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HomeMy WebLinkAbout2014-06-23 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers June 23, 2014 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 June 23, 2014 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. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council 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, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. 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 up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Closed Session 5:00-5:45 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations(James Keene, Lalo Perez, Joe Saccio, Kathryn Shen, Dania Torres Wong, Eric Nickel, Catherine Capriles, Geo Blackshire, Melissa Tronquet, Mark Gregerson, Nancy Nagel, Molly Stump, Walter Rossman) Employee Organization: International Association of Fire Fighters (IAFF), Local 1319 Authority: Government Code Section 54957.6(a) REVISED 2 June 23, 2014 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. 2.CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Lalo Perez, Melissa Tronquet, Joe Saccio, Molly Stump, Walter Rossman, Nancy Nagel, Dennis Burns, Mark Gregerson, Kathryn Shen, Dania Torres Wong) Employee Organization: Palo Alto Police Officers Association (PAPOA) Authority: Government Code Section 54957.6(a) 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. City Manager Comments 5:45-5:55 PM Oral Communications 5:55-6:10 PM Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 6:10-6:15 PM May 5, 2014 May 6, 2014 Consent Calendar 6:15-6:20 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 3.Award of Banking and Related Service Contracts to: (1 and 2) U.S. Bank and Their Wholly-Owned Subsidiary Elavon for General Banking and Merchant Services, (3) Wells Fargo for Lockbox Service, (4) Commerce Bank for the New and Innovative Accounts Payable Bill Payment Service, (5) Union Bank for Investment Safekeeping (Custodial) Service, and (6) JP Morgan Chase Bank for Purchase Card (P-Card) Service 4.Approval of a Five-year Contract with Questica Inc. For a Budget System at a Cost Not to Exceed $472,100 and a 10 percent Contingency Totaling $26,968 3 June 23, 2014 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. 5.Council Direction to Remove Floor Area Ratios From the Draft California Avenue Area Concept Plan per the Council's Discussion of May 5, 2014 6.Approval and Authorization for the City Manager to Execute a Professional Services Agreement with Just Energy Resources LLC in the Amount of $597,878 for Marketing and Program Management for the PaloAltoGreen and PaloAltoGreen Gas Programs for a Term of up to Three Years 7.Adoption of a Resolution of Intent to Establish Utility Underground District No. 46 (Arastradero Rd/El Camino Real/ W. Charleston Rd) by Amending Section 12.16.020 of the Palo Alto Municipal Code 8.Approval of a Water Enterprise Fund Contract with DN Tanks, Inc. In a Total Not to Exceed Amount of $1,534,842 for the Seismic Upgrade of the Boronda Reservoir Project WS-09000-501 9.Second Reading: Adoption of a Park Improvement Ordinance for Hopkins Park (First Reading: June 9, 2014 PASSED: 8-0 Scharff absent) 10.Approval of a Contract with Graham Contractors, Inc. in the Amount of $1,084,553, for the FY 2015 Preventive Maintenance Project, the 1st of 4 Contracts in the FY 2015 Street Maintenance Program Project (CIP PE-86070) 11.Approval of On-Call Surveying Consultant Contract with Sandis Civil Engineers Surveyors Planners for a Total of $150,000 for Surveying and Design Support Services 12.Utilities Advisory Commission Recommendation that Council Adopt a Resolution Terminating the “Power from Local Ultra-clean Generation Incentive" Program and Repealing Utilities Gas Rate Schedule G-8 (Gas for Electric Generation Service) 13.Approval of a Contract with Schaaf & Wheeler Consulting Civil Engineers In The Amount of $250,000 for Storm Drain Master Plan Update, Capital Improvement Program Project SD-15008 4 June 23, 2014 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. 14.Approval of a Funding Agreement with the County of Santa Clara in the Amount of $100,000 for Development of a Concept Plan Line for Possible Improvements to Page Mill Road from Oregon Expressway to I-280 and Adoption of a Budget Amendment Ordinance to Transfer $75,000 from the Stanford Research Park/El Camino Traffic Impact Fee Fund and $25,000 from the Citywide Traffic Impact Fee Fund to CIP PL-12000 for this purpose. 15.Authorization to Submit a Grant Funding Application to the Federal Aviation Administration for Rehabilitation of the Runway and Taxiways at the Palo Alto Airport 16.Approval of Contract with MV Transportation in the Amount of $1,215,036.00 to Provide Community Shuttle Service on the Existing Crosstown Shuttle Route and the East Palo Alto/Caltrain Shuttle Route for up to Three Years; Approval of Funding Agreement with East Palo Alto and Adoption of a Budget Amendment Ordinance Amending the Fiscal Year 2015 Operating Budget to Increase the Planning and Community Environment Department Appropriation by $221,239 17.Request to Issue Notice of Intent to Award 50 Year Lease to Avenidas for 450 Bryant Street Site to Allow Continued Use of Building for Senior Services 18.Second Reading: Adoption of Ordinance Amending Section 22.04.270 by Adding Subsection 22.04.270(C) to Prohibit the Feeding of Wildlife and Feral Animals in Palo Alto Parks And Open Space Areas (First Reading: June 9, 2014 PASSED: 8-0 Scharff absent) 19.Second Reading: Adoption of an Ordinance Authorizing the Operation, Management and Control of the Palo Alto Airport by the City of Palo Alto and Amending Section 2.08.190 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code to Add the Palo Alto Airport to the Duties of the Director of Public Works (First Reading: June 9, 2014 PASSED: 8- 0 Scharff absent) 20.Approval of Amendment No. 8 with Group 4 Architecture, Inc., to Add $143,339 for a Total Contract Not to Exceed $8,998,570 21.Approval of Amendment No. 1 to On-Call Transportation Service Agreement - Contract C13147610 with TJKM Transportation Consultant in the Amount of $151,000 5 June 23, 2014 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. 22.Rescission of Resolution 9415 and Adoption of Updated Resolution Calling a Special Election to Modernize the Telecommunications Provision of the Utility Users Tax Ordinance, Eliminate the Discount Tax Rate for a Small Number of Commercial Customers Who Use Large Volumes of Water, Gas and Electric Utilities and Reduce the Telephone UUT Rate from 5% to 4.75% 23.Adoption of a Resolution Calling a Special Election for November 4, 2014 and Submitting to the Electorate a Measure to Amend Article III, Section 2, of the Charter to Change the Number of Council Member Seats from Nine to Seven Commencing January 1, 2019 Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 6:20-7:00 PM 24.Approval of One Contract and Two Contract Amendments: (1) ConstructionContract with Duininck, Inc. in the Amount of $8,987,809 for the Palo Alto Golf Course Reconfiguration Project, CIP PG-13003; (2) Change Order No. One with Duininck, Inc. in the Amount of $265,399, Reflecting Cost Savings;and (3) Amendment No. One to Contract C13148028 with Golf Group, Ltd. In the Amount of $456,693 for Construction Support and Environmental Mitigation Monitoring Services; Adoption of Two Resolutions: (4) Amending Resolution No. 9296, adopted November 13, 2013, to Extend Statutory Exception for Soil Transfers by Truck on Oregon Expressway until December31, 2014; and (5) Adopt the Attached Resolution Declaring Intention to Reimburse Expenditures from the Proceeds of Tax-Exempt Obligations (e.g. Certificates of Participation) for Not-To-Exceed Par Amount of $7 Million toFund a Portion of the Cost of the Palo Alto Municipal Golf Course Reconfiguration Project; and Adoption of Two Budget Amendment Ordinances: (6) In the Amount of $2,501,569 for Golf Course Reconfiguration Project PG-13003, Increasing Appropriations From $8,545,338 to $11,046,907; and (7) In the Amount of $324,800 in Revenues and $324,800 in Expenses to Operate Golf Course During July 1, 2014 – August 31, 2014 7:00-9:00 PM 25.PUBLIC HEARING: City Council Review and Consideration of a Proposed Reclassification from a Category 3 Historic Resource to a Category 2 Historic Resource and an Architectural Review Application for the Historic Rehabilitation Project Located at 261 Hamilton Avenue that would Generate 15,000 Square Feet of Transferable Development Rights for Off-Site Development. The Rehabilitation Project Includes Renovations to the Existing Building And Relocation of Floor Area to Make A 5,910 Square Foot Addition at the Rear of the Building. 6 June 23, 2014 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. Environmental Assessment: Exempt from the California Environmental Quality Act per Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities 9:00-10:00 PM 26.PUBLIC HEARING: Council Action Regarding an Appeal of the Director of Planning and Community Environment's Decision Approving a Project on an Approximately 17-acre Site in the RP (AS2) Zoning District located at 1451-1601 California Avenue, and Council Approval of a Tentative Map to Subdivide Three Parcels Into 83 Parcels at the Same Site. The Proposal Would Authorize Demolition of Approximately 290,220 Square Feet of Existing R&D/Office Space and Construction of 180 Dwelling Units, Which Includes 68 Detached Single Family Units and 112 Multi-Family Units as Anticipated in the 2005 Mayfield Development Agreement. Environmental Assessment: City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (State Clearinghouse No. 2003082103). Inter-Governmental Legislative Affairs 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. 7 June 23, 2014 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 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Annual Report on Use of Cap and Trade Revenue for the Electric Utility City of Palo Alto Sales Tax Digest Summary Fourth Quarter Sales (October - December 2013) Progress Report on the Issuing of a Request for Proposal for the Development of a Composting Facility on the Measure E Site for co-collected Residential Food Scraps and Yard Trimmings with an option for only Yard Trimmings Public Letters to Council SET 1 SET 2 City of Palo Alto (ID # 4905) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Banking and Related Service Contracts Title: Award of Banking and Related Service Contracts to : (1 and 2) U.S. Bank and Their Wholly-Owned Subsidiary Elavon for General Banking and Merchant Services, (3) Wells Fargo for Lockbox Service, (4) Commerce Bank for the New and Innovative Accounts Payable Bill Payment Service, (5) Union Bank for Investment Safekeeping (Custodial) Service, and (6) JP MorganChase Bank for Purchase Card (P-Card) Service From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council approve the attached six contracts, all with a term of six years beginning July 1, 2014, with the exception of the Commerce Bank contract, which will begin January 1, 2015. 1) U.S. Bank and its wholly-owned subsidiary, Elavon, for general banking and merchant services (Attachments A-1 to A-6) 2) Wells Fargo for lockbox service. (Attachments B-1 to B-6) 3) Commerce Bank for the new and innovative Accounts Payable (A/P) bill payment service (aka ControlPay) (Attachment C) 4) Union Bank for investment safekeeping (custodial) service (Attachments D-1 and D- 2) 5) JP Morgan Chase Bank’s cloud-based and paperless purchase card service (aka P- Card) (Attachments E-1 to E-3) Executive Summary With the purpose of increasing competition among banking service providers, lowering costs, and taking advantage of “cutting edge” technology, staff distributed a Request for Proposal City of Palo Alto Page 2 (RFP) that resulted in competitive bids for six distinct categories of banking services. Seeking cost-effective services of a high caliber with the technological capacity to meet current and future needs, staff spent eight months exhaustively reviewing proposals from nine banks providing: general banking, lockbox (processing of utility bill check payment), A/P bill payment solution, merchant (credit and debit card acceptance), safekeeping or custodial (settlement, safekeeping, and reporting of investment security), and purchase (credit) card (aka P-Card) services. After thoroughly analyzing and discussing each proposal, staff recommends entering into the referenced agreements. Estimates of costs and/or revenues (rebates) are provided based on annual historical averages for activity/volume and the new (contract) fees/rebate rates which are summarized in the tables 1 and 2. 1) U.S. Bank and its wholly-owned subsidiary, Elavon, for general banking and merchant services. Estimated annual costs for banking and bank portion of merchant fee (excludes VISA and MasterCard network or interchange fees) is $39,000 and $12,400, respectively. Over six years’ costs equal $234,000 and $74,400, respectively. These costs are lower by 43.2 percent (for banking) and 72.0 percent (for merchant) compared to the current contract. (Attachments A-1 to A-6) 2) Wells Fargo (Wells) for lockbox service. Estimated annual cost is $31,200 and over six years’ cost equals $187,200. This is 14.3 percent lower than the current contract. (Attachments B-1 to B-6) 3) Commerce Bank (Commerce) for the new and innovative cloud-based, which are virtual servers available over the Internet with full-blown application and storage services, A/P bill payment service (aka ControlPay). The revenue rebate ranges from 1.15 percent to 1.37 percent of net activity (based on volume of card payments) and the processing fee is $3.67 per invoice. The annual rebate is estimated at $75,000 and the average invoice processing expense is approximately $74,500 resulting in net income to the City of $500. Over six years’ revenue (rebate) is $450,000 and expense is $447,000 with net income to City of $3,000, respectively The contract rebate rate change is indexed to the U.S. Prime Rate and potential invoice processing fee increases are annually capped to 3 percent (increases could begin in the second contract year). (Attachment C) 4) Union Bank (Union) for investment safekeeping (custodial) service. Annual estimated fees totals $13,200 and for six years equal $79,200. This is 37.1 percent lower than the current cost. (Attachments D-1 to D-2) 5) JP Morgan Chase Bank’s (JP Morgan) cloud-based and paperless purchase card service (aka P-Card). This is a revenue (rebate) contract where there are no service City of Palo Alto Page 3 fees. The annual estimated rebate is $96,000 and over six years totals $576,000. This is 20.3 percent higher (revenue) than the current contract. (Attachments E-1 to E-3) Table 1 below summarizes the estimated proposed contracts expenses and revenues. Annually Over Six Years Banking Services Expense (39,000)$ (234,000)$ Merchant (credit and debit card) Services Expense (12,400) (74,400) (Bank costs only; excludes credit card network fee) Lockbox Service Expense (31,200) (187,200) Accounts Payable (A/P) Bill Payment Service - Card Bill Payment Revenue (Rebate)75,000 450,000 A/P (Workflow Process) Expense (74,500) (447,000) Net Estimated A/P Revenue 500 3,000 Investment Safekeeping Service Expense (13,200) (79,200) Purchase Card (P-Card) Service Revenue (Rebate)96,000 576,000 Net Estimated Revenue 700$ 4,200$ Table 1 Banking and Related Services Estimated Proposed Contracts Expenses and Revenues City of Palo Alto Page 4 Table 2 below summarizes the current and proposed annual contract expenses, revenues and savings. Table 2 Current Contracts Proposed Contracts $ Savings / $ Rev. Incr. % Expense Savings or % Rev. Incr. Banking Services Expense (68,700)$ (39,000)$ 29,700 (43.2%) Merchant (credit and debit card) Services Expense (44,300) (12,400) 31,900 (72.0%) (Bank costs only; excludes credit card network fee) Lockbox Service Expense (36,400) (31,200) 5,200 (14.3%) Accounts Payable (A/P) Bill Payment Service - Card Bill Payment Revenue (Rebate)n/a 75,000 A/P (Workflow Process) Expense n/a (74,500) Net Estimated A/P Revenue - 500 500 Investment Safekeeping Service Expense (21,000) (13,200) 7,800 (37.1%) Purchase Card (P-Card) Service Revenue (Rebate)79,800 96,000 16,200 20.3% Net Estimated Exp. and Rev. or Savings (90,600)$ 700$ 91,300$ A/P Internal Cost Savings 16,100$ A/P Scanning Cost Avoidance 12,750$ Total Estimated Annual Savings 120,150$ New Service New Service Banking and Related Services Current and Proposed Annual Contract Expenses, Revenues, and Savings The contract term for each provider, with the exception of Commerce Bank’s contract, which begins January 1, 2015, is six years, starting July 1, 2014. In each contract, the City and the banking services provider each retains the option to terminate the contract upon 30 day notice (60 day for Commerce Bank). Commerce’s “cutting edge” ControlPay solution to streamline and manage the entire Accounts Payable process from purchase to payment implementation will begin after the general banking services transition is completed. Because these contracts are constructed based on service and activity level, the City essentially controls costs via a fixed payment per service during the length of the contracts. In addition, there are caps on any provider services allowing rate increases. Staff is requesting, however, that there shall be a “not-to-exceed limit” on these contracts, as transaction volume can change over time. Staff will closely monitor costs on a regular basis. City of Palo Alto Page 5 Background In 2005, the City conducted a RFP process for banking related services. After reviewing the proposals from a number of banks, the City selected Wells Fargo (Wells) for general banking services. The selection of Wells ended a long-term relationship with Bank of America, the prior banking services provider. The agreement with Wells consisted of a three-year contract plus an additional two years based on satisfactory performance, which Wells exceeded. The five-year service contract ended on December 31, 2010. In November 2010, staff requested that Council extend the existing contract with Wells for three years, rather than initiate a new RFP. This approach was taken at the depth of the recession for a number of operational and cost related issues. Lower fees were successfully negotiated with Wells during this time. Council agreed with staff’s request. As a result of a more complex evaluation process, staff requested and City Council approved on December 9, 2013 (CMR ID # 4284), a one-year banking services contract extension from January 1, 2014 to December 31, 2014 at an annual (upper) estimated cost of $120,000. Staff did not request separate contract extensions for lockbox (current annual costs of $36,400) and merchant services (banking portion of current annual cost of $44,300) because their contract dates had not expired. The A/P bill payment solution is a new service and the Purchase Card (P-Card) does not expire until January 2015. As for the latter (P-Card), staff opportunistically bid this sooner (current contract ends January 2015) to determine if the City could obtain better service and/or pricing and save staff time in releasing a separate RFP in one year. Typically, the financial industry constantly is improving processes and technology to gain efficiencies and/or lower costs. In the past, staff has been successful in obtaining pricing concessions during the life of the existing banking services contract. We applied this experience to the P-Card contract. A summary of the City’s current financial contracts are: 1) Wells Fargo Bank for banking, lockbox, and merchant services with the Accounts Payable included in the banking services 2) Union Bank for custodial (aka safekeeping) services 3) JP Morgan for purchase card (aka P-Card) services Discussion After multiple years of service from Wells an RFP was developed. Due to the increased complexity of the financial services used by the City and by the addition of new services, the evaluation process was more complicated and more time-consuming. New and better services include:  Developing a new A/P bill payment solution (program described later in the report)  Outsourcing Utility payment processing (Lockbox Service) City of Palo Alto Page 6 Consolidating receipts of third party bill payers (Internet Bill Payment) New and stronger regulations governing safeguarding of sensitive, private credit card information Together with traditional services, staff grouped all requested services into six distinct categories (see chart below) with the purpose of increasing competition among providers and lowering costs as well as taking advantage of “cutting edge” technology and services. Each service proposal was evaluated separately with the contract being awarded to the best proposal for each service group. In the past, it was typical to award a contract to one provider for multiple services offered. Group Number Service Service Group 1 General Banking (includes Accounts Payable Check Issuance) Service Group 2 Lockbox Service Service Group 3 Accounts Payable Bill Payment Solution Service Group 4 Merchant (credit and debit card) Service Service Group 5 Investment Safekeeping (Custodial) Service Service Group 6 Purchase (Credit) Card (aka P-Card) The RFP was mailed to 23 companies, posted to City’s website, and posted to the California Society of Municipal Finance Offices (a professional organization) website which includes firms providing financial services. Staff reached out to financial institutions on file and those that hadn’t solicited business from the City in the past. The City received nine proposals although each proposer may not have submitted proposals for all six service groups. Table 3 below shows proposers and the services for which they submitted bids. Table 3 1 2 3 4 5 6 7 8 9 Svc. Grp.Service Description Bank Up JP Morgan Comerica Bank Commerce Bank Wells Fargo Bank of America US Bank Zions Bank Union Bank Total No. of Proposals 1 General Banking -X --X X X -X 5 2 Accounts Payable Payment Solution(s)---X X -X --3 3 Lockbox Service X X --X X X -X 6 4 Merchant Service -X X -X X X -X 6 5 Investment Safekeeping (Custody) Svc.----X X X X X 5 6 Procurement Credit Card (aka P-Card)-X X -X X X -X 6 "X" = Received proposal for that service "-" = Did not submit a proposal for that service Proposal Submitted Summary By Service Group City of Palo Alto Page 7 Staff was pleased with the quantity and quality of the proposals received. A committee consisting of staff from the Administrative Services (Treasury Administration and Accounting divisions) and the Utilities (Customer Service) Departments evaluated and rated the proposals. The Information Technology department evaluated the vendors’ data security and privacy compliance. Banking and Merchant (credit and debit card) Services (Service Group 1 and 4): Banking services include, for example: maintaining the City’s various checking accounts, wiring funds for purchases of goods and overnight deposits, processing cash, providing a variety of reports to enhance cash management, downloading files to update City financial system, and merchant services. For these services, all the proposers provided a similar range of products including a dedicated team for customer support. Also, all provided user friendly Internet portals that staff can use to perform banking services tasks including monitoring and preventing fraudulent activities, wiring funds, and obtaining reports. The main difference between the proposers is cost. All the proposers have quoted six year activity based prices and/or a percentage rate (for merchant service). Prices or percentage rates are fixed for the duration of the six year contract. For banking, costs are based on activities and for merchant services a percentage of the credit card charges and/or the number of transactions. It is important to note that the majority of the credit card fees are attributable to the credit card (brand) networks (e.g., VISA, MasterCard, etc.). Network fees are not negotiable so they were not included in this RFP. Only bank fees, which are for the portal to the card networks, were evaluated. The annual general banking services cost of the five proposals received for this service ranged (using historical volume activity) from $39,000 to $82,700 (over six years it’s $234,000 to $496,200). U.S. Bank provided an exceptionally low bid that is 43.2 percent lower than the current banking fees and 32.7 percent lower than the second lowest proposal. The merchant services annual costs ranged from $12,400 to $41,200 (over six years it’s $74,700 to $247,200). U.S. Bank merchant services are provided through Elavon, a wholly-owned subsidiary. Elavon is the fourth largest (credit and debit) card processor in the United States; with more than 1.2 million merchants using its services. Elavon’s pricing proposal was not typical in that it was not priced as a percentage of credit card charges. Instead, Elavon quoted a fixed fee per transaction. As a result, its cost is 53.6% lower than the second lowest proposal. Again, most of the credit card processing cost is attributable to the card networks. In FY 2013, the City’s total credit card expense was $521,900. Staff is recommending that banking and merchant services contract be awarded to U.S. Bank and Elavon as a consequence of: providing services the City requires; having the lowest costs; providing a technologically sophisticated, but easy to use portal; and receiving positive feedback from vendor references and from additional cities via the California Society of Municipal Finance Officers’ list serve. City of Palo Alto Page 8 Lockbox Service (Service Group 2): This service outsources the processing of utility check payments. As with banking and merchant services, the services are similar among the proposers. The main difference is cost. The cost, based on average past activity level, ranges from $31,200 to $35,100 (over six years it’s $187,200 to $210,600). The current service provider, Wells, has the lowest cost proposal that is 14.3 percent lower than its current contract. In addition, its service to date has been excellent and its on-line portal is user friendly. Staff recommends the lockbox service contract be awarded to Wells Fargo Bank. Accounts Payable (A/P) Bill Payment Solution (Service Group 3): The A/P division of the Administrative Services Department pays the City’s’ vendors for services rendered and/or goods purchased through the generation of a physical checks (approx. 10,500 checks issued annually) or wires. The review, approval, and routing of invoices and payment record retention are mostly paper based. Through this RFP, staff embarked on finding a comprehensive cloud-based (hosted solution) system that is innovative, convenient, efficient, and maintains effective fiscal controls in paying City bills. Also, the requirement included the ability to track invoices through the approval process for timely payment and effective response to vendor inquiry about payment status. Of the nine proposals received, three offered comprehensive services the City was seeking: Commerce, Wells Fargo, and U.S. Bank. Financially, this service has two elements. The first is making vendor payments through an automated (credit) card program (card) (which uses the credit card network to pay bills) that results in monthly revenue for the City in the form of rebates. The second element is costs for the workflow process (invoice scanning, routing, approval, and storage) which includes: check and electronic (automated clearing house aka ACH) payments and electronic storage and retrieval of payment records. The latter has the potential, which staff will explore, to be part of the Open Data initiative whereby payment records could be available (on-line) to the public. Below are the proposals’ average annual (financial) summary. Commerce Bank Wells Fargo Bank US Bank (Eliminated) Estimated Rebates 75,000$ 63,000$ 105,000$ Estimated Costs (74,500) (87,700) (63,400) Net (Cost)/Rebate 500$ (24,700)$ 41,600$ The revenue estimate is based on City’s twelve-month payment history compared against the proposers’ list of vendors that currently accept card payments. The estimate assumes approximately $6 million or 5 percent of the City’s vendor payments will be made by card. The City of Palo Alto Page 9 rest will paid by check or electronically (ACH). Commerce’s estimated cost is based on number of invoices processed while Wells Fargo and U.S. Bank have a more complicated pricing structure that also considers things such as type of payments (e.g. check, ACH), PO Box rental for receiving invoices, invoice and purchase order line item capture, and record storage duration. U.S. Bank had the best financial proposal; however, it was eliminated for a variety of reasons, including for not understanding the City’s requirements, not providing the needed services, and not clearly articulating its product and services. Also, its program required contracting with a third party (to do the workflow process); however, that party didn’t submit a proposal to the original RFP. Both Commerce and Well Fargo banks can provide the needed service; however, there are key differences in how each bank delivers its services. Commerce provides all the services in-house which includes the workflow process and payment solution; print check payments on their checking account; and includes in its base price seven year archiving of payment records which meets the City’s record retention requirement. Wells Fargo partners with a third party to do the workflow process; prints vendor checks on City’s checking account; and includes 18 months of record retention (Wells can provide up to seven years of the latter service for an additional cost). While Wells’ printing of checks on the City’s checking account is favorable because: (1) it would be on City stock; (2) there is no need to fully fund the check issuance upfront as we would with Commerce Bank; and (3) offers better visibility to encashment, these benefits don’t justify the estimated (net) additional cost (for six years) of over $148,200. Both firms have solid cloud-based user friendly portals. Reference checking showed that neither has a customer using both of its respective workflow and payment process simultaneously although Commerce has a few clients who are on the cusp of implementing both services. Staff is recommending this service be awarded to Commerce Bank. It is the lowest net cost provider, it meets the City’s key requirements, and it has a single integrated system. In addition, Commerce is committed to being an industry leader for this service with over 200 staff members dedicated to it. Financially, Commerce’s service is expected to be cost neutral. Internally, the expectation is that efficiencies will be gained and savings realized in supplies such as those involved in check printing, mailing, storage, and miscellaneous supplies resulting in annual savings of approximately $16,100. Prior to this RFP, staff planned to scan the payment supporting documents for long-term retention at an annual cost of $12,750. With Commerce’s ControlPay service this cost will be avoided. Though the scanned PDF document would be a big improvement over today’s storage of paper documents, Commerce’s electronic records will allow for more robust capability to search and generate reports of payment records for audit, public requests, and internal analysis. The implementation of this “cutting edge” payment solution will impact the entire organization. In the first year, resources will be needed to clean and update the existing vendor database, implement and test the new system, train over 200 City staff, and develop new procedures and City of Palo Alto Page 10 processes to safeguard City funds. In addition, A/P staff will assume new responsibilities and tasks such as becoming the system administrator and support on-going training and use of the cloud-based system. As a result, there will be no staff savings in the first year while an evaluation will be conducted in the second year to assess potential staffing savings, to further increase efficiencies, and increase operational oversight and controls in other areas. Staff reviewed this service diligently over several months by evaluating the technology through demonstrations and by references checks. Ultimately, this is a “cutting edge” technology so it carries a greater risk of unforeseeable issues arising. To mitigate this possibility, Commerce has waived all implementation fees so if the City is not satisfied with the product and/or services during implementation, the contract can be cancelled without the City incurring any costs. In addition, the City will retain the ability to issue checks in-house with the new bank provider for backup and so that vendor payments can be made. This contract will begin on January 1, 2015 with a tentative go-live date of June 2015. The delayed implementation is necessary since the banking conversion (with U.S. Bank) must be completed first in the event issues arise with the A/P payment solution. In summary, the key benefits of the AP Solution include: - Moving to a paperless A/P process - Monitoring, processing, and approving invoices on-line (cloud-based service) - Scanning invoices (into the workflow process) upon receipt will allow tracking of invoices through the approval process for timely payment and recording of City expenses and responding more effectively to vendor inquiry about payment status - Eliminate the need for paper files (filing/retrieval time, cabinets, in-house and off- site storage) - On-line lookup and central repository for all invoices - Reduce the number of paper checks issued (maximize electronic (ACH) and automated card program payments) - Generate new revenue for the City on a monthly basis from card payments which is expected to offset the workflow costs - Result in internal cost savings This service is an example of implementing the innovative and continuous improvement components of the Administrative Services Department’s Strategic Plan. Investment Safekeeping (Custodial) Service (Service Group 5): Safekeeping or custodial services include: taking custody of investment securities purchased by the City; paying interest and principal due from securities; and providing monthly statements which show the book, par and market values of securities in the City’s portfolio. Compared to other bank proposals, the lowest cost service is provided by Union Bank. Annual cost estimates in the RFP ranged from $13,200 to 42,400 (over six years it’s $79,200 to City of Palo Alto Page 11 $254.400). The service and on-line portals are similar among the banks. The City has been receiving excellent service from Union Bank for over a decade and it is the lowest cost provider. The highest price proposal was over three times that of Union Bank’s and the remaining proposals were a few thousand dollars (annually) higher. Given the City’s strict buy-and-hold philosophy which results in fewer transactions, and the relative homogeneity of its investment instruments (Federal Agency Securities, Certificate of Deposits, Municipal Bonds, and U. S. Treasury Notes), the City does not require a complex or costly custodial system. Renewal of the contract with Union Bank, for custodial (safekeeping) services is recommended. Purchase Card (aka P-Card) (Service Group 6): The purchasing card program is an innovative cloud-based payment solution that helps the City reduce costs and simplifies the procure-to-pay process. It solidifies purchasing controls while allowing: the flexibility to purchase goods and general services; the City to leverage transaction data for more informed decisions and better vendor management; and a more complete picture of spending patterns. As a result, employees will spend less time authorizing, tracking and processing expense data. Staff’s innovative use of this service, since February 2012, resulted in Palo Alto being the first organization (using JP Morgan’s system) to turn a traditional P-Card system into a paperless one by scanning and attaching store receipts to the on-line transaction records thereby eliminating the need to keep paper records. Over several years P-Card charges went from $0.2 million in FY 2005 to $6 million in current fiscal year (2014). This amount continues to rise. At the same time, A/P check issuances went from a high of 25,600 to 10,500 resulting in improved efficiency and savings. Approximately 200 City purchasing cards are in use generating $74,454 in revenue during calendar year 2013. Of all firms responding, JP Morgan (the existing service provider) has the highest rebate, an increase of 20.3 percent over their current rebate, and a robust system that allows directly attaching store receipts to a transaction. This makes the current paperless system possible. The higher rebate (over JP Morgan’s current rate) is attributable to the City joining JP Morgan’s payment solution consortium, an option now available to California municipalities, originated by the City of Fort Worth (Texas). The consortium’s revenue (rebate) rate takes into consideration the total consortium and individual member charges volume as shown in the following table. City of Palo Alto Page 12 For the above reasons, staff recommends JP Morgan Chase Bank be awarded the P-Card contract. Timeline and Resource Impact The six-year contracts are from July 1, 2014 to June 30, 2020 for banking, merchant, lockbox, investment safekeeping (custodial), and purchase (credit) card and January 1, 2015 to December 31, 2020 for the Accounts Payable bill payment solution (aka ControlPay). Staff is requesting a departure from the “not-to-exceed limit” on these contracts, as they are based on specific services, fixed prices, and City control over transactions. Contracts have specific fixed durations with exit clauses. Finally, there are provisions for caps on future cost increases where appropriate. Caps do not apply to revenue based contracts such as the purchase card agreement. Staff will closely monitor costs on a regular basis. Again, Table 2 below shows current and proposed annual contract estimated expenses, revenues, and savings with percentage savings. City of Palo Alto Page 13 Table 2 Current Contracts Proposed Contracts $ Savings / $ Rev. Incr. % Expense Savings or % Rev. Incr. Banking Services Expense (68,700)$ (39,000)$ 29,700 (43.2%) Merchant (credit and debit card) Services Expense (44,300) (12,400) 31,900 (72.0%) (Bank costs only; excludes credit card network fee) Lockbox Service Expense (36,400) (31,200) 5,200 (14.3%) Accounts Payable (A/P) Bill Payment Service - Card Bill Payment Revenue (Rebate)n/a 75,000 A/P (Workflow Process) Expense n/a (74,500) Net Estimated A/P Revenue - 500 500 Investment Safekeeping Service Expense (21,000) (13,200) 7,800 (37.1%) Purchase Card (P-Card) Service Revenue (Rebate)79,800 96,000 16,200 20.3% Net Estimated Exp. and Rev. or Savings (90,600)$ 700$ 91,300$ A/P Internal Cost Savings 16,100$ A/P Scanning Cost Avoidance 12,750$ Total Estimated Annual Savings 120,150$ New Service New Service Banking and Related Services Current and Proposed Annual Contract Expenses, Revenues, and Savings As stated, the above-referenced expenses and revenues are based on average past activity level and proposed contract (fee or revenue) rates so actuals will flutuate depending on the activity level generated by the City. The merchant service cost cited above only represents the bank’s portion of the fee. The lion’s share of credit card fees charged to the City are attributed to the credit card networks (e.g VISA, MasterCard). For information purposes, FY 2013 total credit card fees was approzimately $521,900. In FY 2015, there are sufficient funds in the operating budget for the servcies described in this report. In fact, actual expensess in FY 2015 are likely to be lower than budgeted resulting in savings. The Fiscal Year 2016 Base Budget will include any savings generated from these contracts. For FY 2016, the A/P workflow (new service) expenses and offsetting revenues will require net zero budget adjustments. Also, due to efficiencies gained from the A/P bill payment solution, potential staff savings may be realized, which will be incorporated in future budgets. Environmental Review The award of a banking services agreement is not considered a project under the California Environmental Quality Act; therefore, an environmental review is not required. City of Palo Alto Page 14 Attachments:  Attachment A-1 US Bank Contract - Banking and Merchant Services Agreement (PDF)  Attachment A-2 US Bank Contract - Banking - Master Service Agreement (PDF)  Attachment A-3 US Bank Contract - Banking - Terms and Conditions (PDF)  Attachment A-4 US Bank Contract - Banking - Your Deposit Account Agreement (PDF)  Attachment A-5 Elavon Contract - Merchant Service - Payment Device Processing Agreement (PDF)  Attachment A-6 Elavon Contract - Merchant Service - Schedule I Processing Services For Government Entities and Institutions (PDF)  Attachment B-1 Wells Fargo Contract - Lockbox Service - Master Agreement For Treasury Management Services (PDF)  Attachment B-2 Wells Fargo Contract - Terms and Treasury Management Letter (PDF)  Attachment B-3 Wells Fargo Contract - Wells Fargo Treasury Management Pricing (PDF)  Attachment B-4 Wells Fargo Contract - Lockbox Service - Authorization Certificate (PDF)  Attachment B-5 Wells Fargo Contract - Lockbox Service - Treasury Management Product Enrollment (PDF)  Attachment B-6 Wells Fargo Contract - Wholesale Lockbox Service Description (PDF)  Attachment C Commerce Bank Contract for Accounts Payable Payment Process and Pay (aka ControlPay) (PDF)  Attachment D-1 Union Bank - Custody Agreement For Public Funds (PDF)  Attachment D-2 Union Bank - Schedule of Fees (PDF)  Attachment E-1 JP Morgan Chase Bank - Participant Agreement (PDF)  Attachment E-2 JP Morgan Chase Bank - (Consortium) Commercial Card Agreement of City of Fort Worth, Texas (PDF)  Attachment E-3 JP Morgan Chase Bank - (Consortium) Commercial Card Agreement Amendment of City of Fort Worth, Texas (PDF) 1 AGREEMENT FOR BANKING AND MERCHANT SERVICES This AGREEMENT FOR BANKING AND MERCHANT SERVICES (“Agreement”), effective ______________, 2014, is by and between U.S. BANK NATIONAL ASSOCIATION (“Bank”), ELAVON, INC. (“Elavon”) and the CITY OF PALO ALTO, CALIFORNIA (“Customer”). Whereas, Customer desires to secure certain banking and payment transaction processing services pursuant to a contract; and, Now, therefore, in consideration of mutual covenants, Bank, Elavon and Customer agree as follows: 1. Term. The term of this Agreement shall be for the period commencing on ___________________ _____, 2014, and ending on _______________ __, 20___, unless otherwise terminated in accordance with this Agreement. 2. Pricing. [Attachment E-1 (Pricing Proposal)] 3. Independent Contractor. Each of Bank and Elavon is an independent contractor and under no circumstances shall Bank be considered an agent or employee of Customer or Elavon. Furthermore, under no circumstances shall Elavon be considered an agent or employee of Customer or Bank. 4. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. The parties consent to the jurisdiction of the courts of the State of California and waive any argument that such venue is inconvenient, regardless of where else venue may lie. 5. Captions and Paragraph Headings. Captions and paragraph headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing it. 6. Notice. Notices required by this Agreement must be given in writing by personal delivery, overnight delivery or U.S. mail, at the addresses given below, unless some other means or method of notice is required by law. Customer Bank [ADD] Donna Chu Vice President | Relationship Manager U.S. Bank Government Banking 1 California St., Suite 350 SF-CA-SF10 San Francisco, CA 94111 Direct: 415.677.3558 Fax: 415.677.3782 2 Elavon 7300 Chapman Highway Knoxville, TN 37920 Attention:_______________ The address to which notices shall or may be mailed by either party may be changed by written notice by such party to the other party. Nothing shall preclude the giving of notices by personal service. 7. Integration. A. As between Customer and Bank, this Agreement, Bank’s Deposit Account Agreement (attached hereto as Exhibit ___ and incorporated herein by reference), Bank’s Master Services Agreement (attached hereto as Exhibit ___ and incorporated herein by reference), Bank’s Services Terms & Conditions (attached hereto as Exhibit ___ and incorporated herein by reference) constitutes the complete and exclusive statement of understanding between Customer and Bank and supersedes all previous agreements, written or oral, and all other previous communication between the parties relating to the provision of banking services pursuant to this Agreement. In the event of a conflict between this Agreement and the other documents and agreements referenced in the first sentence of this section 7 A (collectively, the “Bank Contract”), the terms of this Agreement shall govern. The parties acknowledge and agree that the Bank Contract and the Elavon Contract (as defined in section 7 B below) are separate and distinct contacts and that any termination of the Bank Contract will not automatically result in the termination of the Elavon Contract. B. As between Customer and Elavon, this Agreement, Payment Device Processing Agreement (attached hereto as Exhibit ___ and incorporated herein by reference), and Schedule I: Processing Services for Government Entities and Institutions (attached hereto as Exhibit ___ and incorporated herein by reference) constitute the complete and exclusive statement of understanding between Customer and Elavon and supersedes all previous agreements, written or oral, and all other previous communication between the parties relating to payment transaction processing services. In the event of a conflict between this Agreement and the other documents and agreements referenced in the first sentence of this section 7 B (collectively, the “Elavon Contract”), the terms of this Agreement shall govern. The parties acknowledge and agree that the Bank Contract and the Elavon Contract are separate and distinct contacts and that any termination of the Elavon Contract will not automatically result in the termination of the Bank Contract. C. No waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing and signed by the applicable parties. Such 3 waiver, consent, modification or change, if made, shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, or representations, oral or written, not specified herein regarding this Agreement. 8. Severability. The parties agree that if any term or provision of this Agreement is declared by a court of competent jurisdiction to be illegal or in conflict with any law, the validity of the remaining terms and provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the contract did not contain the particular term or provision held to be invalid. 9. Survival. The terms, conditions, representations and all warranties contained in this Agreement shall survive the termination or expiration of this Agreement. 10. Waiver. The failure of any party hereto to enforce any provision of this Agreement shall not constitute a waiver by such party of that or any other provision. 11. Execution and Counterparts. This Agreement may be exercised in several counterparts, each of which shall be an original, all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the undersigned have affixed their signatures in execution hereof. Bank Customer U.S. BANK NATIONAL ASSOCIATION CITY OF PALO ALTO, CALIFORNIA Donna Chu VP & Relationship Manager Elavon: ELAVON, INC. ________________________________ Master Services Agreement (Governmental Entities) Rev. 04/10/2013 Page 1 of 3 Version: 4/13 Customer Tax Identification Number: I, , HEREBY CERTIFY that I am of (“Customer”). I further certify that I have full power and lawful authority to execute this Master Services Agreement (“MSA”) on behalf of Customer. I further certify that Customer has taken all action required by its resolutions and other organizational documents, records or agreements to authorize the individuals listed below to act on behalf of Customer in all transactions contemplated under this MSA. Customer shall not be bound by the terms and conditions for those specific services described, to the extent Customer elects not to use such service(s). Customer hereby agrees as follows: DEPOSIT ACCOUNTS: 1. U.S. Bank National Association (“Bank”) is hereby designated as Customer’s banking depository. Customer has received a copy of the deposit account terms and conditions and agrees that such terms shall govern the deposit account services provided by Bank. All transactions between Customer and Bank involving any of Customer’s accounts at Bank will be governed by the deposit account terms and conditions, this MSA and other disclosures provided to Customer. Customer agrees to provide Bank with a copy of documents requested by Bank. 2. Any one (1) of the persons whose names and signatures appear in Appendix A (individually, an “Account Signer”) are hereby authorized to open, add, modify, or close accounts in the name of Customer or its subsidiaries or affiliates, or if applicable, as an agent for another entity, and to sign, on behalf of Customer, its subsidiaries or affiliates or as an agent for another entity, checks, drafts or other orders for the payment, transfer or withdrawal of any of the funds or other property of Customer, whether signed, manually or by use of a facsimile or mechanical signature or otherwise authorized, including those payable to the individual order of the person or persons signing or otherwise authorizing the same and including also those payable to the Bank or to any other person for application, or which are actually applied to the payment of any indebtedness owing to the Bank from the person or persons who signed such checks, drafts or other withdrawal orders or otherwise authorized such withdrawals; and are also authorized to endorse for deposit, payment or collection any check, bill, draft or other instrument made, drawn or endorsed to the accounts governed by this MSA for deposit into these accounts. The authorization contained in the preceding sentence includes transfers of funds or other property of Customer to accounts outside of those accounts Customer maintains at Bank. Any one of the Contract Signers (as defined below) is also authorized to execute any documentation that Bank may require to add or delete Account Signers. 3. Unless Customer otherwise advises Bank in writing and Bank has a reasonable opportunity to act on such writing, the Account Signers listed in Appendix A will be Account Signers on any future deposit accounts that Customer maintains with Bank. 4. Customer acknowledges and agrees that Bank is not required to obtain the consent of or otherwise contact an Account Signer for transactions other than those listed in paragraph 2 above, including, but not limited to, transfers between accounts Customer maintains at Bank, advances on loans Customer has with Bank and transfers to pay down loans Customer has with Bank. TREASURY MANAGEMENT SERVICES: 5. Bank’s treasury management services (“Treasury Management Service(s)”) are described in the U.S. Bank Services Terms and Conditions, any supplements thereto, any implementation documents, user manuals, operating guides and other related documentation and disclosures provided by Bank, and any addendum to any of the foregoing (collectively the "Services Agreement"). Customer has received and reviewed the Services Agreement and desires to use one or more of the Treasury Management Services. 6. Any one (1) of the persons whose names and signatures appear in Appendix B (individually, a “Treasury Management Signer”) are empowered in the name of and on behalf of the Customer to enter into all transactions contemplated in the Services Agreement including, but not limited to, selecting Treasury Management Services, appointing agents to act on behalf of Customer in the delivery of Treasury Management Services, signing additional documentation necessary to implement the Treasury Management Services and giving Bank instructions with regard to any Treasury Management Service, including without limitation, wire transfers, ACH transfers, and any other electronic or paper transfers from or to any account Customer may maintain with Bank. Bank may, at its discretion, require Customer to execute additional documentation to implement or amend certain Treasury Management Services. In such cases, documentation necessary to implement or amend such Services shall be signed by a Treasury Management Signer. Customer further acknowledges and agrees that Bank may implement or amend Services based on the verbal, written, facsimile, voice mail, email or other electronically communicated instructions that it believes in good faith to have been received from a Treasury Management Signer. Any one of the Contract Signers (as defined below) is also authorized to execute any documentation that Bank may require to add or delete Treasury Management Signers. Master Services Agreement (Governmental Entities) Rev. 04/10/2013 Page 2 of 3 Version: 4/13 MONEY CENTER AND SAFEKEEPING SERVICES: 7. Any one (1) of the persons referenced in Appendix M (individually, a “Money Center Signer”) are each authorized and empowered in the name of and on behalf of the Customer to transact any and all depository and investment business through the Bank’s Money Center division (the “Money Center”) and any securities custodial business through the Bank’s Safekeeping Department (the “Safekeeping Department), which such person may at any time deem to be advisable, including, without limiting the generality of the foregoing, selecting any services that may from time to time be offered by the Money Center or the Safekeeping Department (collectively referred to herein as “Money Center Services” and “Safekeeping Services”, respectively), appointing additional Money Center Signers or agents to act on behalf of Customer with respect to Money Center Services and Safekeeping Services, signing additional documentation necessary to implement the Money Center Services and Safekeeping Services and giving Bank instructions with regard to any Money Center Service and Safekeeping Service. Customer has received and reviewed the Services Agreement and may use one or more of the Money Center Services or Safekeeping Services from time to time. Bank may, at its discretion, require Customer to execute additional documentation to implement or amend certain Money Center Services or Safekeeping Services. In those cases, the required documentation shall be signed by a Money Center Signer. Customer further acknowledges and agrees that Bank may take any action with respect to any Money Center Services or Safekeeping Services requested by a Money Center Signer based on the verbal, written, facsimile, voice mail, email or other electronically communicated instructions that Bank believes in good faith to have been received from a Money Center Signer. Any one of the Money Center Signers is also authorized to execute any documentation that Bank may require to add or delete Money Center Signers. FOREIGN EXCHANGE: 8. Bank is authorized by Customer to enter into foreign exchange transactions. Customer has received a copy of the Services Agreement and agrees that the terms contained in the Services Agreement, this MSA and other disclosures provided to Customer shall govern the foreign exchange services provided by Bank. Customer agrees to provide Bank with a copy of documents requested by Bank. FOREIGN CURRENCY ACCOUNTS: 9. Bank is hereby designated as Customer’s banking depository for one or more Foreign Currency Account(s) (the “Foreign Account(s)”). Any one (1) of the persons whose names and signatures appear in Appendix C (individually, a “Foreign Currency Account Signer”) are hereby authorized to open, add, modify, or close any Foreign Account(s) in the name of Customer or its subsidiaries or affiliates and to make, on behalf of Customer, orders for payment or transfer of any of the funds or other property of Customer, whether signed, manually or by use of a facsimile or mechanical signature or otherwise authorized, including those payable to the individual order of the person or persons signing or otherwise authorizing the same. Customer hereby expressly authorizes and directs Bank to accept written and oral instructions any payment orders, by telephone or otherwise, consistent with the Services Agreement. Customer has received a copy of the Services Agreement and agrees that the terms contained in the Services Agreement, this MSA and other disclosures provided to Customer shall govern the Foreign Accounts. Any one of the Contract Signers (as defined below) is also authorized to execute any documentation that Bank may require to add or delete Foreign Currency Account Signers. OTHER SERVICES: 10. A Contract Signer is authorized and empowered on behalf of Customer to transact any and all other depository and investment business with and through Bank, and, in reference to any such business, to make any and all agreements and to execute and deliver to Bank any and all contracts and other writings which such person may deem to be necessary or desirable. GENERAL: 11. All Account Signers, Treasury Management Signers, Foreign Currency Account Signers and/or Money Center Signers (whether designated in this MSA or in a prior document [for example, a Certificate of Authority or a Treasury Management Services Agreement] executed by Customer) will remain in place until Bank receives written notice of any change and has a reasonable time to act upon Customer’s written notice. 12. Any and all transactions by or in behalf of Customer with the Bank prior to the adoption of this MSA (whether involving deposits, withdrawals, Treasury Management Services, or otherwise) are in all respects ratified, approved and confirmed. 13. Customer agrees to furnish Bank with the names and signatures (either actual or any form or forms of facsimile or mechanical signatures adopted by the person authorized to sign) of the persons who presently are Account Signers, Treasury Management Signers, Foreign Currency Account Signers and/or Money Center Signers. Bank shall be indemnified and saved harmless by Customer from any claims, demands, expenses, loss or damage resulting from or growing out of honoring or relying on the signature or other authority (whether or not properly used and, in the case of any facsimile signature, regardless of when or by whom or by what means such signature may have been made or affixed) of any officer or person whose name and signature was so certified, or refusing to honor any signature or authority not so certified. Master Services Agreement (Governmental Entities) Rev. 04/10/2013 Page 3 of 3 Version: 4/13 Each of the undersigned (individually and collectively, the “Contract Signers”) certifies that, based on his or her review of Customer’s books and records, Customer has, and at the time of adoption of this MSA had, full power and lawful authority to adopt the MSA and to confer the powers herein granted to the persons named, and that such persons have full power and authority to exercise the same. Each of the Contract Signers further certifies that he or she has the full power and lawful authority to execute this MSA on behalf of Customer, its subsidiaries and affiliates, or if applicable, as an agent for another entity who has entered into an agreement with Customer authorizing Customer to act on such entity's behalf. Each of the Contract Signers further certifies that the Account Signers, Treasury Management Signers, Foreign Currency Account Signers and/or Money Center Signers have been duly elected to and now hold the offices of Customer set opposite their respective names, and the signatures appearing opposite their names are the authentic, official signatures of the said signer. The undersigned Contract Signers have executed this MSA as of the day of , 20 . Contract Signer Signature: Contract Signer Signature: Print Name: Print Name: Print Title: Print Title: Contract Signer Signature: Contract Signer Signature: Print Name: Print Name: Print Title: Print Title: Contract Signer Signature: Contract Signer Signature: Print Name: Print Name: Print Title: Print Title: Contract Signer Signature: Contract Signer Signature: Print Name: Print Name: Print Title: Print Title: For Internal Use Only: Review________________ Validation Method _______________ TL Review________________ Imaged________________ © 2014 U.S. Bank National Association U.S. Bank Services Terms and Conditions Thank you for choosing U.S. Bank Services. This document provides product information, disclosures and descriptions of the Global Treasury Management, Foreign Exchange, Money Center and Safekeeping Services (“Services”) available at U.S. Bank. Other documents may become part of our Agreement depending on the Services selected. Please read all documents carefully; they will govern the Services provided to you, the Customer. Customer shall not be bound by the terms and conditions for specific Services to the extent Customer is not using such Service(s). U.S. Bank National Association Member FDIC U.S. Bank Services – Terms and Conditions TABLE OF CONTENTS Page I. Introduction ............................................................................................................. 1 II. Terms Applicable to All Global Treasury Management, Foreign Exchange and Money Center and Safekeeping Services ............................................................. 2 III. Terms Applicable to All Internet-Based Services ................................................. 6 IV. Terms Applicable to Specific Global Treasury Management Services ............... 7 A. E-Payment Service ............................................................................................... 7 B. Information Reporting and Transaction Services .................................................. 8 C. Electronic Deposit Services .................................................................................. 9 D. ACH Services ..................................................................................................... 12 E. Wire Transfer Services ....................................................................................... 16 F. Data Translation Services ................................................................................... 18 G. Courier Services ................................................................................................. 19 H. Cash Vault Services ........................................................................................... 20 I. U.S. Bank EasytaxSM Services ............................................................................ 21 J. Paper-Based Disbursement Services ................................................................. 22 K. Positive Pay Services ......................................................................................... 24 L. Lockbox Services ............................................................................................... 25 M. E-Disbursement Services ................................................................................... 27 N. Commercial Sweep Accounts – Loan Option ...................................................... 28 O. Commercial Sweep Accounts – Investment Option ............................................ 29 P. Master Repurchase Agreement (MRA) ............................................................... 31 Q. Singlepoint® International Request for Transfer Services ................................... 35 R. Focal Point Plus Services ................................................................................... 36 S. Healthcare Payment Consolidator Services ........................................................ 37 V. Terms Applicable to Specific Foreign Exchange Services ................................ 38 A. Foreign Exchange Web ...................................................................................... 38 B. Foreign Currency Accounts ................................................................................ 40 VI. Terms Applicable to Specific Money Center and Safekeeping Services .......... 41 A. Investment and Depository Services ................................................................... 41 B. Safekeeping Terms and Conditions .................................................................... 43 C. Terms And Conditions for Electronic Delivery ..................................................... 45 Page 1 (Effective 1/02/2014) I. INTRODUCTION 1. Definitions. a. “Agent” means any director, officer, employee, representative, affiliate, third-party vendor or any other person acting on behalf of the Customer with the actual, implied or apparent authority of Customer. Bank may rely on any grant of authority until it receives written notice of its revocation and is given a reasonable amount of time to act upon such notice. b. “Bank” means U.S. Bank National Association and each subsidiary or affiliate of U.S. Bank that provides Services to Customer. c. “Business Day” means any day on which a majority of Bank’s offices are open to the public for substantially all banking functions. Saturdays, Sundays, federal or state holidays or any day recognized by a Federal Reserve Bank as a holiday shall not be considered a Business Day, even if Bank’s offices are in fact open. d. “Customer” means the business entity and any parent company, subsidiary or affiliate for whom Bank provides a Service. 2. Other Agreements, Laws and Regulations. These terms and conditions and the Master Services Agreement (or existing Treasury Management Service Agreement or equivalent document executed by Customer) are collectively referred to herein as the “Agreement”. The Services are provided to Customer subject to the following other agreements, laws and regulations, which are hereby incorporated into and made part of this Agreement: a. the set-up materials, user guides, and any supplement thereto required by Bank to implement a specific Service (referred to in the Agreement as the “Implementation Documents”); b. the most current fee and availability schedule and other fee disclosures provided to Customer, including account statements; c. the provisions of the then current deposit account agreement and accompanying disclosures and fee schedules, which govern standard deposit accounts and other depository services; d. the Uniform Commercial Code, as enacted in the State of Minnesota; e. any applicable automated clearinghouse operating rules, including, without limitation, the National Automated Clearing House Association Operating Rules and Guidelines (the “NACHA Rules”) and the rules promulgated by the Electronic Check Clearing House Organization (the "ECCHO Rules"); and f. federal, state and local laws and regulations applicable to Bank or Customer, including, without limitation, Regulation CC promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Section 229.1, et seq. ("Regulation CC"), all Operating Circulars promulgated by the Board of Governors of the Federal Reserve System, and the regulations overseen by the Office of Foreign Assets Control (“OFAC”). 3. Change of Terms/Amendments to Agreement. Bank may change the terms of this Agreement at any time upon reasonable written or electronic notice to Customer or by any other method permitted by law. Any and all amendments to this Agreement must be in writing and executed by Bank. In the event performance of the Services in accordance with the terms of this Agreement would result in violation of any present or future statute, regulation or government policy to which Bank is subject, and which governs or affects the transactions contemplated by this Agreement, then this Agreement shall be deemed amended to the extent necessary to comply with such statute, regulation or policy, and Bank shall incur no liability to Customer as a result of such violation or amendment. No course of dealing between Bank and Customer will constitute a modification of this Agreement or constitute an agreement between the Bank and Customer regardless of whatever practices and procedures Bank and Customer may use. 4. No Third Party Beneficiaries/Third Party Claims. Services provided by Bank are for the sole and exclusive benefit of Customer, and no other persons or organizations shall have any of the rights and remedies arising under this Agreement. Customer agrees to indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities and damages of third parties of any nature whatsoever, including, without limitation, reasonable attorney fees and court costs at trial or appeal arising directly or indirectly from any Service delivered to Customer pursuant to this Agreement. 5. Transferable Record. The Agreement and the Implementation Documents are each a “transferable record” as defined under applicable law relating to electronic transactions. Bank may create a microfilm, optical disk, or other electronic image of the Agreement or Implementation Document that is an authoritative copy as defined under such law. Bank may store the authoritative copy of such Agreement and Implementation Document and then destroy the paper original as part of Bank’s normal business practices. Bank may control and transfer such authoritative copy as permitted by such law. 6. Foreign Account Tax Compliance Act. If a payment made by either party under this Agreement is or could become subject to the U.S. Federal withholding tax imposed by Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (“FATCA”), then (i) each party shall provide to the other party such information, and shall disclose to the applicable governmental authorities such information, as may be required in order for such party to comply with all applicable requirements of FATCA and to determine that the other party has complied with FATCA, and (ii) a party that fails to comply with FATCA shall indemnify the other party for all costs, damages, and liabilities arising out of such party’s failure to comply with FATCA. 7. Disclaimer of Warranties. NOTICE: BANK MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN LAW OR IN FACT, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND OF MERCHANTABILITY, EITHER TO CUSTOMER OR TO ANY OTHER PARTY, WITH RESPECT TO THE SERVICES PROVIDED BY BANK OR ITS AGENTS OR WITH RESPECT TO SOFTWARE PRODUCTS PROVIDED OR MADE AVAILABLE TO THE CUSTOMER FOR ITS USE BY BANK IN CONNECTION WITH THIS AGREEMENT AND ANY SERVICE. Page 2 (Effective 1/02/2014) II. TERMS APPLICABLE TO ALL GLOBAL TREASURY MANAGEMENT, FOREIGN EXCHANGE AND MONEY CENTER AND SAFEKEEPING SERVICES 1. Services. Bank may provide Services that are not specifically included in the Services section of this Agreement. By accepting and using any Service, Customer agrees that the Service will be governed by this Agreement and any other conditions communicated to Customer by Bank. Certain Services included in this Agreement may not be available or may not be provided in certain market areas. 2. Proprietary Information. Customer acknowledges that this Agreement, all related documentation and computer programs and systems used in providing Services, and all information related thereto constitute proprietary property of Bank that is of great commercial value. Customer agrees that it shall not acquire any proprietary interest or rights therein as a result of its use of the Services and shall keep all such proprietary information strictly confidential. 3. Representations and Warranties. Customer and Bank each represent and warrant to the other, as of the date this Agreement is entered into and at the time any Service is used or performed, that: (a) it is validly existing and in good standing under the laws of the jurisdiction of its organization; (b) it has all requisite power and authority to execute and deliver, and to perform its obligations under, this Agreement and each Service used or performed by it; (c) this Agreement has been duly authorized and executed by it and constitutes its legal, valid and binding obligation; and (d) any consent or authorization of any governmental authority or third party required to be obtained by it in connection with this Agreement or any Service used or performed by it has been obtained. 4. Financial Review. Bank’s willingness to provide Services to Customer is dependent on the Customer’s financial condition. Customer’s financial condition is subject to review by Bank from time to time, and such reviews must be satisfactory to Bank in its sole discretion and opinion. Customer shall, upon request, provide to Bank any such information as Bank may require to perform any such review. Customer’s failure to meet such standards or provide such information or assistance when requested shall constitute a breach of this Agreement and shall permit Bank to cease providing Services upon written notice to Customer. 5. Fees. Unless otherwise agreed by Bank in writing, Customer shall pay Bank the fees, charges and assessments set forth for the Services provided in the most current fee schedules and other fee disclosures provided to Customer (including account statements), plus additional fees and expenses for extraordinary Services. The price schedule for each Service shall be deemed accepted by Customer upon provision of the Service to Customer. In addition, Customer shall pay Bank the amount of any taxes levied or leased on fees charged pursuant to this Agreement, including, without limitation, federal, state, or local privilege excise or sales taxes based on gross revenue, any taxes or amount in lieu thereof paid or payable by Bank, excluding Bank’s income taxes and any assessments charged to Bank directly as a result of providing the Services. Bank may change the amount or type of service charges from time to time. Fees for Services used by Customer may be charged in full to Customer’s account(s) or may be offset through account analysis by applying earnings credit to Customer's service charges to determine a single monthly net service charge. The applicable earnings credit rate is established by the Bank and will change from time to time without advance notice to Customer. Customer’s net service charge could be zero if such earnings credit exceeds total charges in a given month. If Customer’s earnings credit is insufficient to offset the amount due hereunder, Customer agrees to pay such amount to Bank upon demand. Customer authorizes Bank to debit Customer’s account(s) with Bank for any and all fees, expenses or other charges owed by Customer to Bank under this Agreement. 6. Deposit Accounts. Most Services require that Customer maintain one or more deposit accounts with Bank. All checks, wire transfers, ACH payments and other items deposited into such accounts are provisionally credited and taken subject to later verification by Bank and Bank's receipt of final settlement. Deposited items that are deposited and later returned unpaid will be charged against the account without prior notice. Customer agrees to pay Bank for any overdraft or overpayment in any of Customer's accounts. Bank will first attempt to recover such amounts from the account associated with the debt. If the available balance of such account is insufficient to compensate Bank, Customer authorizes Bank to charge any account Customer maintains with Bank for any amount remaining due under this section. 7. Security Interest. Customer grants to Bank a consensual possessory security interest in Customer’s deposit accounts maintained with Bank and the funds held therein to secure payment of all of Customer’s obligations under this Agreement. 8. Accuracy and Timeliness of Information. Bank will use reasonable efforts to provide the information requested through the Services in a prompt fashion, but shall not be liable for temporary failure to provide timely information. In such event, Customer shall be responsible for carrying out banking business through alternative delivery channels. Bank shall not be liable for any inaccurate or incomplete information with respect to transactions which have not been completely processed or posted to Bank’s systems prior to being made available pursuant to the Services. 9. Authorized Signers and Users. Customer shall appoint certain Authorized Signer(s) in the U.S. Bank Master Services Agreement or in such other format or document as may be agreed by Bank. Customer agrees that Authorized Signers shall be authorized to act on behalf of Customer in all actions taken under this Agreement and may enter into all transactions contemplated in this Agreement, including, without limitation, selecting Services for the benefit of Customer, appointing Agents to act on behalf of Customer in the delivery of Services, signing additional documentation that may be necessary to implement Services and giving Customer’s instructions with regard to any Service, including, without limitation, wire transfers, ACH transfers and other electronic or paper transfers from or to any account Customer maintains with Bank. The Authorized Signer(s) designated in the U.S. Bank Master Services Agreement or equivalent document shall appoint Agents to use the Services provided for the benefit of Customer (“Authorized Users”). Authorized Users may act on behalf of Customer for a particular Service in accordance with the relevant Implementation Documents or other document(s) establishing the Authorized Users’ responsibilities or in accordance with the authority granted by Customer. Customer may revoke the authority of or change the Authorized Signers or Authorized Users at any time upon prior written notice or electronic notice (if permitted by Bank) and execution of additional documentation required by Bank. Such change or revocation shall not be binding upon Bank until it has received the required written notice or electronic notice (if permitted by Bank) and has had a reasonable opportunity to act thereon. In any event, Bank may act on instructions that it believes in good faith were provided by an Authorized Signer or Authorized User, or anyone purporting to be an Authorized Signer or Authorized User. 10. Check Samples. Forms Approval and Service Implementation. Bank reserves the right to approve the form of Customer’s checks, drafts, deposit slips and similar documentation. Prior to initiating a new account or Service, or at any other necessary time, Customer agrees to provide all information and conduct any test that Bank may reasonably request, including, without limitation, completing Implementation Documents, signature cards, corporate resolutions and other documents and assessing test tapes and transmissions. Customer acknowledges that Services will not commence or continue until such time as an approved item or test is provided to Bank and determined by Bank to be satisfactory. Customer shall be responsible for initial product installation, whether or not Bank provides telephone or on-site installation support. 11. Security Procedures. a. Introduction. Bank and Customer shall agree to one or more security procedures that must be used in connection with certain Service(s). Customer acknowledges and agrees that it has been informed of and understands Bank’s security procedures and that such security procedures are commercially reasonable. Customer agrees to be bound by any payment order, transaction or service change order that is acted upon by Bank in accordance with such security procedure. Customer understands that the security procedures are not for the purpose of detecting errors in the transmission or content of information controlled Page 3 (Effective 1/02/2014) by Customer. If Customer selects certain security procedures to use in connection with a Service and those security procedures provide less protection against unauthorized transactions or activity than other security procedures offered by Bank in connection with such Service, the security procedures selected by Customer shall be deemed commercially reasonable to the same extent as the security procedures offered by Bank that provide greater protection. Bank reserves the right to issue new security procedures and/or to cancel or change any security procedures by giving verbal or written notice to Customer . Bank also reserves the right to periodically audit Customer's security procedures and information technology processes, and to mandate controls or suspend Services until Customer complies with such security procedures. b. Access. Customer shall be solely responsible for designating individuals authorized to access Services. Access to Services will be controlled through the use of user IDs, personal identification numbers, passwords, digital certificates/signatures, private keys or other security devices (“Codes’). Customer is solely responsible for maintaining its own internal security and agrees to use the utmost care in selecting any company or individual given access to use one or more of the Services. Codes that are assigned to individual Authorized Users shall not be shared with any other person, including other Authorized Users and Customer shall not disclose any information regarding the Services that an unauthorized user would find helpful to obtain access to all or part of any Service. Customer assumes all risk of accidental disclosure or inadvertent use of any Codes by any party, whether such disclosure or use is on account of Customer’s negligent or deliberate acts or otherwise. If Customer or its Agents has reason to believe that any security procedures or Codes have or may become known by unauthorized persons (whether or not employed by Customer) or if Customer believes its network or computer systems have been compromised or its computers infected, Customer shall immediately notify Bank by telephone and confirm such verbal notification in writing to Bank within 24 hours. Bank will replace the security procedures and/or Codes in accordance with Bank’s procedures. Customer shall be solely responsible for funds transfer instructions and other communications or transactions initiated before Bank received Customer’s notice and had a reasonable time to act on such notice. Customer agrees to defend and indemnify Bank against any claims, losses, damages, costs, expenses, fines and other liabilities arising out of Customer’s failure to maintain the security and confidentiality of the Codes or arising out of the unlawful use of any website or portal by Customer or any person who obtains access to a website or portal using the Codes. c. Confidentiality. Customer and Bank represent, warrant and mutually agree that all confidential information concerning the other party or parties that comes into its possession in connection with any of the Services will be maintained in strictest confidence and shall not be used or divulged to any other party except as may be necessary or advisable for the due performance of any of the Services or as required by applicable law. Bank shall maintain physical, electronic, and procedural safeguards to keep Customer's confidential information secure. Customer’s obligation to maintain the confidentiality of all security procedures shall survive the termination of any Service or this Agreement. Customer acknowledges that certain Services may involve the handling of confidential consumer information that may be subject to privacy laws and regulations, including unauthorized access or breach notification regulations. Customer agrees to notify Bank immediately if Customer sends or receives protected health information that requires the execution of a business associate agreement. d. Verbal or Written Instructions. For some Services, Bank may choose to honor Customer’s request to give Bank verbal or written instructions regarding the Services. Customer agrees that Bank may in good faith rely on such verbal or written instructions that purport to come from an authorized Agent of the Customer without independent verification by Bank. e. Fraud prevention measures. Bank offers certain products and Services such as Positive Pay and account blocks or filters that are designed to detect or deter fraud. Failure to use such Services could substantially increase the likelihood of fraud. If Customer fails to implement any of these products or Services, or if Customer fails to follow these or other precautions reasonable for its particular circumstances, Customer agrees: (i) it will be precluded from asserting any claims against Bank for paying any unauthorized, altered, counterfeit or other fraudulent item that such product, Service, or precaution was designed to detect or deter; (ii) Bank will not be required to re-credit Customer’s account or otherwise have any liability for paying such items; and (iii) Customer will pay all costs and expenses incurred by Bank for all efforts undertaken by Bank to recover any losses incurred by Customer. 12. Unsecured Electronic Transmissions and Instructions. Bank shall transmit to Customer information related to Services via secure electronic transmissions. If Customer elects to send or receive instructions or reports from Bank via unsecured electronic means, including, without limitation, facsimile transmission, voice mail, unsecured e-mail, pager or other unsecured electronic or telephonic methods (“Electronic Transmission”), Customer acknowledges that such Electronic Transmissions are an inherently insecure communication method due to the possibility of error, delay and observation or receipt by unauthorized personnel. Bank may rely in good faith on Customer’s instructions regarding how and to what number or e-mail address Electronic Transmissions should be sent and may rely on any Electronic Transmission that it reasonably believes to have been initiated by the Customer. Should Customer elect to send or receive unsecured Electronic Transmissions to or from Bank, Customer assumes all risks, and Bank shall not be liable for any loss, that results from the nonreceipt, disclosure, alteration or unauthorized access of any such unsecured Electronic Transmission. 13. Account Blocks and Filters. ACH debit blocks and check blocks prevent ACH debits and checks from posting to Customer’s account. ACH filters and check filters enable Customer to set various criteria to authorize certain transactions to post to Customer’s account while excluding others. If an ACH debit or check filter is established by Customer, any ACH debit entry or check presented that does not specifically meet the criteria will be dishonored or sent back to the originator of the transaction. Customer acknowledges that the effectiveness of the filters is dependent on the accuracy and timeliness of the information provided by Customer. In addition, certain ACH transactions such as returns or adjustments cannot be blocked per NACHA Rules. If Customer desires to modify a block or filter setting, Customer shall notify Bank at least 72 hours in advance of the changes taking effect. 14. Computer Equipment and Software. Many Services require the use of computer hardware and software or other equipment. Customer is responsible for maintaining its computer and equipment (including those provided by or through Bank for use with Services) in good working order. Customer shall ensure that computers and other equipment have the necessary compatibility and format to interface with Bank’s systems, including, without limitation, the ability to support the Bank's security procedures. Customer agrees to install upgrades and other system enhancements within a reasonable time of being requested to do so by Bank. License agreements for necessary software shall either be embedded in the software or separately documented. Customer agrees to comply with all applicable software license agreements, whether or not such agreements have been executed by Customer. Customer has no rights or ownership in any software provided by or through Bank and shall not transfer, copy, alter, modify, reverse engineer, reproduce, or convey in any manner, in whole or in part, any such software. Customer shall return all software and user manuals associated with any software upon request. Bank makes no representations or warranties with respect to any equipment or software provided by Bank. 15. Transactions on Non-Business Days/Cutoff Times. Transactions, deposits, payment orders, entries or other requests by Customer received by Bank on a non-Business Day or after established cutoff deadlines may be treated by Bank as received on the next Business Day. Bank may change any cutoff time or other deadline at any time. Bank will make a reasonable effort to notify Customer of any changes in advance. 16. Customer-initiated Transactions and Instructions. Bank will honor Customer’s transactions and instructions (including adjustments, amendments and cancellations) only when Customer has complied with this Agreement and related policies and procedures. Bank will be under Page 4 (Effective 1/02/2014) no obligation to honor, either in whole or in part, any transaction or instruction that: a. exceeds Customer’s collected or available funds on deposit with Bank; b. Bank has reason to believe may not be authorized by Customer; c. involves funds subject to a hold, dispute or legal process preventing their withdrawal; d. violates any provision of any applicable regulation of the Federal Reserve Bank or any other federal, state or local regulatory authority; or e. Bank has reasonable cause not to honor, for the protection of either Bank or Customer. 17. Inconsistent Name and Account Number. If Customer or third party acting on Customer’s instruction initiates a fund transfer instruction or payment order (“Payment Order”) to Bank that describes the person to receive the proceeds of such Payment Order (the “Beneficiary”), the Beneficiary’s bank, or an intermediary bank by name and an account or other identifying number, Bank and subsequent parties to the Payment Order may rely on and act solely on the basis of such number, even though the name and number do not agree and even though Bank and subsequent parties know or have reason to know of the inconsistency. Customer’s obligation to pay the amount of the Payment Order to Bank is not excused in such circumstances. With respect to incoming Payment Orders that do not include an account number recognizable to Bank, Bank may return the Payment Order to the sending financial institution without incurring any liability to Customer. 18. Intercompany Services/Authority to Transfer or Commingle Funds. In the event that Customer requests Bank to provide Services to a parent company, subsidiary, affiliate, or other commonly owned Company, Customer agrees that it shall be jointly and severally liable for such Company’s obligations under this Agreement. Customer hereby represents and warrants to Bank that any and all transfers and commingling of funds required or permitted by any Service or requested by Customer, and all other aspects of the performance hereby by Bank and Customer, have been duly authorized by all necessary parties, including, without limitation, the account holder of each account, and that Customer has obtained and shall maintain in its regular business records and make available to Bank upon reasonable demand, for a period of seven (7) years after termination of the Service, adequate documentary evidence of such authorization from the account holder of each account, executed by the duly authorized officer(s) of each such account holder in accordance with that account holder’s bylaws and/or board resolutions. Customer further represents and warrants that each transfer or commingling of funds authorized hereunder is not in violation of any agreement, bylaw or board resolution of Customer or any of its affiliates or subsidiaries, nor is it in violation of any applicable federal, state, local law, regulation, of any decree, judgment, order of any judicial or administrative authority. Each representation and warranty contained herein shall be continuing and shall be deemed to be repeated upon Bank’s effecting each transfer and commingling of funds authorized hereunder. 19. Customer Records. This Agreement and the performance of Services by Bank shall not relieve Customer of any obligation imposed by law, clearinghouse rules (including the NACHA Rules and ECCHO Rules), or by contract regarding the maintenance of records or from employing adequate audit, accounting and review practices as are customarily followed by similar businesses. In addition, Customer shall retain and provide to Bank, upon request, all information necessary to remake or reconstruct any deposit, transmission, file or entry for thirty (30) days following receipt by Bank of the deposit, file, entry, transmission or other order affecting an account. 20. Account Communications and Review Period. Customer agrees to regularly and promptly review and verify all statements, reports, check payment records, wire transfer instructions, confirmations, adjustments, charges, and other transactions ("Account Communications"). Customer may receive or access Account Communications electronically, including without limitation, delivery by posting to a password protected Web site or database. Customer acknowledges that Account Communications provided by Bank through electronic delivery is deemed to constitute good and effective delivery when posted by Bank, regardless of whether Customer actually or timely receives or accesses the Account Communications. Unless a different review period is specified elsewhere in this Agreement, Customer shall, within a reasonable time, which in no event shall be greater than thirty (30) calendar days following the day Bank first mails, electronically transmits or otherwise makes data available to Customer (“Review Period”), notify Bank of any error or discrepancy between Customer’s records and any Bank notice or statement, or any transaction or transfer Customer believes was not authorized. If Customer fails to notify Bank of such unauthorized transaction within the Review Period, Customer agrees that the failure to report any such errors or unauthorized transactions shall relieve Bank of any liability for the unreported erroneous or unauthorized transaction. In accordance with NACHA Rules, Customer must report an unauthorized ACH debit entry to the Customer’s account by the established deadline on the Business Day following the settlement date of the unauthorized entry. Otherwise, Customer's sole recourse is to the originator of the transaction. 21. Monitoring and Recording Communications. Customer acknowledges and agrees that Bank, and anyone acting on Bank’s behalf, may monitor and/or record any communications between Customer, or its Agent, and Bank, or anyone acting on Bank’s behalf, for quality control and other purposes. Customer also acknowledges and agrees that this monitoring or recording may be done without any further notice to Customer or its Agent. The communication that may be monitored or recorded includes telephone calls, cellular or mobile phone calls, electronic messages, text messages, instant or live chat, or any other communications in any form. 22. Limitation of Bank’s Liability for Services. Customer acknowledges that Bank’s fees for Services are very small in relation to the amounts of transfers initiated through these Services and consequently Bank’s willingness to provide such Services is based on the liability limitations contained in this Agreement. In addition to greater limitations on Bank’s liability that may be provided elsewhere in this Agreement, Bank’s liability related to any Service shall be limited exclusively to actual proven damages arising directly from its own gross negligence or willful misconduct. Bank will not, under any circumstances, be liable for any special, incidental, indirect, consequential, punitive or similar losses or damages, whether or not the likelihood of such losses or damages was known by either party at the time Customer first obtains Services from Bank or at the time any instruction or order is given to a Bank pursuant to any Service, and whether such losses or damages arise from tort, contract or otherwise. Bank’s maximum liability for any loss of interest shall be calculated using a rate equal to the average Federal Funds rate at the Federal Reserve Bank of New York for the period involved. Notwithstanding the foregoing, Bank shall not be liable for any losses or damages caused, in whole or in part, by the action or inaction of Customer, or any Agent or employee of Customer, whether or not such action or inaction constitutes negligence or a breach of this Agreement. Bank shall not be liable for any damage, cost, loss, liability or delay caused by accident, strike, fire, flood, war, riot, terrorist act, equipment breakdown, electrical or mechanical failure, acts of nature, any cause which is attributable to a third party, or any other cause or event that was beyond Bank’s reasonable control. Customer agrees that the fees charged for the performance of the Services shall be deemed to have been established in contemplation of these liability limitations. 23. Dispute Resolution. a. Governing Law. Except as otherwise provided herein, this Agreement shall be governed by the laws of the State of Minnesota, without regard to conflicts of law principles. b. Jury Trial Waiver. To the fullest extent permitted by law, Bank and Customer hereby agree to waive trial by jury in any judicial proceeding involving, directly or indirectly, any matter (whether in tort, contract or otherwise) in any way arising out of, related to or connected with these Services or this Agreement. Bank and Customer represent and warrant to each other that this jury trial waiver is knowingly, willingly and voluntarily given. c. Jurisdiction and Venue. Customer consents to the jurisdiction of the courts of the State of Minnesota, waives any argument that such venue Page 5 (Effective 1/02/2014) is inconvenient and agrees to bring litigation commenced in connection with this Agreement in either the District Court of Hennepin County or the United States District Court, District of Minnesota, Fourth Division. d. Collection Costs. Should Bank have to undertake any action to recover any amount due under this Agreement for the Services, including, without limitation, fees, overdrafts or overpayment, Customer will be liable to Bank for the cost of such effort, plus reasonable attorney fees in any court action or appeal therefrom. e. Adverse Claims. If Bank receives an adverse claim against any account, and Bank reasonably believes that it will not be protected if the claim is ignored, Customer agrees that Bank may place a hold on the affected account. Any such hold will remain in place only so long as reasonably necessary to resolve the claim or employ legal remedies to allow a court to decide such claim. Assuming compliance with this section, Bank shall have no liability for dishonored transactions due to the hold, and Customer agrees to reimburse Bank all costs, including attorney fees, incurred due to such adverse claim. 24. Necessary Third Party Service Providers. a. Third Party Networks. Some Services are provided by Bank through access to a third party network. Such Services are dependent upon the availability of the third party network on conditions acceptable to Bank. Bank reserves the right to discontinue the Service or provide the Service through an alternative third party network and shall have no liability should such network become unavailable. Bank does not warrant and shall not be responsible for Services received by Customer from any third party network. b. Third Party Vendors. Some Services and/or computer equipment and software are provided to Customer by a third party vendor selected by Customer who is unaffiliated with Bank. In those cases, the third party vendor is acting as Customer’s Agent rather than an agent of Bank, and Customer agrees to be bound with such third party's acts and omissions. Bank does not warrant and shall not be responsible for Services provided by unaffiliated third party vendors. Customer authorizes Bank to disclose to any third party vendor information concerning Customer to the extent required to deliver the requested Service. 25. Notices. All written notices to Bank shall be delivered or mailed to the address designated by Bank. Notices sent to Customer shall be delivered or mailed to Customer’s current lead account address or other known address if deemed more appropriate by Bank under the circumstances. Notices may be delivered to some Customers in electronic format, including posting to Bank's Web site, if requested or appropriate. 26. Severability. To the extent possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision shall be held to be invalid, illegal or unenforceable, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability, without rendering invalid, illegal or unenforceable the remainder of any such provision or the remaining provisions of this Agreement. 27. Waiver. A waiver by Bank or Customer of any term or provision shall not be construed as a waiver of such term or provision at any other time, or of any other term or provision. Bank’s waiver of the enforcement of any of the terms of this Agreement with respect to any transaction or series of transactions will not affect Bank’s right to enforce any of its rights with respect to other Customers or to enforce any of its rights with respect to later transactions with Customer. 28. Assignment. In addition to section 24 above, Bank may at any time assign or delegate its rights and duties under this Agreement. Customer may not assign or transfer its rights or obligations hereunder to any other person or entity without Bank's written consent, whose consent shall not be unreasonably withheld. 29. Termination. Any Services may be terminated by either party upon 30 days’ prior written notice to the other. Bank may also terminate or suspend any Services without notice to Customer if any of the following occurs: (a) Customer becomes insolvent or files, or has filed against it, any bankruptcy or other insolvency, reorganization, liquidation or dissolution proceeding of any kind; (b) a material adverse change occurs in Customer’s business or financial condition; (c) Bank has reason to believe that Customer has engaged in fraudulent or illegal activity; (d) Customer fails to maintain balances in accounts sufficient to cover overdrafts; (e) Customer violates the terms of this Agreement or any financing arrangement with Bank; (f) Customer fails to comply with security procedures or fails to provide financial information reasonably requested by Bank; (g) Bank determines it is impractical or illegal to provide any Services because of changes in laws, regulations or rules; (h) Bank, in good faith, is unable to satisfy itself that any Services have been properly authorized by Customer; or (i) Bank, in good faith, deems itself insecure. Notwithstanding any termination, the terms of this Agreement shall apply to all transactions which have been initiated prior to termination. Page 6 (Effective 1/02/2014) III. TERMS APPLICABLE TO ALL INTERNET-BASED SERVICES 1. Introduction. Bank offers a number of Services over the Internet. If requested by Customer and agreed to by Bank, Bank will grant Customer access to one or more of Bank's Internet Services in the manner established by Bank. Customer agrees that its use of Services from time to time offered by Bank via the Internet (collectively, the “Internet Services”) shall be governed by: (i) this Section and all other relevant sections of this Agreement, including, without limitation, sections governing the specific Services that are offered online; (ii) the other agreements, laws and regulations described in Section I.2. of this Agreement; and (iii) the applicable Terms of Use, as defined in Section III.2. below. 2. Terms of Use. Bank may post terms or rules of use (“Terms of Use”) governing Customer’s use of the Internet Services on Bank's Web site(s) for accessing such Services. Such Terms of Use shall supplement and amend the terms set forth in this section. In the event of a conflict between the Terms of Use and the rules set forth in this Agreement, the Terms of Use shall govern. Customer’s initial use of an Internet Service shall constitute an acceptance of the Terms of Use posted on the Web site. Bank may change the Terms of Use for any Internet Service at any time by posting notice of such change via an alert or message on a broadcast or message page of the Web site (“Broadcast Message”). All changes shall have an effective date. Customer’s use of the Internet Service after the effective date of any such change shall constitute an acceptance of the revised Terms of Use by Customer. Customer is responsible for establishing an internal procedure for reviewing the Broadcast Message page on a regular basis to obtain timely notice of changes to the Terms of Use. In the event that a specific Internet Service does not have Broadcast Message capability, Customer will be notified of any changes in accordance with section II.25 hereof. Neither Bank nor Customer will contest the validity, enforceability, or admissibility of hard copy printouts of the Terms of Use for any Web site or notices of changes to such Terms of Use provided in accordance with this section. Copies of such Terms of Use or notices, if introduced as evidence in tangible form in any judicial or administrative proceeding, will be admissible to the same extent and under the same conditions as other business records originated and maintained in documentary form. 3. Security. Customer agrees to use the Internet Services in accordance with the security procedures established by Bank. Without limiting the foregoing, Customer shall at all times use a Web browser that supports the level of encryption used by Bank as part of its security procedures. Due to emerging technologies and ensuing changes in security practices, Bank reserves the right to supplement or change its security procedures from time to time upon reasonable notice to Customer. Customer acknowledges and agrees that, notwithstanding anything to the contrary set forth in the Agreement, in matters of security, reasonable notice may be less than a day’s notice or even, in some cases, notice after the fact. Bank reserves the right to reject any transaction or service request that is not made in accordance with its security procedures. Customer shall designate one or more System Administrator(s). The System Administrator shall be responsible for setting up Internet Services and for establishing internal security procedures related to such Internet Services, including, without limitation, accepting delivery of software, system-wide configuration of Bank accounts, establishing authority levels, establishing authorization requirements, and distributing and re-setting IDs, passwords and other internal security devices related to the Internet Services. Customer's designation of the System Administrator may be amended or revoked from time to time upon notice to Bank. Bank shall have a reasonable time to act on any such notice. 4. Other Customer Responsibilities. a. Equipment and Software. Customer is responsible for obtaining (from Bank, in some instances), installing and maintaining the computer and communications equipment (including, without limitation, personal computers and modems), software, Web browsers, Internet access and communications services necessary to access and use the Internet Services in accordance with this Agreement. b. Use of Internet Services. Customer shall use its access to Internet Services and Web sites operated by or on behalf of Bank only to conduct its business through or with Bank and agrees to limit access to those Agents who require access to Internet Services. c. Antivirus Protection. Customer agrees to run antivirus software before transmitting data to or through any Web site. Customer may use any commercially available, industry recognized antivirus software of the type that detects and disinfects viruses automatically, without the need for the Customer to execute virus scanning for each file manually. Customer shall update its antivirus software on a regular basis and in no event less often than once every week. d. Anti-malware Protection. Bank may offer complimentary anti-malware software for use with certain Services that is designed to detect, deter or destroy different types of malware. Failure to install anti-malware software offered by Bank could substantially increase the likelihood of fraud and other losses. If Customer fails to install software offered by Bank, Customer agrees it will be precluded from asserting claims against Bank for any losses caused by malware which such software would have detected, deterred or destroyed. Bank will not be required to re-credit Customer’s account or otherwise have any liability for such losses. e. Network Security. Customer agrees to install and utilize current industry-standard network security for its information technology systems that access Services via the Web. Network security protection includes, but is not limited to, firewalls and intrusion detection systems. For certain Services, Bank may require Customer maintain specific network security protection in order to access the Services. 5. Disclaimer of Warranties. NOTICE: BANK PROVIDES ALL INTERNET SERVICES ON AN “AS IS,” “AS AVAILABLE” BASIS AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE INTERNET SERVICES OR THE CONTENT OR SECURITY OF ANY WEB SITE. BANK DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, BANK DOES NOT WARRANT THAT THE OPERATION OF ANY WEB SITE WILL BE UNINTERRUPTED OR ERROR-FREE. CUSTOMER IS RESPONSIBLE FOR TAKING APPROPRIATE PRECAUTIONS AGAINST DAMAGE TO ITS OPERATIONS WHICH COULD BE CAUSED BY INTERRUPTIONS OR MALFUNCTIONS OF ANY WEB SITE AND ASSUMES THE RISK OF SUCH OCCURRENCES. Page 7 (Effective 1/02/2014) IV. TERMS APPLICABLE TO SPECIFIC GLOBAL TREASURY MANAGEMENT SERVICES The following are additional terms and conditions applicable to specific Treasury Management Services offered by Bank. Bank may change the number or type of Services offered at any time. Customer shall not be bound by the terms and conditions for the specific Services described in Sections IV, V and VI of this Agreement to the extent Customer is not using such Service(s). A. E-PAYMENT SERVICE Customer may select the E-Payment Service that would allow its customers ("Payers") to make convenient payments to Customer through the Internet, an Integrated Voice Response (IVR) system, a 'live' call center, or a bill payment kiosk. Customer agrees that this Service shall be governed by this Section and all other relevant sections of this Agreement. 1. Internet. a. “Customer Payment Site” means the interactive Internet payment site hosted by Bank where Payers may make payments to Customer over the Internet. Bank will configure, implement, host and support the Customer Payment Site. If Customer provides the content for the Customer Payment Site, Customer agrees to indemnify and hold Bank harmless for any content that violates applicable law or payment network rules. b. Customer License. Bank shall have the right and license to use Customer’s name, trademarks, service marks, copyrights and logos and other textual information in connection with the Customer Payment Site solely for the purposes contemplated herein. c. “Administrative Terminal” means the interactive Internet site hosted by Bank where Customer may access reports, initiate payments on behalf of Payers, or initiate refunds. Bank will configure, implement, host and support the Administrative Terminal. Customer shall be solely responsible for setting up Authorized Users, access entitlements and internal controls within the Administrative Terminal. d. Links. Customer shall provide and maintain a secure link on its Web site to the Customer Payment Site. Customer shall be responsible for ensuring that the link to the Customer Payment Site takes Payer to the appropriate area within the Customer Payment Site. Customer shall be responsible for providing the agreed-upon data concerning Payer in a manner that meets Bank’s encryption or security methods during the exchange. Customer and Bank agree to use industry-standard security procedures and technology to ensure the security of the Customer’s Web site and the Customer Payment Site and to prevent data theft or unauthorized access. e. Payer Authentication. Depending on the applicable payment processing channel, Customer shall be responsible for verifying the identity of each Payer prior to the time Payer is linked to the Customer Payment Site. Customer agrees that Payers shall not be granted access to the Customer Payment Site link until Customer has verified the identity of each Payer using a commercially reasonable fraud detection system. For every Payer that accesses the Customer Payment System, Bank may rely on Customer to have completed such verification. 2. Compliance with laws and regulations. Customer agrees to comply with all applicable laws, rules and regulations, including without limitation, those issued by: (i) the National Automated Clearing House Association; (ii) any governmental entity, including (without limitation) the requirements contained in the Electronic Fund Transfer Act, Regulation E, and the Electronic Signatures in Global and National Commerce Act; (iii) the American with Disabilities Act; and (iv) any other entity or association that issues or sponsors a payment device, including (without limitation) the requirements of the Payment Card Industry (PCI) Data Security Standard and any credit card association, including Visa and MasterCard. Customer further agrees to comply with all payment network regulations for ATM debit networks. 3. Integrated Voice Response (IVR). To make an automated payment via a touch-tone phone, Payers may access the IVR system by calling a toll-free number provided by Bank or Customer. Customer shall have previously forwarded a one-time file of existing Payers ("pre-registration file") to Bank. In order to make a payment via the IVR system, Payers are required to input information that matches their user information in the pre-registration file. 4. Call Center. If this option is selected by Customer, Payers may make a payment by phone by calling a 24-hour call center and speaking to 'live' Bank personnel. Bank shall authenticate a Payer's identity in the manner specified by Customer, and agreed to by Bank, in the Implementation Documents. Customer acknowledges and agrees that the authentication of the Payer's identity in such manner shall constitute a commercially reasonable fraud detection system and Bank shall have no liability for all payments so authenticated. 5. Payer Authorization. If payment is made via the Internet, Payer will be prompted to authorize the payment and print a confirmation once Payer has reviewed the payment data and input the information necessary to complete the payment. If payment is made via the IVR or call center, the confirmation number will be read to Payer. Bank is not responsible for the detection of errors made by Payer or Customer and may rely on the information submitted or communicated by Payer or Customer. 6. Payment Processing. Payments shall be processed in the manner mutually agreed to between Bank and Customer, which may include ACH debit entries, debit cards, credit cards or other payment processing methods. Customer shall at all times be considered the originator of Payer’s payment. Depending on the applicable payment processing channel, payment processing may also be subject to the terms of any other agreement between Bank and Customer and between Customer and the payment transaction processor supported by Bank. Payments may be initiated through the Customer Payment Site, IVR system or Administrative Terminal. Bank will notify Customer of the payments that were initiated either through the Administrative Terminal or by delivering a file in the manner set forth in the Implementation Documents. Customer acknowledges that all payments are subject to adjustment, return, reversal and/or chargeback in accordance with the rules governing the applicable payment processing channel. Customer agrees to be liable to Bank for any such adjustment, return, reversal or chargeback. 7. Recurring Payments. The E-Payment Service provides Customer with the ability to offer Payers the option of making fixed or variable recurring payments. If permitted by applicable regulations, Payers have the ability to initiate a payment that recurs semi-weekly, weekly, semi- monthly, monthly or quarterly. Payers must be pre-registered in order to initiate variable recurring payments. 8. Fees. In addition to Bank’s standard fees, Customer agrees to pay additional fees and expenses for implementation of the E-Payment Service or other additional Services, if any, as may from time to time be disclosed to Customer by Bank. Customer also agrees to pay the applicable fees and expenses charged by the payment transaction processor supported by Bank, as set forth in Customer’s agreement with such processor. 9. Convenience Fee. a. If permitted by applicable regulations, the E-Payment Service offers a flexible convenience fee option that allows Customer or Bank to define and collect a convenience fee to be charged to Payers in connection with the payment transaction. Payers are provided with the opportunity to stop the payment process if they do not wish to pay the convenience fee. b. If Customer desires to collect the convenience fee, Customer shall be responsible for ensuring that convenience fee assessments comply with the relevant laws, rules and regulations. c. If agreed to by Bank and Customer, Bank may collect and retain the convenience fee. Customer agrees that Bank may, in its sole discretion, set, adjust, manage and collect the convenience fee as a means to wholly or partially offset Bank fees that may otherwise have been incurred by Customer. Bank’s willingness to collect the convenience fee shall be based on Customer’s projected payment volume, average ticket, type of transactions, or other considerations such as changes to Page 8 (Effective 1/02/2014) interchange fees and assessments. Bank may, in its sole discretion, establish or modify payment caps for sums paid by Payers. If the actual payment volume, average ticket or other considerations fail to meet Customer’s stated projections or do not completely offset Bank fees, Customer agrees that Bank may, in its sole discretion, require Customer to wholly or partially reimburse Bank for any resulting shortfall in Bank fees. 10. Transaction Controls. Customer agrees to notify Bank of any material change or anticipated material change in daily dollar activity or type of transaction processing, and obtain Bank’s consent to such change. Bank may, in its sole discretion, immediately upon written notice to Customer, place a maximum dollar limit on the E-Payment transactions or require Customer to provide reasonable security for Bank’s continued handling of such transactions. 11. Bill Payment Kiosk. If selected by Customer and agreed to by Bank, Customers may deploy bill payment kiosks at their public locations to accept cash and card payments from Payers. Customer’s kiosk payment data will be consolidated with their payment data from other E-Payment channels. While using the bill payment kiosk: a. Customer is responsible for safeguarding the kiosk and agrees to hold harmless and indemnify Bank and its officers, agents and employees from and against any and all claims, losses, damages, liability, causes of action and costs (including but not limited to court costs and attorney’s fees and disbursements), in any way relating to or arising out of the kiosk, including but not limited to bodily injury, property damage, damage to the kiosk, economic damages, fines and/or penalties. Customer agrees to protect the kiosk and its contents from damage, loss, or theft. Customer waives any rights of recovery against Bank arising from such loss, theft, damage, or destruction. Customer is solely responsible for providing security against theft at any kiosk location and Bank will have no liability to Customer in the event of theft or damage. Customer shall be responsible to physically inspect the kiosk at least weekly to insure that no tampering/skimming devices have been installed on the kiosk. Customer is responsible for any and all losses stemming from such occurrence. b. Customer is solely responsible for ensuring that: (i) the location for the kiosk has adequate and uninterrupted power and broadband internet connectivity via ethernet or digital subscriber line; (ii) each network port for a kiosk has a public IP address; (iii) the location for the kiosk is secure and protected from weather and high or low temperatures beyond the design tolerances of the machine; and (iv) kiosk sites are free of old equipment, obstructions, and other material that may hinder proper placement of kiosk or end-user access to the kiosk. c. Customer shall also be solely responsible for any site modifications and construction and for the removal of packaging and waste materials. B. INFORMATION REPORTING AND TRANSACTION SERVICES Information reporting and transaction Services may be provided by Bank to Customer through SinglePoint®, Global Trade or other applications or systems as may be introduced by Bank ("System(s)"). The System may also be used by Customer to automate many of the Services offered by Bank and also may provide access to other Bank systems that initiate transactions. Customer agrees that such use of the System shall be governed by this Section and all other relevant sections of this Agreement. 1. Introduction. If requested by Customer and agreed to by Bank, Bank will grant access to Bank’s System(s) in the manner agreed to by Bank. Customer agrees to be bound by any terms of use and license agreements associated with these Systems. 2. Information Reporting. Bank is authorized to store, process, transmit and make available through Bank’s agencies and Systems and through third party data processing providers (“Providers”) information regarding accounts designated by Customer. Bank or Providers will transmit to Customer information regarding its account(s) and/or other financial data through the System on a periodic basis. Customer may elect to receive data through one or more delivery mechanisms, including, without limitation, the Internet, computer dial-up, telephonic delivery, facsimile, CD-Rom or unsecured e-mail. Section II.12. shall apply in the event Customer elects to receive unsecured reports via an Electronic Transmission. Balance and related information for Customer’s account(s) held at other financial institutions may be made available by these financial institutions or Providers that input information into Bank's System. Bank will use reasonable care in submitting data into the System, but assumes no responsibility for the accuracy or timeliness of the account information and other financial data supplied by other financial institutions or Providers. Bank will make every reasonable effort to deliver information by the mutually agreed upon time, but does not guarantee a specific delivery time. Accordingly, Bank’s responsibility to Customer with respect to the delivery of information shall be to deliver such work as close to the agreed time as may be reasonably practicable. 3. Transaction Services. Customer may use SinglePoint®, Global Trade, or other similar System to access treasury management or trade finance transaction Services offered by Bank for which Customer has enrolled. Depending on the type of product offered by Bank, access to the transaction Services may include, but are not limited to, ACH, ACH positive pay, wire transfer payments, book transfers, stop payments, positive pay, reverse positive pay, image access, DDA adjustments and system administration. Customer agrees that use of the System for transaction Services shall be governed by this Section B and all other sections of this Agreement that are applicable to the product or Service being accessed. 4. Security Procedures/System Administrator. Customer agrees to operate the System in accordance with the procedures established by Bank. Bank reserves the right to reject any transaction or Service request that is not made in accordance with these procedures. Customer agrees to designate one or more System Administrator(s). The System Administrator is responsible for setting up Services available through the System and for establishing internal security procedures related to such Services, including, without limitation, system-wide configuration of Bank accounts, assigning users, establishing authority levels, establishing authorization requirements, distributing and re-setting passwords and other internal security devices related to the Services. Designation of the System Administrator may be amended or revoked from time to time upon notice to Bank. Bank shall have a reasonable time to act on any such notice. Customer is solely responsible for maintaining a secure work environment to ensure against use of the System by unauthorized individuals. Security procedures to be followed by Customer include, without limitation, informing Agents that any passwords should not be shared with anyone and to secure physical access to the terminals used for Services when an Agent has logged on to the system or otherwise. 5. Manuals. Bank will provide Customer with a manual(s) in paper or electronic format that will set forth the applicable System's policies and procedures with which Customer agrees to comply. Bank may, without prior notification, make amendments to any manual. Bank owns or has obtained all proprietary rights to the manuals and Customer agrees not Page 9 (Effective 1/02/2014) to duplicate, distribute or otherwise copy Bank’s manuals without Bank’s prior written consent. Any manual will at all times remain the property of Bank and Bank reserves the right to request Customer to return all printed copies of such manual within thirty (30) days of termination of this Service. 6. Customer Responsibilities. Customer will purchase (from Bank, in some cases) and provide all equipment and software necessary to use the applicable System in accordance with this Agreement. Bank shall have no responsibility and makes no warranties for such equipment or software. Customer agrees to use the System solely to conduct its business with Bank and agrees to limit access to those Agents who require access to the System. Customer agrees that in addition to other limitations to Bank’s liability elsewhere in this Agreement, Bank shall not be liable for any loss or damage arising directly or indirectly from the following: a. any inaccuracy or incompleteness in the input of an order or instruction from the Customer; b. any failure by Customer to obtain a confirmation of an order or instruction; or c. any cancellation or attempted cancellation by Customer of an order or instruction. 7. International Information Reporting. If requested by Customer and agreed to by Bank, Bank may provide incoming international information reporting through Providers or via SWIFT, which shall be governed by the terms of this Section B, other applicable sections of this Agreement, and other applicable agreements or law. Bank shall receive the international information reporting data through Providers or via SWIFT from Customer’s account-servicing Bank (“Servicing Bank”) and shall display such data to Customer using SinglePoint® or other similar System. If Customer makes a request to Bank for an off-schedule international information report from the Servicing Bank, Customer agrees that Bank shall have no liability if the Servicing Bank does not support the off -schedule request or does not respond to the request in a timely manner. C. ELECTRONIC DEPOSIT SERVICES Electronic Deposit Services provide Customer with the option of making electronic deposits using one or more products offered by Bank. Customer agrees that the Electronic Deposit Services shall be governed by this Section and other relevant sections of this Agreement. 1. Processing Options. Customer shall at all times maintain an account with Bank. Customer captures checks or check information received from its Payor Customers into Check Images and/or MICR Data, and transmits the same to Bank for processing and collection. Bank will seek to collect such Check Images and/or MICR Data through the check collection system by presenting or exchanging Check Images and/or MICR Data, or using Check Images and/or MICR Data to create a Substitute Check, a Demand Draft or a Photo-In-Lieu (“PIL”) for collection. If ACH processing is selected by Customer, checks that are eligible to be used as source documents to originate ARC entries, POP entries, or BOC entries are converted to ACH Entries and processed through the ACH system. Checks ineligible for ACH conversion are sent through the check collection in the manner previously described. 2. Definitions. a. “ACH Entry” means an ARC, POP or BOC debit entry originated to debit funds from a Payor Customer’s account at a financial institution in accordance with the NACHA Rules. b. “Check Image” means an electronic image of an original paper check or an electronic image of a Substitute Check that is created by Customer, Bank or another bank or depository institution in the check collection system. c. “Check Image Metadata” means information about the Check Image, as well as pointers to the actual image data (also known as image tags). d. “Customer System” means the computer hardware and/or software and/or Web-based applications located at Customer’s site that is used by Customer to prepare Electronic Deposits and to access the Electronic Deposit Services. e. “Electronic Deposit” means electronic information (including Check Images, Check Image Metadata, MICR Data, dollar amount or ACH Entry information), obtained from capturing information from an original paper check and remittance documentation that is transmitted to Bank for deposit, processing and collection. f. "Electronic Deposit Services" means an array of products and Services that allow organizations that receive check payments and/or remittance payments by mail, dropbox or a walk-up environment to deposit all payments electronically at Bank, as further described in the applicable User Manual. g. "Electronic Deposit System" means Bank's computer systems or databases that Customer may access in order to obtain Electronic Deposit Services. h. "MICR Data" means information from the Magnetic Ink Character Recognition stylized printing on the bottom of checks comprising of routing, transit, account and check serial numbers. i. “Payor Customers” means clients and/or customers of Customer that submit original paper checks or check information to Customer for payment obligations owed to Customer. j. “Photo-In-Lieu” or “PIL” means a photocopy of an original paper check, other than a Substitute Check, created from a Check Image. k. “Remotely-Created Check” or “Demand Draft” means a paper item, other than a Substitute Check or PIL, which (i) is drawn on a Payor Customer account, (ii) does not bear the signature of the Payor Customer, and (iii) is authorized by the Payor Customer to be issued in the amount for which the item is drawn. l. “Substitute Check” means a paper check document that meets the definition of a “substitute check” in the Check Collection for the 21st Century Act as implemented by Regulation CC of the Federal Reserve Board. Page 10 (Effective 1/02/2014) 3. Customer Authorizations and Notifications. Customer shall adhere to any and all applicable laws, regulations and clearinghouse rules, including but not limited to, obtaining all necessary consents and authorizations from, and/or providing all necessary disclosures to its Payor Customers concerning the creation of Demand Drafts or the conversion of Payor Customers’ checks to ACH Entries. Customer is solely responsible for ascertaining the content, method, and frequency of any required authorizations and notifications. 4. Determination of Items Eligible for Electronic Deposit. a. Only original paper checks that qualify as a source document may be converted to an ARC Entry, POP Entry or BOC Entry under NACHA Rules. Customer represents and warrants to Bank that Customer shall not use the Electronic Deposit Services to transmit electronically created payment orders (which are Check Images, PILs or Demand Drafts that were not originally captured from the original paper checks), unless permitted by applicable law. Bank will apply certain automated internal edits and screens to the MICR Data and/or Check Images submitted by Customer to determine whether the original paper check is a source document that qualifies for conversion to an ACH Entry. Customer acknowledges and agrees that Customer is the Originator of such ACH Entries under NACHA Rules regardless of whether Customer or Bank initiates the ACH Entry into the payment system. b. Only a draft, payable on demand, and drawn on or payable through or at an office of a bank, is eligible for deposit as a Check Image. Without limiting the generality of the preceding sentence, the following items are not eligible for deposit as Check Images under the Electronic Deposit Services, and Customer must deposit these original paper checks with Bank for collection: (i) checks, including travelers checks, that are drawn on banks located outside of the United States; (ii) checks payable in a medium other than U.S. dollars; (iii) non-cash items (as defined under Section 229.2(u) of Federal Reserve’s Regulation CC); (iv) promissory notes and similar obligations, such as savings bonds; (v) checks issued by and drawn on Customer or an affiliate of Customer; and (vi) any other class of checks or drafts as identified by Bank to Customer from time to time. 5. Capture of Checks and Check Information. a. For certain Electronic Deposit Services, Customer shall use scanning hardware and software that meets Bank's specifications. Depending on the type of Electronic Deposit Service or processing option(s) selected by Customer, Customer shall be responsible for accurately capturing an image of each paper check, the MICR Data and the correct dollar amount of the check into the Customer System. Depending on the type of Electronic Deposit Service selected by Customer, in the event the condition of a paper check precludes a complete automated read, Customer shall be responsible for visually inspecting the check and repairing the MICR Data. Customer shall be responsible for the inspection of all Check Images to ensure the legibility of the Check Image (including without limitation the dollar amount and signature of the drawer), for the repair of any MICR Data (if applicable), and for ensuring that any and all information on a paper check is accurately captured and legible in the resulting Check Image and/or MICR Data and otherwise complies with any Check Image or MICR Data quality standards and guidelines that may be established by the American National Standards Institute (ANSI), ECCHO Rules, the Federal Reserve, other applicable regulatory agency or clearinghouse or that Bank may provide to Customer from time to time. Customer acknowledges that current image technology may not capture all security features (e.g. watermarks) contained in the original paper checks, and agrees to assume any and all losses resulting from claims based on security features that do not survive the image process. b. Customer further acknowledges that Bank does not verify the accuracy, legibility or quality of the Check Image or MICR Data prior to processing an Electronic Deposit. Bank may, in its sole discretion, reject, repair, alter, amend, re-format or convert the Check Image Metadata or MICR Data submitted in an Electronic Deposit in accordance with general check collection practices and industry presentment standards, but Bank shall have no obligation to reject, repair, alter, amend, re-format or convert the Check Image Metadata or MICR Data. If Bank requires that Customer comply with certain formatting standards or other guidelines when submitting Electronic Deposits and Customer declines to implement, or comply with, such standards or guidelines, Customer acknowledges that Bank shall not be liable for any error or loss that results from Bank processing such Electronic Deposit or from Bank’s re-formatting or conversion of the Electronic Deposit prior to processing. c. Bank shall not be liable to Customer for failure to process an Electronic Deposit, or any error that results in processing or collecting an Electronic Deposit: (i) for which Customer has not provided Bank with full and correct MICR Data and dollar amount from the original paper check; (ii) for which Customer has not provided an accurate and legible image of the original paper check; (iii) for which Customer has failed to comply with formatting standards or other guidelines required by Bank; or (iv) which would violate this Agreement, the User Manual or any other agreement between Customer and Bank. d. Customer agrees to notify Bank prior to using or accessing Electronic Deposit Services in a location outside the continental United States. 6. Upload of Electronic Deposit to Bank. a. Customer shall upload the Electronic Deposit transmission (containing one or more Electronic Deposits) to Bank prior to the daily cut-off time established by Bank from time to time for the receipt of Electronic Deposits. Any Electronic Deposit transmission received by Bank after its daily cut-off time shall be deemed to have been received by Bank at the opening of its next Business Day. Performance of the Electronic Deposit Services may be affected by external factors such as communication networks latency. Customer is responsible for the transmission of the Electronic Deposit until the Electronic Deposit System reports a successful acknowledgement of receipt of the transmission. b. An Electronic Deposit is received when the entire Electronic Deposit transmission in which that Electronic Deposit is contained is received by Bank in accordance with section 6.a. above. If only a portion of that Electronic Deposit transmission is received by Bank for any reason, including without limitation a failure during the transmission to Bank, the Electronic Deposit transmission is deemed to have been not received by Bank with respect to any Electronic Deposit contained in that Electronic Deposit transmission (including any Check Image contained in the portion of that Electronic Deposit transmission that was received). c. Bank will process Electronic Deposit transmission received from Customer either via ACH Processing, or via Check Image/Substitute Check Collection, according to the processing options selected by Customer. For each Check Image sent to Bank in an Electronic Deposit transmission, Customer agrees not to deposit the original paper check nor re-deposit the Check Image at Bank or any other financial institution. d. A per item limit, dollar limit, or file limit may be established by Bank in its sole discretion and communicated to Customer. If any such limit is established, Bank shall have no obligation to process items or files in excess of the limit. 7. Funds Availability. Customer agrees that the transmission of Check Images, MICR Data, Demand Drafts, PILs or any other legally permissible check collection method using Electronic Deposit Services is not subject to the funds availability requirements of Regulation CC. Bank may, at any time, and in its sole discretion, provide a one-time notification to Customer if Bank intends to delay funds availability beyond ordinary Regulation CC funds availability time frames for items submitted by Customer using Electronic Deposit Services. In such instance, funds deposited will be available for withdrawal 3 business days after electronic transmission to Bank. Bank may, but is not required to, make such funds available sooner. 8. Collection of Check Images and MICR Data. Notwithstanding anything to the contrary in this Agreement, Bank may in its sole discretion determine the manner in which Bank will seek to collect a Check Image and/or MICR Data deposited by Customer. Without limiting the generality of the preceding sentence, Bank may, at its option: (i) present or transfer the Check Image or MICR Data to the paying bank, a Federal Reserve Bank, check clearinghouse, image share/exchange network, or other bank; (ii) create a Substitute Check, a Demand Draft or a PIL from the Check Image and/or MICR Data and collect such item, or (iii) request that Customer provide to Bank the Page 11 (Effective 1/02/2014) original paper check from which the Check Image and/or MICR Data was created and then collect the original paper check. Depending on the collection method, the Check Image, MICR Data, Substitute Check, Demand Draft or PIL is subject to the rules of that clearinghouse, Federal Reserve Bank, or image share/exchange network or financial institution agreement. 9. Representment of Returns. If Customer identifies to Bank a returned ACH Entry as being returned because the original paper check was ineligible as a source document for the ACH Entry, Bank shall use reasonable efforts to collect the check related to the ACH Entry by creating, in Bank’s sole discretion, a Substitute Check, a Demand Draft or a PIL from the image of the original paper check. 10. Storage of Check Images. Bank shall store Check Images and other check information on the Electronic Deposit System in accordance with Bank's record retention schedule, and shall make such information available to Customer according to the applicable User Manuals and fee schedule. If the Electronic Deposit Services are terminated, Customer may obtain Check Images or check information at the price outlined in the fee schedule. 11. Franking, Retention and Destruction of Original Paper Checks. To help ensure that an item is not deposited more than once either as a Check Image or physical check, Bank strongly recommends that Customer frank the face of each original check after successfully capturing each Check Image. Customer shall destroy the original paper check based on guidelines identified in the applicable User Manual and shall employ commercially reasonable methods to securely store the original paper check until destruction. At Bank’s request, Customer shall provide the original paper check to Bank if the original paper check has not been destroyed by Customer and Bank needs the original paper check to process a payment or resolve a dispute arising from an Electronic Deposit. 12. Representations and Warranties. With respect to each Check Image or Electronic Deposit that Customer transmits to Bank, Customer is deemed to make any representation or warranty that would have applied had Customer deposited the original paper check. In addition Customer is deemed to make to Bank any representation or warranty that Bank makes, under applicable law, clearinghouse rule, Federal Reserve Operating Circular, bi-lateral agreement or otherwise, to any person (including without limitation a collecting bank, a Federal Reserve Bank, a Receiving Depository Financial Institution, a paying bank, a returning bank, the drawee, the drawer, any endorser, or any other transferee) when Bank transfers, presents or originates the Electronic Deposit or Check Image, or a Substitute Check, Demand Draft, PIL, or ACH Entry created from that Check Image or MICR Data. 13. Customer Responsibility. With respect to each Check Image or Electronic Deposit that Customer transmits to Bank, Customer shall indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising directly or indirectly: (a) from Customer’s breach of a representation or warranty as set forth in section 12 above; (b) as a result of any act or omission of Customer in the capturing, creation or transmission of the Check Image or Electronic Deposit, including without limitation the encoding of the MICR Data from the original paper check; (c) from any duplicate, fraudulent or unauthorized check, Check Image, MICR Data, Substitute Check, Demand Draft, PIL or ACH Entry; or (d) for any loss caused by Bank’s acceptance or creation of a Check Image, MICR Data, Substitute Check, Demand Draft, PIL or ACH Entry instead of presentment of the original paper check; or (e) from any other act or omission arising out of Bank’s action or inaction taken pursuant to any request by Customer or pursuant to this Agreement. This section 12 shall survive termination of the Agreement. 14. User Manual. Bank will provide Customer with one or more user guides (“User Manual”) in paper or electronic format that will set forth the policies and procedures for the relevant Electronic Deposit Services product with which Customer agrees to comply. Bank may, without prior notification, make amendments to any User Manual. Bank may require that certain employees of Customer attend periodic training as a condition to using the Electronic Deposit Services. 15. Security Procedures and Right to Audit. Customer shall comply with all security procedures for the Electronic Deposit Services that are established by Bank or set forth in the applicable User Manual. Customer is solely responsible for (i) maintaining its own internal security procedures; (ii) safeguarding the security and confidentiality of any information that is obtained from Payor Customers’ checks, Check Images and other information that is either printed from, stored on, or downloaded to, the Customer System, Electronic Deposit System, or Customer’s other computer/data systems or portable media; and (iii) preventing errors or unauthorized access to the Customer System or the Electronic Deposit System. Bank reserves the right to periodically audit Customer's security procedures and information technology processes, and to mandate controls. Page 12 (Effective 1/02/2014) D. ACH SERVICES 1. Introduction. If requested by Customer and agreed to by Bank, Customer or its Agent may initiate credit or debit Automated Clearing House (ACH) transactions (“Entries”) for payments ("Credit Entries") and/or collections ("Debit Entries") on ACH Business Days to its accounts or the accounts of others (“Receivers”) in accordance with Bank’s security procedures and this Agreement. Bank will act as an Originating Depository Financial Institution with respect to such entries. Bank may process Entries directly, through one or more clearinghouses, or through the mechanism selected by Bank. Customer’s rights and obligations with respect to such Entries are governed by applicable law and the NACHA Rules, as amended from time to time. Customer acknowledges that it shall be bound by NACHA Rules and agrees not to initiate any Entry in violation of the NACHA Rules or applicable federal, state or international law, regulation or clearinghouse rules, including, without limitation, Regulation E of the Board of Governors of the Federal Reserve System, regulations promulgated by the Office of Foreign Assets Control, FinCEN, rules of the Canadian Payments Association and the Mexican Interbanking Electronic Payment System (SPEI), and Operating Circular 4 of the Federal Reserve Bank (collectively referred to herein as the "Rules"). Customer acknowledges and agrees that Bank shall have the right to examine Customer’s books, records and systems to ensure Customer’s compliance with the Rules and this Section IV, D and that Bank shall further have the right to suspend Services if Bank determines, in its sole and absolute discretion, that Customer is not complying with the Rules and/or this Section IV, D. Customer acknowledges that a copy of the NACHA Rules is available through the National Clearing House Association (“NACHA”) at current NACHA prices. Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in the NACHA Rules. 2. Entry Origination/Processing Dates/Deadlines. Customer may initiate Entries in the manner and format agreed to by Bank. ACH files transmitted to Bank shall be in an unbalanced file format. Bank has the right to restrict the standard entry class (“SEC”) codes utilized by Customer. If notified by Bank of such restriction, Customer must cease use of the SEC code and the underlying transaction type. Customer agrees that all ACH Entries (regardless of SEC Code) that involve the exchange or transmission of banking information via unsecured electronic networks shall be encrypted or transmitted via a secure session, using a commercially reasonable security technology that, at a minimum, is equivalent to 128-bit RC4 encryption technology. Bank will establish a deadline for the receipt of Entries from Customer (“Deadline”). Bank may establish different Deadlines for Entries depending on the method of delivery employed by Customer and all such Deadlines are subject to change. Bank must receive Customer’s Entries at or prior to the Deadline for the Entries to be processed on the ACH Business Day of receipt. Entries received after the Deadline will be processed on the next ACH Business Day. Entries with settlement dates of more than thirty (30) calendar days from receipt will not be processed unless prior arrangements have been made. 3. Content and Secondary Authorization. In submitting any Entry, Customer shall be responsible for providing all information required by Bank. Customer bears sole and exclusive responsibility to verify that the information set forth in Entries submitted to Bank is authentic, accurate and conforms to the Rules. The Services hereunder are only designed to respond to information provided by Customer. Accordingly, any inaccuracy in any information provided by Customer may result in unintended processing by Bank. Bank bears no responsibility for detecting or reporting any error in data supplied by Customer and shall not be liable to Customer for any information provided by Customer with respect to an Entry which is inaccurate, incomplete or otherwise incorrect. Bank strongly recommends that Customer utilize a second individual to review and approve ACH files prior to submission to Bank. Customer acknowledges and agrees that such a security procedure is commercially reasonable and that Customer’s failure to use this procedure substantially increases Customer’s risk of an unauthorized ACH file. 4. Prenotification. To the extent required by NACHA Rules, Customer shall send a prenotification that it intends to initiate an Entry to a particular account in accordance with the procedures set forth in the Rules or by Bank. The prenotification can be returned or result in a Notification of Change ("NOC"). If the prenotification is returned, Customer shall research the problem and make any necessary corrections before transmitting another Entry. If the prenotification results in a NOC, Customer shall make the required change prior to initiating another Entry, or issue a Refused NOC. NOC Manager is an optional Service that allows Bank to track Customer's NOC on Customer's behalf. If Customer selects this option, Bank shall only manage the changes to the routing, transit and account numbers. 5. Entry Limits and Payment. Customer shall at all times maintain a settlement account with Bank for the purpose of funding Customer’s Entries (“Account”). The total dollar amount of Entries initiated by Customer through Bank under all ACH Services and pending on a given day shall not exceed the lesser of collected or available balances in the Account or an exposure limit should one be established by Bank (“Exposure Limit”). Establishment of an Exposure Limit should not be interpreted or construed by Customer as a commitment or agreement to provide any credit or loans to a Customer and is subject to modification or termination at any time by Bank. Customer shall pay Bank for all Entries and authorizes Bank to charge its Account or any other account with Bank in the amount of such Entries. Bank shall have the right to reject Entries initiated by Customer without notice if Bank has reason to believe that there will be insufficient available funds on the relevant settlement date. Customer will receive funds for any Debit Entry on the ACH settlement date. Bank shall credit the Account in any amount payable to the Customer, subject to Bank’s right to make adjustments in accordance with this Agreement. Bank may establish, monitor and periodically review Customer's Exposure Limit and Customer's compliance thereof, and may, in Bank's sole discretion, cease processing Entries based on such review. 6. Data Breach Notification. Customer may have gathered personal or financial information of its customers for the purpose of initiating ACH transactions. Such information may include, without limitation, the customer’s bank account number together with the bank routing number, or the customer’s name together with the customer’s social security number or tax identification number. Customer agrees to immediately report to Bank any loss, theft or unauthorized access of such information (“data breach”) by or from Customer, its Agent, or third party service provider, if circumstances indicate that the misuse of such information has occurred or is reasonably possible. Customer acknowledges that Bank may have an obligation to report any data breaches to NACHA and other affected parties, and agrees to establish appropriate procedures to prevent, detect, investigate and report data breaches. 7. ACH Secured Funds Entries. Bank may, at any time, and in its sole discretion, require Customer to prefund all Credit Entries that Customer desires to initiate. Customer acknowledges and agrees that such funds are held solely for the benefit of Bank and that Customer will not be entitled to earn any interest thereon. Upon initiation of such Credit Entries, Bank is authorized to immediately charge the Account (in the total amount of such Entries). If ACH Secured Funds is used to initiate Debit Entries, funds will be credited to the Account on the settlement date of the transaction. However, such funds shall not be available for withdrawal from the Account for two Business Days after the settlement date. 8. File Confirmation System. Customer shall at all times comply with applicable file confirmation procedures established by Bank and any security procedures established by Bank or Customer. Such procedures are solely for the purpose of verifying the origination of Entries by Customer or Bank's receipt of the ACH file and/or batch (but not for errors in transmission or content). a. Control Totals. If Customer elects to provide Bank with the total dollar value of ACH Entries and any other necessary information ("Control Totals"), Customer must telephone Bank’s Interactive Voice Response system each time it originates ACH Entries. After Bank receives Customer's ACH file, Bank will compare the information in the file to the Control Totals. If the information matches the Control Totals, Bank will process the ACH file. Bank will not process a file if it does not receive conforming Control Totals on or before the established file delivery deadline on the Business Day it receives the file. Bank will notify Customer if the Control Totals do not match the information in the file, or if Bank receives a file without receiving Control Totals or vice versa. Page 13 (Effective 1/02/2014) b. Confirmation of Receipt. If Customer elects not to provide Bank with Control Totals but elects to receive a confirmation, Bank shall provide Customer with a confirmation that Bank received Customer's ACH file and/or batch. After Customer receives the confirmation, Customer will compare the confirmation information to Customer's ACH transmission information. If the information does not match, Customer shall notify Bank before Bank’s established deadline, failing which, Bank shall process Customer’s ACH file and/or batch. Customer acknowledges that the confirmation is for the sole purpose of verifying Bank's receipt of the file and does not signify any validation of data. Customer bears sole responsibility for any inaccurate or incomplete information provided to Bank if Customer fails to notify Bank prior to Bank's processing of Customer's file. 9. Rejected and Returned Entries, Unauthorized Entries. Bank may reject any Entry that is not initiated in accordance with this Agreement. In the event that an Entry is rejected, or returned by an ACH processor, for any reason whatsoever, it shall be Customer’s responsibility to reinitiate the Entry. Bank will give Customer or its designated Agent notice of any rejected or returned Entry in the manner agreed to by the parties. Bank is authorized to debit/credit the Account for Entries that are returned to Bank. Unless the return is caused by Bank’s failure to properly execute an Entry, Bank has no obligation to pay Customer interest on the amount of any returned Entry debited from the Account. A Receiver may, in some cases, have the right to have an unauthorized or erroneous Debit Entry credited to its account. Customer agrees that Bank may deduct the amount owing to the Receiver from Customer’s Account upon Bank’s receipt of proper notice from the Receiver’s bank. Bank may charge back against Customer any Debit Entry that is returned or reversed by the Receiving Depository Financial Institution. 10. ACH Redeposit Service. If requested by Customer and agreed to by Bank, Bank will reinitiate (maximum of two times) each Debit Entry returned for insufficient or uncollected funds. 11. Amendment of Entries. Customer does not have the right to delete or amend any Entry after it has been received by Bank unless Customer has requested, and Bank has agreed to provide ACH Adjustment Services. If such Services are provided, Customer may initiate an amendment to ACH Entries after receipt by Bank. Customer may initiate such amendments via internet or fax in accordance with the terms of this Agreement and all communications must be received by Bank prior to the established deadlines in order to be effective. Customer acknowledges that the ability to delete or reverse ACH transactions depends on the timing of the adjustment request. a. Internet Option. If Customer has selected the Internet Option, Customer may use the Internet to transmit information to Bank for the purpose of amending ACH files. Customer agrees to comply with any applicable software agreement, user guide and any established security procedures. b. Fax Option. If Customer has selected the Fax Option, Customer may amend ACH files in accordance with this Agreement by sending instructions to Bank to delete Entries via facsimile. Bank will notify the Customer of the telephone numbers for facsimile and verbal instructions. Bank may from time to time change such telephone numbers or the form of instructions upon notification to the Customer. Customer acknowledges that the Internet Option may be substantially more secure than the Fax Option. Customer agrees to be bound by any instructions, whether or not authorized, issued in its name and accepted by Bank in accordance with the agreed procedures. 12. Customer Representations/Indemnity. Customer represents and warrants to Bank that each Entry: (i) complies with the terms of this Agreement and NACHA Rules; (ii) does not breach any warranty of Customer or Bank contained in this Agreement and NACHA Rules; (iii) complies with applicable state, federal and international laws and rules, including, without limitation, the Electronic Funds Transfer Act, Regulation E and regulations overseen by the Office of Foreign Assets Control; (iv) is accurate, timely, and authorized; and (v) that any Debit Entry is for a sum that on its settlement date is due and owing from the Receiver to Customer or is a correction of a previously transmitted erroneous Credit Entry. With respect to each ACH Entry (regardless of SEC Code), Customer is deemed to make to Bank any representation or warranty that Bank makes, under applicable law and NACHA Rules to any person, Receiving Depository Financial Institution, or any other transferee. Receiver authorizations shall expressly authorize Bank to transmit corrective entries to Receiver’s accounts to correct a prior Entry and shall authorize Customer to release to Bank all information concerning its Receivers that is required by Bank to recover such Entries. Customer shall immediately cease initiating Entries upon receiving actual or constructive notice of the termination or revocation of the Receiver's authorization. Customer will retain each authorization received by Customer for such period of time as may be required by the Rules or applicable law and shall provide Bank with copies of such authorizations upon request. Customer will indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities, and damages, including reasonable attorney fees and court costs at trial or on appeal that arise directly or indirectly out of any Entry initiated by Customer in violation of this Agreement. 13. Re-presented Check Entries. NACHA Rules allow Customer to initiate an ACH Entry to collect certain checks that have been returned unpaid for insufficient or uncollected funds ("RCK Entry"). In the event that Customer initiates an RCK Entry to Bank for check collection purposes, Customer agrees that such RCK Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the RCK Entry on its behalf: a. Each check is eligible under NACHA Rules to be collected via an RCK Entry. b. Customer has no knowledge of any insolvency and it has good legal title to the returned item. c. All signatures on the returned item are authentic and authorized, and the returned item is without alteration, not subject to claims or defenses, and will not be presented to the paying bank. d. The RCK Entry accurately reflects the item and any information encoded after issue in magnetic ink is correct. (RCK Entries cannot be used for collection fees.) e. Any restrictive endorsement placed on the item is void or ineffective. f. Customer has provided clear and conspicuous notice of its electronic check representment policy in advance of receiving the item to which the RCK Entry relates. g. The Customer will provide to Bank immediately upon request a copy of the front and back of the returned item, provided that the request is made within seven (7) years of the settlement date of the RCK Entry. 14. Internet-Initiated Entries. NACHA Rules allow Customer to initiate a Debit Entry to a consumer Receiver's account pursuant to an authorization obtained from the Receiver via the Internet ("WEB Entry"). In the event that Customer initiates a WEB Entry to Bank, Customer agrees that such WEB Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the WEB Entry on its behalf: a. Customer has employed a commercially reasonable fraudulent transaction detection system to screen each WEB Entry. b. Customer has employed commercially reasonable methods of authentication to verify the identity of the Receiver. c. Customer has taken commercially reasonable steps to verify that routing numbers are valid. d. Customer has established a secure Internet session prior to the key entry by the Receiver of any banking information and through the transmission of the data to Customer. Currently, 128-bit RC4encryption technology is the standard for financial transactions and is considered commercially reasonable. If technological advancements drive the commercially reasonable standard to change, Customer agrees to comply with the new standard. e. Customer has and will conduct an annual audit to ensure that the financial information that Customer obtains from Receivers is protected Page 14 (Effective 1/02/2014) by security practices that include adequate levels of: (1) physical security to protect against theft, tampering, or damage, (2) personnel and access controls to protect against unauthorized access and use, and (3) network security to ensure secure capture, storage and distribution of financial information. Customer will provide proof of Customer's security audits to Bank upon request. Any such information provided to Bank shall be kept confidential. Bank may cease processing Entries for Customer if Bank in its sole discretion determines that Customer's security procedures are inadequate. 15. Telephone-Initiated Entries. NACHA Rules allow Customer to initiate a Debit Entry to a consumer Receiver's account pursuant to the Receiver's oral authorization and banking information obtained via the telephone ("TEL Entry"). In the event that Customer initiates a TEL Entry to Bank, Customer agrees that such TEL Entry will comply with all provisions of this Agreement and applicable Rules, and makes the following additional representations and warranties regardless of which entity initiates the TEL Entry on its behalf: a. Receiver Authorization. Customer shall obtain the Receiver's explicit authorization prior to initiating a Debit Entry to the Receiver's account. In the event that Customer obtains the Receiver's authorization verbally, Customer will either tape record the Receiver's oral authorization or provide, in advance of the settlement date of the Entry, written notice to the Receiver that confirms the oral authorization. Customer agrees that, at a minimum, the following specific information is disclosed to, and acknowledged by, the Receiver during the telephone call: (i) the date on or after which the Receiver's account will be debited; (ii) the amount of the Debit Entry to the Receiver's account; (iii) the Receiver's name; (iv) a telephone number that is available to the Receiver and answered during normal business hours for customer inquiries; (v) the date of the Receiver's oral authorization; and (vi) a statement that the authorization obtained from the Receiver will be used to originate an ACH debit to the Receiver's account. Customer shall retain either the original or a duplicate tape recording of the Receiver's oral authorization or a copy of the written notice confirming the Receiver's oral authorization for two years from the date of the authorization, and shall immediately provide same to Bank upon request. If Customer chooses to provide the Receiver with written notice confirming the Receiver's oral authorization, Customer will disclose to the Receiver during the telephone call the method by which such notice will be provided. b. Security Procedures. In addition to all other representations and warranties contained herein, Customer also represents and warrants the following each time it delivers a TEL Entry to the Bank that it has (a) utilized a commercially reasonable security procedure to verify the identity of the Receiver, including name, address and telephone number; and (b) further that Customer has established commercially reasonable procedures to verify the accuracy of the Receiving Depository Financial Institution's ABA routing and transit number. 16. Accounts Receivable and Back Office Conversion Entries. NACHA Rules allow Customer to utilize ACH to collect consumer check payments received via U.S. mail or at a dropbox location ("ARC Entry"). NACHA Rules also enable Customer to convert during back office processing checks presented either at the point of purchase or a manned bill payment location ("BOC Entry"). In the event that Customer initiates an ARC or BOC Entry to Bank, Customer agrees that such ARC or BOC Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the ARC or BOC Entry on its behalf: a. Prior to the receipt of each check, Customer has provided clear and conspicuous notice to the Receiver: (i) that receipt of the check is authorization for a payment as a check transaction or for a one-time ACH debit to the Receiver's account; and (ii) of Customer's phone number for inquiries regarding BOC Entries. b. Customer shall provide a copy of the notice to the Receiver at the time of the transaction if Receiver presents the check in-person. c. Each check is eligible as a source document under NACHA Rules to be collected via an ARC or BOC Entry. d. The amount of the entry, the routing number, the account number, and the check serial number are in accordance with the source document. e. The source document to which the ARC or BOC Entry relates will not be presented for payment. f. Customer has established policies and procedures to destroy the source document as soon as is reasonable and shall use commercially reasonable methods to securely store the source document until such destruction. g. Customer shall use commercially reasonable methods to securely store the banking information relating to the ARC or BOC Entry. h. Customer shall retain a reproducible and legible image, microfilm or copy of the front of the Receiver's source document for two years from the settlement date of each ARC or BOC Entry, and shall immediately provide same to Bank upon request. i. For BOC Entries, Customer has employed commercially reasonable procedures to verify the identity of each Receiver of BOC Entries. j. For BOC Entries, Customer maintains a working telephone number that is answered during Customer’s normal business hours for Receiver inquiries regarding BOC transactions. 17. Point of Purchase (POP) Entries. NACHA Rules allow Customer to initiate a Debit Entry to a Receiver’s account for in-person purchases made by check at the point-of-purchase (“POP Entry”). In the event that Customer initiates a POP Entry to Bank, Customer agrees that such POP Entry will comply with all provisions of this Agreement and applicable Rules and makes the following additional representations and warranties regardless of which entity initiates the POP Entry on its behalf: a. Customer has posted a notice in a prominent and conspicuous location at the point-of-purchase and provided Receiver with a written notice of same: (i) that when a check is provided as payment, it is authorization for payment as a check transaction or for a one-time ACH debit to the Receiver's account; and (ii) that funds may be withdrawn from the Receiver’s account the same day payment is made. b. Each check is eligible under NACHA Rules to be collected via a POP Entry and the Receiver has not opted out of check conversion. c. Customer has returned the voided source document to the Receiver after capturing the necessary check information and the source document was not previously negotiated, voided, or provided by the Receiver for use in any prior POP Entry. d. Customer has obtained the Receiver’s authorization and provided a copy of same to Receiver, which: (i) is in writing and signed or similarly authenticated by the Receiver; (ii) is readily identifiable as an ACH debit authorization; (iii) clearly and conspicuously states its terms; and (iv) states that the check will not be processed. 18. International ACH Transactions (IAT) Entries. NACHA Rules allow Customer to initiate or receive international payment transactions transmitted via the ACH network. In the event any part of an Entry originates from, or is transmitted to, a financial agency office located outside the territorial jurisdiction of the United States that handles the payment transaction ("IAT Entry"), Customer agrees that such IAT Entry will comply with all provisions of this Agreement and applicable Rules. Customer also makes the following additional representations and warranties regardless of which entity initiates the IAT Entry on its behalf: a. Customer is in compliance with U.S. law, including, but not limited to, Customer’s obligations under programs administered by OFAC and FinCEN. Page 15 (Effective 1/02/2014) b. The origination of an outbound IAT Entry is in compliance with the laws and payment system rules of the receiving country. c. In the case of an IAT Entry to a non-consumer account, Customer has an agreement with the Receiver whereby the Receiver has agreed to be bound by the Rules. IAT Entries may be processed by Bank through a correspondent bank. Bank assumes no liability for delays, non-delivery, late returns or other events resulting from processing delays by the correspondent bank or for other causes beyond Bank’s control. Cancellation or amendment of an IAT Entry involving non-US dollar currency is subject to any rate exchange loss as determined by Bank. Customer agrees to sell any canceled or amended Entry to Bank at the then current applicable foreign currency buy rate. 19. Third Party Vendors. If Customer initiates Entries through a third party vendor or processor (“Vendor”), Vendor is the agent of Customer and not of Bank. If Customer uses a Vendor, Customer shall be deemed to have authorized Bank to follow the instructions of such Vendor to the same extent and under the same conditions as would apply if the instructions came direct from Customer and Customer shall be responsible for insuring that such Vendor fully complies with the Rules and this Agreement. Bank is not responsible for the acts or omissions of Vendor and Customer agrees to be liable for and hold Bank harmless from, any losses caused by the acts or omissions of Customer’s Vendor. 20. Third Party Sender. If Customer is transmitting Entries as a third party vendor or processor on behalf of originators (“Third Party Sender”), Customer agrees to be bound by the applicable terms provided in this Section E and NACHA Rules. Customer warrants to Bank that the originator has agreed to assume the responsibilities of an Originator under NACHA Rules and that ACH Entries shall not be initiated in violation of laws of the United States. Customer represents that it has executed an ACH agreement with each Originator and that the agreement binds the Originator to the NACHA Rules. Customer shall provide Bank with the list of Originators, copies of the agreements, and other information deemed reasonably necessary to identify the Originators within two (2) banking days of Bank’s request. Bank reserves the right to review the list of Originators for which Customer is transmitting the Entries and to reject any in Bank’s sole discretion. As Third Party Sender, Customer agrees to indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities, and damages, including reasonable attorney fees and court costs at trial or on appeal that arise directly or indirectly from the failure of the Originator to perform its obligations as an Originator under NACHA Rules. Customer further agrees to assume all applicable responsibilities, warranties and liabilities of the ODFI, as specified in the NACHA Rules. Customer shall cooperate fully and respond within five (5) banking days to any inquiry from Bank relating to potential NACHA Rule inquiries or violations. 21. Cash Concentration/Deposit Reporting Services. Customer may request Bank to provide deposit reporting Services based on information provided by the Customer or its designated Agent. Information will be delivered to Bank at the time and location established by Bank. Bank has no responsibility for the accuracy of any information provided by Customer. Customer may authorize Bank to initiate Credit or Debit Entries to accounts designated by Customer at other financial institutions. Bank will initiate such Entries in accordance with agreed procedures. Customer agrees to authorize Receiving Depository Financial Institutions to honor such transactions. 22. ACH Positive Pay Service. ACH Positive Pay Service assists Customer in detecting fraud by electronically matching incoming ACH transactions to authorizations that Customer can create and manage online. If ACH Positive Pay Service is selected by Customer, Customer shall designate the account(s) maintained at Bank that are to be used with the ACH Positive Pay Service (“Account”). Customer shall create authorizations for incoming ACH Credit and/or Debit Entries that it desires to post to the Account. Customer shall be responsible for the accuracy and completeness of all information provided to Bank. Bank will allow incoming ACH Entries that match Customer’s authorizations to post to Customer’s Account. Incoming ACH transactions that do not match Customer’s authorizations will be treated as exception items, and Customer agrees to monitor, review and make payment decisions on the exception items prior to Bank’s established deadline. If Customer’s requested default setup is for Bank to pay all exception items, then such exception items shall post to Customer’s Account unless Customer has instructed Bank to return one or more exception items prior to the established deadline. If Customer’s requested default setup is for Bank to return all exception items, then Bank is authorized to return all exception items unless Customer instructs bank to pay one or more exception items prior to the established deadline. Bank shall have no responsibility for any liability, loss or damage resulting from: (i) payment in accordance with this section of any exception item that is unauthorized; (ii) the return of any exception item to the Originator in accordance with this section; or (iii) Customer’s failure to meet Bank’s established deadlines. Bank’s failure to report a discrepancy will not discharge Customer’s obligation with regard to any item, and shall not obligate Bank to return any item if it is otherwise authorized. 23. Secure Vault Payments. Secure Vault Payments is an ACH Service that allows Customer to process online payments received from consumers who initiate secure electronic ACH payments using their financial institutions’ online banking Web sites (a “Vault Transaction”). The financial institutions will authenticate consumers and provide Customer with real-time authorization and confirmation of payment. Prior to accepting Vault Transactions, Customer shall provide all necessary information as may be requested by Bank or NACHA, and Customer shall be certified to accept Vault Transactions by a NACHA- approved switch provider. If Customer is sponsored by Bank and approved by NACHA for Secure Vault Payments, Customer agrees: a. To comply with NACHA’s Secure Vault Payments System Operating Rules (the “Vault Rules”) and its applicable technical requirements, NACHA Rules, this Agreement, and any applicable law, regulation and clearinghouse rules; b. To permit Bank to amend this Agreement from time to time as necessary to ensure compliance with the Vault Rules and applicable law, regulation and clearinghouse rules; c. To authorize Bank or NACHA to immediately terminate or suspend Customer’s participation in the Secure Vault Payments System as provided in the Vault Rules, including but not limited to, based on incident rates involving fraud, chargebacks or unauthorized transactions; d. To use the Vault Mark(s) solely in accordance with the Vault Rules and the Graphic Standards Manual; e. To provide its consumers with the goods and services as described or as advertised, failing which Bank is authorized to debit Customer’s account for the value of such goods or services; f. To cooperate with Bank on a best efforts basis to prevent delivery of any fraudulently purchased goods or services in the event Bank determines a consumer payment may have been unauthorized or fraudulently initiated; g. Not to initiate a Vault Transaction on behalf of its consumer; and h. To indemnify and hold Bank harmless for any and all losses incurred by Bank, and for fees, fines or sanctions imposed by NACHA on Bank for the acts or omissions of Customer in connection with the Secure Vault Payments System and Vault Transactions. Bank shall periodically review Customer's transaction history and return rates and reasons, including Customer’s compliance with the Vault Rules, and Bank may, in its sole discretion, require Customer to establish a reserve account or take other measures to mitigate Bank’s exposure. Upon termination of the Secure Vault Payments Service, Customer agrees Bank may withhold sufficient funds in Customer’s account for a period of time to cover any chargebacks, returns or fees. Page 16 (Effective 1/02/2014) E. WIRE TRANSFER SERVICES 1. Introduction. a. Governing Law. Bank sends outgoing and receives incoming wire transfers through Fedwire (the funds transfer system owned and operated by the Federal Reserve Banks or other provider in accordance with section II.23.A.). All funds transfers are governed by this Agreement, Subpart B of Regulation J of the Federal Reserve Board, OFAC regulations, and all other applicable federal, state and local laws and regulations. Customer agrees not to initiate or receive a wire transfer payment order in violation of applicable federal, state or local law. b. Authorized Users. Customer will designate to Bank in the form required by Bank those individuals authorized to instruct Bank regarding wire transfer Services including without limitation, individuals authorized to initiate payment orders and select advice methods, confirmation methods, and any or all authorizations and instructions that may be requested by Bank. Bank may rely on any such authorization until it has been revoked in writing by Customer. Bank shall have a reasonable time to process any revocation received pursuant to this section. 2. Routing/Time Deadlines. Bank may use means and routes that Bank thinks in its own discretion are suitable for each outgoing wire transfer. Bank will establish from time to time a specific time of day after which Bank will not accept an incoming payment order to be processed on the day of receipt. Payment orders received after Bank’s established deadline or on any non-Business Day, including any Saturday, Sunday, holiday or any day that Bank’s wire department is not open will be considered received on the next Business Day. 3. Payment Orders. a. Communication. Customer may communicate a payment order to Bank by the means and manner agreed to between the parties. b. Content of Payment Orders. Customer will supply to Bank any information Bank may reasonably request regarding any payment order initiated by Customer, including, without limitation, money amounts, affected accounts, dates of transfer, the beneficiary’s name and account number, the name and routing number or bank identifier code of the beneficiary’s financial institution, such additional information as Bank may reasonably request and, if necessary, further evidence of any Agent’s authority to transfer funds or to do any other act contemplated by this Service. c. Execution of Payment Orders. Customer authorizes Bank to execute and charge Customer’s account(s) with Bank for payment orders delivered to Bank in accordance with this Agreement. Bank has no obligation to execute a payment order if Customer’s account to be charged has insufficient collected and available funds to cover the order. d. Processing Payment Orders. The order in which Bank processes wire transfer payment orders is determined solely by Bank. Customer does not have the right to reverse, adjust or revoke any payment order after it has been received by Bank, provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a payment order already transmitted to the beneficiary’s financial institution, Bank shall, at Customer’s request, request the financial institution to return funds previously transferred. Customer understands that the receiving institution is under no legal obligation to comply with this request. e. Rejection of Payment Orders. Bank may reject a payment order from Customer if such payment order is not initiated in accordance with the applicable security procedure, if there is any inconsistency between a payment order and information previously supplied to Bank, if Bank is unable to obtain confirmation of such payment order satisfactory to Bank, if there are insufficient collected funds in Customer’s specified account to fund the payment order, or if Bank has other reasonable grounds not to honor the payment order. Bank will notify Customer by telephone that it has rejected a payment order. Bank may also reject an incoming payment order if it has reasonable grounds to do so. f. Standing Payment Orders. If requested by Customer and agreed to by Bank, Customer may initiate a standing payment order, which is one where the Customer pre-programs the beneficiary, the beneficiary’s financial institution, and the accounts to be debited and credited and such information remains constant for subsequent payment orders. Customer shall provide Bank with the necessary information to execute the standing payment order, including, without limitation, the dollar amount to be transferred or the desired peg balance, the frequency of the order and the day of week or month when the payment order is to be executed. Customer may terminate a standing payment order at any time upon receipt by Bank of a written notice. Bank shall have a reasonable time to act on such notice. g. Batch Wire Transfers. (i) Service Specifications. If requested by Customer and agreed to by Bank, Customer may initiate payment orders from its computer to Bank's computer, subject to the provisions of this Agreement. Customer will comply with interface specifications established by Bank, including, without limitation, file formats and means of data transmission (the “Specifications”). Bank may furnish Customer with modifications to the Specifications and Customer shall implement such modifications as soon as reasonably practicable. (ii) Wire Transfer Software, Confidentiality. Customer shall be solely responsible for creating the computer programs to implement the Specifications (“Wire Transfer Software”). Customer shall maintain the confidentiality of the Specifications and the Wire Transfer Software and permit access solely to those responsible for supporting the Wire Transfer Software or authorized to initiate Payment Orders. Customer shall implement passwords and other security devices commensurate with the highest level of security afforded by Customer to other computer programs and confidential information of Customer. 4. Confirmation of Outgoing Wire Transfers. a. Confirmation Method. Customer and Bank shall agree to the method of confirming payment orders received from Customer. Customer shall designate Authorized Users to confirm payment orders. Bank recommends a minimum of three potential Authorized Users to confirm payment orders and that Authorized Users serve as an initiator or a confirmer, but not both. Notwithstanding Bank's recommendation, if Customer permits an Authorized User to act as both initiator and confirmer, Customer hereby authorizes Bank to process a wire initiated and confirmed by such Authorized User. Customer may add, change or delete the Authorized Users in accordance with Section II.9. of this Agreement. In the event the designated Authorized Users with authority to confirm are not available to confirm a payment order, Customer agrees that Bank may, at its discretion, elect to process the payment order initiated by an Authorized User. Customer agrees to be bound by any such payment order processed by Bank. b. Waiver of Confirmation. Bank advises Customer not to waive confirmation. If Customer, however, chooses to waive confirmation, Customer agrees to be liable for all outgoing payment orders, except those payment orders where (1) Customer is able to conclusively prove that the unauthorized transfer could not have been prevented by the use of confirmation procedures; (2) Bank is unable to produce any evidence that the unauthorized transfer could have been prevented by the use of confirmation procedures; and (3) Customer is not otherwise liable for the transfer under this Agreement or applicable law. Customer acknowledges that not using confirmation procedures substantially increases Customer’s risk of liability for an unauthorized wire transfer. c. Confirmation of Wire Transfers Initiated through electronic Bank applications. The confirmation of payment orders initiated by Customer through electronic Bank applications shall be verified and approved by Customer prior to their transmission to Bank. All payment orders shall be initiated and confirmed in accordance with the security procedures established for the relevant application. 5. Advices. a. Advice Method. Customer will select the type of advice it wishes to receive after Bank receives an incoming wire transfer. If Customer selects telephonic advices, Customer may designate person(s) to be contacted and telephone numbers to be used for advice purposes. Bank shall not be required to make more than one attempt to reach Page 17 (Effective 1/02/2014) Customer’s designated location by telephone. If Bank is able to reach the Customer’s designated location, but not Customer’s designated Agent, Bank may leave a message containing the information to be conveyed. b. Advices by Facsimile. If Customer selects advices by facsimile (“fax”), Customer shall exercise extreme care in maintaining its own security in the receipt of fax advices. Customer acknowledges that the information to be received by fax may include confidential information, including, without limitation, names, amounts, phone numbers, originating account information, and the text of incoming wires. Customer further acknowledges that it alone assumes full responsibility for maintenance of its internal security procedures to keep such information confidential. Customer agrees to indemnify, defend and hold Bank harmless against any and all claims, demands, expenses, liabilities and damages, including attorney fees at trial and on any appeal or petition for review, incurred by Bank arising directly or indirectly from the transmission by fax of an incoming wire transfer advice. c. Waiver of Advice. Customer may waive its right under the Uniform Commercial Code to receive advices by so indicating on the applicable Implementation Documents. 6. International Wire Transfers. a. General. Wire Transfers across country borders are customarily done by Bank through a correspondent bank. Outgoing US dollar payment orders to selected countries may be converted by Bank or its correspondent to the local beneficiary’s currency at the applicable rate in effect at any point in the processing chain, unless Customer has instructed Bank not to convert the currency. Any fee, commission or charges assessed by Bank or the correspondent bank shall be passed on to the Customer or deducted from the wire transfer amount by Bank or the correspondent bank. Payment to a foreign country is subject to the laws of the foreign country involved. Bank assumes no liability for delays, non-delivery or other events resulting from causes beyond Bank’s control. In refunding unexecuted payment orders, Bank shall be liable to Customer only to the extent it receives payment from the correspondent bank processing the transfer. Cancellation of a transfer involving non-US dollar currency is subject to any rate exchange loss as determined by Bank. Customer agrees to sell any canceled payment order to Bank at the then current applicable foreign currency buy rate. b. Remittance Transfer Provider. If Customer is at any time classified as a Remittance Transfer Provider under Regulation E, Customer represents, warrants and agrees that: (i) Customer shall be responsible for performing and complying with the requirements of 12 CFR Part 1005, including, but not limited to, providing disclosures to the consumer (sender), the error resolution procedures, the provision of any remedies to the consumer, and the cancellation and refund of remittance transfers; (ii) Bank is acting as an agent and not as a Remittance Transfer Provider when performing activities on behalf of Customer; and (iii) Even if Bank is deemed a Remittance Transfer Provider under applicable law, Customer shall take all actions necessary to comply with the obligations of a Remittance Transfer Provider. Customer agrees to indemnify and hold Bank harmless from and against any and all loss, liability, damage, costs and expenses (including attorneys’ fees) that Bank may sustain in reliance on Customer’s representations and warranties set forth herein. 7. Reverse Wire Transfers. a. Authorized Debits. If requested by Customer and agreed to by Bank, Customer authorizes Bank to debit Customer’s account(s) with Bank upon receipt of a Fedwire drawdown request, and to send funds to the Requesting Bank. Each transfer will be done on the Business Day Bank receives the incoming request from the Requesting Bank if the request is received within a reasonable time to determine whether Customer’s Account has sufficient available funds and to obtain access to the Federal Reserve network prior to the close of business. b. Reverse Wire Funding. Customer acknowledges and agrees that Bank may reject any reverse wire request in excess of the collected and available balance. Requesting Bank will be notified if the request is rejected by Bank. c. Wire Transfer Numbers. Customer’s obligation to pay Bank the amount of the funds transfer in the event that the Fedwire message does not identify the same account or financial institution is not excused in such circumstances. When names and numbers are inconsistent, the numbers shall control. With respect to incoming wire transfers that do not indicate an account number recognizable to Bank, Bank may return the wire transfer to the sending financial institution without incurring any liability. Customer does not have the right to reverse, adjust, or revoke any Fedwire message after it is received by Bank; however, Bank will use reasonable efforts to act on such a request by Customer to reverse, adjust or revoke such message before Bank has sent the outgoing wire transfer. With respect to an outgoing wire transfer already transmitted by Bank, Bank shall, at Customer’s request, request the receiving financial institution to return funds previously transferred. Customer understands and agrees that the receiving financial institution may or may not comply with any such request. d. Authorizations. Customer’s authorization for reverse wire requests shall remain in effect until Customer gives written notice to Bank. Bank will have a reasonable time to act on any written notice received from Customer. e. Limitation on Bank’s Liability. In consideration of Bank’s compliance with this authorization, Customer agrees that Bank’s treatment of any charge, and Bank’s rights with respect to it, shall be the same as if the entry were initiated personally by Customer. Bank shall have no liability if any charge is dishonored. 8. Additional Limits on Bank’s Liability. Bank is responsible only for performing the Services described in this Section. Bank shall not be responsible for the acts or omission of Customer, any Federal Reserve Bank or other financial institution, any transmission or communication, or any other person and no such person shall be deemed to be Bank’s agent under this Agreement. Page 18 (Effective 1/02/2014) F. DATA TRANSLATION SERVICES 1. Introduction. Bank may provide electronic data integration, custom formatting, or data translation ("Data Translation Services") to electronically streamline the exchange of payments, remittance and other information between Customer and Bank and between Customer and its trading partners. If requested by Customer and agreed to by Bank, Bank will provide Data Translation Services in accordance with this Agreement and other procedures provided to the Customer. Customer agrees that Data Translation Services shall be governed by this Section and all other relevant sections of this Agreement. 2. Scope of Services. Data Translation Services may be used by Customer to initiate and receive payments using multiple payment channels or networks such as checks, wire transfers, ACH, credit card and SWIFT, and to provide and receive business communications such as remittance data, payment data, invoices, confirmations, orders, or other information in Customer’s preferred format. In order to obtain Data Translation Services, Customer must maintain an analyzed demand deposit account with Bank. 3. Entry Origination/Processing Dates/Deadlines. Customer may from time to time deliver to Bank requests to format information for payments and/or other data translation via the agreed upon means (collectively, “Data Translation Request(s)”). All Data Translation Requests shall conform to the content, format, deadlines and other specifications that may be established by Bank or a third party software program approved by Bank for use with the Service. Bank may establish different deadlines for Data Translation Requests depending on the method of delivery employed by Customer and all such deadlines are subject to change. Bank must receive Customer’s Data Translation Requests at or prior to the deadline established for processing on the Business Day of receipt. Data Translation Requests received after the deadline will be processed on the next Business Day. Customer will be notified if a Data Translation Request is rejected in accordance with procedures established by Bank. Customer represents and warrants that all information in each Data Translation Request delivered to Bank by Customer shall be accurate, timely, authorized and will otherwise comply with all applicable laws, rules and regulations. 4. Content and Transmission of Information. Data Translation Requests are only designed to respond to information provided by Customer. Accordingly, any inaccuracy in any information provided by Customer may result in unintended processing by Bank. Bank bears no responsibility for detecting or reporting any error in data supplied by Customer and shall not be liable to Customer for any information provided by Customer with respect to a Data Translation Request which is inaccurate, incomplete, duplicative, or otherwise incorrect. Customer shall retain data on file adequate to permit Customer to remake each request for at least ten (10) Business Days following the date a file is sent to Bank, and shall provide such data to Bank on request. Customer acknowledges that Bank has no obligation to maintain back-up copies of requests or other information delivered by Customer to Bank. Customer acknowledges that Data Translation Services may involve the transmission of confidential consumer information that may be subject to privacy laws and regulations, including breach notification regulations. Customer agrees to notify Bank if Customer sends or receives protected health information as part of Data Translation Services. If Customer is the recipient of misdirected information, Customer shall immediately notify Bank and return the information to Bank. Customer agrees not to retain, use, copy, distribute or otherwise disclose the information in any manner. 5. Payment Requests. Customer agrees that its requests to initiate payments utilizing Data Translation Services shall be governed by this Section, the sections of this Agreement governing the applicable payment mechanism, and all other applicable laws, rules and regulations governing the relevant payment mechanism. Customer authorizes Bank to execute all electronic and check payment requests (“Payment Requests”), and settle to the Customer’s account all Payment Requests, delivered to Bank in compliance with the terms of this Agreement, including the security procedures. Customer is solely responsible for initiating the Payment Requests sufficiently in advance to meet Customer’s contractual obligations to its vendors and/or its customers. Bank shall not be responsible for any late payment or finance charges that may result from Customer’s failure to allow sufficient lead-time. a. Electronic Payment Requests. Customer may from time to time request that Bank initiate electronic payments using the ACH network, the credit card network, the SWIFT network, the wire transfer system or other electronic funds transfer system (“Electronic Payment Requests”). Except as may be provided elsewhere, Customer may not amend or revoke Electronic Payment Requests after they have been received by Bank. Customer acknowledges that the rules of NACHA and other electronic funds transfer systems may make any credit provisional until the financial institution crediting the account of the beneficiary specified in an Electronic Payment Request receives final settlement and that if the financial institution does not receive final settlement, it is entitled to a refund and Customer shall be deemed not to have paid the beneficiary. Electronic Payment Requests with settlement dates of more than thirty (30) calendar days from receipt will not be processed unless prior arrangements have been made. Customer authorizes Bank to use whatever means Bank, in good faith, deems reasonable under the circumstances to execute each Electronic Payment Request, including selection of a funds transfer system, routing, and means of transmission. b. Check Payment Requests Customer may from time to time request that Bank print checks and related remittance information (“Check Payment Request(s)”) and issue and distribute such checks and information. Customer shall designate the account(s) from which Bank is to make payment (“Payment Account”) and shall maintain a sufficient balance in the Payment Account to fund its Check Payment Requests. To mitigate against fraud, Bank may require that Customer utilize Bank's Positive Pay Services in conjunction with the Payment Account. Customer agrees that checks drawn in a manner consistent with a Check Payment Request shall be duly authorized to the same extent as a check drawn and signed by Customer and is properly payable by Bank. Customer authorizes Bank to deduct the Payment Account in the amount of the Check Payment Request. If there are insufficient funds in the Payment Account to make a Check Payment Request, Bank may in its sole discretion either refuse to make the payment, or make the payment and overdraw the Payment Account. In either event, Customer shall incur fees as disclosed by Bank in the account agreement and related fee schedules and other disclosures. Customer has no right to reverse, adjust or revoke any Check Payment Request after it has been received by Bank. Bank will, however, make reasonable efforts to act on such a request by Customer. 6. Security Procedures. Customer shall comply with all security procedures established by Bank for Data Translation Services. Customer agrees that all Data Translation Requests that involve the exchange or transmission of banking information shall only use secure transmission options supported by Bank. For some Services, such as ACH, Customer and Bank may establish alternative, comparable security procedures for accessing such Services when Data Translation Services are utilized. Customer is solely responsible for maintaining its own internal security procedures to prevent errors or unauthorized access to Customer’s computer systems by unauthorized employees, vendors or customers. Bank has no responsibility for the security procedures employed by Customer’s trading partners. 7. File Confirmation Procedures. Customer shall at all times comply with the applicable file confirmation procedures established by Bank. File confirmation procedures utilizing Data Translation Services are solely for the purpose of verifying Bank's receipt of the Payment Requests but not for identifying errors in transmission or content. a. Control Totals. Customer shall call Bank's Audio Response Unit ("ARU") or send a data file to Bank providing the total items and dollar value of the Payment Requests and any other necessary information (“Control Totals”). After Bank receives Customer’s Payment Requests, Bank will compare the Payment Requests to the Control Totals. If the Control Totals match the Payment Requests, Bank will process the Payment Requests. Bank will not process the Payment Requests if Bank does not receive conforming Control Totals on or before the established delivery deadline. Bank will notify Customer if the Control Totals do not match the Payment Requests, or if Bank receives Payment Requests without receiving Control Totals or vice versa. b. File Status Manager. File Status Manager is an elective Service that allows Customer to confirm that Bank has received Customer’s files. Using a secure Web site, Customer may view the status of Data Page 19 (Effective 1/02/2014) Translation files sent by Customer to Bank. If Customer selects this Service, Customer agrees to promptly and regularly review the status of all files displayed in the File Status Manager and to notify Bank if any files sent by Customer were not received by Bank. Customer bears sole responsibility for any inaccurate or incomplete information sent to Bank if Customer fails to notify Bank prior to Bank's processing of Customer's files. G. COURIER SERVICES 1. Introduction. Courier Services are offered by Bank for Customers who require ground transportation for the pick-up, transportation and delivery of non-cash banking transactions to Bank locations other than a cash vault. Bank has selected a third party courier ("Courier") to provide the transportation Services on Customer's behalf. 2. Deposit Contents. Customer acknowledges that the Courier Services is not an armored delivery service and agrees to tender check- only deposits to the Courier. Customer agrees that it shall not deposit any currency, securities, documents or other items which cannot be reconstructed or duplicated. Any deposits of cash using this Service shall be at Customer’s peril and Customer agrees to assume any and all risk of loss associated with tendering cash deposits. 3. Courier as Agent of Customer. Customer acknowledges and agrees that the Courier is the Agent of Customer and not of Bank. Until Bank actually receives a delivery in accordance with section 7 below, Bank assumes no risk of loss or theft by third parties or employees of the Customer or the Courier. Bank makes no representation or warranty regarding, and assumes no responsibility with respect to, any services performed or promised by the Courier. The Courier maintains ultimate responsibility for scheduling, movement and routing. 4. Packaging. Customer agrees to tender deposits to the Courier using an undamaged and properly fastened bag. Customer shall prepare in duplicate, deposit tickets that list the deposit contents, the total dollar amount of the deposits, and the account or accounts of Customer at Bank to which the checks shall be deposited. Customer agrees to place the original deposit ticket in the bag, and to retain the duplicate ticket. 5. Reconstruction. Customer agrees to maintain a complete and accurate reconstructible deposit listing of each deposit given to the Courier. Customer agrees to reasonably and promptly cooperate with Bank and/or the Courier in the notification, identification and replacement of any damaged, lost or destroyed deposit items. Such cooperation shall include reasonable requests by Customer to the makers of the checks to issue duplicates for the damaged, lost or destroyed items. Customer shall notify Bank of any damaged, lost or destroyed items no later than sixty (60) days following the day the items were delivered to the Courier. Bank shall have no obligation to research any damaged, lost or destroyed items if Customer fails to notify Bank within the prescribed time. 6. Processing. Bank is authorized to open the bag and to process the contents in accordance with Bank’s normal procedures and any applicable availability schedules. All deposits shall be subject to verification and adjustment by Bank. Bank’s verification shall be deemed correct and binding upon Customer absent manifest error. If Bank discovers a discrepancy between the contents of the bag and the deposit ticket, Customer hereby authorizes Bank to process and deposit the contents, and to complete an adjustment ticket, which will be mailed or delivered to Customer. 7. Actual Receipt Required. Bank is not liable for any losses, damage or destruction of items that occur while in the custody of the Courier. Bank shall not be considered as an insurer of any deposits placed with the Courier until such time the deposits are received and acknowledged by Bank. Deposits delivered to the Courier are not considered received by Bank until they are actually delivered to Bank's processing center. 8. Delivery of Deposits. Deposits delivered by the Courier after Bank’s deadline for the receipt of deposits, may, at Bank’s discretion, be held and credited to the Customer’s account the next Business Day. Courier Service deliveries on Saturdays, Sundays and on days recognized as bank holidays (when available), shall be held and credited to the Customer’s account the next Business Day. Page 20 (Effective 1/02/2014) H. CASH VAULT SERVICES 1. U.S. Currency. The Terms “cash”, “coin” and “currency” as used herein shall refer to coin and currency of the United States. Customer shall not deposit coin or currency of any other country. 2. Account. All deposits of currency, coin, checks and food coupons will be credited to, and all withdrawals of currency, coin and checks will be debited against, Customer’s deposit account at Bank (the “Account”) which Customer has designated as being covered by the Services described herein. Customer agrees that it shall not deposit any items, instructions or objects other than currency, coin, checks and food coupons, and agrees to assume any and all risk of loss associated with tendering items not specified herein. 3. Deposits. a. Customer shall supply and maintain clear disposable plastic bags used for deposits. Plastic bags shall be sealed according to manufacturers’ instructions. Customer will prepare deposits in good order as follows: (i) currency and food coupons will be batched separately with each accompanied by a deposit ticket fully completed by Customer; (ii) currency and food coupons will be banded with 100 notes of the same denomination whenever possible; (iii) food coupon deposits must include Agricultural Department Redemption Certificates; (iv) deposits will be delivered by Customer’s certified armored carrier to the secured facility specified by Bank; and (v) to receive same date credit, deposits must be made prior to the daily cut-off time established by Bank from time to time, and any deposits received by Bank after its daily cut-off time may be considered to have been received on the next banking day. b. Bank will process Customer’s deposits as follows: (i) deposits will be receipted and conditional (subject to verification) credit assigned based on the amount identified on the deposit ticket; (ii) deposit tickets that are missing, blank or do not contain legible “declared balances are subject to delayed ledger credit of one banking day; and (iii) coins, currency and food coupons will be counted and Bank’s count will be the valid and controlling count. c. If there is a currency and coin variance of more than $10.00 from the declared balance on Customer's deposit ticket, Bank shall adjust Customer's currency and coin deposits through a separate debit or credit to Customer's account. Any such adjustment shall not be reflected on Customer's deposit ticket. Deposit tickets containing a declared total that includes check deposits, may require a separate and additional adjustment for any variances to Customer's check deposits. If there is a currency and coin variance of $10.00 or less from the declared balance on Customer's deposit ticket, Bank shall not make any adjustment to Customer's currency and coin deposits, and shall credit Customer's account based on Customer's declared balance. Bank will notify Customer promptly by telephone of any deposit for which Bank’s count varies from Customer’s count by $100.00 or more. Upon request, Bank will provide Customer with any available information which may assist Customer in reconciliation of the difference. d. Deposited items will be deemed received on the day of delivery if Bank receives the deposit prior to Bank’s established deadlines. Deposits will be processed in accordance with normal Bank procedure and any applicable availability schedules. All deposits made by Customer shall be subject to verification and adjustment by Bank. Bank’s verification shall be deemed correct and binding upon Customer for all purposes, absent manifest error. e. If Customer chooses to pre-encode its checks or other items for deposit, Customer agrees to comply with the pre-encoded deposit procedures and specifications as may be established and revised by Bank. Customer shall be responsible for any of its encoding errors. Bank may treat certain deposits as unencoded deposits if there is an unacceptable rate of encoding errors. 4. Withdrawals. a. Bank may provide Customer with United States currency and coin in designated denominations from time to time as requested by Customer through the Bank’s automated ordering system (“Cash Orders”). Customer must comply with all of Bank’s policies and procedures regarding the placement and delivery of Cash Orders, including, without limitation, the maintenance of a designated password. Customer shall be responsible for maintaining the confidentiality of Customer’s password and restricting access to the system to authorized Agents. All Cash Orders will be charged to the account designated by Customer and must be picked up by Customer’s Agent or sent by registered mail to a street address. Only armored couriers may pick up Cash Orders directly from a cash vault operated by Bank. Bank may release any Cash Order to any individual that Bank reasonably believes to be Customer’s Agent. Customer shall be responsible for any Cash Order after receipt thereof by the Agent. Bank may specify a daily Cash Order limit and Customer agrees that it will not initiate a Cash Order in excess of the designated limit. In no event shall Customer initiate a Cash Order in excess of the immediately available funds in the designated account. b. Customer may order currency and coin from Bank as follows: (i) The preferred order for currency is in standard full strap quantities only. (ii) Coin may be ordered in standard full box units (50 rolls), individual rolls or loose standard bags only. (iii) A charge for the face value of the monies ordered will be made to the Account on the day the order is processed by Bank. (iv) Orders for coin and currency may be placed no later than the cut-off time established by Bank from time to time for delivery on the next banking day. Depending on Customer's location, select cash vault sites may require a minimum two-day lead time for coin and currency orders. (v) Bank must be notified of any discrepancies pertaining to currency or coin orders within two banking days of receipt by Customer of such currency or coin. Customer must return documentation to back-up outages such as strap, coin, wrapper and/or box. 5. Processing. Bank will provide processing on all days Monday through Friday, except for holidays on which Bank is closed. Cash Vault Services using third party vendor applications with time stamp data are for informational purposes only and may not reflect actual timing of receipt, posting or verification of Customer's deposits by Bank. Bank shall not be liable for any inaccurate or incomplete information with respect to such time stamp data provided to Customer. 6. Carrier Service. Any carrier service utilized to deliver or secure coin, currency or other property to or from Bank, including, without limitation, the United States Postal Service, will act as the agent of Customer and not of Bank. Customer and carrier shall agree upon the delivery days and times. Customer will bear the entire risk of loss of coins, currency or other property of Customer when in the custody or control of Customer’s carrier service. 7. Remote Cash Deposit. The Remote Cash Deposit Service allows Customer to contract directly with one or more armored carriers to utilize a ‘smart’ safe at one or more Customer locations that will enable Customer to receive Bank-offered provisional credit for the currency residing in each safe. If this Service is selected by Customer and agreed to by Bank, the armored carrier is responsible for providing on-going maintenance for the safe, currency pickups, and delivery of the currency to Bank. Bank shall not be responsible for the safe or any aspect of the Service provided by Customer’s armored carrier. Prior to Bank’s established cut-off time, the armored carrier will provide Bank with an electronic presentment file of the currency amount at each safe location. Bank will post to Customer’s Account the credits, debits or adjustments in the presentment files sent by the armored carrier. Bank shall provide provisional credit only for the declared values in the presentment file that were verified and accepted by the safe’s currency acceptor. All coin, check, mutilated currency, coupons or other similar items shall not be deposited in the safe, shall be handled by Customer as a separate Page 21 (Effective 1/02/2014) deposit and will not be given provisional credit under the Remote Cash Deposit Service. Customer must deliver the physical currency to Bank within applicable timeframes that are dependent on Customer’s pickup frequency, which in no event shall be greater than fifteen calendar days after Customer receives the provisional credit. Any physical currency not received by Bank within the applicable timeframes will be debited from Customer’s Account without further notice. Bank shall charge Customer’s Account for any counterfeit currency deposited in the safe. Customer agrees to indemnify, defend and hold Bank harmless from and against any and all claims, demands, expenses, losses, liabilities and damages of any nature whatsoever, including, without limitation, reasonable attorney fees and court costs at trial or appeal arising directly or indirectly from Customer’s failure to maintain sufficient funds in its Account to cover any obligations incurred hereunder. Customer acknowledges and agrees that all items deposited in the safe, including, but not limited to, all coin, currency, checks, securities, bonds, and other valuables (without limitation, “Safe Contents”) are held in trust solely for the benefit of Bank, Customer has no right, title and interest in the Safe Contents after they are deposited in the safe and that Customer has no present ability and will not have the future ability to remove the Safe Contents from the safe. Customer further acknowledges and agrees that the provisions contained herein are enforceable against it regardless of whether Customer owns or leases the safe located at any Customer location. 8. Representations. Customer represents and warrants to Bank that (a) all funds deposited with Bank will be the proceeds of, and all funds ordered and withdrawn from Bank will be intended for use in, Customer’s lawful activities and (b) all of Customer’s transactions hereunder will be conducted solely on Customer’s behalf and not on behalf of any other person or entity. 9. Regulatory Compliance. Customer shall provide Bank immediately upon request with any information, and otherwise shall cooperate with Bank in every way necessary in order to enable Bank to fulfill its obligations with respect to the reporting of transactions in coin and currency or any other regulatory requirement. 10. Agents. Bank from time to time may use a third party or agent to receive Customer’s deposits, to deliver Customer’s coin and currency orders, or to perform any other Services of Bank hereunder. Bank will provide Customer with all necessary instructions for contact with such third party or agent. Customer agrees to implement and properly use any and all other security procedures prescribed or recommended by any third party or agent providing this Service on Bank’s behalf and agrees to hold Bank harmless from any claims or losses arising from Customer’s failure to implement and properly use any security procedures prescribed or recommended by such third party or agent. If Customer uses its own agent or vendor to provide a specific service for Customer, Customer agrees Bank shall not be liable for the actions of such agent or vendor. I. U.S. BANK EASYTAXSM SERVICES 1. Authorization; Enrollment. If the EasyTax Service is requested by Customer and agreed to by Bank, Bank will electronically enroll Customer in the Electronic Federal Tax Payment System (EFTPS) if Customer desires to make federal tax payments via EFTPS. Electronic enrollment will allow Bank to process Customer’s tax payments in compliance with EFTPS through Bank’s tax payment system only. If Customer chooses to pay federal taxes by any other means, payments may not be EFTPS compliant. Customer understands that Bank’s EFTPS enrollment form 8655 does not replace the EFTPS form 9779, which is sent to mandated companies by the Internal Revenue Service. Customer may also make state tax payments using EasyTax. Customer agrees that the EasyTax Service shall be governed by this Section and all other relevant sections of this Agreement. 2. Submission of Information. Customer shall furnish Bank with complete and accurate master file information which shall enable Bank to file tax deposits via ACH with the appropriate tax authorities in a timely manner. The Service provided by Bank hereunder shall be based solely upon the information furnished by Customer to Bank. Accordingly, any inaccuracy in any information provided by Customer may result in unintended processing by Bank. Customer bears sole and exclusive responsibility to verify that the information provided to Bank is complete and accurate. Bank bears no responsibility for detecting or reporting any error in data supplied by Customer and shall not be liable to Customer for any information provided by Customer with respect to information that is inaccurate, incomplete or otherwise incorrect. The Service provided hereunder does not relieve Customer of any duty imposed on Customer by law to maintain records or from verifying and, if necessary, immediately correcting in writing all data received from Bank relating to the Service. Customer agrees to be bound by any instructions, whether or not authorized, issued in its name and accepted by Bank in accordance with the agreed procedures. Customer shall indemnify and hold Bank harmless from and against all liability, loss and damage (including attorneys’ fees and other costs incurred in connection therewith) arising out of the use of information provided by Customer. 3. Requests for Payment. Requests for payment to tax authorities must be made in accordance with instructions which Bank shall provide Customer, which may be amended by Bank from time to time at its discretion, and will be considered complete only if actually received by Bank. All tax deposits must be initiated at least one Business Day in advance of the due date, otherwise deposits may be subject to federal or state penalties. Any request by Customer to make tax deposits hereunder shall be submitted to Bank prior to the daily cut-off time established by Bank from time to time. Any such request received by Bank after its daily cut-off time may be processed on the next banking day. In the event that an ACH Entry is rejected or returned by an ACH processor for any reason whatsoever, Bank will give Customer notice of any rejected or returned ACH Entry in the usual manner agreed to by the parties. Bank shall have no liability for any delay caused by strikes, telephone failure, equipment or electrical failure, or any other condition beyond the reasonable control of Bank. 4. Receipt of Funds. Funds received by Bank from Customer shall be held as a deposit liability of Bank to Customer until such time as such funds are due and paid to the appropriate tax authorities. Customer is not entitled to interest on such funds and Bank may invest such funds solely for Bank’s benefit. 5. Account. Customer shall maintain with Bank a commercial demand deposit account in which Customer shall maintain immediately available funds in an amount sufficient to cover all tax deposits and fees charged by Bank for the Service hereunder. Failure by Customer to maintain such funds shall relieve Bank from providing such Service, notwithstanding any request by Customer to provide the Service. 6. Liability. Bank shall not be liable for any penalties assessed by reason of failure of Customer to make any tax payments. Interruption of the Service or performance hereunder for any reason shall not relieve Customer of its obligation to make any required tax deposits, and Bank shall not incur any liability to Customer for Customer’s failure to make any such deposit. If Customer elects to make a tax deposit by any means other than through Bank, Bank shall not be liable for any penalties or interest arising from any error in due date or other Page 22 (Effective 1/02/2014) calculations for deposits made within the period in which such other deposit was made. Bank may choose to provide its EasyTax Service through a third-party vendor. Bank and its third party vendor's liability to Customer is limited to correcting any error made by the Bank or third-party vendor. The sole and exclusive remedy, at law or in equity, against Bank or third party vendor is limited to money damages in an amount not to exceed the total amount paid to Bank for EasyTax fees during the twelve (12) months preceding the event giving rise to the liability. Neither Bank nor third party vendor will be liable for special, incidental, or consequential damages. Customer acknowledges that the EasyTax Service would not be available or would be available at substantially increased rates without the liability and remedy limitations set forth in this agreement. 7. Codes. Customer shall keep confidential the Access and PIN codes issued to Customer in connection with the Service, and only Customer shall use such codes. If Customer suspects that any such codes have become known or otherwise accessed by unauthorized persons, Customer shall notify Bank immediately and follow up such notice with written confirmation. The occurrence of unauthorized access will not affect any deposits made in good faith by Bank before Bank has received such notification and had a reasonable time to act to prevent any unauthorized deposits. J. PAPER-BASED DISBURSEMENT SERVICES 1. Controlled Disbursement. a. Disbursement Account. If requested by Customer and agreed to by Bank, Customer will open and maintain a demand deposit account (“Disbursement Account”) and a primary funding account (“Funding Account”) at Bank. The disbursing bank may be a financial institution that is a subsidiary or affiliate of Bank or Bank itself. Bank reserves the right to require Customer to use Bank's Positive Pay Services in conjunction with the use of Disbursement Account(s). Customer hereby authorizes and directs Bank to act on its behalf and as its agent, as Bank in its sole discretion deems necessary or advisable, in performing any of the Controlled Disbursement Services and related Services. b. Funding Procedures. On each Business Day, Bank shall electronically provide Customer with a report of the total aggregate amount of all presented disbursement checks, and ACH transactions posted in the early morning ACH window, net of the prior day adjustment and other charges to the Disbursement Account (the "Total Clearings"). Customer agrees to maintain sufficient collected balances in the Funding Account by the established deadline to fund the Total Clearings. Bank is hereby authorized to debit the Funding Account in an amount equal to the actual or estimated Total Clearings and to transfer funds in said amount for credit to the Disbursement Account. Bank reserves the right to convert the Disbursement Account into a standard prepaid checking account at any time upon notice to Customer. c. Adjustments. Bank will compare the report of electronic presentments to the checks presented against the Disbursement Account. If the total dollar amount of checks electronically reported is less than the total dollar amount of checks presented, Bank will credit the Disbursement Account for the difference. Bank will add this difference to Customer's Total Clearings the next Business Day. d. Daily Dollar Limit. A daily dollar limit (the “Dollar Limit”) may be established from time to time by Bank with respect to the Disbursement Account in Bank's sole discretion. Bank shall have no obligation to pay disbursement checks and ACH transactions (collectively, "Items") in excess of the Dollar Limit. Bank may, at any time, either verbally or in writing (but shall not be deemed obligated to) notify Customer of any change made by Bank in the Dollar Limit. Establishment of the Dollar Limit should not be interpreted or construed by Customer as any commitment or agreement by Bank to provide any credit or loans to Customer, nor as an agreement or commitment to debit the Funding Account when doing so would create a negative balance therein. e. Special Circumstances. Customer acknowledges that Bank, under some circumstances beyond its control, may at times be unable to provide a report of the total amount of its Total Clearings early enough for Customer to make a complete and acceptable funding of the accounts. Customer nevertheless agrees to fund the Funding Account completely by using an estimate of the Total Clearings. f. Action Affecting Accounts. Should Bank receive any process, summons, order, injunction, execution, levy, lien, garnishment, or adverse claim notice (either by a governmental authority or third party) (hereinafter referred to as “Process”), which Bank reasonably believes will adversely affect the Funding Account or the Disbursement Account, Bank may, at its option and without liability, refuse to honor orders to pay or withdraw sums from any Disbursement Account and may either hold the Funding Account balance herein until such Process is disposed of to the satisfaction of Bank or pay the balance over to the source of the Process in accordance with applicable law. g. Return of Items Unpaid. Bank reserves the right, in Bank’s sole discretion, to return unpaid any or all Items presented for payment against the Disbursement Account in the event that: (i) there are insufficient collected and available balances on deposit in the Funding Account by the established deadline to fund the Total Clearings; (ii) debits cannot be posted because the Disbursement Account or Funding Account is frozen, blocked, closed or because of any other condition; or Page 23 (Effective 1/02/2014) (iii) any communications failure or other condition prevents Bank from monitoring Customer’s Dollar Limit and/or the Items presented for payment. h. Stop Payment Orders. Customer may issue stop payment orders on Items drawn on the Disbursement Account in accordance with Bank's procedures. 2. Drafts/Warrants. a. Draft/Warrant Account. If requested by Customer and agreed to by Bank, Customer shall open and maintain a demand deposit account upon which drafts or warrants shall be drawn and will be charged (the “Draft Account”). Customer shall maintain on deposit sufficient collected and available balances to cover items drawn on the Draft Account. b. Draft/Warrant Format. All drafts/warrants shall contain on the face of the item the words “draft” or “warrant,” and “payable through U.S. Bank.” Customer will also encode all drafts/warrants in accordance with Bank specifications. Customer agrees to immediately make any changes to the format of the drafts/warrants or encoding when requested to do so by Bank and will be solely responsible for its failure or refusal to comply with Bank's specifications. Any draft/warrant drawn by Customer on the Draft Account shall be treated by Bank as a draft/warrant regardless of what appears on the face of the draft/warrant and Customer shall hold Bank harmless as a result of so handling any such item. c. Presentment and Return. Bank shall make drafts/warrants presented to Bank available to Customer via electronic presentment. Bank shall notify Customer by electronic means of the account number, draft number and dollar amount of all presented drafts/warrants and provide Customer with a front and back image of each draft/warrant received by Bank. Bank's delivery of the images shall constitute an electronic presentment under the Uniform Commercial Code, Federal Regulation CC and other applicable laws. Draft/Warrant Services are additionally subject to the Reverse Positive Pay terms contained elsewhere in this Agreement. Customer shall notify Bank of each draft/warrant that should be returned in the form agreed to by Bank and Customer. If Customer does not specifically decline payment of a draft/warrant by the deadline established by Bank, such draft/warrant will be finally paid by Bank. Customer acknowledges that drafts/warrants payable through Bank are considered to be drawn on Bank for purposes of the expeditious return and notice-of-nonpayment requirements of subpart C of Regulation CC of the Federal Reserve Board. If Bank agrees to return a draft/warrant following Bank's deadline, Customer agrees to be responsible for Bank's failure to return the draft/warrant in an expeditious manner as prescribed in Regulation CC. Bank shall be deemed to have made timely presentment to Customer with respect to any drafts/warrants that Bank receives at a time when it is prevented from making presentment to Customer as a result of any force majeure including, but not limited to, earthquake, flood, hurricane, tornado, volcanic eruption, severe weather event or other act of nature, war, riot, civil disturbance, strike, lockout, and disruption in telecommunications service. d. Examination of Drafts/Warrants. Bank shall have no responsibility to examine drafts/warrants prior to presentment to Customer for its payment decision. Bank will take ordinary care to see that the amount of each draft/warrant as drawn is accurately posted to Customer's account. Bank will not make any attempt to verify signatures, endorsements or restrictive clauses on drafts/warrants. Bank will not examine the dates on which drafts/warrants have been drawn for undated, stale or post- dated items. Bank shall have no responsibility for any liability, loss or damage resulting from (i) a payment in accordance with this Section of any draft/warrant that is altered or unsigned or that bears the forged or unauthorized signature of Customer or (ii) return of any check to the depository bank in accordance with this Section. e. Encashment of Drafts/Warrants. Unless otherwise instructed by Customer, Bank is authorized to pay its drafts or warrants issued by Customer that are presented for encashment by payees. Bank will not be liable for the encashment of any draft/warrant which contains, or is purported to contain, a forged signature of a maker or endorser, or any other unauthorized modification, as long as Bank exercises ordinary care in cashing the draft/warrant. f. Controlled Funding. (i) Funding Account; Report of Incoming Debits. If Customer has selected a Controlled Draft/Warrant Account, Customer agrees to open and maintain a primary funding account (“Funding Account”). All drafts/warrants drawn shall be provisionally charged to Customer’s Controlled Draft/Warrant Account on the Business Day of receipt by Bank and such charges shall become final and irreversible, except as to drafts/warrants that are dishonored as provided herein. Bank shall on each Business Day make reasonable efforts to electronically provide Customer with a report of the total aggregate amount of all presented drafts/warrants ("Items"), net of the prior day adjustment, and other charges to the Controlled Draft/Warrant Account (the "Total Clearings"). If for any reason Bank is unable to provide Customer with the Total Clearings, the Total Clearings for such day shall be estimated by Customer. Any discrepancies shall be reconciled on the following Business Day. (ii) Funding Procedures. Customer shall maintain on deposit in the Funding Account sufficient collected and available funds to cover drafts/warrants charged to the Controlled Draft/Warrant Account. Bank is hereby authorized to debit the Funding Account in an amount equal to the actual or estimated clearings charged against the Controlled Draft/Warrant Account. If Bank and Customer agree to other methods of funding the drafts/warrants, Customer shall be responsible for compensating Bank for any uncollected funds which may occur and Bank may require suitable approval and the establishment of daily dollar limits. (iii) Adjustments. Bank will compare the report of electronic presentments to the drafts/warrants presented against the Controlled Draft/Warrant Account. If the total dollar amount of drafts/warrants electronically reported is less than the total dollar amount of drafts/warrants presented, Bank will credit the Controlled Draft/Warrant Account for the difference. Bank will add this difference to Customer's Total Clearings the next Business Day. (iv) Return of Items Unpaid. Bank reserves the right, in Bank’s sole discretion, to return a draft/warrant unpaid in the event that: (a) there are insufficient available and collected funds in the Funding Account by the established deadline to fund the Total Clearings; or (b) debits or charges cannot be posted because the Controlled Draft/Warrant Account or Funding Account is frozen, blocked, closed or otherwise unavailable. (v) Account Limitations. Customer shall not initiate or authorize an ACH debit entry or other electronic debit or payment order from the Controlled Draft/Warrant Account. Page 24 (Effective 1/02/2014) K. POSITIVE PAY SERVICES 1. Introduction. Positive Pay Services are offered by Bank as the most effective way to minimize loss from fraudulent check issuance or payment. If Positive Pay Services are requested by Customer and agreed to by Bank, Customer and Bank agree that in the event of an inconsistency between this Agreement and applicable law, the provisions of this Agreement shall prevail to the extent permitted. Nothing in this Agreement is intended to limit Bank’s right to return an item unpaid if there are insufficient available funds in the designated account. 2. Format Specifications. Customer shall comply at all times with Bank’s format and data transmission standards for the Positive Pay Service. Customer agrees to issue checks, drafts, warrants or other items (collectively, “Items”) in accordance with Bank’s specifications and will change the Item format when requested to do so by Bank. Bank shall not be responsible for correcting or resolving processing problems caused by substandard quality magnetic encoding. Customer shall supply Bank with sample Items for testing. 3. Positive Pay. a. Customer Responsibilities. Customer shall designate to Bank all account(s) that are to be used with the Positive Pay Service (“Account”). Customer will provide Bank with a file of all outstanding Items prior to activation of this Service. On each day that an Item is written against the Account, Customer shall supply Bank with all required Item issue information prior to the deadline established by Bank. Such information shall include, without limitation, the account number, the issue date, the Item number and the face amount. Customer shall be responsible for the accuracy and completeness of all information provided to Bank. b. Bank’s Responsibilities. In reliance on the information provided by Customer, Bank shall create a master issue file for each designated Account (“Issue File”). If ARP File Confirmation Service is selected by Customer, Bank shall process the Issue File and provide a confirmation to Customer that the Issue File was received and processed. Excluding valid stop payment orders and issue records voided by Customer request, all Items, including those that have been electronically converted, that match by serial number and amount to Bank’s Issue File will be deemed properly payable and Bank is authorized to pay all such Items. c. Paid No Issues. Each Business Day, Bank shall make reasonable efforts to report to Customer any Item serial numbers that do not match the Issue File (“Paid No Issue”) and, if requested and available, provide the front and back images of those Items for that day’s presentment; provided, however, no images shall be provided in the case of electronically converted Items. Customer agrees to review and make payment decisions on the Paid No Issue Items prior to Bank’s established deadline. If Customer selects the Positive Pay Same Day service for controlled disbursement accounts, Customer shall receive and may make payment decisions on Paid No Issue Items prior to the Items posting to the Account, or defer payment decisions until the established deadline on the next Business Day. If Customer’s requested default setup is for Bank to pay all Paid No Issue Items, then Bank is authorized to finally pay any Paid No Issue Item unless Customer has instructed Bank to return the Paid No Issue Item prior to the established deadline. If Customer’s requested default setup is for Bank to return all Paid No Issue Items, then Bank is authorized to return any Paid No Issue Item unless Customer instructs bank to pay a Paid No Issue Item prior to the established deadline. Bank may rely on any instructions received from Customer that Bank reasonably believes to be genuine. Bank shall have no responsibility for any liability, loss or damage resulting from: (i) payment in accordance with this section of any Paid No Issue Item that is altered or unsigned or which bears the forged or unauthorized signature of Customer; (ii) the return of any Paid No Issue Item to the depository bank in accordance with this section; or (iii) Customer’s failure to meet Bank’s established deadlines. Customer may be required to place a stop payment order on any returned Paid No Issue Item, which shall be subject to Bank’s customary stop payment fee. Bank’s failure to report a discrepancy will not discharge Customer’s obligation with regard to any Item, and shall not obligate Bank to return any Item if it is otherwise properly payable. d. Teller Positive Pay. All positive pay accounts will interface with the Bank’s teller system unless otherwise agreed by Bank. Bank will compare Items presented for cash at a branch of the Bank with Customer’s Issue File. Customer agrees that Bank may refuse to cash any Paid No Issue Item and such refusal will not be deemed to be a wrongful dishonor. In the event of dishonor, Bank will refer the presenter to Customer. Customer acknowledges that under some circumstances issuance information submitted by Customer may not be reflected in Customer’s Issue File until the opening of the following Business Day. Customer agrees to follow established procedures should it need to manually add an Item to the Issue File. Bank will make reasonable efforts to assist Customer, but Customer acknowledges that Bank may be unable to process such requests on a same day basis. If a special handling process for teller-cashed items is selected by Customer and agreed to by Bank, Bank shall attempt to contact Customer for approval prior to the encashment of any item that does not appear in the Issue File. In the event that Customer requests Bank not activate or temporarily deactivate teller positive pay, Customer agrees to assume all risk of loss for any Bank teller-cashed Item that would have been identified as a Paid No Issue Item prior to acceptance. e. Payee Positive Pay. If Customer selects this option which is available only through SinglePoint®, Customer’s Item stock shall first be tested to ensure it meets Bank’s payee name readability rate. Customer shall designate to Bank all positive pay accounts that shall use Payee Positive Pay. In addition to the Item issue information provided by Customer for the Positive Pay Service, Customer shall supply Bank with the payee name(s) for each Item issued by Customer. Customer shall be responsible for the accuracy and completeness of the payee information provided to Bank. In reliance on the payee information provided by Customer, Bank will compare the payee information on the Item with Customer’s Issue File for Items presented or deposited at Bank. Customer acknowledges that Bank will not be able to validate payee information for electronically converted Items presented to Bank for payment. Bank may, in its sole discretion, impose variable parameters for which the payee information will not be reviewed for certain Items processed through the back office. If such parameters are imposed, Bank agrees to assume the risk of loss for an Item that would have been identified as a Paid No Issue solely on the basis of the payee information. f. Teller Payee Positive Pay. In addition to the Item issue information provided by Customer for the Positive Pay Service, Customer shall supply Bank with the payee name(s) for each Item issued by Customer. Customer shall be responsible for the accuracy and completeness of the payee information provided to Bank. In reliance on the payee information provided by Customer, Bank will compare the payee information on the Item presented for encashment at a Bank teller line with Customer’s Issue File. Customer agrees that Bank may refuse to cash any Item where the payee name is not an exact match and such refusal will not be deemed to be a wrongful dishonor. In the event of dishonor, Bank will refer the presenter to Customer. Customer acknowledges that under some circumstances issuance information submitted by Customer may not be reflected in Customer’s Issue File until the opening of the following Business Day. 4. Reverse Positive Pay. a. The Paid File. Customer shall identify all accounts subject to Reverse Positive Pay (“Account”). When an Item is presented for payment against an identified Account, Bank shall notify Customer prior to the designated time, and in no case later than the Business Day following the day of presentment, of the Account number, Item number and amount of the presented Item (the “Paid File”) and, if requested and available, shall provide Customer with the front and back images of the Items. By electing Reverse Positive Pay, Customer assumes all fraudulent and other risks associated with teller-cashed Items unless Customer provides standing instructions to Bank to disallow encashment at the teller line. Page 25 (Effective 1/02/2014) b. Payment Instructions. Customer shall compare the information provided by Bank with Customer’s Item issuance records. Customer shall notify Bank prior to the deadline established by Bank of Customer’s decision on any reported Items that should be dishonored. Bank may rely on any instructions received from Customer that it reasonably believes to be genuine. Bank is authorized to finally pay any Item listed on the Paid File unless the Customer instructs Bank to return the Item prior to the established deadline. Bank shall have no responsibility for any liability, loss or damage resulting from (i) a payment in accordance with this section of any Item that is altered or unsigned or which bears the forged or unauthorized signature of Customer or (ii) return of any Item to the depository bank in accordance with this section. Bank reserves the right to require Customer to place a stop payment order on any Item to be returned. Any such orders will be subject to Bank’s customary stop payment fee. Customer shall notify Bank by the designated deadline if the Paid File has not been received from Bank. Bank will make reasonable efforts to provide the Paid File to Customer and honor Customer’s instructions. Bank’s failure to provide a Paid File will not discharge Customer’s obligation with regard to any Item that was otherwise properly payable at the time of presentment. L. LOCKBOX SERVICES 1. Lockbox Service Requirements. Bank provides retail and wholesale Lockbox Services to assist customers in expediting receipt of their remittances. Customer will have its customers forward their payments to the location designated by Bank (“Lockbox”). Prior to initiation of any Lockbox Service, Customer must maintain a demand deposit account with Bank associated with the Lockbox Service ("Lockbox Account"). 2. Access to Mail. Customer authorizes Bank to pick up mail at the appropriate postal facility, to have custody of the keys or combinations and unrestricted and exclusive access to such box, and to collect the mail therein to be processed by Bank as agreed by the parties. Bank shall process remittances in accordance with its standard procedures or in accordance with prior instructions received from Customer and agreed to by Bank. Upon termination of Customer’s Lockbox Service, mail received shall be forwarded for sixty (60) days following termination. 3. Proprietary Rights. Bank possesses all proprietary rights to written material, including, without limitation, all computer programs written for Bank’s Lockbox processing system, portable media, listings, and other documentation originated and prepared by Bank. Customer shall not duplicate, sell, or use in any manner such programs or documentation without the prior written consent of Bank. 4. Collections/Availability. Unless otherwise agreed, while Customer receives Lockbox Services, all collected funds held in the Lockbox Account shall be deemed to be Customer’s funds for all purposes, including adjustment, attachment, execution, garnishment and other forms of legal process. The crediting and collection of items will be handled under the same agreement as applied to other commercial deposits and shall be subject to Bank's then current funds availability schedule. 5. Transmission of Information. Bank may transmit to Customer remittance information or other information received at the lockbox (“Lockbox Information”) via secure electronic transmission. Customer further acknowledges that Bank has a duty to protect Lockbox Information and ensure that it is safely delivered to Customer and that Bank has deemed secure electronic transmissions to be the safest mechanism for delivery. If Customer elects to receive the Lockbox Information using other delivery means including paper reports, Internet delivery, CDs, DVDs, or other portable electronic media, Customer acknowledges that such delivery means are inherently more insecure and agrees to assume all risk, and hold Bank harmless from, any obligations, liability or losses that results from the nonreceipt, disclosure, dissemination, alteration or unauthorized access of the Lockbox Information. If Customer is the recipient of misdirected Lockbox Information, Customer shall immediately notify Bank and return the information to Bank. Customer agrees not to retain, use, copy, distribute or otherwise disclose the information in any manner. 6. Image Delivery Services. Bank shall electronically store check images, check information, remittance information or other information received at the Lockbox in accordance with Bank’s record retention schedule. Customer may obtain such images or information via Internet access, CDs, DVDs or file transmission, if available, at the price outlined in the fee schedule. If the images or information are sent via CD or DVD, Customer agrees to verify the contents of the CD or DVD upon receipt and request a replacement, if necessary, within 10 days of receipt. Customer is solely responsible for safeguarding the security and confidentiality of all images and information that is stored on Customer’s computer systems, or printed or downloaded from the Internet, CDs, DVDs, other portable media, or file transmissions. 7. Credit/Debit Card Processing. If Customer desires to provide its customers with the option of making their payments via credit card or non-PIN based debit card, Customer shall first secure approval from a payment transaction processor that Bank is able to support. Credit/debit card processing shall be subject to applicable laws, rules and regulations, and the terms of any other agreement between Customer and the payment transaction processor. Customer acknowledges that Bank is acting on behalf of Customer to merely initiate the authorization of payments at the Lockbox site, and that Bank shall have no responsibility for chargebacks, processing fees, payment disputes or other matters related to the credit/debit card transaction. Bank shall Page 26 (Effective 1/02/2014) enter the credit/debit card information using its best efforts and if adjustments are subsequently required, Customer shall be responsible for handling all adjustments. 8. Foreign currency-denominated items and items drawn on foreign banks. If Customer desires to have non-US dollar items processed by Bank, or items denominated in US dollars but drawn on a foreign bank, Bank shall handle the items within parameters established by Bank based on amount, the type of currency and other considerations outlined in the Implementation Documents. If the item does not fall within Bank’s parameters for processing, Bank shall return the item unprocessed to Customer or forward the item for handling as a foreign cash letter collection. If Bank provides Customer with credit at the US dollar conversion rate in effect, and if the item is subsequently returned by the drawee Bank, Bank shall charge Customer’s account for the prevailing exchange rate in effect at the time of the chargeback. 9. Customer Responsibility. With respect to each item received at the Lockbox, Customer shall indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising directly or indirectly: (i) from Customer’s breach of a representation or warranty under applicable law, clearinghouse rule, Federal Reserve Operating Circular, or other similar rules or regulations; or (ii) from any other act or omission arising out of Bank’s action or inaction taken pursuant to any request by Customer or pursuant to this Agreement. This section 9 shall survive termination of the Agreement. 10. Wholesale Lockbox Processing/Lockbox Remote Capture Services. Bank is authorized to remove and examine the contents of each envelope in accordance with Bank's wholesale lockbox servicing guidelines and shall observe the following guidelines provided in this section. Bank shall capture, format and send remittance data to Customer via information reporting or data transmission in accordance with the Implementation Documents. Customer shall not use any form of prepaid business reply mail envelopes for its lockbox remittances and shall review any proposed envelope changes with Bank prior to use. In addition, Lockbox Remote Capture Services provides Customer with the ability to scan and transmit to Bank lockbox payments received at Customer’s office locations. If Customer selects Lockbox Remote Capture Services, Customer agrees that Bank’s Lockbox Remote Capture Services shall be governed by this Lockbox Services Section and other relevant sections of this Agreement, including but not limited to, the Electronic Deposit Services section. a. Check Date. Bank will not examine any checks or other items with respect to check dates. b. Check Amount. If Bank is unable to determine the amount of a check, such check will be forwarded unprocessed to Customer as an exception. c. Payee. Checks made payable to the Acceptable Payees listed in the Implementation Documents or any reasonable derivation thereof are acceptable for deposit. Checks made payable to others may be returned by Bank as exceptions. Customer warrants that each Acceptable Payee is either Customer, its affiliate, or an entity that has authorized Customer to act on its behalf for the Services provided herein. If the Acceptable Payee is an affiliate of Customer or an entity which authorized Customer to act on such entity's behalf, Customer represents and warrants that such affiliate or entity has authorized checks payable to it to be credited to the Lockbox Account. Bank may require written authorization from any Acceptable Payee or written evidence that an Acceptable Payee has authorized Customer to act on its behalf. If Customer designates ‘Accept All Payees’ in the Implementation Documents and Bank accepts such designation, Bank shall process all checks for credit to the Lockbox Account regardless of the payee name on the check. Such designation may be subject to additional Bank fees. Customer agrees to indemnify and hold Bank harmless for any claims, fines, expenses, and damages that arise out of Bank’s processing of checks based on Customer’s ‘Accept All Payees’ designation. d. Missing Signature. In the absence of a signature, Bank will process the check. Customer agrees to reimburse Bank if the check is subsequently returned. e. Exceptions. If a check is treated as an exception, it will be forwarded by Bank to Customer with the remittance data, and not deposited or otherwise reflected in the account of Customer. f. Correspondence. Any correspondence, invoices and miscellaneous enclosures which are included with a payment, as well as any envelope that does not contain a check, will be returned to Customer. g. Notation. Customer agrees that Bank shall disregard any notation on a check containing "paid in full", "lien waiver" or other restrictive notation, whether preprinted or handwritten, and treat any such check as though such notation did not appear thereon. If Customer instructs Bank not to process checks with restrictive notations, Bank will use its best efforts to detect checks bearing such notations, but Bank shall not be liable to Customer for failure to detect any such notation. 11. Retail Lockbox Processing. Bank is authorized to open each envelope and remove the contents, disregarding all notations and other marks on the envelopes. Bank shall not examine checks or other items with respect to payee names, check dates and check signatures. Bank is not required to retain remittance envelopes or forward them to Customer. Bank will disregard any restrictive notation on any check, including but not limited to “paid in full”, whether preprinted or handwritten, and shall treat any such check as though such language did not appear thereon. Bank will process, endorse and deposit remittances in accordance with its standard procedures. If Bank is unable to determine the amount of a check, such check will be forwarded to Customer as unprocessable. Bank will deliver miscellaneous enclosures, unprocessable transactions and remittance data in accordance with the Implementation Documents. Remittances and envelopes submitted to Bank for processing must meet the specifications designated by Bank from time to time. All changes in remittances and return envelope design are subject to prior testing and approval by Bank. Bank may adjust the price for processing Customer's payments if changes are made to Customer's remittances and/or envelopes (including remittance scan line configuration) without such prior approval. a. Retail Lockbox ARC Services. Retail Lockbox ARC Services provides Customer with the services necessary to convert eligible check payments received within U.S. Bank's retail lockbox into ACH ARC Entries. If Customer selects Retail Lockbox ARC Services, Customer agrees that the Service shall be governed by this Lockbox Services Section and other relevant sections of this Agreement including, but not limited to, the Electronic Deposit Services section. Customer shall adhere to any and all applicable laws, regulations and clearinghouse rules, including but not limited to, obtaining all necessary consents and authorizations from, and/or providing all necessary disclosures to, its customers concerning the conversion of such customers’ checks to ACH Entries. Customer is solely responsible for ascertaining the content, method, and frequency of any required authorizations and notifications. Only original paper checks that qualify as a source document may be converted to an ACH Entry under NACHA Rules. Bank will apply certain automated internal edits and screens to determine whether the original paper check is a source document that qualifies for conversion to an ACH Entry. Customer acknowledges and agrees that Customer is the Originator of such ACH Entries under NACHA Rules regardless of whether Customer or Bank initiates the ACH Entry into the payment system. Bank shall not be liable to Customer for failure to electronically process checks if such processing would violate this Agreement, or any other agreement between Customer and Bank. If an ACH Entry is returned because the original paper check was ineligible as a source document for the ACH Entry, Bank shall use reasonable efforts to collect the check related to the ACH Entry by presenting the original paper check (if not destroyed), the check image, or a substitute check. 12. E-Lockbox. E-Lockbox provides Customer with the ability to receive consumer payments electronically that are initiated via the consumers' personal computer home banking application or other Internet bill payment providers, including consumer credit counseling agencies. Page 27 (Effective 1/02/2014) a. Network. “Network” means the MasterCard Remote Payment and Presentment Service (“RPPS”), a division of MasterCard International, Inc. or Visa ePay, a division of Visa International (“ePay”), or other originators of consumer-initiated bill payments such as Fiserv, iPay, Yodlee or FIS. Bank receives payments and remittance data via the Network. Bank will credit payments to Customer’s account and electronically transmit the remittance data in Bank's standard or other mutually acceptable format for loading to Customer’s accounts receivable system. b. Customer’s Responsibilities. Customer shall provide Bank with all data and specifications necessary for the Network to process payments and for Bank to transmit the remittance data to Customer. Customer agrees to conduct tests that Bank may deem necessary to ensure Customer and Bank are able to process the remittance data. The purchase, installation, testing and maintenance of any and all equipment used to receive and process information from Bank is the responsibility of Customer. As soon as possible, and in any event, no later than 48 hours after Bank transmits the remittance data to Customer, Customer agrees to process all such data and inform Bank of any incorrect, unidentifiable or unprocessable information (collectively, "Returns"). d. Bank’s Responsibilities. Bank shall develop a program to process and transmit remittance data received from the Network in Customer’s preferred file format. Bank shall transmit Returns to the Network when Customer provides Bank with the Return information. Bank will credit Customer’s account in an amount equal to the payments received and debit Customer’s account in an amount equal to any Returns and, if applicable, any Reversals (defined below). e. Reliance on Network. Customer acknowledges that Bank’s ability to process payments and remittances are dependent upon the continued use and support of the Network and third party computers housing the Network and its associated communications network. In the event that access to the Network or its computer communications system is terminated or suspended for any reason, Bank shall not be liable to Customer for any disruptions or failure to provide any part of this Service. Bank assumes no responsibility for the accuracy, timeliness or the completeness of data delivered from the Network to Bank. f. Optional Reversal Transactions. Reversals are Network-initiated debit messages from payment originators informing of the cancellation of previous transactions. Customer may set debit caps on Reversals to limit the daily debit amount a payment originator may send through the Network. If Customer instructs Bank to accept Reversals, Customer hereby authorizes Bank to debit Customer’s account for the amount of the Reversals. g. Optional Biller Stop Payment. Biller Stop Payment allows Customer to provide Bank with instructions regarding payments that Customer does not want posted to its account. If Customer instructs Bank to stop a payment from posting to its account, Customer hereby authorizes Bank to return the payment through the Network. Payments that are stopped will not be included in Customer's settlement transaction or the remittance data provided to Customer. 13. Transportation of Lockbox Items. If Customer directs Bank to pick up mail from any United States Post Office and deliver such mail to a traditional Bank lockbox site for processing in accordance with this Section M and Bank agrees to do so, Customer shall indemnify and hold Bank harmless from and against any and all claims, demands, damages, losses, liabilities, penalties and expenses (including, without limitation, reasonable attorney fees and court costs at trial or on appeal) arising after Bank picks up the mail from the postal facility. M. E-DISBURSEMENT SERVICES Customer may select E-Disbursement Services that will provide organizations a method of distributing funds to multiple consumer recipients (“Recipients”) via a customized Web page that allows Recipients to manage disbursement preferences. Customer agrees that this Service shall be governed by this Section and all other relevant sections of this Agreement. 1. Internet. a. “Customer Disbursement Site” means the interactive Internet disbursement site hosted by Bank where Recipients register to receive disbursements from Customer. Bank will configure, implement, host and support the Customer Disbursement Site. Customer is responsible for sending a file to Bank containing Recipient information for purposes of pre-registering Recipients. Alternatively, Customer may choose to enable Recipients to update payment instructions within the Customer Disbursement Site. In either case, Recipients will have the ability to access the Customer Disbursement Site and input disbursement receipt preferences. b. Customer License. Bank shall have the right and license to use Customer’s name, trademarks, service marks, copyrights and logos and other textual information in connection with the Customer Disbursement Site and on checks issued by Bank to Recipients solely for the purposes contemplated herein. c. Links. Customer shall provide and maintain a link on its Web site to the Customer Disbursement Site. Customer shall be responsible for ensuring that the link to the Customer Disbursement Site takes Recipients to the appropriate area within the Customer Disbursement Site. Customer agrees to use industry-standard security procedures and technology to ensure the security of the Customer’s Web site and to prevent data theft or unauthorized access. Each of Customer and Bank agrees to use industry-standard security procedures and technology to ensure the security of the Customer Disbursement Site and to prevent data theft or unauthorized access. d. Recipient Authentication. Depending on the applicable payment processing channel, Customer shall be responsible for verifying the identity of each Recipient. Customer agrees that Recipients shall not be granted access to the Customer Disbursement Site link until Customer has verified the identity of each Recipient using a commercially reasonable fraud detection system. For every Recipient that accesses the Customer Disbursement System, Bank may rely on Customer to have completed such verification. 2. Compliance with laws and regulations. Customer agrees to comply with all applicable laws, rules and regulations, including without limitation, those issued by: (i) the National Automated Clearing House Association; and (ii) any governmental entity, including (without limitation) the requirements contained in the Electronic Fund Transfer Act, Regulation E, and the Electronic Signatures in Global and National Commerce Act. In addition, Customer agrees to strictly comply with all applicable laws, rules and regulations pertaining to the Higher Education Act Title IV funds and distribution of student loan proceeds. 3. Disbursement Processing. Customer is responsible for sending a file to Bank containing disbursement amounts, names of Recipients, reason for disbursements and, if applicable, disbursement instructions prior to initiating any disbursements to Recipients. Disbursements shall be processed in the manner mutually agreed to between Bank and Customer, which may include ACH credit entries, checks or other payment processing methods. Customer shall at all times be considered the originator of the disbursement. Depending on the applicable payment processing channel, disbursement processing may also be subject to the terms of any other agreement between Bank and Customer and between Customer and the payment transaction processor supported by Bank. Customer acknowledges and agrees that all payments are subject to adjustment, return, reversal and/or chargeback in accordance with the rules governing the applicable payment processing channel. 4. Fees. In addition to Bank’s standard fees, Customer agrees to pay additional fees and expenses for implementation of the E-Disbursement Service or other additional Services, if any, as may from time to time be disclosed to Customer by Bank. Customer also agrees to pay the Page 28 (Effective 1/02/2014) applicable fees and expenses charged by the payment transaction processor supported by Bank, as set forth in Customer’s agreement with such processor. 5. Disbursement Controls. Customer agrees to notify Bank of any material change or anticipated material change in daily dollar activity or type of disbursement processing, and obtain Bank’s consent to such change. Bank may, in its sole discretion, immediately upon written notice to Customer, place a maximum dollar limit on the E-Disbursement transactions or require Customer to provide reasonable security for Bank’s continued handling of such transactions. N. COMMERCIAL SWEEP ACCOUNTS – LOAN OPTION THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF THE BANK FAILURE, THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) WILL ALLOW THE LOAN SWEEP TRANSFER OF EXCESS BALANCES IN CUSTOMER’S DEPOSIT ACCOUNT, ABOVE A PRE-ESTABLISHED THRESHOLD, OUT OF THE DEPOSIT ACCOUNT TO PAY DOWN THE LOAN AT BANK ON THE DAY OF FAILURE. THE REMAINING FUNDS IN THE DEPOSIT ACCOUNT WILL BE DEEMED DEPOSITS UNDER FDIC RULES AND WILL BE INSURED UP TO THE APPLICABLE FDIC LIMITS. 1. Definitions. a. “Account” means Customer’s deposit account at Bank which Customer has designated as being covered by the Services described herein. b. “Available Funds” means the total of the collected funds in the Account as of the close of business on any Business Day, determined in accordance with the manner in which Bank generally provides credit for deposited checks. c. “Business Day” means any day other than a Saturday or Sunday on which Bank is open to the public for carrying on substantially all of its banking functions. d. “Credit” means any loan arrangement which is designated as a line of credit where Bank has agreed will be subject to the Services described herein. e. “Credit Agreement” means any loan agreement, promissory note, guaranty or other agreement, instrument or document which evidences, secures or guarantees the Credit. f. “Deficiency Amount” means the amount by which the Target Balance exceeds the amount of Available Funds as of the close of business on any Business Day. g. “Event of Insolvency” means any of the following: (i) Customer or Guarantor shall die or cease to exist; (ii) any Guarantor shall attempt to revoke its guaranty or other obligation to Bank, or such guaranty or other obligation shall become unenforceable in whole or in part; (iii) any bankruptcy, insolvency or receivership proceeding, or any assignment for the benefit of creditors, shall be commenced under any Federal or state law by or against Customer or any Guarantor; (iv) Customer or any Guarantor shall become the subject of any out-of-court settlement with its creditors; or (v) Customer or any Guarantor is unable or admits in writing its inability to pay its debts as they mature. h. “Excess Funds” means the amount of Available Funds as of the close of business on any Business Day which exceeds the Target Balance. i. “Guarantor” means any guarantor, surety, accommodation party or joint obligor of the obligations of Customer under the Credit. j. “Target Balance” means that amount of funds which Customer desires to maintain in the Account and which is mutually agreeable to Bank and Customer from time to time. k. “Transaction” means either a Loan Transaction or a Repayment Transaction. 2. Initiation of Transactions. a. As of the close of business on each Business Day, Bank will determine the amount of Excess Funds, if any. If Bank determines that there are Excess Funds, Bank will debit the Account and credit the Credit in an amount equal to the lesser of (i) the amount of Excess Funds or (ii) the outstanding principal balance of the Credit plus all interest, fees and charges then outstanding under the Credit (a “Repayment Transaction”); provided, however, that Bank will not be required to initiate any Repayment Transaction in an amount less than a minimum sum mutually agreeable to Bank and Customer. Customer grants Bank a security interest in and right of set-off with respect to the Account for purposes of effecting Repayment Transactions. Page 29 (Effective 1/02/2014) b. As of the close of business on each Business Day, Bank will determine the Deficiency Amount, if any. If Bank determines that there is a Deficiency Amount, Bank will charge the Credit in an amount equal to the lesser of (i) the amount by which such available balance is less than the Target Balance or (ii) the amount which is available to be borrowed under the Credit (the lesser of such amounts being referred to as the “Loan Amount”), plus the amount of any fees and charges under the Credit, and credit the Account in an amount equal to the Loan Amount (a “Loan Transaction”); provided, however, that Bank will not be required to initiate any Loan Transaction in an amount less than a minimum sum established by Bank, and Bank will not be required to initiate any Loan Transaction if any default exists under any Credit Agreement or this Agreement or Bank is otherwise excused or prohibited under any Credit Agreement or applicable law from making an advance to Customer. In addition, Bank will not be required to initiate any Loan Transaction, and the Services hereunder shall immediately and automatically terminate without notice, if: (A) the Credit has matured or been terminated; (B) Customer has cancelled the Credit; (C) an Event of Insolvency has occurred; or (D) Bank has demanded payment under the Credit. c. If Bank has agreed to provide any other service to Customer pursuant to which Bank is authorized to transfer Excess Funds from the Account, (i) this Agreement shall prevail over the terms and conditions of such other service, (ii) Bank may initiate a Repayment Transaction or Loan Transaction under this Agreement in lieu of or prior to initiating the transfer of Excess Funds under such other service, and (iii) Bank shall not be in default as to such other service solely by reason of not initiating the transfer of Excess Funds under such other service. 3. Overdrafts. Bank may debit the Account as set forth in section P. A.1 above, even though, subsequent to such debit, and as a result of additional transfers or withdrawals from the Account, the return of checks unpaid, or any other cause, the Account becomes overdrawn. In such event, Customer will be assessed Bank’s then prevailing charges for overdrafts. 4. Ordinary Course. Customer and Bank intend that each Repayment Transaction hereunder be (a) in the ordinary course of business or financial affairs of Customer and Bank, and (b) made according to ordinary business terms. 5. Asset-Based Loan Sweep Advance. For each asset-based loan sweep transfer or loan sweep advance (each an “Asset Based Transfer”), Customer certifies to Bank that (i) the Asset Based Transfer is being made in accordance with the certain agreements between Bank and Customer (the “Asset Based Documents”); (ii) the Asset Based Transfer is not revocable by Customer; (iii) the representations and warranties set forth in the Asset Based Documents are true and correct as of the date of each Asset Based Transfer; and (iv) no default or event of default, however denominated, has occurred or is continuing under the Asset Based Documents or will result following the Asset Based Transfer. O. COMMERCIAL SWEEP ACCOUNTS – INVESTMENT OPTION NOTICE: INVESTMENT PRODUCTS, INCLUDING MUTUAL FUNDS, ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY BANK OR ANY OF ITS AFFILIATES, NOR ARE THEY INSURED BY THE FDIC, OR ANY OTHER GOVERNMENT AGENCY. THE INVESTMENT OPTIONS OFFERED BY BANK UNDER THE COMMERCIAL SWEEP ACCOUNT ARE SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF PRINCIPAL OF THE AMOUNT INVESTED. 1. General Terms Applicable to All Investment Options. a. If a Commercial Sweep Account Investment Option has been requested and agreed to by Bank, Customer authorizes Bank to transfer funds on a manual or automated basis to and from the demand deposit account (“DDA”) and investment device selected by Customer. Funds will be transferred between the accounts so that: (a) to the extent funds are available in either account, Customer’s DDA maintains an average collected balance equal to a pre-established balance (“Peg Balance”); and (b) any collected funds in the DDA that exceed the Peg Balance are invested by Bank as directed by Customer in accordance with this Agreement. Amounts invested in money market mutual funds, including investment income, will be liquidated and credited back to the DDA as needed so that the average collected balance of Customer's DDA equals the Peg Balance. Amounts invested in other investment options, including interest or other investment income, will be credited back to the DDA upon maturity. Bank may limit the amount of excess collected funds that it will invest on behalf of Customer on any particular Business Day. Bank may also impose a maximum redemption amount to bring the DDA to the Peg Balance on a particular Business Day. If Customer’s Investment Option is not available on a given Business Day, then all excess funds will remain in the DDA until the next Business Day. b. Bank is authorized to accept verbal instructions, including telephone instructions, from Customer representatives for the transfer of funds between Bank and Customer and between Customer's accounts. Bank may rely on any instructions received from Customer that it reasonably believes to be genuine. c. Bank is authorized to execute as agent for Customer all certificates of ownership and other instruments required by law or by contract. Bank shall not be accountable for errors in judgment but only for gross negligence or willful misconduct. Bank shall not be required to comply with any direction of Customer which in Bank’s judgment, may subject it to liability or to defend or prosecute any suit or action unless indemnified in a manner and amount satisfactory to it. d. Customer may, by written instrument executed by Customer and delivered to Bank, terminate this Service and withdraw from the account the principal and accumulated income upon paying all sums due to Bank and indemnifying Bank to its satisfaction against liabilities incurred in the administration of the account. e. Bank will act as agent to invest on the order and for the benefit of Customer. The Services described herein are provided by Bank to Customer solely as bona fide treasury management Services. Bank does not undertake any fiduciary obligation to Customer with respect to these Services. Bank’s duties to act for Customer hereunder are solely mechanical and administrative in nature. 2. Investment Options. a. Repurchase Agreements. (i) Terms. If Customer chooses to invest excess funds in repurchase agreements, Customer and Bank agree to be bound by the Master Repurchase Agreement with Bank. If Customer's investments in repurchase agreements exceed its typical investment amount by $10 million or more on a given Business Day, Customer agrees to notify Bank by providing sufficient advance notice to allow Bank to adequately collateralize the investments. Bank will exercise reasonable efforts to invest the entire amount but cannot guarantee full investment under these circumstances. If Customer fails to notify Bank in advance or if Bank is unable to invest any or all of the additional funds in repurchase agreements, Customer agrees that Bank may be Page 30 (Effective 1/02/2014) required to withhold or withdraw any interest that may have been previously paid. (ii) Confirmations. After each repurchase transaction, Bank will deliver to Customer (via mail, fax, email, or other electronic means, including without limitation, posting to a password protected Web site) a confirmation (“Confirmation”) describing any information required by applicable law, and any other terms and information which Bank may include at its discretion. The information contained in the Confirmation shall be considered true and correct and conclusively binding unless Customer notifies Bank of any error therein within three (3) Business Days after the date the Confirmation is mailed, faxed, emailed, personally delivered to Customer or sent via other electronic means, including without limitation, posting to a password protected Web site. If Customer elects to receive Confirmations electronically, Customer acknowledges and agrees that Customer will no longer receive Confirmations by mail. If Customer desires to discontinue receiving Confirmations electronically, Customer shall provide written notice to Bank, whereupon Bank shall resume delivering mailed Confirmations. b. Eurodollar Investments. (i) Terms. If Customer chooses to invest excess funds in Eurodollars, Bank is authorized to sweep excess funds from Customer’s DDA into overnight Eurodollar time deposits at the Cayman Islands branch of Bank. The minimum amount that may be swept pursuant to this option is $100,000. Excess funds less than $100,000 in a given Business Day will not be invested unless otherwise agreed by Bank. Customer’s Eurodollar investments may be registered in the name of Bank’s nominee or nominees. Earnings in Eurodollar investments shall be credited to Customer’s DDA on a daily basis. CUSTOMER ASSUMES ALL RISK OF LOSS ARISING FROM ANY ACTION TAKEN WITH RESPECT TO THE CAYMAN DEPOSIT BY THE GOVERNMENT OF THE CAYMAN ISLANDS OR ANY SOVEREIGN OR MILITARY POWER (DE FACTO OR DE JURE). (ii) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF BANK FAILURE, THE BALANCES RESIDING IN CUSTOMER’S EURODOLLAR SWEEP ACCOUNT AT BANK WILL NOT BE DEEMED “DEPOSITS” UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) AND WILL NOT BE INSURED BY THE FDIC. IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER’S CLAIM FOR FUNDS THAT WERE SWEPT INTO THE EURODOLLAR SWEEP ACCOUNT WILL BE TREATED AS UNSECURED GENERAL CREDITOR CLAIMS. c. Mutual Funds. (i) Terms. If Customer chooses the Mutual Fund sweep option, excess funds will be invested in the First American fund offered for this service. Bank affiliates serve as investment advisor, custodian, transfer agent, and accounting services agent and receive compensation for such services as disclosed in the prospectus for the selected fund. If Mutual Fund shares are not available on a given Business Day, then all excess funds will remain in the DDA until the next Business Day. While Bank makes every effort to secure sufficient Mutual Fund shares for the sweep, the fully automated nature of the same-day sweep does not allow Bank to predict extraordinary deposit inflows. Consequently, there may be days when a sweep investment is not available and funds will remain in the DDA. Funds that are not swept will be treated as deposits and will be insured up to the applicable FDIC insurance limits. (ii) Customer Acknowledgments. BY ACCEPTING THIS SERVICE, CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE PROSPECTUS OF ANY DESIGNATED FUND. CUSTOMER FURTHER ACKNOWLEDGES THAT BANK IS NOT PROVIDING ANY INVESTMENT ADVICE HEREIN TO CUSTOMER AND MAKES NO REPRESENTATION OR WARRANTY AS TO THE SUITABILITY OR SAFETY OF THE INVESTMENTS IN ANY FUND OFFERED UNDER THIS SERVICE. (iii) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER WILL MAINTAIN ITS INTEREST IN THE MONEY FUND SHARES FOLLOWING A COMPLETED MONEY FUND SWEEP. THE VALUE OF THE SHARES IN THE MONEY FUND SWEEP WILL NOT BE DEEMED “DEPOSITS” UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) AND WILL NOT BE INSURED BY THE FDIC. ON THE DAY OF FAILURE, HOWEVER, THE FDIC MAY DISALLOW THAT DAY’S SWEEP TO OCCUR. IF THE SWEEP IS DISALLOWED, ANY EXCESS BALANCES THAT WOULD HAVE NORMALLY SWEPT ON THAT BUSINESS DAY WILL REMAIN IN THE DEPOSIT ACCOUNT AND WILL BE TREATED AS DEPOSITS. THOSE DEPOSITS WILL BE INSURED UP TO THE APPLICABLE FDIC INSURANCE LIMITS. THE SAME RESULT MAY OCCUR IF BANK HAS INSUFFICIENT SHARES FOR THE MONEY FUND SWEEP. d. Commercial Paper. (i) Terms. If Customer chooses the Commercial Paper sweep option, excess funds shall be invested in an unsecured short- term promissory note issued by U.S. Bank National Association, and held in book entry. At the end of each Business Day, excess funds are automatically transferred from Customers' DDA into a sweep account that invests overnight in U.S. Bank National Association Commercial Paper. The minimum amount that may be swept pursuant to this option is $25,000. Excess funds less than $25,000 on a given Business Day will not be invested in the Commercial Paper sweep. (ii) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: IN THE UNLIKELY EVENT OF BANK FAILURE, THE BALANCES RESIDING IN CUSTOMER’S COMMERCIAL PAPER SWEEP ACCOUNT AT BANK WILL NOT BE DEEMED “DEPOSITS” UNDER RULES PROMULGATED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) AND WILL NOT BE INSURED BY THE FDIC. IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER’S CLAIM FOR FUNDS THAT WERE SWEPT INTO THE COMMERCIAL PAPER SWEEP ACCOUNT WILL BE TREATED AS UNSECURED GENERAL CREDITOR CLAIMS. e. Business Savings Sweep. If Customer chooses the Business Savings Sweep option, collected funds with a minimum of $500 in excess of a Peg Balance shall be swept from Customer’s DDA into a Business Savings Sweep Account (the “Savings Account”). The Peg Balance shall be set at a minimum of $10,000 unless otherwise agreed to by Bank. Funds remain in the Savings Account until Customer’s DDA reaches a negative balance, whereupon available funds are swept back into Customer’s DDA in an amount necessary to return the DDA balance to the Peg Balance. In accordance with applicable federal law, sweeps from the Savings Account to Customer’s DDA in an amount necessary to return the DDA balance are limited to six per month. In order to comply with applicable regulations, on the sixth transfer from the Savings Account to Customer’s DDA, all of the funds are moved from the Savings Account back into Customer’s DDA and the sweeps suspend until the first day of the following month’s cycle. Page 31 (Effective 1/02/2014) P. MASTER REPURCHASE AGREEMENT (MRA) THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE LAW: ALL FUNDS IN THE REPURCHASE AGREEMENT SWEEP WILL NOT BE DEEMED “DEPOSITS” AND WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”). IN THE UNLIKELY EVENT OF BANK FAILURE, CUSTOMER WILL MAINTAIN ITS OWNERSHIP OR SECURITY INTEREST IN THE SECURITIES THAT ARE SUBJECT TO THE REPURCHASE AGREEMENT AND, UPON LIQUIDATION, WILL RECEIVE THE VALUE OF THE SECURITIES UP TO THE AMOUNT OF FUNDS SWEPT FROM THE ACCOUNT. 1. Applicability. From time to time the parties hereto may enter into transactions in which one party (“Seller”) agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this MRA. 2. Definitions. a. “Act of Insolvency”, with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such party’s inability to pay such party’s debts as they become due; b. “Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof; c. “Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for such Transaction as of such date; d. “Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction; e. “Confirmation”, the meaning specified in Paragraph 3(b) hereof; f. “Income”, with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon; g. “Margin Deficit”, the meaning specified in Paragraph 4(a) hereof; h. “Margin Excess”, the meaning specified in Paragraph 4(b) hereof; i. “Margin Notice Deadline”, the time agreed to by the parties in the relevant Confirmation, or otherwise as the deadline for giving notice requiring same day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice); j. “Market Value”, with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities); k. “Price Differential”, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction); l. “Pricing Rate”, the per annum percentage rate for determination of the Price Differential; m. “Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates); n. “Purchase Date”, the date on which Purchased Securities are to be transferred by Seller to Buyer; o. “Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller’s obligations under clause (ii) of Paragraph 5 hereof; p. “Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction hereunder. The term “Purchased Securities” with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof; q. “Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof; r. “Repurchase Price”, the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination; s. “Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of such date; t. “Seller’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction. 3. Initiation; Confirmation; Termination. a. An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller. b. Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a “Confirmation”). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this MRA. Page 32 (Effective 1/02/2014) The Confirmation, together with this MRA, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this MRA, this MRA shall prevail. c. In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the Business Day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer. 4. Margin Maintenance. a. If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Seller require Seller in such Transactions, at Seller’s option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased Securities”), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller). b. If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller’s Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer). c. If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any Business Day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of business in the relevant market on the next Business Day following such notice. d. Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller. e. Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions). f. Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this MRA). 5. Income Payments. Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Securities that is not otherwise received by Seller, to the full extent it would be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is paid or distributed either (i) transfer to or credit to the account of Seller such Income with respect to any Purchased Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed. 6. Security Interest. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with respect to all Transactions hereunder and all Income thereon and other proceeds thereof. In all Transactions, Seller is acting as agent for Buyer. In the event of Seller’s default under the MRA, Buyer has the right to either: (i) direct Seller to sell the Securities, or (ii) sell the Securities, and, following any sale pursuant to this sentence, apply the proceeds in satisfaction of Seller’s liability hereunder. 7. Payment and Transfer. Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds. All Securities transferred by one party hereto to the other party (i) shall be in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer. 8. Segregation of Purchased Securities. To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this MRA. Segregation may be accomplished by appropriate identification on the books and records of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this MRA shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof. Page 33 (Effective 1/02/2014) Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities Seller is not permitted to substitute other securities for those subject to this MRA and therefore must keep Buyer’s securities segregated at all times, unless in this MRA Buyer grants Seller the right to substitute other securities. If Buyer grants the right to substitute, this means that Buyer’s securities will likely be commingled with Seller’s own securities during the trading day. Buyer is advised that, during any trading day that Buyer’s securities are commingled with Seller’s securities, they [will]* [may]** be subject to liens granted by Seller to [its clearing bank]* [third parties]** and may be used by Seller for deliveries on other securities transactions. Whenever the securities are commingled, Seller’s ability to re-segregate substitute securities for Buyer will be subject to Seller’s ability to satisfy [the clearing]* [any]** lien or to obtain substitute securities. * Language to be used under 17 C.F.R. ß403.4(e) if Seller is a government securities broker or dealer other than a financial institution. ** Language to be used under 17 C.F.R. ß403.5(d) if Seller is a financial institution. 9. Substitution. Seller may not substitute other Securities for any Purchased Securities. 10. Representations. Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this MRA, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this MRA on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this MRA and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this MRA and the Transactions hereunder will not violate any law, ordinance, charter, bylaw or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it. 11. Events of Default. In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one Business Day’s notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each an “Event of Default”): a. The non-defaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The non-defaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable. b. In all Transactions in which the defaulting party is acting as Seller, if the non-defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party’s obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price therefore on the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the non- defaulting party and applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately deliver to the non-defaulting party any Purchased Securities subject to such Transactions then in the defaulting party’s possession or control. c. In all Transactions in which the defaulting party is acting as Buyer, upon tender by the non-defaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the non-defaulting party, and the defaulting party shall deliver all such Purchased Securities to the non- defaulting party. d. If the non-defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the non-defaulting party, without prior notice to the defaulting party, may: (i) as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the non- defaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefore on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and (ii) as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the non-defaulting party may reasonably deem satisfactory, securities (“Replacement Securities”) of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the non-defaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefore on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source. The parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the non-defaulting party may establish the source therefore in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Securities). e. As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the non-defaulting party for any excess of the price paid (or deemed paid) by the non-defaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder. f. For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the non-defaulting party of the option referred to in subparagraph (a) of this Paragraph. g. The defaulting party shall be liable to the non-defaulting party for (i) the amount of all reasonable legal or other expenses incurred by the non-defaulting party in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction. h. To the extent permitted by applicable law, the defaulting party shall be liable to the non-defaulting party for interest on any amounts owing by Page 34 (Effective 1/02/2014) the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the non-defaulting party’s rights hereunder. Interest on any sum payable by the defaulting party to the non-defaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate. i. The non-defaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. 12. Single Agreement. Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. 13. Notices and Other Communications. Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified by Bank, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. 14. Entire Agreement; Severability. This MRA shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 15. Nonassignability; Termination. a. The rights and obligations of the parties under this MRA and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. Subject to the foregoing, this MRA and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This MRA may be terminated by either party upon giving written notice to the other, except that this MRA shall, notwithstanding such notice, remain applicable to any Transactions then outstanding. b. Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof. 16. Governing Law. This MRA shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof. 17. No Waivers, Etc. No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this MRA and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date. 18. Use of Employee Plan Assets. a. If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed. b. Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition. c. By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party. 19. Intent. a. The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). b. It is understood that either party’s right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. c. The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). d. It is understood that this MRA constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA). 20. Disclosure Relating to Certain Federal Protections. The parties acknowledge that they have been advised that: a. In the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder; b. In the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and c. In the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by Page 35 (Effective 1/02/2014) the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. Q. SINGLEPOINT® INTERNATIONAL REQUEST FOR TRANSFER SERVICES The U.S. Bank SinglePoint® International Request for Transfer Services will enable domestic or foreign organizations doing cross-border business to initiate or execute payment or transfer instructions from, or between, Customer accounts held at Bank and foreign banks. Prior to implementation of this Service, the Forwarding Bank and the Executing Bank must enter into a Bilateral Agreement referencing their mutual accession to the SWIFT Request for Transfer (MT101) Service Level or other relevant Service Level. At implementation of this Service, Customer shall select whether Bank acts in the capacity of the Forwarding Bank or the Executing Bank with respect to all Requests for Transfer. This Service or other similar remote initiation Services offered by Bank are governed by this Agreement, the Bilateral Agreement, the Interbank Agreement, and all other applicable federal, state and local laws and regulations. 1. Definitions. a. “Beneficiary” means the person or entity designated in the Originator’s instruction to receive funds. b. “Beneficiary Bank” means the financial institution crediting the funds to the Beneficiary’s account. c. “Execute” or “Execution” means the debiting of the Originator’s account by the Executing Bank pursuant to a Request for Transfer from the Forwarding Bank and the forwarding of the credit transfer to the Beneficiary Bank. d. “Executing Bank” means the financial institution that receives and Executes the Request for Transfer from the Forwarding Bank and then forwards the credit transfer to the Beneficiary Bank. e. “Forwarding Bank” means a financial institution receiving a Request for Transfer from the Instructing Party and forwarding it to the Executing Bank. f. “Instructing Party” means a customer of the Forwarding Bank, which could be an office, department or division of the Originator, or a separate legal entity, authorized by the Originator to initiate a Request for Transfer to the Forwarding Bank. g. “Interbank Agreement” means the Service Level Master Agreement (SLMA) and Request for Transfer Service Level Rules and Regulations (MT 101) or other relevant Service Levels offered by Society for Worldwide Interbank Financial Communications (SWIFT), to which the Forwarding Bank and the Executing Bank are a party. h. “Originator” means the customer of the Executing Bank whose account is to be debited pursuant to a Request for Transfer. i. “Request for Transfer” means a transfer instruction received by the Forwarding Bank from the Instructing Party for onward transmission as an MT101 to the Executing Bank, and which is capable of being processed under an Interbank Agreement. 2. Bank as the Forwarding Bank. If Customer selects Bank as the Forwarding Bank, Customer is deemed to be the Instructing Party for all Requests for Transfer. Customer will appoint those individuals authorized to instruct Bank regarding Request for Transfer Services (“Authorized Users”) via the relevant Implementation Documents and System Administrator designations establishing the Authorized Users’ access authority and transaction limits. Bank may rely on any such authorization until it has received Customer’s written notice of revocation and has had a reasonable opportunity to act thereon. Customer and its Authorized Users and other Agents shall maintain the highest possible level of confidentiality with regard to PINs, or other security devices and will take all steps necessary to prevent access to them by unauthorized persons. Customer shall be responsible for the accuracy, completeness and timeliness of all Requests for Transfer sent to Bank. Requests for Transfer received after Bank’s established deadline or on any non-Business Day, including any Saturday, Sunday, holiday or any day that Bank’s wire department is not open will be considered received on the next Business Day. Customer authorizes Bank to process and forward to the Executing Bank all Requests for Transfer received in accordance with any established security procedures. Notwithstanding Page 36 (Effective 1/02/2014) the foregoing, Bank does not assume any responsibility for the Execution of the Request for Transfer by the Executing Bank and completion of the credit transfer to the Beneficiary Bank. Customer understands and acknowledges that any applicable callback notifications on PIN limits established by Customer with Bank for wire transfer dollar thresholds do not apply to Requests for Transfer. Customer agrees not to initiate a Request for Transfer in violation of applicable federal, state or local law or regulations. 3. Bank as the Executing Bank. If Customer selects Bank as the Executing Bank, Customer is deemed to be the Originator for all Requests for Transfer. Customer shall designate to Bank the account(s) (“Account”) to be debited by Bank upon receipt of a Request for Transfer. Bank is hereby authorized to disclose to the Forwarding Bank information about Customer and the Account that may be necessary for the implementation of this Service. Customer authorizes Bank to debit the Account for each Request for Transfer even if such Execution may give rise to an overdraft in the Account. Customer, Instructing Party and Forwarding Bank shall be responsible for the accuracy, completeness and timeliness of all Requests for Transfer sent to Bank for Execution. Customer authorizes Bank to act on all Requests for Transfer received in accordance with any established security procedures notwithstanding any other conflicting instructions sent by Customer, the Instructing Party or the Forwarding Bank. Bank and any other financial institution may rely on the account, routing or BIC numbers in the Requests for Transfer even if such numbers do not correspond to the name of the Customer, Beneficiary or the Beneficiary Bank. With respect to incoming Requests for Transfer that do not include an account number recognizable to Bank, Bank may reject or return the Request for Transfer to the Forwarding Bank without incurring any liability to Customer. Customer hereby represents and warrants to Bank that it has the power to authorize the Instructing Party to initiate Requests for Transfer on it behalf. Bank shall act on all Requests for Transfer initiated by the Instructing Party until Bank receives a notice of revocation from Customer and has a reasonable opportunity to act on it. 4. Security Procedures. Customer and Bank shall comply with any established security procedures with respect to the initiation, forwarding or Execution of any Request for Transfer. Customer agrees that any such security procedures shall be deemed commercially reasonable. Customer understands that the security procedures are not for the purpose of detecting errors in the transmission or content of a Request for Transfer controlled by Customer. Customer agrees to be bound by any Request for Transfer sent in the name of Customer that is processed by Bank in compliance with the agreed security procedures whether or not authorized. 5. Amendment or Cancellation. Customer does not have the right to reverse, adjust or revoke any Request for Transfer after it has been received by Bank; provided, however, that Bank will make a reasonable effort to act on such a request by Customer. With respect to a Request for Transfer that has already been Executed, Bank shall, at Customer’s request, request that the Beneficiary Bank return all or a portion of the funds. Customer understands that the Beneficiary Bank is under no legal obligation to comply with this request. 6. Rejection/Repair. Bank may reject a Request for Transfer if: (i) it is not initiated or transmitted in accordance with the applicable security procedures; (ii) there is any inconsistency between a Request for Transfer and information previously supplied to Bank; (iii) Customer’s Requests for Transfer exceeds any applicable transaction limits established with the Executing Bank (iv) if there are insufficient collected funds in the Account to fund the Request for Transfer; or (v) Bank has other reasonable grounds not to honor the Request for Transfer. Bank shall have no obligation to repair any Request for Transfer it receives but may, in its absolute discretion, endeavor to repair any Request for Transfer. The Forwarding Bank shall be responsible for informing the Instructing Party of any rejections or suspensions. 7. Limits on Bank’s Liability. Bank sends outgoing and receives incoming Requests for Transfer using SWIFT. Bank shall not be responsible for the acts or omissions of Customer, the SWIFT network, other financial institution, or any other person. Payment to a foreign country is subject to the laws of the foreign country involved. Bank assumes no liability for foreign exchange risk, delays, non-delivery or other events resulting from causes beyond Bank’s control. R. FOCAL POINT PLUS SERVICES Bank offers Focal Point Plus Services to allow Customers to track transactions with location reporting. Focal Point Plus uses individual location codes (“Shadow Accounts”) to simplify management of multi- location business and automatically identify transactions within a single account (“Master Account”). Customer acknowledges and agrees the Shadow Accounts are deemed to be part of the Master Account for purposes of this Agreement and cannot be used to process transactions independent of the Master Account. Page 37 (Effective 1/02/2014) S. HEALTHCARE PAYMENT CONSOLIDATOR SERVICES U.S. Bank Healthcare Payment Consolidator Services enable Customers to electronically receive, post, and reconcile healthcare payments and remittances received from health plans and/or their Agents. Payment Consolidator includes check payments, remittances and correspondence received by Bank or third party vendors in paper form via lockbox as well as electronically. Electronic remittance files are delivered from Bank to Customer at agreed upon schedule. Images are made available via Web site or file transmission. Customer agrees that Payment Consolidator shall be governed by this Section and all other relevant sections of the U.S. Bank Treasury Management Terms and Conditions. 1. Introduction. If Customer selects Payment Consolidator, this service may include but is not limited to, lockbox, Automated Clearinghouse (ACH), image viewing, data translation and file transmission services to assist Customer in expediting and automating receipt of their remittances. Prior to initiation of Payment Consolidator, Customer must maintain a demand deposit account with Bank. 2. Processing, Collections and Availability. Payment Consolidator is available only in certain regional locations where hardware and software have been configured by Bank to accommodate processing. Bank is authorized to examine the checks and remittances received at Customer’s designated lockbox in accordance with Bank’s lockbox servicing terms and guidelines. Bank, or third party vendors, shall image, capture data, format and send remittance data to Customer via transmission, image viewer, and/or information reporting in accordance with options selected by Customer in the Implementation Documents. The crediting and collection of items will be handled in accordance with other commercial deposits processed by Bank and shall be subject to Bank’s then current funds availability schedule. 3. Image Viewing and Storage. Bank, or third party vendors, shall process and store images of paper checks, explanation of benefits statements, correspondence or other enclosures, as well as created images of electronic remittance advices and electronic funds transfers. Bank, or third party vendors, will make images available to Customer for web viewing or via secure transmission as directed in the Implementation Documents. Original paper documents will be securely destroyed on a periodic basis. 4. File Transmission and Data Reporting. Bank will transmit to Customer remittance data according to the agreed upon schedule. Customer may elect to receive data through one or more mechanisms as specified in the Implementation Documents. If Payment Consolidator is terminated, Customer may obtain an FTP transmission or other available format of image information processed at the price outlined in the fee schedule. 5. Accuracy and Timeliness of Information. Performance of Payment Consolidator may be affected by external factors such as communication networks latency, mail delays and other factors beyond Bank’s control. Bank will use reasonable efforts to provide Payment Consolidator in a prompt fashion, but shall not be held liable for temporary failure to provide in a timely manner. Information with respect to all transactions is provided solely for Customer’s convenience, and Customer shall have no recourse to Bank as to use of such information. 6. Customer Authorizations, Notifications and Responsibility. Customer authorizes Bank to disclose Customer information to third party vendors to the extent required to deliver the requested Payment Consolidator and to debit or credit Customer’s accounts to perform the Payment Consolidator hereunder. Customer shall provide Bank with all data and specifications necessary for processing. Customer shall conduct tests that Bank may deem necessary to ensure Customer and Bank are able to exchange files and implement Payment Consolidator. Customer shall adhere to any and all applicable clearinghouse, local, state, or federal laws, rules or regulations. 7. Customer Access and Security Procedures. Customer will be bound by any terms of use and any license agreements associated with Payment Consolidator. Customer will use Payment Consolidator in accordance with the procedures established by Bank. Customer will designate one or more System Administrator(s) responsible for setting up and maintaining access available through Payment Consolidator. Customer System Administrator(s) will be responsible for establishing internal security related to Payment Consolidator, including, without limitation, assigning users, establishing access levels, and establishing authorization requirements. Customer is solely responsible for maintaining a secure work environment to ensure against unauthorized access to Payment Consolidator. 8. Proprietary Rights. Bank, or third party vendors, possess all proprietary rights to written material including without limitation, all computer programs written for Bank’s Payment Consolidator, Web sites and other product documentation provided by Bank. Customer shall not duplicate, sell, or use in any manner such programs or documentation without the prior written consent of Bank. Page 38 (Effective 1/02/2014) V. TERMS APPLICABLE TO SPECIFIC FOREIGN EXCHANGE SERVICES The following are additional terms and conditions applicable to all Foreign Exchange Services offered by Bank. Bank may change the number or type of Services offered at any time. 1. Conflicting Provisions. With respect to all foreign exchange transactions or other derivative products entered into by Customer, to the extent that any provision of this Agreement conflicts with a provision of any ISDA Master Agreement by and between Customer and Bank or any documents related thereto (the “ISDA”), the ISDA terms shall govern. 2. Foreign Exchange Risk. Many banking and finance transactions carry risk. All foreign exchange transactions, including but not limited to, swaps, options, forwards, foreign exchange transactions currency accounts, and other similar derivatives and related products involve unique risks specific to the nature of these types of transactions and the currency market. These types of transactions are not suitable for all Customers. Customer should fully understand the nature and extent of exposure to risk of loss, if any, which in some circumstances may significantly exceed the amount of any initial payment made by or to Customer. All decisions to enter into foreign exchange transactions should be made by Customer giving appropriate consideration to Customer’s experience, objectives, financial resources and business environment. 3. Arms Length Transactions. Bank is acting solely in the capacity of an arm’s length contractual counterparty and not in the capacity of financial advisor to Customer or fiduciary unless otherwise explicitly agreed in writing and then only to the extent so provided. A. FOREIGN EXCHANGE WEB 1. Introduction. Bank may provide foreign exchange services to Customer in connection with U.S. Bank Foreign Exchange Web, a private Internet site owned and operated by Bank (“USB FX Web”). If requested by Customer and agreed to by Bank, Bank will provide USB FX Web services in accordance with this Agreement and other procedures provided to the Customer. Customer agrees that Customer’s use of USB FX Web and all transactions initiated thereby shall be governed by this Section, all other relevant sections of the Agreement, and any other related disclosures provided to Customer, in either paper or electronic format. USB FX Web shall be available only during normal business hours as established by Bank, which may vary by day or location. Notwithstanding anything to the contrary herein, Bank does not confirm that the person authorizing any USB FX Web transaction is an Authorized Signer or is otherwise authorized to conduct any USB FX Web transaction on behalf of Customer. 2. Access Devices. USB FX Web shall be available only during normal business hours as established by Bank, which may vary by day or location. Once Bank has granted Customer access to USB FX Web, System Administrator(s) designated by Customer in the Implementation Documents will be provided with one or more access devices, which may include cards, identification numbers and/or passwords. Customer shall use USB FX Web in accordance with the security procedures set forth in this Agreement. 3. Trades. a. General Procedures. By clicking one or more buttons in USB FX Web, Customer informs Bank that Customer wishes to purchase or sell a stated amount of currency against a second currency on a designated date (“Settlement Date”) either unconditionally or at a displayed exchange rate, if one may be obtained (“Trade”). Any transaction that results following the submission of a Trade shall be Customer’s legally binding obligation. Trades submitted to Bank via USB FX Web shall be effective only upon acceptance by Bank. Bank will establish from time to time specific times of day after which Trades will not be processed on a "same-day" or "next-day" basis. Trades submitted after Bank's deadline will be considered received on the next business day. Deadlines will differ depending on the Trade currency and other factors. Customer is solely responsible for the accuracy and completeness of any settlement instructions delivered to Bank through USB FX Web and such settlement instructions are subject to the concurrence of Bank. Bank shall make reasonable efforts to provide information and status of the terms of any Trade on the USB FX Web Web site, or by other means established by Bank. Failure by Bank to confirm a Trade for any reason, including without limitation computer malfunction, shall not excuse Customer’s obligations related to any Trade. Bank’s internal records with respect to each Trade shall constitute conclusive evidence of the terms of each Trade. The terms of each Trade shall be incorporated into and become part of this Agreement. b. Payment. Once a Trade has been made, Customer agrees to make payment or delivery of currency to Bank on the Settlement Date of the Trade in accordance with the settlement instructions provided by Customer, plus any applicable fees or charges. Should Customer instruct Bank to settle a Trade by debiting an account, Customer agrees to maintain sufficient available funds in the account to settle on the Settlement Date. Should funds be insufficient to settle the trade on the Settlement Date, Bank reserves the right in its sole discretion to debit any of Customer’s account with the Bank in the amount of Trade, subject to applicable account fees and charges, or to cancel the Trade. c. Cancellation or Change. Customer acknowledges and agrees that Customer shall have no right to cancel or reverse a Trade once submitted. Bank will, however, make reasonable efforts in its sole and complete discretion to cancel or amend the terms of a Trade upon Customer’s request. Should a Trade be successfully canceled or amended, or in the event that a Trade is canceled due to failure by Customer to make settlement on the Settlement Date or failure to provide Bank with complete settlement instructions prior to the Settlement Date of a Trade, Customer agree to reimburse Bank for any breakage costs and other expenses incurred by Bank to cancel or amend the Trade, including any fees imposed for this extraordinary service. Bank reserves the right to adjust the exchange rate on any Trade requiring a new Settlement Date to reflect any costs associated with carrying that Trade to a new Settlement Date. 4. Orders. a. General Procedures. Bank may offer and agree to accept conditional instructions from Customer to Bank to buy or sell a stated amount of foreign exchange against U.S. dollars based upon exchange rate target prices (“Orders”) via USB FX Web. All Orders requests submitted to the Bank through USB FX Web will not become active until accepted by the Bank. Bank in its sole discretion may decline to accept any Order. All Orders must be in liquid, actively traded currencies, and must contain a U.S. dollar component. If an expiration date is not specified, Orders will remain open until filled. Orders must be for an amount of currency equivalent to at least $100,000 U.S. dollars, based upon the exchange rate contained in the Order. Either Bank or Customer may cancel an Order that has been accepted by Bank at any time prior to the execution of that Order. Cancellations, however, must be effected by direct telephone communication between Bank and Customer. Bank shall have a reasonable time to act on any request for cancellation. An Order that has been filled will be binding on the Customer, even if it has not yet been communicated to the Customer as filled. Customer shall have no right to cancel an Order once filled by Bank. Note that there is no single facility, exchange, or system for the exchange of currencies and therefore, prices that fulfill the requirements of Orders may be reached at some place in the world at some time of day that is not apparent to Bank or its agents. Bank and its agents monitor markets and systems that are generally best representative of the primary market for foreign exchange, and can only be responsible for filling Orders based upon prices traded or available in those markets or systems. b. Types of Orders. Two types of Orders may be transacted via USB FX Web. (i) Limit/Profit Orders. Limit/Profit Orders are Orders placed above the current exchange price for sellers and below the current exchange price for buyers. A Limit/Profit Order to sell foreign currency would yield more dollars at the Order price than at the current exchange price and are filled only if wholesale buyers begin bidding for the foreign currency specified in the Order against U.S. dollars at a price equal to or higher than the price stated in the Order. A Limit/Profit Order to buy foreign currency would cost fewer dollars at the Order price than at the current exchange price and are filled if wholesale sellers begin offering the foreign currency specified in the Order against U.S. dollars at Page 39 (Effective 1/02/2014) a price equal to or less than the price stated in the Order. All Limit/Profit Orders are filled only when they can be filled at a price equal to or better (for the Customer) than the Order price. Limit/Profit Orders for $5,000,000 U.S. dollar equivalent or less will be executed in full, should all the conditions of the Order be met. If Bank or its agents cannot find sufficient liquidity to fill the complete Order at the requested price Limit/Profit, Orders for more than $5,000,000 U.S. dollars may be filled for less than the Order amount, but in no event for less than $5,000,000 U.S. dollars. Orders larger than $5,000,000 U.S. dollar equivalent with an “all or none” limitation may not be placed through USB FX Web. (ii) Stop/Loss Orders. Stop/Loss Orders are Orders placed below the current exchange price for sellers, and above the current exchange price for buyers. A Stop/Loss Order to sell foreign currency would yield fewer dollars at the Order price than at the current exchange price and becomes a market Order to be executed at the next available price(s), when actual wholesale market trades are observed to have been executed at or below the Order price. A Stop/Loss Order to buy foreign currency would cost more dollars at the Order price than at the current exchange price and becomes a market Order to be executed at the next available price(s), when actual wholesale market trades are observed to have been executed at or above the Order price. The fill price may be better than, equal to, or worse than the Order price. A Stop/Loss Order may also be filled at multiple prices. The Customer bears all market risk on a Stop/Loss Order. c. Limited Liability. Bank will rely on market information that it deems adequate and appropriate to determine if, when, and how an Order should be executed. However, Order execution is on a best-efforts basis, and no assurance is given that Bank’s traders or agents can or will have access to or even observe every bid, offer, or trade available in the over-the-counter foreign exchange market. Except for manifest error, Bank’s decisions, prices, execution, or non-execution of Orders will be final and conclusive. 5. Foreign Currency Drafts. Bank may offer and agree to provide a service whereby Bank shall act as Customer’s agent to arrange for the payment of foreign drafts issued by the Customer via USB FX Web ("Foreign Drafts"), which are drawn on the Bank's accounts at various banks with which Bank has a correspondent relationship (each a "Drawee Bank"). Foreign Drafts may not exceed the monetary draft limit communicated to Customer by Bank from time to time in writing. Customer shall draw Foreign Drafts only in accordance with the terms of this Agreement and any related procedures. a. Stop Payment Orders. Upon receipt of a stop payment order, Bank shall make reasonable efforts to ascertain whether the Foreign Draft has been paid by the Drawee Bank. If such Foreign Draft has not been paid, Bank will send a stop payment notice to the Drawee Bank. Bank shall have no liability for the Drawee Bank’s payment of a Foreign Draft over a stop payment order processed by Bank or if the stop payment order does not prevent a Foreign Draft from being legally enforceable for any reason. b. Refund; Replacement Foreign Drafts. Customer may request Bank to refund the amount of a Foreign Draft or issue a replacement Foreign Draft (the "Replacement Foreign Draft") if the original Foreign Draft and duplicate, if any, are surrendered to U.S. Bank properly endorsed. If the original Foreign Draft is unavailable, Bank will refund the amount of the Foreign Draft or issue a Replacement Foreign Draft in accordance with the terms of the applicable Lost, Stolen or Destroyed Foreign Drafts Affidavit. Any refund shall be at the U.S. dollar equivalent of the amount of the Foreign Draft based upon Bank's buying rate on the date of the refund, and Bank shall deduct from such refund all expenses or fees incurred by Bank or the Drawee Bank in connection with the refund. If Bank determines that there is no ready market for the currency specified in the Foreign Draft, Bank may decline to make such refund unless and until Bank determines such a market exists. Any Replacement Foreign Draft issued shall be priced at the selling rate for the original Foreign Draft. c. Liability. In addition to liability limitations elsewhere in this Agreement, Bank's liability for any loss or damage shall not exceed the total amount of the fee charged to Customer related to the particular Foreign Draft which gave rise to the loss or damage. Neither Bank nor the Drawee Bank shall be liable for any loss, cost or expenses resulting from the delay in presenting the Foreign Draft for payment or from the refusal or inability of the Drawee Bank to pay the Foreign Draft by reason of any law, decree, moratorium, regulation, compulsion or control of public authority or of domestic or foreign government, de jure or de facto, or any agency thereof, or resulting from declared or undeclared war, censorship, blockade, revolution, insurrection or civil commotion. d. Drafts; Safekeeping. Bank may deliver to Customer from time to time blank draft forms. Customer shall hold all such draft forms and completed drafts in safekeeping until their use in an authorized transaction by authorized personnel. Customer must destroy all canceled or otherwise used forms and notify Bank in accordance with the procedures. e. Fees. Customer agrees to pay any service charges incurred by Bank in connection with this service and charges for special services, such as stop payment orders or expenses incurred in attempting to recover the proceeds of erroneously paid Foreign Drafts. f. Indemnification. Except to the extent caused by Bank's gross negligence or willful misconduct, and except to the extent recovered from the Drawee Bank, the payee or its transferee, Customer shall be liable for and shall indemnify Bank, its directors, officers, employees and agents against any loss, cost or expense (including attorney's fees) arising out of or relating to a Foreign Draft drawn by Customer, including without limitation, the unauthorized completion or use of a Foreign Draft, conversion of a Foreign Draft, regardless of whether the conversion occurs while the Foreign Draft is held by Customer in safekeeping or thereafter, the use of a Foreign Draft for any illegal purpose, the Drawee Bank's payment of a Foreign Draft to a party other than the payee or an authorized transferee, the placement of a stop payment order, the Drawee Bank's failure to honor a timely stop payment order, the Drawee Bank's failure or refusal to pay the Foreign Draft upon presentment, loss of use of funds while recovering a canceled Foreign Draft, errors in the payment of the Foreign Draft, conditions beyond the reasonable control of Bank, exchange rate fluctuations, the insolvency of the Drawee Bank, foreign exchange disruption or suspension caused by political or economic conditions in the Drawee Bank's country or the United States. In the event of any such loss, cost or expense where recovery may be made against persons in the Drawee Bank's country, Bank will make reasonable efforts to assist Customer in attempting to obtain a recovery from those persons; provided, however, that Customer agrees to pay the expense of such recovery efforts, including attorney's fees, and assumes the risk of loss if the recovery efforts do not succeed. Customer’s indemnity obligations shall survive any termination of this Agreement. 6. Funds Transfers. Customer authorizes Bank to execute and charge the designated Customer account(s) for wire transfer payment orders delivered to Bank via USB FX Web. Customer agrees that all such wire transfer payment orders will be governed by the relevant Sections of this Agreement. 7. Representations and Warranties. Customer represents and warrants to Bank as of the date of this Agreement and as of the date of each Trade that: (i) Customer is authorized to enter into this Agreement and any Trade, (ii) the persons entering into the Agreement (and each Trade) on Customer’s behalf have been duly authorized to do so, (iii) the Agreement (and each Trade) is binding and enforceable against Customer in accordance with its terms, (iv) no Termination Event has occurred or is continuing and (v) Customer is acting as principal with respect to each Trade. 8. Close-Out Events. Each of the following events shall constitute a close-out event under this Agreement (each a “Close-Out Event”): (i) failure by Customer to pay Bank for any amounts due under this Agreement or any Trade, (ii) any voluntary or involuntary insolvency proceeding (including without limitation any proceeding under any bankruptcy, insolvency or other similar laws governing the operations of Customer) shall have been commenced against Customer, (iii) Customer fails, or is otherwise unable, to pay its debts as they become due, (iv) Customer disaffirms, disclaims or repudiates any Trade, (v) any Page 40 (Effective 1/02/2014) representation made by Customer under this Agreement shall prove to have been false or misleading in any material way at the time that it was made, (vi) Customer shall be in default of any agreement between Customer and Bank or its subsidiaries or affiliates. 9. Rights Upon Close-Out Event. If a Close-Out Event has occurred, Bank shall have the right to terminate this Agreement and, upon notice to Customer, close out all outstanding Trades on a date specified by Bank (the “Close-Out Date”). In such event, Bank shall liquidate such Trades by calculating in good faith the gain or loss of all Trades as follows: (i) determine the close out amount of each Trade, which shall be equal to the sum of the face value of each Trade in a particular currency with a Settlement Date that is the same or later than the Close-Out Date and the face value of each Trade in the same currency with a Settlement Date prior to the Close-Out Date, plus interest at the overnight LIBOR rate from and including the Settlement Date, but excluding the Close-Out Date, (ii) convert the close out amount of each group of like currency Trades into United States Dollars at the rate of exchange at which, at the time of the calculation, Bank may buy U.S. Dollars with or against currency of each closed out Trade and (iii) determine for each Trade the sums that would have been owed by Customer to Bank and the sums that would be owed by Bank to Customer (adjusted to present value by discounting the gain or loss at overnight LIBOR from and including the Settlement Date, but excluding the Close-Out Date). The preceding amounts shall be aggregated, so that all such amounts are netted into a single liquidated amount payable to or by Bank. Customer shall pay on demand any amounts owing to Bank pursuant to this section and Bank’s calculations shall be conclusively binding against Customer, absent manifest error. B. FOREIGN CURRENCY ACCOUNTS 1. Introduction. If requested by Customer and agreed to by Bank, Customer may open a Foreign Currency Account (“FCA”) at either U.S. Bank National Association (“Standard FCA”) or U.S. Bank National Association, Cayman Branch (“Cayman FCA”). 2. Permitted Deposits. Bank may accept the following for deposit into a FCA: a. Proceeds of matured foreign exchange purchase contracts; b. Proceeds of foreign currency denominated letters of credit or collection; c. Incoming international funds transfers; d. Proceeds of loan disbursements; or e. Checks and other items subject to collection may not be available until funds are received by Bank Bank will not accept currency or coin for deposit into a FCA. Deposits not specifically enumerated above may be allowed if agreed to by Bank in writing. Only collected and verified funds can be deposited into a FCA, whereupon funds will be immediately available for withdrawal or transfer by Customer. 3. Withdrawals. Customer can make withdrawals out of a FCA in the following ways: a. Settlement of a foreign currency exchange sale contract; b. Negotiation of foreign currency denominated letters of credit or collection; c. Outgoing international funds transfers by wires initiated in accordance with Bank procedures; or d. Payment of a foreign currency loan. Each of these methods of making a withdrawal will result in an immediate debit to the FCA for the entire amount Customer has elected to withdraw from such FCA. 4. Interest. Interest is not paid on Standard FCAs. Interest rates offered on Cayman FCAs are determined in Bank’s discretion based on the applicable currency. Such interest rates may be set at zero. Interest is calculated based on the average daily balance method. The average daily balance method is an annualized rate that reflects the relationship between the amount of interest earned each fiscal month and the average daily balance in the account for such fiscal month. 5. Denomination. Customer will elect the denomination of each FCA on a separate account opening document. Transfers of funds into and out of a FCA in the currency in which that particular FCA is denominated will be made without regard to the equivalent value of that sum of foreign currency in U.S. Dollars or other foreign currencies. Transfers of funds into and out of a FCA in a currency other than the currency in which that particular FCA is denominated may be accommodated by the Bank in its discretion. Such transfers will be made at the prevailing exchange rate determined by Bank. 6. Non-Business Days. In addition to Non-Business Days specified in the Agreement, there will occasionally be other days on which Bank cannot process or complete a transaction due to holidays in foreign countries (including, but not limited to, Cayman Island holidays with respect to Cayman FCAs). 7. Other Terms. Bank may refuse a deposit, limit the amount which Customer may deposit, return all or any part of a deposit, or require that Customer close a FCA at any time. Bank may also close a FCA without prior notice and remit to Customer any balance remaining after taking into account all pending debits and charges against such FCA.. 8. Foreign Currency Account Risks. Investing in any currency other than the base currency of the Customer carries risk. The value of the balances in such accounts may be significantly affected by changes in currency exchange rates. Some other risks of maintaining foreign currency balances include, but are not limited to: the effects of a different economic system in a foreign country, future political and Page 41 (Effective 1/02/2014) economic developments, possible imposition of exchange controls or other government restrictions, and with respect to certain countries, the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could adversely affect the value of the currency. Should Bank’s balances in a foreign country become blocked or withdrawals by Bank become otherwise restricted, Customer’s funds in the FCA will likewise be blocked or otherwise restricted. WHILE DEPOSITS IN STANDARD FCAS MAY BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) UP TO A MAXIMUM AMOUNT ALLOWED BY LAW, CUSTOMER IS NOT PROTECTED BY BANK AGAINST FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS OR FROM INABILITY TO ACCESS FUNDS FROM FOREIGN REGULATIONS BY THE FDIC INSURANCE, OR ANY OTHER INSURANCE OR GUARANTY PROGRAM. CUSTOMER ASSUMES ALL RISK OF LOSS ARISING FROM ANY ACTION TAKEN WITH RESPECT TO THE CAYMAN FCAs BY THE GOVERNMENT OF THE CAYMAN ISLANDS OR ANY SOVEREIGN OR MILITARY POWER (DE FACTO OR DE JURE). IN THE UNLIKELY EVENT OF BANK FAILURE, THE BALANCES RESIDING IN CUSTOMER’S CAYMAN FCA WILL NOT BE DEEMED “DEPOSITS” UNDER RULES PROMULGATED BY THE FDIC AND WILL THEREFORE NOT BE INSURED BY THE FDIC. CUSTOMER’S CLAIM FOR FUNDS HELD IN THE CAYMAN FCA WILL BE TREATED AS UNSECURED GENERAL CREDITOR CLAIMS. 9. Limitations on Liability. In addition to other limitations on liability set forth in this Agreement, Customer expressly releases and holds harmless Bank, and its affiliates, agents and employees, from any liability, loss, damage or claim related to currency exchange rates or fluctuations in value of the currency in which the applicable FCA is denominated with respect to the U.S. Dollar and other currencies. Customer hereby assume all risks related to currency exchange rates and fluctuations in currency values, including that the foreign currency in a FCA might be worthless, in U.S. Dollars or other foreign currencies, than the U.S. Dollar or other foreign currency equivalent of such funds at the time deposited into the FCA. Bank makes no warranty and no representation about the value of any FCA balance at any time. VI. TERMS APPLICABLE TO SPECIFIC MONEY CENTER AND SAFEKEEPING SERVICES The following are additional terms and conditions applicable to specific Money Center and Safekeeping Services offered by Bank. Bank may change the number or type of Services offered at any time. Customer shall not be bound by the terms and conditions for the specific Services described in this Section VI to the extent Customer is not using such Service(s). A. INVESTMENT AND DEPOSITORY SERVICES From time to time, Customer may purchase through or from and/or sell to or through Bank certain Securities (defined below), or may make Time Deposits (defined below) at Bank through Bank’s Money Center Department (the “Money Center Department”). All such transactions shall be effected upon the following terms and conditions. 1. Definitions. a. “Securities” means all bankers’ acceptances, certificates of deposit issued by financial institutions other than Bank, commercial paper, government securities as defined by the Securities Exchange Act of 1934 (“Act”), municipal securities (as defined by the Act), securities sold subject to repurchase agreements, and all other investment securities or products now or hereafter offered by Bank to Customer, other than Time Deposits. b. “Time Deposit” means any time deposit now or hereafter maintained by Bank for Customer through the Money Center Department. c. “Confirmation” means the confirmation statement described in paragraph 6 of this Section VI(A) below. d. “Settlement Account” means any settlement account designated by Customer in a written notice delivered to Bank. e. “Variable Debit” means the amount by which a debit to a Settlement Account differs from the amount of the immediately preceding debit. 2. Capacity of Bank; Compensation. a. In General. In any transaction governed by this Section VI(A), Bank may be acting as principal, riskless principal, or agent. Bank’s capacity in any transaction involving Securities is indicated on the Confirmation. b. Transactions as Principal. When acting as a principal in transactions involving Securities, Bank will either buy Securities for its own account or sell for its own account Securities owned by Bank, whether such Securities are bought before or after receiving Customer’s order. In such transactions, Bank’s compensation, if any, is reflected in the price at which Bank buys and sells the Securities. c. Transactions as Riskless Principal. When acting as a riskless principal in transactions involving Securities, Bank will, after receiving an order to buy or sell Securities from Customer, buy or sell Securities for its own account to offset a contemporaneous sale to or purchase from Customer. In such transactions Bank’s compensation, if any, is reflected in the price at which Bank buys and sells the Securities. d. Transactions as Agent. When acting as Customer’s agent, Bank will buy or sell Securities solely for Customer’s account. In such transactions, Bank’s compensation due from Customer, if any, is the amount of agency service charge indicated on the Confirmation. e. Additional Fees. In addition to compensation received as a principal, riskless principal, or an agent, Bank (and the financial institution maintaining the Settlement Account, if other than Bank) may charge additional fees for services related to a transaction as specified in the current fee schedule as provided to Customer, which may be amended from time to time upon notice to Customer. f. Other Compensation. Bank shall not be prohibited from contracting for and receiving a fee or other compensation from any other party in connection with any transaction hereunder, and any such fee or compensation from such other party shall be in addition to, and shall not be applied as a reduction of, any fee or compensation due from Customer to Bank. Such additional compensation may include, without limitation, applicable advisory, custodial, distribution and/or shareholder service fees (which may be paid as 12b-1 service fees) that Bank or its Page 42 (Effective 1/02/2014) affiliates may receive from various mutual funds and/or mutual fund service providers, based upon moneys invested in the funds, and Customer acknowledges that those fees may be paid to Bank for such services. 3. Transaction Requests. Each transaction will be made pursuant to Customer’s verbal or written request, or electronically via a trading system provided or approved by Bank. Customer may give written instructions to Bank via email by sending such instructions to Bank’s email address of record, in accordance with the delivery requirements of this Section VI(A), as designated from time to time by Bank. In the event transaction requests are submitted to Bank via email, Bank is authorized to act upon any such transaction request received immediately upon receipt thereof. Bank is under no obligation to deliver to Customer acknowledgement that it has received Customer’s transaction request received via email. Bank may reject, refuse to honor, or reverse all or any portion of any transaction request with or without notice. All claims against Bank for failure to properly follow the instructions of Customer must be made within sixty (60) days from the date on which the instructions were received by Bank or such claims are expressly waived by Customer. Customer acknowledges that with respect to certain money market, mutual fund or other similar investments that Customer may acquire through Bank, such funds may from time to time have an ownership interest in securities issued by Bank or its affiliates. 4. Settlement Account. Unless otherwise specified, Customer unconditionally authorizes, empowers, and directs Bank (and any financial institution maintaining the Settlement Account) to: (i) debit the Settlement Account on the settlement date indicated on the Confirmation for the full amount of each transaction effected under this Section VI(A) (including all fees and charges payable hereunder), notwithstanding that such debit may cause the Settlement Account to be overdrawn; and (ii) credit the Settlement Account with interest payments, maturity payments or other appropriate payments. Customer represents that no party other than the individuals designated from time to time by Customer to Bank as having such authority is required to authorize the Money Center Department to debit or credit the Settlement Account. Customer authorizes the financial institution maintaining the Settlement Account to accept debit and credit entries to the Settlement Account until this authorization is cancelled in writing through written notification of its termination in sufficient time and in such manner as to allow the financial institution maintaining the Settlement Account and the Money Center reasonable opportunity to act on it. Customer acknowledges that it has the right to receive notice from the Money Center Department of a Variable Debit (as defined above) 10 days prior to such debit, however, Customer hereby elects not to receive such notice when the Variable Debit is between $1 and $100,000,000. 5. Delivery. Pursuant to instructions given in a manner consistent with paragraph 3 of this Section VI(A), Customer shall direct the delivery of any Securities purchased hereunder to any account set forth in such instructions, which account may be a safekeeping account maintained at Bank, in which case such Securities will be held in accordance with the Safekeeping Terms And Conditions set forth in Section VI(B) below. If Customer shall otherwise direct the delivery of any Securities that are being sold by Bank subject to a repurchase agreement, Bank shall have the right to require that such Securities be delivered to a third-party bailee selected by Bank to hold such Securities, subject to the rights and obligations of Customer and Bank hereunder. With respect to Time Deposits, Bank will issue no certificate, passbook, or any other evidence of deposit except for the Confirmation. 6. Confirmation Statements. Promptly after effecting any transaction pursuant to this Section VI(A), Bank will deliver to Customer (via mail, fax, email, or other electronic means, including without limitation posting to a password protected website) a confirmation statement (the “Confirmation”) which shall identify Bank and Customer and specify the trade and settlement dates of the transaction, the issuer and par amount of any Securities or the principal amount of any Time Deposit, the interest rate or discount rate applicable to any Securities or Time Deposit, the maturity date of the transaction, the capacity of Bank as principal, riskless principal or agent, any terms and information required by applicable law, and any other terms and information which Bank may include at its sole and absolute discretion. The information contained on the Confirmation shall be considered true and correct and conclusively binding upon Customer unless Customer notifies Bank of any error therein within three (3) business days after the date the Confirmation is deemed as delivered to Customer pursuant to paragraph 14 of this Section VI(A) below. 7. Disclosures, Notices and Other Account Information. All disclosures, notices and other Customer account information from Bank may be delivered to Customer in electronic form (including, without limitation posting to a password protected website) to the extent Customer elects to receive such information through electronic delivery, subject to the Terms and Conditions of Electronic Delivery set forth in Section VI(C) below. Customer agrees that sending information in this manner will constitute good and effective delivery of the information to Customer, regardless of whether Customer actually accesses the website or other electronic medium containing the information. 8. No Representation or Warranty. Customer acknowledges and agrees that Bank makes no representation or warranty, express or implied, with respect to the validity, enforceability, collectibility, or investment quality of any Securities sold hereunder. 9. Interest on Time Deposits. All Time Deposits will earn interest from the date of deposit until their respective maturity dates computed at the rate and in the manner established by Bank from time to time. Bank will advise Customer of the applicable interest rate at the time that the request for the Time Deposit is made. 10. Early Withdrawal of Time Deposits. Customer agrees that each Time Deposit will remain on deposit with Bank until the maturity date thereof. A penalty may be imposed if Customer withdraws the principal of any Time Deposit before the maturity date thereof. The amount of such penalty will be specified in the current fee schedule, which may be amended from time to time. 11. Repurchase Transactions. Customer shall not be entitled to purchase any Securities which are government securities, subject to Bank’s agreement to repurchase, and to be held by Bank for the account of Customer, unless Customer shall first have executed and delivered to Bank a written repurchase agreement, in substance satisfactory to Bank, governing such repurchase transaction. In the event of any conflict between the terms of such written repurchase agreement and the terms of this Section VI(A), the terms of such written repurchase agreement shall control. 12. Joint Accounts. In the event that any account opened hereunder is a joint account for more than one Customer (each such Customer hereafter called a “Co-Tenant”), all Co-Tenants jointly and severally agree that any one Co-Tenant shall have authority on behalf of the joint account (i) to buy, sell, and otherwise deal in Securities at Bank and to establish Time Deposits at Bank through Bank; (ii) to receive on behalf of such joint account Confirmations and all other demands, notices, reports, statements of account and communications of every kind; and (iii) to deal with Bank on behalf of such joint account as fully and completely as if such Co-Tenant alone were interested therein, all without notice to the other Co-Tenant(s). Bank is authorized to follow the instructions of any Co-Tenant given in accordance with paragraph 3 of this Section VI(A) in every respect concerning such joint account and is under no duty to inquire into the purpose or propriety of any such instruction. The liability of each Co-Tenant with respect to such joint account shall be joint and several. Any notice sent to one Co-Tenant shall be deemed to be notice to all Co-Tenants. If conflicting instructions are received from a Co-Tenant (whether one or more), Bank may, at its sole and absolute discretion, take any of the following actions: (a) choose which instructions to follow and which to disregard; (b) suspend all action in the account until written instruction signed by all owners is received; (c) close the account and deliver all securities and other property, net of debits or liabilities, to the address of record; and/or (d) take other appropriate legal action. 13. Amendment; Termination. Notwithstanding the provisions set forth in paragraph 28 of Section II above, Bank may amend the terms set forth in this Section VI at any time in any respect, effective upon thirty (30) days prior notice to Customer and Customer or Bank may terminate the Service(s) described in this Section VI at any time effective upon notice to the other party. If any Service described in this Section VI is Page 43 (Effective 1/02/2014) terminated for any reason, Customer will continue to be responsible for any obligation incurred by Customer prior to termination. 14. Notices. All Confirmations, notices, or other disclosures or communications from Bank to Customer shall be deemed delivered upon transmission of fax, email, or other electronic communication to Customer or upon five (5) business days after the date of deposit in the United States mail, postage prepaid, and addressed to the mailing or email address provided to Bank. All written confirmations, notices, instructions, or other communications from Customer to Bank shall be sent to the attention of Customer’s Money Center Department representative at such address designated by Bank from time to time. 15. Recording Conversations. Customer acknowledges and agrees that Bank may record any telephone conversations with Customer without further notice. 16. No Investment Advice. Customer acknowledges that Bank will not provide supervision, recommendations or advice to Customer in connection with the investment, purchase, sale, retention, or other disposition of any Securities. 17. ERISA. If assets of an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), are intended to be deposited, invested or used by Customer in a transaction under this Section VI(A), Customer shall notify Bank prior to effecting that deposit, investment or transaction and will provide Bank with any additional information as Bank may reasonably request. Customer represents and warrants to Bank that any deposit, investment, or transaction pursuant to this Section VI(A) shall not result in a prohibited transaction under ERISA or shall otherwise be exempt, and Customer further agrees to indemnify and hold Bank harmless from any loss or claim arising therefrom. B. SAFEKEEPING TERMS AND CONDITIONS From time to time, Customer may open a safekeeping account or accounts through Bank’s Safekeeping Department (the “Safekeeping Department”) to hold Securities, including Securities purchased to or through the Money Center, and Bank and Customer agree that such accounts and any Securities held therein will be subject to the following terms and conditions. 1. Custody of Securities. Bank agrees to hold and keep as custodian hereunder all securities that Bank has agreed to accept for the account of Customer (“Safekept Securities”) and to deliver such Safekept Securities as Customer directs pursuant to the terms and conditions as described below. Bank in its discretion may refuse to accept any security for safekeeping and in any case will not accept any security for safekeeping unless it is fully paid for or good funds are available to Bank to pay for any such unpaid security. 2. Customer Instructions. Bank is authorized to accept, act upon and rely upon all written instructions given by Customer or those Authorized Users designated from time to time by Customer to Bank as having such authority as provided in accordance with this Agreement. Customer hereby represents and warrants that each Authorized User is authorized to give instructions to Bank. Customer may give written instructions to Bank via email by sending such instructions to Bank’s email address of record (as may be designated from time to time by Bank) and Bank is authorized to act upon any such transaction request received immediately upon receipt thereof. Bank is under no obligation to deliver to Customer acknowledgement that it has received such instructions via email. Bank shall not be liable in any manner if it executes any oral or written instruction that comes from Customer or its Authorized User. All claims for failure to properly follow the instructions of Customer or the Authorized User must be made within thirty (30) days from the date on which the instructions were received by Bank or such claims are expressly waived by Customer. 3. Securityholder Information. Unless otherwise required by law or pursuant to written instructions, in no event shall Bank be responsible to take any action concerning any puts, calls, conversions, exchanges, reorganizations, offers, tenders or other corporate actions or similar matters relating to Safekept Securities other than to forward to Customer or its Authorized User all information received by Bank relating to any such transaction. Customer agrees that its instructions to Bank with respect to any such actions shall be in writing and delivered to Bank within sufficient time for Bank to act thereon if any action is required. Bank shall forward to Customer at Customer’s address so provided to Bank any proxies, financial statements or written notices received by Bank relating to Safekept Securities held on behalf of Customer. All proxies and proxy material received by Bank relating to Safekept Securities are to be voted by Customer or per Customer’s timely written instructions to Bank. Safekept Securities called for redemption prior to maturity will be presented for payment provided the trustee gives Bank adequate notice of redemption. Should any Safekept Security be called for partial redemption by the issuer of such security, Bank is authorized to accept the allocation applied by any central depository. If Bank has to allocate any redemption among its accounts, Bank shall allot the redemption proceeds in any manner it deems fair and equitable in its sole discretion. 4. Registration and Third Party Depositories. Bank shall register Safekept Securities in nominee name, and may from time to time change the registration of Safekept Securities from nominee name to Customer’s name or vice versa; provided that Customer timely completes any necessary documentation provided by Bank to change the registration of the Safekept Securities. Safekept Securities held in nominee name may be deposited with The Depository Trust Company or other third party depository acceptable to Bank. Securities that are depository eligible will be held at the depository in the depositor’s nominee name. 5. Collection of Income and Principal. Bank shall collect and receive the interest, principal and other income payable in connection with the Safekept Securities and shall pay any amounts so collected or received to, or credit the account of, Customer so specified to Bank or any other settlement account subsequently designated by Customer to Bank (the “Settlement Account”). Bank shall not be obligated (a) to pay to or credit the account of Customer with any payment of interest, principal or other Page 44 (Effective 1/02/2014) income until Bank receives such payment in immediately available funds, or (b) to institute or participate in any collection proceedings or other proceedings to enforce Customer’s rights relative to any Safekept Securities or to pursue any remedies on behalf of Customer. Bank is authorized to sign on behalf of Customer any declarations, affidavits, certificates of ownership or other documents relating to securities held by Bank in nominee name that are now or may hereafter be required with respect to all coupons, registered interest, dividends or other income. 6. Settlement Account. Unless otherwise specified, Customer unconditionally authorizes, empowers, and directs Bank (and any financial institution maintaining the Settlement Account) to (i) debit the Settlement Account on the settlement date indicated on the confirmation for the full amount of each transaction effected under this Section VI(B) (including all fees and charges payable hereunder), notwithstanding that such debit may cause the Settlement Account to be overdrawn and (ii) credit the Settlement Account with interest payments, maturity payments or other appropriate payments. Customer represents that no party other than those individuals so designated from time to time as having such authority is required to authorize the Safekeeping Department to debit or credit the Settlement Account. Customer authorizes the financial institution maintaining the Settlement Account to accept debit and credit entries to the Settlement Account until this authorization is cancelled in writing through written notification of its termination in sufficient time and in such manner as to allow the financial institution maintaining the Settlement Account and the Safekeeping Department reasonable opportunity to act on it. Customer acknowledges that it has the right to receive notice from the Safekeeping Department of a Variable Debit (as defined below) 10 days prior to such debit, however, Customer hereby elects not to receive such notice when the Variable Debit is between $1 and $100,000,000. “Variable Debit” means the amount by which a debit to a Settlement Account differs from the amount of the immediately preceding debit. 7. Return of Payments. Customer will repay Bank, or Bank may credit Customer’s Settlement Account, in the event that for any reason: (i) Bank is required to return to the issuer or to a third party any payments; (ii) Bank fails to receive from the issuer or appropriate other party a payment Bank paid to Customer in respect of Safekept Securities; or (iii) Bank must return to the issuer or appropriate other party a payment Bank paid to Customer in respect of Safekept Securities. 8. Receipt and Delivery of Securities. Bank shall not be liable or responsible for or on account of any act or omission of any broker or other Agent designated by Customer or, in the absence of such designation, selected by Bank to receive or deliver Securities for the account of Customer. 9. Withdrawal of Securities. Any and all Safekept Securities may be withdrawn from Bank at any time upon a written order or receipt signed by Customer or its Authorized User. Withdrawal or delivery of securities is subject to availability (e.g., among other reasons, securities involved in a corporate action or in frozen status, restricted securities, or pledged securities may not be available for withdrawal or delivery). 10. No Investment Advice. Customer acknowledges that Bank will not provide supervision, recommendations or advice to Customer in connection with the investment, purchase, sale, retention or other disposition of the Safekept Securities. 11. Standard of Care. Bank shall use reasonable care in carrying out its duties under this Section VI(B). For purposes of this Section VI(B), “reasonable care” shall mean the same degree of care and protection that Bank gives to its own property. Customer shall indemnify and hold harmless Bank, its directors, officers, employees and agents, for and against all claims, losses, liabilities and expenses of any nature or kind, including, without limitation, Bank’s reasonable legal fees and any and all expenses arising from any claim of any party resulting from any actions taken by Bank pursuant to this Section VI(B). Bank shall not be liable, directly or indirectly, for any damages or expenses arising out of the services Bank provides in accordance with this Section VI(B) except where Bank fails to act in good faith or in accordance with reasonable commercial standards of banking business. In no event shall Bank be liable for special, consequential or punitive damages even when Bank has been advised of the possibility of such damages. 12. Fees and Expenses. Customer shall pay to Bank such fees as shown on the current fee schedule, which may be amended from time to time by Bank. If the fee schedule is amended, the amended fees will apply to any Safekept Securities being held in safekeeping at that time. In addition, Customer shall reimburse Bank for its commercially reasonable out-of-pocket expenses, including, but not limited to: postage, insurance, registration fees, wire fees, and other fees incurred by Bank in connection with the Safekept Securities and its services provided under this Section VI. If Customer fails to pay Bank any sums due under this Section VI within 30 days after a written late notice is sent to Customer by Bank, Bank shall be entitled to exercise any one or more of the following options: a. to offset any sums due against any funds of Customer on deposit with Bank; b. to offset any sums due against any interest, principal or other income received or to be received for Customer’s safekeeping account or accounts maintained pursuant to this Agreement; c. to terminate this Agreement and return the Safekept Securities to Customer at Customer’s expense; and d. to avail itself of any other remedy it may have in law or in equity. 13. Record and Taxes. Bank shall maintain records of Customer’s account and provide Customer with a Confirmation/Custody Receipt for all Safekept Securities following delivery to Bank and periodic statements of Safekept Securities on deposit with Bank. Bank will also send to Customer such notices and reports required by law. Customer understands and agrees that it is Customer’s obligation to prepare and file all required tax returns and to pay all taxes due on any income Bank collects for Customer. 14. Subaccounts. If Customer notifies Bank that Customer’s account is a master account for multiple underlying accounts (the “Subaccounts”) of Customer’s customers or other parties, the underlying owners of the Subaccounts shall not be deemed as third-party beneficiaries under this Safekeeping Agreement and Bank shall have no duties or obligations to those parties. Bank will conduct tax reporting as if Customer, and not Bank, was the applicable payor of the Subaccounts and Customer will be responsible for all fees and penalties imposed by relevant taxing authorities due to inaccurate reporting. 15. Amendment or Termination of Services. a. Except as provided in paragraph 12 of this Section VI(B), the provisions of this Section VI(B) may be amended only by written amendment executed by both Customer and Bank; provided, however, that the terms of this Section VI(B) may also be amended by Bank if Bank gives written notification of such amendment to Customer and Customer does not terminate its use of Services described in this Section VI(B) within 30 days of such notification. Customer agrees that failure to so terminate such Services constitute consent to such amendment. The Services provided pursuant to this Section VI(B) may be terminated at any time either by Customer or by Bank upon written notification to the other, whereupon all Safekept Securities shall be delivered or surrendered to Customer upon a written order or receipt signed by Customer or its Authorized User; provided, however, that Bank may offset any sums due Bank as provided in paragraph 12 of this Section VI(B). Such delivery and the termination of Services shall release Bank from all further liability and responsibility under this Section V(B). b. The provisions of this Section VI(B) shall be continuous and shall survive any temporary or intermittent closing of any safekeeping accounts with Bank, and shall replace and substitute any prior agreement regarding the subject matter hereof between Bank and Customer despite language in such prior agreement that such prior agreement was continuous. c. The provisions of this Section VI(B) or any of Bank’s rights and obligations hereunder shall be assignable by Bank to any entity affiliated by common control with Bank or to any successor of Bank upon merger, consolidation, reorganization or otherwise. This Agreement shall not be assignable by Customer. The provisions of this Section VI(B) shall inure to the benefit of and be binding upon Bank, its successors and assigns Page 45 (Effective 1/02/2014) and Customer, his/her heirs, administrators, executors, successors and assigns. 16. Written Confirmation, Notices, Instructions and Other Communications. All Confirmations, notices, or other disclosures or communications from Bank to Customer shall be deemed delivered upon transmission of fax, email, or other electronic communication to Customer or upon five (5) business days after the date of deposit in the United States mail, postage prepaid, and addressed to the mailing or email address provided to Bank. All written confirmations, notices, instructions, or other communications from Customer to Bank shall be sent to the attention of Customer’s Safekeeping representative at such address designated by Bank from time to time. C. TERMS AND CONDITIONS FOR ELECTRONIC DELIVERY The following sets forth the terms and conditions of use of Bank’s electronic delivery and notification service (the “Electronic Delivery Service”) in connection with account(s) with the Money Center Department or Safekeeping Department. The Electronic Delivery Service described in this Section VI(C) shall constitute an Internet Service as defined in Section III of this Agreement and shall be subject to the terms set forth therein, as well as any other agreements between Customer and Bank and any applicable laws or regulations. If there is a conflict between the terms and conditions set forth in this Section VI(C) and the terms and conditions of any other section of this Agreement or any other agreement between you and us as they relate to the Electronic Delivery Service, the terms and conditions set forth herein will control. 1. Electronic Delivery of Documents. Customer may elect to receive Account Communications (defined below) related to your account(s) electronically. All Account Communications will be delivered electronically by posting to Bank’s password protected website designated for Customer’s account(s) or, at Bank’s election, delivered via electronic mail to the email address provided by Customer to Bank. “Account Communications” include, without limitation, all current and future account statements, trade confirmations, security notices, maturity notices, prospectuses, offering and disclosure documents, shareholder communications (such as quarterly, semi-annual and annual reports, proxy statements, etc.), regulatory communications and other information, documents, data, notices and records regarding Customer’s account(s) with Bank. Bank may, from time to time, designate additional Account Communications that are then eligible for electronic delivery through the Electronic Delivery Service, the delivery of which will then be subject to these terms and conditions. From time to time, Bank may add to, modify or delete any feature of the Electronic Delivery Service or Account Communications eligible for delivery through the Electronic Delivery Service at its sole discretion. Customer acknowledges and agrees that by being enrolled in the Electronic Delivery Service, Customer will no longer receive Account Communications by mail that is otherwise available for delivery as part of the Electronic Delivery Service. 2. Accessing Account Communications. Bank will notify Customer via email when Account Communications are posted. Bank may also provide, in its sole and absolute discretion, Account Communications directly via email. Customer may access all Account Communications for at least thirty days from the date of initial posting. Customer acknowledges and agrees that all Account Communications will be deemed to constitute good and effective delivery to Customer upon posting, regardless of whether Customer actually or timely receives or accesses the Account Information, or if Account Communications are delivered directly to Customer via email, when so delivered. 3. Changes in Delivery Method. Customer must notify Bank if it wishes to discontinue the Electronic Delivery Service. Following Bank’s receipt of such notice and after Bank has a reasonable opportunity to act on such notice, Customer will thereafter begin to receive mailed Account Communications beginning with your next statement cycle and/or mailed confirmation statements. 4. Reporting Unauthorized Transactions or Erroneous Statements. Customer agrees to promptly and carefully review all Account Communications as and when delivered and notify Bank via telephone within three business (3) days of delivery (unless otherwise expressly provided for in the applicable customer agreement or safekeeping agreement) if Customer objects to the information provided. Absent such timely objection, Bank shall treat such information as accurate and conclusive. 5. Third Party Services. Customer acknowledges and agrees that receipt of email notifications when Account Communications are posted may be delayed, or prevented by factors affecting Customer’s or Bank’s Internet service provider(s), phone operator(s), and such other similar entity (“Third Party Service Providers”). Bank makes no representations or warranties whatsoever with regard to the products and services offered by such Third Party Service Providers and shall not be liable for any loss caused, in whole or in part, by a Third Party Service Provider. Page 46 (Effective 1/02/2014) 6. International Use. Bank makes no representations or warranties that any content or use of the Electronic Delivery Service is appropriate or available for use in locations outside the United States and accessing the Electronic Delivery Services from territories where its contents or use is illegal and is prohibited by Bank. If Customer accesses the Electronic Delivery Service from locations outside the United States, Customer does so at its own risk. Customer is responsible for compliance with all local laws. 7. Proprietary Rights; Materials; Trademarks. All content included or available through the Electronic Delivery Service (other than Customer’s account information), such as advertisements, test, graphics, logos, button icons, images, audio clips and software, is the property of Bank and/or third parties and is protected by copyrights, trademarks or other intellectual property rights. The compilation (meaning the collection, arrangements and assembly) of all content on the Electronic Delivery Service is the exclusive property of Bank and/or its licensors and is protected by copyrights or other intellectual property rights. The trademarks, logos, and service marks displayed on the Electronic Delivery Service (collectively, “Trademarks”) are the registered and unregistered Trademarks of Bank or third parties. Under no circumstances may Customer use, copy, alter, modify or change these Trademarks. Nothing contained on the Electronic Delivery Service should be construed as granting by implication or otherwise any license or right to use any Trademark without the express written permission of Bank or the third party that has rights to such Trademark, as the case may be. Your DEPOSIT ACCOUNT AGREEMENT & General Terms & Conditions Electronic Transfers Funds Availability Safe Deposit Box Lease Agreement U.S. Bank Consumer Reserve Line Agreement U.S. Bank Business Reserve Line Agreement U.S. Bank Checking Account Advance Agreement Effective February 11, 2013 Member FDIC Table of Contents Terms Applicable to all Deposit Accounts This is an Agreement ................................................................................................................................................................................................................................................2 Definitions.................................................................................................................................................................................................................................................................2 Cellular Phone Contact Policy ..................................................................................................................................................................................................................................2 Waivers and Precedents.............................................................................................................................................................................................................................................2 Identification Notice (USAPATRIOTAct)...............................................................................................................................................................................................................2 Owner’s Authority.....................................................................................................................................................................................................................................................2 Authorized Access and Power of Attorney................................................................................................................................................................................................................3 You Cannot Transfer an Account...............................................................................................................................................................................................................................3 Change in Authorized Signers ..................................................................................................................................................................................................................................3 Adjustments...............................................................................................................................................................................................................................................................3 Liability for Charges and Overdrafts.........................................................................................................................................................................................................................3 Transaction Posting Order ........................................................................................................................................................................................................................................3 Deposits ....................................................................................................................................................................................................................................................................3 Returned Deposited and Cashed Items .....................................................................................................................................................................................................................4 Check 21 ...................................................................................................................................................................................................................................................................4 Substitute Checks and Your Rights ...........................................................................................................................................................................................................................4 Copies of Documents ................................................................................................................................................................................................................................................4 Night Depository.......................................................................................................................................................................................................................................................4 Checks ......................................................................................................................................................................................................................................................................4 Endorsement Standards.............................................................................................................................................................................................................................................5 Insufficient Funds and Overdrafts.............................................................................................................................................................................................................................5 Overdraft Protection Plans ........................................................................................................................................................................................................................................6 Refusing Payment on Your Checks...........................................................................................................................................................................................................................6 Funds Transfers .........................................................................................................................................................................................................................................................6 Withdrawal Rights, Ownership of Account, and Beneficiary Designation...............................................................................................................................................................................................................................7 Pledges and Security Interests in Favor of Others ....................................................................................................................................................................................................8 Accrual of Interest.....................................................................................................................................................................................................................................................8 Stop Payments...........................................................................................................................................................................................................................................................8 Dormant Accounts and Escheat.................................................................................................................................................................................................................................9 Consumer Electronic Check Representment.............................................................................................................................................................................................................9 Checking Accounts and “Subaccounts”....................................................................................................................................................................................................................9 Telephone Transfers...................................................................................................................................................................................................................................................9 Required Signatures ..................................................................................................................................................................................................................................................9 Changes to Our Agreement with You........................................................................................................................................................................................................................9 Closing Your Account................................................................................................................................................................................................................................................9 Statements and Notices ...........................................................................................................................................................................................................................................10 Return of Cancelled Checks....................................................................................................................................................................................................................................10 Checks, Checking Accounts and Savings Accounts with Draft Access ..............................................................................................................................................................................................................................................10 Savings Accounts ...................................................................................................................................................................................................................................................10 S.T.A.R.T. Program Agreement...............................................................................................................................................................................................................................11 Time Deposits..........................................................................................................................................................................................................................................................12 Limit of Liability.....................................................................................................................................................................................................................................................12 Electronic Messages and Agreements.....................................................................................................................................................................................................................12 Levies, Garnishments and Other Legal Process......................................................................................................................................................................................................12 Resolving Account Disputes and Adverse Claims..................................................................................................................................................................................................12 Account Information ...............................................................................................................................................................................................................................................12 Setoff.......................................................................................................................................................................................................................................................................12 Security Interest in Accounts...................................................................................................................................................................................................................................12 Security....................................................................................................................................................................................................................................................................13 Arbitration...............................................................................................................................................................................................................................................................13 Attorney’s Fees........................................................................................................................................................................................................................................................13 Funds Availability: YourAbility to Withdraw Funds- All Accounts Determining the Availability of a Deposit - All Accounts.......................................................................................................................................................................................13 Immediate Availability - All Accounts....................................................................................................................................................................................................................13 Longer Delays May Apply......................................................................................................................................................................................................................................13 Retail Consumer, Small Business and Commercial Accounts................................................................................................................................................................................14 Private Client Accounts...........................................................................................................................................................................................................................................14 Deposits at Automated Teller Machines - Retail Consumer, Small Business and Commercial Accounts.......................................................................................................................................................................................................14 Special Rules for New Accounts - Retail Consumer and Small Business Accounts............................................................................................................................................................................................................................14 Cashing Checks.......................................................................................................................................................................................................................................................14 Other Accounts........................................................................................................................................................................................................................................................14 Business Account Issues Deposit of Pre-authorized Drafts.............................................................................................................................................................................................................................14 Earnings Credit........................................................................................................................................................................................................................................................14 Waiver of Notification of Redeposited Checks.......................................................................................................................................................................................................14 Checks and Checking Accounts and Savings Accounts with Draft Access.................................................................................................................................................................................................................14 Facsimile Signatures................................................................................................................................................................................................................................................14 Deposits...................................................................................................................................................................................................................................................................14 Fraud Prevention Measures.....................................................................................................................................................................................................................................15 Electronic Banking Agreement for Consumer Customers Types of Transactions..............................................................................................................................................................................................................................................15 Limits on Transfers..................................................................................................................................................................................................................................................15 Fees..........................................................................................................................................................................................................................................................................16 Using Your Card For International Transactions.....................................................................................................................................................................................................16 Advisory Against Illegal Use ..................................................................................................................................................................................................................................16 Documentation ........................................................................................................................................................................................................................................................16 1 Preauthorized Payments..........................................................................................................................................................................................................................................16 Our Liability............................................................................................................................................................................................................................................................16 Unauthorized Transactions and Lost or Stolen Cards.............................................................................................................................................................................................16 Consumer Liability for Unauthorized Transfers .....................................................................................................................................................................................................17 Minnesota Liability Disclosure .............................................................................................................................................................................................................................117 Business Days..........................................................................................................................................................................................................................................................17 Confidentiality.........................................................................................................................................................................................................................................................17 Error Resolution Notice...........................................................................................................................................................................................................................................17 Notice of ATM/Night Deposit Facility User Precautions........................................................................................................................................................................................17 Electronic Banking Agreement for Business Customers Account Access .......................................................................................................................................................................................................................................................18 Limits on Transfers..................................................................................................................................................................................................................................................18 Using Your Card For International Transactions.....................................................................................................................................................................................................18 Balance Requirements.............................................................................................................................................................................................................................................18 Unauthorized Transactions, Lost or Stolen Cards and Security..............................................................................................................................................................................18 Safe Deposit Box Lease Agreement ..............................................................................................................................................................................................................19 U.S. Bank Consumer Reserve Line Agreement ........................................................................................................................................................................................20 U.S. Bank Business Reserve Line Agreement............................................................................................................................................................................................23 U.S. Bank Checking Account Advance Agreement..................................................................................................................................................................................23 TERMS APPLICABLE TO ALLDEPOSITACCOUNTS THIS IS AN AGREEMENT Welcome to U.S. Bank and thank you for opening an account with us. This booklet provides the general rules that apply to the account(s) you have with U.S. Bank. Additional rules will be provided in: (1) disclosures we give you when you open your account (for example our Consumer Pricing Information and Business Pricing Information brochure) and other fee disclosures; (2)disclosures we give to you when you use additional products and services (for example our Online Banking Agreement); (3)periodic statements; (4) user guides; (5) Privacy Pledge brochure; (6) any appropriate means such as direct mail and notices on or with your statement, including statements delivered electronically; and (7) disclosures we give you about ATM and Check Card Overdraft Coverage (applicable to certain consumer accounts, refer to the Insufficient Funds and Overdrafts section on page 10 for details). These things, together, are an agreement between you and U.S. Bank. Please read this carefully and retain it for future reference. This brochure is revised periodically, so it may include changes from earlier versions. By providing a written or electronic signature on a signature card or other agreement or contract, opening, or continuing to hold an account with us, you agree to the most recent version of this Agreement, which is available to you at your local U.S. Bank branch, at www.usbank.com, or by calling U.S. Bank 24-Hour Banking at a number listed on the back of this booklet. If any terms of your signature card, resolution, or certificate of authority are inconsistent with the terms of this Agreement, the terms of this Agreement will control. If you have any questions, please call us. Our most commonly used phone numbers are printed on the back of this booklet. DEFINITIONS The following definitions apply in this Agreement except to the extent any term is separately defined for purposes of a specific section. The words “we,” “our,” and “us” mean U.S. Bank National Association (“U.S. Bank”). We are a national bank. We are owned by U.S. Bancorp. U.S. Bancorp and U.S. Bank own or control other companies, directly and indirectly. The members of this family of companies are our “affiliates.” The words “you” and “your” mean each account owner and anyone else with authority to deposit, withdraw, or exercise control over an account. If there is more than one owner, then these words mean each account owner separately, and all account owners jointly. The term “account” means any savings, transaction (for example, checking, Consumer Now Account), and time deposit (for example, certificate of deposit or CD) account or other type of account you have with us, wherever held or maintained. An “owner” is one who has the power to deal with an account in his, her or its own name. An “agent,” in contrast, is one whose power to withdraw from an account comes from, or is on behalf of, the owners. Authorized signers, designated corporate officers, trustees, attorneys-in-fact, and convenience signers are examples of agents. Entities such as corporations, limited liability companies, partnerships, estates, conservatorships, and trusts are not natural persons, and can only act through agents. In such cases, it is the “entity” that is the owner. “Personal accounts” are accounts in the names of natural persons (individuals). They are to be distinguished from “non-personal accounts” which are accounts in the name of corporations, partnerships, trusts and other entities. Except where it is clearly inappropriate, words and phrases used in this document should be interpreted so the singular includes the plural and the plural includes the singular. CELLULAR PHONE CONTACT POLICY By providing us with a telephone number for a cellular phone or other wireless device, you are expressly consenting to receiving communications—including but not limited to prerecorded or artificial voice message calls, text messages, and calls made by an automatic telephone dialing system—from us and our affiliates and agents at that number. This express consent applies to each such telephone number that you provide to us now or in the future and permits such calls regardless of their purpose. Calls and messages may incur access fees from your cellular provider. WAIVERS AND PRECEDENTS Our Agreement with you gives us rights and duties. If we don’t take advantage of all our rights all the time that does not mean we lose them. For example: •if we make funds available to you for withdrawal ahead of schedule, that does not mean we have to do it again. • if we pay a check that is more than your account balance, that does not mean we have to do it again. IDENTIFICATION NOTICE (USAPATRIOT ACT) To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see other identifying documents like a driver’s license or documents showing your existence as a legal entity. Existing customers Even if you have been a customer of ours for many years, we may ask you to provide this kind of information and documentation because we may not have collected it from you in the past or we may need to update our records. Failure to Provide Information If, for any reason, any owner is unable to provide the information necessary to verify their identity, their account(s) may be blocked or closed, which may result in additional fees assessed to the account(s). OWNER’S AUTHORITY Each owner of a personal account, or an agent for a non-personal account, acting alone, has the power to perform all the transactions available to the account. For example, each owner can: (1) make withdrawals by whatever means are available for the account; 2 (2) make deposits by whatever means are allowed for the account; (3) obtain and release information about the account; (4) sign or authenticate any document in connection with the account (for example, an owner can endorse a check payable to a co-owner for deposit to a joint account); and (5) give rights to others to access the account (for example, any owner could grant a power of attorney to have access to the account). In addition, if you share ownership of an account with someone else (for example, you have a joint or multi-party account), then each of you can endorse items for deposit to the account on behalf of another owner. If there is shared ownership of an account, it is the intention of all owners that each of you has complete and separate access and withdrawal rights to all the funds in the account irrespective of who had deposited the funds in the account. AUTHORIZED ACCESS AND POWER OF ATTORNEY Each owner of your account is independently permitted to authorize someone else to access your account. For example, the following persons will have access to your account: (1)Any person listed on a signature card, resolution, or certificate of authority as being authorized to make withdrawals or transfers, by check or otherwise, from your account; (2) Any person that you authorize to make withdrawals or transfers from the account by whatever means the account allows (for example, pre-authorized withdrawals, wire transfers, ATM card, or check card transactions); (3) Any person you give rights to act on your behalf, such as a power of attorney; (4) Any person to whom you make your checkbook or your checking account number available for purposes of transacting business on the account. We discourage this type of “authorization” because it is possible that we will detect such transactions and treat them as unauthorized. If you give any such person “authority,” we are not responsible whether we honor the transactions or dishonor them; and (5) Any person to whom you make your ATM card or check card personal identification number (PIN) available. By allowing this type of “authorization,” the person to whom you make your personal identification number (PIN) available may be able to access all of your accounts held with us by using the telephone, ATM, online or other banking access channels. If you give any person such “authority,” we are not responsible for actions they take with respect to your accounts. We will use the word “agent” to mean any person who you authorize to act on your behalf, whether by following the process we require (for example, by designating an authorized signer on a signature card), or on your own (for example, by creating a power of attorney). If you name such an agent: (1) we may require that you use forms we approve and require each owner to sign the form to be effective; (2) the powers you give to your agent, and any limitations on those powers, are between you and your agent, even if we have express written notice of those powers. You understand and agree that we have no duty or responsibility to monitor the acts of your agent or ensure that the acts of your agent are for your benefit. For example, if you only give your agent authority to pay your bills and your agent exceeds that authority, we are not responsible for that breach of authority; (3) you agree not to hold us responsible for any loss or damage you incur as a result of us following instructions given to us by your agent; (4) the owners of the account are responsible to us for any actions of your agent, regardless of whether those actions exceed the authority given or whether the agent is formally nominated by all the owners or less than all the owners; (5) the agency will end if the owner dies and we get notice of that death, or if there is more than one owner, the agency will end after the death of the last owner and we get notice of that death and, in either case, once we’ve had reasonable opportunity to act on it. (6)the agency will end after the owner notifies us in writing to end the agency and we have had a reasonable opportunity to act on it. (7) if you authorize any third person, such as a bookkeeping service, an employee, or agent of yours to retain possession of or prepare items, you agree to assume full responsibility for any errors or wrongdoing performed or caused by such third person or any of its agents or employees if we should pay any such item. YOU CANNOT TRANSFER AN ACCOUNT You may not transfer an account to someone else without our express written permission. This does not limit your right to access your account by any permissible means. CHANGE IN AUTHORIZED SIGNERS Any owner, including one of the owners of a joint account, may add owners or authorized signers to an account; however, we have the right to require the signature of all owners to make the change. Only under special circumstances and subject to prior approval by us may an owner remove another owner or authorized signer from an account. No change in owners or authorized signers is effective until we have received written notice of the change and have had adequate time to approve and act on it. ADJUSTMENTS If we (or you, or you and us together) make an error on your account, we can fix the error without first notifying you. For example, if: • the dollar amount of your check is paid for the incorrect amount; •a deposit is added incorrectly; • we apply a deposit to the wrong account; we can fix the error without any special notice to you, though such a correction will normally appear on your statement if the error and the correction occur on different business days. We might not adjust for insignificant errors unless you request it. LIABILITY FOR CHARGES AND OVERDRAFTS All account owner(s) are responsible to repay to us any overdraft amount and any overdraft fees charged to an account, no matter which owner caused it or why. That repayment is due immediately, and we will take it from your next deposit or whenever funds become available in your account. If there is more than one owner, each owner is separately, and all owners are jointly, responsible for an overdraft and any account fees. (This means we can collect the total from any owner(s), on any of the owner(s) accounts, but we won’t collect it more than once). An overdraft occurs if you take more money out of your account than is available to you for withdrawal, or if it is available to you but is later reversed. This can happen for example: • by writing a check without enough money in a checking account to pay the check, and we decide to cash it; • by making a withdrawal from your account that exceeds your available balance; • by making a deposit, withdrawing money based on that deposit, and having that deposit reversed because the deposited item is later returned to us unpaid; • by withdrawing money from your account and not having enough money left to pay the charges you incur; or • when money is deposited in your account by mistake, and you withdraw money based on that deposit and the deposit is reversed. We list the charges that you may incur on your account in separate pricing information brochures or agreements for your account. For more information on overdrafts please refer to the section titled Insufficient Funds and Overdrafts. TRANSACTION POSTING ORDER We reserve the right to decide the order of the items we will pay and which items will be returned (if any). Generally, we post the following three transaction types after the close of each business day in the following order: 1. Deposits we receive before the daily cut off time will be posted before any withdrawals. 2. Your non-check withdrawals will be posted in date/time order, based on the date and time associated with each transaction. A date and time (if one is available) will be assigned to each transaction based on one of the following: (1) when the transaction was preauthorized (for example a debit card or ATM transaction was approved); or (2) when the transaction was processed by U.S. Bank (for example an ACH, or Bill Pay transaction for which there is no pre-authorization). If a date and time is not available, these transactions are posted to your account after all transactions with a valid date and time or check number are complete, and posted to your account in order of amount, starting with the lowest transaction amount first (frequently referred to as low-to-high). 3. Your checks will be posted in check number order, starting with the lowest number. (For example: on Monday we may receive and post check # 107; on Tuesday we may receive check # 102 and # 105, and those would be posted on Tuesday in the order of lowest check number (i.e., # 102) posting first). DEPOSITS When you make a non-cash deposit to your account, we give you credit for that deposit, but that credit is provisional (temporary). If the deposit needs to be collected from another financial institution, we must be paid before the credit becomes final. After a credit is final it may still be reversed if the funds cannot be collected. See the sections titled Returned Deposited and Cashed Items and Funds Availability. All deposit receipts are issued subject to our count and verification of the items deposited. Foreign Currency: If you make a deposit in the form of, or payable in a foreign currency, that deposit has to be converted (exchanged) into U.S. dollars. That takes time, there may be additional expenses, and your final credit will be adjusted to reflect the final exchange rate as well as any fees imposed by the entity that makes the conversion. Deposits by Mail:If you make a deposit by mail, we have to receive it and have time to record it before it becomes effective. (See our Funds Availability section.) Cutoff Time:A deposit made after our daily cutoff time on a business day, or on a day we are not open for all forms of business, will be considered deposited on the next full business day. (Refer to our Funds Availability section for cutoff time description.) The cutoff time applies to all accounts (savings, certificate of deposits, payments, etc.), not just checking accounts. Endorsement: If you make a deposit to an account and you fail to endorse the item, we may add an endorsement on any item and you will be responsible for the item as if you endorsed it yourself. 3 We can refuse to accept any item for deposit for any reason, or no reason, or impose conditions on a deposit. For example, we can treat a deposit as an “inquiry” or take an item for “collection” instead of deposit. RETURNED DEPOSITED AND CASHED ITEMS The funds you deposit to your account are subject to normal collection processes even after we make the funds available to you for withdrawal (i.e., the check has “cleared”). If we do not collect the funds, or we need to return the funds, your deposit will be reversed and become your responsibility. Returned items are charged back to your account and a Return Item Advise is mailed to the primary account address. For example: • the deposit amount of the check is recorded incorrectly to your account. The person who wrote the check catches the error, and reports it to their bank, who in turn reports it to us. We would reverse the incorrect portion of the deposit and correct the mistake. • a check you deposit has a forged endorsement. The person who wrote the check notices the forgery and reports it to their bank, who reports it to us. We would reverse the deposit and collection of the check would become your responsibility. • this also applies to checks we might cash for you that you don’t deposit. For example, if you bring a check to us and take cash back from a deposit, or we simply cash the check and if that check “bounces” (is returned to us unpaid), we can take the money from your account to reimburse us for the check and you will have to collect it through other channels. There will be a Returned Deposited Item or Cashed Check fee for such a transaction as well as applicable overdraft fees if sufficient funds are not in your account to cover your items. CHECK 21 Check processing is getting faster as banks begin to process checks “electronically.” We are required by law to provide the notice in the following section (“SUBSTITUTE CHECKS AND YOUR RIGHTS”), which explains the differences between your original check (which might not be returned) and a substitute check, and your rights in the event the substitute check causes a loss that would have been avoided if the original check was still available. SUBSTITUTE CHECKS AND YOUR RIGHTS What is a substitute check? To make check processing faster, federal law permits banks to replace original checks with “substitute checks”. These checks are similar in size to original checks with a slightly reduced image of the front and back of the original check. The front of the substitute check states: “This is a legal copy of your check. You can use it the same way you would use the original check.” You may use the substitute check as proof of payment just like the original check. Some or all of the checks that are returned to you from us may be substitute checks. This notice describes your rights you have when you receive substitute checks from us. The rights in this notice do not apply to original checks, photocopies of original checks, or to electronic debits to your account. However, you have rights under other laws with respect to those transactions. What are my rights regarding substitute checks? In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, overdraft or NSF fees). The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You are also entitled to interest on the amount of your refund if your account is an interest-bearing account. If your loss exceeds the amount of the substitute check, you may be able to recover additional amounts under other law. If you use this procedure, you may receive up to $2,500 of your refund (plus interest, if your account earns interest) within ten business days after we received your claim and the remainder of your refund (plus interest, if your account earns interest) not later than 45 calendar days after we received your claim. We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was correctly posted to your account. How do I make a claim for a refund? If you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please call U.S. Bank 24-Hour Banking (see the back of this booklet for phone numbers) or write to us at U.S. Bank, 60 Livingston Ave, EP-MN-WS5D, St. Paul, MN 55107. You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later. We will extend this time period if you were not able to make a timely claim because of extraordinary circumstances. Your claim must include: (1) a description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect); (2) an estimate of the amount of your loss; (3) an explanation of why the substitute check you received is insufficient to confirm that you suffered a loss; and (4) a copy of the substitute check or identifying information such as the check number and the name of the person to whom you wrote the check. COPIES OF DOCUMENTS We do not typically keep the original paper documents (like deposit slips) associated with your account for a long time. We make copies of most of the documents that end up with us and destroy the paper originals. Microfilm is one type of media that is used, but as technology changes, there are and will be other copying techniques. You agree that such copies will be sufficient for all purposes. See the section titled CHECK 21. To facilitate check imaging and electronic check collection, it is important that you take care with the transactions you create on paper. When completing a check, you must: (1) write clearly; (2) use black or dark blue ink in the date, pay to, amount, and signature fields; and (3) use only the space provided for your part of a transaction. (See the section on ENDORSEMENT STANDARDS.) You agree to reimburse us for any losses and costs we incur as a result of a poor check image caused by a deficiency in the written check, whether due to your failure to follow these guidelines or otherwise. You also agree to reimburse us for any losses and costs we incur as a result of a poor check image caused by a deficiency in the written check that you accepted and deposited as the payee. NIGHT DEPOSITORY If you arrange for night depository services, you must comply with the following two rules and also comply with the rules in any separate night depository agreement. (1) Use of Containers.You must use the night depository bags or envelopes we provide you, and use them only for deposits you make with us. (2) Care.You must take appropriate care when you put the container in our night depository or other facility to make sure the container is received by us. Our responsibility for the security of the container and the drawer or facility is to use reasonable care. This means we are not automatically liable for just any loss, only for losses that result from our own negligence, only to the extent we caused a loss, and reduced by your contribution to any loss. In legal terms, we are a “bailee” until the point: (a) when we open the container and inventory its contents (if that is what we are asked to do); or (b) until you sign the receipt for or take custody of the container (if we do not open the container). CHECKS Post-Dated Checks. We are not responsible to you if we pay a check before its date, even if we have noticed that it is post-dated. If we, at our option, refuse to pay a check because it is presented before its date, you will have to pay, if applicable, the fee we charge for Overdraft Item Returned (NSF) or Overdraft Item Paid. If you want to be sure we do not cash it before its date, you must stop its payment by following our rules for stop payments in the STOP PAYMENTS section of this Agreement and follow our procedures for revoking a stop payment request. Stale-Dated Checks.A “stale-dated” check is one that is brought to us for payment more than six months after its date. We may pay, or refuse to pay, a check brought to us (“presented”) more than six months after its date. (The general rule is we will pay the check or may return the check for insufficient funds.) In addition, the check would be subject to an Overdraft Item Returned (NSF) or Overdraft Item Paid fee. If you do not want us to pay a stale-dated check, you must place a stop payment order on the check. Check Legends. We are not required to honor any legends or memos you put on your checks, even if we are aware of them. By a “legend” or “memo” we mean a message, such as “not valid for more than $50” or “do not pay more than ten days after date” or “paid in full”. Check Forms. Checks are sorted and copied by high speed equipment. If you don’t buy your checks through us, you must get them approved by us or we will not be responsible if your checks do not process correctly. See the section titled COPIES OF DOCUMENTS for additional information on inks and related issues. Deposits of Checks at ATMs We reserve the right to refuse to credit your account for ATM deposits of the following items. If an item is refused it may be returned via mail to the primary account address. (1) For items greater than $2,500, not endorsed by payee (if single payee) or by all payees (if more than one payee); (2) Improperly endorsed (e.g., different endorser than payee); 4 (3) Restrictive wording (on the deposited item); (4) Post dated (greater than one day after the ATM network business day); (5) No date or incomplete date; (6) Altered in any way; (7) Photocopy of item; (8) Not signed by maker; (9) Traveler’s check with different counter signature; (10) Drawn on a foreign bank (other than Canada); (11) Missing the numeric amount and/or the written amount; (12) Numeric amount and written amount do not match; (13) No payee listed; (14) Federal tax refund checks not endorsed by payee or payees; and (15) Any other instrument which is not a check or negotiable instrument. ENDORSEMENT STANDARDS The payee of a check (the person to whom a check is payable) must sign (endorse) the check on the back in the space shown in the picture. If a check is transferred to someone else before it gets deposited or cashed, that person (the transferee) may also be required to sign the check. Every bank that handles a check on its way to the bank that is asked to pay it also has to identify itself on the back of the check. The space for those banks is to the right of the space shown for the payee and other “holders” (see picture on following page). When you endorse a check, you must: (1) clearly sign your name; (2) use black or dark blue ink if possible; (3) never use a faint color, like red, pink or any pastel, or a gel ink (these do not copy well); (4) sign near the top of the space provided, or just below any other signature in that space; (5) stay out of the area below the space for endorsers (most check forms have a line separating the endorsement area); and (6) keep any stamp within the area set aside for handwritten signatures. The picture on this page shows you the correct endorsement area. Why is this important? If your endorsement of a check, or the endorsement of someone from whom you took the check, either: (1)causes a delay in a necessary notice to someone else, or (2) prevents someone from being identified quickly enough (and therefore cannot get notice or cannot get it in time) you will be responsible for the check and the loss that occurs because it is not paid. It will then be up to you to try and recover from someone else who might be liable. INSUFFICIENT FUNDS AND OVERDRAFTS “Insufficient funds” means you don’t have enough available funds in your account to pay the withdrawals you are attempting from that account. An insufficient funds “item” refers to any way a withdrawal or transfer can be debited/made from your account and may include any of the following: •check, • pre-authorized withdrawal, • Online bill payment, • ATM cash withdrawal or ATM card purchase, • check card purchase, • Online banking transfer, • telephone transfer, or • any other debit from your account where we return it because it is for more than the available funds you have in your account at the time the transaction is posted to your account. “Overdraft” means a transaction has caused the available balance on an account to become a negative number. An overdraft can happen, for example, if: • by writing a check without enough money in a checking account to pay the check, and we pay the item; •by making a withdrawal from your account that exceeds your available balance; •by making a deposit, withdrawing money based on the credit received from that deposit, and then having that deposit reversed because the deposited item is later returned to us unpaid; • by withdrawing money from your account and not having enough money left to pay any related charges posted to the account; or • when funds are credited to your account in error and you use the funds, and the reversal of the credit results in an overdraft. Our Options: You do not have the right to withdraw funds that exceed the available balance on your account. When an item of yours overdraws an account, we can either pay or return the item. You have no right to choose which items we pay or return. If we get a batch, or multiple batches,of such items in a day (for example, checks, ATM purchase transactions, and check card purchase transactions typically come in batches), and if one, some or all of them would overdraw the account if paid, we will post items in accordance with the "Transaction Posting Order"section listed within this agreement. This may result in processing larger dollar items before smaller dollar items, even though this would have the effect of reducing your available balance more quickly. Our Fees:We charge an Overdraft Item Returned (NSF) for each withdrawal (e.g., in-person, ATM, automatic payment, or other paper or electronic withdrawal transaction) we return because it exceeds your available balance on a given day. An Overdraft Item Paid fee is assessed for each item or transaction we pay that causes the available balance to become negative or occurs while the available balance is negative on the checking account. We may charge you an extended overdraft fee if your account remains FRONT OF CHECK Bank Name and Location 123456789 7654 Pay to the order of $ dollars 20 Name Address, City, State 7654 BACK OF CHECK Memo Keep your endorsement out of this area. 1 1/2" TRAILING EDGE YOUR ENDORSEMENT MUST BE WITHIN THIS AREA 5 negative for an extended period of time. See the current pricing information brochure for information on fees and how fees will be assessed. If you want to avoid the inconvenience and extra expense of insufficient funds and overdraft fees, refer to the section titled Overdraft Protection Plans on the following page for information. Your responsibilities for overdrafts: If you have an overdraft on your account, you must deposit enough money into your account to pay both the overdraft amount and the fees we charge, and you must do so immediately. If you share ownership of your account with someone else, you are responsible to us for the overdraft, whether or not you personally caused the overdraft or benefited from it. You have the option to direct us to not authorize and/or return all overdraft items, but you may still be charged an insufficient funds fee for returned items. If you wish to request all overdraft items be returned, contact a local U.S. Bank branch or call U.S. Bank 24-Hour Banking. Please be aware it may take up to five business days to implement your request. ATM and Check Card Overdraft Coverage: Certain accounts are subject to a consumer’s election/choice to opt in to receive ATM and Check Card Overdraft Coverage. These accounts include most consumer checking and money market accounts. Ask your U.S. Bank representative for details about account eligibility. Upon account opening you will receive a notice advising you of your choice to authorize (“opt-in”)U.S. Bank to authorize and pay ATM and everyday (non-recurring) check card transactions that may cause your account’s available balance to become negative. If you do not opt-in, we will not authorize payment of an ATM or everyday (non-recurring) check card transaction that could result in an overdraft status. In limited circumstances, yourATM or every day check card transaction may be processed and your account results in a negative available balance, even if you have not opted-in to overdraft coverage for these transactions. These situations may include, but are not limited to, check card transactions that post that are processed by the merchant when the merchant does not first obtain an authorization from U.S. Bank. If this situation occurs, you will not be charged an Overdraft Item Paid fee for paying the transaction if you have not elected to Opt-In to ATM and Check Card Overdraft Coverage. If you wish to change your account election, contact a local U.S. Bank branch or call U.S. Bank 24-Hour Banking or visit www.usbank.com. Please be aware it may take up to five business days to implement your request. Other sections: While many other sections of this booklet relate to these issues, these sections are particularly appropriate: • Setoff (page 28) • Security Interest in Accounts (page 29) • Funds Availability: Your Ability to Withdraw Funds - All Accounts (page 30) • Limits on Transfers (page 36) • Electronic Banking Agreement for Consumer Customers (page 35); Business Customers (page 42) • U.S Bank Consumer Reserve Line Agreement (page 47) OVERDRAFT PROTECTION PLANS U.S. Bank offers Overdraft Protection Plans to help you avoid the inconvenience of having a check returned, and/or a check card purchase rejected, resulting in the expense of overdraft fees or return item fees. These Overdraft Protection Plans allow an eligible account to be linked to a U.S. Bank Personal Checking Account(s) (“checking account(s)”) to cover overdraft situations when the available balance is insufficient to cover checks presented for payment and/or available balance has been reduced due to pending authorized check card transactions, as specified in subsection “Check Card Transactions”. U.S. Bank lets you choose which eligible accounts are linked to your checking account for Overdraft Protection, and the order in which those accounts are accessed to transfer funds to your checking account. You can choose to link up to three eligible U.S. Bank accounts to your checking account for Overdraft Protection. Owner(s) who are signers on the checking account must also be signers on the account(s) linked for Overdraft Protection. Eligible accounts include: • U.S. Bank savings account • U.S. Bank Reserve Line • U.S. Bank Credit Card • Asecondary U.S. Bank personal checking account • U.S. Bank Premier Line • U.S. Bank Home Equity Line of Credit If you have linked eligible accounts, and the negative available balance in your checking account is $10 or more, the advance amount will transfer in multiples of $50. If, however, the negative available balance is less than $10, the amount advanced will be a maximum of $10 and the Bank’s fee (refer to the Consumer Pricing Information Brochure - Overdraft Protection Transfer Fee for fee amount) will be waived. If the account linked for Overdraft Protection does not have enough funds to cover the overdrawn amount, the remaining available balance will be transferred to reduce the overdrawn amount. If there is more than one account linked for Overdraft Protection and the available balance of the first linked account is not enough to cover the overdrawn balance, the next linked account will transfer funds in multiples of $50 to cover the remaining overdrawn balance. For each day an Overdraft Protection transfer occurs, a Bank fee (refer to the Consumer Pricing Information brochure – Overdraft Protection Transfer Fee for fee amount) will be charged to the checking account that received the transfer. While no fee will be charged to your U.S. Bank savings account or secondary checking account, U.S. Bank Reserve Line, U.S. Bank Credit Card, U.S. Bank Premier Line, or U.S. Bank Home Equity Line of Credit, for any automated advance to cover an overdraft to your associated deposit account, you will incur an interest charge according to the terms of your agreement governing your credit account. Please refer to your U.S. Bank Reserve Line, U.S. Bank Credit Card, U.S. Bank Premier Line or U.S. Bank Home Equity Line of Credit for information regarding interest charges. When the Bank accesses funds from an eligible savings account(s), these types of transfers are also subject to transaction limitations and Bank fee noted in the Consumer Pricing Information brochure regarding Federal Regulation D governing savings and money market transaction limitations and also noted in subsection “Savings Accounts”. When the Bank accesses funds from an eligible line of credit or credit card, these types of transfers may be subject to additional charges such as annual fees. In addition, you may be subject to interest that will accrue on the amounts advanced in accordance with your line of credit or cardmember agreement. REFUSING PAYMENT ON YOUR CHECKS You must fill in an amount (in words and numbers) correctly and clearly, and sign your name on checks you write. You should fill in the date and name a payee on your checks. If you don’t name a payee, anyone can cash the check. If you fail to follow these rules, we may refuse to honor your checks. When a check you write is presented to us by another bank for payment, we will generally accept the endorsements on the check, because if an endorsement is missing or forged, we have rights against the other bank that protect us. When a check of yours comes to us other than through another bank, we might not cash it if we are not comfortable with the endorsements on it or the identity of the person who presents it. This is especially true with an endorsement in the name of a business entity. We may require anyone who presents a check for payment in person (other than an account owner presenting a check on his or her own account) to: • pay a fee to cash the check if applicable; and • give a fingerprint or thumbprint, and identification, as a condition of cashing a check. If the presenter of the check refuses to comply with these requirements, or complies but later asserts that these requirements infringed on their legal rights, you understand and agree that imposing these requirements will not be considered a “wrongful dishonor” of your checks. FUNDS TRANSFERS Unless we have entered into a specific written agreement with you that provides otherwise, payment orders you give to us for the transfer of funds out of the account by wire transfer or otherwise, and payment orders we receive for the transfer of funds into the account, will be governed by this paragraph. In addition your rights and obligations with respect to a payment order, and our rights and obligations, will be governed by (a) any separate written agreement with us; then (b) this section; and then, to the extent not specified in a separate written agreement or this Agreement; (c) by Article 4A of the Uniform Commercial Code (“UCC4A”) as enacted in the state in which you have your account with us. We reserve the right to refuse to accept any payment order. Payment orders are accepted when they are executed by us. We may process any payment order request (as well as any amendment or cancellation request concerning a payment order) that we believe is transmitted or authorized by you if we act in compliance with a security procedure agreed upon by you and us. Such payment orders will be deemed effective as if made by you, and you will be obligated to pay us in the amount of such orders, even though they are not transmitted or authorized by you. Unless we agree on another security procedure, you agree that we may confirm the authenticity and content of a payment order (among other ways) by placing a telephone call to you. If we cannot reach you, or if the payment order is not confirmed or approved in the manner we require, we may refuse to execute the payment order. YOU AGREE THAT IF A PAYMENT ORDER OR CANCELLATION THEREOF IDENTIFIES THE BENEFICIARY BY BOTH NAME AND AN IDENTIFYING NUMBER, AND THE NAME AND NUMBER IDENTIFY DIFFERENT PERSONS OR ACCOUNT HOLDERS, EXECUTION AND PAYMENT TO THE BENEFICIARY OR CANCELLATION MAY BE MADE SOLELY ON THE BASIS OF THE IDENTIFYING NUMBER. YOU ALSO AGREE THAT IF A PAYMENT ORDER IDENTIFIES AN INTERMEDIARY BANK OR THE BENEFICIARY’S BANK BY BOTH NAME AND AN IDENTIFYING NUMBER AND THE NAME AND NUMBER IDENTIFY DIFFERENT PERSONS, EXECUTION OF THE PAYMENT ORDER BY ANY BANK MAY BE MADE SOLELY ON THE BASIS OF THE IDENTIFYING NUMBER. 6 If we receive a funds transfer into any account you have with us, we are not required to give you any notice of the receipt of the funds transfer. The funds transfer will appear on your next periodic statement. Prior to the acceptance of an outgoing payment order, the outgoing payment order may be cancelled, but may not be amended or modified, if the beneficiary’s bank is located within the United States of America and the outgoing payment order is to be paid in U.S. dollars. Other outgoing payment orders may not be cancelled, amended or modified. We must receive your cancellation in a reasonable time prior to the time we execute the outgoing payment order. Payment orders sent by Fedwire will be subject to the Federal Reserve’s Regulation J, and payment orders sent via other payment systems will be subject to the rules of those systems. You agree that we may record all telephone conversations and data transmissions received from, made for or made on behalf of you pursuant to or in connection with a payment order. YOU AGREE THAT IF A PAYMENT ORDER, OR ANY CANCELLATION OR AUTHORIZATION RELATING THERETO, BUT FOR THE APPLICABILITY OF THE ELECTRONIC FUND TRANSFERS ACT OF 1978 (AS IN EFFECT FROM TIME TO TIME), CONSTITUTES A PORTION OF A FUNDS TRANSFER AS DEFINED IN UCC4A, ALL ACTIONS AND DISPUTES CONCERNING SUCH PAYMENT ORDER, CANCELLATION OR AUTHORIZATION SHALL BE DETERMINED PURSUANT TO UCC4A AND THIS AGREEMENT TO THE FULL EXTENT PERMITTED BY LAW. If an outgoing payment order in a foreign currency cannot be completed, the exchange rate that will apply to any refund due you will be the exchange rate in effect at the time on the day the refund is made. Additional fees may be deducted from a payment order amount by other banks involved in the funds transfer process. WITHDRAWALRIGHTS, OWNERSHIPOFACCOUNT, AND BENEFICIARY DESIGNATION The following rules govern the ownership and withdrawal rights of deposit accounts with the various titles given to them. There are two primary issues that these rules control. The first is “withdrawal rights” and the second is “ownership.” By “withdrawal rights” we mean who has access to the funds in the account for all purposes. These withdrawal rights will control, for example, whose instructions we must follow, whose checks we must pay, and whose withdrawal requests we must honor. These withdrawal rights do not control who actually owns the funds, as between multiple parties to an account. By “ownership” we generally mean who owns the funds in the account. In particular, by selecting a particular ownership, you are expressing your intention of how and to whom your interest in the funds in the account should pass in the event of your death. If you create a type of account, you retain the right to change or close the account to the extent of the withdrawal rights you retain in your own name. We make no representations as to the appropriateness or effectiveness of any particular ownership or beneficiary designations. Our only responsibility is to permit access to the account as provided by the withdrawal rights. You must consult with your own attorney or financial advisor as to whether and how to effect any change in actual ownership of funds in the account. Individual Account. This is an account in the name of one person. Such an account is also referred to as a “single ownership” account. Withdrawal Rights.The holder of such an account is the only person who has the right to withdraw from the account, unless we permit the holder to designate an agent or attorney-in-fact to the account. Ownership. The holder of such an account is presumed to be the owner. Holding such an account, by itself, creates no additional ownership rights nor survivorship rights (nor does such type of ownership create or extinguish any community property rights). In almost all instances this type of account will pass, on the death of the owner, through the estate of the owner. (You must consult your own estate planner to be sure.) Agents and “Attorneys-in-Fact.” The owner of this type of account can nominate an authorized signer or attorney-in-fact. Joint Account - With Survivorship. This is an account in the names of two or more natural persons, with the following features: Withdrawal Rights. Each joint tenant has complete and separate access to the funds and withdrawal rights, and each authorizes the other(s) to endorse for deposit any item payable to the joint tenant. Upon the death of any joint tenant, any surviving joint tenant will have complete withdrawal rights to the balance of the account. If there is more than one surviving joint tenant, such survivors remain as joint tenants with right of survivorship with the same withdrawal rights provided in this section. Each joint tenant reserves the right to change the ownership of the account to the extent of that owner’s withdrawal rights. Ownership. Each joint tenant is presumed to “own” the funds in proportion to that person’s net contribution to the account. Each joint tenant intends upon his or her death that the funds owned by such person will be owned by the survivor. If there is more than one survivor, the “ownership” of the decedent’s funds will be shared equally with such survivors. Other Titles. In some states, it is advisable to add either “not as tenancy in common” or “not as a tenancy by the entirety” or both to insure the intention described above. Agents and “Attorneys-in-Fact.” Any joint tenant can nominate an authorized signer or attorney-in-fact who can hold all the same withdrawal and deposit rights as the authorizing owner, except the authorized signer or attorney-in-fact will not be an owner (a joint tenant). Joint Account with Survivorship - Arizona. A Joint Account with Survivorship in Arizona has a unique feature that will change the “ownership” rights on the death of one of the joint owners if there is more than one surviving joint tenant and one of the surviving joint tenants is the surviving spouse of the deceased joint tenant. Withdrawal Rights. This rule will not change the withdrawal rights to the account on the death of a joint tenant; it only affects the actual ownership of the account balance, which will only affect the survivors, and will not affect our responsibilities under the account. Ownership. If two or more parties survive and one is the surviving spouse of the deceased party, the amount to which the deceased party, immediately before death, was beneficially entitled by law belongs to the surviving spouse. If two or more parties survive and none is the spouse of the decedent, the amount to which the deceased party, immediately before death, was beneficially entitled by law belongs to the surviving parties in equal shares, and augments the proportion to which each surviving party, immediately before the deceased party’s death, was beneficially entitled under law, and the right of survivorship continues between the surviving parties. Tenancy in Common Accounts. A Tenancy in Common account is another form of joint account without the survivorship feature. A Tenancy in Common account is also in the name of two or more individual owners. Withdrawal Rights.Each joint tenant has complete and separate access to the funds and withdrawal rights, and each authorizes the other(s) to endorse for deposit any item payable to the joint tenant. Until we receive notice of the death of any joint tenant, any tenant in common will have complete withdrawal rights to the entire account balance. If more than one tenant in common survives the death of another tenant in common, such survivors remain as tenants in common between them. Each tenant in common reserves the right to change the ownership of the account to the extent of that owner’s withdrawal rights. Ownership. Each tenant in common is presumed to “own” the funds in proportion to that person’s net contribution to the account. However, because of the extreme difficulty in determining such proportions over time, you agree that upon the death of one tenant in common, the balance in the account at the time immediately before the death of the tenant in common will be deemed to be owned in equal shares between all tenants in common. After death and our receipt of notice of such death, the decedent’s share will be set aside for the estate of the decedent, and the survivor’s share in the account balance will be at the disposal of the surviving tenant in common. Other Titles. In some states this account is referred to as Joint Tenancy WITHOUT Right of Survivorship. Agents and “Attorneys-in-Fact.”Any tenant in common can nominate an authorized signer or attorney-in-fact who can hold all the same withdrawal and deposit rights as the authorizing owner, except the authorized signer or attorney-in-fact will not be an owner (a tenant in common). Marital Account (Wisconsin). This account is an account established by two persons in Wisconsin who claim to be husband and wife. This account is, for such persons, the same as the Tenancy in Common account described above. Marital Account with P.O.D. Beneficiaries (Wisconsin). This account is, first, the same as a Wisconsin Marital Account (which is, in turn, the same as a Tenancy in Common account described above). Withdrawal Rights.During the lives of both parties to the marriage, the withdrawal rights will be the same as for the Marital Account. The beneficiaries have no withdrawal rights until the death of one of the marriage partners. Ownership. Upon the death of one of the spouses, the surviving spouse owns 50% of the funds on deposit, and the P.O.D. beneficiary named by the deceased party (if that beneficiary is then surviving) owns the other 50%. Each spouse can name his or her own beneficiary. If there is more than one beneficiary who is named by a party who survives, the shares of those beneficiaries will be equal. On the death of one of the marriage partners, the account will have to be retitled and beneficiary shares will have to be redeposited or withdrawn. Pay-on-Death Account. This is an account where one or more persons create the account and name one or more living persons as beneficiaries. Frequently the account title is A.B. Pay-on-Death to C.D. beneficiary. Withdrawal Rights.The person who creates this type of account retains complete withdrawal rights in such an account during his or her lifetime and for his or her own benefit. The named beneficiary has no withdrawal rights to the account during the lifetime of the creator of the account. The owner can change or close the account, and change beneficiaries at any time. On the death of the creator of the account, the beneficiary (on proof of death of the creator and proof of the identity as the named beneficiary), can withdraw the entire account balance. If there is more than one beneficiary who is named and survives the creator, the surviving beneficiaries acquire and can withdraw an equal share with the other surviving beneficiaries, without survivorship rights between beneficiaries. If a beneficiary dies before the creator, neither the beneficiary’s estate nor heirs acquire anything on the death of the owner. If more than one person creates such an account, then such creators have complete and separate withdrawal rights between them during their joint lives, and the survivor of them will have complete withdrawal rights upon the death of the other creator. Named beneficiaries can withdraw a share of the account balance only upon the death of the last creator and only if such beneficiaries are then alive (and upon proof of the deaths of the creators and their own identity as the named beneficiaries). In effect, if more than one person creates this type of account, with one or more beneficiaries, the account has first all the incidents of a “Joint Account with Survivorship” and only after there is but one joint tenant does the account have the incidents of a “Pay-on-Death” account. 7 Ownership.The creator of this type of account is presumed to own the funds during his or her lifetime and intends that ownership to pass to the beneficiary only upon his or her death and only if the named beneficiary survives him or her. If there is more than one creator, the ownership between such creators is the same as that between joint tenants with right of survivorship, with the same incidents upon the death of a joint tenant. If there is more than one beneficiary who is named and survives the creator(s), the creators intend his, her or their ownership rights to pass to the then surviving beneficiaries in equal shares, with no survivorship rights between them. Other Titles. This type of account has other names such as “Tentative Trust,” “Totten Trust,” “In Trust For” and “Revocable Trust.” In states where one of these trust accounts is recognized, the creators of such accounts will be referred to as a “settlor” or “grantor.” Nevertheless, all the incidents of such an account, the rights of the grantor(s) and beneficiaries are exactly the same as described for “Pay-on-Death” accounts above. Only the names have been changed. Revocable Trust or Pay-on-Death Account (not subject to the Nonprobate Transfers Law of Missouri) In Missouri, a Revocable Trust or Pay-on-Death account may include an appendage to its title “not subject to the Nonprobate Transfers Law of Missouri.” This appendage does not change the features of the account as described above for Pay-on-Death accounts. Registration in Beneficiary Form - Missouri Adding the acronym LDPS (which stands for lineal descendants, per stirpes) to a Revocable Trust or Pay-on-Death account in Missouri, changes the rights of beneficiaries of such accounts. LDPS designation means that if a named beneficiary of such an account dies before the account owner, then the unnamed lineal descendants of that deceased beneficiary will acquire the share of the deceased beneficiary on the death of the owner per stirpes. UTMA (Uniform Transfers to Minors Act) Account This is an account in the name of an adult custodian (or possibly a corporate custodian) for the benefit of a person who is a minor at the time the account is created. Withdrawal Rights. During the minority of the child, the custodian has all withdrawal rights, but is required by law to exercise those rights solely for the benefit of the child. We, however, have no duty or agreement whatsoever to monitor or insure that the acts of the custodian are for the child’s benefit. The custodian is required to turn over the account balance when the child reaches the age of majority. The custodian authorizes us, at our discretion, to exercise the custodian’s duty to transfer funds to the child at the child’s request upon reaching the age of majority. Ownership. The child/beneficiary is at all times the owner of the funds in the account. UGMA (Uniform Gifts to Minors Act) Account A few states have not adopted the Uniform Transfers to Minors Act. These few states have, for our purposes, an equivalent statute known as the Uniform Gifts to Minors Act, which has the same incidents as those described above for the UTMAaccount. Fiduciary Account A fiduciary account is an account opened by or taken over by an executor, administrator, personal representative, guardian, conservator, trustee, or other fiduciary in such capacity. Any fiduciary named as a signer on a fiduciary account shall be solely responsible for acting in accordance with the terms of the applicable laws, will, court order or trust instrument establishing and covering the fiduciary relationship, and we are not responsible for examining, or insuring compliance with the provisions of any such law or instrument. Corporate, Partnership, Limited Liability Company and other Organizational Accounts These are accounts opened by any business organization or association. We reserve the right to require the account holder(s) to furnish us with such resolutions, agreements or documents as we may reasonably request to evidence the authority of individuals to act on behalf of the account holder(s). We will honor such an authorization until we receive written notice of change from the governing body of the organization. It is mutually agreed that the power and authority of each person named as authorized to take action with respect to the account shall continue in full force and effect until we receive actual written notice of revocation, whether the same be brought about by dissolution of the account holder or otherwise. PLEDGES AND SECURITY INTERESTS IN FAVOR OF OTHERS You cannot give a security interest or pledge your account to someone else without first getting our express written consent. We are not required to give consent to a security interest or pledge. The security interest or pledge must be satisfied or released before any right to withdraw from the account can be exercised, including any right that arises by surviving the death of an owner (for example, a surviving joint tenant or beneficiary of a pay on death account). ACCRUALOF INTEREST We will begin to accrue interest on deposits drawn from other banks at the time we get credit for the deposit in the collection process, which is not necessarily the same time as the time we make funds available for withdrawal. If your account (for example a savings account) earns a variable rate of interest, we can change that rate at any time without notice to you, except as specifically provided in writing in the account disclosure or agreement. You can find out our current rates on accounts that earn interest in our branches, from US Bank 24-Hour Banking, or at www.usbank.com. The telephone number is at the end of this booklet. STOPPAYMENTS Unless otherwise provided, the rules in this section cover stopping payment of items such as checks and drafts drawn on your account. Rules for stopping payment on other types of transfers of funds, such as consumer electronic funds transfers, are covered elsewhere in the Electronic Banking Agreement For Consumer Customers section. Here is what you must do to stop a payment: E-Checks An E-Check is a transaction that starts as a paper check that you give to a merchant. The merchant converts the check, using the information on the paper, to send an electronic message to a bank to immediately take the money from your account. The merchant is required to post a notice about E-Checks in a prominent and conspicuous location at the time of the transaction. You cannot stop payment of an E-Check transaction, because it is already done. Electronic Funds Transfers You can stop payment of certain types of electronic transactions. Please refer to the Electronic Banking Agreement section for details. Checks and drafts If you want to stop payment of a check, you must stop by a U.S. Bank branch or call U.S Bank 24-Hour Banking. Writing to us will take too much time and we will not have time to act on your request before the check is paid. We will need the following information: (1) the account number the check is written on; (2) the check number; (3) the dollar amount; (4) the date; and (5) the name of the person you wanted to pay. This information must be exact and correct. If it is not, we will not be responsible if the item is paid. Who can stop a payment and for how long? (1) Any owner can stop payment of any check on the account whether that owner wrote the check or not (and assuming the item can still be stopped). (2) A stop payment order is effective for twenty-four months or longer, as determined at the time the stop payment order is placed. You must renew it prior to the expiration of the stop payment effective period or the item could get paid. We will not notify you when the stop payment effective period ends. Fees may be assessed for placing a stop payment order. (3) Only the owner who made the stop payment order can release it. (4) You must give us sufficient notice so that we have a reasonable period of time to act upon your request and verify that the item has not been paid. Effect of a stop payment When you stop payment of a check, you may still be obligated to the payee, and the payee may still have the right to collect on the check or the underlying transaction. If we have to defend ourselves for letting you stop payment on a check, you have to protect us by paying our expenses, including our reasonable attorney’s fees. What if we don’t stop payment? We cannot stop payment of a check that has already been paid. If you ask us to stop payment of a check and we pay it anyway, we gain whatever rights the payee has against you. This means, if the check should have been paid, or the payee has the right to collect from you anyway, we can collect from you. Therefore, if we pay an item that should have been stopped, before we recredit your account, you will have to prove to us that by our payment you have suffered a loss and the cause is our failure to stop the payment. What kinds of checks does this NOT apply to? This section does not apply to items not drawn on your account, such as teller’s checks, official (cashier’s) checks, and accepted checks (e.g., certified checks). We have no responsibility to honor your request to stop payment of items not drawn on your account. If we agree to stop payment on these items, we may require you to provide us with additional security (for example, a bond or collateral) and you agree to indemnify us for any damages and costs we incur as a result of stopping payment of such items. 8 Fee To stop a payment you must pay our fee, the amount of which is disclosed in the pricing information brochure or agreement for your account. DORMANTACCOUNTS AND ESCHEAT A dormant account is an account that has been inactive. Generally, subject to state law, “inactive” means there has been no deposit, withdrawal or other communication from you about the account for the period of time as follows: (1)after 11 months for a checking account; (2) after 23 months for a savings account including those that offer limited (no more than six per month) check writing options. It will then be converted to a savings account. For security reasons, we may refuse a withdrawal or transfer from an account we internally classify as inactive if we cannot reach you in a timely fashion to confirm the transaction’s authorization. We charge a dormant account fee. The amount and frequency is disclosed in our pricing information brochure. If your account has a zero balance, we reserve the right to close it. Escheat is the term that is used to describe the process of transferring an account balance to the state government after an account has been dormant for a long time and if our attempts to find you fail. The time period after which funds must escheat to the state varies from state to state. Once the funds are transferred to the state, you may be able to recover the funds from the state itself, but not from us. We also charge a fee to transfer funds to the state, which is disclosed in your pricing information brochure. CONSUMER ELECTRONIC CHECK REPRESENTMENT If you write a check on a personal account that we return unpaid because of insufficient or uncollected funds, the depositor of the check or the depositor’s bank may resend (“represent”) the check to us electronically. That is, the depositor or the depositor’s bank may send us an electronic instruction (“electronic represented check”) to charge your account in the amount of the check. Our Handling of Electronic Represented Checks.If we receive an electronic represented check from the depositor or the depositor’s bank, we will pay or return the electronic represented check as if the original paper check were being represented to us. The section titled “Electronic Fund Transfers” will not apply to any electronic represented check. Ineligible or Unauthorized Electronic Represented Checks.For an electronic represented check to be charged to your account, all of the following must be true: • the electronic represented check must relate to a paper check drawn on a personal account that we returned unpaid because of insufficient or uncollected funds; • the paper check must not have contained an unauthorized signature or an alteration and must not have been a counterfeit; • you must not have placed a stop payment on the paper check after we returned it unpaid but before it was collected electronically; • the paper check must have been less than $2500 in amount; • the paper check must have been dated 180 days or less before the date on which the electronic represented check is sent to us; • the electronic represented check must be for the face amount of the paper check only and may not include any collection fee charged by the depositor, the depositor’s bank, or a collection agency; • the payee of the paper check must have given you notice that, if we returned the paper check unpaid because of insufficient or uncollected funds, the fee could be collected electronically; and •the electronic represented check must have been sent to us no more than twice after the first time we returned the paper check, or no more than once after the second time we returned the paper check. You may have the right to reverse any ineligible or unauthorized electronic represented check that we charged to your account. If you want to reverse an electronic represented check because you placed a stop payment on the paper check to which the electronic represented check relates after we returned the paper check unpaid but before it was collected electronically, you must notify us within 15 days after we send or make available to you the periodic statement that reflects payment of that electronic represented check. If you want to reverse an electronic represented check for any other reason, you must give us an ACH Claim Form within 15 days after we send or make available to you the periodic statement that reflects payment of that electronic represented check. An ACH Claim Form may be obtained by contacting a U.S. Bank 24-Hour Banking or a local U.S. Bank branch. In your claim form, you must declare and swear under oath that the electronic represented check was ineligible or unauthorized. If we receive your notice or claim form within the 15-day period, we will recredit your account with the amount of the charge but will not be responsible for any other damages associated with the transaction. Stop Payment. If you wish to stop payment of any electronic represented check, you must follow the procedures contained in the rules for stopping payment of checks, not the procedures contained in the rules for stopping payment on electronic loan or bill payments. CHECKING ACCOUNTS AND “SUBACCOUNTS” For regulatory accounting purposes we may designate two sub-accounts for a checking account; one sub-account is a savings (non-transaction) account and the other is a checking account. Checks and other third party transfers are paid from the checking (transaction) account. As necessary, we transfer funds from the savings sub-account to the checking sub-account automatically. You cannot access the savings sub-account directly. This accounting device does not affect either the appearance or the operation of your checking account in any way. TELEPHONE TRANSFERS If you have more than one account with us, including a credit card or open end loan account, you can transfer funds between your accounts by telephone. You will need to have a PIN, and enter your account numbers, and other qualifications, but if you meet them, (1) you can transfer funds between your accounts by calling our telephone transfer service, and (2)telephone transfers may be made by the same account owners/signers and usually under the same conditions as generally applicable to withdrawals made in writing or by other means. Atransfer made by telephone is not immediately completed. It may take as long as one business day for us to verify the transaction, and make the transfer. REQUIRED SIGNATURES Signature Comparison. We process certain items mechanically, based on information encoded on checks and other transaction items, and we are not required to examine items and debits drawn on your account. We collect your signature to obtain your agreement to the rules we establish for your account, but this does not create any responsibility on our part to verify signatures on items and other charges to your account. Number of Signatures. You agree that if you (1) have an account in which more than one signature is required to complete a transaction; (2) authorize someone to transact some but not all transactions on your account; (3) authorize someone to transact business on your account for limited purposes and no others; or (4) use checks that require two or more signatures, such arrangements are strictly between you and the other person(s) you authorize, whether we have notice of your arrangement (including in a form we provide you) or not. You cannot assert a claim against us for permitting a transaction so long as any one of the owners or authorized persons sign or initiate the transaction, even if a person exercises more authority than you have given. CHANGES TO OUR AGREEMENT WITH YOU We may change any term of this Agreement. We will give you reasonable notice in writing or by any other method permitted by law. You agree that in any event 30 days written notice is reasonable. If we notify you that the terms of your account have changed and you continue to have your account after the effective date of the change, you have agreed to the new terms. For consumer customers, rules governing changes in interest rates are provided for separately in the Truth-in-Savings disclosure or in another document. CLOSING YOUR ACCOUNT This section does not apply to an active time deposit (or certificate of deposit) account. If you intend to close your account: If you intend to close your account with us, you should tell us; simply transferring all the money in your account and reducing your account balance to $0.00 is insufficient notice and may result in additional fees charged to your account. If you close your account, (1) you are still responsible for transactions you arranged for, including those that arrive after the account is closed; (2) you should pay special attention to pre-authorized electronic deposits to your account and payments from that account; you should reroute the deposits to another account and make other arrangements for the payments, with us and the other institutions involved; (3) you should not close your account until all the transactions you arranged for have been cleared, and you should leave enough funds to clear them and the fees that might be due; and (4) if it is an interest-bearing account, accrued interest will not be paid. We can close your account: We can close your account for any reason or for no reason at all. If we close your account, we will send you notice within ten days after closing and/or indicate the closure on your next account statement. We will send the collected account balance to you at your last known address as reflected in our account records, after withholding a sufficient 9 sum to cover any outstanding items and likely fees. If we withheld any money for such contingencies, we will refund that to you after we are satisfied that no further withholding is necessary. STATEMENTS AND NOTICES Statements. We will periodically make available to you a paper or on-line statement of your checking or savings account. These statements show the transactions that occurred in the time period covered by the statement. If you elect not to receive or review your statement, you are still responsible for having access to the information provided in the statement. At our option, a statement will not be produced in any statement period in which service charges, fees, reversals, refunds or interest are the only transactions on the account. When other activity exists, such as a deposit or withdrawal, a statement will be available to you and will include all transactions which have occurred since the last statement (this includes any service charges, fees, reversals, refunds or interest that occurred since the last available statement). At a minimum, all accounts will receive an annual statement. Regardless of how frequently a statement is made available, monthly service charges and other account fees will continue to be deducted from the account. In addition, applicable interest will continue to accrue and be paid periodically as disclosed in the product pricing information brochure. Combined Statements.If you have multiple accounts with us, we may at any time automatically combine your accounts on a single, easy-to-read monthly statement. We will only combine statements for accounts that have common ownership (meaning at least one owner is common across multiple accounts) and the same address and Social Security Number. If you prefer to continue receiving separate statements, please contact U.S. Bank within 30 days of receiving your combined statement. You may reach us by calling one of the numbers listed on the back of this brochure, sending a letter to U.S. Bank, 60 Livingston Ave, EP-MN-WS5D, St. Paul, MN 55107, or sending a secured email by logging on to usbank.com and selecting “Contact Us”. Please include the following information in your correspondence: your name, account number(s) and the reference code “CMBSTMN.” Your address. You must give us your correct address, and if you move or change your address, you must keep us advised. You are responsible for messages and statements we send to the most recent address you have given us. If you agree to accept mail electronically, you must give us your accurate email address and keep us up to date with any changes to your address. You are responsible for keeping your email functioning properly, or advising us if it does not work. Multiple owners. Periodic statements and notices that we make available to one owner or agent/signer of an account will be the same as providing statements and notices to all owners of an account. You agree to designate the primary address for purposes of receiving statements and other account correspondence. Each account owner agrees that we may send any legal notice or legal process affecting any owner or the account to the primary address designated on the account. Each account owner agrees to notify the other owners of any legal notice received at that address pertaining to such other account owner or to the account. Your Duty to Examine Your Statement. As used in this section, the term “problem” means any error, alteration, counterfeit check, or unauthorized transaction (including, but not limited to, forged or missing signatures and excluding consumer electronic banking transactions) related to your account. Because you are in the best position to discover any problem, you agree to promptly examine your statement and report to us any problem on or related to your statement. You agree that we will not be responsible for any problem that: (1) you do not report to us in writing within a reasonable time not to exceed 30 calendar days after we mail the statement (or make the statement available) to you; (2) results from a forgery, counterfeit or alteration so clever that a reasonable person cannot detect it (for example, unauthorized checks made with your facsimile or other mechanical signature device or that look to an average person as if they contain an authorized signature); or (3) as otherwise provided by law or regulation. You agree to waive any rights to recovery you may have against us if you do not provide notice to us in the manner and within the time required by this Agreement. You may not start a legal action against us because of any problem unless: (a) you have given us the above notice and (b) the legal action begins within one year after we send or make your statement available to you. If you make a claim against us in connection with a problem, we reserve the right to conduct a reasonable investigation before re-crediting your account and you agree to fully cooperate in such investigation. Within 30 days of the date of mailing, you agree to complete and return an affidavit of unauthorized paper debit on the form we provide you along with any other information we may request. You further agree to file a police report if we request. If you refuse to sign such an affidavit or fail to return the affidavit and other requested documentation within 30 days of the date we mail it to you, you agree that we may consider the matter resolved and reverse any provisional credit provided. At our sole discretion, we may, but are not obligated to, provisionally credit your account during the investigation for all or a portion of the amount claimed. Any provisional credit to your account may be reversed if you fail to fully cooperate in our investigation or, if as a result of our investigation, we determine that the charge to your account was proper. You agree to pay any fees assessed or accrued against your account during the investigation or that may arise upon reversal of any provisional credit. For problems involving an electronic banking transaction, please refer to the “Electronic Banking Agreement” sections of this brochure. This time period for you to examine your statement and report problems to us are without regard to our level of care or the commercial reasonableness of our practices, and without regard to whether cancelled checks are supplied to you. Contact us if you do not receive your regular statement. If this is a business account, you agree that you will have at least two people review your statements, notices, and returned checks, or in the alternative, the person who reviews these will be someone who does not have authority to transact business on the account. RETURN OF CANCELLED CHECKS For some specific consumer and small business checking accounts we currently offer three plans, with respect to the return of cancelled checks: (1)Check Safekeeping: paid checks that are not returned - your statement will show the check number, the amount, and the date it is paid; (2) Image Checks on Statement: paid checks that are not returned - your statement will include a reduced image of the front of the check in addition to the number, amount and date the check is paid as part of the statement; (See the CHECK 21 section; the images sent with your statement are not substitute checks themselves, but some may be images of substitute checks.) and (3)Returned Checks in Statement: paid checks that are returned with the statement - At our option the paid checks may be a full size image of the front and back of the paid check in addition to the number, amount and date the check is paid as part of the statement. (See the CHECK 21 section for more information about substitute checks.) Option 1 is what you will get unless you specifically ask for option 2 or 3. The checking accounts for which these options are available vary. The products and our fee structures for each option are disclosed in the Consumer Pricing Information brochure or agreement for your account. If you take option 1 or 2, and you have need for a specific paper check, we can provide a substitute copy to you upon request. CHECKS, CHECKING ACCOUNTS AND SAVINGS ACCOUNTS WITH DRAFTACCESS Consumer NOW Accounts: Consumer transaction accounts are Consumer NOW Accounts on which you can write negotiable orders of withdrawal. Negotiable orders of withdrawal look and function like checks, and the rules governing checks also apply to them. Depending on account features, Consumer NOWAccounts may or may not bear interest. Although we have no intention of exercising this right, federal regulations require that we reserve the right to require at least seven days’ written notice prior to withdrawal or transfer of any funds on your Consumer NOWAccount. SAVINGS ACCOUNTS By the term “savings” account we mean an account that earns interest, but has no specific maturity date or required notice period. (Amaturity date or a required notice period is a characteristic of a time deposit or certificate of deposit.) We will provide you with a periodic (quarterly, monthly, annually based on your account type and account activity) statement for your savings account and you must examine your statement for errors or forgeries just as you should for your checking account. Withdrawals: You can make withdrawals from a savings or money market account in many ways, such as: (1) in person by withdrawal slip; (2) at ATMs with an ATM card or check card; (See section titled Electronic Banking Agreement. You must have a card and a PIN, and you must select your saving account as the account you want to access on the screen.) (3) using your check card with a merchant, online or in person; (This will only apply if the savings account is the only account that is attached to your check card.)* (4) by automatic (electronic) payment to a loan account with us; (You would have to set this up in advance.) (5) by automatic (electronic) payment to others; (You would have to set this up in advance.)* (6) by telephone transfer to another account of yours with us; (You will need a PIN to use our automated system.)* (7) online transfers to other accounts with us; (You would need to arrange for online transactions.)* (8) online transfers to others; (You would need to arrange for online transactions.)* (9) by check. (You would need to select a savings account that permits access by check.)* Federal Regulation D limits certain types of withdrawals and transfers made from a savings or money market account to a combined total of six per account cycle. This includes withdrawals made by check or draft to third parties; debit or ATM card point-of-sale (POS) purchases; and pre-authorized withdrawals such as automatic transfers for overdraft protection and transfers made by telephone, online banking, mobile banking, bill pay, wire and facsimile. Withdrawals and/or transfers exceeding the six per account cycle allowance will result in an excessive withdrawal fee per transaction (refer to the Consumer Pricing Information brochure). Withdrawals and transfers made in person at a U.S. Bank branch or at an ATM are not included in the limit of six per account cycle. 10 If limitations are continuously exceeded, we may: (1) convert your account to a checking account, and price it accordingly; or (2) close your account; and (3) charge you a fee, in addition to (1) or (2) above. We reserve the right to require seven days notice before any withdrawal from any savings account, though it is very unlikely we will require such notice and, if we do, we will require it for all savings accounts. S.T.A.R.T. PROGRAM AGREEMENT Savings Today And Rewards TomorrowTM S.T.A.R.T. is a free program offered by U.S. Bank to help you achieve and maintain your savings goals. The following information provides the terms of the S.T.A.R.T. Program (the “Program”), the details you need to know to enroll in and manage your savings plan, as well as the terms for earning rewards under the Program. We may change these terms at any time, in which case we will provide you notice of those changes. Please read these terms carefully and contact us if you have any questions. By enrolling in the Program, you agree to these terms. Enrollment Process and Eligibility To be eligible for the Program, you must meet, and continue to meet, the following three requirements: 1. Open and/or maintain an active U.S. Bank Package, including: •ASilver, Gold or Platinum Package Checking account AND • APackage Money Market Savings account Note: Account ownership must be identical for both the package checking and package money market savings accounts. 2. Enroll in the Program. 3.Schedule and maintain a qualifying transfer from your Package Checking account to your Package Money Market Savings account. Qualifying Transfers Options A qualifying transfer must occur at least once per month from your Package Checking account (“checking account”) to your Package Money Market Savings account (“savings account”). Three transfer options are available for you to choose. You are required to set up at least one option, but can utilize all three choices. 1. Scheduled Transfer option:A recurring regularly scheduled transfer based on a specific amount transferred from the Package Checking to the Package Money Market Savings on a specific date(s) you select. •Transfers can occur daily, weekly, every other week, or can be based on a specified date(s) or day(s) during the month. One-time or same-day transfers do not qualify. • Example: Schedule a transfer of $10 from your checking account to your savings account on the 1st of each month. 2. Transfers Based on Check Card Purchases: A recurring transfer from the Package Checking account to the Package Money Market Savings account based on each number of U.S. Bank Check Card purchases you make, transferred on the business day after the transaction is posted. •Select a dollar amount between $.25 and $5.00 to transfer for each purchase transaction. • The total number of check card purchase transactions posted to your checking account each day will be multiplied by the per transaction dollar amount selected. That amount will be transferred from your Package Checking account to your Package Money Market Savings account. • The check card must be associated with the enrolled checking account. For joint checking accounts, more than one check card can be designated and a separate transfer will occur for the activity of each card. • Example: You have selected a transfer amount of $.50. If five check card purchases post on Tuesday, a transfer of $2.50 will occur on Wednesday (from your checking account to your savings account). 3. Transfers Based on Credit Card Purchases: A recurring transfer based on the number of U.S. Bank Credit Card purchases you make, transferred on the business day after the transaction is posted. •Select a dollar amount between $.25 and $5.00 to transfer from the Package Checking account to the Package Money Market Savings account for each credit card purchase transaction. •The total number of credit card purchase transactions posted to your credit card each day will be multiplied by the dollar amount selected. That amount will be transferred from your Package Checking account to your Package Money Market Savings account. •The credit card owner’s name must also be an owner on the enrolled S.T.A.R.T. checking account. For joint checking accounts, more than one credit card can be designated, and a separate transfer will occur for the activity of each card. • All U.S. Bank-branded, co-branded or affinity credit cards are eligible. • If more than one credit card is enrolled in S.T.A.R.T for this transfer option, separate transfers will occur for the total purchases posted to each card. • Example: You have selected a transfer amount of $3.00. If two credit card purchases post on Monday, a transfer of $6.00 will occur on Tuesday (from your checking account to your savings account). S.T.A.R.T. Goals and Rewards The Program offers two rewards that can be earned by achieving and maintaining a specific account balance – called your Goal Balance – in your savings account. Your Goal Balance is the account balance of your Package Money Market Savings account at time of enrollment, plus $1,000. You must reach Goal 1 before you become eligible for Goal 2. S.T.A.R.T. Goal 1: When you reach the Goal 1 Balance in your Package Money Market Savings account AND a qualifying transfer occurs within 35 days of meeting the Goal 1 Balance, you will earn a $50 U.S. Bank Rewards Visa Card. S.T.A.R.T. Goal 2: When you maintain the Goal Balance in your Package Money Market Savings account for 12 consecutive months from the date of meeting Goal 1, you will earn a $50 U.S. Bank Rewards Visa Card. Think TwiceTM Savings Feature Option • If you select the Think Twice option, you will receive a message giving you the opportunity to “think twice” before you make a withdrawal from your enrolled Package Money Market Savings account. • This Think Twice message will be presented when a request for transfer or withdrawal is made through U.S. Bank ATMs, U.S. Bank branches, Online Banking and U.S. Bank 24-Hour Banking. •Think Twice can be enabled or turned off anytime at a U.S. Bank branch, online via Online Banking or on the phone with U.S. Bank 24-Hour Banking. Monitor and Make Changes to your S.T.AR.T. Selections You can make changes to any transfer option, add or delete transfer selections, and monitor your goal progress: by accessing your account via Online Banking, speaking with a banker at a participating branch, or calling U.S. Bank 24-Hour Banking at 800-USBANKS (872-2657). Additionally, S.T.A.R.T. Mobile or Email Alerts can be set-up through Online Banking, and your monthly statements will provide S.T.A.R.T. progress information. Program Termination Your participation in S.T.A.R.T. will end if: • You notify your banker that you no longer wish to participate in the Program. • Your Package Checking account or Package Money Market Savings account is closed, is transferred to another product, or the account ownership does not match on both the checking and savings accounts. • Aqualifying transfer is not scheduled for six consecutive months when working towards Goal 1 achievement Note: Reward(s) will be sent to the primary savings accountholder within 30 days of goal verification. Rewards will be reported as interest earned on IRS Form 1099-INT. The accountholder is responsible for any applicable taxes. If your savings account is subject to State or Federal tax withholding, the amount of your U.S. Bank Rewards Visa card will have taxes withheld. Acustomer is eligible to earn only one of each goal type, for a maximum reward of $100. Terms and conditions and fees may apply to Rewards Cards. The U.S. Bank Rewards Visa Card cannot be reloaded with additional funds, nor can it be used at an ATM. For complete terms and conditions, see the “U.S. Bank Rewards Visa Card Agreement” available at www.myusbankcorporaterewards.com. Lost or stolen cards can be replaced if the card number is available; some restrictions apply. Note: Qualifying transfers will not be processed if your checking account has a negative available balance or if your balance would become negative as a result of the transfer. 11 TIME DEPOSITS A time deposit is more commonly known as a certificate of deposit or CD. With a time deposit, you agree to keep your deposit with us for a specified period of time, or agree to give a required advance notice prior to withdrawal, and we agree to pay you interest at an agreed upon rate, or an agreed formula for a rate, for that period of time. We are not required to permit an early withdrawal from a time deposit, and if we do, it will be on condition that you pay an early withdrawal fee and penalty. The amount of that penalty will be disclosed to you when you open such an account. All the features of your time deposit will be disclosed to you when you open the account. You can call 24-Hour Banking, visit a local U.S. Bank branch, or go to usbank.com to find out what CD products and terms we offer. LIMIT OF LIABILITY We process millions of transactions every day, with the help of complicated technology and other companies. If we make a mistake and charged you more than we should have, or failed to give you credit you were due, we will correct the error, so long as you give us sufficient and timely notice and an opportunity to fix it. See the section above titled Statements and Notices, for your duty to pay attention to your statement and report any errors. You agree – to the extent allowed by law - to waive any indirect, incidental, special, consequential and punitive damages for errors or mistakes we make in good faith. This includes damages that might otherwise be available in a tort or contract action, and whether the consequences are foreseeable or not. ELECTRONIC MESSAGES AND AGREEMENTS Many customers use the Internet and email as their primary form of communication with us. For example, we offer Online Banking and the ability to obtain periodic account statements online. You agree that we may make agreements with you by electronic means. Your authorization and consent to such an agreement, or your delivery of instructions, may be made by use of certain numbers, codes, marks, signs, personal identification numbers (PINs), public or private keys or other means, acceptable to you and to us, to establish your identity and acceptance of the electronic communications. All electronic communications that meet these requirements will be deemed to be valid and authentic and you intend and agree that those electronic communications will be given the same legal effect as written paper communications signed by you. You agree that electronic copies of communications are valid and you will not contest the validity of the originals or copies, absent proof of altered data or tampering. You are not required to accept electronic communications; we want you to be aware that this is an option for you to accept. We will never ask you for sensitive account information, such as, passwords, PINs, Social Security numbers or account numbers via email. If you receive an email that appears to be from U.S. Bank asking for this type of information, immediately forward the email in its entirety (not as an attachment) to fraud_help@usbank.com. LEVIES, GARNISHMENTS AND OTHER LEGALPROCESS We are a national bank with many branch locations. A “branch” is a brick-and-mortar facility available to all of our customers (which does not mean an automated teller machine) established by us where you may make both deposits to and withdrawals from your account with a live teller. You agree that for purposes of this part your account exists at any and all locations where we operate a branch. You understand and agree that a creditor or governmental agency may attach your account by service of legal process on any branch, any brick-and-mortar facility where you make both deposits to or withdrawals from your account with a live teller, or at any site designated by us for acceptance of service of process on our behalf. If we are served with a garnishment, levy, execution, or other legal process of apparent validity (together referred to as “legal process”), we will pay all amounts in the account in satisfaction of the legal process and in compliance with federal law. If your account is a joint account, for purposes of responding to legal process, we will consider each joint owner to have an undivided interest in the entire account. Therefore, you agree we may pay all amounts in the account in satisfaction of any legal process, even if it attaches to the interest of fewer than all the account owners. If you believe your funds are exempt from legal process, or otherwise should not be subject to the legal process (for example, if you own funds and the legal process applies to another joint owner), it is your responsibility to raise any defense to the legal process against the party who originated the legal process or seek reimbursement from a joint owner. You agree that we may process a levy, garnishment, or other legal process served on us even if we do not process it on the same day it was received. If we are served with any legal process that tries to attach or in some way prevent you from freely using your funds, you give us the right to hold any portion of the funds during any time necessary to determine to our satisfaction who has the legal right to the funds. If we are not able to determine whether the funds are subject to the legal process, you agree that we may deposit the funds with a court in the location of the branch where the legal process against your account was deemed served and ask the court to determine to whom the funds belong. You consent to the jurisdiction of such court to determine the legal right to the funds in your account and agree to reimburse us for our expenses, including attorney’s fees and expenses, arising out of the service of the legal process on us and our response to it. All legal process is subject to our right of setoff and our security interest in your account. We will assess a service fee against your account for any legal process served on us regardless of whether the process is subsequently revoked, vacated, or released. Unless expressly prohibited by law, we will set off or enforce our security interest against your account for such fee prior to our honoring the legal process. We will not be liable to you if an attachment, a hold, or the payment of our fee from your account leaves insufficient funds to cover outstanding items. You agree to hold us harmless from any claim relating to or arising out of how we handle legal process. RESOLVING ACCOUNT DISPUTES AND ADVERSE CLAIMS If a dispute arises concerning your account (including, for example, a dispute over who is an authorized signer or owner), or if we believe we have a claim against you or we have or receive a claim by a third party (including our affiliates) to all or a portion of the property (including money, certificates of deposit, securities and other investment property, financial assets, etc.) in your account, or if we have concerns regarding your account or the use of your account, we have the right to hold any portion of the property in your account until the dispute, claim, or concern is resolved to our satisfaction. For purposes of this section, "account" includes any account you have with us or any of our affiliates (including, without limitation, agency, custody, safekeeping, brokerage, and revocable trust accounts). If the dispute, claim or concern remains unresolved, you agree that we may at our option deposit the property in your account with a court and ask the court to determine to whom the property belongs. We will not be liable to you if the hold we place on your account leaves insufficient funds to cover outstanding items. You agree to reimburse us for our expenses, including attorney’s fees and expenses, arising out of any dispute, claim, or concern and our response to it. ACCOUNT INFORMATION Our Privacy Pledge discloses the information we share with other entities for marketing purposes. We also may be required to provide information about you and your account when and as required or permitted by law for other purposes, such as, for example: (1)reporting of interest you earn to federal and state tax authorities; (2) reporting of cash transactions that are at reportable limits; (3) investigating and reporting of transactions that we reasonably determine to be suspicious; and (4) responding to subpoenas, court orders, or government investigations. SETOFF We have the right under the law to set off amounts you owe us against your accounts with us. For purposes of this section, "account" includes any account you have with us or any of our affiliates (including, without limitation, agency, custody, safekeeping, securities, investment, brokerage, and revocable trust accounts) and “you” includes, without limitation, your revocable trust, any partnership in which you are a general partner, any prior or successor entity by way of an entity conversion, and any other series of your series limited liability company (as applicable). In addition to this legal right, you give us and our affiliates the contractual right to apply, without demand or prior notice, all or part of the property (including money, certificates of deposit, securities and other investment property, financial assets, etc.) in your accounts, against any debt any one or more of you owe us or our affiliates. If your account is a joint account, you agree we may consider each joint owner to have an undivided interest in the entire account, so we may exercise our contractual right of setoff against the entire account. This includes, for example, debts that now exist and debts that you may incur later, your obligations under a guaranty, and also includes all fees you owe us or our affiliates. If the debt arises from a note, the term “debt” means the total amount on which we would be entitled to demand payment after a default under the note. Our contractual right of setoff does not apply: (1) to an account that is an IRAor other tax-deferred retirement account; (2) to a debt that is created by a consumer credit transaction under a credit card plan (but this does not affect our rights under any consensual security interest); or (3) if our records demonstrate to our satisfaction that the right of withdrawal that a depositor/debtor has with us only arises in a representative capacity (for example, only as an authorized signer, attorney-in-fact or a fiduciary) for someone else. This right of setoff is in addition to, but behind (subordinate to) any security interest that we or an affiliate of ours might have in your deposit account. SECURITY INTEREST IN ACCOUNTS You grant to us a security interest in all your accounts with us, and all property in your accounts (including money, certificates of deposit, securities and other investment property, financial assets, etc.), to secure any amount you owe us or our affiliates, now or in the future. For purposes of this section, "account" includes any account you have with us or any of our affiliates (including, without limitation, agency, custody, safekeeping, securities, investment, brokerage, and revocable trust accounts) and “you” includes, without limitation, your revocable trust, any partnership in which you are a general partner, any prior or successor entity by way of an entity conversion, and any other series of your series limited liability company (as applicable). If your account is a joint account, you agree we may consider each joint owner to have an undivided interest in the entire account, so we may exercise our security interest against the entire account. We may enforce our security interest without demand or prior notice to you. You agree, for purposes of this security interest, that our affiliates may comply with any instructions we give them regarding your accounts held with them, without further consent. You also agree that we may comply with any instructions ©1988, 1993, 1996 Wolters Kluwer Financial Services – Bankers Systems™Form AIB-TIS-CU 9/3/96 3p Custom TCM-5CUn,2ba,4q,5 2792606-010 12 regarding your accounts that we receive from our affiliates pursuant to a security interest they have in your accounts with us. We will not be liable to you if enforcing our security interest against your account(s) leaves insufficient funds to cover outstanding items or other obligations. You agree to hold us harmless from any claim arising as the result of our security interest in, or enforcement of our security interest against, your account. SECURITY It is your responsibility to protect the account numbers, including card numbers and electronic access devices (e.g., an ATM card, check card, or PIN) we provide to you for your account(s). Do not discuss, compare, or share information about your account number(s) with anyone unless you are willing to give him or her full use of your money. An account number can be used by thieves to encode your number on a false demand draft which looks like and functions like an authorized check. If you furnish your access device and grant actual authority to make transfers to another person (a family member or coworker, for example) who then exceeds that authority, you are liable for the transfers unless we have been notified that transfers by that person are no longer authorized. Your account number can also be used to electronically remove money from your account. If you provide your account number in response to a telephone solicitation for the purpose of making a transfer (to purchase a service or merchandise, for example), payment can be made from your account even though you did not contact us directly and order the payment. You must also take precaution in safeguarding your blank checks. Notify us at once if you believe your checks have been lost or stolen. As between you and us, if you are negligent in safeguarding your checks, you must bear the loss entirely yourself or share the loss with us (we may have to share some of the loss if we failed to use ordinary care and if we substantially contributed to the loss). We reserve the right to place a hold on your account if we suspect irregular, fraudulent, unlawful or other unauthorized activity involved with your account. We may attempt to notify you of such a hold, but we are not required to provide notice prior to placing the hold. You agree that we may maintain such a hold until all claims against you or us to the funds held in your account, whether civil or criminal in nature, have been resolved fully in our sole satisfaction. ARBITRATION This section does not apply to any dispute in which the amount in controversy is within the jurisdictional limits of, and is filed in, a small claims court. These arbitration provisions shall survive closure of your account or termination of all business with us. If any provision of this section is ruled invalid or unenforceable, this section shall be rendered null and void in its entirety. Arbitration Rules: In the event of a dispute relating to or arising out of your account or this Agreement, you or we may elect to arbitrate the dispute. At your election, the arbitration shall be conducted by either JAMS or the American Arbitration Association ("AAA") (or, if neither of these arbitration organizations will serve, then a comparable substitute arbitration organization agreed upon by the parties or, if the parties cannot agree, chosen by a court of competent jurisdiction). If JAMS is selected, the arbitration will be handled according to its Streamlined Arbitration Rules unless the Claim is for $250,000 or more, in which case its Comprehensive Arbitration Rules shall apply. If the AAA is selected, the arbitration will be handled according to its Commercial Arbitration Rules. You may obtain rules and forms for JAMS by contacting JAMS at 1-800-352-5267 or www.jamsadr.com and for the AAA by contacting the AAA at 1-800-778-7879 or www.adr.org. Any arbitration hearing that you attend will take place in the federal judicial district in which you reside. Without regard to which arbitration body is selected to resolve the dispute, any disputes between you and us as to whether your claim falls within the scope of this arbitration clause shall be determined solely by the arbitrator, and not by any court. Arbitration Process: Arbitration involves the review and resolution of the dispute by a neutral party. The arbitrator’s decision will generally be final and binding. At your request, for claims made to consumer accounts, we will advance your filing and hearing fees for any claim you may file against us; the arbitrator will decide whether we or you will ultimately be responsible for those fees. Arbitration can only decide our or your dispute and cannot consolidate or join claims of other persons who may have similar claims. There will be no authority or right for any disputes to be arbitrated on a class action basis. Effects of Arbitration: If either of us chooses arbitration, neither of us will have the right to litigate the dispute in court or have a jury trial. In addition, you will not have the right to participate as a representative or member of any class of claimants, or in any other form of representative capacity that seeks monetary or other relief beyond your individual circumstances, pertaining to any dispute subject to arbitration. There shall be no authority for any claims to be arbitrated on a class action or any other form of representative basis. Arbitration can only decide your or our claim, and you may not consolidate or join the claims of other persons who may have similar claims, includng without limitation claims for public injunctve or other equitable relief as to our other customers or memebers of the general public. Any such monetary, injuctive, or other equitable relief shall be limited solely to your accounts, agreements, and transaction with us. Notwithstanding the foregoing, any question as to the validity and effect of this class action waiver shall be decided solely by a court of competent jurisdiction, and not by the arbitrator. ATTORNEY’S FEES Where used, “attorney’s fees” includes our attorney’s fees, court costs, collection costs, and all related costs and expenses. Notwithstanding any provision in this Agreement to the contrary, any provision for attorney’s fees in this Agreement shall not be enforceable in any dispute governed by the laws of California or Oregon. FUNDS AVAILABILITY: YOUR ABILITYTO WITHDRAW FUNDS – ALLACCOUNTS This funds availability policy statement applies to our checking and savings accounts. Some sections of this disclosure apply to all accounts and all customers. There are special sections for New Accounts, Commercial Accounts, Private Client Accounts and Retail Consumer and Small Business Accounts. We will make that clear in the section headings. Funds “availability” means your ability to withdraw funds from your account, whether those withdrawals are to be in cash, by check, automatic payment, or any other method we offer you for access to your account. If deposited funds are not “available” to you on a given day, you may not withdraw the funds in cash and we may not use the funds to pay items that you have written or honor other withdrawals you request. If we pay items that you have written or honor other withdrawals before funds are available to you, we may charge a fee for this. Please review the product pricing information brochure for information regarding overdraft fees associated with your accounts. Please remember that even after the item has “cleared,” we have made funds available to you, and you have withdrawn the funds, you are still responsible for items you deposit that are returned to us unpaid and for any other problems involving your deposit. See our Returned Deposited and Cashed Items section. DETERMINING THE AVAILABILITY OFADEPOSIT – ALLACCOUNTS The day funds become available is determined by counting business days from the day of your deposit. Every day is a business day except Saturdays, Sundays, and federal holidays. If you make a deposit in person before our “cutoff time” on a business day we are open, we will consider that day to be the day of your deposit for purposes of calculating when your funds will become available. However, if you make a deposit after the cutoff time, or on a day we are not open, we will consider that the deposit was made on the next business day we are open. Our cutoff times vary from branch to branch. The earliest cutoff time at any of our branches is 2:00 p.m. (local time at the branch). In addition, cutoff times may also vary depending on whether it is a deposit envelope ATM or a no deposit envelope ATM. If you make a deposit before 6:00 p.m. (local time, at the ATM location) for a deposit envelope ATM or before 8:00 p.m. (local time, at the ATM location) for a no deposit envelope ATM on a business day we are open, we will consider that day to be the day of your deposit. If you make a deposit at a deposit envelope ATM on or after 6:00 p.m. (local time), or on or after 8:00 p.m. (local time) for a no deposit envelope ATM or on a day we are not open, we will consider the deposit to be made on the next business day we are open. Deposits you send by mail are considered deposited on the business day it arrives if it arrives by the cutoff time at the branch of deposit. In all cases, availability of any deposit assumes that a requested withdrawal will not overdraw the account. IMMEDIATE AVAILABILITY – ALLACCOUNTS The following types of deposits will usually be available for withdrawal immediately under normal circumstances: • Cash (if deposited in person to an employee of ours); • Electronic direct deposits; • Wire transfers; and • The first $200 from the total of all other deposits made on any given day. Cash and wire transfer deposits are subject to the Special Rules for New Accounts and the $200 availability is subject to the rule in the section titled Longer Delays May Apply. LONGER DELAYS MAYAPPLY Government Checks, Cashier's Checks, and Other Types of Special Checks. If you make a deposit of one of the following items in person to one of our employees, our policy is to make the funds from those deposits available no later than the first business day after the day of deposit: • State and local government checks that are payable to you; • Cashier’s, certified, and teller’s checks that are payable to you; and, • Federal Reserve Checks, Federal Home Loan Checks, and U.S. Postal Money orders that are payable to you. If you do not make your deposit in person to an employee of the bank (for example, if you mail us the deposit), funds from these deposits may be available no later than the second business day after the day of deposit. However, we may delay funds for a longer period of time, see section titled Longer Delays May Apply – Safeguard Exceptions. Case-by-Case Delays. In some cases, we will not make all of the funds that you deposit available to you as provided above. Depending on the type of check that you deposit, funds may not be available until the second business day after the day of your deposit. The first $200 of your deposit, however, will be available no later than the first business day after the day of deposit, and usually immediately. 13 If we are not going to make all of the funds from your deposit available on the first business day, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. If your deposit is not made directly to one of our employees (including a deposit made at an ATM) or if we decide to take this action after you have left the premises, we will mail you the notice by the day after we receive your deposit. If you will need the funds from a deposit right away, you should ask us when the funds will be available. Safeguard Exceptions.In addition, funds you deposit by check may be delayed for a longer period under the following circumstances: • We believe a check you deposit will not be paid. • You deposit checks totaling more than $5,000 on any one day. • You redeposit a check that has been returned unpaid. • You have overdrawn your account repeatedly in the last six months. • There is an emergency, such as failure of computer or communications equipment. We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the seventh business day after the day of your deposit. RETAILCONSUMER, SMALLBUSINESS AND COMMERCIALACCOUNTS Our general availability policy for these accounts is to make funds available to you on the first business day after the day of deposit. We generally make some portion of a day’s deposits available for withdrawal immediately. See the previous section for the types and amounts of deposits that are available immediately. PRIVATE CLIENTACCOUNTS Our general availability policy for Private Client Accounts is to make funds you deposit available to you immediately. This immediate availability policy includes all deposits at any ATM. The section above titled Longer Delays May Apply also applies to your accounts. If we impose a delay as provided in that section, then the sections titled Cashing Checks and OtherAccounts may also apply. DEPOSITS ATAUTOMATED TELLER MACHINES – RETAILCONSUMER, SMALLBUSINESS AND COMMERCIALACCOUNTS Our Machines. If you make a deposit at an ATM identified as ours with the U.S. Bank name, your deposit will generally be available on the first business day after the day of deposit. However, in certain circumstances, and at U.S. Bank’s discretion, the funds may not be available until the second business day after the day of deposit. Other Machines. If you make a deposit at an ATM that is not identified as ours with the U.S. Bank name, your deposit will not be available until the fifth business day after the day of deposit. New customers cannot make deposits at ATMs we do not own or operate within the first 90 days of the account relationship. SPECIALRULES FOR NEWACCOUNTS – RETAILCONSUMER AND SMALLBUSINESS ACCOUNTS If you are a new customer, the following special rules will apply during the first 30 days your account is open. Funds from electronic direct deposits and deposits of cash and wire transfers to your account will be available on the day we receive the deposit. The first $5,000 of a day’s total deposits of cashier’s, certified, teller’s, traveler’s, on-us checks (checks drawn on U.S. Bank), and federal, state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you (and you may have to use a special deposit slip). The excess amount over $5,000 will be available on the fifth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,000 will not be available until the second business day after the day of your deposit. Funds from all other check deposits will generally be available on the fifth business day after the day of your deposit. In certain instances, we may hold funds from other check deposits for longer than five business days. For example, if we receive a check that falls within the Safeguard Exception description above, we may delay funds for up to seven business days. If we do so, we will provide you with a hold notice at the time of deposit or when we learn that we will hold the funds from the deposit. CASHING CHECKS If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it. OTHER ACCOUNTS If we accept for deposit a check that is drawn on another bank, we may make funds from the deposit available for withdrawal immediately but delay your availability to withdraw a corresponding amount of funds that you have on deposit in another account with us. The funds in the other account would then not be available for withdrawal until the day the deposited item would have been available, which will usually be the first business day after the day of deposit. BUSINESS ACCOUNT ISSUES All other sections of this booklet apply to consumer and business accounts alike, (except when a rule specifically says it will apply to consumers). These next six apply to accounts used primarily for business purposes. DEPOSIT OF PRE-AUTHORIZED DRAFTS A pre-authorized draft is an arrangement whereby you get authority from a person (a customer, usually) to access a deposit account owned by that person to pay a debt that person owes you. You deposit these “drafts” into a deposit account with us, and we collect them from your customers, who may have accounts with us or other banks. (These “drafts” are checks you create based on information your customer provides you, such as the customer’s name and account number, and the express permission your customer gave you to draw on his account.) When you deposit these pre-authorized drafts, you make the following agreements and warranties: (1) You have express, verifiable and binding authorization from your customer to access his, her or its account for the amount you ask us to collect; (2)You will keep the proof of your authorization in retrievable form for not less than two years from the date of the authorization and provide us with such proof upon our request; (3) We may reverse any credit given to you for any draft deposited to your account and returned to us regardless of when it is returned or the reason for the return. We may take funds in your account to pay the amount you owe us, and if there are insufficient funds in your account, you will still owe us the remaining balance. EARNINGS CREDIT Fees for services used by you may be assessed in full to your accounts or may be offset through account analysis by applying earnings credit to your service charges to determine a single monthly net service charge. Your earnings credit rate is established by us and will change from time to time. Your net service charge could be zero if your earnings credit equals or exceeds your total charges in a given month. If your earnings credit is not sufficient to offset the amount due hereunder, you agree to pay such amounts to us upon demand. WAIVER OF NOTIFICATION OF REDEPOSITED CHECKS When you deposit checks to your account, you have a right to be notified whenever a check you deposit is returned unpaid. We offer a plan (to businesses who elect it) whereby we will automatically redeposit checks returned unpaid due to insufficient funds. To simplify collection of these items, you give up this right to notification for those items we redeposit. If these items are returned unpaid a second time, you will receive standard notification. We may withhold the availability of funds represented by a redeposited check. We will notify you of such delay. CHECKS AND CHECKING ACCOUNTS AND SAVINGS ACCOUNTS WITH DRAFTACCESS NOW Accounts. Sole proprietors, government agencies and nonprofit business enterprises may open transaction accounts (“Business NOW” accounts) on which you can write negotiable orders of withdrawal, and theoretically earn interest. Negotiable orders of withdrawal look and function like checks, and the rules governing checks also apply to them. Depending on account features, Business NOW accounts may or may not bear interest. Where applicable, interest on Business NOW accounts is normally paid on investment-eligible balances (collected balances minus reserve requirements). Although we have no intention of exercising this right, federal regulations require that we reserve the right to require at least 7 days’written notice prior to withdrawal or transfer of any funds in your Business NOW account. FACSIMILE SIGNATURES You may wish to use a facsimile signature stamp or other mechanical signature device to sign checks or other orders relating to your accounts. If you do, we will, without contacting you, debit your account for items bearing an imprint that looks substantially like your authorized mechanical signature, whether or not such items bear the actual facsimile signature stamp. You agree to notify us and give us a sample imprint if you plan to use such a device. If you do not give us a sample, this section still applies to your use of the device. You are responsible for the security of any mechanical signature device. We will not be responsible for payment of unauthorized items bearing an imprint from, or similar to, your authorized mechanical signature. DEPOSITS Truncation, Substitute Checks, and Other Check Images:If you truncate an original check and create a substitute check or other replacement document, or other paper or electronic image of the original check, you warrant that no one will be asked to make payment on the original check, a substitute check or any other electronic or paper image, if the payment obligation relating to the original check has already been paid. You also warrant that any substitute check you create conforms to the legal requirements and generally accepted specifications for substitute checks. You agree to retain the original check in conformance with the time requirements as outlined in your Remote Deposit Capture Agreement with us. You agree to indemnify us for any loss we may incur as a result of any truncated check transaction you initiate. We can 14 refuse to accept substitute checks that have not previously been warranted by a bank or other financial institution in conformance with the Check 21 Act. Unless specifically stated in a separate agreement between you and us, we do not have to accept any other electronic or paper image of an original check. Deposit Preparation, Sorting, and Endorsements: You agree to properly prepare, sort, and endorse all deposits according to requirements specified in any applicable user guides and Federal Regulation CC. You agree to indemnify us for any loss we incur that results from your failure to comply with these requirements. Requalification:If you elect to have another bank or entity receive and process all of your returned checks, such other bank's endorsement may be obscured by our depository bank endorsement. You understand and agree that any other endorsement placed on your checks that identify another bank as the depository bank or the bank to which checks should be returned may result in illegible or double endorsements, which may delay the return of your checks. You agree we shall not be liable for any such delays. FRAUD PREVENTION MEASURES.We offer certain products and services, such as “positive pay,” and account blocks and filters that are designed to detect or deter fraud. Failure to use such services could substantially increase the likelihood of fraud. If you fail to implement any of these products or services, or if you fail to follow these or other precautions reasonable for your type of account or circumstances, you agree that you will be precluded from asserting any claims against us for paying any unauthorized, altered, counterfeit or other fraudulent item that such product, service or precaution was designed to detect or deter, and we will not be required to re-credit your account or otherwise have any liability for paying such items. ELECTRONIC BANKING AGREEMENT FOR CONSUMER CUSTOMERS This section applies to payment orders and funds transfers governed by the Electronic Fund Transfer Act. If you have any questions regarding electronic banking transactions or believe that an unauthorized transaction has occurred, please call U.S. Bank 24-Hour Banking (see the back of this booklet for phone numbers), visit a local U.S. Bank branch or write to: U.S. Bank 24-Hour Banking EP-MN-WS5D, 60 Livingston Ave., St. Paul, MN 55107 Please read this disclosure carefully because it tells you your rights and obligations for the transactions listed. You should keep this notice for future reference. TYPES OFTRANSACTIONS These are the types of Electronic Fund Transfers that you can accomplish with us (assuming you make arrangements to do so). Electronic Fund Transfers Initiated by Third Parties. You may authorize a third party to initiate electronic fund transfers between your account and the third party’s account. These transfers to make or receive payment may be one-time occurrences or may recur as directed by you. These transfers may use the Automated Clearing House (ACH) or other payments network. Your authorization to the third party to make these transfers can occur in a number of ways. In all cases, these third party transfers will require you to provide the third party with your account number and bank information. Thus, you should only provide your bank and account number information (whether over the phone, the Internet, or via some other method) to trusted third parties whom you have authorized to initiate these electronic fund transfers. Examples of these transfers include, but are not limited to: Direct Deposits. You can arrange for direct deposits to your checking or savings account(s). Preauthorized Payments. You can arrange to pay certain recurring bills from your checking or savings account(s). Electronic check conversion.You may authorize a merchant or other payee to make a one-time electronic payment from your checking account using information from your check to pay for purchases or pay bills. Electronic returned check charge. You may authorize a merchant or other payee to initiate an electronic funds transfer to collect a charge in the event a check is returned for insufficient funds. Expanded Account Access What it is. Any card or PIN (personal identification number) can be used to access up to five checking, savings, line of credit and credit card account(s) held in the same name at U.S. Bank or any of its bank affiliates; and any account you open with us and our affiliates may be accessed by your card or PIN. “Access” means use of a card or account number and PIN to conduct a transaction or obtain information at ATMs, over the telephone, through personal computer banking, or any other available method. If the card or PIN is for a joint account, that card or PIN can be used to access all the accounts linked to the card or PIN account, whether joint or individual. The “cards” that can get Expanded Account Access. All U.S. Bank Check Cards and ATM cards, and all U.S. Bank-issued Credit Cards (including, but not limited to, co-branded credit cards, and all credit lines issued through U.S. Bank and U.S. Bank affiliates). Fees and Charges for Expanded Account Access. There are no additional fees or charges just for Expanded Account Access, but fees applicable to each applicable account will continue to apply in accordance with the terms of the applicable account agreements. The fees and terms for each of your accounts will be as disclosed in the Consumer Pricing Information brochure. You should have received one and they are also available at any of our branches in your state. The fees and terms for your personal credit cards and lines of credit are disclosed in the applicable cardmember agreement. How to Cancel. You can call the U.S. Bank 24-Hour Banking number at any time to cancel Expanded Account Access. If you cancel Expanded Account Access for any account, that account will not be accessible by any card or PIN other than the card or PIN specifically designated for that account. Account Access at Automated Teller Machines You can access up to five checking, five savings, and five line(s) of credit or credit card accounts at U.S. Bank ATMs through all your cards held in the same name. You may perform the following transactions at ATMs: •Make cash withdrawals from your checking and savings accounts. • Get cash advances from your credit card or line of credit account using your U.S. Bank Check Card or ATM card. (Refer to your cardmember agreement for any cash advance fees and finance charges that may apply.) • Deposit funds to checking and savings accounts. • Transfer funds from your account associated with your card. • Make payments to credit card or line of credit accounts from a deposit account associated with your card. • Check the current balance of your linked checking, savings, credit card and line of credit accounts. • Request a statement showing your most recent deposit account transactions. (Refer to your account fee disclosures regarding any fees for purchasing statements at ATMs.) • Purchase stamps, event tickets and wireless phone minutes. • Make certain charitable contributions from a deposit account associated with your card. Some of these transactions are not available at all ATMs. Purchases at Merchants You may use any of your U.S. Bank Check Cards to make purchases at Visa®merchants that accept debit cards. You may use your U.S. Bank ATM Card and any of your U.S. Bank Check Cards to make purchases by entering your PIN at participating merchants. You may also get cash from a merchant, if the merchant permits. Purchases made with your card will result in debits to your “primary” checking account. These transactions will be itemized on your monthly statement, including the merchant name, location, the date of purchase and the amount of the purchase. Other Electronic Transactions In addition to transactions initiated by using your U.S. Bank Check Card, there are other electronic banking transactions that you may arrange through your account. These include: •Telephone/personal computer activated transfers of funds from your accounts with us to other accounts with us or to third parties. These include but are not limited to transfers made by telephone, text, online and mobile banking. • Automatic transfer of funds between checking and savings accounts. •Automatic periodic payments to third parties or us from checking or savings accounts (for example, monthly mortgage payments, installment loan payments, insurance payments, utility payments). • Direct deposit to checking or savings accounts (for example, payroll checks, social security payments). • Electronic check conversions from your checking account using a blank, partial or fully completed personal check at merchant locations. • You can also use any of your U.S. Bank Check Cards to obtain a cash advance from your checking account at any Visa® member bank anywhere in the world. LIMITS ON TRANSFERS The terms of your deposit account may restrict the number of withdrawals you may make from your account each month. Restrictions described earlier in this brochure and in other disclosures and agreements you received at the time your account was opened or when additional products or services were accessed, will also apply to your electronic withdrawals and electronic payments unless specified otherwise. New Accounts For the first 90 days of opening a new account, you cannot make deposits at a non-U.S. Bank ATM. After this initial period, you can make deposits at any participating ATM. 15 Security For security reasons, there are limitations on the transactions that you may perform with any of your U.S. Bank Check Cards or U.S. Bank ATM Cards per day. There are limitations on the dollar amount of cash withdrawals at ATMs and or cash that you receive from merchants over the amount of your purchase. There are also limitations on the total dollar amount of purchases at merchants and or cash advances at Visa® member banks you may perform during each 24-hour period beginning at 9:00 p.m. Central Time. Our standard transaction limits are $300 per day for cash withdrawals and $1,000 per day for purchases. We may change these limitations based on periodic risk assessments and we reserve the right to make such changes without notice to you. Transfer limits are also subject to temporary reductions to protect the security of customer accounts or transfer systems. Check Card Transactions When we receive an electronic notice that a U.S. Bank Check Card Visa transaction has been authorized against your account, we will place a hold on your account for that amount. Some merchants (e.g., hotels, restaurants, gas stations, car rental agencies) estimate the amount of the anticipated purchase for the purpose of determining an authorization amount. As a result, the amount held against your account may be less or greater than the final transaction amount presented. Your available account balance will be reduced by the amount held for all pending check card Visa purchases from the time we receive the notice until the item is presented, a completion message is received, or three business days, whichever occurs first. If we release a hold due to the expiration of three business days, your account may still be debited if and when the transaction is presented to us for processing. During that time, sufficient funds may not be available to pay checks or other electronic transactions, and you may be subject to an overdraft or insufficient funds fee. FEES We will charge you fees for electronic funds transfers in accordance with the information found in our Consumer Pricing Information brochure. The fees may be changed at any time, subject to our giving you any notice required by law. ATM Surcharges. When you use an ATM that is not identified as ours with the U.S. Bank name, you may be charged a fee by the ATM operator or any network used to complete the transfer (and you may be charged a fee for a balance inquiry). USING YOUR CARD FOR INTERNATIONALTRANSACTIONS You may use your U.S. Bank Check Card or ATM card for retail purchases with international merchants, for international cash advances and all transactions performed at international ATMs that bear any of the network logos found on your card. Some merchant and ATM transactions, even if you and/or the merchant or ATM are located in the United States, are considered international transactions under the applicable network rules, in which case we will add International Processing Fees to those transactions. U.S. Bank does not control how these merchants, ATMs and transactions are classified for this purpose. If the transaction requires a currency conversion, the exchange rate in effect when processed may differ from the rate in effect on the date of the transaction or the date of the posting to your Account. Transactions processed through the Visa® system will be converted according to the applicable rules established by Visa®. The foreign currency transaction will be converted to U.S. Dollars by multiplying the amount of the foreign currency times (a) a rate selected by Visa® from the range of rates available in wholesale currency markets for the applicable central processing date, which rate may vary from the rate Visa® itself receives, or (b) the government-mandated rate in effect for the applicable central processing date. For transactions processed through other networks, the international currency transaction will be converted by that network in accordance with their rules. Additional fees may apply. If you need to contact us about your card while outside of the United States, call us collect at 503-401-9991. ADVISORYAGAINST ILLEGALUSE You agree not to use your card(s) for illegal gambling or any other illegal purpose. Display of a payment card logo by, for example, an online merchant does not necessarily mean that transactions are lawful in all jurisdictions in which you may be located; therefore, we reserve the right to decline all online (Internet) gambling transactions. DOCUMENTATION Terminal transfers. You can get a receipt at the time you make any transfer to or from your account using automated teller machines or point-of-sale terminals. However, you may not get a receipt if the amount of the transfer is $15 or less. Pre-authorized credits.If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or company, you can call U.S. Bank 24-Hour Banking or visit our Online Banking site at usbank.com to find out whether or not the deposit has been made. If you have entered into an Online Banking Agreement with us, you may also communicate with us by e-message as described in the agreement. Periodic statements.You will get a monthly account statement unless there are no transfers in a particular month. In any case, you will get the statement at least quarterly for an account to or from which you have arranged for electronic access. In the event your account has become inactive as defined in the section titled Dormant Account and Escheat (refer to page 19) and you have had no electronic activity, you will receive an annual statement. PREAUTHORIZED PAYMENTS If you have arranged for automatic periodic payments to be deducted from your checking or savings account and these payments vary in amount, you will be notified by the person you are going to pay ten calendar days prior to the payment date of the amount to be deducted. If the date upon which your payment is scheduled to be deducted changes, the person you are going to pay will notify you seven calendar days prior to the new scheduled date. To confirm the completion of automatic transfers, payments and/or direct deposits, please contact U.S. Bank 24-Hour Banking or visit our Online Banking site at usbank.com. Right to Stop Payment of Preauthorized Transfers To stop a preauthorized electronic payment or transfer, please call U.S. Bank 24-Hour Banking (see last page for phone numbers). You must call in time for us to receive your request and to be able to act upon it, which in the case of these electronic payments, is at least three business days before the transfer is scheduled to occur. We may also require you to put your request in writing and forward it to us within 14 days after you call. If you order us to stop one of these payments at least 3 business days before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages. You have no right to stop payment on any other type of electronic banking transaction. OUR LIABILITY Liability for failure to make transfers.If we do not complete a transfer to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages. However, there are some exceptions. We will not be liable, for instance: (1)If, through no fault of ours, you do not have enough money in your account to make the transfer. (2) If you have an overdraft line and the transfer would go over the credit limit. (3) If the automated teller machine where you are making the transfer does not have enough cash. (4) If the terminal or system was not working properly and you knew about the breakdown when you started the transfer. (5) If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have taken. (6) There may be other rules/limitations stated in our agreement(s) with you that excuse our failure to make a requested transfer (for example, the monthly limit on certain transfers out of non-transaction savings accounts; refer to Savings Accounts, Withdrawal section on page 23 for additional details). Authorized Transactions We assume that all transactions performed with your U.S. Bank ATM Card or any of your U.S. Bank Check Cards and/or your personal identification number (PIN) are authorized unless you promptly notify us to the contrary. If you intentionally provide another person with the means to perform electronic banking transactions using your account, any resulting transactions will be treated as if they were performed and authorized by you. Such treatment will continue until you notify U.S. Bank 24-Hour Banking that the other person is no longer authorized to use your card and/or PIN (in which case the card and PIN will have to be deactivated). UNAUTHORIZED TRANSACTIONS AND LOST OR STOLEN CARDS An unauthorized transaction is one that another person conducts without your permission and from which you receive no benefit. In order to avoid unauthorized transactions, please observe the following basic precautions: •Do not keep your U.S. Bank ATM Card or U.S. Bank Check Card and personal identification number (PIN) together. Do not write your PIN on your card. •Do not provide your card or reveal your PIN to another person. If you do so, you authorize that person to conduct transactions using your card or PIN. You are liable for that person’s transactions until you notify U.S. Bank Fraud Liaison Center (see below) that the person is no longer authorized to use your card or PIN. •Notify U.S. Bank Fraud Liaison Center or any U.S. Bank branch of the loss, theft or unauthorized use of your card or PIN. •Notify U.S. Bank Fraud Liaison Center or any U.S. Bank branch if you think an electronic banking transaction is incorrectly reported on a receipt or statement. Failure to promptly notify U.S. Bank Fraud Liaison Center or any U.S. Bank branch of the loss, theft, or unauthorized use of your card or PIN will result in inconvenience to you and will hinder the efficient operation of your account. U.S. Bank Fraud Liaison Center 877-595-6256 TDD: 800-685-5065 We reserve the right to cancel, block, and not renew your access device for any reason, with or without prior notice. Reasons for suspension of access may include, for example: •Detection of suspicious or fraudulent activity; •Lack of usage; 16 •Misuse; or •Access devices returned as undeliverable by postal service. CONSUMER LIABILITY FOR UNAUTHORIZED TRANSFERS Zero Liability for All Transactions.Except as provided in the next paragraph, you are generally protected from all liability for unauthorized use of any of your U.S. Bank Check Cards, the associated account numbers printed on them (including purchases made over the phone or online) and your ATM card or its associated personal identification number (PIN). You still need to report the loss or theft of these cards, PINs, and any unauthorized transactions to us as soon as you can. This is necessary so you can get any unauthorized transactions reversed, prevent further unauthorized transactions, and avoid liability for subsequent purchases we could have prevented had you given us notice. This policy also protects you from liability for other types of electronic funds transfers. Please follow the section entitled Error Resolution Notice to report any unauthorized activity on your account. After 60 Days from Statement Notice.If you fail to give us notice of an unauthorized electronic fund transfer within 60 days of when we first deliver a statement to you that discloses that unauthorized transaction, you will be liable for all fund transfers that occur after that 60 day period expires if we could have prevented such transaction had you reported it to us within the 60 day period. This rule applies to all forms of electronic fund transfers (including but not limited to ATM transactions, preauthorized withdrawals, Online transactions, and purchases with any of your U.S. Bank Check Cards, etc.) that occur after the 60 day period following the first statement notice. If a good reason (such as a long trip or hospital stay) kept you from telling us, we may extend this time period. MINNESOTALIABILITY DISCLOSURE If our records assign your account to a branch located in the State of Minnesota, you may bring a civil action against any person violating the consumer privacy and unauthorized withdrawal provisions of Minnesota Statutes, § 47.69 and may recover, in addition to actual damages or $500, whichever is greater, punitive damages when applicable, and the court costs and reasonable attorney’s fees incurred. BUSINESS DAYS Bank “business days” are Monday through Friday. Federal holidays are not included. CONFIDENTIALITY We will disclose information to third parties about your account as permitted by law or the transfers you make: (1)where it is necessary for completing transfers; or (2) in order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant; or (3) in order to comply with government agency or court orders; or (4) if you give us your written permission; or (5) according to our privacy pledge, which generally permits us to share information with companies that perform marketing or other services on our behalf or financial institutions with which we have joint marketing arrangements. ERROR RESOLUTION NOTICE In case of errors or questions about your electronic transfers, call U.S. Bank 24-Hour Banking at a number on the back of this booklet, visit any U.S. Bank branch or write us at the address listed below, as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. If you have entered into an Online Banking Agreement with us, you may also communicate with us by e-message as described in the agreement. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared. (1) Tell us your name and account number (if any). (2) Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information. (3) Tell us the dollar amount of the suspected error. If you tell us orally or send us an e-message, we may require that you send us your complaint or question in writing within ten business days. We will determine whether an error occurred within ten business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your complaint or question. If we decide to do this, we will credit your account within ten business days for the amount you think is in error, unless your transaction is a Visa transaction in which case we will credit your account within five business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within ten business days, we might not provisionally credit your account. For errors involving new accounts, point-of-sale, or foreign-initiated transactions, we may take up to 90 days to investigate your complaint or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within three business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation. Write to us at: U.S. Bank EP-MN-WS5D 60 Livingston Ave. St. Paul, MN 55107 Customers who have entered into an agreement with us for Online Banking may send e-messages to us from our Online Banking site using the secure email feature. The Online Banking site may be accessed by going to the U.S. Bank web site at usbank.com and following the directions to login to Online Banking. Error resolution and contact information with respect to Online Banking services is provided in our Online Banking Agreement. More detailed information is available on request. NOTICE OFATM/NIGHT DEPOSIT FACILITY USER PRECAUTIONS As with all financial transactions, please exercise discretion when using an automated teller machine (ATM) or night deposit facility. For your own safety, be careful. The following suggestions may be helpful: (1) Prepare for your transactions at home (for instance, by filling out a deposit slip) to minimize your time at the ATM or night deposit facility. (2) Mark each transaction in your account record, but not while at the ATM or night deposit facility. Always save your ATM receipts. Do not leave them at the ATM or night deposit facility because they may contain important account information. (3) Compare your records with the account statements you receive. (4) Do not lend your ATM card to anyone. (5) Remember, do not leave your card at the ATM. Do not leave any documents at a night deposit facility. (6) Protect the secrecy of your Personal Identification Number (PIN). Protect your ATM card as though it were cash. Don’t tell anyone your PIN. Don’t give anyone information regarding your ATM card or PIN over the telephone. Never enter your PIN in any ATM that does not look genuine, has been modified, has a suspicious device attached, or is operating in a suspicious manner. Don’t write your PIN where it can be discovered. For example, don’t keep a note of your PIN in your wallet or purse. (7) Prevent others from seeing you enter your PIN by using your body to shield their view. (8) If you lose your ATM card or if it is stolen, promptly notify us. You should consult the other disclosures you have received about electronic fund transfers for additional information about what to do if your card is lost or stolen. (9) When you make a transaction, be aware of your surroundings. Look out for suspicious activity near the ATM or night deposit facility, particularly if it is after sunset. At night, be sure that the facility (including the parking area and walkways) is well lighted. Consider having someone accompany you when you use the facility, especially after sunset. If you observe any problem, go to another ATM or night deposit facility. (10) Do not accept assistance from anyone you do not know when using an ATM or night deposit facility. (11) If you notice anything suspicious or if any other problem arises after you have begun an ATM transaction, you may want to cancel the transaction, pocket your card and leave. You might consider using another ATM or coming back later. (12) Do not display your cash; pocket it as soon as the ATM transaction is completed and count the cash later when you are in the safety of your own car, home, or other secure surrounding. (13) At a drive-up facility, make sure all the car doors are locked and all of the windows are rolled up, except the driver’s window. Keep the engine running and remain alert to your surroundings. (14) We want the ATM and night deposit facility to be safe and convenient for you. Therefore, please tell us if you know of any problem with a facility. For instance, let us know if a light is not working or there is any damage to a facility. Please report any suspicious activity or crimes to both the operator of the facility and local law enforcement officials immediately. 17 ELECTRONIC BANKING AGREEMENT FOR BUSINESS CUSTOMERS This section governs transactions initiated by you or your employees using a U.S. Bank Business Check Card, Business Deposit Card, Business Deposit Check Card, Business ATM card or other U.S. Bank card products offered to business customers from time to time by U.S. Bank (“Business Check Card(s)”). Your use of business check cards is subject to the fees and terms of your checking and savings accounts as set forth elsewhere in this Agreement and in related brochures and fee schedules, which are available at any branch in your state. Some ATM networks impose an additional transaction fee unrelated to our fees and charges and may be assessed to your account. Other electronic transactions against your account, whether or not initiated or authorized by you will be governed by the specific Agreement between us related to such transactions and/or all applicable rules and regulations governing such transactions, including without limitation, the rules of the National Automated Clearing House Association (NACHA) as may be amended from time to time. Under NACHA rules we cannot return an unauthorized electronic transaction (ACH debit) unless you notify us no later than 5:00 p.m. Central Time on the business day following the settlement date of the transaction. Otherwise, your sole recourse is to the originator of the transaction. ACCOUNTACCESS Any U.S. Bank Business Check Card or personal identification number (PIN) issued to or selected by you, except sole proprietors who choose to have a sole proprietor business check card or business ATM card, may access only related business checking or business savings accounts (for example, accounts with the same name or tax identification number). Sole proprietor check cards and ATM cards, however, can access up to five checking accounts, five savings accounts, and five line of credit or credit card accounts through Expanded Account Access. Sole proprietor cards may access business and personal accounts. For more information on Expanded Account Access, see the Consumer Electronic Banking Agreement. Access methods will differ depending on the business check card selected by you and approved by us. All business check card services may not be available depending on the access method selected. LIMITS ON TRANSFERS The terms of your deposit account may restrict the number of withdrawals you may make from your account each month. Restrictions described earlier in this brochure and in other disclosures and agreements you received at the time your account was opened or when additional products or services were accessed, will also apply to your electronic withdrawals and electronic payments unless specified otherwise. New Accounts For the first 90 days of opening a new account, you cannot make deposits at a non-U.S. Bank ATM. After this initial period, you can make deposits at any participating ATM. Security For security reasons, there are limitations on the transactions that you may perform with any of your U.S. Bank Check Cards or U.S. Bank ATM Cards per day. There are limitations on the dollar amount of cash withdrawals at ATMs and or cash that you receive from merchants over the amount of your purchase. There are also limitations on the total dollar amount of purchases at merchants and or cash advances at Visa® member banks you may perform during each 24-hour period beginning at 9:00 p.m. Central Time. Our standard transaction limits are $300 per day for cash withdrawals and $1,000 per day for purchases. We may change these maximum daily limitations based on periodic risk assessments and we reserve the right to make such changes without notice to you. Transfer limits are also subject to temporary reductions to protect the security of customer accounts or transfer systems. Check Card Transactions When we receive an electronic notice that a U.S. Bank Check Card Visa transaction has been authorized against your account, we will place a hold on your account for that amount. Some merchants (e.g., hotels, restaurants, gas stations, car rental agencies) estimate the amount of the anticipated purchase for the purpose of determining an authorization amount. As a result, the amount held against your account may be less or greater than the final transaction amount presented. Your available account balance will be reduced by the amount held for all pending check card Visa purchases from the time we receive the notice until the item is presented or three business days, whichever occurs first. If we release a hold due to the expiration of three business days, your account may still be debited if and when the transaction is presented to us for processing. During that time, sufficient funds may not be available to pay checks or other electronic transactions, and you may be subject to an overdraft or insufficient funds fee. Purchases at Merchants You may use any of your U.S. Bank Check Cards to make purchases at Visa® merchants that accept debit cards. You may use your U.S. Bank ATM Card and any of your U.S. Bank Check Cards to make purchases by entering your PIN at participating merchants. You may also get cash from a merchant, if the merchant permits. Purchases made with your card will result in debits to your “primary” checking account. These transactions will be itemized on your monthly statement, including the merchant name, location, the date of purchase and the amount of the purchase. Other Electronic Transactions In addition to transactions initiated by using your U.S. Bank Check Card, there are other electronic banking transactions that you may arrange through your account. These include: •Telephone/personal computer activated transfers of funds from your accounts with us to other accounts with us or to third parties. These include but are not limited to transfers made by telephone, text, online and mobile banking. • Automatic transfer of funds between checking and savings accounts • Automatic periodic payments to third parties or us from checking or savings accounts (for example, monthly mortgage payments, installment loan payments, insurance payments, utility payments). • Direct deposit to checking or savings accounts (for example, payroll checks, social security payments). • Electronic check conversions from your checking account using a blank, partial or fully completed personal check at merchant locations. • You can also use any of your U.S. Bank Check Cards to obtain a cash advance from your checking account at any Visa® member bank anywhere in the world. FEES We will charge you fees for electronic funds transfers in accordance with the information found in our Business Pricing Information brochure. The fees may be changed at any time, subject to our giving you any notice required by law. ATM Surcharges.When you use an ATM that is not identified as ours with the U.S. Bank name, you may be charged a fee by the ATM operator or any network used to complete the transfer (and you may be charged a fee for a balance inquiry). USING YOUR CARD FOR INTERNATIONALTRANSACTIONS You may use your U.S. Bank Check Card or ATM card for retail purchases with international merchants, for international cash advances and all transactions performed at international ATMs that bear any of the network logos found on your card. Some merchant and ATM transactions, even if you and/or the merchant or ATM are located in the United States, are considered international transactions under the applicable network rules, in which case we will add International Processing Fees to those transactions. U.S. Bank does not control how these merchants, ATMs, and transactions are classified for this purpose. If the transaction requires a currency conversion, the exchange rate in effect when processed may differ from the rate in effect on the date of the transaction or the date of the posting to your Account. Transactions processed through the Visa® system will be converted according to the applicable rules established by Visa®. The foreign currency transaction will be converted to U.S. Dollars by multiplying the amount of the foreign currency times (a) a rate selected by Visa® from the range of rates available in wholesale currency markets for the applicable central processing date, which rate may vary from the rate Visa® itself receives, or (b) the government-mandated rate in effect for the applicable central processing date. For transactions processed through other networks, the international currency transaction will be converted by that network in accordance with their rules. Additional fees may apply. If you need to contact us about your card while outside of the United States, call us collect at 503-401-9991. BALANCE REQUIREMENTS Transactions using your business check card(s) will be completed only if sufficient funds are available in the applicable account balance, overdraft protection or other linked credit facility to fully perform the transaction. UNAUTHORIZED TRANSACTIONS AND LOST OR STOLEN CARDS AND SECURITY You are solely responsible for maintaining the security of your U.S. Bank Business Check Cards and PINs and their use by you and your employees and other agents. You shall be liable for the acts of your employees and agents related to your business check card(s), including business check card applications and other service requests. If you provide another person with the means to perform transactions related to your accounts using your business check card or PIN, any resulting transactions will be treated as if they were performed and authorized by you. VISA® offers Zero Liability for transactions with your Visa card, and this policy applies to use of your business check card. However, this policy does not extend to ATM transactions or PIN transactions not processed over the Visa® network. The Visa Zero Liability policy is subject to certain conditions. If we reasonably determine that the unauthorized transaction was caused by your gross negligence or fraud, the Visa Zero Liability policy will not apply. In any case, you must report an unauthorized transaction to us within a reasonable time, not to exceed 60 days, from the day we send or make your account statement available to you on which an unauthorized transaction is first reported. Failure to report an unauthorized transaction within such 60 days will conclusively mean the transaction is authorized. If you believe that an erroneous or unauthorized transaction has occurred using your business check card(s), or if your business check card has been lost or stolen, or if you want to cancel a business check card issued to you or your employee/agent, or if you want to change your PIN, you must immediately telephone us at: 18 SAFE DEPOSIT BOX LEASE AGREEMENT This Safe Deposit Box Lease Agreement (“Safe Deposit Box Agreement”) applies if you have rented a safe deposit box from U.S. Bank. It completely replaces any earlier lease or rental terms. The words “we,” “our,” and “us” refer to U.S. Bank, and the words “you” and “your” refer to each and all of the renters of that safe deposit box. Insurance. Safe deposit boxes and their contents are not covered by FDIC-Insurance or U.S. Bank’s insurance policy. The Federal Deposit Insurance Corporation (FDIC) insures deposits in deposit accounts. Safe deposit boxes are considered storage space provided by the bank and do not fall under these insurance laws. Therefore, when considering whether to rent a safe deposit box, please check with your personal insurance carrier to determine whether safe deposit box contents are covered under your existing policy or if you will require additional insurance. Term. The box is rented for a one-year period payable in advance. If you signed a safe deposit contract, then that one-year period begins on the date of that contract. Otherwise, the period ends on the due date shown on your safe deposit statement. This lease will be automatically renewed for a one-year term each time it expires unless you or we terminate as provided below or unless you fail to pay the rental amount for the renewal term in advance. Rental Fees.We reserve the right to change the safe deposit box rental amount for any renewal term by billing you for the changed amount. Your rent, along with any tax that might be due, is payable in advance before the beginning of any renewal period. If we do not receive your rental payment or any other amount you owe us within 15 days after it is due, it may be charged against any deposit or credit account you have with us. Also, you agree to give us a lien on all contents of the box for any rent or other amount that you may owe us. You also agree to pay the fees outlined in the Safe Deposit Box Fees schedule, as shown in the Consumer Pricing Information brochure, which may be amended from time to time and are a part of this Safe Deposit Box Agreement. You agree to pay the late payment fee if your rent payment is not paid when due. We also reserve the right to charge fees for any changes or other activity in connection with your box. Our Duty. Our duty is to use reasonable care to prevent anyone from opening the box other than you or your appointed deputy (agent) or court-appointed representative, except as we may otherwise be required or permitted by law. You, your deputies (agents), or other designated representatives agree to comply with our requirements for accessing the box. Keys. You must immediately notify us if you lose one or more keys, or the combination, to your box. You also agree, in such a case, to pay all the expenses of opening the box, changing the lock, and replacing the keys. Items Stored. You agree not to store any: •guns, ammunition, explosives, or other items we may believe to be dangerous, or •liquids, or •items that we may conclude would interfere with the operation of the safe deposit vault, or •property the possession of which would be a violation of law. If we know or have reason to suspect you store these items, we may turn the box’s contents over to the police or other legal authorities, or permit those authorities to inspect the box’s contents, including any items stored in violation of this lease. Access. If you are late making any payment due under this Safe Deposit Box Agreement, we can deny you access to the box. We may also deny access as required by law or if we reasonably believe we may be so required, or if there is a dispute over ownership or access rights, or if we have a reasonable doubt as to who is entitled to access. If you die, become bankrupt, or are incapacitated, we may permit access to the box to the persons, and for the purposes, as the law allows or requires. You agree that if anyone having access to the box dies, you will give us notice of that death and provide documentation as required by State law before you seek access to the box. If we allow access to the box, and except as otherwise required by law, we have the right to require all owners (or their legal representatives) to be present. We reserve the right to charge a fee for access to the box. If we know or have reason to suspect you store items in this box in violation of this Safe Deposit Box Agreement, we may block access to the box pending an investigation. Deputies (Agents). You may appoint another person or persons, except for one of our officers or employees, as a deputy (agent) on your box. To appoint a deputy (agent) the individual renter or all joint renters must be present, along with the deputy, to sign the revised Safe Deposit Box contract. The renter or any co-renter may independently revoke the deputy appointment by signing the Access Revoked section of the deputy designation area of the contract. Deputies are permitted to access or close the safe deposit box without the presence of the renter(s). We may admit any deputy (agent) to the box until we either: (1) receive your authorization to revoke the deputy by signing the Access Revoked section of the contract, or (2) receive notice of the death or incapacity of the renter or one of the co-renters who appointed the deputy. You agree to be responsible for the actions of your deputies (agents) and to hold us harmless against any of their actions. Joint Rental. If there is more than one renter on the safe deposit box, each person will have access to the safe deposit box. Each of you has the right to exchange the box or terminate the lease (surrender the box), and consent to an increase in box rent. Each of you will be liable for the full amount of payment due under this Safe Deposit Box Agreement. Corporate and Other Organization Renters.A business safe deposit box may be rented to any Sole Proprietorship, Partnership, Association/Organization, or Corporation. In order to open a box in a business name, the business must provide appropriate legal documents (e.g., Articles of Incorporation, Partnership Agreement) and complete a ‘Business Safe Deposit Box Resolution’. Entry to the box will only be permitted to those parties you authorize based on the documentation we have on file. We reserve the right to require a new contract to be created and a new ‘Business Safe Deposit Box Resolution’if authorized signers change on a business owned box. Vault Hours. Our vault is open only on banking days during our regular business hours or only during such other hours as we may set. In addition, we have the right to close or deny access to the vault temporarily if, in our judgment, it would be prudent to do so. For example, an event where we may deny access to the vault may include fire, unusual crowds, national emergency, malfunction of the vault door, and inclement weather. Location. You agree that if we close the bank office or the safe deposit vault at the office where your box is located, you authorize us to move the box to another branch of the bank or we may require you to exchange your box for one at another branch of the bank. Upon acceptance of that exchange, you agree to move the contents from the old box to the new box within 30 days from receipt of notice from us. If you do not accept the exchange, then the lease shall be treated as terminated by us. In either case, you will remove the contents from the old box and return all keys or the combination to us in person within that 30-day period. Mailing Address. You must notify us immediately in writing if you change your mailing address. We will regard the last address you have given us in our safe deposit vault record as correct, unless you have notified us in writing of any changes. Escheat. You understand and agree that, should your box remain in a delinquent payment status for a length of time designated by law, we may have to turn over the contents of the box to the state. You further agree that we continue to have a lien on all contents of the box for any rent or other amount that you may owe us. Notice. Any mailed notice that we may give to you shall be effective upon our putting that notice in the mail. Termination. We may terminate this lease by giving you 30 days’written notice, whether or not you have paid all amounts due to us. During that period, you must return all keys or the combination to us in person. We will not accept keys or combinations sent by mail.You must also remove the contents of the box and pay past due rent or other amounts, if any. We will then give you a prorated refund of any rent you may have paid in advance. If you do not surrender all keys or combination in person and pay all amounts due when the lease expires or is terminated, we may forcibly open the box in accordance with applicable law and remove and store its contents for you at your expense. We may turn over to the police or other legal authorities, or permit those authorities to inspect, any item stored in violation of this lease. We will have no liability for the safekeeping of any contents. We will charge rent even after the lease is terminated, until you return all keys or combination to us in person. If you wish to terminate this lease, you must remove all contents of the box, surrender all keys or the combination to us in person, and sign the surrender portion of the Safe Deposit Box contract. However, you will not receive a refund of any rent you have paid. Changes in Terms. We may change the terms of this Safe Deposit Box Agreement by mailing you notice of the changes, publishing them in a newspaper, or posting them in our bank office. The changes shall become effective 15 days after such mailing, publishing or posting, unless before that 15th day you remove all contents from the box and surrender the box to us by returning all keys or the combination to us in person. You shall then be entitled to a refund of any unearned rent. Liability. Although your safe deposit box is designed to be fire- and water-resistant and burglar-resistant, we do not guarantee absolute safety, nor are we liable for any contents which are claimed to be lost. Except for the duty specifically stated above, we have no liability for any damage to the contents of your box even if the damage resulted from our negligence. Under no circumstances do we serve as a bailee of anything you may put in it. You also agree to keep money, jewelry and other untraceable items in the box at your own risk. Our Costs and Losses. You agree to reimburse us, upon our request, for any amounts we incur in connection with the removal and storage of box contents for which rent has not been paid, any failure to return all keys or combination upon termination, or lawsuits related to your box. ARBITRATION This section does not apply to any dispute in which the amount in controversy is within the jurisdictional limits of, and is filed in, a small claims court. These arbitration provisions shall survive closure of your account or termination of all business with us. If any provision of this section is ruled invalid or unenforceable, this section shall be rendered null and void in its entirety. U.S. Bank Fraud Liaison Center 877-595-6256 TDD: 800-685-5065 19 Arbitration Rules: In the event of a dispute concerning your account or this Agreement, you or we may elect to arbitrate the dispute. At your election, the arbitration shall be conducted by either JAMS or the American Arbitration Association ("AAA") (or, if neither of these arbitration organizations will serve, then a comparable substitute arbitration organization agreed upon by the parties or, if the parties cannot agree, chosen by a court of competent jurisdiction.) If JAMS is selected, the arbitration will be handled according to its Streamlined Arbitration Rules unless the claim is for $250,000 or more, in which case its Comprehensive Arbitration Rules shall apply. If the AAA is selected, the arbitration will be handled according to its Commercial Arbitration Rules. You may obtain rules and forms for JAMS by contacting JAMS at 1-800-352-5267 or www.jamsadr.com and for the AAA by contacting the AAA at 1-800-778-7879 or www.adr.org. Any arbitration hearing that you attend will take place in the federal judicial district in which you reside. Without regard to which arbitration body is selected to resolve the dispute, any disputes between you and us as to whether your claim falls within the scope of this arbitration clause shall be determined solely by the arbitrator, and not by any court. Arbitration Process: Arbitration involves the review and resolution of the dispute by a neutral party. The arbitrator's decision will generally be final and binding. At your request, for claims relating to consumer accounts, we will advance the first $375 of the filing and hearing fees for any claim you file against us; the arbitrator will decide whether we or you will ultimately pay those fees. Arbitration can only decide our or your dispute and cannot consolidate or join claims of other persons who may have similar claims. There will be no authority or right for any disputes to be arbitrated on a class action basis. Effects of Arbitration: If either of us chooses arbitration, neither of us will have the right to litigate the dispute in court or have a jury trial. In addition, you will not have the right to participate as a representative or member of any class of claimants, or in any other form of representative capacity that seeks monetary or other relief beyond your individual circumstances, pertaining to any dispute subject to arbitration. There shall be no authority for any claims to be arbitrated on a class action or any other form of representative basis. Arbitration can only decide your or our claim, and you may not consolidate or join the claims of other persons who may have similar claims, including without limitation claims for public injunctive or other equitable relief as to our other customers or members of the general public. Any such monetary, injunctive, or other equitable relief shall be limited solely to your accounts, agreements, and transactions with us. Notwithstanding the foregoing, any question as to the validity and effect of this class action waiver shall be decided solely by a court of competent jurisdiction, and not by the arbitrator. U.S. BANK CONSUMER RESERVE LINE AGREEMENT How We Will Calculate Your Balance: We use a method called "average daily balance (including new purchases)." See your account agreement for more details. Billing Rights: Information on your rights to dispute transactions and how to exercise those rights is provided in the account agreement. This Reserve Line Agreement ("Reserve Line Agreement") describes the U.S. Bank Consumer Reserve Line account. This is an open end line of credit that is (or can be) attached to a U.S. Bank checking account and provides "overdraft" protection (up to your credit limit). If you accept the offer of a Reserve Line (overdraft protection) feature for your checking account, you agree to the terms below. Your acceptance will be further evidenced and confirmed the first time you access the account or by failing to cancel this account within 30 days after we mail notice to you of the creation of the account. DEFINITIONS In this Reserve Line Agreement, the words, "YOU" and "YOUR" mean the borrower(s) under this Reserve Line Agreement who are also the account holders of the associated deposit account. If there is more than one, these words mean each borrower separately and all borrowers jointly. Your address, telephone number, and other identification information are as recorded in the associated deposit account records. You confirm that such deposit account information is accurate, and you promise to keep it so. “WE” and “OUR” mean U.S. Bank. The “associated deposit account” is the deposit account to which this line of credit account is attached. Your credit limit under this Reserve Line Agreement will be provided to you by separate notice. The account number we give you for your deposit account will be the same number for your line of credit. USE OFACCOUNT You can access this line of credit by requesting a withdrawal from your associated deposit account that, if allowed, would create an overdraft to that account (but for an advance under this Reserve Line Agreement). This means you can access the line of credit by any method by which you can access your associated deposit account. Therefore, if you can access your deposit account through an ATM card, check, debit card, online transaction, preauthorized withdrawal, telephone or any other method of withdrawal, then you can access this line of credit by such method. Your access to this line of credit is also subject to any limits on your ability to access your deposit account as well. (For example, your ATM machine daily withdrawal limit will indirectly limit your access to the loan account by that method of withdrawal.) ADVANCE AMOUNT If you overdraw your associated deposit account by $10 or more, advances will be made in increments of $50 (rounded to the next higher $50), or the unused portion of your credit line if that is less. If the amount of the overdraft is less than $10, the advance will be $10, or the unused portion of your credit line. While no fee will be charged to your Reserve Line for an automated advance to cover an overdraft to your associated deposit account, an overdraft protection transfer fee may be assessed against the associated deposit account. Please refer to the current Consumer Pricing Information brochure for information regarding fees for your deposit account. CREDIT LIMIT You agree not to allow your unpaid principal balance to exceed your credit limit. If you attempt a withdrawal that would cause you to exceed your credit limit: •we are under no obligation to make the loan; if we reject the advance, you will incur the fee on the deposit account for an insufficient funds item; •if we make the loan and you thereby exceed your credit limit, this does not increase your credit limit, and we are not obligated to permit you to exceed your credit limit later; and • if we make the loan, the excess over your limit is immediately due, can be taken from your deposit account when funds are available and, if not sooner paid, you agree to increase your next periodic payment by the amount you exceed your credit limit. CREDIT REVIEW We may periodically review your creditworthiness. In doing so, we may review your credit reports and any other credit information that we believe to be relevant. We may request, and you agree to provide, any information regarding your financial condition that we believe appropriate for purposes of this review. We reserve the right to periodically re-evaluate your account and, based on our credit criteria for determining the likelihood of repayment, increase or decrease your credit limit. STATEMENTS Your billing cycle for this account is monthly. Each billing cycle in which there is a transaction or a balance we will send you (or make available) a statement which will show all loans, finance charges, payments and credits made to your account during the billing cycle and the date and amount your minimum payment is due. PAYMENT You may repay your entire balance at any time, but if you do not, you must make a minimum monthly payment that will be equal to the greater of (a) $25.00 or the remaining balance, if less; or (b) 1% of your principal plus accrued interest and fees. If your loan balance is over your credit limit, your minimum monthly payment will be as described above increased by the amount your balance exceeds your credit limit. AUTOMATIC PAYMENT You authorize us to automatically deduct your minimum monthly payment from your associated deposit account on the due date shown on your statement. It is your responsibility to ensure that there are sufficient available funds in that deposit account to cover the minimum monthly payment due. If you do not have sufficient funds in Interest Rates and Interest Charges Annual Percentage Rate 21.9% Paying Interest Your due date is 20 days after the close of each billing cycle. There is no interest-free period. You will be charged interest from the transaction date. Fees Annual Fee None Penalty Fees • Late Payment $20 20 your associated deposit account to make your minimum monthly payment, and we do not receive your minimum monthly payment by the payment due date, you will be charged a late payment fee of $20.00. APPLICATION OF PAYMENTS All payments will be applied first to any unpaid Finance Charges that have accrued through the end of the preceding billing cycle, then to any payment protection fees, then to any other charges, and then the unpaid principal balance. If we cannot collect on your check or other payment item you send us to pay on your Account, we may post as an Advance transaction an amount equal to the credit previously given to you for such check or payment item and we may charge interest on this amount from the date your Account originally was credited for the payment. After a payment has been made, we reserve the right to withhold available credit in the amount of the payment for 7 business days. Any credit available before the payment is made will continue to be available for use during this time. INTEREST CHARGES AND FEES Fees •Late Payment Fee: If we do not receive your minimum monthly payment by the due date, you will be charged a late payment fee of $20.00. Interest Charge You agree to pay an INTEREST CHARGE on the unpaid balance of your U.S. Bank Consumer Reserve Line loans beginning on the date the funds are advanced to your checking account. We determine the INTEREST CHARGE for the billing cycle by taking the applicable daily periodic rate of 0.06% (corresponding ANNUAL PERCENTAGE RATE of 21.9%) and multiply that rate by the number of days in the billing cycle and multiplying that result by the Average Daily Balance for the billing cycle. Average Daily Balance To figure the INTEREST CHARGE we first determine the Average Daily Balance of your account for the billing cycle. To get the Average Daily Balance, we take the beginning balance of your account (minus unpaid finance charges and unpaid fees from the previous billing cycles), add any new advances, and subtract any payments and credits . This gives us a daily balance. Then we add up all the daily balances for the billing cycle and divide the total by the number of days in the billing cycle. This gives us the Average Daily Balance. APPLICABLE LAW You understand that we are a national bank located in Ohio. The law that will apply to this Reserve Line Agreement as to issues related to interest and related charges will be the law of the State of Ohio. SECURITY INTEREST IN ASSOCIATED DEPOSITACCOUNT You grant to us a security interest in the associated deposit account to secure the payment of this line of credit. For purposes of this security interest, you and we agree that the law of the state of North Dakota will control as to the creation, perfection, and effect of perfection of the interest granted in this paragraph. ADDITIONALPARTIES You shall not add a person to your deposit account with authority to make withdrawals unless that person agrees to assume responsibility for this Reserve Line Agreement, including any outstanding balance at that time, unless you pay off any balance and terminate this Reserve Line Agreement. FOR EXECUTIVE OFFICERS Notwithstanding any other provision of this Reserve Line Agreement, we have the option to terminate this account and make the entire outstanding balance immediately due and payable if: 1. You are or become an executive officer of ours, and 2. Your indebtedness to any bank or number of banks, in the aggregate, exceeds the amount (in any regulated category) permitted to an executive officer under Federal law. “Federal law” includes regulations and interpretations of federal agencies. “Your indebtedness” includes any debts attributed to you by Federal law. DEFAULT You will be in default on this loan: 1. If your associated deposit account is assigned to a branch in Iowa, you fail to make a payment in full within 10 days of when it is due; 2.If your associated deposit account is assigned to a branch in Wisconsin, a. You fail to pay in full when due on 2 occasions within any 12-month period; or b. Your spouse sends us notice of termination of this plan; 3. If your associated deposit account is assigned to a branch in any other state (neither Iowa nor Wisconsin) you fail to make a payment in full when it is due; Or, regardless of the state of the branch to which your associated deposit account is assigned, 4. You fail to keep any other promise in this Reserve Line Agreement or the associated deposit account, and that failure materially impairs your ability to pay amounts due under this Reserve Line Agreement. If any of you are in default on this Reserve Line Agreement we may exercise our remedies against any of you separately or all of you together. REMEDIES: YOUR RIGHTS IFYOU DEFAULT The remedies we have in the event of your default are, in some states, dependent on a limited right to cure a default, and to get notice of that right. We will provide the notice, which will explain your limited right, and permit you to cure a default, if and when required by state law. If you are in default (and subject to any right to cure) we may: • require you to pay the entire unpaid balance of principal and accrued interest before the scheduled due date; • set off the debt against any amount we may owe you in the associated deposit account or any other deposit account interest you may have with us; • enforce our security interest, if applicable; • terminate or suspend your right to further advances under this Reserve Line Agreement; and • pursue any other method permitted by law to collect a debt. COSTS OF COLLECTION You agree to pay the costs we incur to collect this debt in the event of your default. In the event we have to collect this note through your bankruptcy proceeding, voluntary or otherwise, and without regard to your state of residence, these costs will include our reasonable attorney's fees, for an attorney who is not our salaried employee, in the bankruptcy proceedings. The following additional fees and issues will depend on where you reside at the time this line of credit is signed. (If attorneys' fees are permitted, this would be for attorneys who are not our salaried employees.) In Arizona, Illinois, Kentucky, Michigan, Minnesota, Montana, Nevada, Pennsylvania, South Dakota, Tennessee, Utah, Virginia, and Washington and Wyoming these costs will include our reasonable attorney's fees. In Arkansas, these costs will include our reasonable attorney's fees not to exceed 10% of the amount of principal and accrued interest. In Colorado, these costs will include our reasonable attorney's fees not to exceed 15% of the unpaid debt after default. In Idaho, these costs will include our reasonable attorney's fees. This provision for attorney's fees does not apply if this loan is a consumer loan with a principal amount of $1,000.00 or less. In Indiana, these costs will include our reasonable attorney's fees; and in any collection efforts, we waive any relief we might be entitled to from evaluation and appraisement; In Iowa, if the credit limit is greater than $25,000 then these costs include our reasonable attorney's fees to collect this note, including such fees on appeal. In California, Nebraska, North Dakota, Ohio, Oregon and West Virginia these costs will not include attorney's fees. In Kansas, these costs will include our reasonable attorney's fees or collection agency fees, up to 15% of the unpaid amount due and payable under this note. We are entitled to the collection of attorneys' fees or collection agency fees, but not both. This provision is applicable only if collection is handled by someone other than a salaried employee of ours. In Missouri, these costs will include our reasonable attorney's fees, if it is necessary to bring suit, of 15% of the amount due and payable under this note. In Oklahoma, these costs will include our reasonable attorney's fees not to exceed 15% of the unpaid debt after default; this provision for attorney's fee does not apply to certain supervised loans as provided in Okla. Statutes 14A§3-514. In Wisconsin, you agree to pay the charges we incur as authorized by Wis Stat Chaps. 421 to 427. DELAY IN ENFORCEMENT We can delay enforcing our rights under this Reserve Line Agreement without losing them and we will still be able to recover all amounts you owe us. We can also release one borrower from the responsibilities of this Reserve Line Agreement without releasing any other. 21 CANCELING OR AMENDING THIS RESERVE LINE AGREEMENT We may cancel or amend this Reserve Line Agreement at any time by notifying you at least 15 days (or such longer period as required by law) in advance in writing. Where permitted by law, the changes will apply to all existing and future balances. You have the same right to cancel for any reason or if you do not agree with our amendment, but your obligation to repay the amount owed continues. If more than one rate applies to your account, we will apply payments to the oldest rate's unpaid Finance Charge and unpaid principal balance first. FINANCIALSTATEMENTS When we agree to make loans to you, we are relying on information you gave us on your application. You guarantee that this information is true and correct and that any information you give us in the future will also be true and correct. You agree to provide us with additional financial statements as we may reasonably require. You agree that annual statements of this nature are reasonable, and that such annual statements may be used to adjust the credit limit for this account. PAYMENT PROTECTION We may offer you payment protection on this loan account at a later date. If we offer you, separately, payment protection (Basic or Plus), such payment protection is NOT required to obtain credit. We cannot compel you to buy such payment protection from us or our affiliate, NOR prohibit you from buying it from someone else. We will disclose the cost of such products at the time of our offer. CREDIT BUREAU DISPUTES If you believe we have inaccurately reported information on your credit history to a credit bureau, you can call 1-800-331-4738 or write U.S. Bank, Consumer Recovery Department, Attn: CBR Disputes, P. O. Box 17143, Denver, CO 80217. YOUR BILLING RIGHTS - KEEPTHIS DOCUMENT FOR FUTURE USE This notice tells you about your rights and our responsibilities under the Fair Credit Billing Act. WHAT TO DO IFYOU FIND AMISTAKE ON YOUR STATEMENT If you think your statement is wrong, or if you need more information about a transaction on your statement, you must write us (on a separate sheet) as soon as possible at: U.S. Bank P.O. Box 64991 St. Paul, MN 55164-9505 In your letter, you must give us the following information: • Account Information: Your name and account number. • Dollar Amount: The dollar amount of the suspected error. • Description of Problem: If you think there is an error on your bill, describe what you believe is wrong and why you believe it is a mistake. You must contact us: • Within 60 days after the error appeared on your statement. • At least 3 business days before an automated payment is scheduled, if you want to stop payment on the amount you think is wrong. You must notify us of any potential errors in writing. You may call us, but if you do we are not required to investigate any potential errors and you may have to pay the amount in question. You have authorized us to automatically deduct payments from your checking account to apply on your line of credit. You can stop payment on any amount which you think is wrong by mailing your notice so that we receive it three business days before the payment is scheduled to occur. WHAT WILLHAPPEN AFTER WE RECEIVE YOUR LETTER When we receive your letter, we must do two things: 1. Within 30 days of receiving your letter, we must tell you that we received your letter. We will also tell you if we have already corrected the error. 2. Within 90 days of receiving your letter, we must either correct the error or explain to you why we believe the bill is correct. While we investigate whether or not there has been an error: • We cannot try to collect the amount in question, or report you as delinquent on that amount. •The charge in question may remain on your statement, and we may continue to charge you interest on that amount. • While you do not have to pay the amount in question, you are responsible for the remainder of your balance. • We can apply any unpaid amount against your credit limit. After we finish our investigation, one of two things will happen: 1.If we made a mistake: You will not have to pay the amount in question or any interest or other fees related to that amount. 2.If we do not believe there was a mistake: You will have to pay the amount in question, along with applicable interest and fees. We will send you a statement of the amount you owe and the date payment is due. We may then report you as delinquent if you do not pay the amount we think you owe. If you receive our explanation but still believe your bill is wrong, you must write to us within 10 days telling us that you still refuse to pay. If you do so, we cannot report you as delinquent without also reporting that you are questioning your bill. We must tell you the name of anyone to whom we reported you as delinquent, and we must let those organizations know when the matter has been settled between us. If we do not follow all of the rules above, you do not have to pay the first $50 of the amount you question even if your bill is correct. ARBITRATION This section does not apply to any dispute in which the amount in controversy is within the jurisdictional limits of, and is filed in, a small claims court. These arbitration provisions shall survive closure of your account or termination of all business with us. If any provision of this section is ruled invalid or unenforceable, this section shall be rendered null and void in its entirety. Arbitration Rules: In the event of a dispute relating to or arising out of your account or this Agreement, you or we may elect to arbitrate the dispute. The party commencing the arbitration may select to use either JAMS or the American Arbitration Association ("AAA") (or, if neither of these arbitration organizations will serve, then a comparable substitute arbitration organization agreed upon by the parties or, if the parties cannot agree, chosen by a court of competent jurisdiction). If JAMS is selected, the arbitration will be handled according to its Streamlined Arbitration Rules unless the Claim is for $250,000 or more, in which case its Comprehensive Arbitration Rules shall apply. If the AAA is selected, the arbitration will be handled according to its Commercial Arbitration Rules. You may obtain rules and forms for JAMS by contacting JAMS at 1-800-352-5267 or www.jamsadr.com and for the AAA by contacting the AAA at 1-800-778-7879 or www.adr.org. Any arbitration hearing that you attend will take place in the federal judicial district in which you reside. Arbitration Process: Arbitration involves the review and resolution of the dispute by a neutral party. The arbitrator’s decision will generally be final and binding. At your request, for claims made to consumer accounts, we will advance your filing and hearing fees for any claim you may file against us; the arbitrator will decide whether we or you will ultimately be responsible for those fees. Arbitration can only decide our or your dispute and cannot consolidate or join claims of other persons who may have similar claims. There will be no authority or right for any disputes to be arbitrated on a class action basis. Effects of Arbitration: If either of us chooses arbitration, neither of us will have the right to litigate the dispute in court or have a jury trial. In addition, you will not have the right to participate as a representative or member of any class of claimants pertaining to any dispute subject to arbitration. ACCEPTANCE I accept the terms of this agreement. My acceptance will be further evidenced and confirmed the first time I access the account created and explained in this form, or, by failing to cancel this account within 30 days after you have mailed this disclosure to me (if I have not accessed the account before then). Spousal notices: Wisconsin Residents Only: Married Borrower. The obligation evidenced by this note is incurred in the interests of your marriage or family. DISCLAIMER OF ORALAGREEMENTS Oral agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable. To protect you (borrower(s)) and us (creditor) from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it. 22 U.S. BANK BUSINESS RESERVE LINE AGREEMENT In this agreement, “I” “me” or “my” refers to the customer who has applied for or accepted a pre-approved offer for a U. S. Bank Business Reserve Line account (the “account”). “You” or “your” refers to the bank where my checking account is located. “Applicant(s)” refers to the person or persons who requested the account on my behalf. “We” “our” or “us” refers jointly to me and each of the individual applicants. Use of the account or not canceling the account within thirty days after receipt of credit approval indicates our acceptance of the terms outlined below, including the personal guaranty by each of the applicants. “Credit limit” refers to the amount you disclose to me by separate communication as my credit limit. It is the maximum amount of money I am able to borrow under this agreement. “Checking account” means the checking account listed on my application or my pre-approved offer for the account. If you agree to make loans to me, you may rely on information, which I have submitted to you. We guarantee that this information is true and correct. 1. Persons Liable For the Account.We agree that we are jointly and severally liable for amounts due under the account. This liability extends to account balances due by the use of the account by (a) any person authorized to draw on the checking account (for account access by check overdraft) or (b) any person requesting an advance by other permitted means and believed by you to be authorized by me to request an advance, regardless of whether or not actually authorized by me to access the account. Any use of this account constitutes acceptance of the terms of this agreement for which we will each be responsible. 2. Guaranty. Applicant agrees to be personally responsible for any credit granted under the terms of this agreement. Each applicant is a co-obligor with the customer and is primarily, jointly, and severally liable for the obligations of the customer. 3. Using the Account.You agree to make loans to me under the account. I may request a loan by overdrawing my checking account, by phone, in person, by debit card or in any other way you approve. You will make each loan by advancing money in units of $200 into my checking account. A request for a different amount will be rounded to the next higher $200 but not more than the unused portion of my credit limit. 4. Credit Limit.We agree not to allow our unpaid principal balance to exceed my credit limit. Although you are not required to lend me any amount over my credit limit, you may make a loan if you choose. If I go over my credit limit, you may treat it as a loan under this account, except that we must repay any amount in excess of our credit limit immediately without notice or demand from you. 5. Credit Review.You may periodically review our creditworthiness. In doing so, you may review our credit reports and any other credit information that you believe to be relevant. You may request, and we agree to provide, any information regarding our financial condition that you believe appropriate for purposes of this review. You reserve the right to periodically re-evaluate my account and, based on your credit criteria for determining the likelihood of repayment, increase or decrease my credit limit. 6. Statements.Each month my regular checking account statement will contain a Business Reserve Line account section. It will state all loans, payments, credits, and finance charges during the billing cycle and the date my minimum payment is due. 7. Payments.We jointly and severally promise to pay you all amounts loaned under this account plus finance charges and any other amounts we may owe you. If my statement shows a balance due, I may: (a) pay the full amount; (b) make the minimum payment based on the standard rate; (c) make a fixed payment based on the standard minimum rate for a fully utilized credit limit; (d) elect the Zero Balance Option (if available to me) by authorizing you to debit my Demand Deposit Account daily to make payment on my Business Reserve Line account balance. On the day my normal payment is due, if the total of the daily payments taken is less than the minimum standard payment, I authorize you to debit the balance due to meet the minimum payment required from my Demand Deposit Account; (e) elect to use my skip payment option (if available to me); or (f) pay any amount greater than the minimum payment due. The minimum payment will be due on or before the day indicated on my monthly statement, and will be equal to the greater of $25.00 or 3% of the balance due. If less than $25.00 remains due, we will pay the full balance. For example, if I owe $1500.00, my minimum monthly payment would be $45.00. If any of us is an Executive Officer as defined by Regulation ‘O’, we understand you reserve the right to require us to repay on demand, either in whole or in part, the principal amount outstanding on loans made under this account. 8. Finance Charge.You will charge a finance charge for each day a loan is outstanding under the account. The finance charge begins to accrue on the date each loan posts to the account and will continue until paid in full. The ANNUAL PERCENTAGE RATE of interest applicable to the account shall be a fixed rate of 21.9%. The **FINANCE CHARGE** (if any) on loans for each billing cycle is determined by multiplying a daily periodic rate (the ANNUAL PERCENTAGE RATE divided by 365 or 366 during leap years) times the number of days in the billing cycle. The product of those two numbers is multiplied by the Average Daily Balance. 9. Figuring the Finance Charge.You compute the **FINANCE CHARGE**during my billing cycle by the Average Daily Balance. To get the Average Daily Balance, you take the beginning balance of my account each day, add any new advances, and subtract any payments, credits and unpaid finance charges. Sum all of these entries and divide by the number of days in the billing cycle. 10. Annual Fee.An annual fee of $20 will be debited the first statement cycle date after account initiation and annually thereafter from my checking account. This annual fee will not be pro-rated if the account is closed during the year. 11. Default.We will be in default if: (a) we do not make a payment on time; or (b) we violate any provision of this agreement or any security agreement; or (c) any of our checking accounts with you is garnished, levied against, or is closed for any reason; or (d) an Applicant dies; or (e) any of us becomes insolvent, assigns any property for the benefit of creditors, or goes into bankruptcy, receivership or anything similar; or (f) any of us fails to provide a financial statement, tax returns or any other financial information that you may reasonably request; or (g) any of us gives you any false information or acts dishonestly in connection with this account; or (h) anything happens which you feel increases the risk that any payment will not be made on time. 12. Restriction – Payroll Accounts.We understand and agree that we may not use our Business Reserve Line account for paying employee wages. We further acknowledge that you do not authorize or allow such uses, and that to use the account directly or indirectly for employment compensation is a violation of this agreement. 13. Remedies.If any of us is in default, you will give me notice of my right to cure the default if required by law. If we do not cure the default within the time stated in the notice, you may: (a) declare the entire balance of this account immediately due and payable without demand or notice to us; or (b) exercise any legal remedy available. Your remedies include, but are not limited to, exercising your right of setoff against any deposit account any of us has with you or your affiliates. We also agree to pay any attorney’s fees, legal expenses, and costs incurred by you in enforcing this agreement, except as prohibited by law. We understand that if you choose to pursue one or more of these remedies, you are not waiving the right to choose later any other remedy until this account is paid in full. You can delay enforcing your rights under this agreement without losing them and still recover all amounts owed. 14. Deposit Account Security Interest.Unless it is prohibited by law, we give you a security interest in any deposit account we may at anytime have with you to secure this account. If the entire balance of this account becomes due, you may use such funds on deposit to pay this account. If the deposit is a time deposit, any early withdrawal penalty would not go to pay the account balance. If you take any funds or place a hold on funds to enforce a security interest in my deposit account, you will give me notice and right to cure as required by law. If you give me that notice, we will not have a claim against you for wrongful dishonor of checks written against our accounts or for any other damages to us arising from a hold on, or taking of funds. 15. Governing Law.The validity, construction and enforcement of this agreement are governed by the internal laws of the state in which you are located. If any other provision of this agreement violates the law and is unenforceable, the rest of the agreement will remain valid. 16. Canceling or Amending this Agreement.You have the right to cancel for any reason or amend this agreement at any time, by notifying me 15 days in advance in writing. Unless prohibited by law, the changes will apply to all existing and future balances. If I am in default, you can cancel use of this account without notifying me. I have the right to cancel for any reason at any time, but our obligation to repay the amount owed remains. You may at any time review my account and based on credit criteria for determining the likelihood of repayment of my account, reduce or cancel the use of my account. 17. Payment Protection.The U.S. Bank Payment Protection Plan (the “Plan”) is an optional provision of your Line of Credit, as described in the Payment Protection Plan Addendum. Your decision whether or not to purchase this protection will not affect your application for credit or the terms of any existing credit agreement you have with U.S. Bank. There are eligibility requirements, conditions and exclusions which apply to each type of protection and that may prevent you from obtaining protection under the Plan. These are fully explained in the U.S. Bank Payment Protection Plan Addendum which amends the Line of Credit. If you are not completely satisfied, you may cancel the Plan within 30 days and we will refund any Debt Cancellation Fee paid by crediting your Line of Credit. Additionally, you may cancel at any time by notifying us in writing and receive a refund of unearned fees (if any). WARNING: The terms of this revolving loan account may be changed whether or not authorized by agreement in accordance with the Uniform Consumer Credit Code or other applicable law. U.S. BANK CHECKING ACCOUNTADVANCE AGREEMENT Billing Rights:Information on your rights to dispute transactions and how to exercise those rights is provided in your account agreement. Checking Account Advance is an open-end line of credit provided by U.S. Bank. This document provides the general terms and conditions that apply to your U.S. Bank Checking Account Advance. Additional terms and disclosures may be provided to you separately, including the terms and conditions of your Associated Checking Account (defined below), which together with these terms and conditions form an agreement (“Checking Account Advance Agreement”) between you and us. In the event of a conflict between the terms and conditions of this Checking Account Advance Agreement and any terms and conditions of the Associated Checking Account, the terms and conditions Fees Advance Fee $2 for every $20 advanced 23 of this Checking Account Advance Agreement control. Please read these terms and disclosures carefully and contact us with any questions. By using the Checking Account Advance, you agree to the terms of this Checking Account Advance Agreement. DEFINITIONS In this Checking Account Advance Agreement, the words, “you” and “your” mean the borrower(s). If there is more than one, these words mean each borrower separately and all borrowers jointly. Your address, telephone number, and other identification information are as recorded in the Associated Checking Account records. You confirm that such checking account information is accurate, and you promise to keep it so. “We,” “us,” and “our” mean U.S. Bank. The “Associated Checking Account” is the consumer checking account to which the Checking Account Advance is attached, and into which you receive direct deposits that meet the eligibility criteria specified in this Checking Account Advance Agreement. “Advance” means each transaction in which you access credit from the Checking Account Advance. “Credit Limit” is the amount of credit available to you when using Checking Account Advance. ELIGIBILITY You will only be eligible to take an Advance from your Checking Account Advance if you meet the following eligibility criteria: •You must have a U.S. Bank deposit account that has been open during the past six months • The Associated Checking Account is an active U.S. Bank consumer checking account in good standing, not including the following: • Electronic Transfer Account (ETA), Limited Checking and U.S. Bank Asset Management Account • Accounts held by minors • Accounts titled as non-individual, such as trust, conservatorship/ guardianship, custodial and representative payee accounts (e.g. Social Security funds deposited to the benefit of another person) • The Associated Checking Account must have received at least one direct deposit of $100 or more in each of two consecutive statement cycles, one of which must have been received by us in the past 35 calendar days • The Associated Checking Account: • must not be subject to legal process, such as a garnishment or levy, and must not be included in a current bankruptcy proceeding • must not be in the charge-off process or in the Checking Account Repayment Plan After becoming eligible, your access to credit from Checking Account Advance may be restricted. If any of the following events occur, you may lose your ability to borrow funds using Checking Account Advance. • If you obtain an Advance in each of nine consecutive statement cycles, you will be ineligible for an advance for up to 90 days following the ninth month. • If your Associated Checking Account is continuously overdrawn for 5 consecutive business days or more, you will not be eligible for an Advance until the Associated Checking Account balance is brought to a zero or positive balance. • If the Associated Checking Account is overdrawn an excessive number of times, the ability to Advance may be restricted until total overdrafts are reduced. • If your available credit or requested advance are insufficient to bring your Associated Checking Account balance to at least a zero balance. • If you are a participant in the Checking Account Repayment Plan, and successfully complete the program, you will have a one statement cycle waiting period before becoming eligible for the Checking Account Advance. • If your Associated Checking Account is in continuous overdraft status for more than 13 consecutive days, you will be in default of this Agreement, and we may close the Checking Account Advance account. The amount of the outstanding Checking Account Advance balance and advance fees will be added to the overdraft balance that you will be obligated to pay. • You will not be eligible for Advances if you violate the terms of this Agreement. CHECKING ACCOUNTADVANCE ACCESS Checking Account Advance will become effective when you accept an Advance and terminate if you do not take an Advance for a period of 12 consecutive months. Use of Checking Account Advance constitutes your acknowledgement of having received a copy of this Agreement and acceptance of its terms. Access to Checking Account Advance is subject to the eligibility criteria provided in this Agreement and your compliance with the terms of this Agreement. For joint account holders, either account holder may access the Checking Account Advance service. If one or the other account holder wishes to make the account unavailable for the Checking Account Advance or to reinstate the service, they may visit a banker at any local U.S. Bank branch or call 24-Hour Banking at 1-800-USBanks (1-800-872-2657). ADVANCES Advances may be made in increments of $20, with a minimum advance amount of $20. If you have a negative available balance in your Associated Checking Account, your minimum advance will be the amount, rounded up to the nearest $20 increment, necessary to bring the available balance in your Associated Checking Account to zero. For example, if your checking account has a negative available balance of $53.75, your minimum advance amount will be $60 to remove the negative balance in your Associated Checking Account. You may request an Advance through online banking at usbank.com, 24-Hour Banking at 800-US Banks (800-872-2657), and at any U.S. Bank branch. Each Advance is deposited into your Associated Checking Account. If the Associated Checking Account has a negative available balance, the Advance will first be used to bring the available balance positive prior to any amount being available for withdrawal. You may request multiple Advances up to your Credit Limit. Each Advance requested under the Checking Account Advance is made subject to our discretion. CREDIT LIMIT Your Checking Account Advance Credit Limit is the lesser of $500 or half of the total direct deposits listed on your most recent Associated Checking Account statement rounded up to the next $20. This Credit Limit is subject to change with changes in your direct deposits and your Associated Checking Account status. We reserve the right, at any time, and upon notice when required by applicable law, to adjust this Credit Limit based on your use of the Checking Account Advance, management of funds in your Associated Checking Account and other factors, at the bank’s sole discretion. We reserve the right to review your credit status at any time, including obtaining credit reports and other credit information we believe to be relevant. We may modify or cancel your Credit Limit at any time based on this information. FEES A $2 fee will be assessed for each $20 that you advance through your Checking Account Advance service. Fees, including cycle to date fees paid and year to date fees paid, are displayed in the Checking Account Advance section of your associated checking account statement. PAYMENTS Payment Due Date.Each Advance and the related advance fee must be repaid within 35 days of the Advance. Method of Payment. There are three methods of payment of your outstanding balance, described below. Automatic Payment from Your Direct Deposits.Payments will be automatically deducted from your Associated Checking Account at the time a direct deposit of $100 or more is received in your Associated Checking Account, no sooner than one business day after an Advance is taken. We will apply only the amount of the direct deposit that results in an available balance greater than zero in the Associated Checking Account to your outstanding Checking Account Advance balance. The automatic payment from your direct deposit to the Checking Account Advance balance will be no greater than the direct deposit amount. You have authorized us to pay your Checking Account Advance balance automatically from your Associated Checking Account and you can stop the payment on any amount you think is wrong. To stop payment, your notice must reach us three business days before the automatic payment is scheduled to occur. Manual Payments. You may make a manual payment to your outstanding Checking Account Advance balance online through U.S. Bank’s retail internet banking, at any U.S. Bank branch, or by calling U.S. Bank’s 24-Hour Banking at 1-800-USBanks (1-800-872-2657). Making a manual payment will not decrease the cost of the advance fees for the Advances that you have made. Manual payments may be an option if the direct deposit is not large enough to pay off an Advance prior to the 35th day an Advance is outstanding or to avoid automatic payments from your Associated Checking Account at the payment due date. Automatic Payments of Outstanding Balances at the Due Date.If your outstanding Checking Account Advance balance is not fully repaid within 35 days, you authorize us to automatically deduct this amount, including any related advance fees, from your Associated Checking Account – even if this creates an overdraft position in your Associated Checking Account and it becomes subject to applicable fees under the terms of Your Deposit Account Agreement, such as per item and continuous overdraft fees, until paid. APPLICATION OF PAYMENT All Checking Account Advance payments will be applied first to any unpaid advance fees and then to the unpaid principal balance. If the funds from your payment - whether from direct deposit, manual payment, or automatic payment at the due date - are not sufficient to repay the entire Advance and related fees, then we will pay advance fees first, and then apply as much of the payment funds as available to the unpaid principal balance. STATEMENTS All Advances and their payment due dates, advance fees incurred, outstanding balances, payments and credits will appear on your Associated Checking Account monthly statement. YOUR BILLING RIGHTS. KEEPTHIS NOTICE FOR FUTURE USE. This notice contains important information about your rights and our responsibilities under the Fair Credit Billing Act. Notify Us In Case of Errors or Questions about Your Bill If you have a question or think there is an error concerning your Checking Account Advance, you should write to us as soon as possible at: U.S. Bank P.O. Box 1800 St. Paul, MN 55101-0800 24 We must hear from you within 60 days after we sent you the first statement with the information in question. You can telephone us, but doing so will not preserve your rights. In your letter, give us the following information: • Your name and account number. • The dollar amount of the suspected error. • Describe the error and explain why you believe there is an error. If you need more information, describe the item you are not sure about. Your Rights and Our Responsibilities After We Receive Your Written Notice We must acknowledge your letter within 30 days, unless we have corrected the error by then. Within 90 days, we must either correct the error or explain why we believe the bill was correct. After we receive your letter, we cannot try to collect any amount you question, or report you as delinquent. We can continue to bill you for the amount you question, including advance fees, and we can apply any unpaid amount against your credit limit. You do not have to pay any questioned amount while we are investigating, but you are still obligated to pay the parts of your bill that are not in question. If we find that we made a mistake on your bill, you will not have to pay any advance fees related to any questioned amount. If we didn't make a mistake, you may have to pay advance fees, and you will have to make up any missed payments on the questioned amount. In either case, we will send you a statement of the amount you owe and the date that it is due. If you fail to pay the amount that we think you owe, we may report you as delinquent. However, if our explanation does not satisfy you and you write to us within ten days telling us that you still refuse to pay, we must tell anyone we report you to that you have a question about your bill. And, we must tell you the name of anyone we reported you to. When the matter is resolved, we must tell anyone we report you to that it has been settled. If we don't follow these rules, we can't collect the first $50 of the questioned amount, even if your bill was correct. DEFAULTAND REMEDIES If your account is assigned to a branch in Wisconsin, you will be in default of this Checking Account Advance Agreement if you fail (1) to pay when due on 2 occasions within any 12-month period, or (2) to observe any other covenant of the Checking Account Advance Agreement, breach of which materially impairs the condition, value or protection of or our right in any collateral securing the Checking Account Advance Agreement, or materially impairs your ability to pay amounts due under the Checking Account Advance Agreement. If your account is assigned to a branch in any other state (not Wisconsin), you will be in default of this Checking Account Advance Agreement if you fail to meet the eligibility criteria specified in the ELIGIBILITY section of this Checking Account Advance Agreement or violate any terms of your Associated Checking Account agreement. In the event you default under this Checking Account Advance Agreement, we have the following rights and remedies in addition to any other rights and remedies we have by law. These rights are in addition to the actions we may take based on your failure to meet the eligibility requirements, including suspending your right to obtain Advances. Our rights are subject to any applicable notice and right to cure. If you are in default (and subject to any applicable notice requirement and right to cure) we may: • require you to pay the entire unpaid balance of principal and advance fees before the scheduled due date; • set off the debt against any account you have with us; • enforce our security interest, if applicable; • terminate or suspend your right to further Advances under this Checking Account Advance Agreement; and • pursue any other method permitted by law to collect a debt. CLOSED ACCOUNT PROCESS If you close your Associated Checking Account and there is an outstanding balance remaining on your Checking Account Advance line, we will automatically deduct this amount from your Associated Checking Account balance at closing. If this creates an overdraft position in the Associated Checking Account, you still remain responsible for paying back any outstanding amount due to us. CHANGE IN TERMS We reserve the right to change the terms of this Checking Account Advance Agreement at any time with notice to you. Such changes may apply to any outstanding Advances as well as to future advances. By continuing to use the Checking Account Advance service or keeping your checking account open, you are accepting the change in terms, or you may decline the change in terms by no longer using the Checking Account Advance service prior to the effective date of the change or by requesting that access to the service be discontinued. ALTERNATIVE FORMS OF CREDIT The Checking Account Advance is designed to fulfill a short-term funds need and not for use as a continuous source of funds for basic financial maintenance. Please contact us to discuss alternative credit services that may be less expensive and more suited to your individual financial needs. By requesting an Advance, you acknowledge and agree that you have had an opportunity to consider other credit products or services and understand the Checking Account Advance to be an appropriate service based on your needs. APPLICABLE LAW You understand that we are a national bank located in Ohio. The law that will apply to this Checking Account Advance Agreement as to issues related to interest and related charges will be the law of the State of Ohio. SECURITY INTERESTIN ASSOCIATED CHECKING ACCOUNT You grant to us a security interest in the Associated Checking Account to secure the payment of the Checking Account Advance obligation. This security interest is subordinate to any right of setoff we have against your Associated Checking Account. ADDITIONALPARTIES You cannot add a person to your Associated Checking Account with authority to make withdrawals unless that person agrees to assume responsibility for this Checking Account Advance Agreement, including any outstanding balance at that time, unless you pay off any balance and terminate this Checking Account Advance Agreement. FOR EXECUTIVE OFFICERS Notwithstanding any other provision of this Checking Account Advance Agreement, we have the option to terminate the Checking Account Advance and make the entire outstanding balance immediately due and payable if: •You are or become an executive officer of ours, and • Your indebtedness to any bank or number of banks, in the aggregate, exceeds the amount (in any regulated category) permitted to an executive officer under Federal law. "Federal law" includes regulations and interpretations of federal agencies. "Your indebtedness" includes any debts attributed to you by Federal law. COSTS OF COLLECTION If your account is assigned to a branch in Wisconsin, you agree to pay our statutory costs and attorneys’fees as specifically authorized by Wis. Stat. §422.413, and any other charges we incur as specifically authorized by Wis. Stat. Chaps. 421 to 427. This previous provision also shall apply if you file a petition or any other claim for relief under any bankruptcy rule or law of the United States, or if such petition or other claim for relief is filed against you by another. If your account is assigned to a branch in any other state (not Wisconsin), you agree to pay the costs we incur to collect this debt in the event of your default. In the event we have to collect this note through your bankruptcy, voluntary or otherwise, and without regard to your state of residence, these costs will include our reasonable attorney’s fees and other related collection costs to the extent allowed by applicable law, for an attorney who is not our salaried employee, in the bankruptcy proceedings. ARBITRATION This section does not apply to any dispute in which the amount in controversy is within the jurisdictional limits of, and is filed in, a small claims court. These arbitration provisions shall survive closure of your account or termination of all business with us. If any provision of this section is ruled invalid or unenforceable, this section shall be rendered null and void in its entirety. Arbitration Rules: If you or we elect to arbitrate a dispute concerning your account, the dispute will be decided by arbitration under the Commercial Arbitration Rules of the American Arbitration Association. If this arbitrator or these arbitration rules are not available, then you and we will use a comparable substitute arbitration procedure and/or arbitration organization that does business on a nationwide basis. You may obtain rules and forms by calling the AAA at 800-778- 7879. Any arbitration hearing that you attend will be in the federal judicial district where you reside. Arbitration Process: Arbitration involves the review and resolution of the dispute by a neutral party. The arbitrator’s decision will generally be final and binding. At your request, for claims made to consumer accounts, we will advance the first $250 of the filing and hearing fees for any claim you may file against us; the arbitrator will decide whether we or you will ultimately be responsible for those fees. Arbitration can only decide our or your dispute and cannot consolidate or join claims of other persons who may have similar claims. There will be no authority or right for any disputes to be arbitrated on a class action basis. Effects of Arbitration: If either of us chooses arbitration, neither of us will have the right to litigate the dispute in court or have a jury trial. In addition, you will not have the right to participate as a representative or member of any class of claimants pertaining to any dispute subject to arbitration. Notwithstanding the foregoing, any question as to the validity and effect of this class action waiver shall be decided solely by a court of competent jurisdiction, and not by the arbitrator. 25 The Guide to Checking Account Advance U.S. Bank is committed to providing you with timely information about our products and services that is direct, plain and simple to allow you to make informed financial decisions. As part of our commitment, we have created a Guide to Checking Account Advance to help you understand Checking Account Advance and determine if it is the right credit option for you. You may view the Guide online at usbank.com/caa. In addition, we provide examples, illustrations and frequently asked questions related to Checking Account Advance on-line at usbank.com/caa. Spousal notices: Wisconsin Residents Only: Married Borrower. The obligation evidenced by this note is incurred in the interests of your marriage or family. To borrowers whose accounts are assigned to a branch in Missouri specifically, and to all borrowers generally. Oral agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable. To protect you (borrower(s)) and us (creditor) from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it. 26©2013 Wolters Kluwer Financial Services – Bankers Systems™ Form USB-AIB 2/11/2013 Custom 3514499-020 U.S. Bank 24-Hour Banking Cincinnati Metro Area:(513) 632-4141 Denver Metro Area:(303) 585-8585 Milwaukee Metro Area:(414) 765-4636 St. Louis Metro Area:(314) 425-2000 Minneapolis/St. Paul Metro Area:(612) US BANKS (612) 872-2657 Portland Metro Area:(503) US BANKS (503) 872-2657 All Other Areas:800-US BANKS 800-872-2657 TDD:800-685-5065 ©2013, U.S. Bank NA, Minneapolis, MN 40341 U.S. Bank Fraud Liaison Center 877-595-6256 TDD: 800-685-5065 U.S. Bank Business Service Center: Monday - Saturday ...................................................................................................................................................................................................7:00 a.m. to 9:00 p.m. CST Minneapolis/St. Paul Metro Area................................................................................................................................................................................................(651) 244-7770 All Other Areas within the U.S......................................................................................................................................................................................................800-673-3555 TDD...............................................................................................................................................................................................................................................800-685-5065 Outside the United States...............................................................................................................................................................................................................503-401-9992 TM-1450 Master Agreement for Treasury Management Services Page 1 of 4 Revised 09-02-2010 MASTER AGREEMENT FOR TREASURY MANAGEMENT SERVICES The Service Documentation described below contains the terms under which Wells Fargo Bank, National Association (“Bank”) provides treasury management services (“Services”). The Bank customer to which the Services will be provided (“Company”) is identified in the Acceptance of Services (“Acceptance”). Bank and Company agree: 1. Service Documentation. The Service Documentation for each Service includes: 1.1. The Service Description. 1.2. The Acceptance. 1.3. This Master Agreement for Treasury Management Services (“Master Agreement”). 1.4. The account agreement for the deposit account(s) (each, an “Account”) that Company or Company’s affiliate or subsidiary maintains at Bank or Bank’s affiliate in connection with a Service. The account agreement includes the Dispute Resolution Program that Company and Bank agree to use to resolve any disagreements between Company and Bank regarding accounts and Services governed by the Service Documentation. 1.5. User Guides which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices. 1.6. The set-up form(s) for each Service. The Service Documentation also applies to a Service that is provided by an affiliate of Bank and a Service that is used by an affiliate or a subsidiary of Company. “Bank” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. If there is a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth above. Company acknowledges receiving a copy of the Service Documentation for each Service Bank provides to Company. 2. Services. Bank and Company will agree upon the Service(s) to be provided. 3. Changes to Services. Bank may change (or add to) the terms and fees in the Service Documentation at any time upon prior written notification to Company. If Company discontinues using the affected Service before the change becomes effective, it will not be bound by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change. 4. Term and Termination. Unless terminated sooner in accordance with the Service Documentation, this Master Agreement and all Services will continue in effect until terminated by either party upon thirty (30) days prior written notice to the other party (unless a Service is terminated sooner in accordance with the Service Documentation). Bank may terminate any Service (a) following notice to Company of a breach of any provision of the Service Documentation and Company’s failure to cure the breach within fifteen (15) days of the date of TM-1450 Master Agreement for Treasury Management Services Page 2 of 4 Revised 09-02-2010 such notice, or (b) without notice to Company if (i) Company is subject to a petition under the U. S. Bankruptcy Code or (ii) Bank determines in its sole discretion that a material adverse change has occurred in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect Company’s or Bank’s rights with respect to transactions occurring before termination. Bank will not be liable to Company for any losses or damages Company may incur as a result of any termination of any Service. 5. Service Fees. Company will pay Bank the fees described in the Service Documentation and any taxes applicable to each Service however designated exclusive of taxes based on Bank’s net income. Bank may debit Company’s account(s) with Bank for any fees not covered by earnings credits and any taxes that are due, or it may send an invoice to Company for such amounts, which Company shall promptly pay. Bank may assess finance charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted under applicable law (determined in accordance with section 8.1), whichever is less, on any invoiced fees or taxes not paid within thirty (30) days of the due date and will apply payments and other reductions of amounts owed first to unpaid interest and then to other fees and charges. 6. Confidential Information. Unless otherwise provided in the Service Documentation, all User Guides and software constitute Bank’s or its vendor's confidential information ("Confidential Information"), and Company will not acquire any ownership interest in or rights to Confidential Information as a result of Company’s use of any Service. Company will (a) maintain the confidentiality of the Confidential Information; (b) not disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise make any of it available to any person or entity, other than Company’s employees who have a need to use the Confidential Information in connection with the applicable Service; and (c) not decompile, reverse engineer, disassemble, modify, or create derivative works of any Confidential Information. Company will notify Bank immediately if it knows or suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information. If Company (or its employees or agents) is responsible for the Unauthorized Use, Company will, at its expense, promptly take all actions, including without limitation initiating court proceedings to recover possession and prevent further Unauthorized Use of the Confidential Information and obtain redress for any injury caused to Bank as a result of such Unauthorized Use. 7. Liability and Indemnification. 7.1. Bank will perform each Service in accordance with reasonable commercial standards applicable to Bank’s business; laws, regulations and operating circulars governing the activities of Bank; applicable funds transfer system(s) and clearinghouse rules; and the Service Documentation. 7.2. Bank is under no obligation to honor, in whole or in part, any entry, file, batch release, transfer instruction, payment order, transaction or instruction that (a) exceeds the available balance in the Account, unless otherwise provided in the Service Documentation; b) is not in accordance with the Service Documentation or Bank’s applicable policies, procedures or practices as made available to Company; c) Bank has reason to believe may not have been duly authorized, should not be honored for its or Company’s protection, or involves funds subject to a hold, dispute, restriction or legal process; or d) would possibly result in Bank violating any applicable rule or regulation of any federal or state regulatory authority including without limitation any Federal Reserve guidelines such as the limitations on Bank’s intra-day net funds position. 7.3. All uses of Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”) will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party to (a) TM-1450 Master Agreement for Treasury Management Services Page 3 of 4 Revised 09-02-2010 use the Services, (b) access Company’s electronic communications and financial data, and (c) send or receive information and communications to Bank. Company assumes the entire risk of unauthorized use of Codes and unencrypted electronic transmissions. 7.4. Neither Bank nor any software vendor makes any express or implied representations or warranties with respect to the Services or any software used in connection with the Services including without limitation any warranty as to the merchantability or fitness for a particular purpose, other than those expressly set forth in the Service Documentation. 7.5. Company will promptly furnish written proof of loss to Bank and notify Bank if it becomes aware of any third party claim related to a Service. Company will cooperate fully (and at its own expense) with Bank in recovering a loss. If Company is reimbursed by or on behalf of Bank, Bank or its designee will be subrogated to all rights of Company. 7.6. Any claim, action or proceeding against Bank for losses or damages arising from a Service, including Bank’s honoring or dishonoring a check covered by a Service, must be brought within one (1) year from the date of the act or omission or in the case of a check from the date the check was first paid or returned by Bank. 7.7. Bank will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond Bank’s reasonable control. If Bank determines that any funds transfer or communications network, Internet service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable for use by Bank or Company, Bank may, upon notice to Company, suspend or discontinue the affected Service. 7.8. Except in the case of Bank’s negligence or intentional misconduct, Company will indemnify and hold Bank, its directors, officers, employees and agents harmless from all losses or damages that arise out of (a) the performance of a Service in accordance with the Service Documentation including without limitation any warranty Bank is required to make to a third party in connection with a Service; (b) an act or omission of any agent, courier or authorized representative of Company; and (c) if the Service includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining access to the software through Company that is inconsistent with the license or sublicense. 7.9. Bank will only be liable to Company for Company’s direct monetary losses due to Bank’s negligence or intentional misconduct. Except in the case of Bank’s gross negligence or intentional misconduct, Bank’s liability to Company will be limited to an amount not to exceed ten (10) times Bank fees incurred during the calendar month immediately preceding the calendar month in which such loss or damages were incurred (or, if no Bank fees were incurred in such month, Bank fees incurred in the month in which the losses or damages were incurred). Except as expressly provided otherwise in the Service Documentation, neither party to this Master Agreement will be liable to the other party for any special, consequential, incidental (including without limitation court costs and attorneys’ fees), indirect, or punitive losses or damages, whether any claim is based on contract or tort, or whether the likelihood of such losses or damages was known to the other party and regardless of the form of the claim or action. TM-1450 Master Agreement for Treasury Management Services Page 4 of 4 Revised 09-02-2010 © 2010 Wells Fargo Bank, N.A. All rights reserved. 8. Miscellaneous. 8.1. The Service Documentation will be governed by substantive federal laws, regulations and rules and, to the extent such laws, regulations and rules are not applicable, those of the state in which the office of Bank that maintains the Account is located, without regard to conflicts of laws principles. Any portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and applied in a manner consistent therewith, and Bank will incur no liability to Company as a result of the inconsistency or modification and application. If any portion of the Service Documentation is deemed unenforceable, it will not affect the enforceability of the remaining Service Documentation. 8.2. The Service Documentation is the entire agreement between Bank and Company and supersedes all prior representations, conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion. 8.3. Company will provide Bank promptly upon Bank’s request any existing financial statements or other information pertaining to Company’s financial condition or any previously unprepared financial statements which Bank may require Company to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to Bank. 8.4. Company warrants it will not use any Service in a manner which violates any federal or state law including without limitation any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration. 8.5. If Company employs an agent in connection with its use of any Service, Company represents and warrants to Bank that (a) Company’s governing body has duly authorized the agent and (b) Company will exercise appropriate controls to ensure each agent so authorized does not exceed the authority so granted to it. Any communication to Bank regarding Company’s use of a Service from Company’s agent will be deemed to be a communication from Company, and Company authorizes Bank to communicate with Company’s agent regarding any such communication or Service. 8.6. Either party may provide notice to the other party by mail, personal delivery, or electronic transmission. Bank will use the most recent address for Company in Bank’s records, and any notice from Bank will be effective when sent. Company will use the address where Company’s relationship manager or other manager is located and address any notice to the attention of such manager. Any notice from Company will be effective when actually received by Bank. Bank will be entitled to rely on any notice from Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated in the Service Documentation, will have no obligation to verify the signature (including an electronic signature). Each party will have a reasonable time after receipt of any notice to act on it. 8.7. Sections 1, 4, 5, 6, 7, and 8 will survive termination of this Master Agreement. Government & Institutional Banking Government Banking, NorthWest Division 333 Market Street, 15th floor MAC A0109-152 San Francisco, CA 94105 Wells Fargo Bank, N.A. May 19, 2014 City of Palo Alto Purchasing and Contract Administration 250 Hamilton Avenue, Mail Stop MB Palo Alto, CA 94301 Contract Administration: Enclosed please find the Pricing List for the Lockbox Services in response to the RFP 151491. The Pricing List enclosed shall remain in effect for a 6-year fixed term from date of contract. Thank you for your business and continued partnership with Wells Fargo Bank. We look forward to continue to service the city and will strive to meet or exceed your expectations with regard to product and customer service. Sincerely, Mary Lou Lopez Vice President (415) 371-2964 Wells Fargo Treasury Management Pricing City of Palo Alto Pricing as of May 2014 AFP Code Service Description GENERAL ACCOUNT SERVICES Charge Basis Price 22051 010000 ACCOUNT MAINTENANCE-CHEXSTOR Account 7.00000 34222 05031Z LOCKBOX SERVICES LOCKBOX CEO SUBSCRIPTION PER ITEM Item accessed 0.25000 48200 050020 WTLBX MONTHLY BASE Lockbox 65.00000 48205 050401 WTLBX TRANSMISSION MONTHLY BASE Transmission 65.00000 48220 050122 WTLBX TOTAL PAYMENTS PROCESSED Bond/coupon 0.13000 48307 059999 WTLBX STD ITEM PROCESSED NON SCAN Remittance 0.30000 48221 050122 WTLBX SCANNABLES MULTIS Bond/coupon 0.10000 48222 050002 WTLBX SCANNABLES PARTIAL PAYS Bond/coupon 0.02000 48320 059999 WTLBX REMIT PROC FOREIGN CHECKS Check 5.00000 48336 059999 WTLBX REMIT PROCESSED CASH Transaction 5.00000 48241 059999 WTLBX REMIT PROCESSED EXPR MAIL Transaction 2.00000 48236 050127 WTLBX MICR DATA CAPTURE Transaction 0.02000 48317 059999 WTLBX MICR CAP PER LINE NON SCAN Transaction 0.02000 48244 050530 WTLBX CORRESPONDENCE / REJECTS Envelope 0.25000 48234 050101 WTLBX DOCUMENT SCANNED Image produced 0.03000 48326 059999 WTLBX DOCUMENT SCANNED - NON SCAN Image 0.05000 48249 050424 WTLBX 7 YEAR B/W IMAGE ARCHIVE Image 0.01000 48318 059999 WTLBX VALUE ADDED KEYING - NON SCAN Keystroke 0.01000 48340 050410 WTLBX FIRST CLASS POSTAGE PKG $ pass through 2.00000 48230 050301 WTLBX DAILY DEPOSIT CUT Deposit 1.00000 48257 050899 WTLBX MARK SENSE/ADDRESS CHANGE Bond/coupon 0.06000 CEOLS 050000 LOCKBOX CEO SUBSCRIPTION MTHLY BASE Account 120.00000 311 100220 DEPOSITORY SERVICES WHOLESALE LBX CHECKS DEPOSITED Check deposited 0.05000 Setup Charges 48271 050801 WHTL LOCKBOX SET UP FEE Lockbox Waived 48240 050137 WTLBX PROGRAMMING CHARGES Hour 125.00000 48258 050002 WTLBX PO BOX RENTAL/ANNUAL Lockbox *225 *Once a Year - Direct Bill Optional 36707 050500 WLBX ONLINE DECISION MONTHLY BASE Lockbox 50.00000 36713 050500 WLBX ONLINE DEC EXCEPTIONS POST Occurrence 0.10000 36714 050500 WLBX ONLINE DECISION ITEMS REJECT Reject 0.10000 Customer Price Report Authorization Certificate Depository Accounts and Treasury Management Services ___________________________________ 1 Facsimile Signature/Logo and/or Electronic Signature. Customer authorizes the use of facsimile signatures/logos and/or electronic signatures in connection with its agreements with, and instructions to, Bank if such is provided for on this form. Customer agrees that Bank will have no liability for accepting any agreements or instructions of Customer that bears signatures resembling Customer's facsimile signatures/logos and/or electronic signatures. Customer will provide a sample of any such signature/logo to Bank. Authorization Certificate - Non-Personal Accounts (Revised 12/17/2013) Page 1 of 2 The undersigned hereby certifies that he or she is the duly appointed authorized representative of CITY OF PALO ALTO (Account holder's complete legal entity/company name), a MUNICIPALITY (description of Account holder's business entity type) ("Customer"), with authority to act on behalf of Customer, and that the following are true and correct resolutions duly adopted by Customer, in accordance with its formation and governing documents, and that these resolutions have not been in any way altered, amended or rescinded, and are now in full force and effect: The undersigned further certifies that any one of the following named persons, whose signatures are set forth opposite their names (and titles, if applicable): Add more rows Remove Name Title (if applicable) Signature or Facsimile Signature 1 #1 X #2 X #3 X #4 X #5 X #6 X is individually authorized to, and to designate one or more other Customer officers, agents or employees (each such aforementioned person, officer or designee thereof is referred to herein as an "Authorized Representative") to: (a) open or close one or more deposit and/or securities accounts (the "Accounts") with Wells Fargo Bank, National Association ("Bank"); (b) execute and deliver in Customer's name such agreement(s) regarding the Accounts and the services related thereto as Bank may from time to time require; (c) authorize and execute transactions on the Accounts, including, without limitation, (i) signing checks and other instruments withdrawing funds from the Accounts, including those payable to cash or to persons who sign them, (ii) requesting funds transfers by Bank to and from the Accounts, (iii) entering into arrangements for the processing of automated clearing house (“ACH”) debit entries and/or ACH credit entries to and from the Accounts, and (iv) endorsing on behalf of Customer, and otherwise negotiating, checks and other items payable to Customer; (d) incur overdrafts and other obligations in the Accounts at Bank in connection with any of the products, services, or activities authorized by these resolutions; and (e) invest Customer's funds on such terms and conditions as such Authorized Representative deems appropriate. Customer is authorized to enter into any other arrangements, agreements and documents with respect to any of Bank's deposit and treasury management products and services, in such form and on such terms and conditions as may be agreed to by a Authorized Representative signing such agreements and documents. Customer shall be bound to Bank by, and Bank may rely upon, any communication or act, including telephone communications, purporting to be done by any partner, employee or agent of Customer provided that Bank believes, in good faith, that the same is done by a person authorized to so act. The authority hereby conferred is in addition to that conferred by any other certificate heretofore or hereafter delivered to Bank and shall continue in full force and effect until Bank shall have received notice in writing from Customer of the revocation hereof. Any such revocation shall be effective only as to actions which are taken by Customer pursuant to the certifications contained herein, subsequent to Bank's receipt of such notice. The authority hereby conferred shall be deemed retroactive, and any and all acts authorized herein which were performed prior to the execution of this certificate are hereby approved and ratified. Page 2 of 2 © 2013 Wells Fargo Bank, N.A., All rights reserved. Authorization Certificate - Non-Personal Accounts (Revised 12/17/2013) The undersigned further certify that the activities covered by the foregoing certifications constitute duly authorized activities of Customer; that said certifications are now in full force and effect; and that there is no provision in any document pursuant to which Customer is organized and/ or which governs Customer's continued existence limiting the power of the undersigned to make the certifications set forth herein, and that the same are in conformity with the provisions of all such documents. ____________________________________________________ ACKNOWLEDGED & AGREED TO: By/Signature: Printed Name: (this individual must be a duly appointed representative of the TIN of record) Title (if applicable): Date: Tax Identification Number of Customer:946000389 (TIN of the Account holder as assigned by the IRS) Submit Edits Treasury Management Product Enrollment Customer Information Customer Name CITY OF PALO ALTO CEO Company ID CITYO751 Street Address 250 HAMILTON AVE City PALO ALTO State CA Zip 94301 Country Name Country Code (if applicable) Primary Contact TARUN NARAYAN Phone (650) 329-2362 Email Address Tarun.Narayan@CityofPaloAlto.org Fax Acceptance of Services Each person signing in the signature block at the end of this form certifies that: the customer identified in the signature block ("Customer" or "Company") has received and agrees to be bound by the Service Documentation for the Treasury Management Services (each, a "Service") in which Customer is enrolling as of the date of this form. "Service Documentation" is defined in Wells Fargo Bank, N.A.'s ("Bank") Master Agreement for Treasury Management Services. Customer has granted the person(s) signing the signature block the authority on Customer's behalf to (i) enter into this and other agreements with Bank for Services on or after the Effective Date of this form and (ii) amend, terminate or otherwise act on behalf of Customer with respect to this form and the Services. Customer's use of any Service, including each Service Customer enrolls in after the Effective Date of this form, confirms Customer's receipt of and agreement to be bound by the Service Documentation relating to that Service. "Customer" may also be referred to as "Company" in the Service Documentation. Customer Entity Name(s)City of Palo Alto TIN(s)946000389 Customer Approval - (Authorized Signature Required) Each person signing this form on the Customer’s behalf is authorized to do so by agreement or other legally sufficient action, or is listed as a Company Administrator on the Commercial Electronic Office® (CEO®) portal, or is an Authorized Signer on the Customer’s account. Printed Name of Authorized Signer Phone Signature Date INTERNAL BANK USE ONLY Bank Approval Printed Name of Relationship Manager/Authorized Approver Mary Lou Lopez Phone (415) 371-2964 Relationship Manager/Authorized Approver Signature*Date *By signing this document you are approving and acknowledging this individual is authorized to make these changes on behalf of this company. Voice Wire Only - Submitter Information & Instructions Submitter Name NA Submitter Phone Submitter E-mail Submitter Fax NOTE: If Voice Wire is a component of this form, once the customer approves and signs the form, the Banker/Relationship Manager must approve and sign the form, then fax it to Wire Implementation at 866-922-6202 from a valid Wells Fargo Fax. File copies in your location’s record-retention file. Submit Edits TM-1527 Wholesale Lockbox Service Description Page 1 of 8 Revised 10-17-11 WHOLESALE LOCKBOX SERVICE DESCRIPTION 1. Introduction.This Service Description is part of the applicable documentation (“Service Documentation”) governing the Wells Fargo Bank, N.A. (“Bank”) Wholesale Lockbox service (“Service”). For treasury management relationships governed by Bank’s Master Agreement for Treasury Management Services, the Service Documentation includes the Acceptance of Services, and “Company” is the company identified in the Acceptance of Services. For treasury management relationships governed by Bank’s Deposit Agreement and Disclosures for Commercial Accounts, the Service Documentation includes the related Depository Authorization & Agreement Certificate and/or Signature Card, as applicable (each an “Authorization Certificate”), and “Company” is the company identified in the Authorization Certificate. As used in this Service Description, the term “Master Agreement” refers to either Bank’s Master Agreement for Treasury Management Services or Bank’s Deposit Agreement and Disclosures for Commercial Accounts, as applicable. 2. Scope of Service. The Service covers the processing of (i) checks and other instruments submitted in payment of obligations to Company (“Remittances” or “Checks”) and (ii) written authorizations to charge payments due Company to the payors’ credit cards (“Charge Authorizations”). However, processing of Charge Authorizations is not available at all processing sites. To the extent Company is not using the Service to process Charge Authorizations, the references to Charge Authorizations throughout this Service Description will not apply to Company. 3. Commencement of Service.The Service will start on the date separately agreed to by Bank and Company if the following events have occurred before such date: 3.1.The United States Postal Service has assigned the Lockbox (as defined in Section 4 below) to Company with the number and at the address specified by Bank to Company; 3.2.The Account (as defined in Section 6 below) has been opened and is in good standing; 3.3.Company has designated to Bank in writing the processing options selected by Company for the Service; and 3.4.Company has provided to Bank such other information and documents as Bank requests to enable Bank to commence and operate the Service for Company and to enable Bank to comply with its other obligations under this Service Description. 4. Lockbox.Company will direct its customers to mail Remittances and (if applicable) Charge Authorizations to the post office box identified in Company’s Lockbox Service Set-up Form, or otherwise identified in writing to Company by Bank (the “Lockbox”). Bank (including any subcontractor of Bank) will have exclusive access to the Lockbox. Bank will give appropriate instructions concerning the Lockbox to the United States Post Office where the Lockbox is located. 5. Processing Lockbox Mail.Each Business Day (a day on which Bank is open to conduct its regular banking business, other than a Saturday, Sunday or public holiday), Bank or its subcontractor will pick up at, and transport from, the Lockbox to the processing site or sites designated by Bank (each a “Processing Site”) the Remittances and Charge Authorizations TM-1527 Wholesale Lockbox Service Description Page 2 of 8 Revised 10-17-11 addressed to the Lockbox. Except as otherwise specifically provided in this Service Description, Bank or its subcontractor will open the Remittances and Charge Authorizations and process them in accordance with the lockbox processing procedures set forth in this Section 5 (the “Processing Procedures”). Company agrees to instruct its customers and other obligors not to send cash to the Lockbox. 5.1. Disposition of Remittances, Charge Authorizations, and Remittance Materials. On each day Bank offers the Service, Bank will collect from the Lockbox the envelopes and other contents of the Lockbox. Bank will open the envelopes and determine whether they contain any Charge Authorizations, Remittances, remittance statements, invoices, correspondence, cash, papers, documents, or other items. Unless otherwise requested by Company and agreed to by Bank, if cash is sent with any remittance materials the cash will be removed from the envelope containing the remittance materials and a credit advice of the amount of the cash will be placed in such envelope with the remainder of the envelope's contents. Except as otherwise specifically provided in these Processing Procedures or elsewhere in this Service Description, or as specifically requested by Company and agreed to by Bank, Bank will not reconcile the Remittances, Charge Authorizations, cash or other items in the envelopes to invoices, to remittance statements, or to any other documents or papers in the envelopes or elsewhere. Bank will process any Remittances, Charge Authorizations and any cash in the envelopes as provided in these Processing Procedures. 5.2. Document Identification, Imaging, and Data Capture. Bank or its subcontractor will, if requested (i) print an audit trail idenfication number on each of the checks it processes, (ii) image all Remittances, Charge Authorizations, remittance stubs and correspondence included among the remittance materials. 5.3. Checks Not to Be Deposited.Unless otherwise requested by Company and agreed to by Bank, Bank will not deposit Checks falling into any of the following four categories, or Checks which Company has specifically instructed Bank in writing not to deposit. 5.3.1. Unacceptable Payees.Checks on which the name or designation of the payee is not the name or designation specified by Company to Bank for acceptable payees or a reasonable variation (in Bank’s opinion) of such name or designation. 5.3.2. Postdated and Staledated Checks.Checks which are postdated three or more days after the date they are collected from the Lockbox, postdated Checks that in Bank’s opinion would not be paid on presentation, and Checks dated six (6) months or more prior to the date they are collected from the Lockbox. 5.3.3. Indeterminable Amount.Checks on which the correct amount of the Check cannot be determined from the Check and the documents accompanying the Check, or Checks on which the numerical and written amounts are not the same and the envelope containing the Check did not contain an invoice or a Remittance statement (or, if such were included, the amount of the invoice or Remittance statement did not match either the numerical or written amount on the Check). 5.3.4. Alterations.Checks with alterations; provided, however, that Bank will only use reasonable efforts to catch such alterations and prevent deposits. As a result, Bank will have no liability whatsoever, despite anything to the contrary in TM-1527 Wholesale Lockbox Service Description Page 3 of 8 Revised 10-17-11 the Lockbox Agreement, for its deposit of any Check containing an alteration, unless the deposit results directly from the willful misconduct of Bank’s officers or employees. 5.4. Checks to Be Deposited.Unless Company specifies otherwise in writing to Bank, Checks which do not fall into one of the four categories listed in Section 5.3 above will be deposited in the Account as provided in Section 5.7 below, and Checks falling into either of the following two categories will be deposited in the Account after being processed as provided below, unless they also fall into one of the four categories listed in Section 5.3 above, in which case they will not be deposited. 5.4.1. Discrepancies in Amount.Checks on which the numerical and written amounts are not the same, in which case the amount deposited will be that amount which corresponds to the amount on the invoice or Remittance statement enclosed in the envelope with the check. If the numerical and written amounts on any Check are the same, but do not correspond to the amount on the invoice or Remittance statement enclosed in the envelope with the Check, the Check amount will be deposited. 5.4.2. Missing Date.Checks which are not dated, in which case the Check will be deposited after being dated by Bank as of the date it is collected from the Lockbox. 5.5 Foreign Checks. If Company so desires, Bank will deposit and process certain Checks drawn on a foreign bank or payable in a currency other than United States Dollars, so long as the both the country in which the foreign bank is located and the currency in which the Check is payable currently appear on that certain list, announced by Bank from time to time, of foreign bank locations and currencies for which Bank is willing to process Checks. Foreign Checks not meeting these criteria will not be deposited. 5.6. Restrictive Notations.Bank will not inspect checks to determine whether they bear restrictive notations, such as “Paid in Full”. Bank will have no liability whatsoever, despite anything to the contrary in this Service Description, for depositing or otherwise handling any check bearing a restrictive notation in accordance with these Processing Procedures, regardless of whether Bank has knowledge of such restrictive notation. 5.7. Deposits of Checks and Cash.During each Business Day, Bank will make deposits of the acceptable Checks and cash received in the Lockbox by crediting the Account for the amount of such Checks and cash. Checks and cash received and processed on any day which is not a Business Day will be deposited to the Account on the next succeeding Business Day. Except as otherwise specifically provided in this Service Description, the normal and customary laws, rules, practices and procedures for handling deposits to checking accounts will apply to these Processing Procedures and the Service. 5.8. Changes in Names or Designations of Payees. Company may at any time upon ten (10) calendar days advance notice to Bank request that a name or designation on Company’s list of payees sent to Bank be deleted or added, and Bank will add or delete the name or designation if the request is acceptable to Bank. 5.9. Eligibility Requirements for Processing Charge Authorizations.In order to be eligible for processing by Bank, a Charge Authorization received in the Lockbox must contain the name of the account debtor, the account debtor’s credit card number, the TM-1527 Wholesale Lockbox Service Description Page 4 of 8 Revised 10-17-11 expiration date, the three digit security code, and the amount of the payment authorized, all of which must be written or imprinted on the authorization form in a reasonably legible manner. If any one of these items of information is missing from a Charge Authorization, or is, in the sole judgement of Bank or its subcontractor, not sufficiently legible for processing purposes, the Charge Authorization will not be processed, and will be forwarded to Company as set forth below. 5.10. Processing Charge Authorizations for Approval. Bank will proceed to process for approval each Charge Authorization received in the Lockbox which contains the information required in Section 5.9 above and is otherwise eligible for processing. Bank will seek approval from the issuer of the applicable credit card for the payment transaction set forth on the Charge Authorization. Bank will submit for settlement each Charge Authorization approved in this manner. 5.11. Settlement Report for Charge Authorizations. Following processing of Charge Authorizations for approval, Bank will segregate those Charge Authorizations which are approved from those Charge Authorizations which are declined. Bank will generate a settlement report for all approved Charge Authorizations and will make it available to Company in the manner mutually agreed upon during implementation of the Service. 5.12. Imaging. Bank or its subcontractor will electronically image checks, Charge Authorizations, remittance statements and correspondence received in the Lockbox. Company acknowledges and agrees that the images are not works made for hire and are the property of Bank and not of Company. 5.13. Truncation of Remittance Materials. Company understands that any original remittance statements, invoices, coupons, correspondence and other remittance materials that are imaged by Bank pursuant to this Service Description will be destroyed by Bank five (5) calendar days after they are imaged. Therefore, Company must notify Bank of any issues which require inspection of original remittance materials prior to expiration of such five (5) day period. 5.14. Transmission of Information from Processed Remittances and Charge Authorizations.Each Business Day that Bank offers the Service, Bank will electronically transmit to Company, in accordance with the transmission method and file format agreed upon between Bank and Company, information from processed Remittances and Charge Authorizations, including credit card transaction data, and each settlement report applicable to approved Charge Authorizations. 5.15. Mailing Undeposited Checks and Unimaged Remittance Materials to Company. Unless otherwise specified by Company in writing to Bank, Bank will mail to Company, in accordance with the terms of this Service Description, (i) any remittance statements, invoices, correspondence, papers, and other documents enclosed in each envelope sent to the Lockbox which are not imaged in accordance with this Service Description, and (ii) any Checks enclosed in such an envelope which are not deposited in accordance with these Processing Procedures. 5.16. Nil Report. On any Business Day when Bank collects no cash or Checks from the Lockbox, Bank will send Company a statement to that effect if Company so requests. 6. Account.Company will maintain a deposit account with Bank, which Company will designate in the Lockbox Service Set-up Form or otherwise in writing, to which Bank or its subcontractor will (i) deposit Remittances received through the Lockbox, and (ii) credit amounts attributable to settlement of Charge Authorizations received through the Lockbox, throughout the term of TM-1527 Wholesale Lockbox Service Description Page 5 of 8 Revised 10-17-11 the Service (the “Account”). Company understands that this Service Description covers the lockbox service to be provided by Bank and, except as specifically provided in this Service Description, does not cover the handling of the Account or the processing of checks drawn on the Account. Except as otherwise specifically provided in this Service Description, the Account will be handled and checks drawn on the Account will be processed by Bank as Bank would perform such responsibilities with respect to any other demand deposit account at Bank. As a result, the Account will be subject to, and Bank’s operation of the Account will be in accordance with, the terms and provisions of Bank’s deposit account agreement governing the Account (the “Account Agreement”), a copy of which Company acknowledges having received. 7. Deposits and Confirmations.Company authorizes Bank to endorse Remittances received at the Lockbox, and to deposit them into the Account as provided in the Processing Procedures. If any payee of a Remittance received in the Lockbox is a legal entity other than Company, Company represents and warrants to Bank that Company has the proper authorization from the payee to have the Remittance endorsed for deposit, and deposited, into the Account, and Company agrees to indemnify Bank against any losses, liabilities, damages, claims, demands, obligations, actions, suits, judgments, penalties, costs or expenses, including, but not limited to, attorneys' fees (collectively, "Losses and Liabilities") suffered or incurred by Bank as a result of, or in connection with, Company’s failure to have proper authorization. Company also authorizes Bank to process and settle Charge Authorizations received at the Lockbox, and to cause the amounts received on account of settlements of such Charge Authorizations to be credited to the Account as provided in the Processing Procedures. Bank will provide to Company an advice of deposits and other credits made to the Account. Company agrees to notify Bank’s customer service center, whose address and telephone number is available upon request from Bank, (i) of any error in an advice of deposit within fourteen (14) calendar days after Company receives such advice of deposit and (ii) of any error in a bank statement, or of any failure of a bank statement to show a deposit that should have been made during the period covered by the statement, within thirty (30) calendar days after Company receives such bank statement. The liability of Bank for such errors is limited as provided in Section 17 of this Service Description. 8. Access to Lockbox Images.The Service will allow Company to enter a website hosted by Bank or its subcontractor (the “Website”) for the purpose of accessing archival images of Charge Authorizations, Remittances and other remittance materials processed through the Lockbox, and giving Bank or its subcontractor certain types of instructions with regard to the processing of such remittance materials. Company agrees to use the Website only in accordance with this Service Description and any notices and information posted on the Website (collectively, the “Website Use Documentation”). Persons entering the Website for Company (the "Users") must also accept any “terms of use” for the Website which appear on the Website when a User initially logs on. 9. Security Procedures. 9.1.Bank or its subcontractor will provide each User with a multi-factor authentication compliant access method (which may consist of a combination of user names, passwords, passphrases, digital certificates and/or tokens) to be used whenever the User enters the Website. 9.2.It is Company’s responsibility to ensure that any user names, passwords, passphrases, digital certificates and tokens provided in connection with use of the Website (collectively, “Security Devices”) are known to, and used only by, persons who have been properly authorized by Company to access the Website and use the Service through the Website. TM-1527 Wholesale Lockbox Service Description Page 6 of 8 Revised 10-17-11 9.3.FAILURE TO PROTECT SECURITY DEVICES MAY ALLOW AN UNAUTHORIZED PARTY TO (1) USE THE SERVICE, (2) CORRECT, CHANGE, VERIFY, OR SEND DATA USED WITH THE SERVICE, (3) SEND INFORMATION AND COMMUNICA- TIONS TO, OR RECEIVE INFORMATION AND COMMUNICATIONS FROM, BANK OR (4) ACCESS COMPANY’S ELECTRONIC COMMUNICATIONS AND FINANCIAL DATA. ALL ENTRIES INTO THE WEBSITE, ALL COMMUNICATIONS SENT, AND ALL USES OF THE SERVICES, THROUGH COMPANY’S SECURITY DEVICES WILL BE DEEMED TO BE ENTRIES, USES, AND COMMUNICATIONS AUTHORIZED BY COMPANY AND SHALL BE BINDING UPON COMPANY. COMPANY ASSUMES THE ENTIRE RISK FOR THE FRAUDULENT OR UNAUTHORIZED USE OF ALL SECURITY DEVICES. Company acknowledges the importance of developing internal procedures to limit such risk, which procedures will include, at a minimum, (a) notifying Bank immediately when any new person becomes a User or when any existing User stops being a User, (b) disabling access to the Website immediately for each User who stops being a User, and (c) not keeping, in any form or in any place, lists of Security Devices. 9.4.Company agrees to notify Bank immediately when Company becomes aware of any loss or theft of, or any unauthorized use of, any Security Device. Company also agrees to notify Bank immediately when Company becomes aware of any unauthorized entry into the Website. 10. Use of Certain Software to Access the Website.In using the Website, Company will be sending financial and other data as well as electronic messages directly to Bank or Bank’s subcontractor through the Internet. Company acknowledges that when the Internet, or other electronic communications facilities, are used to transmit or receive data and messages, the data and the messages may be accessed by unauthorized third parties. To reduce the likelihood of such third party access, Company agrees to transmit and receive data and messages through the Website using only software, including, but not limited to, browser software, or other access devices that support the Secure Socket Layer (SSL) protocol or other protocols required by, or acceptable to, Bank, and to follow the log-on procedures established by Bank or its subcontractor that support such protocols. 11. Restricting or Terminating Access to the Website.In addition to, and not in substitution for, any provision in this Service Description or the other Service Documentation, Company understands and agrees neither Bank nor its subcontractor will in any way be obligated to permit Users access to the Service through the Website if (a) such use or access is inconsistent with any term or condition applicable to the Service or the Website or to the information to be accessed, (b) such use or access is not permitted by applicable state or federal law or regulation, (c) Bank has reasonable cause to believe that such use or access may not be authorized by Company or any third person whose authorization Bank believes is necessary for such use or access, or (d) Bank has reasonable cause to deny such use or access for Company’s protection or the protection of Bank or Bank’s subcontractor. If the Service cannot be used through the Website, Bank will make reasonable efforts for the Service to be used by other means. Neither Bank nor its subcontractor shall have any liability to Company for any losses or damages Company may suffer or incur as a result of any such termination. 12. Intra-Day Image Access. Company understands that any images which it accesses on an intra-day basis may not be final, and are subject to further value-added keying. Therefore, Company expressly assumes all risk associated with Company’s use of such intra-day images. TM-1527 Wholesale Lockbox Service Description Page 7 of 8 Revised 10-17-11 13. Decisioning Module.If Bank’s decisioning module is available to Company, and Company elects to use it in connection with the Service, Company will be able to send instructions through the Website to Bank or its subcontractor as to how to process certain Remittances or Charge Authorizations which Bank classifies as either “processable suspend” or “unprocessable” (collectively, the “Unprocessable Items”). Company will have several options for instructions, as agreed upon in advance by Bank and Company. Such options may include one or more of the following: (i) apply the Unprocessable Item to a specific customer account, (ii) apply the Unprocessable Item to Company’s suspense account, (iii) reject the Unprocessable Item and have it placed in Company’s reject package, or (iv) direct Bank to issue a letter of pre-arranged content to the remitter of the Unprocessable Item. Each message related to the processing of an Unprocessable Item (a “Decisioning Instruction”) must be received by Bank or its subcontractor by the cutoff time for deposit or processing of such item which Bank and Company have mutually agreed upon during implementation of the Service. If no Decisioning Instruction is received by the specified deadline, the Unprocessable Item will be handled in accordance with the Processing Procedures or any other standing instructions applicable such items. Bank will have no liability or responsibility whatsoever for any keying errors, Company system issues, or misapplied payments resulting from Company’s Decisioning Instructions. 14. Customer Service.Any questions or problems that Company has with respect to the Service should be addressed to Bank’s customer service center at the telephone number and address separately disclosed to Company. 15. Claims, Legal Progress and Notices. If Bank receives any claim, notice, legal process or court order relating to the Charge Authorizations, the Remittances, the Lockbox or the Account, Bank will comply with it if Bank determines in its sole discretion that the legal process, legal notice or court order is legally binding on it. 16. Indemnification. Company agrees to indemnify Bank and its officers, directors, employees, agents and subcontractors (collectively, “Indemnified Parties”) and hold each of the Indemnified Parties harmless from and against any and all losses, liabilities, claims, damages, demands, obligations, actions, suits, judgments, penalties, costs or expenses, including, but not limited to, attorneys’ fees (collectively, “Losses and Liabilities”) which any one or more of the Indemnified Parties suffers or incurs in relation to (i) the processing of Charge Authorizations, (ii) any keying errors, Company system issues, or misapplied payments resulting from Company’s Decisioning Instructions, or (iii) any action taken by Bank or its subcontractor in response to a Decisioning Instruction, except to the extent that any such Losses and Liabilities are directly caused by Bank’s gross negligence or willful misconduct. 17. Limitation of Liability.Company understands and agrees that, absent manifest evidence of fraud, Bank is entitled to assume that each Charge Authorization received at the Lockbox is legitimate and duly authorized by the account debtor purporting on its face to give the Charge Authorization, and Bank will have no liability for processing such Authorization in accordance with the Processing Procedures. In addition to the other limitations on Bank’s liability contained in the Master Agreement, if Company incurs a material loss which results directly from Bank’s or its subcontractor’s negligence or breach in performing the Service and (i) if such negligence or breach is a failure to deposit any check which should have been deposited or to process any Charge Authorization which should have been processed, pursuant to this Service Description, the liability of Bank and its subcontractor shall be limited to direct money damages in an amount not to exceed interest on the amount of the check or the amount of the payment authorized under the Charge Authorization at a rate equal to the cost of funds (at a reserve adjusted daily interest rate which Bank will determine in good faith) for the time period such amount is not in the Account, which time period for the purpose of calculating the interest will not extend beyond the end of the thirty (30) calendar day notice period referred to in TM-1527 Wholesale Lockbox Service Description Page 8 of 8 Revised 10-17-11 Section 7 of this Service Description, and (ii) if such negligence or breach results from any other action or failure to act by Bank or its subcontractor, the liability of Bank and its subcontractor shall, unless otherwise provided by any law which cannot be varied by contract, be limited to direct money damages in an amount not to exceed the lesser of (A) three (3) times all the Service Fees charged or incurred in relation to the Service during the calendar month immediately preceding the calendar month in which the loss occurred (or, if no such fees were charged or incurred in the preceding month, such fees charged or incurred in the month in which the loss occurred), or (B) Two Hundred Thousand Dollars ($200,000.00). 18. Termination.Upon termination of the Service, Bank will (i) close the Lockbox, and (ii) dispose of the mail addressed to the Lockbox in the manner instructed by Company for a period of three (3) months after the termination date, unless arranged otherwise between Company and Bank, with Service Fees with respect to such disposition based on Bank’s estimate being prepaid directly to Bank at the time of such termination in immediately available funds or by another payment method acceptable to Bank in its sole discretion. 19. Assignment.Notwithstanding anything to the contrary in the Agreement, the rights and obligations of Bank with respect to the Service shall be assignable to any successor in interest without restriction. 20. Instructions.Bank is authorized to act on any instructions received by Bank if (i) such instructions purport to be made in the name of Company, (ii) Bank reasonably believes that they are so made, and (iii) they do not conflict with the terms of this Service Description, including, but not limited to, the Processing Procedures, as such terms may be amended from time to time, unless the conflicting instructions are supported by a court order. 21. Authorized Persons.Any person identified by Company in the Lockbox Service Set-up Form or any certification, notice or other communication delivered to Bank may receive information, communications and notices regarding the Service, and is authorized to transact all business, make all agreements and sign and deliver all documents in connection with the Service. If the identity of such a person changes Company will promptly notify Bank in writing. Bank will have a reasonable time after receipt of a certification, notice or other communication to act on it. 22. Software, Hardware and Backup Requirements.Upon notice from Bank of a failure of any software, hardware or other equipment necessary for Bank to perform in accordance with this Service Description, Company will as soon as reasonably possible deliver to Bank all data in Company’s possession or under its control which Bank reasonably requests in order for Bank to continue to provide the Service. 23. Survival. Sections 7, 9, 11, 12, 16, 17 and 23 of this Service Description will survive termination of the Service. 24. Terminology.As used in this Service Description and in the Master Agreement as applied to this Service, “negligence” will mean a material failure to use that degree of care that would be used under the same or similar circumstances by a national banking association having substantially the same volume and type of lockbox activity and approximately the same number, size and diversity of lockbox customers. TM 1527 Wh l l Lkb S i D iti © 2010 Wells Fargo Bank, N.A. All rights reserved. CONFIDENTIAL 03/2014 1 COMMERCIAL PAYMENTS MASTER SERVICES AGREEMENT THIS COMMERCE BANK COMMERCIAL PAYMENTS MASTER SERVICES AGREEMENT (“Master Services Agreement” or “Agreement”) is made and entered into as of the Effective Date by and between Commerce Bank, a Missouri bank and trust company (“Commerce”) and City of Palo Alto, California (“Customer”). For purposes of this Agreement, Commerce and Customer may sometimes be referred to herein individually as a “Party” and collectively as the “Parties.” 1. DEFINITIONS. As used in this Agreement, the following terms have the definitions ascribed to them and include the plural as well as the singular: 1.1 “Administrator” means, individually and collectively, one or more employees and/or a third party provider of Customer who are designated by Customer to assist Commerce in the administration of the Service(s). 1.2 “Charges” has the meaning provided in Section 10 and set forth in the Pricing Addendum attached to this Agreement 1.3 “Customer” means Customer and any of its officers, directors, employees and agents who utilize the Services. 1.4 “Customer Account” means one or more commercial bank accounts established and maintained by Customer wherein Customer authorizes Commerce to debit by means of an automated clearing house (ACH) transaction to facilitate Vendor Payments/Charges or credit monthly revenue share payments. 1.5 “Disbursement Account” means an account maintained and owned by Commerce and will be used by Commerce to disburse Payments on behalf of Customer for non-credit transactions pursuant to a Payment Instruction and related Documentation. 1.6 “Document” or “Documentation” means the documentation given to Customer by Commerce to enable Customer to access and use the Service(s) including, but not limited to, electronic or printed versions of the Customer Responsibilities Manual, User Guides, instructions, policies, procedures, specifications, product standards and guidelines. 1.7 “Effective Date” shall be defined as set forth in Section 19. 1.8 “Indemnification Law” means any law (including, without limitation, any statute, regulation, ordinance, rule or any budget law or case law) applicable to Customer (whether federal, state, local or otherwise) that has the effect of limiting or restricting Customer‟s power, right or authority to undertake, or make payment pursuant to, any obligation to contractually indemnify third parties. 1.9 “Invoices” means a statement received from a Vendor requesting payment or providing credit for goods or services received by or on behalf of Customer. 1.10 “Losses” means the aggregate of (a) any liability, loss, claim, settlement payment, cost, expense, interest, award, judgment, damages, diminution in value, fines, fees, penalties or other charges for which indemnification may be sought hereunder and (b) any court filing or other fees or costs, investigative costs, attorney‟s fees and costs, witness and professional fees and any other fee and cost associated with the successful assertion of a claim for indemnification hereunder. 1.11 “Master Services Agreement” or “Agreement” means the Commerce Bank Commercial Payments Master Services Agreement and all Addenda from time to time executed by the parties and attached hereto, and all amendments to the foregoing. 1.12 “Payment” means the settlement of a Payment Instruction by Commerce using funds from the Disbursement Account and/or through a line of credit at Commerce. The term “Payment” as used in this Agreement does not imply that Vendor has taken the funds, only that Payment has been made available to Vendor using the payment method elected by Customer. CONFIDENTIAL 03/2014 2 1.13 “Payment Instruction” means a Customer initiated and approved file request for Payment to Customer‟s Vendor(s) initiated through Commerce‟s systems. 1.14 “Program” means the Commercial Payments Program administered by Commerce as set forth in this Agreement. 1.15 “Public Record Law” means any state‟s law which provides that Customer‟s contracts are open and available to the public. 1.16 “Services” shall have the meaning as described in Section 2 and as further defined in the Service Agreement(s). 1.17 “Service Agreement” means the agreement(s) attached hereto and incorporated herein, in which Customer elects the Service(s) offered under the Program. 1.18 “Vendor” means any entity or person that has entered into a contract with Customer pursuant to which such entity provides goods or services to or on behalf of Customer. 2. INTRODUCTION. Commerce shall perform or provide to Customer the Services identified in the applicable Service Agreement(s) in accordance with this Master Services Agreement, the applicable Service Agreement(s), Customer Responsibilities Manual and User Guides, as well as any other documents or materials that are made a part thereof, or are incorporated therein by reference, or are generally available to the users of the Services. The Documentation may be modified from time to time by Commerce and/or Commerce‟s third party providers in their sole discretion and without prior notice to Customer. If applicable, this Master Services Agreement shall supersede and replace any other Commerce Bank Commercial Card Agreement, ActiveFunds Agreement or ControlPay/EIPP Buyer Participation Agreement previously entered into by Customer and shall be the controlling document that governs all Services, Service Agreements and related Documentation whether existing at the time this Master Services Agreement is executed or entered into at a future date by Customer. Commerce may utilize outside service providers and agents in the performance of all or any of the Services. Except as otherwise provided, if the terms of any Documents conflict with this Master Services Agreement, the conflict shall be resolved in the following order of control: (1) Master Services Agreement; (2) Service Agreement; (3) Customer Responsibilities Manual or User Guides; (4) Other documents or materials made available to users of same or similar Services. 3. SERVICES; INVOICES AND DATA; SET-UP. 3.1 Use of the Services. The Services will be used by Customer, if Customer so elects, to capture and process invoices and/or make Payments to Vendors through various payment methods, all in accordance with this Master Services Agreement, the Service Agreements and the then-current Documentation. Customer agrees that it will review and comply with the relevant provisions of the Documentation, as the same may be amended from time to time. 3.2 Customer‟s Vendor Invoices and Data. Customer shall provide Commerce with a sample copy of all current Vendor Invoices or an automated Excel data file containing the required Vendor information, which may vary depending on payment type, for all Vendors to facilitate Commerce‟s creation of the initial Vendor profile. Commerce will also provide Customer with standard data exchange formats and transmission protocols, along with requirements and testing processes. If any of these requirements are not met, Commerce shall no longer be bound to provide the Services elected by Customer or shall be authorized to deliver (as a complete and finished work product) whatever portion of the Services that can reasonably be performed under the circumstances. 3.3 Set-Up and On-Boarding. Customer acknowledges that Commerce is relying upon Customer to perform industry standard screening on the Vendors paid using this Program. Customer represents that each Vendor to whom it will send payment is an established Vendor or has been independently verified by Customer. Commerce and Customer will cooperate to establish the authorized Vendors for payment, the payment terms of such Vendors and any other requested Vendor information. Customer will provide Commerce with all such identifying information regarding its Vendors as Commerce may deem to be required, to enable Commerce to fulfill its legal and regulatory obligations with respect to each Vendor that Customer intends to pay through the Program. Commerce makes no representation or warranties concerning the accuracy or completeness of any Vendor information supplied by Customer or the validity or accuracy of any Payment Instruction. Customer assumes full responsibility for maintaining appropriate back-up documentation CONFIDENTIAL 03/2014 3 as may be required from time to time to reconstruct or audit any Payment. Commerce shall have no responsibilities or obligations to Customer based on the actions or inactions of the Vendors with respect to Customer. 4. PROGRAM ADMINISTRATOR. Promptly after the Effective Date of this Agreement, Customer shall designate one or more Administrator(s) to assist Commerce in the administration of the Services. Customer must execute and deliver proper documentation authorizing said Administrator to act for and on behalf of Customer. Customer shall be responsible for all transactions initiated or authorized by the Administrator. Customer agrees that Commerce will not be liable for losses arising from or as a result of the negligence or willful misconduct of Customer‟s Administrator, including but not limited to Administrator‟s failure to properly enter and/or transmit Payment Instruction. If Customer permits any person or entity other than the documented Administrator to perform any duty or responsibility of the Administrator, Customer shall be deemed to have authorized that person to act as an Administrator and perform duties of an Administrator. In addition to any other duties listed elsewhere in this Agreement, as well as any other duties reasonably requested by Commerce, the Administrator shall undertake the following duties on behalf of Customer: (i) the Administrator shall have the responsibilities assigned in the Program Administrator Delegation document provided by Customer to Commerce; (ii) the Administrator shall familiarize themselves with the basic functionality of the Service(s), including but not limited to, Payment Instruction processing and approval, Payment log status and posted transactions examination, and Payment settlement procedures; and (iii) the Administrator shall act as the primary point of contact between Customer and Commerce. 5. ELECTION OF INTERNET SYSTEMS. The Parties acknowledge that they intend to establish procedures for the transmission of information and data over the Internet in connection with Customer‟s access and use of the Services. Customer understands and accepts the risks inherent in the use of the Internet, including the potential for the risk of loss. Customer acknowledges that data transmitted over the Internet, in secure formats or otherwise, may be intercepted by third parties and that data sent over the Internet is not guaranteed to arrive, be on-time or be accurate and that missing, delayed or incorrect data may result in errors in processing and paying Payment Instructions and may present other problems for Customer‟s business. Commerce shall not be liable to Customer based on or arising out of the failure of any data transmitted over the Internet to arrive in a timely manner (or at all) or be complete and accurate or for any acts by third persons who wrongfully intercept such data. Customer shall be responsible for any costs associated with making its internal systems compatible with the system(s) used to provide the Service(s), if any. Use of the Internet with any system will require a user name and password. Customer acknowledges that Commerce is entitled to rely on the use of the user name and password as authorization for any transaction initiated using the Internet. Customer is responsible for all transactions initiated or authorized using the Internet with any system. The password Customer selects is for its use and protection. Customer agrees to: (a) not disclose the password or otherwise make it available to anyone else; (b) use the password as instructed; (c) be liable for the password and for its use, as described in the Service Agreement(s) and/or other Documentation. 6. PAYMENTS. Customer will utilize the selected Internet system to process a Payment Instruction. Customer will submit Payment Instructions following the procedures described in the Documentation, as amended from time to time. The Payment Instruction will include, but not be limited to, Vendor information and specific dollar amounts to be paid to each Vendor. 6.1 Non-Credit Transactions. Customer shall authorize Commerce to debit its designated Customer Account for all amounts included in each Payment Instruction received by the cut off time as stated in the Customer Responsibilities Manual. Commerce shall place said funds in one or more Disbursement Accounts, depending on payment type, for the settlement of Customer‟s non-credit transactions and shall hold the funds for two (2) business days after receipt for verification. Thereafter once the funds have been verified, during the next two business days, Commerce will process each payment type and inform Customer‟s Vendors when Payment will be available. A Payment Instruction will not result in a Payment unless and until there are sufficient verified funds available in the Disbursement Account to make that Payment. Customer acknowledges that funds delivered to the Disbursement Account are irrevocable. Unless otherwise agreed upon in writing, Commerce does not have any binding obligation to extend any credit accommodations to Customer. 6.2 Credit Transactions. Credit transactions, if any, shall be handled as described in the applicable Service Agreement and related Documentation. CONFIDENTIAL 03/2014 4 6.3 Sole Responsibility. Customer shall be solely responsible for determining the accuracy, validity and approval of all Payment Instructions. Customer agrees that if Customer or its Administrator approves a Payment Instruction, Customer is irrevocably obligated to fund said Payment in respect of such Payment Instruction. Commerce shall not be responsible for and shall be held harmless by Customer from and against any Losses arising out of or relating to any delay in making or failure to make any Payment to any Vendor by reason of (i) the failure or delay of Customer or the Vendor to remit any required Vendor information; (ii) any instructions by Customer to withhold Payment from that Vendor; (iii) any failure by Customer to timely approve any Payment Instruction or timely provide funding in respect of any Payment Instruction; (iv) the inaccuracy or incompleteness of any Vendor information or instructions provided by Customer or Vendor; or (v) if applicable, lack of funds in Customer‟s Account. Commerce’s sole responsibility hereunder shall be the receipt and processing Payment Instructions and the remittance of Payments on behalf of Customer pursuant to instructions issued by Customer in accordance with this Agreement. 6.4 Authorization. Customer authorizes Commerce to make Payments in accordance with Customer‟s Payment Instructions. Commerce is entitled to conclusively rely on the Payment Instructions given by Customer‟s Administrator, even if such instructions are incorrect. Customer further acknowledges and agrees that once a Payment Instruction has been delivered to Commerce, Customer acknowledges and agrees that a Payment Instruction cannot be reversed. 7. CUSTOM SERVICES. Customer may from time to time request that Commerce provide it with custom development, reporting or other services. All such requests for services shall be evidenced by a statement of work executed by Customer and Commerce. Customer agrees to pay to Commerce all fees associated with such custom services. 8. FINANCIAL STATEMENTS. From time to time, Commerce may request and Customer shall produce financial records relating to the financial condition of Customer. Customer shall produce such records not later than thirty (30) days following such request. Customer shall, upon reasonable request by Commerce, send its annual audit to Commerce within 30 days of its completion by Customer‟s auditor. 9. TITLE & OWNERSHIP OF INTELLECTUAL PROPERTY. Commerce and/or the relevant Commerce third party providers or agents shall retain title and ownership to all software code utilized by Customer in connection with the terms of this Agreement, including all rights to patents, copyrights, trademarks and trade secrets. No rights in or to any such intellectual property shall accrue to Customer. Customer agrees not to sell, transfer, publish, disclose, display or otherwise make available to others any of the software code, documentation or other materials relating to the software and agrees to use said software according to the provisions contained in any license agreement between Customer and the system provider. Customer may not modify, reverse engineer or decompile any of such Intellectual Property nor make any derivative works thereof. The terms of this Section shall survive any termination or expiration of this Agreement. 10. CHARGES. Customer shall pay to Commerce all fees, charges and other amounts due to Commerce incurred in the use of the Services and pursuant to this Master Services Agreement, Service Agreements and Pricing Addendum or any other addenda at any time attached hereto or incorporated herein by reference (collectively, “Charges”). All Charges due Commerce shall be electronically billed monthly and debited from the Customer Account. Customer hereby expressly authorizes Commerce to provide Services elected in the Service Agreement(s), to credit or unilaterally debit, from time to time, to or against Customer‟s Account, any Charges owed to Customer by Commerce, or payable by Customer to Commerce, and Customer agrees to deposit and maintain in its Customer Account sufficient sums to cover any Charges to be made by Commerce. From time to time Commerce may request and Customer shall provide documentation to verify Customer‟s Account. Furthermore, in the event of any errors, Commerce may charge or credit Customer‟s Account therefore, without notice. Failure to comply with this Section may result in immediate termination of this Agreement. Customer agrees that Commerce may deduct any and all Charges due under this Agreement, or a portion thereof, from Customer‟s earned monthly revenue share payment, if any, each month. If (i) Customer no longer receives revenue share payments; or (ii) Customer elects not to deduct the Charges from its monthly revenue share payment(s); or (iii) Customer‟s monthly revenue share payment is insufficient to cover the Charges which Commerce has billed, Customer CONFIDENTIAL 03/2014 5 promises to pay the balance of the Charges which remain unpaid. All Charges, less any credits due from Commerce to Customer, shall be indicated on each applicable billing statement. Commerce will review the fees described in the Pricing Addendum on an annual basis from the Effective Date. If an increase is required, Commerce agrees to provide Customer ninety (90) days prior written notice of a fee increase. An increase, if any, will not exceed three percent (3%) of the then current fee. 11. DISPUTES. All disputes and claims concerning a Vendor‟s performance or non-performance of their obligations shall be resolved between Customer and the relevant Vendor. Commerce shall have no liability or responsibility to mediate or resolve any such dispute or claim and Commerce makes no representations or warranties regarding the acceptability of any party‟s performance of its obligations. Customer‟s beliefs that it is due a credit or other compensation from a Vendor or other dispute with Vendor shall not affect Customer‟s irrevocable obligations to fund a Payment in respect to a Payment Instructions and pay all Charges associated with each Service. 12. INDEMNITY. 12.1 Customer Obligation. To the extent permitted under the Indemnification Laws, Customer agrees to defend, indemnify and hold harmless Commerce and its officers, directors, agents and employees from and against any and all claims by third parties (including, without limitation, Customer‟s Vendors or its Administrators) and all costs (including reasonable attorneys‟ fees), expenses and liabilities incurred by Commerce in connection with such claims, arising from or as a result of the establishment and use of the Services, provided that such claims are not the result of or connected with the gross negligence or willful misconduct of Commerce or the violation by Commerce of any law or regulation relating to the Services. Customer acknowledges that the pricing provided in Addendum A is based on including this indemnification. 12.2 Commerce Obligation. Commerce agrees to defend, indemnify and hold harmless Customer and its officers, directors, agents and employees from and against any and all claims by third parties (including reasonable attorneys‟ fees), expenses and liabilities incurred by Customer in connection with such claims, arising from or as a result of the gross negligence or willful misconduct of Commerce, provided that such claims are not the result of, or connected with, the gross negligence, or willful misconduct of Customer or the violation by Customer of any law or regulation relating to the Services. 12.3 Limitation of Commerce Obligation. In no event shall the amount of Commerce‟s obligation under Section 12.2 exceed the maximum amount that Customer would be legally permitted, under the Indemnification Laws in effect as of the date of the event giving rise to such obligation of Commerce, to pay or contractually incur (whichever amount is lower) under Section 12.1 as of such date. 13. TERM AND TERMINATION. 13.1 Term. This Agreement shall remain in full force and effect beginning on the Effective Date through December 31, 2020, unless terminated by either party as herein set forth. Either party may terminate this Agreement at any time, with or without cause, upon sixty (60) days' prior written notice. 13.2 Termination. Notwithstanding the foregoing, Commerce or Customer shall have the right to terminate this Agreement immediately and without notice, upon the occurrence of any one or more of the following events: (i) Dissolution or liquidation of the other Party; or (ii) Insolvency of the other Party; or the institution by or against the other Party of any bankruptcy or insolvency proceeding; or the appointment of a receiver or trustee for the other Party; or the other Party enters into an arrangement with, or for the benefit of, its creditors; or (iii) Any material adverse change in the financial condition of the other Party; or (iv) Any default hereunder, or breach of the obligations undertaken herein, or in any other agreement by and between the Parties hereto; or (v) Upon the occurrence of any event in any agreement which would allow Commerce to declare any indebtedness owing by Customer due and payable in full; or (vi) A change in the ownership of Customer, or a sale of all or substantially all of Customer‟s assets; or (vii) If either Party is hereafter prohibited by law from performing or contracting for the Services. Commerce will not be responsible or liable in any manner for any Losses incurred by Customer in respect of any breach of contract which may arise out of any termination of this Agreement pursuant to this Section. CONFIDENTIAL 03/2014 6 14. DISCLAIMER AND LIMITATION OF LIABILITY. COMMERCE DOES NOT MAKE OR GIVE, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES, REPRESENTATIONS OR CONDITIONS, BOTH EXPRESSED OR IMPLIED, ARISING BY STATUTE OR OTHERWISE IN LAW, OR FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY, REPRESENTATION OR CONDITION OF MERCHANTABLITY, MERCHANTABLE QUALITY OR FITNESS FOR ANY PURPOSE, PARTICULAR, SPECIFIC OR OTHERWISE OR ANY WARRANTY OF TITLE OR NON- INFRINGEMENT, FOR ANY OF THE PRODUCTS, PROCESSING, SERVICES, PROGRAMS, SPECIFICATIONS, STANDARDS, SOFTWARE, HARDWARE OR FIRMWARE CREATED, SUPPLIED, REQUIRED, LICENSED OR APPROVED BY COMMERCE OR REFERENCED IN THIS AGREEMENT. OTHER THAN THE RIGHT TO INDEMNIFICATION SET FORTH IN SECTION 12 OF THIS AGREEMENT, CUSTOMER SHALL, AND HEREBY DOES, WAIVE AND RELEASE COMMERCE, AND ALL OF THEIR RESPECTIVE REPRESENTATIVES FROM ANY CLAIM OR LIABILITY RELATED TO THIS AGREEMENT AND CUSTOMER‟S ACCESS TO AND USE OF THE SERVICES (INCLUDING ANY CLAIMS OR LIABILITIES RELATED TO DEFECTS, ERRORS, MALFUNCTIONS OR INADEQUACIES OF THE DOCUMENTATION). TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, CUSTOMER HEREBY ACKNOWLEGES AND AGREES THAT NEITHER COMMERCE NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES BASED ON BREACH OF CONTRACT, BREACH OF WARRANTY, TORT, STRICT LIABILITY OR OTHER LEGAL THEORY, EVEN IF ANY OF SUCH PERSONS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 15. NOTICE AND COMMUNICATION. All notices hereunder shall be in writing and shall be deemed duly given when personally delivered, when delivered by recognized overnight courier, or three (3) days after mailing if sent by certified or registered United States mail, return receipt requested, postage prepaid, to the appropriate Party at the address set forth below, or at such other address as the applicable Party may indicate from time to time in writing. Notice hereunder shall be sent: Commerce: Customer: Commerce Bank City of Palo Alto, California Attn: Commercial Products Attn: Tarun A. Narayan, Sr. Management Analyst 811 Main Street, KCCOMPROD 250 Hamilton Ave., 4th Floor Kansas City, Missouri 64105 Palo Alto, CA 94301 16. ELECTRONIC RECORDS. Customer agrees that this document and all paper records related to the transaction with which this document is a part and whether or not the paper records were submitted in advance of, contemporaneously with or subsequent to, the execution of this document may, at the option of the Commerce, be converted by any digital or electronic method or process to an electronic record or subsequently further converted or migrated to another electronic record format or electronic storage medium. Customer further agrees that upon conversion to an electronic record as authorized herein such electronic record shall be the record of the transaction and the electronic record shall have the same legal force and effect as the paper documents from which it was converted. Customer waives any legal requirement that any documents digitally or electronically converted be embodied, stored, or reproduced in a tangible media. Customer further agrees that a printed or digitally reproduced copy of the electronic record shall be given the same legal force and effect as a signed writing. In addition, Customer authorizes and agrees to destruction of the paper documents by Commerce upon conversion of the paper documents to a digital or electronic record. 17. CONFIDENTIALITY. Commerce and Customer will keep strictly confidential and will not use or disclose to any third party or to any employee, officer, director or agent (except on a need to know basis) for any purpose whatsoever (other than as contemplated herein or for a business evaluation of the Program performed by either party) all or any portion of the contents of the Program, including but not limited to, any of the terms of, conditions of or other facts CONFIDENTIAL 03/2014 7 concerning the Services, pricing, materials, processes and any written or oral information furnished by Commerce or by Customer which is either nonpublic, confidential or proprietary in nature unless such use or disclosure is lawfully permitted or is mutually agreed upon in writing by Customer and Commerce; provided, however, Customer understands and acknowledges that affiliates of Commerce and vendors of Commerce will assist in the implementation and maintenance of, and provision of various services under, the Program, therefore Customer authorizes Commerce to share any information that it obtains from Customer with its affiliates and vendors if needed to perform periodical financial, operational and regulatory reviews and audits. Information may also be shared with any regulators having jurisdiction over Commerce or its affiliates. In the event Customer is subject to a Public Record Law, Customer shall comply with the provisions of this Confidentiality paragraph only to the extent that such compliance is in accordance with the applicable Public Record Law. 18. MISCELLANEOUS PROVISIONS. 18.1 Compliance with Applicable Laws and Regulations. Customer acknowledges that Commerce is a regulated financial institution and that Customer must provide any information and records regarding its Vendors, Customer‟s identity, business, and operations, and other matters that may be requested from time to time by Commerce in order to enable it to perform periodic financial, operational and regulatory reviews and to comply with any applicable laws or regulatory requirements, including but not limited to the USA Patriot Act and The Office of Foreign Assets and Control (OFAC). In addition, Customer acknowledges that all transactions initiated through the Program are subject to possible limitations under applicable laws and regulations, including the rules issued by OFAC, and that no Payments which violate any such laws and regulations can be made using the Services. In addition, Customer covenants to comply with any mandatory state or local laws applicable to Customer relating to this Agreement, including without limitation, any laws relating to appropriations or budgets. 18.2 Taxes. Customer acknowledges and agrees that Commerce: (i) is not responsible for calculating VAT, retail sales, withholding or other taxes associated with a Payment Instruction; and (ii) is not responsible for collecting or reporting taxes owed to any party or authority associated with a Payment Instruction. As between Commerce and Customer, Customer shall calculate and pay all taxes, duties, levies, tariffs or similar charges of any kind (including withholding or value added taxes) imposed by any federal, state, local or other governmental entity with respect to any Payment Instructions processed under this Agreement for goods or services provided to Customer. Customer shall hold Commerce harmless from any and all Losses arising from any failure by Customer or any Vendor to collect or pay any such taxes, duties, levies, tariffs or similar charges. 18.3 No Implied Waivers. The rights of any party under any provision of this Agreement shall not be affected by its prior failure to require the performance by the other party under such provision or any other provision of this Agreement, nor shall the waiver by any party of a breach of any provision hereof constitute a waiver of any succeeding breach of the same or any other provision or constitute a waiver of the provision itself. A waiver of any right or obligation hereunder must be in writing and signed by the parties to this Agreement. 18.4 Remedies. In the event that either party breaches or violates any of the obligations contained in this Agreement, and in addition to the rights and remedies otherwise provided in this Agreement, the other party shall be entitled to exercise any right or remedy available to it either at law or in equity, including without limitation, termination of this Agreement, damages and injunctive relief. The exercise of any right or remedy shall be cumulative. 18.5 Complete Agreement; Amendments. This Agreement constitutes the complete understanding between Customer and Commerce with respect to the subject matter hereof and all prior oral or written communications and agreements with respect thereto are superseded. No alteration, amendment or modification of any of the terms and conditions of this Agreement shall be valid unless made pursuant to any instrument in writing signed by both Parties. 18.6 Authority. The execution and delivery of this Agreement by Customer and the performance hereof by Customer have been duly authorized by all necessary corporate action on the part of Customer. Customer shall provide to Commerce, as Commerce may request from time to time, such documentation relating to Customer‟s authority to contract for the Services. 18.7 Binding Agreement; Benefit. The Documents shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, permitted successors and permitted assigns. Except as agreed to in writing by the parties, this Agreement, as well as any applicable Service Agreement shall not be deemed to be entered into for the CONFIDENTIAL 03/2014 8 benefit of any other person, third party beneficiary or entity, and no other person, third-party beneficiary or entity shall have the right against Commerce or Customer under this Agreement or any part thereof. 18.8 Assignment. Neither party shall sell, assign or transfer this Agreement or any part thereof without the prior written consent of the other party; provided, however, Commerce may, without the consent of Customer assign any or all of its rights and obligations under this Agreement to its parent, any subsidiary (of Commerce or its parent), or any affiliate (of Commerce or its parent) or to any other party pursuant to a merger, acquisition, consolidation, reorganization, or a sale of all or any portion of its assets. 18.9 Force Majeure. Commerce shall not be in default of this Agreement to the extent that performance of its obligations is delayed or prevented by reason of any act of God, war, terrorism, fire, explosion, flood, act of government or any act or omission of a third party, including, but not limited to, telecommunications carriers and utilities or any other matter beyond its reasonable control. 18.10 Severability. The invalidity or unenforceability of any one or more portions, sentences, clauses or paragraphs in this Agreement shall not affect the validity or enforceability of the remaining portions of this Agreement or any part thereof. 18.11 Independent Contractors. Customer and Commerce acknowledge and agree that they intend to create an independent contractor relationship between them under this Agreement. Accordingly, Customer and Commerce agree that: (i) nothing contained in this Agreement will be construed to make either Customer or Commerce, an agent of the other; (ii) neither Customer nor Commerce shall have any authority under this Agreement to bind, obligate, or otherwise commit the other to any other agreement or transaction for any purpose whatsoever; and (iii) this Agreement does not create or evidence any partnership, joint venture, franchise, or other business organization between the Customer and Commerce. 18.12 Press Releases and Publicity. Neither Party will use other Party‟s name in press releases, product brochures and annual reports indicating that the Parties are doing business with each other without the prior written approval by the other Party before release; provided, however, Commerce may use Customer‟s name, Customer-provided logo, and general industry/business description in Commerce‟s customer listings and in its sales presentations without obtaining Customer‟s prior consent. 18.13 Headings and Language. Headings are inserted for convenience of reference only and do not constitute part of this Agreement. 18.14 Survival: Notwithstanding anything to the contrary herein, Sections 3, 5, 6, 9, 10, 11, 12, 14, 15, 16, 17 and 18 shall survive the termination of this Agreement. 19. EFFECTIVE DATE. Notwithstanding anything else contained herein to the contrary, this Agreement will be subject to Commerce performing due diligence and credit investigations and will be effective only upon execution by Commerce as of the date shown below (the “Effective Date”). IN WITNESS WHEREOF, this Master Services Agreement has been executed by the duly authorized officers of the parties hereto. Dated this ______ day of _____________, 20__ by: Commerce Bank City of Palo Alto, California By: ____________________________________ Printed Name: ____________________________ By: ____________________________________ Printed Name: ____________________________ Title: _____________________________________ Title: _____________________________________ CONFIDENTIAL 03/2014 9 PRICING ADDENDUM – PROCESS & PAY This Pricing Addendum to the Commercial Payments Master Services Agreement (the ““Pricing Addendum”), by and between Commerce Bank, (“Commerce”) and the City of Palo Alto, California (“Customer”) is made and entered into as of the Effective Date of the Master Services Agreement. Capitalized terms used without definition herein shall have the meanings assigned to such terms in the Master Services Agreement. Customer grants Commerce authority to contact a minimum of 2,840 Vendors, representing an estimated $105,000,000 of account payables volume, and enroll the Vendors. Customer shall use the Program within the first twelve months following the Effective Date of the Master Services Agreement. ONE TIME IMPLEMENTATION FEE $13,298 (WAIVED) Implementation will include project management, associated travel expenses, initial program setup, supplier setup and other requirements. Commerce will invoice the Implementation Fee upon execution of the Master Services Agreement and begin invoicing Transaction Fees upon successfully processing Customer‟s first Transaction within the Program. Fees Process & Pay Transaction Fee $3.67 per Invoice Invoice Process and Document Handling Document Imaging and Data Capture Included Electronic Invoices (EDI) Included Email Invoices (PDF attachment) Included Paper Invoices Included Fax Invoices Included Vendor Payment Type Card Included ACH Included Check Included Wire Transfer $5.00 per Wire Payment Access and Reporting User Access (up to 150) Included Additional User Access Custom Quote Approval Access Included Base Reporting Package Included Data Storage Online (0 to 36 months) Included Online (37 months up to 84 months) Included Custom Services Custom Quote LATE FEE. If any of the fees listed above are not received by the due date shown on the invoice, Commerce may charge a late fee of 2.5% of the amount past due. IN WITNESS WHEREOF, the Parties hereto have executed this Pricing Addendum and agreed to the terms and conditions herein. Commerce Bank City of Palo Alto, California (Commerce) (Customer) By: By: Title: Title: Effective Date: CONFIDENTIAL 03/2014 10 PROCESS & PAY SERVICE AGREEMENT THIS INVOICE PROCESSING AND INVOICE DECISION ENGINE SERVICE AGREEMENT, COMMERCIAL CARD SERVICE AGREEMENT, AUTOMATED CLEARING HOUSE (ACH) SERVICE AGREEMENT AND CHECK SERVICE AGREEMENT (collectively referred to as the “Process & Pay Service Agreement”) are made and entered into as of the Effective Date by and between Commerce Bank (“Commerce”) and City of Palo Alto, California (“Customer”). Commerce and Customer agree that the Services referenced herein shall be performed in accordance with these Service Agreements and the Customer Responsibilities Manual, subject to the Master Services Agreement. Commerce shall be responsible only for performing those Services expressly referenced in this Service Agreement and related Documentation. Terms used herein, which are defined in the Master Service Agreement, shall have the meanings given to them in the Master Service Agreement. INVOICE PROCESSING Customer elects Commerce‟s Invoice Processing Service (“Invoice Processing Service”) that will facilitate the common capture point for Customer‟s Invoices, whether they are delivered via U.S. Mail, Fax, email or electronic data file. Once Customer‟s Invoices are received, Commerce utilizes its scanning and data capture technologies to capture images of all received Invoices and correspondence along with Customer specified values from each Invoice. These Invoice images and associated data will then be relayed to Customer using the Invoice Decision Engine. Customer shall be responsible for instructing its Vendors to submit all of their Invoices through Commerce in accordance with Commerce‟s specifications and requirements, as set forth in the Customer Responsibilities Manual. Customer must provide complete and concise Invoice processing and data capture instructions to Commerce. Commerce will attempt to process all items as specified in the processing instructions. Commerce will exercise ordinary care to follow these instructions in providing the Service. Commerce will not be liable for the loss, injury or destruction of any Invoices, documentation or other writings in Commerce’s possession, in transit or in the possession of others or any damages associated with any of the aforementioned items. INVOICE DECISION ENGINE Customer elects Commerce‟s web-based Invoice Decision Engine (“Invoice Decision Service”) that will facilitate Customer‟s approval and GL Coding of all Invoices presented. Once Customer reviews and approves all presented Invoices, an approved Invoice voucher file is electronically transmitted to Customer‟s accounts payable/ERP system for proper aging. Customer is then responsible for generating Payment Instructions to Commerce to facilitate on time Vendor Payments. Commerce will not be responsible for Customer‟s inability to access the Invoice Decision Service, errors, or failure to act, including but not limited to: (i) use of incompatible and/or deficient equipment, software, operation system, modem and any other computer equipment or component or Internet access device; (ii) problems associated with Internet browser software, including, but not limited to, plug in components , helper applications, enhancements, upgrades and add-ons; (iii) connectivity difficulties resultant from telephone communications, Internet service provider, modem, personal computer, or telephone volume or traffic levels resulting in slow or no response time or incomplete data transmissions; or (iv) delay in U.S. Mail, war or emergency, equipment failure, software failure or other circumstances beyond the Commerce‟s control. COMMERCIAL CARD Customer elects Commerce‟s Commercial Card Service (“Card Service”) that will facilitate payment to Customer‟s Vendors by assigning Commercial Cards to Customer and/or issuing Commercial Cards to Employee Cardholders. 1. DEFINITIONS. These additional terms, as used in this Card Service Agreement, shall have the following meanings: CONFIDENTIAL 03/2014 11 1.1 “Cardholder Agreement” means that agreement delivered to each Employee Cardholder which governs the use of the Commercial Cards, as amended from time to time. 1.2 “Commercial Cards” means the Visa or MasterCard Commercial Cards and the numbers associated with the Commercial Cards issued by Commerce to Employee Cardholder(s) and the account numbers issued by Commerce and assigned to Customer without an associated plastic card. 1.3 “Employee Cardholders” means, collectively, those designated officers, directors, agents and employees of Customer. 1.4 “Unauthorized Charge” means the use of a Commercial Card by a person, other than the Customer, who does not have actual, implied or apparent authority for such use, and from which the Customer receives no benefit. 2. COMMERCIAL CARDS. a. Commerce shall issue Commercial Cards to the Customer, provided that a Commercial Card issuance request has been made by an Administrator in the form required by Commerce; and/or Commerce shall issue a Commercial Card to each Employee Cardholder designated by Customer, provided that (i) each such designated Employee Cardholder has a business or commercial purpose for the Commercial Card, and (ii) a card issuance request has been made by an Administrator in the form required by Commerce. b. Each Commercial Card shall be valid for the term indicated thereon, unless such Commercial Card has been canceled by Commerce pursuant to the provisions of this Card Service Agreement or at the request of Customer. c. Commerce acknowledges the ability of Customer to revoke any authority given to an Administrator, at Customer‟s discretion upon proper notice to Commerce; provided, however, that Customer shall remain liable for all charges made to each Commercial Card as provided in this Card Service Agreement. d. Commerce acknowledges the ability of Customer and/or its Administrator to cancel the Commercial Card issued to any one or more Employee Cardholder(s), at Customer‟s discretion upon proper notice to Commerce; provided, however, Customer and/or its Administrator shall take all reasonable actions necessary to retrieve the Commercial Card issued to Employee Cardholder or terminated Employee Cardholder and shall immediately destroy the retrieved Commercial Card. 3. BILLING PROCEDURES. Central Billed Accounts: Except as otherwise provided herein, Customer shall be liable for all charges made to each Commercial Card. Charges shall be set forth on a billing statement and shall be paid by Customer as agreed in Addendum A, Commercial Card Pricing and Payment Schedule, attached hereto and incorporated herein by this reference, and as set forth herein (“Addendum A”). Except for a proven Unauthorized Charge or as otherwise expressly provided herein, Customer shall pay Commerce for all charges made to each Commercial Card and/or Employee Cardholder‟s Commercial Card within the time period provided in Addendum A. Commerce shall have no duty or obligation to inquire into the nature of any transaction charged by a Customer or Employee Cardholder (e.g., whether such transaction was for a business or personal use). Commerce shall be paid fees and charges, if any, set forth in Addendum A and may be subject to change from time to time by Commerce upon ninety (90) days‟ prior written notice. 4. LINE OF CREDIT. Commerce will establish a maximum line of credit amount for Customer. a. All amounts charged to the Commercial Cards together with any fees and charges owed to Commerce by Customer in connection with the Card Service, may not exceed, in the aggregate, the line of credit amount unless Commerce in its sole discretion authorizes such charges. b. Commerce may, at any time in its sole discretion, increase the amount of Customer‟s line of credit without prior notice. c. Commerce may, at any time in its sole discretion, decrease the amount of Customer‟s line of credit upon thirty (30) days‟ prior written notice to Customer; provided, however, that Customer may elect to terminate this Agreement by written notice to Commerce during such thirty (30) day notice period; provided, further, Customer agrees that if any amounts are outstanding on the Commercial Cards which exceed the adjusted line of credit amount, Customer will immediately pay Commerce such excess amounts. d. Collateral securing other obligations with Commerce, if any, will also secure this line of credit. 5. TERMINATION. All Commercial Cards and/or related accounts shall be deemed canceled effective upon termination of this Agreement or as otherwise provided herein, and all amounts outstanding under such Commercial Cards shall automatically become immediately due and payable in full by Customer without further notice. 6. REPORTING. Commerce will, either directly or indirectly through its vendors, receive data from the transactions CONFIDENTIAL 03/2014 12 made with the Commercial Cards; such data will be delivered to Customer as specified herein. Commerce shall have no responsibility or liability for the capture, transmission, grouping, reporting, categorizing or any other act performed or required to be performed in connection with the foregoing data that Customer‟s Vendors are transmitting at the point of sale. 7. CUSTOMER LIABILITY. a. Except for a proven Unauthorized Charge, the Customer shall be solely liable for the payment of all charges incurred in the use of Commercial Cards except as provided in paragraph (b) below. b. Customer shall not be liable for the payment of charges incurred in the use of Commercial Cards if such charges relate to: (i) Charges waived as set forth in Visa Waiver of Liability or MasterCard Zero Liability documentation, as amended from time to time; (ii) Commercial Card transactions after the original closure request date for a Commercial Card where the request by Customer was made in accordance with the terms of this Agreement during normal business hours; or (iii) The use of a stolen Commercial Card if the Commercial Card is reported stolen via telephone as provided in this Process & Pay Service Agreement within twenty-four (24) hours after Customer or its Administrator, including, without limitation, any Employee Cardholder, discovers, or, using reasonable care should have discovered, the theft of the Commercial Card; provided that if the Commercial Card is not reported stolen within such time frame, Customer shall be liable for all charges associated with the stolen Commercial Card until the date Customer notifies Commerce of such theft. c. To report a lost or stolen Commercial Card, Customer shall contact Commerce by phone at 800-892-7104. Communications with Commerce concerning disputed billings shall be made by mail to Commercial Card Services, 811 Main Street, Kansas City, Missouri 64105 or by phone at 800-892-7104. ACH Customer elects Commerce‟s ACH Service (“ACH Service”) which will facilitate Customer‟s Vendor Payments through the electronic network governed by the NACHA Operating Rules. Customer hereby authorizes Commerce to originate corporate (non-consumer) debit and credit ACH entries on its behalf to the account of each of Customer‟s Vendors who have authorized payment by ACH. Customer acknowledges and agrees that ACH entries, which it originates or which Commerce originates on its behalf, must comply with the laws of the United States, including, without limitation, regulations administered by the U. S. Treasury Department‟s Office of Foreign Assets Control and/or Financial Crimes Enforcement Network. In addition, Customer acknowledges and agrees that it will be solely responsible (either directly or by way of indemnification in relation to any responsibilities of Customer as Originator assumed by Commerce as the Originating Depository Financial Institution) for compliance with any applicable Foreign Payment System Rules (i.e., the laws and payment system rules of the receiving country in effect from time to time). Additionally, the operating procedures outlined within the Customer Responsibilities Manual are in accordance with the National Automated Clearing House Association (NACHA) Rules and other applicable laws as amended from time to time; Customer acknowledges and agrees to be bound by the NACHA Rules and laws. NACHA Rules are updated annually and are available for purchase from EPCOR at www.EPCOR.org or by calling (800) 500-0100. The NACHA Rules may also be purchased through NACHA‟s Web site at www.nacha.org. Customer acknowledges that Commerce shall have the right to perform periodic reviews, inspections and audits of Customer‟s operations, books and records to verify Customer‟s compliance with applicable laws and regulations or any NACHA Rules; and Commerce may terminate or suspend this Process & Pay Service Agreement, with or without notice, in the event Customer fails to comply with this Process & Pay Service Agreement and/or applicable laws and regulations or any NACHA Rules. Customer acknowledges that it is obligated to provide Commerce with any information that may be required pursuant to applicable laws, relegations, orders, or the NACHA Rules, and/or that Commerce may use to identify Customer‟s Vendors. Upon receipt of a request from Commerce for such information, Customer must provide the requested information to Commerce within two (2) business days. Commerce will obtain the required Vendor authorizations on behalf of Customer and will maintain the authorizations pursuant to Commerce‟s record retention policies and in accordance with the NACHA rules. CONFIDENTIAL 03/2014 13 CHECK Customer elects Commerce‟s Check Service (“Check Service”) that will facilitate Customer‟s Vendor Payments by check. Once a Payment Instruction has been successfully validated, Commerce will print and mail a check to Customer‟s Vendor. Customer acknowledges that there are deadlines for timely Payment; please see the Customer Responsibilities Manual for details. All Payments must be submitted for payment in U.S. currency (USD). Commerce will not be liable for the loss, delay or destruction of any check in transit or in the possession of others, including the U.S. Mail, or any other circumstances beyond Commerce‟s control. IN WITNESS WHEREOF, this Process & Pay Service Agreement has been executed by the duly authorized officers of the parties hereto. Commerce Bank City of Palo Alto, California (Commerce) (Customer) By: By: Title: Title: Effective Date: CONFIDENTIAL 03/2014 14 ADDENDUM A Commercial Card Pricing and Payment Schedule Card Service Fees Pricing Term The pricing outlined herein will expire in 60 days from June 13, 2014 unless a Card Service Agreement is executed. Late Fee for Central Bill Accounts For each payment not received by the payment due date shown on the billing statement, a late fee will be charged. The late fee for the respective Commercial Card or account will be 2.5% of the amount past due. Cash Advance Fee All cash advances will be assessed a cash advance fee of 3.0% of the cash advance amount with a $3.00 minimum. International Service Fee Visa and MasterCard purchases, cash withdrawals and cash advances made in currencies other than U.S. Dollars will be converted to U.S. Dollars under regulations established by Visa International and MasterCard International. Visa conversion will be at a rate selected by Visa from the range of rates available in wholesales currency markets for the applicable central processing date, which may vary from the rate Visa itself receives, or the government-mandated rate in effect for the applicable central processing date. MasterCard conversion rate will be selected by MasterCard, typically either a government-mandated rate or a wholesale rate provided to MasterCard. Conversion to U.S. Dollars may occur on a date other than the date of the transaction. Therefore, the conversion rate may be different from the rate in effect at the time of the transaction. Customer agrees to pay the converted amount, plus an international service fee in the amount of 2% of the transaction amount on purchases and 1% on cash withdrawals and cash advances. For purchases, cash withdrawals and cash advances made in U.S. dollars outside of the United States and its territories, you agree to pay the transaction amount plus a 1% service assessment fee. Finance Charge on Cash Advances The periodic rate finance charge begins to accrue on the transaction date of any cash advance and is computed by applying the periodic rate to the average daily balance. Whenever payment in full is credited to the Employee Cardholder account by the statement due date, no additional periodic rate finance charge will be billed on a later statement to collect the periodic rate finance charge earned from the billing statement date to the date of actual payment. Cash advances include advances made by means of convenience checks, an electronic device or machine, a teller of any financial institution, by means of a balance transfer from another credit card, for the purchase of wire transfers, non-US currency, traveler‟s checks, truck stop transactions, tax payments, money orders, bets, lottery tickets and casino gaming chips. A minimum finance charge of $.50 will be imposed in any billing period for which a finance charge is payable. Each Employee Cardholder account will accrue a finance charge at a periodic rate equal to 4.9% in excess of the Prime Rate, fixed monthly, divided by 12. As used herein, the “Prime Rate” is the rate published in The Wall Street Journal in its column called “Money Rates” on the last business day of the month immediately preceding the first day of the applicable billing cycle. No representation is made that the Prime Rate is the lowest, the best or the favored rate of interest. If for any reason The Wall Street Journal no longer publishes the “Money Rates” column, then Commerce will choose a new index based on comparable information. Other Fees Overnight Delivery of Replacement Card $25 per occurrence Federal Express Delivery of Bulk Cards Price Quote Basic Card Design NO CHARGE Ultra-graphic Card Design $500 one- time fee (waived) Full Customized Plastic and re-order Price Quote Returned Check Fee $29 per occurrence ACH Return $29 each after first occurrence Phone Payment $15 each after first occurrence Statement Reprinting $2 per statement after three occurrences Free through certain software products selected by Customer. Other For information, copies or other reports not specified in this Addendum, Commerce may charge Customer such fees as Customer and Commerce may agree from time to time. Software Training Commerce uses a „train the trainer‟ model. Initial training for Program Administrators (in person, WEBX or by phone) is at no charge. Additional training for Program Administrators via WEBX or by phone is at no additional charge. It is the Bank‟s intention that the Program Administrator will train the cardholders and systems users on reporting and maintenance applications. If further training by Commerce is required for the cardholders and system users (in-person), Commerce will charge $250 per hour. CONFIDENTIAL 03/2014 15 Reporting and Maintenance Tool Options ControlPay Implementation Fee** $5,000 WAIVED Annual Maintenance Fee** $500 WAIVED Routine maintenance and upgrades NO CHARGE Initial web-based or phone training for Administrators** NO CHARGE Receipt Scanning $1 per open card per month. Customized Programming AP File Layouts  Standard – No Charge  Custom – in those instances where this effort will generate a cost over $3,000, Commerce will obtain a price quote for Customer. Reconciliation Reports  Standard – No Charge  Custom – Commerce will obtain a price quote for Customer. Other Custom Programming  Commerce will obtain a price quote for Customer unless development is mutually agreed upon by Customer and Commerce. Development hours, beyond the initial 20 hours, are typically charged at a rate of $150.00 per hour. Payment Schedule Commerce will generate a billing statement on a periodic basis as outlined below. All amounts owing on the Commercial Cards, including fees and charges, shall be due and payable in full on a grace period as outlined below, after the date of such statement. The statement will be transmitted to the Employee Cardholder or to Customer via U.S. Mail or made available by an alternative means as agreed upon by both parties. Billing Frequency Grace Period in Days Payment Method Weekly 3 AutoPay REVENUE SHARE 1) Commerce will pay Customer a revenue share on a monthly basis. 2) Total Monthly Net Volume is defined as gross purchases less credits, cash advance amounts, and fraudulent transaction amounts. 3) Monthly payments are based on the matrix schedule below. Payment tiers are calculated on total monthly net volume. 4) Customer shall have ninety (90) days from statement date to notify Commerce of any revenue sharing payment errors. Monthly Net Volume Corresponding Annual Net Volume 3 Day Grace $0 - $249,999 $0 - $2,999,999 1.15% $250,000 - $416,666 $3,000,000 - $4,999,999 1.20% $416,667 - $583,333 $5,000,000 - $6,999,999 1.25% $583,334 - $749,999 $7,000,000 - $8,999,999 1.30% $750,000 - $999,999 $9,000,000 - $11,999,999 1.35% $1,000,000 + $12,000,000 + 1.37% CONFIDENTIAL 03/2014 16 REVENUE SHARE ADJUSTMENTS 1) Volume qualifying at Large Ticket Interchange (LTI) will be paid 0.50%. 2) Revenue sharing will be withheld for net sales volume qualifying at Visa Large Purchase Advantage (VLPA). 3) Commerce reserves the right to withhold, suspend or modify payment for the following reasons: a) If the average transaction falls below $1,000 (Gross purchase volume / total transaction count) b) If Customer‟s average Interchange Rate falls below 2.25% c) If Interchange Rates become significantly altered by Visa and / or MasterCard d) If monthly volume contain fraudulent transactions e) If the revenue share payment is less than $10 f) If account become delinquent (central billed accounts only) 4) Commerce may (without written notice) adjust the revenue sharing percentages, as provided below, at the end of each calendar quarter following the Agreement Effective Date a) Adjustments are based on the U.S. Prime Rate, as published in The Wall Street Journal "Money Rates" column on the last business day of the month immediately preceding the first day of the applicable billing cycle b) Adjustments to revenue share based on Prime Rate fluctuations are not applicable while Prime Rate remains at, or below, the established 4.00% floor c) When the Prime Rate exceeds 4.00%, Commerce will adjust the revenue share percent payable using the grid below. Commerce will use the same grid to determine subsequent revenue share adjustments should the Prime Rate increase or decrease from any newly established Prime Rate level in future quarters d) The Established Prime Rate at the time of this contract is 3.25% Billing Cycle Grace Period Change in Prime Rate Revenue Share Adjustment Weekly 3 Day 0.50% 0.010% For example, if Prime Rate is 5.00% at the end of a calendar quarter and Customer has a Weekly Billing Cycle and a 3-Day Grace Period, Commerce will reduce percentages in all revenue share tiers by 2 basis points (0.02%). **All line items noted with a “**” are the costs associated with establishing the Card Service as referenced in Paragraph 5 of the Card Service Agreement. IN WITNESS WHEREOF, this Addendum A has been executed by the duly authorized officers of the parties hereto, and this Addendum A supersedes any prior Addendum A. Commerce Bank City of Palo Alto, California (Commerce) (Customer) By: By: Title: Title: Effective Date: © Union Bank, N.A. (2013_1104) 1 of 6 CUSTODY AGREEMENT For Public Funds This agreement is made between CITY OF PALO ALTO, a California chartered municipal corporation (“Client”) and Union Bank, N.A. ("Bank"). TERMS AND CONDITIONS 1. APPOINTMENT AS AGENT Client hereby appoints Bank as agent to act as custodian of cash, securities, and other property ("Property") described on Schedule A, attached hereto, and other property which may be deposited by Client with Bank from time to time to be held in the account established by this Agreement ("Account") and Bank agrees to act as Client's agent for such property according to the terms and conditions of this Agreement. 2. HANDLING OF INCOME AND PRINCIPAL 2.1 Income. Bank shall collect the income, when paid on said Property, and hold it in a demand deposit income account until invested or otherwise disposed of pursuant to Client's written instructions. 2.2 Principal. Bank shall collect principal of Property when paid on maturity, redemption, sale, or otherwise, and hold it in a demand deposit principal account until invested or otherwise disposed of pursuant to Client's written instructions. 2.3 Collection Obligations. Bank shall diligently collect income and principal of which the Bank has received actual notice in accordance with normal industry practices. However, Bank shall be under no obligation or duty to take any action to effect collection of any amount if the securities or other Property upon which such amount is payable is in default, or if payment is refused after due demand unless the Bank has been adequately indemnified by Client in advance. Bank, however, shall notify Client promptly of such default or refusal to pay. 2.4 Additions to and Withdrawals from Account. Bank shall make all additions and withdrawals of Property to and from this Account only upon receipt of and pursuant to written instructions from Client except for those withdrawals provided for in Section 4. Upon receipt of such order for each withdrawal, unless otherwise instructed in writing, Bank shall deliver the Property so withdrawn to Client or to Client's designee, upon an appropriate receipt. 3. INVESTMENT OF PROPERTY 3.1 Directions by Client. Client shall have sole responsibility for the investment, review, and management of all Property held in this Account. Bank shall make all purchases, sales, conversions, exchanges, investments and reinvestments of Property held in this Account only upon receipt of and pursuant to written instructions from Client. Bank shall have no duty or obligation to review, or make recommendations for, the investment and management of any Property held in this Account, including uninvested cash. 3.2 Handle Corporate Actions. Bank shall notify Client of the receipt of notices of redemptions, conversions, maturities, exchanges, calls, puts, subscription rights, and scrip certificates ("Corporate Actions"). Bank need not monitor financial publications for notices of Corporate Actions and shall not be obligated to take any action without waiting for Client's instruction. If a Corporate Action has a fixed expiration date, and Bank has not received written instructions regarding it from Client five business days prior to such date, Bank shall take such action as it deems appropriate in its sole discretion. © Union Bank, N.A. (2013_1104) 2 of 6 3.3 Fractional Interests. Bank shall receive and retain all stock distributed by a corporation as a dividend, stock split, or otherwise and, in connection therewith, any fractional shares unless otherwise instructed or without authorization to sell. 3.4 Use of Nominees. Bank shall have the right to hold all registered securities in the name of its nominee. 3.5 Use of Securities Depository. Bank may, in its discretion, deposit in a securities depository any securities, which, under applicable law, are eligible to be deposited. 3.6 Delivery of Instructions and Funds. Instructions and Funds shall be directed to Custodian or Domestic Sub-Custodian, as applicable with respect to the foregoing. 4. PLEDGE OF SECURITIES Client shall inform Bank in writing in the event that Client has pledged any Property held in the Account as collateral ("Pledged Collateral") for any loan or advance ("Secured Obligation") made to Client by The Union Bank, N.A., or by any other lender designated by Client ("Secured Party"). Client's notice to Bank shall precisely identify the Pledged Collateral and state the name, address, telephone number and telex number of the Secured Party and the appropriate officer, if any, to contact in connection with the Pledged Collateral, and Client shall provide evidence that a copy of such notice has been provided to the Secured Party. Client shall be responsible to Bank for keeping Bank informed of any changes to this information, and Bank shall be fully protected in relying on such notice until receipt of a notice providing additional or substituted information. Bank shall segregate and identify such Property in its records as pledged. Notwithstanding anything to the contrary contained in this Agreement, by providing the notice referred to above, Client acknowledges and agrees that the terms of this Custody Agreement are superseded by the terms of any pledge or security agreement covering the Pledged Collateral and that Bank cannot release the Pledge Collateral without the prior written consent of the Secured Party. In the event that the Secured Party shall notify the Bank in writing of a default of such Secured Obligation, Bank shall follow, with no further obligation, the written instructions of the Secured Party regarding the Pledged Collateral and shall be fully protected in so doing. Any interest or principal payments due on the Secured Obligation may be charged to the Account upon written instruction from Client. 5. OVERDRAFT AND INDEBTEDNESS 5.1 Advance Funds. If Custodian advances funds to or for the benefit of Account in connection with the settlement of securities or currency transactions or other activity in the Account including overdrafts or other indebtedness incurred in connection with the settlement of securities transactions, maturity or income payments or funds transfers, Principal agrees to reimburse Custodian on demand the amount of the advance or overdraft and all related fees as established in Custodian's published fee schedule. Principal will bear the risk from any currency valuation differences associated with Principal’s reimbursement obligations to Custodian. Custodian shall also have the right to utilize any cash in the Account in order to obtain reimbursement hereunder and to setoff Custodian’s obligations with respect to any deposits or credit balances in the Account against any obligation of Principal hereunder. 5.2 Repayment. To the extent permissible by applicable law, in order to secure repayment of Account's obligations to Custodian hereunder, Principal hereby pledges and grants to Custodian a continuing lien and security interest in, and right of set-off against, all of Account’s right, title and interest in and to (a) all Accounts in Principal’s name and the Securities, money and other property now or hereafter held in such Accounts (including proceeds thereof); (b) each Account in respect of which or for whose benefit the advance or overdraft relates and the Securities, money and other property now or hereafter held in such Accounts, including proceeds thereof. In this regard, Custodian shall be entitled to all the rights and remedies of a pledgee and secured creditor under applicable laws, rules or regulations as then in effect. Principal authorizes the Custodian, in the Custodian's sole discretion, at any time to charge any overdraft or indebtedness, together with interest due thereon, against any balance of account standing to the credit of the Principal on the Custodian's books. In addition, the Custodian shall be entitled to utilize available cash and to dispose of such Principal’s Securities to the extent necessary to obtain reimbursement. © Union Bank, N.A. (2013_1104) 3 of 6 6. CORPORATE ACTIONS, PROXIES AND CORPORATE LITERATURE 6.1 Corporate Actions. Custodian shall notify Manager of the receipt of notices of redemptions, conversions, exchanges, calls, puts, subscription rights, and scrip certificates ("Corporate Action(s)"). Custodian need not monitor financial publications for notices of Corporate Actions and shall not be obligated to take any action unless actual notice has been received by Custodian at the offices of its Domestic Sub-Custodian. Custodian's sole responsibility in this regard shall be to give such notices to Principal or Investment Manager, as the case may be, within a reasonable time after Custodian receives them. Custodian has no responsibility to respond or otherwise act with respect to any such notice unless and until Custodian has received timely and appropriate instructions from Principal or Manager. Principal or Manager is responsible to ensure all required documentation and funds are available to Custodian and its agents as required under the terms of the offer or by legal jurisdiction in order for Custodian and its agent to take action on behalf of Account. 6.2 Proxies. Bank shall forward all proxies and accompanying material issued by any company whose securities are held in the Account to Client unless directed in writing not to do so. 6.3 Corporate Literature. Bank shall have no duty to forward or retain any other corporate material received by the Account unless required to do so by law. 6.4 Disclosure to Issuers of Securities. Unless Client directs Bank in writing to the contrary, Client agrees that Bank may disclose the name and address of the party with the authority to vote the proxies of the securities held in this Account as well as the number of shares held, to any issuer of said securities or its agents upon the written request of such issuer or agent in conformity with the provisions of the applicable law. 7. STATEMENT AND CONFIRMATIONS 7.1 Statements and Confirmations. Custodian shall provide Client Account statements and other reports periodically via paper delivery or electronically by means of the Custodian’s online system or as otherwise as agreed to by Client and Custodian showing all income and principal transactions and cash positions, and a list of Property. Client may approve or disapprove any such statement within thirty (30) days of its receipt, and, if no written objections are received within the thirty (30) day period, such statement of Account shall be deemed approved. Client acknowledges and agrees that if Custodian’s online system is selected, paper statements will be provided only upon request and that the Custodian’s online statements, trade confirms and related online communications satisfy all of Custodian’s existing legal and contractual obligations to provide statements, reports and confirmations with respect to the account. Printed trade confirmations for trades effected by the Custodian will be available upon request and at no additional cost. Client may request printed trade confirmations for other securities transactions from the broker through which they direct such trades. 8. USE OF OTHER BANK SERVICES Client may direct Bank to utilize for this Account other services or facilities provided by Bank, its subsidiaries or affiliates. Such services may include, but not be limited to, the placing of orders for the purchase or sale of units or shares of any registered investment company including such registered investment companies to which Bank, UnionBanCal Corp., or their subsidiaries or affiliates manage, provide investment advice, act as custodian or provide other services. Client hereby acknowledges that Bank will receive additional fees for such services in accordance with Bank's standard fee schedules, which shall be delivered to Client from time to time. If Client or Manager uses UnionBanc Investments Services, or other brokerage affiliate of Custodian, for the purchase or sale of securities as principal to or from, or the placing of orders for the purchase, sale, exchange, investment or reinvestment of securities, Client authorizes and directs Custodian to accept the confirmation of security transactions received from UBIS as the instructions from Client or Manager contemplated by this Agreement and no further instructions to Custodian shall be required. © Union Bank, N.A. (2013_1104) 4 of 6 Notwithstanding the above, Client hereby directs Bank to utilize for this Account any mutual fund available in the market as permitted by law. These investment directions may include, but are not limited to, money market mutual funds or long equity and fixed income mutual funds. Such funds may be sub- advised by an affiliate or subsidiary of Bank and/or for which Custodian may also act as the mutual fund’s custodian and/or provide other services for the mutual fund. Client shall designate the particular HighMark Fund that Client deems appropriate for the Account. Client hereby acknowledges that Bank will receive management fees for such services in accordance with Bank's standard fee schedules, which shall be delivered to Client from time to time. These management fees will be in addition to those fees charged by Bank as agent for the Client's Custody Account. 9. INSTRUCTIONS All instructions from Client shall be in writing, and shall continue in force until changed by subsequent instructions. Pending receipt of written authority, Bank may, in its absolute discretion at any time, accept oral, wired, or electronically transmitted instructions from Client provided Bank believes in good faith that the instructions are genuine. 10. COMPENSATION AND OTHER CHARGES 10.1 Compensation. Bank's annual fee as agent shall be based on the Schedule of Fees, City of Palo Alto, Effective January 1, 2014 through December 31, 2020. Fees shall be taken quarterly. 10.2 Charging the Account. Bank is authorized to charge the Account for reasonable out-of-pocket expenses as well as for funds necessary for Bank to complete any purchase or expense, to make any directed disbursement or take any other action regarding the Account. Bank shall have no duty to make any purchases, exchanges, or disbursements or to incur any expenses, unless the funds necessary to cover the amount of the expense are available in the Account. 11. COST BASES AND DATES OF ACQUISITION Client agrees to furnish Bank with the income tax cost bases and dates of acquisition of all Property held in the Account to be carried on its records. If Client does not furnish such information for any such Property, Bank shall carry the Property at any such nominal value it determines, such value to be for bookkeeping purposes only. All statements and reporting of any matters requiring this information will use this nominal value. Bank shall have no duty to verify the accuracy of the cost bases and dates of acquisition furnished by Client. Property purchased in the Account shall be carried at cost. 12. LIMITED POWER OF ATTORNEY Bank is hereby granted a limited power of attorney by Client to execute on Client's behalf any declarations, endorsements, assignments, stock or bond powers, affidavits, certificates of ownership or other documents required (1) to effect the sale, transfer, or other disposition of Property held in the Account, (2) to obtain payment with respect to Property held in the Account, or (3) to take any other action required with respect to the Property held in the Account, and in the Bank's own name to guarantee as Client's signature so affixed. 13. INDEMNIFICATION As additional consideration for the Bank's acceptance of this Account and Agreement to act as "Agent," Client agrees to indemnify, and hold Bank, its officers, directors, employees and agents harmless from and against any and all losses, liabilities, demands, claims, and expenses, any attorney's fees and taxes (other than those based on Bank's net income) arising out of or in connection with this Agreement, or out of any actions of Client or Client's agents which are not caused by Bank's gross negligence or willful misconduct. This provision shall survive the termination of this Agreement and shall be binding upon each party's successors, assigns, heirs and personal representatives. 14. AMENDMENT AND TERMINATION OF AGREEMENT 14.1 Amendment. This Agreement may be amended only by a written agreement executed by both Bank and Client. © Union Bank, N.A. (2013_1104) 5 of 6 14.2 Termination. This Agreement may be terminated at any time by written notice from one party to the other. Such termination shall be effective immediately. In addition, this Account shall terminate upon notification to the Bank of Client's incapacity or Client's death. Upon termination, Bank shall have a reasonable amount of time to transfer the Property held in the Account in accordance with the written instructions of Client or the person or entity legally entitled to receive such property. Costs related to termination, including without limitation, costs for shipping securities and other Property held in the Account and costs of re-registering securities, generating reports and accounting for disposition of cash shall be charged to the Account. 15. ENTIRE AGREEMENT This Agreement constitutes the entire Agreement between the parties. All previous agreements, whether written or oral, between the Bank and Client, are hereby superseded, except any direction to Bank prohibiting it to disclose information to issuers of securities as provided in Section 5.3. 16. SINGULAR AND PLURAL If more than one person shall execute this Agreement, then where the context permits, singular pronouns shall be deemed to be plural personal pronouns. 17. GOVERNING LAW This agreement shall be governed by, and construed under, the laws of the State of California. 18. TAXATION OF ACCOUNT 18.1 W-9 Certification. Client agrees to provide a completed W-9 or W-8 certification, as appropriate, to Bank. 18.2 Client's Tax Identification Number is: 18.3 Client's responsibility for Filing Tax Returns and Paying Taxes. Client is responsible for filing any and all tax returns and for paying all taxes on Property and income held in this Account. 19. NOTICES 19.1 Mailing of Notices. Except as otherwise specified herein, all notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed as having been duly given on the date of service, if served personally on the party to whom notice is to be given, or on the fifth (5) day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows: To Client: To Bank: Union Bank, N.A. 350 California Street, 6th Floor San Francisco, CA 94104 Attn: Fax: Email: @unionbank.com This agreement and any amendment, notice or other document required to be signed and in writing under this Agreement may be delivered by personal service or U.S first class mail postage prepaid or via fax, © Union Bank, N.A. (2013_1104) 6 of 6 email with an imaged or scanned attachment (such as a .PDF), or similar electronic transmission with electronic signature through Union Bank’s online secure messaging service pursuant to security protocols established and agreed by the parties, unless otherwise specified herein. Signatures delivered via fax, email, or similar electronic transmission shall be effective as original signatures in binding the parties and shall be effective upon receipt. 19.2 Change of Address. Either party may change the address at which notice may be given by giving ten (10) days prior written notice of such change to the other party. 20. CONFIDENTIALITY All non-public information and advice furnished by either party to the other shall be treated as confidential and will not be disclosed to third parties unless required by law, except that Union Bank may disclose (a) the identity of Client as a client or client reference of Union Bank; (b) any information to any government regulator of Union Bank or the Affiliated Entities. 21. EFFECTIVE DATE This Agreement shall become effective upon the date of receipt by the Bank of the securities and other property described in the attached Schedule A. BY PRINCIPAL: By: Name and Title: Date: By: Name and Title: Date: ACCEPTED: Union Bank, N.A. By: Name and Title: Date: By: Name and Title: Date: SCHEDULE A SCHEDULE OF FEES City of Palo Alto Effective January 1, 2014 – December 31, 2020 Institutional New account set-up Custody Services Free receipt of assets (initial transfer into Union Bank) Asset safekeeping Trade settlements Proxy processing Daily cash sweep Electronic Account statement – Holdings and Transactions Dedicated relationship manager assigned to your account Account access to Online Trust & Custody Annual $5,000 per account Administration Fee Itemized Fees Transaction Fee Depository Eligible/Ineligible $12/$40 Monthly Holding Fee* Depository Eligible/Ineligible $1/$4 Disbursements – Wires/Checks $10 P&I Paydowns $5 Income Collection Capital Gains Distribution Hard Copy Statements $25 per statement Out-of-Pocket Expenses As incurred Class Action Services 6% of recovered funds Disclosures Market value used for fee calculations on fee invoices may differ slightly from market values on client statements due to posting of accruals, late pricing of securities, and/or other timing issues. A transaction is defined as any activity affecting assets including purchases, sales, tender offers, stock dividends, stock splits, free receipts, free deliveries, maturities, exchanges, calls, redemptions, capital changes, etc. Fees for foreign securities, foreign exchange transactions, international wires, and non-standard services are quoted separately. Union Bank retains the right to charge special fees for extraordinary services not covered in this fee schedule. You may be assessed an overdraft charge for any negative balance in your account, provided such advance or overdraft is not related to Bank errors or omissions. The current rate will be provided at time of account opening and may be subject to change upon notification. Please see your account Agreement for additional information. *Includes cash sweep Acknowledgment City of Palo Alto Client Name Authorized Client Representative Date Union Bank Representative Date ©2011 Union Bank, N.A. (11/11) Page 1 of 2 PARTICIPATION AGREEMENT THIS PARTICIPATION AGREEMENT (the “Participation Agreement”) is made and effective this _____ day of ____________, 20__ (“Effective Date”), by and between City of Palo Alto, a California Municipality (the “Participant”) and JPMorgan Chase Bank, N.A. or Chase Bank USA, N.A., as may be determined from time to time, (the “Bank”) each a national banking association. WITNESSETH: WHEREAS, pursuant to that certain Commercial Card Agreement dated as of August 31, 2007 (the “Commercial Card Agreement”) between City of Fort Worth (the “Client”) and the Bank, the Bank has agreed to provide commercial card services to the Client (the “Program”) on the terms and conditions of the Commercial Card Agreement, attached hereto and incorporated herein as Exhibit I; and WHEREAS, the Participant desires to participate in the Program, subject to the terms and conditions of the Commercial Card Agreement; NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements, provisions and covenants contained herein, the parties agree as follows: 1. Definitions. Except as otherwise provided herein, all capitalized terms used herein and not otherwise defined and which are defined in the Commercial Card Agreement shall be used herein as so defined in the Commercial Card Agreement. 2. Mutual Obligations. By their execution of this Participation Agreement, the Participant and Bank hereby agree to be bound by all the terms and conditions of the Commercial Card Agreement as may be amended, supplemented, restated, or replaced from time to time attached hereto as Exhibit I. In the event of a conflict between the provisions of this Participation Agreement and the provisions of the Commercial Card Agreement, the provisions of this Participation Agreement will prevail. This Participation Agreement shall remain in effect according to its terms without regard to the continued existence or enforceability of the Commercial Card Agreement with respect to the original parties thereto. All references to “Client” in the Commercial Card Agreement shall be deemed to constitute references to the Participant hereunder. Without limiting the generality of the foregoing, the Participant further agrees that it shall be responsible only for transactions and for fees, charges and other amounts due under the Commercial Card Agreement related to the use of Accounts of the Participant pursuant to the Commercial Card Agreement and that the Client shall not be liable for any such transactions and for any such fees, charges and other amounts. 3. Representations and Warranties. The Participant represents and warrants that this Participation Agreement constitutes its legal, valid and binding obligation enforceable in accordance with its terms, and that execution and performance of this Participation Agreement (i) does not breach any agreement with any third party, (ii) does not violate any law, rule, or regulation, or any duty arising in law or equity applicable to it, (iii) is within its organizational powers, and (iv) has been authorized by all necessary organizational action of Participant. 4. Termination. Notwithstanding the provisions of the Commercial Card Agreement, either party may terminate this Participation Agreement at any time and for any reason upon sixty (60) days’ prior notice to the other party. Notwithstanding the foregoing, this Participation Agreement may be terminated by the Bank upon the Participant’s default after Participant receives notice of such default and has failed to remedy said default within thirty (30) days of Participant’s receipt of said notice. The Bank may refuse to allow further Transactions or revoke any of the Accounts at any time and for any reason. 5. Incentives. For purposes of calculating rebates, Combined Charge Volume for each Participant will begin to accrue on the first day of the month following the date the Participation Agreement is executed. 6. Notices. Notwithstanding the provisions of the Commercial Card Agreement, all notices and other communications required or permitted to be given under this Participation Agreement shall be in writing and shall be effective on the date on which such notice is actually received by the party to which addressed. All notices shall be sent to the address set forth below or such other address as specified in a written form from one party to the other. To the Bank: JPMorgan Chase Bank, N.A. 10 South Dearborn, Floor 34 Mail Code IL1-0032 Chicago, IL 60670-0199 Attn: Commercial Card Contracts Manager To the Participant: City of Palo Alto 250 Hamilton Ave Palo Alto, CA 94301 Attn: Christopher D. Anastole Page 2 of 2 7. Fees. Notwithstanding the provisions of the Commercial Card Agreement, the following fee shall apply to the Participant: OPTIONAL PROGRAM/TECHNOLOGY SERVICES SDOL monthly maintenance fee WAIVED 8. Miscellaneous. This Participation Agreement shall be governed by and construed in accordance with the substantive laws of the State of California, and as applicable, federal law. The headings, captions, and arrangements used in this Participation Agreement are for convenience only and shall not affect the interpretation of this Participation Agreement. This Participation Agreement embodies the entire agreement and understanding between the Participant and Bank and supersedes all prior agreements and understandings between the Participant and Bank relating to the subject matter thereof. Notwithstanding the provisions of the Commercial Card Agreement, this Participation Agreement may be amended or waived, subject to applicable law, only by notice to the Participant in writing from Bank. This Participation Agreement may be signed in one or more counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same document. Facsimile signatures shall have the same force and effect as the original. IN WITNESS WHEREOF, the parties have caused this Participation Agreement to be duly executed as of the date first written above. BANK: JPMorgan Chase Bank, N.A. By: Name: Title PARTICIPANT: City of Palo Alto By: Name: Title: Participant Attestation: The undersigned, a duly authorized officer or representative of Participant, does hereby certify that Participant has been duly authorized to enter into and perform this Participation Agreement and that the person signing above on behalf of the Participant, whose execution of this Participation Agreement was witnessed by the undersigned, is an officer, partner, member or other representative of Participant possessing authority to execute this Participation Agreement. By: Name: Title City of Palo Alto (ID # 4516) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Contract with Questica Inc. for a Budget System Title: Approval of a five-year Contract with Questica Inc. For a Budget System at a Cost Not to Exceed $472,100 and a 10 percent contingency totaling $26,968 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to 1. execute the attached five-year contract with Questica Inc. (Attachment A) in an amount not to exceed $472,100 for the life of the contract subject to annual appropriation of funds with the following fiscal year costs:  FY 2015: $312,180 (implementation cost, first year license, maintenance/hosting, reporting development)  FY 2016: $39,980 (second year license)  FY 2017: $39,980 (third year license)  FY 2018: $39,980 (fourth year license)  FY 2019: $39,980 (fifth year license) 2. approve a 10 percent contingency totaling $26,968 (based on the first year implementation and license fee cost) in the event additional services need to be added. Executive Summary Currently, the Office of Management and Budget (OMB) develops the City’s annual budget of approximately $470 million for about 80 funds through a variety of manual processes and spreadsheets. An integrated operating and capital budget system will create efficiencies in the OMB and City departments by City of Palo Alto Page 2 providing a budget development, forecasting, labor cost modeling, financial reporting and monitoring, and workflow management platform. Additionally, the new system provides a dashboard functionality to monitor budget versus actual expenditures and key performance measures. Due to the various process and analytical enhancement the new budget system provides, it is estimated that with the acquisition and implementation of the Budget System, the Administrative Services Department will be able to dedicate a 0.5 full-time equivalent (FTE) Senior Management Analyst throughout the year towards higher value projects and tasks generating about $85,000 in productivity savings annually and $425,000 during the life of the contract. Further, as part of the annual budget process, staff in departments will be able to provide information in a much more streamlined form to OMB and decision makers, thereby generating productivity savings citywide. Background The operating budget for about 80 funds and approximately $470 million in expenditures is developed through a manual workflow process and extracted financial data from the City’s Enterprise Resource System (ERP). Spreadsheets that are emailed between City departments and the OMB are the primary tool for developing the City’s annual operating and capital budgets. The General Fund Long Range Financial Forecast (LRFF), labor cost modeling, financial reporting, and monitoring of the City’s budget is also completed on spreadsheets. Workflow and review of the City’s capital budget is through an improvised workflow system as part of an obsolete document publishing software, which is scheduled for replacement prior to the development of the Fiscal Year 2016 budget and does not have any workflow functionality. Discussion Project Description The budget system will be the primary development tool of the City’s operating and capital budgets, the LRFF, labor cost modeling, and financial reporting and monitoring. The proposed solution will integrate with the City’s current ERP system (SAP) and budget document publishing software (Pattern Stream). Due to the various process and analytical enhancement the new budget system provides, it is estimated that with the acquisition and implementation of the Budget System, the Administrative Services Department will be able to dedicate a 0.5 FTE Senior Management Analyst throughout the year towards higher value projects City of Palo Alto Page 3 and tasks generating about $85,000 in productivity savings annually and $425,000 during the life of the contract. Further, as part of the annual budget process, staff in departments will be able to provide information in a much more streamlined form to OMB and decision makers, thereby generating productivity savings citywide. Budget Development & SAP Integration The budget system will have the capability to process and approve budget proposals using a controlled, paperless, workflow process. Under the current workflow process, departments submit their annual budget proposals to the OMB on spreadsheets and then enter their proposals (numbers only) into SAP’s budget planning module. OMB then reconciles the spreadsheets to what has been entered into SAP’s budget planning module and then tabulates all proposals to provide decision makers with a packet of information of each budget proposal and a financial summary of the department. Approvals of the budget proposals are done verbally or via email and, depending on the decision, OMB adjusts the numbers in the SAP budget planning module accordingly. The workflow process of receiving a budget proposal, packaging decision meeting materials, and compiling text and figures into the budget document would be automated in the budget system. Automating these tasks will allow Senior Management Analysts in OMB to focus on performance measurement analytics, current year monitoring, labor cost and long range financial forecast modeling, working with departments on cost saving measures or value adding program enhancements, and other special projects. In addition to annual budget development, the OMB and city departments adjust department budgets to reallocate existing funds into more appropriate line items or to augment a department budget based on Council action. These budget adjustments are completed on a standard form that is routed for signature and then manually entered by OMB staff. After the adjustment is entered, administrative staff scans each budget change into a master directory for documentation and future reference. The selected budget system would manage this workflow process documenting the budget change and reasons for the change within the system and automatically updating SAP. It is important to note, that the selected software, TeamBudget by Questica, has the ability to interface City of Palo Alto Page 4 with variety of well-established ERP systems in the market. Forecasting and Labor Cost Modeling Development of the City’s base budget for the upcoming fiscal year and the LRFF is completed during the fall. The OMB uses worksheets to build the LRFF and model future years in accordance with labor agreements, projected changes in pension rates, and a variety of other factors. The functionality of the budget system would allow staff to input percent changes or dollar amounts for these scenarios and have these changes automatically flow through the next ten fiscal years. The OMB will also be able to extract employee census data and incorporate salary and benefit projections and rate changes to have continually current labor cost modeling for use in labor negotiations, estimated projected labor cost, and other salary and benefit reporting. Municipal Fee Calculation Module As part of the cost of services study, staff is in a two-year process to document in detail the staff time, non-salary costs, and overhead costs related to fee activities. After completion of this effort, staff will have documented the expenditures for approximately 1,000 fees on individual spreadsheets and calculated the cost-recovery level for each fee. Questica, as part of the procurement process, developed a fee calculation module within the budget system. This fee calculation module will be updated annually based on updated salary and benefits costs, which will substantially simplify the annual fee calculation process. Financial Reporting and Monitoring As described with the budget processes, monitoring of expenditures and related reports also occurs on spreadsheets. The data is exported from the financial system and then analyzed with spreadsheets and packaged for Council reports. This budget system will automate the OMB’s internal reports such as budget versus actual analysis, staffing reports, and source and use statements for over 80 funds. Budgets can be monitored with dashboards and drill-down capability allowing managers to monitor their respective budgets at a fund level, department level, or cost center level. City of Palo Alto Page 5 Performance Measures and Dashboards With this new system, data for performance measures can be input and calculated within the system. Then, these measures can be presented with dashboards to monitor departments’ key performance measures and budgets. Making the review of performance measures central to managing the City’s operation is expected to enhance productivity and services for residents. Initially, the dashboard capability will only be available within the City’s firewall with the goal of making the data available to the public consolidating various open data and open budget data sources and systems. Request for Proposal (RFP) Process On October 17, 2013, a notice inviting professional services proposals for the Budget System RPF was posted on the City’s website and sent to 24 known budget software companies. The proposal period was 25 working days. Proposals were received from six companies on November 25, 2013. The selection committee comprised of City Staff from the OMB, Public Works, and Information Technology Departments. The committee reviewed all proposal submitted and scored on a variety of technical requirements, cost to the City, and references. Proposals ranged in price from $351,346 to $984,592. The top three companies were invited to demonstrate their products on February 5, 2014. Questica Inc. offered a vendor hosted and a City hosted solution with separate pricing. Questica’s vendor hosted solution was the lowest priced proposal. After careful analysis, incorporating feedback from staff, and contract/pricing negotiation, the committee selected Questica Inc. as the most technically qualified professional firm that has submitted the most advantageous proposal to the City. In accordance with the City’s IT strategy, the budget system will be hosted by the vendor. Questica Inc. has successfully provided budgeting solutions to public sector agencies since 1998. The software, called TeamBudget, is well known in the public sector for its ability to allow for logical creation of the budget in an intuitive and secure web-based environment. Resource Impact Ongoing funding for the software, support, licensing, and maintenance cost is City of Palo Alto Page 6 available and appropriated in the in the City’s Technology Fund. The contract is for five years and totals $499,068. The cost is spread as follows:  FY 2015: $312,180 (implementation cost, first year license, maintenance/hosting, reporting development)  FY 2016: $39,980 (second year license)  FY 2017: $39,980 (third year license)  FY 2018: $39,980 (fourth year license)  FY 2019: $39,980 (fifth year license)  Contract Contingency: $26,968 Due to the various process and analytical enhancement the new budget system provides, it is estimated that with the acquisition and implementation of the Budget System, the Administrative Services Department will be able to dedicate a 0.5 FTE Senior Management Analyst throughout the year towards higher value projects and tasks generating about $85,000 in productivity savings annually and $425,000 during the life of the contract. Further, as part of the annual budget process, staff in departments will be able to provide information in a much more streamlined form to OMB and decision makers, thereby generating productivity savings citywide. Environmental Review The approval of this contract is not a project under the California Environmental Quality Act (CEQA). Attachments:  Attachment A: C14152204 Questica Contract Final -Signed (PDF) Page 1 of 8 CITY OF PALO ALTO CONTRACT NO. C15152204 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND QUESTICA INC. FOR PROFESSIONAL SERVICES AND SOFTWARE LICENSES This Agreement is entered into on this day of July 1, 2014 (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Questica, Inc., an Ontario corporation, located at 980 Fraser Drive, Suite 105, Burlington, Ontario, Canada, ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A.CITY intends to acquire a budget system and desires to engage a consultant in connection with the implementation and annual maintenance and support of said budget system. B.CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2019 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed $499,068. In the event Additional Services are authorized, the total compensation for services and reimbursable expenses ATTACHMENT A Page 2 of 8 shall not exceed $26,968. The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges in accordance with the milestones identified in Exhibit “C”, the annual maintenance cost, or based upon the CONSULTANT’s billing rates (set forth in Exhibit “C-1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. For custom reports and other work performed using the Contingency Amount as outlined in Exhibit “C”, the invoice shall include an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY ATTACHMENT A Page 3 of 8 for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign as a project manager to have supervisory responsibility for the performance, progress, and execution of the Services and as the project to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s project manager is Christine Paras, Administrative Services Department, Office of Management and Budget, Palo Alto, CA 94303, Telephone: 650-329-2450. The CONSULTANT’s point of contact with respect to performance, progress and execution of the Services will be Michael Newsome. The CONSULTANT’s trainer/instructor will be Steve Williamson and the lead for the technical implementation will be RJ Ahuja. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, the data in the system shall be and remain the exclusive property of CITY without restriction or limitation upon their use. The use of the system is governed by Exhibit “D” titled License Agreement. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or ATTACHMENT A Page 4 of 8 injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. ATTACHMENT A Page 5 of 8 SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above. SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. ATTACHMENT A Page 6 of 8 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. ATTACHMENT A Page 7 of 8 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. ATTACHMENT A ATTACHMENT A Exhibit A,Page 1 of 73 Exhibit “A”–Scope of Services I.TeamBudget Description TeamBudget was designed specifically for creating and maintaining public sector /local government budgets.It provides an easy to use web based interface that allows budget entry and development,forecasting and analysis,amendment tracking,and reporting (over 90 standard out of the box reports,plus Ad Hoc and custom reports available). TeamBudget consists of three primary modules:(1)Operating,(2)Salary/Position Planning and (3)Capital.These modules can be purchased individually,or bundled together as a complete solution set. TeamBudget Operating Module The Operating module allows those in charge of the operating budget to manage the budget at a monthly,quarterly or annual basis.Actual cost and budget data can be imported into TeamBudget and budgets can be categorized on an organizational basis where Cost Centers roll up into Departments and Divisions.Budgets can also be categorized on a Fund basis where Cost Centers roll up into their respective funds.Cost Centers can easily be moved from one Department and Division to the next,as well as from one Fund to the next. Users are able to break down their budgets by line item,identify expenses and funding sources, enter comments for each line item,and attach documents and notes.Users can also forecast for multiple future years using TeamBudget’s RegularIncrease feature to increase or decrease costs by a specific amount or percentage.Past years budget and actuals are also easy to see making for straightforward comparisons. Salary /Position Planning Module This module supports the ability to accurately model and forecast all costs associated with positions and employees.Each Position is associated with a default GL Account and is then assigned a pay grade,step,contract,pay scales and benefits (start and end dates can be associated to each).Union affiliations,job titles,and job numbers can also be entered for each employee and each employee can be allocated to a position or multiple positions in different departments or funds.Throughout the year,adjustments such as cost of living adjustments, new benefits etc.can be made.Position costs can be generated for an unlimited number of years and can be broken down on an hourly,monthly or yearly basis.Each positions cost can be associated to any one (or multiple)costing centers.This association/allocation can range from 0 100%with each costing center belonging to a department or fund.Position data can be imported from HR systems into TeamBudget.Salary /Position Planning reports can also be generated for analysis purposes. ATTACHMENT A ExhibitA,Page 2 of 73 TeamBudgetCapitalModule TeamBudgetCapitalsimplifiesandcentralizestheprocessofCapitalbudgetplanningand executionthroughaunifiedwebinterface.Prior years’budgetdata(ActualCostsandBudget values)canbeimportedintoTeamBudgetandusersareabletocreatemulti yearCapital projectswheretheycanidentifytheirexpenditures,fundingsourcesandmakeadjustmentsas theypreparetheirbudgets.Userscanconstructtheircapitalprojectsonanannual,quarterlyor monthlybasis,enternarrations/explanationsfortheirrequestsandcategorizetheirprojects basedondifferentcriteriasuchasTangibleCapitalAssets,Fund(s),orProjectStatus.The requestswillthenbeescalatedthroughtheworkflowsystemintegratedwithinTeamBudget. Projectrankcanalsobeadministeredaccordingtopredeterminedcriteriaandmultipleproject scenarioscanbecreatedforeachproject. ActualcostversusbudgetsanalysiscanalsobedoneeasilybecauseTeamBudgetimports financialinformationdirectlyfromtheaccountingsystem.Oncedepartmentsbeginentering theirbudgets,reportscanbegeneratedatanytime.SinceTeamBudgetautomaticallyupdates theinformation,reportsaregeneratedinreal time. Supplementary/CoreSoftwareFeaturesAdvancedSearch AllocationsModule TheTeamBudgetAllocationsmoduleallowsyoutomovedollarsaroundtheOperatingbudget, andevenintotheCapitalbudget,inastructuredandbalancedfashion.Itsupportscomplex arrangementsofallocationsbetweenmanybudgetelements. Forexample,someDepartments(CostCenters)allocatealloftheirexpensestoother DepartmentsorCostCenters.Theseareoftenreferredtoas InternalServiceProviders orISPs. AcommonexampleofanISPcanbetheInformationTechnology(IT)department.ISPbudgets aredevelopedindetailjustlikeanyotherdepartment,andthentheirexpensescanbe allocatedouttootherbudgetelements –otherdepartments. AnISPAllocationlikethismightuseaCostDriversuchas"NumberofComputers"todetermine howmuchoftheIT'sdepartmentexpenseswillgotoeachrecipient.Oncetheallocationhas beenrun,eachrecipientCostingCenterwillhaveaDestinationBudgetLinerepresentinga portionofITexpenses,andtheITdepartmentbudgetwillhaveaRecoveryBudgetLinethat effectivelyzeroesouttheirtotalbudget. TheTeamBudgetAllocationmoduleprovidestheabilityto ‘visualize’all(orsome)ofthebudget allocations. ATTACHMENT A ExhibitA,Page 3 of 73 ChangeRequests ChangeRequests(alsoreferredtoasBudgetAdjustments,BudgetModificationsorDecision Packages)allowyoutoprocesspreandpostapprovalbudgetchangesusingacontrolled processandworkflow –based approval. ChangeRequestsisyetanotherfeaturewhichdistinguishesandsetsapartTeamBudgetfrom strictlyabudgetpreparationtoolandfocusesonBudgetManagement.ChangeRequests providesastructuredframeworktodealwithAmendments,Transfers,andotherneeded changestothebudget –bothduringbudgetprepandPostApproval.Withdedicated workflowsandapprovalprocess,staffcanrequestchangessuchasmovingmoniesfromone budgettoanother,proposingchangestopositionsorevenproposingameritpayincreasefor anemployee –allusingasimpleintuitiveuserinterfaceandintheend,thecomplexmathis doneforyou.ChangeRequestscanbemadeindividuallyortheycanbebundledtogether(a decisionpackage)andaretreatedapartfromthegeneralbudgetwiththeirownapproval process,untilthechangesareapproved,thentheycanbeappliedtothebudget(s) automatically.Nootherbudgetsoftwarevendorhasthebudgetsubmissionandchange controlfunctionalityprovidedbyTeamBudget. ServiceLevelMeasurements/Performanceor ServiceLevelMeasurements Formanyclientswishingtocaptureinformationbeyondthebudget,suchasServiceLevel Measures(SLM),Questicaofferscustomizedscreensatthebusinessunitlevelwhereusersare abletoenterinformationsuchasthegoals,objectivesandoutcomes/performancefortheir businessunit.Theycanentertheoutcomes/performance(actualandestimate)forthecurrent year,enterestimatesforthecomingyears,alonewithviewing2previous years’actual performances allonthesamescreen.These SLM’s nowbecomepartoftheworkflowprocess andcanbeadjusted,approved/deniedatthedifferentstagesofthebudgetingprocess. Customizedreportscanshowbudgetaryinformation,performancemeasuresalonewith narrativesanddescriptions/justificationsforeachbudget. StagesandWorkflow TeamBudgetusestheterm ‘BudgetStage’,orsimplyStagetofacilitatethebudgetdevelopment processandalsoindicatewhereagivendepartmentisintheannualbudgetingprocess.Each Stageisconfigurable,and coupledwithaworkflow. TeamBudgetusesamethodologythatintroducesacontrolledenvironmentwithaworkflow component –userscanenterandapprovebudgetsandescalatethemthroughaseriesof predefinedstages.Thisworkflowcontrolstheaccessindividualshavetothebudgetsand supportsamethodtoensurebudgetsareproperlyreviewedandapprovedbyallthosewhoare participatinginthedevelopmentprocess.Afterstaffhaveenteredtheirbudget(s),theyare responsibleforpromotingit(advancingit)tothenextworkflowstage(reportsareavailableto showwhichdepartmentsareatwhichstage).Thesystemrecordsthebudgetateach ATTACHMENT A ExhibitA,Page 4 of 73 submissionstage,sothatthechangesandmodificationstothebudgetareclearlyvisibleand transparentifrequiringreviewatalaterdate. Explorer/Multiplefunds,departments,anddivisions TeamBudgetcanaccommodateanunlimitednumberoffunds,departmentsanddivisions. BudgetsarecategorizedonanorganizationalbasiswhereCostCentersroll upinto DepartmentsandDivisions(orviceversa).BudgetscanalsobecategorizedonaFundbasis whereCostCentersroll upintotheirrespectivefunds. Fromthepull downmenu(topcenter)oftheaboveExplorerscreen,usescanselectother ‘Trees’–alternativeorganizationalentitiesbywhichthebudgetscanbeorganized. Narrative/Comments/Descriptions/Text Narrativecontentcanbeenteredandassociatedwithmanydifferentareasoftheapplication; includingDepartment,ProgramOffer,CostCenter,Project,Position,Union(Profile),Employee, tomentionjustafew.UserscanbreakdownindividualbudgetsbylineItem,identifyexpenses andfundingsources,entercommentsforeachlineItem,andattachdocumentsandnotes.The TeamBudgetFormsEditor(screeneditor)featureallowsadministratorscontroloverthetype andamountofcontentoneachofthenarrativescreens/fields. AdvancedSearch Arobustandpowerfultool,theAdvancedSearchfeatureallowsauthorizeduserstoperform sophisticatedandhighlydynamicdataanalytics/Ad Hocqueriesbasedonspecificcriteriaor descriptivewords.Queriesarecreatedinauserfriendlyfashionwhereacomplexquerycanbe built –one lineatatime. AdvancedBudgetSearchallowspoweruserstheabilitytoview,update,andmanipulatelarge volumesofbudgetdataquickly.AllAdvancedSearchgridsareexportabletoExcel. EachofthefollowingareasofTeamBudgethasitsowndedicatedAdvancedSearchfunction: ChangeRequests(DecisionPackages) CostCenters Employees Forecasts(alsocalledBudgetLines) GLAccounts(Objects)andGLCategories OperatingImpacts ActualCosts Positions Projects ProjectForecasts(Capitalmodulelineitems) Scenarios(What ifs) ATTACHMENT A ExhibitA,Page 5 of 73 Hierarchy/Trees TeamBudgetwillbeconfiguredtomirrorThe City’s accountingandorganizationalstructure. QuesticawillworkwithTheCitytodefineandimporttheorganizationstructure(s)andChartof Accountsfoundinthefinancialsystem. TheTeamBudgetfeatureknownas SystemTrees providesformultiplehierarchystructuresfor rollingupThe City’s organizationalstructure.OneSystemTreeisbasedonDivision/Department whiletheotherallowsforrollupbyFund(s).Manysystemreportsdisplaydataaccordingtothe SystemTreesandtheorganizationalstructuretherein. InadditiontoSystemTrees,staffcancreateuser defined Additional Trees allowingformany morehierarchicalstructuresbeyondDivision/Departmentandfunds.TheseAdditionalTrees havenoeffectontheSystemTreesnortheunderlyingorganizationalandaccountstructures. ThereisnolimittothenumberofAdditionalTreesthatcanbecreated.TeamBudgetoffersa reportthatshowsrevenuesandexpendituresforeachAdditionalTreecreated. EmailNotifications Someuserswanttobeinformedwhencertaineventstakeplace.TeamBudgetallowsthemto usetheemailnotificationsfeaturetobenotifiedbyemaileachtimeapredeterminedevent occurs. Distributions –Spreadoutamounts TeamBudget’s Distributionfeatureallowsforanannualamounttobe spread overcertain months(orallmonths)basedonapredeterminedcalculation.Example,ifauserneedsto accountforsnowremoval,theymaywanttodistributethecostofsnowremovalonlyoverthe wintermonthsandnotovertheentireyear.Distributionscanbeappliedtorevenues,expenses andpositioncosts.Whenappliedtopositioncosts,seasonalstaffwagesforexample,canbe budgeteddowntoonlythemonthsinwhichtheywork. RegularIncrease TeamBudget’s “RegularIncrease”featureallowsuserstoapplyincreases/decreasesattheline item,budget,department,andorganizationlevel.Onceachangeismadeatanyofthoselevels, theyareautomaticallyreflectsattheotherlevels. What ifScenarios TeamBudgetOperatingandCapitalmoduleshavetheabilitytocopyany budget/project/changerequest/etc.andcreateasmanydifferent ‘What if’scenariosofthat budgetdataasdesired.Thesealternativebudgetscenariosaremaintainedforeasyreference. However,onlyonebudgetversion(onescenario)canbedesignatedas ‘Active’. Itistheactive budget/scenariothatissubmittedwhentheuserpromotes(advances)thebudgettothenext approvalstage.What ifScenarioscanbeactivated(turnedonorturnedoff)onebyone.The Salarymodulealsoaccommodatesdifferent ‘What if’scenariosforsalaryandbenefitdatasuch ATTACHMENT A ExhibitA,Page 6 of 73 as,wageincreases,COLAincreases,collectiveagreementnegotiations,andallrelated calculations. ReserveForecasts The ReserveForecasts featurewasspecificallydesignedfortrackingreservebalances.Thishelps Financetobeup to datewithfundsandreservebalances,inreal time. Eachreservecan beassociatedwithaGLaccount.Asusersidentifytheirfundingsources(i.e. Reservesaccounts)fortheirCapitalprojects,FinanceisabletoviewtheirReservesBalanceand Forecasts –theopeningbalance,theamountbeingwithdrawnfromeachreserves,any contributionsandtheclosingbalance.Out of the box,TeamBudgetallowsstafftoviewthis informationforupto25years.Thiscanbeextended,shouldtheCitywishtodisplayadditional years. TeamBudgetalsocomeswithanout of the boxreportwhichshowstheaboveinformation alongwiththenameofeachprojectthatisrequiringmoniesfromeachreserve. ForthetrackingofFunds,TeamBudgethasasimilarfeaturecalled “FundForecasts,”which servesasimilarforecastbutspecificallyforFunds. FundBalanceForecast AsuserscreatetheirCapitalprojects,theyareabletocopyexistingprojects,renamethemand havemultiplescenariosrepresentingadifferentstateofaffairs. TheReserveForecastandFundBalanceForecastfeaturesalsoallowFinancetocopyexisting Reserve/FundForecastsandtocreatealternativescenarios. Onlyonescenariocanbeactiveatatime,butFinancewillbeabletoswitchbetweenscenarios inordertogaugetheirlong termeffects.Thiscanbeviewedonscreenand/orviareports. Formulas/Excel LikeBudgeting TeamBudgetwasdesigned(fromthebudgetinputperspective)tolooksomewhatlikeanExcel spreadsheet,asmostofournewcustomersareacquaintedwithdevelopingbudgetsinthis manner.Inadditiontothelookofaspreadsheet,TeamBudgetalsohasspreadsheet like capabilities,inthatuserscanenterExcel likeformulasiftheywish(notarequirement).Current ViewdisplayoptionswithinaCostCenterare;Monthly,Quarterly,AnnualandFormula(in additiontonumberofyears,anddecimalplaces). AuditTrails –Logs TheTeamBudgetAPIwaswrittenfromthegrounduptosupportafulleventmodel.Virtually alluseractionsandentriessuchasloggingin,savingabudget,updatingabudget,promotinga budgetetc.aretrackedandrecordedintheAuditSystem.Virtuallyanyeventinthesystemcan beloggedforlaterretrievalifnecessary.Standardsearchparametersinthelogviewerinclude; daterange,user,entity,actiontype,applicationeventtype,andcontainingtext. ATTACHMENT A ExhibitA,Page 7 of 73 Security(UserSecurity) Securityisrolebasedandonceestablished,youradministratorswillbeabletodeterminewho isabletoview,edit,demote,promote(advance)andlockbudgets ateachstageofthebudget process(asoutlinedaboveunder “Stages and Workflow”). Restrictionstorunningreportsand batchprocesses,creatingscenarios,administrativelook ups,accesstoactualcostsinformation etc.caneasilybeestablished.Administratorscanalsodeterminewhohasaccesstothebudgets andalsodeterminethetypesofanalysisthatcanbeperformed.Individualswithoutpermission willnotbeableviewselectedsystemreportsand/orperformbudgetanalysis. Yourpermissionsdeterminewhatyoucansee:Auser’s interfaceisdependentonthe permissionsgrantedthembytheSystemAdministrator.NotetheSystemAdministratorhas access(rights)tovieweachoftheprimarymoduleswhichmakeupTeamBudget –Operating, Salaries,andCapital (ontheleftsideofthescreen)whereastheotheruseronlyhasOperating modulerights.TheuserontherighthasnoaccesstoanythingrelatedtoSalariesorCapital. Arobustandpowerfultool,theAdvancedSearchfeatureallowsauthorizeduserstoperform sophisticatedandhighlydynamicdataanalytics/Ad Hocqueriesbasedonspecificcriteriaor descriptivewords.Queriesarecreatedinauserfriendlyfashion(seebelow)whereacomplex querycanbebuilt –one lineatatime. AdvancedBudgetSearchallowspoweruserstheabilitytoview,update,andmanipulatelarge volumesofbudgetdataquickly.AllAdvancedSearchgridsareexportabletoExcel. EachofthefollowingareasofTeamBudgethasitsowndedicatedAdvancedSearchfunction: ChangeRequests(DecisionPackages) CostCenters Employees Forecasts(alsocalledBudgetLines) GLAccounts(Objects)andGLCategories OperatingImpacts ActualCosts Positions Projects ProjectForecasts(Capitalmodulelineitems) Scenarios(What ifs) Reports Thereportingcapabilityofanybudgetingsoftwareiscritical.TeamBudgetprovidesthree(3) primarymethodstocreateandviewbudgetrelatedreports. 1.Standard(pre built)reports ATTACHMENT A ExhibitA,Page 8 of 73 2.Ad Hocreports 3.Customizedreports(customerand/orQuesticacreated) AllStandard(pre built)reportsgeneratedwithintheapplicationleverage Microsoft’s SQL ServerReportingServices(SSRS). TeamBudgetincludesover90pre builtreportsreadytouse,ortobecustomized.Thereports availableineachmodule(Operating,Salaries,andCapital)areunique.Newreportscanbe addedeasilyandexistingreportscanbecopiedandedited.The90plussystemreportsare groupedintothefollowing14categories: 1.Ad HocReports 2.Actualvs.Budget 3.CustomReports 4.Graphs 5.Operating 6.Salaries 7.FundReports 8.BaselineReports 9.DepartmentalReports 10.Capital 11.ChangeRequest 12.Allocations 13.StageReports 14.SnapshotReports Allout of the boxreportsareexportableto:PDF,Excel,Word,XML,CSV,MHTML(webarchive) andTIFFfileformats. Drilldown Drillthroughreports Manyofstandardreportsaredrill down,and/ordrill through,inthattheyallowtheenduserto quicklyaccessunderlying(moredetailed)information. Rollupandconsolidationbudgetdata Manyoftheout of the boxreportswillautomaticallyrollupandconsolidationbudgetdataby costcategorycodes,objectcodes,costcenters,departmentsand/ordivisions. ATTACHMENT A ExhibitA,Page 9 of 73 Ad HocReporting Inadditiontothe90+out of the boxreportsthatuserscanimmediatelyutilizeQuesticahas integrated Microsoft’s SQLServer Ad HocReporting asthecornerstonetechnologyforthose whowishtoquicklydesigntheirownreports. Thistechnologyhasmanybenefits: Itiswebbasedsousersdonotrequirespecialsoftwareloadedontotheircomputers. NoquerywritingisrequiredsothereisnoneedtoinvolveITresources. Itincludesintuitiveinterface.Userscandraganddroptheinformationtheywanttosee intoareportdesignwindow. AllreportsareexportableintoPDFExcelXMLetc. TheAd Hocreportwritingtoolisdesignedfornon technicaluserswhodesirequickaccessto designandcreatetheirownreports.Itincludesanintuitiveuserinterface.Userscandragand droptheinformationtheywanttoseeintoareportdesignwindow.Ad Hocreportingsolves themostcommonprobleminreportdesign –howtocreatereportsthatdisplaytherelevant datathatusersrequirewhilehavingenoughflexibilitytoallowtheusertoorganizeandview thedatahowevertheywish.Ad HocReportingwillprovidethe City’s userstheabilitytoview dataimmediatelyinwhateverformtheychoosewithouthavingtorequestanewcustomized report.Oncedevelopeduserscanre usethereportstheydesignedorincludethemasapartof theTeamBudgetapplicationmakingthemavailabletoallusers. Ad HocReportuserscanalso: Addtheircustomtitles,graphics,logos Draganddropfieldsonthegridbasedonthewaytheywanttoseethedataonthe report Makeareportintoadrill downreportbyaddingmorefieldstothegrid Formatthegridbyapplyingfonts,borders,fillsandchangingthealignments ApplyformulasastheywillinExcelforcustomanalysis Applyfilters Exportreports Havesavedreportsbecomeoneoftheregularreportsavailabletootherusers(subject tosecuritypermission) Variance/Budgetvs.ActualCosts Severaloptionsexistforuserstoreportonvariancesacrossmultipletimeperiods.Forbrevity, wewillconsiderjusttwooptionshere,onemoreonthe ‘micro’sideofbudgeting,andone fromamore ‘macro’perspective: ATTACHMENT A ExhibitA,Page 10 of 73 Microexample:Eachcostcenter/programhasseveralscreensandreportsdedicatedto variances.Thesamplescreenbelow(FinanceAdministration)showsastandardscreencalled ‘AnnualComparison’–whichdisplaysthebudgetvs.actualcosts,thedifference(thevariance) andanareaforstafftoentercomments,notesorjustifications.Thisdatacanalsobeviewed onamonthlyorquarterlybasis,aswellas ‘Details’individualtransactions(assumingyour financialsystemsupportsindividualcosttransactions). Again,costcenterscanbethoughtofasapieceofthebudget –acollectionofrevenuesand/or expendituresbelongingtoadepartment.Forexample,afinancedivisionmightbesplitupinto variousdepartmentssuchasComptrollerAdmin,FinanceAdmin,andBudgetAdmin –eachof thesedepartmentscanhaveoneormore(sometimesmanymore)costcentersassociatedto them. Macroexample:Whereastheaboveexamplearevariancesfromaspecificpartofthebudget, justonedepartment,belowisahigherlevelperspectiveshowingbudgetvs.actualcostsviewed asanaggregateofallcostcenters,alldepartments,alldivisions,etc.Thereportbelowiscalled ‘Budget vs.ActualsYearto Date’andallowsforin depthinterrogationofbudgetvs.actuals acrosstheentireenterpriseandacrossmultipledimensions. PerformanceMeasuresModule Summary ThePerformancemodulecontainsallthefeaturesthatarerequiredtodoPerformance Measurementinthepublicsectorandothertypesoforganizations. Terminology ThevocabularyofPerformanceMeasurementisnotstandardized.Herearesomedefinitions andexplanations: Program:a.k.a.ServiceArea.Onediscreteprogramorserviceintheorganization. PerformanceMeasuresgenerallymeasureaspectsofprograms,includingtheirinputs, activities,effectivenessandoutcomes. Performance Measure:onethingthatwillbemeasured.NumberofBusPassengersper Month.NumberofInvoicesProcessed.TotalExpensesbyDepartment(manymeasuresare financial.)Customersatisfaction.Citycrimerate.Population.TotalAssessment. KPI’s, Indicators:MeansaboutthesamethingasaPerformanceMeasure. Scorecard:Avisualizationtoolfororganizingmeasuresintoahierarchywherelowerlevel measurementsareaggregatedintohigherlevelindicators.Putyourmeasuresintoahierarchy. Ifsomemeasuredeepbelowhierarchynode “A”isoffitstarget,Node “A”getshighlighted somehowandyoucandrilldowntofindoutmore. Balanced Scorecard:Atrademarkedstrategicmeasurementtool/systemthatincludesa wholeplethoraofpractices,diagrams,scorecards,dimensions,seminarsandcertifications,as dictatedbytheBalancedScorecard Institute™. Nottobeconfusedwithascorecard.ThePM ATTACHMENT A ExhibitA,Page 11 of 73 modulewillbeabletodomanyoftheactivitiesthatarepartofBalancedScorecardpractices, butnotall. FeatureList AbilitytodefineandtrackMeasures. o Canbeusedtotrackanyquantifiabledataincluding(butnotlimitedto)inputs,outputs, efficiency,andoutcomes(fourcommontermsfrompublicsectorPM.)withconfigurable UnitsofMeasure(percentage,liters,foot pounds, FTE’s, stone,exabytes,etc.) o MeasurescanhaveTargets (similartobudgetsinthebudgetingmodules.)Targetscan besetAnnually,QuarterlyorMonthly.Wehavestructuredthearchitectureinsucha waythatitwillbepossibletoaddnewperiodsoftargetcalendarizationinthefuture, likeweeklyordaily. o FinancialandstaffingTargetscanbeautomaticallygeneratedbydefininganadvanced searchonbudgetsor FTE’s intheOperatingandCapitalmodules.Hugetimesaverfor customerswhoownmultiplemodules!Nointegrationsormanualdataentryrequired. o TargetscanhaveThresholdswhichdefinehowfarofftargetthemeasurecanbebefore it’s consideredina“warning”(yellow)or “critical”(red)state. o MeasureshaveActuals(the “measurement”itself.)Actualscanbeenteredasfrequently asdesired(muchlikeactualcosttransactionsonbudgets)andarerolledupfor comparisontotargets. o Actualscanbehuman enteredonaschedule. Theuserresponsibleforameasurecanbeautomaticallyemailedwhentheirdataisdueor overdue. Adashboardwidgetwillprovide “quickentry”foractualsandshowseriouslookingcolors whenentriesareoverdue. o Financialactualscanbeautomaticallygeneratedbydefininganadvancedsearchon actualcostsintheOperatingandCapitalmodules.Hugetimesaverforcustomerswho ownmultiplemodules!Nointegrationsormanualentryrequired. o “Combined”measurescanaggregate,sumanddivideothermeasuresbyeachotherto generateratesandper itemcosts,whichcanbeseparatelyreportedandtracked. ByusingtheProgramsfeature,userscandesignameasurementplanfromscratchfollowing bestpractices. o Enteralistofallyour organization’s programs. o DefineaLogicModelandOutcomesforeachprogram.Usethesetoderiveyour measures.Questicacanworkwithyoutoimplementthesestepsusingourin house PerformanceMeasurementexpertise. o Organizeyourmeasuresundereachprogram. o (Measures don’t have tobelongtoaprogram.Ifyouhaveanexistingmeasurementplan youcanjustdumpinallthedatatoo.) StatisticalLedgerfortrackingandmaintainingnon financialmetricsthatcanbeincluded withfinancialmeasurestoestablishcost/unitorrevenue/unitobjectivesorsimplytotal unit/quantityobjectives.Therearerealisticallynolimitsonthenumberofstatistical measurestobeestablishedandmaintained.Examplesincludegallonsofwater,feetof highway,squarefeetofabuilding,numberofvehicles,numberofcomplaints etc… ATTACHMENT A ExhibitA,Page 12 of 73 Usedashboardchartstovisualizeyourmeasurementplananditsexecution,andbenotified ofwarningandcriticalsituationsastheyarise. BuildScorecardstoorganizeyourmeasuresintorolleduphierarchies.UsetheScorecard Widgettoaddyourscorecardtoadashboard. Workswithoursecuritysystemforgranularcontrolofviewingandeditingforall measurementdata. Totalintegrationwithallof Questica’s coreproductivityfeaturesincludingadvancedsearch, spreadsheetimportandexport,customfields,customizablegridsandself servereporting. II.TeamBudgetFunctionalandNon functionalRequirements Classificationdefinition: •Mandatory featuresmustbeincludedforthesystemtofunction. •Required featuresshouldbeincludedbutthesystemcanfunctionwithout them. •Desired featuresarenicetohavebutarenotneededforthesystemto function. FunctionalRequirements Thefollowingfunctionalrequirementsdefinespecificbehaviororfunctionsrequiredofthesystem. IntegratedBudgetSystem General ID Requirement Classification VendorResponse 1a IntegratedOperatingandCapitalBudget Systemforover80fundsand hundredsofexpenditureandrevenue appropriations MandatoryTeamBudgetwillbeconfiguredto mirrorThe City’s accountingand organizationalstructure.Questica willworkwithTheCitytodefineand importtheorganizationstructure(s) andChartofAccountsfoundinthe financialsystem. TheTeamBudgetfeatureknownas SystemTrees providesformultiple hierarchystructuresforrollingup The City’s organizationalstructure. OneSystemTreeisbasedon Division/Departmentwhiletheother allowsforrollupbyFund(s).Many systemreportsdisplaydata accordingtotheSystemTreesand theorganizationalstructuretherein. InadditiontoSystemTrees,staffcan createuser defined AdditionalTrees allowingformanymorehierarchical structuresbeyond ATTACHMENT A ExhibitA,Page 13 of 73 Division/Departmentandfunds. TheseAdditionalTreeshaveno effectontheSystemTreesnorthe underlyingorganizationaland accountstructures.Thereisnolimit tothenumberofAdditionalTrees thatcanbecreated.TeamBudget offersareportthatshowsrevenues andexpendituresforeachAdditional Treecreated. 1bAccesstoabout80userscity wideMandatoryAll80usersfromacrossthewillhave accesstoTeamBudget. 1c Trackingofrevenues,expenditures,and positionsbyBudgetphase (e.g.:Base,Proposed,Adopted,and Amended/Adjusted) MandatoryYes.TeamBudgetoffersafeature called ‘Baselines,’whichare snapshots/reportsofallbudgetdata acrosstheentireorganizationata pointintime,orat any pointintime. Thereisnolimittothenumberof Baselinesyoucangenerate. TeamBudget’s Baselinereportsallow userstocompareonebaseline versusanother(ormultiple baselines)inordertoseewhathas increaseddecreasedornotchanged, ataveryhighlevel. 1d Transferentriesarecorrectlyrecordedinboth fundsaffectedbythe transfer MandatoryYes.Transferscanbedoneviathe ChangeRequestsfeaturewillallows moniestobemovedfromonefund toanother,amongother functionality. 1eAbilitytore labelexistingsystemfield descriptions DesiredYes.AllfieldswithinTeamBudget canberelabelledaccordingtoCity specification. 1fAbilityto “bookmark”certainareasofthe budgetsystem DesiredYes.Costcenters,projects, employees,positions,profiles, ChangeRequestsandreportscanbe bookmarked. 1gAbilitytoredesignthebudgetstructureRequiredYes.Bydefault,TeamBudget providestwoSystemTrees (organizations/budgetstructure). Thesetreescanbereconfiguredas required.Additionaluser defined Treescanalsobecreatedallowing stafftodraganddropdepartments, ATTACHMENT A ExhibitA,Page 14 of 73 divisionsandbudgetsfromonenode ontheTreetoanother. 1h Abilitytocopy “prioryear”data(e.g.:forecast analysis,budgetchange requests)tothecurrentbudgetyear RequiredYes.Usersareabletocopyanycost center/projectfrompreviousyears, andusethemasthebasisofthe currentbudgetyear. 1iAbilitytodevelopmulti yearsourceanduse fundstatements RequiredYes.Thisinformationcanbeviewed onscreenandviareports. InterfacewithSAP ID Requirement Classification VendorResponse 2 IncludestheabilitytointerfacewithSAP VersionECC6.0orhigherto uploadanddownloadfinancialdata –please explaindetails MandatoryYes.Theintegrationbetween TeamBudgetandSAPwillbe establishedduringthe implementationprocess.Thiswill allowforactualcoststobebrought intoTeamBudgetandforbudget informationtobebroughtintoSAP. See “Chapter4 WorkPlanor Proposal”under “Integration Approach”formoreinformation. SalaryandFringeCostBudgeting&Modeling ID Requirement Classification VendorResponse 3aUploadpositioncostinformation(e.g.:salary, specialpays,pension,healthcosts)fullyandfor specificfieldsfromSAP MandatoryYes.Theprocessforloading (importing&exporting)HR/payroll dataintothesystemisviathe ‘Salaries Synchronization Tool’.This providesamechanismtoreviewand committhechangestothe TeamBudgetSalariesmodule.This applicationinterfaceallowstheuser todeterminepreciselywhich changesshouldbebroughtover fromtheHRsystem. See “Chapter4 WorkPlanor Proposal”under “Integration Approach”formoreinformation. 3b Calculatepersonnelexpenditurebyposition, department,fund,detail (e.g.:salary,pension,retireehealthcare, specialpays,healthbenefits)forvarious employeegroupswithvariousbenefitlevels MandatoryYes.ThiswillbedoneviatheSalaries module,whichsupportstheability toaccuratelymodelandforecastall costsassociatedwithpositionsand employees.EachPositionis associatedwithadefaultGLAccount ATTACHMENT A ExhibitA,Page 15 of 73 andisthenassignedapaygrade, step,contract,payscalesand benefits(startandenddatescanbe associatedtoeach). Union/BargainingUnitaffiliations (Profiles),jobtitles,andjobnumbers canalsobeenteredforeach employeeandeachemployeecanbe allocatedtoapositionormultiple positionsindifferentdepartmentsor funds.Throughouttheyear, adjustmentssuchascostofliving adjustments,newbenefitsetc.can bemade.Positioncostscanbe generatedforanunlimitednumber ofyearsandcanbebrokendownon anhourly,monthlyoryearlybasis. Eachpositionscostcanbe associatedtoanyone(ormultiple) costingcentersbelongdifferent departments/fund.This association/allocationcanrange from0100%witheachcosting centerbelongingtoadepartmentor fund.Positiondatacanbeimported fromHRsystemsintoTeamBudget. Salary/PositionPlanningreportscan alsobegeneratedforanalysis purposes. 3c Abilitytomodeltotalcompensation(e.g.: salary,specialpays,health plancosts,pensionrates)changes RequiredYes.ThiswillbedoneviatheSalaries module.Seeanswertoquestions above. 3dAbilitytoassignmultiplefundingsourcestoa position RequiredYes.ThiswillbedoneviatheSalaries module.Seeanswerto3babove. CostAllocationPlans ID Requirement Classification VendorResponse 4a Developmentofcostallocationplansfor internalsupportfunctionsas wellasInternalServiceFunds RequiredAsmentionedbefore: TheTeamBudgetAllocationsmodule allowsyoutomovedollarsaround theOperatingbudget,andeveninto theCapitalbudget,inastructured andbalancedfashion.Itsupports complexarrangementsofallocations betweenmanybudgetelements. Forexample,someDepartments ATTACHMENT A ExhibitA,Page 16 of 73 (CostCenters)allocatealloftheir expensestootherDepartmentsor CostCenters.Theseareoften referredtoas InternalService Providers orISPs.Acommon exampleofanISPcanbethe InformationTechnology(IT) department.ISPbudgetsare developedindetailjustlikeany otherdepartment,andthentheir expensescanbeallocatedoutto otherbudgetelements –other departments. AnISPAllocationlikethismightuse aCostDriversuchas"Numberof Computers"todeterminehowmuch oftheIT'sdepartmentexpenseswill gotoeachrecipient.Oncethe allocationhasbeenrun,each recipientCostingCenterwillhavea DestinationBudgetLine representingaportionofIT expenses,andtheITdepartment budgetwillhaveaRecoveryBudget Linethateffectivelyzeroesouttheir totalbudget. 4b Abilityforrelatedcostallocationplans(Human Resource(HR)costsare costallocatedtoAdministrativeServices Department(ASD)andASDcostareallocated toHR;furtherinternalsupportservices departments’costsarethenallocatedtoall otherCitydepartmentstocalculatethe transferamountsfromnon generalfund departmentsforinternalsupportservicesto theGeneralFund) RequiredYes.Thiswillbedoneviathe Allocationsmodule. ForecastDevelopment ID Requirement Classification VendorResponse 5a AfterdevelopmentoftheBase Budget(firstyearofForecast),ability to modelnineyearsofForecastdata withadjustments(e.g.:annual percentagecompounded;different percentagesforForecastyears; associatedfringepercentages)to RequiredYes.Thereisnolimittothenumberof yearsthatcanbebudgetedand forecastedwithinTeamBudget. TeamBudget’s “RegularIncrease” featureallowsuserstoapply increases/decreasesatthelineitem, budget,department,andorganization level.Onceachangeismadeatanyof ATTACHMENT A ExhibitA,Page 17 of 73 revenuesandexpendituresthoselevels,theyareautomatically reflectsattheotherlevels. 5bParalleldevelopmentofvarious ForecastModels RequiredYes.Forecastmodelingcanbedonefor theOperatingbudget(costcenters), capitalprojectsandSalaries. Forbudgeting,forecastingandanalysis purposes(whetherforrevenuesor expenditures),TeamBudgetprovides userswiththeabilitytocopyacost center(s),giveitaname,andmake changesastheyseefit.Theycanalso createscenariosfromscratch.These alternativebudgetsaremaintainedfor easyreferenceandmaylookentirely differentfromthefirstscenario. However,onlyoneversioncanbe designatedas ‘Active’.Itistheactive scenariothatdeterminesthecostingof thepositionswithintheProfile.Each scenariocanbemade “Active”ata time,inordertogaugeitseffectonthe positioncosting. Usersarealsoabletoforecastformultipleyearsusing TeamBudget’s “RegularIncrease”featuretoincreaseor decreaseanentirecostcenter/projectbyaspecificamountorpercentage.IndividualLineItemscanalsobe adjustedbyaspecificamountorpercentage.Alternatively,formulascanbeusedwithVariables(costdrivers)to provideamorespecificvaluethatwillself maintainitselfbasedoncostdriverchanges.Thereisnolimittothe ATTACHMENT A ExhibitA,Page 18 of 73 numberofyearsthatcanbeforecastedwithinTeamBudget. 5c Abilitytousepastfiscalyearactual dataandcurrentfiscalyear projecteddatatoforecastfuture expenditurelevels DesiredYes.Forecastingcanbeaidedbyusing the AnnualBudget(SummaryView) screenwithinTeamBudget,which shows2prior year’s budgetandactual costs,thecurrent year’s budgetand actualsandtheforecastyears. Essentially,ausercouldscrollfromleft torightinordertoseehowtheir budgetshavedoneinthepast,how theircurrentlydoingandhowtheyplan ondoinginthefuture. WorkflowCapabilities ID Requirement Classification VendorResponse 6aFlexibleworkflowsystem(includingdelegation ofapprovaland/orparallelapprovals)for budgetchangemodificationsforvarious budgetphases(e.g.:basebudget,proposed budget)andmodificationstotheadopted budgetincludinginternaldepartmentapproval, multi departmentapprovals(e.g.:Information TechnologyDepartmentforITrequestsor PeopleStrategyandOperationsDepartment forpositionrequests),andBudgetOffice approvals MandatoryYes.TeamBudgetusestheterm ‘BudgetStage’,orsimplyStageto facilitatethebudgetdevelopment processandalsoindicatewherea givendepartmentisintheannual budgetingprocess.EachStageis configurable,andcoupledwitha workflow. TeamBudgetusesamethodology thatintroducesacontrolled environmentwithaworkflow component –userscanenterand approvebudgetsandescalatethem throughaseriesofpredefined stages.Thisworkflowcontrolsthe accessindividualshavetothe ATTACHMENT A ExhibitA,Page 19 of 73 budgetsandsupportsamethodto ensurebudgetsareproperly reviewedandapprovedbyallthose whoareparticipatinginthe developmentprocess.Afterstaff haveenteredtheirbudget(s),they areresponsibleforpromotingit (advancingit)tothenextworkflow stage(reportsareavailabletoshow whichdepartmentsareatwhich stage).Thesystemrecordsthe budgetateachsubmissionstage,so thatthechangesandmodifications tothebudgetareclearlyvisibleand transparentifrequiringreviewata laterdate. Atypicalbudgetmightevolve throughseveralapprovalstages: Aboveisanexampleonly TheCity candefineandconfigureasmany budgetstagesyouwish. Sincethisentireprocessisusingthe samedatabaseinacontrolled environmentthereisnore entryof data.Reportsaregeneratedfrom thesamedatathattheusers enteredattheirfirstandsubsequent submissions.Thebudgetprocess is efficientbecauseTeamBudget automaticallynotifiesusersviae mailwhentheirparticipationis required.Asthebudgetispromoted throughthedifferentstages,user permissions(securitysettings)are Stage1– InitialBudget Stage2– ManagementReview Stage3–Budget OfficeReview Stage4–Final Review&Approval ATTACHMENT A ExhibitA,Page 20 of 73 triggered,providingthere assurance thatonlytheappropriatepeoplecan modifyorviewthebudgetateach stage. SampleScreen –BudgetApproval Stagesandrelatedpermissions: 6bIncludescommentornotesfunctionfor recordingactionssuchasforbudgetchange requests MandatoryYes.Narrativecontentcanbe enteredandassociatedwithmany differentareasoftheapplication; includinglineitem,costcenter, project,position,union(profile), employee,tomentionjustafew. Userscanbreakdownindividual budgetsbylineItem,identify expensesandfundingsources,enter commentsforeachlineItem,and attachdocumentsandnotes.The TeamBudgetFormsEditor(screen editor)featureallowsadministrators controloverthetypeandamountof contentoneachofthenarrative screens/fields. Atypicalnarrativescreenin ATTACHMENT A ExhibitA,Page 21 of 73 TeamBudgetmightlooksomething likethesamplescreenbelow: 6cSearchablecommentsornotesfunctionDesirableYes.Thiscanbedoneviathe AdvancedSearchfeaturewhich allowsauthorizeduserstoperform sophisticatedandhighlydynamic dataanalytics/Ad Hocqueriesbased onspecificcriteriaordescriptive words.Queriesarecreatedinauser friendlyfashionwhereacomplex querycanbe built –one lineata time. 6cAllowsfortheattachmentofsupporting documents RequiredYes.Supportingdocumentscanbe attachedatthelineitem,cost center,project,employee,Profile, andposition.Thereisnolimittothe typesofdocumentsandthenumber ofdocumentsthatcanbeattached withinTeamBudget. 6d Allowsforreviewersandapproversto commentondecisionofbudget changerequests RequiredYes.ThiscanbedoneviatheNotes andcommentsfeatureswithin TeamBudget. 6eProvidesforemailnotificationRequiredYes.ThiscanbedoneviatheEmail Notificationsfeaturewhichallows userstoreceiveemailnotifications ATTACHMENT A ExhibitA,Page 22 of 73 eachtimeapredeterminedevent occurs.Aperfectexampleofemail notificationsbeingusedisviathe Workflowfeature,wherestaffat eachleveloftheapprovalprocess receivedemailseachtimeabudget ispromotedordemoted. Notificationscanalsobesetupin ordertobealertedwhensomeone deletes/changesabudget,or adds/deleted/changesascenario. BudgetBalancing ID Requirement Classification VendorResponse 7Abilitytobalancebudgetswithinthesystem forvariousfunds RequiredYes.Severalfeaturesareavailableto assistinthisarea,includingtheFund BalanceForecastfeaturewithin TeamBudget,whichallowsthe Finance/BudgetDepartmenttotrack thebalanceofeachFund.Also availableisafeaturecalled ‘Force Balance’whichwheninitiatedwill requirethatselectedbudget elements(Funds,etc.)bebalanced (Revenues=expenditures)at specifiedbudgetstages.Generally speaking,thisfeatureistypically usedoncethebudgetisgettingclose totheapprovalstage.Also,there areanumberofreportsthatcanaid inensuringthatthebudgetsand Fundsarebalanced. FeeDevelopment ID Requirement Classification VendorResponse 8a Identificationoffeecostcomponents(e.g.: fullyloadedpersonal servicescostbyposition;percentofpositions; relatedcostallocation percentages;non salary costs) RequiredManyelementsinTeamBudgetcan bemappedlogicallytoreflecta relationshipbetweenthat componentofthebudgetandlarger (orsmaller)communitywide services/goalsorcalculations.This mappingcantakeplaceinmany differentplaceswithinTeamBudget including;Departments,Cost Centers,individuallineitems, Positions,andEmployees toname ATTACHMENT A ExhibitA,Page 23 of 73 justafew.Forexample,ifyou wantedtoidentifyafeecost componentwithinthePolice Department,allthebudgetelements associatedwiththisfeecost componentcanbeflagged,or mappedtothePoliceDept.“Fee CostComponentA,B,Cetc.”By mappingtherelationshipbetween budgetitemsandfeecost components,reportscanbequickly generatedshowingallbudget revenuesandexpendituresforeach fee.Moreinformationisneeded regardingthisrequirement. 8bAutomaticupdatesoffeecostcomponentsRequiredSeeresponseto8aabove. 8cCalculationofrevenuegeneratedbasedon activitylevel RequiredSeeresponseto8aabove. 8dCalculationofcost recoverylevelRequiredSeeresponseto8aabove. 8eRoll overoffeecostcomponentstothenext fiscalyear RequiredSeeresponseto8aabove. PublicationofBudgetDocument ID Requirement Classification VendorResponse PleaseNote:AcomprehensivebudgetbookpublishingtoolisontheTeamBudgetroadmap.Atpresent,most customersgenerateapproximately70%oftheir City’s budgetbookdirectlyfromTeamBudgetviareports.Since theTeamBudgetdatabaseisopentoAdministrators,othersolutionssuchaspublishingtoolscanaccessthe databaseinordertogathertheinformationneededtocreatethebudgetbook.Onesuchvendorthathas experienceworkingwiththeTeamBudgetdatabaseisFiniteMatters/PatternStream. 9aReportwritingtoolMandatoryYes.Asmentionedin “Chapter4 WorkPlanorProposal”under “Reporting,”TeamBudgetprovides userswiththeabilitytohaveaccess toout of the boxreports,tocopy andeditout of the boxreports,and tocreatetheirownreports allfrom withinthesoftware. Thereportwritingtoolisdesigned fornon technicaluserswhodesire quickaccesstodesignandcreate theirownreports.Itincludesan intuitiveuserinterface.Userscan draganddroptheinformationthey wanttoseeintoareportdesign window.Ad Hocreportingsolves themostcommonprobleminreport design –howtocreatereportsthat ATTACHMENT A ExhibitA,Page 24 of 73 displaytherelevantdatathatusers requirewhilehavingenough flexibilitytoallowtheuserto organizeandviewthedatahowever theywish.Ad HocReportingwill providethe City’s userstheabilityto viewdataimmediatelyinwhatever formtheychoosewithouthavingto requestanewcustomizedreport. Oncedevelopeduserscanre usethe reportstheydesignedorinclude themasapartoftheTeamBudget applicationmakingthemavailableto allusers. 9bReporttemplatedevelopmentMandatoryYes.Citystaffareabletouseanyof theout of the boxreportsasthe basisofcreatingnewreports. 9c Compilationofbudgetdata(numbersand texts)forpaginationof budgetdocuments RequiredYes.ThiscanbedoneviatheAd Hoc Reportwritertool. 9d Allowsmultipleuserstoinputandedittext, financial,orperformance information(e.g.:paragraph,tables,graphs) andmaintainversion controlofdocument components RequiredYes.ThiscanbedoneviatheAd Hoc Reportwritertool. 9eAbilitytocheckspellingandgrammarRequiredYes.SpellCheckingcanbedoneon eachpagebelongingtoacost center,project,ChangeRequest, employee,positionandprofile.The narrativetextsrelatedtothese differentareascanbeincludedin reports. 9f Abilitytoeasilyedit,integrate,andformat customExcelcharts,graphs, andtablesintodocument RequiredYes.TeamBudgetcomeswith90+ reportsout of the box.These reportscaneasilybecopiedand changedasusersseefit.Columns canbeadded/deleted/edited. Graphs,charts,tablescanalsobe incorporatedintoreports.Allreports (existing,editedorcreated)canbe exportedtoformatssuchasPDF, Word,andExcel,justtonameafew. 9gFlexibilityandabilitytoaddorremovesections orpages RequiredYes.ThiscanbedoneviatheAd Hoc Reportwritertool. 9hInsert,change,oreditphotosRequiredYes.ThiscanbedoneviatheAd Hoc Reportwritertool. 9i Automaticallycompileandpaginatedocument andbuildthetableof RequiredNo.Whilemostofthebudgetbook canbeproducedbyTeamBudget,it ATTACHMENT A ExhibitA,Page 25 of 73 contentsdoesnotprovideatooltocreate itemssuchasthetableofcontents, finalpaginationetc.This functionalitywillneedtobe providedbythepublishingtool. 9j Producehigh quality,bookmarkedPDFfor printingandviewingonthe City’swebsite RequiredYes.AllreportswithinTeamBudget canbeexportedtoPDFtobeused astheCityseesfit. 9k Abilitytomanagetext,data,andpublishing componentsformultiple documents(operatingbudget,capitalbudget, municipalfeeschedule,longrangefinancial forecast,andothers) RequiredYes.TeamBudgetcomeswitha numberout of the boxreportsthat providethisinformation.These reportscanbecopiedandeditedas usersseefit,andnewreportscanbe createdatanytime. OnlinePublicationofBudgetDataandPerformanceMeasures ID Requirement Classification VendorResponse 10aAbilitytopublishbudgetdataonlinewithdrill downreportsandgraphs DesiredSincetheTeamBudgetdatabaseis open,budgetdatacanbeaccessed byothersystemsviaODBCetc. TheCitycouldaccomplishthiswith ASP.NETandSQLReportingServices. ASP.NETwillhavetobeconfigured fortheserverthatisrunningtheCity website. AnASP.NETwebpagewillbehosted onthesitethatincludestheReport ViewerControlfromMicrosoft.This couldbeconfiguredinsuchaway thattheCitycouldchooseexactly whichreportsareavailablefor viewing,andthecredentialsand communicationwiththereport serverwillallhappenontheserver side. Thispagewillhaveallofthefeatures ofthereportviewerthatisusedin TeamBudget,includingdrill downs, reportlinking,andexportingto multipleformats. Thissolutiondoesnotactually involveTeamBudget(exceptthatthe reportswillshowdatafromthe TeamBudgetdatabase).Itisa benefitofbuildingourproduct aroundSQLReporting Services.Ultimately,thedecisionas ATTACHMENT A ExhibitA,Page 26 of 73 tohowsiteisbuildwillbe determinedbythe City’s webmaster. 10b Abilitytopublishperformancemeasuredata onlineingraphical formats(e.g.:dashboards)andtoregularly updatethedata(e.g.:monthly,quarterly, annually)andcomparisonofbudgettoactual data DesiredYes.Seeanswerabove. 10c Abilitytopublishmulti yearactual performancedataonlineingraphical form DesiredYes.TeamBudgetcanbeconfigured tocaptureperformancedata.This informationcanbeplacedin graphicalformviathereportwriting tool. PerformanceMeasurementandManagement ID Requirement Classification VendorResponse PleaseNote:Currentlyunderdevelopmentisaseriesofrobustandsignificantimprovementsto TeamBudget’s existingPerformanceMeasurementsfeatures.Thisnewmodule dedicatedtoPerformanceMeasurements, willbereleasedinthefirsthalfof2014. 11aInputanddocumentationofperformance measures Required ServiceLevel Measurements/Performanceor ServiceLevelMeasurements Formanyclientswishingtocapture informationbeyondthebudget, suchasServiceLevelMeasures (SLM),Questicaofferscustomized screensatthebusinessunitlevel whereusersareabletoenter informationsuchasthegoals, objectivesand outcomes/performancefortheir businessunit.Theycanenterthe outcomes/performance(actualand estimate)forthecurrentyear,enter estimatesforthecomingyears, alonewithviewing2previous years’ actualperformances allonthe samescreen.These SLM’s now becomepartoftheworkflow processandcanbeadjusted, approved/deniedatthedifferent stagesofthebudgetingprocess. Reportscanbecreatedshow budgetaryinformation,performance measuresalonewithnarrativesand descriptions/justificationsforeach budget. ATTACHMENT A ExhibitA,Page 27 of 73 11b Uploadcapabilityfromothersystemssuchas publicsafetysystemsfor responsecalldata DesiredSincetheTeamBudgetdatabaseis open,budgetdatacanbeaccessed byothersystemsviaODBCetc.This informationcanalsobeimportedvia theExcelExport/Importtool. 11cDashboardandothergraphicaldisplayof performancedata RequiredDashboardsarecurrentlyunder development,andwillbereleasedin early2014. MonitoringofBudgetedExpendituresandRevenues ID Requirement Classification VendorResponse 12aMonthlydownloadofactual expendituresandrevenuesfromSAP RequiredYes.Oncetheintegrationbetween TeamBudgetandSAPhasbeen created,theactualcostdatacanbe automaticallyimportedinto TeamBudget.Thiscanbedoneona nightly,weekly,monthly,or quarterlybasis. 12bComparativeAnalysisofBudgetto Actuals(e.g.:straightlining) RequiredYes. Yes.Manyscreensdisplayyearto yearcomparisonsshowingactual andbudgetvalues.Thisisalso availableviareports.Belowisan exampleofthe AnnualBudget (SummaryView)screen.This screenshowsthecurrentbudget year(inthiscase2014)andtheYTD actualcosts. Thetwopreviousbudgetvs.actual (2013&2013)arealsodisplayed. ATTACHMENT A ExhibitA,Page 28 of 73 12c Displayofactualexpenditureand revenuedatabymonth,quarter,and year DesiredYes.Thiscanbeviewedonscreen andreports.TheAnnualSummary, QuarterlyandMonthlySummary gridsallowenduserstoinput comments,justifications, explanations,etc.foreachlineon thevariancereports/screens. PriorYearData ID Requirement Classification VendorResponse 13 AccesstoprioryearBudgetandActualdata forreportingandanalytical purposes RequiredYes.Asmentionedabove: Manyscreensdisplayyeartoyear comparisonsshowingactualand budgetvalues.Thisisalsoavailable ATTACHMENT A ExhibitA,Page 29 of 73 viareports.Belowisanexampleof the AnnualBudget(SummaryView) screen.Thisscreenshowsthe currentbudgetyear(inthiscase 2014)andtheYTDactualcosts. Thetwopreviousbudgetvs.actual (2013&2013)arealsodisplayed. CapitalBudgetModel ID Requirement Classification VendorResponse 14a Abilitytoenterandtrackmulti yearoperating budgetimpactsof capitalprojectsandlinkthecostimpactstothe developmentoftheForecast RequiredYes.AllTeamBudgetmodulesshare thesameinterfaceandacommon database(MicrosoftSQLServer), allowingallmodulestowork together.InthecaseofOperating andCapital,themostobvious synergiesbetweenthesesystemsis the OperatingBudgetImpacts (OBI’s).IntheCapitalmodule,some capitalprojectswill affectthe operatingbudgetinthefuture(the newcommunitycenterwillneedto bestaffed).EachTeamBudget Capitalprojectprovidesforanarea totrackandrecord OBI’s. Each OperatingBudgetImpactallows userstospecifyacostcenterto whichthecostscorrespond. PublishingtheOperatingImpactwill addthecostsdirectlytothe Operatingbudgetbycreating ATTACHMENT A ExhibitA,Page 30 of 73 Forecasts(budgetlines)onthe specifiedcostcenter(s). 14bAbilitytoprioritizeandrankprojectsbasedon user definedcriteria DesiredYes.Usersareabletorankprojects accordingtopredeterminedcriteria. Whileenteringtheirbudgets,users canchoosetheseranksandassigna valuetoeachrankalongwitha justification. 14c Abilitytocreatecustomfields(e.g.:LEED certification,projectstart date,projectenddate) RequiredYes.Fieldssuchasprojectstartand enddatesareprovidedout of the box.Additionalfieldscanbeadded viatheFormsEditortoolandcanbe donebyCitystaffwiththeproper permissions. 14dProjectstatusidentification(e.g.:future, current,close out) RequiredYes.ProjectStatusescanbe attributedtoeachproject. Manyreportsallowuserstodeterminewhetherthereportsshowdatafromallstatusesorspecificstatuses. ATTACHMENT A ExhibitA,Page 31 of 73 Reporting ID Requirement Classification VendorResponse 15a Systemprovidesconfigurableself servicereportingonallsystemfields (e.g.:bybudgetphase,fiscalyears, fund,appropriations) RequiredYes.Viadrop downmenus (parameters),mostreportsallow userstodeterminethelevelof detailthatshowuponreports. 15bAbilitytodisplayreportdatain graphicalforms DesiredYes.TeamBudgetcomeswitha numberofreportsthatshow ATTACHMENT A ExhibitA,Page 32 of 73 graphsandcharts.Additional reportscanalsobecreatedto showtheseforms. 15cAbilitytoexportreportdatatoMS ExcelandMSWord RequiredYes.Allreportscanbeexported toPDF,Excel,Wordetc. 15d Abilitytosetupforms/reportswhich alerttheuserofcertainbusiness rulesarenotfollowed(e.g.:forSource andUseStatementstheSourceTotal DesiredYes.CustomBusinessRulesand Actions –TeamBudgetisanAPI (ApplicationProgramming Interface)drivenapplication. ATTACHMENT A ExhibitA,Page 33 of 73 hastomatchtheUse Total)We’ve includedacustomizations interfacethatallowsC#codeto bewrittenwithintheinterface thatcanutilizethefull TeamBudgetAPIandenhanceits functionalitybycreatingcustom rulesandactions.These customizationsaretriggered eitherbylisteningforoneof manyapplicationevents,orby userdrivenactivity,suchasby selectingacustomright click menuitemthatwascreatedfora specificpurposeonabudgetgrid. Training ID Requirement Classification VendorResponse 16a Vendororpartner/preferredvendorcan providesystemfunctional trainingtousersandsystemadministrators DesiredYes.Duringtheimplementation process,alltrainingwillbeprovided byQuesticastaff.Thistrainingwill beprovidedtoCityusersand Administrators.See “Chapter4 WorkPlanorProposal”under “TrainingApproach”formore information. 16b Providefunctionaltrainingdocumentationfor end usersand administrators RequiredYes.Documentationwillinclude: Customizedhand outs createdforeachgroupto betrained AdministrativeManuals for administratorsonly TeamBudgetOperating UserManual TeamBudgetDatabase Documentation for administratorsonly TeamBudgetReleaseNotes TeamBudgetDatabase Schema foradministrators only TeamBudgetTechnical Requirements for administratorsonly TeamBudgetUserManual Someofthesedocumentshavealso been ‘baked’intoTeamBudget. ATTACHMENT A ExhibitA,Page 34 of 73 Auditability ID Requirement Classification VendorResponse 17Systemlogsalluser &systemactionsand events(who,what,when) DesiredTheTeamBudgetAPIwaswritten fromthegrounduptosupportafull eventmodel.Virtuallyalluser actionsandentriessuchaslogging in,savingabudget,updatinga budget,promotingabudgetetc.are trackedandrecordedintheAudit System.Virtuallyanyeventinthe systemcanbeloggedforlater retrievalifnecessary.Standard searchparametersinthelogviewer include;daterange,user,entity, actiontype,applicationeventtype, andcontainingtext.Belowisan exampleofasearchresultusingthe LogViewer. Clickingonthemagnifyingiconaboveopensadetailedresultsscreen,showingwhatwaschanged –inthiscase avaluewaschangedfrom70520.000000to7050. ATTACHMENT A ExhibitA,Page 35 of 73 Implementationmanagement ID Requirement Classification VendorResponse 18 Provideanimplementationplanwhichincludes taskdescriptions,levelofinvolvementofCity staff(numberofstaff,typesofstaff,and hours),andastandardtimeline RequiredYes.QuesticawillworkwiththeCity inordertofinalizean implementationplan.See “Chapter 4 WorkPlanorProposal”under “ImplementationApproach”for moreinformation. Non functionalRequirements CloudComputing ID Requirement Classification VendorResponse 19 Infrastructureanddataishousedbycloud serviceprovidertoensure thesystemproposedisalignedtothe City’s IT cloud firststrategy RequiredYes.TeamBudgetcanbeinstalledon the City’s serversoritcanbehosted. Questicausesahostingprovide namedAegisys. TechnicalOverviewofTeamBudget TeamBudgetiscomprisedofthree majorcomponents. Application.TeamBudgetis a.Net4.0web based solutionthatrequiresIIS. Database.TeamBudget supportsSQLServer2008R2 and2012. ReportingServices. TeamBudgetsupportsSQL ServerReportingServices (SSRS)versions2008R2and ATTACHMENT A ExhibitA,Page 36 of 73 2012.Otherreporting technologiessuchasCrystal Reportingcanalsobeused todevelopreportsagainst theTeamBudgetdatabase. Therearethreeprimaryscenarios forinstallation: SingleServer – TeamBudget,thedatabase, andReportingServicesare onthesameserver. TwoServer –TeamBudget isonaserver.The databaseandReporting servicesareonthesecond server. ThreeServer –Allthree componentshavetheirown server. TeamBudgetiscompletely supportedinaVirtualized Environmentandthisisutilizedby manyofourcustomersasa mechanismtoseparateserversfrom hardwareinfrastructure requirements. CloudSolution ShouldtheCityoptforacloud based (hosted)solution,Questicawill provideallserver,database, operatingsystem,monthly management,andsoftware maintenance. Browsers InordertoaccessTeamBudget,City staffwillonlyrequiretheuseofan internetbrowser.TeamBudget supportsthefollowingbrowsers: InternetExplorer Version9 Version10 SafariforMac LatestVersion MozillaFirefox LatestVersion GoogleChrome ATTACHMENT A ExhibitA,Page 37 of 73 LatestVersion Bandwidthrequiredfortheservice toperformasdesigned Assumingahosted/SaaS environment,weaskforaminimum of5MBbidirectionally.Installed locally,TeamBudgetisarelatively low demandapplicationwhen comparedwiththeprocessing requirementsofafullfinancial systemsuchasSAP. Uptime TeamBudget isdesignedtoachieve 99.9%uptimeayear. Ownershipofdata AllCitydataisownedbytheCitywill onlybeaccessedformaintenance andsupportservicesbyQuestica. Backuppracticesanddisaster recovery InahostedorSaaSenvironment, Questicatakesonresponsibilityfor allserver,database,WindowsOS, monthlymanagement,TeamBudget licenses,softwaremaintenance. RecoveryTimeObjective(RTO)A RTOof1hourrequiresthat TeamBudgetbepartofacluster (Virtualorphysical)forfailover. RecoveryPointObjective(RPO)A RPOof15minutesrequiresthatthe databaseandlogsbesufficiently backedupwithinthespecified15 minuteinterval. FormatofallCityrecordsthatwill bestored AllrecordsaresavedtotheSQL database.Typically,retentionof backupdataisdeterminedbyour customers.Questicabelievesitis goodpracticetomaintainfour weeksofdataretention. ATTACHMENT A ExhibitA,Page 38 of 73 IntegrationwithCitylocalpayroll andfinancialsystemsfromthe cloudbasedenvironment Theprocessofintegration,whether onsiteorviathecloud,remains fundamentallythesame,exceptfor theportsandfirewalltothefinancial andpayrollsystemsneedingtobe openedfortransactionexchanges betweenthesystems. Installedsolution TeamBudgetisdevelopedusing Microsoft.Net4.0andisa100% webbasedapplication.Assuch,no softwareisinstalledonclient PC’s. Workstationsrunninganycurrent versionofWindowsOS(XP,Vista,7, 8)withInternetExplorer(IE)version 9.0orbetterarerequired.(other browsersalsosupported,see below).APentium4orbetter workstationwith512MbofRAM willbesufficient.Softwareisonly installedoncorporatewebserver(s). TeamBudgetsupportsthefollowing browsers: InternetExplorer Version9 Version10 SafariforMac LatestVersion MozillaFirefox LatestVersion GoogleChrome LatestVersion Maintainability ID Requirement Classification VendorResponse 20aSystemupgradesarefullymaintainedand managedbyvendor RequiredYes.Inacloud based(hosted) solution,Questicawillprovideall server,database,operatingsystem, monthlymanagement,andsoftware maintenance. ATTACHMENT A ExhibitA,Page 39 of 73 20b Systemis “off theshelf”solutionanddoesnot requirecustom development/codingbythevendorortheCity RequiredYes.TeamBudgetisoneofthefew trulyCOTS(CommercialOffthe Shelf)budgetingsoftwaretoolson themarket. 20cCityshouldbeabletoconfigurethesystem withappropriateaccessprivileges RequiredYes.TheTeamBudgetdatabaseand APIareopenforfurther configurationbytheCity subjectto securitypermissions. SystemCompatibility ID Requirement Classification VendorResponse 21Windows7,InternetExplorerversion9,Google Chrome,iOS TeamBudgetsupportsthefollowing browsers: InternetExplorer Version9 Version10 SafariforMac LatestVersion MozillaFirefox LatestVersion GoogleChrome LatestVersion Portability ID Requirement Classification VendorResponse 22aHTML5(orhasoneofthesefeatureson productroadmap) DesiredYes.TeamBudgetsupportsHTML5. HTML5isanewstandardforthe WorldWideWeb.Itintroduces manycutting edgefeaturesthat enabledeveloperstocreateapps andwebsiteswiththefunctionality, speed,performance,and experienceofdesktopapplications. OurvisionforTeamBudgetisto embracethisnewtechnologyto improvetheproductinawide rangeofareas. 22b Responsivewebdesignforflexibleand fluidlayoutsthatadaptto almostanyscreen DesiredYes.AllscreensinTeamBudgetare allsetupinasimilarmanner,with thedetailsonthelargerright hand pane,andthenavigationelements onthesmallerleft handpane.The left handpaneisreferredtoasthe NavigationBar,orsimply ‘NavBar’. TheNavBarhelpusersnavigate withoutextraneousinformation ATTACHMENT A ExhibitA,Page 40 of 73 displayedwhichisnotapplicableto thatarea.Beloware4examplesof someofthesystemsNavigation Bars: Home/WelcomeScreenCostCenterProfilePosition FormandFieldDesigner –Thisinterfaceallowsadministratorstodesignandupdatescreensandtheirdatafields. Thereisnorestrictiononthenumberofvariablesorfieldsthatarecreated,andourusershavetheabilitytodefine datatypesandregexexpressionstocontrolthedatainputintothesefields.Thesystemallowsupdatestotake placewithouttheneedtoupdatetheseinterfaces. CustomBusinessRulesandActions –TeamBudgetisanAPI(ApplicationProgrammingInterface)driven application.We’ve includedacustomizationsinterfacethatallowsC#codetobewrittenwithintheinterfacethat canutilizethefullTeamBudgetAPIandenhanceitsfunctionalitybycreatingcustomrulesandactions.These customizationsaretriggeredeitherbylisteningforoneofmanyapplicationevents,orbyuserdrivenactivity,such asbyselectingacustomright clickmenuitemthatwascreatedforaspecificpurposeonabudgetgrid. 22c Abilitytoaccesspublishedwebdata frommobiledevices,tablets,and smartphones RequiredAlthoughthereisnospecific integrationtodevicessuchas iPhones,Blackberry’s ortablet computers,allthesedevicescan readwebpages.TeamBudgetisa web basedproductsupporting numerousbrowsers.Also,these devicesalsosupportreadingPDF fileformats,andTeamBudget reportscanbeexportedtoPDF, andotherformats. ATTACHMENT A ExhibitA,Page 41 of 73 Support ID Requirement Classification VendorResponse 23 Technicalongoingoron demandsupportis maintainedbythevendor orpartnervendor RequiredYes.TechnicalSupportwillbe providedbyQuestica.See “Chapter 4 WorkPlanorProposal”under “SupportApproach”formore information. ServiceLevelAgreement ID Requirement Classification VendorResponse 24a Submissionofvendor'sservicestandards regardingsystemsupportand escalationprocess Supportcallsareclassifiedintothe followingcriteria: Priority1–Urgent (example:system isunavailabletousers)–Support staffimmediatelyceasesanyother activityandworktowardsasolution, andifpossible,remainsonthe phonewiththecustomeruntil resolved. Priority2–Important (example: softwarebug)–Supportstaffwork toresolvetheissuewithinthesame businessday. Priority3–Minor (example:minor nuisanceorirregularity)–Tobe consideredinthenextdevelopment cycle –mayrequireahotfix. Allsupportissues,customer needs andsuggestionsaretrackedthrough ourCRM(CustomerRelationship Management)andConnectWise tools.Allsupportcalls/emailsare enteredandassignedatracking number. Supportissuesareclassifiedas describedabove(Priority1,2,3). Softwareissueshavethefollowing classifications: Low Tobeconsideredin thenextdevelopmentcycle Medium Tobeconsidered inthenextdevelopment cycle High Addressedinthenext Build ATTACHMENT A ExhibitA,Page 42 of 73 Critical(WorkStoppage) Addressedimmediately Serviceticketsareescalated automatically(todevelopment)via emailtoensureallresponse commitmentsaremet. Ifneeded,customerscanescalate supportissuesinthefollowing manner: 1.Manager,CustomerService &Support 2.President 3.Chairman Officeandmobilephonenumberfor thesepositionswillbeprovided uponcontractaward. 24bSystemavailability;99.9%Yes.TeamBudgetwasdesignedto provide99.9%uptime. Integration ID Requirement Classification VendorResponse 25 SystemhaswebservicesApplication ProgrammingInterface(API) capabilitiestointegratewithotherCity applications RequiredDuringtheimplementationprocess, TeamBudgetwillbeintegratedwith the City’s SAPsolution. TeamBudgetisanAPI(Application ProgrammingInterface)driven application.SincetheTeamBudget databaseisopen,budgetdatacan beaccessedby othersystemsvia ODBCetc. OpenData ID Requirement Classification VendorResponse 26a Allsystemdatashouldbeexportableand machinereadabletosupport opendataenvironment RequiredYes.Allreportsandmostgrids withinTeamBudgetcanbeexported viaExcel,Word,PDF,XMLetc. 26b Exportabledatashouldincludemetadata(set ofdatathatdescribesand givesinformationaboutotherdata) DesiredTheformatinwhichdataisexported dependsontheviewoptions (columnsandrows)auserchooses onscreen. EachreleaseofTeamBudgetcomes withanupdateddatabaseschema. ATTACHMENT A ExhibitA,Page 43 of 73 Security ID Requirement Classification VendorResponse 27a Systemcomplieswitheither:ISO27001(InformationSecurity ManagementSystems)orNIST800 53Standards(SecurityandPrivacyControls forInformationSystems) Note:Ifchosenasafinalist,vendorwillbe requiredtocompletethe City’sVendor InformationSecurityAssessmentand acknowledgeandagreetocomplywiththe City’s Security&PrivacyAgreement RequiredNote:Ifchosenasafinalist,vendor willberequiredtocompletethe City’s VendorInformationSecurity Assessmentandacknowledgeand agreetocomplywiththe City’s Security&PrivacyAgreement ShouldQuesticabechosenasa final,wewillcompletethe City’s IT assessmentandagreement documentation. 27bAbilitytosetappropriatesecuritylevelsfor users RequiredYes.Securityisrolebasedandonce established,youradministratorswill beabletodeterminewhoisableto view,edit,demote,promote (advance)andlockbudgets –at eachstageofthebudgetprocess. Restrictionstorunningreportsand batchprocesses,creatingscenarios, administrativelook ups,accessto actualcostsinformationetc.can easilybeestablished. Administratorscanalsodetermine whohasaccesstothebudgetsand alsodeterminethetypesofanalysis canbeperformed.Individuals withoutpermissionwillnotbeable viewselectedsystemreportsand/or performbudgetanalysis. Yourpermissionsdeterminewhat youcanseeandaccess:Auser’s interfaceisdependentonthe permissionsgrantedthembythe SystemAdministrator.For example,inthescreenshotsbelow, themenulistingontheleftisthatof theAdministratorwhereasthe menulistingontherightisthatofa userwithfewerpermissions granted. AdministratorLowerLevelUser ATTACHMENT A ExhibitA,Page 44 of 73 NotetheSystemAdministratorhasaccess(permissions)tovieweachoftheprimarymoduleswhichmakeup TeamBudget Operating,Salaries,andCapital(ontheleftsideofthescreen)whereastheotheruseronlyhas accesstotheOperatingmodule.Also,theuserontherighthasnoaccesstoanythingrelatedtotheSalaries module. Scalability ID Requirement Classification VendorResponse 28 Abilitytoeasilyutilizethetechnologyacross theorganizationfor differentpurposes(foradditionalusersand departmentswithvaryingprocessesand workflowsandconfigurationrequirements) RequiredYes.TeamBudgetcanbeusedacross alldepartments,whetherforbudget entry,reportviewingetc.Shouldthe Citywishtorolloutthesoftwareto morethantheinitial80users,itcan dosobypurchasingadditional licenses. DataLiberation ID Requirement Classification VendorResponse 29 Abilitytoquicklymoveallofthedataoutofthe systeminanopen, interoperable,portableformatatnoadditional costandinonefell swoopintheeventthatthe Citywishestodiscontinuetheproduct RequiredYes.TakenfromSection10.5ofour LicenseandServicesAgreement: ReturnofYourData.Uponrequest madebyYouwithin30daysafter terminationofaPurchasedServices ATTACHMENT A ExhibitA,Page 45 of 73 subscription,Wewillmakeavailable toYoufordownloadafileofYour Dataincommaseparatedvalue (.csv)formatalongwithattachments intheirnativeformat.Aftersuch30 dayperiod,Weshallhaveno obligationtomaintainorprovide anyofYourDataandshall thereafter,unlesslegallyprohibited, deleteallofYourDatainOur systemsorotherwiseinOur possessionorunderOurcontrol. BusinessContinuity ID Requirement Classification VendorResponse 30aFailover/redundancy/replicationofsystemto anotherlocation RequiredAegisys (Questica’s hostingprovider) hasmultipleFiberproviderswhich provideourupstreamconnectivity. WedosupportmultipleIKE gatewaysprovidedthattheCityhas redundantcarriersaswellandthe firewallusedbytheCitysupports multiplegateways. DisasterRecovery:Becausealldata andproductconfigurationdatais storedinasingleMS SQLdatabase, TeamBudgetcanberestoredfroma disasterveryquicklyprovidingthe databaseisbackedupregularly. Therearethreecorefailure scenarios –thewebserver component(IIS,oritsrelatedserver hardware,)theTeamBudget database(MS SQLServer,orits relatedhardware,)orboth. Theprocessofrecoveryisthesame inallcases:1.Ensurethatthe TeamBudgetdatabaseisavailable fromaMS SQLdatabase,being recoveredfromabackuponan alternateserverifnecessary.2. EnsurethattheTeamBudgetproduct isinstalledonanIISwebserver.3. ConfigureTeamBudgettopointto theappropriateTeamBudget databasebyconfiguringthe web.configfileonthehostedIIS ATTACHMENT A ExhibitA,Page 46 of 73 server.(Thereareotherminorsteps involvedthatarewelldocumented, butthesearethemajorsteps.) PleasenotethatTeamBudgetis supportedinfailoverclusteredIIS andSQLserverenvironments,such thattheneedsforabarebonesre installationfrombackupsshouldnot benecessary.However,ifitis,the speedofrecoveryisbasedonthe timerequiredtohavetheIISand SQLserverinstalledandreadyso thattheabovestepscanbe performed,togetherwiththe restoredbackup.Ifitiscriticalthat TeamBudgetbeavailableasquickly aspossiblewithlittletono downtime,andalternateservercan beconfiguredforfailoverpurposes. 30bfrequencyofbackups:atminimumdaily;RequiredInaSaaSorHostedenvironments, backupsareperformedonadaily basisataminimum. 30c DataRestoration:within1dayexcebetweenJulyandFebruary;4hours betweenMarchandJune RequiredYes.Questicacancomplywiththis requirement. 30dMinimumRetentionrequirements:SevenYearsRequiredYes.Thereisnolimittothenumber ofbudgetyearsthatcanberetained intheTeamBudgetdatabase. III.TeamBudgetImplementation ProjectWorkStatement ThisProjectWorkStatementprovidestheframeworkforthetypicalScopeofWork(SOW). IneachsectionofthedetailedScopeofWork,thefollowingwillbedetermined: QuesticaResponsibilities CityResponsibilities Deliverables AcceptanceCriteria SolutionTesting ExhibitBprovidesadetailprojectimplementationPlanwithaJuly7startdate. 1.ProductInstallation ATTACHMENT A ExhibitA,Page 47 of 73 1.1.Description 1.1.1.SystemInstallationincludesinstallationofthebasesoftwareandassociated databasesfortheTeamBudgetproductineachoftherequiredenvironments. Whencompleted,theproductshallbeinafullyfunctionalstatewhichis preparedforfurtherconfiguration.Itcanbe verifiedasfunctionalwithan exampledatabaseprovidedbyQuestica. 2.ProductConfiguration 2.1.Description 2.1.1.Productconfigurationincludestheadministrativeconfigurationoftheproducts suchthattheywillbesuitableforuserinputinaproductionenvironment. Questicawilltakeanactiveroleinthisconfiguration,butitwillrequire City participation. 3.InitialBudgetDataImport 3.1.Description 3.1.1.Questicawillimportgivenyearsofhistoricaldata.Thiswillprovideahistorical referenceandafoundationforsubsequentstaffbudgetpreparation.Citywill assistwiththisexportandprovidethedatainaformatprovidedbyQuesticato facilitateimport. 4.StaffTraining 4.1.Description 4.1.1.TrainingCityusersthatwillbeparticipatinginthebudgetingprocess.IfTheCity hasadopteda‘train the trainer’methodology,trainingwillbeprovidedtoallow attendeestotrainotherindividuals.AlltrainingmaterialsdevelopedbyQuestica willbeprovidedforthatpurpose. 5.Customization(asneeded) 5.1.Description 5.1.1.TeamBudgetisaCommercialofftheshelf(COTS)product.Somecustomizations mayberequiredinordertomeetThe City’s requirements. 6.CustomReports(asneeded) 6.1.Description 6.1.1.TheTeamBudgetproductsallowforthemodificationofthe ‘out ofthe box’ reports,ortheinclusionofnewcustomreports.Thedetailedrequirementswill bedeterminedinthedetailedscopeofworktobedeveloped. 7.SAPandHRSystemIntegration 7.1.Description ATTACHMENT A ExhibitA,Page 48 of 73 7.1.1.AdataexchangewillbeprovidedbetweenthefinancialandHRsystemandthe TeamBudgetmodules tobedetailedinSOW. 8.ProjectManagement 8.1.Description 8.1.1.AninitialanalysisofexistingCityprocessandbudgetstrategyasoutlinedinthis document. 8.1.2.Amethodicalmanagementoftheprojectresourcesandexecutionincloseco ordinationwithTheCityProjectManagementteam.Allimplementation activitieswillsupportthemethodologyoutlinedinthisRFPresponse. ProjectManagement TheQuesticaProjectManagershallberesponsiblefor: 1.Mainpointofcontactthroughtheimplementationprocess 2.CoordinatingthedevelopmentoftheProjectPlaninconsultationwithThe City’s Project Managerandteammembers. 3.Thetimelydeliveryofitemsidentifiedas “Inscope”withintheSOW. 4.EnsuringthatCitystaffaresufficientlyeducatedintheTeamBudgetapplicationto understandtheimplicationsofinitialdesigndecisions. 5.ProvidingTheCitywithtimelyanddetaileddescriptionsoftheitemsidentifiedas “Customertask”withintheSOW. 6.AdvisingTheCityofexpectedcompletiondatesforitemsidentifiedas “Inscope”within theSOW. 7.AdvisingTheCityoftheimpactontheexpecteddeliverydatesof “Inscope”itemswhen prerequisitetheCustomertasks,suchasthecompletionofdataimporttemplatesor approvalofreportspecifications,areadvancedordelayed. 8.MonitoringtheprogressoftheprojectandadvisingTheCityofriskstoitson time completion. 9.CoordinatingthecompletionandapprovalofChangeOrders. TheCityProjectManagershallberesponsiblefor: 1.Thetimelydeliveryofitemsidentifiedas “Customertask”withintheSOW. 2.AdvisingQuesticaoftheexpecteddeliverydatesofitemsdesignatedas “Customer tasks”. 3.EnsuringthatChangeOrderscontainafullspecificationofthechangesrequired. 4.EnsuringthatCustomizationsarefullyspecifiedanddocumented. 5.EnsuringthatallCityteammembershaveaclearunderstandingoftheirresponsibilities totheproject. ATTACHMENT A ExhibitA,Page 49 of 73 Testing/QualityAssurancePlan Note:ThefinalAcceptanceTestingPlanwillbemutuallyagreedupon. AcceptanceTestingProcedures: QuesticaproposestotakeontheroleofGuideandFacilitator,providingbestpracticesand structuretoensuretestinghappensinanorganized,effectiveandtimelyway.Workingwiththe ProjectManagementandCoreWorkingTeam,Questicawillprepareguidelinesthatwill documentthefollowing: Objectives Itisanticipatedthattesting,withassistancefromQuestica,beconductedbyeachstakeholder class(Technical,Functional,Manager’s Office,etc.).Anyspecificgoals,assumptions,or constraintswillbedetailed. Unit/ComponentTesting Thepurposeoftheunit/componenttestingistoensurethateachindividualmoduleinthe systemsatisfiesthequalitystandardsandsystemrequirementsthatapply.Itdescribesthe typeoftestingthatisexpectedandexplicitlyhowitshouldbeconducted.Itwillinclude: Requirement(s)satisfiedbythemodule/component Testingprocedures Adefinitionofhowthetestswillbeperformed.Whatscreenswill betested,whatreportswillbetested?Atestingscriptmaybeincludedinthis specificationifrequired. EnvironmentDefinition Willdefinethedataenvironmenttobeusedforthetesting. ExitCriteria Definingwhatanacceptableleveloftestingisandwhenitshouldbe consideredcomplete. Integration/RegressionTesting TheprojectintroducesnewComponentson aphasedandper componentbasis.Thepurpose oftheIntegration/Regressiontestistoretestpreviouslytestedunitsandensurethat TeamBudgetisworkingasintendedaftertheintroductionofeachadditional Module/Component.ThepurposeforRegressiontestingistoensurethat ‘what usetowork, still works’aftereachnewcomponentisadded. FinalUserAcceptanceTesting ThefinalstageoftestingwillbetheAcceptancetest.IftheUnitandSystemtestswere completedsuccessfully,thereshouldbenosurpriseshere.ThepurposeoftheUserAcceptance testistoverifythatthesystemmeetstheneedsoftheusers.Itisanticipatedthatthetesting groupforthistestwillbetheCoreWorkingTeamandaseriesofFunctionalUsersdesignated andaskedtoparticipateinthisprocess. ForthisprocessQuesticawillprovide: ATTACHMENT A ExhibitA,Page 50 of 73 Requirements theFunctionaltestthatwillberequired.Itwillbespecificaboutwhat willbetested,andwillbebasedontheneedsdefinedinthediscoveryphaseofthe Project.ItwillalsoincludeareviewofanyCityspecificdocumentationcreatedforthis project. Responsibility acleardefinitionofwhoisexpectedtotestwhat. Procedures definingthesign offprocedure,atestingplan,andifnecessary,scripts. ExitCriteria Definingtheacceptableleveloftesting.Thisissimilartotheunittesting discussedabove,butwithabroaderscope. SuccessfulcompletionoftheAcceptancetestingwillbedeterminedasfollows: AcceptancetestingofRequirementscompleted,testresultsdocumentedand deficienciesnoted Noteddeficiencylist,ifany,reviewedbytheContractor,responseonplantoaddress deficienciessentbacktoTheCity,plantoaddresstoaddressdeficienciesreviewedand approvedbyTheCity AcceptanceTestingFailureProcedures: Deliverdeficiencylist,ifany,toQuestica. ReviewofdeficiencylistbytheContractorandreturnresponseonplantoaddress deficiencies. Remedies Noteddeficiencylist,ifany,reviewedbyQuestica,responseonplantoaddress deficienciessentbacktoTheCity,plantoaddresstoaddressdeficienciesreviewedand approvedbyTheCity DesignandImplementationPhases Wehaveoveradecadeofexperiencewithprojectmanagementandcontrolmethodologiesto managetheprojectandimplementationprocess.Wehaveidentifiedwhatworks,andwhat doesnot,whenitcomestoprojectcontrolmethodologies.Apossibleimplementation methodologyforTheCitymightlooksomethinglikethis(inbrief): Phase1 BlueprintingandeffectiveProjectManagementiscriticaltothesuccessofthisproject.We havebrokendowntheImplementationProcessofTeamBudgetintoanumberofsectionsand uniquetasksasfollows: ATTACHMENT A ExhibitA,Page 51 of 73 Discovery Aseriesofonsiteand/oronlineworkshops(oneforeachsoftwarecomponent), anothertodiscusstheTestingandUserAcceptancemethodology,andanothertodiscussthe StrategicVisionandGoalsofTheCity. WorkflowandGAPAnalysis Oncethediscoveryprocessis complete,Questica’s Project ManagerwillcreateasummaryofbulletpointsthatoutlinesthekeyfindingsoftheDiscovery process,astrategytoaddressanynewneedsidentifiedthroughtheprocess,andaworkflow planfortheproject.ThisworkingdocumentwillbepresentedtoTheCitytoensurethatthere is generalagreementonthestrategy. PlanDocumentation TheTeamBudgetProjectManagerwillgenerateadetailedScopeof WorkthatalignswiththestrategyapprovedbyThe City’s ImplementationTeam.Thiswill containmoredetailthantheScopestatementsincludedintheRFPdocument,astheProject Managerand CoreTeamwillhaveabetterunderstandingofthespecificneedsofTheCityand thefunctionalityoftheSoftware.TheCityProjectManagerwillbeconsultedtoensureitaligns withneeds.Usingthissamemethodology,aProjectPlanandTimelinewillbecreated,aswilla Testing&UserAcceptancedocument.TheQuesticaProjectManagerwillcreateandassemble thesedocumentsintoafinalwrittenBlueprintdocument. PlanPresentation TheBlueprint,ScopeofWorkandProjectandTestingPlanswillbe submittedtotheCoreWorkingTeamforreviewandcomment.TheWorkingTeamwillhave workedtogethercloselytothispoint,sothereshouldbenolastminutesurprises.The expectationisthatminorchangesandrefinementsmayberequiredatthispoint. Phase2 ImplementationMethodology PhasetwocontainsfiveComponentsthataddsuccessivefunctionalitytoTeamBudget.Thereis someuniquenesstohoweachofthesecomponentswillbeimplementedbut,weareproposing thatabasictemplatebeusedtoconsiderreviewingthebasicmethodology. ComponentKick off Thecomponentswillbephasedin.Eachwillstartwithakick offmeeting wheretheBlueprintandplanarereviewedsothatthefocusonsuccessandgoalsis maintained. OverviewSessions TheTeamBudgetfunctionalitywillbepresentedtotheteamsothatthey arefamiliarwiththemoduleandabletoparticipateinitsconfigurationandunderstandthe needsofdataimports. Configuration ThecomponentsinTeamBudgetwillbeconfiguredtoprovidethedesired functionalityandaccommodatetherelateddataimports. DataImport Yourhistoricaldatawillbeimported. ATTACHMENT A ExhibitA,Page 52 of 73 CustomizationsandReportDevelopment Ifrequired,customizedfunctionalityandreporting willbeintroducedandreviewed.Thistaskbenefitsfromthedataimport,asanyscreenor reportswillreflecttheactualandfamiliardataimported. SecuritySetup Establishingappropriateusersecurity. FinancialandHR systemsIntegration Establishtheappropriateintegrationtothefinancial andHRsystems,asapplicabletothecomponent. ComponentUserTesting UserTestingandAcceptancebasedonthemethodologyoutlinedin theBlueprintdocument.TheQuesticaProjectManagerwillassistandactasafacilitator throughthisprocess. ComponentKickoff TheComponentwillbemovedintotheproductionenvironmentforuse. ProjectImplementationCommunication –CityandQuesticawillsetupweekly,andif necessary,morefrequentconferencecallsduringtheimplementationofthesystemuntilfinal Cityacceptanceofthesystem. SAPIntegration TeamBudgetisusedbyvariouspublicsectorentities,allwithdifferentfinancial/HRsystems.As weroutinelyintegratewiththeseexternalsystemstosharebudgetrelateddata,wehave developedaspecializedtoolforthispurpose –The QuesticaIntegrationSystem or QIS. QISisasubsystemwithinTeamBudgetandis designedtosimplifytheintegrationprocessand reducetheamountoftimeittakestointegrateTeamBudgetwithdifferentcustomersystems, typicallyfinancial/HR/ERP,andothermiscellaneousexternalsystems.Becauseallcustomers usedifferenttablesanddimensions, it’s importanttheintegrationbeconfigurable.TheQIS IntegrationToolwasdesignedtoprovideahighlyconfigurableframeworkforsharingbudget relateddatawithexisting(andfuture)externaldatasources. Thedataflowcanbestbevisualizedusingthefollowingdiagram (Using ‘SAP’asthesysteminthisexample): ATTACHMENT A ExhibitA,Page 53 of 73 Diagram IntegrationToolLogic InthecasewheredataistobeextractedfromSAPandmovedtoTeamBudget,wewillconsider datatobemovingfromlefttorightinthediagram.IfwewereextractingfromTeamBudgetto insertintoSAP,datawillmovefromrighttoleft. Thesystemconsistsofaseriesofinterchangeableconnectors.Aconnectorisaddeddepending onhowthedataisbeingtransferred.Itmayormaynotbepossibletointeractwiththesource tablesofaSAP,andoftenanintermediateexchangemethodisall that’s available.Wehave pre builtconnectorsthatwillutilize SQLDatabaseQueries,WebServices,XML,ODBC,OLEDB, delimitedflatfiles,etc.Theappropriateconnectorisselectedandconfiguredwithatextfile thatprovidesthedetailsoftheinformationthatisbeingimported. Theconnectorthenpassesdata(asXML)totheTransformerwhereadatatransformationis executedusingTSQL.TheTSQLcanbeconfiguredtomanipulatethedataandmapittothe requiredformatandcolumns.Althoughnotshownonthisdiagram,theTSQLusedforthe transformationisalsoconfigurableviaatextconfigurationfile. Finally,asecondConnectorisusedtotransferthedataintoTeamBudget(ifweconsiderthe caseofadataextractionfromSAP).Again,differentConnectorscanbeutilizeddependingon whetherTeamBudgetishostedonthesameserverandtheIntegrationtool,orishosted elsewhere.Ifonthesameserver(oraserveronthesamenetwork)aSQLconnectorwill typicallybeused.Onceagaintheconnectorisconfiguredwithaconfigurationfile. TheprocesstomovebudgetdatafromTeamBudgettoSAPisessentiallythesameasdescribed abovebuttheprocessoccursinreverse. TheentireprocessisscheduledthroughtheWindowstaskscheduler.Monitoringofscheduled integrationtaskscanbeperformedinanumberofways,butthemostpopularmethodisthe ATTACHMENT A ExhibitA,Page 54 of 73 notificationofexceptionorfailureviaanemail.Exception/Failureemailscanbeconfiguredto e mailoneormorepeopleinthecaseoffailure. Thesystemisnormallyconfiguredby Questica’s technicalstaffthroughthecourseofthe implementation.Thisconsists ofselectingtheappropriateconnectorsandestablishingthe integrationbychangingthetextintheconfigurationfiles.TeamBudgetCustomerswillcertainly beabletoupdateorcreatenewintegrationsusingtheframeworkprovided.Thekeyskill involvedisanunderstandingofXMLandknowledgeofTSQL.Alloftheconfiguration filesare availabletoallcustomers therearenohiddentoolsortechnologythatwillnotbeavailableto yourstaff. SAPIntegration(Payroll) SynchronizationPlan TheTeamBudgetprocessforloading(importing&exporting)HR/payrolldataintothesystemis viathe ‘Salaries Synchronization Tool’.Thisprovidesamechanismtoreviewandcommitthe changestotheTeamBudgetSalariesmodule.Thisapplicationinterfaceallowstheuserto determinepreciselywhichchangesshouldbebroughtover fromtheHRsystem. BudgetDataConversion Datamigrationwillbebasedontheorderinwhicheachcomponentistobecompleted. Questicahashadgreatsuccessimportingdataforourclients.Theprocessiswelldefined,and ourstaffmembersarereadytoapplythesamemethodologytothe City’s toimportdata. Dataimporttendstobeanormal,straightforwardprocessandcanoftenbedoneinasingle passinmostcases.Morecomplicateddataconversionsoftenrequirethatdatabeimported fromtheoldsystemtonew,alistofexceptionsgeneratedtoidentifyproblemsinthe conversionprocess,cleaningthedatabasedontheexceptions,andthenre importingthedata. Atypicaldataconversionmethodologyisoutlinedbelow: ReviewexistingdataandCityobjectives Scriptdataconversiontoallowforsubsequentrefinedconversions Convertdataandgeneratedataexceptions,asrequired Reviewdataforaccuracyandsuitability Correctormodifysourcedataorconversionscripts,asrequired Repeatimportprocessasnecessaryuntilalldataissuccessfullyimported QuesticawillprovidetheMSExcelimporttemplatestobeinitiallyfilledoutbyCitystaff. ATTACHMENT A ExhibitA,Page 55 of 73 PersonnelDataMigration Thisisbasedonaone timeexportofsalarydatafromtheHRsystem.Thesalarydatacanbe importedfromspreadsheetsprovided,assumingthatallpositionsandemployeesdetailsetc. arepresentononlyonespreadsheet.Alternatively,aspreadsheetwithallposition/employee dataandsalaries(inaformatprovidedbyQuestica)canbepopulatedbytheCityandimported directly. IV.TeamBudgetImplementationScopeofWork 1.RevisionHistory Edition Date Authors Notes/Changes 1 26 Mar 13 JamesMcCall 2.ScopeofWork IntheScopeofWorktables,entriesinthecolumnheaded “Scope of Work”aredefinedasfollows: Entry Meaning Inscope ThetaskorfunctioniswithinthescopeofworktobeundertakenbyQuestica professionalservices. Customertask ThetaskorfunctionisnotwithinthescopeofworktobeundertakenbyQuestica professionalservices,butwillbeundertakenbythecustomer. Notinscope ThetaskorfunctionisnotwithinthescopeofworktobeundertakenbyQuestica professionalservices,norwillitbeundertakenbythecustomer. n/a SomefunctionssuchasreportingusingthestandardQuesticaBudgetreportlibraryare availableto,andutilizedby,thecustomerbuttheiruseisancillarytotheimplementation ofQuesticaBudgetandnotarequiredcomponentofimplementation. QuesticaandtheCustomeragreethattheimplementationofQuesticaBudgetisasharedresponsibility andthatneitherpartyisintotalcommandofalltheresourcesnecessarytoachieveobjectiveswithin mutuallyagreedtimeframes.However,bothQuesticaandtheCustomeragreethattheywillemploytheir besteffortstocompletetheiragreedtasksonatimelybasis.NeitherQuesticanortheCustomeris expectedtohaveresourcesavailabletomitigatetimeframeslippagecausedbytheotherparty,andneither shallhaveanobligationtodoso. ATTACHMENT A ExhibitA,Page 56 of 73 “Integration”asusedinthisScopeofWorkshallincludethedatapopulationofpre existingcostingcenters fortheoperatingmoduleandprojectsforthecapitalmodule.DataelementsidentifiedbyafullGLaccount inthegeneralledgerwillbeimportedasaQuesticaBudgetGLobjectifthatelementcanbeunambiguously matchedtoapre existingGLobjectortoapre existingcostingcenter/project+fundcombination.An exceptionreportisprovidedfordataelementswhichcannotbethusmatched.Similarly,integrationswill notcreateaccountsinthegeneralledgerwherenosuchaccountsexist.Generalledgerintegrationsdonot includetheintegrationofpostapprovalbudgetamendmentsandtransfersotherthanintheformof unannotatedchangedbudgetamounts.Inthecaseofprojectbudgetsandactualdata,thisScopeofWork coversonlythosesituationswheretheprojectidentifierformspartoftheGLaccountstringorisavailable intheimportfile,queryorwebservice.ThecustomeragreestoprovideQuesticawithassistancein understandingthenatureandlocationofthedatatobeintegratedand,whererequired,createorcauseto becreatedallnecessarysourcesofdataincludingdatabasequeries,delimitedfiles,and/orwebservices. 2.1.QuesticaBudgetConfiguration&SharedComponents FunctionalArea Description Scopeof Work Implementation Hosting ImplementationHostingisasperProductionHosting(below). Twosystemswillbecreated productionandtest. Inscope ProductionHosting Questicawillprovidethehostedoperatingserverenvironment,as perthesignedhostingagreement.TheCustomerwillprovideuser workstationenvironmentsas follows:•Awebbrowser:supported browsers InternetExplorer9ornewer,Safarilatestrelease(on Maconly),Firefoxlatestrelease,Chromelatest release.• MicrosoftExcel2007ornewer(ifspreadsheetexport/import featureis required)•Microsoft.NETFramework4.0installed Inscope QuesticaAccessTo ProductionServer Questicaimplementation&technicalstaffhavefullaccesstothe productionsystemforthepurposeofsystemimplementation. Inscope ConsultonBudget BookConfiguration Provideupto8hoursofQuesticaBudgetexpertisefor PatternStreamBudgetBookproductionandotherpre press activities. Inscope MunicipalFee Calculator Configuration Provideupto40hoursofQuesticaconsultinganddevelopment servicestoimplementtheMunicipalFeeCalculatorperthe City’s specifications.Intheeventmorethan40hoursisrequired,a changeorderwillberequired. Administrator AuthoredReporting Provisionofdatabasemodelsforadministratorauthoredreport building.Notethatcreatingadministratorauthoredreportsisa customertask. Inscope FocusedTraining: Administrator AuthoredReporting Trainingintheuseofreportviews.Trainingwillbecarriedoutby remotedesktop.Eachtrainingsessionintheuseofreportcenter reportingisapplicabletoanyandallinstalledmodules. Inscope ApplicationLevel Security Determinehowandwhentousethevarioussecuritylevels availablewithinQuesticaBudget,enterusersandassignthemto groupsandroles.Questicawillassistwiththistaskuntilsuchtime asadministratorshavereceivedtraininginthesecurity componentofQuesticaBudget. Customer task ATTACHMENT A ExhibitA,Page 57 of 73 FocusedTraining: Security AdditionaltrainingintheuseQuesticaBudget'ssecurity componentoverandabovethatprovidedintheadministration training.Forinstallationswithlargeuserbaseandcomplex securityneeds. Notinscope FocusedTraining: Administration TraininginQuesticaBudgetadministration.Notinscope FocusedTraining: Allocations AdditionaltraininginQuesticaBudget'sAllocationsfeature,over andabovethatprovidedintheOperatingtraining.Trainingwillbe carriedoutbyremotedesktop Inscope Windows Authentication ConfigureQuesticaBudgettouseTheCustomer'sexistingActive Directory®foruserlogonandauthentication. Notinscope Create Division/Department Structure Division/DepartmenthierarchycreatedbyimportingExcel workbooks.QuesticawillsupplyTheCustomerwithblank workbookswhichmustbecompletedaccordingtothedefined formatandstructure. Inscope Objects/GLAccounts &Categories Importfromdataimportworkbooks.Inscope FundCategories& Funds Importfromdataimportworkbooks.Inscope 2.2.OperatingModule TheQuesticaBudgetOperatingmoduleisincludedinthisinstallation. FunctionalArea Description Scopeof Work AllocationsAdd in TheQuesticaBudgetAllocationsadd on,toallocatespecific forecaststomultiplecostingcenters. Inscope Train the Trainer: Operating “Train the trainer”trainingintheuseQuesticaBudget'sOperating module.Trainingwillbecarriedoutbyremotedesktop. Inscope Train the User: Operating “Train the user”trainingintheuseQuesticaBudget'sOperating module. Notinscope ImportData …InitialdataisimportedintoQuesticaBudgetfromExcel®files(“workbooks”). QuesticawillsupplyTheCustomerwithblankworkbookswhichmustbe completedaccordingtothedefinedformatandstructure.Questicawillimportthe operatingdatauptotwotimes,subjecttothesupplieddatabeingcleanandfree ofinconsistenciesandtothe City’s satisfaction.Ataminimum,thefileswill containthedatanecessary to:•Createcosting centers•Addcostingcentersto departments•Definefundsandassociatecostingcenterswith funds•CreateGL objectsandassociatethemwithobject categories•Associatedollaramountswith GLobjectsatthecostingcenterlevel. ImportInitialBudget Importfromdataimportworkbooks.Inscope ImportHistoricBudget Data Importfromdataimportworkbooks.Inscope ATTACHMENT A ExhibitA,Page 58 of 73 ImportActualsData Importfromdataimportworkbooks.Inscope Forthepurposeoftheabove,thedefinitionsofcostingcenters,divisions,departments,GLobjects,object categoriesandfundsshallbethosefoundintheQuesticaBudgetOperatingmanual.Themathematical relationshipsbetweenthemshallbethosecurrentlysupportedbyQuesticaBudgetanddescribedinthe QuesticaBudgetOperatingManual. Theimportofchartfieldsotherthanthosethatrelatetodivision,department,fund,costcenterandGL objectisnotwithinscopeunlessexpresslyreferencedinthe “Customizations”sectionofthisScopeof Work. Theobject/objectcategory,division/department/costingcenterandfundcategory/fundstructuresmustbe consistentacrossallyearsandacrosstheOperatingmoduleandcapitalmoduleifbothareused.The Customerwillresolveanyinconsistenciesinthestructuresimplicitintheactualandbudgetimportdata priortoprovidingthemtoQuesticaforimporttoQuesticaBudget. IfimportdataissuppliedintheExcelimporttemplatesprovidedbyQuesticaandthedataisconsistent withthedataintegrityrequirementsofQuesticaBudget,QuesticawillpopulatetheQuesticaBudget databasewithin15businessdaysofreceivingtheimportworkbooks.Theinclusionofcustomchartfield itemswillextendthistimeframeaswilldetermininghowtodealwithdatacombinationsthatviolate Questica Budget’s dataintegrityrules. ImportConfiguration … CostingCenters Importfromdataimportworkbooks.Inscope Configuration … OperatingBudget Stages TheCustomerwilldeterminehowtoconfigureQuesticaBudget's budgetstagestoassistintheirbudgetprocessandestablishthose stageswithinthesystem. Customer task Scenarios TheCustomerwilldeterminehowandwhentousetheconceptof scenariostoassistintheirbudgetprocess.Scenariosareversions ofacostingcenterbudget.Acostingcentermayhavemultiple scenariosbutonlyonescenariomaybeactiveandincludedinthe consolidatedbudget. Customer task Integration … BudgetExport AutomatedfacilitytotransferOperatingmodulebudgetdata fromQuesticaBudgettothe Customer’s SAPgeneralledgeratthe approvedbudgetobject/costingcenterlevelonanannualor otherbasiswheninvokedbyauser.Questicashallberesponsible forprovidingthesoftwareinterfaceintoQuesticaBudgetandthe operationalinfrastructurerequiredtomanagetheintegration. TheCustomershallberesponsibleforensuringthatthestandard QuesticaBudgettoSAPimportintegrationcomponentis available.Budgetdataintegrationshallbeatthedivision, department,costcenter,fundandGLobjectlevelonly. NotwithstandingresponsestoRequestsforProposalsorother communicationsbetweenQuesticaandtheCustomer,Questica willcreatenomorethan1customexportconfiguration.No customuserinterfacewillbecreatedfortheselectiveexportof sectionsofthebudget,noristheintegrationofadditionalchart fieldsincludedinthisScopeofWorkunlessexpresslyreferenced inthe “Customizations”sectionofthisScopeofWork. Inscope ATTACHMENT A ExhibitA,Page 59 of 73 ActualsImport Automatedfacilitytotransferactualdatafromthe Customer’s SAPgeneralledgertotheQuesticaBudgetOperatingmoduleata transactionlevelonadailybasiswhenautomaticallyscheduled. Questicashallberesponsibleforprovidingthesoftwareinterface fromQuesticaBudgetandtheoperationalinfrastructurerequired tomanagetheintegration.TheCustomershallberesponsiblefor makingavailablethedatatobeexportedfromtheSAPsystem, eitherinCSVformattedfilesorbyensuringthatthestandardSAP toQuesticaBudgetintegrationcomponentisavailable.Actual dataintegrationshallbeatthecostcenter,fundandGLobject levelonly.NotwithstandingresponsestoRequestsforProposals orothercommunicationsbetweenQuesticaandtheCustomer, Questicawillcreatenomorethan1customactualsimport configuration.Nocustomuserinterfacewillbecreatedforthe selectiveexportofsectionsofthebudget,noristheintegrationof additionalchartfieldsincludedinthisScopeofWorkunless expresslyreferencedinthe “Customizations”sectionofthisScope ofWork. Inscope Reports … StandardReports ProvisionofQuesticaBudget'sstandardOperatingmodule reports. Inscope StandardViewsfor Administrator AuthoredReporting ProvisionofQuesticaBudget'sstandardreportviewsforthe Operatingmodule. Inscope CustomReportViews Adaptationofreportviewstoincludecustomfieldsaddedtothe Operatingmodule. Notinscope Customizations … Customizationsincludecustombusinessrules,modifiers,userinterface(grids,forms,etc.),hand crafted reportsandad hocreportingmodels.Theyarealldetailedinsection “2.5.Customizations”ofthisScopeof Workdocument. 2.3.CapitalModule TheQuesticaBudgetCapitalmoduleisincludedinthisinstallation. FunctionalArea Description Scopeof Work Train the Trainer: Capital “Train the trainer”trainingintheuseQuesticaBudget'sCapital module.Trainingwillbecarriedoutbyremotedesktop. Inscope Train the User:Capital “Train the user”trainingintheuseQuesticaBudget'sCapital module. Notinscope ATTACHMENT A ExhibitA,Page 60 of 73 ImportData …InitialdataisimportedintoQuesticaBudgetfromExcel®files (“workbooks”). QuesticawillsupplyTheCustomerwithblankworkbookswhichmustbe completedaccordingtothedefinedformatandstructure.Questicawillimportthe capitaldatauptotwotimes,subjecttothesupplieddatabeingcleanandfreeof inconsistencies.Ataminimum,thefileswillcontainthedatanecessary to:• Create projects•Createassettypes&assets•Associateprojectswithasset types• Associateprojectswith divisions•Define funds•CreateGLobjectsandassociate themwithobject categories•Populateprojectswithvalues. ImportInitialBudget Importfromdataimportworkbooks.Inscope ImportHistoricBudget Data Importfromdataimportworkbooks.Inscope ImportActualsData Importfromdataimportworkbooks.Inscope Forthepurposeoftheabove,thedefinitionsofprojects,divisions,departments,assets,GLobjects,object categoriesandfundsshallbethosefoundintheQuesticaBudgetCapitalmanual.Themathematical relationshipsbetweenthemshallbethosecurrentlysupportedbyQuesticaBudgetanddescribedinthe QuesticaBudgetCapitalManual. Theobject/objectcategory,division/department/projectandfundcategory/fundstructuresmustbe consistentacrossallyearsandacrosstheCapitalmoduleandcapitalmoduleifbothareused.The Customerwillresolveanyinconsistenciesinthestructuresimplicitintheactualandbudgetimportdata priortoprovidingthemtoQuesticaforimporttoQuesticaBudget. IfimportdataissuppliedintheExcelimporttemplatesprovidedbyQuesticaandthedataisconsistent withthedataintegrityrequirementsofQuesticaBudget,QuesticawillpopulatetheQuesticaBudget databasewithin15businessdaysofreceivingtheimportworkbooks.Theinclusionofcustomchartfield itemswillextendthistimeframeaswilldetermininghowtodealwithdatacombinationsthatviolate Questica Budget’s dataintegrityrules. ImportConfiguration … CapitalProjects Importfromdataimportworkbooks.Inscope Configuration … CapitalBudgetStages TheCustomerwilldeterminehowtoconfigureQuesticaBudget's budgetstagestoassistintheirbudgetprocessandestablishthose stageswithinthesystem. Customer task Scenarios TheCustomerwilldeterminehowandwhentousetheconceptof scenariostoassistintheirbudgetprocess.Scenariosareversions ofaprojectbudget.Aprojectmayhavemultiplescenariosbut onlyonescenariomaybeactiveandincludedintheconsolidated budget. Customer task Integration … ATTACHMENT A ExhibitA,Page 61 of 73 BudgetExport AutomatedfacilitytotransferCapitalmodulebudgetdatafrom QuesticaBudgettothe Customer’s SAPgeneralledgeratthe approvedbudgetobject/departmentlevelonanannualorother basiswheninvokedbyauser.Questicashallberesponsiblefor providingthesoftwareinterfaceintoQuesticaBudgetandthe operationalinfrastructurerequiredtomanagetheintegration. TheCustomershallberesponsibleforensuringthatthestandard QuesticaBudgettoSAPimportintegrationcomponentis available.Budgetdataintegrationshallbeatthedivision, department,costcenter,fundandGLobjectlevelonly. NotwithstandingresponsestoRequestsforProposalsorother communicationsbetweenQuesticaandtheCustomer,Questica willcreatenomorethan1customexportconfiguration.No customuserinterfacewillbecreatedfortheselectiveexportof sectionsofthebudget,noristheintegrationofadditionalchart fieldsincludedinthisScopeofWorkunlessexpresslyreferenced inthe “Customizations”sectionofthisScopeofWork. Inscope ActualsImport Automatedfacilitytotransferactualdatafromthe Customer’s SAPgeneralledgersystemattheGLobject/projectlevelona regularlyscheduledbasisand/orotherbasiswheninvokedbya user.Questicashallberesponsibleforprovidingthesoftware interfacefromQuesticaBudgetandtheoperationalinfrastructure requiredtomanagetheintegration.TheCustomershallbe responsibleformakingavailablethedatatobeexportedfromthe SAPsystem,eitherinCSVformattedfilesorbyensuringthatthe standardSAPtoQuesticaBudgetintegrationcomponentis available.Actualdataintegrationshallbeatthecostcenter,fund andGLobjectlevelonly.NotwithstandingresponsestoRequests forProposalsorothercommunicationsbetweenQuesticaandthe Customer,Questicawillcreatenomorethan1customactuals importconfiguration.Nocustomuserinterfacewillbecreatedfor theselectiveexportofsectionsofthebudget,noristhe integrationofadditionalchartfieldsincludedinthisScopeof Workunlessexpresslyreferencedinthe “Customizations”section ofthisScopeofWork. Inscope Reports … StandardReports ProvisionofQuesticaBudget'sstandardCapitalmodulereports.Inscope StandardViewsfor Administrator AuthoredReporting ProvisionofQuesticaBudget'sstandardreportviewsforthe Capitalmodule. Inscope CustomReportViews Adaptationofreportviewstoincludecustomfieldsaddedtothe Capitalmodule. Notinscope Customizations … Customizationsincludecustombusinessrules,modifiers,userinterface(grids,forms,etc.),hand crafted reportsandad hocreportingmodels.Theyarealldetailedinsection “2.5.Customizations”ofthisScopeof Workdocument. 2.4.SalariesModule TheQuesticaBudgetSalariesmoduleisincludedinthisinstallation. ATTACHMENT A ExhibitA,Page 62 of 73 FunctionalArea Description Scopeof Work Train the Trainer: Salaries “Train the trainer”trainingintheuseQuesticaBudget'sSalaries module.Trainingwillbecarriedoutbyremotedesktop. Inscope Train the User: Salaries “Train the user”trainingintheuseQuesticaBudget'sSalaries module. Notinscope ImportData …InitialdataisimportedintoQuesticaBudgetfromExcel®files (“workbooks”). QuesticawillsupplyTheCustomerwithblankworkbookswhichmustbe completedaccordingtothedefinedformatandstructure.Questicawillimportthe operatingdatauptotwotimes,subjecttothesupplieddatabeingcleanandfree ofinconsistencies.Ataminimum,thefileswillcontainthedatanecessary to:• Create profiles•Create contracts•Create positions•Createsalary grades•Create salarygrade steps•Createmodifiers (benefits)•Create employees•Allocate employeesto positions•Allocatepositionstocostingcenters. ImportProfiles Importfromdataimportworkbooks.Inscope ImportPositions Importfromdataimportworkbooks.Inscope ImportContracts Importfromdataimportworkbooks.Inscope ImportGrades Importfromdataimportworkbooks.Inscope ImportGradeSteps Importfromdataimportworkbooks.Inscope ImportBenefits (Modifiers) Importfromdataimportworkbooks(ifsufficientmodifiersexist tomakethismoreefficientthatenteringmanually).Ifnotin scopethenTheCustomercanentermodifiersmanually.Thisis typicallymoreefficientthanenteringdataintoaspreadsheetfor automatedimport. Customer task Import Employee/Position Allocations Importfromdataimportworkbooks.Inscope Import Position/Costing CenterAllocations Importfromdataimportworkbooks.Inscope Forthepurposeoftheabove,thedefinitionsofprofiles,contracts,positions,salarygrades,salarygrade steps,employeesandmodifiersshallbethosefoundintheQuesticaBudgetSalariesmanual.The mathematicalrelationshipsbetweenthemshallbethosecurrentlysupportedbyQuesticaBudgetand describedintheQuesticaBudgetSalariesManual. Integration … ATTACHMENT A ExhibitA,Page 63 of 73 HRData AutomatedfacilitytosynchronizesalariesdatabetweenQuestica Budgetandthe Customer’s SAPHRsystem.Questicashallbe responsibleforprovidingthesoftwareinterfaceintoQuestica Budgetandtheoperationalinfrastructurerequiredtomanagethe integration.TheCustomershallberesponsibleformaking availablethedatatobeexportedfromtheSAPsystem,eitherin CSVformattedfilesorbyensuringthatthestandardSAPto QuesticaBudgetintegrationcomponentisavailableforextracting datafromandupdatingdatawithinthatsystem.Thiswillbe throughtheexportandimportofstructuredfilesorbyproviding databaseinterfaces(storedproceduresandqueries).This integration synchronizes:•New,deletedandupdated employees;•New,deletedandupdated positions;•Changesin employee position relationships;•Changesinposition costing centerrelationships.Theintegrationofprofiles(bargainingunits), grades,steps,payscalesandbenefitsshallnotbeincludedunless expresslyreferredtointhe “Customizations”sectionofthisScope ofWork.NotwithstandingresponsestoRequestsforProposalsor othercommunicationsbetweenQuesticaandtheCustomer,the integrationofcustomchartfielditemsisnotincludedunless expresslysetoutinthe “Customizations”sectionofthisScopeof Work. Inscope Include … PublishToOperating PublicationofcalculatedsalariestotheOperatingmodule'sdata.Inscope StandardReports ProvisionofQuesticaBudget'sstandardSalariesmodulereports.Inscope StandardViewsfor Administrator AuthoredReporting ProvisionofQuesticaBudget'sstandardreportviewsforthe Salariesmodule. Inscope CustomReportViews Adaptationofreportviewstoincludecustomfieldsaddedtothe Salariesmodule. Notinscope Customizations … Customizationsincludecustombusinessrules,modifiers,userinterface(grids,forms,etc),hand crafted reportsandad hocreportingmodels.Theyarealldetailedinsection “2.5.Customizations”ofthisScopeof Workdocument. ATTACHMENT A ExhibitA,Page 64 of 73 2.5.Customizations 2.5.1.CustomBusinessRules(CBRs),Modifiers,UserInterface ThisScopeofWorkdoesnotincludethedevelopmentofcustomizations. Customizationsnotlistedherecanbeaccommodateduponreceiptandacceptanceofachangeorder. 2.5.2.CustomReports,CustomReportViewsandCustomDashboards ThisScopeofWorkdoesnotincludethedevelopmentofcustomreports,viewsordashboards. Customreportinganddashboardrequirementsnotlistedherecanbeaccommodateduponreceiptand acceptanceofachangeorder. 2.5.7.Specifications BeforeQuesticaundertakesanycustomizationsdescribedherein,aswellasgeneralledgerintegrationsand dataimports,theCustomerandQuesticashallprepareandsign offonthedetailedspecifications (“Specifications”)fortheworktobeperformed. 2.5.6.ChangeOrders Anychangestotheagreedspecifications,includingchangesrequestedbytheCustomerwithintheone yearwarrantyperiod,shallbethesubjectofanewchangeorderandtheworktobecarriedout thereundershallbeseparatelyquoted,agreed,andbilledandshallnotbeincludedaspartofthisScopeof Work. 2.5.7.Warranty OncecompletedthecustomworkshallbewarrantedbyQuesticainaccordancewiththe “Technical Support Services”sectionoftheQuesticaSoftwareLicenseAgreement. 2.6.ProjectManagement 2.6.1.QuesticaProjectManagementResponsibilities 1.CoordinatingthedevelopmentoftheprojectplaninconsultationwiththeCustomerproject managerandteammembers. 2.Thetimelydeliveryofitemsidentifiedas “Inscope”withinthisSoW. 3.EnsuringthatmembersofthecustomerstaffaresufficientlyeducatedintheQuesticaBudget applicationtounderstandtheimplicationsofinitialdesigndecisions. 4.Providingthecustomerwithtimelyanddetaileddescriptionsoftheitemsidentifiedas “Customertask”withinthisSoW. 5.Advisingthecustomerofexpectedcompletiondatesforitemsidentifiedas “Customertask” withinthisSoW. 6.Advisingthecustomeroftheimpactontheexpecteddeliverydatesof “Customertask”items whenprerequisitecustomertasks,suchasthecompletionofdataimporttemplatesorapproval ofreportspecifications,areadvancedordelayed. 7.Monitoringtheprogressoftheprojectandadvisingthecustomerofriskstoitson time completion. 8.Coordinatingthecompletionandapprovalofchangeorders. 2.6.2.TheCustomerProjectManagementResponsibilities 1.Thetimelydeliveryofitemsidentifiedas “Customertask”withinthisSoW. 2.Advisingthecustomerofexpecteddeliverydatesforitemsidentifiedas “Customertask”within thisSoW. 3.Ensuringthatchangeorderscontainafullspecificationofthechangesrequired. 4.Ensuringthatcustomizationsarefullyspecifiedanddocumented. 5.EnsuringthatallCustomerteammembershaveaclearunderstandingoftheirresponsibilitiesto theproject. 2.6.3.ProjectPlanning ATTACHMENT A ExhibitA,Page 65 of 73 1.TheprojectplanwillbepreparedbytheQuesticaprojectmanagerinconsultationwiththe Customer’s projectmanagerandteammembers. 2.TheprojectplanningphasewilldeterminewhetherQuesticaBudgetmodulesaretobe implementedseriallyorinparalleland,ifserially,theorderofmoduleimplementation. 3.TheimplementationofeachQuesticaBudgetmodulewillinvolvethefollowingstages: a.Anoverviewof,andtrainingin,themoduleandthewaysinwhichthemodulecanbe extendedbyconfigurationandcustomizations. b.Adeterminationofhowbesttoconfigureand,ifnecessary,customizethemoduleto meettheobjectivesoftheCustomer. c.Anoverviewoftheadvantagesand,ifpresent,disadvantagesoftheproposed configurationandcustomizations. d.Documentationoftheagreedconfigurationandcustomizations. e.Thepreparationofdataimporttemplatesconsistentwiththeagreedconfigurationand customizations. f.ThecompletionbytheCustomerofthedataimporttemplates. g.TheimportbyQuesticaofthedataimporttemplates. h.CustomerapprovaloftheimportedQuesticaBudgetstructuresanddata. i.ThecreationbytheCustomerofatechnicalenvironmentinwhichQuesticaBudgetcan operate. j.ThedeploymentoftheQuesticaBudgetapplicationanddatabaseontheCustomer servers. k.Thecreationofcustomadhocmodelstosupportthereportingofcustomfields. l.TrainingintheuseofadhocmodelingforReportBuilder1.0. m.Determinationofcustomreportingrequirementsthatcannotbemetbythestandard reportsandtheuseofReportBuilder1.0. n.Thepreparationofchangeordersincludingthespecificationsforanyrequiredcustom reports. o.ThedevelopmentbyQuesticaofanyrequiredcustomreports. p.ThetestingandacceptancebytheCustomerofcustomreportsandadhocmodels. q.Thedeploymentofcustomreportsandadhocmodels. r.ThedevelopmentofanintegrationstrategyforupdatingtheQuesticaBudgetdatabase withactualresultdatafromthefinancialsystemandthepassingofbudgetdataintothe financialsystem. s.ThedevelopmentbytheCustomeroftheintegrationcomponentsthatarerequiredto accessactualdatafromthefinancialsystem/HRSystemandupdatethefinancialsystem withbudgetdata. t.ThedevelopmentbyQuesticaof: i.theintegrationcomponentsthattransformbudgetdatapriortoupdatingthe financialsystem; ii.theintegrationcomponentsthattransformactualresultdatapriortoupdating theQuesticaBudgetdatabase; iii.theintegrationcomponentsrequiredtoinitiatetheexecutionofintegrations. u.Thedeploymentofallintegrationcomponents. v.ThetestingandacceptancebytheCustomeroftheintegrationcomponents. 2.7.CustomerResources 1.TherequirementforCustomerresourcesisvariablewith: a.Thedurationoftheproject. b.ThedegreeofinternalCustomerconsultation. c.ThelevelofinternalCustomeragreement. d.Thenumberofcustomizations. e.ThefamiliarityofCustomerstaffwiththeSQLServerenvironment. ATTACHMENT A ExhibitA,Page 66 of 73 V.TeamBudgetSupport Questicahasonlyonesupportmodelthatitmakesavailabletoallofitscustomers.Itis designedtoprovidethehigheststandardofqualitysupporttoclientsinallNorthAmerican timezones. Thesupportprocess:AllsupportissuesaretrackedassupportticketsatQuestica.Weusea dedicatedincidentandtickettrackingsystem(Connect wise)totrackeverysupportissuefrom thetimeitisfirstreporteduntilitisresolvedandclosed.Whenanincidentisreporteditisfully documentedanditsseverityandimpactonthecustomerisusedtoroutethesupportticket appropriately.AllQuesticastaffarebasedinourBurlington,Ontariooffices,soticketscanbe immediatelyreferredtothehighestlevelofdevelopmentortechnicalresourcesforadditional attention,ifneeded. Inallcasesasupportincidentisassignedtoanindividualwhohastheresponsibilityofworking withourclientcontactuntiltheincidentisresolved.Itisthis individual’s responsibilitytowork onourcustomersbehalftoescalateincidentsifappropriate,andtoprovidesteadyfeedbackto ourcustomers. Asupportissuecanberaisedwithoursupportstaffbyemailorbycallingourtechnicalsupport line.ThislineisalwaysstaffedMondaythroughFridayfromthehoursof8amto8pmEST.At alltimesthereisanindividualwhomaintainstheprimaryresponsibilityofensuringthesupport lineismonitoredandansweredpromptly –ifthisindividualisoccupied,ourphonesystemwill automaticallyescalatethecalltoalargerpoolofqualifiedindividuals. Eachsupportincidentisdeemedclosedwhenaremedy,reasonableworkaround,or recommendationfortheinstallationofacurrentmaintenancereleasehasbeenofferedand accepted,andacommerciallyreasonableefforthasbeenmadetorestoreoperationtothe originalintentanddesignoftheSoftware. AlloursupportstaffislicensedtousetheCitrixGoToMeetingproducttoshareascreenwith callers. Therearenoformallimitsputinplaceonthenumberofcallsorincidentsthatacustomermay log.OurexpectationisthatsupportcallswillbemadetoQuesticabystafforAdministratorsof TeamBudget. ATTACHMENT A ExhibitA,Page 67 of 73 ConfigurationSupport:TheimplementationplanincludedinthisRFPresponseincludesthe initialconfigurationoftheTeamBudgetsystem.AfteryouareliveandusingTeamBudgetina productionenvironmentyoursupportwillbetransitionedfromyourimplementertoour TechnicalSupportstaffforongoingsupport.Atthatpoint,ifthereareanyquestionsrelatedto configurationyourstaffarewelcometocontactourTechnicalSupportstaffontheunlimited supportbasisasdescribedabove. IntegrationSupport:TeamBudgetintegrationsthatarepurchasedandarepartoftheinitial implementationarefullysupportedbyQuestica. SystemSupport:AllSystemSupportrelatedquestionsarefullycoveredbyoursupport programandareansweredonanunlimitedbasis. Wemaintainaservicesagreementthatdetailswhatweprovidebasedonthelicensetype.Inall caseswecommittosupportingTeamBudgetsothatitcanbeusedonanongoingbasisinthe samewaythatitwasimplemented.AllproductreleasesareincludedinourMaintenanceand Supportaswell.Thereareseveralexclusionsinthesupportagreementaswelldependingon thenatureofthelicensing(hostedvs.nothosted).However,inbothcasesourmaintenance doesnotincludethetrainingofyourstaff. VersionSupport:Questicareleasesatleastonemajorandoneminorproductupdateperyear. Weunderstandthatoftenourcustomersonlywanttoupdatetheirproductonascheduled basis,orwhennewfunctionalityisintroducedthatintereststhem.Althoughwedoencourage ourcustomerstokeepTeamBudgetupdated,itisnotarequirement.Wehavemirroredour supportstructurewiththatofMicrosoft –wecontinuetosupportbrowser,serverand databaseversionsthataresupportedbyMicrosoft.(Forexample,theMSSQL2005database wasnolongersupportedasatJanuary2013,matching Microsoft’s supportstructure.)Itshould benotedthatoursupportstaffwillprovideassistancetotheextentthattheycanwithprior releases –theresolutiontoaproblemmaybeaddressedinafuturerelease,andinthosecases theseresolutionswillbearecommendationofanupgradetothatfuturerelease. DisasterRecovery:SincealldataandproductconfigurationdataisstoredinasingleMS SQL database,TeamBudgetcanberestoredfromadisasterveryquicklyprovidingthedatabaseis backedupregularly.Therearethreecorefailurescenarios –thewebservercomponent(IIS,or itsrelatedserverhardware,)theTeamBudgetdatabase(MS SQLServer,oritsrelated hardware,)orboth. Theprocessofrecoveryisthesameinallcases:1)EnsurethattheTeamBudgetdatabaseis availablefromaMS SQLdatabase,beingrecoveredfromabackuponanalternateserverif necessary.2)EnsurethattheTeamBudgetproductisinstalledonanIISwebserver.3) ConfigureTeamBudgettopointtotheappropriateTeamBudgetdatabasebyconfiguringthe web.configfileonthehostedIISserver.(Thereareotherminorstepsinvolvedthatarewell documented,butthesearethemajorsteps.) ATTACHMENT A ExhibitA,Page 68 of 73 PleasenotethatTeamBudgetissupportedinfailoverclusteredIISandSQLserver environments,suchthattheneedsforabarebonesre installationfrombackupsshouldnotbe necessary.However,ifitis,thespeedofrecoveryisbasedonthetimerequiredto havetheIIS andSQLserverinstalledandreadysothattheabovestepscanbeperformed,togetherwiththe restoredbackup.IfitiscriticalthatTeamBudgetbeavailableasquicklyaspossiblewithlittleto nodowntime,analternateservercanbeconfiguredforfailoverpurposes. Processformonitoring,escalating,andresolvingissuesduringtheproject AlltechnicalsupportisprovidedtollfreefromtheQuesticaofficeinBurlington,Ontario. Standardsupporthoursare8amto8pm(EST),MondaythroughFriday.Forafter hours supportrequests,Questica’s ProjectManagerscanalsobereachedviacellularphoneoremail. Responsetimeisnormallyimmediate,andisgenerallynolongerthan12hours.Normally,6 supportstaffareavailableonthetechnicalsupportcallqueue.TheywillworkwithCitystaffto assistintroubleshootingallissues,includingsystemissues.Often,screensharingtechnologies suchasWeb exorGoToMeetingareusedtofacilitatesuchtroubleshootingandsupportissues. Supportcallsareclassifiedintothefollowingcriteria: Priority1–Urgent (example:systemisunavailabletousers)–Supportstaffimmediatelyceases anyotheractivityandworktowardsasolution,andifpossible,remainsonthephonewiththe customeruntilresolved. Priority2–Important (example:softwarebug)–Supportstaffworktoresolvetheissuewithin thesamebusinessday. Priority3–Minor (example:minornuisanceorirregularity)–Tobeconsideredinthenext developmentcycle –mayrequireahotfix. Allsupportissues,customer needsandsuggestionsaretrackedthroughourCRM(Customer RelationshipManagement)tools.Allsupportcalls/emailsareenteredandassignedatracking number. Supportissuesareclassifiedasdescribedabove(Priority1,2,3) Softwareissueshavethefollowingclassifications: Low Tobeconsideredinthenextdevelopmentcycle Medium Tobeconsideredinthenextdevelopmentcycle High AddressedinthenextBuild Critical(WorkStoppage)Addressedimmediately Serviceticketsareescalatedautomatically(todevelopment)viaemailtoensureallresponse commitmentsaremet. ATTACHMENT A ExhibitA,Page 69 of 73 Ifneeded,customerscanescalatesupportissuesinthefollowingmanner: 4.Manager,CustomerService&Support 5.President 6.Chairman Officeandmobilephonenumberforthesepositionswillbeprovideduponcontractaward. ProductUpdates/UpgradesApproach Questicareleases12majorproductupdatesperyear.Hotfixesarereleasedasneeded.All Supportandproductupdatesareprovidedtoclientsatnochargeaspartoftheirmaintenance package.Thisallowsastructuredrolloutofnewversionsforourcustomersintroducingonly featuresthathavebeenrigorouslytestedpriortorelease.Ourdevelopmentscheduleisdriven primarilybycustomerfeedback.Allreleasescomewithcomprehensivedocumentation, featuresadded,knownissues,databaseschemas,installationdocumentsetc.Typicallyan upgradetakes12hourstoinstallandtestpriortoproductionimplementation.Upgradescan bedoneduringoff peaktimeswhentherearefewerusersloggedintotheapplicationandcan bedonebyQuesticastafforbyyourstaff(withpropertraining). ApplyingUpgrades Upgradesarenormallyperformedinthetestenvironmentpriortorollouttotheproduction environment. ArequestwillbemadetoCitystafftogiveQuesticastaffaccesstotheapplicationdatabase. Normallydoneafterhours,thedatabasewillthenbe “frozen,”andtheupgradeappliedviaour automaticdatabaseupgradetool asimpledrag&dropexecutablefile.Asthereisnosoftware installedontheworkstations,theyarenotaffected.Afterinitialtesting,thedatabasewillthen bereleasedbacktoCitystaffmembers.OnceTheCityhastestedandaccepted/signedoffon theupgrade,trainingwillbegin(ifapplicable). ForeachupgradeQuesticaperformsthefollowingtasks: 1.Updateanydocumentationthatisnecessary. 2.Updateinstallerdocumentifnecessary. 3.Updatethenewfeaturesdocument. 4.Updatethetableandtableschema. 5.Updatethelistofchangestothedatabase. 6.UploadthenewversiontoQuesticaFTPsite. 7.Notifyexistingcustomersofanewversion. ATTACHMENT A ExhibitA,Page 70 of 73 VI.TeamBudgetTraining Questicatakesahands onapproachtotrainingbyworkingcloselywithcustomerstoestablish thebesttrainingplanpossible.Itistheroleof Questica’s ProjectManagerstoworkwithCity stafftoestablishtrainingobjectivesanddesiredoutcomes. Questicaispreparedtoperformalltrainingservicesonsite.However,given theadvancements intechnology,Questicaisalsoabletoconducttrainingremotely.TheCitymayalsowantto considera“Train the Trainer”approachwhereQuesticawilltraincoreuserswhowillinterm trainotherusers. Yourstaffwillchooseasuitabledate(s)andtime(s)thatisbestavailableforallpartiestobe trained.Iftrainingistobedoneremotely,itwillbeThe City’s responsibilitytoprovideitsstaff withthenecessarycomputerequipmentandinternetcollaborationtoolsneededforthe remotetraining.Iftrainingweretobeonsite,itwillbeThe City’s responsibilitytoschedulea trainingroomandsupplythenecessarycomputerequipment. QuesticawillworkwithTheCitytosupplytrainingmaterialsaswellashandoutsforend user training.Oftenwhenaskedtodothe “Train the Trainer”approach,Questicawillalsositinon thefirstfewendusertrainingsessionstoensurethetrainersarecoveringthematerial properly.Questicaalsorecommendstrainingstaffatatimethatisclosetothebeginningofthe budgetpreparationcycle. AtypicalendusertrainingsessionwillbeginwithaPowerPointslideshowthatdiscussesthe purposeofthesoftwareandthefundamentalconcepts.Thenextstepistoinviteuserstowork handsonwithintheTeamBudgettrainingenvironment.Theinstructorandsupportingstaff walkaroundtheroomassistingwithquestions.Ahandoutisusuallypreparedandgiventothe users. TheCitywillbeencouragedtomodify Questica’s handoutstosuittheneedsofyourusers. On lineTraining PostProjectimplementationtrainingwillbeavailableatyourlocation,atouroffices (Burlington)orviaWeb extypeservices.Inaddition,eachmonthQuesticahostsafree customer onlywebinartoprovideyourstaffon goingtrainingandproductknowledge.These monthlysessionsareknownas TeamBudgetTuesdays astheyareheldonthe2ndTuesdayof eachmonth.EachTeamBudgetTuesdaysessionisrecordedandthelibraryofvideotraining sessionsisalwaysavailabletoyourstaff. AllTeamBudgetcustomershaveaccesstoover20recordedTeamBudgetTuesdaywebinars. Eachofthesetrainingwebinarsis20 40minutesinlength,andfocusonasingleaspectofthe application.ThesetrainingvideosareavailableatnochargetoallTeamBudgetcustomersand ATTACHMENT A ExhibitA,Page 71 of 73 canbeviewedasoftenasyouwish.NewTeamBudgetTuesdaysessionsareaddedeach month. Thecurrentlibraryofvideotrainingmaterialincludesthefollowingtopics: AdvancedSearch Gridfundamentals Reporting(standardreports) ChangeRequests VariablesandFormulae Ad Hocreporting Salary&PositionPlanningmodule Capitalmodule Tips&Tricks(allmodules) FormEditor(ScreenEditor) Security Modifiers/Benefits Baselines&baselinereports Audits/Logging Distributions –annualizingbudget numbers NewUserNavigation Scenarios&“What if”budgeting BatchProcesses Salarymodulereviewandnewfeatures Q&Aonly(customerquestionsonany topic) ExcelImport/Exportfeature ChangeRequests –focusonCapital module TrainingSessions Atypicaltrainingsessionwillbelaidoutasfollows: User/AdministrativeTraining IndepthoverviewofTeamBudget AdministrativeTraining Overview/Trainingtopics GeneralOrientation o Interface o Consistentlayout o Trytoreducenumberofscreens o Contextualexperience(menurollovers,buttonpop ups) o Easynavigation Reports o Contextual(specifictoaprojectorcostcenter) o ReportCenter AdministrativeTraining Administration: ATTACHMENT A ExhibitA,Page 72 of 73 o BatchProcesses o LockVersions o CopyVersions o Promote/DemoteVersions o BalanceVersions o Security users,licenses,rolesandpermissions o GroupModel o Licensing o Settings budgetyear,budgetstages,ranks,projecttypes,trees,regions, templates,systemproperties Reporting o ReportTypes PDF,Word,Excel o ContextualReports theyrunwithinaprojectanddonotrequireausertoenter anyparameters o ReportCenter RequiresParameters o CustomReporting o Ad HocReporting o FutureofReporting SQLServerReportingiscurrentlysupported TrainingDocumentation QuesticawillworkwithCitystafftosupplytrainingmaterials,aswellashandoutsforuser training.Thesetakeawayswillbegearedtowardeachgroupthatisbeingtrainedsuchas: Finance BusinessPlanning Back EndTechnical UnlimitedTechnicalSupport ManagementReporting Administrators Documentationwillinclude: Customizedhand outscreatedforeachgrouptobetrained AdministrativeManuals foradministratorsonly TeamBudgetOperatingUserManual TeamBudgetDatabaseDocumentation foradministratorsonly TeamBudgetReleaseNotes TeamBudgetDatabaseSchema foradministratorsonly TeamBudgetTechnicalRequirements foradministratorsonly TeamBudgetUserManual ATTACHMENT A ExhibitA,Page 73 of 73 Note:Inadditiontothecustomizedhand outs,userswillreceivemostoftheabovedocuments containingscreenshotsofTeamBudgettoassistinnavigatingtheapplication. ATTACHMENT A Ex h i b i t C , P a g e 1 o f 2 Ex h i b i t C CO M P E N S A T I O N Sc o p e De s c r i p t i o n o f S e r v i c e s Co s t Pa y m e n t Sc h e d u l e Im p l e m e n t a t i o n ( c o s t o f a l l pr o f e s s i o n a l s e r v i c e s r e q u i r e d fo r i n s t a l l a t i o n , i m p l e m e n t a t i o n , da t a c o n v e r s i o n , a p p l i c a t i o n de v e l o p m e n t , t r a i n i n g , a n d t h e fi r s t y e a r ’ s w a r r a n t y , ma i n t e n a n c e , a n d s u p p o r t a s we l l a s a n y a p p l i c a b l e l i c e n s e co s t s . ) Li c e n s e s : So f t w a r e F r a m e w o r k Ca p i t a l , O p e r a t i n g , a n d S a l a r y L i c e n s e s ( $ 1 , 6 0 0 p e r l i c e n s e ) : 6 Ca p i t a l , O p e r a t i n g L i c e n s e s ( $ 1 , 3 0 0 e a c h ) : 2 0 Op e r a t i n g L i c e n s e s ( $ 1 , 0 0 0 e a c h ) : 1 2 Re a d O n l y L i c e n s e s : u n l i m i t e d n u m b e r o f r e a d o n l y l i c e n s e s $1 3 0 , 0 0 0 $ 4 3 , 0 0 0 a t C o n t r a c t Si g n i n g $4 3 , 0 0 0 a t s t a r t o f tr a i n i n g $4 4 , 0 0 0 S y s t e m Go - L i v e Im p l e m e n t a t i o n S e r v i c e s : p l a n n i n g & a n a l y s i s , i n s t a l l a t i o n , da t a l o a d & v e r i f y , a c c o u n t i n g i n t e g r a t i o n , t r a i n i n g , p r o j e c t ma n a g e m e n t p e r E x h i b i t A $1 2 9 , 6 0 0 $ 2 5 , 9 2 0 e a c h a s ou t l i n e d b e l o w Ma i n t e n a n c e a n d H o s t i n g ( Y e a r 1 ) $1 0 , 0 8 0 C o n t r a c t S i g n i n g Su b t o t a l : $2 6 9 , 6 8 0 An n u a l m a i n t e n a n c e ( Y e a r 2 ) A n n u a l M a i n t e n a n c e a n d H o s t i n g $3 9 , 9 8 0 O n e y e a r a f t e r co n t r a c t s i g n i n g An n u a l m a i n t e n a n c e ( Y e a r 3 ) A n n u a l M a i n t e n a n c e a n d H o s t i n g $3 9 , 9 8 0 T w o y e a r s a f t e r co n t r a c t s i g n i n g An n u a l m a i n t e n a n c e ( Y e a r 4 ) A n n u a l M a i n t e n a n c e a n d H o s t i n g $3 9 , 9 8 0 T h r e e y e a r s a f t e r co n t r a c t s i g n i n g An n u a l m a i n t e n a n c e ( Y e a r 5 ) A n n u a l M a i n t e n a n c e a n d H o s t i n g $3 9 , 9 8 0 F o u r y e a r s a f t e r co n t r a c t s i g n i n g Cu s t o m R e p o r t D e v e l o p m e n t 25 0 h o u r s a t $ 1 7 0 p e r h o u r $4 2 , 5 0 0 Pa y m e n t u p o n ac c e p t a n c e o f t h e re p o r t 10 % C o n t i n g e n c y Ba s e d o n f i r s t y e a r i m p l e m e n t a t i o n a n d l i c e n s e f e e c o s t $2 6 , 9 6 8 30 d a y s a f t e r a n ap p r o v e d i n v o i c e TO T A L N O T T O E X C E E D CO M P E N S A T I O N $4 9 9 , 0 6 8 ATTACHMENT A Ex h i b i t C , P a g e 2 o f 2 Pa y m e n t S c h e d u l e f o r I m p l e m e n t a t i o n S e r v i c e s 1. $ 2 5 , 9 2 0 d u e e a r l i e r o f 6 0 d a y s f r o m c o n t r a c t s i g n i n g o r c o m p l e t i o n o f d a t a i m p o r t 2. $ 2 5 , 9 2 0 d u e e a r l i e r o f 1 2 0 d a y s f r o m c o n t r a c t s i g n i n g o r s t a r t o f t r a i n i n g 3. $ 2 5 , 9 2 0 d u e e a r l i e r o f 1 5 0 d a y s f r o m c o n t r a c t s i g n i n g o r c o m p l e t i o n o f d a t a i n t e g r a t i o n 4. $ 2 5 , 9 2 0 d u e e a r l i e r o f 2 1 0 d a y s f r o m c o n t r a c t s i g n i n g o r G o - L i v e 5. $ 2 5 , 9 2 0 d u e 6 0 d a y s a f t e r G o - L i v e Ex h i b i t C - 1 HO U R L Y R A T E S C H E D U L E A N D O T H E R C O M P E N S A T I O N Pr o j e c t M a n a g e r - $ 2 0 0 / h r Co n s u l t a n t - $ 2 0 0 / h r Tr a i n e r - $ 2 0 0 / h r De v e l o p e r - $ 2 0 0 / h r Re p o r t W r i t e r - $ 2 0 0 / h r ATTACHMENT A Exhibit D, Page 1 of 2 Exhibit D QUESTICA BUDGET LICENSE AGREEMENT 1.PERMITTEDUSE.SubjecttothetermsofthisAgreement,QuesticaherebygrantstoLicenseeaperpetual,Personal,non transferable andnon exclusivelicensetousetheSoftware,solelyinexecutablecodeformat,andtheDocumentationprovidedtherewith,solelyfor Licensee’s owninternalbusinesspurposesexclusivelywithinthefacilitiesandsiteswithinthejurisdictionoftheLicensee. IfLicenseewishestousetheSoftwareatorfromanadditionalsiteorsitesoutsideofitsjurisdiction,Licenseeagreestoobtainaseparate licenseforsuchsite(s).Licensee’s righttousetheSoftwareandtheDocumentationislimitedtothoserightsexpresslysetoutherein. LicenseeshallnotusetheSoftware,inwholeorinpart,onbehalfoforforthebenefitofanyotherPerson,includinganaffiliateofthe Licensee,exceptasexpresslyprovidedherein. 1.1STAFFWORK AT HOMERIGHTS.StaffoftheLicenseemayusetheSoftwarefromtheirhomeorremotelyasanextensionofthe licensegrantedtotheLicensee,forbusinessrelatedpurposes.StaffmaynotusetheSoftwareathomeforpersonalpurposes. LicenseeisresponsibleforensuringthattheSoftwareismadeinaccessibletoitsstaffifa)anyeventcausesthestaffmembertonolonger beanemployeeforanyreason,orb)thestaffmemberwouldnotnormallyrequiretheuseoftheSoftwareintheat workenvironment. 1.2PERMITTEDCUSTOMIZATIONS.QuesticaalsograntstheLicenseeanon sublicensable,non exclusive,non transferablerightto create,ortohave createdonitsbehalf,“PermittedCustomizations”totheexecutablecodecomponentsoftheSoftwaresolelyfor internaluseandonlyforuseaspartofandinconjunctionwiththerelatedSoftware.“PermittedCustomizations”iscustomsoftwareor reportswhicharedevelopedthataccessorinteractwiththeSoftwareoritsassociateddatabase(s).TheLicenseemayonlycreate PermittedCustomizationsthatdonotrequireaccessandchangestothesourcecode.TheLicenseemayonlycreatePermitted CustomizationsthatdonotrequirethesourcecodeoftheSoftwaretocreatethePermittedCustomizations,andaccesstheexecutable codeversionofthe Softwareoritsassociateddatabasesinawaythatisreasonablypracticalwithoutaccesstothesourcecodeofthe Softwareatanytime. PermittedCustomizationsDoNotInhibit Questica’s RighttoInnovate.Independently,Questicaiscontinuallyinnovatingandimproving theSoftwaretomeettheneedsofitscustomers.TheLicenseeacknowledgesthat,whileithastheabilitytocreateitsownPermitted Customizations,Questicamustnotbepreventedfromcontinuingtodevelopandenhanceitssoftwareinanyrespect,evenifsuch modificationsmaybesimilartothePermittedCustomizations infunctionality,appearanceorotherwise.Therefore,ifQuesticadevelops anymodificationswhichmaybesimilartothePermittedCustomizations,LicenseeagreestonotmakeanyclaimagainstQuesticafor infringementofanyofits(oritssubcontractors)rightsinortothePermittedCustomizations.Questicashallnotdirectlyincorporateinto itsmodificationsanyoriginalsourcecodeindependentlydevelopedbytheLicensee. 1.3RESTRICTIONSONUSE.Exceptassetforthherein,Licenseeshall(a)notcopytheSoftwareexcepttocopyitontothesitecomputers beingusedbyLicenseeandtomakeonecopyoftheSoftwaresolelyforbackuportestingpurposes;(b)notcopyanyofthe Documentationforanyuseoutsidethesite;(c)notassignthisAgreementortransfer,lease,exportorgrantasub LicenseeoftheWork orthelicensecontainedhereintoanyPersonororganizationexceptasandwhenauthorizedtodosobyQuesticainwriting;(d)not reverseengineer,decompileordisassembletheSoftware;(e)notusetheWorkexceptasauthorizedherein;(f)takesuchprecautions withrespecttotheSoftware,asitwouldtaketoprotectitsownproprietarysoftwareorhardwareorinformation.Forthepurposesof thisAgreement,“Person”includesanindividual,corporation,partnership,jointventure,trust,unincorporatedorganization,theCrownor anyagencyorinstrumentalitythereoforanyotherjudicialentityrecognizedbylaw. 2.OWNERSHIPANDCOPYRIGHT.QuesticaistheownerofallintellectualpropertyrightsintheWork,relatedwrittenmaterials,logos, namesandothersupportmaterialsprovidedpursuanttothetermsofthisAgreement.NotitletotheintellectualpropertyintheWorkor inanymagneticmediaorotherphysicalmediaprovidedtherewithistransferredtotheLicenseebythisAgreement. QuesticashalldefendLicenseeagainstanyclaimthattheWorkinfringesapatent,copyright,trade markorotherintellectualproperty rightofanythirdpartyandQuesticawillpayresultingcost,damagesandreasonablelegalfeesfinallyawarded,providedthati)Licensee promptlynotifiesQuesticainwritingoftheclaim;andii)Questicahassolecontrolofthedefenseandallrelatedsettlementnegotiations. Ifsuchclaimhasoccurredorin Questica’s opinionislikelytooccur,LicenseeagreestopermitQuesticaatitsoptionandexpense,either toprocureforLicenseetherighttocontinueusingtheWorkortoreplaceormodifythesamesothatitbecomesnon infringingwithout lossoffunctionality. QuesticashallhavenoobligationtodefendLicenseeortopaycosts,damagesorlegalfeesforanyclaimbaseduponuseofotherthana currentunalteredreleaseoftheWork,ifsuchinfringementwouldhavebeenavoidedbytheuseofacurrentunalteredreleasethereof. TheforegoingstatestheentireobligationsofQuesticawithrespecttoinfringementorproprietaryorintellectualrightsofthirdparties. 3.LIMITEDWARRANTY.QuesticawarrantsthatsolongasProductMaintenanceandSupportservicesareprovidedbyQuesticathatthe Software,whenproperlyinstalled,willperformsubstantiallyinaccordancewiththeaccompanyingwrittenmaterials.IftheSoftware doesnotsoperformduringsuchperiod,Questicawillcorrect,atnocosttoLicensee,programmingerrorsintheSoftwaretomakethe Softwaresoperformprovidedthati)theSoftwarehasbeenproperlyusedbytheLicenseeinaccordancewiththedocumentation furnishedbyQuesticatoLicenseeinconnectiontherewith;ii)LicenseenotifiesQuesticaoftheprogrammingerrorsanddescribesthe ATTACHMENT A Exhibit D, Page 2 of 2 natureofthesuspectederrorsandofthecircumstancesinwhichtheyoccur;iii)Questica,usingreasonableefforts,isabletoconfirmthe existenceoftheprogrammingerrors;andiv)LicenseeoranythirdpartyhasnotchangedormodifiedtheSoftware. LicenseeagreesthatQuesticashallnotbeliabletotheLicenseeoranyotherperson,regardlessofthecause,fortheeffectivenessor accuracyoftheSoftware,theDocumentationoranyotherrelatedmaterials,orforanyotherspecial,indirect,incidentalorconsequential damagesarisingfromoroccasionedbytheuseoftheSoftware,theDocumentationortherelatedmaterials,orthefailureoromissionon thepartofQuesticatocomplywithitsobligationsunderthisAgreement. TheLicenseeherebyagreesthat Questica’s maximumliabilityforanyclaimarisinginconnectionwiththeSoftware,theDocumentation oranyrelatedmaterials(whetherincontract,tort,includingnegligence,productliabilityorotherwise)shallnotexceedthetotalContract valuepaidbytheCity. 4.IRREPARABLEHARM.LicenseeacknowledgesandagreeswithQuesticathatthebreachbyitofanyoftheprovisionsofSections1 3of thisAgreementwouldcauseseriousharmtoQuesticawhichcouldnotadequatelybecompensatedforindamagesandintheeventofa breachbyLicenseeofanyofsuchprovisions,Licenseeunderstandsthataninjunctionmaybeissuedagainstitrestrainingitfromany furtherbreachofsuchprovisions,butsuchactionsshallnotbeconstruedsoastobeinderogationofanyotherremedywhichQuestica mayhaveintheeventofsuchbreach. 5.PRODUCTMAINTENANCE,SUPPORTANDHOSTING.ForthefirstyearofthisAgreement,uponpayingtheLicenseeFeeandforeach yearthereafter,providedthatLicenseecontinuestopaytheAnnualProductMaintenance,SupportandHostingFeeinaccordancewith theattachedquotation,QuesticashallprovidetheMaintenanceandTechnicalSupportservices(the"Services")forthesoftwareas outlinedinAppendixA,iftheLicenseeisnototherwiseinbreachoftheprovisionsofthisAgreement. ATTACHMENT A ATTACHMENT A ATTACHMENT A City of Palo Alto (ID # 4815) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 Summary Title: California Avenue Concept Plan FAR Title: Council Direction to Remove Floor Area Ratios from the Draft California Avenue Area Concept Plan per the Council's discussion of May 5, 2014 From: City Manager Lead Department: Planning and Community Environment RECOMMENDATION Staff recommends that the City Council direct staff to remove Floor Area Ratios from the draft California Avenue Concept Plan per the Council’s discussion on May 5, 2014. Following Council’s direction, the revised draft Concept Plan (attached) will be subject to further public input, revisions, and environmental review as part of the Comprehensive Plan Update. EXECUTIVE SUMMARY The purpose of the California Avenue Concept Plan (Cal. Ave. Concept Plan) is to identify appropriate land uses and intensities for the area near the California Avenue Caltrain Station and plan for improved pedestrian and bicycle connections. The draft Cal. Ave. Concept Plan was the subject of two recent City Council hearings on April 21 and on May 5 and was the result of a long planning process involving significant public input. The City Council provided feedback on the draft Concept Plan at the April 21st hearing. The City Council then directed staff at the May 5th hearing on the Comprehensive Plan Update to remove all references to floor area ratios from the draft Concept Plan and to return with the revised document on a future City Council consent calendar. Council also requested that staff clarify for the public that the current draft Cal. Ave. Concept Plan is just that --a draft --and has not been approved by the City Council. Following the requested action, staff will continue to refine the draft Concept Plan further based on input received as part of the larger outreach effort on the Comprehensive Plan. Both the Cal Ave. and East Meadow Circle Concept Plans will return to the City Council with the draft Comprehensive Plan Update for a final decision by the Council following preparation of a program-level Environmental Impact Report (EIR). BACKGROUND City of Palo Alto Page 1 The California Avenue Area Concept Plan (Cal. Ave Concept Plan) is one of two studies initiated by the City Council in 2006 as part of the overall Comprehensive Plan (Comp Plan) Update project; !t that time, Council’s direction for the Comp Plan was to study and prepare concept area plans for two specific areas: the East Meadow Circle and the California !venue/Fry’s areas. Those concept area plans would help determine if those areas needed land use or policy changes. The Draft Cal. Avenue Area Concept Plan specifies land uses and development intensities, including the potential for additional housing, the desire to retain and enhance retail/service opportunities, and the desire for improved pedestrian and bicycle connections. Specific focus was given to preferred uses of the Fry’s site and the character of the California !venue business district. The Concept Plan identifies a vision for this area and if adopted, would provide a framework to help guide future development. DISCUSSION There are only two areas in the Cal. Ave. Concept Plan where Comprehensive Plan land use designations are proposed for change, as further described below. In the draft Concept Plan reviewed by Council, floor area ratios (FAR) were identified in conjunction with the suggested land use designation of these areas on pages 6 and 8. The draft Concept Plan has been revised to remove all references to FAR to make it clear that such ratios have not been identified and would be subject to future discussion. The text to be deleted is shown with strikethroughs in the redlined version of the Concept Plan in Attachment A. If FARs are not included in the final Concept Plan, the FAR associated with each land use designation or zoning district would govern. These FARs are presented in the Land Use and Community Design Element (pp. L-10 through L-12 in the current Comp Plan). Subarea II Park Boulevard - Technology Corridor The Park Boulevard subarea includes the properties located south of California Avenue and between Park Boulevard and Alma Street. Goal CACP-3 promotes Park Boulevard as an important hub of innovation and entrepreneurship for small new companies. Policy CACP-3.1 and the associated Programs CACP-3.1.1 and 3.1.2 encourage strengthening the Park Boulevard area’s ability to attract rising technology companies with the application of a Technology Corridor overlay. On page 6 of the draft Concept Plan, under the Comprehensive Plan Land Use Designations heading, a maximum allowable floor area ratio of 1.5 was proposed for the Technology Corridor Overlay. As shown in the attached revised draft Concept Plan, the reference to the 1.5 ratio is removed. Subarea III -Fry’s !rea This subarea includes the commercial uses to the west and south of the Fry’s Electronics Store as well as some of the low density residential properties to the north. The proposal would be to change the land use designation of the Fry’s Electronics property from Multifamily Residential to Mixed Use. The intent is to provide a flexible designation that would accommodate retail use if desired and other compatible uses such as housing or office. There City of Palo Alto Page 2 was one reference to floor area ratios for the Mixed Use land use designation in the draft Concept Plan in Table CACP-1 on page 8. All floor area ratios will be removed as indicated from the table in the attached revised document. NEXT STEPS Following Council review and input, the draft Cal. Avenue Area Plan will be included in the overall Comprehensive Plan Update outreach process, and will be evaluated in a program-level EIR to assess potential impacts, including cumulative impacts as development in the plan area occurs. The revised document will also be uploaded on the Comprehensive Plan Update website (www.paloaltocompplan.org). Staff will specifically seek input on what appropriate floor area ratios should be considered, and seek to address other questions and comments received from the City Council on April 21, 2014. POLICY IMPLICATIONS The draft California Avenue Area Concept Plan is generally consistent with the existing goals and policies of the City’s Comprehensive Plan, but proposes to add a suite of new goals and policies aimed at shaping the future of this area of the City. These goals and policies will require careful consideration as the Concept Plan (and the Comp Plan) moves forward, as will the two proposes changes in land use designations discussed above. Based on the City Council’s discussion, it appears that the important policy issues include, but are not limited to: (a) the desired mix and intensity of residential and non-residential uses; (b) the tension between policies supporting a vibrant mix of uses including high density residential uses, and those supporting preservation of the low scale character of California Avenue itself; and (c) ways to enhance the pedestrian environment, ensure safety for all modes of travel, and address traffic and parking concerns. ENVIRONMENTAL REVIEW The draft Concept Plan will be analyzed in the program-level Environmental Impact Report that will be prepared for the Comprehensive Plan Amendment. Attachments:  Attachment A - Revised Draft Cal. Ave. Concept Plan with tracked changes(PDF) City of Palo Alto Page 3 Attachment A - CALIFORNIA AVENUE AREA CONCEPT PLAN INTRODUCTION The California Avenue Area Concept Plan focuses on an area in central Palo Alto bounded roughly by Cambridge Avenue in the north, the Peninsula Corridor Joint Powers Board (Caltrain) tracks to the east, Lambert Avenue to the south, and El Camino Real to the west. As shown in Figure CACP-1, the Concept Plan Area is home to a number of important Palo Alto landmarks and destinations, including the California Avenue Caltrain station, Fry's Electronics, the Santa Clara County Superior Courthouse, and a number of popular local institutions in the California Avenue Business District. With excellent access to transit and the availability of larger vacant or underutilized parcels for redevelopment, private developers have increasingly focused their attention on the Concept Plan area in recent years. Significant multi-family residential and mixed-use developments like the Sheridan Plaza development (1995) and the Palo Alto Central condominium complex (1983) set the table for recently approved projects like the mixed-use Park Plaza Development at 195 Page Mill Road. The Concept Plan Area has also been the focus of a number of recent planning initiatives undertaken by the City, including important regional corridor planning efforts in progress along its perimeter. These initiatives include: Pedestrian Transit-Oriented Development (PTOD) Combining District Regulations. Applicable to an area within walking distance (2,000 feet) of the California Avenue Caltrain station, the PTOD District regulations (Zoning Code Chapter 18.34) were incorporated into the Palo Alto Zoning Code in 2007. The District is intended to encourage a mix of context-sensitive, higher-density residential, commercial, and office development while also protecting surrounding low-density residential neighborhoods and historic resources. PTOD District regulations contain detailed development standards and design guidelines intended to promote a lively street environment, supporting and encouraging both pedestrian and bicycle activity. 1 CALIFORNIA AVENUE AREA CONCEPT PLAN Palo Alto Bicycle and Pedestrian Transportation Plan (BPTP). The BPTP was adopted in 2012 to strategically guide public and private investments in non-motorized transportation facilities and related programs. The Plan contains policy vision, design guidance, and specific recommendations intended to encourage walking and cycling in order to achieve local and regional targets for accommodating new growth, maintaining mobility, and reducing overall environmental impacts. California Avenue Transit Hub Corridor Streetscape Improvements Project. Currently in progress, this proposed project envisions streetscape improvements along California Avenue to better balance the needs of drivers, bicyclists, and pedestrians. Proposed improvements include a reduction from four lanes to two lanes of travel, together with curb extensions, parking enhancements, traffic calming treatments, landscaping elements, street furniture, and place-making identity markers. El Camino Real Design Guidelines Update. In August 2013, City Council directed the Architectural Review Board and the Planning and Transportation Commission to recommend zoning changes and revisions to the south El Camino guidelines, adopted in 2002 to promote a more vibrant El Camino Real. Existing guidelines encourage wider sidewalks, outdoor seating, and other pedestrian amenities where appropriate; however, as the guidelines are not codified in law, developers are not required to meet them. The current initiative will re-examine sidewalk widths, setbacks, and building massing and articulation in order to develop updated requirements that will result in buildings designed to address the street and enhance the public right-of-way. Priority Development Area (PDA) Designation. The City of Palo Alto has designated much of the Concept Plan Area as a Priority Development Area (PDA) as part of the Bay Area's regional development and conservation strategy. PDAs are designated by the City, based on criteria established by the Association of Bay Area Governments (ABAG), as areas that are served by transit and can accommodate additional infill development. The PDA designation makes the California Avenue area eligible for funding from regional agencies for technical assistance, planning grants, and capital infrastructure. The boundaries of the California Avenue Area PDA are shown in Figure CACP-1. 3 CALIFORNIA AVENUE AREA CONCEPT PLAN Rail Corridor Study. Prepared under the direction of a 17-member task force and approved by the Palo Alto City Council in January 2013, this report sets out a community vision for land use, transportation, and urban design opportunities along the Caltrain corridor and includes recommendations in response to the California High Speed Rail project and regional improvements to fixed rail services along tracks through Palo Alto. The Study identifies the California Avenue area as an important area with a strong pedestrian and transit-oriented mix of uses. The Study recognizes this as one of the key areas that can accommodate much of the city’s future development, but must be approached carefully. Grand Boulevard Initiative. This major regional corridor planning initiative is a collaboration of 19 cities, counties, local and regional agencies united to improve the performance, safety, and aesthetics of El Camino Real from Daly City in the north to the Diridon Caltrain Station in central San Jose. The overarching objective is to enhance the corridor, ensuring the corridor achieves its full potential as a place for residents to work, live, shop and play, and creating links between communities that promote walking and transit and an improved and meaningful quality of life. The purpose of this Concept Plan is to lay out a unifying vision that weaves together the City's recent planning initiatives in order to guide future development and redevelopment in the Concept Plan Area, while preserving and enhancing the quality of life in residential neighborhoods in and adjacent to the Concept Plan area. Developed on the basis of public input received during a series of four community meetings between 2010 and 2012, the Concept Plan generally maintains existing Comprehensive Plan land use designations. It is intended as a tool to help the public and decision makers frame the context for future planning in this sector of the city. FUTURE PLANNING FRAMEWORK Based on input from the community at public meetings held early in the Concept Plan process, three distinct subareas were identified, as shown on Figure CACP-2: the California Avenue subarea, the Park Boulevard subarea, and the Fry’s site subarea. These subareas represent sectors of the Concept Plan area that can accommodate change; locations outside of the subareas are not likely to change and the Concept Plan supports the continuation of their current character. Each subarea has its own set of opportunities and challenges, which are described below. Additionally, 4 CALIFORNIA AVENUE AREA CONCEPT PLAN community input helped to establish several important area-wide themes. This Concept Plan presents a future planning framework that addresses both the area­ wide themes as well as the specific opportunities and challenges in each of the subareas. COMPREHENSIVE PLAN LAND USE DESIGNATIONS The Concept Plan area contains a mix of residential, commercial, and light industrial/office uses. As shown in Figure CACP-3, commercial land use designations currently apply to nearly half of the Concept Plan area, with Community Commercial concentrated along California Avenue and Cambridge Avenue near the California Avenue Caltrain station, and Service Commercial concentrated around the Fry's site. Residential designations generally apply near the center of the Concept Plan area, with Multi-Family Residential north of the Oregon Expressway and an enclave of Single-Family Residential along Olive and Pepper Avenues. The Major Institution/Special Facility designation applies to the Santa Clara County Superior Courthouse. The Light Industrial and Research/Office Park designations apply along Park Boulevard and Page Mill Road south of the Oregon Expressway. As shown in Figure CACP-3 and on Table CACP-1, the Concept Plan maintains almost all of the current 2010 Comprehensive Plan land use designations, with the exception of the Fry's site, which would change from its current Service Commercial designation to a Mixed-Use designation. Additionally, Figure CACP-3 shows the location of the Technology Corridor Overlay that would be created through the implementation of Programs CACP-3.1.1 and CACP-3.1.2. A draft overlay designation is presented below. This will become a new overlay in the Comprehensive Plan once the California Avenue Area Concept Plan is approved by Palo Alto City Council. TECHNOLOGY CORRIDOR OVERLAY This overlay designation is intended to encourage small-scale, technology-related businesses that are compatible with the character of the surrounding neighborhoods. Allowable uses include offices, research and development facilities, ground floor retail and commercial space, and multi-family residences. Maximum allowable floor area ration (FAR) is 1.5. 6 CALIFORNIA AVENUE AREA CONCEPT PLAN Table CACP-2 describes a range of recently approved projects and pending development proposals. Given the level of interest developers have shown for sites in the Concept Plan area, there are concerns in the community for adverse effects to neighborhood character and quality of life from new development. Chief among these are concerns for roadway safety, traffic and parking issues, and aesthetics and architectural character. There are mechanisms already in place or currently in development that can help manage change in a way that addresses community concerns, including the plans and studies described in the Introduction, above. For example, the City is considering enhancing its existing transportation demand management policy and will continue to work with the Santa Clara Valley Transportation Authority (VTA) in developing multi-modal level of services standards that establish acceptable travel conditions for a range of roadway users. The City's robust project approval process will also help to ensure that future development proposals are vetted in public forums with ample opportunity for community input. Design review by the City's Architectural Review Board and implementation of the PTOD District regulations will help ensure a cohesive character in line with community standards. New development will require in-depth studies of potential environmental, safety, or aesthetic impacts, and detailed mitigation measures to reduce any identified impacts. It will be important to carefully consider cumulative traffic, noise, and pollution effects in evaluating future development proposals, and the future planning framework should also encourage consideration for the design of open spaces in the public realm. GOAL CACP-1 Provide a framework for managing change in identified subareas while preserving the existing character of surrounding residential neighborhoods and shopping districts. Policy CACP-1.1 Preserve the existing single-family residential character of the Olive/Pepper enclave. Program CACP-1.1.1 Consider cumulative traffic, noise, pollution, aesthetic effects, and parking impacts from new development adjacent to residential neighborhoods when reviewing new development and redevelopment in the Concept Plan area. 9 CALIFORNIA AVENUE AREA CONCEPT PLAN TABLE CACP-2 MAJOR RECENT AND PENDING DEVELOPMENTS IN THE CONCEPT PLAN AREA (AS OF NOVEMBER 2013) Approved Date Projects Approved First project in the Pedestrian/Transit-Oriented Development March 2010 420 Cambridge Avenue (PTOD) Overlay Area. A 7,700-square-foot development with four residential units and ground floor retail space. Second project in the PTOD Overlay Area. Under construction as April 2012 of fall 2013. A 4-story mixed-use development of 25,000 square 2640 Birch Street feet with office on the ground floor and eight townhomes above; all rental. Mixed-use residential/research & development project currently June 2012 under construction. The project features 50,000 square feet of 195 Page Mill Road ground floor research and development space, with 84 residential units above. A new 3-story office/retail building with approximately 27,000 June 2013 260 California Avenue square feet of gross floor area on a 13,500-square-foot project site. Four-story, 74,000-square-foot mixed-use building with residential 3159 El Camino Real and commercial on the Equinox site. Pending Project Applications A proposed 4-story, 33,500-square-foot mixed-use building with 3 stories of below­2755 El Camino Real grade parking on the site of an existing VTA lot. A proposed mixed-use project involving two buildings totaling 28,000 square feet. Proposed are a 2-story commercial building and one 4-story, eight-unit mixed-use 3255 El Camino Real building with ground floor retail and three floors of residential. The project will also include a below-grade parking garage. 385 Sherman Avenue A proposed 3-story mixed-use building totaling 55,500 square feet of space. 21,500 square feet of commercial space and eight residential units with one level of 441 Page Mill Road below-grade parking. Policy CACP-1.2 Encourage mixed-use and multi-family infill developments, particularly with smaller units, on appropriate underutilized sites throughout the concept plan area in order to capitalize on opportunities to provide a range of neighborhood housing, close gaps in the neighborhood fabric, and foster the development of publicly accessible open spaces and plazas. Policy CACP-1.3 On appropriate sites in the Concept Plan area, encourage development at the higher end of the allowed density range. 10 CALIFORNIA AVENUE AREA CONCEPT PLAN Policy CACP-1.4 Balance the needs of neighborhood residents and the daytime population of the Concept Plan area. Program CACP-1.4.1 Conduct an area-wide parking needs assessment to quantify the amount of parking necessary to support additional residential, retail, and office development in the Concept Plan area. Program CACP-1.4.2 Based on the findings of the area-wide parking needs assessment, develop a strategy to manage parking supply and demand that considers options for parking policy, parking restrictions, parking pricing, shared parking, and additional structured parking. Policy CACP-1.5 Prioritize roadway safety for all users. Program CACP-1.5.1 Periodically evaluate the need for additional traffic calming measures on local roadways to maintain safe residential streets. Program CACP-1.5.2 Police Department to controls. Work with residents and the Palo Alto ensure optimum enforcement of traffic Policy CACP-1.6 Improve circulation for active modes walking, cycling, and inline skating. of transport, including Policy CACP-1.7 Coordinate bicycle and pedestrian planning initiatives, with other regional and local initiatives, including Safe Routes to School and Bay Area Bike Share. Policy CACP-1.8 Encourage incorporation of rooftop gardens, green roofs, and public open spaces into building and site design as redevelopment occurs in the Concept Plan area. Policy CACP-1.9 Recognize the California Avenue area, including Park Boulevard, as an appropriate location for a public safety building. 11 CALIFORNIA AVENUE AREA CONCEPT PLAN CALIFORNIA AVENUE SUBAREA This subarea extends from El Camino Real to the California Avenue Caltrain Station, with California Avenue at its heart. The subarea encompasses the California Avenue Business District and includes Sheridan and Cambridge Avenues, as shown in Figure CACP-4. California Avenue was originally the main commercial thoroughfare of the Town of Mayfield, and today it still offers small town shopping in the heart of Palo Alto. Locally owned small businesses on California and Cambridge Avenues cater to the daily needs of residents and commuters alike, with a wide variety of retail and personal service businesses, as well as a popular weekend farmers' market. At the eastern edge of the subarea, the California Avenue Caltrain station provides an important gateway to the city for nearly 1,000 weekday commuters travelling to jobs in Palo Alto. Planning throughout the Concept Plan Area should support the existing neighborhood-oriented commercial character of the subarea and enhance its vitality. People are the key to vitality. Strategies that bring local residents, commuters, and workers to the Concept Plan Area will help strengthen its retail role and stimulate its economic and social vitality. Additionally, carefully crafted development standards and design guidelines can help to activate the street and create safer, more comfortable public spaces, attracting more people to the subarea. The diversity of the type of retail uses on California Avenue is also a concern for Palo Alto. As part of the Comprehensive Plan Update of the Business Element, the City is considering a new program to study appropriate commercial diversity in the California Avenue business district to balance a healthy mix of locally owned and chain-type commercial businesses, and to prevent proliferation of specific use types. With the PTOD District Regulations and the California Avenue Transit Hub Corridor Streetscape Improvements project, the City has already taken important steps toward supporting the vitality of the California Avenue subarea. Together, these planning initiatives provide a framework to guide development and redevelopment in the subarea. As development and redevelopment occur, strategies to optimize parking availability will be required. Attention will also be needed to improve connections between the County Courthouse and California Avenue in order to ensure this important destination remains linked to California Avenue and the Caltrain station. 12 CALIFORNIA AVENUE AREA CONCEPT PLAN GOAL CACP-2 Support the California Avenue subarea as an attractive, transit-rich neighborhood shopping district. Policy CACP-2.1 Maintain the existing neighborhood-oriented commercial character of California Avenue and Cambridge Avenue. Policy CACP-2.2 Encourage mixed-use residential development, particularly with smaller units, at the higher end of the allowed density range that promotes the social and economic vitality of the California Avenue Business District while maintaining its neighborhood-oriented commercial character. Program CACP-2.2.1 Hold a design competition to generate innovative concepts for the use of City-owned parking lots and structures. Policy CACP-2.3 Encourage a mix of residential, retail, and personal service uses consistent with the PTOD Combining District Regulations. Program CACP-2.3.1 Consider revising the PTOD Combining District Regulations to further incentivize mixed-use development Program CACP-2.3.2 Consider adding minimum on storefront width to the design standards for the California Avenue Pedestrian Transit-Oriented District (TOD) contained in the Zoning Ordinance. Policy CACP-2.4 Maintain existing multi-family residential uses and encourage new multi-family residential development, particularly with smaller units, at the higher end of the allowed density range on appropriate under-utilized sites where adequate parking can also be provided. Policy CACP-2.5 Support development of a hotel and associated hospitality uses on El Camino Real, in proximity to transit. Policy CACP-2.6 Require active uses on the ground floor of buildings fronting California and Cambridge Avenues, including retail uses, personal service uses, and other uses that provide opportunities for people to come and go throughout the day. Policy CACP-2.7 Encourage implementation of the California Avenue Pedestrian Transit-Oriented District (PTOD) design guidelines. 14 CALIFORNIA AVENUE AREA CONCEPT PLAN Program CACP-2.7.1 Meet with merchants and property owners to discuss opportunities to streamline and facilitate implementation of the design guidelines, including provisions applicable to the design of buildings, public spaces, and bicycle and pedestrian amenities. Policy CACP-2.8 Capitalize on the proximity of the California Avenue Caltrain station to major employment centers such as the Stanford Research Park in order to bring more weekday commuters to the California Avenue subarea. Policy CACP-2.9 Work with employers to encourage employee transit use through the development of shuttle programs and the provision of transit passes. Policy CACP-2.10 Create a pedestrian gateway for the County Courthouse and foster better connections with California Avenue. Policy CACP-2.11 Work with transit agencies, including Caltrain and VTA, to ensure that the California Avenue subarea continues to be adequately served by transit as development and redevelopment occurs. Policy CACP-2.12 Together with Caltrain and VTA, evaluate opportunities to improve shuttle service connections from the California Avenue Caltrain station to the Stanford Research Park and other employment centers in proximity to the subarea. Policy CACP-2.13 Promote the use of active transportation, including walking and bicycling, to local shops as an alternative to vehicles for residents of the surrounding neighborhoods. Program CACP-2.13.1 Consider creating incentives for local business owners to provide bicycle parking on California and Cambridge Avenues as a way to encourage local residents to bicycle rather than drive to shops. Program CACP-2.13.2 Coordinate implementation of future California Avenue streetscape improvements with implementation of the Bay Area Bike Share program in Palo Alto. 15 CALIFORNIA AVENUE AREA CONCEPT PLAN Program CACP-2.13.3 Evaluate the need for improvements to the Caltrain underpass at California Avenue to improve safety and access for cyclists and pedestrians. Consider improvements that would address issues such as connectivity with the Park Boulevard Bicycle Boulevard and for bicycle and pedestrian access to the underpass order to accommodate via Page Mill Road. PARK BOULEVARD SUBAREA The Park Boulevard subarea includes the area east of Park Boulevard to the railway tracks and south from California Avenue almost to Lambert Avenue, as well as the block bounded by Olive, Ash, and Page Mill Road west of Park Boulevard. The precise boundaries of the subarea are shown in Figure-CACP-5. This sector of the city contains large parcels adjacent to the railway tracks and has attracted significant interest from private developers in recent years. State regulations will require remediation of any remnant contamination still present on former industrial sites in the subarea before development can take place. Construction has begun of a three-story building with research and development uses at ground level and 84 residential units above at 195 Page Mill Road. The subarea is also home to many technology firms, including AOL, Groupon, and numerous smaller companies. Palo Alto has a global reputation as an incubator of Silicon Valley talent, and there is an opportunity to build on the nucleus of small- scale technology-related enterprises already located in the subarea to create a technology corridor that attracts and nurtures even more innovators and entrepreneurs. Park Boulevard is a highly travelled bicycle corridor and a popular commute route. Park Blvd. has been designated as a Bicycle Boulevard in the City's Bicycle and Pedestrian Transportation Plan, prioritizing it for bicycle traffic. Striped bicycle lanes and distinctive green paint have been added to the roadway surface to demarcate a clear path for cyclists. Although data from the Statewide Integrated Traffic Records System (SWITRS) does not indicate the rate of collisions involving cyclists is higher relative to other parts of the city, pedestrian and bicycle safety is a significant community concerns. Going forward, a key challenge will be to improve roadway safety throughout the subarea as development and redevelopment occur. Application of PTOD District development standards for the pedestrian and bicycle 16 CALIFORNIA AVENUE AREA CONCEPT PLAN environment will also bring improvements to the public realm. However, continued focus will be needed to ensure that adequate pedestrian infrastructure is provided as development occurs. GOAL CACP-3 Promote Park Boulevard as an important hub of innovation and entrepreneurship for small new companies. Policy CACP-3.1 Strengthen Park Boulevard's nascent identity as a technology corridor. Program CACP-3.1.1 Work with developers and property owners to determine appropriate incentives for encouraging smaller, technology-related firms to locate on Park Boulevard. Update the zoning code as necessary to incorporate these incentives. Program CACP-3.1.2 Adopt a new Technology Corridor Overlay applicable to parcels east of Park Boulevard between Oregon Expressway and Lambert Avenue. Policy CACP-3.2 Favor mixed-use development proposals that provide research and development or office uses on the ground floor, with smaller residences or live/work spaces on upper floors, as appropriate. Policy CACP-3.3 Encourage development at the higher end of the allowed density range that is consistent with the standards for context-sensitive design and active street frontage contained in the PTOD District regulations. Policy CACP-3.4 Work with property owners to ensure remediation of remnant contamination required for compliance with federal, State, and local regulations. GOAL CACP-4 Ensure Park Boulevard provides safe, easy, and comfortable access for cyclists and pedestrians. Policy CACP-4.1 Prioritize roadway safety for pedestrians and cyclists, while balancing the needs of pedestrians, cyclists, and drivers on Park Boulevard. 18 CALIFORNIA AVENUE AREA CONCEPT PLAN Program CACP-4.1.1 Monitor the rate of accidents involving cyclists and pedestrians. Program CACP-4.1.2 Study alternate routes to Caltrain stations that could provide safer, more direct access for cyclists and pedestrians. Consider access via Page Mill Road. Policy CACP-4.2 Recognize Park Boulevard as a designated Bicycle Boulevard and continue to implement strategies from the Bicycle Boulevard Design Toolbox that support its role as a key thoroughfare in the City's bicycle network. Policy CACP-4.3 Require new office uses along Park Boulevard to provide ample bicycle parking for employees. Policy CACP-4.4 Enhance the pedestrian environment along Park Boulevard with such improvements as wider sidewalks, restriped crosswalks, or additional pedestrian amenities. Program CACP-4.4.1 Survey the pedestrian environment along Park Boulevard and incorporate additional recommendations for improvements into the BPTP as appropriate. FRY'S SITE SUBAREA The Fry's Site subarea is generally bounded by El Camino Real, Lambert Avenue, Park Boulevard, and Olive Avenue as shown in Figure CACP-6. The subarea is home to the Palo Alto location of consumer electronics retailer Fry's Electronics, a popular regional shopping destination, located in the interior of the subarea. Given the current trend for large format retailers to locate in areas with excellent freeway access, Fry's may opt to relocate when the option on its current lease expires. Fry's is located on a single large parcel, and should the retailer leave the subarea in the future, there is a significant redevelopment opportunity. The Fry's site subarea also contains a varied mixture of commercial, retail, and office uses, including commercial and retail establishments fronting El Camino Real, professional offices near the interior of the subarea, and smaller technology-related firms closer to Park Boulevard. Single-family homes are found along Olive Avenue. A channelized portion of Matadero Creek runs through the southern portion of the subarea. 19 CALIFORNIA AVENUE AREA CONCEPT PLAN Access to the interior of the subarea is available either through the Fry’s parking lot from Park Boulevard, or via Portage Avenue from El Camino Real. Options for future redevelopment could include the addition of a new through street to improve connectivity and circulation. A number of existing and planned bicycle facilities nearby also represent an opportunity to expand the bikeways network and improve bicycle circulation. Pictured in Figure CACP-6, existing facilities include the Bicycle Boulevard on Park Boulevard, the Multi-Use Path at Hanover Street, and the Class II bicycle land on Hansen Avenue west of El Camino Real; planned facilities include a Class II bikeway along Portage Avenue and a Bicycle Boulevard along Matadero Avenue. GOAL CACP-5 Over the long-term, foster the transformation of the Fry's site subarea into a walkable, human-scale mixed- use neighborhood that includes ample amenities. Policy CACP-5.1 If Fry’s chooses to relocate, encourage a mixture of uses in the Fry's site subarea compatible with its surroundings, including smaller dwelling units, single-family residences, multi-family housing types, retail and commercial uses, and office space for research and development and technology-related businesses. Encourage appropriate development, such as residential development with smaller units, at the higher end of the allowed density range on the site. Program CACP-5.1.1 Require the residential component of mixed-use development in the subarea to be no less than 20 percent of the total square footage. Policy CACP-5.2 Coordinate site planning to improve the relationship of the Fry's site to its surroundings, including adjacent single-family residential neighborhoods, Park Boulevard, and El Camino Real. Program CACP-5.2.1 Require community outreach and preparation of a site-specific master plan for the Fry's site, in the event the property owner elects to redevelop or add additional development to the site. The site-specific master plan should focus on fostering mixed-use; improving the relationship of the site with adjacent neighborhoods; enhancing connectivity and circulation for pedestrians, cyclists and drivers; and providing context-sensitive, pedestrian-scaled development consistent with its surroundings. 21 CALIFORNIA AVENUE AREA CONCEPT PLAN Program CACP-5.2.2 Study the possibility of creating a linear park along the portion of Matadero Creek that runs through the subarea. Consider restoring the channelized portion of the creek to create a neighborhood amenity that enhances connectivity. Policy CACP-5.3 Ensure that development and redevelopment is context-sensitive and appropriate in proximity to adjacent single-family residential neighborhoods. Policy CACP-5.4 Recognize the relationship of the Fry's site subarea to El Camino Real and encourage reconfiguration to provide a better connection with El Camino Real. Policy CACP-5.5 Improve bicycle and pedestrian connectivity through the site while accommodating vehicles. 22 City of Palo Alto (ID # 4822) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: PaloAltoGreen Program Marketing Contract Title: Approval and Authorization for the City Manager to Execute a Professional Services Agreement with Just Energy Resources LLC in the Amount of $597,878 for Marketing and Program Management for the PaloAltoGreen and PaloAltoGreen Gas Programs for a Term of up to Three Years From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council: 1. Approve and authorize the City Manager or his designee to execute the attached professional services agreement with Just Energy Resources LLC, dba Just Green (“Just Energy”), for marketing and program management services for the PaloAltoGreen and PaloAltoGreen Gas Programs, the City’s voluntary electric and gas green energy programs for a total not to exceed amount of $597,878 for a three-year term; and 2. Authorize the City Manager to extend the agreement annually for up to two additional years, subject to Council approval of sufficient funds. Executive Summary Council has adopted a number of policies to support increased use and development of renewable energy in the City of Palo Alto, including establishing the PaloAltoGreen (PAG), the City’s voluntary green electric program in 2003, and the PaloAltoGreen Gas (PAG Gas) programs scheduled for launch in July 2014. The City’s longstanding commitment to green power led to Council’s decision in March 2013 to using only carbon neutral resources for the City’s electric supply portfolio. The contract for marketing and administrative services for PAG expired at the end of August 2013. In order to continue actively marketing PAG and to initiate the PAG Gas program, staff issued a Request for Proposals (RFP), seeking a wide response and range of suggestions, innovations and proposals from vendors. The RFP elicited two responses. Staff analyzed the responses and recommends executing a contract with Just Energy for two primary tasks: 1) marketing and administration of the PAG program; and 2) marketing, administration and City of Palo Alto Page 2 procurement of environmental offsets for the new PAG Gas program. If fully implemented, this contract will cost $189,906 for FY 2015 and a total of $597,878 over three years. The costs are expected to be fully recovered from premiums paid by program participants. Background The City established PaloAltoGreen in April 2003. Within two years, the program achieved the highest participation rate of any voluntary green power program in the nation, reported by the U.S. Department of Energy’s National Renewable Energy Laboratory. The City currently purchases Green-e certified or certifiable Renewable Energy Certificates (RECs) generated in the Western Electric Coordinating Council region to meet PAG program requirements. The RECs purchased also meet the California Energy Commission’s renewable resource eligibility requirements. The success of the PAG program is attributed to the direct benefit participants receive in the form of reduced greenhouse gas (GHG) emissions equivalent to all or a portion of their electricity consumption in a simple, convenient, and easy-to-communicate manner. An additional benefit for PAG customers is having the choice to make a positive environmental impact by supporting 100% renewable energy. Participating in PAG allows CPAU’s commercial customers (including City facilities) to achieve environmental recognition and certifications in line with their own corporate environmental or sustainability goals, including participation in the Environmental Protection Agency (EPA) Green Power Partnership Program1. Many of these customers achieve EPA program recognition by purchasing blocks of PAG RECs sufficient for at least 3% of their electric load. Through these efforts, the City’s PAG participants reduced their 2012 GHG emissions by 30,224 tons2. Since the electric supply portfolio was carbon neutral starting in 2013, in September 2013, Council suspended the 100% PAG “Full Needs” program option and reduced the cost for the “Commercial Block” PAG program from $15 per 1,000 kilowatt-hour (kWh) block to $2 per 1,000 kWh block to reflect the current wholesale prices for RECs. The reduced pricing premium may attract significant numbers of new commercial participants to the program. In June 2014, Council terminated the suspended Full Needs portion of the PAG program for residential customers and reinstated the Full Needs program for commercial customers, since some commercial customers preferred the option of covering 100% of their needs with RECs through the program. In April 2014, Council approved the PaloAltoGreen Gas program, which will launch in July 2014 and will offer a “green” alternative to all natural gas customers wishing to reduce their carbon footprint. The program will be similar to the PAG electric program in that the natural gas usage of customers voluntarily enrolled in the PAG Gas program will be supported by environmental 1 EPA Green Power Partnership Program details can be seen at: http://www.epa.gov/greenpower/index.htm 2 Based on the 2005 baseline emission factor of 879 pounds of carbon dioxide equivalent (CO2e) per MWh and PAG participation at 75,805 MWh in 2012. City of Palo Alto Page 3 offsets to neutralize the carbon emissions associated with all or a portion of their natural gas usage. Environmental offsets represents a specific quantity of greenhouse gas (GHG) emission reductions (i.e. a ton of carbon dioxide absorbed or avoided) from a project-based activity, which are purchased in order to negate or diminish the impact of an individual’s GHG emissions. Residential and small commercial customer participants will pay a premium to offset the carbon emissions for their entire gas usage. Commercial customers will have the option to offset the carbon emissions for any portion of their gas usage in the “blocks” structure, similar to the Commercial Block part of the PAG electric program or elect to participate at 100% (full needs) option with PAG Gas program. Discussion The current contract for marketing support and program administration for PAG expired on August 31, 2013. In December 2013, the City issued a Request for Proposals (RFP) seeking proposals from organizations interested in providing marketing and administration services for both PAG and the new PAG Gas program. Selection Process The RFP was emailed to 67 firms and organizations that might provide this service or could partner with companies that could. The two tasks outlined in the RFP were Task 1, marketing and administration of the PAG (electric) program, and Task 2, marketing and administration of the new PAG Gas program as well as supply of the environmental offsets for the program. The primary goal of Task 1 is to maintain the current engagement level of existing PAG customers and increase participation through enhanced marketing of the program. The primary goal of Task 2 is to design and implement the marketing for the PAG program. The list of entities that received the RFP included: Green Power Network, California Municipal Utilities Association, Center for Resource Solutions, Northern California Power Agency and Hometown Connections of the American Public Power Association. These organizations are all known to offer relevant services. Only two firms responded to the RFP, and both proposals exceeded cost expectations, and were subsequently asked to submit a Best and Final Offer. A staff committee reviewed each firm's proposal, qualifications and submittal by the following selection criteria: references; qualifications of principals and staff; familiarity with the City; financial stability; price range; completeness of proposal; proposal clarity; methodology; marketing support; program development; and completeness of response to scope of services. The committee recommended the use of a blended approach using both consultant expertise and in-house resources. This blended approach reduces costs for the program by increasing participation rates and reducing the need for additional internal staffing, as well as reducing the total cost of sales support, marketing communication materials, and program advertising. Based on the rankings of the selection committee, Just Energy, an energy service provider serving retail corporate, non-profit and residential customers with electric RECs as well as verified emissions reduction credits for natural gas, was selected as the sole consultant for both City of Palo Alto Page 4 the PAG and PAG Gas programs. Due to its history in creatively marketing highly performing voluntary green energy programs, Just Energy is the most qualified organization to provide these services cost-effectively in such a narrow, highly specialized field. Just Energy currently provides services for programs across the U.S. Just Energy will provide the following services: 1. Marketing support, tracking, and reporting; 2. Compliance certification with Green-e Energy for PAG and Green-e Climate for PAG Gas; 3. Renewable energy certificates for PAG, verified environmental offsets for PAG Gas; and 4. Development and implementation of the PAG Gas program. Just Energy also agrees to strictly protect the confidentiality of utility usage and account information of all participating PAG and PAG Gas customers, by executing a non-disclosure agreement (Exhibit E to the attached professional services agreement). Staff anticipates that PAG commercial participant’s engagement level will maintain, if not grow the program’s current participation rate due to the reduced pricing that is expected to attract additional commercial participants. However, the main focus will be on the new PAG Gas program, with PAG as a secondary offering available. Staff anticipates an estimate of a 2.7% participation level within the first year, and estimates a 7.2% participation level at the end of three years. As in the PAG program, the level at which City facilities participate will have a disproportionate effect on the non-residential load numbers. For Task 1 (to market and administer PAG), the contract with Just Energy includes a not to exceed annual fee of $80,126 for billable labor. For this, Just Energy will maintain current PAG commercial participant’s engagement levels at a minimum. The City will pay for Reimbursable Expenses including the production and printing expenses for pre-approved marketing collateral materials created under this agreement, up to a maximum of $35,000 for the 3 years of the contract. For Task 2 (marketing and administering PAG Gas), Just Energy will provide marketing support, tracking, reporting, and compliance verification support at a performance-billing rate of 4 cents per therm enrolled in the PAG Gas program, plus production and printing expenses as described above, up to a maximum of $90,000 for the 3 years of the contract. The variable performance-based compensation in the contract provides an incentive for Just Energy to increase participation rapidly in PAG Gas. Resource Impact Since PAG is a cost pass-through voluntary program, there is no net impact on City financial resources. Program costs paid by customers participating in PAG electric program will fund the purchase of RECs and cover administrative, marketing and overhead costs. No change in Council approved fees for PAG and PAG Gas are requested at this time. Funds for FY 2015 and FY 2016 are included in the electric and natural gas fund budgets. Funds for subsequent years will be subject to appropriation of funds in subsequent budgets. City of Palo Alto Page 5 The costs for the two tasks are shown in the tables below. Overall, the costs for Just Energy’s services for PAG are expected to be a total of $275,378 over three years. Just Energy’s services for PAG Gas are expected to cost a total of $322,500 over three years, depending on the level of customer participation achieved. Staff has negotiated the professional services agreement with Just Energy such that all of Just Energy’s fees will be covered from the PAG and PAG Gas program revenues. The total not to exceed amount is the sum of the two tasks, or $597,878 for the three-year period. Staff will return to Council with a recommendation for the City’s facilities participation level of PAG Gas program. The City’s participation level in the PAG Gas program will have a dramatic effect on the engagement level and budget. Staff will return to council with a recommendation of City commitment as well as request for additional funds based on the new projections and budget. Task 1 – PaloAltoGreen Program Budget (three-year estimate of contract cost) Term Billable Labor Total not to exceed (Task 1.1- 1.19) Reimbursable Expenses Total Cost Admin Marketing Materials FY 2015 (1-12 Months) $40,063 $40,063 $80,126 $22,000 $102,126 FY 2016 (13-24 Months) $40,063 $40,063 $80,126 $6,500 $86,626 FY 2017 (25-36 Months) $40,063 $40,063 $80,126 $6,500 $86,626 36 Month Total $120,189 $120,189 $240,378 $35,000 $275,378 Task 2 - PaloAltoGreen Gas Program Budget (three-year estimate of contract cost) Term Therms Estimated Participation Labor Cost ($0.04 per therm) Offset Cost Reimbursable Expenses Total Cost % Number FY 2015 (1-12 Months) 460,000 2.7% 809 $18,400 $24,380 $45,000 $87,780 FY 2016 (13-24 Months) 920,000 5.5% 1619 $36,800 $48,760 $25,000 $110,560 FY 2017 (25-36 Months) 1,120,000 7.2% 2132 $44,800 $59,360 $20,000 $124,160 36 Month Total 2,500,000 7.2% 2132 $100,000 $132,500 $90,000 $322,500 Policy Implications The recommended contract supports the Council-approved Gas Utility Long-Term Plan, the Long-term Electric Acquisition Plan, and the Comprehensive Plan Goal N-9. Furthermore, renewable energy and environmental offset projects play an important role in achieving greenhouse gas reduction targets reflected in California Climate Action Team goals and AB 32 City of Palo Alto Page 6 (California Global Warming Solutions Act of 2006) and identified in Palo Alto’s 2007 Climate Protection Plan. Environmental Review Council’s approval of this professional services agreement does not constitute a project for the purposes of the California Environmental Quality Act (CEQA) under Public Resources Code Section 21065, thus, no environmental assessment is required. Attachments:  Attachment A: Contract C1415113 with Just Energy (PDF) CITY OF PALO ALTO CONTRACT NO. C14151135 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JUST ENERGY RESOURCES LLC DBA JUSTGREEN FOR PROFESSIONAL SERVICES This Agreement is entered into on this 1st day of July, 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and JUST ENERGY RESOURCES LLC DBA JUST ENERGY, a Limited liability company, located at 5251 Westheimer Road, Suite 1000, Houston, Texas 77056 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to market the ongoing commercial electric green energy program “Commercial PaloAltoGreen” (CPAG) and a new commercial and residential natural gas green energy program “PaloAltoGreen Gas” (PAG GAS) (“Project”) and desires to engage a consultant to provide comprehensive marketing, administrative support, and/or purchasing of services for both the CPAG and PAG Gas programs (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2017 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed Five Hundred Ninety Seven Thousand Eight Hundred Seventy Eight Dollars ($597,878.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Irela Bague as the Project Supervisor to have supervisory responsibility for the performance, progress, and execution of the Services to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s project manager is the Utilities Department, Manager, Utility Marketing Division, currently Anthony Enerio, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone:(650)329- 2621. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. Professional Services Rev. Feb. 2014 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\UTILITIES - CAROLYNN\RFPs\151135 PA Green 2014\CONTRACT AMY B. 5.30.14\C14151135 Feb 2014 Final (6-4-14).docx DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: __________________________ Senior Deputy City Attorney JUST ENERGY RESOURCES LLC DBA JUSTGREEN By:___________________________ Name:_________________________ Title:________________________ Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS EXHIBIT “E”: NON-DISCLOSURE AGREEMENT Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EVP Gerardo Manalac EXHIBIT “A” SCOPE OF SERVICES Summary CONSULTANT shall provide comprehensive marketing, administrative support, and/or purchasing of services for the City of Palo Alto’s (CITY) current and proposed renewable (green) energy programs operated by the City of Palo Alto Utilities Department (CPAU). CONSULTANT shall complete the following two tasks: • Task 1. Marketing of an ongoing commercial electric green energy program, “Commercial PaloAltoGreen” (CPAG). • Task 2. Marketing of a new commercial and residential natural gas green energy program, “PaloAltoGreen Gas” (PAG GAS), and the supplying of certified environmental offsets for use in the commercial and residential PAG GAS program. CONSULTANT shall notify CITY in writing within five (5) business days if and when they discover any condition that shall affect the contract amount or project completion date. Overview CONSULTANT shall work with The City of Palo Alto Utilities (CPAU) to provide marketing support for the existing CPAG program and the new PAG GAS program and the supplying of certified environmental offsets. Task 1. Marketing of an ongoing commercial electric green energy program CPAG The CPAG marketing plan shall cover improving the experience of its customers by focusing entirely on business needs and values. CONSULTANT shall work with the CPAU program manager to review the existing CPAG program as it applies to business customers, including customer segmentation, previous marketing collateral and promotions, success rates, and any feedback from the customer base regarding program benefits and areas for improvement. CONSULTANT shall clarify the City’s goals and metrics for the new program especially as they relate to the PAG GAS program and its launch. Task 2. Marketing of a new commercial and residential natural gas green energy program PAG GAS, and the supplying of certified environmental offsets for use in the commercial and residential PAG GAS program The PAG GAS marketing plan shall cover program launch details such as events, a new web- based portal for easy customer sign-up, welcome kits and local media coverage. Beyond launch the plan shall include strategies for customer growth and ongoing retention, including engagement methods to enhance loyalty and provide education. Marketing metrics shall also be discussed and approved by CPAU. CONSULTANT’S Responsibilities shall include, but are not limited to: Task1. Marketing of an ongoing commercial electric green energy program, CPAG a. MARKETING SUPPORT SERVICES Task1.1 Marketing Plan Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task1.2 Branding/Transitional Plan: Task1.3 Innovation Task1.4 Training Task1.5 Outreach Event Task1.6 Welcome Kit Task1.7 Public Relations Task1.8 Marketing and Collateral Task1.9 Online Content Task1.10 Social Media Task1.11 Video Task1.12 E-Newsletters Task1.13 Participant Data Entry And Tracking Task1.14 Marketing Reports Task1.15 Staffing b. TRACKING, REPORTING, AND COMPLIANCE VERIFICATION Task1.16 Green-e WREGIS Registration Task1.17 Green-e Energy Program Standards and Code of Conduct Task1.18 Green-e Energy Program Compliance Verification Task1.19 California Power Source Disclosure Reporting and Verification Task 1. Marketing of an ongoing commercial electric green energy program, “Commercial PaloAltoGreen” (CPAG). a. MARKETING SUPPORT SERVICES Task1.1 Marketing Plan: CONSULTANT shall provide an overview of the proposed approach to fulfill the requirements of the scope of work within the marketing plan. CONSULTANT shall identify strengths and unique features of proposed approach. CONSULTANT shall specify the marketing work plan, including but not limited to, the proposed approach, methods, activities, and associated deliverables. CONSULTANT shall propose the plan for completing each specific component detailed in the scope of work, including specific activities to be completed and coordinated with CPAU. CONSULTANT shall propose a marketing plan that includes a transitional communication plan for current residential and business customers, customer education, training for City personnel, information needed for advertising and billing inserts, poster, banner, program design and marketing advice, outreach print materials, quarterly program e-newsletters, and web-based communication, including but not limited to Social Media (Facebook, Twitter, et.al) and the City’s web site. City staff shall manage customer contact. CONSULTANT shall propose a marketing plan, tailored to CPAU commercial market sectors, with specific semiannual sales targets and tactics. CONSULTANT shall provide a detailed project schedule that specifies timelines for each task and sub-task and associated deliverables. The schedule must incorporate time for CPAU to review and approve in writing all final-design deliverables. 1) CONSULTANT shall provide a semiannual marketing plan. o Due Date: ongoing Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 2) CONSULTANT shall lead a review and marketing strategy session. o Due Date: Within 2 weeks of the start of the contract execution 3) CONSULTANT shall create recommendations for program updates. o Due Date: 1 week post the marketing strategy session 4) CONSULTANT shall create a finalized marketing plan and implementation timeline. o Due Date: 1 week from the City’s acceptance of the Consultant’s recommendations plan Task1.2 Branding/Transitional Plan: CONSULTANT shall provide a branding/transitional plan for maintaining the CPAG brand. CONSULTANT shall develop a media kit to ensure that all radio, television and internet advertising conform to and appropriately promote the CPAG brand with written approval from CPAU prior to distribution. CONSULTANT shall develop program application guidelines and templates for CPAU and CPAU business customers that which enroll into CPAG. Applications shall authorize City use of customer likeness, corporate or business identity, and testimonials for the promotional use and public recognition of the CPAG program. 1) CONSULTANT shall include any branding work within marketing plan. o Due Date: In conjunction with the finalized marketing plan Task1.3 Innovation: CONSULTANT shall identify creative concepts for managing program implementation, marketing, tracking enrollment growth, and customer satisfaction and feedback on desirable future changes to the program. CONSULTANT shall make program, process and financial improvement recommendations to CPAU based on experience and market potential. 1) CONSULTANT shall provide suggestions for program innovations based on outcome of task 1.1 and 1.2. o Due Date: In conjunction with the finalized marketing plan Task1.4 Training: CONSULTANT shall train Utilities staff. Subject areas include, but are not limited to: fielding phone inquiries, entering orders, and developing and utilizing coding and tracking mechanisms. CONSULTANT shall submit all training material for approval, prior to use. CONSULTANT shall describe the format, timeline and audience for the proposed workshop(s) or course(s). CONSULTANT shall address core curricular concepts including, but not limited to; lead generation, referrals, understanding audience segments, traditional marketing channels, online marketing, social media, planning marketing campaigns, sales presentations, sales closing and customer service. CONSULTANT shall describe how the training will address commercial market segments. CONSULTANT shall address how training participants will be better prepared to meet the challenges in marketing and selling of CPAG. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 1) CONSULTANT shall update the library of training materials for CPAG support staff, including training documents, scripts, and customer service procedure as needed. o Due Date: 2 weeks prior to the launch of the program 2) CONSULTANT shall provide local training for CPAG support staff o Due Date: 1 week prior to launch of program Task1.5 Outreach Events: CONSULTANT shall provide staffing up to a maximum of 15 outreach events per year. Events shall be selected by the CPAU-CPAG Project Manager. CONSULTANT shall then be responsible for turn-key support for these events. CONSULTANT shall submit all outreach material for written approval. CONSULTANT shall provide detailed outreach analytics monthly in a format, or formats, as determined by the CPAU-CPAG Project Manager. 1) CONSULTANT shall identify outreach events. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall create turnkey event material, including equipment, scripts for any presentations, materials. o Due Date: 1 week prior to 1st event Task1.6 Welcome Kit: CONSULTANT shall coordinate the assembly and sending of Welcome Kits to each new subscriber of the program. CONSULTANT shall submit any proposed changes to Welcome Kits to CPAU staff for approval, prior to use. CONSULTANT shall coordinate printing and mailing these pieces at CPAU’s expense. Any future changes to Welcome Kits must be approved by CPAU staff prior to use. 1) CONSULTANT shall provide recommendations for improvement on design and materials of current kit. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall oversee and execute Welcome Kit fulfillment. o Due Date: Weekly or as otherwise agreed with the CPAU Project Manager Task1.7 Public Relations: CONSULTANT shall provide proactive media outreach through media pitches and communications that should be maintained on a regular basis and coordinated through the CPAU Communications Manager. CONSULTANT shall provide reactive media support by responding in a timely manner to media with research and data requests with pre-approval of responses from the CPAU-CPAG Project Manager and the CPAU Communications Manager. A monthly calendar release should be provided by CONSULTANT promoting CPAG by publicizing information regarding new developments in the program, new large customer enrollment or purchase level, seasonal promotions or other key milestones or accomplishments in the CPAG program. Press releases shall be written by CONSULTANT and follow the appropriate CPAU approval process through, distributed to comprehensive media lists and Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 through a press release service. CONSULTANT shall track and identify successful public relations efforts; a media tracking service should also be utilized to note number of mentions. CONSULTANT shall prepare local, state and national recognition award nomination forms for approval before submitting on behalf of CPAU. CONSULTANT shall assist with the tracking of the award and nomination efforts; 1) CONSULTANT shall create a media relations calendar. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall draft PR materials. o Due Date: Ongoing Task1.8 Marketing Activities and Collateral Material: CONSULTANT shall produce program marketing and collateral material, upon written approval of CPAU. Examples of such material include, but are not limited to; a program brochure, utility bill inserts utility bill bang-tails, direct mail letters, and similar utility customer communication pieces. CONSULTANT shall coordinate schedules for printing and mailing of collateral materials prepared at CPAU expense. CONSULTANT shall present detailed marketing analytics monthly, with updates to the CPAU-CPAG Project Manager, as requested. 1) CONSULTANT shall review and redesign existing marketing collateral. o Due Date: In conjunction with the marketing plan Task1.9 Online Content: CONSULTANT shall, with approval from CPAU, be responsible for creating updated content for the CPAG website a minimum of two times per year, or as often as required by regulators or certifying agencies. CONSULTANT shall supply a CPAG-branded carbon calculator distributed for CPAG marketing use. CONSULTANT shall present detailed CPAG website analytics monthly, with updates to the CPAU-CPAG Project Manager, as requested in Task1.9 Online Content 1) CONSULTANT shall create an online content distribution plan based on CONSULTANT and TerraPass Lifestyle library of content. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall provide a monthly delivery of online content based on content distribution plan. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager Task1.10 Social Media: CONSULTANT shall provide a Social Media Strategy. CONSULTANT shall maintain knowledge of emerging high visibility or high usage social media platforms and the opportunities and relevance each may offer. CONSULTANT shall provide day-to-day content for social media postings with pre-approval of posts from CPAU. CONSULTANT shall provide daily monitoring of social media as well as development of the program. CONSULTANT shall provide further information about the intended purposes and activities through a monthly social media plan. Examples include, but are not limited to; social media promotions and material (via daily status updates): Facebook Ads, customers’ Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 stories/testimonials, Facebook promoted posts, Facebook apps, Twitter promoted Tweets, Infographics, and Videos. CONSULTANT shall make suggestions based on their industry experience. CONSULTANT shall make recommendations for improving service and experiences for CPAU customers. CONSULTANT shall present detailed social media analytics monthly. 1) CONSULTANT shall develop a holistic approach to manage social media channels. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall provide analytics reporting for Facebook, Twitter, LinkedIn, Pinterest, etc. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager. Task1.11 Video: CONSULTANT shall produce educational and promotional videos. CONSULTANT shall work with CPAU-CPAG Program Manager to identify an annual calendar and budget for videos, with possible opportunities to work with business customers enrolled in the program. 1) CONSULTANT shall provide recommendations for video production or reallocation of funds for higher outreach ROI. o Due Date: In conjunction with Marketing Plan Task1.12 E-Newsletters: CONSULTANT shall produce content for quarterly business newsletters, and provide detailed e-newsletter analytics monthly. 1) CONSULTANT shall develop an e-newsletter distribution plan. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall produce an e-newsletter. o Due Date: Monthly, quarterly or as otherwise agreed with the CPAU Project Manager Task1.13 Participant Data Entry and Tracking: After executing a Non-Disclosure Agreement satisfactory to the CITY, CONSULTANT shall maintain a legacy database or transfer information from the City’s previous databases to a new program participant database. CONSULTANT shall provide CPAU staff direct and full access to necessary customer databases for all CPAG participants . This database shall include confidential information on the customer’s name, address, utility account number, sign-up date, sign-up mechanism, and dates for leaving either the utility system or the CPAG program. CONSULTANT shall provide monthly reports to CPAU-CPAG program manager. CONSULTANT shall strictly maintain the confidentiality of such information as required by the City’s Non-Disclosure Agreement. Database must be designed with physical and cyber-security and redundancy features required by City-IT standards. 1) CONSULTANT shall provide recommendation on improvements or transfer of information to a new database program. o Due Date: Within 30 days of contract execution 2) CONSULTANT shall provide monthly reports as required by the CPAU Program Manager. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager Task1.14 Marketing Reports: CONSULTANT shall produce a report detailing the cost of marketing and sign- up collateral as well as the status of new and existing customers. CONSULTANT shall produce a monthly report of all new enrollments based on cost of acquisition (COA) by sign-up mechanism, overall participation levels and rate class, as well as report of all exits (churn rate, or attrition rate) of the number of customers moving out or canceling CPAG members over a specific period of time. CONSULTANT shall produce quarterly reports summarizing the program status and projections on both a Calendar Year (January 1 to December 31) and Fiscal Year (July 1 to June 30) basis. 1) CONSULTANT shall produce detailed monthly reports to include status of existing and new customers as well as cancellation and provide monthly reports in both Calendar and Fiscal Year formats. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager Task1.15 Staffing: CONSULTANT shall provide on-site staffing at CPAU as required to perform certain tasks, including, but not limited to, the input of data and sending out of Welcome Kits to new customers. CONSULTANTs on-site staff shall be scheduled on a mutually agreed upon basis with the CPAU-CPAG Program Manager. 1) CONSULTANT shall have on-site staff scheduled on a mutually agreed upon basis with the CPAU-CPAG Program Manager. o Due Date: Ongoing b. TRACKING, REPORTING, AND COMPLIANCE VERIFICATION Task1.16 Green-e Energy Western Renewable Generation Information System Registration: CONSULTANT shall verify that all RECs utilized by the program have been registered with Western Renewable Generation Information System (WREGIS) in accordance with WREGIS Operating Rules, dated June 4, 2007, or as subsequently amended or modified or replaced. 1) CONSULTANT shall register and retire RECS according to WREGIS and Green-e standards o Due Date: As required by Green-e and the CITY. Task1.17 Green-e Energy Program Standards and Code of Conduct: CONSULTANT shall adhere to the Green-e Renewable Energy Certification program National Standard Version 1.4 or as subsequently amended, and the associated Code of Conduct and Customer Disclosure Requirements. 1) CONSULTANT shall meet Green-e Energy Program Standards and Code of Conduct. o Due Date: Ongoing with each purchase Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task1.18 Green-e Energy Program Compliance Verification: CONSULTANT shall complete all necessary paperwork, forms and information submittals to the Center for Resource Solutions in accordance with the Green-e Energy program verification process requirements, including, if required, annual or biannual audits in accordance with the Green-e Energy Verification Process Audit Protocols starting with calendar year 2013 through the duration of the contract. CONSULTANT shall also provide a time line for submittal and data gathering no later than January 1 of each year of the contract. 1) CONSULTANT shall compile requisite documentation. o Due Date: Quarterly or as otherwise agreed with the CPAU Project Manager. 2) CONSULTANT shall submit documentation to CRS. o Due Date: January – March of the following year Task 1.19 California Power Source Disclosure Reporting and Verification: CONSULTANT shall complete all necessary paperwork, forms and information submittals to the California Energy Commission and the City’s Scheduling Coordinator (Northern California Power Agency). These reports include, but are not limited to, an official copy of all RECs, also known as “Green Tag Certificate” or “Tradable Renewable Energy Certificates”. No later than March 1 of each year, CONSULTANT shall submit Schedule 4 (Power Purchased Out of Pool) of the Annual Report to the California Energy Commission, describing the Green Tags Purchased, by resource type (in kWh) in accordance with the California Power Source Disclosure Program. CONSULTANT shall verify the validity of all RECs utilized by the Program. The CEC Power Content Label Annual Report Attestation Form may be used for this purpose, or a suitable substitute subject to City’s prior written approval. The report shall also include a general description of each resource, including the location, technology, and web links to relevant web sites if available. Additionally, if a program audit is required in addition to the Green-e Energy verification process audit, CONSULTANT shall conduct an audit using the Agreed-Upon Procedures found in the California Code of Regulations, Title 20, Section 1394, Appendix C (see Amended Regulations governing SB 1305). 1) CONSULTANT shall submit Documentation to the CEC. o Due Date: Yearly or as otherwise agreed with the CPAU Project Manager Task 2. Marketing of a new commercial and residential natural gas green energy program, PAG GAS, Note that some tasks such as marketing outreach may be completed concurrently with CPAG. a. MARKETING SUPPORT SERVICES Task2.1 Marketing Plan Task2.2 Branding Plan Task2.3 Innovation Task2.4 Training Task2.5 Outreach Event Task2.6 Welcome Kit Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task2.7 Public Relations Task2.8 Marketing and Collateral Task2.9 Online Content Task2.10 Social Media Task2.11 Video Task2.12 E-Newsletters Task2.13 Participant Data Entry And Tracking Task2.14 Marketing Reports Task2.15 Staffing b. TRACKING, REPORTING, AND COMPLIANCE VERIFICATION Task2.16 Green-e Climate Program Standards and Code of Conduct Task2.17 Green-e Climate Compliance Verification c. ENVIRONMENTAL OFFSET ACQUISITION AND MANAGEMENT (Priced Separately from Task 2a and Task 2b above) Task2.18 Supply of environmental offset Task 2. Marketing of a new commercial and residential natural gas green energy program, “PaloAltoGreen Gas” (PAG GAS), and the supplying of certified environmental offsets for use in the commercial and residential PAG GAS program. a. MARKETING SUPPORT SERVICES Task2.1 Marketing Plan: CONSULTANT shall provide an overview of the proposed approach to fulfill the requirements of the scope of work within the marking plan. CONSULTANT shall identify strengths and unique features of proposed approach. CONSULTANT shall specify the marketing work plan, including the proposed approach, methods, activities, and associated deliverables. CONSULTANT shall propose the plan for completing each specific component detailed in the scope of work, including specific activities to be completed and coordinated with CPAU. While CPAU welcomes and encourages original ideas and new approaches, CONSULTANT shall provide a marketing plan including but not limited to; a transition communication plan for current enrolled PAG customers, customer education, training for City personnel, information needed for advertising and billing inserts, poster, banner, program design and marketing advice, outreach print materials, quarterly program e-newsletters, and web-based communication, including but not limited to Social Media (Facebook and Twitter) and the City’s web site. CONSULTANT shall develop a direct sales plan to recruit from targeted groups, including, for example businesses, non-profits, civic organizations, and neighborhood associations. City personnel shall manage customer contact. CONSULTANT shall provide estimates of participation levels based on CONSULTANT’s experience with local demographics and similar size utilities and programs, as well as explore innovative program enhancements. CONSULTANT shall present a detailed marketing plan tailored to CPAU customers with specific targets and tactics every 3 months. CONSULTANT shall provide a detailed project schedule that specifies timelines for each task and sub- task and associated deliverables. The schedule must incorporate time for CPAU to review and approve all draft deliverables. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 1) CONSULTANT shall provide a quarterly marketing plan. o Due Date: ongoing 2) CONSULTANT shall lead review and marketing strategy session. o Due Date: Within 2 weeks of the execution of the contract 3) CONSULTANT shall submit draft marketing plan. o Due Date: 1 week post the marketing strategy session 4) CONSULTANT shall submit a finalized marketing plan and implementation timeline. o Due Date: 1 week from the City’s acceptance of the CONSULTANT’s recommended plan Task2.2 Branding Plan: CONSULTANT shall provide a branding plan for the PAG GAS program. CONSULTANT shall submit all branding materials and plans for approval, prior to their use. CONSULTANT shall design a brand for the PAG GAS program to include but not limited to, internal branding guidelines and style guide documents. CONSULTANT shall incorporate the brand into logo and tagline, color, messaging documents and integrate the brand into all promotional and marketing materials targeted to both residential and business CPAU customers. CONSULTANT shall develop a media kit to ensure that all radio, television and internet advertising conform to and appropriately promote the PAG GAS program brand with approval from CPAU prior to distribution. CONSULTANT shall develop guidelines and templates for CPAU and CPAU business customers that enroll into the PAG GAS program to use for the promotional use and recognition of the PAG GAS program. 1) CONSULTANT shall submit a brand and marketing plan. o Due Date: In conjunction with the finalized marketing plan Task2.3 Innovation: CONSULTANT shall find and nurture creative concepts for ways including, but not limited to; managing program implementation, marketing, tracking, enrollment growth, and customer engagement, satisfaction, and feedback. CPAU wants to find the best ideas out there and help get them implemented. CONSULTANT shall make recommendations based on experience, as well as market potential to CPAU and its customers. The examples include, but are not limited to; potential for lower costs, measurable and local environmental benefits, process improvement, and local economic development opportunities. 1) CONSULTANT shall provide suggestions for program innovations based on outcome of task 2.1 and 2.2 o Due Date: In conjunction with the finalized marketing plan Task2.4 Training: CONSULTANT shall train all new customer service and Utilities Marketing Services staff, as well as but not limited to, performing biannual in-service training on industry advances. Responsibilities include but are not limited to; fielding phone inquiries, entering orders, and developing and utilizing coding and tracking mechanisms. CONSULTANT shall submit all training material for approval, prior to their use. CONSULTANT shall get all course curricula and Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 materials including, but not limited to; PowerPoint, handouts, written materials or guides, etc., which must be approved by CPAU before use. CONSULTANT shall describe the format, timeline and audience for the proposed workshop(s) or course(s). CONSULTANT shall address core curricular concepts including, but not limited to; lead generation, referrals, understanding audience segments, traditional marketing channels, online marketing, social media, planning marketing campaigns, sales presentations, sales closing and customer service. CONSULTANT shall describe how the training shall address residential and commercial market segments. CONSULTANT shall address how training participants shall be better prepared to meet the particular challenges in marketing and selling the PAG GAS program. CONSULTANT shall, in consultation with CPAU, organize and facilitate a Kickoff Meeting to be held at City Hall to establish a foundation for the project, review the proposed statement of work and schedule, and consider any revisions or adjustments that may be necessary, and establish communication protocols. 1) CONSULTANT shall create library of training materials for PAG GAS support staff, including training documents, scripts, and customer service procedure as needed. o Due Date: 2 weeks prior to the launch of the program 2) CONSULTANT shall lead a local training session for PAG GAS support staff. o Due Date: 1 week prior to launch of program Task2.5 Outreach Events: CONSULTANT shall staff up to a maximum of 15 outreach events per year. Which events CONSULTANT shall staff be determined by CPAU’s project manager and communicated to CONSULTANT. CONSULTANT shall be responsible for turn-key support for these events. CONSULTANT shall submit all outreach material for approval, prior to their use. CONSULTANT shall in consultation with CPAU, organize a Community Kickoff Meeting(s) to be held at the City Hall and/or Community Centers to present the new PAG GAS program offering. CONSULTANT shall present detailed outreach analytics monthly. 1) CONSULTANT shall identify outreach events. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall create turnkey event material, including equipment, scripts for any presentations, materials. o Due Date: 1 week prior to 1st event Task2.6 Welcome Kit: CONSULTANT shall coordinate and establish the assembly and sending of welcome kits to each new subscriber of the program. CONSULTANT shall submit any proposed changes to Welcome Kits to CPAU staff for approval, prior to use. CONSULTANT shall coordinate printing and mailing these pieces at CPAU’s expense. Any future changes to Welcome Kits must be approved by CPAU staff prior to use. 1) CONSULTANT shall create customized Welcome Kits that engage program enrollees. o Due Date: In conjunction with the marketing plan Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 2) CONSULTANT shall oversee all Welcome Kit fulfillment. o Due Date: Weekly or as otherwise agreed with the CPAU Project Manager Task2.7 Public Relations: CONSULTANT shall provide proactive media outreach through media pitches and communications that should be maintained on a regular basis. CONSULTANT shall provide reactive media support by responding in a timely manner to media with research and data requests with pre-approval of responses from CPAU. A monthly calendar release should be provided by CONSULTANT that promotes the PAG GAS programs by sharing information regarding new developments in the program, new large customer enrollment or purchase level, seasonal promotions or other key milestones or accomplishments in the PAG GAS program. Press releases shall be written by CONSULTANT and must follow the appropriate approval process through CPAU, distributed to comprehensive media lists and through a press release service. CONSULTANT is to assist with the tracking of the public relations efforts; a media tracking service shall be utilized to note successes. CONSULTANT shall also prepare award nomination forms for CPAU approval and review before submitting for CPAU. CONSULTANT shall assist with the tracking of the award and nomination efforts; an award tracking spreadsheet shall also be utilized to note and archive successes. 1) CONSULTANT shall create a media relations calendar. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall draft PR material. o Due Date: Ongoing as needed Task2.8 Marketing and Collateral: CONSULTANT shall produce all program marketing and sign-up collateral, upon the approval of CPAU staff. Examples of such material include, but are not limited to; a program brochure, utility bill inserts, utility bill bang-tails, direct mail letters, and so on. CONSULTANT shall coordinate printing and mailing these pieces at CPAU’s expense. CONSULTANT shall present detailed marketing analytics monthly. 1) CONSULTANT shall develop marketing and collateral calendar which includes mailing inserts and other promotional material. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall develop marketing materials for bill inserts and other promotions. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager. Task2.9 Online Content: CONSULTANT shall, with approval from CPAU, be responsible for creating updated content for the PAG GAS program website a minimum of two times per year, or whenever mandated by Center for Resource Solutions to stay in compliance with Green-e certification. CONSULTANT shall provide a carbon Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 calculator with program branding designed for the PAG GAS program customers use. CONSULTANT shall present detailed program website analytics monthly. 1) CONSULTANT shall build a library of online content. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall deliver online content based on content distribution plan. o Due Date: Quarterly, monthly or as otherwise agreed with the CPAU Project Manager Task2.10 Social Media: CONSULTANT shall maintain knowledge of emerging social media platforms and the opportunities and relevance each may offer. CONSULTANT shall provide a Social Media Strategy. CONSULTANT shall manage the day-to-day management of the social media posting with pre-approval of posts from CPAU. CONSULTANT shall provide daily monitoring of social media as well as development of the program. CONSULTANT shall provide further information about the intended purposes and activities through a monthly social media plan. Examples include, but are not limited to; social media promotions and material (via daily status updates): Facebook Ads, customers’ stories/testimonials, Facebook promoted posts, Facebook apps, Twitter promoted Tweets, Infographics, and Videos. CONSULTANT shall make suggestions based on their industry experience. CONSULTANT shall make recommendations for improving service and experiences for CPAU customers. CONSULTANT shall present detailed social media analytics monthly. 1) CONSULTANT shall develop a holistic approach to manage social media channels. o Due Date: In conjunction with the marketing plan 2) CONSULTANT shall provide analytics reporting for Facebook, Twitter, LinkedIn, Pinterest, etc. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager Task2.11 Video: With approval from CPAU, CONSULTANT shall produce educational and promotional videos. CONSULTANT shall work with CPAU Project Manager to identify an annual calendar and budget for videos, with possible opportunities to work with both residential and business customers enrolled in the program. 1) CONSULTANT shall provide recommendations for video production or reallocation of funds for higher outreach ROI. o Due Date: In conjunction with Marketing Plan Task2.12 E-Newsletters: CONSULTANT shall be responsible for compiling the information with approval from CPAU, to complete quarterly newsletters and shall provide the support necessary to complete this outreach. CONSULTANT shall present detailed e- newsletters analytics monthly. 1) CONSULTANT shall develop an e-newsletter distribution plan. o Due Date: In conjunction with the marketing plan Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 2) CONSULTANT shall produce e-newsletter. o Due Date: Monthly, quarterly or as otherwise agreed with the CPAU Project Manager Task2.13 Participant Data Entry and Tracking: After executing a Non-Disclosure Agreement satisfactory to the CITY, CONSULTANT shall produce direct and full access to necessary customer databases for all PAG GAS program members to CPAU staff. This database shall include confidential information on the customer’s name, address, utility account number, sign-up date, sign-up mechanism, and dates for leaving the utility system or the program. CONSULTANT shall strictly maintain the confidentiality of such information as required by the City’s Non-Disclosure Agreement. CONSULTANT shall provide monthly update reports to CPAU program manager. Database must be designed with physical and cyber-security and redundancy features required by City-IT standards. 1) CONSULTANT shall provide recommendation on improvements or transfer of information to a database program. o Due Date: Within 1 month of execution of contract 2) CONSULTANT shall provide monthly reports as required by the CPAU Program Manager. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager Task2.14 Marketing Reports: CONSULTANT shall produce a report detailing the cost of marketing and sign-up collateral as well as the status of new and existing customers. CONSULTANT shall produce a monthly report of all new enrollments based on cost of acquisition (COA) by sign-up mechanism, overall participation levels and rate class, as well as report of all exits (churn/attrition rate measure of the number of customers moving out or cancel PAG GAS member over a specific period of time)). CONSULTANT shall produce quarterly reports summarizing the program status and projections on both a Calendar Year (January 1 to December 31) and Fiscal Year (July 1 to June 30) basis. 1) CONSULTANT shall produce detailed monthly reports to include status of existing and new customers as well as cancellation and provide monthly reports in both Calendar and Fiscal Year formats. o Due Date: Monthly or as otherwise agreed with the CPAU Project Manager. Task2.15 Staffing: CONSULTANT shall provide on-site staffing at CPAU as required to perform certain tasks, including, but not limited to, the input of data and sending out welcome kits to new customers. CONSULTANTs on-site staff shall be scheduled on a mutually agreed upon basis with the CPAU PAG GAS Program Manager. 1) CONSULTANT shall have on-site staff scheduled on a mutually agreed upon basis with the CPAU PAG GAS Program Manager. o Due Date: Ongoing Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 b. TRACKING, REPORTING, AND COMPLIANCE VERIFICATION Task2.16 Green-e Climate Program Standards and Code of Conduct: CONSULTANT shall adhere to the Green-e Climate Certification program National Standard Version 2.1 or as subsequently amended, and the associated Code of Conduct and Customer Disclosure Requirements. 1) CONSULTANT shall prepare and submit the requisite documentation to the Center for Resource Solutions. o Due Date: Ongoing as required by Center for Resource Solutions (CRS) Task2.17 Green-e Climate Compliance Verification: CONSULTANT shall complete all necessary paperwork, forms and information submittals to the Center for Resource Solutions in accordance with the Green-e Climate program verification process requirements, including, if required, annual or biannual audits in accordance with the Green-e Verification Process Audit Protocols. CONSULTANT shall also provide a time line for submittal and data gathering no later than January 1 of each year of the contract. The PAG GAS program shall be marketed and implemented so as to be eligible for Green-e Climate certification. 1) CONSULTANT shall prepare and engage with CENTER FOR RESOURCE SOLUTIONS for all Green-e Compliance Verifications o Due Date: Ongoing as required by Green-e c. ENVIRONMENTAL OFFSETS ACQUISITION AND MANAGEMENT (Priced Separately from Task 2a and Task 2b above) Task2.18 Supply of Environmental Offsets: CONSULTANT shall provide the City with sufficient environmental offsets, measured in metric tons CO2 equivalent, to meet the City’s residential and commercial retail subscriptions to the City’s PAG GAS program. Environmental offsets shall be certified by the Climate Action Reserve (with American Carbon Registry and the Verified Carbon Standard certification considered as a second choice) or environmental offsets shall be certified by the California Air Resources Board (CARB). Protocols shall be limited to those approved by CARB and preference shall be given to projects located within California. Following a review after the first year of implementing PAG GAS, at its sole discretion, the City reserves the right to self-provide or to procure environmental offsets separately from this contract. 1) CONSULTANT shall supply Climate Action Reserve-verified offsets to balance 100% of therms enrolled in the PAG GAS program. Protocols shall be limited to those approved by CARB and other protocols may be approved in the future if agreed by the City of Palo Alto project manager. o Due Date: In conjunction with the marketing plan. 2) CONSULTANT shall retire or transfer offset based on the City’s preferences. o Due Date: Quarterly after Program Launch, or otherwise as agreed by the CPAU Project Manager. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Schedule of Performance, Task 1 Task 1. Marketing of an ongoing commercial electric green energy program, “Commercial PaloAltoGreen” (CPAG). Task 1 Responsibilities Deliverable Timing (Due Date) Task 1.1 Marketing Plan: 1. CONSULTANT 1. Shall provide a semiannual marketing plan 1. ongoing 1. CONSULTANT 2. Shall lead a review and marketing strategy session 2. Within 2 weeks of the start of the contract execution 3. CONSULTANT 3. Shall create recommendations for program updates 3. Within 14 days of draft 4. CONSULTANT 4. Shall create a finalized marketing plan and implementation timeline. 4. 1 week from the City’s acceptance of the CONSULTANT’s recommendations plan Task 1.2 Branding / Transitional Plan: 1. CONSULTANT 1. Shall include any branding work within marketing plan. 1.In conjunction with the finalized marketing plan Task 1.3 Innovation: 1. CONSULTANT 1. Shall provide suggestions for program innovations based on outcome of task 1.1 and 1.2. 1. In conjunction with the finalized marketing plan Task 1.4 Training: 1. CONSULTANT 1. Shall update the library of training materials for CPAG 1. 2 weeks prior to the launch of the program Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 support staff, including training documents, scripts, and customer service procedure as needed. 2. CONSULTANT 2. Shall provide local training for CPAG support staff 2. 1 week prior to launch of program Task 1.5 Outreach Events: 1. CONSULTANT 1. Shall identify outreach events 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall create turnkey event material, including equipment, scripts for any presentations, materials. 1 week prior to 1st event Task 1.6 Welcome Kit: 1. CONSULTANT 1. Shall provide recommendations for improvement on design and materials of current kit. 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall oversee and execute Welcome Kit fulfillment. 2. Weekly or as otherwise agreed with the CPAU Project Manager Task 1.7 Public Relations: 1. CONSULTANT 1. Shall create a media relations calendar 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall draft PR materials 2. Ongoing Task 1.8 Marketing Activities and Collateral: 1. CONSULTANT 1. Shall review and redesign existing marketing collateral 1. In conjunction with the marketing plan Task 1.9 Online Content: 1. CONSULTANT 1. Shall create an online content distribution plan based on CONSULTANT and TerraPass Lifestyle library of content. 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall provide a monthly delivery of online content based on content distribution plan 2. Monthly or as otherwise agreed with the CPAU Project Manager Task 1.10 Social Media: 1. CONSULTANT 1. Shall develop a holistic approach to 1. In conjunction with the marketing Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 manage social media channels plan 2. CONSULTANT 2. Shall provide analytics reporting for Facebook, Twitter, LinkedIn, Pinterest, etc. 2. Monthly or as otherwise agreed with the CPAU Project Manager Task 1.11 Video: 1. CONSULTANT 1. shall provide recommendations for video production or reallocation of funds for higher outreach ROI 1. In conjunction with Marketing Plan Task 1.12 E- Newsletter: 1. CONSULTANT 1. Shall develop an e- newsletter distribution plan 1. In conjunction with the marketing plan 2. CONSULTANT 1. Shall produce an e- newsletter 2. Monthly, quarterly or as otherwise agreed with the CPAU Project Manager Task 1.13 Participant Data Entry and Tracking: 1. CONSULTANT 1. Shall provide recommendation on improvements or transfer of information to a new database program 1. Within 30 days of contract execution 2. CONSULTANT 2. Shall provide monthly reports as required by the CPAU Program Manager 2. Monthly or as otherwise agreed with the CPAU Project Manager Task 1.14 Marketing Reports: 1. CONSULTANT 1. Shall produce detailed monthly reports to include status of existing and new customers as well as cancellation and provide monthly reports in both Calendar and Fiscal Year formats 1. Monthly or as otherwise agreed with the CPAU Project Manager Task 1.15 Staffing: 1. CONSULTANT 1.Shall have on-site staff scheduled on a mutually agreed upon basis with the CPAU- CPAG Program Manager 1. Ongoing Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task 1.16 - Green-e Energy Western Renewable Generation Information System (WREGIS) Registration: 1. CONSULTANT 1. Shall register and retire RECS according to WREGIS and Green-e standards 1. As required by Green-e and the CITY Task1.17 Green-e Energy Program Standards and Code of Conduct: 1. CONSULTANT 1. Shall meet Green-e Energy Program Standards and Code of Conduct 1. Ongoing with each purchase Task1.18 Green-e Energy Program Compliance Verification: 1. CONSULTANT 1. Shall compile requisite documentation 1. Quarterly or as otherwise agreed with the CPAU Project Manager 2. CONSULTANT 2. Shall submit documentation to CRS 2. January – March of the following year Task 1.19 California Power Source Disclosure Reporting and Verification: 1. CONSULTANT 1. Shall submit Documentation to the CEC 1. Yearly or as otherwise agreed with the CPAU Project Manager Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Schedule of Performance, Task 2 Task 2. Marketing of a new commercial and residential natural gas green energy program, “PaloAltoGreen Gas” (PAG GAS), and the supplying of certified environmental offsets for use in the commercial and residential PAG GAS program. Task 2 Responsibilities Deliverable Timing (Due Date) Task2.1 Marketing Plan: 1. CONSULTANT 1. Shall provide a quarterly marketing plan 1. Ongoing 2. CONSULTANT 2. Shall lead review and marketing strategy session 2. Within 2 weeks of the execution of the contract 3. CONSULTANT 3. Shall submit draft marketing plan 3. 1 week post the marketing strategy session 4. CONSULTANT 4. Shall submit a finalized marketing plan and implementation timeline 4. 1 week from the City’s acceptance of the CONSULTANT’s recommended plan Task 2.2 Branding Plan: 1. CONSULTANT 1. Shall submit a brand and marketing plan 1. In conjunction with the finalized marketing plan. Task 2.3 Innovation: 1. CONSULTANT 1. Shall provide suggestions for program innovations based on outcome of task 2.1 and 2.2 1. In conjunction with the finalized marketing plan Task2.4 Training: 1. CONSULTANT 1. Shall create library of training materials for PAG GAS support staff, including training documents, scripts, and customer service procedure as needed 1. 2 weeks prior to the launch of the program 2. CONSULTANT 2. Shall lead a local training session for PAG GAS support staff 2. 1 week prior to launch of program Task 2.5 Outreach Events: 1. CONSULTANT 1. Shall identify outreach events 1. In conjunction with the marketing plan 1. CONSULTANT 2. shall create turnkey event material, including equipment, 1 week prior to 1st event Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 scripts for any presentations, materials Task 2.6 Welcome Kit: 1. CONSULTANT 1. Shall create customized Welcome Kits that engage program enrollees 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall create turnkey event material, including equipment, scripts for any presentations, materials 2. Weekly or as otherwise agreed with the CPAU Project Manager Task 2.7 Public Relations: 1. CONSULTANT 1. Shall create a media relations calendar 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall draft PR material 2. Ongoing as needed Task 2.8 Marketing Activities and Collateral: 1. CONSULTANT 1. Shall develop marketing and collateral calendar which includes mailing inserts and other promotional material 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall develop marketing materials for bill inserts and other promotions 2. Monthly or as otherwise agreed with the CPAU Project Manager Task 2.9 Online Content: 1. CONSULTANT 1. Shall build a library of online content 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall deliver online content based on content distribution plan 2. Quarterly, monthly or as otherwise agreed with the CPAU Project Manager Task 2.10 Social Media: 1. CONSULTANT 1. Shall develop a holistic approach to manage social media channels 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall provide analytics reporting for Facebook, Twitter, LinkedIn, Pinterest, etc. 2. Monthly or as otherwise agreed with the CPAU Project Manager Task 2.11 Video: 1. CONSULTANT 1. Shall provide recommendations for 1. In conjunction with Marketing Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 video production or reallocation of funds for higher outreach ROI Plan Task 2.12 E-Newsletter: 1. CONSULTANT 1. Shall develop an e- newsletter distribution plan 1. In conjunction with the marketing plan 2. CONSULTANT 2. Shall produce e- newsletter 2. Monthly, quarterly or as otherwise agreed with the CPAU Project Manager Task 2.13 Participant Data Entry and Tracking: 1. CONSULTANT 1. Shall provide recommendation on improvements or transfer of information to a database program 1. Within 1 month of execution of contract 2. CONSULTANT 2. Shall provide monthly reports as required by the CPAU Program Manager 2. Monthly or as otherwise agreed with the CPAU Project Manager Task 2.14 Marketing Reports: 1. CONSULTANT 1. Shall produce detailed monthly reports to include status of existing and new customers as well as cancellation and provide monthly reports in both Calendar and Fiscal Year formats 1. Monthly or as otherwise agreed with the CPAU Project Manage Task2.15 Staffing: 1. CONSULTANT 1. Shall have on-site staff scheduled on a mutually agreed upon basis with the CPAU PAG GAS Program Manager 1. Ongoing Task2.16 Green-e Climate Program Standards and Code of Conduct: 1. CONSULTANT 1. Shall prepare and submit the requisite documentation to the Center for Resource Solutions 1. Ongoing as required by Center for Resource Solutions (CRS) Task2.17 Green-e Climate Compliance Verification: 1. CONSULTANT 1. Shall prepare and engage with CENTER FOR RESOURCE 1. Ongoing as required by Green-e Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 SOLUTIONS for all Green-e Compliance Verifications Task2.18 Supply of Environmental Offsets 1. CONSULTANT 1. Shall supply Climate Action Reserve-verified offsets to balance 100% of therms enrolled in the PAG GAS program. Protocols shall be limited to those approved by CARB and other protocols may be approved in the future if agreed by the City of Palo Alto project manager 1. In conjunction with the marketing plan 2. CONSULTANT 2.Shall retire or transfer offset based on the City’s preferences 2. Quarterly after Program Launch, or otherwise as agreed by the CPAU Project Manager Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $597,878. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $597,878. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task One – Electric Program • Sub-total Basic Services $240,378 • Reimbursable Expenses $35,000 • Total Basic Services and Reimbursable expenses $275,378 Task Two – Gas Program • Sub-total Basic Services $232,500 • Reimbursable Expenses $90,000 • Total Basic Services and Reimbursable expenses $322,500 Maximum Total Compensation $597,878 Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task 1 - Marketing of an ongoing commercial electric green energy program CPAG CONSULTANT shall market and implement the ongoing commercial electric green energy program, CPAG. CONSULTANT shall maintain at a minimum current participation level at a cost not to exceed $70,000 for billable labor for Tasks 1.1-1.15 annually, not including Reimbursable Expenses. Reimbursable Expenses include production and printing expenses for pre-approved marketing collateral materials created by CONSULTANT under this agreement, up to a maximum of $35,000 for the 3 years of the contract. CITY reimbursement of any other expenses requires prior written approval. Most of Task 1 and its subtasks shall be completed concurrently with Task 2 PAG GAS, such as marketing outreach. The main focus shall be the new PAG GAS program with CPAG as a secondary offering available. Task 1 - Program Budget Term Total not to exceed (Task 1.1- 1.19) Billable Labor Reimbursable Expenses Total Cost Admin Marketing Materials FY 2015 (1-12 Months) $80,126 $40,063 $40,063 $22,000 $102,126 FY 2016 (13-24 Months) $80,126 $40,063 $40,063 $6,500 $86,626 FY2017 (25-36 Months) $80,126 $40,063 $40,063 $6,500 $86,626 1-36 Months Total $240,378 $120,189 $120,189 $35,000 $275,378 Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task 1 - Annually Budget Schedule Task 1 Total Billable Labor not to exceed Billable Labor Reimbursable Expenses Admin Marketing Materials Task 1.1 $9,538.00 $3,250.00 $4,000.00 CITY shall pay for Reimbursable Expenses including the production and printing expenses for pre-approved marketing collateral materials created under this agreement, up to a maximum of $35,000 for the 3 years of the contract. Task 1.2 $0 $0 $0 Task 1.3 $3,393.00 $400.00 $2,550.00 Task 1.4 $3,450.00 $800.00 $2,200.00 Task 1.5 $6,840.00 $2,600.00 $3,000.00 Task 1.6 $7,130.00 $5,000.00 $1,200.00 Task 1.7 $6,900.00 $2,800.00 $3,200.00 Task 1.8 $7,216.00 $1,200.00 $5,075.00 Task 1.9 $5,290.00 $1,400.00 $3,200.00 Task 1.10 $6,750.00 $$800.00 $4,200.00 Task 1.11 $3,220.00 $400.00 $2,400.00 Task 1.12 $5,330.00 $600.00 $3,600.00 Task 1.13 $4,370.00 $3,800.00 $0 Task 1.14 $3,450.00 $3,000.00 $0 Task 1.15 $0 $0 $0 a. Marketing Support Services Subtotal (Task 1.1 – 1.15) $69,776.25 $26,050.00 $34,625.00 Task 1.16 $1,150.00 $1,000.00 $0 Task 1.17 $1,840.00 $1,600.00 $0 Task 1.18 $3,680.00 $3,200.00 $0 Task 1.19 $3,680.00 $3,200.00 $0 b. Tracking, Reporting, and Compliance Verification Subtotal (Task 1.16 – 1.19) $10,350 $9000.00 $0 Total (Task 1.1- 1.19) $80,126.00 $35,050.00 $34,650.00 $35,000 Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task 2. Marketing of a new commercial and residential natural gas green energy program PAG GAS, and the supplying of certified environmental offsets for use in the commercial and residential PAG GAS program CONSULTANT shall provide services and supports for Tasks 2.1 -2.17 at a performance-billing rate of 4 cents per therm enrolled in the program, plus Reimbursable Expenses of up to $90,000 for the three-year contract term. Reimbursable Expenses include production and printing expenses for pre-approved marketing collateral materials created under this agreement. The CONSULTANT’s fees and expenses shall be billed monthly. Task 2 - Program Budget Term Therms Labor Cost ($0.04 / therm) Estimate Participation Level Offset Cost Reimbursable Expenses Total Cost % Members FY2015 1-12 Months 460,000 $18,400 2.7% 809 $24,380 $45,000 $87,780 FY2016 13-24 Months 920,000 $36,800 5.5% 1619 $48,760 $25,000 $110,560 FY2017 25-36 Months 1,120,000 $44,800 7.2% 2132 $59,360 $20,000 $124,160 1-36 Months Total 2,500,000 $100,000 7.2% 2132 $132,500 $90,000 $322,500 Task 2 - Performance Bill Rate Task Scope Performance Bill Rate ($/therms) a. Marketing Support Services 4 cents per therm Task 2.1 Marketing Plan Task 2.2 Branding Plan Task 2.3 Innovation Task 2.4 Training Task 2.5 Outreach Event Task 2.6 Welcome Kit Task 2.7 Public Relations Task 2.8 Marketing and Collateral Task 2.9 Online Content Task 2.10 Social Media Task 2.11 Video Task 2.12 E-Newsletters Task 2.13 Participant Data Entry And Tracking Task 2.14 Marketing Reports Task 2.15 Staffing b. Tracking, Reporting, and Compliance Verification Task 2.16 Green-e Climate Program Standards and Code of Conduct Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 Task 2.17 Green-e Climate Compliance Verification Offset supply shall be billed on a quarterly basis initially, moving to a monthly basis later in the contract term as volume increases. For the first year of the contract, offset supply prices are: Task 2 - Environmental Offset Acquisition and Management Task Scope Registr y Livestock Forestry Non CA CA Non CA CA c. Environmental Offset Acquisition and Management (Priced Separately from Task 2a and Task 2b above) Task 2.18 Supply of Environmental Offset CAR $9.25 per metric ton $12.50 per metric ton Not Offered $10.00 per metric ton Task 2.18 Supply of Environmental Offset CARB $11.00 per metric ton Not Offered Not Offered $12.00 per metric ton REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not Reimbursable Expenses. CITY shall reimburse CONSULTANT for the following Reimbursable Expenses at cost. • Task 1: CITY shall pay for Reimbursable Expenses including the production and printing expenses for pre-approved marketing collateral materials created under this Agreement up to a maximum of $35,000 for the 3 years of the contract. • Task 2: CITY shall pay for Reimbursable Expenses including the production and printing expenses for pre-approved marketing collateral materials created under this Agreement up to a maximum of $90,000 for the 3 years of the contract. Other expenses for which CONSULTANT shall be reimbursed are A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $50 shall be approved in advance by the CITY’s project manager. Professional Services Rev. Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EXHIBIT “C-1” HOURLY RATE SCHEDULE Task 1 - Hourly Rates for Time and Materials Work Staff Name Staff title Responsibility Hourly Rate Erin Craig Project Director Project Director $275 Kathryn Sarkis Project Manager Project Coordination $200 Irela Bague Marketing/Branding Marketing/Branding $200 Tamara Grose Operations/Reports Operations/Reports $200 Kristi Kaiser Online Marketing Manager Marketing Support $100 Usman Shah Operations Analyst Operations Support $100 Ana Fiotte Analyst Social Media & Marketing $100 Gwendoline Chen Analyst Marketing/Branding Support $100 Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EXHIBIT “E” NON-DISCLOSURE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND JUST ENERGY RESOURCES LLC DBA JUSTGREEN This NON-DISCLOSURE AGREEMENT (the “Agreement”), dated as of July 1, 2014 (the “Effective Date”), is entered into by and between the City of Palo Alto, a California chartered municipal corporation, 250 Hamilton Avenue, Palo Alto, CA 94301 (the “Disclosing Party”) and JUST ENERGY RESOURCES LLC DBA JUSTGREEN, a Limited liability company, 5251 Westheimer Road, Suite 1000, Houston, Texas 77056 (the “Receiving Party”) (individually, a “Party” and, collectively, the “Parties”). RECITALS 1. The Parties entered into a contract for Professional services as of July 1, 2014 City of Palo Alto Contract No. C14151135 (the “Contract”); the Receiving Party is providing comprehensive marketing, administrative support, and/or purchasing of services for the City of Palo Alto’s (CITY) current and proposed renewable (green) energy programs operated by the City of Palo Alto Utilities Department (CPAU) to the Disclosing Party. 2. In its performance of consulting services, the Receiving Party and its authorized members, directors, officers, employees, agents and representatives will acquire and otherwise gain access to certain Confidential Information of the Disclosing Party, including the personal information of one or more electric utility customers of the City’s Department of Utilities, which is exempt from public disclosure under California Government Code section 6254.16. 3. The Disclosing Party would not share or disclose any Confidential Information to the Receiving Party but for the legal protections against unauthorized disclosures intended to be afforded by California law and this Agreement, and is relying on this Agreement in disclosing such Confidential Information to the Receiving Party. AGREEMENT In consideration of the foregoing recitals and mutual covenants, terms and conditions, the Parties agree, as follows: 1. Confidential Information. “Confidential Information” means any and all financial and related utility customers’ personal information of a non-public, proprietary or confidential nature, in any form or medium, written or oral, concerning or relating to the Disclosing Party (whether prepared by the Disclosing Party, its employees or agents, and irrespective of the form or means of communication and whether it is labeled or otherwise identified as confidential) that is furnished or made available to the Receiving Party by the Disclosing Party. 2. Exceptions. The Receiving Party agrees to maintain as confidential, to the extent permitted or required by applicable law, all Confidential Information furnished or otherwise made available to the Receiving Party by the Disclosing Party. Notwithstanding the foregoing and the provisions of Section 1, “Confidential Information” shall exclude (and the Receiving Party shall not be under any obligation to maintain in confidence) any information (or any portion thereof) disclosed to the Receiving Party by the Disclosing Party to the extent that such information: (a) is in the public domain at the time of disclosure; or Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 (b) at the time of or following disclosure, becomes generally known or available through no act or omission on the part of the Disclosing Party; or (c) is known, or becomes known, to the Receiving Party from a source other than the Disclosing Party or its Representatives (as defined herein), provided that disclosure by such source is not in breach of a confidentiality agreement with the Disclosing Party; or (d) is independently developed by the Receiving Party without violating any of its obligations under this Agreement or any other agreement between the Parties; or (e) is legally required to be disclosed by judicial or other governmental action; provided, however, that prompt notice of such judicial or other governmental action shall have been first given to the Disclosing Party, which shall be afforded the opportunity to exhaust all reasonable legal remedies to maintain the Confidential Information in confidence, in accordance with Section 7 below; or (f) is permitted to be disclosed by a formal written agreement executed by and between the Parties. Specific information shall not fall within the exceptions of Sections 2(a) through 2(f) above merely because it is embraced by more general information falling within such exceptions. 3. California Public Records Act. The Receiving Party acknowledges that the Disclosing Party is a public agency subject to the requirements of the California Constitution, Article 1, Section 3 and California Public Records Act Cal. Gov. Code section 6250 et seq. The Receiving Party acknowledges that the Disclosing Party may submit to or otherwise provide access to the Receiving Party Confidential Information that the Disclosing Party or any electric utility customer of the Disclosing Party considers to be protected from disclosure pursuant to exemptions granted by applicable California law. Whether or not there is a request or demand of any third party not a Party to this Agreement (the “Requestor”) for the production, inspection and/or copying of information designated by the Disclosing Party as Confidential Information, the Disclosing Party shall be solely responsible for taking whatever legal steps the Disclosing Party deems necessary to protect information deemed by it to be Confidential Information and to prevent release of information to the Requestor (including the release of such information by the Receiving Party). Under no circumstances will the Receiving Party be permitted to comply with the Requestor’s demand for disclosure of such Confidential Information that the Disclosing Party deems confidential and not intended for disclosure to the general public, or otherwise publicly disclose the Confidential Information to any person not authorized by law to receive such information. 4. Confidential Information. As practicable, the Confidential Information shall be marked with the words “Confidential” or “Confidential Material” or with words of similar import. The Disclosing Party shall instruct the Receiving Parties that information of a financial, personal, or proprietary nature being conveyed orally and intended by the Disclosing Party to be covered by the terms of this Agreement, is deemed Confidential Information. To the extent possible, the Disclosing Party shall endeavor to mark any electronic document intended to be covered by the terms of this Agreement with the words “Confidential” or similar words, or, if Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 that is not possible or would be exceedingly difficult, the City shall notify the Receiving Parties (for example, by covering e-mail transmitting the electronic document) that the electronic document is Confidential Information. The City’s failure, for whatever reason, to mark any material at the time it is produced to the Receiving Party, or to notify it that oral or electronic material is Confidential Information at the time it is provided, shall not take the material out of the coverage of this Agreement for all time, and the Receiving Party shall treat the material as Confidential Information once the City has notified it that the material is to be covered by this Agreement. 5. Duty to Keep Confidential. The Receiving Party acknowledges that the Confidential Information is proprietary and a valuable asset of the Disclosing Party and agrees that the Receiving Party shall take reasonable precautions to ensure that such Confidential Information is safeguarded against disclosure to unauthorized employees or third parties. (a) The Receiving Party shall use the Confidential Information solely as permitted by the Contract and shall not sell Confidential Information or otherwise disclose City of Palo Alto Utilities’ customers’ personal information under any circumstances and without the prior written consent of the City. The Receiving Party shall not disclose the Confidential Information, or portions thereof, to any directors, officers, partners, managers, members, employees, advisors, agents, sub-contractors and other representatives of the Receiving Party and their subsidiaries and affiliates, including, without limitation, attorneys, accountants, consultants, and financial advisors (collectively, the “Representatives”), except to those who need to know such information for the purpose of advising City and who agree to the terms of this Agreement. (b) The Receiving Party agrees that any of the Representatives to whom the Confidential Information is disclosed will be informed of the confidential or proprietary nature of such information and of the Receiving Party’s obligations under this Agreement. The Receiving Party is responsible for any use of Confidential Information by any of its Representatives. (c) The Receiving Party shall ensure that (i) any directors, officers, representatives, advisors and sub-contractors with whom the Receiving Party shares such information or who acquire knowledge of such information from or through the Receiving Party regard and treat such Confidential Information of the Disclosing Party as strictly confidential and wholly owned by either the Disclosing Party, and (ii) the Receiving Party shall not (and the Receiving Party shall ensure that any directors, officers, representatives, advisors and sub- contractors with whom the Receiving Party shares such information or who acquire knowledge of such information from or through the Receiving Party do not) for any reason, in any fashion, either directly or indirectly, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, or otherwise communicate any such Confidential Information to any third party, or misappropriate, reproduce, copy or use any such Confidential Information, in either case, for any purpose other than in accordance with this Agreement. (d) If the Receiving Party or any of its Representatives are requested or required to disclose any Confidential Information, including terms and conditions being negotiated, by law, regulation, the applicable rules of any national securities exchange or other market or reporting system, oral questions, interrogatories, requests for information or other documents in legal proceedings, subpoena, civil investigative demand or any other similar process, the Receiving Party shall provide the Disclosing Party with prompt written notice of any Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 such request or requirement so that the Disclosing Party has an opportunity to seek a protective order via Writ of Mandate or other appropriate remedy, or waive compliance with the provisions of this Agreement. (e) If the Disclosing Party waives compliance with the provisions of this Agreement with respect to a specific request or requirement, the Receiving Party and its Representatives shall disclose only that portion of the Confidential Information that is expressly covered by such waiver and which is necessary to disclose in order to comply with such request or requirement. The Receiving Party and its Representatives shall cooperate in a reasonable manner with the Disclosing Party in attempting to preserve the confidentiality of the Confidential Information. (f) If (in the absence of a waiver by the Disclosing Party) the Disclosing Party has not secured a protective order or other appropriate remedy despite attempting to do so, and the Receiving Party or one of its Representatives is nonetheless then legally compelled to disclose any Confidential Information, the Receiving Party or such Representative may, without liability hereunder, disclose only that portion of the Confidential Information that is necessary to be disclosed. In the event that disclosure is made in accordance with this subsection, the Receiving Party shall exercise, and cause its Representatives to exercise, reasonable efforts to preserve the confidentiality of the Confidential Information, including obtaining reliable assurance at the sole expense of the Receiving Party that confidential treatment shall be accorded any Confidential Information so furnished. 6. No Liability, Reliance, or Obligation. Except as set forth in any formal written agreement executed by and between the Parties, neither the Receiving Party nor any of its Representatives shall be entitled to rely on any statement, promise, agreement or understanding, whether written or oral, or any custom, usage of trade, course of dealing or conduct. In addition, each Party understands and acknowledges that neither the Disclosing Party nor any of its representatives, employees or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of any Confidential Information, and that neither the Disclosing Party nor any of its representatives, employees or agents shall have any liability whatsoever to the Receiving Party or to any of its Representatives relating to or resulting from the Confidential Information or any errors therein or omissions therefrom. 7. Remedies. The Receiving Party, in recognition that an irreparable injury may result to the Disclosing Party, if any provision of this Agreement is violated, agrees that upon any breach or threatened breach of any provision of this Agreement by the Receiving Party or any Representatives, that the City shall be entitled to seek an injunction or specific performance prohibiting such conduct or any other relief as may be permitted by law. 8. Return of Confidential Information. The Disclosing Party may at any time request that the Receiving Party promptly return to the Disclosing Party or destroy any or all documents or other materials containing Confidential Information of the Disclosing Party, and the Receiving Party shall immediately comply with any such request. Notwithstanding the return or destruction of the Confidential Information as contemplated by this subsection, the Receiving Party and its Representatives will continue to be bound by the terms of this Agreement with respect thereto, including all obligations of confidentiality. Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 9. Survival. The Receiving Party’s obligations of confidentiality and non- circumvention under this Agreement shall survive the termination of this Agreement. 10. General Provisions. (a) Entire Agreement. This Agreement contains the entire understanding between the Parties with respect to the Confidential Information and supersedes all prior communications, representations, understandings, or contracts, either written or oral, which purport to describe or embody the subject matter of this Agreement. This Agreement shall apply in lieu of and notwithstanding any specific legend or statement associated with any Confidential Information transferred. (b) Governing Law and Jurisdiction. This Agreement shall be interpreted and construed pursuant to the laws of the State of California without regard to its conflicts of laws principles. The Receiving Party agrees that this Agreement may be enforced in the courts of the State of California and, by executing this Agreement, the Receiving Party submits to the jurisdiction of any federal or state court in California for the resolution of any dispute under this Agreement. (c) Waiver; Amendment. None of the terms or conditions of this Agreement may be amended or waived except in writing signed by the Parties. The Parties agree that no waiver, amendment, or modification of this Agreement shall be established by conduct, custom, or course of dealing. The failure by any Party at any time or times to require performance of any provision hereof will in no manner affect its right at a later time to enforce the same. (d) Assignment. This Agreement shall not be assignable without the prior written consent of the non-assigning Party, and such consent may not be unreasonably withheld. Any assignment attempted in violation of this paragraph shall be void. (e) Severability. If any term of this Agreement is found to be invalid by a court of competent jurisdiction then such term shall remain in force to the maximum extent permitted by law. All other terms shall remain in force unless that term is determined not to be severable from all other provisions of this Agreement by such court. (f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original part, all of which together shall constitute one and the same instrument. (g) Successors and Assigns. The benefits of this Agreement shall inure to the respective successors and assigns of the Parties hereto, and the obligations and liabilities assumed in this Agreement by the Parties hereto shall be binding upon their respective successors and assigns. (h) Ownership Rights Not Created. The transfer of Confidential Information hereunder shall not be construed as granting a license of any kind or any right of ownership in the Confidential Information. (i) No Obligation to Disclose. Nothing in this Agreement shall obligate the City to disclose specific Confidential Information to the Receiving Party. Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective Date. JUST ENERGY RESOURCES LLC DBA JUST ENERGY _______________________________ By: Title: CITY OF PALO ALTO ____________________________ James Keene City Manager Approved as to Form ___________________________ Amy Bartell Senior Deputy City Attorney Professional Services Rev Feb. 2014 DocuSign Envelope ID: 7C68E79D-EE15-43D0-84D0-6B72723899B0 EVP Gerardo Manalac City of Palo Alto (ID # 4829) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Adoption of Resolution of Intent to Establish Utility Underground District No. 46 Title: Adoption of a Resolution of Intent to Establish Utility Underground District No. 46 (Arastradero Rd/El Camino Real/ W. Charleston Rd) by Amending Section 12.16.020 of the Palo Alto Municipal Code From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council adopt the attached Resolution of Intent to establish Underground Utility District No. 46 (UUD 46) by amending Section 12.16.020, of Chapter 12.16 of Title 12, of the Palo Alto Municipal Code (Resolution of Intent). Background As part of the City’s goal of undergrounding all overhead utility lines, staff works with AT&T California (AT&T, co-owner of the utility poles) and Comcast of California IX, Inc. (Comcast) on establishing the underground district boundaries. The areas selected are based on rules and guidelines followed by the City and rules established by the California Public Utilities Commission (CPUC) that govern AT&T’s financial participation in the project. Comcast leases space on the poles from AT&T and is required to participate in the undergrounding of their lines in order to maintain service continuity to their customers. The boundaries of UUD 46 run along Arastradero Road, El Camino Real and W. Charleston Road, as described more particularly in the map attached to this Staff Report as Exhibit B. AT&T has agreed that UUD 46 meets the City and CPUC rules for undergrounding overhead utility lines. Exhibit C provides additional background and history on undergrounding of electric utilities. Discussion The formation of UUD 46 will result in the removal of 3 poles and placement of existing overhead electric distribution lines and communication lines (telephone, Cable TV (CATV), fiber) within the boundaries of UUD 46 in underground conduits. This will include requiring underground service to 8 properties at the intersection of El Camino Real and City of Palo Alto Page 2 Arastradero/West Charleston Road. The overhead 60kV transmission line (as exempted in PAMC 12.16.050(a)(3)), and poles necessary to support them will remain. Completion of UUD 46 will enhance reliability of the electric distribution system while improving the aesthetics of this heavily traveled thoroughfare. Once the Resolution of Intent establishing UUD 46 is adopted, staff will design and obtain bids for the installation of the underground substructure required prior to placing the electric, telephone, CATV, fiber, street light and City communication facilities underground. After the new underground systems (cable, transformers, switches, etc.) have been installed, the property owners will connect to the new underground system, utilizing their own contractors. City crews will then remove the overhead power lines, and telephone crews will complete the project by removing the remaining telephone and CATV overhead facilities and the poles. On April 9, 2014 a letter was sent to the property owners within the proposed boundaries of UUD 46 introducing the project, inviting them to a community meeting to explain the details of the project and answer questions from the property owners, and soliciting comments via a questionnaire that was included with the letter. The property owner meeting was held on May 6, 2014 at 7:00 pm at 1007 Elwell Court. Out of the 8 properties within the district boundary, no property owners attended the meeting. Staff has received completed questionnaires from two (2) property owners, both of whom are not in favor of the project. Copies of these completed questionnaires are included in Exhibit D. Though the only feedback received from affected customers did not support the project, staff recommends that the Resolution of Intent be adopted because:  The utility lines within the boundaries of UUD 46 are some of the few that remain overhead along El Camino Real and they are most visible when entering Palo Alto from the south. The visual impact of the electric distribution, telecommunications, cable television, and fiber optic lines will be significantly reduced when the project is completed.  The existing wood poles are in need of replacement because they are currently showing signs of deterioration. Undergrounding the lines in UUD 46 would eliminate the need to replace them.  Undergrounding will increase electric service reliability for customers served by this line by reducing the number of wood poles that are vulnerable to car/pole accidents at a major City intersection. Timeline The first step in the establishment of UUD 46 is the adoption of the Resolution of Intent. The Resolution of Intent defines the UUD 46’s boundaries and sets a time and place for a public City of Palo Alto Page 3 hearing on the matter. The public hearing has been tentatively scheduled for the City Council meeting on October 6, 2014. At the public hearing, the property owners and other interested members of the public will have an opportunity to comment on the project. The adoption of the Resolution of Intent will also serve as a formal action that is required by AT&T and Comcast prior to starting engineering design. The table below shows the major steps involved for completion of UUD 46: Action Date 1. Adoption of Resolution of Intent to establish Underground District No. 46 June 23, 2014* 2. Public Hearing October 6, 2014* 3. Second Reading of Ordinance November 3, 2014* 4. Award of construction contract and Joint Construction Agreement with AT&T/Comcast March 2015* 5. Substructure (conduits, vaults, etc.) installation by Contractor April 2015 through May 2015 6. Installation of electric underground facilities (cable, switches, etc.) June 2015 through September 2015 7. Resolution determining properties electing to pay service conversion cost over a period of 10 years September 2015* 8. Service conversion work by property owners October 2015 through November 2015 9. Installation by other utilities, service conversion work, removal of overhead distribution facilities, and project completion November 2015 through June 2016 * Denotes Council Action Resource Impact Funds for UUD 46 (EL-12001) are included in the FY 2014 Adopted Capital Budget, and additional funding is programmed in the FY 2015 Proposed Capital Budget. The only cost to the property owners will be that of replacing the overhead service drops to their buildings with underground service. The property owners of the four commercial buildings within the district will not incur any cost since their service is already underground. There are 4 residential properties that will require service conversion work. It is estimated that the average cost per property owner will be approximately $6,000. Property owners will be offered the option of financing their service conversions under Section 12.16.091 of Palo Alto Municipal Code which provides for City loans to property owners to fund the service conversions. Property owners repay the loan and administrative costs, which are added to their property tax bills, over a ten- year period, at an interest rate approved by the Council. Policy Implications City of Palo Alto Page 4 The resolution of intent does not represent any change to existing City policy and is consistent with the Council-approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. Environmental Review This project is categorically exempt from the California Environmental Quality Act under Section 15302(d) of Title 14, Division 6, Chapter 3 of the California Code of Regulations (conversion of overhead electric utility distribution system facilities to underground). Attachments:  Attachment A: Resolution - Underground Utility District 46 (PDF)  Exhibit B: Underground District 46 Boundary Map (PDF)  Exhibit C: Undergrounding History and Background (PDF)  Exhibit D: Received Completed Questionnaires (PDF) NOT YET APPROVED Resolution No. ______ Resolution of the Council of the City of Palo Alto Declaring Its Intention to Amend Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code by Establishing Underground Utility District Number 46 R E C I T A L S The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. In its opinion, the public necessity, health and safety require, and it is the intention of the Council, pursuant to Section 12.16.040 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”), to amend Section 12.16.020 of Chapter 12.16 of the Code, by ordering the establishment of an Underground Utility District (“District”) and to prohibit the construction in and require the removal from the proposed District of all poles and overhead lines and associated overhead structures used or useful in supplying electric, communication or similar and associated services with the exception of the City’s sixty kilovolts transmission lines and associated poles pursuant to Section 12.16.050 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”). SECTION 2. The number of the proposed District is Underground Utility District Number 46 of the City of Palo Alto, commonly known as Colorado Avenue/Middlefield Road/Oregon Expressway/Cowper Street. SECTION 3. The description of the area comprising the District is as follows: “All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of Arastradero Road/West Charleston Road/El Camino Real. Underground Utility District Number 46,” on file in the office of the City Clerk.” SECTION 4. From and after the effective date of the establishment of the proposed District, no person or utility shall erect or construct within the District any pole, overhead lines or associated overhead structure used or useful in supplying electric, communication or similar associated services. SECTION 5. Within ninety (90) days from the date of the completion and acceptance of the proposed underground facilities within the District to be constructed by the City of Palo Alto, Pacific Bell Telephone Company doing business as AT&T California, and Comcast of California IX, Inc., all poles and overhead lines and associated structures used or useful in supplying electric, communication or similar and associated services in the proposed District shall be removed, and from and after the date no person or utility shall use or maintain 1 140611 jb 0180046 NOT YET APPROVED such facilities within the proposed District. Additional notice shall be given after the completion date has been precisely determined. SECTION 6. NOTICE IS HEREBY GIVEN that Monday, the 6th day of October, 2014, at the hour of 7:00 p.m., in the regular meeting place of its City Council, Civic Center, Palo Alto, California, is hereby fixed as the time and place when and where the Council shall hear all protests and receive evidence for and against the action herein proposed, and when and where the Council shall consider and finally determine whether the public necessity, health and safety require the establishment of the District and the removal of poles, overhead wires, and associated overhead structures, and the underground installation of wires and facilities for supplying electric, communication and similar or associated services in the District hereinabove described. SECTION 7. At the public hearing, all persons interested shall be given an opportunity to be heard. The hearing may be continued from time to time as determined by the Council. SECTION 8. The Electrical Engineering Manager, Department of Utilities, City of Palo Alto, is hereby designated as the person to answer inquiries regarding the protest proceedings, to be had herein and may be contacted during regular office hours at 1007 Elwell Court, Palo Alto, California, 94303, or by calling (650) 566-4548. SECTION 9. The Clerk of the City shall give notice of the public hearing by publishing notice of the public hearing and the director of utilities shall mail copies of this resolution to all property owners within the proposed District as shown on the last equalized tax roll of the City, and to all utilities supplying electric, communication or similar or associated services within the proposed District, the mailing to be completed at least thirty (30) days prior to the date of the public hearing. The Clerk is authorized to include in the notice to be mailed a statement to the effect that any affected property owner has the option of paying the cost of converting his or her or their service connection to underground locations over a period of years. Such notice shall conform to Section 12.16.092 of Chapter 12.16 of Title 12 of the Code. // // // // // // 2 140611 jb 0180046 NOT YET APPROVED // SECTION 10. This project is categorically exempt from the California Environmental Quality Act under Section 15302(d) of Title 14, Division 6, Chapter 3 of the California Code of Regulations (conversion of overhead electric utility distribution system facilities to underground). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ______________________________ _________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ______________________________ _________________________ Senior Asst. City Attorney City Manager _________________________ Director of Utilities 3 140611 jb 0180046 El Ca m i n o R e a l Pena Ct McKe l l a r L n I r v e n C t Ma y b e l l A v e Alta Mesa Av e Thain Way 531 535 539 4175 4170 W. C h a r l e s t o n R d . 4195 4191-4 1 9 3 473 474 471 476 4211 535 540 541 551 556 562 557 554 4170 544 548 536 550 4222-4 2 2 4 4220 4214-4 2 1 6 4218 Ar a s t r a d e r o R d . 550 544 549 553 566 5604174 529 4185 565 4200 530 570 4180 550 531 538 532 4190 496 488 470 4173 464 468 El Ca m i n o R e a l Boundary Map Underground District No. 46 California UTILITIES, ELECTRIC ENGINEERING City of Palo Alto LEGEND Project Boundary Feb 2014 Tom Ting SR. ENGINEER / MANAGER CHKD. APPROVED DRWN ENGR.JV SHEET MAP #CKT # REV.DATE NTS SCALE APPR. 11OF W.O.# / DRAWING # DESCRIPTION ATTACHMENT C BACKGROUND AND HISTORY ON UNDERGROUNDING OF ELECTRIC UTILITIES BACKGROUND History of Undergrounding The City of Palo Alto began a program to underground overhead electric, telephone, and cable TV facilities in 1965 with a project along Oregon Expressway. Since that time 42 Underground Districts have been formed. The main reasons for starting the undergrounding program in Palo Alto were to improve the aesthetics of the neighborhoods and to improve service reliability by reducing the impacts of weather on the electric distribution system. To establish the undergrounding program, the city amended the Municipal Code adding Chapter 12.16 titled Underground Utilities. All new development after 1965 was required to have underground facilities. This requirement resulted in the undergrounding of electric facilities for most of the commercial areas outside of the older commercial developments in the University Avenue and California Avenue districts. Types of Underground Districts Rules for establishing an underground district in the City are covered by Utility Rule and Regulation 17. This rule establishes three types of underground districts: General Public Benefit, Primarily of Local Public Benefit, and areas that do not qualify under the preceding types. General Public Benefit projects are established by the City and the City pays for the installation of the electric system in the public right- of-way (ROW) and the residents pay for conversion of the facilities on their property. In the remaining two conversion area types, the residents must request the underground district and fund the service conversion on their property as well as a portion of the utility costs in the public ROW. Most of the projects completed have been established under the General Public Benefit provision. Joint Construction on Utilities Poles The poles within the City of Palo Alto are jointly owned with AT&T or in some cases jointly owned with AT&T and PG&E. Comcast leases space on the poles from AT&T for the attachment of cable TV cables. Due to the joint ownership of the poles, underground districts require agreement by the other joint owners. Once agreement on the Underground District boundaries has been reached, the conduits and structures are jointly constructed. Joint construction is used to reduce costs and coordinate the construction to minimize impacts on the neighborhoods. Agreement on Underground District boundaries by AT&T is subject to AT&T’s ability to recover its costs pursuant to California Public Utilities Commission’s (CPUC) Schedule A2 Rule 32 on undergrounding which specifies the criteria for different levels of financial participation by AT&T. The applicable section of Rule 32 is critical to the financial viability of the underground project. If a project qualifies under section A.1 of Rule 32, the project has been found to have General Public Benefits, and AT&T and Comcast fund all the their improvements in the public right-of-way. If it is determined that Rule 32A.2 or 32A.3 are applicable to the project, the cost responsibility for the Cable TV and Telephone conduits and other structures shifts either to the City or to the residents. In the past, once AT&T had determined that the proposed area did not qualify under Rule 32A.1 the City has cancelled the underground project because of the increased costs to the Electric Utility and moved forward on undergrounding projects in areas where the telephone company would participate. Currently there are only a few small areas where the telephone company will participate. To facilitate the coordination between the parties in an Underground District, a master agreement has been signed by the City, AT&T, and Cable TV. This master agreement is amended each time an underground district is formed to include the new Underground District. Funding for Underground Districts General Benefit Undergrounding was funded at approximately 2% of annual electric revenues. Beginning in 1998, funding was reduced to 1% per year due to the need to shift electric resources to rebuilding aging infrastructure. The current funding which has been recently returned to 2% of annual electric revenues converts, on average, electric facilities for approximately 150 to 200 homes per year. The reduction in funding to 1% of revenues for underground districts was initiated about 10 years ago to “free up” revenues and resources to focus on replacing underground facilities reaching the end of their useful lives. Cables installed in the sixties and seventies had an expected cable life of 30 years. In the late nineties a significant portion of the city’s underground system had exceeded its expected life and failures were beginning to occur at an increasing rate. To reduce the rate of failure, an accelerated infrastructure program was initiated to replace the cables that had exceeded their life expectancies. Because of staffing constraints the underground program was temporarily scaled back. Costs that AT&T can recover from its rate payers for funding General Public Benefit Undergrounding under Rule 32A.1 are limited. The restrictions on AT&T’s funding limit the City’s ability to accelerate the undergrounding program beyond 2% of revenues while still receiving the full rule 32A.1 level of participation from AT&T. In addition the cost of the required service conversions on private property is borne by the individual owners in accordance with Utility Rule and Regulation No.17. This cost can range from $5,000 to $8,000. In order to reduce the burden of the service conversion cost to property owners in underground districts the property owners are offered the option of financing their service conversion costs over a period of ten years with interest in accordance with the procedure given in Section 12.16.090 through 12.16.096 of the Palo Alto Municipal Code. The CMR that accompanies this document seeks approval of a resolution listing property owners electing to participate in the service conversion financing offered by the City. Budgeting Funding for the Underground Districts is approved by the City Council during the annual budget process. In addition to the current fiscal year’s funding, staff also provides four additional years of projected funding for proposed undergrounding projects. These future projects are not approved for construction until the budget for these projects is approved each fiscal year. Each year staff reevaluates the future year recommendations and proposes changes based on additional information acquired since the last budget cycle including AT&T’s participation in covering project costs. Selecting Underground Districts Proposed undergrounding districts are determined by applying the priorities in Rule 17 and negotiations with AT&T as joint pole owners. In addition, Comcast, which leases pole space from AT&T, must also fund part of the underground costs to move their facilities. The City Electric Utility takes the lead in proposing boundaries for an underground project. AT&T’s agreement is driven by its ability to recover costs under rules that differ from Utility Rule and Regulation No. 7. Recently the City was advised by AT&T that the proposed underground district planned for FY 2007-08 did not qualify under section A.1 of Rule 32, and that AT&T would be unable to fund all the improvements in the public right-of-way, resulting in the cost responsibility for the telephone substructure shifting to the City or the residents within the proposed districts. To give a perspective on this impact, the present cost to the City for undergrounding is about $15,000 per home. This does not include the additional cost for each homeowner of about $5,000 for their service conversion. If the City continues undergrounding without AT&T and Comcast reimbursements, the cost to the City per home increases to approximately $20,000, an increase of 33%. Future of Program The overhead lines for approximately 14,100 homes remain to be undergrounded and the current program undergrounds facilities for approximately 200 homes per year. If the City were to proceed with the program without AT&T and Comcast reimbursements at the present funding rate of 2% of annual electric revenues, it is expected to take approximately 100 years more to complete the undergrounding of the entire city at a cost of $296,100,000. This is based on the current value of the dollar. Under the current program the electric rate payers would be responsible for funding approximately $225,600,000 and the property owners would be responsible for funding about $70,500,000 of total cost. In light of the recent position taken by AT&T to suspend participation in undergrounding of utilities where AT&T is not able to recover costs from its ratepayers, staff is reviewing with AT&T and Comcast potential undergrounding project areas in the City. If an agreement is reached with AT&T on additional areas for undergrounding of utilities, then staff will obtain Council approval for undergrounding of such areas to continue the undergrounding program. Parcel # Property Owner(s): Address of Property: UNDERGROUND CONVERSION PROJECT DISTRICT NUMBER 46 QUESTIONNAIRE Do n ()" J A~,QCS]» ~ K<tihkrz n em V'i VlMr L(15? 5 fJ.l+~ fYl Es rA AU6f\)A{Z Mailing Address (if not the same as above): _____________ _ l!We, the property owner(s) of the above property am (are) in favor of the Underground Conversion Project: , DYeS, , e DHave no p"ferenc~ " ' If ttw vn'\dev-~r'()ftI~J'I1, {l\c/~~G! AH-ul n~t'S(A bo-t~ S(ote.s~wt W()/)vld fU1J(jy\ If the meter were to be relocated during service conversion, I (We) prefer the electric meter (while facing the property from the street) on the, [JRight Side l!We plan to attend the meeting on March 26, 2014 at 1007 Elwell Ct DYes Signature(s):-I.L...s.L:..:.~t.....+~~~L======::-='-·::"'-·"_-'·_·· _______ _ I Instructions: I Please return this form by May 6,2014 Note: If you prefer to receive all future notifications on this project via email, please provide your email address: UNDERGROUND CONVERSION PROJECT DISTRICT NUMBER 46 QUESTIONNAIRE Parcel # Property Owner(s): /9 /111M ~ !t:I7 U/iJ {]{) IV /iJ <5 L Address of Property: J.J/f" /?l2l?dt,e ti./) ££0 .£~ Mailing Address (if not the same as above): l!We, the property owner(s) of the above property am (are) in favor of the Underground Conversion Project: / ~.~ t1nII4-,;:~ DYes iNo OHavenopreferencf~.:~ ~ (!.uyn~-??n.~"'-'U~r- ' . ..:tIic.J ~ If the meter were to be relocated during service conversion, I (We) prefer the e~meter (while facing the property from the street) on the, DRight Side DLeft Side l!We plan to attend the meeting on March 26, 2014 at 1007 Elwell Ct ~es DNo Signature(s):_~_-:;... ___ a __ ··_, -~~-':'---";:;;'-T------------- I Instructions: I Please return this form by May 6, 2014 ~ If you prefer to receive all future notifications on this project via email, please provide your email address: ~ __ ~ _______________ _ City of Palo Alto (ID # 4811) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Boronda Reservoir Seismic Upgrade Project Title: Approval of a Water Enterprise Fund Contract with DN Tanks, Inc. In a Total Not to Exceed Amount of $1,534,842 for the Seismic Upgrade of the Boronda Reservoir Project WS-09000-501 From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached contract with DN Tanks, Inc. (Attachment A) in a total not-to-exceed amount of $1,395,311 for seismic upgrades to the Boronda Reservoir WS-09000-501. Staff also recommends that Council approve and authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with DN Tanks, Inc. for related additional but unforeseen work, which may develop during the project, the total value of which shall not exceed $139,531 or 10% of the contract’s not-to-exceed amount, which when combined with the contract’s not to exceed amount of $1,395,311 shall not exceed a total in the amount of $1,534,842. Background The City of Palo Alto (City) maintains a water system consisting of nine pressure zones, five receiving stations from the SFPUC’s Hetch Hetchy aqueduct system, seven reservoirs, seven booster pumping stations, eight wells and approximately 234 miles of water transmission and distribution mains. The City’s primary source of potable water, since 1962, has been the Hetch Hetchy aqueduct system. This construction contract supports the ongoing efforts to improve the City’s water distribution system to be able to supply water during emergency periods when the traditional supply is not available. The California Department of Public Health (CDPH) recommends that water systems have the ability to supply an 8 hour maximum day demand plus have a sufficient supply of water to fight fires during periods of supply curtailment. The recommended capital improvements were addressed in the Water Wells, Regional Storage and Distribution System Study (1999 Study), which the Utilities Advisory Commission (UAC) and Council supported. City of Palo Alto Page 2 During the project development, an Environmental Impact Report (EIR) titled “City of Palo Alto Emergency Water Supply and Storage Project” was prepared and approved by Council on March 5, 2007 (CMR 161:07). The project description in the EIR proposed implementing capital improvements which would allow the City to provide water in the event of an emergency. The seismic upgrade of the Boronda Reservoir (a 1.5 million gallon reinforced concrete reservoir) is one of the recommended capital improvements projects that will provide stored water supply during an emergency, when the San Francisco aqueducts are out of service. A project location map is provided in Attachment B. Discussion The Seismic Upgrade of Boronda Reservoir Project was originally part of the Seismic Upgrade of Mayfield and Boronda Reservoir Project that was awarded to Anderson Pacific Engineering Construction, Inc. in November 2011 (Staff Report ID #2212). Because of operational constraints of the City’s water system, only one of these two reservoirs could be taken out of service at a time for construction. Retrofit work at the Mayfield Reservoir started in May 2012 and was completed in October 2012. Once construction was completed and the Mayfield Reservoir was filled, it was found that the reservoir was leaking at a rate higher than what is allowed by current standards. As a result, City staff determined that the Mayfield Reservoir needed to be taken offline and repaired immediately, as referenced in the September 16, 2013 Council-approved staff report (ID# 4057). Because the Mayfield and Boronda Reservoirs cannot be taken out of service at the same time, the Boronda portion of the work was terminated from the construction contract with Anderson Pacific in order to avoid any contractor delay claims. The City then worked with its consultant, URS Corporation, to repackage and rebid a separate construction contract for the Boronda reservoir work. (ID #4369). The City issued the repackaged Request for Proposal (RFP) for the Boronda Reservoir work on April 17, 2014 (RFP #153686). This construction contract will provide construction services to seismically upgrade the Boronda Reservoir, which is a reinforced concrete tank, to ensure reliability during a seismic event. Work at the Boronda Reservoir site includes removal of exterior shotcrete (sprayed structural concrete) and pre-stressed steel cables, re-wrapping of pre-stressed steel cables, installation of a new ring foundation, tie-downs from the reservoir to the new foundation, and re-application of shotcrete. In addition, construction will include seismic bracing for pipes, anchorage for the roof and miscellaneous appurtenances, and recoating of the existing piping. The work is being performed by contract because the project resource requirements are beyond City’s personnel and equipment capacity. URS Corporation will be the Engineer of Record for this project and will provide construction management and specialty inspections throughout construction, pursuant to the January 13, 2014 Council-approved Amendment No. 1 to Contract No. C10131413 (ID #4369). Construction is currently expected to begin in July 2014 and will be completed by the end of April 2015. Summary of Solicitation Process City of Palo Alto Page 3 Bid Name/Number Seismic Upgrade of Boronda Reservoir, IFB Number 153686 Proposed Length of Contract 270 Calendar Days Number of Bids Mailed to Contractors 7 Number of Bids Mailed to Builder’s Exchanges 8 Total Days to Respond to Bid 27 Days Pre-Bid Meeting? Yes (Mandatory) Number of Company Attendees at Pre-Bid Meeting 10 Number of Bids Received 1 Bid Price Range $1,395,311 Company Name Location (City, State) Amount* DN Tanks, Inc. El Cajon, CA $1,395,311 *Bid summary provided in Attachment C. As noted above, the City received only one bid for this work from DN Tanks, Inc. The likely reason for receiving one bid is that retrofit work on a reinforced concrete tank requires highly specialized skills. To ensure the quality of the work, the City required that the contractor be a specialized tank contractor in the rehabilitation of AWWA D-110 reinforced concrete tanks and have seismically upgraded at least ten reinforced concrete tanks in the last ten years. DN Tanks was the only qualified and experienced firm that submitted a bid. DN Tanks had also successfully completed repair work on the Mayfield Reservoir (a 4 million gallon reinforced concrete reservoir) as previously referenced (ID# 4057). Additional details concerning DN Tanks is provided in the IFB Construction Contract Agreement Justification attached to this staff report at Attachment D. Staff has reviewed the submitted bid and recommends that the bid of $1,395,311 submitted by DN Tanks, Inc. be accepted and DN Tanks, Inc. be declared the lowest responsible bidder. The bid is 22% percent below the engineer’s estimate of $1,798,500. The change order amount of $139,531, which equals 10% of the total contract, is requested for additional unforeseen work that may develop during the project. This 10% contingency amount is requested to address unknown existing conditions of the Boronda Reservoir foundation. The exact structural conditions of the reservoir will be unknown until the existing shotcrete has been removed from the exterior of the reservoir. Staff confirmed with the Contractor’s State License Board that the contractor has an active license on file, and checked the references supplied by the contractor for previous work performed and found no significant complaints. Resource Impact Funding for this project, including contingency, totals to $1,534,842. The project is budgeted in CIP WS-09000. Staff does not have the ability to perform the specialized work in-house. This project will be managed by URS Corporation through a previously approved contract (ID #4369). City of Palo Alto Page 4 Policy Implications The approval of this Water Enterprise Fund construction contract is consistent with existing City policies. This recommendation is consistent with the Council-approved Utilities Strategic Plan (Staff Report 1880), especially Key Strategy No. 1, “Ensure a high level of system reliability in a cost effective and timely manner.” Environmental Review Council’s award of this contract is categorically exempt from review under the California Environmental Quality Act (CEQA), under Section 15301 (repair and maintenance of existing facilities) of the CEQA Guidelines. Attachments:  Attachment A: Contract (PDF)  Attachment B: Location Map (PDF)  Attachment C: Bid Summary (PDF)  Attachment D: Executive Summary (PDF) CONSTRUCTION CONTRACT Contract No. C14153686 City of Palo Alto “Boronda Reservoir Seismic Upgrade Project” Invitation for Bid (IFB) Package 1 Rev. January 2014 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. ......................................................... 5 1.1 Recitals. ................................................................................................................................................... 5 1.2 Definitions. ............................................................................................................................................ 5 SECTION 2 THE PROJECT. .................................................................................................................... 5 SECTION 3 THE CONTRACT DOCUMENTS. ......................................................................................... 5 SECTION 4 CONTRACTOR’S DUTY. ...................................................................................................... 6 SECTION 5 PROJECT TEAM. ................................................................................................................. 7 6.1 Time Is of Essence. .............................................................................................................................. 7 6.2 Commencement of Work. ................................................................................................................ 7 6.3 Contract Time. ...................................................................................................................................... 7 6.4 Liquidated Damages. .......................................................................................................................... 7 6.4.1 Other Remedies. ....................................................................................................... 7 6.5 Adjustments to Contract Time. ....................................................................................................... 8 SECTION 7 COMPENSATION TO CONTRACTOR. ................................................................................ 8 7.1 Contract Sum. ....................................................................................................................................... 8 7.2 Full Compensation. ............................................................................................................................. 8 SECTION 8 STANDARD OF CARE. ........................................................................................................ 8 SECTION 9 INDEMNIFICATION. ........................................................................................................... 8 9.1 Hold Harmless. ..................................................................................................................................... 8 9.2 Survival. .................................................................................................................................................. 9 SECTION 10 NONDISCRIMINATION. ................................................................................................... 9 SECTION 11 INSURANCE AND BONDS. ............................................................................................... 9 SECTION 12 PROHIBITION AGAINST TRANSFERS............................................................................... 9 SECTION 13 NOTICES ……………………………………………………………………………………………………………………. 10 13.1 Method of Notice ………………………………………………………………………………………………………………10 13.2 Notice Recipents ……………………………………………………………………………………………………………….10 13.3 Change of Address. ........................................................................................................................... 10 SECTION 14 DEFAULT. ......................................................................................................................... 11 Invitation for Bid (IFB) Package 2 Rev. January 2014 CONSTRUCTION CONTRACT 14.1 Notice of Default. .............................................................................................................................. 11 14.2 Opportunity to Cure Default. ........................................................................................................ 11 SECTION 15 CITY'S RIGHTS AND REMEDIES. ...................................................................................... 11 15.1 Remedies Upon Default. ................................................................................................................. 11 15.1.1 Delete Certain Services. .......................................................................................... 11 15.1.2 Perform and Withhold. ........................................................................................... 11 15.1.3 Suspend The Construction Contract. .................................................................... 11 15.1.5 Invoke the Performance Bond. ............................................................................. 12 15.1.6 Additional Provisions. ............................................................................................. 12 15.2 Delays by Sureties. ............................................................................................................................ 12 15.3 Damages to City. ................................................................................................................................ 12 15.3.1 For Contractor's Default. ........................................................................................ 12 15.3.2 Compensation for Losses. ...................................................................................... 12 15.4 Suspension by City ............................................................................................................................ 13 15.4.1 Suspension for Convenience. .......................................................................................... 13 15.5 Termination Without Cause. ......................................................................................................... 13 15.5.1 Compensation. ......................................................................................................... 13 15.5.2 Subcontractors. ........................................................................................................ 14 15.6 Contractor’s Duties Upon Termination. ..................................................................................... 14 SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES. ...................................................................... 14 16.1 Contractor’s Remedies. ................................................................................................................... 14 16.1.1 For Work Stoppage. ................................................................................................. 15 16.1.2 For City's Non-Payment. ......................................................................................... 15 16.2 Damages to Contractor. .................................................................................................................. 15 SECTION 17 ACCOUNTING RECORDS. ................................................................................................ 15 17.1 Financial Management and City Access. ................................................................................... 15 17.2 Compliance with City Requests. ................................................................................................... 15 SECTION 18 INDEPENDENT PARTIES. ................................................................................................. 15 SECTION 19 NUISANCE. ...................................................................................................................... 16 SECTION 20 PERMITS AND LICENSES. ................................................................................................ 16 SECTION 21 WAIVER. .......................................................................................................................... 16 SECTION 22 GOVERNING LAW AND VENUE....................................................................................... 16 Invitation for Bid (IFB) Package 3 Rev. January 2014 CONSTRUCTION CONTRACT SECTION 23 COMPLETE AGREEMENT. ................................................................................................ 16 SECTION 24 SURVIVAL OF CONTRACT. ............................................................................................... 16 SECTION 25 PREVAILING WAGES. ...................................................................................................... 16 SECTION 26 NON APPROPRIATION. ................................................................................................... 17 SECTION 27 AUTHORITY. .................................................................................................................... 17 SECTION 28 COUNTERPARTS .............................................................................................................. 17 SECTION 29 SEVERABILITY. ................................................................................................................. 17 SECTION 30 STATUTORY AND REGULATORY REFERENCES . ............................................................. 17 SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. ................................................................ 17 Invitation for Bid (IFB) Package 4 Rev. January 2014 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on June 23, 2014 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and DN TANKS, INC. ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a corporation duly organized and in good standing in the State of Delaware, Contractor’s License Number 979914. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. C. On April 17, 2014, City issued an Invitation for Bids (IFB) to contractors for the Seismic Upgrade of Boronda Reservoir (“Project”). In response to the IFB, Contractor submitted a Bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Contract Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. If there is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the “Seismic Upgrade of Boronda Reservoir Project”, Palo Alto, CA. ("Project"). SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders Invitation for Bid (IFB) Package 5 Rev. January 2014 CONSTRUCTION CONTRACT 2) Field Orders 3) Contract 4) Bidding Addenda 5) Special Provisions 6) General Conditions 7) Project Plans and Drawings 8) Technical Specifications 9) Instructions to Bidders 10) Invitation for Bids 11) Contractor's Bid/Non-Collusion Affidavit 12) Reports listed in the Contract Documents 13) Public Works Department’s Standard Drawings and Specifications (most current version at time of Bid) 14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current version at time of Bid) 15) City of Palo Alto Traffic Control Requirements 16) City of Palo Alto Truck Route Map and Regulations 17) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 18) Performance and Payment Bonds 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. SECTION 4 CONTRACTOR’S DUTY. Contractor agrees to perform all of the Work required for the Project, as specified in the Contract Documents, all of which are fully incorporated herein. Contractor shall provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including, but not limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless Invitation for Bid (IFB) Package 6 Rev. January 2014 CONSTRUCTION CONTRACT otherwise specified in the Contract Documents. Contractor also agrees to use its best efforts to complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents. SECTION 5 PROJECT TEAM. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Contract requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City’s Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed within two hundred seventy calendar days (270) after the commencement date specified in City’s Notice to Proceed. By executing this Construction Contract, Contractor expressly waives any claim for delayed early completion. 6.4 Liquidated Damages. Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time, including any approved extensions thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion, based on the amount of Two Thousand dollars ($2,000) per day, or as otherwise specified in the Special Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor, including, but not limited to, setoff against release of retention. If the total amount of liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from Contractor or its sureties. Occupancy or use of the Project in whole or in part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess liquidated damages. 6.4.1 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. Invitation for Bid (IFB) Package 7 Rev. January 2014 CONSTRUCTION CONTRACT 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and memorialized in a Change Order approved in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of One Million Three Hundred Ninety Five Thousand Three Hundred Eleven Dollars ($1,395,311). [This amount includes the Base Bid and Additive Alternates.] 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work, except as expressly provided herein. The Contract Sum may only be adjusted for Change Orders approved in accordance with the requirements of the Contract Documents. SECTION 8 STANDARD OF CARE. Contractor agrees that the Work shall be performed by qualified, experienced and well-supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter individually referred to as an “Indemnitee” and collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss, damage, claims, expenses (including, without limitation, attorney fees, expert witness fees, paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or omissions of Contractor, its employees, Subcontractors, representatives, or agents, in performing the Work or its failure to comply with any of its obligations under the Contract, except such Liability caused by the active negligence, sole negligence, or willful misconduct of an Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Except as provided in Section 9.2 below, nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. Invitation for Bid (IFB) Package 8 Rev. January 2014 CONSTRUCTION CONTRACT Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of any third-party claim relating to the Contract. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Contractor acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract in reliance upon the stated experience and qualifications of the Contractor and its Subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract and grounds for default in addition to any other legal or equitable remedy available to the City. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co-tenancy shall result in changing the control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed served on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (v) On the date it is accepted or rejected if sent by certified mail. Invitation for Bid (IFB) Package 9 Rev. January 2014 CONSTRUCTION CONTRACT 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copy to: City of Palo Alto Public Works Administration 250 Hamilton Avenue Palo Alto, CA 94301 Attn: AND City of Palo Alto Utilities Engineering 1007 Elwell Court Palo Alto, CA 94303 Attn: Romel Antonio In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be delivered personally or sent by certified mail. All notices, demands, requests or approvals from City to Contractor shall be addressed to: DN Tanks, Inc. 351 Cypress Lane El Cajon, CA 92020 13.3 Change of Address. In advance of any change of address, Contractor shall notify City of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. Invitation for Bid (IFB) Package 10 Rev. January 2014 CONSTRUCTION CONTRACT SECTION 14 DEFAULT. 14.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract, with a copy to Contractor’s performance bond surety. 14.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than ten (10) Days after receipt of such written notice. SECTION 15 CITY'S RIGHTS AND REMEDIES. 15.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 14, then City may pursue any remedies available under law or equity, including, without limitation, the following: 15.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 15.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 15.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Construction Contract for as long a period of time as City determines, in its sole discretion, appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 15.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 14. City’s election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. Invitation for Bid (IFB) Package 11 Rev. January 2014 CONSTRUCTION CONTRACT 15.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. 15.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall not waive the City’s authority to designate other breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City’s determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 15.2 Delays by Sureties. Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the date of the notice of termination, Contractor’s surety shall be deemed to have waived its right to complete the Work under the Contract, and City may immediately make arrangements for the completion of the Work through use of its own forces, by hiring a replacement contractor, or by any other means that City determines advisable under the circumstances. Contractor and its surety shall be jointly and severally liable for any additional cost incurred by City to complete the Work following termination. In addition, City shall have the right to use any materials, supplies, and equipment belonging to Contractor and located at the Worksite for the purposes of completing the remaining Work. 15.3 Damages to City. 15.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s default under the Contract Documents. 15.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor. If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the difference and shall promptly remit same to City. Invitation for Bid (IFB) Package 12 Rev. January 2014 CONSTRUCTION CONTRACT 15.4 Suspension by City 15.4.1 Suspension for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. 15.4.2 Suspension for Cause. In addition to all other remedies available to City, if Contractor fails to perform or correct work in accordance with the Contract Documents, City may immediately order the Work, or any portion thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction. Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents. City’s right to suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of the Contract Documents. 15.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s expense, comply with the notice and take all reasonable steps to minimize costs to close out and demobilize. The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. Termination pursuant to this provision does not relieve Contractor or its sureties from any of their obligations for Losses arising from or related to the Work performed by Contractor. 15.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the following to Contractor as Contractor’s sole compensation for performance of the Work : .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors: (i) Demobilizing and (ii) Administering the close-out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. Invitation for Bid (IFB) Package 13 Rev. January 2014 CONSTRUCTION CONTRACT .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. .4 Profit Allowance. An allowance for profit calculated as four percent (4%) of the sum of the above items, provided Contractor can prove a likelihood that it would have made a profit if the Construction Contract had not been terminated. 15.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. 15.6 Contractor’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Work to the extent specified in the notice; (ii) Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and (v) Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. Upon termination, whether for cause or for convenience, the provisions of the Contract Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees, submittals of as-built drawings, instructions, or manuals, or other such rights and obligations arising prior to the termination date. SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES. 16.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: Invitation for Bid (IFB) Package 14 Rev. January 2014 CONSTRUCTION CONTRACT 16.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of government, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension notice issued either for cause or for convenience. 16.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 16.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 15.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 17 ACCOUNTING RECORDS. 17.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. 17.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many enforce Contractor’s obligation to provide access to City of its business and other records referred to in Section 17.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 18 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’ of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. Invitation for Bid (IFB) Package 15 Rev. January 2014 CONSTRUCTION CONTRACT SECTION 19 NUISANCE. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 20 PERMITS AND LICENSES. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 21 WAIVER. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. SECTION 22 GOVERNING LAW AND VENUE. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no other place. SECTION 23 COMPLETE AGREEMENT. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 24 SURVIVAL OF CONTRACT. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final Completion or any termination of the Construction Contract. SECTION 25 PREVAILING WAGES. This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is Invitation for Bid (IFB) Package 16 Rev. January 2014 CONSTRUCTION CONTRACT funded one hundred percent (100%) by the City of Palo Alto. This Project remains subject to all other applicable provisions of the California Labor Code and regulations promulgated thereunder. SECTION 26 NON APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 27 AUTHORITY. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. SECTION 28 COUNTERPARTS This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. SECTION 29 SEVERABILITY. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. SECTION 30 STATUTORY AND REGULATORY REFERENCES. With respect to any amendments to any statutes or regulations referenced in these Contract Documents, the reference is deemed to be the version in effect on the date that the Contract was awarded by City, unless otherwise required by law. SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.” // // // // Invitation for Bid (IFB) Package 17 Rev. January 2014 CONSTRUCTION CONTRACT IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: ____________________________ Senior Deputy City Attorney DN TANKS, INC. By:___________________________ Name:________________________ Title:__________________________ Date: _________________________ Invitation for Bid (IFB) Package 18 Rev. December 2013 CONSTRUCTION CONTRACT May 2014 City of Palo Alto Boronda Reservoir Seismic Upgrades Palo Alto, California PROJECT LOCATION MAP EXHIBIT A N Source: TopoUSA 5.0 2004 (www.delorme.com) 012 Scale in Miles LEGEND City Boundary for City of Palo Alto Reservoir Attachment B CITY OF PALO ALTO BID SUMMARY Attachment C SEISMIC UPGRADE OF BORONDA RESERVOIR, WS-09000-501 Bid Date: 05-13-14 BID SUMMARY Engineer's Estimate DN Tanks, Inc. Item Quantity Description Unit Unit Unit Unit No.Price ($) Price ($) Price ($) Price ($) A: BASE BID 11 Mobilization, Demolition and sitework. All labor, equipment, material, and transportation to perform the demolition and sitework including mobilization, demobilization, excavating, hauling, and cleaning. $100,000.00 $121,701.00 21Removal, storage and reinstallation of existing site equipment and tank appurtenances, including fencing, monitoring equipment, antennas, signs. $10,000.00 $31,900.00 31Demolition including existing shotcrete, prestressing wire, ladder, paving, partial vault wall, trees. Removal of all demolished materials and safe transport to suitable landfill.$100,000.00 $57,444.00 4 700 Seal vertical core wall joints and wall/floor circumferential joint inside tank. $105,000.00 $64,960.00 5 500 Repair roof cracks. $25,000.00 $36,019.00 6 500 Repair spalled concrete inside of tank. $25,000.00 $15,625.00 7 6 Saw cut drainage notches in roof. $15,000.00 $25,740.00 8 30 Install stainless steel roof to wall hold-down anchors. $150,000.00 $34,078.00 9 1 Install Miscellaneous Metals: Roof vent hatch, exterior ladder. $20,000.00 $19,800.00 10 1 Valve Vault Structural Rehabilitation: Restore demolished wall portions, rehabilitate pipe penetrations, replace roof and install new vents and hatch.$100,000.00 $60,500.00 11 1 Valve Vault Mechanical Rehabilitation: Replace 4 plug valves, 1 check valve, install 2 flex adapters, pipe supports and hangars. Install new flex couplings and restrained couplings outside, adjacent to vault.$150,000.00 $52,800.00 12 1 Install exterior ring footing and seismic cables. Work includes excavation, forming, concrete, reinforcing steel, dowels, neoprene pads, and fasteners. $250,000.00 $155,800.00 13 1 Rewrap and shotcrete reservoir. $500,000.00 $487,100.00 14 1 Remove and replace coatings on existing interior pipes and ladder, exterior valve vault pipes and adjacent booster station.$25,000.00 $51,150.00 15 5,000 Install Asphalt Paving. Including all backfilling, base and subbase preparation required to pave, labor, equipment, material, and transportation to perform this work. $125,000.00 $93,501.00 Total of Base Bid (items 1 through 15 only, with all applicable taxes included) $1,700,000.00 $1,308,118.00 B: BID ALTERNATES 16 350 Install 4-inch subsurface perimeter drain $3,500.00 $27,528.00 17 1 Install Stainless steel rain gutters and downspouts. $30,000.00 $44,340.00 18 10,000 Install AC slurry seal over existing AC pavement. $50,000.00 $7,701.00 19 1 Install Roof Safety Cable System.$15,000.00 $7,624.00 Total of Bid Alternate (items 16 through 19 only, with all applicable taxes included) $98,500.00 $87,193.00 Total of Bid (items 1 through 19 only, with all applicable taxes included) $1,798,500.00 $1,395,311.00 Page 1   ATTACHMENT D        This project supports the ongoing efforts to improve the City’s water distribution system to be able to  supply water during emergency periods when the traditional supply is not available. The Boronda  Reservoir was constructed in 1960. The California seismic standards for construction of reinforced  concrete reservoirs have changed drastically over the past 50 years. Due to this, and the age of the  reservoir, staff has recommended that this reservoir be retrofitted to ensure the City will be able to  provide stored water supply during an emergency.  The Seismic Upgrade of Boronda Reservoir Project  was originally part of the Seismic Upgrade of Mayfield and Boronda Reservoir Project that was awarded  to Anderson Pacific Engineering Construction, Inc. (AP) in November 2011 (ID #2212). Retrofit work at  the Mayfield Reservoir started in May 2012 and was completed in October 2012. Once construction was  completed and the reservoir filled, it was found that the reservoir was leaking. As a result, staff  determined that the reservoir needed to be taken offline and repaired immediately. To ensure proper  water supply during construction, only one reservoir could be taken offline at a time. Because of this,  and in order to avoid any contractor delay claims, the Boronda Reservoir portion of the work was  terminated from the AP  contract. The Mayfield Reservoir has now been fully repaired and is back in  service. Therefore, construction at the Boronda Reservoir site can commence.       This construction contract will provide construction services to seismically upgrade the Boronda  Reservoir (a 1.5 million gallon reinforced concrete reservoir) to ensure reliability during a seismic event.  Work at the Boronda Reservoir site includes removal of exterior shotcrete (sprayed structural concrete)  and pre‐stressed steel cables, re‐wrapping of pre‐stressed steel cables, installation of a new ring  foundation, tie‐downs from the reservoir to the new foundation, and re‐application of shotcrete.  In  addition, construction will include seismic bracing for pipes, anchorage for the roof and miscellaneous  appurtenances, and recoating of the existing piping.       Due to the extent and nature of this work, a specialty tank contractor is needed for construction.  Therefore, the level of expertise needed for construction of the project prevented City staff from being  able to perform this work themselves.      Per current City policy, an Invitation for Bid (IFB) was issued by the Purchasing Department for this  project on April 17, 2014. The bid period was 27 days with a Bid Opening date of May 13, 2014. DN  Tanks, Inc. provided the sole bid for this work.  Because retrofit work on a reinforced concrete tank is  highly specialized and the extent of work to be done is quite extensive, the City required that the  contractor be a specialist tank contractor in the rehabilitation of AWWA D‐110 reinforced concrete tanks  and have seismically upgraded at least ten reinforced concrete tanks in the last ten years. DN Tanks, Inc.  is the only qualified and experienced firm able to complete this project.      ATTACHMENT D    DN Tanks is n or local business. They have offices located around the country, with their main  headquarters being located in El Cajon, California.      DN Tanks, Inc. has been awarded multiple contracts for similar work at other agencies around  the country over the past ten years.  This includes seismic retrofit work with the City of  Mountain View, City of Oakland and City of Daly City. In addition, the City recently contracted  with DN Tanks, Inc. to complete emergency leak repairs of the Mayfield Reservoir (ID #4057).      The City has previously worked with DN Tanks, Inc. on other utility type projects and has been  pleased with their performance. Most recently, DN Tasks, Inc. successfully completed  emergency repair work to the Mayfield Reservoir (ID #4057).       DN Tanks, Inc. will have 270 calendar days to complete construction. The Utilities Department is  expecting to issue a Notice to Proceed in July 2014 with a completion date of April 2015. Costs were  determined through the IFB process as discussed above.      There should be no amendments to the agreement.    None.    CITY OF PALO ALTO OFFICE OF THE CITY CLERK June 23, 2014 The Honorable City Council Palo Alto, California Second Reading: Adoption of a Park Improvement Ordinance for Hopkins Park (First Reading: June 9, 2014 PASSED: 8-0 Scharff absent) ATTACHMENTS:  Hopkins Park Ord (PDF) Department Head: Donna Grider, City Clerk Page 2 City of Palo Alto (ID # 4790) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Approval of a Contract for FY15 Preventive Maintenance Project Title: Approval of a Contract with Graham Contractors, Inc. in the Amount of $1,084,553, for the FY 2015 Preventive Maintenance Project, the 1st of 4 Contracts in the FY 2015 Street Maintenance Program Project (CIP PE-86070) From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve,and authorize the City Manager or his designee to execute,the attached contract with Graham Contractors, Inc. (Attachment A) in an amount not to exceed $1,084,553 for the FY 2015 Preventive Maintenance Project; and 2.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Graham Contractors, Inc. for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $108,456. Background The Public Works Engineering Services Division manages construction contracts for concrete repair, preventive maintenance, resurfacing and reconstruction of various city streets on an annual basis. The candidate streets are surveyed biannually by Public Works Engineering Services staff and then rated by a computerized pavement maintenance management system (PMMS). City of Palo Alto Page 2 Since 2003, the Public Works Engineering Services Division has implemented multi-phased resurfacing projects by bidding one phase for concrete repairs and preparation, a second phase for preventive maintenance and a third phase for asphalt concrete resurfacing. This method of phasing has proved to be more cost effective by avoiding the typical 15% markup that prime contractors place on work that is performed by their subcontractors. This typically includes all concrete and preventive maintenance work which had been included in the asphalt overlay contract. This contract is the preventive maintenance contract. Preventive maintenance includes roadway seals, base repairs and crack sealing. Discussion Project Description Staff is recommending approval of this contract, the first of four street resurfacing contracts to be approved for fiscal year 2015,as part of an enhanced program to improve the condition of Palo Alto’s streets. The work included in this project includes preventive maintenance of 28 lane miles of public streets (220,000 square feet). The contract will include 1,630 tons of asphalt road base repairs and 148,000 linear feet of crack sealing,including work on major streets such as Embarcadero, East and West Bayshore and Middlefield Roads. This contract also includes thermoplastic striping work in coordination with the Public Works Public Services Division. The streets included in this contract are shown on the project maps (Attachment B). Additionally, this contract includes work on University Avenue Parking District Parking Lots G, A and P. Extensive public outreach will be conducted before and during construction phase to inform the community step by step throughout the process, including flyers sent to adjacent residences and businesses, and notices posted on Nextdoor and the City’s website. In addition, staff will interface with the Palo Alto Downtown Business and Professional Association, neighborhood associations, and other organizations and businesses as appropriate. Bid Process On April 23, 2014,a notice inviting formal bids (IFB) for the FY 2015 Preventive Maintenance Project was posted at City Hall, and was sent to 8 builder’s exchanges and 5 contractors. The bidding period was 21 calendar days. Bids were received from five qualified contractors on May 13, 2014 as listed on the attached Bid Summary (Attachment C). City of Palo Alto Page 3 Summary of Bid Process Bid Name/Number FY 15 Preventive Maintenance Project IFB #154025 Proposed Length of Project 90 calendar days Number of Bid Packages emailed to Contractors 5 Number of Bid Packages emailed to Builder’s Exchanges 8 Total Days to Respond to Bid 21 Pre-Bid Meeting?No Number of Bids Received:5 Base Bid Price Range $1,041,993 to $1,273,273 Base bids ranged from a high of $1,273,273 to a low of $1,041,993 and from 1.5% above to 19%above the engineer’s estimate. Staff has reviewed all bids submitted and recommends that the base bid and Add Alternate 1 totaling $1,084,553 submitted by Graham Contractors, Inc. be accepted and that Graham Contractors, Inc. be declared the lowest responsible bidder. The change order amount of $108,456, which equals 10 percent of the total contract, is requested for related, additional, but unforeseen work which may develop during the project. The lowest responsible bidder, Graham Contractors, Inc. has worked with the City on previous preventive maintenance projects. Staff investigated the references and found no significant complaints. Staff also checked with the Contractor's State License Board and found that the contractor has an active license on file. Resource Impact Funding for the FY 2015 Preventive Maintenance Project is available in the following CIP Projects: PE-86070 Street Maintenance Program, PO-11001 Thermoplastic Pavement Marking and Striping, PL-04010 Bicycle and Pedestrian Plan Implementation, and PF-14003 University Avenue Parking District Maintenance. Funding allocation breakdown for each of the CIPs is in the table below. City of Palo Alto Page 4 Funding Source Contract Contingency Total Encumbrance 1 PE-86070 $954,446 $95,445 $1,049,891 2 PO-11001 $75,696 $7,570 $83,266 3 PL-04010 $35,200 $3,520 $38,720 4 PF-14003 $19,211 $1,921 $21,132 Totals $1,084,553 $108,456 $1,193,009 Policy Implications This project is in conformance with City of Palo Alto’s Comprehensive Plan and does not represent any changes to existing City policies. Environmental Review This proposed street resurfacing project is a minor alteration and repair to existing facilities and is categorically exempt from the California Environmental Quality Act (CEQA) section 15301c guidelines. Attachments: ·A -Contract (PDF) ·B -Project Maps (PDF) ·C -Bid Summary (PDF) ATTACHMENT A CONSTRUCTION CONTRACT Contract No. C15154025 City of Palo Alto and Graham Contractors, Inc. PROJECT: FY15 Preventive Maintenance Project Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 2 Rev. January 2014 CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. ......................................................... 5 1.1 Recitals. ...................................................................................................................................... 5 1.2 Definitions. ................................................................................................................................ 5 SECTION 2 THE PROJECT. .................................................................................................................... 5 SECTION 3 THE CONTRACT DOCUMENTS. .......................................................................................... 6 SECTION 4 CONTRACTOR’S DUTY. ...................................................................................................... 7 SECTION 5 PROJECT TEAM. ................................................................................................................. 7 6.1 Time Is of Essence. ................................................................................................................. 7 6.2 Commencement of Work. ................................................................................................... 7 6.3 Contract Time. ......................................................................................................................... 7 6.4 Liquidated Damages. ............................................................................................................. 8 6.4.1 Other Remedies ........................................................................................................ 8 6.5 Adjustments to Contract Time. .......................................................................................... 8 SECTION 7 COMPENSATION TO CONTRACTOR. ................................................................................. 8 7.1 Contract Sum. .......................................................................................................................... 8 7.2 Full Compensation. ................................................................................................................ 8 SECTION 8 STANDARD OF CARE. ........................................................................................................ 9 SECTION 9 INDEMNIFICATION. ........................................................................................................... 9 9.1 Hold Harmless. ........................................................................................................................ 9 9.2 Survival. ..................................................................................................................................... 9 SECTION 10 NONDISCRIMINATION. ................................................................................................... 9 SECTION 11 INSURANCE AND BONDS. ............................................................................................... 9 SECTION 12 PROHIBITION AGAINST TRANSFERS. .............................................................................. 10 SECTION 13 NOTICES ……………………………………………………………………………………………………………………. 10 13.1 Method of Notice ………………………………………………………………………………………………………………10 13.2 Notice Recipents ……………………………………………………………………………………………………………….10 13.3 Change of Address. ........................................................................................................................... 11 SECTION 14 DEFAULT. ......................................................................................................................... 11 Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 3 Rev. January 2014 14.1 Notice of Default. ................................................................................................................. 11 14.2 Opportunity to Cure Default. ............................................................................................ 11 SECTION 15 CITY'S RIGHTS AND REMEDIES. ...................................................................................... 12 15.1 Remedies Upon Default. .................................................................................................... 12 15.1.1 Delete Certain Services. .......................................................................................... 12 15.1.2 Perform and Withhold. ........................................................................................... 12 15.1.3 Suspend The Construction Contract. .................................................................... 12 15.1.5 Invoke the Performance Bond ............................................................................... 12 15.1.6 Additional Provisions. ............................................................................................. 12 15.2 Delays by Sureties. ............................................................................................................... 12 15.3 Damages to City. ................................................................................................................... 13 15.3.1 For Contractor's Default. ........................................................................................ 13 15.3.2 Compensation for Losses. ....................................................................................... 13 15.4 Suspension by City ............................................................................................................... 13 15.4.1 Suspension for Convenience. .......................................................................................... 13 15.5 Termination Without Cause. ............................................................................................ 14 15.5.1 Compensation. ......................................................................................................... 14 15.5.2 Subcontractors. ........................................................................................................ 14 15.6 Contractor’s Duties Upon Termination. ........................................................................ 14 SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES........................................................................ 15 16.1 Contractor’s Remedies. ...................................................................................................... 15 16.1.1 For Work Stoppage. ................................................................................................. 15 16.1.2 For City's Non‐Payment. ......................................................................................... 15 16.2 Damages to Contractor. ...................................................................................................... 15 SECTION 17 ACCOUNTING RECORDS. ................................................................................................. 15 17.1 Financial Management and City Access. ....................................................................... 15 17.2 Compliance with City Requests. ...................................................................................... 16 SECTION 18 INDEPENDENT PARTIES. ................................................................................................. 16 SECTION 19 NUISANCE........................................................................................................................ 16 SECTION 20 PERMITS AND LICENSES. ................................................................................................. 16 SECTION 21 WAIVER. .......................................................................................................................... 16 SECTION 22 GOVERNING LAW AND VENUE. ...................................................................................... 16 Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 4 Rev. January 2014 SECTION 23 COMPLETE AGREEMENT. ................................................................................................ 17 SECTION 24 SURVIVAL OF CONTRACT. ............................................................................................... 17 SECTION 25 PREVAILING WAGES. ....................................................................................................... 17 SECTION 26 NON APPROPRIATION ..................................................................................................... 17 SECTION 27 AUTHORITY. .................................................................................................................... 17 SECTION 28 COUNTERPARTS .............................................................................................................. 18 SECTION 29 SEVERABILITY. ................................................................................................................. 18 SECTION 30 STATUTORY AND REGULATORY REFERENCES ................................................................. 18 SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. ................................................................. 18 Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 5 Rev. January 2014 CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on June 23, 2014 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and Graham Contractors, Inc. ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a California corporation duly organized and in good standing in the State of California, Contractor’s License Number 315789. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. C. On April 23, 2014, City issued an Invitation for Bids (IFB) to contractors for the FY15 Preventive Maintenance Project (“Project”). In response to the IFB, Contractor submitted a Bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Contract Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. If there is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the FY15 Preventive Maintenance Project, located on various streets within, Palo Alto, CA. ("Project"). Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 6 Rev. January 2014 SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders 2) Field Orders 3) Contract 4) Bidding Addenda 5) Special Provisions 6) General Conditions 7) Project Plans and Drawings 8) Technical Specifications 9) Instructions to Bidders 10) Invitation for Bids 11) Contractor's Bid/Non‐Collusion Affidavit 12) Reports listed in the Contract Documents 13) Public Works Department’s Standard Drawings and Specifications (most current version at time of Bid) 14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current version at time of Bid) 15) City of Palo Alto Traffic Control Requirements 16) City of Palo Alto Truck Route Map and Regulations 17) Notice Inviting Pre‐Qualification Statements, Pre‐Qualification Statement, and Pre‐ Qualification Checklist (if applicable) 18) Performance and Payment Bonds 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 7 Rev. January 2014 shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. SECTION 4 CONTRACTOR’S DUTY. Contractor agrees to perform all of the Work required for the Project, as specified in the Contract Documents, all of which are fully incorporated herein. Contractor shall provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including, but not limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless otherwise specified in the Contract Documents. Contractor also agrees to use its best efforts to complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents. SECTION 5 PROJECT TEAM. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Contract requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City’s Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed not later than . within ninety calendar days (90) after the commencement date specified in City’s Notice to Proceed. By executing this Construction Contract, Contractor expressly waives any claim for delayed early completion. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 8 Rev. January 2014 6.4 Liquidated Damages. Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time, including any approved extensions thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion, based on the amount of Five Hundred dollars ($500.00) per day, or as otherwise specified in the Special Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor, including, but not limited to, setoff against release of retention. If the total amount of liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from Contractor or its sureties. Occupancy or use of the Project in whole or in part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess liquidated damages. 6.4.1 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and memorialized in a Change Order approved in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of One Million Eighty Four Thousand Five Hundred and Fifty Three Dollars and Fifteen Cents ($1,084,553.15). [This amount includes the Base Bid of One Million Forty‐One Thousand Nine Hundred Ninety Three Dollars and Forty Eight Cents ($1,041,993.48) and Additive Alternate #1 of Forty-Two Thousand Five Hundred Fifty‐Nine Dollars and Sixty Seven Cents ($42,559.67). ] 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work, except as expressly provided herein. The Contract Sum may only be adjusted for Change Orders approved in accordance with the requirements of the Contract Documents. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 9 Rev. January 2014 SECTION 8 STANDARD OF CARE. Contractor agrees that the Work shall be performed by qualified, experienced and well‐supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter individually referred to as an “Indemnitee” and collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss, damage, claims, expenses (including, without limitation, attorney fees, expert witness fees, paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or omissions of Contractor, its employees, Subcontractors, representatives, or agents, in performing the Work or its failure to comply with any of its obligations under the Contract, except such Liability caused by the active negligence, sole negligence, or willful misconduct of an Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Except as provided in Section 9.2 below, nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of any third‐party claim relating to the Contract. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Contractor acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 10 Rev. January 2014 SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract in reliance upon the stated experience and qualifications of the Contractor and its Subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract and grounds for default in addition to any other legal or equitable remedy available to the City. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co‐tenancy shall result in changing the control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed served on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (v) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copy to: City of Palo Alto Public Works Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Holly Boyd AND City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 11 Rev. January 2014 In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be delivered personally or sent by certified mail. All notices, demands, requests or approvals from City to Contractor shall be addressed to: Graham Contractors, Inc. 860 Lonus Street San Jose, CA 95126 Gerald R. Graham, Jr. 13.3 Change of Address. In advance of any change of address, Contractor shall notify City of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. SECTION 14 DEFAULT. 14.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract, with a copy to Contractor’s performance bond surety. 14.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than ten (10) Days after receipt of such written notice. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 12 Rev. January 2014 SECTION 15 CITY'S RIGHTS AND REMEDIES. 15.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 14, then City may pursue any remedies available under law or equity, including, without limitation, the following: 15.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 15.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 15.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Construction Contract for as long a period of time as City determines, in its sole discretion, appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 15.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 14. City’s election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. 15.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. 15.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall not waive the City’s authority to designate other breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City’s determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 15.2 Delays by Sureties. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 13 Rev. January 2014 Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the date of the notice of termination, Contractor’s surety shall be deemed to have waived its right to complete the Work under the Contract, and City may immediately make arrangements for the completion of the Work through use of its own forces, by hiring a replacement contractor, or by any other means that City determines advisable under the circumstances. Contractor and its surety shall be jointly and severally liable for any additional cost incurred by City to complete the Work following termination. In addition, City shall have the right to use any materials, supplies, and equipment belonging to Contractor and located at the Worksite for the purposes of completing the remaining Work. 15.3 Damages to City. 15.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s default under the Contract Documents. 15.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor. If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the difference and shall promptly remit same to City. 15.4 Suspension by City 15.4.1 Suspension for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. 15.4.2 Suspension for Cause. In addition to all other remedies available to City, if Contractor fails to perform or correct work in accordance with the Contract Documents, City may immediately order the Work, or any portion thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction. Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents. City’s right to suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of the Contract Documents. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 14 Rev. January 2014 15.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s expense, comply with the notice and take all reasonable steps to minimize costs to close out and demobilize. The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. Termination pursuant to this provision does not relieve Contractor or its sureties from any of their obligations for Losses arising from or related to the Work performed by Contractor. 15.5.1 Compensation. Following such termination and within forty‐five (45) Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the following to Contractor as Contractor’s sole compensation for performance of the Work : .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close‐out Costs. Reasonable costs of Contractor and its Subcontractors: (i) Demobilizing and (ii) Administering the close‐out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. .4 Profit Allowance. An allowance for profit calculated as four percent (4%) of the sum of the above items, provided Contractor can prove a likelihood that it would have made a profit if the Construction Contract had not been terminated. 15.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. 15.6 Contractor’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Work to the extent specified in the notice; (ii) Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 15 Rev. January 2014 the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and (v) Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. Upon termination, whether for cause or for convenience, the provisions of the Contract Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees, submittals of as‐built drawings, instructions, or manuals, or other such rights and obligations arising prior to the termination date. SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES. 16.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 16.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of government, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension notice issued either for cause or for convenience. 16.1.2 For City's Non‐Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 16.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 15.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 17 ACCOUNTING RECORDS. 17.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take‐offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 16 Rev. January 2014 orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. 17.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many enforce Contractor’s obligation to provide access to City of its business and other records referred to in Section 17.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 18 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’ of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. SECTION 19 NUISANCE. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 20 PERMITS AND LICENSES. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non‐City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 21 WAIVER. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. SECTION 22 GOVERNING LAW AND VENUE. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no other place. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 17 Rev. January 2014 SECTION 23 COMPLETE AGREEMENT. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 24 SURVIVAL OF CONTRACT. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final Completion or any termination of the Construction Contract. SECTION 25 PREVAILING WAGES. This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is funded one hundred percent (100%) by the City of Palo Alto. This Project remains subject to all other applicable provisions of the California Labor Code and regulations promulgated thereunder. Or The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations. Copies of these rates may be obtained at the Purchasing Office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1810, and 1813 of the Labor Code. SECTION 26 NON APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 27 AUTHORITY. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Invitation for Bid (IFB) Package CONSTRUCTION CONTRACT 18 Rev. January 2014 SECTION 28 COUNTERPARTS This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. SECTION 29 SEVERABILITY. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. SECTION 30 STATUTORY AND REGULATORY REFERENCES. With respect to any amendments to any statutes or regulations referenced in these Contract Documents, the reference is deemed to be the version in effect on the date that the Contract was awarded by City, unless otherwise required by law. SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self‐insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.” IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO Purchasing Manager City Manager APPROVED AS TO FORM: Graham Contractors, Inc. By: Name: Title: Senior Asst. City Attorney APPROVED: Date: Public Works Director PUBLIC WORKS DEPARTMENT  ENGINEERING SERVICES DIVISION  (CIP: PE‐86070)        PROJECT TITLE:    FY15 PREVENTIVE MAINTENANCE PROJECT                      PART 7    PROJECT MAPS  4000 600 25600 25500 900 4000 700 600 3700 3800 3900 3800 300 3100 3300 4000 600 500 500 4200 4200 200 500 4100 41004100 4000 400 4100 3600 0 4100 4300 400 4200 200 0 4000 4200 300 200 300 200 4100 3800 100 3700 3700 3900 300 300 500 400400 2500 600 3000 300 41004000 3800 700 200 200 3500 100 3400 3300 300 500 3800 500 700 700 2700 400 3100 200 3000 2800 2900 2600 100 2500 500 3200 300 400 3000 3100 600 31003000 3200 2900 3300 35003400 700 3400 3800 3900 900 800 3600 900 4000 900 3600 3700 3800800 700 3300 3100 3200 700 3200 3400 900 3600 3400 3500 1100 3700 1000 1000 2900 800 800 2800 700 2700 2800 2900 3000 900 700 800 2600 800 800 3100 900 3100 3300 3400 3200 1000 1000 3200 3000 3300 3400 3400 3000 1600 3300 1800 2300 1200 2200 1400 2000 2000 2200 2000 2200 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700 800 900 1000 1100 400 Cavalier Court400 600 600 700 600 400 500 600 600 700 100 600 100 600 600 0 100 200 300 400 500 0 100 200 300 400 500 600 0 0 400 400 500 200 300 400 300 300 300 200 200 200 100 300 400 200 300400 500 300 400 300400 300 400 300 400 500 300 400 400 500 600 0 100 200 300 400 0 0 200 0 0 0 100 200 0 100 0 100 200 200 300 400 500 100 200 100 100 0 0 0 100 200 0 0 100 200 300 400 13900 300300400 300 0 400 0 100 200 300 400 0 0 100 200 300 0 200 300 800 7000 100 100 0 0Catalina Court 100600 700 600 700 200 200 200 0 100 700 800 500 5000 100 0 0 300 300 200300 200 200 0200 0 200 300 400 500 400 500 600 700 400 500 600 700 400 500 600 600 700 400 500 600 700 400 0 100 200 300 400 500 200 300 400 500 300 100 200 300 200 300 300 0 100 200 300 300 0 100 200 300 0 100 200 300 0 100 100 300 300 200 300 100 200 Merritt Court100Frederick Court100 100 200 100 200 00100 0 0 100 100 200 300 400 500 400 0 100 400 400 400 0 100 200200 0 100 200 300 0 100 200 100 0 100 0 100 Marvin Avenue200 0 100 200 0 100 100 200 300 200 300 0 100 200 300 Silvia Court200 200 300 200 300 200 300 400 500 400 500 600 400 400 300 400 500 600 700 300 400 500 200 300 500 600 0 100 200 300 400 500 600 500 600 500 600 100 600 0 100 0 600 0 600 700 800 700 800 700 800 0 100 600 600 500 600 500 600 600 600500 500 500 600 600 700 700 700 0 100 200 300 400 300 200 500 300 400 500 600 400 500 600 600 700 700 700 400700 400 500 600 400 500 500 600500 600 700 800 0 0 100 200 0 100 200 300 400 500 600 100 200 300 400 500 400 500 400 500 0 100 200 300 300 500 100 700 700 800 800 800 500 600500 600 700 Middlebury Lane0 0 100 200 300 400 600 700 800 800 800 800 800 800 800 900 900 800 700 800 800 700 500 600600 700 0 500 600 700 600 500 0 100 200 0 100 200 300 400 500 600 800 900 0 0 0 100 200 300 400 500 600 700 0 800 900 1000 0 200 300 400 400 0 200 300 0 100 200 300 Plaza Central100 Plaza Central200 Plaza Central300 Plaza North0 100 Plaza North100 Plaza North200 Plaza North300 0 100 100 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1700 1800 1700 1800 1400 17001800 1900 2000 400 500 600 700 900 700 900 700 900 1300 1300 700 800 900900 1400 900 900 500 000150016001700 1800 19001900 2000 2000 300 400 500 600 700 800 900 1000 1100 1200 160017001800 1900 100 200 300 400 500 600 700 800 900 1000 1100 1200 1200 Sawmill Court00 0 0 0 0 0 800 900 1000 800 800 800 700 800 800 700 800 800 900 1000 700800 700 800 800 900900 1000 1100 12001300700 700 1600 1500 1600 1700 15001600 1700 1600 1700 1800 1900 2000 2100 2200 2300 2400 500 14100 13900 13800 13700 13600 13500 13400 1900 2000 19001900 2000 2100 2200 2300 2400 2500 2100 2200 2300 2400 2500 600 700 800 900 1000 1100 800 2100 2200 400 400 500 400 2400 400 5002400 24002500 400 240025002500 300 2500 2400 300 2400 2500 300 2400 1900 2000 2100 2200 2300 2400 2500 600 2400 200 24002400 24002400 200 200 2400 2400 100 200 2400 100 200 2300 2300 100 2300 2300 2300 2300 2300 2300 200 300 Bella Corte400 2100 200 200 300 400 400 500 4300 0 100 600700 800 9001000110012001300140015001900 1800 1900 1900 2100 2200 23002400 2500 2100 2200 Serra San Bruno300 100 200 300 4002000 400 500 600 700 800 900 1000 1100 12001200 1300 14001500160017001800 1900 2000 100 200 100 200 400 500 600 23002400 100 100 100 0 0 100 100 100 100100 100 0100100 100 0 0 100 200 500 600 200021002200 300 300 300 400400 300 2200 2200 Royal Oak Court0 Paragon Court0 Wellington Court0 Sheffield Court0Glenmead Court0Empire Court0 Towne Circle2200 0 100 200 300 400 500 600 700 800 900 1900Silverwood Avenue 0 100 200 300 400 5004300 2600 2700 6001900 500 100 200 300 400 500 600 700 800 1200 1300 Space Park Way200 Space Park Way200 1000 1200 1300 Oro Way0 Palomas Way0 Flores Way0 Madero Way0 Main Street0 Main Street0 El Centro Avenue0 Monterey Drive100 Villa Drive100 Bonita Drive300 Monte Vista Drive300 400 400 Hermosa Drive200 Casa Grande Drive200 Casa Grande Drive0 La Paz Drive200 100 200 100 100 200 2600 300 400 500 600 0 0 0 1000 1100 1200 1300 1000 1100 1200 1300 1300 800 900 1000 900 1000 1000 1400 1500 1600 100 200 300 400 500 600 700 1000 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 220023002400250026002700 2800 2900 3000 Bill Graham Parkway0 Bill Graham Parkway0 Bill Graham Parkway0 1100 1200 1300 1400 1500 1400 1500 1600 17001800 1900 1800 19002000 2100 2100 1800 1200 1300 1400 1500 1600 1700 18001900 2000 2000220023002400 2500 2600 2700 1000 1200 1500 2500 2600 2700 2600 2700 2500 2600 2700 2500 2600 230025002600 2600 2000 80090010001100120013001400150016001700 18001900 2000 1500 160017001800 1900 2000 2100 2200 23002400250026002700280029003000 100 400 2100 Sheila Court800 Warner Court800 Montelena Court100 100 100 200 300 400 400 500 200 300 1400 1600 1700 13400 13500 13600 14000 14100 14200 14200 14100 14200 11900 12000 11900 11900 11800 11800 11900 12000 24900 12100 12200 2460024700 24800 24900 24000 24000 11400 11500 11600 11400 11200 11500 11600 24900 25000 0 0 2500 0 0 0 2600 Beaume Court400 Rhone Court400 Medoc Court400 St Emilion Court400 St Emilion Court400 St Emilion Way2000 St Julien Way400 St Julien Way400 St Julien Court2000 St Julien Court2000 Forest Glen Street0 Midrock Corners600 Windrose Place2100 Almendra Lane0 900 500 100 200 13800 13900 2790013600 1350013600 13700 13800 11400 11500 11600 1170011800 26600 27600 Arroyo Way27100 27400 27200 2680026900270002710027300 27600 27600 277002780027900 25400 25600 14500 14500 14100 14200 14100 14200 28100 28200 28000 14100 14200 14300 14400 14500 14500 27200 27300 27100 26700 26800 26900 27000 27400 27600 27700 27100 28000 27000 27900 28000 25200 24500246002470012800 12000 12100 12200 12200 1220012300 1240012500 12500 12600 24500 24600 24400 24500 12400 2470024800 12000 12100 12200 12300 12400 12500 12600 12700 12800 12900 24900 25000 25100 25200 25300 25400 10900 1100011900 12000 2820028300 28400 2100 2200 2000 13400 244002450024600 2470024800 28100 1200 0 200 25600 25700 25800 25900 26000 26100 26200 2630026400 Altamont Circle27700 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2000900 5000 200 100 300 MoanaCourt Wallis Ct Donald Drive Encina Grande Drive Cereza Drive Los Robles Avenue Villa Vera Verdosa Drive Campana Drive Solana Drive Georgia Ave Ynigo Way Driscoll Ct ngArthur'Maybell Way Maybell Avenue Frandon Ct Florales Drive Georgia Avenue Amaranta Avenue Amaranta Ct MirandaGreen Foothill Expressway Ki sCourt Terman Drive Baker Avenue Vista Avenue Wisteria Ln Pena Ct Coulombe Drive Cherry Oaks Pl Pomona Avenue Arastradero Road Abel Avenue Clemo Avenue Villa Real El Camino Way Curtner Avenue Ventura Avenue Maclane Emerson Street Ventura Ct Park Boulevard Magnolia Dr South El Camino Real Cypress Lane GlenbrookD Fairmede Avenue Arastradero RoadIrven Court Los Palos Cir LosPalosPl Maybell Avenue Alta Mesa Ave Kelly Way Los Palos Avenue Suzanne Drive Suzanne Drive rive El Camino Real Suzanne CtLorabelle Ct McKellar Lane El Camino Way James Road Maclane Second Street Wilkie Way Camino CtWest Meadow Drive Thain Way Barclay Ct Victoria Place Interdale Way West Charleston Road Tennessee LaneWilkie Way Carolina Lane Tennessee Lane Park Boulevard Wilkie Ct Davenport Way Alma Street Roosev Monroe Drive Wilkie Way Whitclem PlWhitclem Drive Duluth Circle Edlee Avenue Dinah's Court Cesano Court Monroe DriveMiller Avenue Whitclem Wy Whitclem Ct Ferne Avenue Ben Lomond Drive Fairfield Court Ferne Avenue Ponce DriveHemlockCourt Ferne Court Alma Street Monroe Drive San Antonio Avenue NitaAvenue Ruthelma Avenue Darlington Ct Charleston Road LundyLane Newberry Ct Park Boulevard George Hood Ln Alma Street eltCircle LinderoDrive Wright Place StarrKingCircle Shasta Drive Mackay DriveDiablo C o u r t Scripps Avenue Scripps C o u r t Nelson Drive Tioga Court Creekside Drive Greenmeadow Way Ben Lomond Drive Parkside Drive Dixon Place Ely Place Dake Avenue Ferne Avenue San Antonio Court (Private) ChristopherCourt CalcaterraPlace Ely Place Ely Place Adobe PlaceNelson Court ByronStreetKeats CourtMiddlefield Road Duncan Place Carlson Court Duncan Place Mumford Place Charleston Road San Antonio Avenue East Meadow Drive Emerson Street Court BryantStreet RooseveltCircle RamonaStreet CarlsonCircleRedwoodCircleSouth Leghorn Street Montrose AvenueMaplewood Charleston Ct Charleston Road Seminole Way Sutherland Drive Nelson Drive El Capitan Place Fabian Street Loma Verde Avenue Bryson Avenue Midtown Court Cowper Street Gary Court Waverley Street South Court Bryant Street Ramona Street Alma Street Coastland Drive Colorado AvenueByron Street Middlefield Road Gaspar Court Moreno Avenue Coastland Drive El Carmelo Avenue RosewoodD Campesino Avenue Dymond Ct Martinsen Ct Ramona Street Bryant Street Towle Way Towle Place Wellsbury Ct AvalonCourt FlowersLane Mackall Way Loma Verde Avenue KiplingStreet Cowper Street South Court Waverley Street El Verano Avenue Wellsbury Way LaMiddlefield Road St Claire Drive Alger Drive Ashton Avenue St Michael Drive St Michael Drive Maureen Avenue Cowper Court Rambow Drive East Meadow Drive Ashton Court Murdoch Drive CowperStreet Murdoch Ct St Michael Court MayCourt Mayview Avenue Middlefield Road Ensign Way Bibbits DriveGailen Ct Gailen Avenue Grove Avenue San Antonio Avenue Commercial Street Industrial Avenue Bibbits Drive Charleston Road Fabian Way T East Meadow Drive Grove Avenue Christine Drive Corina Way Ross RoadCorina Way Louis Road Nathan Way Transport Street Ortega CourtEast Meadow Drive yneCourt alisman Loma Verde Avenue Allen Court Ross Court Loma Verde Pl Ames Avenue Richardson Court Holly Oak Drive Ames Avenue CorkOakWay Middlefield Road Ames Ct Ames Avenue Ross Road Rorke Way RorkeWay Stone Lane Toyon Place Torreya Court Lupine Avenue Thornwood Drive DriftwoodDrive Talisman Drive Arbutus Avenue Ross Road Louis Road Aspen Way Evergreen Drive East Meadow Drive Corporation Way Elwell Court Janice Way East Meadow Circle East Meadow Circle GreerRoad Bayshore Freeway rive Ellsworth Place San Carlos Court Wintergreen Way SutterAvenue Sutter Avenue Clara Drive Price CourtStern Avenue Colorado Avenue Randers Ct Ross Road Sycamore Drive Sevyson Ct Stelling Drive Ross Road David Avenue MurrayWay Stelling Drive Stelling Ct ManchesterCourt Kenneth DriveThomasDrive GreerRoad Stockton Place Vernon Terrace Louis Road Janice Way Thomas Drive Kenneth Drive Loma Verde Avenue CliftonCourt ElbridgeWay Clara Drive BautistaCourtStockton Place Morris Drive Maddux Drive Piers Ct Louis Road Moraga Ct Old Page Mill Road Deer Creek Road CoyoteHillRoad Hillview Avenue Porter Drive Hillview Avenue Hanover Street Foothill Expressway Arastradero Road Miranda Avenue Stanford Avenue Amherst Street Columbia Street Bowdoin Street Dartmouth Street Hanover StreetCollege Avenue California Avenue Hanover Street Ramos Way (Private) Page Mill Road Hansen Way Hanover Street Old Adobe Road Old Trace Court Arastradero Road Miranda Avenue MockingbirdLane OldTraceRoad Manuela Way RobbRoad Manuela Court Mesa Avenue Oak Hill Avenue Manuela Avenue Miranda Avenue Laguna Ct Barron Avenue Josina Avenue Kendall Avenue Tippawingo St Julie CtMatadero Avenue Ilima Way Ilima Court Laguna Oaks Pl Carlitos Ct La Calle Laguna Avenue ElCerrit Paradise Way Roble Ridge (Private) LaMataWay Chimalus Drive Matadero Avenue oRoad Paul AvenueKendall AvenueWhitsell Avenue Barron Avenue Los Robles Avenue Laguna Way ShaunaLane La Para Avenue San Jude Avenue El Centro Street Timlott La Jennifer Way Magnolia Dr North La Donna Avenue LosRoblesAvenue Rinc Manzana Lane onCircle MesaCourt Crosby Pl Georgia Avenue Hubbartt Drive Willmar Drive Donald Drive Arastradero Road Foothill Expressway Miranda Avenue La Para AvenueSan Jude Avenue Magnolia Drive Military Way Arbol Drive Orme Street Fernando Avenue Matadero Avenue Lambert Avenue Hansen Way El Camino Real Margarita Avenue Matadero Avenue Wilton Avenue Oxford Avenue Harvard Street California Avenue Wellesley Street Princeton Street Oberlin Street Cornell Street Cambridge Avenue College Avenue Williams Street Yale Street Staunton Court Oxford AvenueEl Camino Real Churchill Avenue Park Boulevard Park Avenue Escobita Avenue Churchill Avenue Sequoia Avenue Mariposa Avenue Castilleja AvenueMiramonte Avenue Madrono Avenue Portola Avenue Manzanita Avenue Coleridge Avenue Leland Avenue Stanford AvenueBirch Street Ash Street Lowell Avenue Alma StreetTennyson Avenue Grant Avenue Sheridan Avenue Jacaranda Lane El Camino Real Sherman Avenue Ash Street Page Mill Road Mimosa Lane Chestnut Avenue Portage Avenue Pepper Avenue Olive Avenue Acacia Avenue Emerson Street Park Boulevard Orinda StreetBirch Street Ash Street Page Mill Road Ash Street Park Boulevard College Avenue Cambridge Avenue New Mayfield LaneBirch Street California Avenue Park BoulevardNogal Lane Rinconada Avenue Santa Rita Avenue Park Boulevard Seale Avenue Washington Avenue Santa Rita Avenue WaverleyStree Bryant Street High Street Emerson Street Colorado Avenue Street Emerson Street Ramona Street Bryant Street South Court El Dorado Avenue Alma Street Alma Street HighStreet t Emerson Waverley Oaks Washington Avenue Bryant Street South Court Waverley Street Emerson Street Nevada Avenue North California Avenue Santa Rita Avenue Ramona Street High Street North California Avenue Oregon Expressway Marion Avenue Ramona Street Colorado Avenue Waverley Street Kipling Street South Court Cowper Street Anton Court Nevada Avenue Tasso StreetTasso Street Oregon Avenue Marion Pl Webster Street Middlefield Road Ross Road Warren Way El Cajon Way Embarcadero Road Primrose Way Iris Way Tulip LaneTulip Lane Garland Drive Louis Road Greer Road Morton Street Greer Road Hamilton Avenue Hilbar Lane Alannah Ct Edge Rhodes Drive Marshall Drive Fieldin Moreno Avenue MarshallDrive Dennis Drive Agnes Way Oregon AvenueBlair Court Santa Ana Street Elsinore DriveElsinore Court El Cajon Way Greer Road North California Avenue gDrive Colorado Avenue Sycamore Drive Amarillo Avenue VanAukenCircle Bruce Drive Colonial Lane Moreno Avenue Celia Drive Burnham Way Greer Road Indian Drive Elmdale PlC 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Camino Real venue Mitchell Lane Hawthorne Avenue Everett Avenue Lytton Avenue Lane 15 E High Street Alma Street Bryant Street Lane 6 E Lane 11 W Lane 21 High Street Gilman Street Hamilton Avenue University Avenue Bryant Court Lane 30 Florence Street Kipling Street Tasso Street Cowper Street Ruthven Avenue Hawthorne Avenue Lane 33 PaloAltoAvenue Everett Avenue Poe Street Waverley Street Tasso Street Cowper Street Palo Alto Avenue Webster Street Everett Court Lytton Avenue Byron Street Fulton Street Middlefield Road Churchill Avenue Lowell Avenue Seale Avenue Tennyson Avenue Melville Avenue Cowper Street Tasso Street Webster Street Byron Street North California Avenue Coleridge AvenueWaverley Street Bryant Street Emerson Street Kellogg Avenue Kingsley Avenue Portal Place Ross Road Oregon Avenue Garland Drive Lane A West Lane B West Lane B East Lane D West Lane 59 East Whitman Court Kellogg Avenue Embarcadero Road Kingsley Avenue Lincoln Avenue Addison Avenue Lincoln Avenue Forest Avenue Downing Lane Homer Avenue Lane D East Lane 39 Lane 56 Hamilton Avenue Webster Street Waverley Street Kipling Street Bryant Street Ramona Street Addison Avenue Scott Street Byron Street Palo Hale Street Seneca Street Lytton Avenue Guinda StreetPaloAltoAvenue Fulton Street Middlefield Road Forest Avenue Webster Street Kellogg Avenue Middlefield Road Byron Street Webster Street Cowper Street Tasso Street Cowper Street Addison Avenue Lincoln Avenue Boyce Avenue Forest Avenue Hamilton Avenue Homer AvenueGuinda Street Middlefield Road Channing Avenue AltoAvenueChaucer Street Chaucer Street University Avenue Channing Avenue Addison Avenue Lincoln Avenue Regent Pl Guinda Street Lincoln Avenue Fulton Street Melville Avenue Byron Street Kingsley Avenue Melville Avenue Hamilton Avenue Hamilton Court Forest Avenue Forest Ct Marlowe Street Maple Street Palm Street Somerset Pl Pitman Avenue Fife Avenue Forest AvenueDana Avenue Lincoln AvenueUniversity Avenue Coleridge Avenue Lowell Avenue Fulton Street Cowper Street Tennyson Avenue Seale Avenue Northampton Drive West Greenwich Pl Middlefield Road Newell Road Guinda Street East Greenwich Pl Southampton Drive Webster Street Kirby Pl Kent PlaceTevis Pl Martin Avenue Center Drive Harriet Street Wilson Street Cedar Street Harker AvenueGreenwood Avenue Hutchinson Avenue Channing Avenue Hopkins Avenue Embarcadero Road Ashby Drive Dana AvenueHamilton Avenue Pitman Avenue Southwood Drive WestCrescentDrive CrescentDrive University Avenue Center Drive EastCrescen Arcadia Place Louisa Court Newell Pl Sharon Ct Erstwild Court Walter Hays Drive Walnut DriveNewell Road Parkinson AvenuePine Street Mark Twain Street Louis Road Barbara Drive Primrose Way Iris Way Embarcadero Road Walter Hays DriveLois LaneJordan Pl Lois Lane Heather Lane Bret Harte Street Stanley Way De Soto Drive De Soto Drive Alester Avenue Walter Hays Drive Channing Avenue Iris Way tDrive Dana Avenue Hamilton Avenue Newell Road Kings Lane EdgewoodDrive Island Drive Jefferson Drive JacksonDrive Patricia Lane Madison Way EdgewoodDrive Ramona Street Addison Avenue Channing Avenue Waverley Street Tennyson Avenue Seale Avenue Middlefield Road Byron Street Webster Street Marion Avenue Welch Road Sedro Lane Peral Lane McGregor Way Monroe Drive Silva Avenue Silva Court Miller Court Briarwood Way Driscoll Place Paulsen Ln Community Lane Lane 15 E Court Madeline Ct Arroyo Ct David Ct Alexis Drive Green Ct Oregon Expressway Oregon Expressway Sheridan Avenue Page Mill Road Page Mill Road Foothill Expressway Miranda Avenue Foothill Expressway Miranda AvenueFoothill Expressway Cerrito Way Emerson Street Miranda Avenue Lane 20 WLane 20 E Oregon Expressway University Avenue Jacob's Ct CalTrain ROW CalTrain ROW CalTrain ROW CalTrain ROW Emerson Street Waverley Street Kipling Street Clark Way Durand Way Sandhill RoadSwain Way Clark Way Mosher Way Charles Marx Way Orchard Lane Vineyard Lane Oak Road Sand Hill Road Sand Hill Road Sand Hill Road Hillview Avenue Arastradero Road Lane 66 Bryant Street Ramona Street Blake Wilbur Drive West Charleston Road Bayshore Freeway Bayshore FreewayBayshore FreewayWest Bayshore Road East Bayshore Road East Bayshore Road East Bayshore RoadWest Bayshore Road East Bayshore RoadBayshore FreewayBayshore FreewayFabian Way Bayshore Freeway Bayshore Freeway Palo Road Shopping Center Way Shopping Center Way Shopping Center Way London Plane Way Plum Lane Sweet Olive Way Pear Lane Lane 66 La Selva Drive Grove Ct Miranda Court Stanford Avenue Lane 12 W Lane 5 E Lasuen Street Serra Mall Escondido Road Olmsted Road Arastradero Road Caballo Lane John Marthens Lane(Private)Bandera drive Laurel Glenn Drive Alexis Drive Phillips Road Pistache Place Santa Ynez Street Lane B Lane C El Dorado Avenue Oak Creek Drive Clara Drive Bellview Dr Everett Avenue Los Trancos Road Homer Avenue La Calle SAN ANTONIO AVENUE Matadero Ave Colorado Pl Los Robles Avenue Timlott Ct Vista Villa PaloAltoAvenue Lane La Donna Avenue Cass Way Kenneth Drive Fabian Way Page Mill Road Middlefield RoadChristine Drive Louis Road Charleston Road Bayshore FreewayBayshore Freeway Chimalus Drive Hanover Street Community Lane Greenwood Avenue Harker Avenue Parkinson Avenue AvenueMaplewood Pl Mackay Drive Santa Teresa Lane Byron Street Varian Way Las Trampas Valley Road Las Trampas Valley Road Las Trampas Valley Road Las Trampas Valley Road Vista Hill Road Vista Hill Road Vista Hill Road Madera Point Road Vista Hill Road Madera Point Road Arastradero Rd ALPINE RD Quail DrQuail Dr Paloma Dr Paloma Dr Trinity Ln Heron Wy Feather LnStanislaus Ln Tuolumne Ln Plover Ln Sandpiper Ln Curlew Ln Mallard LnEgret Ln Klamath Ln Deodar StAlder Ln Spruce Ln Rickey's Ln Juniper Way Rickey's WyRickey's Wy Rickey's Wy Juniper Lane Tracy Ct Emerson Street Boronda Lane Tahoe Lane Lake Avenue Donner Lane Almanor Lane Fallen Leaf Street Berryessa Street Cashel St Noble StHettinger Ln Pratt Ln Emma Court Galvez Mall Federation Way Abrams Court Allardice Way Alta Road Alvarado CtAlvarado Row Angell Court Arguello Way Arguello Way Avery Mall Ayrshire Farm Lane Barnes Court Bonair Siding Bowdoin Street Cabrillo Avenue Cabrillo Avenue Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Capistrano Way Casanueva Place Cathcart Way Cedro Way Cedro Way Churchill Mall Comstock Circle Aboretum Road Aboretum Road Blackwelder Court Campus Drive Cathcart Way Constanzo Street Cooksey Lane Coronado Avenue Cottrell Way Cottrell Way Cowell Ln Crothers Way Dolores Street Dolores Street Dudley Lane Duena Street Electioneer Road Escondido Mall Escondido Mall Escondido Road Escondido Road Escondido Road Esplanada Way Estudillo Road Fremont Road Frenchmans Road Frenchmans Road Galvez Mall Alvarado Row Galvez Street Galvez Street Galvez Street Gerona Road Gerona RoadEl Escarpado Gerona Road Hoskins Court Hulme Court Jenkins Court Junipero Serra Boulevard Junipero Serra Boulevard Junipero Serra Boulevard Junipero Serra Boulevard Knight Way Lagunita Drive Lane L Lane W Lasuen Mall Lasuen Mall Lasuen Mall Lasuen Street Lathrop Drive Lathrop Drive Lathrop Place Lathrop Drive Links Road Links Road Lomita Drive Lomita Drive Lomita Drive Lomita Drive Lomita Drive Lomita Court Lomita Mall Los Arboles Avenue Masters Mall Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue McFarland Court Mears Court Mears Court Memorial Way Mirada AvenueMirada Avenue Museum Way N Service Road N Tolman Ln Nelson MallNelson Road North-South Axis Oberlin StComstock Circle Escondido Mall Olmsted Road Olmsted Road Olmsted Road Olmsted Road Olmsted Road Palm Drive Palm Drive Pampas Lane Panama Mall Panama Mall Panama Street Panama Street Pearce Mitchell Pl Peter Coutts Circle Peter Coutts Road Peter Coutts Road Pine Hill Court Pine Hill Road Quarry Extension Quarry Road Quillen Ct Raimundo Way Raimundo Way Raimundo Way Roble Drive Rosse LaneRoth Way Roth Way Roth Way Running Farm Lane Ryan Court S Service Road S Tolman Ln Salvatierra Street Salvatierra St Salvatierra Walk Samuel Morris Wy San Francisco TerraceSan Francisco Court San Juan St San Juan St San Rafael Pl Santa Fe Avenue Santa Maria Avenue Santa Teresa Street Santa Teresa Street Santa Ynez Street Searsville Road Sequoia Wy Serra Mall Serra Street Serra Street Serra Street Sonoma Terrace Stanford Avenue Stanford Avenue Stock Farm Road Thoburn Court Tolman Drive Valdez Place Valparaiso Street Vernier Place Via Ortega Via PalouVia Pueblo Mall Welch Road Wellesley St Wilbur Way Wing Place Yale St Alma Street Alma Street Alma Street Alma Street Alma Street Hawthorne Avenue Lytton Avenue Loop Road North Yard Road Pep Ring Road Pep Ring Road Pep Ring Road Alpine Access Road Nathan Abbott Way Sam McDonald Road Sam McDonald Mall Vista Lane Bowdoin Lane Arguello Way Governors Avenue Governors Avenue Governors Avenue S Governors LanePasteur Drive Lagunita Drive Alma Village Lane Alma Village Circle Reservoir Road Reservoir Road Reservoir Road Ranch Road Page Mill Road Ryan Lane O'Connor Lane Gene Ct Brassinga Ct Cole Ct CHARLESTON ROAD ALEXIS DRIVE DESOTODRIVE SHARONCOURT WALTER HAYESDRIVE WEST BAYSHORE ROAD SIMPKINSCOURT THOMAS DRIVE JANICEWAY COLORADOAVENUE LOUISACOURT CLARADRIVE DANAAVENUE VAN AUKENCIRCLE MOFFETTCIRCLEMETROCIRCLE CORPORATIONWAYELWELLCOURT EAST BAYSHORE ROAD EAST BAYSHORE ROAD EAST BAYSHORE ROAD LAUREL GLEN DRIVE COLONIALLANE NEVADAAVENUE LOT G LOT A COYOTEHILLROAD GEORGEHOODLANE DULUTHCIRCLE MONROEDRIVE MONROEDRIVE MILLERAVENUE MILLERCOURT NEWELLPLACE SILVACOURT LOT P SANDRAPLACE RORKEWAY MIDDLEFIELD ROAD MIDDLEFIELDROAD LOMAVERDEPLACE LAWRENCELANE JORDANPLACE EMBARCADEROROAD ASHBYDRIVE SILVAAVENUE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 4726' FY15 PM MASTER MAP CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:44:55FY15PM MASTER MAP (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) 600 600 500 400 300 400300 700 300 600 200 100 600 200 100 500 300 400 300 300 400 500400 700 400 700600 600 500 400 300 400300 700 300 600 200 100 600 200 100 500 300 400 300 300 400 500400 700 400 700 Homer Avenue L dical Foundation Way Lane 7 West Lane 7 East U lls Avenue Fo r e s t A v e n u e H Em A El Camino Real Mitchell Lane Ev e r e t t Av e n u e Ly t t o n A v e n u e High Street Lane 6 E Lane 11 W Lane 21 Gilman Street Ha m i l t o n A v e n u e Lane 30 Florence Street Downing Lane Wa K B RaPaulsen Ln Lane 15 E Lane 20 W Lane 20 E University Avenue Waverley Street Kipling Street Bryant Street Ramona Street Lane 12 W Lane 5 E Ev e r e t t Av e n u e Homer Avenue Emerson Street Alma Street Lytton Avenue LOT P LOT G LOT A This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 325' FY15 PM MAP 1 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:45:36FY15PM MASTER MAP (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) 28200 14900 28100 14000 28000 14200 14100 13100 13200 27500 27600 2770027800 27900 13000 13100 13300 27400 27500 27600 12200 28200 27800 27300 27600 27700 27600 27700 27900 12500 12600 12300 12400 12500 27700 27800 27900 27800 14200 14300 28500 28600 28000 28100 27800 27800 27600 27700 27800 13300 13400 13500 13400 13500 13400 13400 13400 27900 13600 14100 13900 13800 13700 13600 13500 13400 14000 14100 14200 14200 14100 14200 13800 13900 2790013600 13500 13600 13700 13800 11400 11500 14500 14500 14100 14200 14100 14200 28100 28200 28000 14100 14200 14300 14400 14500 14500 Altamont Circle 27700 27900 27800 Altamont Circle 13500 28000 28200 14900 28100 14000 28000 14200 14100 13100 13200 27500 27600 2770027800 27900 13000 13100 13300 27400 27500 27600 12200 28200 27800 27300 27600 27700 27600 27700 27900 12500 12600 12300 12400 12500 27700 27800 27900 27800 14200 14300 28500 28600 28000 28100 27800 27800 27600 27700 27800 13300 13400 13500 13400 13500 13400 13400 13400 27900 13600 14100 13900 13800 13700 13600 13500 13400 14000 14100 14200 14200 14100 14200 13800 13900 2790013600 13500 13600 13700 13800 11400 11500 14500 14500 14100 14200 14100 14200 28100 28200 28000 14100 14200 14300 14400 14500 14500 Altamont Circle 27700 27900 27800 Altamont Circle 13500 28000 Country Clu b Cou r t Alexis Drive Alexis Dr i ve Alexis Drive A r a s t r a d e r o R o a d B a n de r a drive Laur e l G l en n D r i ve A l exis D riv e Las Trampas Valley Road Vista Hill Road Vista Hill Road Vista Hill Road Vista Hill Road Tracy Ct Page Mill Road LAUREL GLEN DRIVE ALEXIS DRIVE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 1134' FY15 PM MAP 2 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:46:54FY15PM MASTER MAP (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) 3400 3400 1600 3300 1800 3200 1700 3300 900 1000 800 1000 0 1000 100 700 900 13400 27100 269 27000 200 3400 3400 1600 3300 1800 3200 1700 3300 900 1000 800 1000 0 1000 100 700 900 13400 27100 269 27000 200 Ol d Page Mill R oad Deer Creek Road C o y o t e H i l l R o ad Hillview Avenue Porter Drive Hillview Avenue Ha nover Street Foothill ExpresswayMiranda Avenue Miranda A Pag e Mill Roa Page Mill Road F o othill E xpress w ay Mira n d a A v e n u e F oothill Expr e s s w ay Arastrade Al la rd i c e W a y Cathcart Way Cathcart Way Cottrell Way levard man Ln Peter Coutts Circ l e Peter Coutts Road Raimundo Way R ai m u n d o W a y an Ln Tolman Drive Vernier Place COYOTEHILLROAD This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 830' FY15 PM MAP 3 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:47:20FY15PM MASTER MAP (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) 600 500 4200 4200 400 4300 400 4200 0 4000 4200 300 200 4100 3800 100 3900 4100 400 4200 400 400 400 400 4200 4200 4200 1000 1000 100200 100 200300 300 1100 1100 100 1100 2700 4400 4400 4500 2600 2600 4300 4300 2600 2700 100 200 100 100 200 2600 300 400 Montelena Court 100 100 100 200 300 400 400 500 200 300 4300 400 400 400 600 500 4200 4200 400 4300 400 4200 0 4000 4200 300 200 4100 3800 100 3900 4100 400 4200 400 400 400 400 4200 4200 4200 1000 1000 100200 100 200300 300 1100 1100 100 1100 2700 4400 4400 4500 2600 2600 4300 4300 2600 2700 100 200 100 100 200 2600 300 400 Montelena Court 100 100 100 200 300 400 400 500 200 300 4300 400 400 400 Coulombe Drive emo Avenue venue Arastradero R oad alos Cir PalosPl Alta Mesa Ave Ke lly Way Los Palos Avenue Suzanne Drive Suzanne Drive r i v e El Camino Real Suzanne Ct Lorabelle Ct McKellar Lane West Charleston Road Carolina Lane Monroe Drive Wilkie Way Whitclem Pl Whitclem Drive Duluth Circle Edlee Avenue Dinah's Court Cesano Court Monroe DriveMiller Avenue Whitclem Wy Whitclem Ct Ferne Avenue Ben Lomond Driv Ponce Drive HemlockCourt Ferne Court Alma Street Monroe Drive Ruthelma Avenue Darlington Ct Charlesto n R o Lundy Lane Newberry Ct Park Boulevard George Hood Ln Alma Street ght Place n g Circle Scripp Creekside D Greenmeadow Way Ben Lomond D Parkside Drive Dixon Place Ely Place Ely Place Monroe Drive Silva Avenue Silva Court Miller Court Briarwood Way CalTrain ROW West C harleston Road Deodar St Alder Ln Spruce Ln Rickey's Ln Juniper Way R icke y's W y Rickey's Wy Rickey's Wy Juniper Lane Cashel St Noble StHett inger L n Pratt L n Ryan LaneGene Ct Brassinga Ct Cole Ct GEORGEHOODLANE DULUTHCIRCLE MONROEDRIVE MONROEDRIVE MILLERAVENUE MILLERCOURT SILVAAVENUE SILVACOURT This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 566' FY15 PM MAP 4 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:48:41 (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) 00300 500 400 400 2500 600 3000 300 4100 4000 3800 700 500 3800 500 700 700 3200 3300 35003400 700 3400 3800 3900 900 800 3600 900 4000 900 3600 3700 3800 800 700 3300 3200 3200 3400 900 3600 3400 3500 1100 3700 1000 1000 800 800 900 3300 3400 3200 1000 1000 3200 3300 400 3200 3400 3700 3700 3900 400 3600 3700 800 3300 3800 2600 3200 3400 3700 3700 1000 1000 1100 1100 3100 3100 3200 3200 3100 3100 3200 3200 1100 11001100 1100 800 800 1100 2400 2500 2500 1000 1100 2500 2500 2200 2300 2400 2500 2600 2700 1500 2500 2600 2700 2300 2500 2600 2600 800 2400 00300 500 400 400 2500 600 3000 300 4100 4000 3800 700 500 3800 500 700 700 3200 3300 35003400 700 3400 3800 3900 900 800 3600 900 4000 900 3600 3700 3800 800 700 3300 3200 3200 3400 900 3600 3400 3500 1100 3700 1000 1000 800 800 900 3300 3400 3200 1000 1000 3200 3300 400 3200 3400 3700 3700 3900 400 3600 3700 800 3300 3800 2600 3200 3400 3700 3700 1000 1000 1100 1100 3100 3100 3200 3200 3100 3100 3200 3200 1100 11001100 1100 800 800 1100 2400 2500 2500 1000 1100 2500 2500 2200 2300 2400 2500 2600 2700 1500 2500 2600 2700 2300 2500 2600 2600 800 2400 Ferne Avenue San Antonio Avenue Shasta Drive Dia b l o C o u r t Nelson Drive ioga Court Dake Avenue Ferne Avenue San Antonio Court (Pr Chr istopherCourt erra Place Ely Place Adobe PlaceNelson Court ByronStreetKeats CourtMiddlefield Road Carls Duncan Place Charleston Road San A nto nio Av e n ue Cour t woo d C i r c le S o u t h Leg h orn Stre et Montrose Avenue Maplewood Charleston Ct Charleston Road Seminole Way Sutherland Drive Nelson Drive El Capitan Place F abia n Street Waverley Street St Claire Drive Alger Drive Ashton Avenue St Michael Drive St Michael Drive Maureen Avenue Cowper Court Rambow Drive East Meadow Drive Ashton Court Murdoch Drive Co w p e r Street Murdoch Ct St Michael Court MayCourt Mayview Avenue Middlefield Road Ensign Way Bibbits DriveGailen Ct Gailen Avenue Grove Avenue S a n A nto nio A v e n ue C o m m ercial Street In d ustrial Ave n u e Bibbits Drive C h arle ston Ro a d Fabian W ay T East Meadow Drive Grove Avenue Christine Drive Corina Way R oss R oad Corina W ay Louis R o ad N athan W ay Transport Street Ortega CourtEast Meadow Drive alisman Loma Verde Avenue Ross Court Ames Avenue Richardson Court Holly Oak Drive Ames Avenue CorkOakWay Middlefield Road Ames Ct Ames Avenue Ross Road Rorke Way Rorke Way Stone Lane Toyon Place Torreya Court Lupine Avenue Thornwood Drive DriftwoodDrive Talisman Drive Arbutus Avenue Ross Road Louis Road Aspen Way Evergreen Drive E a st M eado w Drive Corporation Way Elwell Court Janice Way East Meadow Circle East Meadow Circle GreerRoad Bayshore Freeway Mur ray Way rt K en n eth D riv e ThomasD r iv e Greer R o ad Stockton Place Vernon Terrace Louis Road Janice Way Thomas Drive Kenneth Drive Loma Verde Avenue CliftonCourt Court Bayshore Freeway Bayshore Freeway Bayshore FreewayWest Bayshore Road East Bayshore Road East Bayshore Road West Bayshore Road East Bayshore RoadBayshore FreewayBayshore FreewayFabian Way Bayshore Freeway Bayshore Freeway Grove Ct S A N AN T O NIO Kenneth Drive Fabian W ay Middlefield Road Christine Drive Louis Road C h arlesto n R oad Bayshore Freeway Bayshore Freeway AvenueMaplewood Pl Qu ail Dr Q u ail Dr P alom a Dr Palo m a Dr Trinity L n H eron Wy Feather L nStanislaus Ln Tuolumne Ln Plover Ln S a n dpip er L n Cu rle w Ln Mallard L nEgret Ln Klamath Ln ane Tahoe Lane Lake Avenue Donner Lane Almanor Lane Fallen Leaf Street ryessa Street Fed eration W ay ELWELLCOURT CORPORATIONWAY CHARLESTON ROAD EAST BAYSHORE ROAD THOMAS DRIVE WEST BAYSHORE ROAD MIDDLEFIELDROAD MIDDLEFIELD ROAD RORKEWAY JANICEWAY This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 924' FY 1 5 P M MA P 5 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:49:42 (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) 2700 400 3100 200 3000 2800 2900 26002500 500 300 400 3000 3100 600 310030002900 3100 700 2900 800 800 2800 700 2700 2800 2900 3000 900 700 800 2600 800 31003100 3200 3000 2800 20001800 200 300 1900 300 200 2500 2100 2100 200 2300 300 200 1900 400 400 500 200 400 300 2400 2600 2400 300 500 24002300 500 23002200 600 700 22002200 800 2400 1900 1900 2100 900 900 1700 500 500 1900 1000 2500 700 2200 800 2200 2400 2300 900 25002400 2800 1000 27002600 2600 1000 3000 31002900 2400 1000 1100 1100 1100 2000 1900 2300 2000 0 200 1600 1700 1600 500 1800 2100 1700 400 1700 1800 1500 1500 1400 600 2000 600 700 700 700 400 1300 500 1500 400 1100 200 14001300 400 1400 100 200 1200 1200 900 0 1000 300 900 1000 900 1200 600 1100 400 1100 500 1000 600 900800 1000 800 1000 900 1000 1200 13001200 700 1100 800 900 1100 1000 1700 700 1900 600 1600 500 1600 2100 1700 600 1800 800 1300 1200 800 1200 1200 1400 1100 1100 600 700 1100 1300 1300 1800 500 800 1500 900 700 1400 1000 1300 1100 1200 800 900 800 1700 1600 1700 1800 500 700 1400 1500 1400 600 1500 1600 1600 1400 2000 2000 2100 1800 2000 2200 2200 2500 2800 1100 2000 1900 600 2500 27002600 2900 2600 1800 2000 1500 400 2300 2700 3000 2800 2100 1600 1700 18001800 3100 3100 1100 1900 Circle Drive600 600 1900 0 900 900 900 1900 1900 100 100 200 100 0 1100 100 200 100 1900800 1900 1700 1800 1900 1700 1800 1900 1900 100 100 Newell Court0 2700 400 3100 200 3000 2800 2900 26002500 500 300 400 3000 3100 600 310030002900 3100 700 2900 800 800 2800 700 2700 2800 2900 3000 900 700 800 2600 800 31003100 3200 3000 2800 20001800 200 300 1900 300 200 2500 2100 2100 200 2300 300 200 1900 400 400 500 200 400 300 2400 2600 2400 300 500 24002300 500 23002200 600 700 22002200 800 2400 1900 1900 2100 900 900 1700 500 500 1900 1000 2500 700 2200 800 2200 2400 2300 900 25002400 2800 1000 27002600 2600 1000 3000 31002900 2400 1000 1100 1100 1100 2000 1900 2300 2000 0 200 1600 1700 1600 500 1800 2100 1700 400 1700 1800 1500 1500 1400 600 2000 600 700 700 700 400 1300 500 1500 400 1100 200 14001300 400 1400 100 200 1200 1200 900 0 1000 300 900 1000 900 1200 600 1100 400 1100 500 1000 600 900800 1000 800 1000 900 1000 1200 13001200 700 1100 800 900 1100 1000 1700 700 1900 600 1600 500 1600 2100 1700 600 1800 800 1300 1200 800 1200 1200 1400 1100 1100 600 700 1100 1300 1300 1800 500 800 1500 900 700 1400 1000 1300 1100 1200 800 900 800 1700 1600 1700 1800 500 700 1400 1500 1400 600 1500 1600 1600 1400 2000 2000 2100 1800 2000 2200 2200 2500 2800 1100 2000 1900 600 2500 27002600 2900 2600 1800 2000 1500 400 2300 2700 3000 2800 2100 1600 1700 18001800 3100 3100 1100 1900 Circle Drive600 600 1900 0 900 900 900 1900 1900 100 100 200 100 0 1100 100 200 100 1900800 1900 1700 1800 1900 1700 1800 1900 1900 100 100 Newell Court0 Loma Verde Avenue Bryson Avenue Midtown Court Cowper Street Gary Court Waverley Street South Court Bryant Street Ramona Street Coastland Drive Colorado Avenue Byron Street Middlefield Road Gaspar Court Moreno Avenue Coastland Drive El Carmelo Avenue Ros ewood D Campesino Avenue Dymond Ct Martinsen Ct Towle Way Towle Place Wellsbury Ct AvalonCourt FlowersLane Mackall Way Loma Verde Avenue Kipling Street Cowper Street Wellsbury Way La Middlefield Road yneCourt Allen Court Loma Verde Pl Toyon Place rive Ellsworth Place San C a r l o s C o u r t Wintergreen Way SutterAvenue Sutter Avenue Clara Drive Price Court Stern Avenue Colorado Avenue Randers Ct Ross Road Sycamore Drive Sevyson Ct Stelling Drive Ross Road David Avenue Stelling Drive Ste l l i n g C t ManchesterCourt CliftonCourt Elbridge Way Clara Drive BautistaCourt Stockton Place Morris Drive Maddux Drive Piers Ct Louis Road Moraga Ct enue Avenue nue venue Emerson StreetAvenue Avenue nue Avenue Santa Rita Avenue WaverleyStree Bryant Street Emerson Street Colorado Avenue Street Emerson Street Ramona Street Bryant Street South Court El Dorado Avenue t Emerson Waverley Oaks Washington Avenue Bryant Street South Court Waverley Street Emerson Street Nevada Avenue ia Avenue Santa Rita Avenue Ramona Street North California Avenue xpressway Marion Avenue Ramona Street Colorado Avenue Waverley Street Kipling Street South Court Cowper Street Anton Court Nevada Avenue Tasso StreetTasso Street Oregon Avenue Marion Pl Webster Street Middlefield Road Ross Road Warren Way El Cajon Way Embarcadero Road Primrose Way Iris Way Tulip Lane Tulip Lane Garland Drive Louis Road Greer Road Morton Street Greer Road Hamilton Avenue Hilbar Lane Alannah Ct Edge Rhodes Drive Marshall Drive Fieldin Moreno Avenue Marshall Drive Dennis Drive Agnes Way Oregon Avenue Blair Court Santa Ana Street Elsinore Drive Elsinore Court El Cajon Way Greer Road North California Avenue gDrive Colorado Avenue Sycamore Drive Amarillo Avenue VanAukenCi rcle Bruce Drive Colonial Lane Moreno Avenue Celia Drive Burnham Way Greer Road Indian Drive Elmdale Pl C Tanland Drive Moreno Avenue Amarillo Avenue West Bayshore Road Sandra Place Clara Drive Colorado Avenue Greer Road Colorado Avenue Simkins Court Otterson Ct Higgins Place Lawrence Lane Maddux Drive Genevieve Ct Metro Circle MoffettCircle Greer Road East Bayshore Road ardinalWay Santa Catalina Street ArrowheadWayAztec Way Chabot TerraceOregon Avenue Carmel Drive Sierra Court St Francis Drive West Bayshore Road Tanland Drive East Bayshore Road wood D rive Edgewood Drive Wildwood Lane Ivy L ane East Bayshore Road St Francis Drive Wildwood Lane Watson Court Laura Lane Sandalwood Ct O'Brine Lane (Private) Geng Road reet ue Churchill Avenue Lowell Avenue Seale Avenue Tennyson Avenue nue Cowper Street Tasso Street Webster Street Byron Street North California Avenue Coleridge Avenue Waverley Street Bryant Street Emerson Street enue nue Portal Place Ross Road Oregon Avenue Garland Drive Lane B East Lane D West Lane 59 East Whitman Court Kellogg Avenue Embarcadero Road Kingsley Avenue e Lincoln Avenue Lane D East reet reet eet et reet Addison Avenue Scott Street Kellogg Avenue Middlefield Road Byron Street Webster Street Cowper Street Tasso Street t Addison Avenue Lincoln Avenue eet Road Channing Avenue Channing Avenue Addison Avenue Lincoln Avenue Regent Pl Guinda Street Lincoln Avenue Fulton Street Melville Avenue Byron Street Kingsley Avenue Melville Avenue So merset Pl Pitman AvenueForest AvenueDana Avenue Lin Coleridge Avenue Lowell Avenue Fulton Street Cowper Street Tennyson Avenue Seale Avenue Northampton Drive West Greenwich Pl Middlefield Road Newell Road Guinda Street East Greenwich Pl Southampton Drive Webster Street Kirby Pl Kent Place Tevis Pl Martin Avenue Center Drive Harriet Street Wilson Street Cedar Street Harker Avenue Greenwood Avenue Hutchinson Avenue Channing Avenue Hopkins Avenue Embarcadero Road Ashby Drive Dana Avenue Hamilton Avenue Pitman Avenue Southwood Drive escentDrive Center Drive East Crescen Arcadia Place Louisa Court New ell Pl Sharon Ct Erstwild Court Walter H ays Drive Walnut Drive Newell Road Parkinson Avenue Pine Street Mark Twain Street Louis Road Barbara Drive Primrose Way Iris Way Embarcadero Road Walter Hays Drive Lois LaneJordan Pl Lois Lane Heather Lan e Bret Harte Street Stanley Way De Soto Drive De Soto Drive Alester Avenue Walter H ays Drive C hanning Avenue Iris W ay tDrive Dana Avenue Hamilton Avenue Newell Road Kings Lane Edgewood Dr i ve Isla nd Driv e Jefferson Drive Jackson Drive Patricia Lane Madison Way Edgewood D riv e Addison Avenue Channing Avenue Waverley Street Tennyson Avenue Seale Avenue Middlefield Road Byron Street Webster Street Marion Avenue Community Lane David Ct Green Ct Oregon Expressway Oregon Expressway Emerson Street Oregon Expressway East Bayshore Road Phillips Road Avenue Clara Drive Bellview Dr Colorado Pl Comm unity Lane Greenwood Avenue Harker Avenue Parkinson Avenue Boronda Lane Berryessa EAST BAYSHORE ROAD SIMPKINSCOURT COLORADOAVENUE WALTER HAYESDRIVE CLARADRIVESHARONCOURT VAN AUKENCIRCLE MOFFETTCIRCLEMETROCIRCLE EAST BAYSHORE ROAD COLONIALLANE JORDANPLACE NEVADAAVENUE SANDRAPLACE LAWRENCELANE EMBARCADEROROAD ASHBYDRIVE DANAAVENUE LOUISACOURT NEWELLPLACE DESOTODRIVE LOMAVERDEPLACE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc FY 15 PM STREETS 0' 1331' FY 1 5 P M MA P 6 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2014 City of Palo Alto mnicols, 2014-04-04 11:51:05 (\\cc-maps\gis$\gis\admin\Personal\Pavement.mdb) PE-86070 FY 15 PREVENTIVE MAINTENANCE PROJECT BID SUMMARY ATTACHMENT C # BID ITEM QNTY UNITS 1 Type I Slurry 110,437 SY 1.08$ 119,271.96$ 1.35$ 149,089.95$ 1.37$ 151,298.69$ 1.61$ 177,803.57$ 1.85$ 204,308.45$ 1.70$ 187,742.90$ 2 Type II Slurry 139,914 SY 1.35$ 188,883.90$ 1.42$ 198,677.88$ 1.85$ 258,840.90$ 1.74$ 243,450.36$ 1.75$ 244,849.50$ 2.45$ 342,789.30$ 3 AC Base Repair 1,630 TON 150.00$ 244,500.00$ 190.00$ 309,700.00$ 200.00$ 326,000.00$ 144.00$ 234,720.00$ 177.00$ 288,510.00$ 190.00$ 309,700.00$ 4 Crack Seal 147,905 LF 0.45$ 66,557.25$ 0.33$ 48,808.65$ 0.44$ 65,078.20$ 0.82$ 121,282.10$ 1.00$ 147,905.00$ 0.42$ 62,120.10$ 5 Inert Recycling 1,630 TON 5.00$ 8,150.00$ 6.00$ 9,780.00$ 5.25$ 8,557.50$ 95.00$ 154,850.00$ 17.00$ 27,710.00$ 5.00$ 8,150.00$ 6 Reset Manhole 6 EA 800.00$ 4,800.00$ 800.00$ 4,800.00$ 787.00$ 4,722.00$ 1,200.00$ 7,200.00$ 1,500.00$ 9,000.00$ 750.00$ 4,500.00$ 7 Blue Markers 49 EA 20.00$ 980.00$ 25.00$ 1,225.00$ 27.00$ 1,323.00$ 25.00$ 1,225.00$ 25.00$ 1,225.00$ 14.00$ 686.00$ 8 Caltrans Det. 1 6,500 LF 1.00$ 6,500.00$ 0.45$ 2,925.00$ 0.48$ 3,120.00$ 0.45$ 2,925.00$ 0.45$ 2,925.00$ 0.36$ 2,340.00$ 9 Caltrans Det. 6 6,185 LF 1.50$ 9,277.50$ 0.60$ 3,711.00$ 0.63$ 3,896.55$ 0.60$ 3,711.00$ 0.60$ 3,711.00$ 0.45$ 2,783.25$ 10 Caltrans Det. 10 955 LF 1.50$ 1,432.50$ 0.80$ 764.00$ 1.00$ 955.00$ 0.80$ 764.00$ 8.00$ 7,640.00$ 0.61$ 582.55$ 11 Caltrans Det. 12 20000 LF 1.00$ 20,000.00$ 0.60$ 12,000.00$ 0.63$ 12,600.00$ 0.60$ 12,000.00$ 0.60$ 12,000.00$ 0.45$ 9,000.00$ 12 Caltrans Det. 19 6253 LF 1.00$ 6,253.00$ 1.00$ 6,253.00$ 1.05$ 6,565.65$ 1.00$ 6,253.00$ 1.00$ 6,253.00$ 1.55$ 9,692.15$ 13 Caltrans Det. 20 1,000 LF 1.50$ 1,500.00$ 1.20$ 1,200.00$ 1.26$ 1,260.00$ 1.20$ 1,200.00$ 1.20$ 1,200.00$ 1.48$ 1,480.00$ 14 Caltrans Det. 21 2,390 LF 1.00$ 2,390.00$ 0.80$ 1,912.00$ 0.84$ 2,007.60$ 0.80$ 1,912.00$ 0.80$ 1,912.00$ 2.00$ 4,780.00$ 15 Caltrans Det. 22 13,152 LF 1.00$ 13,152.00$ 1.00$ 13,152.00$ 1.05$ 13,809.60$ 1.00$ 13,152.00$ 1.00$ 13,152.00$ 2.10$ 27,619.20$ 16 Caltrans Det. 23 6,403 LF 2.00$ 12,806.00$ 1.80$ 11,525.40$ 2.00$ 12,806.00$ 1.80$ 11,525.40$ 1.80$ 11,525.40$ 2.09$ 13,382.27$ 17 Caltrans Det. 25 A 7485 LF 1.00$ 7,485.00$ 0.60$ 4,491.00$ 0.63$ 4,715.55$ 0.60$ 4,491.00$ 0.60$ 4,491.00$ 0.66$ 4,940.10$ 18 Caltrans Det. 27 B 1,230 LF 1.00$ 1,230.00$ 0.40$ 492.00$ 0.50$ 615.00$ 0.40$ 492.00$ 0.40$ 492.00$ 0.48$ 590.40$ 19 Caltrans Det. 29 157 LF 1.50$ 235.50$ 1.00$ 157.00$ 2.00$ 314.00$ 1.00$ 157.00$ 1.00$ 157.00$ 3.22$ 505.54$ 20 Caltrans Det. 33 2,095 LF 1.50$ 3,142.50$ 1.20$ 2,514.00$ 1.30$ 2,723.50$ 1.20$ 2,514.00$ 1.20$ 2,514.00$ 2.96$ 6,201.20$ 21 Caltrans Det. 37 B 1,034 LF 1.00$ 1,034.00$ 0.95$ 982.30$ 1.00$ 1,034.00$ 0.95$ 982.30$ 0.95$ 982.30$ 0.99$ 1,023.66$ 22 Caltrans Det. 38 5741 LF 1.00$ 5,741.00$ 0.90$ 5,166.90$ 1.00$ 5,741.00$ 0.90$ 5,166.90$ 0.90$ 5,166.90$ 1.13$ 6,487.33$ 23 Caltrans Det. 38BD 85 LF 1.50$ 127.50$ 1.00$ 85.00$ 2.00$ 170.00$ 1.00$ 85.00$ 1.00$ 85.00$ 1.31$ 111.35$ 24 Caltrans Det. 39/39A 45,579 LF 1.00$ 45,579.00$ 0.60$ 27,347.40$ 0.63$ 28,714.77$ 0.60$ 27,347.40$ 0.60$ 27,347.40$ 0.65$ 29,626.35$ 25 Themo 4" White 4,300 LF 1.50$ 6,450.00$ 1.20$ 5,160.00$ 1.26$ 5,418.00$ 1.20$ 5,160.00$ 1.20$ 5,160.00$ 1.50$ 6,450.00$ 26 12" Yellow Thermo 3,085 LF 5.00$ 15,425.00$ 4.00$ 12,340.00$ 4.20$ 12,957.00$ 4.00$ 12,340.00$ 4.00$ 12,340.00$ 5.00$ 15,425.00$ 27 12" White Thermo 9686 LF 5.00$ 48,430.00$ 4.00$ 38,744.00$ 4.20$ 40,681.20$ 4.00$ 38,744.00$ 4.00$ 38,744.00$ 4.00$ 38,744.00$ 28 Thermo Legends 643 EA 45.00$ 28,935.00$ 30.00$ 19,290.00$ 32.00$ 20,576.00$ 30.00$ 19,290.00$ 30.00$ 19,290.00$ 58.00$ 37,294.00$ 29 Green Back Sharrow 8 EA 500.00$ 4,000.00$ 650.00$ 5,200.00$ 630.00$ 5,040.00$ 660.00$ 5,280.00$ 600.00$ 4,800.00$ 450.00$ 3,600.00$ 30 Traffic Control 1 LS 100,000.00$ 100,000.00$ 110,000.00$ 110,000.00$ 68,754.00$ 68,754.00$ 80,500.00$ 80,500.00$ 103,000.00$ 103,000.00$ 82,000.00$ 82,000.00$ 31 Tree Trimming 1 LS 17,000.00$ 17,000.00$ 3,500.00$ 3,500.00$ 14,000.00$ 14,000.00$ 10,000.00$ 10,000.00$ 35,000.00$ 35,000.00$ 8,000.00$ 8,000.00$ 32 Notices 1 LS 5,000.00$ 5,000.00$ 1,000.00$ 1,000.00$ 3,205.29$ 3,205.29$ 10,000.00$ 10,000.00$ 5.00$ 5.00$ 14,926.35$ 14,926.35$ 33 Trans Improvements 1 LS 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ 30,000.00$ BASE BID TOTAL: 1,026,268.61$ 1,041,993.48$ 1,117,500.00$ 1,246,523.03$ 1,273,400.95$ 1,273,273.00$ # BID ITEM QNTY UNITS 1 Black Aggregate 250,351 SY 0.15$ 37,552.65$ 0.17$ 42,559.67$ 0.14$ 35,049.14$ 0.18$ 45,063.18$ 0.30$ 75,105.30$ 0.01$ 2,503.51$ INTERMOUNTAIN SLURRY ENGINEER'S ESTIMATE GRAHAM CONTRACTORS VALLEY SLURRY AMERICAN ASPHALT WINDSOR FUEL CO. WINDSOR FUEL CO. INTERMOUNTAIN SLURRY ENGINEER'S ESTIMATE GRAHAM CONTRACTORS VALLEY SLURRY AMERICAN ASPHALT City of Palo Alto (ID # 4834) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: On-Call Surveying Consultant Contract Title: Approval of On-Call Surveying Consultant Contract with Sandis Civil Engineers Surveyors Planners for a Total of $150,000 for Surveying and Design Support Services From: City Manager Lead Department: Public Works Recommendation 1.Staff recommends that Council approve,and authorize the City Manager or his designee to execute,Contract No.C15153291 with Sandis Civil Engineers Surveyors Planners (Attachment A) in a not-to-exceed amount of $150,000 for surveying and design support services. Background The City currently has one land surveyor on-staff who primarily handles grade checking for Public Works Capital Improvement Program (CIP) construction projects and administrative documents and does not have the time or capability to perform large roadway surveys. The on-call contract for surveying will augment the staff surveyor to meet this need. On February 13, 2014, the City released a Request for Proposals (RFP) for On-Call Surveying Services. Six proposals were received in response to the RFP. Public Works Engineering Services staff carefully reviewed each firm's qualifications and submittal in response to the criteria identified in the RFP. Sandis was selected as the top bidder due to its in-house ability to perform surveying, studies and design as well as its familiarity with City projects and standards. Discussion City of Palo Alto Page 2 The proposed project includes providing on-call support services to help advance street resurfacing projects,including the survey and drainage design for Middlefield Road and Alma Street. An additional $2.3 million in funding is included in the FY 2015-2019 Capital budget for the repaving of these major roads. Additionally, other CIP projects requiring surveying may also require the consultant’s services. This on-call contract may be extended for up to two additional years (for a total of three years) at the City’s option. Summary of Solicitation Process Proposal Description/Number Name/Number of Proposal here Proposed Length of Project 12 months Number of Proposals Emailed 19 Total Days to Respond to Proposal 26 Pre-proposal Meeting Date None Number of Company Attendees at Pre-proposal Meeting N/A Number of Proposals Received: 6 Company Name Location (City, State)Selected for oral interview? 1. NV5 San Jose, CA No 2. BKF Redwood City, CA No 3. Underwood & Rosenblum Inc. San Jose, CA No 4. Sandis Sunnyvale, CA Yes 5. Siegfried San Jose, CA Yes 6. F3 & Associates Inc.Benicia, CA No Range of Proposal Amounts Submitted N/A Resource Impact Funding for the on-call project will be encumbered as task orders are assigned to various CIP projects with sufficient unexpended and unencumbered funds. Funding is available in CIP PE-86070 Street Resurfacing for the street work projects. City of Palo Alto Page 3 Policy Implications Approval of the contract is consistent with City policies. Environmental Review Surveying and design work does not constitute a project subject to the California Environmental Quality Act (CEQA). Typical street roadway projects that are supported by surveying are considered minor alterations and repairs to existing facilities and are categorically exempt from the (CEQA) section 15301(c) guidelines. Environmental review required for projects other than roadway work would be completed during the design process. Attachments: ·A - Sandis Civil Engineers Contract (PDF) CITY OF PALO ALTO CONTRACT NO. C15153291 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND FOR PROFESSIONAL SERVICES This Agreement is entered into on this 16th day of June, 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SANDIS CIVIL ENGINEERS SURVEYORS PLANNERS , a California Corporation, located at 936 E. Duane Avenue, Sunnyvale, CA 94085 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to have Professional Engineering and Surveying Services performed for various projects (“Project”) and desires to engage a consultant to provide surveying, engineering and design services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by the City, as needed, with a Task Order assigned and approved by the City’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a City Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and the City may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. Professional Services Rev. Feb. 2014 1 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E SECTION 2. TERM. The term of this Agreement shall be for one year from the date of its full execution unless terminated earlier pursuant to Section 19 of this Agreement. This AGREEMENT may be extended for up to two additional one year renewals by mutual agreement between the CITY and CONSULTANT. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed One Hundred Fifty Thousand Dollars ($150,000.00). The $150,000 not-to-exceed amount is per fiscal year (July 1 through June 30) for each year the AGREEMENT is in effect. The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or Professional Services Rev. Feb. 2014 2 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: To be determined by CONSULTANT and approved by Project Manager. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval Professional Services Rev. Feb. 2014 3 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Ken Olcott as the Principal in Charge to have supervisory responsibility for the performance, progress, and execution of the Services and Ron Sanzo as the project manager for the Engineering Services and Andrew Chafer as the Project Manager for the Surveying Services to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s project manager is Holly Boyd, Public Works Department, Engineering Services Division, 250 Hamilton Avenue Palo Alto, CA 94301, Telephone:650.329.2612. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any Professional Services Rev. Feb. 2014 4 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY Professional Services Rev. Feb. 2014 5 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY Professional Services Rev. Feb. 2014 6 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. Professional Services Rev. Feb. 2014 7 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: •All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. •Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. •Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. Professional Services Rev. Feb. 2014 8 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. / / / / / / / / / / / / / / / / / / / / Professional Services Rev. Feb. 2014 9 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: Senior Asst. City Attorney SANDIS CIVIL ENGINEERS SURVEYORS PLANNERS By: Name: Title: Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “A-1” ON CALL TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS Professional Services Rev. Feb. 2014 10 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E Vice President Jeffrey M. Setera, P.E> EXHIBIT “A” SCOPE OF SERVICES The City of Palo Alto (City) owns and operates many parks and buildings as well as its own water, gas, wastewater, electric, and storm drain utilities. The Public Works Department is responsible for maintaining and upgrading city buildings, roads, bridges, bike paths, parks, and lighting. Public Works also reviews and approves private development projects and issues permits and inspects work performed by private contractors in the public right-of-way. Consultant shall provide as-needed, on-call surveying services for various projects. The contract will be administered by the Public Works Department, Engineering Services Division, however the scope of work may not be limited to one Division or Department, but will be open to all City Departments. SPECIFIC QUALIFICATIONS The Consultant must be able to provide the following service in-house: Surveying Technical review of survey and land use/development related documents Act as City Surveyor Civil Engineering Traffic Studies The selected Consultant must be able to subcontract for the following services, including but not necessarily limited to: Construction Management Architecture (minor) TASK ORDERS Consultant shall perform topographic surveying, engineering or design services on a task order basis for a term not to exceed three years and with a maximum compensation not to exceed $150,000 per fiscal year (July 1 to June 30). Task orders not to exceed $150,000 will be developed for specific projects by the City department requesting the work and fee negotiated the Consultant. The determination of which Consultant to initially approach with the task order shall be based on the Consultant’s in-house expertise and ability to perform the work within the City’s needed timeframe and budget. The City reserves the right to issue a stand-alone Request for Proposal (RFP) for any project at any time. SCOPE OF WORK Consultant will be working with various work groups within the Public Works Engineering Services Division including Private Development, Streets and Sidewalks and Storm Drain. This Professional Services Rev. Feb. 2014 11 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E contract will be open to more than one work group, therefore the consultant may be asked to work on more than one project at a time. All services to be performed by the Consultant shall be documented in a task order to be executed by the Consultant and City. The specified work required for these projects will be determined as the projects are developed including a detailed scope, schedule and budget. Below are descriptions of required tasks for each work group. Private Development – Technical review of maps, easements, and legal documents will be used to determine accuracy and completeness of various land development applications and entitlements. The Consultant shall provide the following services: Technical review of tentative maps, preliminary parcel maps, final (tract) maps, parcel maps and all associated documents, including but not limited to closure calculations, title reports, ordinances, etc.. Review of deeds, title reports, chains of title, and associated documents. Technical review of Certificates of Compliance for Lot Line Adjustments, Lot Line Removals/Lot Mergers, and Compliance. Technical review of legal descriptions, plat maps, record of surveys, and easements of all types. Perform historical and/or forensic analysis of discrepancies, errors, or inconsistencies in plats, legal descriptions, surveys, record of surveys, and other documents as needed. Perform tasks required as City Surveyor such as but not limited to signing and stamping final (tract) maps, parcel maps, and certificates of compliance. Attend meetings; provide professional opinion/s as needed. Streets, Sidewalks and Storm Drain – Topographic survey services will be used to provide base maps for preparation of plans for proposed street and storm drain improvement projects. The Consultant shall provide the following topographic survey services: Establish survey control line extending beyond the limits of work Locate, identify, and tie-out City of Palo Alto survey markers found within the project area Perform topographic survey of existing features, which includes but is not limited to the following: o Street features – curb and gutter, sidewalk, driveways, ramps, edge of pavement, centerline, street cross-sections, catch-basins, manholes and valves in roadway o Trees, utility boxes and walkways in park strips or driveway areas o Speed humps, traffic striping, signs, and other pertinent roadway features The Consultant shall provide the following design services: Professional Services Rev. Feb. 2014 12 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E Design of parking lots, street pavements, roadway design, intersection-widening and traffic signal relocation Design of drainage improvements Traffic studies Additional features required for Storm Drain projects include the following: Storm drain infrastructure (pipelines, manholes, and catch basins) including invert elevations, pipe sizes, material type, and rim elevations Other existing underground utilities (i.e. sewer, water, gas, electric, fiber optics, telecommunications, and cable television utilities) including invert elevations, pipe sizes, material type, top/bottom, pipe elevations, rim elevations, and duct/encasement bottom elevations. Deliverables – prepare and submit the following: 2010 Civil 3D Auto-CAD files for the survey work done Electronic files (csv format) of all survey data points Key descriptions as feature identifier for each surveyed infrastructure Separate layers for different topographic features Provide line work, profile, and cross-sections utilizing 2010 Auto-CAD Civil 3D The City will provide existing infrastructure and right-of way information from City of Palo Alto Geographic Information System (GIS) Streets may include busy arterials such as Middlefield and Alma Street. Work on arterial and collector streets (including Alma, Middlefield, and Embarcadero will not be permitted between the hours of 7 and 9 a.m. and 4 and 6 p.m. to avoid traffic congestion to the public. Consultant shall be responsible for all traffic control for survey crews. The Consultant shall comply will the MUTCD Rolling/mobile traffic control for short term work. Any work that is longer than 15 minutes at one particular spot shall require a more specific traffic control plan to be submitted for the City’s Transportation Division’s review and approval. Consultant shall be responsible for all traffic control for survey crews. Professional Services Rev. Feb. 2014 13 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER Consultant hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO.C15153291 ISSUE DATE Purchase Requisition No. 153291 1A. MASTER AGREEMENT NUMBER C15153291 1B. TASK ORDER NO. 2.CONSULTANT SANDIS CIVIL ENGINEERS SURVEYORS PLANNERS 3.PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5.BUDGET CODE: _______________ COST CENTER_______________COST ELEMENT______________ WBS/CIP___ _______PHASE___ 6.CITY PROJECTMANAGER’S NAME/DEPARTMENT_________________________________________ 7.DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: WORK TO BE PERFORMED SCHEDULE OF WORK BASIS FOR PAYMENT & FEE SCHEDULE DELIVERABLES REIMBURSABLES (with “not to exceed” cost) 8.ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO SANDIS Civil Engineers Surveyors Planners: BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ Professional Services Rev. Feb. 2014 14 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete various tasks as assigned. The time to complete each task may be increased or decreased by mutual written agreement of the project manages for CONSULTANT and CITY so long as the work is completed within the term of the Agreement. Professional Services Rev. Feb. 2014 12 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $150,000 per fiscal year (July 1 to June 30). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted in the task orders. Maximum Total Compensation $150,000 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: travel (including mileage), telephone charges and photocopying. A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500 shall be approved in advance by the CITY’s project manager. Professional Services Rev. Feb. 2014 14 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E EXHIBIT “C-1” HOURLY RATE SCHEDULE SANDIS Standard Hourly Charge Rates Sunnyvale Office Effective September 1, 2013 through August 31, 2014 High Definition Scanning / 3-D modeling Services Laser Scanning Field: 2-Person $245.00 Laser Scanning Field: 1-Person $215.00 3-D Model / Scan Post Processing Project Manager $135.00 3-D Scanning Technician Level I $105.00 3-D Scanning Technician Level II $115.00 3-D Scanning Technician Level III $125.00 Engineering Services / QSD & QSP Services Clerical $60.00 Computer / Field / Engineer Technician Level I $60.00 Level II $70.00 Level III $85.00 Design Engineer Level I $70.00 Level II $80.00 Level III $90.00 Project Engineer / Traffic Engineer Level I $95.00 Level II $105.00 Level III $115.00 Project Manager $140.00 Associate Principal /Senior Project Manager / Senior Traffic Engineer $175.00 Principal $250.00 Surveying Services Computer / Surveying Technician Level I $60.00 Level II $70.00 Level III $85.00 Project Surveyor Level I $95.00 Level II $105.00 Level III $115.00 Senior Project Surveyor $140.00 Survey Manager $175.00 Professional Services Rev Feb. 2014 18 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E 1-Person Survey Crew $170.00 2-Person Survey Crew $220.00 2-Person Survey Crew with Apprentice $250.00 3-Person Survey Crew $290.00 Utility Locating Field Crew $150.00 Utility Locating Office Staff $105.00 Reimbursable Costs: Printing, Monuments, Materials, Outside Services and Consultants, Courier/Delivery Services, Express/Overnight Mail, Travel/per diem, Agency Fees Advanced, etc., at Cost. OVERTIME: All overtime charges are invoiced on the basis of one and one-half times the above rates. Professional Services Rev Feb. 2014 19 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRE D TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II.CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III.ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A.PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY Professional Services Rev Feb. 2014 20 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1.IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2.IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Professional Services Rev Feb. 2014 21 DocuSign Envelope ID: A6270921-F6C0-40B7-9B3A-0A6AFE95785E City of Palo Alto (ID # 4878) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Termination of Local Generation Incentive Program Title: Utilities Advisory Commission Recommendation that Council Adopt a Resolution Terminating the “Power from Local Ultra-clean Generation Incentive" Program and Repealing Utilities Gas Rate Schedule G-8 (Gas for Electric Generation Service) From: City Manager Lead Department: Utilities Recommendation The Utilities Advisory Commission (UAC) recommends that the City Council approve the attached resolution to: 1. Terminate the Power from Local Ultra-clean Generation Incentive (PLUG-In) program; and 2. Repeal Gas Rate Schedule G-8, Gas for Electric Generation Service. Executive Summary Council adoption of the 2013 Carbon Neutral Plan for the electric supply portfolio has made the City of Palo Alto Utilities’ (CPAU’s) PLUG-In program, which promotes primarily fossil-fuel based local generation, outdated. In addition no projects have been developed under the PLUG-In program since its inception in 2007 due to CPAU’s relatively low electric rates, relatively high natural gas rates and the high cost of installing distributed generation projects in Palo Alto. Termination of the PLUG-In program and repealing the associated gas rate schedule is necessary to ensure that CPAU’s offerings and incentives for local distributed generation projects are consistent with the City’s objectives for achieving carbon neutrality. Background The City’s history of supporting distributed local generation started in 1999 when the City launched its first solar PV system incentive program. Currently more than 560 local solar PV systems provide about 0.7% of the City’s annual electricity needs. Except for PV systems and about 56 diesel- or natural gas-fueled back-up generation units at City and customer facilities, there is no other electrical generation in Palo Alto. City of Palo Alto Page 2 The PLUG-In program and associated gas rate (Attachment B) were adopted in 2007 (Resolutions 8760 and 8761) to encourage the installation of high efficiency, co-generation systems at customer sites (“distributed generation”). The PLUG-In program enables the City to purchase the electric output of distributed generation projects. The program had a goal to meet 5% to 10% of the City’s electricity needs through distributed generation systems. The gas rate for distributed electric generation was initially approved as Rate Schedule G-COG but later renamed Rate Schedule G-8 (CMR 391:07). The Long-term Electric Acquisition Plan (LEAP) approved by Council (Resolution 9241), includes a strategy to promote local generation and directs staff to evaluate the merits and effectiveness of the PLUG-In program and provide a recommendation to Council. The PLUG-In program has the following features: 1. The program encourages customers to pursue high efficiency co-generation applications where the customer’s heating load could be economically met by the waste heat from the generation of electricity by a natural gas-fired engine or turbine. 2. The program provides an up-front financial incentive1 based on CPAU’s avoided capacity and transmission cost in exchange for the right for CPAU to purchase electricity from the co-generation system at the avoided energy cost and transmission related cost2. 3. The program was designed based on CPAU’s avoided cost and to be cost neutral for electric ratepayers, with additional value recognized for local generation. Discussion The City recognizes the value of local, distributed generation as demonstrated by Council’s recent adoption of the Local Solar Plan, with a goal of meeting four percent of the City’s energy needs by 2023 through local solar system installations. The Palo Alto Clean Local Energy Accessible Now (CLEAN) program also promotes local solar photovoltaic (PV) generation by establishing a price that CPAU would pay for the locally generated energy over a 20-year term. Adoption of the Carbon Neutral Plan in 2013 significantly diminished the merits of fossil fuel- fired local co-generation projects, necessitating a re-examination of the PLUG-In program. While the PLUG-In program can support renewable or non-fossil fuel based resources, its complex structure and the competing Palo Alto CLEAN program make the PLUG-In program outdated, and staff recommends terminating the program. The City is committed to promoting local, renewable generation and has explored alternatives to the PLUG-In program for non-PV local renewable energy generation. One alternative to the 1 Example a 3 megawatt (MW) high-efficiency, natural gas fired co-generation system capable of meeting approximately 2.5% of City’s load would qualify for a $750,000 upfront incentive in exchange for the City’s right to purchase the energy over the 20-year life of the co-generation system. 2 The current avoided energy cost is 6.4 cents per kilowatt-hour (kWh). City of Palo Alto Page 3 cancellation of the stand-alone PLUG-In program would be to expand the Palo Alto CLEAN program beyond solar generation. For example, the CLEAN program could be expanded to include those projects that may have previously been candidates for participation in the PLUG- In program. Currently, staff is aware of one potential project which could qualify under a new base-load CLEAN rate3. The facility under consideration by the City would convert bio-solids from the Palo Alto Regional Water Quality Control Plant (and possibly food scraps) to energy. In December 2012 Council approved a policy (Staff Report #3314) specifying ‘avoided cost as the basis for electricity purchase price from the proposed Waste to Energy Facility. At its May 12, 2014 meeting, Council reiterated this direction through a motion when passing a separate motion to proceed with the investigation of Waste to Energy Project. Commission Review and Recommendation At its June 4, 2014 meeting, the UAC reviewed staff’s recommendation to terminate the PLUG- In program. After discussion, the UAC voted unanimously (4-0 with Vice Chair Foster, Commissioners Chang and Hall absent) to recommend that Council terminate the PLUG-In program and associated rate schedule. The excerpted draft minutes from the UAC’s June 4, 2014 meeting are provided as Attachment C. Next Steps Staff is evaluating electricity generation options from the Energy/Compost Facility, including developing a recommendation to expand the Palo Alto CLEAN program and developing a price CPAU would pay for generation from the Waste to Energy Facility and other generation with similar characteristics. Staff expects to seek approval of expanding the Palo Alto CLEAN program with a price for such facilities by the end of 2014. Resource Impact Currently there are no participants in the City’s PLUG-In program; therefore termination of the program will not impact resources. Policy Implications The recommendation to terminate the PLUG-In program supports the City’s carbon neutral electric portfolio. Environmental Review Adoption of this resolution to terminate the PLUG-In program does not meet the California Environmental Quality Act’s definition of a “project” under Public Resources Code Section 21065, thus, environmental review is not required. Attachments:  Attachment A: Resolution to Terminate PLUG-In Program and Repeal G-8 Rate (PDF) 3 Base load electric generation is an electricity source that can produce electricity round the clock, all year around. City of Palo Alto Page 4  Attachment B: G-8 effective 03-01-2014 (PDF)  Attachment C: Excerpted Draft UAC Minutes of June 4, 2014 meeting (PDF) ATTACHMENT A *NOT YET APPROVED* Resolution No. _________ Resolution of the Council of the City of Palo Alto Terminating the “Power From Local Ultra-clean Generation Incentive Program” and Repealing Utility Gas Rate Schedule G-8 (Gas for Electric Generation Service) R E C I T A L S A. In March 2007, the Council approved a set of energy portfolio planning objectives to provide competitive and predictable supply cost while balancing environmental, local reliability, rate and cost impacts, and pursuing opportunities including local generation to serve customer energy needs. B. One of the Council-approved energy portfolio planning objectives was to promote an ultra-clean distributed generation incentive program. C. The Council approved the “New Ultra-Clean Local Distributed Generation Incentive Program” (the PLUG-In Program) (Resolution 8760) and associated Natural Gas rate schedule G-8 in October 2007 (Resolution 8761) to encourage local electric generation within Palo Alto City limits; these generation resources were contemplated primarily to be natural gas fired cogeneration facilities. D. In December 2007, in an effort to combat climate change, the City of Palo Alto adopted the Climate Protection Plan, which set aggressive greenhouse gas (GHG) emission reduction goals to be achieved by the year 2020. E. In March 2013, the City Council adopted the Carbon Neutral Plan that required all of the City’s electric supplies be sourced from carbon neutral resources (Resolution 9322). F. The Carbon Neutral Plan has significantly diminished the merits of fossil fuel- fired local co-generation projects in Palo Alto, necessitating a re-examination of the PLUG-In program. G. After thorough review, staff recommends terminating the PLUG-In Program and associated Rate Schedule G-8 (Gas for Electric Generation Service). H. Termination of the PLUG-In Program will impact no customers, since there has been no participation in the PLUG-In program since its inception. I. The City remains committed to promoting local, renewable generation. Since 2013 the City has implemented a Clean Local Energy Action Now (CLEAN) program to encourage local Photo Voltaic (PV) generation, and anticipates expanding it to other local renewable electric supplies. The Council of the City of Palo Alto hereby RESOLVES as follows: *NOT YET APPROVED* 140521 jb 6053053 SECTION 1. The “Power from Local Ultra-Clean Generation Incentive” Program (the PLUG-In Program) is terminated effective ________, 2014, and all associated and previously approved Program documents, including the August 2007 PLUG-In Distributed Generation Program Description and Handbook, are repealed. SECTION 2. Utility Rate Schedule G-8 (Gas for Electric Generation Service) is hereby repealed, effective _______, 2014. SECTION 3. The Council finds that the adoption of this resolution terminating the PLUG-In program and its associated rate schedule does not meet the California Environmental Quality Act’s definition of a “project” under Public Resources Code Section 21065, thus, environmental review is not required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services GAS FOR ELECTRIC GENERATION SERVICE UTILITY RATE SCHEDULE G-8 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 3-1-2014 Supercedes Sheet No. G-COG-1 dated 11-1-2008 Sheet No G-8-1 A. APPLICABILITY: This schedule applies to Customer-owned power generating facilities. Gas supplied under this schedule is only available for the electric generation portion of the Customer’s load purchases. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Customer Charge: $345.00 Per Therm Charges (To be added to Customer Charge Per Therm Supply Charge: Commodity Charge ............................................................................................ $0.10-$2.00 Administrative Fee ....................................................................................................$0.0227 PG&E Local Transportation .....................................................................................$0.0212 Distribution Charge: Palo Alto Local Distribution .....................................................................................$0.1870 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s meter. The Commodity charge will fall within the minimum/maximum range set forth in Section C. {End} EXCERPTED DRAFT MINUTES OF THE JUNE 4, 2014 UTILITIES ADVISORY COMMISSION MEETING ITEM 2: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that Council Adopt a Resolution Terminating the “Power from Local Ultra-clean Generation Incentive Program,” and Repealing Utilities Gas Rate Schedule G-8 (Gas for Electric Generation Service) Director Fong said that no presentation was planned for this item, but that Senior Resource Planner Shiva Swaminathan was available to answer questions. Commissioner Waldfogel asked why no one was interested in the program. Swaminathan replied that the program was originally designed for one customer, who was planning to build a combined heating, cooling and power project. However, their plans changed and they were no longer interested and no other customers have shown an interest in the program. Chair Cook asked if terminating the program will affect the anaerobic digester project. Swaminathan stated that it will not impact the anaerobic digester project. He added that the program is simply an outdated program that has not had any participants. Action: Commissioner Melton made a motion to support the staff recommendation. Commissioner Waldfogel seconded the motion. The motion carried unanimously (4-0 with Vice Chair Cook, Commissioners Chang and Hall absent). City of Palo Alto (ID # 4857) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Approval of Agreement for Storm Drain Master Plan Update Title: Approval of a Contract with Schaaf & Wheeler Consulting Civil Engineers In The Amount of $250,000 for Storm Drain Master Plan Update, Capital Improvement Program Project SD-15008 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve,and authorize the City Manager or his designee to execute,the attached contract with Schaaf & Wheeler Consulting Civil Engineers (Attachment A) in the amount of $250,000 for the Storm Drain Master Plan Update, Capital Improvement Program Project SD-15008, including $247,840 for basic services and $2,160 for additional services. Background The existing Storm Drain Master Plan,which was prepared in 1993, identified capacity deficiencies in several major segments of the City’s storm drain system. The highest priority improvement projects identified in the Master Plan were included in a funding measure presented to Palo Alto property owners in 2005. Property owners approved the ballot measure to increase the City’s monthly storm drain fee and thereby provided funding to implement a set of seven capital improvement projects to upgrade the storm drain system. The projects funded by the 2005 ballot measure include: 1.San Francisquito Creek Storm Water Pump Station 2.Channing Avenue/Lincoln Avenue Storm Drain Improvements 3.Alma Street Storm Drain Improvements 4.Gailen Avenue/Bibbits Avenue Storm Drain Improvements 5.Southgate Neighborhood Storm Drain Improvements City of Palo Alto Page 2 6.Clara Drive Storm Drain Improvements 7.Matadero Creek Storm Water Pump Station Upgrade and Trunk Line Improvements All of the storm drain capital improvement projects specified in the ballot measure will be completed by the end of FY 2017,and the storm drain fee increase approved in the ballot measure will sunset in June 2017. Discussion The purpose of the Storm Drain Master Plan Update project is to incorporate all of the projects completed since the last master plan was prepared into an updated storm drain computer model and master planning document, and to identify and prioritize a new set of storm drain capital improvement projects to address remaining capacity deficiencies in the City’s storm drain system. Staff intends to use the findings of the updated Master Plan as the basis for the development of a future proposal to the Finance Committee and Council for a ballot measure that would seek property owner approval to extend the term of the higher storm drainage fee in order to provide adequate project funding beyond FY2017. The prioritized set of storm drain improvement projects recommended in the updated Master Plan would be incorporated into a proposed funding package that would form the basis of the potential ballot measure. Staff anticipates making a recommendation to conduct the balloting process in mid-2016, approximately one year prior to the sunset of the existing storm drainage fee structure. Staff issued a Request for Proposals (RFP) seeking a qualified engineering firm to update the existing Storm Drain Master Plan. The following is a summary of the scope of work requested in the RFP: 1.System Capacity The Consultant shall determine future storm drain system capacity requirements for a 20-year planning period. 2.Drainage Design Standards The Consultant shall review the City’s existing drainage design standards and recommend changes or additions as needed. City of Palo Alto Page 3 3.Drainage System Computer Model The City will provide the Consultant the existing storm drain network model based on Computational Hydraulic Institute (CHI) PC-SWMM version 5 (2013) software, populated with SWMM4 data. The Consultant shall convert the SWMM4 data included in the existing model to the latest CHI PC-SWMM5 (2013) format and generate an updated computer model of the City’s storm drain system. 4.The Consultant shall participate in meetings with staff on a bi-weekly basis. 5.Master Plan Report The Consultant shall prepare a revised comprehensive storm drain master plan. The master plan report shall identify and prioritize specific storm drain system segments where the current capacity of the system is undersized and unable to convey the design storm. 6.Storm Drain System Replacement/Rehabilitation Recommendations The Consultant shall review the 1993 Condition Assessment Report and the storm drain system replacement/rehabilitation work completed to-date and shall provide programmatic recommendations to the City on how to assess its storm drain infrastructure and plan for system replacement/rehabilitation in the future. The RFP was sent to prospective consultants and posted on the City web site on May 7, 2014. The following table summarizes the results of the RFP solicitation: Summary of Solicitation Process Proposal Description/Number Design Services for the Storm Drain Master Plan Update Project (RFP #154206) Proposed Length of Project 20 Weeks Number of RFPs Issued 8 Total Working Days to Respond 22 Number of Proposals Received 4 Company Name Location (City, State) Selected for Oral Interview Schaaf & Wheeler Santa Clara, CA Yes City of Palo Alto Page 4 WRECO Walnut Creek, CA Yes BKF Redwood City, CA Yes Kasraie Consulting Ventura, CA Yes Range of Proposal Amounts Submitted $226,186 -$247,851 An evaluation committee consisting of three representatives from the Public Works Engineering Services Division reviewed the proposals. Four firms were invited to participate in oral interviews on June 6, 2014. The evaluation committee carefully reviewed each firm’s qualifications and proposal in response to the criteria identified in the RFP, including its experience in developing storm drain master plans, the quality of its proposed project approach, performance on past projects, the qualifications of the specific staff to be assigned to the project, and understanding of the project goals.Schaaf & Wheeler Consulting Civil Engineers was selected as the preferred consultant because of the depth and quality of its experience with the development of storm drain master plans in the Bay Area, its knowledge of local conditions, City storm drain infrastructure, and Santa Clara Valley Water District flood control facilities, and the exceptional qualifications of its proposed project design team. Timeline The development of the Storm Drain Master Plan Update is scheduled to be completed by December 2014. Resource Impact Funding for the Storm Drain Master Plan Update is available from FY 2015 Storm Drainage Fund Capital Improvement Program Project SD-15008. Environmental Review The project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15306 of the CEQA Guidelines and no further environmental review is necessary. An assessment of environmental impacts will be made during the design stage of any projects that may be recommended in the updated Master Plan. Attachments: ·A -Schaaf and Wheeler Contract (PDF) CITY OF PALO ALTO CONTRACT NO. C15154206 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND SCHAAF & WHEELER, CONSULTING CIVIL ENGINEERS FOR PROFESSIONAL SERVICES This Agreement is entered into on this 16th day of June, 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SCHAAF & WHEELER, CONSULTING CIVIL ENGINEERS, a California Corporation, located at 1171 Homestead Rd., Suite 255, Santa Clara, CA 95050 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to implement the Storm Drain Master Plan Project (“Project”) and desires to engage a consultant to provide professional engineering services, including project management, development of drainage design standards, data collection, development of a computer model of the storm drain system, identification of a list of capital improvement projects increasing the capacity of the storm drain system, preparation of an updated Storm Drain Master Plan Report, development of a list of recommended storm drain system replacement/rehabilitation projects, and staff training in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Professional Services Rev. Feb. 2014 1 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by the City, as needed, with a Task Order assigned and approved by the City’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a City Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and the City may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the schedule of Performance attached as Exhibit “B” unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed Two Hundred Forty Seven Thousand Eight Hundred and Forty Dollars ($247,840.00). In the event Additional Services are authorized, the total compensation for Services, Additional Services and reimbursable expenses shall not exceed Two Hundred Forty Seven Thousand Eight Hundred and Forty Dollars ($250,000.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- Professional Services Rev. Feb. 2014 2 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. Professional Services Rev. Feb. 2014 2 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. Option B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: V&A Consulting Engineers, Inc. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Daniel J. Schaaf as the Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Emily D. Straley as the project engineer to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s project manager is Joe Teresi, Public Works Department, Engineering Services Division, 250 Hamilton Avenue Palo Alto, CA 94303, Telephone:(650) 329-2129. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT Professional Services Rev. Feb. 2014 3 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. CITY shall indemnify and hold CONSULTANT harmless from and against any claims, damages, losses, or fees (including attorney fees and court costs) that result from modification to CONSULTANT’s work product unless specifically authorized by CONSULTANT in writing. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, and employees (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. Professional Services Rev. Feb. 2014 5 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. Professional Services Rev. Feb. 2014 6 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above Professional Services Rev. Feb. 2014 7 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not Professional Services Rev. Feb. 2014 8 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. Professional Services Rev. Feb. 2014 9 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: Senior Asst. City Attorney SCHAAF & WHEELER, CONSULTING CIVIL ENGINEERS By: Name: Title: Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS Professional Services Rev. Feb. 2014 10 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC Daniel J. Schaaf vice president EXHIBIT “A” SCOPE OF SERVICES The following Scope of Services is in accordance with Schaaf and Wheeler, Consulting Engineer’s Proposal dated May 29, 2014: Task A: Progress Meetings and Project Management Schaaf & Wheeler’s tried and tested methods have time and again made us believe that staying in regular contact with our client is an effective tool for keeping master plans on track and within budget. We will have face-to-face meetings with the staff at key points during the project. These meetings will involve reviewing work products and making decisions on future steps. Our team will be available to City staff throughout the project via telephone and email. Our engineers are also available to attend quick meetings on short notice. Schaaf & Wheeler is budgeting for ten (10) one-hour meetings with the City. These includes bi-weekly face- to-face project meetings as well as a Council presentation on the master plan and CIP. Agendas and meeting minutes will be prepared for each formal meeting and distributed to the project team for review. Task B: Drainage Design Standards Schaaf & Wheeler will review the City’s current drainage design standards and criteria and will work with the City to revise and augment these standards to meet existing and future needs. These revisions will make the City standards consitent with methods applied to this master planning effort and flood control measures of the Santa Clara Valley Water District, which operates a number of important drainage facilities within Palo Alto. The new drainage standards will include methods for: • calculating runoff, • sizing draiange facilities and flood control channels, • designing standards for inlets, pipes and manholes, • designing pump stations, • determining detention sizing criteria, and more. Proposed standards will also incorporate current NPDES requirements and other regional standards. Schaaf & Wheeler will work with the City to determine methods for reducing impacts on strom water runoff and on-site detention from increase in impervious surfaces due to future development. A standard policy for on-site detention systems that can be used in the construction of private development projects will be developed. Schaaf & Wheeler will use data from two gaged watersheds in Palo Alto - San Fransiquito Creek and Matadero Creek, to validate the PC-SWMM model. The methods and assumptions used in the validated PC-SWMM model will be consistent with those used and accepted by other engineers. The Santa Clara County Drainage Manual (Schaaf & Wheeler, 2006) provides calibrated AMC values that will be applied and modified to work in the PC-SWMM model. Task C: Data Collection and Review Schaaf & Wheeler will map the City of Palo Alto’s drainage network using a combination of existing GIS data, past reports, record drawings, and field work. Schaaf & Wheeler will collect all readily available data and conduct minimal field work at strategic system locations. The accuracy of the data collected will be adequate for master planning purposes. Schaaf & Wheeler has worked on several similar projects and will apply our team’s knowledge and engineering techniques to produce mapping that is effective and functional for this study. Professional Services Rev. Feb. 2014 11 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC Planning and Research Schaaf & Wheeler will review the City’s readily available archives and record drawings to assess the accuracy of the existing drainage system data.Schaaf & Wheeler will utilize ArcGIS 10.1 to build an updated geodatabase of the City’s drainage system, using the 1993 storm drain master plan model files as a base. This platform is the industry standard for master planning and asset management and works seamlessly with most hydraulic modeling software. Before beginning field work, Schaaf & Wheeler will compile additional spatial data and hydrography from other sources including: Santa Clara County, FEMA, NRCS, USGS and other engineers working in the region. Our team will present this data in mapping format to the City for review. A meeting to discuss the accuracy and uncertainties in the data may be necessary after the City has reviewed the data. Field Data Collection There are several drainage systems scattered throughout the City of Palo Alto and performing minimal inspection and verification can greatly increase the accuracy of the storm drain model. It is often quicker and more accurate to field survey portions of the system that are not available in GIS instead of working off of as-built drawings. Schaaf & Wheeler will develop a time-effective and systematic approach for field data collection. This approach will be based on: • known drainage issues, • available data, • past studies by other consultants and • City recommendations. This organized method of data collection will help optimize the project budget. With the combined effort of Schaaf &Wheeler and V&A our team will cover about 100 drainage structures of the City. V&A will lead the field operations and is tasked with condition assessment and collecting system attributes (pipe diameter, material, depth, etc.). Depth from rim to invert will be measured at accessible nodes at an appropriate level of detail required for hydraulic modeling. Rim elevation will be globally referenced to the 2006 Santa Clara County LiDAR data or other topographic surfaces. Schaaf & Wheeler engineers will also spend up to three days in the field collecting watershed and system data to enhance the GIS data. This will include roadway drainage configurations, and land use characteristics. Spatial Data Analysis The field and record data collected by Schaaf & Wheeler and V&A will be appended into the City’s geodata. All data will be referenced spatially to the State Plane (NAD83) coordinate system and vertically to the NAVD88 datum. The attributes will include the source of the data to help document accuracy. Data attribute formats will be consistent with City datasets whenever possible. Metadata will be developed for all spatial data created by this study. Condition Assessment Schaaf & Wheeler will complete a condition assessment of critical sections of the drainage system. This will benefit the City by identifying critical issues within the system and having them addressed in the CIP. Portions of the system that have known issues or are in corrosive or erosive environments will be the focus of our assessment work. Our preliminary budget is for four days of field investigations. V&A has worked on several drainage master plans and have a strong understanding of what information is required for these types of studies. However, we will meet with the City staff before the assessments to confirm the types of information that will be collected and its usage, presentation and documentation. Professional Services Rev. Feb. 2014 12 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC At this point the use of CCTV is not deemed necessary; however, V&A may compile a list of pipes that may need CCTV inspection. The condition of the City’s drainage system will be documented in a stand-alone report by V&A. Schaaf & Wheeler will use this information to assess existing conditions and develop a Capital Improvements Program (CIP). Projects will be categorized based on priority with public safety being the highest concern. This CIP will be incorporated into the Storm Drain Master Plan CIP which will include capacity related projects. Task D: Develop Computer Model of the Storm Drain System The data collected under Task C will be utilized to create hydraulic models and conduct other analyses to determine the current system performance and the necessary capacity related improvements. Watershed Data Schaaf & Wheeler will verify the 1993 watershed delineations and characteristics based on existing land use, soils and topographic data. The County’s hydrologic methodology will be utilized to check runoff hydrographs for the 10-year event. This storm event frequency is a common design standard in Santa Clara County and an indicator of system performance in terms of annual flood risk. Land use data will be based on the City’s current planning and zoning data or other readily available information. Schaaf & Wheeler will validate the land use information with aerial imagery and confirm impervious percentages for various land use types. Soils will be based on NRCS databases and watersheds will be delineated using the regional LiDAR surfaces, drainage system layouts, and engineering judgment. A key step in the hydrology process is to incorporate a watershed mapping review by the City. Staff engineers know the systems better than anyone and their input vastly improves the quality of these studies. Hydraulic Model Schaaf & Wheeler will develop hydraulic models for City of Palo Alto drainage systems to identify capacity constraints. While the SCS methodology from the Santa Clara County Drainage Manual (2006) cannot be reproduced using SWMM, Schaaf & Wheeler engineers have developed effective techniques to produce similar, verifiable results. Storm drain pipes smaller than 12-inches have minimal conveyance capacity; therefore, Schaaf & Wheeler will only model pipes with diameters 12-inches and larger unless they lead directly to a creek outfall. Schaaf & Wheeler will model the County’s 10-year design storm event; however, models with other frequency events (2-, 25-, 100-year) can also be developed for the City as an optional task. Schaaf & Wheeler will utilize the hydraulic models to determine sections of the pipe network that do not currently have 10-year capacity. Figures showing the location and magnitude of capacity constraints will be developed and submitted to the City staff for review. City input is one of the best ways to ground-truth the model results. Models and calculations will be adjusted based on City’s feedback, and mapping and figures will also be updated accordingly. Future Land Use Schaaf & Wheeler will create hydraulic models for a built-out land use condition. This will include all future land use changes based on the City’s current general plan. The model will be run with improved system infrastructure to determine any direct impacts on the drainage system from future development. This information may be incorporated into the master plan document or presented as a stand-alone technical memorandum. Task E: Analyze and Update Capital Improvement Project List System deficiencies identified in Task D will be mitigated with proposed improvement projects. Improvements may range from pipeline upsizing to new pump stations. Alternatives for larger Professional Services Rev. Feb. 2014 13 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC projects may be developed to provide design flexibility. The condition related CIPs from Task C will be incorporated into the overall master plan CIP. Opportunities to combine stormwater management goals with capacity improvements may also be analyzed. Schaaf & Wheeler will work with the City to prioritize improvement projects. A project summary sheet will be created for each major improvement project. These sheets will provide a clear and concise summary of the current problem, improvement components, and construction costs. Cost Estimating Schaaf & Wheeler will estimate the cost of each identified CIP project using a combination of unitized costs and site specific details. Contingencies will be added to account for administration, permitting, design, construction management and construction costs. Schaaf & Wheeler has compiled project costs from several storm drainage projects throughout the Bay Area and will utilize that data to develop realistic unitized cost for pipeline and pump station projects. Schaaf & Wheeler anticipates City’s assistance with cost estimation for easements and land acquisition. CIPs for future land use changes (build out) will also be developed. All improvement and maintenance costs will be clearly summarized and adjusted to current ENR indices. Capital Improvement Program and Schedule Based on the projects and prioritizations, Schaaf & Wheeler will develop a Capital Improvement Program (CIP). The highest priority projects will be scheduled for a 5-year construction window, or a construction window the City prefers after consultation. The remaining projects will be scheduled over a long-term (20-year) timeframe. Cost often strongly influences project priority rankings. Schaaf & Wheeler will meet with the City’s Operations and Maintenance group to discuss known issues with the system. The proposed CIP may incorporate annual maintenance costs as well as improvement projects to correct maintenance issues. Task F: Prepare Report Schaaf & Wheeler will produce a complete draft master plan report that will: • discuss drainage design standards and design criteria, • summarize existing drainage system condition, • outline the system’s current performance, • detail out areas currently subject to flooding, • list and prioritize improvement projects, • estimate costs for all improvements, and • document technical methodologies and model results. The document will be formatted and organized to layer the study information. It will provide a concise overview of the study findings and recommendations in simple non-technical terms with sufficient information for the general public and City officials outside the engineering field, such as City Council members. The report will also supply the technical community with detailed implementable information on the drainage system to execute proposed projects. The report will also include recommendations that consider climate change issues and innovative projects and techniques that achieve multiple benefits such as storm water runoff reduction, groundwater recharge, and water conservation. CIPs and project schedules will be organized with the anticipation of a 2016 ballot measure to extend the City’s storm drain fee. Appendices supplied as a part of the Storm Drain Master Plan will include model results, improvement figures and Professional Services Rev. Feb. 2014 14 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC detailed cost estimates. The report will be supplied in hard copy as well as electronically, in PDF format. Schaaf & Wheeler will work with City staff to develop a master plan format that works best for the community. Schaaf & Wheeler submissions will include: • First Draft Report at the 90% level - including preliminary model results and improvement projects. • Final Report – will be submitted once City comments on the 90% report have been incorporated and the final CIP and project schedule have been developed. The final report will be submitted to City Council and presented at a formal meeting. Task G: System Replacement/Rehabilitation Recommendations Schaaf & Wheeler and V&A will work with the City to develop a systematic program for evaluating the condition of the drainage system. The work by V&A will be the first step in determining the current condition of the pipe networks, culverts, pump stations and outfalls. V&A will develop a plan to phase the inspection work and prioritize key locations. Ideally this program will be part of the City’s overall drainage master plan Capital Improvement Program and will be funded by the City’s drainage fee program. Task F: Staff Training Schaaf & Wheeler will provide training to ensure that City staff can use the master plan report and storm drain system model to make important planning and design decisions. We Schaaf & Wheeler will conduct a series of two-hour classes with handouts and hands-on problem solving. Each class will build on topics directly related to master planning the City’s storm system. Professional Services Rev. Feb. 2014 15 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Weeks From NTP 1. Project Management 20 2. Drainage Design Standards 8 3. Data Collection & Review 12 4. Develop Computer Model 15 5. Analyze and Update CIP 16 6. Report 20 7. Replacement/Rehab Recommendation 20 Professional Services Rev. Feb. 2014 16 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $247,840. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $250,000. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s project manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $247,840 and the total compensation for Additional Services does not exceed $2,160. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task A $19,720 (Project Management) Task B $7,960 (Drainage Design Standards) Task C $55,460 (Data Collection and Review) Task D $81,450 (Develop Computer Model) Task E $30,240 (Analyze and Upgrade CIP) Task F $38,390 (Report) Task G $14,620 (Replacement/Rehab Recommendation) Professional Services Rev. Feb. 2014 14 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC Sub-total Basic Services $247,840 Reimbursable Expenses $0.00 Total Basic Services and Reimbursable expenses $247,840 Additional Services (Not to Exceed) $2,160 Maximum Total Compensation $250,000 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s project manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: A change or increase in the scope of work. Professional Services Rev. Feb. 2014 15 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC EXHIBIT “C-1” HOURLY RATE SCHEDULE SCHAAF & WHEELER CONSULTING CIVIL ENGINEERS Personnel Charges Charges for personnel engaged in professional and/or technical work are based on the actual hours directly chargeable to the project. Current rates by classification are listed below: Classification Rate/Hr Project Manager $210 Construction Manager $200 Project Engineer $200 Senior Resident Engineer $175 Senior Engineer $185 Resident Engineer $155 Associate Engineer $165 Assistant Resident Engineer $135 Assistant Engineer $145 Construction Inspector $125 Junior Engineer $135 Designer $130 Technician $125 Engineering Trainee $ 95 Principal time is $275 per hour and is charged only for work done in preparation for litigation and other very high level-of-expertise assignments. Court or deposition time as an expert witness is charged at $375 per hour with a minimum of four hours per day. Materials and Services Subcontractors, special equipment, outside reproduction, data processing, computer services, etc., will be charged at 1.10 times cost. These rates are subject to revision semi-annually. Professional Services Rev Feb. 2014 18 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC EXHIBIT “C-1” HOURLY RATE SCHEDULE V&A Consulting Engineers, Inc. 2014 Fee Schedule20 VVV2&A Consulting Engineers V 2014 Fee Schedule Effective January 1, 2014 Principal-in-Charge $283 Senior Project Manager $247 Project Manager $221 Senior Project Engineer $206 Structural Engineer $206 Project Engineer $185 Associate Engineer $165 Assistant Engineer $134 CADD Designer $134 Engineering Assistant $124 Senior Technician $118 NACE Certified Coating Inspector $82 Technician $103 Project Administrator/Clerical $82 Forensic Engineering $412 Deposition/Court Appearance $515 RATES INCLUDE OVERHEAD AND PROFIT Other Direct Costs Subcontractor/Subconsultant Cost + 10% Soil and Coating Sample Analysis Cost + 10% Travel (Air/Hotel/Per Diem/Rent-A-Car) At Cost Auto/Truck Mileage Federal Rate Field Truck $85/Day Confined Space Entry Truck and Safety Equipment $130/Day Reproduction, Printing, Shipping At Cost Professional Services Rev Feb. 2014 19 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRE D TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY Professional Services Rev Feb. 2014 20 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Professional Services Rev Feb. 2014 21 DocuSign Envelope ID: 96C48DCE-CA59-40DD-934D-2E50F2D8ADEC City of Palo Alto (ID # 4880) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Page Mill Rd Plan Line Study with County of Santa Clara Title: Approval of a Funding Agreement with the County of Santa Clara in the Amount of $100,000 for Development of a Concept Plan Line for Possible Improvements to Page Mill Road from Oregon Expressway to I-280 and Adoption of a Budget Amendment Ordinance to Transfer $75,000 from the Stanford Research Park/El Camino Traffic Impact Fee Fund and $25,000 from the Citywide Traffic Impact Fee Fund to CIP PL-12000 for this purpose. From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council authorize the City Manager to execute an agreement with the County of Santa Clara, providing $100,000 in funding for the development of a Concept Plan Line to assess possible improvements to Page Mill Road between I-280 and Alma Street, and that Council approve a Budget Amendment Ordinance transferring a total of $100,000 from the Stanford Research Park/El Camino Development ($75,000) and Citywide Traffic Impact Fee ($25,000) Funds to CIP PL-12000 (Parking & Transportation Improvements) for this purpose. Background The County of Santa Clara is in the process of preparing an update to the Comprehensive Expressway Planning Study. The study evaluates the existing conditions of the expressways and evaluates them against near-term and long-term regional growth scenarios. Within the City of Palo Alto there are three expressways: Page Mill Rd-Oregon Expressway traversing the city east to west; Foothill Expressway entering Palo Alto from the South and ending at Page Mill Rd before turning into Junipero Serra Blvd through the north half of the city; and Central Expressway terminating at the southern border of the City at Mountain View and turning into Alma Street through Palo Alto. On June 16, 2014 Council held a Study Session with County representatives to learn more about the Comprehensive Expressway Planning Study (Staff Report ID#4760 – Attachment C). In preparing for the Study Session, staff identified an opportunity to assist the County in evaluating options to improve the Oregon Expressway-Page Mill Road corridor. Oregon City of Palo Alto Page 2 Expressway is already under construction, due largely in part to previous expressway studies that recommend signal optimization improvements between Alma Street and Highway 101. Page Mill Road on the other hand is impacted under existing conditions from the I-280 interchange to Foothill Expressway and projected to operate at LOS F up to El Camino Real in the future without additional improvements. Summary of Key Issues To assist the County in identifying meaning improvements for Page Mill Road that are acceptable to the community, a Concept Plan Line Study is recommended. The County of Santa Clara – Concept Plan Line Funding Agreement (Attachment B) identifies the scope of the Concept Plan Line study, which would include studying options to widen Page Mill Road to 6- lanes west of Foothill Expressway to provide additional roadway capacity, a focused bicycle and pedestrian assessment, and target improvements at key intersections to improve operations. Page Mill Road & Foothill Expressway-Junipero Serra Boulevard would also be analyzed for potential grade-separation as part of the Concept Plan Line study. Having a Concept Plan Line that is developed through a collaborative planning process with the County and that includes community outreach would inform recommendations in the next iteration of the Comprehensive Expressway Planning Study, and would be useful in securing regional transportation grant funds by facilitating more detailed construction estimates. Stanford Research Park Traffic Impact Fee (TIF) Program Staff recommends a combination of funds from the Stanford Research Park ($75,000) and Citywide ($25,000) Traffic Impact Fee programs to help fund the proposed Concept Plan Line between I-280 and Alma Street. The Stanford Research Park TIF is $11.08 per new square foot of land use generated by new development and is intended to help fund specific transportation improvements along Page Mill Road that impact access into/from the research park. The findings generated from the Concept Plan Line include preliminary engineering recommendations that will be used for future Capital Improvement Program (CIP) projects by either the County of Santa Clara or the City of Palo Alto. The County will fund separately, as part of the Concept Plan line, the accompanying preliminary traffic analysis study to identify benefits or impacts of proposed improvements. Ultimately, any recommended improvements from the Concept Plan Line would be the basis for community engagement and ultimate construction improvements. Many of the improvements that will be considered as part of the Concept Plan Line development for Page Mill Road are consistent with the Stanford Research Park TIF Program projects such as improvements at Page Mill Road & Foothill Expressway-Junipero Serra Boulevard and Page Mill Road & Hanover Street so use of the Stanford Research Park/El Camino Development funds is appropriate. The Concept Plan Line also includes opportunities for improvements to bicycle/pedestrian City of Palo Alto Page 3 connections along Page Mill Road. $25,000 from the Citywide TIF program is recommended to help identify opportunities for bicycle/pedestrian improvements on parts of Page Mill Road that are outside of the influence of the Stanford Research Park TIF such as multi-use trail opportunities near I-280 or connections to Old Page Mill Road for bicyclists. Page Mill Road – Potential Improvements for assessment in the Concept Plan Line Study With funding from the City, the County is proposing to undertake a plan line study to evaluate possible corridor improvements such as those listed below: Bicycle and Pedestrian Facilities:  Bicycle Lane addition east of El Camino Real with guidance off of Page Mill Road towards Park Blvd  Multi‐use trail along the north side of Page Mill Road between Foothill Expressway and  Old Page Mill Road  Multi‐use trail along the south side of Page Mill Road between Deer Creek Road and I‐280 with supporting retaining wall improvements El Camino Real & Page Mill Road:  Capacity improvements including extending the double westbound left turn lanes (Westbound Page Mill Rd to Southbound El Camino Real towards Mountain View)  Bulb‐out improvement on the southeast corner (AT&T Building) to help reduce pedestrian crosswalk distances and to provide a larger radius for the return  Pedestrian improvements with a focus on the southwest corner (Palo Alto Square) Page Mill Road & Hansen Avenue Street  Identify opportunities to increase the storage capacity of the eastbound left turn  movement into 1050 Page Mill Road Page Mill Road & Hanover Street  Explore a 4‐lane to 2‐lane reduction on each approach of Hanover Street to support bicycle lane additions on Hanover Street and new north‐south left turn lanes with protected left turn signal improvements  Study the left turn storage capacity of Page Mill Road  Study opportunities for addition of right turn lanes from Page Mill Road onto Hanover Street Page Mill Road & Porter Drive  Study the left turn storage capacity of Page Mill Road  Extend bicycle lanes on Porter Drive to Page Mill Road  Improve storage capacity on Porter Drive Page Mill Road & Foothill Expressway Intersection Improvement Concepts: City of Palo Alto Page 4  Widening of Page Mill Road East to improve capacity  Grade separation with Foothill Expressway under Page Mill Road  Grade separation with Page Mill Road under Foothill Expressway Page Mill Road – West of Foothill Expressway  Widening of Page Mill Road from 4‐Lanes to 6‐Lanes  Identify constraints at Coyote Hill Road o Remove left turn access to and from Coyote Hill Road o Remove just left turn access from Coyote Hill Road but preserve left turn access onto Coyote Hill only Page Mill Road‐Oregon Expressway & Alma Street Interchange  For an additional $65,000 a focused study can be prepared to identify near‐term improvements for the interchange. No immediate improvements have been identified The Concept Plan Line Study will include two focused community outreach meetings in Palo Alto and Study Sessions with both the Planning & Transportation Commission and City Council. Outreach to Stanford University, City of Los Altos, and Town of Los Altos Hills will be included as part of each community meeting and study session. Resource Impact A Budget Amendment Ordinance (Attachment A) is required to transfer $100,000 from the Stanford Research Park/El Camino Development Fund ($75,000) and the Citywide Traffic Impact Fee Fund ($25,000) to the Capital Improvement Fund for Project PL-12000 (Parking & Transportation Improvements) to fund the proposed agreement. The County of Santa Clara will contract for the proposed study and both match the City funds with in-kind staff support and concurrent traffic impact analysis studies using County resources from the County Expressway Study 2040. Timeline The Concept Plan Line development for Page Mill Road will begin over the summer and include a focused community engagement process that will continue through the Fall. Study Sessions with both the Planning & Transportation Commission and City Council are anticipated during the Fall so that study may be completed before Spring 2015 so as to inform the County Expressway Study 2040. Environmental Review The proposed Concept Plan Line study for Page Mill Road will be used to inform the County Expressway Study 2040, for which a Program Level EIR is being prepared. As future capital improvement projects in the County Expressway Study are funded, supplemental CEQA analysis will be completed as needed. City of Palo Alto Page 5 Courtesy Copies County of Santa Clara – Dawn Cameron Attachments:  Attachment A: Budget Amendment Ordinance (PDF)  Attachment B: The County of Santa Clara – Concept Plan Line Funding Agreement (PDF)  Attachment C: Comprehensive Expressway Planning Study (Staff Report ID#4760 City Council June 16, 2014) (PDF) ATTACHMENT A ORDINANCE NO.XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 2014 TO PROVIDE TO ADDITIONAL APPROPRIATION OF $75,000 IN THE STANFORD RESEARCH PARK TRAFFIC IMPACT FEE FUND AND $25,000 IN THE CITYWIDE TRAFFIC IMPACT FEE FUND FOR A TOTAL OF $100,000 AND TO TRANSFER THIS APPROPRIATION TO THE CAPITAL IMPROVEMENT FUND FOR CIP PL-12000 FOR THE DEVELOPMENT OF A CONCEPT PLAN LINE STUDY FOR TRAFFIC IMPROVEMENTS TO PAGE MILL ROAD BETWEEN I-280 AND ALMA STREET The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 10, 2013 did adopt a budget for fiscal year 2013; and B. The County of Santa Clara is preparing an update to the Comprehensive Expressway Study to evaluate the conditions of expressways for near and long-term growth; and C. There are three expressways within the City of Palo Alto that will be included in the study. They are Page Mill Rd-Oregon Expressway traversing the city east to west; Foothill Expressway entering Palo Alto from the South and ending at Page Mill Rd before turning into Junipero Serra Blvd through the north half of the City; and Central Expressway terminating at the southern border of the City at Mountain View and turning into Alma Street through Palo Alto; and D. As part of the City of Palo Alto’s traffic mitigation efforts, participation in the Concept Plan Line study will be useful in securing regional transportation grant funds and facilitate more detailed construction efforts for future transportation capital improvement projects; and E. Sufficient funds are available in the Stanford Research Park/El Camino Development Fund to participate in the study; and F. Sufficient funds are available in the Citywide Traffic Impact Fee Fund to participate in the study; and G. The additional appropriation of $75,000 from the Stanford Research Park/El Camino Development Fund and $25,000 from the Citywide Traffic Impact Fee Fund will be transferred in total to the Capital Improvement Fund for CIP PL-12000 (Parking and Transportation Improvements) to fund the City of Palo Alto’s participation in the study. SECTION 2. The sum of Seventy Five Thousand Dollars ($75,000) is hereby appropriated and transferred from the Stanford Research Park/El Camino Development Fund to the Capital Improvement Fund for CIP PL-12000 (Parking and Transportation Improvements). SECTION 3. The sum of Twenty Five Thousand Dollars ($25,000) is hereby appropriated and transferred from the Citywide Traffic Impact Fee Fund to the Capital Improvement Fund for CIP PL-12000 (Parking and Transportation Improvements). SECTION 4. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 5. The above referenced project areas are categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301c of the CEQA Guidelines as repair, maintenance and/or minor alteration of the existing facilities and no further environmental review is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: _________________________ City Clerk __________________________ Mayor APPROVED AS TO FORM: _________________________ City Attorney __________________________ City Manager __________________________ Director of Planning and Community Environment __________________________ Director of Administrative Services Agreement between the City of Palo Alto and the County of Santa Clara for Conceptual Plan Layout of the Page Mill Road Expressway Corridor Between Old Page Mill Road (West) and Birch Street Page 1 of 4 FUNDING AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA FOR THE CONCEPTUAL PLAN LAYOUT OF THE PAGE MILL ROAD EXPRESSWAY CORRIDOR BETWEEN OLD PAGE MILL ROAD (WEST) AND BIRCH STREET This is an agreement made and entered into as of the date it is fully executed by and between the City of Palo Alto, California, a chartered municipal corporation of the State of California (hereinafter referred to as “CITY”), and the County of Santa Clara, a political subdivision of the State of California (hereinafter referred to as “COUNTY”), collectively referred to herein as the “PARTIES”, to develop the conceptual plan layout for the Page Mill Road Expressway Corridor between Old Page Mill Road (west) and Birch Street (hereinafter referred to as “PROJECT”). RECITALS WHEREAS, this improvement is necessary to improve traffic flow, reduce delay to motorists, enhance safety, and improve bicycle and pedestrian facilities in both the CITY and on the COUNTY Expressway; and, WHEREAS, CITY has been collecting traffic impact mitigation fees to be used toward the improvement of Page Mill Road Expressway and intersections; and, WHEREAS, development along Page Mill Road Expressway in the CITY is underway and guidance for future CITY approvals of development within the PROJECT area is necessary to preserve the necessary right-of-way and secure improvements consistent with the ultimate conceptual layout for this corridor; and, WHEREAS, COUNTY is preparing the Expressway Plan 2040, the successor to the 2003 and 2008 Comprehensive County Expressway Planning Study, and the PROJECT will better define the expressway improvements for inclusion in the Expressway Plan 2040; and, WHEREAS, CITY has acknowledged the future benefit of this PROJECT to CITY and indicated its willingness to contribute funding to the PROJECT; and WHEREAS, the PARTIES desire to memorialize such agreement (“AGREEMENT”) in writing. NOW, THEREFORE, for and in consideration of their mutual promises and covenants, and subject to the terms, conditions, and provisions hereinafter set forth, the PARTIES agree as follows: AGREEMENT Scope of Work: COUNTY, as the lead agency, will engage a consultant to develop the ultimate conceptual layout for the Page Mill Road Expressway Corridor between Old Page Mill Road (west) and Birch Street as described in Exhibit A, Scope of Services. Attachment B Agreement between the City of Palo Alto and the County of Santa Clara for Conceptual Plan Layout of the Page Mill Road Expressway Corridor Between Old Page Mill Road (West) and Birch Street Page 2 of 4 1) PROJECT Cost and Funding: PROJECT cost shall not exceed $100,000. CITY will provide $100,000 to the COUNTY to conduct the work described in Attachment A. Any changes to the scope of work that may increase the PROJECT costs shall receive prior written approval and agreement on a funding plan from both COUNTY and CITY. 2) Timing of PROJECT Funding: a) Within 30 days of execution of this AGREEMENT, COUNTY shall invoice CITY in the amount of $100,000. CITY shall pay the full invoice amount to COUNTY within 30 days of receipt of invoice. b) Upon PROJECT completion, COUNTY shall provide a final cost summary to CITY and return any unspent funds to the CITY. c) COUNTY will provide CITY with one hard copy and one electronic format version of the PROJECT final memorandum. 3) Project Management COUNTY, as lead agency, shall have responsibility for consultant management and completion of the PROJECT. CITY, as a PROJECT partner, shall cooperate fully towards the successful outcome of the PROJECT by providing sufficient staffing and attention to work products to represent the CITY’s concerns and preferences, and where necessary resolve difference or make policy decisions. The PARTIES shall incur no liability individually or as a group for the implementation or non-implementation of PROJECT. 4) Indemnification: In lieu of and not withstanding the pro rata risk allocation, which might otherwise be imposed between the PARTIES pursuant to Government Code Section 895.6, the PARTIES agree that all losses or liabilities incurred by a Party shall not be shared pro rata but, instead, COUNTY and CITY agree that, pursuant to Government Code Section 895.4, each of the PARTIES hereto shall fully indemnify and hold each of the other PARTIES, their officers, board members, employees, and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this AGREEMENT. No party, nor any officer, board member or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other PARTIES hereto, their officers, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other PARTIES under this AGREEMENT. // Agreement between the City of Palo Alto and the County of Santa Clara for Conceptual Plan Layout of the Page Mill Road Expressway Corridor Between Old Page Mill Road (West) and Birch Street Page 3 of 4 5) Additional Provisions: a) The parties’ waiver of any term, condition or covenant, or breach of any term, condition, or covenant shall not be construed as a waiver of any other term, condition or covenant or breach of any other term, condition or covenant. b) This agreement is the entire AGREEMENT between COUNTY and CITY relating to the PROJECT. Any prior agreements, promises, negotiations, or representation not expressly set forth in this agreement are of no force or effect. c) If any term, condition or covenant of this agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this agreement will be valid and binding on COUNTY and CITY. d) This agreement will be governed and construed in accordance with the laws of the State of California. e) This agreement may be executed in counterparts and will be binding as executed. f) The term of this agreement will commence upon execution of the agreement by both PARTIES and shall remain in effect until terminated by mutual agreement of the PARTIES or pursuant to Section 8(h). If not terminated earlier, the AGREEMENT will expire on June 30, 2015. g) All changes or extensions to the AGREEMENT must be in writing in the form of an amendment and approved by both PARTIES. h) Either COUNTY or CITY may terminate the agreement at any time prior to award of the construction contract for the PROJECT upon thirty (30) days written notice. Once the consultant contract for the PROJECT has been awarded, the agreement can be terminated only upon the mutual written consent and terms acceptable to both PARTIES. i) The designated project manager for COUNTY for the duration of the PROJECT is Roy Cabaltera or his designee. COUNTY’s project manager will have all the necessary authority to direct technical and professional work within the scope of the agreement and will serve as the principal point of contact with COUNTY. The CITY Traffic Engineer, Jaime Rodriguez, or his designee, will serve as the principal point of contact for the CITY, responsible for coordinating the review of the study for the CITY, for obtaining the necessary CITY approvals, and for authorizing work which may result in additional cost. j) The AGREEMENT does not change any authority or responsibility between COUNTY and CITY with regard to design, maintenance, operation or future repair responsibility. // // // Agreement between the City of Palo Alto and the County of Santa Clara for Conceptual Plan Layout of the Page Mill Road Expressway Corridor Between Old Page Mill Road (West) and Birch Street Page 4 of 4 9) Notices – Notices required by this agreement may be delivered by first class mail addressed to the appropriate party at the following addresses and deemed received when sent to: To CITY: CITY OF PALO ALTO 250 Hamilton Ave, Palo Alto, CA 94301 Attn: Jaime O. Rodriguez, Chief Transportation Official To COUNTY: ROADS AND AIRPORTS DEPARTMENT 101 Skyport Drive, San Jose, CA 95110-1302 Attn: Michael Murdter, Director IN WITNESS WHEREOF, the PARTIES have entered into this AGREEMENT as of the date it is fully executed. CITY OF PALO ALTO, a municipal corporation By: ___________________________ Date: _________________ James R. Keene City Manager APPROVED AS TO FORM: By: _______________________ Date: __________________ COUNTY OF SANTA CLARA By: _______________________ Date: __________________ Michael Murdter, Director Roads and Airports Department By: _______________________ Date: __________________ Sylvia Gallegos Office of the County Executive APPROVED AS TO FORM & LEGALITY: By: ___________________________ Date: __________________ E. Ray Ruiz Deputy County Counsel City of Palo Alto (ID # 4760) City Council Staff Report Report Type: Study Session Meeting Date: 6/16/2014 Summary Title: County Expressway Study Program and Page Mill/280 Update Title: Study Session on the County of Santa Clara Expressway Study Program and Update on the Page Mill Road & I-280 Interchange Project From: City Manager Lead Department: Planning and Community Environment Recommendation This is a study session, and there is no recommended action. The study session will provide an update and discussion about the County of Santa Clara – Expressway Study Program with a focus on proposed study elements of expressways that traverse through or influence Palo Alto including: Oregon Expressway-Page Mill Road, Foothill Expressway, Central Expressway, and the Page Mill Road & I-280 Interchange. County staff will make the presentation. Background The County of Santa Clara is developing an update to the Comprehensive Expressway Planning Study. The Study is updated every five years by the County to assess the condition and performance of the expressway network and to help plan for future improvements. Updates are either administrative --documenting improvements over the five year period --or comprehensive, with an in-depth assessment of potential improvements given regional growth. This current updated, called Expressway Plan 2040, is the more comprehensive analysis. On April 7, 2014 staff provided an Information Report (Attachment A) to Council regarding activities to date, the level of analysis to be conducted on the three expressways traversing through or terminating in Palo Alto: Oregon Expressway-Page Mill Road, Foothill Expressway, Central Expressway, and a focused study of the Page Mill Road & I-280 Interchange. The assumptions for study elements included in the Information Report are still being considered and will be analyzed as part of the Program Environmental Impact Report (PEIR) for the County General Plan Circulation and Mobility Element. The Notice of Preparation (NOP) for the PEIR was released by the County on May 30, 2014, with scoping comments for the environmental analysis being accepted through June 30, 2014. Staff has been participating in a Technical Working Group (TWG) comprised of Public Works Directors or Transportation Officials from every city in the County to provide perspective City of Palo Alto Page 1 Attachment C regarding planned growth and appropriate transportation infrastructure improvement opportunities as part of the study; Jaime Rodriguez, Chief Transportation Official has represented Palo Alto on the TWG. A Policy Advisory Board (PAB) comprised of local elected officials has been meeting with County officials to help provide community perspective and vision guidance for growth of each City and to validate staff assumptions on improvement opportunities for the expressway network; Councilmember Sharff is the Palo Alto representative to the PAB. Summary of Key Issues As part of the Expressway Study Update the County conducted an extensive existing conditions data assessment in 2013 to help identify the performance levels of the expressway using both Intersection Level of Service (LOS) for key intersections such as Page Mill Road & Foothill Expressway and Link LOS to evaluate the overall capacity of the expressways using Volume to Capacity (V/C) ratios to identify bottleneck areas. The County is using the Future Year (2025) assumptions of the Valley Transportation Authority (VTA) Land Use Travel Forecast Model which tracks growth within the County and in the adjacent San Mateo County region for monitoring of freeway linkages to the expressway system. Through Palo Alto the two LOS methodologies (intersection and link LOS) were used for evaluation of existing conditions of the three expressways traversing through or terminating in the City. Based on the findings of the existing conditions assessment, the TWG discussed potential improvement opportunities for analysis as part of the Circulation and Mobility Analysis. A summary of the existing conditions information and staff comments is included below. Oregon Expressway-Page Mill Road 2013 Existing Conditions  The County estimates that Oregon Expressway-Page Mill Road facility accommodates approximately 134,000 daily vehicle trips making it the 6th busiest expressway facility in the County of Santa Clara.  The Page Mill Road & Foothill Expressway-Junipero Serra Boulevard intersection currently operates at LOS F during both the AM and PM peak periods with an average intersection delay of 118.9 seconds.  Page Mill Road between I-280 and Foothill Expressway currently operates at LOS E during the AM peak period and LOS F during the PM peak period.  Page Mill Road between Foothill Expressway-Junipero Serra Boulevard and El Camino Real currently operates at LOS E during both the AM and PM peak periods. 2025 Future Projections  The County anticipates the Page Mill Road & Foothill Expressway-Junipero Serra Boulevard intersection to continue to operate at LOS F in 2025. The intersection of Foothill Expressway & Hanover Street is projected to operate at LOS F in 2025.  The County projects the existing AM peak period LOS E conditions on Page Mill Road City of Palo Alto Page 2 between I-280 and Foothill Expressway to worsen to LOS F by 2025.  The County also projects that the existing LOS E conditions on Page Mill Road, between FoothillExpressway-Junipero Serra Boulevard, will extend onto Oregon Expressway to Highway 101 by 2025. Potential Improvements for Study Bicycle and Pedestrian Facilities:  Bicycle Lane addition east of El Camino Real with guidance off of Page Mill Road towards Park Blvd  Multi-use trail along the north side of Page Mill Road between Foothill Expressway and Old Page Mill Road  Multi-use trail along the south side of Page Mill Road between Deer Creek Road and I- 280 with supporting retaining wall improvements El Camino Real & Page Mill Road:  Capacity improvements including extending the double westbound left turn lanes (Westbound Page Mill Rd to Southbound El Camino Real towards Mountain View)  Bulb-out improvement on the southeast corner (AT&T Building) to help reduce pedestrian crosswalk distances and to provide a larger radius for the return  Pedestrian improvements with a focus on the southwest corner (Palo Alto Square) Page Mill Road & Hansen Avenue Street  Identify opportunities to increase the storage capacity of the eastbound left turn movement into 1050 Page Mill Road Page Mill Road & Hanover Street  Explore a 4-lane to 2-lane reduction on each approach of Hanover Street to support bicycle lane additions on Hanover Street and new north-south left turn lanes with protected left turn signal improvements  Study the left turn storage capacity of Page Mill Road  Study opportunities for addition of right turn lanes from Page Mill Road onto Hanover Street Page Mill Road & Porter Drive  Study the left turn storage capacity of Page Mill Road  Extend bicycle lanes on Porter Drive to Page Mill Road  Improve storage capacity on Porter Drive Page Mill Road & Foothill Expressway Intersection Improvement Concepts:  Widening of Page Mill Road East to improve capacity  Grade separation with Foothill Expressway under Page Mill Road  Grade separation with Page Mill Road under Foothill Expressway City of Palo Alto Page 3 Page Mill Road – West of Foothill Expressway  Widening of Page Mill Road from 4-Lanes to 6-Lanes  Identify constraints at Coyote Hill Road o Remove left turn access to and from Coyote Hill Road o Remove just left turn access from Coyote Hill Road but preserve left turn access onto Coyote Hill only Page Mill Road-Oregon Expressway & Alma Street Interchange  For an additional $65,000 a focused study can be prepared to identify near-term improvements for the interchange. No immediate improvements have been identified. Community Outreach Plan The Concept Plan Line Study will include two focused community outreach meetings in Palo Alto and Study Sessions with both the Planning & Transportation Commission and City Council. Outreach to Stanford University, City of Los Altos, and Town of Los Altos Hills will be included as part of each community meeting and study session. Staff would appreciate Council input on these potential improvements, and the Council’s interest in partnering with the County of Santa Clara to fund the development of a Concept Plan Line for the Page Mill Road corridor. The City’s cost to participate in the study is estimated at $100,000 and funds are available from the Stanford Research Park Traffic Impact Fee Program. A proposed study scope is provided in Attachment B and based on Council interest; staff is prepared to return to Council with a Budget Amendment Ordinance (BAO) to fund the study. Foothill Expressway 2013 Existing Conditions  The County estimates the Foothill Expressway facility through Palo Alto currently operates at LOS C or better with the exception of the Page Mill Road intersection.  In Los Altos the section of Foothill Expressway north of El Monte, including the El Monte intersection, operates at LOS F. This impacts the commute into Palo Alto. 2025 Future Projections  The County estimates that the intersection of Foothill Expressway & Arastradero Road will operate at LOS F in 2025. Potential Improvements for Study The TWG are recommending the Expressway Plan study a grade separation of Foothill Expressway & Arastradero Road with Foothill Expressway going underneath Arastradero Road. Grade separation will allow Arastradero Road to remain at its current grade and may allow for the removal of traffic signals at the Foothill Expressway and Miranda Avenue intersections and replacement with roundabout facilities. The existing multi-use path along the north side of Arastradero Road (West of Foothill Expressway) can be extended to Miranda Avenue improving City of Palo Alto Page 4 bicycle and pedestrian connections to Gunn High School. Council input on this study idea would be appreciated. Central Expressway 2013 Existing Conditions  The County of Santa Clara does not include any LOS information regarding Alma Street within their report.  The County estimates that Central Expressway immediately south of Palo Alto operates at LOS D through the City of Mountain View. 2025 Future Projections  The County estimates that Central Expressway operations will degrade in the 2025 to LOS E south of Rengstorff Avenue and that the Rengstorff Avenue intersection will operate at LOS F. There are no capacity operational improvements proposed by the County of Santa Clara adjacent to the City of Palo Alto border. Staff is currently partnering with Google to study the Alma Street & San Antonio Avenue intersection as part of the Bicycle Boulevard Program and will be developing improvement concepts that will be shared with the County of Expressway for consideration to include within the County Expressway Study to help qualify the improvements for regional fund improvements. Page Mill Road & I-280 Interchange In the April 7, 2014 Information Report staff noted previous work conducted by the Caltrans and the County of Santa Clara for near-term improvements to signalize the I-280 off-ramp movements and to add pedestrian-bicycle facilities on Page Mill Road. Caltrans studied these improvements as part of an Initial Study to help expedite the use of $2.2M from the State Highway Safety Fund for the improvements. Caltrans has delayed the completion of their Initial Study at the request of the County of Santa Clara to allow the County time to do additional analysis of the interchange as part of the County Expressway Study. No discussion of the Page Mill Road & I-280 interchange is required at this time as the County is requesting time to develop more focused concept plans for discussion with the Council and Palo Alto-Los Altos Hills communities later this Fall. Timeline The County of Santa Clara released the NOP for the County General Plan Circulation and Mobility Element PEIR on May 30, 2014, with scoping comments due by June 30, 2014. Based on the input from this Study Session, staff will prepare a response letter to the NOP for signature by the City Manager. Environmental Review The County is preparing a Program Level EIR for the County General Plan, which includes City of Palo Alto Page 5 expressway system improvements and policies consistent with the Expressway Study 2040 Plan. Courtesy Copies Dawn Cameron – County of Santa Clara Dan Collen – County of Santa Clara Fariba Zohoury - Caltrans Attachments:  Attachment A: City Council Informational CMR of April 7, 2014 (PDF)  Attachment B: Proposed Scope of Work - 060514 (PDF) City of Palo Alto Page 6 City of Palo Alto (ID # 4644) City Council Staff Report Report Type: Informational Report Meeting Date: 4/7/2014 Summary Title: County Expressway Study Update Title: Informational Report - County of Santa Clara Expressway Study Update and Page Mill Rd & I-280 Traffic Signal Improvements From: City Manager Lead Department: Planning and Community Environment Recommendation This is an Informational Report regarding the County of Santa Clara Expressway Plan 2040 Program, including an update on Caltrans’ traffic signal installation project at Page Mill Road & I-280. No action is recommended. Background The County of Santa Clara conducts a study of the County Expressway System approximately every five years to help identify projects that will improve the capacity and/or operations of the system. The expressway study is prepared in parallel with the Valley Transportation Authority’s (VTA’s) Valley Transportation Plan (VTP) Update, which is used to identify needed transportation projects around the County by program type including: Highways, Expressways, Local Streets & County Roads, Roadway Maintenance, Transit, Transportation Systems and Operations and Management, Bicycle, and the Community Design and Transportation Program. An update of the VTP 2035 to create the VTP 2040 is currently underway and projects identified as part of the County of Santa Clara Expressway Plan 2040 study will feed into the VTP 2040. The County of Santa Clara Expressway Plan process has involved two advisory groups: 1) the Policy Advisory Board (PAB) comprised of local elected officials from every city in the County, two County Supervisors, and two members of the VTA Board of Directors; and 2) the Technical Working Group (TWG) comprised of local Public Works Directors or Transportation Officials from every city. Councilmember Greg Scharff was appointed to represent Palo Alto on the PAB, although the meeting schedule conflicts with City Council meetings, and Chief Transportation Official Jaime Rodriguez represents Palo Alto on the TWG. Both the PAB and TWG have each met twice since the Expressway Plan update was initiated in August 2013. Focused Workshops City of Palo Alto Page 1 of both the PAB and TWG have met separately to discuss individual expressway conditions and needs. Within the City of Palo Alto, three expressways terminate or pass through the city including:  Oregon Expressway-Page Mill Road - traversing the City east-west between Highway 101 and Intersection 280.  Foothill Expressway - traversing the city north-south between the Los Altos border and Junipero Serra Boulevard.  Central Expressway - terminating in Palo Alto at the southern border with the City of Mountain View. Central Expressway becomes Alma Street at San Antonio Avenue. The County of Santa Clara is also currently developing a new County General Plan Circulation and Mobility Element. The Expressway System and major improvements for the system will be included in the Circulation and Mobility Element and analyzed as part of a Program Environmental Impact Report (PEIR) for the General Plan Element. The County plans on releasing a Notice of Preparation (NOP) in May 2014. In advance of the NOP, the County has conducted preliminary analysis of each of the expressway facilities to help identify potential major capacity or operational improvements that may be necessary to maintain an acceptable Level of Service (LOS) along each expressway. The remainder of this report highlights existing condition findings and projects for each of three expressway facilities adjacent to or within the City of Palo Alto and discusses potential projects discussed through the PAB and TWG for inclusion with the NOP. Inclusion of projects within the NOP does not guarantee improvement of those projects but allows for their continued study through the Expressway Plan 2040 update to help communities discuss and determine whether the projects are preferred for inclusion in the final report. The City will have an opportunity to comment on the scope of the projects and the associated environmental review process once the County issues its NOP in May. Oregon Expressway-Page Mill Road 2013 Existing Conditions  The County estimates that Oregon Expressway-Page Mill Road facility accommodates approximately 134,000 daily vehicle trips making it the 6th busiest expressway facility in the County of Santa Clara.  The Page Mill Road & Foothill Expressway-Junipero Serra Boulevard intersection City of Palo Alto Page 2 currently operates at LOS F during both the AM and PM peak periods with an average intersection delay of 118.9 seconds.  Page Mill Road between I-280 and Foothill Expressway currently operates at LOS E during the AM peak period and LOS F during the PM peak period.  Page Mill Road between Foothill Expressway-Junipero Serra Boulevard and El Camino Real currently operates at LOS E during both the AM and PM peak periods. 2025 Future Projections  The County anticipates the Page Mill Road & Foothill Expressway-Junipero Serra Boulevard intersection to continue to operate at LOS F in 2025. The intersection of Foothill Expressway & Hanover Street is projected to operate at LOS F in 2025.  The County projects the existing AM peak period LOS E conditions on Page Mill Road between I-280 and Foothill Expressway to worsen to LOS F by 2025.  The County also projects that the existing LOS E conditions on Page Mill Road between Foothill Expressway-Junipero Serra Boulevard will extend onto Oregon Expressway to Highway 101 by 2025. The following projects are being considered by the County of Santa Clara as part of the development of the Expressway Plan 2040 project:  Include the Page Mill Road & I-280 Interchange in the study area for documentation of existing conditions and LOS analysis.  I-280 Interchange – Modify interchange to improve vehicle operations and safety for bicyclists and pedestrians.  Foothill Expressway between I-280 and El Camino Real – Consider widening from 4-lanes to 6-lanes. City of Palo Alto has available funds in the Stanford Research Park Traffic Impact Fee (TIF) Program to assist in identifying the feasibility of this project.  Grade Separate Page Mill Road & Foothill Expressway-Junipero Serra Boulevard intersection - this project may include an alternative concept to just widen the Page Mill Road approaches of the intersection to improve capacity.  Page Mill Rd & Hanover Street – Convert to 8-phase traffic signal operation to address 2025 LOS F conditions.  Alma Street Bridges – Reconstruct and modify the Alma Street bridges to improve vehicle operations and safety for bicyclists and pedestrians.  US 101/Embarcadero Road/Oregon Expressway Interchange – Modify interchange to reduce queue spillbacks onto expressway (freeway project) City of Palo Alto Page 3 Foothill Expressway 2013 Existing Conditions  The County estimates the Foothill Expressway facility through Palo Alto currently operates at LOS C or better with the exception of the Page Mill Road intersection.  In Los Altos the section of Foothill Expressway north of El Monte, including the El Monte intersection, operate at LOS F, this impacts the commute into Palo Alto. 2025 Future Projections  The County estimates that the intersection of Foothill Expressway & Arastradero Road will operate at LOS F in 2025. The following projects are being considered by the County of Santa Clara as part of the development of the Expressway Plan 2040 project:  Identify in planning documents the existing 2013 LOS E conditions at the Foothill Expressway & Arastradero Road intersection.  Grade Separate the Foothill Expressway & Arastradero Road intersection with Foothill Expressway going underneath Arastradero Road. Grade separation will allow Arastradero Road to remain at its current grade and may allow for the removal of traffic signals at the Foothill Expressway and Miranda Avenue intersections and replacement with roundabout facilities. The existing multi-use path along the north side of Arastradero Road (West of Foothill Expressway) can be extended to Miranda Avenue improving bicycle and pedestrian connections to Gunn High School. Central Expressway 2013 Existing Conditions  The County of Santa Clara does not include any LOS information regarding Alma Street within their report.  The County estimates that Central Expressway immediately south of Palo Alto operates at LOS D through the City of Mountain View. City of Palo Alto Page 4 2025 Future Projections  The County estimates that Central Expressway operations will degrade in the 2025 to LOS E south of Rengstorff Avenue and that the Rengstorff Avenue intersection will operate at LOS F. There are no capacity operational improvements proposed by the County of Santa Clara adjacent to the City of Palo Alto border. Staff has requested that the County consider the San Antonio Avenue intersection where Central Expressway currently ends so that bicycle and pedestrian improvements to the San Antonio Caltrain Station can be considered. A copy of existing and 2025 LOS Findings for the Expressway Study 2040 are provided in Attachments A and B respectively. Foothill Expressway & I-280 Traffic Signal Improvements In 2011, the City of Palo Alto requested that Caltrans conduct a traffic signal warrant study as part of a request by then Mayor Sid Espinosa. Caltrans conducted a warrant study and found that the intersection of Page Mill Road & I-280 SB met the installation criteria for traffic signal. Caltrans funded the project at $400,000 through their Highway Safety Program. Parallel to the Caltrans traffic signal warrant study, the City of Palo Alto funded a Concept Study for Interchange Improvements at Page Mill Road & I-280 in partnership with the County of Santa Clara. The Concept Study identified the need for a larger, focused study, which is now proposed as part of the Expressway 2040 Plan project. Caltrans participated in the Concept Study and agreed to include the Page Mill Road & I-280 NB intersection as part of their improvement project and increased their funding for the project to $2.2M to include additional sidewalk and bicycle improvements between Page Mill Rd & Old Page Mill Road to the I-280 SB intersection. More recently, the Town of Los Altos Hills has expressed concerns regarding impacts to the rural environment of the Page Mill Road & I-280 intersections and has submitted a petition to Caltrans, asking them to defer the project. Caltrans is planning to respond to the Town of Los Altos Hills petition but is continuing design work in conjunction with their community engagement process. A copy of the Draft Caltrans Traffic Signal Project Concept Plan is provided in Attachment C. Staff is hoping to schedule a study session to discuss this project with the Council in more detail next month. City of Palo Alto Page 5 Timeline The County of Santa Clara plans to release an NOP for the County General Plan Circulation and Mobility Element PEIR, which includes the future plans for the Expressway System by May 2014. The County has requested that the City submit any additional major capacity/operation improvement projects by April 11th so that they may be included in the NOP. (The projects discussed within this report are already included in the Draft NOP.) City staff has requested that the County of Santa Clara and Caltrans attend a City Council study session to provide the City and the community with additional information, but this study session cannot be scheduled before April 11, and will instead occur after the NOP is issued. Environmental Review The County will prepare a Program Level EIR for their Expressway Study 2040 Plan, which will help identify projects for inclusion in the County General Plan and in the VTP 2040 Update being conducted in parallel with the County Expressway Plan study. Courtesy Copies Dawn Cameron – County of Santa Clara Dan Collen – County of Santa Clara Fariba Zohoury - Caltrans Attachments:  Attachment A: County 2013 Map (PDF)  Attachment B: County 2025 Map (PDF)  Attachment C: Caltrans I-280 Page Mill TS Project Concept (PDF) City of Palo Alto Page 6 Job No. 4469.00June 2, 2014 Page 1 of 7 Exhibit A PROJECT DESCRIPTION Client County of Santa Clara –Roads andAirports Department Project Name Page Mill Road Corridor Evaluation City Palo Alto Description Ultimate Conceptual Layout for Page Mill Road OVERVIEW HMH (“Consultant”)will provide to the County of Santa Clara -Roads and AirportsDepartment(“County”)professional services in collaboration with the City of Palo Alto ("City") to develop a preferred option for the Ultimate Conceptual Layout of Page Mill Road corridor between the Westerly intersection with Old Page Mill Road and Birch Street, located entirely within the County unincorporated area and the City of Palo Alto (“Project”). The scope includes developing the following designs with the intent to relieve congestionandcomply with the California Complete Streets Act: Conceptual plan for widening Page Mill Road from four to six-lanes, and study the feasibility of accommodating six-lanes within existing right-of-way; Conceptual footprint for grade separation of Foothill Expressway/Junipero Serra Boulevard -Page Mill Road intersection; Conceptual layout plans for adding northbound and southbound left turnlanes at Page Mill Road / Hanover Street intersection and converting the signal to an 8-phase operation. The conceptual plan shall also include converting Hanover Street to one-through lane in each direction plus bike lane; and Conceptual layout plan to accommodate current and future proposed developments at the intersection of Page Mill Road and El Camino Real. STUDY PURPOSE AND OBJECTIVE The purpose of developing the conceptual plan is to identify required improvements on Page Mill Road to relieve congestion, and identify the impacts of intersection improvements at Hanover Street, Foothill Expressway, Hansen Way, Porter Drive, Coyote Hill Road and the El Camino Real.Existing bicycle lanes on Page Mill will be preserved in the concept plans. Job No. 4469.00June 2, 2014 Page 2 of 7 SCOPE OF SERVICES Task A.Project Management Steve Loupe will be the Project Manager, and will be responsible for HMH services on the project. In addition, he will manage our subconsultants and coordinate the team with the County of Santa Clara -Roads and Airports Department, City of Palo Alto and otheragencies involved. The Project Manager will be responsible for project organization and monitoring. This involves planning the work program, organizing the team personnel to implement the program, monitoring the team progress, and controlling the quality of the work products tocomplete the project on time and within budget. The work program will include periodic team meetings with the County of Santa Clara and City of Palo Alto to establish clear, concise project goals, design criteria, schedules and budgets. Minutes will be taken at meetings describing topics discussed, decisions madeand action to be taken. Meeting minutes will be distributed to participants and appropriateaffected parties.It is anticipated that HMH will also participate in at least two community meetings, one City Planning Transportation Commission meeting and one City Council study session. Task B.Preliminary Investigation / Data Collection Obtain,review, and coordinate available data and information pertinent to the project from the County,City,VTA,and other agencies. Such information may include the following: Environmental clearance documents from other relevant projects. Preliminary plans and construction documents prepared previously for portions ofthe project. Aerial photos, topographic base sheets, master plans record drawings of City, County, and facilities and utility systems. Survey notes, parcel maps, tract maps and other record right-of-way documents. Available traffic engineering studies and level of service calculations. Job No. 4469.00June 2, 2014 Page 3 of 7 Task C. Record Right-of-Way Mapping Perform surveys of street monumentation to establish control in CaliforniaCoordinate system for record right-of-way mapping.Perform field surveys of existing curbs and surface features necessary to complete the scope of work. Calculate existing right-of-way from available record information and input from fieldsurveysin AutoCAD for use in design. Task D. Plan Line Development Project Area Base Mapping.Utilizing available aerial photos,Consultant will prepare a base mapping that will show:existing right-of-way, assessor parcel numbers,utilities of a high risk or critical nature such as power poles, proposed curb lines,and proposed traffic lane geometry for projected traffic volumes except for features visible on the aerial photos. Such base map will not show plotted landscape features, signage, underground utilities(storm, sanitary, water, gas, reclaimed water, fiber-optic cables, traffic signal conduit, etc.), and fence. Preliminary Plan Line Submittal.Based on comments received from the communication and coordination meetings,Consultant will advance the plan line to the point that the majordesign concept is represented in a preliminary plan line submittal.Bike lanes will be preserved and/or added to the design concept.Consultant will work with the City and County to resolve any conflicts between the requirements of different stakeholders prior to this submittal. Preliminary plan line drawings will be developed at a scale of 1” =40’, to show the fundamental base map elements required within the Project Area that would be necessary to carry out the design concept. Draft Plan Line Submittal. Based on comments received from the preliminary plan linesubmittal,Consultant will work with City, County,and other stakeholders to resolve any remaining conflicts between the comments of different reviewers. Consultant will prepare and submit a memo with “response to comments” received from the preliminary plan line submittal. Final Plan Line Study.In response to the draft plan line submittal review process, Consultant will incorporate any final revisions and prepare final documents, technical memorandum,and cost estimate in accordance with City and County’s instructions. Job No. 4469.00June 2, 2014 Page 4 of 7 Task E. Page Mill Road / Foothill Expressway Grade Separation Develop three road concept sketches to separate Page Mill Road and Foothill Expressway with connecting ramps including Page Mill Road under at-grade Foothill Expressway,Foothill Expressway under at-grade Page Mill Road, and a partial grade separation for justthe high volume traffic movement(s).A fourth alternative will identify potential at-grade improvements in lieu of a grade separation that may not fully address the intersection level of service needs but will improve traffic flow.Each grade separation concept will include unsignalized through traffic on Page Mill Road and signal(s) at the connecting rampintersection(s) with Foothill Expressway. A single concept will be selected and developedat 1"=40" scale for use in the Plan Line Study. Task F. Page Mill Road /Hanover Street Intersection The addition of a northbound and southbound left turn lane and converting the signal to an8-phase operation will be studied both with and without Page Mill Road widening at this intersection, and shall include converting Hanover Street to one-through lane in each direction plus bike lanes. Task G. Page Mill Roa d / El Camino Real Intersection Develop concept layout plan to accommodate current and future proposed developments at the intersection of Page Mill Road and El Camino Real. A single concept will be selected and developed for use in the Plan Line Study to include westbound left turn movements,southeast corner improvements and southwest corner improvements (elimination ofsouthboundslip ramp). Task H. Page Mill Road / Hansen Way Intersection Develop concept layout plan for extending left-turn storage capacity of eastbound Page MillRoad and Hansen Way Intersection with and without Page Mill Road widening. County to provide applicable traffic data. Task I.Page Mill Road /Porter Drive Intersection Develop concept layout plan for the addition of an eastbound U-turn only movement at this intersection with and without Page Mill Road widening. County to provide applicable traffic data. Task J. Page Mill Road / Coyote Hill Road Intersection Develop concept layout plan for options that will necessitate signalization or street closure improvements with Page Mill Road widening. Job No. 4469.00June 2, 2014 Page 5 of 7 Task K.Preliminary Opinion of Probable Construction Costs Consultant will prepare a preliminary estimate of probable construction costs based uponthe geometry to be developed in the Final Plan Line submittal. Task L.Reimbursable Expenses Client will reimburse Consultant for reimbursable expenses that may include: reproductionof plans and documents, overnight mail, delivery and courier services, fees charged byagencies and utilities to obtain information on existing facilities, fees advanced to public agencies, premiums for additional insurance requirements requested by Client, and other costs and expenses incurred at Client’s request. DELIVERABLES Consultant shall prepare a draft and final conceptual layouts for all the items in the scope of work, and any technical memorandum describing the potential constraints, special challenges, etc., that were considered in project design. DUTIES OF COUNTY The following activities are the responsibility of County. This is not intended to represent a complete list but is included for additional clarity. Provide copies of available plans, exhibits, records and data pertinent to the project. Provide all available traffic counts, turning volumes and turn lane storage lengthrequirements. Assist Consultant in obtaining permission to enter the grounds as necessary to perform the services. SPECIAL PROVISIONS Consultant may utilize computer aided design and drafting software and other applications of Consultant’s choice in providing the services in this Agreement. File structure andorganization of data will be at Consultant’s discretion, and are intended only forConsultant’s use on the project. The following services may be required for successful completion of the project, but are specifically not included in this scope of services. Consultant may provide some of theseservices pursuant to the “Changes in Services” section of this agreement, or Client may Job No. 4469.00June 2, 2014 Page 6 of 7 engage others to provide these services. This is not intended to represent a complete list, but is added only for clarity. Traffic engineering, level-of-service queue length calculations, operational analysisor preliminary signal designs. Environmental Impact Reports, Special Studies and Reports (Noise, Traffic, Biotic, etc.) or Phase I or Phase II analysis. Location of trees by field surveys. Uncovering or potholing existing underground facilities. Record of Survey maps. Substantial revisions to plan line drawings based upon comments received after the first round of meetings with the community,City Planning Transportation Commission, or the City Council study session. Job No. 4469.00June 2, 2014 Page 7 of 7 SCHEDULE Consultant will endeavor to complete the services in accordance with the following timeframes: Task Weeks After NTP Preliminary Investigation 3 Weeks Preliminary Plan Line Submittal 6 WeeksDraft Plan Line Submittal 12 Weeks*Final Plan Line Submittal with Estimate of 16 Weeks* Probable Cost (*assumes 3-week response from agencies and shareholders) Due to the level of coordination required with other agencies and elements that are beyond Consultant’s control, adjustments to these timeframes may be required. Consultant will communicate with City regarding such adjustments. City of Palo Alto (ID # 4722) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Council Priority: Land Use and Transportation Planning Summary Title: Submit Grant Funding Application for Palo Alto Airport Title: Authorization to Submit a Grant Funding Application to the Federal Aviation Administration for Rehabilitation of the Runway and Taxiways at the Palo Alto Airport From: City Manager Lead Department: Public Works Recommendation Staff recommends that the Council authorize the City Manager or his designee to submit a grant application to the Federal Aviation Administration for the funding of construction regarding the rehabilitation of the runway and taxiways at the Palo Alto Airport (PAO) and to sign related grant program agreements and amendments. Background Each year, the Federal Aviation Administration (FAA) accepts grant applications to fund projects. The applications are reviewed by the FAA with key importance being placed on improving the safety and viability of airports. Through this process, the FAA establishes and prioritizes the projects to determine which projects will receive federal funding. The County of Santa Clara (County) is not eligible for FAA grant funding at this time due to its standing non-compliance matter with the FAA. Under FAA rules and practices, Title 14 of the Code of Federal Regulations (Part 16), the proceeding’s determination so far indicates that the County is out of compliance on a matter relating to another County-operated airport, thus the County’s ongoing inability to obtain federal funding appears to create the potential for City of Palo Alto Page 2 safety concerns to arise after the City gains management and control of PAO. City staff has been working with the FAA on the needed deferred pavement maintenance in preparation for the City’s assumption of management and control of PAO. (See Staff Report ID# 4672). Discussion Staff is requesting a FAA grant application to acquire funds needed to rehabilitate the runway and taxiways at the PAO. This project was bid last year by the County as it is an important safety improvement to PAO. However, the County was not awarded a grant, because it is still barred from applying for that grant, as it is operating under the Part 16 restriction. The FAA will not award the grant to the City, until the transfer of PAO has taken place and the City is the PAO sponsor; this transfer is scheduled to take place the first week in August 2014. If this project is not awarded during the federal government’s FY 2014, October 1 to September 30, PAO will lose the opportunity to receive $150,000 of entitlement funds. If PAO is not transferred to the City during the first week of August 2014, then the FAA grant funding sources for this fiscal year will be closed. The City must apply for and receive grant funding by no later than August 2014. Although grant applications were due earlier this calendar year, the FAA is working with the City, even though the City is not yet the sponsor of PAO, and the City understands that the FAA will accept a grant application from the City in anticipation of the event that the City will become the sponsor in August. The FAA has encouraged City staff to file an application for the rehabilitation project with the understanding that, if the transfer does not occur in August, the project will not be considered for grant funding for the federal FY 2014. The FAA has requested that the City submit the grant application for this upcoming fiscal year, and it must be submitted by July 2014. The FAA will fund 90% of the project’s costs; the remaining 10% will be the ‘local match,’ meaning the City must pay for this portion of the costs. The County has tentatively agreed to pay the match money for this project. This stipulation is part of the transfer agreement between the City and the County, which is scheduled for consideration by the Council on August 4, 2014 and by the Board of Supervisors on August 5, 2014. City staff will return to Council with a budget amendment ordinance to facilitate the acceptance of the FAA grant after the PAO transfer is completed, and the FAA issues the grant award offer letter, based upon City of Palo Alto Page 3 the selection of the lowest responsible bidder for this project. City staff plans to bid the project in July and the award of contract to the lowest responsible bidder will be submitted to the FAA. Upon the City’s acceptance of the low bid, the FAA will send a grant award letter to the City and staff will return to Council in August. The two-week construction project will take place in the fall of this year. Staff is anticipating the completion of the project and the closeout of the FAA grant during the City’s FY2015. Resource Impact The estimated total grant amount for rehabilitation of the runway and taxiways at the PAO from the FAA is $610,000. As the Airport Fund may not have sufficient funds to cover the cost for the contract for the rehabilitation of the runway and taxiways, if the City is awarded the grant, at the time of contract award, an additional loan from the General Fund may be required. As it is estimated that the work will be completed during FY 2015, staff anticipates that the FAA will reimburse the Airport Fund for the expenditure within FY 2015. Additionally, staff anticipates that the County will be paying to the City the approximately 10% grant match money, estimated at $61,000. In the event that the County does not provide the match money, the Airport Enterprise Fund would have to cover the 10% grant match. After the Airport Fund is reimbursed by the FAA and the County funds, it is anticipated that the Airport Fund will pay back the General Fund loan. Policy Implications This grant program is consistent with two of the City Council’s 2014 top 3 priorities: 1) Comprehensive planning and action on land use and transportation; and 2) Infrastructure Strategy and Funding. Environmental Review In 2011, the FAA issued a Category Exclusion (CATEX) for rehabilitation of the runway and taxiways as it relates to the National Environmental Policy Act (NEPA). The proposed runway and taxiways project is a minor alteration and repair to existing facilities and is categorically exempt under the California Environmental Quality Act (CEQA) section 15301 guidelines. City of Palo Alto (ID # 4819) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Shuttle Contract with MV Transportation Title: Approval of Contract with MV Transportation in the amount of $1,215,036.00 to Provide Community Shuttle Service on the existing Crosstown Shuttle Route and the East Palo Alto/Caltrain Shuttle Route for up to three years; Approval of Funding Agreement with East Palo Alto and Adoption of a Budget Amendment Ordinance Amending the Fiscal Year 2015 Operating Budget to Increase the Planning and Community Environment Department Appropriation by $221,239 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council: a. authorize the City Manager or designee execute an agreement with MV Transportation in the amount of $1,215,036 for the operation of the existing Crosstown route and the proposed East Palo Alto/Caltrain Shuttle Route for up to three years; and b. authorize the City Manager or designee execute an agreement with the City of East Palo Alto in which East Palo Alto agrees to provide $669,519 for the operation of the East Palo Alto Shuttle Route for up to three years; and c. approve the attached Budget Amendment Ordinance (BAO) to amend the General Fund budget for Fiscal Year 2015 to increase revenue estimates from Other Agencies in the amount of $221,239 and increase the Planning and Community Environment Department appropriation by $221,239 for additional contract service for the East Palo Alto Shuttle Route. Background The Palo Alto Shuttle Program began in December 1999 and provides free shuttle bus services between the Palo Alto Caltrain station and City destinations and neighborhoods. The program currently consists of two shuttle routes (Embarcadero and Crosstown) that operate Monday through Friday, excluding some holidays. City of Palo Alto Page 2 The Crosstown Shuttle provides a north-south transit connection from Charleston Road to the University Avenue Caltrain station along Middlefield Road and several community neighborhoods. This route serves both JLS and Jordan middle schools during the morning and afternoon bell schedules. Crosstown operates on one-hour headway during most of the day, except for the morning and mid-afternoon school bell schedule period when there is additional service to support school activity. The Crosstown Shuttle Route is funded 100% by the City. In January 2011, the City Council approved a three year contract with MV Transportation to provide service for the Crosstown Shuttle until February 28, 2014. On February 10, 2014, City Council approved an amendment to this contract to extend the provision of services until June 30, 2014 to allow for a Request for Proposals (RFP) process to be completed for identification of a new vendor for at least the Crosstown Shuttle Route. During the development of the RFP, the City of East Palo Alto approached the City requesting a partnership to introduce a new shuttle route to bridge the Woodland Avenue Neighborhood with Downtown Palo Alto. The City released an RFP for the Palo Alto Shuttle Program on March 20, 2014 and received three proposals in response. The RFP requested base bids for the Crosstown service and “add alternate” bids for the East Palo Alto/Caltrain Route and other potential expansions of the City’s shuttle system. Staff is still evaluating potential expansions of the shuttle program and views award of the contract for the Crosstown and East Palo Alto shuttle routes as a first phase. Upon completion of an ongoing analysis of potential ridership, staff will return to Council for discussion and direction regarding the second phase, including potential increases in frequency and additional shuttle routes. The proposed East Palo Alto Route will be fully funded by the City of East Palo Alto, which received regional transportation funding for this purpose. The shuttle route would link the University Avenue/Downtown Palo Alto Caltrain Station with Woodland Avenue community in East Palo Alto. The shuttle would operate as a free shuttle route to users and be available seven days per week, from approximately 6:00AM to 9:00PM. The Embarcadero Shuttle, not included in this proposed agreement, connects the business parks on the east side of the City along Embarcadero Road to the University Avenue Caltrain Station. The City currently contracts with the Peninsula Corridor Joint Powers Board (JPB) for the Embarcadero Shuttle, which is a part of the Caltrain peak hour commuter shuttle program, and is subsidized heavily by the JPB. The existing agreement with JPB which is only for Embarcadero Shuttle Route terminates on June 30, 2014; however, JPB staff is updating and standardizing the original Rail Shuttle Bus Service Administration Agreement from 1999 and the new base agreement will be available beginning July 1, 2014. Staff will present that agreement upon receipt from JPB under a separate staff report. There will be no gap in service and execution of a contract with MV Transportation will not impact the contract with JPB. Discussion The work to be performed under the contract is to provide all equipment, staffing, and City of Palo Alto Page 3 materials necessary to provide shuttle services for up to three years to operate the Crosstown and East Palo Alto/Caltrain shuttles. Future contracts or contract amendments will be needed for any phase two expansions in service beyond these two routes. Summary of Request for Proposal Process The City issued a Request for Proposal (RFP) for shuttle service providers for the Crosstown Shuttle Route and other proposed routes on March 20, 2014 and invited all of three respondents to participate in panel interviews. The original proposals were reviewed and oral interviews were conducted by City staff from the Transportation Division, Police Department, and East Palo Alto City staff. The evaluation criteria utilized during the proposal and panel oral interview include: qualification of the firm organization- technical expertise of the company in performing the work (including experience in providing public transportation shuttle services and knowledge of regulations and codes regarding shuttle services); use of alternative fuel vehicles for this project; staffing and project- qualifications of project staff, and shuttle route operator training curriculum; demonstrated understanding of the project’s objectives and scope; and cost to the City, including price and competiveness of the total price. MV Transportation was identified as the best suited vendor to provide community shuttle bus services for these two routes. Table 1-Crosstown Shuttle Service Provider RFP Process RFP Respondents (alphabetical) Location (City,State) Panel Interview Preferred Vendor El Camino Charters South San Francisco, CA Yes No Mosaic Global Transportation Redwood City, CA Yes No MV Transportation San Jose, CA Yes Yes Preferred Crosstown Shuttle and East Palo Alto/Caltrain Route Vendor: MV Transportation MV Transportation’s proposal provides the City with new 2014 compressed natural gas (CNG) powered 32 foot shuttle buses accommodating up to 30 ambulatory passengers for both routes, with one vehicle dedicated for emergency use and peak-hour service availability. The firm proposes to perform a pre-trip inspection before entering service and preventive maintenance safety inspection on each vehicle within each 3,000 miles. MV Transportation also City of Palo Alto Page 4 proposes to provide a total of 84 hours of training to the proposed drivers. The new service also comes with expanded performance report tools including a GPS-based tracking system called Time Point Software that will allow users to track the bus online to help schedule travel time to designated pick-up stations. Summary of Proposed Services The existing Crosstown Shuttle Route provides one-hour headway service between Downtown and South Palo Alto. During school commute periods a second shuttle operates to provide 10- minute headway to support school bell schedules. The estimated total cost of the Crosstown Shuttle for a three-year period is $545,517 (Table 2). The proposed contract maintains this existing operation but more frequent service is being evaluated as part of an ongoing assessment of the shuttle program. The City of East Palo Alto currently receives shuttle service through the Caltrain Commuter Shuttle Program. Caltrain will be cancelling all East Palo Alto shuttle routes after June 30, 2014, which is the end of a one-year notice period extended by Caltrain. Staff from the City of East Palo Alto developed the proposed East Palo Alto/Caltrain Shuttle Route and requested assistance from City to help operate the shuttle program. Under the terms of the proposed agreement, the City of East Palo Alto will pay 100% of the shuttle operation costs for a minimum of three years (Attachment B). Neither the City of Palo Alto nor the City of East Palo Alto is committing to maintain the shuttle route after three years. Staff recommends entering into an agreement with East Palo Alto in the amount of $669,519 (Table 2), equal to 100% cost recover of the EPA Shuttle Route, for a three-year period. Table 2 - Palo Alto Crosstown and East Palo Alto/Caltrain Shuttle- Estimated 3-Year Expenditure Hours of Operation Cost for Year 1 Cost for Year 2 Cost for Year 3 Total Price: Year 1 through Year 3 Crosstown Shuttle 2,893 $178,123.82 $181,158.88 $186,234.30 $545,517.00 East Palo Alto/ Caltrain Shuttle 3,200 $221,238.18 $218,982.12 $229,298.70 $669,519.00 Total Contract Price $1,215,036 Potential Future Service Expansions Earlier this year, the City Council directed staff to pursue expansions to the shuttle program as part of efforts to reduce traffic congestion and parking demand. While the current proposal only involves the Crosstown and the East Palo Alto/Caltrain Shuttle routes, staff included a number of other possible routes as “add alternates” in the RFP, and is currently completing an analysis of potential increases in service (i.e. service frequency and new routes). Staff will return to Council in the fall for discussion of possible service expansions and possible contract amendments to the MV Transportation contract for additional shuttle routes. City of Palo Alto Page 5 California Avenue Noon-Time Shuttle The California Avenue Noon-Time shuttle was introduced in March 2014 as a mitigation effort to construction related activities along California Avenue to help transport customers in the Stanford Research Park to the California Avenue Business District. To help promote this service, the City partnered with the California Avenue Business Association, Stanford Research Park, and Stanford University. The shuttle is not showing regular usage and staff plans to terminate the California Avenue Noon-Time Shuttle after June 30, 2014. The California Avenue Business Association is aware of this change. Shuttle Bench Update There are currently 48 shuttle stops along the Crosstown Shuttle Route of which 22 stop locations are shared by other transit providers (VTA and SamTrans). Of the 22 stop locations shared by VTA and SamTrans, 13 locations currently have a bench provided by VTA or SamTrans; 3 locations have benches installed as part of public-private partnerships (Lytton Gardens, Stevenson House and 530 Lytton Avenue Project); and 6 locations have benches installed by the City over the last 6 months. The Embarcadero Road Shuttle, currently operated by the Caltrain Commuter Shuttle Program, has 24 stops with 9 existing benches. Staff conducted an assessment of shuttle benches and shelters in 2012 as part of a planned Safe Routes to Transit Program and in preparation of the 2013 One Bay Area Grant Program (OBAG). Staff submitted an OBAG grant for the Palo Alto Shuttle Program which included introducing new benches and shelters at existing routes along with a new proposed West Shuttle Route but the grant was not funded. This spring, Staff used remaining funds in the Capital Improvement Program (CIP) PL-12000 (Parking & Transportation Improvements) to fund shuttle bench installations. A total of 10 benches have been added since January, including new benches at Main Library, Palo Alto High School, Lytton Avenue (at Alma and Ramona), and Embarcadero Road (at Heather and Geng Road). An additional 5 bench installations are planned before the end of the fiscal year bringing the total number of stops with benches or shelters to 36 citywide. The remaining 36 shuttle stops are located in front of existing residential units or commercial buildings where the property owners have requested that no bench be installed due to transient or aesthetic concerns. Staff has a standing practice of not installing benches at shuttle stops where the benches are not supported by the adjacent property owners. In these instances, Staff evaluates opportunities to relocate shuttle stops to alternative locations where benches may be installed if the alternative shuttle stop location would not impact shuttle operations. For example, shuttle stops are typically located on the far-side of an intersection. Relocating a stop to the near-side of an intersection is not considered, unless the shuttle stop generator such as a school or shopping center is located on that side of the intersection, to avoid conflicts when the shuttle vehicles re-enter the roadway. City of Palo Alto Page 6 The East Palo Alto/Caltrain Shuttle Route introduces 5 new shuttle stops within the City of East Palo Alto and 11 within City of Palo Alto. Of the 11 stop locations within Palo Alto, 7 locations already have an existing bench shared by other transit routes. Staff plans to install benches at remaining 4 locations of the Palo Alto shuttle stops and staff from the City of East Palo Alto is doing the same. All of the shuttle stops in the East Palo Alto/Caltrain Shuttle Route will have a bench in place by August, or sooner depending on bench availability. Staff can further evaluate the shuttle bench program as part of future shuttle service enhancements if desired. Timeline Staff anticipates MV Transportation will commence operations on both shuttle routes on July 1, 2014 in order to provide uninterrupted operation of the Crosstown shuttle. Resource Impact The Planning and Community Environment Department Fiscal Year 2015 Adopted Operating Budget includes $225,000 for the Palo Alto Shuttle Program which provides sufficient funding to continue services for the Crosstown Shuttle Route, beginning July 1, 2014. With the adoption of the agreement between the City of Palo Alto and the City of East Palo Alto, sufficient funding will be available for the proposed East Palo Alto Shuttle Route. Staff is requesting adoption of the Budget Amendment Ordinance to recognize $221,239 in revenue from the City of East Palo Alto and to increase the Planning and Community Environment Department budget by the commensurate amount for the East Palo Alto Shuttle Route. Policy Implications This request is consistent with existing Council direction to continue and expand Palo Alto shuttle services. Additional potential service expansions will be brought to Council for discussion and direction later this year. Environmental Review On August 2, 1999, the City Council approved a Negative Declaration finding the shuttle project would not result in any significant environmental impact. The current contract would perpetuate existing shuttle service currently provided by the City of Palo Alto (Crosstown Service) and replace existing shuttle service currently provided by Caltrain with modified service (East Palo Alto Service). The shuttle services would utilize CNG fueled vehicles and are covered by the general rule that CEQA applies only to project which have the potential for causing a significant effect on the environment (State CEQA Guidelines Section 15601(b)(3)). Attachments:  Attachment A: Agreement No. C14152828 with MV Transportation - unsigned but revised (PDF)  Attachment B: Funding Agreement with East Palo Alto (PDF) City of Palo Alto Page 7  Attachment C: Budget Amendment Ordinance (PDF)  Attachment D: EPA Shuttle Route - Draft Final - 060214 (PDF) AGREEMENT BETWEEN THE CITY OF PALO ALTO, AND THE CITY OF EAST PALO ALTO FOR THE OPERATION OF THE EAST PALO ALTO/CALTRAIN SHUTTLE ROUTE This is an agreement made and entered into as ofthe date it is fully executed by and between the City of Palo Alto, California, a chartered municipal corporation ofthe State of California (hereinafter referred to as "PALO ALTO"), and the City ofEast Palo Alto, a municipal corporation (hereinafter referred to as "EAST PALO ALTO"), collectively referred to herein as the "PARTIES." RECITALS WHEREAS,EAST PALO ALTO by letter to PALO ALTO on January 15'\2014 requested PALO ALTO to include the East Palo Alto/Caltrain Shuttle route with Palo Alto's Request for Proposals for their existing and expansion ofShuttle Program; WHEREAS,coordinating PALO ALTO and EAST PALO ALTO shuttle routes will help to reduce traffic congestion and provide public transportation options for residents ofboth PARTIES; WHEREAS,PALO ALTO intends to manage a contract with its own shuttle program operator for the operation ofEast Palo Alto/Caltrain Shuttle Route herein referred to as "PROJECT"; WHEREAS,EAST PALO ALTO has acknowledged the future benefit ofthis PROJECT to EAST PALO ALTO and indicated its willingness to fully fund the PROJECT for up to three years; and WHEREAS,the PARTIES desire to memorialize such agreement in writing. NOW,THEREFORE,for and in consideration oftheir mutual promises and covenants, and subject to the terms, conditions, and provisions hereinafter set forth, the PARTIES agree as follows: Page 1 of6 Agreementbetweenthe Cityof PaloAltoandthe Cityof EastPaloAltoforthe operationofEastPaloAlto/CaltrainShuttleRoute June 10'\2014 Page 2 of 6 Agreement between the City of Palo Alto and the City of East Palo Alto for the operation of East Palo Alto/ Caltrain Shuttle Route –June 10th , 2014 AGREEMENT 1) Scope of Work: PALO ALTO will contract with MV Transportation to operate two shuttle routes: the Palo Alto Crosstown shuttle and the East Palo Alto/Palo Alto Caltrain shuttle route, as depicted in Exhibit A in City of Palo Alto Contract Number 14152828 (PROJECT). PROJECT operates seven days a week, excluding some holidays. MV Transportation is responsible for providing all personnel and equipment needed for the service. PALO ALTO will pay MV Transportation an hourly rate of $69.14 per hour for each bus operated in this service for the first year of service; $68.43 per hour for each bus operated in this service for the second year of service; and $71.66 per hour for each bus operated in this service for the third year of service. The operating hours of the two routes are listed below. Shuttle Route Operating Hours Estimated Daily Service Hours East Palo Alto/ Palo Alto Caltrain Weekdays: 5:55 a.m.-10:02 a.m. 9.22 4:13 p.m.-9:20 p.m. Weekends: 7:09 a.m.-10:51 a.m. 8.21 4:20 p.m.-8:51 p.m. Crosstown Shuttle 7:40 a.m.-5:20 p.m. 9.6667 School Commute Service 7:35 a.m.-8:25 a.m. 1.2 3:15 p.m.-3:37 p.m. ATTACHMENT C ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE GENERAL FUND BUDGET FOR FISCAL YEAR 2015 TO INCREASE REVENUE ESTIMATES FROM OTHER AGENCIES IN THE AMOUNT OF $221,239 IN RECOGNITION OF FUNDING FROM THE CITY OF EAST PALO ALTO AND INCREASE THE PLANNING AND COMMUNITY ENVIORNMENT DEPARTMENT APPRORIATION BY $221,239 FOR THE PALO ALTO SHUTTLE PROGRAM FOR ADDITIONAL CONTRACT SERVICES FOR THE EAST PALO ALTO SHUTTLE ROUTE. The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015; and B. The Palo Alto Shuttle Program began in December 1999 and provides free shuttle bus service between the Palo Alto Caltrain station and City destinations and neighborhoods; and C. In January 2011, the City Council approved a three year contract with MV Transportation to provide shuttle services; and D. On February 10, 2014 the City Council approved an amendment to the contract with MV Transportation to provide shuttle services until June 30, 2014; and E. During the development of a Request For Proposals (RFP) for the Palo Alto Shuttle Program, the City of East Palo Alto approached the City requesting a partnership to introduce shuttle service to bridge the Woodland Avenue Neighborhood with Downtown Palo Alto; and F. The City released a Request For Proposals for the Palo Alto Shuttle Program on March 20, 2014 and the City received three response; and G. MV Transportation was identified as the most responsive, most experienced, and best suited vendor to provide community shuttle bus services; and H. The cost of the East Palo Alto Route for Fiscal Year 2015 is $221,239; and I. The cities of Palo Alto and East Palo Alto have entered into an agreement that provides 100 percent funding of the East Palo Alto route from the City of East Palo Alto; and J. This ordinance amends the Fiscal Year 2015 General Fund revenue estimates from other agencies in the amount of $221,239; and K. This ordinance amends the Fiscal Year 2015 General Fund appropriation for the Planning and Community Environment Department in the amount of $221,239. SECTION 2. The revenue estimate for Other Agencies in the General Fund is increased by Two Hundred Twenty One Thousand Two Hundred Thirty Nine ($221,239) in recognition of funding from the City of East Palo Alto. SECTION 3. The sum of Two Hundred Twenty One Thousand Two Hundred Thirty Nine ($221,239) is hereby appropriated for contracted shuttle services for the East Palo Alto Route. SECTION 4. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 5. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 6. On August 2, 1999, the Council of the City of Palo Alto approved a Negative Declaration finding that the Palo Alto Shuttle Program would not result in any significant environmental impact under the California Environmental Quality Act. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager City Attorney Director of Planning & Community Environment Director of Administrative Services City of Palo Alto (ID # 4922) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: New Lease between the City of Palo Alto and Avenidas at 450 Bryant Street Title: Request to Issue Notice of Intent to Award 50 Year Lease to Avenidas for 450 Bryant Street Site to Allow Continued Use of Building for Senior Services From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that the City Council authorize the City Manager to begin the process of providing a public notice of the City of Palo Alto’s intent to enter into a new, fifty (50) year lease for the 450 Bryant site with Avenidas. EXECUTIVE SUMMARY Fifty years ago, senior services in Palo Alto were scattered at different locations. Presently, many services and programs for older adults on the Mid-Peninsula, as well as other information resources, are housed and centralized at Avenidas. For forty-seven years, Avenidas has been providing seniors services to the community at the 450 Bryant Street site as a part of a longstanding collaboration with the City. The current location is ideal in terms of: the downtown location, accessibility to parking, and proximity to public transit. Built in 1927 to provide Public Safety services, much of the original interior configuration remains. The existing lease between the City and Avenidas was executed on May 11, 1977 and it will end on May 10, 2027 (a 50 year lease). Recently, Avenidas approached the City requesting a second fifty year (50) lease based on plans to undertake a major rehabilitation and modernization of the interior of the building in order to meet the growing needs of the City’s seniors and to continue its many services. According to the City’s Charter and Policy and Procedures, however, the City cannot grant lease leasehold rights unless it provides a 30 day public notice of its intention to enter into a new 50 year lease with Avenidas. Staff is requesting Council approval to post the 30 day notice. City of Palo Alto Page 2 BACKGROUND Avenidas dates its birthday to 1968 when the Senior Coordinating Council (SCC) of the Palo Alto Area was formed. The SCC persuaded City officials, at one point in time, to allow space in the main library to provide seniors with information, referrals and counseling. Soon thereafter, transportation and health services were added along with directories of county-wide services and housing needs. In 1974, the SCC sponsored a comprehensive study of seniors in the area. From this effort, a City-sponsored task force “When We Grow Older in Palo Alto” was formed. In 1977, the notion of seniors volunteering their time in the community was a novel idea, but Avenidas proved to be a catalyst for popularizing it and facilitating volunteering by establishing the local Retired Senior Volunteer Program (RSVP). RSVP enabled seniors to contribute their time and talents to public and non-profit institutions throughout northern Santa Clara County and at one time had more than 500 active volunteers who contributed more than 80,000 hours of service annually to approximately 110 institutions. In 1996, the SCC changes its name to Avenidas, which means “avenues” in Spanish. Twenty five years later, in 2002, volunteering was well-established and numerous places to find volunteer opportunities existed. Avenidas ended its affiliation with RSVP and today, through the Avenidas Volunteer Corps, recruits and supports over 500 volunteers for its own programs which include: the Early Literacy Program (matching older adults with young schoolchildren for reading tutoring); the Roadrunners transportation program; and the Computer Learning Center (where volunteers run the entire program). Avenidas received funding as part of a grant administered by the Community Services Department starting in 1978. Key historical points from this relationship are listed below: • The City established its own Senior Adult Services in 1971, based on a study of Palo Alto senior residents completed by the Senior Coordinating Council (SCC), and witnessed an expansion of those services over the next few years. • The City funded the SCC administration, Senior Day Care (now Day Health) Program and Home Repair Service prior to the establishment of the Senior Center of Palo Alto, while concurrently funding its own Senior Adult Services. • After numerous discussions, the City agreed to lease the historic, former Police/Fire Station building (450 Bryant Street) to the SCC at a nominal yearly fee provided that the SCC raised the necessary funds ($1.2 million) to renovate the facility. Implicit in this agreement was a commitment to help the SCC with operating funds for the Senior Center as well as continuing support for its other programs. • In 1978, the City transferred its Senior Adult Services to the SCC and provided funds for the operation of the Senior Center. • In 1978, following a $1.2 million fundraising effort to renovate the building, the Senior Center opened in the City’s former Police and Fire Station building. That year also marked the City of Palo Alto Page 3 beginning of the public-private partnership between Avenidas and the City of Palo Alto. • The City and the SCC agreed that the SCC would always make substantial efforts to secure community support and other non-city public funds. That objective has remained part of the SCC’s contract Scope of Services. • A 1986 evaluation of the SCC conducted by a City-retained outside consultant reported that the SCC had become an established part of the community and that the SCC’s administrative component represented one of the most important tools for leveraging the dollars the City devotes to senior services. Avenidas now serves more than 6,000 people from southern San Mateo County to northern Santa Clara County. It is the place to go for information, services, and activities for older adults. Avenidas provides classes, lectures, health screenings, social work services, information and assistance, transportation, handyman services, volunteer opportunities, adult day health and day care, and caregiver services. DISCUSSION On April 16, 2014, Avenidas requested a new 50 year lease to replace the existing one which is set to expire in May 10, 2027. The purpose of the extension is twofold: 1) It allows Avenidas the foundation to begin credible fund raising efforts for an estimated $12 million to undertake a major and comprehensive rehabilitation and modernization of the building at 450 Bryant Street; 2) the new lease will serve to assure that Avenidas will continue its services at the present location for many years to come. Avenidas understands that it must comply with the City’s planning and permitting processes in making improvements to the building it now occupies. These requirements would apply to any occupant making physical changes to the facility. According to City’s Policy and Procedures regarding leased use of City land (Attachment A), prior to awarding an Option to Lease or a lease, the City shall provide a reasonable and appropriate opportunity to other entities to respond to possible use of City facilities. The City Charter limits the City to a fifty (50) year lease term. The City can award a long-term lease, however, by either: 1) providing a public notice to award an option to lease or lease to a particular tenant; or 2) sending out a request for proposal to entities likely to have an interest in submitting a proposal to lease. Traditionally staff has used the first process for awarding leases to non profit agencies who provide local community services. It is staff’s intent to provide a public notice that the City intends to issue a 50 year lease to Avenidas. If Council approves staff’s recommendation, a public notice including the Council public hearing date on which date the City intends to approve the new lease. This process allows other entities an opportunity to express interest in leasing the 450 Bryant site. In summary, staff requests Council’s approval to post a 30 day public notice for leasing the 450 City of Palo Alto Page 4 Bryant Street facility. TIMELINE Provided there are no expressions of interest in leasing 450 Bryant Street, staff will return to Council in August to request the cancellation of the existing lease and the approval of a new 50 lease between the City and Avenidas. In the event other interested parties surface, a Request For Proposal process would be undertaken. RESOURCE IMPACT At this time there is no budget impact from this report. POLICY IMPLICATIONS Entering into a new Lease Agreement is consistent with policies and programs in the Comprehensive Plan promoting City-Avenidas collaboration and the effective provision of community services. ENVIRONMENTAL REVIEW Extension or re-negotiation of an existing lease and agreement does not constitute a project for purposes of the California Environmental Quality Act (CEQA). Attachments:  ATTACHMENT A: Leased Use of City and Land Facilities (PDF) POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 LEASED USE OF CITY LAND/FACILITIES POLICY STATEMENT The purpose of this policy is to ensure that decisions regarding use of City real property are made in the best interests of the citizens and taxpayers of Palo Alto. The development and operation of facilities by others (profit and/or non-profit entities) on City- owned property is appropriate only when such development and operation will further public use or provide a public benefit. Such facilities and operations must be consistent with existing City policies, plans, services and/or procedures. Open competitive and/or bid processes will be used to solicit proposals or provide opportunities to others prior to awarding an Option to Lease. This policy shall not apply to short-term interim leases where no significant change in use is proposed PROCEDURE A. Criteria for Permitting Leased Use of City Property by Others The proposed leased use must be compatible with, incidental to, and/or supportive of, the primary public use of the City-owned property, e.g. a snack stand in a district park, or the pro shop and coffee shop at the Golf Course. In the event of park dedicated land, the proposed use shall be consistent with the provisions set forth in the Charter of the City of Palo Alto, Article VIII, and the Palo Alto Municipal Code (PAMC), Sections 22.04 and 22.08 et. seq., which require that uses of park dedicated land be park, playground, recreation or conservation related uses. B. Option to Lease In all cases where there are significant approval requirements (significant tenant construction and/or rehabilitation), financing requirements (fundraising drives, obtaining financing from lending institutions, etc.), or other tenant pre-operation conditions, the Council shall award an Option to Lease setting forth all pre-construction/operation conditions as conditions to the tenant's obtaining the lease. The option term shall be for a reasonable period of time consistent with the nature of the conditions of the option. Prior to awarding an Option to Lease for a specific use, consideration shall be given to particular information. (Specific application and the relative importance of each of the following considerations will vary from site to site and by specific uses proposed.) Applications for leased use shall provide the following information: 1. The extent to which the proposed leased use satisfies a public need (e.g., by a significant number of Palo Alto residents and taxpayers) for the proposed services and/or uses. Page 1 of 4 ATTACHMENT A POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 2. Consistency of the proposed use with existing City goals and objectives (set forth in the Comprehensive Plan, Zoning Ordinance, Municipal Code, and general municipal services objectives). 3. Consistency of the proposed use with existing plans for the property or facility (e.g., an approved Master Plan). 4. The impact of the proposed use (compatible services and uses, traffic impacts, noise impacts, energy conservation, etc.) upon: a. the immediate neighborhood; b. the community generally; and c. the environment (The proposed tenant shall, during the Option period, satisfy the City's environmental review process.) 5. The degree of public access, including City shared use of the facility or co- sponsorship of programs and/or services, i.e. the numbers of people, especially Palo Alto residents and taxpayers, that will be served by the proposed use and/or service. (It is the general intent of the City to maximize public access to its facilities and services, especially if park land is involved.) 6. The fees that will be charged to Palo Alto citizens. (It is the intent of the City to provide public access to its facilities at prices and/or fees that are fair and reasonable to the public. In the case of parklands, any fees and charges should be minimum and consistent with the fees and charges of comparable City-provided services.) 7. The monetary consideration to be provided to the City. 8. The history and assessment of the proposed group's ability to carry out the construction, if any, and operation of the facility and services as proposed. 9. A five-year pro-forma financial analysis of the proposed use, setting forth the project revenues and expenses for this period of time. Page 2 of 4 ATTACHMENT A POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 C. Public Notification 1. Prior to awarding an Option to Lease (or Lease if there are no pre-construction or pre-operation conditions), the City shall provide a reasonable and appropriate opportunity to other groups or entities to respond to possible use of City facilities. Such reasonable and appropriate opportunities shall take one of the following forms: a. A Notice of Intent to Award an Option to Lease (or Lease if there are no pre-construction or pre-operation conditions) generally outlining the conditions of the Option and Lease, shall be published twice in a local newspaper of general circulation. The Notice shall provide at least 30 days notice to the public prior to a public hearing for Council action to award the Option to Lease. In addition, copies of the notice shall be mailed to property owners and tenants within 300 feet of the subject property in accordance with Section 18.77.080(d) of the Palo Alto Municipal Code (PAMC). b. A Request for Proposals will be sent to groups or entities likely to have an interest in submitting a proposal, subsequent to a public hearing and Notice of Intent to Request Proposals being published in the appropriate media. At a minimum, the Notice of Request for Proposals shall be announced in a local newspaper of general circulation and copies of the notice mailed to property owners and tenants within 300 feet of the subject property in accordance with PAMC Section 18.77.080(d). The Notice shall provide at least 30 days notice to the public prior to the public hearing. 2. The City’s Real Estate Division shall be responsible for the public notification by mail and newspaper in accordance with either C(1)(a) or (b) above. D. Tenant Improvements 1. Construction of tenant improvements shall take place only after Council approval (as well as Planning Commission and Architectural Review Board approval when otherwise required by City procedures) of plans for such tenant proposed construction is obtained. In the event of park dedicated lands, Council approval shall be obtained by ordinance subject to referendum (PAMC Sections 22.08.005 and 22.08.006). 2. Generally, improvements to the real property shall become the property of the City upon termination of the Lease. Tenant-provided fixtures shall remain the property of the tenant. Page 3 of 4 ATTACHMENT A POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 E. Terms of the Lease 1. Tenant shall be required to provide the City with adequate compensation for the rights granted by the City to the Tenant. Determination of appropriate consideration shall begin with the estimated fair market rental value of the lease premises for the use proposed. Consideration shall, however, be given to non- monetary benefits to be provided by the tenant. These proposed non-monetary public benefits must be clearly articulated and must provide an actual benefit to a significant portion of the citizens and taxpayers of Palo Alto. 2. The lease term shall be the minimum period of the time required to: a. amortize tenant's investment in any permitted and approved tenant construction; and b. be consistent with the nature of the proposed tenant operation. NOTE: Questions and/or clarification of this policy should be directed to the Administrative Services Department Page 4 of 4 ATTACHMENT A CITY OF PALO ALTO OFFICE OF THE CITY CLERK June 23, 2014 The Honorable City Council Palo Alto, California Second Reading: Adoption of Ordinance Amending Section 22.04.270 by Adding Subsection 22.04.270(C) to Prohibit the Feeding of Wildlife and Feral Animals in Palo Alto Parks And Open Space Areas (First Reading: June 9, 2014 PASSED: 8-0 Scharff absent) ATTACHMENTS:  No Feeding Ordinance 00710269 ORDN Amendment to Section 22 04 270 by adding Subsection (c) (DOCX) Department Head: Donna Grider, City Clerk Page 2 130819 dm 00710269 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Amending Section 22.04.270 by Adding Subsection 22.04.270(c) to Prohibit the Feeding of Wildlife and Federal Animals in City Parks and Open Spaces The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Section 22.04.270 of Chapter 22.04 of Title 22 Parks is hereby amended by adding Section 22.04.270(c), to read: “22.04.270 Flora, fauna, feeding of wildlife (a) No person other than a duly authorized city employee or any person participating in city-sponsored activities shall dig, remove, destroy, injure, mutilate or cut any tree, plant, shrub, bloom or flower, or any portion thereof, growing in any park or open space lands, without the written consent of the director. (b) No person shall take, seize, molest, injure, or hunt a bird, reptile, or animal in any city park or open space lands, except as authorized by park regulations or with the written consent of the director. (c) No person shall feed, cause to be fed, scatter or leave food, seed or other matter edible to any wildlife animal, including any bird or feral animal, including any feral cat, in any park or open space lands or building located within a park or open space lands, without the written consent of the director.” SECTION 2. The Council finds that the adoption of this ordinance is not a project for the purposes of the California Environmental Quality Act. SECTION 3. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: 130819 dm 00710269 __________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ____________________________ Senior Asst. City Attorney City Manager ____________________________ Director of Community Services ____________________________ Director of Administrative Services CITY OF PALO ALTO OFFICE OF THE CITY CLERK June 23, 2014 The Honorable City Council Palo Alto, California Second Reading: Adoption of an Ordinance Authorizing the Operation, Management and Control of the Palo Alto Airport by the City of Palo Alto and Amending Section 2.08.190 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code to Add the Palo Alto Airport to the Duties of the Director of Public Works (First Reading: June 9, 2014 PASSED: 8-0 Scharff absent) This is a second reading of the Ordinance. No changes were made during the first reading. ATTACHMENTS:  Airport Ordinance (PDF) Department Head: Donna Grider, City Clerk Page 2 *****NOT YET APPROVED***** Ordinance No. Ordinance of the Council of the City of Palo Alto Authorizing the Operation, Management and Control of the Palo Alto Airport By the City of Palo Alto and Amending Section 2.08.190 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code to Add the Palo Alto Airport to the Duties of the Director of Public Works The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. (A) The Palo Alto Historical Society reports in PALO ALTO A Centennial History (1993), at 161-163, that a municipal airport has existed in Palo Alto since the early 1930s. Its operation as a municipal airport was suspended during World War II. A part of the airport then was located in San Mateo County. In 1946, the airport opened with two runways, but, by the early 1950s, one of two runways was relocated to make room for the Palo Alto Municipal Golf Course. Since 1963, the airport has operated wholly within Santa Clara County. Since 1967, federal air controllers have operated at the airport. (B) Palo Alto Airport (“PAO”) is located at 1925 Embarcadero Road, Palo Alto, County of Santa Clara, State of California; it has a bearing of Latitude: 37° 27' 40” N and Longitude: 122° 06' 54” W. PAO is approved for day and night use. Runway 13/31 is 2,443 feet in length; left traffic is assigned to Runway 13 and right traffic is assigned to Runway 31. (C) Pursuant to California Public Utilities Code Section 21662, the State of California, Department of Transportation, Division of Aeronautics, has issued an Airport Permit for a Public-Use Airport for PAO (the “Permit”). The Permit identifies the City of Palo Alto (the “City”) as the owner of PAO and the County of Santa Clara (the “County”) as the operator of PAO. PAO is maintained in accordance with Title 21, Sections 3525 through 3560 of the California Code of Regulations. (D) Pursuant to California Constitution Article 11, Sections 5, 7 and 9, and California Government Code Sections 50001 and 50470 through 50485.14, the City, as a chartered city and a local agency, is empowered to use land that it owns as a site for an airport. That includes, without limitation, the power and right to construct improvements, incur and issue debt, levy taxes, permit rental car agencies and aircraft maintenance on-site, grant leases and licenses to the State of California and the United States of America, and in the interest of the public health, safety and welfare, regulate airport hazards and adopt airport zoning regulations, in the ownership, operation, management and control of an airport. 1 140603 sdl 00710406 (E) Pursuant to Article II of the Charter of the City of Palo Alto, the government of the City of Palo Alto has and may exercise all powers necessary and appropriate to a municipal corporation which are not prohibited by the California Constitution. This power includes the power and right to operate a municipal airport. (F) Pursuant to Palo Alto Municipal Code (“PAMC”) Section 2.08.050(a), the City Manager is authorized to adopt rules and regulations regarding the public’s use of any city- owned real property, building, structure or facility. Pursuant to PAMC Section 2.08.190(a)(1) the director of public works-city engineer is responsible for the construction, maintenance and repair, and improvement of all city facilities and property owned or operated by the City. Under both of these PAMC provisions, the City is authorized to own, operate, manage and control a municipal airport. (G) In 1967, the City, as landlord, and the County, as tenant, entered into a ground lease of PAO (the “Lease”). The City and the County (the “Parties”) intend to early terminate the Lease in order that the City may assume sole operation, management and control of PAO. To effectuate that purpose, the Parties will enter into a Termination, Assignment and Assumption Agreement and several other contracts that will effectively transfer the operation, management and control of PAO from the County to the City between August 2014 and December 2014 (the “Effective Transfer Date”). (H) The operation of PAO as a public airport requires compliance with federal, state, and local laws, rules, regulations, policies, assurances, terms and conditions. The City recognizes that its ability to regulate operations at PAO is significantly limited by federal law, including, without limitation, by the provisions of 49 U.S.C. sections 40101 through 46507, 14 C.F.R. part 16 et seq. and the orders of the Federal Aviation Administration (“FAA”). (I) In assuming operation, management and control of PAO, the City is required to comply with all applicable federal, state and local laws, rules, regulations, policies, assurances, terms and conditions in exercising the operation and management of PAO, including, without limitation, awarding contracts, leases and licenses and issuing permits on a nondiscriminatory basis. SECTION 2. The Council of the City of Palo Alto hereby declares that the City of Palo Alto, California has the legal authority under California law, the Charter of the City of Palo Alto, and the Palo Alto Municipal Code to own, operate, manage, control, plan, design, construct, maintain, repair and improve a municipal airport, including the Palo Alto airport. The Council hereby authorizes the City Manager and his designee, the Director of Public Works or his designee, the Airport Division manager, to assume and undertake the full and complete operation, management and control of PAO promptly upon the Effective Transfer Date in accordance with applicable federal, state and local laws, rules, regulations, policies, assurances, terms and conditions. 2 140603 sdl 00710406 SECTION 3. Section 2.08.190 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code is amended to read, as follows: 2.08.190 Department of Public Works. (a) The department of public works shall be under the direction of the director of public works-city engineer, who shall be accountable to the city manager. The duties of the director of public works shall be as follows: (1) To be responsible for the planning, design, construction, maintenance, repair and improvement of all city facilities and property owned or operated by the city, except as otherwise provided in this code; (2) To assist with the preparation of the capital improvement program and assist the city manager, as directed, in reviewing capital project budget requests; (3) To provide engineering services as required including development and implementation of capital improvement program projects; (4) To provide permitting and inspection services relating to private construction of public facilities and private construction affecting city property; (5) To inspect all construction work done by or for the city and require compliance with all contracts made in connection therewith; (6) To prepare or cause to be prepared all official maps of the city and to keep and maintain such records as are necessary for the fulfillment of the department's function; (7) To operate the physical plant regarding the assignment of space, the maintenance of the buildings, and the recommendation of such rules and regulations as are proper for the efficient use of the facilities; (8) To maintain all public structures owned or operated by the city, and to establish a maintenance program including janitorial services, security and safety, for the upkeep of all public structures owned or operated by the city, and to report the condition of such structures; (9) To schedule repairs and preventative maintenance to ensure that the streets and sidewalks are maintained in a safe, and structurally sound, and sanitary manner, and to maintain all markings for traffic control painted or placed upon the streets or curbs; 3 140603 sdl 00710406 (10) To maintain trees, parking lots, paved bicycle paths, and underpasses in a safe and aesthetic manner; and to maintain trees adjacent to electric power lines in order to minimize electrical outages caused by tree limbs; (11) To coordinate the needs of the city departments in their requirements for motorized equipment, to operate the city garage, actively supervise a preventative maintenance program, keep the operating records of all motorized equipment used or operated by the city, monitor the use of pool cars, and maintain fuel sites at city facilities; (12) To be responsible for the management, regulation, operation, system rehabilitation, and capital improvements of the storm and surface water management enterprise, and to coordinate related activities with interested municipalities or special districts; (13) To be responsible for refuse collection, source reduction, recycling, landfill operations, street sweeping, and long term resource recovery and disposal activities of the refuse enterprise; (14) To be responsible for the operation of the regional water quality control plant, on behalf of the city and its partner agencies within the regional service area; the permitting and enforcement of regulations with respect to industrial discharges into the sewer system; and the development of programs and treatment methods to ensure the maximum feasible compliance with regulations protecting the San Francisco Bay and environment; (15) To perform or cause to be performed all duties required by this code or other law of the city engineer, superintendent of public works, the superintendent or manager of the water quality control plant, and the street superintendent; (16) To be responsible for the general aviation operation and management of the Palo Alto municipal airport, the adoption and enforcement of general aviation rules and regulations applicable to invitees and third parties doing general aviation-related business at the airport, and the management and control of all general aviation- and non-general aviation- related leases, licenses, permits, easements and other contracts and authorizations issued to or in connection with invitees and third parties doing business at the airport. (1617) To perform such other duties as may be required. (b) For organizational purposes, the department of public works shall consist of the following divisions: public works administration, engineering services, storm and surface water management, facilities management, operations, refuse, water quality control, and equipment management; public services; environmental services; and airport. 4 140603 sdl 00710406 SECTION 4. The Council finds that the amendment to Section 2.08.190 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code does not meet the definition of a project under the California Environmental Quality Act pursuant to California Public Resources Code Section 21065 and, therefore, no environmental impact assessment is necessary. SECTION 5. This ordinance shall become effective upon the expiration of thirty (30) days from its passage. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Senior Assistant City Attorney City Manager ____________________________ Director of Public Works 5 140603 sdl 00710406 City of Palo Alto (ID # 4900) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Contract with Group 4: Mitchell Park Library & Community Center Title: Approval of Amendment No. 8 with Group 4 Architecture, Inc., to Add $143,339 for a Total Contract Not to Exceed $8,998,570 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager to execute Amendment No. 8 to Contract C09130744 with Group 4 Architecture, Research + Planning, Inc. (Attachment A), to add $143,339 for additional construction administration services for the Mitchell Park Library and Community Center (MPLCC)project for a total contract amount of $8,998,570. Executive Summary The MPLCC project has experienced substantial construction delays, including the termination of the general contractor, Flintco, and having Flintco’s surety company take on the completion of construction. Accordingly, the City has amended the contract with Group 4 Architecture, Research + Planning, Inc. (Group 4) in order to continue their construction administration services through the various delays. In an effort to minimize delays and make the library and community center available to the public as soon as possible,staff reprogrammed funding associated with the project close out (punch list, record drawings)in the amount of $143,339 to construction administration. In order to replenish the original budget for project closeout services, staff recommends that the contract be amended to revise the schedule and to increase the compensation. Background Measure N, which passed on November 4, 2008, allows the City to sell bonds to City of Palo Alto Page 2 fund the renovation of the Downtown Library, construction of a new and expanded MPLCC, renovation and expansion of Rinconada Library and renovation of temporary facilities to accommodate the various library closures. The City entered into an agreement with Group 4 in 2009 to provide the architectural services for all of the Library Bond projects. Seven amendments have been previously approved by Council to add to or revise the scope of work and project schedules and to add compensation. The MPLCC project is over two years behind schedule; mostly due to Flintco’s inability to perform the construction in a timely, coordinated and acceptable manner. Group 4 provides the City construction administration services, including review of project documents, resolving design and construction issues, and review of construction. Group 4 has also had to expend a considerable amount of unforeseen time discussing and planning corrections of Flintco’s failed work. Due to Flintco’s failures and delays, the City has had to extend the term and add compensation to Group 4’s construction administration task three times previously. Discussion Amendment 7 to the contract, approved on May 20, 2013, includes a schedule for the completion of construction administration services on October 31, 2013. Amendment 7 also includes a budget of $143,339 for project closeout services, which include punch list work and preparing record drawings. Staff, via their authority in the contract, transferred this entire amount to the construction administration task in order for Group 4 to continue working on that task from October 31, 2013 to June 30, 2014. Now, staff recommends reestablishing the $143,339 budget for project closeout services. Resource Impact Funds for Group 4 contract amendment are available in CIP PE-09006. The Group 4 contract and seven contract amendments encumbered to date as well as the proposed Amendment #8 are as follows: Contract Date Amount Original contract March 2, 2009 $3,827,280 Amendment 1 September 14, 2009 $92,034 Amendment 2 June 28, 2010 $312,396 City of Palo Alto Page 3 Amendment 3 August 5, 2010 $3,192,000 Amendment 4 July 25, 2011 $258,041 Amendment 5 January 5, 2012 $220,670 Amendment 6 November 5, 2012 $692,810 Amendment 7 May 20, 2013 $260,000 Amendment 8 June 23, 2014 $143,339 Total Contract Value to Date $8,998,570 Note: The Group 4 contract amounts are for all the Measure N library projects. The MPLCC portion of the total contract amount is $6,164,064. Policy Implications Amending the contract with Group 4 does not conflict with any current City policy. Timeline Construction of the new Mitchell Park Library and Community Center began in September of 2010 and staff anticipates the facility opening to the public in November 2014. Attachments: ·A -PAMP Amendment No 8 Signed (PDF) Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744 AMENDMENT NO.8 TO CONTRACT NO. C09130744 BETWEEN THE CITY OF PALO ALTO AND GROUP 4 ARCHITECTURE, RESEARCH + PLANNING, INC. This Amendment No.8 ("Amendment") to Contract No. C09130744 ("Contract") is entered into and made effective on June ~ 2014, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and GROUP 4 ARCHITECTURE, RESEARCH + PLANNING, INC., a California corporation with offices located at 211 Linden Avenue, South San Francisco, California 94080 ("CONSULTANT"). R E CIT A LS: A. The Contract was entered into on March 2, 2009, between the parties for a total Contract amount not to exceed $3,827,280 for the provision of professional consulting design services relating to, among other things, the demolition of an existing library and community center at Mitchell Park and the construction of a new joint library and community center ("Mitchell Park Project"), rehabilitation of the Downtown Library, renovation and addition to the Main Library, and to provide temporary facilities during the construction of the other projects ("Project"); and B. On September 14, 2009, June 28, 2010, August 5, 2010, July 25, 2011, January 5, 2012, November 5, 2012, and May 20, 2013, the parties amended the Contract (Amendments No.1 through 7, respectively) to add $5,027,951 of compensation for a total Contract amount not to exceed $8,855,231 and to amend Exhibit "A" SCOPE OF WORK, Exhibit "B" SCHEDULE OF PERFORMANCE and Exhibit "C", COMPENSATION; and C. The parties seek by this Amendment No.8 to maintain Consultant services and avoid further delay to the Mitchell Park Library Project by extending the completion date of Consultant's responsibility to provide Basic Construction Administration Services for the Construction Phase of the Mitchell Park Library Project and amending Consultant's Compensation under the Contract; and to reserve the City's rights with respect to certain damages relating to this amendment. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. The Recitals set forth above are hereby incorporated in and made a part of this Amendment and the Contract by this reference. SECTION 2. SECTION 2 of the Contract, 'TERM", is hereby amended to read: 1 S:/013/Group 4/Amendment No 8 Attachment A The term of this Agreement shall be from the date of its full execution through six months after completion of the services in accordance with the Schedule of Performance attached as Exhibit "B" unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. The following exhibits to the contract are hereby amended to read as set forth in the following attachment to this amendment which is incorporated in full by this reference. a. Exhibit "B" entitled "EXHIBIT "B" SCHEDULE OF PERFORMANCE". b. Exhibit "C" entitled "EXHIBIT "C" "COMPENSATION". SECTION 4. EXHIBIT "A" SCOPE OF WORK, II. CONSULTANT'S BASIC SERVICES, SECTION 1.5.1, as most recently amended in Amendment No.7 to the Contract, is hereby amended to read : "CONSULTANT's responsibility to provide Basic Construction Administration Services for the Construction Phase under this Agreement commences with CITY's issuance of a Notice to Proceed with the Contract for Construction and will end on June 30, 2014, upon commencement by the CONSULTANT of the Punch List, as mutually agreed upon by CONSULTANT, the CITY's Construction Manager and CITY, whichever comes first. If the punch list does not commence by June 30, 2014 any further time and effort spent on behalf of the project shall continue to be performed using the Task G1.1 budget as available on a time and material basis until the commencement of the Punch List. " SECTION 5. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. 2 S:/013/Group 4/Amendment No 8 CITY OF PALO ALTO James Keene City Manager APPROVED AS TO FORM: Senior Asst. City Attorney S:/013/Group 4/Amendment No 8 3 Attachment A GROUP 4 ARCHITECTURE, RESEARCH + PLANNING, INC. By: jkw//ff&:r - Name: 'PA-VtO (V), S1(1\~C) Title: c., p; O. Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744 -AMENDMENT EIGHT EXHIBIT "B" SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones MITCHEll PARK LIBRARY I COMMUNITY CENTER Task Dl: Design Development Task El: Construction Documents Task Fl: Bidding & Award Task Gl: Construction Administration Task HI: Project Closeout & Record Documents 4 S:/013/Group Ii/Amendment No 8 Completion Date or No. of Weeks From NTP Week24 Week 50 (26 weeks from receipt of authorization to proceed from Design Development Task) Week 63 (13 weeks from receipt of authorization to proceed from Construction Document Task) June 30, 2014 -estimated 90 days starting from beginning of Punch List preparation Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744-AMENDMENT EIGHT EXHIBIT "C" COMPENSATION CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Contract, and as set forth in the budget schedule below. Compensation sholl be paid to the CONSUL TANT on 0 lump sum basis for Mitchell Park Librory Task 01, El, Fl, subject to the Reservation of Rights below, except for Fl.1 services compensated on a time and material basis. Compensation sholl be poid to the CONSULTANT on a lump sum basis for Renovated Downtown Library Tosk 02, E2, F2, 62, and H2. Compensation for Temporary Library Task 03, E3, F3, and 63 shall be calculated based on the hourly rate schedules attached as Exhibit C-l up to the Not to Exceed amount set forth below. Compensation for Participation Task D4 shall be on a per meeting basis as identified in attached Exhibit C-l up to the Not to Exceed amount set forth below. Subject to the Reservation of Rights below the compensation to be paid to CONSULTANT under this Contract for all services described in Exhibit itA ", ("Basic Services") and reimbursable expenses shall not exceed $8,102,338. CONSULTANT agrees to camplete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $8,998,570. Any work performed or expenses incurred for which payment would result in total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tosks and categories of work os outlined and budgeted below. The CITY's project manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $8,102,338 and the total compensation for Additional Services does not exceed $896,232. RESERVATION OF RIGHTS Reservation of Rights: All sums paid to Con sultant and received by Consultant under this Amendment are made without prejudice and City and Consultant hereby agree each reserves any and all rights and/or defenses they may have against each other, whether in existence now or hereafter, including, but not limited to, the City's right to claim it incurred extra consultant fees due to construction delays and/or other causes, irrespective of whether the City's claimed extra consultant fees were paid to Consultant or the City's separate consultant(s}. The City and Consultant each further agree all sums paid to Consultant under this Amendment will be paid without withholding fees or retainage. The parties reserve the rights to make these claims until such time as the City and Consultant resolve all claims and disputes that may arise between them in connection with the Mitchell Park Project. Any payment made by City to Consultant under Contract Amendment No.8 shall not affect in any way City's ability to assert that it incurred damages in the form of extra con sultant fees and expenses, in connection with the Mitchell Park Project. Notwithstanding the foregoing, if the CITY and CONSULTANT have been unable to agree in writing to the entitlement to the funds paid by CITY to CONSULTANT, subject to the Reservation 5 S:/013/Group 4/Amendment No 8 Attachment A of Rights above within ninety (90) days after the CITY's final resolution (e.g., the dates of any of the following: settlement agreement; judgment following trial; or judgment following an award in binding arbitration) of any and all claims by or against Contractor, then CITY AND CONSULTANT may submit the dispute surrounding the Reservation of Rights funds to final and binding arbitration to be conducted by a single arbitrator from Judicial Arbitration and Mediation Services ("JAMS") of San Jose, California, or any successor entity. The arbitrator, if any, shall be jointly selected by the CITY AND CONSULTANT or, if they are unable to agree within fourteen (14) days of the first written proposal of an arbitrator, appointed in accordance with the then-current JAMS arbitrator appointment process and subject to all JAMS procedural and discovery rules then in effect. This provision shall not be construed as an agreement to submit any other claims or actions either party has or may have against one another to JAMS arbitration and such other claims or actions shall be governed by the terms set forth in the Contract. 6 5:j013/Group 4/Amendment No 8 Attachme nt A CITY OF PALO ALTO CONTRACT NO . C09130744-AMENDMENT EIGHT BUDGET SCHEDULE NOT TO EXCEED AMOUNT MITCHELL PARK LIBRARY/COMMUNITY CENTER Task D1 $845,455 (Design Development) Task E1 $1,882,555 (Construction Documents) Task F1 $150,437 (Bidding & Award) Task G1 $1,155,517 (Construction Administration, HE & Signage) Task G1.1 after Jan. 2, 2012 $1,084,149 (Construction Administration, FFE & Signage) Task H1 (Project Closeout & Record Documents) Subtotal RENOVATED DOWNTOWN LIBRARY Task 02 (Design Development) Task E2 (Construction Documents) Task F2 (Bidding & Award) Task G2 (Construction Administration) Task G2.1 (LEED Design & Documentation) Task G2 .2 (Furniture) S:!013jGroup 4jAmendment No 8 $143,339 $88,383 $227,882 $14,941 $146,100 $81,795 $20,000 7 BASIS Lump Sum Lump Sum Lump Sum Lump Sum Lump Sum/ Time and Material Lump Sum $5,262,554 Lump Sum Lump Sum Lump Sum Lump Sum Lump Sum Lump Sum Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744-AMENDMENT EIGHT BUDGET SCHEDULE Task H2 NOT TO EXCEED AMOUNT $25,500 BASIS Lump Sum (Project Closeout and Record Documents) Subtotal TEMPORARY MITCHELL PARK LIBRARY Task D3 (Schematic Design & Design Build Bid Package) Task E3 (Construction Documents) Task F3 (Bidding & Award) Task G3 (Construction Administration) Subtotal MAIN LIBRARY PROJECT Task D4 (Design Development) Task E4 (Construction Documents) Task E4.1 (Library andArt Center Site Integration Design and Construction Documents) Task F4 (Bidding & Award) Subtotal TEMPORARY MAIN LIBRARY Task AS &C5 (Site AnalysiS & Prelim Design Documents) Task ES $12,688 $95,916 $9,440 $24,415 $488,307 $892,814 $41,948 $90,749 $39,725 $22,410 (Construction Documents, Bidding & Award) Subtotal 8 S:j013jGroup 4jAmendment No 8 $604,602 Time & Materials to a maximum Lump Sum Lump Sum Lump Sum $142,459 Lump Sum Lump Sum Lump Sum Lump Sum $1,513,818 Time & Materials to a maximum Lump Sum $62,135 Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744 -AMENDMENT EIGHT ART CENTER RENOVATION Task E4.2 (Library and Art Center Site Integration) Design & Construction Documents Subtotal PARTICIPATION Task D6 Subtotal Mitchell Park Library Main Library Art Center Subtotal Basic Services Reimbursable Expenses Allowance: Mitchell Park Library Mitchell Park Library after Sept. 4, 2012 Downtown Library Temporary MP Library Main Library Temporary Main Library Subtotal Reimbursable Expenses $41,948 $75,000 82,000 7,000 $160,000 12,000 56,000 13,500 50,000 19,322 Total Basic Services and Reimbursable Expenses Additional Services (Not to Exceed) Mitchell Park Library Downtown Library Temporary MP Library Main Library Temporary Main Library Art Center Subtotal Additional Services Maximum Total Compensation S:/013/Group 4/Amendment No 8 9 $654,510 56,000 15,600 157,082 8,145 4,895 Lump Sum $41,948 Lump Sum Allowance $164,000 $7,791,516 $310,822 $8,102,338 $896,232 $8,998,570 Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744-AMENDMENT EIGHT REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. cm shall reimburse CONSULTANT for the following reimbursable expenses at cost not to exceed the total amount shown above. Expenses for which CONSULTANT sholl be reimbursed are: • Outside service printing/copying of drawings and documents of any size. • In-house printing of CAD check sets and presentation drawings larger than ll"xl7": $2.00 per square foot. • In-house black & white photocopying for draft and final reports and specifications: $2.00 per page. • In-house color and grayscale printing and photocopying up to ll"x 17" for in house, consultant or client use: $1.25 per page. • Software purchase and licensure on behalf of the client. o Postage, delivery and messenger service. o Photographic and digital imaging. o Architectural renderings and scale models. o Travel expenses o Subconsultant costs over and above those included in Basic Services. o Presentation boards. o Facilitation tools. • Workshop accessories. o Workshop facilitation materials All requests for payment of expenses shall be accompanied by opprapriote backup information. Any expense anticipated to be more than $1,000.00 shall be approved in advance by the CITY's project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY's project manager's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT's proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-I. The additional services scope, schedule and maximum compensation sholl be negotiated and agreed to in writing by the CITY's project manager and CONSUL TANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. 10 S;j013jGroup 4jAmendment No 8 Attachment A CITY OF PALO ALTO CONTRACT NO. C09130744 -AMENDMENT EIGHT Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services. 1. If any of the following circumstances affect the CONSULTANT's services for the Project, the CONSULTANT may be entitled to an appropriate adjustment in the CONSULTANT's schedule and compensation: a. Change in the instructions or approvals given by the CITY that necessitate revisions in design drawings and which are not caused by CONSULTANT's negligence; b. Enactment or revision of codes, laws, or regulations or official interpretations which necessitate significant changes to previously prepared drawings; c. Material delay caused by the CITY beyond CONSULTANT's reasonable control d. Significant change in the Project including, but not limited to, size, complexity, the Owner's schedule or budget, or procurement method; e. Preparation for and attendance at a dispute resolution proceeding or a legal proceeding except where the CONSULTANT is a party thereto; f. Substantial change in the information contained in Exhibit A. Additional services may also include, meetings exceeding those outlined in Exhibit A as Basic Services. 11 S:/013/Group 4/Amendment No 8 Attachment A EXHIBIT C-1 CONSULTANT Hourly Rates and Meeting Rates for Additional Services CONSULTANT's hourly and meeting rate schedu le shall be: Group 4 Architecture Research + Planning. Inc. Position Hourly Rate Consulting Principal $250 Principal in Charge $195 Principal $180 Associate $160 Project Manager $150 Professional I $140 Professional II $130 Professional III $120 Technical I $125 Techn ica l II $110 Technical III $ 95 Techn ical IV $ 85 Project Support $ 80 Subconsultants of the CONSULTANT will be billed hourly in accordance with the subconsultants' rate table as follows: BKF Engineering (Civil) Position Engineering: Associate Project Manager Engineer IV Engineer I, II, III Planning: Planner I, II, III Surveying: Project Manager Surveyor I, II, III, IV Survey Party Chief Survey Chainman Apprentice I, II, III, IV S:/013/Group 4/Amendment No 8 12 Hourly Rate $170 $160-$165 $150 $105-$125-$145 $110-$125-$140 $160 $105-$125-$145-$150 $135 $105 $55-$75-$85-$95 Design & Drafting: Technician I, II, III Drafter I, II, III, IV Student Engineer/Surveyor Construction Administration: Senior Construction Administration Resident Engineer Field Engineer I, II, III Services & Expenses: Project Assistant Clerical/Admin Assistant Rutherford & Chekene (Structural) Position Executive Principal Principals Senior Engineers Engineers Designers CADD Specialists Guttmann & Blaevoet (Mechanical) Position Principal Associate Principal Associate Senior Engineer Engineer CAD Manager Designer Drafter Administrative O'Mahony & Myer (Electrical + lighting) Position Founding Principal Principals Project Electrical Engineer Project Lighting Designer Electrical/lighting Design er S:/013/Group 4/Amendment No 8 13 Attachment A $105-$110-$115 $80-$90-$95-$105 $60 $160 $115 $115-$124-$140 $70 $60 Hourly Rate $230 $190-$200 $150-$190 $110-$150 $95-$120 $90-$140 Hourly Rate $230 $210 $185 $170 $135 $125 $120 $110 $70 Hourly Rate $235 $200 $130 $130 $115 CAD Supervisor CAD Technician Administrative Davis Langdon (Cost Estimator) Position Principals Associate Principals Senior Associates Associates Cost Planners Clerical Gates + Associates (Landscape) Position President Principal Senior Associates Irrigation Designer Associates Draftspersons/Landscape Designer Clerical Staff Smith Fause McDonald (Technology/Acoustic) Position Principals Associates/Senior Engineers Project Consultants/Engineers Consulta nts/Engineers Technicia ns/Drafting Administrative S:/013/Group 4/Amendment No 8 14 $105 $90 $70 Hourly Rate $250-$300 $210 $185 $160 $90-$155 $70 Hourly Rate $175 $120-$150 $105-$125 $105 $80\5-$105 $70-$85 $60-$70 Hourly Rate $175 $145 $125 $105 $80 $70 Attachment A City of Palo Alto (ID # 4903) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: TJKM Transportation Consultant Agreement Amendment No 1 Title: Approval of Amendment No. 1 to On-Call Transportation Service Agreement - Contract C13147610 with TJKM Transportation Consultant in the Amount of $151,000 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council authorize the City Manager to execute Amendment No. 1 with TJKM Transportation Consultants for on-call traffic engineering and transportation planning services in the amount of $151,000, bringing the total contracted amount to $432,820. Background The City entered into an agreement with TJKM Transportation Consultants in March 2013 (Staff Report ID No. 3375 – Attachment A) to provide both on-call traffic engineering and transportation planning services. Currently TJKM is supporting city staff on an as needed basis, and they were instrumental in the completion of improvement plans for the Safe Routes to School program that were built this past Spring. TJKM also provides assistance in responding to customer service request for transportation improvements, and is assisting in the development review process for land development projects. Projects completed by TJKM focused on the Bicycle & Pedestrian Transportation Plan include: Embarcadero Road Concept Traffic Improvements (El Camino Real to PALY), Embarcadero Road & Newell Road Focused Signal Timing Study, and the Maybell Avenue Bicycle Boulevard. The proposed Amendment No. 1 for TJKM Transportation Consultants (Attachment B) provides an additional $151,000 to their agreement, originally $281,820, for an on-going total of $432,820. The Amendment No. 1 also extends the term of their agreement through December 31, 2014, by which time the Department hopes to have filled the Senior Transportation Planner position included in the FY15 budget. Summary of Key Issues City of Palo Alto Page 2 The proposed Amendment No. 1 will allow TJKM Transportation Consultants to continue to provide on-call traffic engineering and transportation planning support services to the City. Immediately planned projects for TJKM include:  Customer Service Augmentation Having TJKM staff available allows the City to immediately respond to customer service requests for neighborhood improvements as well as for Capital Improvement Program (CIP) projects. Customer service augmentation through the new contract term will be focused on implementation of safety improvements recommended through the Safe Routes to School program including design plans for enhanced crosswalk facilities.  Traffic Signal Design – Embarcadero Road & PALY-Town & County TJKM will complete the design plans for modification of the traffic signal facilities at Embarcadero Road & PALY-Town & Country Driveways and the Embarcadero Road & PALY Ped Crossing. The City plans to issue this project for construction in the Fall 2014.  Traffic Impact Analysis (TIA) Guidelines TJKM will assist the City in evaluating its current TIA analysis guidelines against those of similar size cities around the Bay Area and in California to help identify opportunities to both streamline the TIA process and to better focus TIAs around areas of community interest such as cumulative impacts and neighborhood impacts. TJKM’s work will also help the City to evaluate possible alternatives to evaluating transportation impacts via intersection Level of Service (LOS), based on recent changes in State law. This will include consideration of a multi-model assessment of bicycle-pedestrian-transit- accessibility issues. Resource Impact CIP PL-12000 (Parking & Transportation Improvements) will be used to fund Amendment No. 1of the TJKM Transportation Consultants On-Call Services Agreement and there are sufficient funds in the CIP to cover the cost of the project, $151,000. After the amendment, the on-going total cost of the TJKM Transportation Consultants contract will be $432,820. Timeline The On-Call Services Agreement with TJKM Transportation Consultants is for specific projects, each of which have different completion dates. The Departmetn anticipates all three proposed TJKM projects discussed earlier in this report, including general staff support, will be completed by the end of the calendar year, at which time the Department hopes to have filled the Senior Transportation Planner position included in the FY15 budget. Courtesy Copies TJKM Transportation Consultants – Christopher Thnay Attachments: City of Palo Alto Page 3  Attachment A: CMR on Agreement with TJKM Transportation Consultants of March 2013 - ID# 3375 (PDF)  Attachment B: Contract Amendment No. 1 with TJKM Transportation Consultants (PDF) City of Palo Alto (ID # 3375) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2013 City of Palo Alto Page 1 Summary Title: On-Call Transportation Consultant Contracts Title: Approval of On-Call Transportation Consultant Contract with TJKM Transportation Consultants for a Total of $281,820 to Implement Bicycle & Pedestrian Transportation Plan and to Provide Project Support Services From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve and authorize the City Manager or designee to execute contract with TJKM Transportation Consultants (Attachment A) in the amount of $281,820 for On-Call Traffic Engineering & Transportation Planning Services. Background The City adopted the Palo Alto - Bicycle & Pedestrian Transportation Plan 2012 in July 2012 and has made implementation of the Plan a priority. The plan identifies future bicycle and pedestrian transportation facilities, including bicycle boulevards, enhanced bikeways, off-road trail opportunities, etc. Subsequent to completion of a Request for Proposals (RFP) process, the City identified two firms to complete several key projects and to provide on-call traffic engineering & transportation planning services. Hexagon Transportation Consultants was awarded a contract through a City Manager authorization process, as the contract amount was less than $85,000. This staff report requests approval of a contract with TJKM Transportation Consultants, to complete three specific projects and provide project support services focused on the implementation of the Bicycle & Pedestrian Transportation Plan 2012. The City has identified five immediate projects to complete for the on-call work: 1.High Street One-Way to Two-Way Conversion Traffic Study (Hexagon) This traffic study includes evaluating the conversion of High Street between Lytton Avenue and Homer Avenue from a one-way to two-way street, or for select blocks of that segment. The active 801 Homer Street development project on the corner of Alma Attachment A City of Palo Alto Page 2 Street and Homer Street, when completed, will provide a contraflow bicycle lane between Alma Street and High Street. The City is responsible for studying bicycle routes beyond the contraflow bicycle lane facility to support access into the Downtown; the conversion of High Street to a two-way street between Forest Avenue and Homer Street will provides the Downtown link. 2. Wilkie Way Bicycle & Pedestrian Path Connection Project (Hexagon) The City has an active Capital Improvement Program (CIP) project to build a pedestrian and bicycle path from Wilkie Way to the Summer Hill development at El Camino Real & Deodar Street to provide connectivity to the public park located within the community. This project was identified in the Bicycle and Pedestrian Plan 2012 and consists of a 10 feet wide by 130 feet long path with fencing and landscaping. The purpose of this traffic study is to determine the impacts in terms of pedestrian and bicycle traffic diversion to this new path and to measure changes in the parking occupancy rate on Wilkie Way. 3. Embarcadero Road Traffic Improvements (El Camino Real to Palo Alto High School Ped Xing) (TJKM) This traffic study includes identifying civil engineering improvement opportunities along Embarcadero Road to improve roadway operations between El Camino Real and the Palo Alto High School Pedestrian Crossing, including the Town & Country Shopping Center Driveway. This segment of Embarcadero Road is the focus of frequent community requests for improvement. Palo Alto High School is in the process of implementing on-site improvements to the campus and there may be opportunities to reroute on-site trails on the campus to help eliminate the need for one of the signalized intersections on Embarcadero Road to improve efficiency. The City will also be studying options to improve signal coordination with the Embarcadero Road & El Camino Real intersection operated and maintained by the State of California – Department of Transportation, Caltrans. 4. Embarcadero/Newell Roads School-Focused Traffic Signal Timing Study (TJKM) This study includes studying the intersection of Embarcadero Road & Newell Road for time-of-day pedestrian-only signal intervals consistent with those already in place at Embarcadero Road & Middlefield Road. This is a recommended improvement from the Fairmeadow School – Safe Routes to School evaluation and supports school-commute activities to both Fairmeadow School and JLS Middle School. Pedestrian-only signal intervals will be considered between 7:30AM-8:30AM and 2:00PM-3:00PM. 5. Maybell Avenue-Donald Drive-Georgia Avenue Bicycle Boulevard (TJKM) Maybell Avenue is identified as an existing Bicycle Boulevard in the City’s Bicycle & Pedestrian Transportation Plan 2012 between El Camino Real and Donald Drive between Arastradero Road and Georgia Avenue and Georgia Avenue between Donald Drive and the Palo Alto High School Trail entry. Staff intends to prepare a set of improvement plans to improve the Maybell Avenue Bicycle Boulevard and implement the new bicycle City of Palo Alto Page 3 boulevards treatments on Donald Drive and Georgia Avenue. The three streets together serve predominantly student bicyclists attending Gunn High School, Terman Middle School, and Juana Briones Elementary School. This study will develop new concept signage and striping improvement plans for the consideration of the community. Discussion The City received five proposals in response to the RFP solicitation for the On-Call Traffic Engineering and Transportation Planning services project. Three of the firms were selected for interviewing and two selected for award of contracts consistent with the RFP. A contract with Hexagon Transportation Consultants was awarded seperately by the Purchasing Manager, and this staff report is for Council approval of a contract with TJKM Transportation Consultants. The solicitation and selection process is outlined below. City of Palo Alto Page 4 Summary of Solicitation Process Proposal Description/Number On-Call Traffic Engineering & Transportation Planning Project Proposed Length of Contract: 1 year (with additional 1 yr renewal option) Total Days to Respond to RFP: 25 days Pre-proposal Meeting Date: August 29, 2012 via Teleconference Number of Proposals Received: 5 Proposals Received from: Location (City, State) Selected for oral interview? TJKM Pleasanton, CA Yes Fehr & Peers San Jose, CA Yes Hexagon San Jose, CA Yes AECOM San Jose, CA No Hatch Mott MacDonald Gilroy, CA No The proposals were judged by the following criteria:  Quality and effectiveness of proposed solutions,  Qualifications and experience of the staff assigned to the project,  Proposal quality and completeness,  Response time and ability to perform the work, and  Fee The City released an (RFP) for the design of the On-call Traffic Engineering & Transportation Planning Project on August 24, 2012. A pre-bidders teleconference was held on August 29, 2012 to help provide background regarding the projects. Five proposals were received in response to the RFP. An evaluation committee consisting of Public Works, Utilities Electrical Operations and Transportation staff reviewed the proposals and recommended the short-listing of three consultant teams based on proposal content and criteria identified in the RFP. City of Palo Alto Page 5 Three firms were invited to participate in oral interviews held on October 23, 2012. Two consultants, Hexagon and TJKM, were selected for the projects because they demonstrated superior knowledge of traffic engineering and the ability to complete the projects in a timely fashion. Hexagon Consultants was chosen to complete the High Street One–Way to Two-Way Conversion Study and the Wilkie Way Bicycle & Pedestrian Path Project. Staff feels that Hexagon Consultants demonstrated successful completion of various traffic studies and will provide staff with the necessary data required to complete the assessment of the projects. TJKM Consultants were chosen to complete the studies at Embarcadero Road, the Maybell- Donald-Georgia Avenue Bicycle Boulevard project and the Project Support Services role for the Transportation Department. TJKM demonstrated strong skills in completing similar traffic engineering projects. The proposed candidate for the Project Support Services role demonstrated strong skills in AutoCad and Microstation for the development of signing and striping plans that would include innovative bicycle and pedestrian facility design. The contract with Hexagon Transportation Consultants for the studies at Wilkie Way and High Street is for a total amount of $61,425 and does not require Council approval for execution. The Contract with TJKM Transportation Consultants for the traffic studies at Embarcadero Road, Maybell-Donald- Georgia and project support services is for a total of $281,820 and is addressed in this Staff Report. Timeline Immediately upon execution of a contract, staff will meet with the Consultant teams to get them started on each of the projects described above. The study phase of these projects also includes multiple community meetings as well as public hearing with the Planning and Transportation Commission and City Council. Staff estimates all studies, with the exception of the Project Support Services role, will be completed within one year. Resource Impact Funding in the amount of $343,245 for the traffic studies is included in the Capital Improvement Program through various transportation-focused projects, including PL-00026 (Safe Routes to School), PL-04010 (Bicycle & Pedestrian Transportation Plan – Implementation Project), PL-12000 (Parking & Transportation Improvements), and the General Fund – Transportation Division Staffing. City of Palo Alto Page 6 Policy Implications The City’s Comprehensive Plan recommends that the City strive to accommodate all modes of travel in its street system. Consistent with this Comprehensive Plan goal, the proposed traffic studies ensure that “Goal T-4: An efficient Roadway Network is provided for all users, including motor vehicles, transit vehicles, bicyclists and pedestrians” is effectuated. Program T-18: “Develop and periodically update a comprehensive bicycle plan” was also amended by Council in July 2012 to include the updated Bicycle and Pedestrian Transportation Plan, which updates and supersedes the 2003 Plan. Environmental Review No environmental review is required for the proposed traffic studies. The findings of each study though may be used to complete future enviromnetal studies. Attachments:  Attachment A: Contract with TJKM Consultants (PDF)  Attachment B: Correspondence Received (PDF) CITY OF PALO ALTO CONTRACT NO. C13147610 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND TJKM TRANSPORTATION CONSULTAl~TS FOR PROFESSIONAL SERVICES This Agreement is entered into on this day of March, 2013, ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and TJKM TRANSPORTATION CONSULTANTS, a California corporation, located at 4305 Hacienda Drive, Suite 550, Pleasanton, CA. 94588, Telephone (925) 463-0611 ("CONSUL TANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to begin implementation of the recently adopted Bicycle & Pedestrian Transportation Plan 2012 and other traffic engineering projects as required. ("Project") and desires to engage a consultant to provide traffic engineering and transportation planning services in connection with the Project ("Services"). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit "A", attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit "A" in· accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM . . The term of this Agreement shall be from the March, 212013 through September 31,2014 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term ofthis Agreement and in accordance with the schedule set forth in Exhibit "B", attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and Professional Services Rev June 2, 2010 timely manner based upon the circumstances and direction communicated to the CONSULT ANT. CITY's agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. The applicable rates and schedule of payment are set out in Exhibit "C-l ", entitled "HOURLY RATE SCHEDULE," which is attached to and made a part ofthis Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C" . CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit "A". SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed Two Hundred Eighty One Thousand Eight Hundred Twenty Dollars ($281,820.00). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Two Hundred Eighty One Thousand Eight Hundred Twenty Dollars ($281,820.00). The applicable rates and schedule of payment are set out in Exhibit "C-I ", entitled "HOURL Y RATE SCHEDULE," which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subj ect to the provisions of Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit "A". SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONS ULT ANT's billing rates (set forth in Exhibit "C-I "). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT's payment requests shall be subject to verification by CITY. CONSULTANTshall send all invoices to the City's project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT's supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, ifpermitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of Professional Services Rev June 2, 2010 similar knowledge and skill engaged in related work throughout California under the same or similar circumstance~. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to C~TY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSUL TANT has prepared plans and specifications or other design documents to construct the Proj ect, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY's stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULT ANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT's obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval ofthe city manager will be void. SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The sub consultants authorized by CITY to perform work on this Project are: National Data and Surveying Services 8370 Wilshire Blvd. STB 205 Beverly Hills CA. 90211 Bicycle Solutions 450 Silver Ave. #3 San Francisco, CA. 94112 Professional Services Rev June 2,2010 Fehr & Peers 100 Pringle Avenue, Suite 600 Walnut Creek, CA. 94596 CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be :fully responsible to CITY for all acts and omissions of a sub consultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Chris Kinzel as the Principal-in-Charge to have supervisory responsibility for the performance, progress, and execution of the Services and Christopher Thnay as the Project Manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY's project manager. CONSULTANT, at CITY's request, shall promptly remove personnel who CITY fInds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City's project manager is Jaime Rodriguez, Planning & Community Environmental Department, Planning Transportation Division, 245 Hamilton Avenue, Palo Alto, CA 94303, Telephone (650) 329-2136, email The Project Manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifIcations, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectUal property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such matcrials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation ofthe suitability ofthe work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT's records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the :fullest extent permitted by law, CONSLlLTANT shall protect, indenmify, defend and hold harmless CITY, its Council members, officers, employees and agents Professional Services Rev JUlJe 2, 2010 (each an "Indemnified Party") from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements ("Claims") that arise out of, pertain to, or relate to the negligence, rec1dessness, or willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT's services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation (lfthe same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term ofthis Agreement, the insurance coverage described in Exhibit "D". CONSUL TANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best's Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY's Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. Professional Services Rev June 2, 2010 SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19 .2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT's services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise ofhislher discretion. The following Sections will survive any expiration or termination ofthis Agreement: 14, 15, 16, 19.4,20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk . City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would Professional Services Rev June 2, 2010 conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the peliormance of this Agreement, it will not employ sub consultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate fmancial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section .2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the City's Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste . reduction, reuse, recycling and disposal requirements of the City's Zero Waste Program. Zero Waste best practices include frrst minimizing and reducing waste; second, reusing waste and third, recycling or compo sting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherWise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of3 0% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION Professional Services Rev June 2, 2010 24.1. This Agreement is subject to the fiscal provisions of the Charter ofthe City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty ( a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds· for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal inforination as defmed in California Civil Code section 1798.81. 5( d) about a California resident ("Personal Information"), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City's express written consent. 25.9 All unchecked boxes do not apply to this agreement. Professional Services Rev June 2, 2010 IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO TJKM TRANSPORTATION CONS~~TA.NTSIDr~~ By: \..:.:.---..... City Manager Name: tJ C\.~a\J\ A'f\J'...\~ APPROVED AS TO FORM: 'P r-e <6.lde..tI\ \- Senior Deputy City Attorney Attachments: EXHIBIT "A": EXHIBIT "B": EXHIBIT "C": EXHIBIT "C-l": EXHIBIT "D": SCOPE OF WORK SCHEDULE OF PERFORMANCE COMPENSATION SCHEDULE OF RATES INSURANCE REQUIREMENTS Professional Services Rev June 2, 2010 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Professional Services Rev June 2, 2010 TASK I: EXHIBIT "A" SCOPE OF SERVICES EMBARCADERO ROAD TRAFFIC IMPROVEMENTS CONSULT ANT shall evaluate the Embarcadero Road corridor and determine what civil or traffic signal operation modifications are necessary to improve traffic operations along the corridor between EI Camino Real and Palo Alto High School (Paly High) Pedestrian Crossing (Xing) intersections. CONSULTANT shall collect 12-hour turning movement counts (including separately banked bicycle and pedestrian data) for the following three intersections: 1. Embarcadero RoadlEl Camino Real 2. Embarcadero RoadITown and County Shopping Center 3. Embarcadero RoadlPalo Alto High School Pedestrian Xing CONSULTANT shall collect 24-hour counts on each approach of Embarcadero Road and each of the project driveways for seven days. Upon completion of the data collection process, CONSULTANT shall validate the data and develop Synchro model to evaluate existing conditions. CONSULTANT shall develop base maps for the corridor and develop corridor improvements alternatives (including but not limited to: signal modifications, removal or reconfiguration of the intersections) in consultation with the City staff. Upon completion of development of corridor improvements, CONSULTANT shall evaluate alternatives using Synchro model. Results of the evaluation shall be compared to determine the effectiveness of each alternatives or combination of alternatives to improve traffic operations along the study corridor. CONSULTANT shall develop Concept Plan Line improvements for recommended alternative identifying limits of civil, roadway markings and traffic signal improvements. Upon completion of the development of Concept Plan Line, CONSULTANT shall develop Draft Study Report summarizing the data collected, evaluation of existing conditions and future conditions including the Concept Plan Line and submit to City staff for review and comment. Upon receipt of comments from the City, the Study Report shall be revised to incorporate the comments and Final Study Report shall be submitted to the City for approval. CONSULTANT shall attend four community meetings as part of this project at City's request. TASK II: ElVIBARCADERO ROAD SCHOOL-FOCUSED TRAFFIC SIGNAL TIMING STUDY CONSULTANT shall evaluate the feasibility of implementing a similar all-pedestrian signal interval at the intersection of Embarcadero RoadlNewell Road and develop optimized signal timing plans for the two intersections. Professional Services Rev June 2, 2010 The timing plan development process shall involve a collection of roadway, signal control, traffic flow data, construction and calibration of a model, testing & final optimization of the model, and implementation & refinement of the timing plans. CONSULTANT shall coordinate the effort closely with City staff. CONSULTANT shall develop an in depth knowledge of existing traffic conditions in the City, short-and long-term plans for transportation system improvements, and local coordination/management priorities should be used to guide the development and operation of the computer model and the model's ultimate application to develop the timing plans. CONSlJLT MIT'S approach to preparing signal timing plans shall consist of the following sequence of responsibilities: • Conduct Field Visit • Develop Optimized Signal • Define Network Timings • Collect Data • Prepare a Simulation Model • Conduct Before Study • Implement Timing Plans • Develop Existing Model • Fine Tune Timing Plans • Calibrate Existing Model • Conduct After Study • Refine Signal Groupings • Prepare Project Report CONSULTANT'S engineers shall consider a number of factors, such as: Controlling Intersections and Locations -The following conditions shall require special attention and a customized analysis using both computerized, off-the-shelf optimization software and manual adjustments based on engineering experience: a) close signal spacing, which may require shorter cycle lengths and/or metering of upstream traffic to prevent queue spill back from the downstream signals and blockage of through lanes by left-turning vehicles; b) freeway interchanges, which often result in unbalanced lane utilization; c) lane drop and dual left-turn lane locations; d) intersections of major streets, which may require coordination along both arterials and may dictate the choice of cycle length for both systems; and e) over-saturated intersections, which may operate better as isolated, fully-actuated intersections. All of these conditions shall be recognized early on, since they typically impose constraints on the treatment of other intersections in a system. Pedestrian Timing -The minimum pedestrian timing may control cycle lengths. In situations where pedestrian timing clearly affects the choice of coordination plans, additional analyses shall be conducted to determine ways of reducing the adverse impacts on coordination of pedestrian timings. Phasing An efficient coordination plan consists not only of the appropriate cycle lengths and splits, but also the appropriate signal phasing. CONSULTANT shall investigate various alternatives for lead-lag left-turn phasing, right-turn overlap phasing, and consider the adverse impacts of split phasing on cycle length. Critical Movements -In developing optimum timing plans, CONSULTANT shall give attention to critical movements that could cause difticulties in signal operation. These critical movements shall be identified in this task. An example is heavy left-turns without sufficient storage capacity. Another example is heavy left turns from a side street feeding into a downstream signal that is only a short Professional Services Rev June 2, 2010 distance away. In other words, movements with greater coordination requirement may not be the through movements in special cases. In addition, certain movements might be given higher priority. For example, on heavy commute routes, the City may want to give the heavier direction as large a band width as possible, even if the opposite direction is penalized. Considering these movements and priorities in the timing plans is a matter of practicality. Timing Parameters -A complete review of the existing phase timing data shall be conducted. Due to the study signals ofthe actuated type, many ofthe timing parameters, such as minimum green (or initial), unit extension ( or gap), and pedestrian walk and clearance intervals, could significantly impact the efficiency of the coordinated timing plans, particularly with respect to allowable cycle length and split. This review effort shall identifY modifications that shall improve signal coordination as well as isolated signal operatio~. In exceptional cases, modification of the signal phasing might be worthy of consideration. The CONSULTANT'S Team shall present all signal operation related modifications to the City for review and approval. CONSULTANT shall collect 12-hour (7:00 AM -,7:00 PM) turning movement counts at the intersections of Embarcadero RoadlMiddlefield Road and Embarcadero Road/Newell Road. In addition, CONSULTANT shall also collect queue lengths in the field while collecting turning movement counts so that the Synchro model can be calibrated for existing conditions. Upon completion of data collection, CONSULTANT shall develop Synchro model for existing conditions. Synchro model shall be calibrated and validated to existing conditions based on the data collected. Calibrated Synchro model shall be used to determine the feasibility of implementing all- pedestrian signal interval at the intersection of Embarcadero Road/N ewell Road. If it is determined the implementation is feasible and it can result in improved traffic and pedestrian operations CONSULTANT shall develop optimized signal timing plans for the two intersections with all- pedestrian signal interval. The optimized signal timing plans shall be submitted to City for review and approvaL Upon approval from City staff CONSULTANT shall develop timing sheets in City preferred format. CONS UL TANT shall develop Draft Study Report for the proj ect, summarizing the data collection, evaluation of existing conditions and evaluation of proposed conditions. The Draft Study Report shall also include timing sheets for optimized signal timings at the two study intersections. Upon receipt of comments from City staff, the report shall be revised to incorporate the comments and the Final Study Report shall be submitted to the City for approval. Task III: MAYBELL-DONALD-GEORGIA BIKE BOIlLEVARD Maybell Avenue is an existing bicycle boulevard that provides a connection between El Camino Real and west Palo Alto parallel to Arastradero Road. This corridor serves students at Gunn High School, Terman Middle School, and Juana Briones Elementary School. Existing traffic calming improvements along Maybell Avenue include speed humps, center lines and striped medians, and a short section of striped bike lanes, which help to manage vehicle speeds so the speed differential between bicyclists and drivers is reduced, reducing the risk of and severity of potential bicycle- related collisions. The purpose of this project is to improve the Maybell A venue Bike Boulevard, and extend a bike boulevard to Donald Drive and Georgia Avenue to connect to Gunn High School, the Gunn High School Bike Path, and other local destinations. The City has a separate ongoing' Professional Services Rev June 2, 2010 citywide Safe Routes to School project to develop a Walk and Roll to School map for the area surrounding these schools. Data Compilation CONSULTANT shall request available traffic volume, speed surveys and bicycle and pedestrian counts from the City on each of the three streets: Maybell Avenue, Donald Drive, and Georgia Avenue. No new traffic counts are proposed as part of this task. In addition, field visits during the morning school arrival and afternoon school dismissal shall be conducted to review existing bicycle facilities and observe pedestrian, bicyclist, and driver travel patterns, behavior, and interactions. The data and summary of CONSULTANT'S field observations shall be compiled for presentation during the first community meeting. Develop Preliminary Concept Plans Three key design and operational issues require to be addressed in planning and design of bicycle boulevards. CONSULTANT shall address the following: 1. Appropriate volume and speed: Shall the streets require additional measures to reduce the speed and volume of vehicles? 2. Number of bicycle stops required: Stopping and starting requires significant energy and bicyclists often ignore stop signs when they perceive them as unnecessary. Are there opportunities to remove stop signs (flip signs or remove and replace with traffic circles for example) to reduce delay for cyclists on the bike boulevard? 3. Crossing arterials: Bike boulevards are often one-street off of an arterial (in this case, Arastradero Road), the crossings of perpendicular arterials can be challenging. Shall the subject bike boulevard require enhanced crossing treatments at arterials? A base map ofthe study area shall be developed using available aerial photography. CONSULTANT shall prepare Concept Plans to depict preliminary improvement options for Maybell A venue, Donald Drive, and Georgia Avenue. The City anticipates potential improvements to include traffic calming enhancements, signing and striping, geometric modifications at intersections, and potential landscape and streetscape improvements along the corridor. Additional bicycle crossing treatments at the E1 Camino ReallMaybell A venue-EI Camino Way intersection shall be developed (such as bicycle signals, skip-striping through the intersection, bicycle turn lanes, and/or bike boxes). CONSULT ANT shall coordinate this task with the Safe Routes to School program to ensure improvements identified are consistent with the Walk and Roll to School maps. Administrative draft concept plans shall be reviewed with City staff, and feedback shall be incorporated into the draft plans. CONSULTANT shall present draft plan during the first community meeting to gather public input. Modifications based on the public feedback shall be incorporated into the revised draft plans. Develop Final Concept Plans CONSUL T ANT shall take the revised plan back to the second community meeting to review changes to the plans. Input from the community shall be incorporated before the administrative final plans are taken to the public hearings. Professional Services Rev June 2, 2010 Community Meetings CONSULTANT shall attend five community meetings as part of this project. These meetings include: • Two Community Meetings -first to gather input on key issues and draft concept plans, second to review revised draft plans • Palo Alto Bicycle Advisory Committee (P ABAC) meeting • Planning & Transportation Committee me.eting • City Council meeting Project Team Meetings CONSULTANT shall meet with City staff, at minimum, twice during the conduction of the study. There shall be an initial project start-up meeting between CONSULTANT and City, prior to data collection and a meeting to discuss preliminary concept plans. Documentation CONSULTANT shall prepare a memorandum report that summarizes the data compilation, community feedback, and recommended concepts. CONSULTANT shall submit a draft report to the City for review and comments. CONSULTANT shall have up to eight (8) hours of staff time to respond to any comments on the draft and prepare a final version of the memorandum. Task IV: PROJECT SUPPORT SERVICES The CONSULTANT shall include as part of their team an Assistant Engineer-equivalent team member that can provide staff project support to the City's Transportation Division. The CONSULTANT'S team member shall have at least 3-5 years of working experience in the development of signage & striping plans that include innovative bicycle and pedestrian facility design. The team member shall be well-versed in AutoCAD or Microstation to be able to develop one's improvement plans without the need for coordination by a CAD technician. CONSULTANT shall provide a detailed resume that highlights the proposed team members experience and include fully-burdened hourly rate structure. CONSULT ANT shall identify hourly rates for additional positions that may be utilized to provide support to city projects as required including graphic design, CAD technician, and community meeting facilitator. The City expects the proposed CONSULTANT'S team member to be able to develop simple graphics on their own and to develop CAD-based improvement plans independently without substantial training needs by the City. The use of additional CONSULTANT'S team resources must be authorized by City project manager. The CONSULTANT'S team member shall meet with the City's project manager twice weekly to receive assignments and review work The City shall provide a work area with computer and phone access for use during these visits. Travel time for the CONSULTANT'S team member to arrive on- site to Palo Alto shall not be considered as reimbursable expenditures as part of this task The City accepts the CONSULTANT'S proposed candidate Travis Richards, P.E., Transportation Engineer, to provide staff project support to the Palo Alto Planning Community Environment Department, Transportation Division. In the event Travis Richards cannot perform his duties or vacates the position CONSULTANT shall supply the City with an alternate candidate per the Professional Services Rev J=e 2, 2010 specifications stated above. The City reserves the right to select or reject any or all possible candidates. Professional Services Rev June 2, 2010 EXHIBIT "B" SCHEDULE OF PERFORMANCE CONSULTANT shall perfonn the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the tenn of the Agreement. CONSULT ANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones L TASKI EMBARCADERO ROAD TRAFFIC IMPROVEMENTS 2. TASKII EMBARCADERO ROAD SCHOOL- FOCUSED TRAFFIC SIGNAL TIMING STUDY 3. TASKID MA YBELL-DONALD-GEORGIA BIKE BOULEVARD 4. TASKIV PROJECT SUPPORT SERVICES Completion No. of Days/Weeks FromNTP 48 WEEKS 10 WEEKS 36 WEEKS 18 MONTHS Professional Services Rev June 2, 2010 EXIllBIT "C" COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-l up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONS1JLTANT under this Agreement for all services described in Exhibit "A" ("Basic Services") includmg reimbursable expenses shall not exceed $281,820.00. CONSULTANT agrees to complete all Basic Services and reimbursable expenses within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $281,820.00. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY's Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $281,820.00 and the total compensation for Additional Services does not exceed $281,820.00. BllDGET SCHEDULE 5. TASK I (EMBARCADERO ROAD TRAFFIC IMPROVEMENTS) 6. TASK II (EMBARCADERO ROAD SCHOOL- FOCUSED TRAFFIC SIGNAL TIMING STUDY) 7. TASK III (MA YBELL-DONALD-GEORGIA BIKE BOULEVARD) 8. TASK IV (pROJECT SUPPORT SERVICES) NOT TO EXCEED AMOUNT $46,760.00 $15,030.00 $60,030 $157,000.00 Professional Services Rev June 2, 2010 Sub-total Basic Services Total Basic Services Reimbursable Expenses Additional Services (Not to Exceed) Maximum Total Compensation REIMBURSABLE EXPENSES $278,820.00 $3000.00 $0.00 $278,820.00 $281,820.00 The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULT ANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto's policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Plotting (per Sheet) All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $0.00 shall be approved in advance by the City's project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY's Project manager's request, shall submit a detailed written proposal including a description of the. scope of services, schedule, level of effort, and CONSULTANT's proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-l. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement ofthe services. Payment for additional services is subject to all requirements and restrictions in this Agreement Professional Services Rev June 2, 2010 Principal Principal Associate Senior Associate Associate Senior Engineer Engineer Contracts Director Assistant Engineer Assistant Planner Senior Designer Graphics Designer Designer Technical Staff Technical Staff II Administrative Staff Production Staff EXIDBIT "C-1" HOURLY RATE SCHEDULE StaffProiect Support (T. Richard) Plotting: ($18.00 Per Sheet) $220 $200 $190 $160 $140 • $130 $120 $115 $85 $100 $100 $85 $80 $35 $80 $55 $110 Professional Services Rev June 2, 2010 EXIUBIT "D" INSURANCE REQIDREMENTS CONTRACTORS TO THE CTIY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITHAMBEST'S KEY RATING OFA-:VII,ORHIGHER,LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALlF'ORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: I REQUIRED MINIMUM LIMITS TYPE OF COVERAGE REQUIREMENT EACH AGGREGATE OCCURRENCE YES YES YES YES YES YES WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000 LIABILTIY COMBINED. BODILY INJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 $1,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 • DAMAGE COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAt"\1AGES $1,000,000 THE CITY OF P AI,O ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT,THEINSURANCECOVERAGEHEREINDESCRIBED,INSURINGNOTONLYCONTRACTORANDITSSUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDmONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE; A. A PROVISION FOR A WRITTEN TIllRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL llABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. C. THE CITY'S RISK MANAGEMENT DEPARTMENT WILL ACCEPT A PROFESSIONAL LIABILITY INSURANCE DEDUCTABLE AMOUNT OF $35,000.00. OR LESS. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY TillS POllCY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRlBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POllCY SHALL Professional Services Rev June 2, 2010 NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF TIlE INSURED AGAINST ANOTImR, BUT THIS ENDORSEMENT, AND TIlE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER TIllS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRA110N DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSVING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WlUTTEN NOTICE BEFORE THE EFFECTNE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT . OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTNE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURC.gASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Professional Services Rev June 2, 2010 L, "._.' Gonsalves. Ronna 10 From: Stan Hutchings <stan.hutchings@gmail.com> Sent: To: Thursday, February 21, 2013 11:10 AM \ 3 fEB 25 rn \2: 4£' Council, City Subject: Separated Bike Lanes, Slower Vehicle Speeds Greatly Reduce Bicycle Injuries The research article and references are here: http://www.sciencedaily.com/releases/2013/021130220131744.htm?utm source=feedburner&utm medium=em ail&utm canlpaign=Feed%3A+sciencedaily+%28ScienceDaily%3A+Latest+Science+News%29 An excerpt: "Our research demonstrates that transportation planners really need to segregate cyclists from motor vehicle traffic just as we use sidewalks to separate pedestrians," says Harris. "If people see cycling as a safer activity, they would be more encouraged to commute by bike, which makes them more active and healthy citizens." One quick take-away-Bike Blvds should have a much lower speed limit, strictly enforced, ,than other streets. Where possible, there should be physical separation, not just a painted stripe. Regards, Stan & Kiyomi Hutchings 285 Rinconada Ave. 46 ATTACHMENT B CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY June 23, 2014 The Honorable City Council Palo Alto, California Rescission of Resolution 9415 and Adoption of Updated Resolution Calling a Special Election to Modernize the Telecommunications Provision of the Utility Users Tax Ordinance, Eliminate the Discount Tax Rate for a Small Number of Commercial Customers Who Use Large Volumes of Water, Gas and Electric Utilities and Reduce the Telephone UUT Rate from 5% to 4.75% Recommendation Staff recommends the City Council: 1. Rescind Resolution No. 9415 adopted on May 19, 2014 Calling a Special Election to Modernize the Telecommunications Provision of the Utility Users Tax Ordinance; and 2. Adopt the updated Resolution Calling a Special Election for November 4, 2014 for Submittal to the Qualified Electors of the City a Measure Related to the Utility Users (Attachment A). Discussion On May 19, 2014, the City Council adopted a Resolution Calling a Special Election to Modernize the Telecommunications Provision of the Utility Users Tax (UUT) Ordinance. The Ordinance to be submitted to the voters contained three general propositions: (1) modernization language to reflect technological advances in the cellular industry; (2) elimination of the discount tax rate for a small number of commercial customers who use large volumes of water, gas and electric utilities and (3) reduction of the telephone UUT rate from 5% to 4.75%. On June 16, the Council discussed the UUT polling results recently conducted by the City’s consultant FM3. The polling showed a significant number of undecided voters on this issue. The consultant informed Council that these types of Page 2 measures are initially confusing to voters but that focused outreach materials typically help educate and inform voters. The consultant also recommended modifying the ballot measure question to make it more clear and informative to voters. The Council directed staff to modify the language of the ballot question and return to Council on the consent agenda with an updated Resolution. As directed by Council, staff has updated and simplified the ballot measure language in an attempt to better inform the voters. The modified ballot measure language is contained in the updated Resolution contained in Attachment A. Environmental Review This is a fiscal measure and not a project for purposes of the California Environmental Quality Act. ATTACHMENTS:  Attachment A: Resolution Calling Special Election on UUT and Large volume discount (PDF) Department Head: Molly Stump, City Attorney Page 3 NOT YET APPROVED 1 140617 jb 0131201 Resolution No. _______ Resolution of the Council of the City of Palo Alto Calling a Special Election for November 4, 2014 for Submittal to the Qualified Electors of the City a Measure Related to the Utility Users Tax R E C I T A L S A. The City’s long term economic health is dependent on a diverse revenue base. B. Since 1987 the residents of the City of Palo Alto have paid a utility user tax on telephone communications services. C. The telecommunications portion of the total UUT revenue is $2.8 million annually or nearly 2 percent of general fund revenue. D. Telephone communication advances over the past two decades mean that the City must update its utility users tax to match today’s technology, including definitions for new telecommunications technologies. E. Updating the existing outdated utility users tax on telecommunications services with a modest reduction of the existing rate will ensure that taxpayers are treated the same regardless of the type of technology used. F. The telecommunications users tax component of the utility users tax is an important revenue source and preserving that revenue will ensure that the City can preserve essential City services including fire protection, rapid emergency response and crime prevention, library hours and services, maintenance of City parks, playgrounds and athletic fields and continue to provide the programs that residents expect and deserve. G. The measure will safeguard local revenues already being received for local needs and this money cannot be taken away by the State. H. The UUT discount for large volume commercial users of electricity, gas and water is contrary to current city goals of energy conservation. I. A proposed ordinance, attached hereto and incorporated herein by reference as Attachment “A” (the “Ordinance”), would modernize the telecommunications portion of the UUT and eliminate the large volume utility tax discount for gas, electric and water. K. Pursuant to Government Code Section 53724 and Election Code Section 9222, the City Council desires to submit the Ordinance to the voters of the City at the Election. The Council of the City of Palo Alto RESOLVES as follows: NOT YET APPROVED 2 140617 jb 0131201 SECTION 1. Findings. The City Council finds and determines that each of the findings set forth above are true and correct. SECTION 2. General Tax Proposal. The City Council proposes to impose the general tax set forth in the Ordinance and to present this proposal to the voters on November 4, 2014. The proposed type of tax, the rate of the tax, and the method of tax collection are as set forth in the Ordinance. SECTION 3. Special Election. The City Council hereby calls a special municipal election on Tuesday, November 4, 2014. Pursuant to Elections Code Section 9222, the City Council hereby submits the Ordinance to the voters at the Election and orders the following question to be submitted to the voters at the Election: This question requires the approval of a majority of those casting votes. SECTION 4. Adoption of Measure. The measure to be submitted to the voters is attached to this Resolution as Exhibit A and incorporated herein by this reference. SECTION 5. Notice of Election. Notice of the time and place of holding the election is hereby given, and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 6. Impartial Analysis. Pursuant to California Elections Code Section 9280, the City Council hereby directs the City Clerk to transmit a copy of the measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the measure, not to exceed 500 words in length, showing the effect of the measure on the existing law and the operation of the measure, and transmit such impartial analysis to the City Clerk on or before August 19, 2014. SECTION 7. Ballot Arguments. Pursuant to Elections Code Section 9286 et. seq., August 12, 2014 at 5:30 p.m. shall be the deadline for submission of arguments in favor of, and arguments against, any local measures on the ballot. If more than one argument for and/or against is received, the priorities established by Elections Code Section 9287 shall control. SECTION 8. Rebuttal Arguments. The provisions of Elections Code Section 9285 shall control the submission of any rebuttal arguments. The deadline for filing rebuttal arguments shall be August 19, 2014 at 5:30 p.m. To ensure continued funding for basic and essential services such as police, fire and street maintenance and repair, shall the City of Palo Alto maintain the telecommunications portion of the Utility Users Tax while reducing the rate from 5% to 4.75%; modernize its provisions to ensure equal treatment of taxpayers regardless of telecommunications technology used; and eliminate a discounted tax rate paid by a small number of commercial large users of gas, electric and water services? YES NO NOT YET APPROVED 3 140617 jb 0131201 SECTION 9. Consolidation Request. The Council of the City of Palo Alto requests the governing body of any other political subdivision, or any officers otherwise authorized by law, to partially or completely consolidate such elections and the City Council consents to such consolidation. The Council requests the Board of Supervisors of Santa Clara County to include on the ballots and sample ballots, all qualified measures submitted by the City Council to be ratified by the qualified electors of the City of Palo Alto. SECTION 10. Request for County Services. Pursuant to Section 10002 of the California Elections Code, the Council of the City of Palo Alto hereby requests the Board of Supervisors of Santa Clara County to permit the Registrar of Voters to render services to the City of Palo Alto relating to the conduct of Palo Alto’s General Municipal and Special Elections which are called to be held on Tuesday, November 4, 2014. The services shall be of the type normally performed by the Registrar of Voters in assisting the clerks of municipalities in the conduct of elections including, but not limited to, checking registrations, mailing ballots, hiring election officers and arranging for polling places, receiving absentee voter ballot applications, mailing and receiving absent voter ballots and opening and counting same, providing and distributing election supplies, and furnishing voting machines. SECTION 11. Transmittal of Resolution. The City Clerk is hereby directed to submit forthwith a certified copy of this resolution to the Santa Clara County Board of Supervisors and to the Registrar of Voters. / / / / / / / / / / / / / / / / / / / / / / / / NOT YET APPROVED 4 140617 jb 0131201 SECTION 12. Exemption from CEQA. The City Council finds that this resolution is not a project under Section 21065 of the California Environmental Quality Act (CEQA). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSENTIONS: ATTEST: APPROVED: _____________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: ______________________________ City Manager _____________________________ Senior Asst. City Attorney ______________________________ Director of Administrative Services ATTACHMENT A Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Chapter 2.35 of Title 2 of the Palo Alto Municipal Code Relating to the Utility Users Tax The People of the City of Palo Alto do ordain as follows: SECTION 1. Chapter 2.35 of the Palo Alto Municipal Code is hereby amended by amending Chapter 2.35 as follows: Chapter 2.35 UTILITY USERS TAX 2.35.010 Short title. 2.35.020 Tax imposed. 2.35.030 Disposition of tax revenue. 2.35.040 Definitions. 2.35.050 Constitutional exemption. 2.35.060 Electricity users tax. 2.35.070 Gas users tax. 2.35.080 Water users tax. 2.35.090 Telephonecommunications users tax. 2.35.100 Tax rate for high volume service users. 2.35.110 Council authorization to suspend collection of a portion of tax for limited periods of time. 2.35.120 Collection of tax. 2.35.130 Reporting and remitting. 2.35.140 Penalty for delinquency. 2.35.150 Records. 2.35.160 Failure to pay tax - Administrative remedy. 2.35.170 Actions to collect. 2.35.180 Administrative rules, regulations and agreements. 2.35.190 Refunds. 2.35.200 Bundling Taxable Items with Nontaxable Items. 2.35.010 Short title. This chapter shall be known as the "Utility Users Tax." (Ord. 3781 § 1 (part), 1987) 2.35.020 Tax imposed. There is established and imposed, commencing on the effective date of the ordinance codified in this chapter, a utility users tax at the rate set forth in this chapter. (Ord. 3781 § 1 (part), 1987) 2.35.030 Disposition of tax revenue. 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A The tax imposed by this chapter is for the purpose of raising revenues for the general governmental purposes of the city. All of the proceeds from the tax imposed by this chapter shall be placed in the city's general fund. (Ord. 3781 § 1 (part), 1987) 2.35.040 Definitions. (a) Except where context otherwise requires, the definitions given in this section govern the construction of this chapter: (1) "City" means the city of Palo Alto. (2) "Month" means a calendar month. (3) "Person" means any natural person, firm, association, joint venture, joint stock company, partnership of any kind, club, Massachusetts business or common law trust or society, organization, corporation (foreign and domestic), business trust of any kind, or the manager, lessee, agent, servant, officer or employee of any of them. (4) "Service supplier" means a person required to collect and remit a tax imposed by this chapter and includes the city's utilities department with respect to a tax imposed on the use of gas, electricity and water and any telephone corporation with respect to the tax imposed on the use of telephone services. (5) "Service user" means a person required to pay a tax imposed by this chapter. (6) "Utility tax year" means the period beginning on the effective date of the ordinance codified in this chapter and ending June 30, 1988, for the initial utility tax year. Thereafter, the utility tax year shall be the twelve-month period beginning July 1st and ending June 30th of the next succeeding calendar year. (7) "Telephone corporation" means the same as defined in Section 234 of the Public Utilities Code of the state. (Ord. 3781 § 1 (part), 1987) 2.35.050 Constitutional exemption. Nothing in this chapter shall be construed as imposing a tax upon the city of Palo Alto or any other person if imposition of such tax upon that person would be in violation of the Constitution of the United States or that of the state of California or any other statute or regulation that applies to charter cities. The City may adopt an administrative policy to implement this provision. (Ord. 3781 § 1 (part), 1987) 2.35.060 Electricity users tax. (a) There is imposed a tax upon every person in the city using electricity in the city. The tax imposed by this section shall be at the rate of five percent of the charges to a service user made for such electricity by a service supplier, except as provided in Section 2.35.100. Said tax shall be paid by the person paying for such electricity. 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A (b) "Charges," as used in this section, shall include charges made for metered energy and charges for service, including customer charges, service charges, standby charges, charges for temporary services, demand charges, and annual and monthly charges. (c) As used in this section, the term "using electricity" shall not be construed to mean the storage of such electricity by a person in a battery owned or possessed by him for use in an automobile or other machinery or device apart from the premises upon which the electricity was received; provided, however, that the term shall include the receiving of such electricity for the purpose of using it in the charging of batteries; nor shall the term include the mere transmission or receiving of such electricity by a governmental agency at a point within the city for resale. (Ord. 3781 § 1 (part), 1987) 2.35.070 Gas users tax. (a) There is imposed a tax upon every person in the city using gas in the city which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of five percent of the charges to a service user made for such gas by a service supplier, except as provided in Section 2.35.100. Said tax shall be paid by the person paying for such gas. (b) "Charges," as used in this section, shall include charges made for metered gas and charges for service, including customer charges, service charges, demand charges, standby charges, charges for temporary service, and annual and monthly charges. (c) There shall be excluded from the base on which the tax imposed in this section is computed charges made for gas which is to be resold and delivered through mains or pipes and charges made for gas to be used in the generation of electrical energy by a governmental agency. (Ord. 3781 § 1 (part), 1987) 2.35.080 Water users tax. (a) There is imposed a tax upon every person in the city using water which is delivered through mains or pipes in the city. The tax imposed by this section shall be at the rate of five percent of the charges to a service user made for such water by a service supplier, except as provided in Section 2.35.100. Said tax shall be paid by the person paying for such water. (b) "Charges," as used in this section, shall include charges for metered water and charges for service, including customer charges, service charges, standby charges, charges for temporary service, and annual and monthly charges. (c) There shall be excluded from the base on which the tax imposed in this section is computed charges made for water which is to be resold and delivered through mains or pipes and charges made for water used in the generation of electrical energy by a governmental agency. (Ord. 3781 § 1 (part), 1987) 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A 2.35.090 Telecommunicationsphone users tax. (a) There is imposed a tax upon every person in the city, using intrastate telephone communication services in the city, other than a telephone corporation. The tax imposed by this section shall be at the rate of five 4.75 percent of the charges made to a service user for such services by a service supplier and shall be paid by the person paying for such services. (b) As used in this section, the term "charges" shall not include charges for services paid for by inserting coins in a coin-operated telephone except that where such coin-operated services are furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "telephone communications services" include land mobile services or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, or any amendment or replacement thereof. (c) The telephone users tax imposed by this section is intended to, and does, apply to all charges billed to a telephone account having a situs in the city, irrespective of whether a particular communication service originates and/or terminates within the city. The situs shall be the service address, if known; otherwise the billing address. (d) The term "telephone communication services" means refers to that service which provides access to a telephone system and the privilege of telephonic quality communication with substantially all persons having telephone stations which are part of such telephone system. The term "telephone communication services" also refers to that service which provides access to a telephone system for data and/or video to the extent permitted by law. the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points, whatever the technology used, including, but not limited to, traditional telephone service, mobile telecommunications service, and broadband service (e.g., digital subscriber line (DSL), fiber optic, coaxial cable, and wireless broadband, including Wi-Fi, WiMAX, and Wireless MESH) to the extent not prohibited by Federal and/or State law, now or in the future. "Telephone communication services" includes transmission, conveyance, or routing in which computer processing applications are used to act on the form, code or protocol of the content for purposes of transmission, conveyance or routing without regard to whether such service is referred to as voice over internet protocol (VoIP) services or is classified by the Federal Communications Commission as enhanced or value added, and includes video and/or data service that is functionally integrated with "telephone communication services." (e) The tax imposed by this section applies to all telephone communication services however charged or billed, including, but not limited to prepaid services, post-paid services, 800 services (or any other toll-free numbers), or 900 services. (f) The tax imposed by this section applies to ancillary telephone communication services, which are those services that enable or enhance access to telephone communication services. Ancillary telephone communication services include, but are not limited to, charges for connection, reconnection, termination, movement, or change of telephone communication 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A services; detailed billing; central office and custom calling features (including but not limited to call waiting, call forwarding, caller identification and three-way calling); voice mail and other messaging services; directory assistance; access and line charges; local number portability charges; text and instant messaging; and conference calls. (g) “Mobile telecommunication service” means commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations and as set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the regulations thereunder. (h) “Place of primary use” means the street address representative of where the customer's use of the telephone communications service primarily occurs, which must be the residential street address or the primary business street address of the customer. (i) “Service address” means either (1) the location of the service user’s telephone communication equipment from which the communication originates or terminates, regardless of where the communication is billed or paid; or (2) if the location of the equipment is unknown (e.g., mobile telecommunication service or VoIP service), the service address means the location of the service user's place of primary use; or (3) for prepaid telephone communication service “service address” means the point of sale of the services where the point of sale is within the city, or if unknown, the known address of the service user (e.g., billing address or location associated with the service number), which locations shall be presumed to be the place of primary use. (j) There is a rebuttable presumption that a telephone communication service, which is billed to a billing or service address in the city, is used, in whole or in part, within the city's boundaries, and such service is subject to taxation under this section. There is also a rebuttable presumption that a prepaid telephone communication service sold within the city is primarily used, in whole or in part, within the city and is therefore subject to taxation under this section. If the billing address of the service user is different from the service address, the service address of the service user shall be used for purposes of imposing the tax. As used in this section, the term "charges" shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the telephone communication service. (c) Notwithstanding the provisions of subsection (a) of this section, the tax imposed under this section shall not be imposed upon any persons for using intrastate telephone communication services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under Division 2, Part 20 of the California Revenue and Taxation Code, or the tax imposed under Section 4251 of the Internal Revenue Code, any amendment or any replacement thereof. (Ord. 3781 § 1 (part), 1987) 2.35.100 Tax rate for high volume service users. (a) The tax rate imposed on electricity, gas and water users in Sections 2.35.060, 2.35.070 and 2.35.080 respectively shall be three percent on all utility charges to a service user exceeding the cumulative amount of $800,000.00 for water, gas and electricity or any 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A combination thereof during any utility tax year and shall be two percent of the amount of utility charges exceeding the cumulative amount of $2,400,000.00 for water, gas or electricity or any combination thereof during any utility tax year. (b) Commencing on July 1, 1988, and every July 1st thereafter, the director of finance shall annually adjust the three percent and two percent tax rate thresholds specified in subsection (a) of this section by the annual change in the Consumer Price Index, All Urban Consumers, for the San Francisco-Oakland-San Jose Metropolitan Area published by the Bureau of Labor Statistics or any replacement index published by said Bureau ("Index") for the preceding year as illustrated by the following formula: NT = T (A) / (B) NT = New threshold for the upcoming utility tax year T = Current threshold A = The Index for April preceding the upcoming utility tax year B = The Index for the previous April. For example, on July 1, 1988, the thresholds shall be adjusted by multiplying them by the April, 1988, Index divided by the April, 1987, Index. (c) Where any person can establish to the satisfaction of the director of finance that be is a person responsible for the payment of one or more taxes under this chapter, he may aggregate charges for gas, electricity or water or any combination thereof for purposes of determining the application of the reduced rate pursuant to this section. The city manager shall develop and publish written regulations for determining which person(s) is a service user for the purposes of implementing the lower rates authorized by this section. Such regulations may be amended from time to time. (Ord. 3781 § 1 (part), 1987) 2.35.110 Council authorization to suspend collection of a portion of tax for limited periods of time. The city council may from time to time determine to collect less than the five percent tax imposed by Sections 2.35.060, 2.35.070, 2.35.080 and 2.35.090 from all service users and may suspend a portion of the maximum rates by passage of an ordinance stating: (a) The council's intention to suspend collection of a portion of said tax; (b) The duration of the suspension, which in no event shall exceed one year; (c) The exact portion of the tax, collection of which is being suspended. This rate suspension shall apply to all service users across the board and shall be in effect for one year from the effective date of said ordinance. (Ord. 3781 § 1 (part), 1987) 2.35.120 Collection of tax. (a) Every service supplier shall collect the amount of tax imposed by this chapter from the service user. 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A (b) The tax shall be collected insofar as practicable at the same time as, and along with, the collection of charges made in accordance with the regular billing practice of the service supplier. Except in those cases where a service user pays the full amount of said charges but does not pay any portion of a tax imposed by this chapter, or where a service user has notified a service supplier that he is refusing to pay a tax imposed by this chapter which said service supplier is required to collect, if the amount paid by a service user is less than the full amount of the charge and tax which has accrued for the billing period, a proportionate share of both the charge and tax shall be deemed to have been paid. (c) The duty to collect the tax from a service user shall commence thirty days after the effective date of the ordinance codified in this chapter. If a person receives more than one billing, one or more being for a different period than another, the duty to collect shall arise separately for each billing period. (Ord. 3781 § 1 (part), 1987) 2.35.130 Reporting and remitting. Each service supplier, shall, on or before the last day of each month, make a return to the director of finance, on forms provided by him, stating the amount of taxes billed by the service supplier during the preceding month. At the time the return is filed, the full amount of the tax collected shall be remitted to the director of finance. The director of finance may require further information in the return. Returns and remittances are due immediately upon cessation of business for any reason. (Ord. 3781 § 1 (part), 1987) 2.35.140 Penalty for delinquency. (a) Taxes collected from a service user which are not remitted to the tax administrator on or before the due dates provided in this chapter are delinquent. (b) Penalties for delinquency in remittance of any tax collected or any deficiency in remittance, shall attach and be paid by the person required to collect and remit at the rate of ten percent of the total tax collected or imposed herein. (c) The director of finance shall have power to impose additional penalties upon persons required to collect and remit taxes under the provisions of this chapter for fraud or negligence in reporting or remitting at the rate of ten percent of the amount of the tax collected or as recomputed by the director of finance. (d) Every penalty imposed under the provisions of this section shall become a part of the tax required to be remitted. (Ord. 3781 § 1 (part), 1987) 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A 2.35.150 Records. It shall be the duty of every service supplier required to collect and remit to the city any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as such service supplier may have been required to collect and remit to the city, which records the director of finance shall have the right to inspect at all reasonable times. (Ord. 3781 § 1 (part), 1987) 2.35.160 Failure to pay tax - Administrative remedy. Whenever the director of finance determines that a service user has deliberately withheld the amount of the tax owed by him from the amounts remitted to a service supplier, or that a service user has failed to pay the amount of the tax for a period or four or more billing periods, or whenever the director of finance deems it in the best interest of the city, he shall relieve the service supplier of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods. The director of finance shall notify the service user that he has assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to him personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was made by the service supplier, or, should the service user have changed his address, to his last known address. If a service user fails to remit the tax to the director of finance within fifteen days from the date of the service of the notice upon him, which shall be the date of mailing if service is not accomplished in person, a penalty of twenty-five percent of the amount of the tax set forth in the notice shall be imposed, but not less than $5.00. The penalty shall become part of the tax herein required to be paid. (Ord. 3781 § 1 (part), 1987) 2.35.170 Actions to collect. Any tax required to be paid by a service user under the provisions of this chapter shall be a debt owed by the service user to the city. Any such tax collected from a service user which has not been remitted to the director of finance shall be deemed a debt owed to the city by the person required to collect and remit. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount including applicable penalties and attorneys' fees. (Ord. 3781 § 1 (part), 1987) 2.35.180 Administrative rules, regulations and agreements. The city manager has the authority to adopt rules and regulations not inconsistent with the provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of any tax herein imposed, and the city manager may also make administrative agreements to vary the strict requirements of this chapter so that the collection of any tax imposed herein may be made in conformance with the billing procedures of a particular service 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A supplier so long as the overall results of such agreements result in collection of the tax in conformance with the general purpose and scope of this chapter. A copy of such rules and regulations and a copy of any such agreement shall be on file and available for public examination in the office of the city clerk. Failure or refusal to comply with any such rules, regulations or agreements promulgated under this section shall be deemed a violation of this chapter. (Ord. 3781 § 1 (part), 1987) 2.35.190 Refunds. (a) Claim Required. Prior to seeking judicial relief with respect to a dispute regarding whether the amount of any tax has been overpaid, paid more than once or erroneously or illegally collected or received by the city under this chapter, an aggrieved taxpayer, fee payer, service supplier, service user or any other person must comply with the provisions of section 2.28.230 of this code. (b) Service Suppliers. A service supplier may claim a refund or take as credit against taxes collected and remitted, the amount overpaid, paid more than once, or erroneously or illegally collected or received when it is established in a manner prescribed by the director of finance that the service user from whom the tax has been collected did not owe the tax; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the service supplier. (Ord. 5078 § 5, 2010: Ord. 3781 § 1 (part), 1987) 2.35.200 Bundling Taxable Items with Nontaxable Items. If any nontaxable charges are combined with and not separately stated from taxable service charges on the customer’s bill or invoice of a service supplier, the combined charges are subject to tax unless the service supplier identifies, by reasonable and verifiable standards, the portions of the combined charges that are nontaxable and taxable through the service supplier’s books and records kept in the regular course of business, and in accordance with generally accepted accounting principles, and not created and maintained for tax purposes. If the service supplier offers a combination of taxable and non-taxable services, and the charges are separately stated, then for taxation purposes, the values assigned the taxable and non-taxable services shall be based on its books and records kept in the regular course of business and in accordance with generally accepted accounting principles, and not created and maintained for tax purposes. The service supplier has the burden of proving the proper valuation and apportionment of taxable and non-taxable charges. SECTION 2. General Tax. Proceeds of the tax imposed by this Ordinance shall be deposited in the general fund of the City and shall be available for any legal purpose. SECTION 3. Amendment or Repeal. The City Council may repeal Chapter 2.35 of the Palo Alto Municipal Code or amend that Chapter without a vote of the people except that any 140510 jb 0131177 Rev. May 10, 2014 ATTACHMENT A amendment to Chapter 2.35 that increases the amount or rate of tax due from any Person beyond the inflation-adjusted amounts and rates authorized by this Ordinance may not take effect unless approved by a vote of the people. SECTION 4. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force and effect. The people hereby declare that they would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable. SECTION 5. Effective Date. This ordinance shall be effective only if approved by a majority of the voters and shall go into effect immediately after the vote is declared by the City Council and the duty of service providers to collect the tax shall commence as provided in California Public Utilities Code Section 799. SECTION 6. Execution. The Mayor is hereby authorized to attest to the adoption of this Ordinance by the voters of the City by signing where indicated below. I hereby certify that the foregoing Ordinance was PASSED, APPROVED and ADOPTED by the People of the City of Palo Alto voting on the 4th day of November, 2014. ATTEST: __________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED ___________________________ ___________________________ Senior Asst. City Attorney City Manager ___________________________ Director of Administrative Services 140510 jb 0131177 Rev. May 10, 2014 CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY June 23, 2014 The Honorable City Council Palo Alto, California Adoption of a Resolution Calling a Special Election for November 4, 2014 and Submitting to the Electorate a Measure to Amend Article III, Section 2, of the Charter to Change the Number of Council Member Seats from Nine to Seven Commencing January 1, 2019 Recommendation Adopt a resolution calling a Special Election for November 4, 2014 and submitting to the electorate a measure to Amend Article III, Section 2 of the Charter to change the number of Council seats from nine to seven effective January 1, 2019 (Attachment A). Background and Discussion On June 16, 2014 the Council voted to submit to the voters a measure to reduce the number of Council seats from nine to seven effective January 1, 2019. This means that at the general municipal election in November 2018, three Council seats will be on the ballot. The Council also directed that the ballot measure include deletion of obsolete sentences in Section 2. Timeline August 8th is the last day to call a municipal election and place a matter on the November 4, 2014 ballot. Resource Impact The Clerk reports that each item placed on the November 2014 ballot will cost approximately $66,000 for services to the County Registrar of Voters and approximately $10,000 for translation services. Environmental Review Council governance matters are not projects subject to review under the California Environmental Quality Act. Page 2 ATTACHMENTS:  Attachment A: Resolution Calling Special Election for Charter Amendment Reduction of Council Seats (PDF)  Attachment B: Letters to Council (PDF) Department Head: Molly Stump, City Attorney Page 3 NOT YET APPROVED 1 140617 sh 0140119 Resolution No. ________ Resolution of the Council of the City of Palo Alto Calling a Special Election for November 4, 2014 and Submitting to the Electorate a Measure to Amend Article III, Section 2, of the Charter to Change the Number of Council Member Seats from Nine to Seven Commencing January 1, 2019 R E C I T A L S A. Article IX , section 1 of the Charter of the City of Palo Alto authorizes the City Council to propose and submit Charter amendments to the voters of the City for approval at any established municipal election date; and B. The City Council wishes to propose a Charter Amendment to change the number of Council Member seats from nine to seven, commencing January 1, 2019; and C. Elections will be held on November 4, 2014 in certain school districts and certain special districts in Santa Clara County; and D. Pursuant to Education Code section 5342 and Part 3 of Division 10 of the Elections Code commencing at section 10400, such elections may be partially or completely consolidated. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Special Election. Pursuant to Elections Code sections 1405 and 9255 there is called and ordered to be held in the City of Palo Alto, California, on Tuesday, November 4, 2014 a special municipal election. Pursuant to Article IX of the Charter of the City of Palo Alto, this Council orders the following question to be submitted to the voters at the Election: CITY OF PALO ALTO MEASURE ___: Shall the Palo Alto City Charter be amended to change the number of Council Member seats from nine to seven, commencing on January 1, 2019? For the Amendment ____ Against the Amendment ____ SECTION 2. Adoption of Measure. If a majority of qualified electors voting on such measure shall vote in favor of City of Palo Alto Measure “___”, the amendment to Article III, Section 2 of the Charter shall be deemed ratified and shall read as follows: Sec. 2. Number - Term. Commencing July 1, 1971 January 1, 2019, said council shall be composed of nine seven members, each of whom shall be an elector and shall have been a resident of the city of Palo Alto for at least thirty days next preceding the final filing date for nomination ATTACHMENT A NOT YET APPROVED 2 140617 sh 0140119 papers for such office. The members of said council shall be known as councilmen, councilwomen, or council members and their terms of office shall be four years, commencing on the first day of January next succeeding their election. The terms of council members who took office on July 1, 1977, shall expire on December 31, 1981. Commencing January 1, 1992, no person shall be eligible to serve consecutively in more than two full terms of office as a member of the council. Any partial term of office longer than two years shall be deemed a full term. Terms of office commenced before January 1, 1992, shall not be counted when determining eligibility under this section. SECTION 3. Notice of Election. Notice of the time and place of holding the election is hereby given, and the City Clerk is authorized, instructed and directed to give further or additional notice of the election in time, form, and manner as required by law. SECTION 4. Impartial Analysis. Pursuant to California Elections Code section 9280, the City Council hereby directs the City Clerk to transmit a copy of the measure to the City Attorney. The City attorney shall prepare an impartial analysis of the measure, not to exceed 500 words in length, showing the effect of the measure on the existing law and the operation of the measure, and transmit such impartial analysis to the City Clerk on or before August 19, 2014. SECTION 5. Ballot Arguments. Pursuant to Elections Code section 9286 et seq., August 12, 2014 at 5:30 p.m. shall be the deadline for submission of arguments in favor of, and arguments against, any local measures on the ballot. If more than one argument for and/or against is received, the priorities established by Elections Code section 9287 shall control. SECTION 6. Rebuttal Arguments. The provisions of Elections Code section 9285 shall control the submission of any rebuttal arguments. The deadline for filing rebuttal arguments shall be August 19 2014. SECTION 7. Consolidation Request. The Council of the City of Palo Alto requests the Governing Body of any such other political subdivision, or any officers otherwise authorized by law, to partially or completely consolidate such elections and to further provide that the canvass be made by any body or official authorized by law to canvass the returns of the election, except that in accordance with Article III, section 4, of the Palo Alto Charter, the City Council must meet and declare the results of said elections; and that this City Council consents to such consolidation. The Council acknowledges that the election will be held and conducted according to procedures in the Elections Code, including Section 10418. SECTION 8. Request for County Services. Pursuant to section 10002 of the California Elections Code, the Council of the City of Palo Alto hereby requests the Board of Supervisors of Santa Clara County to permit the Registrar of Voters to render services to the City of Palo Alto relating to the conduct of Palo Alto’s General Municipal and Special Elections which are called to be held on Tuesday, November 4, 2014. The services shall be of the type normally performed by the Registrar of Voters in assisting the clerks of municipalities in the conduct of elections including, but not limited to, checking registrations, mailing ballots, hiring election officers and arranging for polling places, NOT YET APPROVED 3 140617 sh 0140119 receiving absent voter ballot applications, mailing and receiving absent voter ballots and opening and counting same, providing and distributing election supplies, and furnishing voting machines. Subject to approval of the Board of Supervisors of Santa Clara County of the foregoing request, the City Clerk is hereby authorized to engage the services of the Registrar of Voters of the County of Santa Clara to aid in the conduct of said elections including canvassing the returns of said election. Further, the Director of Administrative Services is authorized and directed to pay the cost of said services provided that no payment shall be made for services which the Registrar of Voters is otherwise required by law to perform. SECTION 9. Transmittal of Resolution. The City Clerk is directed to submit a certified copy of this resolution to the Board of Supervisors of the County of Santa Clara and to the Registrar of Voters. SECTION 10. Exemption from CEQA. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ City Attorney City Manager _____________________________ Director of Administrative Services Minor, Beth From: Sent: To: Subject: Tom DuBois <tom.dubois@gmail.com> Monday, June 16, 2014 5:13 PM Council, City Nov 2014 Charter Amendments CIT I OF PALO Ado CA CITY CLERK'S OFFICE f 4 JUN 17 PH I : 15 I am against both extending term limits and against shrinking the size of the council. As a candidate for city council, these changes could benefit me if I were to be elected, but I don't believe they are good policy. I have three general points that apply to the overall process and then some comments on each proposal. GENERAL POINTS FIRST-Eliminating Term limits and reducing council seats greatly increases the power of incumbency. It is a rare thing that incumbents are voted out of office. These changes maintain the current power structure. These changes would move Palo Alto from a city with resident representatives on council towards professional politicians. We don't need Big City Politics in Palo Alto. SECOND -Any initiative on the ballot should be worded to exclude those from voting on it to benefit from it. Current term limits should remain in place for existing councilmembers. There has been a lot of discussion lately about when people should recuse themselves. Be very clear about when the amendments to go into effect and who it will benefit. Public trust would be improved by you explicitly excluding all sitting councilmembers from benefiting from the proposed amendments. THIRD -These items should be separate items on the ballot. When citizens bring an initiative forward it is required to address only one topic. The City should 1 ATTACHMENT B have only a single issue addressed per ballot item. Mixing these together into a single item risks confusing voters and forcing tradeoffs for people that might agree with one of the proposals but not the other. In the interests of transparent government, these should be separate items. TERM LIMITS We don't really have term limits in Palo Alto, we have rotation system. People can serve 2 terms, sit out an election and rotate back in. This brings new voices into the process -we need this more often than every 12 years. The current rotation system helps ensure people are represented by their elected officials and helps prevent people from becoming too insular and removed from the electorate. NUMBER OF SEATS This is an issue of Democracy vs efficiency. A one member council would be highly efficient but I don't want a dictatorship. More seats means more representation. In order to increase the public trust and make sure all parts of the city, including South Palo Alto have a voice, we should keep it at 9 members. Fewer members would increase the workload, already cited as a problem by some council members. Nine seats means that people who cannot be "fulltime" councilmembers will run and more people will participate in the process. In the past, Stanford issues were before Council and as many as 3 or 4 members had to recuse themselves due to conflicts of interest, leaving a bare quorum to make major decisions. Sometimes there was concern that a quorum would not be met. To reduce Council size is a set up to poor governance. Palo Alto is not like other area cities-we have a huge entity, Stanford, with complex land use issues, justifying our larger Council of 9. Finally we don't elect council members to run regional boards; we elect them to manage the City. Regional boards are secondary, and if this is the focus of the amendment, it is a case of the tail wagging the dog. Of the 20 regional boards listed 2 in 2012, Palo Alto had one or more members on 19 of them. Justifying the charter amendment through representation on regional boards is a specious argument. Both reducing the council size and extending term limits is a double strike against representation on the council. Regardless of intent, this smacks of self-interest. Thank you, Tom DuBois Midtown 3 Minor, Beth £'IT¥ gr P';';b8 ~He. 8A CITY CLERK'S OFFICE From: Bhushans@aol.com Sent: To: Monday, June 16, 2014 10:13 PM Council, City 14 JUN 17 PH I: I& Subject: Pay Raise and Number of Council Members ... Dear City Council Members, Briefly, as one of many Palo Alto residents, I want to express my view on the 1. Pay Raise issue and 2. How many Council Members is good for the city and for achieving the correct policy decisions. 1. IMHO you can raise your salaries, with all the work that you do, it seems ok to raise your pay. 2. Keep the City Council at nine members; currently, we do not have ethnic diversity so at least keep nine members for what little diversity can be achieved in the present council make-up. Gender balance seems ok too. If it Aint Broke -Don't Fix lt. Thank you, Cybele 1 Minor, Beth From: Sent: To: Subject: To the Palo Alto City Council, TY · LERK'S OFFicE1 Cheryl Lilienstein <clilienstein@me.com> Monday, June 16, 2014 5:04 PM I 4 JUN 17 PH I: IS Council, City; Clerk, City no ballot measures to extend terms and decrease council numbers Please do NOT place term limits and smaller council on the ballot: our city needs more representation, not less. So far, the discussion around term limits has been justified on the grounds that members could then participate in one regional decision making body from which we are excluded. Yet, since these regional boards are supposed to be part of a representative democracy, why should Palo Alto change its democratic values in order to fit in to a regional system? Wouldn't it hold more integrity to address the regional boards directly and challenge their practice of excluding cities whose charters require term limits? And, where is the discussion about whether extending city council terms is good for Palo Alto itself? So, in my view, the idea to extend the terms of present sitting city council members has a very crass feeling to it: it seems like it is a move by certain members of this city council to retain their own power, and not an improvement for the sake of Palo Alto residents. Similarly, the proposal to decrease the number of council members from 9 to 7 does not enhance representative democracy. And in an election year in particular it raises suspicions. Making the city council smaller would exclude newcomers to the council, and consolidate the power of presently seated members. I have heard a rationale that a smaller council would create greater efficiency. Perhaps we all might agree that concision -and better preparation -would create efficiency. Speaking to that: Months ago, I heard that City Manager Jim Keene is exploring how to release staff reports 1 0 days in advance of a meeting. What happened to that? You are aware that other municipalities release information well in advance of meetings. Here, citizens have asked for YEARS that staff reports be released ten days in advance of meetings so that the council and the public would have time to read, consider, and ask questions in advance of a meeting and thus increase efficiency. Yes, it was even a campaign pledge of candidate Greg Scharff, yet even MAYOR Scharff didn't make this happen. Why not? So, to sum it up: Extending your own term limits is not good. Making the city council smaller is not good. Please do not create charter amendments that erode our democracy and concentrate power in fewer hands. Sincerely, Cheryl Lilienstein 1 City of Palo Alto (ID # 4716) City Council Staff Report Report Type: Action Items Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: Approval of Contract and BAO for Golf Course Reconfiguration Project Title: Approval of One Contract and Two Contract Amendments: (1) Construction Contract with Duininck, Inc. in the Amount of $8,987,809 for the Palo Alto Golf Course Reconfiguration Project, CIP PG-13003; (2) Change Order No. One with Duininck, Inc. in the Amount of $265,399, Reflecting Cost Savings; and (3) Amendment No. One to Contract C13148028 with Golf Group, Ltd. In the Amount of $456,693 for Construction Support and Environmental Mitigation Monitoring Services; Adoption of Two Resolutions: (4) Amending Resolution No. 9296, adopted November 13, 2013, to Extend Statutory Exception for Soil Transfers by Truck on Oregon Expressway until December 31, 2014; and (5) Adopt the Attached Resolution Declaring Intention to Reimburse Expenditures from the Proceeds of Tax-Exempt Obligations (e.g. Certificates of Participation) for Not-To-Exceed Par Amount of $7 Million to Fund a Portion of the Cost of the Palo Alto Municipal Golf Course Reconfiguration Project; and Adoption of Two Budget Amendment Ordinances: (6) In the Amount of $2,501,569 for Golf Course Reconfiguration Project PG-13003, Increasing Appropriations From $8,545,338 to $11,046,907; and (7) In the Amount of $324,800 in Revenues and $324,800 in Expenses to Operate Golf Course During July 1, 2014 –August 31, 2014 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve,and conditionally authorize the City Manager or his designee to execute,the attached contract with Duininck, Inc. (Attachment A) in the amount of $8,987,809 for the Palo Alto Municipal Golf Course City of Palo Alto Page 2 Reconfiguration Project, Capital Improvement Program Project PG-13003; and 2.Approve, and authorize the City Manager or his designee to execute,the attached deductive Change Order No. One to the contract with Duininck, Inc. (Attachment B) in the amount of $265,399 to reflect negotiated cost savings measures to be incorporated into the project; and 3.Authorize the City Manager or his designee to negotiate and execute one or more additional change orders to the contract with Duininck, Inc. for related, additional but unforeseen,work which may develop during the project, the total value of which shall not exceed $872,241; and 4.Approve, and authorize the City Manager or his designee to execute, Amendment No. One to Contract No. C13148028 with Golf Group, Ltd. (Attachment C)in the amount of $456,693 for construction support and environmental mitigation monitoring services for the Palo Alto Municipal Golf Course Reconfiguration Project (PG-13003). The amendment includes $344,262 for basic services and $112,431 for additional services. The revised total contract amount is not to exceed $1,002,031, including $779,600 for basic services and $222,431 for additional services; and 5.Adopt the attached resolution extending an exception to Chapter 10.48 [Trucks and Truck Routes] of the Palo Alto Municipal Code for the limited purpose of allowing the transfer of soil from Stanford University along Oregon Expressway to the Palo Alto Municipal Golf Course and adjacent areas (Attachment D); and 6.Adopt the attached resolution declaring intention to reimburse expenditures from the proceeds of tax-exempt obligations (e.g. Certificates of Participation) for not-to-exceed par amount of $7 million to fund a portion of the cost of the Palo Alto Municipal Golf Course Reconfiguration Project (Attachment E); and 7.Adopt the attached Budget Amendment Ordinance (BAO) (Attachment F) in the amount of $2,501,569 for the Palo Alto Municipal Golf Course City of Palo Alto Page 3 Reconfiguration Project (CIP PG-13003) to increase the total project appropriation from $8,545,338 to $11,046,907; and 8.Adopt the attached Budget Amendment Ordinance (BAO)(Attachment G) in the amount of $324,800 in revenues and $324,800 in expenses to operate the Golf Course for the two months of FY 2015 (July, 1, 2014 through August 31, 2014) in the event that inability to secure regulatory permits continues to delay the project. Executive Summary Staff completed preparation of final bid documents and certification of the Environmental Impact Report for the Golf Course Reconfiguration Project in early Spring 2014. Staff has advertised the project, received construction bids, and prepared a contract for implementation of the project. The only remaining milestone preventing us from moving ahead with the construction of the project is the receipt of final regulatory permits. The permitting process with the Regional Water Quality Control Board (Water Board) has been particularly challenging, and we do not yet have their permit in hand. The low bid received for the project will expire on July 14 unless a construction contract is awarded. There are significant financial implications to delaying the project until next year. In light of the upcoming Council vacation, the pending expiration of the construction bid, and a desire to start construction as soon as possible in order to increase the likelihood of being able to complete the project and reopen the Golf Course in early fall 2015, staff requests that Council approve the construction contract and conditionally authorize the City Manager to sign the contract once the outstanding permit issues have been resolved. In the event that the permits are not received and the contract cannot be executed prior to July 14, staff will continue to work with the low bidder to clarify the specific cost and schedule impacts of extending its construction bid for an additional 30 calendar days and will return to Council in early August with a modified recommendation. Background On October 15, 2012,Council awarded a contract to Golf Group, Ltd. (aka Forrest Richardson & Associates)to design a reconfigured Municipal Golf Course,prepare final bid documents (plans, specifications, and cost estimate) for the reconfiguration project, and prepare an Environmental Impact Report (EIR)for the proposed Golf Course modifications based on a conceptual layout plan City of Palo Alto Page 4 approved by Council in July 2012. In accordance with the adopted renovation plan, Forrest Richardson prepared construction documents based on a design concept that will reconfigure the Golf Course to conform to its Baylands setting and rebrand the facility as the Baylands Golf Links at Palo Alto. The Golf Course Reconfiguration Project will modify all 18 holes of the Golf Course, a portion of the driving range and practice facility,and replace an outlying restroom facility, while retaining a regulation golf course with a par of 71. The reconfigured Golf Course will incorporate or modify existing low-lying areas into the Golf Course, reduce the area of managed irrigated turf,and introduce areas of native grassland and wetland habitat. The project design has been developed to achieve the following objectives: ·A golf course that provides enhanced wildlife habitat, improved wetland areas, and a more interesting course that offers challenges for the experienced player and that can also be enjoyed by the beginner, while reducing water and pesticide use and maintenance labor for turf and landscaping. ·Expanded recreation areas to satisfy existing and projected needs. ·Integration of the Golf Course into the Baylands design theme. ·Mitigation for impacts on the Golf Course resulting from the San Francisquito Creek Joint Powers Authority’s (JPA) flood control project. ·Improve Golf Course playing conditions –turf, drainage and irrigation. ·Increase rounds of play and expand recreational opportunities. In order to increase the chances of retaining a qualifed golf course builder to build the project, staff implemented a prequalification process for potential bidders during Fall 2013. Interested contractors submitted information regarding their company with respect to specific golf course construction experience, audited financial statements, ability to provide required bonds and insurance and on-the- job safety records for staff review. As a primary screening tool, the pre- qualification criteria required prospective bidders to hold status as Certified Golf Course Builders with the Golf Course Builders Association of America. Contractor submittals were reviewed and scored by staff to identify firms with the requisite experience, financial strength, safety record, and client relations to meet or exceed the minimum scoring criteria. As a result of the pre-qualification process, staff identified four golf course builders who had the exclusive right to submit a bid for the construction of the Golf Course Reconfiguration Project. City of Palo Alto Page 5 On February 3, 2014, Council granted discretionary approval for the the Site and Design Review application for the Golf Course Reconfiguration Project, certified the final EIR for the project and adopted a Park Improvement Ordinance reflecting the physical changes being made to the dedicated parkland at the Golf Course. Discussion Bid Process On February 24, 2014, a notice inviting formal bids (IFB) for the Golf Course Reconfiguration Project was posted at City Hall and sent to the four pre-qualified golf course builders. The bidding period was 50 days. Bids were received from all four pre-qualified contractors on April 15, 2014, as listed on the attached Bid Summary (Attachment H). Bid Name/Number Palo Alto Municipal Golf Course Reconfiguration Project, Capital Improvement Program Project PG- 13003/IFB # 153403 Proposed Length of Project Through August 1, 2015 Number of Bids Mailed to Contractors 4 pre-qualified contractors Total Days to Respond to Bid 50 Pre-Bid Meeting?Yes Number of Company Attendees at Pre- Bid Meeting 4 Number of Bids Received 4 Bid Price Range $ 8,987,809-$9,940,488 Staff has reviewed all bids submitted and recommends that the bid of $8,987,809 submitted by Duininck, Inc. be accepted and that Duininck, Inc. be declared the lowest responsible bidder. Staff recommends that the contract scope of work include the Base Bid plus Add Alternate Bid Items A and B (the construction of finished greens in the designated Youth Golf Area). The low bid is 17% percent above the engineer’s estimate of $7,664,433. The elevated bid prices are primarily attributable to higher than expected irrigation system material costs and a less competitive bidding environment resulting from the improving economy. In accordance with the provisions of the bid documents, the bids are valid through City of Palo Alto Page 6 July 14, 2014. Initial Contract Change Order As the low bid exceeds the budget established for the Municipal Golf Course Reconfiguration Project CIP, staff has been meeting with the low bidder to identify cost-saving changes that can be made to the project design in order to reduce construction costs without sacrificing project quality or functionality. Based upon discussions with the golf course architect and the low bidder, staff has negotiated a deductive change order that will eliminate or modify several non-essential components of the project without affecting its functionality.For example, cost savings have been achieved by reducing the number of soil moisture sensors, utilizing alternative irrigation system components, and eliminating a bridge and bulkhead design element without impacting the overall scope and appeal of the new golf course. The change order also incorporates cost-saving value engineering ideas generated by the low bidder including changes to irrigation system installation techniques and the donation of labor for the new Youth Golf Area that will result in further cost reductions. The combination of these measures will result in a cost savings of $265,399. Staff recommends that Council approve,and authorize the City Manager or his designee to execute,the attached deductive Change Order No. One with Duininck, Inc. in the amount of $265,399 that will be applicable concurrently with the construction contract. In addition, staff requests authority to execute future change orders to the contract with Duininck, Inc.in the amount of $872,241 (which equals 10 percent of the net contract amount following execution of Change Order No. One) for related, additional but unforeseen work which may develop during the project. Project Regulatory Permits Implementation of the Golf Course Reconfiguration Project will require the acquisition of regulatory permits from state and federal resource agencies. Specifically, the Project requires a Section 404 Permit from the U.S.Army Corps of Engineers (Corps) (which also involves consultation with the U.S.Fish and Wildlife Service with respect to potential impacts to federally-listed endangered species) and a Section 401 Water Quality Certification from the San Francisco Bay Regional Water Quality Control Board (Water Board). Although the Corps has approved the wetlands delineation submitted by the City for the Golf Course project, permit City of Palo Alto Page 7 acquisition for the project has been hindered to-date at least partly due to delays related to the JPA’s permit acquisition process with the Water Board for their flood control project. Despite multiple overtures by staff, the Water Board has been hesitant to complete their review of the Golf Course Reconfiguration Project,because they believe that the JPA project may need to change in ways that will in turn require changes in the design of the Golf Course Project. Staff have been working closely with JPA representatives, our environmental consultant (the same environmental consultant is working on both projects), the City Attorney’s Office, outside legal counsel with specific regulatory permitting expertise retained by the City Attorney, and most recently representatives from our local State legislators’ offices in attempts to expedite the permitting process for both projects. Permit applications for the Golf Course Reconfiguration Project were submitted on December 23, 2013. The resource agencies are required to notify applicants whether their applications are complete within 30 days from the receipt of the application. Since our initial submittal of permit applications, staff has received three sequential letters from the Water Board (dated January 16, February 28, and May 1, 2014) in response to our permit application, citing “deficiencies”with the application. Staff has submitted a series of letters to the Water Board (dated January 31, April 7, and May 16, 2014) responding to each of the items cited in the three deficiency letters. In spite of our repeated efforts to provide supplementary information and justification to help resolve the Water Board staff’s outstanding issues and the City Manager’s personal entreaties to the Executive Officer of the Water Board requesting his personal intervention to expedite the permitting process, the Water Board has still not deemed our application to be complete, and the Water Board will not provide us with a clear road map and timeline to achieve the required project permits.This despite our agreement with the Executive Officer in March that focusing on a roadmap and timeline was essential. Award of Construction Contract Staff initially planned to request Council award of the construction contract for the Golf Course Project only after all required permits were secured. However, in light of the upcoming Council vacation, the pending expiration of the construction bids on July 14th,and a desire to start construction as soon as possible in order to increase the likelihood of being able to complete the project and reopen the Golf City of Palo Alto Page 8 Course in early fall 2015, staff requests that Council approve the construction contract and conditionally authorize the City Manager to sign the contract once the outstanding permit issues have been resolved. Staff believes that the outstanding permitting issues are relatively non-substantive in nature and that the likelihood of changes to the appearance and design of the golf course resulting from the permit review process is relatively low. The Water Board staff efforts to hold up the Golf Course permits pending the Creek JPA project remains a problem. Staff will continue to negotiate with the Water Board in an effort to secure their approval of the permits needed to construct the project prior to the expiration of the construction bids so that the attached contract can be executed with Duininck, Inc. Beyond the July 14 bid expiration date, price quotations from subcontractors and vendors may no longer be honored, and there are indications that material costs, particularly the cost of irrigation system components and turf grass, will have increased since the April 15 bid date. Duininck, Inc. has indicated a willingness to extend its bid for an additional 30 calendar days on the condition that the City pay the differential cost of any documented price increases that have occurred since the bid submittal date. Staff recommends that Council grant the City Manager conditional authority to execute the contract and change order #1 with Duininck, Inc. subject to the following conditions: 1.The contract and change order #1 must be executed no later than July 14, 2014; and 2.The City must receive the Water Board permit required for the construction of the project or must achieve constructive receipt in the form of written confirmation from the Water Board that prior to the execution of the contract and change order #1;issuance of the permit will be imminent. We will still need the Corps’permit approval,but our understanding is that it must be subsequent to the Water Board action. In the event that the contract and change order #1 cannot be executed prior to July 14, staff will continue to work with Duininck, Inc. to clarify the specific cost and schedule impacts of extending its construction bid for an additional 30 calendar days and will return to Council in early August with a modified recommendation. City of Palo Alto Page 9 Amendment No. One to Golf Course Architect Agreement During construction of the Golf Course Reconfiguration Project, there will be a continuing need for the professional services of Golf Course Architect Forrest Richardson and his environmental sub-consultants. Services include construction support services such as review of contractor submittals, responses to requests for information from the construction contractor, construction progress payment and change order review, and periodic site visits by Forrest Richardson to provide design guidance, inspect project progress, and ensure conformance with the Golf Course design aesthetic and functionality. In addition, Dale Siemens, a close associate of Forrest Richardson with extensive golf course construction experience, will be retained as a subcontractor to serve as an on-site project representative conducting quality control inspections and acting as the liaison between the contractor, City staff, and the Golf Course Architect. The final component of the construction stage services is monitoring of the environmental mitigation measures stipulated in the EIR to be implemented during construction of the project. Monitoring tasks, including contractor training, site surveys and implementation of measures for the protection of sensitive plants, birds, wetlands, and cultural and paleontological resources, and other environmental control measures, will be performed by ICF International or Dr. Jeffrey Froke in their role as sub-consultants to Forrest Richardson. The construction stage services described above have been incorporated into Amendment No. One to the professional services agreement with Golf Group, Ltd. (aka Forrest Richardson & Associates), which is attached for Council consideration and approval. Resolution Modifying the City’s Truck Ordinance (PAMC Chapter 10.48) Both the Golf Course Reconfiguration Project and the related San Francisquito Creek Joint Powers Authority (JPA) flood control project require a substantial amount of suitable imported fill material. Soil is needed to raise the level of the golf course and to construct the new flood control levees. On June 17, 2013, Council awarded a contract to Don Tucker & Son for the importation and stockpiling of soil for use on the Golf Course Reconfiguration Project and the JPA’s flood control project. The contractor is paying the City for the right to stockpile up to 364,000 cubic yards for the Golf Course Project and 127,000 cubic yards for the JPA Project at a soil stockpile site on the west side of the Golf Course. The soil importation process is expected to generate up to $1.3 million that will be used to directly offset the cost of the golf course construction work. City of Palo Alto Page 10 There has been and continues to be a substantial amount of construction occurring at the Stanford University campus that is generating excess soil from basement excavations. The juxtaposition of the Golf Course Reconfiguration Project and the Stanford construction activity provides a unique opportunity to share the soil resources in a way that will benefit both parties. The shortest route between Stanford and the project site is Oregon Expressway. Although Oregon Expressway is not a standard truck route, Council adopted a resolution on November 13, 2012,authorizing the use of Oregon Expressway as a truck route for the limited purpose of transporting soil from the Stanford campus to the Golf Course. Under the terms of the original resolution, the special designation truck route designation for Oregon Expressway expires on June 30, 2014. Don Tucker has been utilizing this special truck route provision to facilitate the import of soil to the Golf Course. As a result of the cost savings generated by this shorter haul route, Don Tucker is paying the City $0.50 per cubic yard more for Stanford soil imported via Oregon Expressway. Don Tucker has imported approximately 80,000 cubic yards of soil to the Golf Course to-date. Because much more soil will be required to complete the two projects, he will continue to import and place soil on the Golf Course after the golf course contractor has begun work and through the end of the year. Because it is advantageous for the City to encourage the transport of soil from Stanford sites beyond June 30, 2014, staff recommends that Council adopt the attached resolution,extending the term of the Oregon Expressway truck route designation through December 31, 2014. Financial Analysis In order to help assess the potential financial performance of the Golf Course during and after construction, staff entered into a contract with the National Golf Foundation (NGF) in 2012 to provide an independent Return on Investment analysis on the design options and long-range Golf Course plan (Attachment I). Since the NGF report was completed in 2012, staff has continued to revise the Golf Course pro-forma as new information that impacts the current and future Golf Course financial status has been acquired. Examples of new information include the fact that the project has been delayed a year from the original scheduling estimates, we have begun pre-construction work on the Golf Course by stockpiling soil on the course and have experienced reduced golf rounds played as a result, we have negotiated contract amendments with Golf Professional Brad Lozares and ValleyCrest Maintenance, and we have received actual bids for the project work and have drafted a construction contract with the City of Palo Alto Page 11 lowest bidder. As a result, staff has prepared an updated pro-forma for the Golf Course illustrating anticipated revenues and costs during pre-construction, construction and post-construction stages in light of the latest information available (Attachment J). Council’s last review of estimated project costs and Golf Course pro-forma occurred on February 3, 2014. For comparison, the attached financial analysis (Attachment K) discusses the changes in project cost and the resulting changes to the projected future operational profit/loss status of the Golf Course that have occurred since the last Council update. Project Funding and Certificates of Participation Staff estimates that $10.4 million will be required to complete the Golf Course reconfiguration. Staff anticipates receiving $1.3 million in revenue from the soils broker currently under contract to import soil for use in the project and $3.0 million from the San Francisquito Creek Joint Powers Authority (JPA) for a mitigation payment. The timing for receipt of these resources is not precisely known as of this writing. Assuming full payment for imported soil and the mitigation payment from the JPA, $6.1 million in additional revenue will be required for the project. It is expected that the Golf Course reconfiguration will take approximately 16 months. To minimize capitalized interest costs (interest that would have to be paid from the time funds are borrowed until the course is re-opened to the public) and consequent debt burden, staff recommends utilizing existing cash reserves to support the project until a few months before the project is completed or sometime in late FY 2015. At that time, staff would return to Council for approval of financing via Certificates of Participation (COPs) in order to replenish the funds from which cash was borrowed. Staff has received confirmation from Bond Counsel that this strategy of issuing debt after construction has begun is legitimate as long as the bond reimbursement resolution is passed prior to construction, which is why the resolution to that effect is included in this item. Using existing cash in the City’s portfolio which is earning a yield of 2.03 percent makes financial sense in light of an estimated 4.5 percent rate the City would pay during the construction period for capitalized interest. The current cash drawdown schedule by Fiscal Year for the project is as follows: City of Palo Alto Page 12 -000s- FY 2014 FY 2015 FY 2016 Total $623 $8,288 $1,505 $10,416 Assuming receipt of funds during the construction period revenue from imported soil and the JPA payment, the City would draw $6.1 million from other funds such as the Infrastructure Reserve and Stanford Development Agreement monies. Once COP proceeds are received, these funds would be replenished and used for implementation of the City’s Infrastructure Plan. In addition to the $6.1 million needed for direct project costs, costs for the debt issuance and capitalized interest incurred in FY 2016 would be included in the debt financing. Staff estimates a total borrowing of $6.6 million will be required to cover these and reconfigurations expenses. As with past requests for debt issuances, staff is requesting a maximum authority to issue up to $7.0 million in COPs in the event of some unforeseen change. Based on a $6.6 million borrowing for 20 years and at an estimated 4.5% interest rate, annual average debt service for the Golf Course is estimated at $493,000. Timeline Implementation of the Golf Course Reconfiguration Project is scheduled to conform to the following milestone dates: June 23 –August 13, 2014 Award of construction contract To be determined Start of construction Closure of Golf Course for public use To be determined Issuance of Certificates of Participation September 1, 2015 Open Baylands Golf Links for public use Resource Impact The construction phase of the project is estimated at $10.44 million, of which $7.95 million is available in Capital Improvement Program Project PG-13003, Golf City of Palo Alto Page 13 Course Reconfiguration Project. The balance of the funds required to pay for project costs is recommended to be provided with the approval of the attached Budget Amendment Ordinance (Attachment F) in the amount of $2.5 million. In addition, the project budget already assumes $3 million in revenue from the San Franscisquito Creek JPA and $5 million in certificate of participation procceds. In addition, staff is requesting the recognition of $1.3 million in revenue from the use of imported soil, in addition to increasing the certificate of participation proceed amount by $1,148,637 for a total aggregate amount of $6,148,637. Environmental Review An Environmental Impact Report (EIR) was prepared to evaluate the proposed potential impacts of the Palo Alto Municipal Golf Course Reconfiguration Project and to identify the appropriate mitigation measures in accordance with the provisions of the California Environmental Quality Act (CEQA). Council, acting on behalf of the City of Palo Alto in its role as lead agency for purposes of CEQA, adopted a resolution on February 3, 2014,certifying the final EIR for the project. Attachments: ·A -Contract with Duininck, Inc.(PDF) ·B -Contract Change Order No. One with Duininck, Inc.(PDF) ·C -Amendment No. One to Contract with Golf Group Ltd.(PDF) ·D -Resolution Amending Palo Alto Municipal Code Chapter 10.48 (Truck Routes)(PDF) ·E -Resolution regarding issuance of Certificates of Participation (COPs) for Golf Course Reconfiguration Project (PDF) ·F -Budget Amendment Ordinance for Golf Course Reconfiguration Project (CIP PG- 13003)(DOC) ·G -Budget Amendment Ordinance for Community Services Department (Golf Course) Operating Budget (DOC) ·H -Bid Summary (PDF) ·I -National Golf Foundation Golf Course Pro-Forma analysis (2012)(PDF) ·J -Updated Golf Course Pro-Forma (2014)(PDF) ·K -Golf Course Reconfiguration Project Financial Analysis (PDF) ·L -Public comment via e-mail(PDF)   Attachment A                   CONSTRUCTION CONTRACT    Contract No. C14153403        City of Palo Alto  and  Duininck, Inc.      Palo Alto Municipal Golf Course Reconfiguration Project  CIP PG‐13003       Invitation for Bid (IFB) Package  2 Rev. January 2014  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT  TABLE OF CONTENTS    SECTION 1  INCORPORATION OF RECITALS AND DEFINITIONS. ......................................................... 5  1.1 Recitals. ................................................................................................................................................... 5  1.2 Definitions. ............................................................................................................................................ 5  SECTION 2  THE PROJECT. .................................................................................................................... 5  SECTION 3  THE CONTRACT DOCUMENTS. ......................................................................................... 6  SECTION 4  CONTRACTOR’S DUTY. ...................................................................................................... 7  SECTION 5  PROJECT TEAM. ................................................................................................................. 7  6.1 Time Is of Essence. .............................................................................................................................. 7  6.2 Commencement of Work. ................................................................................................................ 7  6.3 Contract Time. ...................................................................................................................................... 7  6.4 Liquidated Damages. .......................................................................................................................... 8  6.4.1       Other Remedies. ....................................................................................................... 8    6.5 Adjustments to Contract Time. ....................................................................................................... 8  SECTION 7  COMPENSATION TO CONTRACTOR. ................................................................................ 8  7.1 Contract Sum. ....................................................................................................................................... 8  7.2 Full Compensation. ............................................................................................................................. 8  SECTION 8  STANDARD OF CARE. ........................................................................................................ 9  SECTION 9  INDEMNIFICATION. ........................................................................................................... 9  9.1 Hold Harmless. ..................................................................................................................................... 9  9.2 Survival. .................................................................................................................................................. 9  SECTION 10  NONDISCRIMINATION. ................................................................................................... 9  SECTION 11  INSURANCE AND BONDS. ............................................................................................... 9  SECTION 12  PROHIBITION AGAINST TRANSFERS............................................................................... 10  SECTION 13 NOTICES ……………………………………………………………………………………………………………………. 10  13.1 Method of Notice ………………………………………………………………………………………………………………10  13.2 Notice Recipents ……………………………………………………………………………………………………………….10  13.3 Change of Address. ........................................................................................................................... 11  SECTION 14  DEFAULT. ......................................................................................................................... 11    Invitation for Bid (IFB) Package  3 Rev. January 2014  CONSTRUCTION CONTRACT    14.1 Notice of Default. .............................................................................................................................. 11  14.2 Opportunity to Cure Default. ........................................................................................................ 11  SECTION 15  CITY'S RIGHTS AND REMEDIES. ...................................................................................... 12  15.1 Remedies Upon Default. ................................................................................................................. 12  15.1.1   Delete Certain Services. .......................................................................................... 12  15.1.2   Perform and Withhold. ........................................................................................... 12  15.1.3   Suspend The Construction Contract. .................................................................... 12  15.1.5   Invoke the Performance Bond. .............................................................................. 12  15.1.6   Additional Provisions. ............................................................................................. 12    15.2 Delays by Sureties. ............................................................................................................................ 13  15.3 Damages to City. ................................................................................................................................ 13  15.3.1   For Contractor's Default. ........................................................................................ 13  15.3.2   Compensation for Losses. ...................................................................................... 13    15.4 Suspension by City ............................................................................................................................ 13   15.4.1  Suspension for Convenience. .......................................................................................... 13  15.5 Termination Without Cause. ......................................................................................................... 14  15.5.1   Compensation. ......................................................................................................... 14  15.5.2   Subcontractors. ........................................................................................................ 14  15.6 Contractor’s Duties Upon Termination. ..................................................................................... 14  SECTION 16  CONTRACTOR'S RIGHTS AND REMEDIES. ...................................................................... 15  16.1 Contractor’s Remedies. ................................................................................................................... 15  16.1.1   For Work Stoppage. ................................................................................................. 15  16.1.2   For City's Non‐Payment. ......................................................................................... 15    16.2 Damages to Contractor. .................................................................................................................. 15  SECTION 17  ACCOUNTING RECORDS. ................................................................................................ 15  17.1 Financial Management and City Access. ................................................................................... 15  17.2 Compliance with City Requests. ................................................................................................... 16  SECTION 18  INDEPENDENT PARTIES. ................................................................................................. 16  SECTION 19  NUISANCE. ...................................................................................................................... 16  SECTION 20  PERMITS AND LICENSES. ................................................................................................ 16  SECTION 21  WAIVER. .......................................................................................................................... 16  SECTION 22  GOVERNING LAW AND VENUE. ...................................................................................... 16    Invitation for Bid (IFB) Package  4 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 23  COMPLETE AGREEMENT. ................................................................................................ 17  SECTION 24  SURVIVAL OF CONTRACT. ............................................................................................... 17  SECTION 25  PREVAILING WAGES. ...................................................................................................... 17  SECTION 26  NON APPROPRIATION. ................................................................................................... 17  SECTION 27  AUTHORITY. .................................................................................................................... 17  SECTION 28  COUNTERPARTS .............................................................................................................. 18  SECTION 29  SEVERABILITY. ................................................................................................................. 18  SECTION 30  STATUTORY AND REGULATORY REFERENCES . ............................................................. 18  SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. ................................................................ 18                   Invitation for Bid (IFB) Package  5 Rev. January 2014  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT    THIS CONSTRUCTION CONTRACT entered into on June 2, 2014 (“Execution Date”) by and between the CITY  OF PALO ALTO, a California chartered municipal corporation ("City"), and DUININCK, INC. ("Contractor"), is  made with reference to the following:    R E C I T A L S:    A. City is a municipal corporation duly organized and validly existing under the laws of the State of  California with the power to carry on its business as it is now being conducted under the statutes of the  State of California and the Charter of City.    B. Contractor is a corporation duly organized and in good standing in the State of Minnesota,  Contractor’s License Number 816687. Contractor represents that it is duly licensed by the State of  California and has the background, knowledge, experience and expertise to perform the obligations set  forth in this Construction Contract.    C. On February 24, 2014, City issued an Invitation for Bids (IFB) to contractors for the Palo Alto  Municipal Golf Course Reconfiguration Project (“Project”).  In response to the IFB, Contractor submitted a  Bid.    D. City and Contractor desire to enter into this Construction Contract for the Project, and other  services as identified in the Contract Documents for the Project upon the following terms and conditions.    NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth  and for other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, it is mutually agreed by and between the undersigned parties as follows:    SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS.    1.1 Recitals.    All of the recitals are incorporated herein by reference.    1.2 Definitions.    Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the  General Conditions.  If there is a conflict between the definitions in this Construction Contract and  in the General Conditions, the definitions in this Construction Contract shall prevail.  SECTION 2 THE PROJECT.    The Project is the Palo Alto Municipal Golf Course Reconfiguration Project, located at 1875 Embarcadero  Road, Palo Alto, CA 94303. ("Project").      Invitation for Bid (IFB) Package  6 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 3 THE CONTRACT DOCUMENTS.    3.1  List of Documents.  The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist  of the following documents which are on file with the Purchasing Division and are hereby incorporated by  reference.       1) Change Orders    2) Field Orders    3) Contract    4) Bidding Addenda    5) Special Provisions    6) General Conditions    7)    Project Plans and Drawings    8)    Technical Specifications    9) Instructions to Bidders    10) Invitation for Bids    11) Contractor's Bid/Non‐Collusion Affidavit    12)   Reports listed in the Contract Documents    13)   Public Works Department’s Standard Drawings and Specifications (most current version at  time of Bid)    14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current  version at time of Bid)    15)  City of Palo Alto Traffic Control Requirements    16)  City of Palo Alto Truck Route Map and Regulations    17) Notice Inviting Pre‐Qualification Statements, Pre‐Qualification Statement, and Pre‐ Qualification Checklist (if applicable)    18) Performance and Payment Bonds    3.2  Order of Precedence.    For the purposes of construing, interpreting and resolving inconsistencies between and among the  provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the  preceding section.  If a claimed inconsistency cannot be resolved through the order of precedence, the City    Invitation for Bid (IFB) Package  7 Rev. January 2014  CONSTRUCTION CONTRACT    shall have the sole power to decide which document or provision shall govern as may be in the best  interests of the City.  SECTION 4 CONTRACTOR’S DUTY.    Contractor agrees to perform all of the Work required for the Project, as specified in the Contract  Documents, all of which are fully incorporated herein.  Contractor shall provide, furnish, and supply all  things necessary and incidental  for the timely performance and completion of the Work, including, but not  limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless  otherwise specified in the Contract Documents.  Contractor also agrees to use its best efforts to complete  the Work in a professional and expeditious manner and to meet or exceed the performance standards  required by the Contract Documents.  SECTION 5 PROJECT TEAM.    In addition to Contractor, City has retained, or may retain, consultants and contractors to provide  professional and technical consultation for the design and construction of the Project.  The Contract  requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other  members of the Project Team and other contractors retained by City to construct other portions of the  Project.    SECTION 6 TIME OF COMPLETION.    6.1 Time Is of Essence.    Time is of the essence with respect to all time limits set forth in the Contract Documents.    6.2 Commencement of Work.    Contractor shall commence the Work on the date specified in City’s Notice to Proceed.       6.3 Contract Time.    Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be  completed    not later than August 1, 2015.   within        calendar days () after the commencement date specified in City’s Notice to  Proceed.    By executing this Construction Contract, Contractor expressly waives any claim for delayed early  completion.    Invitation for Bid (IFB) Package  8 Rev. January 2014  CONSTRUCTION CONTRACT    6.4 Liquidated Damages.  Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial  Completion of the entire Work within the Contract Time, including any approved extensions  thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in  achieving Substantial Completion, based on the amount of Three Thousand Five Hundred dollars  ($3,500.00) per day, or as otherwise specified in the Special Provisions. Liquidated damages may  also be separately assessed for failure to meet milestones specified elsewhere in the Contract  Documents, regardless of impact on the time for achieving Substantial Completion.  The  assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of  the amount of damages City will suffer by delay in completion of the Work.  The City is entitled to  setoff the amount of liquidated damages assessed against any payments otherwise due to  Contractor, including, but not limited to, setoff against release of retention.  If the total amount of  liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to  recover the balance from Contractor or its sureties.  Occupancy or use of the Project in whole or in  part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess  liquidated damages.    6.4.1 Other Remedies.    City is entitled to any and all available legal and equitable remedies City may have where City’s  Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion  of the entire Work within the Contract Time.    6.5 Adjustments to Contract Time.    The Contract Time may only be adjusted for time extensions approved by City and memorialized  in a Change Order approved in accordance with the requirements of the Contract Documents.  SECTION 7 COMPENSATION TO CONTRACTOR.     7.1 Contract Sum.    Contractor shall be compensated for satisfactory completion of the Work in compliance with the  Contract Documents the Contract Sum of Eight Million Nine Hundred Eighty‐Seven Thousand Eight  Hundred Nine Dollars ($8,987,809).      [This amount includes the Base Bid of $8,947,809 and Additive Alternate A of  $25,000 and Additive Alternate B of $15,000.]    7.2 Full Compensation.    The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor  and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all  Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties  or obstructions which may arise or be encountered in performance of the Work until its Acceptance by  City, all risks connected with the Work, and any and all expenses incurred due to suspension or  discontinuance of the Work, except as expressly provided herein.  The Contract Sum may only be adjusted  for Change Orders approved in accordance with the requirements of the Contract Documents.         Invitation for Bid (IFB) Package  9 Rev. January 2014  CONSTRUCTION CONTRACT      SECTION 8 STANDARD OF CARE.    Contractor agrees that the Work shall be performed by qualified, experienced and well‐supervised  personnel.  All services performed in connection with this Construction Contract shall be performed in a  manner consistent with the standard of care under California law applicable to those who specialize in  providing such services for projects of the type, scope and complexity of the Project.     SECTION 9 INDEMNIFICATION.    9.1 Hold Harmless.    To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its  City Council, boards and commissions, officers, agents, employees, representatives and volunteers  (hereinafter individually referred to as an “Indemnitee” and collectively referred to as  "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss,  damage, claims, expenses (including, without limitation, attorney fees, expert witness fees,  paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every  nature arising out of or in connection with the acts or omissions of Contractor, its employees,  Subcontractors, representatives, or agents, in performing the Work or its failure to comply with  any of its obligations under the Contract, except such Liability caused by the active negligence,  sole negligence, or willful misconduct of an Indemnitee.  Contractor shall pay City for any costs  City incurs to enforce this provision.  Except as provided in Section 9.2 below, nothing in the  Contract Documents shall be construed to give rise to any implied right of indemnity in favor of  Contractor against City or any other Indemnitee.    Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of  any third‐party claim relating to the Contract.    9.2 Survival.    The provisions of Section 9 shall survive the termination of this Construction Contract.    SECTION 10 NONDISCRIMINATION.    As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of  this Agreement, it shall not discriminate in the employment of any person because of the race, skin color,  gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,  familial status, weight or height of such person. Contractor acknowledges that it has read and understands  the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination  Requirements and the penalties for violation thereof, and will comply with all requirements of Section  2.30.510 pertaining to nondiscrimination in employment.    SECTION 11 INSURANCE AND BONDS.    Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with  evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all  requirements in Article 11 of the General Conditions.        Invitation for Bid (IFB) Package  10 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 12 PROHIBITION AGAINST TRANSFERS.    City is entering into this Construction Contract in reliance upon the stated experience and qualifications of  the Contractor and its Subcontractors set forth in Contractor’s Bid.  Accordingly, Contractor shall not  assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by  operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or  transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract  and grounds for default in addition to any other legal or equitable remedy available to the City.    The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of  Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor  is a partnership or joint venture or syndicate or co‐tenancy shall result in changing the control of  Contractor, shall be construed as an assignment of this Construction Contract. Control means more than  fifty percent (50%) of the voting power of the corporation or other entity.     SECTION 13 NOTICES.    13.1 Method of Notice.    All notices, demands, requests or approvals to be given under this Construction Contract shall be given in  writing and shall be deemed served on the earlier of the following:  (i) On the date delivered if delivered personally;  (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and   addressed as hereinafter provided;   (iii) On the date sent if sent by facsimile transmission;   (iv) On the date sent if delivered by electronic mail; or   (v) On the date it is accepted or rejected if sent by certified mail.     13.2 Notice Recipients.     All notices, demands or requests (including, without limitation, Change Order Requests and  Claims) from Contractor to City shall include the Project name and the number of this  Construction Contract and shall be addressed to City at:      To City:  City of Palo Alto     City Clerk     250 Hamilton Avenue     P.O. Box 10250     Palo Alto, CA 94303     Copy to:   City of Palo Alto     Public Works Administration     250 Hamilton Avenue     Palo Alto, CA 94301     Attn:  Joe Teresi               City of Palo Alto     Utilities Engineering     250 Hamilton Avenue     Palo Alto, CA 94301     Attn:            Invitation for Bid (IFB) Package  11 Rev. January 2014  CONSTRUCTION CONTRACT       In addition, copies of all Claims by Contractor under this Construction Contract shall be provided  to the following:    Palo Alto City Attorney’s Office  250 Hamilton Avenue  P.O. Box 10250  Palo Alto, California 94303       All Claims shall be delivered personally or sent by certified mail.    All notices, demands, requests or approvals from City to Contractor shall be addressed to:    Duininck, Inc.  P.O. Box 208  Prinsburg, MN 56281  Attn:  Chris Duininck      13.3 Change of Address.    In advance of any change of address, Contractor shall notify City of the change of address in  writing.  Each party may, by written notice only, add, delete or replace any individuals to whom  and addresses to which notice shall be provided.    SECTION 14 DEFAULT.    14.1 Notice of Default.    In the event that City determines, in its sole discretion, that Contractor has failed or refused to  perform any of the obligations set forth in the Contract Documents, or is in breach of any  provision of the Contract Documents, City may give written notice of default to Contractor in the  manner specified for the giving of notices in the Construction Contract, with a copy to  Contractor’s performance bond surety.    14.2 Opportunity to Cure Default.  Except for emergencies, Contractor shall cure any default in performance of its obligations under  the Contract Documents within two (2) Days (or such shorter time as City may reasonably require)  after receipt of written notice. However, if the breach cannot be reasonably cured within such  time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as  City may reasonably require) and will diligently and continuously prosecute such cure to  completion within a reasonable time, which shall in no event be later than ten (10) Days after  receipt of such written notice.      Invitation for Bid (IFB) Package  12 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 15 CITY'S RIGHTS AND REMEDIES.    15.1 Remedies Upon Default.    If Contractor fails to cure any default of this Construction Contract within the time period set forth  above in Section 14, then City may pursue any remedies available under law or equity, including,  without limitation, the following:    15.1.1 Delete Certain Services.    City may, without terminating the Construction Contract, delete certain portions of the Work,  reserving to itself all rights to Losses related thereto.    15.1.2 Perform and Withhold.    City may, without terminating the Construction Contract, engage others to perform the Work or  portion of the Work that has not been adequately performed by Contractor and withhold the cost  thereof to City from future payments to Contractor, reserving to itself all rights to Losses related  thereto.    15.1.3 Suspend The Construction Contract.    City may, without terminating the Construction Contract and reserving to itself all rights to Losses  related thereto, suspend all or any portion of this Construction Contract for as long a period of  time as City determines, in its sole discretion, appropriate, in which event City shall have no  obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor  for damages if City directs Contractor to resume Work.    15.1.4 Terminate the Construction Contract for Default.    City shall have the right to terminate this Construction Contract, in whole or in part, upon the  failure of Contractor to promptly cure any default as required by Section 14.  City’s election to  terminate the Construction Contract for default shall be communicated by giving Contractor a  written notice of termination in the manner specified for the giving of notices in the Construction  Contract.  Any notice of termination given to Contractor by City shall be effective immediately,  unless otherwise provided therein.    15.1.5 Invoke the Performance Bond.    City may, with or without terminating the Construction Contract and reserving to itself all rights to  Losses related thereto, exercise its rights under the Performance Bond.    15.1.6 Additional Provisions.    All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in  addition to those rights and remedies available in law or in equity.  Designation in the Contract  Documents of certain breaches as material shall not waive the City’s authority to designate other  breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the  City from terminating the Agreement for breaches that are not material.  City’s determination of  whether there has been noncompliance with the Construction Contract so as to warrant exercise  by City of its rights and remedies for default under the Construction Contract, shall be binding on  all parties.  No termination or action taken by City after such termination shall prejudice any other  rights or remedies of City provided by law or equity or by the Contract Documents upon such  termination; and City may proceed against Contractor to recover all liquidated damages and  Losses suffered by City.        Invitation for Bid (IFB) Package  13 Rev. January 2014  CONSTRUCTION CONTRACT    15.2 Delays by Sureties.      Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange  for completion of the Work in accordance with the Performance Bond, within seven (7) calendar  days from the date of the notice of termination, Contractor’s surety shall be deemed to have  waived its right to complete the Work under the Contract, and City may immediately make  arrangements for the completion of the Work through use of its own forces, by hiring a  replacement contractor, or by any other means that City determines advisable under the  circumstances.  Contractor and its surety shall be jointly and severally liable for any additional cost  incurred by City to complete the Work following termination.  In addition, City shall have the right  to use any materials, supplies, and equipment belonging to Contractor and located at the  Worksite for the purposes of completing the remaining Work.    15.3 Damages to City.    15.3.1 For Contractor's Default.    City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s  default under the Contract Documents.     15.3.2 Compensation for Losses.   In the event that City's Losses arise from Contractor’s default under the Contract Documents, City  shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor.   If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the  difference and shall promptly remit same to City.    15.4 Suspension by City      15.4.1 Suspension for Convenience.    City may, at any time and from time to time, without cause, order Contractor, in writing, to  suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an  aggregate of fifty percent (50%) of the Contract Time.  The order shall be specifically identified as  a Suspension Order by City.  Upon receipt of a Suspension Order, Contractor shall, at City’s  expense, comply with the order and take all reasonable steps to minimize costs allocable to the  Work covered by the Suspension Order.  During the Suspension or extension of the Suspension, if  any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered  by the Suspension Order.  If a Suspension Order is canceled or expires, Contractor shall resume  and continue with the Work.  A Change Order will be issued to cover any adjustments of the  Contract Sum or the Contract Time necessarily caused by such suspension.    A Suspension Order  shall not be the exclusive method for City to stop the Work.    15.4.2 Suspension for Cause.  In addition to all other remedies available to City, if Contractor fails to perform or correct work in  accordance with the Contract Documents, City may immediately order the Work, or any portion  thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction.   Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension  occasioned by Contractor’s failure to comply with the Contract Documents.  City’s right to  suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend  the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of  the Contract Documents.    Invitation for Bid (IFB) Package  14 Rev. January 2014  CONSTRUCTION CONTRACT    15.5 Termination Without Cause.    City may, at its sole discretion and without cause, terminate this Construction Contract in part or  in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s  expense, comply with the notice and take all reasonable steps to minimize costs to close out and  demobilize.  The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole  and exclusive compensation for such termination and Contractor waives any claim for other  compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue,  lost opportunity, or other consequential, direct, indirect or incidental damages of any kind  resulting from termination without cause.  Termination pursuant to this provision does not relieve  Contractor or its sureties from any of their obligations for Losses arising from or related to the  Work performed by Contractor.     15.5.1 Compensation.    Following such termination and within forty‐five (45) Days after receipt of a billing from  Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the  following to Contractor as Contractor’s sole compensation for performance of the Work :    .1 For Work Performed.  The amount of the Contract Sum allocable to the portion of the  Work properly performed by Contractor as of the date of termination, less sums previously paid to  Contractor.    .2 For Close‐out Costs.  Reasonable costs of Contractor and its Subcontractors:  (i) Demobilizing and  (ii) Administering the close‐out of its participation in the Project (including, without  limitation, all billing and accounting functions, not including attorney or expert fees) for a  period of no longer than thirty (30) Days after receipt of the notice of termination.    .3 For Fabricated Items.  Previously unpaid cost of any items delivered to the Project Site  which were fabricated for subsequent incorporation in the Work.    .4 Profit Allowance.    An allowance for profit calculated as four percent (4%) of the sum of  the above items, provided Contractor can prove a likelihood that it would have made a profit if  the Construction Contract had not been terminated.    15.5.2 Subcontractors.      Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts  permitting termination for convenience by Contractor on terms that are consistent with this  Construction Contract and that afford no greater rights of recovery against Contractor than are  afforded to Contractor against City under this Section.    15.6 Contractor’s Duties Upon Termination.    Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the  notice directs otherwise, do the following:  (i) Immediately discontinue the Work to the extent specified in the notice;  (ii) Place no further orders or subcontracts for materials, equipment, services or facilities,  except as may be necessary for completion of such portion of the Work that is not  discontinued;  (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the  notice of termination, of all subcontracts, purchase orders and contracts that are  outstanding, including, without limitation, the terms of the original price, any changes,  payments, balance owing, the status of the portion of the Work covered and a copy of    Invitation for Bid (IFB) Package  15 Rev. January 2014  CONSTRUCTION CONTRACT    the subcontract, purchase order or contract and any written changes, amendments or  modifications thereto, together with such other information as City may determine  necessary in order to decide whether to accept assignment of or request Contractor to  terminate the subcontract, purchase order or contract;  (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions  thereof, that City elects to accept by assignment and cancel, on the most favorable terms  reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof,  that City does not elect to accept by assignment; and  (v) Thereafter do only such Work as may be necessary to preserve and protect Work already  in progress and to protect materials, plants, and equipment on the Project Site or in  transit thereto.  Upon termination, whether for cause or for convenience, the provisions of the Contract  Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees,  submittals of as‐built drawings, instructions, or manuals, or other such rights and obligations  arising prior to the termination date.    SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES.    16.1 Contractor’s Remedies.    Contractor may terminate this Construction Contract only upon the occurrence of one of the  following:    16.1.1 For Work Stoppage.     The Work is stopped for sixty (60) consecutive Days, through no act or fault of  Contractor, any  Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of  an order of a court or other public authority other than City having jurisdiction or due to an act of  government, such as a declaration of a national emergency making material unavailable.  This  provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension  notice issued either for cause or for convenience.    16.1.2 For City's Non‐Payment.     If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of  notice from Contractor, Contractor may terminate the Construction Contract (30) days following a  second notice to City of Contractor’s intention to terminate the Construction Contract.    16.2 Damages to Contractor.   In the event of termination for cause by Contractor, City shall pay Contractor the sums provided  for in Paragraph 15.5.1 above.  Contractor agrees to accept such sums as its sole and exclusive  compensation and agrees to waive any claim for other compensation or Losses, including, but not  limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential,  direct, indirect and incidental damages, of any kind.  SECTION 17 ACCOUNTING RECORDS.    17.1 Financial Management and City Access.    Contractor shall keep full and detailed accounts and exercise such controls as may be necessary  for proper financial management under this Construction Contract in accordance with generally  accepted accounting principles and practices. City and City's accountants  during normal business  hours, may  inspect, audit and copy Contractor's records, books, estimates, take‐offs, cost reports,  ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase    Invitation for Bid (IFB) Package  16 Rev. January 2014  CONSTRUCTION CONTRACT    orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these  documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution  of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by  law.    17.2 Compliance with City Requests.    Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition  precedent to filing or maintenance of any legal action or proceeding by Contractor against City  and to Contractor's right to receive further payments under the Contract Documents.  City many  enforce Contractor’s obligation to provide access to City of its business and other records referred  to in Section 17.1 for inspection or copying by  issuance of a writ or a provisional or permanent  mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such  court, without the necessity of oral testimony.    SECTION 18 INDEPENDENT PARTIES.    Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’  of the other party.  City, its officers or employees shall have no control over the conduct of Contractor or  its respective agents, employees, subconsultants, or subcontractors, except as herein set forth.    SECTION 19 NUISANCE.    Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in  connection in the performance of services under this Construction Contract.    SECTION 20 PERMITS AND LICENSES.    Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall  provide, procure and pay for all licenses, permits, and fees, required by the City or other government  jurisdictions or agencies necessary to carry out and complete the Work.  Payment of all costs and expenses  for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation  shall be paid to the Contractor for these items or for delays caused by non‐City inspectors or conditions set  forth in the licenses or permits issued by other agencies.    SECTION 21 WAIVER.    A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be  deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition  contained herein, whether of the same or a different character.    SECTION 22 GOVERNING LAW AND VENUE.    This Construction Contract shall be construed in accordance with and governed by the laws of the State of  California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no  other place.      Invitation for Bid (IFB) Package  17 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 23 COMPLETE AGREEMENT.    This Agreement represents the entire and integrated agreement between the parties and supersedes all  prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended  only by a written instrument, which is signed by the parties.  SECTION 24 SURVIVAL OF CONTRACT.    The provisions of the Construction Contract which by their nature survive termination of the Construction  Contract or Final Completion, including, without limitation, all warranties, indemnities, payment  obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect  after Final Completion or any termination of the Construction Contract.  SECTION 25 PREVAILING WAGES.          This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in  the performance and implementation of the Project, because the City, pursuant to its authority as a  chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages.  The City  invokes the exemption from the state prevailing wage requirement for this Project and declares that the  Project is funded one hundred percent (100%) by the City of Palo Alto.  This Project remains subject to all  other applicable provisions of the California Labor Code and regulations promulgated thereunder.    Or     The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the  California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code.   Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has  obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work  in this locality for each craft, classification, or type of worker needed to execute the contract for this  Project from the Director of the Department of Industrial Relations.  Copies of these rates may be obtained  at the Purchasing Office of the City of Palo Alto.  Contractor shall provide a copy of prevailing wage rates to  any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a  minimum.  Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1810, and 1813 of  the Labor Code.  SECTION 26 NON APPROPRIATION.    This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto  Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the  event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time  within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds  for this Construction Contract are no longer available.  This section shall take precedence in the event of a  conflict with any other covenant, term, condition, or provision of this Agreement.   SECTION 27 AUTHORITY.    The individuals executing this Agreement represent and warrant that they have the legal capacity and  authority to do so on behalf of their respective legal entities.      Invitation for Bid (IFB) Package  18 Rev. January 2014  CONSTRUCTION CONTRACT    SECTION 28 COUNTERPARTS    This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties,  constitute a single binding agreement.  SECTION 29 SEVERABILITY.    In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity,  legality and enforceability of the remaining provisions shall not be affected.    SECTION 30 STATUTORY AND REGULATORY REFERENCES.      With respect to any amendments to any statutes or regulations referenced in these Contract Documents,  the reference is deemed to be the version in effect on the date that the Contract was awarded by City,  unless otherwise required by law.    SECTION 31 WORKERS’ COMPENSATION CERTIFICATION.      Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: “I am aware  of the provisions of Section 3700 of the Labor Code which require every employer to be insured against  liability for workers’ compensation or to undertake self‐insurance in accordance with the provisions of that  code, and I will comply with such provisions before commencing the performance of the Work on this  Contract.”    IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the   date and year first above written.         CITY OF PALO ALTO    ____________________________   Purchasing Manager  City Manager      APPROVED AS TO FORM:    ____________________________  Senior Asst. City Attorney    APPROVED:    ____________________________  Director of Public Works      DUININCK, INC.    By:___________________________    Name:________________________    Title:__________________________    Date: _________________________        Contract Change Order City of Palo Alto Department: Public Works Eng Services Contract Number: C14153403 APPENDIX B – CONTRACT CHANGE ORDER PAGE 1 OF 4 Contract Change Order #1 Project Title: Municipal Golf Course Reconfiguration Project Project No.: PG-13003 Contract Number: C14153403 Date: June 2, 2014 Contractor: Duininck, Inc. Change Order: 1 Description of Change Order Background Information: The low bid received for the project exceeded the available project budget. Staff and the golf course architect negotiated the terms of this change order with the low bidder to reduce the cost of the project without compromising the quality and functionality of the reconfigured golf course. Change Order Justification: The contract modifications listed below are necessary to lower the project cost to within the available project budget. Description of Work to be Performed: See attached itemization of the cost savings proposals accepted by the City. Incorporates Field Order Number(s): N/A Cost Time This change order will:  No cost change: N/A  Increase cost by $ 0.00  Decrease cost by $ 265,399.00 N/A This change order will:  No change time  Increase time by 0 days  Decrease time by 0 days The date of completion as of this change order is August 1, 2015 G/L account number (s): Basis for change in cost:  Unit price(s)  Lump sum  Cost plus (10% self performed work;15% subcontracted)  Other: Contract Change Order #1 -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. AcceptedffirA Con~ctor: Accepted for City of Palo Alto: By: IJJI)/ / --..... By: . 1. -0 Title: -PA,-'Z-"'" ...t~'i2-"}/\ p.~ ~~ e 'Z-Title: Public Works Engineering -Sr. Engineer Date: Sj\b /1t-1 Date: Scope of Work ci z ~ 0 u; 0::: 0 0 0 Description Reason for Change D-c( W 0 0 Amount Total for this change order $ 0.00 PAGE 20F 4 ApPENDIX B -CONTRACT CHANGE ORDER Contract Change Order City of Palo Alto Department: Public Works Eng Services Contract Number: C14153403 APPENDIX B – CONTRACT CHANGE ORDER PAGE 3 OF 4 Document Preparation By: Title: Joe Teresi Senior Engineer Date: City Approval – Division Head Signature required on all change orders By : Title : Brad Eggleston Assistant Director, Public Works Engineering Services Date: City Approval – Department Head: Signature required when any individual Change Order exceeds $10,000. By: Title: Mike Sartor Director of Public Works Date: Contract Change Order #1 – continued Summary of Amounts Payable Under Contract (For Internal Purposes Only) Original Contract Amount: $ 8,987,809.00 Previous Change Orders $ 0.00 This Change Order $ (265,399.00) Revised Contract Amount: $ 8,722,410.00 Compare to: Original Contract Authorization: $ 8,722,410.00 Contingency: 872,241.00 Contract Amendment Authorizations $ 0.00 Contingency added: 0.00 Contingency Authorizations: $ 872,241.00 Used to date (0.00) Total Authorized Funding: $ 9,594,651.00 Balance remaining 872,241.00 Change orders shall not be initiated for Council-approved contracts if the revised contract total exceeds the total authorized funding amount. Item #Quantity Unit Unit Cost Total 5 Reduce total soil sensor count to 5 greens. Reduce from 44 each sensors at 2 per green, to a total of 10 sensors at 5 green locations. Reduce communication wire quantity, data loggers and pedestals. Install at green numbers 1, 6, 11, 13 and 18 1LS (31,340.00)$ (31,340.00)$ 6 Alternate Gate Valve - Change Section 38.1.14.1 to allow use of CMF Global - AquaFuse HDPE Ball Valve or Harco Poly-Valve w/ JM Eagle supplied by Ewing. See attached submittal information. 8" PE Valve 17 EA (925.00)$ (15,725.00)$ 6" PE Valve 20 EA (133.00)$ (2,660.00)$ 4" PE Valve 3EA (91.25)$ (273.75)$ 2" PE Valve (lateral isolation valve)281 EA (25.00)$ (7,025.00)$ Item Total (25,684.00)$ 7 10" basin detail revisions. Change to 12" in size and install per the attached Duininck Catch Basin Detail (allows for pipe size and direction changes) -HDPE 215 EA (28.00)$ (6,020.00)$ 17 Bulkhead and Bridge convert to earthen crossing instead. Minor associated costs for additional grassing or earthwork to be adjusted later (if needed) upon field direction. Bollards to remain in scope.1 LS (105,000.00)$ (105,000.00)$ 20 RR Building conduit reduction. Delete spare 3" conduit requirement and allow Contractor to re-size conduit as needed as part of the design build requirement.1LS (3,620.00)$ (3,620.00)$ 12 Change the Specification Section 17.1.7 to read: Soils used as topsoil for native planted areas (Baylands and Native areas) may contain rocks and stones. However , upon finish grading these areas, the Contractor shall provide a final finish surface free of visible loose stones and rocks. Add clarification that Section 16.2.19 does not apply to the native grassed areas. Dozer track finish is an acceptable quality of finish with rock picking as discussed to allow mowing equipment access and avoid damage from large rocks. 1LS (25,650.00)$ (25,650.00)$ B Other Contractor Value Engineering savings or offsetting additional Items: B1 Native Mix A Keep the Seashore Bentgrass at the current rate Keep the California Brome at the current rate Substitute Slough Sedge for the True Foothill Sedge at the same seeding rate. Blue Wildrye at the same rate Molate Red Fescue at the same rate Substitute Slender Hairgrass for Purple Needlegrass at the same seeding rate. Native Mix B** Substitute Alkali Bullrush for Brown Headed Rush at three times the seeding rate due to lower seed count. Slough Sedge at the current rate Substitute Meadow Barley for Alkali Barley at the same rate **Subject to 2014 harvest. Other Juncus var. available if needed.1 LS (22,850.00)$ (22,850.00)$ B2 Irrigation installed by vibratory plow; HDPE DR 13.5 of 2" pipe with HDPE compatible service fitting in lieu of 2" sch 40 PVC pipe and Lasco PVC service fitting. Duininck to supply Owner with Electrofusion Generator Machine and (10) 2" electrofusion repair couplers. This also includes Duininck training the Valley Crest/Maintenance staff on the use and repair for a total HDPE integral system. 1 LS $ (24,885.00) $ (24,885.00) C Assuming Contact will be awarded as the base, Alt A, and Alt B please see revised discount- ALT1 In working with the City of Palo Alto and as per discussions we also propose to donate our construction labor and equipment of the Youth Area/First Tee facility. Greens are to be built using 10" of greensmix on herringbone drainage system. This includes (4) greens included in Alternate Bid Items A and B.1 LS $ (20,350.00) $ (20,350.00) Change Order 1 Total Deduct $ (265,399.00) Duininck Bid Proposal $ 8,947,809.00 Alt A $ 25,000.00 Alt B $ 15,000.00 Total Value Engineering Contract Price $ 8,722,410.00 DLS Page 1 of 1 5/16/2014 9:02 AM 1 Revision April 28, 2014 AMENDMENT NO. ONE TO CONTRACT NO. C13148028 BETWEEN THE CITY OF PALO ALTO AND GOLF GROUP, LTD. This Amendment No. One to Contract No. C13148028 (“Contract”) is entered into June 18, 2014 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and GOLF GROUP, LTD., an Arizona corporation authorized to do business in the State of California, dba FORREST RICHARDSON & ASSOCIATES, located at 2337 East Orangewood Avenue, Phoenix, AZ 85020 (“CONSULTANT”). R E C I T A L S A. The Contract was entered into between the parties for the provision of golf course architecture and environmental services for the design of the Palo Alto Municipal Golf Course Reconfiguration Project. B. The parties wish to amend the Contract to increase the scope of services to include construction stage services and environmental mitigation monitoring services, increase compensation, and extend the contract schedule. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 1, SCOPE OF SERVICES is hereby amended to read as follows: “CONSULTANT shall perform the Services described in the attached Exhibit “A-2” as an addition to the Scope of Services described in Exhibits “A” and “A-1” of the original Contract and in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY.” SECTION 2. Section 2, TERM is hereby amended to read as follows: “The term of this Agreement shall be from the date of its full execution through the duration of the construction stage services rendered by CONSULTANT for the Project unless terminated earlier pursuant to Section 19 of the Agreement.” SECTION 4. Section 4, NOT TO EXCEED COMPENSATION is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Basic Services described in Exhibit “A-2” in addition to the compensation for performance of the Basic Services described in Exhibits “A” and “A-1” of the original Contract, including payment for professional services and reimbursable expenses, shall not exceed seven hundred seventy-nine thousand six hundred dollars ($779,600). In the event Additional Services are authorized, the total DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 2 Revision April 28, 2014 compensation for services and additional services and reimbursable expenses shall not exceed one million two thousand thirty-one dollars ($1,002,031). The applicable labor rates are set out in Exhibit “C-1” of the original Contract. Additional Services for this Contract Amendment, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C” and “C-2”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibits “A”, “A-1”, and “A-2”. SECTION 4. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “A-2” entitled “SCOPE OF CONSTRUCTION STAGE AND ENVIRONMENTAL MITIGATION MONITORING SERVICES”. b. Exhibit “B-1” entitled “AMENDMENT NO. ONE SCHEDULE OF PERFORMANCE”. c. Exhibit “C-2” entitled “AMENDMENT NO. ONE COMPENSATION”. SECTION 5. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: Senior Asst. City Attorney GOLF GROUP LTD. By: Name: Title: DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Vice Pres. Forrest L. Richardson Attachments: EXHIBIT "A-2": SCOPE OF CONSTRUCTION STAGE AND ENVIRONMENTAL MITIGATION MONITORING SERVICES EXHIBIT "B-1": AMENDMENT NO. ONE SCHEDULE OF PERFORMANCE EXHIBIT “C-2”: AMENDMENT NO. ONE COMPENSATION 3 Revision April 28, 2014 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 EXHIBIT “A-2” SCOPE OF CONSTRUCTION STAGE AND ENVIRONMENTAL MITIGATION MONITORING SERVICES BASIC SERVICES The CONSULTANT’s Basic Services consist of the services described below: Task (6) Construction Support Services (Golf Course Architect) Task (7) Construction Support Services (Project Representative) Task (8) Environmental Mitigation Monitoring Services (ICF/Golfauna) Task 6 - Construction Support Services (Golf Course Architect) (a) The CONSULTANT shall assist and support the CITY during the construction of the Project, including attending a pre-construction conference; providing clarifications/interpretations of plans and specifications; preparing and/or reviewing required shop drawings and submittal reviews; assisting with the preparation of contract change orders; providing recommendations for changes required by design discrepancies, utility conflicts, or other unforeseen circumstances that may develop during construction; and preparing punch lists prior to final acceptance of the Work. (b) The CONSULTANT shall make periodic site visits to observe progress and assist the CITY during the construction of the Project. Administration of the construction of the Project shall be the responsibility of the CITY unless additional services are contracted between the parties for construction administration services. The CONSULTANT has provided a Construction Management Services scope of work as a potential Additional Service to this Contract to be utilized at the discretion of the CITY. (c) Construction Support will commence with the award of the construction contract (or individual contracts in the case of multiple contractors being engaged for this project or the Project being incrementally constructed) and will terminate when the CITY has determined final completion of the Work covered by the CONSULTANT’s plans and specifications. Final completion of the Work shall mean acceptance by the CITY of the Work upon completion of the Work to the CITY’s satisfaction. (d) The CONSULTANT, as a representative of the CITY during the Construction Support phase, shall advise and consult with the CITY, and all of the CITY’s instructions to the Contractor(s) working on the Project shall be issued simultaneously to the CONSULTANT. The CONSULTANT shall have authority to act on behalf of the CITY to the extent provided in the design Agreement. Page 4 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 (e) The CONSULTANT shall at all times have access to the Project wherever it is in progress. (f) The CONSULTANT or his representative(s) shall make periodic visits to the site of the Project to familiarize himself generally with the progress and quality of the Work to determine in general if the Project is proceeding in accordance with the Construction Documents prepared by the CONSULTANT. On the basis of these on-site observations, the CONSULTANT shall endeavor to guard the CITY against defects and deficiencies in the Work of the Contractor(s). The quantity of on-site observation visits of the CONSULTANT shall be not less than thirty (30) and not more than forty (40) during the construction of the Work. An on-site visit is defined as one (1) personnel on-site for two (2) or more hours per calendar day inclusive of travel time to and from the site. (g) The CONSULTANT shall review and approve shop drawings, samples, change orders and other submissions of the Contractor(s) only for conformance with the design concept of the Project and for compliance with the information given in the Construction Documents. (h) Upon completion of any portion of the Work, and prior to payment to the Contractor(s) of amounts due for such portion of the work, the CONSULTANT shall certify to the CITY in writing the percentage of the Work of the Contractor(s) which has been performed and completed in conformance with the Construction Documents. Task 7 - Construction Support Services (Project Representative) (a) A Project Representative(s) shall be mutually selected by the CONSULTANT and the CITY with duties, responsibilities and limitations of authority to be set forth in writing, as agreed to by the City and the CONSULTANT. Provisions shall be included to permit the CONSULTANT to impart instructions and interpretations to the Project Representative(s) for the purpose of implementing the golf course plans and their design intent. The Project Representative mutually agreed upon by all parties shall be the firm DL Siemens Inc, who shall be represented by Dale Siemens, California Contractors License #872425, Class A, 1039 E. Santa Ana Ave, Fresno, CA. (b) The on-site observations by Project Representative(s) of the Work as it progresses is for the purpose of providing further protection for the CITY against the failure of the Work to conform to the Construction Documents, but providing the services of the Project Representative(s) shall not modify the rights or obligations of the CONSULTANT as provided herein. (c) The Project Representative(s) shall be under contract by the CONSULTANT. Page 5 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 (d) Through the on-site observations by Project Representative(s) of the Work as it progresses, the CONSULTANT shall consult with the CITY on matters pertaining to performance of the Work and conformance to the design and specifications of the golf course aspects of the Work. (e) The Project Representative(s) shall perform the following construction administration services from award of the construction contract by the CITY through final acceptance of the Project: (1) Provide regular, on-site observations averaging 3 days per week of the Project Representative’s time to ascertain progress, compliance and quality of the work performed by the Contractor(s) (2) Review of weekly progress reports by the Contractor(s) (3) Provide coordination of the site visits of the CONSULTANT (4) Coordinate required meetings for scheduling, approvals and administration including: (a) Leading weekly or bi-weekly on-site progress construction meetings including minutes and notes thereof. (b) Processing and tracking of contractor submittals as required by the project documents (c) Review, comment and updating of Contractor’s project progress schedule. (5) Provide contract administration and coordinate timely payment approvals consistent with that of the CONSULTANT (6) Impart instructions and interpretations from the Golf Course Architect to the Contractor (7) Meet with the CITY in person or via telephone and/or email to convey pertinent information regarding the project status, discuss issues, make advisements, and record CITY decisions and directives in matters of the construction. (8) The Project Representative shall not be empowered to, nor shall he make decisions on behalf of the CITY. The Project Representative shall only be empowered to convey CITY decisions timely to the Contractor and/or Golf Course Architect. Page 6 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 (9) Coordinate, document and accept comments, observations, concerns of CITY provided staff, consultants or maintenance contractors with regard to the project progress and conformance with the Construction Documents. (10) Coordinate the projects grow-in acceptance schedule and “punch-list” between the Golf Course Contractor and the CITY’s Golf Course Maintenance Contractor. Task 8 - Environmental Mitigation Monitoring Services (ICF/Golfauna) (a) Mitigation Measure AQ1: Implement Tailpipe Emission Reduction for Project Construction (ICF) ICF will assist with the following compliance portion of the mitigation measure: The City’s construction Contractor shall develop a plan for submittal to the City that demonstrates that the off-road equipment (more than 50 horsepower) to be used in construction of the Project (i.e., owned, leased, and subcontractor vehicles) will achieve a Project-wide fleet-average 20 percent NOX reduction. Acceptable options for reducing emissions include the use of late-model engines, low-emission diesel products, alternative fuels, engine retrofit technology, after- treatment products, add-on devices such as particulate filters, and/or other options as such become available. ICF will collect monthly construction equipment data log sheets and quantify emissions based on data log sheets to verify off-road construction equipment of more than 50 horsepower will achieve a Project-wide fleet-average 20 NOX reduction. Deliverable: Prepare a memorandum detailing the methodology and results and whether the Project-wide fleet-average 20 NOX reduction is achieved. Assumptions: ICF International can provide example construction equipment log sheets for the construction contractor. It is assumed that monthly construction equipment log sheets will be compiled by the City’s construction Contractor and submitted to ICF International by the 15th day of the next month. Schedule/Timing: Assumes 20 months of data collection. (b) Mitigation Measure BIO-1: Develop and Implement Worker Awareness Training to provide one day of worker training and handout to workers (Golfauna) Golfauna will create worker awareness handout and training sign-in sheet and provide one day of worker training for the Contractor’s forces. Page 7 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Deliverables: One-day training session for Contractor’s crew. Worker training handout and sign-in sheet. Assumptions: One day is the minimum amount of time required for the training. Any additional training will be provided on an as-needed basis as an Additional Service. Schedule/Timing: Immediately before construction begins. Advance notice needed to create training handout. (c) Mitigation Measure BIO-2a: Conduct Preconstruction Botanical Surveys (ICF) ICF will conduct a one-day survey for all suitable habitat for spring flowering plants. Deliverable: Memo and map of findings. Assumptions: One day survey. Plants previously surveyed in August 2013 do not need to be surveyed again. Schedule/Timing: Mid-April (but if construction will start in April can be done early in the month). (d) Mitigation Measure BIO-3: Establish Buffer Zones for Nesting Raptors and Migratory Birds (Golfauna) Golfauna will conduct a one-day site visit prior to September (not needed after September) to survey all vegetation for bird nests. This survey needs to be conducted prior to any vegetation removal. Deliverable: Nesting bird memo and map of findings, and buffers/guidance if necessary. Assumptions: It is assumed that the nesting bird and burrowing owl survey will be conducted on the same day. Assumes that only one survey will be necessary, implying that the whole site becomes active at the same time. If parts of the site become active at different times, additional surveys will be necessary at additional cost. If nests are found, Golfauna will consult with CA Department of Fish & Wildlife and will establish buffer and monitor active nesting sites until birds have fledged. Additional surveys may be required to confirm that birds have fledged, at additional cost. Schedule/Timing: Survey to be conducted seven days prior to the commencement of construction. Page 8 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 (e) Mitigation Measure BIO-4: Implement Survey and Avoidance Measures for Western Burrowing Owls Prior to Construction Activities (Golfauna) Golfauna will conduct a one-day survey prior to construction to determine if owls are present on-site. Deliverable: Memo and map, and buffers/guidance if necessary. Assumptions: It is assumed that the nesting bird and burrowing owl survey will be conducted on the same day. Schedule/Timing: Survey to be conducted seven days prior to the commencement of construction. (f) Mitigation Measure BIO-5: Implement Survey and Avoidance Measures for California Clapper Rail and California Black Rail Prior to Construction Activities (Golfauna) A qualified biologist from Golfauna will conduct the protocol survey. The surveys need to be conducted separately for the two species. Deliverable: Memo and maps. Buffers/guidance/monitoring/species avoidance plan, if necessary. Oversee the installation of exclusionary fencing, if necessary. Assumptions: One survey for each species of Rail. If species found on-site, exclusionary fencing will be required. It is assumed that the City’s Contractor will install the fence per Golfauna biologist’s direction. Schedule/Timing: 48 hours prior to the start of construction. (g) Mitigation Measure BIO-6: Implement Survey and Avoidance Measures for Salt Marsh Harvest Mouse and Salt Marsh Wandering Shrew Prior to Construction Activities (Golfauna) A qualified biologist and species specialist from Golfauna will conduct a survey of the site to identify potential mouse/shrew habitat areas and to search for live specimens. It is assumed that it will take up to four days for city staff or the Contractor to remove pickleweed by hand from wetland areas to be impacted by the Project. A qualified biologist from Golfauna will be onsite during the pickleweed removal. Deliverable: Memo and maps. Buffers/guidance/monitoring/species avoidance plan, if necessary. Oversee the pickleweed removal and installation of exclusionary fencing, if necessary. Page 9 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Assumptions: It is assumed that the City’s Contractor will remove the pickleweed and, if necessary, install the exclusionary fence per the Golfauna biologist’s direction. It is assumed that Salt Marsh Harvest Mouse and Salt Marsh Wandering Shrew will not be found onsite. If the species are observed, then 50 hours will be required to write a species avoidance plan and conduct agency coordination, at additional cost. Schedule/Timing: Hand removal of pickleweed by City staff or the Contractor must occur prior to start of construction. (h) Mitigation Measure BIO-7: Avoid and Protect Jurisdictional Wetlands during Construction (ICF) ICF biologist will be out on the site for one day pin-flagging (staking) wetlands for fencing installers. Deliverable: Oversee the installation of protective fencing. Assumptions: It is assumed that the City’s Contractor will install the fence per ICF biologist’s direction. Schedule/Timing: Prior to start of construction. (i) Mitigation Measure CUL-1: Conduct Worker Awareness Training for Archaeological Resources Prior to Construction (ICF) ICF cultural resource specialist will conduct one-day training for Contractor’s construction crew regarding what to look for with respect to archaeological resources. Deliverable: Training of Contractor’s construction crew. Assumptions: One-day training. CUL-1 and CUL-4 training will be combined. Schedule/Timing: Prior to start of construction. (j) Mitigation Measure CUL-3: Conduct a Preconstruction Paleontological Resources Field Survey and Paleontological Resources Inventory and Evaluation (ICF) ICF cultural resource specialist will conduct one-day paleontological resources field survey within native soils to determine potential for finding any resources. Page 10 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Deliverable: Memo summarizing field survey. Assumptions: One-day field survey. Schedule/Timing: Prior to start of construction work within native soils. (k) Mitigation Measure CUL-4: Conduct Worker Awareness Training for Paleontological Resources Prior to Construction (ICF) ICF cultural resource specialist will conduct one-day training for Contractor’s construction crew regarding what to look for with respect to paleontological resources. Deliverable: Training of Contractor’s construction crew. Assumptions: One-day training. CUL-1 and CUL-4 training will be combined. Schedule/Timing: Prior to start of construction. (l) Respond to Water Board Letter and Update Mitigation and Monitoring Plan (MMP) (ICF) ICF will provide a formatted response letter as a forward to the updated MMP and include each comment from the Water Board (3rd letter of Incomplete) and a brief response to each question, in most cases referencing the Updated MMP. Deliverable: A maximum of one (1) round of revisions to address the City comments, and one (1) final response letter. ICF will update the MMP per the time available and per what seems reasonable to provide for a project of this size; ICF will consult with the City on approach for addressing comments; This includes the creation of two new figures; ICF will provide feedback on the native seed mix. Deliverable: A maximum of one (1) round of revisions to address City comments, and one (1) final report, plus two new graphics will be produced; one which shows existing versus created wetlands, and one which shows a cross- section of wetland restoration. (m) Jurisdictional Wetland Delineation (additional work and exhibits) (ICF) ICF will coordinate with the US Army Corps of Engineers regarding field Page 11 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Meeting to verify the Project wetlands delineation. Prepare materials for and attend verification meeting. Make modifications to the wetland delineation map based on field verification meeting with Corps staff. Print copies of Wetlands Delineation report/figures and provide to City. Deliverable: Revised Wetlands Delineation Map ADDITIONAL SERVICES The following services may be provided by the Consultant if approved in advance by the City’s Project Manager. Mitigation Measure BIO‐2b: Confine Construction Disturbance and Protect Special‐ Status Plants during Construction (Golfauna) (As‐needed) This mitigation measure is only required if special‐status plants are observed during the pre‐construction survey. Golfauna staff will consult with CA Department of Fish & Wildlife, identify exclusion areas, and oversee installation of protective fencing. Deliverable: One day to oversee the installation of fencing. Assumptions: 2‐3 of hours to consult with agencies is assumed. It is assumed that the City’s Contractor will install the fence per Golfauna biologist’s direction. Schedule/Timing: 2‐3 days prior to construction Mitigation Measure BIO‐2c: Compensate for Loss of Special‐Status Plants (Golfauna) (As‐needed) This mitigation measure is only required if special‐status plants are observed during the pre‐construction survey. Golfauna will prepare a compensation plan for loss of special‐status plant species. Deliverable: Compensation Plan for loss of special‐status plant species. Assumptions: There may be costs from other contractors, primarily associated with preserving a population of the species of interest, or with a nursery collecting seed and creating a new population. These tasks are not included in the scope of work. Schedule/Timing: 2‐3 days prior to construction Page 12 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Mitigation Measure BIO‐2d: Develop and Implement Special‐Status Plant Species Monitoring Plan (Golfauna) (As‐needed)* This mitigation measure is only required if special‐status plants are observed during the pre‐construction survey. Golfauna staff will prepare a monitoring plan. Typically CA Department of Fish & Wildlife requires monitoring for a period of five years. Services are to conduct monitoring for two days a year for five years. Deliverable: Monitoring plan and annual monitoring reports. Assumptions: Five year monitoring period. Schedule/Timing: During blooming period for species observed twice a year. * Services required after September 2015 may be assigned to the City under separate agreement. Mitigation Measure BIO‐2e: Deposit Landscape Waste Exclusively in Developed or Ruderal Areas Absent of Special‐Status Plant Species (ICF) (As‐needed) If special‐status plants are found during pre‐construction survey, ICF will prepare a handout and give training to the City’s Golf Course operations and maintenance staff regarding where to deposit landscape waste in order to avoid impacting special‐status plants. Deliverable: O&M worker awareness training. Special‐status plant species handout and trainee sign‐in sheet. Assumptions: One day training for City’s Golf Course operations and maintenance staff. Schedule/Timing: After construction, but before golf course becomes operational (e.g., start of O&M activities). Mitigation Measure (CUL-2): Stop Work if Cultural Resources, Including Human Remains, are Encountered during Ground-Disturbing Activities (ICF) (As-needed) In the unlikely event of finding any human remains, ICF cultural resources specialist will visit the site and advise the crew regarding recovery of artifacts. Deliverable: Site visit and guidance. Memo of findings and recommendations for further action. Page 13 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Assumptions: Does not assume preparation of a treatment plan or coordination with Native American tribes. Assumes 16 hours of monitoring. Schedule/Timing: As needed during construction. Mitigation Measure CUL-5: Stop Work if Paleontological Resources are Encountered during Ground-Disturbing Activities (ICF) (As-needed) In the unlikely event of finding any paleontological resources, ICF cultural resources specialist will visit the site and advise the crew regarding recovery of artifacts. Deliverable: Site visit and guidance. Memo of findings and recommendations for further action. Assumptions: Does not assume preparation of a treatment plan. Assumes 16 hours of monitoring. Schedule/Timing: As needed during construction. Ongoing Mitigation Monitoring and Resource Agency Coordination Support (As-needed) Additional time is provided in the scope of work to advise the City regarding mitigation measures and to provide specialists on-call to visit the site on short notice as need be. Additional items may come up during coordination with the resource agencies permitting the Project. This is intended to be as‐needed support for permitting and resource agency coordination for items that may arise with the Corps, Water Board, BCDC, USFWS, and/or CDFW to ensure that all permitting needs have been met and, if not, to understand their needs for permitting issuance. Additional Project Administration Costs and Development of Contingency Plan Forrest Richardson and subconstultants shall provide additional project administration tasks if the start of construction on the Golf Course Reconfiguration Project is delayed beyond May 2014. Forrest Richardson shall prepare a revised set of construction documents that redesign the Golf Course to avoid impacting the existing on-site wetlands to be implemented as a contingency if the City is not able to secure permits for the project as originally designed (Contingency Plan). Forrest Richardson shall coordinate with Duininck, Inc. to secure pricing for the revised project design. DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 EXHIBIT “B-1” AMENDMENT NO. ONE SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Weeks From NTP Task 6 - Construction Support Services (Golf Course Architect) 70 Task 7 - Construction Support Services (Project Representative) 70 Task 8 - Environmental Mitigation Monitoring Services (ICF/Golfauna) 70 Page 15 of 19 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 EXHIBIT “C-2” AMENDMENT NO. ONE COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A-2” (“Basic Services”) and reimbursable expenses shall not exceed $344,262. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $456,693. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $344,262 and the total compensation for Additional Services does not exceed $112,431. BUDGET SCHEDULE NOT TO EXCEED AMOUNTS FEES REIMBURSABLES Task 6 $ 98,378 $ 30,000 (Construction Support Services - Golf Course Architect) Task 7 $ 160,913 (Construction Support Services – Project Representative) Task 8 $ 53,221 $ 1,750 (Environmental Mitigation Monitoring Services - ICF/Golfauna) Sub-total Basic Services $ 312,512 Reimbursable Expenses $ 31,750 Total Basic Services and Reimbursable expenses $ 344,262 Additional Services (Not to Exceed) $ 112,431 Maximum Total Additional Compensation $ 456,693 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: (a) Telephone and communications charges; computer-aided-drafting/design (CADD) plots, photocopies and other reproductions; all expendable surveying supplies; and any required and approved travel expenses, plus a per diem amount of $50 per day per person for food when traveling or on-site for six (5) or more continuous hours. (b) Mileage at a rate of fifty-nine (59) cents per mile for use of personal or company vehicles. All requests for payment of Reimbursable Expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $31,750 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit “C-1”. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. Potential Additional Service tasks are outlined in Exhibit “A-2” of this Agreement. DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 FEE BREAKDOWN The fees listed above are based upon the following cost breakdown submitted by the CONSULTANT: Task 6 (Construction Support Services - Golf Course Architect) Task 7 (Construction Support Services – Project Representative)   Month Year Monthly Fee Golf Course Architect Monthly Fee Project Representative Project Representative Notes Construction Support Project Representative* Notes June 2014 $ 7,027.00 $11,493.75 Active - 3 days per week July 2014 $ 7,027.00 $11,493.75 Active - 3 days per week August 2014 $ 7,027.00 $11,493.75 Active - 3 days per week September 2014 $ 7,027.00 $11,493.75 Active - 3 days per week October 2014 $ 7,027.00 $11,493.75 Active - 3 days per week November 2014 $ 7,027.00 $11,493.75 Active - 3 days per week December 2014 $ 3,513.50 $5,746.88 Limited - 5 to 6 days per month January 2015 $ 3,513.50 $5,746.88 Limited - 5 to 6 days per month February 2015 $ 3,513.50 $5,746.88 Limited - 5 to 6 days per month March 2015 $ 3,513.50 $5,746.88 Limited - 5 to 6 days per month April 2015 $ 7,027.00 $11,493.75 Active - 3 days per week May 2015 $ 7,027.00 $11,493.75 Active - 3 days per week June 2015 $ 7,027.00 $11,493.75 Active - 3 days per week July 2015 $ 7,027.00 $11,493.75 Active - 3 days per week August 2015 $ 7,027.00 $11,493.75 Active - 3 days per week September 2015 $ 7,027.00 $11,493.75 Active - 3 days per week Total 2015 $ 98,378.00 $160,913.00 Reimbursable 2015 $ 30,000.00 n/a* Total NTE 2015 $128,378.00 $160,913.00 * Reimbursable Expenses are included in basic Monthly Fee.  Task 8 (Environmental Mitigation Monitoring Services - ICF/Golfauna) Task 8a (Mitigation Measure AQ-1) (ICF) $ 19,402 Task 8b (Mitigation Measure BIO-1) (Golfauna) $ 2,046 Task 8c (Mitigation Measure BIO-2a) (ICF) $ 1,901 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Task 8d (Mitigation Measure BIO-3) (Golfauna) $ 853 Task 8e (Mitigation Measure BIO-4) (Golfauna) $ 341 Task 8f (Mitigation Measure BIO-5) (Golfauna) $ 5,610 Task 8g (Mitigation Measure BIO-6) (Golfauna) $ 5,610 Task 8h (Mitigation Measure BIO-7) (ICF) $ 1,314 Task 8i (Mitigation Measure CUL-1) (ICF) $ 1,065 Task 8j (Mitigation Measure CUL-3) (ICF) $ 1,120 Task 8k (Miitgation Measure CUL-4) (ICF) $ 636 Task 8l (Respond to Water Board letter/update MMP) (ICF) $ 9,546 Task 8m (Jurisdictional Wetland Delineation) (ICF) $ 3,777 TASK 8 TOTAL $ 53,221 Estimated Additional Services Mitigation Measure BIO-2b (Golfauna) $ 1,364 Mitigation Measure BIO-2c (Golfauna) $ 3,410 Mitigation Measure BIO-2d (Golfauna) $ 10,912 Mitigation Measure BIO-2e (ICF) $ 1,940 Mitigation Measure CUL-2 (ICF) $ 2,088 Mitigation Measure CUL-5 (ICF) $ 2,088 Additional Mitigation Monitoring & Agency Coordination $ 17,200 Contingency for Golf Course Architect Construction Services $ 12,838 Contingency for Project Representative Construction Services $ 16,091 Additional Project Administration $ 4,500 Development of Contingency Plan $ 40,000 ADDITIONAL SERVICES TOTAL $112,431 DocuSign Envelope ID: DA17B836-1991-4C43-BD62-9B3D602DBDF7 Not Yet Approved  140604 sdl 00710403B      1  Resolution No. _____  Resolution of the Council of the City of Palo Alto Amending Resolution  Number 9296, Section 2, Extending the Term of an Exception to Chapter  10.48 [Trucks and Truck Routes] of the Palo Alto Municipal Code For the  Limited Purpose of Allowing a Transfer of Soil from the Stanford  University Campus to the Palo Alto Municipal Golf Course and Adjacent  Areas         The Council of the City of Palo Alto RESOLVES as follows:     SECTION 1. The Council adopted Resolution Number 9296 on November 13, 2012.  The adopted resolution is attached as “Attachment A.”  This resolution pertains to the  permitted time, within which the transfer of soils from the Stanford University campus to the  San Francisquito Creek Joint Powers Authority’s regional flood control project and the Palo Alto  Municipal Golf Course reconfiguration project (the “Projects”) may occur, consistent with Palo  Alto Municipal Code section 10.48.090(c).     SECTION 2. Section 2 of Resolution Number 9296 is hereby amended in its entirety to  read, as follows:     “The Council hereby approves the following limited exception to the application of  Chapter 10.48 (Truck and Truck Routes) to the Projects: Trucks depositing soil from  construction at the Stanford University campus that are transported to the Palo Alto Municipal  Golf Course and immediately adjacent areas for use in the construction of the San Francisquito  Creek levee project or for use in the Golf Course reconfiguration project may accomplish such  deliveries by travelling on Oregon Expressway.  Any such trips shall take place between 9 a.m.  and 4 p.m.  This exception shall sunset on December 31, 2014.”        //        //        //    Not Yet Approved  140604 sdl 00710403B      2  SECTION 3.  An EIR for the San Francisquito Creek Flood Reduction, Ecosystem  Restoration, and Recreation Project, San Francisco Bay to Highway 101 project was certified by  the San Francisquito Creek Joint Powers Authority on October 25, 2012.  An EIR for the Palo  Alto Municipal Golf Course Reconfiguration Project was certified by Council on February 3,  2014.    INTRODUCED AND PASSED:    AYES:    NOES:    ABSENT:    ABSTENTIONS:    ATTEST:         APPROVED:    __________________________       ______________________________  City Clerk         Mayor    APPROVED AS TO FORM:         ______________________________          City Manager  __________________________  Senior Asst. City Attorney         ______________________________          Director of Public Works                                       Resolution No. 9296 Resolution ofthe Council ofthe City of Palo Authorizing an Exception to Chapter 10.48 [Trucks and Truck Routes] of the Palo Alto Municipal Code For the Limited Purpose of Allowing a Transfer of Soil from the Stanford University Medical Center Construction Project to the Palo Alto Golf Course and Adjacent Areas The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Findings. A. There is a unique opportunity to transfer soil from the Stanford University Medical Center project to the San Francisquito Creek JPA regional flood control project and/or the Palo Alto Golf Course reconfiguration and playing fields project. B. John ArriHaga, a local developer, has offered to transport soil from the SUMC project to the Palo Alto Golf Course for the flood control project and later use at the golf course and possible future playing fields at no cost to the City or the SFCJPA. C. This local transfer will significantly reduce greenhouse gases, especially if trucks are permitted to travel on Oregon Expressway, which is the shortest vehicle route between the SUMC project site and the flood control project site. D. The Council desires to make a limited exception to Palo Alto Municipal Code Section 10.48.090. SECTION 2. Limited Exception to Palo Alto Municipal Code Chapter 10.48 for Flood Control Project. The City Council hereby approves the following exception to the provisions of Chapter 10.48 (Trucks and Truck Routes): Trucks depositing soil from construction at the Stanford University campus at the Palo Alto Golf Course and immediately adjacent areas for use in the construction of the San Francisquito Creek levee project or for use in the Golf Course re- configuration project or the Palo Alto Playing Fields and landscape buffer projects may accomplish such deliveries by traveling on Oregon Expressway. Any such trips shall take place between 9 a.m. and 4p.m. This exception shall sunset on June 30, 2014. II II II II 121114 jb 0130994 1 SECTION 3. An EI.R for the San Francisquito Creek Flood Reduction, Ecosystem Restoration, and Recreation Project, San Francisco Bay to Highway 101 project was certified by the San Francisquito Creek Joint Powers Authority on October 25, 2012. INTRODUCED AND PASSED: November 13,2012 AYES: BURT, ESPINOSA, HOLMAN, PRICE, SCHARFF, SCHMID, SHEPHERD NOES: ABSENT: ABSTENTIONS: KLEIN, YEH APPROVED: APPROVED AS TO FORM: df7~ Mayor .-.~. it ( . c:r-." Senior Asst. City Attorney 121114 jb 0130994 2 140506 sdl 00710388 [Type text] ****NOT YET APPROVED***** RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DECLARING INTENTION TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS TO BE ISSUED BY THE CITY A. The City proposes to undertake the project referenced below, to issue, execute and deliver a financing lease, either on a private placement basis or using certificates of participation, on a tax-exempt basis (the “Lease”) to finance such project, and use a portion of the proceeds of the Lease to reimburse expenditures made for the project prior to the issuance of the Lease. B. United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure. C. It is in the public interest and for the public benefit that the City declares its official intent to reimburse the expenditures referenced herein. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE, as follows: SECTION 1. The City intends to cause the Lease to be executed and delivered for the purpose of paying the costs of the Palo Alto Municipal Golf Course Reconfiguration Project, more particularly described in Exhibit A (the "Project"). SECTION 2. The City hereby declares that it reasonably expects (i) to pay certain costs of the Project prior to the date of execution and delivery of the Lease, and (ii) to use a portion of the proceeds of the Lease for reimbursement of expenditures for the Project that are paid before the date of execution and delivery of the Lease. SECTION 3. The maximum principal amount of the Lease is expected to be Seven Million dollars ($7,000,000). / / / / / / 140506 sdl 00710388 2 SECTION 4. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act and CEQA Guidelines, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ ________________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ Senior Asst. City Attorney City Manager ______________________________ Director, Administrative Services ______________________________ Director, Community Services 140506 sdl 00710388 3 EXHIBIT A Project Description The Palo Alto Municipal Golf Course Reconfiguration Project (Project) will reconfigure the entire Golf Course to an 18-hole, par 71, regulation-length course measuring 6,685 yards from the back tees. Following the designation of approximately 10.5 acres of the existing Golf Course for a future recreation facility and the loss of 7.4 acres to be incorporated into a widened San Francisquito Creek, the resultant area of the reconfigured Golf Course will be reduced to approximately 156 acres. The existing driving range will be expanded to the north by approximately 8,000 square feet to accommodate six new driving stations. A new Youth Golf Area including elements designed to attract young people to the game of golf will be established along Embarcadero Road south of the existing driving range. At the far western end of this area will be a practice putting green with sand bunkers. The Project will include new 6.5- foot-wide concrete golf cart paths, concrete footpaths at the practice putting green area, and compacted gravel maintenance path connections between the concrete cart paths. The Project will also include a new 300 square foot restroom building located on the Golf Course. The Project will reduce the Golf Course managed turf area by 40 percent from 135 acres to 81 acres. During replacement, nonnative plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (i.e., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: managed turf area, non-turf native grass zones, and Baylands native zones. The Project will also include a dramatic increase in topographic variability throughout the course, including buffer mounds which will act as a visual and acoustical barrier between the Golf Course and the future recreation area. The buffer mounds will be 15 to 25 feet tall. Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new 300 native trees to be planted on the course as part of the Project, the protection of 500 naturally-occurring oak saplings on the Arastradero Preserve, and the restoration of two acres of native bay ecosystem habitat at a site in Byxbee Park near the Golf Course. The Project will replace the existing Golf Course irrigation system with a new high-density polyethylene (HDPE) pipe system with limited metal components to eliminate corrosion and leaks. The sprinkler heads will be individually controlled and adjustable to provide full or part circle coverage. The Project will also include underground soil sensor units which will monitor soil moisture levels to prevent overwatering. Overall water usage for Golf Course irrigation is expected to be reduced by at least 30 percent. Attachment F ORDINANCE NO.xxxx ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 2015 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $2,501,569 TO CAPITAL IMPROVEMENT PROGRAM PROJECT NUMBER PG- 13003, GOLF COURSE RECONFIGURATION AND BAYLANDS ATHLETIC CENTER IMPROVEMENTS PROJECT AND RECOGNIZE $1,300,000 IN REVENUE FROM RECLAIMED SOIL IMPORTS AND APPROVE THE NEED OF AN ADDITIONAL $1,148,437 IN CERTIFICATE OF PARTICIPATION PROCCEEDS FOR AN AGGREGATE AMOUNT $6,148,437 TO FINANCE THE CONSTRUCTION OF THE GOLF COURSE RECONFIGURATION. The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015; and B.On July 23, 2012 City Council approved the Golf Course Reconfiguration Project (CIP Project PG-13003) that includes a reconfiguration of the Course and 10.5 acres for playing fields or other recreational amenities; and C. The City Council amended the Fiscal Year 2013 Golf Course Reconfiguration project budget to provide funding in the amount of $545,338 from the Infrastructure Reserve to expand the contract with Golf Course Architect Forrest Richardson, to develop Golf Course design options and complete the required Environmental Impact Report; and D. The Fiscal Year 2014 capital budget included an appropriation of $8,000,000 for construction bringing the total appropriation for CIP Project PG-13003 to $8,545,338,an amount insufficient to cover the revised project cost of $11,046,907;and E. To date, $598,470 has been expended in CIP Project PG- 13003, leaving an available balance of $7,946,868, requiring additional funding of $2,501,569 for a total of $10,448,437; and F. The Fiscal Year 2014 budget for CIP Project PG-13003 assumed $3,000,000 in revenue from the San Franscisquito Creek Joint Powers Authority and $5,000,000 in certificate of participation proceeds, which is an insufficient amount to cover current project needs;and G. Additional revenue of $1,300,000 from the use of reclaimed soil has been identified to offset the cost of construction; and H. Therefore, an additional amount of $1,148,437 in certificate of participation proceeds, the aggregate principal amount of $6,148,437,will be needed for the financing of the Golf Course Reconstruction Project for Council consideration in Fiscal Year 2015. SECTION 2.The sum of Two Million Five Hundred One Thousand Five Hundred Sixty Nine ($2,501,569) is hereby appropriated to CIP Project PG-13003, Golf Course Reconfiguration and Baylands Athletic Center Project. SECTION 3.The sum of One Million Three Hundred Thousand ($1,300,000) is hereby recognized as revenue from reclaimed soil for CIP Project PG-13003, Golf Course Reconfiguration and Baylands Athletic Center Project. SECTION 4.The sum of One Million One Hundred Forty Eight Thousand Four Hundred Thirty Seven ($1,148,437) is hereby recognized as revenue as from additional certificate of participation proceeds for CIP Project PG-13003, Golf Course Reconfiguration and Baylands Athletic Center Project. SECTION 5. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 6. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 7.Per the requirements of the California Environmental Quality Act (CEQA), this project is categorically exempt from CEQA, per Section 15311, Accessory Structures. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: _________________________ City Clerk __________________________ Mayor APPROVED AS TO FORM: _________________________ Senior Assistant City Attorney __________________________ City Manager __________________________ Director of Public Works __________________________ Director of Administrative Services Attachment G ORDINANCE NO.xxxx ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE GENERAL FUND BUDGET FOR FISCAL YEAR 2015 TO INCREASE GOLF COURSE REVENUE ESTIMATES BY $324,800 AND PROVIDE ADDITIONAL APPROPRIATION OF $324,800 IN THE COMMUNITY SERVICES DEPARTMENT BUDGET FOR GOLF COURSE OPERATIONS FOR A TWO MONTH PERIOD. The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015; and B.As part of the approval of the Fiscal Year 2014 Adopted Capital Budget, the City Council approved the Golf Course Reconfiguration Project; and C. The Fiscal Year 2015 Adopted Operating Budget assumed the closure of the Golf Course effective July 1,2014; and D.In anticipation of the Golf Course Reconfiguration Project, the City applied for permits from the State Water Board; and E. Due to delays in receiving permit approval which has delayed construction as well as contractual obligations with the City’s concessionaires at the Golf Course, staff recommends keeping the Golf Course open through August 31, 2014 or until the State Water Board approves regulatory permits, whichever is sooner. SECTION 2.The revenue estimate for Charges for Services in the General Fund is increased by Three Hundred and Twenty Four Thousand Eight Hundred Dollars ($324,800) for Golf Course related activities. SECTION 3.The expenditures budget for Golf Course related activities is increased by Three Hundred and Twenty Four Thousand Eight Hundred Dollars ($324,800)for Golf Course related activities. SECTION 4. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 5. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 6.The actions taken in this ordinance do not constitute a project requiring environmental review under the California Environmental Quality Act (CEQA). INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager City Attorney Director of Planning and Community Environment Director of Administrative Services Attachment H BAYLANDS GOLF LINKS – PALO ALTO BID SUMMARY Dunnick Wadsworth Landscapes Unlimited Frontier Item Quantity Units Unit Cost Total Bid Item Quantity Unit Unit Price Bid Amount Bid Amount Bid Amount Bid Amount 1 Mobilization/Bond (NTE 1.5% of Total Bid) 1 LS $105,000 $105,000 1 1 LS $133,000 $133,000 $141,400 $67,500 $128,500 2 Staking/Layout 1 LS $35,000 $35,000 2 1 LS $120,000 $120,000 $88,500 $45,000 $24,485 3 Existing Tree Protection 120 ea $65 $7,800 3 1 LS $75,000 $75,000 $48,493 $29,000 $57,800 4 Construction Mitigation Measures Cost Estimate 1 LS $30,000 $30,000 4 1 LS $85,000 $85,000 $10,000 $38,000 $228,670 Schedule 1 Total $177,800 Subtotal $413,000 $288,393 $179,500 $439,455 5 Demo Cart Paths/Bury 1 LS $54,500 $54,500 5 1 LS $25,000 $25,000 $40,963 $42,500 $138,400 6 Demo Existing Features 1 LS $54,000 $54,000 6 1 LS $35,000 $35,000 $10,000 $15,500 $34,720 7 Tree Removal/Bury 650 Ea $100 $65,000 7 1 LS $115,000 $115,000 $156,730 $95,000 $59,808 Schedule 2 Total $173,500 Subtotal $175,000 $207,693 $153,000 $232,928 8 Strip Existing Sod, Bury or Till 135 AC $400 $54,000 8 1 LS $25,000 $25,000 $40,000 $55,000 $179,840 9 Baylands Areas/Pond Earthwork (cuts) 70000 CY $2 $112,000 9 1 LS $201,000 $201,000 $166,500 $116,768 $227,025 10 Fairway Topsoil Management (Harvest /place Sand Cap) 38000 CY $3 $106,400 10 1 LS $135,000 $135,000 $260,000 $174,420 $485,360 11 Place Import Fill from Stockpile 60000 CY $3 $162,000 11 1 LS $225,000 $225,000 $325,000 $356,000 $158,500 12 Oversee/Shape GC Placement of Import by Others 260000 CY $1 $260,000 12 1 LS $185,000 $185,000 $520,000 $390,000 $279,030 Add unit fopr import 13 10000 cy $3 $30,000 $32,500 $35,600 $17,300 Deductive unit for export 14 -10000 cy $1 -$10,000 -$32,500 -$13,000 -$17,300 13 SWPPP & Winter-Over Construction 1 LS $70,000 $70,000 15 1 LS $140,000 $140,000 $301,542 $290,000 $60,500 14 Rough Shaping 20 Holes $6,300 $126,000 16 1 LS $175,000 $175,000 $213,800 $285,000 $308,750 16 Bunker Shaping - New 44 Each $1,200 $52,800 15 Grade/Shape Buffer Mounding 1 LS $17,000 $17,000 17 1 LS $10,000 $10,000 $7,000 $15,000 $21,555 Schedule 3 Total $960,200 Subtotal $1,116,000 $1,833,842 $1,704,788 $1,720,560 17 New Subsurface Drainage Piping 4" Perf 18328 LF $5 $91,641 18 17500 lf $8 $140,000 $139,125 $151,375 $134,750 18 New Subsurface Drainage Piping 6" Non-Perf 27012 LF $6 $162,072 19 1 ls $265,000 $265,000 $350,881 $246,000 $281,940 19 New Catchments 235 EA $130 $30,550 20 Drain Observation Risers 50 EA $75 $3,750 21 Drain Outfalls 24 EA $350 $8,400 22 Connect New Drains to Existing Inlets 21 EA $550 $11,550 23 Bury/Raise/Connect to Existing Backbone Drain Inlets 21 Ea $2,000 $42,000 20 1 LS $35,000 $35,000 $27,517 $22,000 $19,930 24 Drainage Culvert Pipes 1 LS $12,000 $12,000 21 1 LS $75,000 $75,000 $10,540 $6,500 $8,500 25 Greens Construction USGA Method 147300 SF $6 $810,150 22 1 LS $745,000 $745,000 $745,743 $709,500 $741,625 26 Tee Construction 141000 SF $1 $197,400 23 1 LS $175,000 $175,000 $165,539 $213,000 $256,040 27 Bunker Construction New 43840 SF $4 $175,360 24 1 LS $225,000 $225,000 $424,031 $177,000 $238,600 Schedule 4 Totals $1,544,873 Subtotal $1,660,000 $1,863,376 $1,525,375 $1,681,385 28 Irrigation - In play areas 1 LS $1,527,300 $1,527,300 25 1 LS $1,987,000 $1,987,000 $1,860,296 $1,875,000 $1,940,225 29 Irrigation - Native areas 1 LS $184,000 $184,000 26 1 LS $115,000 $115,000 $80,040 $124,000 $116,600 30 Irrigation - Buffer Mounding 1 LS $35,000 $35,000 27 1 LS $35,000 $35,000 $14,690 $21,200 35 Irrigation – Embarcadero Road Area 1 LS $15,000 $15,000 28 1 LS $25,000 $25,000 $27,670 $129,000 $14,310 31 Irrigation - Athletic Field Supply Pipeline 1 LS $24,100 $24,100 29 1 LS $15,000 $15,000 $21,330 $19,000 $24,650 32 Irrigation - Youth Area 1 LS $40,500 $40,500 1 LS 33 Irrigation - Practice Area 1 LS $40,000 $40,000 1 LS 34 Irrigation - Tree Bubblers 1 LS $26,300 $26,300 1 LS 36 Irrigation Staking, Programming and Asbuilts 1 LS $42,000 $42,000 30 1 LS $45,000 $45,000 $42,270 $39,500 $44,000 37 Replacement of Irrigation Pump Station 1 LS $220,000 $220,000 31 1 LS $235,000 $235,000 $305,982 $287,500 $315,000 Schedule 5 Totals $2,154,200 Subtotal $2,457,000 $2,352,278 $2,474,000 $2,475,985 38 Cart Paths and Foot Paths 208000 SF $3 $624,000 32 214000 sf $3 $642,000 $691,220 $716,900 $642,000 39 Path Roll Curb 3000 LF $1 $3,300 40 Cart Path 4" Curbing 3000 LF $4 $12,000 33 5500 lf $7 $38,500 $44,000 $23,375 $41,195 41 Maintenance Routes (Gravel) 2000 LF $8 $16,400 34 14206 sf $2 $21,309 $17,473 $17,757 $15,200 Schedule 6 Totals $655,700 Subtotal $701,809 $752,693 $758,032 $698,395 42 Finish Shaping 1 LS $40,000 $40,000 35 1 LS $175,000 $175,000 $113,476 $125,000 $198,525 43 Fine Grade Prep & Soil Amend Paspalum Area 79 AC $2,800 $221,200 36 1 LS $330,000 $330,000 $193,445 $203,000 $83,794 44 Fine Grade/Soil Prep Native areas 55 AC $780 $42,900 37 1 LS $185,000 $185,000 $112,241 $40,000 $42,158 48 Native Area "A" Hydro Seeding (with Amendments) 42 AC $4,325 $181,650 38 1 LS $130,000 $130,000 $152,722 $205,500 $202,000 49 Baylands Area "B" Hydro Seeding (with Amendments) 13 AC $4,160 $54,080 39 1 LS $40,000 $40,000 $45,146 $62,000 $57,000 45 Paspalum Sod 25.0 AC $25,265 $631,620 40 1 LS $635,000 $635,000 $634,914 $775,500 $715,480 46 Sprigged Paspalum Areas 53.0 AC $5,200 $275,600 41 1 LS $260,000 $260,000 $306,777 $255,000 $312,640 47 Seed & Amend Greens 148000 SF $0 $32,560 42 1 LS $35,000 $35,000 $29,032 $32,000 $49,700 50 Bridge & Bulkheads 1 LS $57,000 $57,000 43 1 LS $110,000 $110,000 $49,243 $54,500 $113,164 51 New Trees 300 Ea $300 $90,000 44 1 LS $100,000 $100,000 $67,305 $70,000 $74,640 53 Landscape Along Embarcadero 1 LS $23,000 $23,000 45 1 LS $50,000 $50,000 $39,501 $22,000 $50,752 52 Fence at Youth Golf Area 1 LS $30,000 $30,000 46 1 LS $25,000 $25,000 $40,478 $44,500 $41,583 58 Grow-In 1 LS $75,000 $75,000 46A 1 LS $115,000 $115,000 $87,553 $150,000 $324,985 Schedule 7 Totals $1,754,610 Subtotal $2,190,000 $1,871,833 $2,039,000 $2,266,421 54 Driving Range Poles and Netting 1 LS $35,000 $35,000 47 1 LS $30,000 $30,000 $60,795 $89,500 $89,010 55 Concrete Range Tee 1 LS $30,000 $30,000 48 1 LS $10,000 $10,000 $10,885 $12,400 $13,133 56 New Synthetic Turf 1 LS $6,000 $6,000 49 1 LS $10,000 $10,000 $4,799 $4,500 $25,623 57 Grassing of Range Area 1 LS $6,000 $6,000 50 1 LS $5,000 $5,000 $21,421 $32,000 $5,400 Schedule 8 Totals $77,000 Subtotal $55,000 $97,900 $138,400 $133,166 59 Restroom (Inc locking doors) 1 LS $88,550 $88,550 51 1 LS $125,000 $125,000 $140,669 $298,000 $128,310 60 RR Sewer 1 LS $20,000 $20,000 52 1 LS $25,000 $25,000 $32,740 $70,000 $53,732 61 RR Electrical Supply 1 LS $14,000 $14,000 53 1 LS $30,000 $30,000 $36,484 $200,000 $52,517 Schedule 9 Totals $122,550 Subtotal $180,000 $209,893 $568,000 $234,559 62 Base Bid Total $7,620,433 Base Bid Total --->$8,947,809 $9,477,901 $9,540,095 $9,882,854 PLAN G DLS Page 1 of 1 6/18/2014 5:25 PM Financial Pro Formas and Supporting Analysis for Reconfiguration Options A, D, F, G For Palo Alto Municipal Golf Course Prepared For: City of Palo Alto Rob de Geus, Division Manager Recreation & Golf Services 1305 Middlefield Road Palo Alto, CA 94301 Prepared By: 1150 South U.S. Highway One, Suite 401 Jupiter, FL 33477 (561) 744-6006 April, 2012 Financial Pro Formas and Supporting Analysis for Reconfiguration Options A, D, F, G Palo Alto Municipal Golf Course Table of Contents INTRODUCTION ....................................................................................................................... 1 PALO ALTO MUNICIPAL GOLF COURSE RECONFIGURATION OPTIONS.......................... 2 Goals and Objectives.......................................................................................................... 2 Option A.............................................................................................................................. 3 Additional Work .............................................................................................................................4 Option D.............................................................................................................................. 4 Additional Work .............................................................................................................................5 Option F.............................................................................................................................. 5 Additional Work .............................................................................................................................6 Option G ............................................................................................................................. 7 Additional Work .............................................................................................................................8 Deferment of Certain Improvements ................................................................................... 9 MARKET OVERVIEW ..............................................................................................................10 Demographics Summary....................................................................................................10 Golf Market Overview.........................................................................................................11 National Trends in Golf Demand and Supply..............................................................................11 Local and Regional Golf Supply and Demand Indicators............................................................13 Competitive Golf Market.....................................................................................................15 Summary Information – Primary Competitors.............................................................................16 Summary of Findings – Primary Competitors .............................................................................18 Palo Alto Golf Course Market Positioning Assessment ......................................................19 FINANCIAL PERFORMANCE MODELS FOR PALO ALTO GOLF COURSE.........................20 Recent Historical Palo Alto GC Performance .....................................................................20 Projections Based on “Option A”........................................................................................22 Key Assumptions.........................................................................................................................22 Pro Forma Estimate for ‘Option A’ Scenario – FY2012 – FY2021..............................................26 Projections Based on “Option D”........................................................................................29 Key Assumptions.........................................................................................................................29 Pro Forma Estimate for ‘Option D’ Scenario – FY2012 – FY2021..............................................32 Projections Based on “Option F” ........................................................................................35 Key Assumptions.........................................................................................................................35 Pro Forma Estimate for ‘Option F’ Scenario – FY2012 – FY2021..............................................36 Projections Based on “Option G”........................................................................................39 Key Assumptions.........................................................................................................................39 Pro Forma Estimate for ‘Option G’ Scenario – FY2012 – FY2021 .............................................42 Financial Projections Summary..........................................................................................45 Summary of Options....................................................................................................................45 Summary Results........................................................................................................................46 Justifications for Revenue Projections ........................................................................................47 Other Considerations Regarding Improvement Options.............................................................48 Option “G” Sensitivity Analysis...........................................................................................49 Option “G” Sensitivity Analysis - Summary for 2017...................................................................49 Option G Sensitivity Spreadsheets..............................................................................................50 OTHER ISSUES AND CONSIDERATIONS..............................................................................56 Market Position / Re-Branding Opportunity........................................................................56 Economics of Potential Long-Term / Additional Improvements...........................................58 Cart Storage Building ..................................................................................................................58 Expanded Meeting Space ...........................................................................................................59 Range Performance Center ........................................................................................................59 Management Structure.......................................................................................................60 Long Range Concerns.......................................................................................................61 Potential Economic Development Of The Airport & Golf “Baylands Gateway” Area............64 Private Funding Possibilities ..............................................................................................65 APPENDICES...........................................................................................................................66 Appendix A – Comparative Supply Ratios – Palo Alto GC & Key Municipal Competitors...67 Appendix B – Comparative Scoring of Reconfiguration Options.........................................68 Appendix C – Water & Power Use Discussion & Assumptions...........................................71 Appendix D – Review Of Probable Cost Estimates ............................................................73 Appendix E – Potential Long-Term Master Plan Improvements..........................................75 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 1 Introduction National Golf Foundation Consulting, Inc. was retained by the City of Palo Alto in furtherance of the City’s due diligence relative to the San Francisquito Creek Flood Control Project, which will involve the reconfiguration of six or more holes at the Palo Alto Golf Course. NGF’s objective was to help the City identify the expected financial impact from the improvements related to the reconfiguration work under Plan Options A, D, F, and G. Specifically, NGF has crafted 10-year cash flow pro formas that project the estimated net financial impact of the proposed improvements, allowing the City to evaluate each of the four reconfiguration options under consideration from an objective standpoint. Our analysis includes expected impact on rounds played, fee structure, revenue generation, operating expenses, and capital spending/debt. The pro formas also provide an estimate for lost revenues during the time that the course is impacted and/or closed. Other aspects of the NGF review include: A market overview of the Palo Alto area, with an emphasis on area demographics and key golf demand and supply indicators. A competitive review, including a qualitative assessment of the impact that the potential reconfigurations would have on Palo Alto Golf Course’s market/competitive position. A review of Forrest Richardson’s work regarding the potential implications from the renovation options on facility branding and marketing. NGF will also offer its opinion about the long-term implications and potential financial impact of improvements associated with the longer range master plan, including clubhouse expansion, cart storage, event areas, range performance center, range enlargement, entry/parking, and the youth training area. NGF will evaluate relevant options available to the City of Palo Alto for the continued operation of Palo Alto Golf Course, including (but not limited to) continuing on an as- is basis or outsourcing all management and maintenance to a full-service management company. Viable options will be identified, and a discussion of the costs, benefits, and financial implications of each operating scenario presented. The study effort was managed by NGF Director of Consulting Services Richard B. Singer and Senior Project Director Ed Getherall. Activities conducted in completion of this report included: field research; statistical and financial analysis; meetings with key City staff from the Recreation & Golf Services, Administration, Community Services, and Finance Departments; meetings with the Head Golf Professional, Golf Course Superintendent, and ValleyCrest Area Director; a tour of the golf course; and, interviews with area golfers. Following is the consultants’ report summarizing key findings and recommendations. Throughout this report, we may refer to shortened names for: the City of Palo Alto (“City”), the Palo Alto Municipal Golf Course (“Palo Alto Golf Course”, “Palo Alto GC” or “PAGC”), and National Golf Foundation Consulting, Inc. (“NGF Consulting” or “NGF”). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 2 Palo Alto Municipal Golf Course Reconfiguration Options NGF Consulting was provided four course reconfiguration options prepared by Forrest Richardson, ASGCA. These options were identified by the titles “Option A,” Option D,” “Option F” and “Option G,” and each have unique characteristics. The options represent four possible scenarios for adjusting the course to accommodate the SFCJPA flood mitigation project. Options A, D, F and G were culled from seven proposed alternatives (Options B, C, and E were eliminated prior to our review) as the most viable and potentially opportune for the City. The process for developing options has been thorough, with extensive input from golfers, staff, concessionaires and the public at large. NGF Consulting has reviewed notes and summaries from these meetings to better understand the goals and objectives desired by those who will use and operate the facility following reconfiguration. GOALS AND OBJECTIVES Among the goals and objectives set forth to guide the design process for reconfiguration options, in addition to the fundamental goal to accommodate the flood project, included: Establish a more natural, aesthetic landscape that incorporates a “Baylands” theme Improve tree care and variety via a theme to use appropriate tree selection Find ways to eliminate geese and burrowing animals from ruining the course Improve bunkers (condition, strategy and aesthetics) Improve overall course conditioning (drainage, irrigation, turf, etc.) Adjust yardage so the course is shorter for beginners, women and seniors Create a “wow factor” to remain competitive with other regional facilities Add interest to the course strategy (dog-legs, differentiation of holes, etc.) Find ways to offer player development opportunities (short game area, range, etc.) Additionally, there was a strong desire to address long range issues that face the aging facility beyond those on the golf course itself. The City commissioned its own scope of work to address these issues concurrently with the course reconfiguration planning. These long range areas included the following: Clubhouse planning Entry, parking and signage Practice areas Cart storage and staging On-course restrooms Branding and image Trail connections from the Baylands and existing trails National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 3 The objective of the additional long-range planning was to look beyond the golf course to ensure that reconfiguration options would not preclude improvements to the areas on the above list. Specific goals and objectives included the following: Find ways to bring non-golfers to the facilities (group events, restaurant, etc.) Expand the clubhouse to seat 200 so larger groups can be accommodated Develop areas to hold multiple outings/events simultaneously Improve the arrival experience, entry aesthetics, trail connections and security Develop a cart storage area/facility Make overall improvements to the clubhouse and grounds (exterior and interior) Improve and expand the practice range Create new player development and practice opportunities Plan for upgrading the on-course restroom facility Develop a new brand and image consistent with the reconfiguration goals and design A common thread among the long range planning components was a strong design to return the facilities, with golf course approaching its 60th year and the clubhouse its 30th, to a “Point of Pride” status within the community. Along with this primary objective come the benefits of leveraging the facility for economic development, tourism and as a home to annual and special events. Secondarily, the community has a strong desire to see the golf course be more compatible with the Baylands environment. This goal is echoed by Mr. Richardson in his reconfiguration options, each of which adds more naturalized areas to the golf course. In addition, long range design concepts associated with the clubhouse, entry and image go hand- in-hand with this goal. OPTION A Option A represents the minimum reconfiguration in order to facilitate the San Francisquito Creek realignment as required by the SFCJPA. This option shifts holes laterally from west to east, retaining much of the same routing of the existing course. Golf holes are moved away from the levee on a minimal basis. Improvements are primarily restricted to the holes moved, with the remaining holes largely unchanged. Bunker work and naturalization enhancements are made throughout the course in order to provide a more consistent golf experience and landscape. The highlights of changes in this option include: 6.5 golf holes relocated 5 new greens constructed Par 72 6,900 / 6,500 / 5,200 yards All bunkers reconstructed and/or new 38.5 acres transformed to naturalized areas (non-managed turf) Revised Hole No. 18 (naturalized hazard) Adjusted Hole No. 12 Adjusted Hole Nos. 13 and 14 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 4 The total projected cost for this option is $3,537,622, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option A. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (13 additional to those covered) Re-turfing of all existing fairways (23.5 acres additional) Replacement of the balance of the existing irrigation system Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Projected Cost for Additional Items: $ 3,250,500 Among the additional (alternate) work, Mr. Richardson and NGF recognize that the full replacement of the existing irrigation system will become an eventual necessity. Our understanding is that the existing system, installed in 1998, presents regular issues due to deteriorating pipe fittings. Now entering its 14th year of service, the system is on the decline due to the high salts inherent within the soils. Even if the balance of the system remains in commission for another six years (20 years is a reasonable longevity for irrigation systems) there exists good probability that emergency repairs and costs may escalate. For this reason, we have studied this additional cost ($857,500) as an alternative scope to be considered for Option A. OPTION D Option D represents an enhanced reconfiguration version from Option A. This option facilitates the San Francisquito Creek realignment as required by the SFCJPA. The primary difference from Option A is that Option D realigns holes with more variety, departing from the common parallel routing of the existing course. Golf holes are moved away from the levee, but go beyond Option A to form new views and variation. Bunker work and naturalization enhancements are made throughout the course in order to provide a more consistent golf experience and landscape. These are more prevalent than that afforded through Option A. The highlights of changes in this option include: 8.5 golf holes relocated 8 new greens constructed Par 72 6,900 / 6,400 / 5,000 yards All bunkers reconstructed and/or new 43 acres transformed to naturalized areas (non-managed turf) New Island Green Hole No. 13 (elevated tee and Bay view) New Double Green Nos. 3 and 15 New Hole No. 5 (elevated green and Bay View) New Hole No. 7 (split fairway) National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 5 New Hole No. 18 (par-5 and naturalized hazard) New Hole No. 4 New Hole No. 17 New Hole No. 16 Future space afforded for a new practice green/short game area The total projected cost for this option is $4,118,748, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option D. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (10 additional to those covered) Re-turfing of all existing fairways (21.5 acres additional) Replacement of the balance of the existing irrigation system Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Future development of a new practice green/short game area Projected Cost for Additional Items: $ 3,096,250 As with Option A, we recognize that the full replacement of the existing irrigation system will become an eventual necessity. The same comments apply to Option D as noted for Option A. We have studied the additional cost ($740,000), which is lower for Option D as more of the existing system is covered within areas impacted by the reconfiguration, as an alternative scope to be considered for Option D. OPTION F Option F represents an opportunity to remove land from golf course use and transform it to use for athletic field(s). This option was added to the reconfiguration scope of the golf course architect based on previous studies with the same objective. For Option F, a general constraint placed on the planning work was to retain yardage (6,800 yards) and a par of 72. Safety from the new trail system and within adjoining holes was to be maintained with no compromise to standard guidelines. Option F facilitates the San Francisquito Creek realignment as required by the SFCJPA. The option is primarily distinguished by the removal of approximately 2.5 acres from the golf course parcel. This land area is shown as athletic field use, accommodating a full NCAA sized soccer field or combination of fields and field types of the same proportion and area. This area would have limited room for parking expansion. Option F realigns holes with more variety than in Option A. As with Option D, the reconfiguration departs from the common parallel routing of the existing course. Golf holes are moved away from the levee to form new views and variation. Bunker work and naturalization enhancements are made throughout the course in order to provide a more consistent golf experience and National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 6 landscape. As a result of the “domino effect” of moving holes to make room for the athletic field area, these enhancements are as prevalent as that afforded through Option D. The highlights of changes in this option include: 12.5 golf holes relocated 12 new greens constructed Par 72 6,700 / 6,300 / 5,000 yards All bunkers reconstructed and/or new 43.4 acres transformed to naturalized areas (non-managed turf) New Island Green Hole No. 13 (elevated tee and Bay view) New Double Green Nos. 3 and 15 New Hole No. 5 (elevated green and Bay View) New Hole No. 7 (split fairway) Revised Hole No. 18 (naturalized hazard) New Hole No. 4 New Hole No. 17 New Hole No. 16 New Hole No. 3 New Hole No. 3 New Hole No. 15 New practice green/short game area developed along with reconfiguration Temporary preparation of the athletic field area (not field development or improvement) The total projected cost for this option is $5,855,454, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option F. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (6 additional to those covered) Re-turfing of all existing fairways (21.5 acres additional) Replacement of the balance of the existing irrigation system Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Projected Cost for Additional Items: $ 2,530,000 As with Options A and D, we recognize that the full replacement of the existing irrigation system will become an eventual necessity. The same comments apply to Option F as noted for previous National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 7 options. We have studied the additional cost ($425,000), which is lower for Option F (than for A or D) as more of the existing system is covered within areas impacted by the reconfiguration, as an alternative scope to be considered for Option F. OPTION G Option G represents a plan to remove more land from golf course use, transforming this land to use for multiple athletic field and non-golf recreation purposes. This option was added to the reconfiguration scope of the golf course architect based on the direction of the City to investigate whether the viability of the golf course could be preserved while opening more area (than with Option F) for non-golf recreation. The constraint placed on the planning work was to retain a regulation layout with a par of 70 or 71. Safety from the new trail system and within adjoining holes was to be maintained with no compromise to standard guidelines. NGF Consulting was in the very early stages of our consulting work for the City when Option G was put into motion. Among the foremost questions we were asked was whether a significantly shorter course and/or a significantly lower par would be advisable for the City of Palo Alto. Our conclusion was that the Palo Alto market, especially in the City’s situation as a single-course owner, is best served in this locale by a regulation 18-hole golf course with a par of 72 being preferred. This conclusion is based on several factors, including the following: A strong history of this golf course producing annual rounds in excess of 80,000 Stated preferences by the current customer base to maintain length and par Viability to host group golf events “demanding” a full-length course experience Competitiveness to area courses Long term viability to host regional events (qualifying, larger tournaments, etc.) Regional offerings of shorter courses Plan options that accommodate more flexible (shorter) yardages flexibility as part of the reconfiguration work NGF Consulting shared this conclusion with the City and the golf course architect, recommending that Option G should, if possible, preserve a regulation length of about 6,500 yards (back tees) and a par of 72 preferred. If pressed to choose between a reduction in par (to 71) or a reduction in yardage lower than 6,500, we opined that it would be better to preserve yardage at 6,500 and allow par to drop to 71. (Note: A par 71 course measuring 6,500 yards is perceived as more difficult, and can be marketed such, than a course measuring the same yardage but holding a par of 72. This is because the ratio of par to yardage is more challenging.) Option G also facilitates the San Francisquito Creek realignment as required by the SFCJPA. The option involves the removal of approximately 10.5 acres from the golf course parcel. This land area is shown as athletic field use (three full sized NCAA soccer fields or combination of fields and field types of the same proportion and area), and additionally shows areas for a small playground, wetlands park and picnic space, and trails connecting to the San Francisquito Creek levee trails, Baylands and neighborhood. Option G realigns holes with more variety than in Option A. As with Option D and F, the reconfiguration departs from the common parallel routing of the existing course. Golf holes are moved away from the levee to form new views and variation. Bunker work and naturalization National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 8 enhancements are made throughout the course in order to provide a more consistent golf experience and landscape. As with Option F, but to an even greater extent, virtually all areas of the existing course would be reconstructed, enhanced and improved. The highlights of changes in this option include: 18 golf holes relocated 18 new greens constructed Par 71 6,600 / 6,100 / 5,000 yards All bunkers reconstructed and/or new 43 acres transformed to naturalized areas (non-managed turf) Irrigated Turf Reduced from 135 acres to 92 acres New Island Green Hole No. 12 (elevated tee and Bay view) New Double Green Nos. 3 and 15 New Hole No. 5 (elevated green and Bay View) New Hole No. 7 (split fairway) New Hole No. 18 (par-5, naturalized hazard) New Hole No. 4 New Hole No. 14 New Hole No. 10 New Hole No. 17 New Hole No. 16 New Hole No. 3 New Hole No. 3 New Hole No. 15 New practice green/short game area developed along with reconfiguration Full irrigation system replacement (all areas of the 18-hole golf course) Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Temporary preparation of the field/recreation area (not field development or improvement) The total projected cost for this option is $7,573,262, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option G. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (3 additional to those covered) Re-turfing of all existing fairways (21.5 acres additional) Replacement of the balance of the existing irrigation system National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 9 Projected Cost for Additional Items: $ 1,675,236 Unlike other options, Option G includes full irrigation replacement. This is because there is no viable method of leaving only three golf holes without replacement. Variables include pumping pressure, control zones and other logistics that had to be considered. DEFERMENT OF CERTAIN IMPROVEMENTS Other additional work listed under each option above has not been incorporated to the pro formas prepared by NGF Consulting due to the complexity of attaching incremental rounds, revenues and expenses to these improvements. However, both NGF and Mr. Richardson believe that deferring some or all of the alternative (optional) improvements, including long- range work to the clubhouse building, grounds, entry, practice areas, etc., will likely have a negative affect on revenues and constrain somewhat the City’s ability to “re-brand” Palo Alto GC. Over the years, NGF Consulting has witnessed the implications of rounds and revenues on golf facilities that have deferred maintenance and/or capital improvements. Eventually, golf course conditions and/or the overall golf experience fall to a level where rounds, pricing and, as a result, revenues are constrained, as is the municipality’s ability to effectively market the golf course as anything other than a “value” provider. Golf consumers begin to migrate away from facilities that are not well maintained when there are other proximate facilities offering better conditions and/or equal or even slightly higher price points. Among the optional/alternative improvements associated with Palo Alto Golf Course, we find the most pressing are: Course conditions, especially greens, drainage and turf condition Yardage flexibility (to attract beginners, youth, women and seniors) Geese and burrowing animal intrusion and damage On-course restroom replacement Clubhouse condition and available space Most of the above are well corrected or mitigated though the reconfiguration options. However, replacement of the irrigation system, as an example, is not fully afforded within the base work of Options A, D and F. Especially in the case of A and D, this alternate cost may be prudent to examine closer as conditions cannot dramatically improve course-wide without a plan to replace the system. If the system is allowed to run for a long period without replacement, revenue is bound to drop incrementally as turf conditions decline. In terms of substantive clubhouse improvements, such as expanding the meeting space, improvements are not likely to pay for themselves under the current operating structure whereby only 7% of food & beverage revenue accrues to the City. Yardage flexibility is accommodated in most of the options, but more so as more work is covered. Options D, F and G adequately allow for more flexibility and will therefore have the potential to attract more player types. The geese and burrowing animal issues, according to the golf course architect, will be positively mitigated by all reconfiguration options. Yet, plan options with more area impacted will likely result in more appropriate habitat and areas for these animals to use rather than the turf areas currently intended for golfers. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 10 Market Overview Below, NGF Consulting provides a summary of key “external” factors that characterize the trade area in which the Palo Alto Golf Course operates. We include basic demographic variables that have the potential to affect the economic performance of the golf facility, as well as an analysis of supply and demand indicators in the public golf market. DEMOGRAPHICS SUMMARY Utilizing research materials provided by Applied Geographic Solutions, Inc. (a supplier of demographic research based on U.S. Census results), NGF Consulting has examined relevant characteristics of the local population. In the following tables, NGF Consulting indicates the population, median age, and median household income trends for San Mateo and Santa Clara counties, as well as the 3-, 10-, and 15- mile market rings surrounding the golf course and the total United States. Palo Alto Golf Course 3 mi 10 mi 15 mi San Mateo County Santa Clara County U.S. Summary Demographics Population 1990 Census 94,021 697,234 1,482,687 649,622 1,496,702 248,710,012 Population 2000 Census 100,652 765,828 1,662,257 707,161 1,682,585 281,421,906 CAGR 1990-2000 0.68%0.94% 1.15%0.85% 1.18%1.24% Population 2010 Census 104,099 806,139 1,750,080 718,376 1,781,728 308,699,447 CAGR 2000-2010 0.34%0.51% 0.52%0.16% 0.57%0.93% Population 2016 Projected 105,110 817,407 1,775,178 725,980 1,805,397 325,288,086 CAGR 2010-2016 0.16%0.23% 0.24%0.18% 0.22%0.88% Median HH Inc $94,304 $96,743 $91,334 $88,233 $88,860 $53,908 Median Age 37.5 37.2 37.1 39.4 36.2 36.9 CAGR = Compound Annual Growth Rate From the data collected for this study, NGF Consulting has made the following observations regarding the demographics of Palo Alto and surrounding areas: The 10-mile and 15-mile markets around Palo Alto GC are dense, with 2010 estimates of about 806,000 and 1.775 million residents, respectively, in these two submarkets. The 10-mile market has added more than 40,000 net new residents since 2006, while the 15-mile market grew by nearly 88,000 people. Population growth is projected to be very moderate through 2016. The Median Ages in the subject market areas are generally similar to the national median age of 36.9 years, though San Mateo County overall is significantly higher at 39.4 years. In general, the propensity to play golf with greater frequency increases with age, making relatively older markets more attractive to golf facility operators, all other factors being equal. Median Household Incomes in the area are much higher than the national median. For instance, the 10-mile market exhibits incomes nearly 80% higher than the national median income of $53,908. In general, higher income residents are more likely to participate in golf, and they play more frequently than lower income National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 11 residents. These high figures are mitigated considerably by the very high cost of living in the Bay Area. GOLF MARKET OVERVIEW Below we provide an overview of recent and emerging national trends with respect to golf participation and municipal golf, as well as a summary of golf demand and supply indicators in the local markets for Palo Alto Golf Course. NGF Consulting utilizes predictive models as benchmarks for estimating potential market strength. The methodology for determining the relative strength of the subject market is described in the following section. National Trends in Golf Demand and Supply Participation Golf participation in the U.S. has grown from 3.5% of the population in the early 1960s to about 9.2% of the population today. NGF estimates that the number of golfers fell slightly in 2011 to 26.1 million; it was encouraging news that the number of golfers gained in 2010-11 held steady vs. previous years while the number of lost golfers dropped significantly. For research purposes, a golfer is defined as a person age 6 or above who plays at least one round of golf in a given year. All U.S. Golfers (in millions) 1985 1990 1995 2000 2005 2010 All golfers age 6+ 19.5 27.4 24.7 28.8 30.0 26.1 Source: National Golf Foundation The number of rounds of golf also fell 2.3% during the past year, from 486 million in 2009 to 475 million in 2010 (most recent year NGF has published), corroborating the decline in the number of golfers. In the Pacific Region, which includes California, the statistics are somewhat more favorable: Regional Profile Participation Rate Number of Golfers Percent of Golfers Total Annual Rounds (millions) Pacific Region 7.3% 3,276,000 12.5% 50.4 United States 9.2% 26,122,000 100.0% 475.0 Source:Golf Participation in the U.S., 2011 edition, National Golf Foundation Considering the severity of the recession and its effects on both discretionary income and time, golf has held up rather well. Multiple NGF studies of golfers since 2008 would attribute the gradual decline in golfers and rounds primarily to the impact of lower job security and concern over personal finances, not waning appeal for the game. Over the past 50 years, golf demand grew at about 4% per year while facility supply grew at about 2% per year. However, since 1990, the situation has reversed – demand has grown at only 0.5% per year while facility supply has grown at 1.4% per year. With the increase in supply, National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 12 we are seeing a marked increase in competition, and the supply is greater than the demand in some markets. In addition to increased competition, other factors have contributed to a decline in the number of rounds per course nationally from 2002 to 2011. In the NGF’s most recent survey of core golfers conducted in September 2011, we found that fearful financial outlooks, weak consumer confidence, and negative golfer attitudes have also played a role. The combination of these has caused many golf facilities to become distressed, particularly those that have a high debt load because of higher construction costs and the perceived need to build high-end courses. The number of golf course closings quadrupled from an annual average of 24 courses per year in the 1993-2001 time period to more than 100 courses in 2005.In 2006, there was negative net growth in golf facilities for the first time in six decades, with 146 18-hole equivalents closing and 119.5 opening. In 2007, there were 113 openings and 121.5 closures, and in 2008, 72 golf course openings and 106 closures. In 2009, 49.5 openings minus 139.5 closures equated to a net loss of 90 18-hole equivalents. Closures continue to be disproportionately public, stand-alone 9-hole facilities or short courses (executive or par-3 length) with a value price point. Net growth in supply has been negative now for four consecutive years, with the largest drop of 90 courses in 2009. However, U.S. openings averaged 200+ (net) for 20 years, and total 18-hole equivalent supply is up 5% since 2000, indicating a slow market correction is underway. In October 2011, NGF projected 2011 net growth of about negative 106.5 (openings minus closings), and projected actual closures for 2011 would be closer to 150. NGF estimates that national rounds played experienced an overall drop from 2000 to 2010 of -9.5%. By the end of 2011, rounds had further declined 2.5% in the U.S., but rounds in the Pacific Region had increased 1.2% and California was up 2.3%. On the positive side, the growth in golf course development has slowed considerably nationally and in the majority of local markets, a trend that should help ease some of the competitive pressure. Another positive trend is the aging of America. Baby Boomers are rapidly approaching retirement age when golf activity flourishes. The baby boomers represent not only the largest single demographic in the US, but they also approach retirement age with more disposable income than any previous generation. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 13 Local and Regional Golf Supply and Demand Indicators The following table summarizes some key golf supply and demand measures for the local markets based on NGF research and golf demand predictive models. Palo Alto Golf Course 3 mi 10 mi 15 mi San Mateo County Santa Clara County U.S. Golf Demand Indicators # of Golfing Households 6,989 55,008 116,506 49,136 116,439 21,237,600 Number of Rounds Played 226,453 1,769,537 3,717,852 1,571,308 3,765,371 498,831,616 Golfing Household Index 101 104 103 105 106 100 Rounds Played Index 140 142 141 143 146 100 Golf Supply Summary Total Golf Facilities 2 13 25 14 33 15,902 Public Golf Facilities 2 8 16 6 20 11,633 Private Golf Facilities 0 5 9 8 13 4,269 Total Golf Holes 36 207 378 279 576 268,443 Public Golf Holes 36 117 225 108 342 191,214 Private Golf Holes 0 90 153 171 234 77,229 Household/Golf Supply Indicators Households per 18 Holes: Total 19,132 25,655 29,805 16,754 19,127 7,733 Households per 18 Holes: Public 19,132 45,390 50,073 43,282 32,214 10,856 Households per 18 Holes: Private NA 59,007 73,636 27,336 47,082 26,879 Households Supply Index: Total 242 325 378 212 242 100 Households Supply Index: Public 171 405 447 387 288 100 Households Supply Index: Private 0 221 275 102 176 100 Golf Course Construction Activity 2001-2010 Total holes added past 10 years 0 0 18 0 72 24,318 Public holes added past 10 years 0 0 0 0 54 17,469 Private holes added past 10 years 0 0 18 0 18 6,849 Percent Total Holes Added 0.00%0.00%4.80%0.00%12.50%9.10% Percent Public Holes Added 0.00%0.00%0.00%0.00%15.80%9.10% Percent Private Holes Added NA 0.00%11.80%0.00%7.70%8.90% National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 14 Golf participation rates in the subject markets around Palo Alto GC are very similar to the national benchmark, while rounds demanded per household are about 40% higher than the national figure. The high rounds demanded per household are indicative of the year-round golf climate, the high number of golf courses, and a demographic profile that is generally conducive to high golf demand, particularly as it relates to median household income. There are thirteen total, including eight public, golf facilities (including Palo Alto GC) in the 10-mile market area, while there are 25 total facilities, including 21 public, within 15 miles of Palo Alto GC. As the tables indicates, the subject markets have significantly more households per 18 holes of golf than the nation overall. For example, in the 10-mile market area surrounding Palo Alto GC, there are nearly four times as many households per total 18 holes and 4.5 times as many households per public 18 holes than in the overall U.S. (We contrast these supply ratios to some of Palo Alto’s key competitors in Appendix A). There was a spate of new golf course construction in the Bay Area in the 1990s and early 2000s. For the nine-county Bay Area region, 27 total golf facilities were added between 1997 and 2006. This included 6 private (comprising 90 holes) and 21 public (360 holes) facilities. However, as with the rest of the country, new golf course construction has slowed to a crawl in the subsequent years, and the NGF database reveals no new golf course projects currently in planning or under construction within 15 miles of Palo Alto GC. Palo Alto and the greater Bay Area are home to a large number of major corporate and public employers, including many high-tech and internet companies. These large employers are prime targets for soliciting tournament/outing play, and could be a key element to boosting play levels and revenues at the Baylands GC. Outings are generally sold at the highest green fee, and also expose a number of golfers to the facility for the first time. Visitors to the Palo Alto area have the potential to significantly impact demand at golf courses. Though visitation numbers were not available for Palo Alto specifically, it is estimated that about sixteen million people visit San Francisco alone each year, and the overall Bay Area has considerably more visitors than that. NGF research shows that roughly one-third of all golfers participate in the activity while traveling, playing .557 rounds per day of travel. This supplemental market should be a target of marketing efforts once the improved Baylands Golf Club is opened. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 15 COMPETITIVE GOLF MARKET One of the objectives of this effort is to identify any opportunities that may exist for the improved “Baylands Golf Club” to increase market share, fees and revenues. In this section, we present an overview of the public access golf market in which the current Palo Alto GC operates, with a focus on key competitors. The map below shows the location of these facilities in relation to Palo Alto Golf Course. In the tables that follow, NGF Consulting presents summary operational information for the golf facilities identified as direct competition to the Palo Alto Golf Course. NGF Consulting identified the primary competitors based on a number of factors, including price point, location, NGF experience in this market, and input from both facility management and City staff. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 16 Summary Information – Primary Competitors The table below provides summary information regarding the golf courses we have identified as Palo Alto GC’s primary competitors. Palo Alto Municipal Golf Course Key Competitors – Summary Information Golf Facility Location Type Year Open Par / Slope Front Tee / Back Tee Location Relative to PAGC* Palo Alto Municipal Golf Course Palo Alto MU 18H 1956 72 / 122 5,744 / 6,833 -- Crystal Springs Golf Course Burlingame MU 18H 1924 72 / 127 5,580 / 6,628 16 mi NW Poplar Creek Golf Course San Mateo MU 18H 1933 70 / 115 4,768 / 6,042 14.5 mi NW San Jose Municipal Golf Course San Jose MU 18H 1968 72 / 119 4,200 / 6,700 13 mi SE Santa Clara Golf & Tennis Club Santa Clara MU 18H 1987 72 / 118 5,521 / 6,723 8.5 mi SE Santa Teresa Golf Club San Jose DF 27H 1963 71 / 126 4,011 / 6,742 24.5 mi SE Shoreline Golf Links Mountain View MU 18H 1983 72 / 129 5,437 / 6,996 2.5 mi SE Spring Valley Golf Course Milpitas DF 18H 1956 70 / 113 5,453 / 6,116 15 mi E Sunnyvale Golf Course Sunnyvale MU 18H 1969 70 / 118 5,170 / 5,742 5.5 mi SE *Air miles from subject site, rounded to half-mile; actual driving distances will likely be greater. Type: DF – Daily Fee; MU – Municipal National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 17 The table below shows summary facility information regarding Palo Alto Municipal Golf Course and its primary competitors. Reported rounds for 2007 are from the 2008 Economic Research Associates report to the City. Average green/cart revenue per round for San Jose and Santa Teresa are estimated based on ERA 2007 numbers. Summary Operating Data – Palo Alto Municipal Golf Course and Primary Competitors Golf Facility Total 2007 Rounds Total 2011 Rounds Average Green / Cart Fee per Round 18-Hole Resident Green Fee (WD/WE) 18-Hole Non- Resident Green Fee (WD/WE) Per Person 18-Hole Cart Fee 18-Hole Twilight Green Fee (WD/WE) 18-Hole Senior Resident Green Fee (WD/WE) 18-Hole Super-Twi Green Fee (WD/WE) Palo Alto Municipal GC 76,241 66,740 $30.20 / $4.50 $37/$47 $39/$49 $14 $30/$34 $28/DNA1 $26/$28 Crystal Springs Golf Course 73,654 63,000* $24 / $8 DNA $44/$66 $16 $36/$43 $30/DNA $26/$36 Poplar Creek Golf Course 86,315 70,709 $33.11 / N/A $33$45 $38/$53 $13.50 $27/$33 $22/DNA1 $19/$25 San Jose Municipal GC 86,991 78,000* $32 / $5 DNA $37/$51 $14 $26/$33 $23/DNA $20/$24 Santa Clara Golf & Tennis 87,120 81,000 $26 / $10 $25/$34 $37/$50 $14 $17/$23 res $26/$29 n/r DNA2 $12/$14 res $16/$18 n/r Santa Teresa Golf Club 75,0003 65,000*$29.60 / $5.70 DNA $40/$46/$60 $13.50 $25/$29/$34 DNA $17/$19/$25 Shoreline Golf Links 67,135 50,000 $28 / $5.60 $31/$47 $38/$54 $12 $25/$28 $21/DNA1 $17/$17 Spring Valley Golf Course N/A N/A N/A DNA $37/$55 $14 DNA/$45 $28 M-F $27/$30 Sunnyvale Golf Course 80,513 72,535 $28 / $4.50 DNA/$44 $35/$48 $13.50 $25/$26 res $25/$30 n/r DNA1 $16/$20 KEY *NGF Consulting estimate N/A – Information not available DNA – Does not apply / Not offered Note: For San Jose, Santa Teresa, “afternoon” rates used for twilight and “twilight” for supertwilight; for Spring Valley, “midday” and afternoon used for twi / supertwi. 1 Non-resident seniors pay $33 at Palo Alto, $28 at Shoreline; senior discounts at Poplar Creek are for residents only. 2 Santa Clara offers senior monthly ticket; Sunnyvale offers senior discount card. 3 Rounds listed are for regulation 18-hole course only. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 18 Summary of Findings – Primary Competitors Based on data reported to NGF Consulting by area golf operators, Palo Alto Golf Course is positioned quite similarly to its chief municipal competitors. The reported average green fee revenue per round among the subject municipal facilities in 2011 generally fell between $28 and $32, while average cart revenue per round was most commonly between $4.50 and $5.70. Posted green fees have been generally flat in this market for the last several years, with only periodic marginal increases aimed at cost recovery at some courses. Non-resident green fees fall within a relatively narrow range among Palo Alto GC and its municipal competitors, but NGF did note that Palo Alto is at the low end of the non-resident pricing spectrum, particularly on weekends. We believe that an improved and re-branded Palo Alto facility should be able to absorb $5 to $10 increases for non-resident rounds, depending on the reconfiguration option chosen and varying by fee category. Of the municipal golf courses profiled (leased Santa Teresa excluded), all but San Jose Municipal offered a fee discount for residents (Sunnyvale restricted the discount to weekends). Most people NGF spoke to consider the city of Mountain View’s Shoreline Golf Links Course to be Palo Alto GC’s most direct competitor. Shoreline’s reputation in terms of maintenance standards has reportedly taken a hit in recent years, and the golf course appeared to be in only fair condition during NGF’s visit. Shoreline has dropped about one-third of its rounds since the mid 2000s and was the least active facility among the key competitors in 2011, with a reported 50,000 rounds. Due to its location, Shoreline probably suffers more than most Bay Area golf courses with the Canadian Geese problem. There were also a large number of coots on the course during our visit. As was the case with nearly every golf market NGF examined nationally, average annual rounds played at many Bay Area golf courses dropped by 25% or more between the late 1990s / 2000 and the middle part of the 2000s. Based on rounds reported to NGF as part of this study effort, rounds played among the direct competitive set have continued to decline since the 2006-07 time period, though variations in the most recent years are at least partly attributable to weather variations. Even with the falling activity levels, rounds played per 18 holes among the subject municipal golf courses remain among the highest we’ve observed anywhere in the U.S. Santa Clara Golf & Tennis and San Jose Municipal, at ±80,000 rounds in recent years, are currently the most active among the competitive set. Because of heightened competition and today’s economic realities, fee discounting (e.g., through internal yield management, use of internet wholesalers such as golfnow.com), even among high-end daily fee courses, is now common in the Bay Area golf market. As a result, the lines can become blurred between “rack” rates and what the majority of customers are actually paying for a round of golf. This disparity is not common among the municipal golf courses we surveyed. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 19 PALO ALTO GOLF COURSE MARKET POSITIONING ASSESSMENT NGF has attempted to provide a qualitative, or subjective, review of how Palo Alto GC, under both its current configuration and the alternate reconfiguration options being considered, stacks up against its key competitors as identified above. The objective of this relative assessment is to provide some justification for assuming an increase in market share (and sustainable green fees) for Palo Alto GC, especially with the more intensive renovation options. NGF Consulting has scored the key competitors to the plan options (A, D, F and G) for Palo Alto GC. A baseline score is also provided for the existing Palo Alto golf course and facility. This scoring has been accomplished by looking at the amenities, course quality and reputation associated with each competitive facility. Reliance has been made on available reviews, NGF data, discussions with Bay Area golf writers/course reviewers and our visits to the subject courses. To rank the reconfiguration plans for Palo Also we relied on the schematic planning work developed as of this date, together with our ratings for the plan options. Scores are expressed as A+, A, A-, B+, B, etc. through D-. Because of the options (alternate) work to be considered, no overall “average” grade is provided. Rather, categories of comparisons are provided. Such scorings are both subjective and objective, combining impressions with facts about the facilities, and in this case, proposed plans. Because of the subjective component of this review, personal opinion and disagreement with some of the relative scoring should be expected. As such, the scoring should be used as a method for the reader to form opinions in combination with the other reporting covered within this report. Comparison of Palo Alto GC to Key Competitors Golf Facility Clubhouse Facilities Practice Facilities Consumer Reputation Golf Conditions* Palo Alto (Existing) C- C+ C+ C Palo Alto (Option A) C- C+ B B- Palo Alto (Option D) C- C+ A- B+ Palo Alto (Option F) C- B A A- Palo Alto (Option G) C- B+ A+ A San Jose Golf Course D A- A- B- Santa Clara Golf & Tennis B A- A- C+ Shoreline Golf Links B+ B+ C C- Sunnyvale Golf Course C- D- D- C+ Crystal Springs Golf Course A- B+ B+ B Poplar Creek Golf Course A- D B- B Santa Teresa Golf Club B- B B- B- Spring Valley B- B- C+ C+ *As observed January-February 2012 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 20 Financial Performance Models for Palo Alto Golf Course As part of this study effort, NGF Consulting has prepared an analysis to show what the potential economic performance of Palo Alto Municipal Golf Course could be considering the reconfiguration options presented in this report. In this section, we estimate the facility’s economic performance based on a set of assumptions that may or may not become reality. We feel that these estimates represent the best effort to create a “fair estimate of performance” for this facility based on our understanding of the golf facility operation, its place in the market and the changes proposed in the various renovation options. The Palo Alto Municipal GC performance has been projected under the assumption that the operation is continued ‘as-is’ with three separate contracts for maintenance, pro shop and food/beverage. The basic contract terms in place in FY2012 are assumed to continue through FY2021. The NGF has also assumed a “standard” set of external assumptions for regional economic performance, consumer discretionary income, and weather, with neither severe declines nor increases in any of these measures through 2021. RECENT HISTORICAL PALO ALTO GC PERFORMANCE In order to put the pro forma projections in context, we have summarized the five-year performance history of Palo Alto GC in the table below. Palo Alto Municipal Golf Course Historical Revenue Performance (2008-2011) Revenues FY2008 FY2009 FY2010 FY2011 Green Fees $2,169,230 $2,073,809 $1,958,234 $1,859,473 Cart Fees 345,656 313,224 339,090 302,815 Driving Range 346,447 365,908 399,773 343,878 Monthly Play Cards 161,368 161,544 135,848 154,933 Tournament / League Fees 2,227 2,651 1,921 2,190 Class Program / Other Fees 0 0 0 11,844 Total Golf Course Revenues $3,024,928 $2,917,136 $2,834,866 $2,675,133 Other Revenue Merchandise Sales 718,450 737,050 684,725 663,400 Food Sales 667,000 0 610,725 637,800 Liquor Sales 172,000 0 141,850 149,000 F & B Concession Payments Fixed Lease $0 $43,811 $0 $0 Variable Portion $58,730 $0 $52,680 $55,076 Utility Payment $25,920 $19,440 $28,080 $25,920 Total F & B Concession Payments $84,650 $63,251 $80,760 $80,996 Pro Shop Concession Payments Fixed Lease $0 $0 $0 $0 Merchandise (4%) $28,738 $29,482 $27,389 $26,536 Total Pro Shop Concession Payments $28,738 $29,482 $27,389 $26,536 Total Gross Margin to City $3,138,316 $3,009,869 $2,943,015 $2,782,665 Rounds Played 77,989 75,511 69,791 67,381 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 21 Palo Alto Municipal Golf Course Historical Expense and Net Income Performance (2008-2011) Expenses FY2008 FY2009 FY2010 FY2011 Salaries & Benefits $951,786 $929,335 $721,596 $259,455 Range Fees 138,579 152,745 142,267 130,152 Cart Fees 131,789 127,836 121,630 117,529 Club Fees 6,473 6,198 5,424 5,576 Fixed Lozares Management Fee 373,435 409,989 388,898 381,544 Contract Maintenance ---475,000 Repairs & maintenance 34,791 39,295 33,321 21,943 Advertising & Publish 5,560 6,583 4,299 10,765 Supplies and Materials 129,891 144,037 119,458 43,742 Gen., Rents, Fac. & Equip 5,959 2,736 944 675 Water Expense 279,326 409,132 271,495 361,870 Other Direct Charges 36,998 39,255 38,882 45,263 Indirect Charges 108,641 132,072 110,343 102,571 Total City Operating Expenses $2,203,228 $2,399,213 $1,958,557 $1,956,085 Net Income From Operations (Loss)$935,088 $610,656 $984,458 $826,580 Income from Sale of Property $35,230 D/S Income $33,629 $32,855 $32,200 $0 Total Non-Operating 33,629 32,855 32,200 35,230 Total Income (Incl. Non-operating)$968,717 $643,511 $1,016,658 $861,810 Debt Service $559,795 $555,686 $560,674 $559,539 Payment to General Fund $94,849 $94,849 $47,684 $94,849 Cost Plan Charges $337,590 $318,969 $332,155 $41,455 Total Debt / Other Charges $992,234 $969,504 $940,513 $695,843 Net Income or (Loss)($23,517)($325,993)$76,145 $165,967 Source: City of Palo Alto Rounds played at Palo Alto GC decreased steadily from FY2008 to FY2011, falling by a total of 10,608, or 13.6%. During the same time, both golf revenues and net income from operations declined by 11.6%. Despite the significant decline in rounds and revenues, net income after debt service, general fund payments and cost plan charges improved by nearly $500,000 between FY2009 and FY2011 due to a reduction in operating expenses and a significant decrease in cost plan charges associated with the conversion to privatized golf course maintenance. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 22 PROJECTIONS BASED ON “OPTION A” NGF Consulting has created a cash flow model for the continued operation of Palo Alto Municipal Golf Course (to be re-branded as “Baylands Golf Club) under the assumption of the “Option A” improvements. These improvements assume the basic minimum upgrades needed to improve the facility within the SFCJPA flood mitigation project, with no substantial change to the character of the golf course. The NGF revenue estimate has been combined with the present operating structure to provide a full estimate of Baylands GC performance for the next 10 years, assuming successful completion of the “Option A” upgrades. The NGF has projected growth to over $2.8 million in total gross facility revenue to the City (from all sources) by 2016. Key Assumptions The Base assumptions in preparing the projected financial performance estimates covers several categories, including rounds activity, green fees, average revenues (carts, range, concessions, etc.), total revenue, expenses, capital and debt. Under all scenarios, we have assumed use of more complimentary and discount rounds in the initial years after reopening for the purposes of gaining back lost customers, stimulating trial, and general promotions. Rounds Performance The rounds activity performance assumptions include: Rounds in FY2012 assume a 3% reduction from FY2011 total rounds based on actual performance in the first 6 months of FY2012 as reported by staff. Rounds in FY2013 assume ‘as-is’ operation on 18 holes for the first 9 months, then operation on only 9 holes for the last 3 months. During the last three months a reduction of 50% off historical rounds for the corresponding month is assumed. All rounds from April-June 2013 are assumed to be 9-hole rounds. Rounds in FY2014 assume operation on 9 holes for the first 6 months, then operation with an upgraded 18 holes for January-June 2014. All rounds from July- December 2013 are assumed to be 9-hole rounds with a reduction of 50% off historical totals for the corresponding month. Rounds projections assume increases to a stabilized level of 68,200 by 2017. The overall distribution of rounds by category is shown in the table below: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 23 Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option A (2012-2021) As-Is 9-Mos. 18-H / 3 Mos. 9-H 6-Mos. 18-H / 6 Mos. 9-H Operate on 18-holes with modest upgrade to the golf course design FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 3,500 2,200 5,200 5,300 5,600 Senior Non-Resident 6,300 4,200 2,300 5,850 6,200 6,500 9-Hole 1,500 6,400 11,500 1,500 1,600 1,700 Senior 900 600 500 900 1,000 1,000 Junior 1,400 1,000 600 1,350 1,400 1,500 Early Bird 700 500 300 600 700 700 Twilight 11,300 7,800 4,500 10,800 11,000 11,600 Specials 7,500 5,400 3,500 9,400 7,600 8,000 Junior Card 1,100 800 500 1,050 1,200 1,200 Senior Card 800 600 400 900 1,000 1,000 Non-Resident Senior Card 4,000 2,600 1,500 3,750 4,000 4,200 Sub-Total Weekday 40,900 33,400 27,800 41,300 41,000 43,000 Weekend 18-Hole 10,200 7,000 4,000 8,550 9,800 10,300 9 Hole 1,900 8,700 12,500 1,850 2,000 2,100 Junior 800 600 400 800 900 900 Twilight 6,200 4,100 2,400 5,800 6,000 6,400 Sub-Total Weekend 19,100 20,400 19,300 17,000 18,700 19,700 Complimentary Play 2,500 1,700 1,200 2,500 2,500 2,500 Tournaments 2,200 1,500 1,000 2,000 2,500 3,000 TOTAL ROUNDS 64,700 57,000 49,300 62,800 64,700 68,200 Average Fees / Revenue The average green fees per round by category are shown in the table that follows. Key assumptions driving this estimate include: There is no change in average fees for FY2012 over FY2011. The only adjustment in FY2013 is for the 9-hole rate, which has been adjusted downward to reflect the various forms of discounting expected to be present when the facility is operating on only 9 holes in the final 3 months of FY2013 and the first 6 months of FY2014. NGF has assumed 9-hole green fee will go as low as $12.00 per round in some discount categories (e.g., late afternoon replay rate). Upon re-opening on 18 holes (assumed January 1, 2014), average fees in each category are increased approximately 5% over FY2012 (rounded). For FY2015 through FY2021, NGF has assumed 1% annual increases in all fee categories. Average Cart fee and driving range revenue per round in FY2012 is based on the actuals in FY2011. For FY2013, average cart / range revenue per round is reduced by 20% (from 2011) to reflect the operation on only 9 holes the last 3 months. For National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 24 FY2014, average cart and range revenue is reduced by 30% (from FY2011) to reflect 6 months on 9 holes. By FY2015, average cart and range revenue is restored at the 2011 level and then increased by 1% per year through 2021. Average merchandise sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 6 months on 9 holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. Average food and bar sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 6 months on 9-holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. The average green fees by category and ancillary revenue per round are shown in the table below (assume 1% annual increases for FY2018-2021 as noted): Palo Alto Municipal Golf Course (Baylands GC) Projected Average Green Fees for Option A (2012-2021) As-Is 9-Mos. 18-H /3 Mos. 9-H 6-Mos. 18-H /6 Mos. 9-H Operate on 18-holes with modest upgrade to the golf course design FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Weekday 18-Hole $37.00 $37.00 $39.00 $39.39 $39.78 $40.18 Senior Non-Resident $32.00 $32.00 $33.50 $33.84 $34.17 $34.52 9-Hole $23.00 $18.00 $17.00 $25.00 $25.25 $25.50 Senior $28.00 $28.00 $29.50 $29.80 $30.09 $30.39 Junior $14.75 $14.75 $15.50 $15.66 $15.81 $15.97 Early Bird $23.00 $23.00 $24.00 $24.24 $24.48 $24.73 Twilight $30.00 $30.00 $31.50 $31.82 $32.13 $32.45 Specials $19.00 $19.00 $20.00 $20.20 $20.40 $20.61 Junior Card $19.70 $19.70 $20.75 $20.96 $21.17 $21.38 Senior Card $23.50 $23.50 $24.75 $25.00 $25.25 $25.50 Non-Resident Senior Card $27.50 $27.50 $29.00 $29.29 $29.58 $29.88 Weekend 18-Hole $47.00 $47.00 $49.50 $50.00 $50.49 $51.00 9 Hole $27.00 $24.75 $25.75 $28.75 $29.04 $29.33 Junior $15.80 $15.80 $16.50 $16.67 $16.83 $17.00 Twilight $34.00 $34.00 $35.75 $36.11 $36.47 $36.83 Tournaments $34.60 $34.60 $36.50 $36.87 $37.23 $37.61 Avg. Cart Fee / Round $4.54 $3.63 $3.18 $4.54 $4.58 $4.63 Avg. Range Revenue / Round $5.15 $4.12 $3.61 $5.15 $5.20 $5.26 Merchandise Sales / Round $9.94 $7.95 $6.96 $9.94 $9.94 $10.14 Food per Round $9.56 $7.64 $6.69 $9.56 $9.65 $9.75 Bar per Round $2.23 $1.79 $1.56 $2.23 $2.26 $2.28 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 25 Other Revenue Assumptions Total green fee revenue includes all discount (10-play) cards and monthly passes. Ancillary revenue per round (carts, merchandise, range, food, bar, other) is derived from total rounds, including complimentary rounds. Concession revenue to the City of Palo Alto assumes the same current contract basics through FY2021,with no minimums after April 2013. The City is assumed to collect: (1) 7% of all F & B revenue; and (2) 4% of merchandise sales. Expense Assumptions Labor expenses are for City oversight only. These include allocations for contract oversight, Parks and Recreation Director, Division manager, etc. The estimate is intended to include both salary and benefits allocation and is increased by 4.5% per year through FY2021. Commissions paid to the pro shop vendor include 38% of driving range gross revenue and 40% of gross cart revenue (as per contract). The pro shop management fee is fixed at $28,775 per month for the full duration of the NGF projection. Reimbursements for merchant fees (mostly credit card fees) are assumed to be 1.4% of total facility revenue. Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012. $62,500 per month for the first 9 months, then $37,500 per months for the last 3 months of FY2013. $37,500 per month for the first 6 months, then $66,667 per months for the last 6 months of FY2014. $66,667 per month in FY2015, growing at 1.5% annually through 2021. Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Advertising and publishing expense is reduced by 50% during construction and operation on 9 holes, totaling 15% reduction in FY2013. Upon re-opening the golf course this expense is assumed to increase to $45,000 to account for enhanced marketing of the upgraded facility and re-theme as “Baylands GC.” Advertising and publishing expense is then reduced in subsequent years to a “standard” of around $17,000 per year. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 25% reduction during construction 28% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 26 Other direct charges (including electric) are based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions Non-operating revenue attributed to debt service is assumed to continue at 6% of debt service payment as long as payments continue (through FY2019). Debt service payments were provided by the City of Palo Alto. The payment to the General Fund ($94,849) expires after FY2012. There is a new payment of ± $107,000 to the General Fund from FY2015 – FY2019 for repayment of a loan for the difference between the estimated capital cost for Option A and the expected reimbursement from the SFCJPA. The Cost Plan Charges are based on actual 2011 charges with historical 3% growth through the end of FY2021. The NGF has added a new “Operating & Capital Reserve” line to the pro forma beginning in FY2015, set at 10% of green fee revenue. Option A also assumes that the full irrigation replacement will be completed in FY2020 (or by 2020) at a cost of $750,000 (real 2012 dollars). Pro Forma Estimate for ‘Option A’ Scenario – FY2012 – FY2021 Utilizing the above assumptions and activity/revenue estimates, NGF Consulting has prepared a pro forma for the next 10 years of operation, including FY2012 (already underway). The table shows that the renovated Baylands Golf Club could produce net income to the City in the range of $690,000 to $950,000 (before debt, cost plan and reserve) through the term of the current debt program. After the City is no longer responsible for debt payments (beginning in FY2020), the facility is expected to produce net income to the City, after all expenses and charges, in the range of ±$620,000, although a one-time expense of $750,000 is projected for 2020 to upgrade the irrigation system. As this is a projection, all figures after FY2012 have been rounded to the nearest $100 for simplicity. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 27 Palo Alto Golf Course Revenue / Expense - Option A Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,605,200 $1,313,900 $1,967,700 $2,090,000 $2,233,100 $2,255,400 $2,278,000 $2,300,700 $2,323,800 Cart Fees 302,799 293,500 206,900 156,600 284,900 296,500 315,600 318,800 322,000 325,200 328,500 Driving Range 343,911 333,400 235,000 177,800 323,600 336,700 358,500 362,100 365,700 369,400 373,100 Tournament / League Fees 2,196 2,100 1,900 1,600 2,100 2,100 2,200 2,200 2,200 2,200 2,200 Other 11,813 11,500 8,100 6,100 11,100 11,500 12,300 12,300 12,600 12,600 12,800 Total Golf Course Revenues $2,677,256 $2,600,600 $2,057,100 $1,656,000 $2,589,400 $2,736,800 $2,921,700 $2,950,800 $2,980,500 $3,010,100 $3,040,400 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $37,600 $28,500 $51,800 $53,900 $57,400 $58,000 $58,600 $59,200 $59,700 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $64,000 $54,900 $78,700 $80,800 $84,800 $85,400 $86,500 $87,100 $88,200 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $18,100 $13,700 $25,000 $25,700 $27,700 $27,700 $28,200 $28,200 $28,800 Total From Pro Shop Concession $26,536 $25,700 $18,100 $13,700 $25,000 $25,700 $27,700 $27,700 $28,200 $28,200 $28,800 Total Gross to City $2,784,788 $2,705,600 $2,139,200 $1,724,600 $2,693,100 $2,843,300 $3,034,200 $3,063,900 $3,095,200 $3,125,400 $3,157,400 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 89,300 67,600 123,000 127,900 136,200 137,600 139,000 140,400 141,800 Cart Fees 117,529 117,400 82,800 62,600 114,000 118,600 126,200 127,500 128,800 130,100 131,400 Club Fees 5,576 5,700 4,600 4,000 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 28,800 23,200 36,300 38,300 40,900 41,300 41,700 42,100 42,600 Contract Maintenance 475,000 750,000 675,000 625,000 800,000 812,000 824,200 836,600 849,100 861,800 874,700 Repairs & maintenance 21,943 22,300 17,800 15,600 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 9,300 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 31,600 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 277,400 207,000 195,000 200,900 204,900 214,100 223,700 233,800 244,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 28 Palo Alto Golf Course Revenue / Expense - Option A Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 32,100 44,700 45,400 46,100 46,800 47,500 48,200 48,900 Indirect Charges 102,571 104,100 83,300 72,900 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,831,700 $1,683,700 $2,024,100 $2,051,000 $2,096,900 $2,133,100 $2,170,100 $2,208,400 $2,247,800 Net Income From Operations (Loss)$828,703 $710,800 $307,500 $40,900 $669,000 $792,300 $937,300 $930,800 $925,100 $917,000 $909,600 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $333,200 $66,600 $694,700 $818,100 $963,200 $956,700 $951,000 $917,000 $909,600 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $432,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $107,600 $107,600 $107,600 $107,600 $107,600 $0 $0 New Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Additional Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $750,000 $0 Reserve for Replacement $0 $0 $0 $0 $196,800 $209,000 $223,300 $225,500 $227,800 $230,100 $232,400 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $779,300 $795,500 $812,600 $816,400 $819,100 $1,034,200 $288,100 Net Income or (Loss)$168,090 $104,200 ($139,000)($407,700)($84,600)$22,600 $150,600 $140,300 $131,900 ($117,200)$621,500 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 29 PROJECTIONS BASED ON “OPTION D” The NGF cash flow model for operation under “Option D” assumes a more significant upgrade to the facility with a “more dramatic transformation” as described by the golf course architect. The NGF revenue estimate has been combined with the present operating structure to provide a full estimate of Baylands GC performance for the next 10 years, assuming successful completion of the “Option D” upgrades. The NGF has projected growth to over $3.0 million in total gross revenue (from all sources) to the City by 2016. Key Assumptions The Base assumptions in preparing the projected financial performance match those presented in the projection for Option A,except the following changes noted below: Rounds Performance The rounds activity performance assumptions include: Rounds in FY2013 assume ‘as-is’ operation on 18 holes for the first 9 months, then operation on only 9 holes for the last 3 months. During the last three months a reduction of 50% off historical rounds for the corresponding month is assumed. All rounds from April-June 2013 are assumed to be 9-hole rounds. Rounds in FY2014 assume operation on 9 holes for the first 7 months, then operation with an upgraded 18 holes for February - June 2014. All rounds from July 2013 through January 2014 are assumed to be 9-hole rounds with a reduction of 50% off historical totals for the corresponding months. Rounds in FY2015 through FY2021 assume increases to a stabilized level of 73,300 by 2017. The overall distribution of rounds by category is shown in the table below: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 30 Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option D (2012-2021) As-Is 9-Mos. 18- H /3 Mos. 9-H 5-Mos. 18- H /7 Mos. 9-H Operate on 18-holes with upgraded golf design and more appealing features FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 3,500 1,800 5,500 5,800 6,100 Senior Non-Resident 6,300 4,200 2,100 6,200 6,550 6,900 9-Hole 1,500 6,400 11,000 1,600 1,600 1,700 Senior 900 600 300 1,100 1,150 1,200 Junior 1,400 1,000 400 1,350 1,400 1,500 Early Bird 700 500 200 800 850 900 Twilight 11,300 7,800 3,700 11,200 11,750 12,400 Specials 7,500 5,400 3,000 7,550 8,000 8,400 Junior Card 1,100 800 400 1,150 1,250 1,300 Senior Card 800 600 300 1,000 1,050 1,100 Non-Resident Senior Card 4,000 2,600 1,200 3,950 4,200 4,400 Sub-Total Weekday 40,900 33,400 24,400 41,400 43,600 45,900 Weekend 18-Hole 10,200 7,000 3,500 9,900 10,450 11,000 9 Hole 1,900 8,700 11,900 2,000 2,150 2,200 Junior 800 600 300 900 950 1,000 Twilight 6,200 4,100 2,100 6,000 6,350 6,700 Sub-Total Weekend 19,100 20,400 17,800 18,800 19,900 20,900 Complimentary Play 2,500 1,700 1,000 2,500 2,500 2,500 Tournaments 2,200 1,500 800 3,000 3,500 4,000 TOTAL ROUNDS 64,700 57,000 44,000 65,700 69,500 73,300 Average Fees / Revenue The average green fees per round by category are shown in the table that follows. Key assumptions driving this estimate include: The only adjustment in FY2013 is for the 9-hole rate, which has been adjusted downward to reflect the various forms of discounting expected to be present when the facility is operating on only 9 holes in the final 3 months of FY2013 and the first 7 months of FY2014. Upon re-opening on 18 holes (assumed January 1, 2014), average fees in each category are increased approximately 10% over FY2012 (rounded). Average Cart fee and driving range revenue per round in FY2012 is based on the actuals in FY2011. For FY2013, average cart / range revenue per round is reduced by 20% (from 2011) to reflect the operation on only 9 holes the last 3 months. For FY2014, average cart and range revenue is reduced by 30% (from FY2011) to reflect 7 months on 9 holes. By FY2015, average cart and range revenue is restored at the 2011 level and then increased by 1% per year through 2021. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 31 Average merchandise sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 7 months on 9 holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. Average food and bar sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 7 months on 9 holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. The average green fees by category and ancillary revenue per round are shown in the table below (assume 1% annual increases for FY2018-2021 as noted): Palo Alto Municipal Golf Course (Baylands GC) Projected Average Green Fees for Option D (2012-2021) As-Is 9-Mos. 18-H /3 Mos. 9-H 5-Mos. 18-H /7 Mos. 9-H Operate on 18-holes with upgraded golf design and more appealing features FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Weekday 18-Hole $37.00 $37.00 $41.00 $41.41 $41.82 $42.24 Senior Non-Resident $32.00 $32.00 $35.00 $35.35 $35.70 $36.06 9-Hole $23.00 $18.00 $17.00 $25.00 $25.25 $25.50 Senior $28.00 $28.00 $31.00 $31.31 $31.62 $31.94 Junior $14.75 $14.75 $16.25 $16.41 $16.58 $16.74 Early Bird $23.00 $23.00 $25.50 $25.76 $26.01 $26.27 Twilight $30.00 $30.00 $33.00 $33.33 $33.66 $34.00 Specials $19.00 $19.00 $21.00 $21.21 $21.42 $21.64 Junior Card $19.70 $19.70 $21.75 $21.97 $22.19 $22.41 Senior Card $23.50 $23.50 $26.00 $26.26 $26.52 $26.79 Non-Resident Senior Card $27.50 $27.50 $30.00 $30.30 $30.60 $30.91 Weekend 18-Hole $47.00 $47.00 $52.00 $52.52 $53.05 $53.58 9 Hole $27.00 $24.75 $27.25 $28.75 $29.04 $29.33 Junior $15.80 $15.80 $17.50 $17.68 $17.85 $18.03 Twilight $34.00 $34.00 $37.50 $37.88 $38.25 $38.64 Tournaments $34.60 $34.60 $38.00 $38.38 $38.76 $39.15 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 32 Expense Assumptions Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012. $62,500 per month for the first 9 months, then $37,500 per months for the last 3 months of FY2013. $37,500 per month for the first 7 months, then $71,000 per months for the last 5 months of FY2014. $71,000 per month in FY2015, growing at 1.5% annually through 2021. Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 25% reduction during construction 32% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021. Other direct charges (including electric) are based on actual 2011 totals, based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions There is a new payment of ± $223,700 to the General Fund from FY2015 – FY2019 for repayment of a loan for the difference between the estimated capital cost for Option D and the expected reimbursement from the SFCJPA. Option D also assumes that the full irrigation replacement will be completed in FY2020 (or by 2020) at a cost of $500,000 (real 2012 dollars). Pro Forma Estimate for ‘Option D’ Scenario – FY2012 – FY2021 Utilizing the above assumptions and activity/revenue estimates, NGF Consulting has prepared a pro forma for the next five years of operation, including FY2012 (already underway). The table shows that with a more comprehensive renovation, the Baylands GC could produce net income to the City in the range of $930,000 to $1.27 million (before debt, cost plan and reserve) through the term of the current debt program. After the City is no longer responsible for debt payments (beginning in FY2020), the facility is expected to produce net income to the City in the range of $915,000 per year, although there is a one-time expense of $500,000 for irrigation in 2020. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 33 Palo Alto Golf Course Revenue / Expense - Option D Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,605,200 $1,213,500 $2,204,500 $2,361,900 $2,522,200 $2,547,500 $2,572,900 $2,598,700 $2,624,600 Cart Fees 302,799 293,500 206,900 139,700 298,100 318,500 339,200 342,600 346,100 349,500 353,000 Driving Range 343,911 333,400 235,000 158,700 338,600 361,700 385,300 389,200 393,100 397,000 401,000 Tournament / League Fees 2,196 2,100 1,900 1,400 2,200 2,300 2,400 2,400 2,400 2,400 2,400 Other 11,813 11,500 8,100 5,500 11,600 12,300 13,200 13,200 13,500 13,500 13,800 Total Golf Course Revenues $2,677,256 $2,600,600 $2,057,100 $1,518,800 $2,855,000 $3,056,700 $3,262,300 $3,294,900 $3,328,000 $3,361,100 $3,394,800 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $37,600 $25,400 $54,200 $57,900 $61,700 $62,300 $62,900 $63,600 $64,200 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $64,000 $51,800 $81,100 $84,800 $89,100 $89,700 $90,800 $91,500 $92,700 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $18,100 $12,200 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total From Pro Shop Concession $26,536 $25,700 $18,100 $12,200 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total Gross to City $2,784,788 $2,705,600 $2,139,200 $1,582,800 $2,962,200 $3,169,100 $3,381,100 $3,414,300 $3,449,100 $3,482,900 $3,518,400 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 89,300 60,300 128,700 137,400 146,400 147,900 149,400 150,900 152,400 Cart Fees 117,529 117,400 82,800 55,900 119,200 127,400 135,700 137,000 138,400 139,800 141,200 Club Fees 5,576 5,700 4,600 4,000 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 28,800 21,300 40,000 42,800 45,700 46,100 46,600 47,100 47,500 Contract Maintenance 475,000 750,000 675,000 595,800 852,000 864,800 877,800 891,000 904,400 918,000 931,800 Repairs & maintenance 21,943 22,300 17,800 15,600 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 9,300 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 31,600 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 277,400 204,000 161,000 165,800 169,100 176,700 184,700 193,000 201,700 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 34 Palo Alto Golf Course Revenue / Expense - Option D Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 32,100 43,500 44,200 44,900 45,600 46,300 47,000 47,700 Indirect Charges 102,571 104,100 83,300 72,900 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,831,700 $1,635,600 $2,055,500 $2,090,300 $2,138,000 $2,173,500 $2,210,100 $2,247,800 $2,286,400 Net Income From Operations (Loss)$828,703 $710,800 $307,500 ($52,800)$906,700 $1,078,800 $1,243,100 $1,240,800 $1,239,000 $1,235,100 $1,232,000 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $333,200 ($27,100)$932,400 $1,104,600 $1,268,500 $1,266,700 $1,264,900 $1,235,100 $1,232,000 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $223,700 $223,700 $223,700 $223,700 $223,700 $0 $0 Additional Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $500,000 $0 Reserve for Replacement $0 $0 $0 $0 $220,500 $236,200 $252,200 $254,800 $257,300 $259,900 $262,500 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $919,100 $938,800 $948,600 $961,800 $964,700 $814,000 $318,200 Net Income or (Loss)$168,090 $104,200 ($139,000)($501,400)$13,300 $165,800 $319,900 $304,900 $300,200 $421,100 $913,800 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 35 PROJECTIONS BASED ON “OPTION F” The NGF cash flow model for operation under “Option F” assumes a more significant upgrade to the facility, with a two-thirds complete renovation the addition of a soccer field and a comparable “dramatic transformation” as proposed in Option D. The NGF estimate shows the Baylands GC revenue performance under Option F over the next 10 years would be comparable to Option D. Key Assumptions The Base assumptions in preparing the projected financial performance match those presented in the projection for Option D,except the following changes noted below: Rounds and Average Fee Performance The rounds activity and average fee performance assumptions are the same as proposed in “Option D,” except: Rounds in FY2014 assume operation on 9 holes for the first 9 months, then operation with an upgraded 18 holes for April - June 2014. All rounds from July 2013 through March 2014 are assumed to be 9-hole rounds with totals reduced by 50% for each corresponding month. Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option F (2012-2021) As-Is 9-Mos. 18- H /3 Mos. 9-H 3-Mos. 18- H /9 Mos. 9-H Operate on 18-holes with nearly complete renovation FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 3,500 1,000 5,500 5,800 6,100 Senior Non-Resident 6,300 4,200 1,100 6,200 6,550 6,900 9-Hole 1,500 6,400 12,800 1,600 1,600 1,700 Senior 900 600 200 1,100 1,150 1,200 Junior 1,400 1,000 300 1,350 1,400 1,500 Early Bird 700 500 200 800 850 900 Twilight 11,300 7,800 2,000 11,200 11,750 12,400 Specials 7,500 5,400 2,200 7,550 8,000 8,400 Junior Card 1,100 800 300 1,150 1,250 1,300 Senior Card 800 600 200 1,000 1,050 1,100 Non-Resident Senior Card 4,000 2,600 800 3,950 4,200 4,400 Sub-Total Weekday 40,900 33,400 21,100 41,400 43,600 45,900 Weekend 18-Hole 10,200 7,000 2,100 9,900 10,450 11,000 9 Hole 1,900 8,700 13,700 2,000 2,150 2,200 Junior 800 600 200 900 950 1,000 Twilight 6,200 4,100 1,000 6,000 6,350 6,700 Sub-Total Weekend 19,100 20,400 17,000 18,800 19,900 20,900 Complimentary Play 2,500 1,700 1,100 2,500 2,500 2,500 Tournaments 2,200 1,500 500 3,000 3,500 4,000 TOTAL ROUNDS 64,700 57,000 39,700 65,700 69,500 73,300 Average green and ancillary fees in “Option F” are identical to those presented for “Option D.” National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 36 Expense Assumptions Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012 $62,500 per month for the first 9 months, then $37,500 per months for the last 3 months of FY2013 $37,500 per month for the first 9 months, then $66,667 per months for the last 3 months of FY2014 $66,667 per month in FY2015, growing at 1.5% annually through 2021. Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 40% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 20% reduction during construction 32% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021 Other direct charges (including electric) are based on actual 2011 totals, based on actual figures for FY2011 with 20% reduction in FY2013 and 40% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions The NGF has assumed that the $2,855,400 in additional cost needed to complete Option F, over and above the amount estimated to be reimbursed by the SFCJPA, will be funded via the issuance of a new debt program (revenue or General Obligation Bond), with terms of 4.5% interest for 20 years, with payments beginning in FY2015. Option F also assumes that the full irrigation replacement will be completed in FY2020 (or by 2020) at a cost of $250,000 (real 2012 dollars). Pro Forma Estimate for ‘Option F’ Scenario – FY2012 – FY2021 Based on the inputs described above, the pro forma estimate for future performance under “Option F” shows that with this more comprehensive renovation, the Baylands GC could produce net income to the City in the range of $960,000 to $1.34 million (before existing and new debt, cost plan and reserve) through the term of the current debt program. After the City is no longer responsible for its older (1999 issue) debt payments, beginning in FY2020, the facility is expected to produce net income to the City in the range of $720,000 per year, although there is a one-time expense of $250,000 for irrigation in 2020. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 37 Palo Alto Golf Course Revenue / Expense - Option F Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,605,200 $969,500 $2,204,500 $2,361,900 $2,522,200 $2,547,500 $2,572,900 $2,598,700 $2,624,600 Cart Fees 302,799 293,500 206,900 126,100 298,100 318,500 339,200 342,600 346,100 349,500 353,000 Driving Range 343,911 333,400 235,000 143,200 338,600 361,700 385,300 389,200 393,100 397,000 401,000 Tournament / League Fees 2,196 2,100 1,900 1,300 2,200 2,300 2,400 2,400 2,400 2,400 2,400 Other 11,813 11,500 8,100 4,900 11,600 12,300 13,200 13,200 13,500 13,500 13,800 Total Golf Course Revenues $2,677,256 $2,600,600 $2,057,100 $1,245,000 $2,855,000 $3,056,700 $3,262,300 $3,294,900 $3,328,000 $3,361,100 $3,394,800 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $37,600 $22,900 $54,200 $57,900 $61,700 $62,300 $62,900 $63,600 $64,200 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $64,000 $49,300 $81,100 $84,800 $89,100 $89,700 $90,800 $91,500 $92,700 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $18,100 $11,000 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total From Pro Shop Concession $26,536 $25,700 $18,100 $11,000 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total Gross to City $2,784,788 $2,705,600 $2,139,200 $1,305,300 $2,962,200 $3,169,100 $3,381,100 $3,414,300 $3,449,100 $3,482,900 $3,518,400 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 89,300 54,400 128,700 137,400 146,400 147,900 149,400 150,900 152,400 Cart Fees 117,529 117,400 82,800 50,400 119,200 127,400 135,700 137,000 138,400 139,800 141,200 Club Fees 5,576 5,700 4,600 3,400 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 28,800 17,400 40,000 42,800 45,700 46,100 46,600 47,100 47,500 Contract Maintenance 475,000 750,000 675,000 537,500 800,000 812,000 824,200 836,600 849,100 861,800 874,700 Repairs & maintenance 21,943 22,300 17,800 13,400 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 9,300 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 21,700 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 280,400 217,600 182,400 187,900 191,700 200,300 209,300 218,700 228,500 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 38 Palo Alto Golf Course Revenue / Expense - Option F Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 22,000 42,500 43,100 43,700 44,400 45,100 45,800 46,500 Indirect Charges 102,571 104,100 83,300 50,000 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,834,700 $1,529,900 $2,023,900 $2,058,500 $2,105,800 $2,141,500 $2,178,200 $2,216,100 $2,254,900 Net Income From Operations (Loss)$828,703 $710,800 $304,500 ($224,600)$938,300 $1,110,600 $1,275,300 $1,272,800 $1,270,900 $1,266,800 $1,263,500 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $330,200 ($198,900)$964,000 $1,136,400 $1,300,700 $1,298,700 $1,296,800 $1,266,800 $1,263,500 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 Additional Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $250,000 $0 New Debt Service $0 $0 $0 $0 $219,500 $219,500 $219,500 $219,500 $219,500 $219,500 $219,500 Reserve for Replacement $0 $0 $0 $0 $220,500 $236,200 $252,200 $254,800 $257,300 $259,900 $262,500 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $914,900 $934,600 $944,400 $957,600 $960,500 $783,500 $537,700 Net Income or (Loss)$168,090 $104,200 ($142,000)($673,200)$49,100 $201,800 $356,300 $341,100 $336,300 $483,300 $725,800 NOTE: Option F would likely include additional revenue from soccer fields of approximately $78,000 per field per year. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 39 PROJECTIONS BASED ON “OPTION G” The NGF projection model for “Option G” represents a significant change from other options presented. This option would involve a complete renovation of the Palo Alto Municipal Golf Course (to be re-branded as “Baylands Golf Club). The project would involve a full closure of the golf course from April 2013 through March 2014, re-opening as a brand new golf course with the highest quality golf features commanding higher fees than any other option presented. The full golf course irrigation system would be replaced and three new soccer fields would be added to the site. Subsequent to the initial draft report, the City Finance Committee recommended that this option include rebuilding of all 18 greens, re-turfing of all fairways, construction of an on- course restroom, and rebuilding the practice green area. These changes should further enhance the product’s marketability and the golfer experience. The NGF revenue estimate has been combined with the present operating structure to provide a full estimate of Baylands GC performance for the next 10 years, assuming successful completion of the proposed “Option G” upgrades. The NGF has projected growth to almost $3.2 million in total gross revenues (from all sources) to the City by 2016. Key Assumptions The Base assumptions in preparing the projected financial performance estimates covers several categories, including rounds activity, green fees, average revenues (carts, range, concessions, etc.), total revenue, expenses, capital and debt. Rounds Performance The rounds activity performance assumptions include: Rounds in FY2012 assume a 3% reduction from FY2011 total rounds based on actual performance in the first 6 months of FY2012. Rounds in FY2013 assume ‘as-is’ operation on 18 holes for the first 9 months. The golf course then closes entirely for the next 12 months (April 2013 –March 2014), re- opening as an upgraded new facility on April 1, 2014. Upon re-opening, rounds are assumed to grow to 67,900 in FY2015, stabilizing at 75,700 rounds by 2017. The overall distribution of rounds by category is shown in the table below: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 40 Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option G (2012-2021) As-Is 9-Mos. 18- H / 3 Mos. closed 3-Mos. 18- H / 9 Mos. Closed Operate on 18-holes with maximum renovation and upgrade FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 4,000 1,000 5,500 5,800 6,100 Senior Non-Resident 6,300 4,700 1,300 6,200 6,550 6,900 9-Hole 1,500 1,100 400 1,550 1,600 1,700 Senior 900 600 250 1,100 1,150 1,200 Junior 1,400 1,000 400 1,450 1,500 1,600 Early Bird 700 500 200 800 850 900 Twilight 11,300 8,400 2,800 11,500 12,150 12,800 Specials 7,500 5,600 2,200 7,650 8,050 8,500 Junior Card 1,100 800 300 1,150 1,250 1,300 Senior Card 800 600 200 1,000 1,050 1,100 Non-Resident Senior Card 4,000 3,000 1,000 4,000 4,300 4,500 Sub-Total Weekday 40,900 30,300 10,050 41,900 44,250 46,600 Weekend 18-Hole 10,200 7,600 2,500 10,050 10,650 11,200 9 Hole 1,900 1,400 500 2,000 2,100 2,200 Junior 800 600 200 900 950 1,000 Twilight 6,200 4,600 1,500 6,050 6,350 6,700 Sub-Total Weekend 19,100 14,200 4,700 19,000 20,050 21,100 Complimentary Play 2,500 1,800 650 3,500 3,500 3,500 Tournaments 2,200 1,600 600 3,500 4,000 4,500 TOTAL ROUNDS 64,700 47,900 16,000 67,900 71,800 75,700 Average Fees / Revenue The average green fees per round by category are shown in the table that follows. Key assumptions driving this estimate include: There is no change in average fees for FY2012 over FY2011. Upon re-opening on 18 holes (assumed April 1, 2014), average fees in each category are increased approximately 15% over FY2012 (rounded). For FY2015 through FY2021, NGF has assumed 1% annual increases in all fee categories. All other ancillary revenue centers mirror estimates made in Options D and F. The average green fees by category and ancillary revenue per round are shown in the table below (assume 1% annual increases for FY2018-2021 as noted): National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 41 Palo Alto Municipal Golf Course (Baylands GC) Projected Average Green Fees for Option G (2012-2021) As-Is 9-Mos. 18- H / 3 Mos. closed 3-Mos. 18- H / 9 Mos. Closed Operate on 18-holes with maximum renovation and upgrade FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Weekday 18-Hole $37.00 $37.00 $42.50 $42.93 $43.35 $43.79 Senior Non-Resident $32.00 $32.00 $37.00 $37.37 $37.74 $38.12 9-Hole $23.00 $18.00 $24.00 $25.00 $25.25 $25.50 Senior $28.00 $28.00 $32.00 $32.32 $32.64 $32.97 Junior $14.75 $14.75 $17.00 $17.17 $17.34 $17.52 Early Bird $23.00 $23.00 $26.50 $26.77 $27.03 $27.30 Twilight $30.00 $30.00 $34.50 $34.85 $35.19 $35.55 Specials $19.00 $19.00 $22.00 $22.22 $22.44 $22.67 Junior Card $19.70 $19.70 $22.50 $22.73 $22.95 $23.18 Senior Card $23.50 $23.50 $27.00 $27.27 $27.54 $27.82 Non-Resident Senior Card $27.50 $27.50 $31.50 $31.82 $32.13 $32.45 Weekend 18-Hole $47.00 $47.00 $54.00 $54.54 $55.09 $55.64 9 Hole $27.00 $24.75 $28.50 $28.75 $29.04 $29.33 Junior $15.80 $15.80 $18.00 $18.18 $18.36 $18.55 Twilight $34.00 $34.00 $39.00 $39.39 $39.78 $40.18 Tournaments $34.60 $34.60 $40.00 $40.40 $40.80 $41.21 Other Revenue Assumptions Total green fee revenue includes all discount (10-play) cards and monthly passes. Ancillary revenue per round (carts, merchandise, range, food, bar, other) is derived from total rounds, including complimentary rounds. Concession revenue to the City of Palo Alto assumes the same current contract basics through FY2021,with no minimums after April 2013. The City is assumed to collect: (1) 7% of all food and beverage revenue; and (2) 4% of merchandise sales. Expense Assumptions Labor expenses are for City oversight only. These include allocations for contract oversight, Parks and Recreation Director, Division manager, etc. The estimate is intended to include both salary and benefits allocation and is increased by 4.5% per year through FY2021. Commissions paid to the pro shop vendor include 38% of driving range gross revenue and 40% of gross cart revenue (as per contract). The pro shop management fee is fixed at $28,775 per month while the golf course is open. No management fees are assumed for April 2013 through March 2014. Reimbursements for merchant fees (mostly credit card fees) are assumed to be 1.4% of total facility revenue. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 42 Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012 $62,500 per month for the first 9 months of FY2013 No contract maintenance expense for April 2013 through March 2014 $68,750 per month (fixed) upon re-opening in April 2014 (3 months in FY2014), then $68,750 per month in FY2015, growing at 1.5% annually through 2021 Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 70% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Advertising and publishing expense is reduced by 50% during construction and operation on 9 holes, totaling 15% reduction in FY2013. Upon re-opening the golf course this expense is assumed to increase $45,000 to account for enhanced marketing of the upgraded facility and re-theme as “Baylands GC.” Advertising and publishing expense is then reduced in subsequent years to a “standard” of around $17,000 per year. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 60% reduction during construction 32% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021 Other direct charges (including electric) are based on actual 2011 totals, based on actual figures for FY2011 with 20% reduction in FY2013 and 70% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions The NGF has assumed that the $4,570,000 in additional cost needed to complete Option G, over and above the amount reimbursed by the SFCJPA, will be funded via the issuance of a new debt program (revenue or General Obligation Bond), with terms of 4.5% interest for 20 years, with payments beginning in FY2015. Pro Forma Estimate for ‘Option G’ Scenario – FY2012 – FY2021 Based on the inputs described above, the pro forma estimate for future performance under “Option G” shows that with this complete renovation, the Baylands GC could produce net income to the City in the range of $1.07 to $1.42 million (before existing and new debt, cost plan and reserve) through the term of the current debt program that ends in 2019. After the City is no longer responsible for its older (1999 issue) debt payments, the facility is expected to produce net income to the City, after all expenses and other charges, in the range of $740,000 per year. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 43 Palo Alto Golf Course Revenue / Expense - Option G Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $544,300 $2,341,500 $2,510,600 $2,680,900 $2,707,800 $2,734,800 $2,762,200 $2,789,800 Cart Fees 302,799 293,500 173,900 72,600 311,100 332,300 353,900 357,400 361,000 364,600 368,200 Driving Range 343,911 333,400 197,500 82,400 353,400 377,400 401,900 405,900 410,000 414,100 418,200 Tournament / League Fees 2,196 2,100 1,600 500 2,200 2,400 2,500 2,500 2,500 2,500 2,500 Other 11,813 11,500 6,800 2,800 12,000 12,700 13,700 13,700 13,900 13,900 14,200 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $702,600 $3,020,200 $3,235,400 $3,452,900 $3,487,300 $3,522,200 $3,557,300 $3,592,900 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $56,600 $60,400 $64,400 $65,000 $65,700 $66,300 $67,000 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $83,500 $87,300 $91,800 $92,400 $93,600 $94,200 $95,500 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $748,600 $3,130,700 $3,351,200 $3,575,400 $3,610,400 $3,647,100 $3,682,800 $3,720,300 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 134,300 143,400 152,700 154,200 155,800 157,400 158,900 Cart Fees 117,529 117,400 69,600 29,000 124,400 132,900 141,600 143,000 144,400 145,800 147,300 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,800 42,300 45,300 48,300 48,800 49,300 49,800 50,300 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 44 Palo Alto Golf Course Revenue / Expense - Option G Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $759,400 $2,061,600 $2,097,500 $2,146,000 $2,182,300 $2,219,400 $2,257,900 $2,297,400 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($10,800)$1,069,100 $1,253,700 $1,429,400 $1,428,100 $1,427,700 $1,424,900 $1,422,900 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 $14,900 $1,094,800 $1,279,500 $1,454,800 $1,454,000 $1,453,600 $1,424,900 $1,422,900 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $234,200 $251,100 $268,100 $270,800 $273,500 $276,200 $279,000 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $1,060,400 $1,081,300 $1,092,100 $1,105,400 $1,108,500 $681,600 $686,000 Net Income or (Loss)$168,090 $104,200 ($123,500)($459,400)$34,400 $198,200 $362,700 $348,600 $345,100 $743,300 $736,900 NOTE: Option G would likely include additional revenue from soccer fields estimated by City at approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 45 FINANCIAL PROJECTIONS SUMMARY Summary of Options Comparative table for options in 2015 and 2020 are shown below: Summary in 2015 Summary in FY2015 Modest Upgrade Option A More significant upgrade / nicer features Option D Nearly complete renovation Option F Maximum renovation Option G TOTAL ROUNDS 62,800 65,700 65,700 67,900 ANNUAL ROUNDS REVENUE $1,967,709 $2,204,512 $2,204,512 $2,341,455 AVERAGE GREEN FEE PER ROUND $31.33 $33.55 $33.55 $34.48 Revenues FY2015 Projected FY2015 Projected FY2015 Projected FY2015 Projected Total Golf Course Revenues $2,589,400 $2,855,000 $2,855,000 $3,020,200 Concessions Total from F & B Concession $78,700 $81,100 $81,100 $83,500 Total From Pro Shop Concession $25,000 $26,100 $26,100 $27,000 Total Gross to City $2,693,100 $2,962,200 $2,962,200 $3,130,700 Expenses Water 195,000 161,000 182,400 225,600 Maintenance Contract 800,000 852,000 800,000 825,000 Total to Pro Shop Contract 618,600 633,200 633,200 646,300 All Other Expenses 410,500 409,300 408,300 407,300 Total City Operating Expenses 2,024,100 2,055,500 2,023,900 2,061,600 Net Income From Operations (Loss)$669,000 $906,700 $938,300 $1,069,100 Total Income (Incl. Non-operating)$694,700 $932,400 $964,000 $1,094,800 Total Debt/Other Charges $779,300 $1,501,100 $914,900 $1,060,400 Net Income or (Loss)($84,600)($568,700)$49,100 $34,400 Footnotes Partial irrigation Partial irrigation Potential for additional $78,000 Soccer revenue Potential for additional $234,000 Soccer revenue National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 46 Summary in 2020 Summary in FY2020 Modest Upgrade Option A More significant upgrade / nicer features Option D Nearly complete renovation Option F Maximum renovation Option G TOTAL ROUNDS 68,200 73,300 73,300 75,700 ANNUAL ROUNDS REVENUE $2,300,746 $2,598,658 $2,598,658 $2,762,185 AVERAGE GREEN FEE PER ROUND $33.74 $35.45 $35.45 $36.49 Revenues FY2015 Projected FY2015 Projected FY2015 Projected FY2015 Projected Total Golf Course Revenues $3,010,100 $3,361,100 $3,361,100 $3,557,300 Concessions Total from F & B Concession $87,100 $91,500 $91,500 $94,200 Total From Pro Shop Concession $28,200 $30,300 $30,300 $31,300 Total Gross to City $3,125,400 $3,482,900 $3,482,900 $3,682,800 Expenses Water 233,800 193,000 218,700 219,500 Maintenance Contract 861,800 918,000 861,800 888,800 Total to Pro Shop Contract 657,900 683,100 683,100 698,300 All Other Expenses 454,900 453,700 452,500 451,300 Total City Operating Expenses $2,208,400 $2,247,800 $2,216,100 $2,257,900 Net Income From Operations (Loss)$917,000 $1,235,100 $1,266,800 $1,424,900 Total Income (Incl. Non-operating)$917,000 $1,235,100 $1,266,800 $1,424,900 Total Debt/Other Charges $1,034,200 $814,000 $783,500 $681,600 Net Income or (Loss)($117,200)$421,100 $483,300 $743,300 Footnotes Partial irrigation Partial irrigation Potential for additional $78,000 Soccer revenue Potential for additional $234,000 Soccer revenue Summary Results The results of the NGF Consulting financial projections for Palo Alto Golf Course, based on the various reconfiguration options and the analysis and assumptions presented in this report, show that the facility will generate, to varying degrees based on the renovation option, improved rounds and revenue performance compared to the base “as is” scenario. In relation to estimating lost rounds and revenues during construction, NGF has assumed for all options under which the facility will remain open for 9-hole play that the City will still be able to provide a quality golf experience that is minimally disruptive to the golfer. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 47 Key observations regarding projected “Baylands Golf Club at Palo Alto” financial performance: NGF has estimated that total revenues to the City will decrease by varying amounts during construction for the four options evaluated. For instance, under Option A, the total two-year cumulative reduction in gross revenue to the City is nearly $1.5 million. This is based on estimated FY 2012 gross revenues. However, because of expense reductions (e.g., range and cart payments, contract maintenance, water, indirect charges) during the time of construction, net income from operations (before debt, other costs) is estimated to decrease by ±$1.08 million over the two-year period, based on actual estimated FY 2012 net operating income. Option G, which involves a 12-month closure of all 18 holes, naturally results in the greatest reduction in revenue, with only $748,600 gross income from operations in FY 2014, when the course is closed for 9 months. The two-year cumulative loss in gross revenue to the City, using FY 2012 as a base, is estimated at nearly $2.7 million, while the loss in net income is estimate at ± $1.1 million. Rounds played, after years of decline, are projected to rebound under all of the reconfiguration options, with options D and F at stabilized total rounds at 73,300, representing a 5,100 round improvement over Option A. Option G – full renovation – results in the highest stabilized activity level, at nearly 76,000 annual rounds. Option D, which is expected to cost ±$600,000 more than base Option A, is projected to produce significantly higher net operating income than Option A, resulting in a quick pay back of the investment. Stabilized Net Operating Income (before debt and other costs such as capital, reserve, and cost plan) is projected to be highest under Option G, with 2021 NOI projected at about $1.42 million. Option F is second with ±$1.26 million, followed closely by Option D at about $1.23 million. After additional debt associated with improvements is considered, Option G is projected to produce overall Net Income to the City that is moderately lower than that of Option D. However, further down the road when the debt for Option G is paid off, it is expected to produce the highest Net Income for the City of Palo Alto. Justifications for Revenue Projections NGF is confident, given the inputs (e.g., expected quality and appeal following improvements) for each option, that the rounds, fees, revenues, and expenses projected under each scenario are reasonable and achievable. The highest stabilized rounds activity we have projected under any scenario was less than 76,000 total rounds, a level that was achieved as recently as 2007- 08 (and was far exceeded in the past) with a product that was inferior to what a reconfigured and re-branded golf course will bring to market. Also, we feel we have been conservative in terms of the fee increases that the improved facility will be able to sustain. Likewise, we believe it is more difficult to estimate the impact on revenues during the time of construction, as there are many variables, not the least of which are golfer behavior and preferences. Pro formas are, by their nature, models based on a set of assumptions that may or may not become reality and which are subject to a number of uncontrollable factors (e.g., weather variations, the economy, quality/quantity of the competition), but NGF believes that our projections represent a “reasonable” estimate of performance for the “Baylands” facility based on the factors discussed in this report. Among the factors considered when crafting our projections for each model are: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 48 Expected higher quality of the Palo Alto Municipal Golf Course (level of improvement depends on intensity of Reconfiguration Option chosen, level of “additional” work). Re-branding and effective marketing of the “Baylands Golf Club at Palo Alto”, along with more proactive direct selling of larger tournaments and events. Reinventing the product should re-energize the current customer base, resulting in increased frequency of play, and also position the facility to compete more effectively for non-resident rounds. Results of ERA’s 2008 survey revealed that the number one reason Palo Alto GC was not the primary course of respondents was “course quality/play experience”. Maintenance conditions that will position the facility in the mid-to-upper tier of municipal golf courses in this market. Non-resident green fees at Palo Alto, especially on weekends, are at the low end of the price range among the direct municipal competitors. With an improved product, there should be little resistance to modest price increases at the “Baylands”. Maintaining a strong price/value proposition will ensure that the improved golf course remains very competitive in the area market despite expected modest fee increases. Palo Alto Municipal Golf Course is operating at rounds levels that are will below peak levels from 1990s and early-to-mid 2000s. The facility has achieved rounds played levels close to what NGF Consulting is projecting under the most favorable option as recently as FY 2008. The Bay Area remains one of the most active markets for municipal golf in the nation. At the peak of the market, Palo Alto and several of its chief competitors realized annual activity levels approaching, or even exceeding, 100,000 rounds. Though play levels may never approach these extraordinary numbers again, we believe the market has the potential to make a recovery. NGF believes there is a lack of truly outstanding direct competitors to Palo Alto GC. Also, it is likely that no new golf course inventory will be added to this market for the foreseeable future. Potential for regional economic recovery, increased discretionary income, etc. The Bay Area and Silicon Valley have some specific economic attributes that act as natural demand drivers for quality golf courses, including high incomes, an extremely robust corporate presence, and one very high visitation numbers. Other Considerations Regarding Improvement Options Aside from the expected economic impact of the various base Reconfiguration Options, there remain questions that will need to be addressed as the City weighs the reconfiguration options, their respective forecasts in terms of rounds/revenue and what additional work will still be required in the instance of doing less now and deferring certain improvements to later. The overriding decision to be made is plan option (A, D, F or G) to go with and how that fundamental decision will affect future decisions. For example, reconfiguration Option A, while least costly of those to be considered, precludes routing improvements beyond those of the few holes being shifted and places overall restrictions on future improvements to the golf asset. Largely, the golf course would remain the same in its anatomy for the long term under A, but of course the golf course may be in much better condition and may be complemented by better support amenities in the future. The misconnection may be the course itself — much nicer, but as our grading exercise concludes, not to the level of the other options because of their improvements to hole- orientation, variety and excitement. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 49 The success rate for increased revenues, better reputation and the ability to be true to the idea of a transformed golf experience, increases with a more intensive re-working of the golf course. The decision on which option to adopt will need to take into account many factors, together with the financial forecasts prepared. OPTION “G” SENSITIVITY ANALYSIS As noted, pro forma projections have been made under a set of assumptions that may or may not come to fruition. Also, projections are subject to several uncontrollable factors such as yearly weather variations, economic conditions, and the nature of the competition. Therefore, in the interest of conservatism we have prepared a sensitivity analysis for Option G (identified by the City as the preferred option) of two key variables related to revenues – rounds played and average green fee. Specifically, we have run three scenarios that present deviations from the “base” model presented above: (1) Rounds reduced to moderately lower than projected FY 12 performance, continuing downward trend; (2) Average green fee increasing over current by just less than half the 15% projected increase in base model; and (3) Rounds and average green fees both lower, in combination. Because of the virtually limitless number of combinations, other variables, such as fixed operating expenses, remain the same as in the base scenario. The sensitivity scenarios reveal that the lower than projected (base) green fee growth would result in a reduction in net income of approximately 47% over the base case. Reduced rounds result in a ±$500,000 reduction in net income, while the “worst case” – both rounds and green fee increases below the projected base model – produces about $640,000 lower net income. Option “G” Sensitivity Analysis - Summary for 2017 Summary in FY2017 Expected Case Option G Reduced Rounds Option G Reduced Fees Option G Reduced Rounds + Fees Option G TOTAL ROUNDS 75,700 63,100 75,700 63,100 ANNUAL ROUNDS REVENUE $2,680,949 $2,221,879 $2,487,511 $2,062,380 AVERAGE GREEN FEE PER ROUND $35.42 $35.21 $32.86 $32.68 Revenues FY2017 Projected FY2017 Projected FY2017 Projected FY2017 Projected Total Golf Course Revenues $3,452,900 $2,865,400 $3,259,500 $2,705,900 Concessions Total from F & B Concession $91,800 $81,100 $91,800 $81,100 Total From Pro Shop Concession $30,700 $25,600 $30,700 $25,600 Total Gross to City $3,575,400 $2,972,100 $3,382,000 $2,812,600 Expenses Total City Operating Expenses 2,146,000 2,088,800 2,143,300 2,086,600 Net Income From Operations (Loss)$1,429,400 $883,300 $1,238,700 $726,000 Total Income (Incl. Non-operating)$1,454,800 $908,700 $1,264,100 $751,400 Total Debt/Other Charges $1,092,100 $1,046,200 $1,072,800 $1,030,200 Net Income or (Loss)$362,700 ($137,500)$191,300 ($278,800) National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 50 Option G Sensitivity Spreadsheets Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Total Rounds 66,740 64,700 47,900 16,000 53,150 58,100 63,100 67,900 67,900 67,900 67,900 Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $544,300 $1,810,100 $2,013,600 $2,221,900 $2,424,700 $2,448,900 $2,473,400 $2,498,200 Cart Fees 302,799 293,500 173,900 72,600 243,600 268,900 295,000 320,600 323,800 327,000 330,300 Driving Range 343,911 333,400 197,500 82,400 276,600 305,400 335,000 364,100 367,700 371,400 375,100 Tournament / League Fees 2,196 2,100 1,600 500 1,700 1,900 2,100 2,200 2,200 2,200 2,200 Other 11,813 11,500 6,800 2,800 9,400 10,300 11,400 12,300 12,500 12,500 12,800 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $702,600 $2,341,400 $2,600,100 $2,865,400 $3,123,900 $3,155,100 $3,186,500 $3,218,600 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $44,300 $48,900 $53,700 $58,300 $58,900 $59,500 $60,100 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $71,200 $75,800 $81,100 $85,700 $86,800 $87,400 $88,600 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $748,600 $2,433,700 $2,699,000 $2,972,100 $3,237,100 $3,270,000 $3,302,000 $3,335,800 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 105,100 116,100 127,300 138,400 139,700 141,100 142,500 Cart Fees 117,529 117,400 69,600 29,000 97,400 107,600 118,000 128,200 129,500 130,800 132,100 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,800 32,800 36,400 40,100 43,700 44,200 44,600 45,100 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 51 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $759,400 $1,995,900 $2,036,000 $2,088,800 $2,146,600 $2,183,300 $2,221,400 $2,260,600 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($10,800)$437,800 $663,000 $883,300 $1,090,500 $1,086,700 $1,080,600 $1,075,200 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 $14,900 $463,500 $688,800 $908,700 $1,116,400 $1,112,600 $1,080,600 $1,075,200 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $181,000 $201,400 $222,200 $242,500 $244,900 $247,300 $249,800 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $1,007,200 $1,031,600 $1,046,200 $1,077,100 $1,079,900 $652,700 $656,800 Net Income or (Loss)$168,090 $104,200 ($123,500)($459,400)($543,700)($342,800)($137,500)$39,300 $32,700 $427,900 $418,400 NOTE: Option G would likely include additional revenue from soccer fields of approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 52 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Total Rounds 66,740 64,700 47,900 16,000 67,900 71,800 75,700 75,700 75,700 75,700 75,700 Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $503,800 $2,172,600 $2,329,500 $2,487,500 $2,512,400 $2,537,500 $2,562,900 $2,588,500 Cart Fees 302,799 293,500 173,900 72,600 311,100 332,300 353,900 357,400 361,000 364,600 368,200 Driving Range 343,911 333,400 197,500 82,400 353,400 377,400 401,900 405,900 410,000 414,100 418,200 Tournament / League Fees 2,196 2,100 1,600 500 2,200 2,400 2,500 2,500 2,500 2,500 2,500 Other 11,813 11,500 6,800 2,800 12,000 12,700 13,700 13,700 13,900 13,900 14,200 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $662,100 $2,851,300 $3,054,300 $3,259,500 $3,291,900 $3,324,900 $3,358,000 $3,391,600 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $56,600 $60,400 $64,400 $65,000 $65,700 $66,300 $67,000 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $83,500 $87,300 $91,800 $92,400 $93,600 $94,200 $95,500 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $708,100 $2,961,800 $3,170,100 $3,382,000 $3,415,000 $3,449,800 $3,483,500 $3,519,000 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 134,300 143,400 152,700 154,200 155,800 157,400 158,900 Cart Fees 117,529 117,400 69,600 29,000 124,400 132,900 141,600 143,000 144,400 145,800 147,300 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,300 39,900 42,800 45,600 46,100 46,500 47,000 47,500 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 53 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $758,900 $2,059,200 $2,095,000 $2,143,300 $2,179,600 $2,216,600 $2,255,100 $2,294,600 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($50,800)$902,600 $1,075,100 $1,238,700 $1,235,400 $1,233,200 $1,228,400 $1,224,400 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 ($25,100)$928,300 $1,100,900 $1,264,100 $1,261,300 $1,259,100 $1,228,400 $1,224,400 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $217,300 $233,000 $248,800 $251,200 $253,800 $256,300 $258,900 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $1,043,500 $1,063,200 $1,072,800 $1,085,800 $1,088,800 $661,700 $665,900 Net Income or (Loss)$168,090 $104,200 ($123,500)($499,400)($115,200)$37,700 $191,300 $175,500 $170,300 $566,700 $558,500 NOTE: Option G would likely include additional revenue from soccer fields estimated by City to be approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 54 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds + Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Total Rounds 66,740 64,700 47,900 16,000 53,150 58,100 63,100 67,900 67,900 67,900 67,900 Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $503,800 $1,680,700 $1,869,300 $2,062,400 $2,250,400 $2,272,900 $2,295,600 $2,318,600 Cart Fees 302,799 293,500 173,900 72,600 243,600 268,900 295,000 320,600 323,800 327,000 330,300 Driving Range 343,911 333,400 197,500 82,400 276,600 305,400 335,000 364,100 367,700 371,400 375,100 Tournament / League Fees 2,196 2,100 1,600 500 1,700 1,900 2,100 2,200 2,200 2,200 2,200 Other 11,813 11,500 6,800 2,800 9,400 10,300 11,400 12,300 12,500 12,500 12,800 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $662,100 $2,212,000 $2,455,800 $2,705,900 $2,949,600 $2,979,100 $3,008,700 $3,039,000 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $44,300 $48,900 $53,700 $58,300 $58,900 $59,500 $60,100 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $71,200 $75,800 $81,100 $85,700 $86,800 $87,400 $88,600 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $708,100 $2,304,300 $2,554,700 $2,812,600 $3,062,800 $3,094,000 $3,124,200 $3,156,200 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 105,100 116,100 127,300 138,400 139,700 141,100 142,500 Cart Fees 117,529 117,400 69,600 29,000 97,400 107,600 118,000 128,200 129,500 130,800 132,100 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,300 31,000 34,400 37,900 41,300 41,700 42,100 42,500 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 55 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds + Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $758,900 $1,994,100 $2,034,000 $2,086,600 $2,144,200 $2,180,800 $2,218,900 $2,258,000 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($50,800)$310,200 $520,700 $726,000 $918,600 $913,200 $905,300 $898,200 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 ($25,100)$335,900 $546,500 $751,400 $944,500 $939,100 $905,300 $898,200 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $168,100 $186,900 $206,200 $225,000 $227,300 $229,600 $231,900 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $994,300 $1,017,100 $1,030,200 $1,059,600 $1,062,300 $635,000 $638,900 Net Income or (Loss)$168,090 $104,200 ($123,500)($499,400)($658,400)($470,600)($278,800)($115,100)($123,200)$270,300 $259,300 NOTE: Option G would likely include additional revenue from soccer fields estimated by City at approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 56 Other Issues and Considerations MARKET POSITION / RE-BRANDING OPPORTUNITY NGF Consulting has reviewed the image and brand recommendations made to the City as part of the expanded scope of services to address long range considerations. We conclude that closer integration of the golf course to the Palo Alto Baylands Preserve, “The Baylands”, should positively affect the City’s efforts to brand this area as a destination for Palo Alto residents and visitors alike. Celebrated as an open space and nature preserve area, the Baylands represents a rich and positive locale within Palo Alto and the Silicon Valley Region and will be enhanced with an improved and re-branded golf product. Currently, Palo Alto Municipal Golf Course effectively lacks a brand image, and the facility is very closely associated with the long-time golf concessionaire – so much so that the website address for the golf course is bradlozaresgolfshop.com, and recorded phone messages mention only the golf shop and not the golf course. We believe that a name change to “Baylands Golf Club at Palo Alto” represents a positive move that will have the effect of repositioning the golf course, distancing it from a “muni” layout. Additionally, it will signal a transformation from an older, “worn down” layout to one that has renewed excitement and positive change. The recommendation to retain “Palo Alto” as part of the course image and brand is a good way to connect with the existing name, as well as the City itself. Use of “Golf Club” in lieu of “Golf Course” is an additional signal that the golf experience is not only something new, but at a higher quality. The marketing theme “Public only in price, access and pride”is an excellent message to remind the customer that the golf facility remains accessible, open to the public and priced to provide one of the better golfing values in the Bay Area. This message also reinforces the transformation, ideally a win-win for the golf consumer to receive high quality at a “municipal” price point. Sample magazine ads provided as part of the Marketing and Theme recommendations hit on important concepts, including: Silicon Valley Location Tradition – The design legacy of Billy Bell The Transformation (i.e., the changes) The “Green” Environmental Commitment of the Facility Our belief is that proper implementation (adequate budgets, quality control and proper media placement) of the program will have a dramatic effect on driving new business to the “new” golf facility. Equally important will be the affect that these messages and the new brand will have on existing customers, and residents of Palo Alto and its neighboring communities who currently play golf elsewhere. In essence, the program for re-branding, introducing a new image and theme, and the marketing program, has the potential to have a very positive affect on rounds and associated revenues. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 57 A commitment on the City’s part to becoming certified with Audubon international as a “Sanctuary Golf Facility” is an integral part of the ability to market the course as a “green” aware and operated golf facility. This goal should be undertaken regardless of which reconfiguration option is opted by the City and should be workable given the operation and/or marketing budgets afforded. (Note: Beginning this process now, prior to any reconfiguration work, will help guide the reconfiguration work and will also establish a greater degree of improvement by which to attain the Audubon status for the facility). Plan Option A poses the greatest challenge to be consistent with the image, brand and marketing changes recommended because it does not go as deep into the many areas of the course in terms of new features and reconstructed areas. However, the fact that Plan Option A will dramatically reduce turf through the course-wide work to create native areas and new “Baylands” themed areas should be an adequately appreciated change. Plan Options D, F and G will have no issues aligning with any of the themes and messages recommended. With emphasis on a quality, outstanding golf facility, the City may be able to realize what we have referred to as a “destination” public golf experience. In the Bay area we would point to such courses as Pasatiempo in Santa Cruz and Harding Park in San Francisco as meeting this definition. These two courses are good examples of courses that have attained a reputation through the following attributes: Legacy of the original design Transformation from marginal to excellent conditions Commitment by the municipal owners to reinvest in the assets Quality rebuilding efforts Good marketing of the finished courses and facilities While both of the above examples are classic era designs (Pasatiempo by Alister MacKenzie, and Harding Park by Willie Watson) it is still appropriate to reference their successes relative to what Palo Alto Golf Course could attain. Whether undertaken under one, larger reinvestment project, or carried out over time, the potential transformation of Palo Alto Golf Course is bolstered by a number of factors inherent in the facility: A design legacy that can be leveraged — William P. and William F. Bell, the former responsible for designs such as Stanford, Riviera and Bel-Air A location that sits at the heart of Silicon Valley A seaside setting that has greater potential to take advantage of its natural landscape — the Baylands environment, Bay and adjoining Sanfrancisquito Creek A population base that is robust for golf rounds by non-residents A location that is in one of the top tourist areas in the nation Obviously, undertaking more intensive reconfiguration (such as with Plan G) will transform more of the existing course and is likely to meet this goal on a stronger basis. So, too, may investing in more of the alternate, optional improvements, including many of the long range improvements before the City for consideration. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 58 ECONOMICS OF POTENTIAL LONG-TERM / ADDITIONAL IMPROVEMENTS Forrest Richardson has proposed that the City study the feasibility of certain facility improvements that are in addition to the base improvements recommended within Reconfiguration Options A, D, F, and G (please see Appendix E for summary table of potential improvements and estimated costs). Though NGF believes that many of these improvements would improve the overall quality of the golfer (and non-golf customer) experience, as well as the image of the facility in the eyes of area golfers, it is not practical to assign incremental rounds played and revenue dollars to many of these improvements (e.g., exterior and entry upgrades, signage/parking, rebuilding practice greens, “alternate” golf course improvements, designated youth area). Practically, these improvements, to varying degrees individually and certainly as a sum of their parts, are likely to draw more patrons overall, keep them on-site longer, and increase their propensity to spend while at the golf course. We have confined our break-even analysis to several potential improvements that tie more directly to revenue: (1) The cart storage building; (2) Expanded meeting space; and (3) Range Performance Center. Cart Storage Building At just $4.54 per round in FY 2011, the average gross cart fee revenue per round at Palo Alto Golf Course significantly trails the average of its chief competitive set (see ERA 2008 report for City). While the low cart utilization is partially a function of the “walkability” of the golf course, ridership and revenues have also likely been constrained by the very limited cart storage. Palo Alto GC has only 46 carts available, some of which are older gasoline powered carts stored in open storage outside the clubhouse (fewer than 35 carts can be stored below the clubhouse). A more typical inventory for most regulation length 18-hole golf courses is ±70 carts. We are told that for larger tournaments, additional carts must be leased and brought in from off-site. In summary, NGF believes it is likely that the limited cart inventory and storage space available has constrained ridership and may have actually negatively affected demand for daily fee and, especially, tournament play on occasion. As part of Forrest Richardson’s overall capital improvement plan for Palo Alto GC, he has included construction of a new cart storage building at an estimated cost of $440,000. In the table below, we illustrate the number of years it will take for the City to break even on this investment, assuming different levels of incremental gross cart rental revenue per round, the current rent percentage of 60%, and stabilized rounds activity under Options D and F – 73,300 rounds. Of course, as noted, it is possible that having additional carts will have a positive effect on rounds played as well, but for purposes of conservatism we are illustrating only increases in cart revenue per round. We also assume that all expenses associated with the cart lease and maintenance will remain the responsibility of the vendor, and that there will be no incremental City operating costs associated with the new building. Palo Alto Golf Course Break-Even Analysis for Cart Storage Building Average Gross Cart Revenue Per Round Increase $0.50 $1.00 $1.50 $2.00 $2.50 Incremental Gross Revenue* $36,650 $73,300 $109,950 $146,600 $183,250 Incremental Revenue to City* $21,990 $43,980 $65,970 $87,960 $109,950 Years to B/E* 20.0 10.0 6.7 5.0 4.0 *Assumes $440,000 estimated cost and stabilized rounds played of 73,300 from Options D,F National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 59 Expanded Meeting Space The existing restaurant at Palo Alto GC has limited meeting space that has significantly constrained meeting and banquet business at the facility. Not being able to accommodate larger events of ±250 people precludes the facility from competing for the most lucrative, high margin food & beverage business. As such, expanding the meeting/banquet space is another component of the long range improvement plan prepared for the City by Mr. Richardson. Based on the estimated cost provided of $1.7 million, and assuming the City incurs all of the cost of the improvement, the annual debt service on a 20-year note at 3.5% would be $120,000 (rounded). NGF has calculated that the incremental annual gross food & beverage revenue necessary to generate $120,000 in additional rents to the City to meet the annual debt service is more than $1.71 million. This calculation is based on the current rent percentage of 7%. In its 2008 study, ERA noted: “Based on the experience of similar golf course oriented banquet facilities and the demographics of the area, expanding the clubhouse to accommodate special events with up to 250 attendees would add $600,000 to $700,000 in annual special event revenue. This rental income would justify about one-half of the cost of the improvements.” NGF concurs that achieving this level of incremental gross revenue would likely be an achievable goal, but with updated cost estimates, this level of revenue would justify only about 40% of the investment cost. Therefore, the balance of the City investment in the expanded facility would have to be justified through the incremental rounds and associated revenues attributable directly to the expanded meeting facilities. Based on current and projected average green + cart (City share) fee revenue per round, it would take 2,000 to 3,000 of these rounds to help fund the expanded facilities. Of course, the equation would change markedly if gross revenues accrued to the City under an alternate operating structure. Range Performance Center In the table below, we provide a similar break-even analysis to the one for the cart storage building. Mr. Richardson’s cost estimate for the range performance center, plus the additional 6- bay range expansion (we assume both are undertaken together), is $600,000. In the table below, we illustrate the number of years it will take for the City to break even on this investment, assuming different levels of incremental gross driving range revenue per round (gross per round was $5.15 in FY 11), the rent percentage of 62%, and stabilized rounds activity under Options D and F – 73,300 rounds. Of course, it cannot be determined what percentage of range activity is a function of number of bays as opposed to rounds played, so we have chosen to do a sensitivity analysis by increasing average revenue per round rather than per tee station. Another factor driving this methodology is that the performance center bays will be used for teaching, and will likely have less utilization than the already existing bays. We also assume that all incremental expenses associated with the expanded range remain the responsibility of the concessionaire, and that there will be no incremental City operating costs associated with the new building. Finally, we assume that the City receives no lesson revenue. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 60 Palo Alto Golf Course – B/E Analysis for Range Performance Center + 6-Bay Expansion Average Gross Range Revenue Per Round Increase $0.50 $0.75 $1.00 $1.25 $1.50 Incremental Gross Revenue* $36,650 $54,975 $73,300 $91,625 $109,950 Incremental Revenue to City* $22,723 $34,085 $45,446 $56,808 $68,169 Years to B/E* 26.4 17.6 13.2 10.6 8.8 *Assumes $600,000 estimated cost and stabilized rounds played of 73,300 from Options D,F MANAGEMENT STRUCTURE NGF was told that some City staff would like to further explore - via issuance of an RFP in advance of the Pro Shop and Maintenance agreements expiring in April, 2013 - the implications of changing the operating structure at Palo Alto Golf Course to a management contract. We have been asked to offer our opinion as to whether this type of structure would be more effective, or produce higher net operating income to the City, than the current “hybrid” structure that involves both a management fee and a concession on the golf operations side, privatized maintenance, and a separate food & beverage concession. As Economic Research Associates (ERA) noted in their 2008 Operations Review of the Palo Alto Municipal Golf Course, the current agreement for golf operations evolved due to IRS regulations related to the tax-exempt financing utilized for the late 1990s renovation of the golf course. Specifically, at least 50% of the compensation within a management agreement must be fixed fee in such a case. ERA, after doing the full operations analysis, concluded that the current pro shop deal was “slightly favorable” to the concessionaire. After running cash flow models under various operating scenarios, ERA concluded that City Net Income was maximized with private maintenance (subsequently put in place) and “market rate” concession terms. However, they also noted that “market rate”, which involved lower concession rents to the City and an elimination of the management fee, was not permissible by the IRS without a restructuring of the current debt. ERA concluded that, among the operating models that were permissible within the current debt framework, the structure that is now in place at Palo Alto Golf Course – no change in contract terms, but with private maintenance – produced the highest City Net Income. A full-service Management Agreement produced the second highest City Net Income. Without doing a full operations review, NGF does not have sufficient information to critically evaluate ERA’s analysis or to identify the operating structure that would be the best fit for Palo Alto GC. While there are a number of advantages to the full service management contract structure, it is also true that “no one size fits all”. There are many factors and variables to consider when evaluating options, and it would be unfair to both the City and the current vendors for a consultant to make a recommendation regarding the optimal structure without being retained to do a full facility analysis. Carefully evaluating the value proposition that each of the current vendors brings to the table would be just one component of such an analysis. For instance, the golfer survey that ERA implemented as part of their 2008 study showed that Brad Lozares was rated quite high by golfers, indicating considerable goodwill and “equity” built up in the golf shop. Similarly, NGF has been told of improved maintenance conditions (as well as considerable cost savings) since ValleyCrest was brought on. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 61 Having said that, we do feel confident recommending that the City retain the current structure at least through the completion of the renovation project.However, delaying consideration of a fundamental change in operating structure should not preclude modifying terms. For instance, the City and the golf vendor may come to an agreement resulting in lowering the management fee to reflect reduced responsibilities and concession revenues during renovation (especially under Option G), while still adhering to IRS guidelines.Not only will the project substantially disrupt business, but significant unknowns include the timing of the project and how the newly improved facility will cash flow after being brought back to market and “re-branded”. Also, the food & beverage contract doesn’t expire until 2018, so some of the advantages of the single operator management structure may be lessened unless an early termination to the agreement can be successfully negotiated with the current vendor. Finally, negotiating a new agreement during construction, when proposers themselves will not have full information about how the improved facility will cash flow, may result in the City not entering into the best deal possible. NGF believes that these are just a few of the important variables that make issuing an RFP at this stage less than optimal. We recommend that the City wait until after renovation is completed and the improved facility has been up and running for a year or more before considering a substantive change in structure. This strategy will provide additional information that will put the City in a better position to make an informed decision regarding operating structure (for instance, the City may find that the improved “Baylands Golf Club” has significant upside revenue potential, thus making it relatively more attractive to control all revenues under the management contract structure). LONG RANGE CONCERNS Concerns raised through the public process of reviewing reconfiguration options have included the following long term implications: High salts present in the native soils Intrusion by geese and burrowing animals Potential for the adjacent airport to negatively affect the golf experience In essence, the question raised is: “Can the Palo Alto Golf Course be expected to become a significantly better golf experience given these issues?” NGF Consulting relies on the opinions of professionals associated with individual golf facilities to address certain questions. For example, in the case of the high salts we look to agronomists, the course superintendent and/or the golf course architect. In the case of animal intrusion, because these are often site specific, we look to nearby facilities to see how they have dealt with the issue. High Salts Soils high in salts are not uncommon to golf courses located along coastal waterways and oceans. In the case of Palo Alto the soils are not only affected by the location by San Francisco Bay, but by the poorly draining soil types. Additionally, the use of effluent (recycled) water, which typically has higher salt content, exacerbates the condition. While our work has not included agronomic evaluation, we have endeavored to understand the general situation by comparing outcomes we have observed at other golf operations. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 62 “Links courses,” those layouts along the dunes formed coasts of the British Isles and similar locales around the world, are prone to salty soils. Yet, with their sandy soil basis, these sites support good turf because the salts are leached regularly downward by natural rains. This is the hallmark of links courses, and why their development on these natural, sandy soils were so appropriate. When soils are not sandy and porous, the build-up of salts becomes problematic. This is the case at Palo Alto Golf Course, where management over the years has been to periodically irrigate with fresh water, driving salts downward, and to add gypsum to the soils. Additionally, the most recent remodeling work added a cap of sand and better soil mix to several fairways, making them much easier to manage and support healthy turf. These best practices have resulted in reasonably healthy turf growth despite the salty soil conditions. According to staff, while salts are high, the turf has “learned” to adapt. There is a definite difference between fairways where the sand cap has been placed and areas where drainage is not as good and where older native soils are present. Also, Paspalum turf varieties have flourished at the golf course in a few areas. These areas appear to have much better success rates of healthy growth because the nature of Paspalum grass is to tolerate salts to a significantly higher degree. NGF Consulting posed the question of managing high salts to Forrest Richardson & Associates, specifically asking what additional measures would be afforded through the reconfiguration options to address this issue. The response summary is as follows: Management of existing sand capping and healthy turf rootzone material (the uppermost layers of rootzone) will be managed through the reconfiguration, replacing that material as “topsoil” to new fairway and turf areas; this cost is represented in the probable cost estimates presented to the City for reconfiguration options. New soils will be imported as possible within the budgets, potentially from the Stanford University Medical Center project(s); these additional costs (and revenue potential) have been accounted in probable cost estimates. Paspalum turfgrass will be used to sod all new areas of fairways, roughs and tees (Note: The specific variety is yet to be determined). The irrigation system will provide dual watering capabilities, able to deliver potable water to selected areas and a mix of effluent (higher salt counts) and fresh water; this capability allows flushing (leaching of salts downward) as is being done currently. Significantly improved drainage is afforded in each reconfiguration option, helping to prevent build-up of salts by quicker transportation of surface water away from turf areas and the soil rootzone, and thereby reducing the build-up of salts that occurs when water is allowed to stand and slowly seep into the rootzone. These are prudent measures that are common among golf course sites with high salts present in the soil. Additionally, we understand that the City has a goal to reduce salt counts within its effluent water system, a goal that is not necessarily aimed at improving conditions at the golf course, but will have a definite value to City’s golf operation asset. While the success rate of overall condition improvement cannot be guaranteed, we can look at comparable operations where high salts are effectively managed. There are numerous examples of this throughout California, including the Bay Area. California examples include National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 63 Monarch Bay (San Leandro), Las Positas (Livermore), Metropolitan (Oakland), Olivas Links and Buenaventura (Ventura), and Irvine (Shady Canyon Club). Many courses with salt issues are turning to Paspalum turfgrass as an answer. Some of the example courses cited have moved to 100% Paspalum grass. NGF Consulting notes that this trend is widespread in Florida, the Caribbean, Mexico, South Texas, and Hawaii. In Hawaii, for example, Paspalum varieties have literally transformed the golf landscape from a struggling Bermudagrass region to one that now predominantly uses Paspalum in order to overcome high salts from water, soils and the proximity to the ocean. Even in Monterey we are seeing Paspalum use. At the Monterey Peninsula Club, for example, some areas located on the shore that were never in good condition, have been completely re-planted with Paspalum and are now in excellent condition. Our conclusion is that Palo Alto can enjoy a good success over the long term at the existing golf course site. Managing salts will have a good result, not only through good maintenance practices, but in combination with the reconfiguration work, which should make the City’s efforts to manage salts more productive, less costly and, ultimately, more impacting to a positive golf experience. Our caution is that the plan options (A, D, F and G) each have an associated result that is specific to the investment. Plan A, for example, addresses only a minority of the course turf areas (drainage, rootzone, topsoil management, irrigation, etc.) and will therefore not produce positive results across the full golf course. Plan G, at the other end of the spectrum, resolves virtually all areas. Animal Intrusion Managing Canadian Geese infestation is often dependent on regulations and restriction placed on locales. Our advice to the City is to study available mitigation measures and to carefully note the measures taken by neighboring courses. Geese populations have been successfully managed through the following measures: Trained dogs, such as border collies Reducing standing water and open water (ponds, lakes, swamps) Increasing habitat surrounding the golf course that will appeal to geese populations Implementing noise, reflective or other repellants Sterilization agents to stop generational return of geese to the golf course areas Among the most successful operations in Northern California are the courses of the Monterey Peninsula, notably Pebble Beach Companies and the private clubs in the area. With few exceptions, these operators have used trained dogs to manage geese away from their turf areas. An on-site dog specifically trained to manage geese populations remains the most efficient measure to rid geese infestation from golf courses in the U.S. Not only is this method humane, but it has the benefit of a lower cost than many other measures, and is less interruptive to the golf experience. We understand there is added complexity relative to the adjacent airport operation and the requirements associated with making sure that geese are not diverted to the airport, but away from both the golf course and the airport. For this reason, we recommend that the City take a look at jointly working out a plan for both the golf and airport needs. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 64 With regard to the ground squirrel infestation, we understand that this is being met with ongoing mitigation efforts that are allowed under state guidelines. Also, the increase of naturalized areas afforded by all reconfiguration options will help drive habitat away from turf and in-play areas of the golf course. Airport Effects Many golf facilities are located immediately adjacent to airports, and yet enjoy a good reputation and high quality of golfing experience. We see no undue negative associated with the relatively small private plane airport, especially given that the flight paths do not directly overtop the golf course itself. Moreover, Silicon Valley appears to be utilizing the airport for corporate flights in favor of the larger regional airports that pose delays and complexities due to their scheduled, commercial flight business. This fact may actually prove beneficial to the golf operation should the golf course and its facilities be elevated a “destination” level of quality and reputation. The result with nominal airport use is that more visitors to Palo Alto will know about the golf course and be able to get a firsthand view of its offerings. Summary Based on experience and input from Forrest Richardson, NGF Consulting believes that long- term mitigation of the concerns of this site is workable and worth the premiums required for maintenance and management. In many cases, golf courses are located on degraded land because that land cannot be used for other purposes. We suspect this is the case in Palo Alto and would find it difficult to justify alternate solutions to the renovations that might be considered: (a) continued operation in a declined state; (b) abandonment of the asset in favor of a new location, given land values in the area; or (c) abandonment of the recreation amenity altogether, given its high use and the financial forecasts presented. POTENTIAL ECONOMIC DEVELOPMENT OF THE AIRPORT & GOLF “BAYLANDS GATEWAY” AREA The golf course “corner” and shared entry with the airport are considered a “gateway” to the Baylands Preserve areas. As such, this intersection has great potential to become more than just a golf clubhouse and airport with nominal retail offerings. According to the Community Services Department, forward and creative thinking has been aimed at the potential for this area to become a more user-friendly and service-oriented destination. Thus far, thinking has included whether the area could support a modest collection of cafes, retail shops, and perhaps even a hotel. While no formal plans have been commissioned, the City has discussed a general, long range approach to looking more in depth at this possibility. Such development, especially if it included a small hotel, would add natural demand drivers in immediate proximity to the golf course, thus resulting in increased rounds and revenues. As an example, a 130-room business hotel in a high demand locale may have as many as 28,000 room nights based on an average 60% occupancy rate. Using a multiplier of 1.3 guests per room, this equates to approximately 36,000 guests per year. Using a percentage of 10% golfers and assuming that the golf course could get even 20% of these guests to play, the resulting bump would be near 1,000 additional golfers per year. Also, these golfers would comprise non- residents paying the highest applicable rates, and traveling golfers typically exhibit less price National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 65 sensitivity and would be likely to also spend money on the practice range, pro shop, and/or restaurant. PRIVATE FUNDING POSSIBILITIES Of course, aside from receiving compensatory money from the San Francisquito Creek Joint Powers Authority, the City may have to grapple with how to fund additional money required if Reconfiguration Options D, F, or G is chosen, and/or if any work identified as “additional” or “alternate” in this report it undertaken. One of the mechanisms that would obviously be very preferable to the City is raising private money to fund some, or even all, of the needed money. Based on preliminary discussion held between Forrest Richardson, NGF, and the City, the private funding mechanism may take a combination of the following avenues that the City will have to explore further: Naming rights for some components of the facility (e.g., range performance center, certain holes, tee markers, designated youth area); this may be feasible do to the number of very wealthy individuals in Palo Alto, as well as the very strong corporate (especially high-tech/ internet-based) presence. Grants – for example, the First Tee, which is very active in the area. Lease-Back – some within the City have mentioned the possibility of finding a design/build entity that might be interested in undertaking all of the improvements, including soccer fields if Option F or G is chosen, and restructuring the financing package to get the entire project, including some or all optional master plan improvements, done at one time. In this case, the ±$3 million the City receives from the SFCJPA could be used toward paying off the old debt and a new arrangement put in place for the work to rebuild the golf course. The Stanford Soil Import is a wildcard in the equation. It could bring revenue into the equation, but likely not more than $500,000. This may provide a partial funding mechanism to help pay for some of the miscellaneous suggested work that will not have a revenue stream attached directly to it (entry experience, trails, signage, parking, etc.). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 66 Appendices APPENDIX A – COMPARATIVE SUPPLY RATIOS – PALO ALTO GC & KEY MUNICIPAL COMPETITORS APPENDIX B – COMPARATIVE SCORING OF RECONFIGURATION OPTIONS APPENDIX C – WATER & POWER USE DISCUSSION & ASSUMPTIONS APPENDIX D – REVIEW OF PROBABLE COST ESTIMATES APPENDIX E – POTENTIAL LONG-TERM MASTER PLAN IMPROVEMENTS National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 67 APPENDIX A – COMPARATIVE SUPPLY RATIOS – PALO ALTO GC & KEY MUNICIPAL COMPETITORS NGF has presented a comparison of some key golf supply measures for Palo Alto GC and its key municipal competitors, with the 5-mile radius around each facility the basis for comparison. We note that all of the subject facilities, except for Santa Teresa, have very high household/supply ratios, which is one of the key factors that explains the very high rounds figures realized per 18 holes among municipal golf courses in this market. Also of note, in its 2009 publication “The Future of Public Golf in America,” NGF hypothesized that the best predictor of a public golf course’s success was the number of golfers per 18 holes within a 10-mile radius, with 4,000 identified as the key number for projected financial stability. As shown in the second table below, all of the subject courses (again with exception of Santa Teresa) exceed this number for the 5-mile market. Golf Facility Supply – 2011 (5-Mile Radius) 5-mile Rings Total No. of Golf Facilities Total No. of Golf Holes Households per 18 holes Households per 18 Hole Index (US=100) Palo Alto Golf Course 4 72 19,836 251 Poplar Creek Golf Course 5 81 17,942 227 San Jose Municipal Golf Course 6 90 31,377 398 Santa Clara Golf & Tennis Club 6 90 21,027 266 Santa Teresa 6 135 7,841 99 Shoreline Golf Links 4 72 24,206 307 Sunnyvale Golf Course 8 126 19,435 246 Source: National Golf Foundation Golfers per 18 Holes (5-Mile Radius) 5-mile Rings Golfing Households Est. No. of Golfers1 Total 18-H Equivalent Golfers per 18 holes Palo Alto Golf Course 14,206 21,309 4 5,327 Poplar Creek Golf Course 14,243 21,365 4.5 4,748 San Jose Municipal Golf Course 30,527 45,791 5 9,158 Santa Clara Golf & Tennis Club 17,855 26,783 5 5,357 Santa Teresa 12,250 18,375 7.5 2,450 Shoreline Golf Links 16,695 25,043 4 6,261 Sunnyvale Golf Course 24,118 36,177 7 5,168 Total U.S. “Threshold” for Successful Public Golf (10-mile Ring) 4,000 1 Golfing Households x 1.5 Source: National Golf Foundation National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 68 APPENDIX B – COMPARATIVE SCORING OF RECONFIGURATION OPTIONS As a useful tool in formulating pro forma projections, NGF has compared the Reconfiguration Options using a “scorecard approach” whereby attributes and benefits are assigned scores (1- 10). This method allows a side-by-side comparison, providing a way to review pluses and minuses associated with each option. We base our scoring on several factors, including the following: Details presented (plans, conceptual images, etc.) Public comments and historical use of the facility (rounds and use) NGF Market Analysis (local and regional trends and golf participation) Competition within the market area Details and other givens regarding the changes to take place (golf design consultant involved, how far along the proposed changes have been studied, budgets, etc.) Long term viability of the changes and market acceptance Known preferences of golfers relative to course conditioning, consistency, etc. Quality of the consultants involved In situations where golf facilities are proposed to be reconfigured, there are both subjective and objective considerations. Additionally, there is often difficulty in verifying to what degree proposed changes will be carried out. Fortunately in the case of the Palo Alto Golf Course, the City and SFCJPA have accommodated a very thorough process and detail so we are able to look at the plans, before and after images, and other documentation that quantify the changes associated with the options. Scoring is one factor considered in estimating potential changes in the financial performance of the golf facility. For example, a golf course with significantly more practice opportunities, especially when such use is in demand, will potentially bring in new use and associated revenue. In the case of a significant transformation of a golf course from an average or below average experience to one with new holes, views and overall landscape improvement, it is likely that an increase in use and/or revenue will be realized. And, where we can see potential to market the facility beyond the immediate area, it is possible to realize an added price-per-round for non-resident use. In this latter example we often cite the ability of golf courses such as Torrey Pines to adopt a green fee structure that holds low rates for residents of the area while charging market rates that are very high for players from out of state. In the case of Torrey Pines, the gap between resident rates and visitor rates are among the widest in the golf business. Though this type of gap will not be realistic for Palo Alto, we do expect that, depending on the reconfiguration option chose, non-residents will effectively be “subsidizing” to some degree a high quality, but still affordable, golf experience for city residents. The following ratings use a 1-10 scale where 1 is the lowest and 10 is the highest. This ranking includes some financial considerations, but is ancillary to the pro forma financial analysis for each option. The rankings here are used to form some of the forecasts within the pro forma analyses. Scoring is based on the base reconfiguration work for each option (i.e., less all optional/alternate work listed). A summary table of rankings is presented following the category descriptions. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 69 The following are categories used to form the scoring: Yardage & Par –Accommodation of yardage (regulation length) for a course and par that will be viable and competitive within the market and region Interruption of Play During Reconfiguration – Ability of the plan to retain some holes (9-hole play) and practice during reconfiguration work Consistency of Bunkers & Hazards – Overall impact of the plan relative to bunker consistency, aesthetics and other hazards Consistency of Greens – Overall result of greens quality and consistency Drainage Improvement – Overall positive impact on drainage; eliminating wet conditions Irrigation Improvement – Overall positive impact on irrigation control, consistency and associated turf quality Pace-of-Play – Degree to which the plan accommodates positive pace-of-play and long range ability to manage for good pace Improved Visual Impact –Overall landscape enhancements (added naturalizes areas and visual impact) Improved Views – Accommodation of more views to the Bay and territorial vistas Improved Golf Experience Impact -Overall plan benefits to strategy, excitement of holes, variation of direction, orientation to wind, etc.) Competitiveness with Area Courses –Ability of the course to compete with courses in the immediate area Competitiveness with Regional Courses –Ability of the course to compete with courses in the region Likelihood for Destination Visits –Ability of the course to attract specific visits expressly to play the course Ability to Leverage “Green” Marketing –Consistency of the plan with a “green” environmental message (Baylands tie-in, more naturalized areas, natural landscape, etc.) Consistency with Long Range Planning –Integration of the plan with future planning (clubhouse, practice, etc.) Turf Reduction (irrigation) –Reduction of managed turf acreage for less water use and reduced pumping Turf Reduction (managed care) –Reduction of managed turf in relation to the ability to shift maintenance emphasis from out-of-play areas to golf features and areas more appreciated by the golfer National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 70 Comparative Scoring of Reconfiguration Options Option A Option D Option F Option G Yardage & Par 8 8 8 6 Interruption of Play during Reconfiguration 5 4 3 1 Consistency of Bunkers & Hazards 7 8 9 10 Consistency of Greens 3 5 6 8 Drainage Improvement 4 6 8 9 Irrigation Improvement 3 6 7 10 Pace-of-Play 5 10 7 7 Improved Visual Impact 4 6 7 8 Improved Views 2 7 7 8 Improved Golf Experience Impact 3 7 8 8 Competitiveness with Area Courses 5 8 8 8 Competitiveness with Regional Courses 2 6 7 8 Likelihood for Destination Visits 1 5 7 7 Ability to Leverage “Green” Marketing 5 7 8 9 Consistency with Long Range Planning 7 9 9 9 Turf Reduction (irrigation) 4 6 8 9 Turf Reduction (managed care) 4 7 8 9 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 71 APPENDIX C – WATER & POWER USE DISCUSSION & ASSUMPTIONS NGF Consulting was not charged with a full water or power use analysis. However, forecasting costs associated with each reconfiguration option requires reasonable estimates on the affects of a more efficient irrigation system combined with less turf acreage. Our conclusions on water and power use are based on the following assumptions, derived from City Staff and the golf course architect/design team: Current irrigation (managed) turf acreage: 135 New irrigation areas efficiency over/above the existing system: +10% Current irrigation inefficiency due to leaks and breaks (loss): -5% Current power inefficiency: -10% New power efficiency realized with full course better watering times/durations: +15% Annual cost for irrigation repair due to age and condition: $30,000 Using the data and assumptions, NGF Consulting has developed the following forecast for water and power use differences with each reconfiguration option. Option A Total irrigated turf following reconfiguration: 96.5 acres Water use reduction based on new irrigated acreage: 28% Approximate area of reconfigured course with new irrigation system: 35 acres Percentage of irrigated Area with New Irrigation: 36% Water use reduction of new usage based on efficiencies of new system area: 3.6% (10% efficiency x 36% = 3.6%) Water efficiency of new usage gained due to fewer leaks/breaks: 2% (5% efficiency x 36% = 2%) Power efficiency realized with better watering times/duration: +5% Conclusions Reduced Water Cost Est. (effluent) $ - 0 - Reduced Water Cost Est. (potable) $72,800 (28% x $260,000) Reduced Water Cost Est. (potable efficiencies) $5,645 ([3.6% + 2%] x $100,800) Reduced Power Cost Est. (efficiencies realized) $1,200(5% x $24,000) Total Est. Reduction in Water & Power Cost $79,645 / annual Option D Total irrigated turf following reconfiguration: 92 acres Water use reduction based on new irrigated acreage: 32% Approximate area of reconfigured course with new irrigation system: 40 acres Percentage of irrigated Area with New Irrigation: 43% Water use reduction of new usage based on efficiencies of new system area: 4.3% (10% efficiency x 43% = 4.3%) Water efficiency of new usage gained due to fewer leaks/breaks: 2% (5% efficiency x 43% = 2%) National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 72 Power efficiency realized with better watering times/duration: +10% Conclusions Reduced Water Cost Est. (effluent) $- 0 - Reduced Water Cost Est. (potable) $83,200 (32% x $260,000) Reduced Water Cost Est. (potable efficiencies) $7,258 ([4.3% + 2%] x $115,200) Reduced Power Cost Est. (efficiencies realized) $2,400 (10% x $24,000) Total Est. Reduction in Water & Power Cost $92,858 / annual Option F Total irrigated turf following reconfiguration: 91.5 acres Water use reduction based on new irrigated acreage: 32% Approximate area of reconfigured course with new irrigation system: 58 acres Percentage of irrigated Area with New Irrigation: 63% Water use reduction of new usage based on efficiencies of new system area: 6% (10% efficiency x 63% = 6.3%) Water efficiency of new usage gained due to fewer leaks/breaks: 3% (5% efficiency x 63% = 3%) Power efficiency realized with better watering times/duration: +12.5% Conclusions Reduced Water Cost Est. (effluent) $ - 0 - Reduced Water Cost Est. (potable) $83,200 (32% x $260,000) Reduced Water Cost Est. (potable efficiencies) $10,711 ([6.3% + 3%] x $115,200) Reduced Power Cost Est. (efficiencies realized)$ 3,000 (12.5% x $24,000) Total Est. Reduction in Water & Power Cost $96,911 / annual Option G Total irrigated turf following reconfiguration: 92 acres Water use reduction based on new irrigated acreage: 32% Approximate area of reconfigured course with new irrigation system: 92 acres Percentage of irrigated Area with New Irrigation: 100% Water use reduction of new usage based on efficiencies of new system area: 10% (10% efficiency x 100% = 10%) Water efficiency of new usage gained due to fewer leaks/breaks: 5% (5% efficiency x 100% = 5%) Power efficiency realized with better watering times/duration: +15% Conclusions Reduced Water Cost Est. (effluent) $ - 0 - Reduced Water Cost Est. (potable) $83,200 (32% x $260,000) Reduced Water Cost Est. (potable efficiencies) $23,040 ([15% + 5%] x $115,200) Reduced Power Cost Est. (efficiencies realized) $3,600 (15% x $24,000) Total Est. Reduction in Water & Power Cost $109,840 / annual National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 73 APPENDIX D – REVIEW OF PROBABLE COST ESTIMATES NGF Consulting has reviewed the probable cost estimates provided to the City for reconfiguration Options A, D, F, and G. In order to objectively evaluate proposed budgets we look for a baseline of comparison. The best resources are similar public sector golf course projects involving reconfiguration. All golf course projects are unique, as are the conditions of the site, construction costs, availability of construction materials (sand, proximity of sod growing, etc.), and terrain. Additionally, in a situation where the proposed modifications to the course are underway, as in this case, we look to other projects by the same golf course architect. The best comparisons are three projects by Forrest Richardson, ASGCA: Buenaventura Golf Course (City of Ventura, California) Peacock Gap Golf Course (San Rafael, California – privately owned) Olivas Links (City of Ventura, California) The Buenaventura project was undertaken to rebuild an existing 18-hole facility originally designed by William P. and William F. Bell. The scope was to largely retain hole corridors through existing mature trees, but to re-turf all of the golf course. The project involved approximately 88 acres of full re-turfing, greens rebuilding (19), new ponds (3) and complete rebuilding of all features (bunkers, tees and fairways). This project had a stated budget of $4.5 million which also included site work for a new maintenance area, a new maintenance building and improvements to the entry and parking areas. The work was completed in 2005 and was funded by the City of Ventura through a capital bond program. NGF was told that the golf course specific work totaled approximately $3.6 million and the market conditions at that time were very similar to current conditions. The Peacock Gap project was a complete re-build of an 18-hole golf course (also an original design of William F. Bell), associated re-routing work for safety reasons, a new pond, new drainage, full new irrigation system, and all new features including a new practice range. The total acreage involved was approximately 94 acres and included similar naturalized area development as has been proposed for Palo Alto. The project was carried out over two phases beginning in 2004 for a reported investment of $5.1 million. Of note is that topsoil management was very similar to that covered in the Palo Alto Probable Cost Estimates. The Olivas Links project is most similar to Palo Alto among these three examples. This course was originally designed by William P. and William F. Bell and also borders a river at its estuary termination point. The course was prone to flooding and had very poor soil conditions as a result of effluent irrigation and inherent salts by way of its seaside locale. Also a part of the capital bond program of the City of Ventura, this 2006-07 work was contracted at $5 million in terms of direct golf course improvements. These included full re-building using on-site soils. Paspalum grass was used for fairways, with Bentgrass on the greens. Our estimation of the timing of this work was that it fell during the most aggressive contracting time in the past 10-15 years. The work appears to have been publically bid with six qualified bids, each very close to the lowest bid at the $5 million point. The City spent additional funds to relocate and replace their maintenance facility over and above the golf course construction contract. Though there are variables that could affect cost, such as the ultimate timing of the project and a change in regional economic conditions, NGF’s general assessment given our exchanges with Forrest Richardson on this matter is that the probable cost estimates prepared for the City (Options A, D, F and G) appear to cover the scope of the work shown for the options, and are National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 74 conservative in approach. According to representatives of the Golf Course Builders Association of America (GCBAA) the Bay Area represents one of the most costly working locales in Northern California based on available labor, housing and the general cost of fuel, operations and logistics. We note that the architect, recognizing this reality, has included a significant degree of project management and contingency in estimates prepared for the City - important components that we often see omitted at this stage of planning. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 75 APPENDIX E – POTENTIAL LONG-TERM MASTER PLAN IMPROVEMENTS The tables below summarize some of the long-term and/or optional improvements that have been presented by Forrest Richardson to the City of Palo Alto for consideration. Clubhouse Improvements Exterior Condition & Upgrades - Estimate: $250,000 Aesthetic improvement to facings, color, materials Replace, upgrade landscaping Expand Meeting Spaces - Estimate: $1,700,000 Current Space: 75 in one room + 70 on patio Expand main pavilion room to hold 200 Expand/open patio to hold 100 additional (300 total) Create outdoor wedding garden Reconfigure grill as potential restaurant space (60) Reconfigure bar as pub seating w/ patio for 60 addl. Expand/improve kitchen Expand/screen service yard Expand/open patio to hold 100 additional (300 total) Golf Shop Upgrades - Estimate: $100,000 Expand office/storage Free-up 1,000 s.f. retail space Create Cart Storage Building - Estimate: $440,000 Currently storage for 15 carts; balance kept outdoors and leased temporarily as needed for groups New building for 70 carts Arrival & Entry Improvements New Entry, Signage and Parking - Estimate: $400,000 New entry New signage Resurfaced parking w/ Landscaping & Lighting (expand to 300 spaces) New Entry, Signage and Parking - Estimate: $200,000 New trail connections (to Baylands, etc.) Bike racks, signage, etc. Practice Facility Improvements Range Performance Center - Estimate: $500,000 New building & hitting bays for Instruction Small meeting spaces and offices Range Expansion - Estimate: $100,000 (6) Additional hitting bays (adjusted netting to north) Rebuild Existing Practice Green - Estimate: $180,000 New green complex as short game area Create Designated Youth Area - Estimate: $200,000 Along Embarcadero (2 Acres) Range Performance Center - Estimate: $500,000 New building & hitting bays for Instruction Small meeting spaces and offices National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 76 Other “Alternate” Improvements On-course Restroom Replacement - Estimate: $95,000 New structure and demo existing Replace Balance of Irrigation System (Varies w/ Plan Option)Complete new system & control Rebuild All Greens on Course (Varies w/ Plan Option)Rebuild all greens to USGA specs Resod all Fairways on Course (Varies w/ Plan Option)New and consistent turf variety throughout New Event Practice Green/Area - Estimate: $80,000 Separate event green and area (Plan D only) Sand Plate New Fairways (Varies w/ Plan Option)Sand cap to 6 in. PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS 6.23.14 ATTACHMENT J BASE PROJECTIONS GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021  ACTUALS  APPORVED   YEAR TO DATE           (Jul ‐ April)  PROJECTED  Revised  PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 5,000 3,920 4,000 0 1,760 2,400 2,500 2,500 2,500 2,500 Green fees (Monthly play cards ) 1,781,405 1,094,543 879,515 1,068,843 291,400 1,873,200 2,510,600 2,680,900 2,707,800 2,734,800 2,762,200 Driving range 343,883 340,000 223,316 321,000 78,000 282,720 377,400 401,900 405,900 410,000 414,100 Cart/club rentals 279,795 255,456 159,118 255,456 49,600 248,880 332,300 353,900 357,400 361,000 364,600 Other fees 24,319 24,319 14,179 24,316 0 1,760 12,700 13,700 13,700 13,900 13,900 Proshop lease 27,248 27,248 20,874 27,248 19,000 21,520 28,500 30,700 30,700 31,300 31,300 Restaurant lease 48,880 48,880 37,895 48,880 48,000 56,600 60,400 64,400 65,000 65,700 66,300 Restaurant Utilities 21,600 15,336 13,000 15,336 18,000 26,900 27,000 27,400 27,400 27,900 27,900 Interest Income ‐ Debt Service 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,810,782 1,351,817 1,765,079 504,000 2,539,240 3,377,200 3,601,300 3,636,300 3,673,000 3,708,700 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 102,165 153,570 150,173 169,500 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 6,476 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 28,331 13,460 15,000 8,000 45,100 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 660 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 1,438 22,300 22,600 22,900 23,200 23,500 23,900 Water Expense 381,966 375,849 296,483 367,888 353,019 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 38,298 48,448 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 29,475 48,089 31,200 83,280 105,700 107,300 108,900 110,500 113,900 Subtotal 681,936 683,397 487,017 651,998 573,630 530,780 601,400 615,900 635,600 655,900 679,100 Contract Services  Golf Maintenance 808,801 750,000 572,893 750,000 640,633 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 0 Range fees 130,676 129,200 84,860 121,980 66,209 67,444 75,480 80,380 81,180 82,000 82,820 Cart rentals 112,083 102,182 63,647 102,182 21,824 49,776 66,460 70,780 71,480 72,200 72,920 Club rentals 5,951 5,000 2,205 5,000 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 345,324 313,495 345,324 82,972 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 93,660 125,530 134,045 135,390 136,740 138,110 Credit Card Fees 38,000 30,000 22,800 30,000 7,500 39,337 52,723 56,299 56,864 57,431 58,006 Subtotal 1,491,121 1,365,671 1,059,900 1,354,486 819,138 1,341,441 1,432,925 1,465,149 1,468,659 1,472,216 1,475,801 Total Operating Expenses 2,173,057 2,049,068 1,546,917 2,006,484 1,392,768 1,872,221 2,034,325 2,081,049 2,104,259 2,128,116 2,154,901 Net Income From Operations 381,443 (238,286) (195,100) (241,405) (888,768)667,019 1,342,875 1,520,251 1,532,041 1,544,884 1,553,799 Debt and Other Charges 1998 Debt Service 428,180 429,020 357,552 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 464,856 464,856 464,856 464,856 464,856 464,856 Cost Plan Charges 23,327 25,317 21,097 25,317 26,798 28,138 29,545 31,022 32,573 34,202 35,912 Capital Reserve 0 0 0 0 0 187,320 251,060 268,090 270,780 273,480 276,220 Subtotal ‐ Debt and Other Charges 451,507 454,337 378,649 454,337 454,998 1,111,114 1,168,661 1,196,268 1,199,409 772,538 776,988 Net Income (Loss)(70,064) (692,623) (573,749) (695,742) (1,343,766) (444,095)174,215 323,983 332,632 772,346 776,811 Golf Rounds 58,000 45,000 54,320 71,800 75,700 75,700 75,700 75,700 PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS 6.23.14 ATTACHMENT J SENSITIVTY ANALYSIS - REDUCED ROUNDS GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021  ACTUALS  APPORVED   YEAR TO DATE           (Jul ‐ April)  PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 5,000 3,920 4,000 0 1,520 1,900 2,100 2,200 2,200 2,200 Green fees (Monthly play cards ) 1,781,405 1,094,543 879,515 1,068,843 291,400 1,448,080 2,013,600 2,221,900 2,424,700 2,448,900 2,473,400 Driving range 343,883 340,000 223,316 321,000 78,000 221,280 305,400 335,000 364,100 367,700 371,400 Cart/club rentals 279,795 255,456 159,118 255,456 49,600 194,880 268,900 295,000 320,600 323,800 327,000 Other fees 24,319 24,319 14,179 24,316 0 7,520 10,300 11,400 12,300 12,500 12,500 Proshop lease 27,248 27,248 20,874 27,248 19,000 21,100 23,100 25,600 27,500 28,100 28,100 Restaurant lease 48,880 48,880 37,895 48,880 48,000 44,300 48,900 53,700 58,300 58,900 59,500 Restaurant Utilities 21,600 15,336 13,000 15,336 18,000 26,900 26,900 27,400 27,400 27,900 27,900 Interest Income ‐ Debt Service 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,810,782 1,351,817 1,765,079 504,000 1,991,480 2,724,900 2,998,000 3,263,000 3,295,900 3,327,900 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 102,165 153,570 150,173 169,452 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 6,476 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 28,331 13,460 15,000 8,000 36,080 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 660 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 1,438 17,840 22,600 22,900 23,200 23,500 18,200 Water Expense 381,966 375,849 296,483 367,888 353,019 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 38,298 48,448 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 29,475 48,089 31,200 83,280 105,700 107,300 108,900 110,500 112,200 Subtotal 681,936 683,397 487,017 651,998 573,630 517,252 601,400 615,900 635,600 655,900 671,700 Contract Services  Golf Maintenance 808,801 750,000 572,893 750,000 640,633 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 0 Range fees 130,676 129,200 84,860 121,980 66,209 55,156 61,080 67,000 72,820 73,540 74,280 Cart rentals 112,083 102,182 63,647 102,182 21,824 38,976 53,780 59,000 64,120 64,760 65,400 Club rentals 5,951 5,000 2,205 5,000 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 345,324 313,495 345,324 82,972 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 72,404 100,680 111,095 121,235 122,445 123,670 Credit Card Fees 38,000 30,000 22,800 30,000 7,500 30,410 42,286 46,660 50,919 51,427 51,941 Subtotal 1,491,121 1,365,671 1,059,900 1,354,486 819,138 1,288,170 1,370,558 1,407,400 1,432,839 1,436,017 1,439,236 Total Operating Expenses 2,173,057 2,049,068 1,546,917 2,006,484 1,392,768 1,805,422 1,971,958 2,023,300 2,068,439 2,091,917 2,110,936 Net Income From Operations 381,443 (238,286) (195,100) (241,405) (888,768)186,058 752,942 974,700 1,194,561 1,203,983 1,216,964 Debt and Other Charges 1998 Debt Service 428,180 429,020 357,552 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 464,856 464,856 464,856 464,856 464,856 464,856 Cost Plan Charges 23,327 25,317 21,097 25,317 26,798 28,138 29,545 31,022 32,573 34,202 35,912 Capital Reserve 0 0 0 0 0 144,808 201,360 222,190 242,470 244,890 247,340 Subtotal ‐ Debt and Other Charges 451,507 454,337 378,649 454,337 454,998 1,068,602 1,118,961 1,150,368 1,171,099 743,948 748,108 Net Income (Loss)(70,064) (692,623) (573,749) (695,742) (1,343,766) (882,544) (366,018) (175,668)23,462 460,035 468,856 Golf Rounds 58,000 45,000 53,150 58,100 63,100 67,900 67,900 67,900 PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS 6.23.14 ATTACHMENT J SENSITIVTY ANALYSIS - REDUCED FEES GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021  ACTUALS  APPORVED   YEAR TO DATE           (Jul ‐ April)  PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 5,000 3,920 4,000 0 1,920 2,400 2,500 2,500 2,500 2,500 Green fees (Monthly play cards ) 1,781,405 1,094,543 879,515 1,068,843 291,400 1,738,080 2,329,500 2,487,500 2,512,400 2,537,500 2,562,900 Driving range 343,883 340,000 223,316 321,000 78,000 282,720 377,400 401,900 405,900 410,000 414,100 Cart/club rentals 279,795 255,456 159,118 255,456 49,600 248,880 332,300 353,900 357,400 361,000 364,600 Other fees 24,319 24,319 14,179 24,316 0 1,760 12,700 13,700 13,700 13,900 19,000 Proshop lease 27,248 27,248 20,874 27,248 19,000 2,700 28,500 30,700 30,700 31,300 31,300 Restaurant lease 48,880 48,880 37,895 48,880 48,000 56,600 60,400 64,400 65,000 65,700 66,300 Restaurant Utilities 21,600 15,336 13,000 15,336 18,000 26,900 26,900 27,400 27,400 27,900 27,900 Interest Income ‐ Debt Service 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,810,782 1,351,817 1,765,079 504,000 2,385,460 3,196,000 3,407,900 3,440,900 3,475,700 3,514,500 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 102,165 153,570 150,173 169,500 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 6,476 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 28,331 13,460 15,000 8,000 36,080 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 660 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 1,438 17,840 22,600 22,900 23,200 23,500 23,500 Water Expense 381,966 375,849 296,483 367,888 353,019 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 38,298 48,448 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 29,475 48,089 31,200 83,280 105,700 107,300 108,900 110,500 112,200 Subtotal 681,936 683,397 487,017 651,998 573,630 517,300 600,400 614,900 634,600 654,900 676,000 Contract Services  Golf Maintenance 808,801 750,000 572,893 750,000 640,633 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 0 Range fees 130,676 129,200 84,860 121,980 66,209 67,444 75,480 80,380 81,180 82,000 82,820 Cart rentals 112,083 102,182 63,647 102,182 21,824 49,776 66,460 70,780 71,480 72,200 72,920 Club rentals 5,951 5,000 2,205 5,000 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 345,324 313,495 345,324 82,972 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 86,904 116,475 124,375 125,620 126,875 128,145 Credit Card Fees 38,000 30,000 22,800 30,000 7,500 36,500 48,920 52,238 52,760 53,288 53,821 Subtotal 1,491,121 1,365,671 1,059,900 1,354,486 819,138 1,331,848 1,420,067 1,451,418 1,454,785 1,458,208 1,461,651 Total Operating Expenses 2,173,057 2,049,068 1,546,917 2,006,484 1,392,768 1,849,148 2,020,467 2,066,318 2,089,385 2,113,108 2,137,651 Net Income From Operations 381,443 (238,286) (195,100) (241,405) (888,768)536,312 1,175,534 1,341,583 1,351,515 1,362,593 1,376,849 Debt and Other Charges 1998 Debt Service 428,180 429,020 357,552 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 464,856 464,856 464,856 464,856 464,856 464,856 Cost Plan Charges 23,327 25,317 21,097 25,317 26,798 28,138 29,545 31,022 32,573 34,202 35,912 Capital Reserve 0 0 0 0 0 173,808 232,950 248,750 251,240 253,750 256,290 Subtotal ‐ Debt and Other Charges 451,507 454,337 378,649 454,337 454,998 1,097,602 1,150,551 1,176,928 1,179,869 752,808 757,058 Net Income (Loss)(70,064) (692,623) (573,749) (695,742) (1,343,766) (561,290)24,983 164,654 171,645 609,785 619,791 Golf Rounds 58,000 45,000 54,320 71,800 75,700 75,700 75,700 75,700 PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS 6.23.14 ATTACHMENT J SENSITIVTY ANALYSIS - REDUCED ROUNDS AND FEES GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021  ACTUALS  APPORVED   YEAR TO DATE           (Jul ‐ April)  PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 5,000 3,920 4,000 0 1,360 1,900 2,100 2,200 2,200 2,200 Green fees (Monthly play cards ) 1,781,405 1,094,543 879,515 1,068,843 291,400 1,344,560 1,869,300 2,062,400 2,250,400 2,272,900 2,295,600 Driving range 343,883 340,000 223,316 321,000 78,000 214,368 305,400 335,000 364,100 367,700 371,400 Cart/club rentals 279,795 255,456 159,118 255,456 49,600 273,768 268,900 295,000 320,600 323,800 327,000 Other fees 24,319 24,319 14,179 24,316 0 8,272 10,300 11,400 12,300 12,500 12,500 Proshop lease 27,248 27,248 20,874 27,248 19,000 21,100 23,100 25,600 27,500 28,100 28,100 Restaurant lease 48,880 48,880 37,895 48,880 48,000 44,300 48,900 53,700 58,300 58,900 59,500 Restaurant Utilities 21,600 15,336 13,000 15,336 18,000 26,900 26,900 27,400 27,400 27,900 27,900 Interest Income ‐ Debt Service 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,810,782 1,351,817 1,765,079 504,000 1,960,528 2,580,600 2,838,500 3,088,700 3,119,900 3,150,100 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 102,165 153,570 150,173 169,500 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 6,476 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 28,331 13,460 15,000 8,000 36,080 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 660 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 1,438 17,840 22,600 22,900 23,200 23,500 23,900 Water Expense 381,966 375,849 296,483 367,888 353,019 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 38,298 48,448 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 29,475 48,089 31,200 83,280 105,700 107,300 108,900 110,500 112,200 Subtotal 681,936 683,397 487,017 651,998 573,630 517,300 600,400 614,900 634,600 654,900 676,400 Contract Services  Golf Maintenance 808,801 750,000 572,893 750,000 640,633 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 0 Range fees 130,676 129,200 84,860 121,980 66,209 53,774 61,080 67,000 72,820 73,540 74,280 Cart rentals 112,083 102,182 63,647 102,182 21,824 54,754 53,780 59,000 64,120 64,760 65,400 Club rentals 5,951 5,000 2,205 5,000 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 345,324 313,495 345,324 82,972 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 67,228 93,465 103,120 112,520 113,645 114,780 Credit Card Fees 38,000 30,000 22,800 30,000 7,500 28,236 39,255 43,310 47,258 47,731 48,208 Subtotal 1,491,121 1,365,671 1,059,900 1,354,486 819,138 1,295,215 1,360,312 1,396,075 1,420,463 1,423,521 1,426,613 Total Operating Expenses 2,173,057 2,049,068 1,546,917 2,006,484 1,392,768 1,812,515 1,960,712 2,010,975 2,055,063 2,078,421 2,103,013 Net Income From Operations 381,443 (238,286) (195,100) (241,405) (888,768)148,013 619,888 827,525 1,033,637 1,041,479 1,047,087 Debt and Other Charges 1998 Debt Service 428,180 429,020 357,552 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 464,856 464,856 464,856 464,856 464,856 464,856 Cost Plan Charges 23,327 25,317 21,097 25,317 26,798 28,138 29,545 31,022 32,573 34,202 35,912 Capital Reserve 0 0 0 0 0 134,456 186,930 206,240 225,040 227,290 229,560 Subtotal ‐ Debt and Other Charges 451,507 454,337 378,649 454,337 454,998 1,058,250 1,104,531 1,134,418 1,153,669 726,348 730,328 Net Income (Loss)(70,064) (692,623) (573,749) (695,742) (1,343,766) (910,237) (484,643) (306,893) (120,033)315,131 316,760 Golf Rounds 58,000 45,000 54,320 67,900 67,900 67,900 67,900 67,900 Golf Course Reconfiguration Project Financial Analysis Attachment K  In order to help assess the potential financial performance of the Golf Course  during and after construction, staff entered into a contract with the National Golf  Foundation (NGF) in 2012 to provide an independent Return on Investment  analysis on the design options and long‐range Golf Course plan (Attachment I).   Since the NGF report was completed in 2012, staff has continued to revise the  Golf Course pro‐forma as new information that impacts the current and future  Golf Course financial status has been acquired.  Examples of new information  include the fact that the project has been delayed a year from the original  scheduling estimates, we have begun pre‐construction work on the Golf Course  by stockpiling soil on the course and have experienced reduced golf rounds  played as a result, we have negotiated contract amendments with Golf  Professional Brad Lozares and ValleyCrest Maintenance, and we have received  actual bids for the project work and have drafted a construction contract with the  lowest bidder. As a result, staff has prepared an updated pro‐forma for the Golf  Course illustrating anticipated revenues and costs during pre‐construction,  construction and post‐construction stages in light of the latest information  available (Attachment J).    As mentioned in the discussion above, the lowest bid was 17% higher than the  estimate of probable project cost prepared by the Golf Course Architect.   Subsequent meetings with the lowest bidder have led to agreement on a contract  change order that reduces project costs by $265,399.  Council’s last review of  estimated project costs occurred on February 3, 2014.  For comparison, the  following table presents both the February 3, 2014 project cost estimate and the  current cost breakdown reflecting the actual lowest bid response and negotiated  construction contract being recommended for Council approval.    Palo Alto Municipal Golf Course Reconfiguration Project Costs    February 3, 2014 Project Construction Stage Cost Estimate:    Base Bid $7,651,595  Change Order Contingency (10%)$765,160  Add Alternate bid items $487,200   Change Order Contingency (10%)$48,720  Golf Course Reconfiguration Project Financial Analysis Attachment K  Soft Costs $549,052   Total Construction Stage Project Costs $9,501,727  Less Estimated Soil Importation Revenue ($1,300,000)  Less Estimated SFCJPA Mitigation Payment ($3,000,000)  Net Financed Costs without Add Alternate items (Funded  by COPs)  $4,665,807   Net Financed Costs with Add Alternate items (Funded by  COPs)  $5,201,727     Current Project Construction Stage Cost Breakdown:    Base Bid $8,702,760  Change Order Contingency (10%)$870,276  Additional Costs ‐ Signage, Public Art and Herbicide  Application  $95,061   Add Alternate items $19,650   Change Order Contingency (10%)$1,965  Soft Costs $758,725   Total Construction Stage Project Costs $10,448,437 Less Estimated Soil Importation Revenue $(1,300,000) Less SFCJPA Mitigation Payment $(3,000,000) Net Costs Funded without Add Alternate items (Funded by  COPs)  $6,126,822  Net Costs with Add Alternate items (Funded by COPs)$6,148,437  Golf Course Reconfiguration Project Financial Analysis Attachment K  The cost estimate from February 3, 2014 projected the need to debt‐finance $5.2  million to complete the project, through the issuance of certificates of  participation (COP) supported by Golf Course revenues.  The current cost  estimate increases the required debt financing to $6.1 million.    Staff continues to use the National Golf Foundation approach to estimate the  financial risk of the Golf Course Reconfiguration Project.  That approach includes  projections and sensitivity analysis on the expected number of golf rounds and  the potential for increased market‐driven fees for the reconfigured Golf Course.   The “base” projection for the reconfigured Golf Course is the most likely outcome  to occur according to the NGF.  However, one of the most sensitive variables in  the pro‐formas that affect the bottom line is the projected number of rounds  played.  While rounds played at the Golf Course at one time surpassed 90,000  rounds annually, golf rounds have dropped to 75,000 in FY 2008 and 58,000 in FY  2013.  The second most sensitive variable in the analysis is the fees the public are  willing to pay to play a round of golf.  Taking into account the potential  uncertainty of the future, staff continues to include sensitivity analysis that  considers the following scenarios:    1) What if the number of golf rounds played is lower than expected when the  City re‐opens the Golf Course?  2) What if the market will not accept the planned fee increases?  3) What if both lower golf rounds played and lower‐than‐anticipated green  fees are the outcome?    The baseline projections and the projections for the three scenarios described  above can be viewed in Attachment J and are summarized in the tables below. As  with project costs, the projections and sensitivity analysis from the February 3rd  2014 Council meeting along with current projections are provided for comparison.       Golf Course Reconfiguration Project Financial Analysis Attachment K  February 3, 2014 Projections:  (thousands of dollars)    Scenarios 2014 2015 2016 2017 2018 2019 2020 2021 Base‐  Projection  (741) (1,272)(377)241 391 400 839 844 Sensitivity Analysis:  1. Lower  Rounds  (741) (1,272)(816)(299)(108)91 527 536 2. Lower Fees (741) (1,272)(495)92 232 239 677 687 3. Lower  Fees/Rounds  (741) (1,272)(843)(418)(240)(53) 382 384   June 23, 2014 Projections:  (thousands of dollars)    Scenarios 2014 2015 2016 2017 2018 2019 2020 2021 Base‐  Projection (696) (1,344)(444)174 324 333  772 777  Sensitivity Analysis:  1. Lower  Rounds (696) (1,344)(883)(366)(176)23  460 468  2. Lower  Fees (696) (1,344)(561)25 164 172  610 620  3. Lower  Fees/Rounds (696) (1,344)(910)(485)(307)(120) 315 317    Golf Course Reconfiguration Project Financial Analysis Attachment K  The substantive change to the current Golf Course pro‐forma, as compared with  the February 3, 2014 pro‐forma, is the increase in annual debt from $400,000 to  $464,856, reflecting the actual bid outcome and subsequent construction  contract recommended for Council approval.  As with all projections, results  depend on the assumptions used. The further a projection goes out in time, the  less likely it is that results will materialize as anticipated.  Varying the  assumptions, along with external factors such as weather and economic  conditions, can change pro‐forma projections.    The FY 2014 – Base Projection is the scenario staff believes to be the most likely at  this time and includes several key assumptions:     1) The renovated Golf Course will attract 75,000 rounds of golf annually within  three years. As a point of reference the current Golf Course generated  75,000 rounds in FY 2008.   2) The market will accept a 10% increase in average green fees for the  enhanced golfing experience.  3) The construction will be complete within 16 months, beginning Summer  2014.  4) The Golf Course debt will be $6.1 million, paid back over 20 years at an  interest rate of 4.5%.    The sensitivity analysis in the table above titled “June 23, 2014: Projections”  shows that the scenario of least impact is that of lower fees.  This scenario could  occur if the golfing public does not accept the planned 10% increase in fees,  resulting in the City needing to lower fees to ensure that we attract target golf  rounds played.  This scenario would increase the City subsidy for the Golf Course  by $117,000 compared to the base projection.  The next scenario with least  impact is that of a lower number of annual golf rounds played than expected.   This scenario could result in a considerable increase in net losses of $981,000  compared to the base projection.  The scenario with the greatest negative impact,  or worst‐case scenario, would be if both lower fees and less annual golf rounds  occur.  This scenario could result in $1.38 million in net losses compared to the  base projection.    Should annual golf rounds played fall below those projected, or if rounds and fees  fall below expectations, considerable pressure will be brought to bear on the Golf  Course operation.  In such scenarios, operating costs for the Golf Course would  Golf Course Reconfiguration Project Financial Analysis Attachment K  need to be curtailed and other Community Services Department or City operating  and/or capital funds would need to be reallocated to maintain a balanced budget.   In addition, the assumption of an annual contribution of at least $200,000 of Golf  Course revenues to an operating and capital reserve is built into all of the pro‐ formas.  Not funding this otherwise prudent reserve could offset some of the  negative financial results from lower fees and/or rounds.    The detailed FY 2014–21 pro‐forma (Attachment J) also includes current fiscal  year projections.  For FY 2014 the pro‐forma incudes three columns representing  FY 2014 approved budget, Year‐to‐Date actuals (July‐April), and projected year‐ end balance. The FY 2014 projections reflect the reduction in golf rounds played  due to pre‐construction work, which involved the importation and stockpiling of  soil needed for both the levee and Golf Course reconfiguration projects.  The  current pro‐forma also reflects the executed amendments to professional services  and maintenance contracts for the next five years.  Each amended contract has a  five‐year term, May 1, 2013 to April 30, 2018.    The revised pro‐forma shows the expected revenues and expenses for the Golf  Course operation during construction in FY 2015 and FY 2016.  As seen in the base  projection, the Golf Course is expected to have cumulative net losses of $2.48  million during pre‐construction, construction, and short‐term post‐construction  before realizing positive cash flows beginning in FY 2017.  The costs contributing  to the losses during this period include ongoing debt service from 1998 COPs, City  internal support costs, salaries and benefits, water expenses, and contractor  expenses for ValleyCrest Maintenance and Brad Lozares Golf Professional  services.  The projected Golf Course performance after the reconfiguration, from  FY 2017 forward, is anticipated to have positive cash flow, with significant  surpluses after FY2019 when the 1998 debt service expires.    The approved FY 2015 budget assumes that the Golf Course will be closed as of  July 1, 2014. However, due to the continuing delays in the regulatory permit  approval process, staff recommends Council approve a Budget Amendment  Ordinance (Attachment G) to operate the Golf Course for the first two months of  FY 2015 (July 1, 2014 through August 31, 2014), in the event that the inability to  secure regulatory permits continues to delay the project.  The proposed budget to  operate the Golf Course, July 1, 2014 through August 31, 2014 and closing the  Golf Course September 1, 2104 through the end of the fiscal year June 30, 2015 is  provided on the last page of this analysis.   Golf Course Reconfiguration Project Financial Analysis Attachment K    Duininck, Inc. has confirmed it can meet the planned construction schedule,  provided that it is awarded a construction contract by July 15, 2014. If the  contract award is delayed beyond July 15, 2014, additional costs and an extension  of the expected completion date is anticipated. If the City operates the Golf  Course during July 1, 2014 through August 31, 2014 and closes the Golf Course for  construction on September 1, 2014, the projected FY 2015 year‐end net loss is the  same as is now assumed in the approved operating budget. As seen in Budget  Amendment Ordinance Attachment G, if the Golf Course stays open during July 1,  2014 through August 30, 2014, additional expenses are estimated at $324,800  offset fully with additional revenue.  ATTACHMENT K FY 2012  Actuals FY 2013  Actuals FY 2014  Projected FY 2015 Scenario A FY 2015 Budget  Recommendation REVENUES  Closed Full Fiscal Year  Open July 1, 2014 through  August 30, 2014, Closed  September 1, 2014 Justification Tournament fees 1,878               1,670               4,000              ‐                                           ‐                                               No activity Green Fees 1,779,053       1,630,018       1,008,843      ‐                                          277,000                                     2 month activity; reduced 11% from prior per forecast Monthly play cards 161,672          151,387          60,000            ‐                                          14,400                                       2 month activity; reduced 11% from prior per forecast Driving range 355,594          343,883          321,000        82,400                                    78,000                                       Adjusted per RDG Cart/club rentals 301,225          279,795          255,456         ‐                                          49,600                                       2 month activity; reduced 11% from prior per forecast Proshop lease 29,966             27,248             27,248           18,000                                    19,000                                       $2,000 per month or 4% gross revenue (open); $1,500 per month or 4% gross (closed); Restaurant lease 43,827             48,880             48,880           58,800                                    48,000                                       Contractual; per lease agreement ($4,000 per month) Restaurant Utilities 21,600             21,600             15,336           20,000                                    18,000                                       Contractual; per lease agreement ($1,500 per month) Other Fee 25,326             24,319             24,316            ‐                                           ‐                                                Interest Income ‐ Debt Service ‐                    ‐                    ‐                  ‐                                           ‐                                                Sale of Golf Course equipment ‐                    ‐                    ‐                  ‐                                           ‐                                                Total Revenue 2,720,141       2,528,800       1,765,079     179,200                                  504,000                                      EXPENDITURES Operating Expenses Salaries 90,531             85,469             85,000           97,676                                    102,676                                     Fixed Benefits 39,055             49,479             68,570           47,497                                    47,497                                       Fixed Miscellaneous       Supplies and Materials 12,238             3,292               28,331           8,000                                      8,000                                          Fixed General Expense 754                  1,014               1,438             1,438                                      1,438                                          Fixed Rents and Leases ‐                    ‐                   1,000             1,000                                      1,000                                          Fixed Facilities and Equipment  Purchases ‐                    ‐                    ‐                  ‐                                           ‐                                                Allocated Charges 314,651          524,116          467,659        357,713                                  413,019                                     Adjusted per RDG Subtotal 457,229          663,370          651,998        513,324                                  573,630                                      Contract Services Golf Maintenance 772,539          808,801          750,000        454,104                                  640,633                                     Valley Crest contractual amount (open); $18,158 for 5 months (closed); $415,000 grown‐in period (5 months Miscellaneous 18,318             18,566              ‐                  ‐                                           ‐                                                Range fees 135,310          130,676          121,980        70,040                                    66,209                                       38% of range fees (open); 85% of range fees (closed); ($78,000 in revenue) Cart Rentals 114,621          112,083          102,182         ‐                                          21,824                                       40% of cart/club rental ($49,600 in revenue) Club Rentals 6,061               5,950               5,000              ‐                                           ‐                                                Fixed management fees 385,018          377,045          345,324        30,500                                    82,972                                       $345,333 prorated for 2 months (open); $30,500 for 10 months (closed Credit card fees ‐                    ‐                   30,000            ‐                                          7,500                                          Estimated Subtotal 1,431,867       1,453,121       1,354,486     554,644                                  819,138                                      Total Operating Expenses 1,889,096       2,116,491       2,006,484     1,067,968                              1,392,768                                   Income From Operations 831,045          412,309          (241,405)       (888,768)                                (888,768)                                     Debt Expenses Debt Service (refunded) 559,539          428,180          429,020        428,194                                  428,194                                     Per Debt Service Schedule Loan payment to General Fund for CIP  Projects PG‐08001 and PG‐07700 ‐                    ‐                    ‐                    ‐                                              Subtotal 559,539          428,180          429,020        428,194                                  428,194                                      Cost Plan Charges 24,873             24,744             25,317           30,485                                    30,485                                       FY 2014 projected increased by 5.85% citywide Net Income (Loss) 246,633          (40,615)           (695,742)       (1,347,447)                             (1,347,447)                                  Golf Rounds 68,000             68,000              ‐                  ‐                                           ‐                                                Full Loss 10 Month Loss 324,800                                     Additional Revenue 324,800                                     Additional Expenses (0)                                                 Net Impact to General Fund Minor, Beth CIT';· or rAte At{C, eAt .. &fTY CLERK'S OfFice: Pat Mamott <patmarnott@sbcglobal.net> From: S~turday,. June 14, 2014 11:30 AM 14 JUN 16 AM ,: 14 Friend, Gil Sent: To: Cc: Subject: Council, City; Keene, James sustainability Dear Gil, Back in April, I sent the email below to you and the council. I recently read the following article in the Chronicle about the impact of climate change on bayfront cities: http://www.sfgate.com/opinion/openforum/article/Climate-change-would-drown-parts-of-San-Mateo-5548800.php See the interactive map at: http://ss2.climatecentral.org/index.html#12/37.5571/-122.3149?show=property&level=3&pois=hide Since Palo Alto is planning developments to the golf course and parking lot, as well as taking over the airport, I wonder you, as chief sustainability officer, weigh in on these projects. Thank you, Pat Marriott From: Pat Marriott [mallto:patmarriott@sbcglobal.net] Sent: Saturday, April 19, 2014 5:01 PM To: City Council (clty.council@cityofpaloalto.org); 'Planning.Commission@CityofPaloAlto.org' Subject: where will the water come from? Council Members and Commissioners: I'm wondering if anyone at City Hall has done research on the dark side of growth, for example: Where will the water come from for residents and workers? How will our carbon footprint increase with the growing dense population, whether we're talking about daytime worker population or residents? When will public transit catch up with the millions of square feet of office space and housing? Who will pay for it? How much will you have to spend to increase the fire department, police department and other services as the population grows? Will the additional population and/or offices provide enough revenue to pay for increased cost of services? How about schools? I'd like to know if you have done any analysis of the above issues. Thank you, Pat Marriott 1 City of Palo Alto (ID # 4678) City Council Staff Report Report Type: Action Items Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: 261 Hamilton Ave Historic Reclassification and Rehabilitation Title: PUBLIC HEARING: City Council Review and Consideration of a Proposed Reclassification from a Category 3 Historic Resource to a Category 2 Historic Resource and an Architectural Review Application for the Historic Rehabilitation Project Located at 261 Hamilton Avenue that would Generate 15,000 Square Feet of Transferable Development Rights for Off-Site Development. The Rehabilitation Project Includes Renovations to the Existing Building And Relocation of Floor Area to Make A 5,910 Square Foot Addition at the Rear of the Building. Environmental Assessment: Exempt from the California Environmental Quality Act per Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities From: City Manager Lead Department: Planning and Community Environment Recommendation The Historic Resources Board, the Architectural Review Board and staff recommend that Council approve the proposed reclassification of the building at 261 Hamilton Avenue (the University Art building) from a Category 3 to a Category 2 Historic Resource, enabling the generation of 15,000 square feet of Transferable Development Rights (TDR) (which must be parked), and approve the Architectural Review application for the proposed project based upon the required findings and subject to the conditions of approval in the Record of Land Action (Attachment B). Executive Summary The applicant has requested that the City Council reclassify the four-story “University Art” building located on the corner of Hamilton Avenue and Ramona Street within the Ramona Street Historic District and Downtown Parking Assessment District from a Category 3 historic resource to a Category 2 historic resource. The applicant has also requested approval of an Architectural Review application that includes historic rehabilitation of the building, remodel of interior floors, conversion of the basement area into a parking facility, and the relocation of existing, assessed square footage from the basement and the first floor to an above-grade City of Palo Alto Page 2 addition at the rear of the building. Because the project would relocate existing, assessed square footage from elsewhere in the building to the rear addition, totaling 5,910 square feet, it would not increase the square footage of the building. In order to be eligible to generate Transferable Development Rights, the building must be reclassified to a Category 2 historic resource and the proposed improvements to the building must meet the Secretary of Interior Standards for Rehabilitation. If these things occur, the project would generate 15,000 sq. ft. of Transferable Development Rights (TDR). In light of the City Council’s recent amendment to the Zoning Code, the TDR area would not qualify for “bonus” parking spaces and when it is transferred to a receiver site, the TDR area must be fully parked. The ability of the project to relocate 5,910 existing square feet from the basement of the building and the first floor to the rear addition rests on an interpretation of Municipal Code Section 18.18.120(b) regarding improvements to legal non-complying facilities, and specifically the definition of “building envelope” as discussed in the Background and Discussion sections below. The Historic Resources Board (HRB) and Architectural Review Board (ARB) have recommended approval of the project, and the City Council (rather than the Planning Director) is being asked to consider the ARB’s recommendation because the City Council is the final decision maker regarding the request to reclassify the building from a Category 3 to a Category 2 historical resource. Background The proposed project is comprised of two components: the reclassification of the historic building from a Category 3 to a Category 2; and the physical changes to the building to complete its historic rehabilitation and facilitate its reuse. The standard review process for the reclassification request requires HRB and City Council review, while the standard review process for physical changes to the building requires HRB and ARB review, with a decision by the Planning Director (appealable to the City Council). Staff has elected to bring both components of the project to the City Council for consideration and action because they benefit from being considered concurrently, and they concern a notable historic resource located within the downtown commercial zone and historic district. Review Process and Public Comments On April 16, 2014, the HRB conducted a public hearing and unanimously recommended approval of both the reclassification request and rehabilitation project. The following day, April 17, the ARB reviewed the project and continued it to June 5, 2014, to allow the applicant time to provide additional details and clarifications. As a result of the ARB’s comments, minor modifications were made to the stair tower façade of the building addition. On May 15, 2014 a subcommittee of the HRB, comprised of board members Kohler, City of Palo Alto Page 3 Bunnenberg, and Bernstein, reviewed design alternatives considered by the applicant, and supported the project modifications as shown on Sheet A4.35 of the plans (Attachment N). The subcommittee found that the project revisions complied with the Secretary of Interior Standards for Rehabilitation. On June 5, 2014, the ARB recommended that Council approve the project (on a 3-1-1 vote). The verbatim minutes of all three meetings are attached for reference (Attachments D and F). The public provided testimony at all three meetings. Generally, comments focused on the project’s aesthetic and rehabilitation details. At both ARB meetings, speakers also expressed concern about bigger picture issues such as the project’s parking impacts to the downtown, as well as the City’s notification process for meetings. Comments also addressed the interpretation of the grandfathered code section and the term “building envelope,” which is explained further below. Public comment letters are attached to this report (Attachment G). Site Information The building at 261 Hamilton occupies a 10,000 square foot lot at the corner of Hamilton Avenue and Ramona Street, which is located in Downtown Palo Alto within the Downtown Parking Assessment District. The site is one block east of University Avenue and abuts a 20 foot wide pedestrian and service alley known as Centennial Walk. The surrounding land uses are primarily ground floor restaurants and retail shops with office uses above. The taller buildings nearby include City Hall, the Cardinal Hotel, and the five-story office building located across Centennial Walk at the corner of Hamilton Avenue and Bryant Street. On the Ramona Street frontage, the adjacent two-story building has an established restaurant use (the Old Pro) and is listed on Palo Alto’s inventory of historic resources as a Category 4 resource. Since the 1920s, the 500 block of Ramona Street has been one of the most prestigious shopping areas in the downtown and today is stronger in this regard than it has ever been. In the last ten years the restoration of every building on the block has been made possible in large part by the City’s Bonus Floor Area incentive for historic buildings. Historic Building The five-story building, including a mezzanine level, is currently listed as a Category 3 Historic Resource, and is located within the National Register-listed Ramona Street Historic District. The District includes the buildings along the south side of Ramona Street and the two adjacent buildings west of the subject property on the north side of Ramona Street. Palo Alto Municipal Code Chapter 16.49 describes a Category 3 or 4 building as a “Contributing Building”, as “any building or group of buildings which are good local examples of architectural styles and which relate to the character of a neighborhood grouping in scale, materials, proportion or other factors. A contributing building may have had extensive or permanent changes made to the original design, such as inappropriate additions, extensive removal of architectural details, or wooden facades resurfaced in asbestos or stucco.” City of Palo Alto Page 4 The building at 261 Hamilton Avenue is the second largest Spanish Colonial Revival building in Palo Alto after the President Hotel on University Avenue. It was designed in 1927 by Birge Clark, generally considered Palo Alto’s most important historic architect, and the city’s master of the Spanish Colonial Revival style. The builder was Wells Goodenough who was the building contractor on most of Birge Clark’s early projects and who was known for the highly skilled carpenters on his team. In 1986, eight buildings on Ramona Street and adjacent Hamilton Avenue, including 261 Hamilton, were listed on the National Register of Historic Places as the Ramona Street Architectural District. 261 Hamilton shares many design characteristics with the other buildings in the District. The District is described in the National Register Nomination Form (Attachment I) as a unified Spanish village enlivened by a diversity of ornamental details and wall openings. The description of 261 Hamilton in the National Register Nomination Form indicates the diversity of architectural treatments and types of ornamentation and craftsmanship that characterize the building: “This four-story stucco-faced building has intersecting Spanish tile hipped roofs. On both Hamilton and Ramona Streets, the ground level facades are composed of a series of arched openings. The second and third floors have evenly spaced rectangle casement windows with nearly continuous wrought iron balconies. The dominant motif at the fourth floor is a series of colonnades, each having a unique column and capital treatment. A central recessed ten-foot-wide vertical slot on the Hamilton Street façade features an open arched entrance to an elevator and stair lobby which serves the upper floors. This entry is accented at the entire second floor by three full-story-high semi- circular birdcage-shaped wrought iron grills. Decorative glazed tile is used both in this entry as well as wainscoting at some ground level arches.” The building’s innovative approach to massing and façade design is described in the project Historic Structure Report, on page 4: “The gabled roof varies slightly in height and pitch to create the illusion that the building comprises different elements constructed over time….The building’s south elevation faces Ramona Street and was designed to appear as if it were two separate buildings, with the left (west) section slightly lower than the right (east) section….The varying roof pitches on the Hamilton Avenue façade also create the illusion of three separate buildings.” Historic photographs of the building, c. 1930, reveal the significant pedestrian interest provided by the original design of the first floor: Gothic pointed arches at store entries and display windows, arched and flattened transom windows decorated with screens of spindles, more colorful wall tile than there is today, hanging lanterns, and shed awnings that allowed the transom windows and spindles to be seen above the awnings. City of Palo Alto Page 5 Existing Floor Area, Uses and Parking The building currently contains approximately 41,900 sq. ft. of floor area, both above and below grade. It is an “oversized” building in the sense that it exceeds the maximum 3:1 floor area ratio (FAR), and is therefore considered a legal non-complying facility with regard to FAR and building height. The existing building has ground-floor retail space (recently occupied by University Art) and office use on the upper four floors (Mezzanine, 2nd, 3rd, and 4th floors). The site includes a full basement that extends beyond the property lines under the City sidewalks. The University Art store used the basement primarily for storage and additional work area. The basement is accessed via the connection to the adjacent basement of 541 Ramona Street. This adjacent basement provides seven existing “on-site” parking spaces, which were recorded at the time of the Downtown Parking Assessment. Vehicles enter and exit the subterranean garage via the alley (Centennial Walk). At the time of the Downtown Parking Assessment, the City determined that the 261 Hamilton building contained 37,800 sq. ft. of floor area (including the basement floor area), and the parking calculation was based on this floor area. The applicant suggests that the difference in the floor area between the existing conditions (41,900 sq. ft.) and the previously assessed floor area (37,800 sq. ft.) could be derived from the mezzanine, if this floor was not counted at the time of the assessment. This hypothesis has not been independently verified, and to address the discrepancy, the applicant has agreed to the City’s stipulation that the total floor area resulting from this project shall not exceed the previously assessed 37,800 sq. ft. of floor area. Project Description: Historic Resource Reclassification The applicant’s proposal is to reclassify the building at 261 Hamilton Avenue from the current “contributing building” designation represented by Category 3 of the Historic Inventory to a Category 2 “significant building.” The HRB voted unanimously to recommend that the City Council reclassify 261 Hamilton Avenue in Category 2 based on the building’s architectural significance and prominence in downtown. The HRB provided a short discussion supporting the staff recommendation for reclassification. The applicant did not participate in the review of the proposed reclassification, and no members of the public spoke to the item. A reclassification of 261 Hamilton Avenue to Category 2 would make the building eligible for 15,000 square feet of Transferable Development Rights, the sale of which could help the applicant fund the proposed changes to the building, including its historic rehabilitation. The HRB adopted the following three findings in support of reclassification. Each of the three findings is introduced by the question reflecting the language of the Municipal Code’s definition of Category 2: 1. Is 261 Hamilton Avenue a building of major regional importance? City of Palo Alto Page 6 Staff interprets the term “regional” to refer to the nine-county Bay Area. 261 Hamilton is one of the largest individual Spanish Colonial Revival buildings in the Bay Area, and is described as “massively-scaled” in the Historic Inventory Form, and yet the National Register Nomination Form notes that the four-story building nevertheless “reflects Clark’s sensitivity to the human scale character of the street.” The massing of the building is varied so that 261 Hamilton seems a grouping of buildings and yet the design unity of the overall building is maintained. The successful attempt, so characteristic of Clark himself, to humanize a very large building throughout its facades (which is enhanced above the main Hamilton entry by a whimsical group of three one-story-tall bird cage treatments in wrought iron) make this an unusual and civilized building of major regional importance. In 2006, a chapter on the work of Birge Clark was included in the book Signature Architects of the San Francisco Bay Area by Dave Weinstein. 2. Is 261 Hamilton Avenue a meritorious work of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region? If one compares the works of Birge Clark to the medieval revival house by Carr Jones at 2101 Waverley, or the avant-garde Craftsman house by Bernard Maybeck at 1061 Bryant Street, or the Spanish Colonial Revival house by George Washington Smith at 1336 Cowper, or the early modernist house by William Wurster at 2240 Cowper it is undeniable that those four architects possessed the stronger creative individuality. But Clark’s National Register Norris House does not appear diminished in that distinguished company. In the context of Palo Alto houses in general, Clark is clearly one of the best architects in Palo Alto, particularly when his National Register commercial, civic, and residential buildings are taken into account. The best buildings of Birge Clark can be styled “meritorious” not only because they manage to preserve overall unity while providing diverse massing and unexpected details, but because whatever their size they manage to leave the impression that the building is humanly scaled. Nothing in Clark’s buildings suggests egoism or showing off; everything displays quiet confidence and humanism. In his design for 261 Hamilton Avenue Clark was able to humanize this large impressive building and he managed to avoid the overpowering despite the building’s scale. The differently designed facades on Ramona and Hamilton (which still result in overall design unity for the building), and the diverse roof and eave strategies which make the Ramona façade look like two different buildings and the Hamilton façade look like three different buildings, and the combination of Gothic elliptical and corbeled arches on the first floor which enhance the human scale character of the building at the street level all come together to produce an outstandingly innovative example of a Spanish Colonial Revival building. 3. Although 261 Hamilton Avenue may have some exterior modifications, is the original character retained? City of Palo Alto Page 7 A professional consultant has determined in the project’s Historic Structure Report (Attachment K) that the original character is retained. The National Register Nomination Form of 1986 states, regarding 261 (formerly 267) Hamilton, that “Minor alterations have only occurred to street-level facades and interiors to accommodate various tenants. The integrity of the original architectural design has not been compromised.” The Historic Structure Report of March 2014 contains a section entitled “Evaluation of Integrity” which evaluated the building under the National Register’s seven aspects of integrity and found in detail that the building retains high integrity of location, materials, workmanship, feeling, and association, good integrity of location, and that “the building strongly conveys its original design intent on the exterior.” The reclassification of 261 Hamilton Avenue as a Category 2 building is based on the building’s retention of historic integrity and on the consistency of the building’s outstanding and regionally important architecture with the definition of Category 2 in Municipal Code Chapter 16.49. Please refer to the attached HRB staff report for additional discussion (Attachment D). Project Description: Physical Modifications to the Building & TDRs The City received an application for a Historic Rehabilitation of the building that would yield, upon approval, Transferable Development Rights (TDRs). The building at 261 Hamilton is classified as an “oversized building,” meaning that it exceeds the maximum 3:1 floor area ratio. Per Palo Alto Municipal Code 18.18.070(a)(5), a building in Historic Category 1 or 2 that is undergoing historic rehabilitation and that currently exceeds a Floor Area Ratio (FAR) of 3.0:1, if located in the CD-C district, shall be allowed to obtain a floor area bonus of 50% of the maximum allowable floor area for the site of the building (i.e. 50% of 3.0:1 FAR). Thus the 10,000 square-foot project site would qualify for 15,000 square feet in TDRs once the rehabilitation is approved and completed. As part of the process for securing TDRs, the property owner of the site must enter into an unsubordinated protective covenant that runs with the land in favor of the city. The City Attorney reviews the form to assure that the property will be rehabilitated and maintained in accordance with the Secretary of Interior's Standards for Rehabilitation of Historic Buildings, together with the accompanying interpretive Guidelines for Rehabilitation of Historic Buildings. Attachment M provides a general summary of the TDR program for additional information, including recent changes to the Municipal Code designed to ensure that transferred floor area is no longer exempt from parking requirements. The applicant proposes to modify all floors of the building, but does not propose to increase the building floor area beyond the 37,800 sq. ft. of floor area found in the City’s Downtown Parking Assessment District record. The general project scope of the proposed project includes the following:  Restoration of existing historic storefronts, metal balconies and ornamental ironwork;  Retrofit elevator with new gurney sized elevator; City of Palo Alto Page 8  Seismic retrofit of the building;  The addition of new mechanical, electrical, plumbing, fire alarm & sprinklers;  Reduction in size of the existing basement and conversion of the remaining space to provide parking accessed from the adjacent building;  The addition of a building code compliant exit stair; and  Replacement of the one-story building element along Centennial Walk with a compatible three-story building element. The applicant’s proposal is for a formal Historic Rehabilitation of the building. “Historic Rehabilitation” is defined in Municipal Code 18.18.030 as “returning a property to a state of utility, through repair or alteration, which makes possible an efficient contemporary use while preserving those portions and features of the property which are significant to its historic, architectural, and cultural values. ‘Historic rehabilitation’ shall remedy all the known rehabilitation needs of the building, and shall not be confined to routine repair and maintenance as determined by the director of planning and community environment.” All components of the project will be required to preserve the character-defining features of the building by consistently adhering to the Secretary’s Standards for Rehabilitation (Attachment B, Section 5). In summary, the specific historic elements of the rehabilitation and restoration of the building include: 1. Repair of the red clay roof tiles and their secure re-attachment to the roof; 2. Cleaning of the stucco surface of the building and repair of damaged stucco in all locations where damage has occurred; 3. Restoration of all ornamental ironwork on the building; 4. Historic rehabilitation of all the steel casement windows on the building; 5. Restoration of all the storefronts on the Ramona and Hamilton facades as depicted on Plan Sheet A4.5; and 6. Restoration of all the transom windows on the ground floor as depicted on Plan Sheet A4.5. Other improvements to the historic building include the following additions:  A historically-compatible iron gate, and accent tiles at the primary Hamilton entrance; and  A historically-compatible iron gate at the secondary Hamilton entrance. The applicant proposes to fill in the 2,053 sq. ft. of basement area located under the City sidewalks, and convert the remaining 6,304 sq. ft. of basement floor area into a parking garage for nine automobiles and 14 to 15 bicycles; space for storage, mechanical/service rooms, and showers are also to be provided in the basement. Parking would be accessed through the adjacent building, and no new ramp to Centennial Way would be required. Once converted to parking and storage, the basement area would no longer be recognized and assessed as legitimate floor area, and the applicant is requesting that this square footage be transferred City of Palo Alto Page 9 elsewhere within the site. Staff has provided additional information about the basement and the relocation of its square footage in the Discussion section of this report. The applicant also proposes to relocate three of the six Centennial Plaques located on the building’s alley façade. Three are proposed to remain in place and three are to be relocated near the University Avenue entrance to Centennial Walk. Plan sheet A5.1 shows alternative plaque locations, but the details are still being developed. A Condition of Approval requires that the final placement for the plaques be submitted for review and approval. Changes (relocation) of floor area within the building and the proposed addition along Centennial Way can be summarized as follows (also see Table 1, below): 1. Reduce the basement floor area by filling-in 2,053 square feet and converting 6,304 square feet to parking, storage, and mechanical space; 2. Reduce the first floor area by removing 188 sq. ft. mainly along the alley-side of the building; 3. Reduce the mezzanine level to 1,196 sq. ft. (from 2,997 sq. ft.) by providing perfunctory spaces such as stairwells, elevator, and telecom closet; 4. Add floor area on the second, third and fourth floors, expanding the second and third floors by 2,887 sq. ft. on each floor; and expanding the fourth floor by 136 sq. ft., with access to a 1,921 sq. ft. roof-top terrace. Table 1: Summary of Floor Area Changes* Existing FAR* Proposed FAR Change* Basement 11,322 2,965 -8,357** First Floor 9,210 9,022 -188 Mezzanine 2,997 1,196 -1,801 Second Floor 6,267 9,154 +2,887 Third Floor 6,267 9,154 +2,887 Fourth Floor 5,879 6,015 +136 Total 41,942 SF* 37,506 SF -4,436 SF* *The City recognizes 37,800 sq. ft. as the existing building square footage based upon the Parking Assessment record, rather than the 41,942 sq. ft. present in the building today. Thus the project would not change the recognized square footage of the building, although it would relocate square footage from the basement, first floor, and mezzanine to the second, third, and fourth floors. **This figure is comprised of the 2,053 sq. ft. sidewalk in-fill and the 6,304 sq. ft. parking facility. The proposed addition would be set back 35 feet from the existing Hamilton façade and inset three feet from the building’s existing Centennial Walk façade. The new pedestrian entrance on City of Palo Alto Page 10 the Centennial Walk façade would be accented with a metal canopy above the door. The alley elevation incorporates large windows and balconies to improve the building’s visual connection to the alley and facilitate pedestrian engagement. The stair tower mass at the end of the building would modulate outward three feet; in this way, a portion of the new wall would maintain the same alignment as the historic portion of the building. The project also includes an outdoor space for tenants and visitors, provided on a new 1,921 sq. ft. roof-top terrace above the addition. This terrace will be visible to the occupants of the adjacent five-story office building at 285 Hamilton Avenue. The proposed upper-floor addition is compatible with the Spanish Colonial Revival style, given the use of a similar architectural style and similar building finishes, such as stucco plaster and red clay tiles on the roof/overhang. The new façade incorporates details from the existing building. These include balconies, light fixtures, decorative metal grille work, and tiles. These details would help tie the old and the new together, for a cohesive (yet differentiated) project. For additional project details, please refer to the applicant’s project description and plans (Attachments C and N). Discussion Historic Structure Report The City’s Floor Area Bonus ordinance requires an application to include submission of a Historic Structure Report (HSR). Staff’s review of the HSR must determine whether it is consistent with Federal standards for such reports as described in “Preservation Brief 43: The Preparation and Use of Historic Structure Reports,” published by the National Park Service. Staff concluded that the project Historic Structure Report by Architectural Resources Group is consistent with the standards presented in Preservation Brief 43. The requirement for a HSR was placed into the Bonus Floor Area Ordinance to ensure that physical treatment of a significant historic building would not commence until substantial information about the building had been gathered: its character-defining features, its development over time, and its significance within local, state, and national contexts. HSR’s are also used by the City to ensure that the proposed work complies with the Secretary of Interior standards. The City’s historic consultant, Architectural Resources Group (ARG) concluded that three initial project components did not comply with the Secretary’s Standards: the proposal to replace all the building’s steel casement windows, the proposals to attempt replication of missing ornamental tile and metal grilles, and replication of the missing post office signage. Subsequently, the applicant agreed to retain and rehabilitate all the steel casement windows, to provide appropriately simplified new tile and grilles, and to delete the post office signage from the project. City of Palo Alto Page 11 Rear Addition The proposed rear three-story addition is depicted on Plan Sheets A4.3, A4.4, and very thoroughly on Sheet A5.0. The addition uses colors and materials closely similar to the colors and materials of the historic building, and the fenestration patterns and balcony design were inspired by the existing building. The HSR (Attachment K) analyzes the compatibility of the addition on page 19 and finds that the addition meets Standard 9 of the Secretary’s Standards because it is compatible and does not impact the significance of the historic building. This existing building is considered “grandfathered” as a “legal non-complying” facility. When constructed in 1927, the building followed the development regulations in place at that time. These regulations are no longer applicable. In the 1970s and 1980s, the City modified the Downtown zoning code to establish maximum floor area ratio (FAR) and height limits. At that time, the building became “non-complying” because it exceeded the newly established FAR and height limits. Based on Palo Alto Municipal Code (PAMC) Section 18.18.120(b), “grandfathered” facilities are those existing on August 28, 1986, and which, when built were a complying facility. These facilities can “remodel, improve or replace site improvements” as long as the improvements do not result in increased floor area, shifting of the building footprint, an “increase of the height, length, building envelope, or any other increase in the size of the improvement,” or an increase in “the degree of noncompliance” except pursuant to the exceptions to FAR regulations of PAMC Section 18.18.070. The current proposal rests on an interpretation of this section of the code, and further explanation follows. Code Interpretation: Background During the 1970s and 1980s, zoning changes reduced the scale of permitted new construction, effectually downzoning new development. Prior to the downzoning, downtown buildings were generally allowed to be larger (from a floor area standpoint) and taller than new buildings developed under today’s Municipal Code. The downzoning made dozens of existing buildings “legal non-complying facilities” and many of these buildings are considered historic resources. Put plainly, under today’s zoning code, new buildings could not be constructed on vacant lots with the same floor area and height as these older and often historic buildings. In recognition of the non-complying status of many downtown buildings, the Council approved a “Grandfathered” ordinance. Grandfathered ordinances are commonly found in zoning ordinances. They generally exist to promote continued investment in properties, by recognizing the fact that the building may be worth more in its current state, such as a historic resource, than a new building built per the “downzoned” code. At the same time, the grandfathered ordinances typically prohibit “increasing the degree of non-compliance” to prevent non- complying situations from getting worse. For clarification, a “non-complying” building describes an existing building that does not adhere to the current development standards regulations (e.g. height, floor area, setbacks, etc.). City of Palo Alto Page 12 The following is the grandfathered facilities section of the code that is applicable to projects in the Downtown CD zone district: 18.18.120 (b) Grandfathered Facilities (1) Any noncomplying facility existing on August 28, 1986 and which, when built, was a complying facility, may remain as a grandfathered facility and shall not be subject to the provisions of Chapter 18.70. (2) The grandfathered facilities specified in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site, provided such remodeling, improvement, or replacement: (A) shall not result in increased floor area; (B) shall not shift the building foot print; (C) shall not result in an increase of the height, length, building envelope, or any other increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070. Improvements to non-complying facilities located outside the CD zone are regulated by PAMC Chapter 18.70. Section 18.70.080 specifies that a non-complying facility can be enlarged providing there is no increase to the non-complying component of the building: 18.70.080 Noncomplying Facility - Enlargement (a) Except as specifically permitted by subsections (b) and (c) hereof or by Section 18.12.050(a), no enlargement, expansion, or other addition or improvement to a noncomplying facility shall be permitted which increases the noncompliance... While not directly relevant to the current project, this code section highlights the fact that the zoning code allows improvements to existing legal non-complying structures. Code Interpretation: Alternatives There are two possible ways to interpret the grandfathered code section 18.18.120(b). First, the addition of above-ground square footage is not currently there and so cannot be permitted. And second, the proposed addition at the rear of the site does not increase the building’s recognized square footage and does not further increase the legal non-complying conditions of the site, so it can be permitted. Staff is of the opinion that the second interpretation is the better one based on the intent of this section of the code, which was adopted to protect the rights of property owners to use and improve existing buildings and to encourage investment in historic buildings specifically. The project does not propose an increase in floor area (per 18.18.120(b)(A)) because the previously assessed floor area is being transferred from the basement and the first floor to the new addition. The footprint of the building is not being increased (per 18.18.120(b)(B)) because the building will take up no more of the site area than it does currently. The building’s height and City of Palo Alto Page 13 length are also not increasing (per 18.18.120(b)(C)) because the building would be no taller, wider, or longer than the current structure if the proposed project is approved. Also, because the building’s floor area and height would not be increased, the project would not increase the degree of non-conformity (per 18.18.120(b)(D)). The only remaining question is whether the proposal would increase the size and “building envelope” per 18.18.120(b)(C). The Municipal Code definition states "’envelope’ means the three-dimensional spatial configuration of a building's volume and mass” (PAMC Section 18.04030(a)(51.5)). Historically, this has been interpreted to mean the building’s volume and mass as allowed by regulations for setbacks, height and daylight plane, floor area and lot coverage established in the current zoning code, which is typically referred to as the “buildable area.” This buildable area interpretation of “building envelope” appears more reasonable than the alternative, since the code could have prohibited increases to the “building” rather than the “building envelope” if the intention was to limit improvements entirely to those within the existing building walls and roof. Considering the “building envelope” as a synonym for “buildable area” is common, as represented by codes from other jurisdictions. For example, Encino (http://homeownersofencino.wordpress.com/zoning-primer/) provides a diagram explaining the interpretation of “building envelope” as follows: Figure 1: "Building Envelope" (Encino, California) Similarly, “size” has historically been interpreted to mean that the floor area cannot be increased, and the maximum size of the building cannot exceed what is allowed under the municipal code. This interpretation allows buildings to be constructed in a manner consistent with the Municipal Code, while prohibiting any increase in the degree of non-compliance. City of Palo Alto Page 14 Several speakers at the ARB hearings were critical of staff’s interpretation of “building envelope” and size, agreeing that the project does not increase the recognized floor area on the site, but arguing that the project still doesn’t comply with code restrictions. These speakers requested a list of buildings remodeled under the staff’s longstanding interpretation of building envelope, where the existing building was a “grandfathered” or a legal noncomplying facility, and the replacement building or addition was allowed to increase beyond the existing building walls but within the buildable area. Staff has prepared a list of some existing Downtown buildings (Attachment H) reflecting the “buildable area” interpretation of “building envelope” for Council’s consideration. The City Council, in reviewing the proposed project will determine whether they agree with staff’s interpretation of “building envelope” and “size” such that the proposed project can be approved with the relocation of recognized square footage from the basement and the first floor to the three story addition along Centennial Walk. Zoning Compliance: Summary of Other Issues Zoning Standards The proposed project is located within the CD-C(GF)(P) zone district. The existing building exceeds the maximum allowable 1:1 (10,000 sq. ft.) FAR for non-residential projects, and rises above the 50 foot height limit. The existing building has approximately 41,900 sq. ft. of floor area, and measures 68 feet to the top of the highest gable. As noted previously, the proposed addition would utilize existing floor area relocated from the basement, so the overall floor area would not increase beyond the existing legal non-complying floor area. The rear building addition would measure less than 50 feet in height. The proposed addition and interior improvements comply with the development standards of the CD-C(GF)(P) district (PAMC Chapter 18.18) as indicated in the attached zoning compliance table (Attachment L). Parking As noted earlier, staff determined that the existing basement (11,322 sq. ft.) floor area was included in the Downtown Parking Assessment for this site and counts toward the existing FAR. The applicant proposes to place soil within the basement area underneath the City sidewalks and wall these areas off. The City supports this action because of the on-going maintenance issues with these sidewalk segments. The area to be in-filled under the sidewalk (2,053 sq. ft., previously assessed and recognized as useable floor area), can be relocated to another location within the project site. This relocation of floor area is also being allowed for basement area converted to a below-grade parking facility (6,304 sq. ft.). The current definition of FAR exempts below-grade parking facilities from FAR calculations, which makes it possible to relocate the 6,304 sq. ft. within the site. At the time the Downtown Parking Assessment was established, 261 Hamilton included 37,800 sq. ft. of floor area and required 151 parking spaces. The building included seven on-site City of Palo Alto Page 15 parking spaces, which are located within the basement of 541 Ramona Street, and was therefore assessed for the 144 parking spaces that were not provided. As noted previously, the proposed improvements will reduce the extant floor area to 37,800 sq. ft., or the amount recognized by the City, based on the current code definition of gross floor area. The applicant proposes to provide nine new parking spaces as well as 14-15 long-term bike lockers, in addition to the seven existing spaces located underneath 541 Ramona. Because of the relocation of assessed floor area, as discussed previously, there is no new floor area requiring more parking. To avoid the basement square footage from re-converting from parking to FAR, the City has added a condition of approval requiring the basement parking facility to be maintained in perpetuity for the use of the occupants of the building only, unless otherwise approved by the Planning Director. The project site is within the Pedestrian Shopping Combining District (P), which requires new construction and building alterations to:  provide design features intended to create pedestrian or shopper interest,  provide weather protection for pedestrians, and  preclude inappropriate or inharmonious building design and siting. The required P-district features include: (1) Display windows, or retail display areas; (2) Pedestrian arcades, recessed entryways, or covered recessed areas designed for pedestrian use with an area not less than the length of the adjoining frontage times 1.5 feet; and (3) Landscaping or architectural design features intended to preclude blank walls or building faces. The existing building and the proposed addition provide glass storefront windows for the majority of the ground floor elevations, meeting the retail/display window requirements. The project site has 200 feet of street frontage and the existing building has 112 sq. ft. recessed covered area. It is legal and noncomplying since 300 sq. ft. of covered recessed area would be required for a new building. Downtown Urban Design Guide & Context-Based Design This project falls within the applicable boundaries of the Downtown Urban Design Guide (Guide). This Guide provides direction to the applicant, staff and ARB regarding development and design in the downtown area, and divides the downtown area into districts, each having a unique identity and design characteristics. The project site is located within the Civic Cross Axis District, which extends from City Hall to Cogswell Plaza. The Guide recommends emphasizing the pedestrian and visual connections between Lytton and Hamilton Districts by creating pedestrian linkages. The project supports this effort by enlivening Centennial Walk. Key features will be added to the alley elevation, including a new building entrance, usable balconies and a roof-top terrace overlooking the alley. City of Palo Alto Page 16 In addition to Zoning Compliance and Architectural Review approval findings, Context-Based Design Considerations and Findings found in PAMC Chapter 18.18 are applicable to projects in the downtown commercial zone district. The findings are discussed below and are included in Attachment B, Draft Context Based Design Findings. (1) Pedestrian and Bicycle Environment. The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements. This finding can be made in the affirmative in that the project, as conditioned, provides bike racks near the building entrances for short term use as well bike lockers and showering facilities in the garage to support the bicycle environment. The existing conditions with storefront awnings, provide pedestrian shelter and supports street activity. (2) Street Building Facades. Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s), to create an environment that supports and encourages pedestrian activity through design elements. This finding can be made in the affirmative in that new addition and entrance, along the alley (Centennial Walk), encourages the use of the alley and enlivens the immediate area. The facade includes glazing and balconies creating a visual connection to the alley. (3) Massing and Setbacks. Buildings shall be designed to minimize massing and conform to proper setbacks. This finding can be made in the affirmative in that the proposed addition complies with the CD-C setback requirements, and is set back three feet from the property line, where none is required. In addition to being set back from the existing building, the new façade incorporates articulation that facilitates the appearance of reducing the mass of the building. (4) Low-Density Residential Transitions. Where new projects are built abutting existing lower scale residential development, care shall be taken to respect the scale and privacy of neighboring properties. This finding does not apply. (5) Project Open Space. Private and public open space shall be provided so that it is usable for residents, visitors, and/or employees of the site. This finding can be made in the affirmative in that the project provides open space with balconies and a roof-top terrace. (6) Parking Design. Parking needs shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment. This finding does not apply. This finding can be made in the affirmative in that the project’s parking is located within the below-grade garage and does not detract from the above grade development or conditions. City of Palo Alto Page 17 (7) Large (Multi-Acre) Sites. Large sites (over one acre) shall be designed so that street, block, and building patterns are consistent with those of the surrounding neighborhood. This finding does not apply, the parcel is 10,000 sq. ft. (8) Sustainability and Green Building Design. Project design and materials to achieve sustainability and green building design should be incorporated into the project. This finding can be made in the affirmative. The rehabilitation of the historic structure is an adaptive re-use of a historic resource and include new building systems (mechanical, electrical and plumbing) that meet the latest code requirements for energy and water efficiency; an open floor plan and new building skylights will allow natural daylight to be infused into the core of the building; the refurbished steel windows with new glazing will greatly assist building energy efficiency; bike storage facilities and showers in the building are provided to encourage bicycle usage for the occupants; and Green building materials and interior finishes will be incorporated into the project. Resource Impact There are no Development Impact Fees associated with this project, since there is no net new floor area. The Building Permit fees would be paid based on valuation of the work. The project includes abandoning and backfilling the portion of the basement encroaching on the Hamilton Avenue and Ramona Street rights-of-way and there is no estimate to date for this work. Also, the cost to the applicant of the proposed improvements to the sidewalk, curb, gutter, street trees and utilities is estimated to range from $90,000 - $125,000. Policy Implications The recommended action furthers the Comprehensive Plan goal and policies encouraging the conservation and preservation of Palo Alto’s historic buildings. The project design and intent is in general conformance with the Comprehensive Plan. The project is consistent with and supported by the following Land Use policies: Policy L-23: Maintain and enhance the University Avenue/Downtown area as the central business district of the City, with a mix of commercial, civic, cultural, recreational and residential uses. Promote quality design that recognizes the regional and historical importance of the area and reinforces its pedestrian character. Policy L-49: Design buildings to revitalize streets and public spaces and to enhance a sense of community and personal safety. Provide an ordered variety of entries, porches, windows, bays and balconies along public ways where it is consistent with neighborhood character; avoid blank or solid walls at street level; and include human-scale details and massing. Policy L-51: Encourage public and private upkeep and preservation of resources that have historic merit, including residences listed in the Historic Inventory. City of Palo Alto Page 18 Policy L-56: To reinforce the scale and character of University Avenue/Downtown, promote the preservation of significant historic buildings. Policy L-58: Promote adaptive reuse of old buildings. Environmental Review Pursuant to California Environmental Quality act (CEQA), this project is categorically exempt under CEQA Guidelines Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. The renovations will be consistent with the Secretary of Interior Standards. Attachments:  Attachment A: Location Map (PDF)  Attachment B: Draft Record of Land Use Action (DOC)  Attachment C: Applicant's Project Description Letter (PDF)  Attachment D: HRB Staff Report (w/o attachments) and Excerpt Minutes of April 16 2014 (PDF)  Attachment E: ARB Staff Report without Attachments, April 17, 2014 and June 5, 2014 (PDF)  Attachment F: ARB Verbatim Meeting Minutes, April 17, 2014 and June 5, 2014 (PDF)  Attachment G: Public Correspondence (PDF)  Attachment H: Examples of Legal Non-Complying Projects in the Downtown (DOCX)  Attachment I: National Register Nomination Form for the Ramona Street District (PDF)  Attachment J: City of Palo Alto Historic Inventory Form for 261 Hamilton Avenue (PDF)  Attachment K: Historic Structures Report, March 4, 2014 (PDF)  Attachment L: Zoning Compliance Table (DOC)  Attachment M: Summary of the Transfer of Development Rights Program (PDF)  Attachment N: Plans (Councilmembers and Libraries only) (TXT) 120-26-095 120-26-099 7 7 7 6 6 7 7 7 7 77 7 7 7 7 7 7 77 6 Ram on a District PC-2967 RM-15 PC-3707CD-C (P) RM-3 PC-4612 P PC-4063 PC-3872 PF PF PF PF PF CD-C(P) F PC-3974 F PC-4195 CD-C(GF)(P)CD-C (P) PC-4611 CD-S(P) ) CD-C(P)CD-C(GF)(P) CD-S(GF)(P) Senior Center Downtown Library Lytton Plaza Cogs well Plaza City Hall E M E RS O N ST R E ET M E R A V E N U E R A M O N A ST R E ET E U NIV E RSIT Y A V E N U E R A M O N A ST R E E T B R Y A N T ST R E E T R S O N ST R E E T A L M A ST R EE T E M E RSO N ST R EE T HIG H ST R E E T HIG H ST R E ET H A M IL T O N A V E N U E H A M IL T O N A V E N U E E M E RS O N ST R E ET H A M IL T O N A V E N U E GIL M A N ST R E ET W A V E R L E Y ST B R Y A N T ST R E ET F O R EST A V E N U E F O R EST A V E N U E B R Y A N T ST R R A M O N A ST R EE T R A M O N A ST R EE T ST R E ET FL O R E N C E ST R E ET B R Y A N T ST R E ET L Y T T U NIV E RSIT Y A V E N U E W A V E R L E Y ST R E E T H A MILT O N L A N L A N E 5 E AST L A N E 6 E A ST LA N E 2 LA N E 20 W E ST L A N E 21 PA U LSE N L A N E L A N E 12 W EST L A N E 11 W EST C E N T E N NIA L W A L K A L E Senior Center Downtown Library Lytton Plaza Cogs well Plaza City Hall This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Project Site Historic District Parking District 0' 200' Location Map 261 Hamilton Avenue 13PLN-00267 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto ccampbe, 2014-05-23 13:14:07 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Page 1 of 27 DRAFT ACTION NO. 2014-xx RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 261 HAMILTON STREET: HISTORIC RECLASSIFICATION AND ARCHITECTURAL REVIEW FOR HISTORIC REHABILITATION 13PLN-00267 (ROXY RAPP, OWNER) On June 23, 2014, the City Council approved the proposed Historic Resource Reclassification and approved the Architectural Review for the Historic Rehabilitation project, making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On June 18, 2013, CAW Architects applied for Architectural Review and Historic Resources Board review of a Historic Rehabilitation that includes the relocation of floor area from the existing basement to allow a 5,910 square foot addition at the rear of the building and establishment of a 1,196 square foot mezzanine floor for a net zero gain in floor area for a Historic Resource located within the Ramona Street Historic District. The project also includes a request for reclassification from a Category 3 Historic Resource to a Category 2 Historic Resource to allow the approved Rehabilitation to generate 15,000 square feet of Transferable Development Rights (“The Project”). B. Following staff review, the Historic Resources Board reviewed the project on April 16, 2014 and voted to recommend approval [7-0-0-0] of the reclassification and historic rehabilitation, and the Architectural Review Board reviewed the project on April 17 and on June 5, 2014 and voted [3-1-0-1] to recommend approval of the historic rehabilitation. The HRB’s and ARB’s actions are contained in the CMR #4678. SECTION 2. Environmental Review. Pursuant to California Environmental Quality act (CEQA), this project is Categorically Exempt under CEQA Guidelines Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. The renovations will be consistent with the Secretary of Interior Standards. The Historical Resource Restoration/Rehabilitation exemption (15331) consists of projects limited to maintenance, repair, stabilization, rehabilitation, restoration, preservation, conservation or reconstruction of historical resources in a manner consistent with the Secretary of the Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (1995), Weeks and Grimmer. Page 2 of 27 The Existing Facilities exemption (15301) is intended for use for projects that consist of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination. For projects located where all public services and facilities are available and there are no environmentally sensitive issues, as addition of up to 10,000 sq. ft. can qualify to use this exemption. SECTION 3. Historic Reclassification Findings. The existing building is currently listed as a Category 3 Historic Resource. The building has been found to meet the Palo Alto Municipal Code (PAMC) definition of a Category 2 “Major Building” [PAMC 16.19.020(b)] based upon the following findings: 1. Is 261 Hamilton Avenue a building of major regional importance? Staff interprets the term “regional” to refer to the nine-county Bay Area. 261 Hamilton is one of the largest individual Spanish Colonial Revival buildings in the Bay Area, and is described as “massively-scaled” in the Historic Inventory Form, and yet the National Register Nomination Form notes that the four-story building nevertheless “reflects Clark’s sensitivity to the human scale character of the street.” The massing of the building is varied so that 261 Hamilton seems a grouping of buildings and yet the design unity of the overall building is maintained. The successful attempt, so characteristic of Clark himself, to humanize a very large building throughout its facades (which is enhanced above the main Hamilton entry by a whimsical group of three one- story-tall bird cage treatments in wrought iron) make this an unusual and civilized building of major regional importance. In 2006 a chapter on the work of Birge Clark was included in the book Signature Architects of the San Francisco Bay Area by Dave Weinstein. 2. Is 261 Hamilton Avenue a meritorious work of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region? If one compares the works of Birge Clark to the medieval revival house by Carr Jones at 2101 Waverley, or the avant-garde Craftsman house by Bernard Maybeck at 1061 Bryant Street, or the Spanish Colonial Revival house by George Washington Smith at 1336 Cowper, or the early modernist house by William Wurster at 2240 Cowper it is undeniable that those four architects possessed the stronger creative individuality. But Clark’s National Register Norris House does not appear diminished in that distinguished company. In the context of Palo Alto houses in general Clark is clearly one of the best architects in Palo Alto, particularly when his National Register commercial, civic, and residential buildings are taken Page 3 of 27 into account. The best buildings of Birge Clark can be styled “meritorious” not only because they manage to preserve overall unity while providing diverse massing and unexpected details, but because whatever their size they manage to leave the impression that the building is humanly scaled. Nothing in Clark’s buildings suggests egoism or showing off; everything displays quiet confidence and humanism. In his design for 261 Hamilton Avenue Clark was able to humanize this large impressive building and he managed to avoid the overpowering despite the building’s scale. The differently designed facades on Ramona and Hamilton (which still result in overall design unity for the building), and the diverse roof and eave strategies which make the Ramona façade look like two different buildings and the Hamilton façade look like three different buildings, and the combination of Gothic elliptical and corbeled arches on the first floor which enhance the human scale character of the building at the street level all come together to produce an outstandingly innovative example of a Spanish Colonial Revival building. 3. Although 261 Hamilton Avenue may have some exterior modifications, is the original character retained? A professional historic consultant, Architectural Resources Group (ARG), has determined in the project’s Historic Structure Report that the original character is retained. The National Register Nomination Form of 1986 states, regarding 261 (formerly 267) Hamilton, that “Minor alterations have only occurred to street- level facades and interiors to accommodate various tenants. The integrity of the original architectural design has not been compromised.” The Historic Structure Report of March 2014 contains a section entitled “Evaluation of Integrity” which evaluated the building under the National Register’s seven aspects of integrity and found in detail that the building retains high integrity of location, materials, workmanship, feeling, and association, good integrity of location, and that “the building strongly conveys its original design intent on the exterior.” SECTION 4. Historic Reclassification Approval. The reclassification of 261 Hamilton Avenue from a Category 3 Historic Resource to a Category 2 Historic Resource is hereby granted for the Project by the City Council pursuant to Chapter 16.49.040 of the Palo Alto Municipal Code. SECTION 5. Floor Area Bonus – Findings. The project is eligible for a floor area bonus totaling 15,000 square feet for the completed historic rehabilitation. The 15,000 square feet of bonus floor area shall be transferred off-site and when developed, vehicle parking requirements shall be met at the current Code requirement. The City Council, pursuant to Section 18.18.070(b)(6) of the Palo Alto Municipal Code, finds that the exterior modifications for the entire project comply with the U.S. Secretary of the Interior's "Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings" (36 CFR § 67, 7)as described below: Page 4 of 27 Standard 1: A property will be used as it was historically or be given a new use that requires minimal change to its distinctive materials, features, spaces, and spatial relationships. The building at 261 Hamilton will continue to serve commercial uses on the ground floor and commercial uses on the upper floors. The existing one-story addition on the Centennial Walk alley that will be removed does not contain any character-defining features. The project, therefore, is compliant with Standard 1. Standard 2: The historic character of a property will be retained and preserved. The removal of distinctive materials or alteration of features, spaces, and spatial relationships that characterize a property will be avoided. The proposed project will retain and preserve all the significant character-defining features of the property including the overall form, the stucco cladding, the steel casement windows on the upper floors, and the historic details of the first floor storefronts and transom windows. The roof tiles will be removed, numbered, and reinstalled as wire-tied tiles. The project, therefore, is compliant with Standard 2. Standard 3: Each property will be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or elements from other historic properties, will not be undertaken. The new iron gate enclosures proposed for the three door openings on the Hamilton Avenue elevation are of a simplified design and are appropriate in material. The finish and color of the new gates will be confirmed during the review process as compatible with the restored metalwork on the building. The project, therefore, is compliant with Standard 3. Standard 4: Changes to a property that have acquired historic significance in their own right will be retained and preserved. The alterations that have occurred to the building over time have not acquired significance and will not be retained. The project, therefore, is compliant with Standard 4. Standard 5: Distinctive materials, features, finishes, and construction techniques or examples of craftsmanship that characterize a property will be preserved. The proposed project will retain and preserve the significant exterior features that characterize the property, including the red-tile roof, the colonnades at the top floor, the steel casement windows, the historic balcony ironwork railing and grilles, the stucco cladding; and the extant historic features of the first Page 5 of 27 floor storefronts and transom windows including the wood spindles. The project, therefore, is compliant with Standard 5 Standard 6: Deteriorated historic features will be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature will match the old in design, color, texture, and, where possible, materials. Replacement of missing features shall be substantiated by documentary and physical evidence. The character-defining historic features will be repaired rather than replaced unless a feature is determined too deteriorated to retain in which case it will be replaced in kind. The replacement of missing features will be based on documentary evidence or will be simplified versions of the originals. The roof red clay tiles will be numbered, removed, and reinstalled by a wire tie method. The project, therefore, is compliant with Standard 6. Standard 7: Chemical or physical treatments, if appropriate, will be undertaken using the gentlest means possible. Treatments that cause damage to historic materials will not be used. The architect has specified that the textured painted stucco will be cleaned using a low-pressure water wash, supplemented by scrubbing with soft natural bristle brushed and non-ionic detergents” as recommended by the Secretary of the Interior's Standards Preservation Brief 22. The project, therefore, is compliant with Standard 7. Standard 8: Archeological resources affected by a project will be protected and preserved in place. If such resources must be disturbed, mitigation measures will be undertaken. An archeological evaluation is beyond the scope of this analysis. However, should materials be found during the demolition or construction process, a qualified archeologist should be consulted for assessment and mitigation recommendations. The project, therefore, is compliant with Standard 8. Standard 9: New additions, exterior alterations, or related new construction will not destroy historic materials, features, and spatial relationships that characterize the property. The new work shall be differentiated from the old and will be compatible with the historic materials, features, size, scale and proportion, and massing to protect the integrity of the property and its environment. The existing one-story addition to the building on the Centennial Walk alley does not contain any character-defining features. Therefore, replacement of this portion of the building with a new addition will not affect the building’s ability to convey its historic significance. The materials and colors of the new addition are closely similar to those of the historic building, and Page 6 of 27 the fenestration and roof details were designed as differentiated from the historic building but compatible due to the simplicity of the addition. The addition is recessed at the connection with the historic building and the height of the addition is lower. Therefore, the proposed addition’s proportions and design do not overwhelm or compete with the historic building’s size and Spanish Colonial Revival style because the addition is designed as a modern interpretation of the historic Spanish Colonial Revival style. The addition is further differentiated by its smooth steel trowel integral colored cement plaster stucco which is different from the historic building’s painted, medium textured, cement plaster finish. The addition’s tile roof will not replicate the tile roof of the historic building. The new wall tiles of the project which will be placed at the storefronts will have no decorative pattern and, therefore, will be appropriately differentiated from the patterned tiles of the historic building. The project, therefore, is compliant with Standard 9. Standard 10: New additions and adjacent or related new construction will be undertaken in such a manner that, if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired. The alterations planned for the historic building such as the new simplified tile at the storefront bases where the original tiles are missing can be removed in the future without negatively impacting the building’s historic materials or overall significance. The proposed addition does remove part of the northernmost portion of the building within the rear “L” but those facades do not contain unique character-defining features. The project, therefore, is compliant with Standard 10. SECTION 6. Architectural Review Findings. 1. The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan. This finding can be made in the affirmative in that the project incorporates quality design that recognizes the importance of the area as described in the Comprehensive Plan. The project is also consistent with The Palo Alto Comprehensive Plan policies related to business and economics. The Comprehensive Plan encourages owners to upgrade or replace existing commercial properties so that these commercial areas are more competitive and better serve the community. The proposed project is also consistent with the following Comprehensive Goals and Policies: Program L-11: Promote increased compatibility, interdependence, and support between commercial and mixed us centers and the surrounding residential neighborhoods; and Policy L-23: Maintain and enhance the University Avenue/Downtown area as the central business district of the City, with a mix of commercial, civic, cultural, recreational and residential uses; promote quality design that recognizes the regional and historical importance of the area and reinforces its pedestrian character. The project is also consistent with Page 7 of 27 additional policies regarding supporting the preservation of historic resources. 2. The design is compatible with the immediate environment of the site. This finding can be made in the affirmative in that the proposed rehabilitation and addition are compatible with the existing historic building and immediate environment in that the addition fits within the massing of the existing building and alley context, with taller buildings adjacent. The proposed design of the project is compatible with the historic context of the Ramona Street Historic District and the commercial development in the downtown and complies with the Secretary of Interior Standards for Rehabilitation. 3. The design is appropriate to the function of the project. This finding can be made in the affirmative in that the design of the new building addition is consistent with the existing historic commercial building. The proposed design is compatible with the Spanish Colonial Revival style of the existing building with the use of a similar architectural style and similar building finishes such as a stucco and red clay tiles on the roof/overhang. The new façade incorporates details from the existing building such as balconies, light fixtures, decorative metal grille work, and tiles that help tie the old and the new together to make a cohesive, but differentiated, project that recognizes the value of this historic resource. 4. In areas considered by the board as having a unified design character or historical character, the design is compatible with such character. This finding can be made in the affirmative; please see Findings 2 and 3 above. 5. The design promotes harmonious transitions in scale and character in areas between different designated land uses. This finding can be made in the affirmative. The site is designated as Regional/Community Commercial and is surrounded by this same use, with exception of the City Hall, which is Public Facility, across the street. The project, with the majority of change happening at the rear of the building along the alley, would not make a significant change to the existing scale and character along Hamilton Avenue and maintains the existing transition. 6. The design is compatible with approved improvements both on and off the site. This finding can be made in the affirmative in that the project is compatible in terms of height, massing, and design with the existing and neighboring buildings and the overall surrounding Page 8 of 27 office and retail uses of the downtown commercial area. Also, see Findings 2 and 3 above. 7. The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community. This finding can be made in the affirmative in that the building amenities (open space, entries, parking, etc.) are accessible and attractive to users. In addition, the project’s associated Traffic Demand Management (TDM) plan enhances the site by reducing vehicle trips to the site and related congestion, as well as reduces the project’s off-site parking demand, which further enhances the desirability of the environment. 8. The amount and arrangement of open space are appropriate to the design and the function of the structures. This finding can be made in the affirmative in that the project provides an open space area with a new roof terrace overlooking Centennial Walk for the tenants of the commercial building. 9. Sufficient ancillary functions are provided to support the main functions of the project and the same are compatible with the project’s design concept. This finding can be made in the affirmative in that the open space, parking, and refuse areas are compatible with the project’s design. 10. Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles. This finding can be made in the affirmative in that the building is easily approachable by all modes of transportation and the automobile circulation is safe and does not introduce any significant changes to the adjacent street and sidewalk system. 11. Natural features are appropriately preserved and integrated with the project. This finding can be made in the affirmative in that the proposed street tree removal is supported by the city staff and are not considered significant as to require retention. 12. The materials, textures, colors and details of construction and plant material are appropriate expression to the design and function. This finding can be made in the affirmative in that the proposed addition is compatible with the existing building’s Spanish Colonial Revival style with the use of a similar architectural style and similar building finishes such as a stucco and red clay Page 9 of 27 tiles on the roof/overhang. The new façade incorporates details from the existing building such as balconies, light fixtures, decorative metal grille work, and tiles that help tie the old and the new together to make a cohesive, but differentiated, project that recognizes the value of this historic resource. Landscaping is discussed in Finding 13. 13. The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment. This finding can be made in the affirmative in that the project is conditioned to provide landscaping and outdoor amenities. These details will be submitted and reviewed to assure the landscape elements are appropriate for the project. 14. Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought-resistant to reduce consumption of water in its installation and maintenance. This finding can be made in the affirmative in that the project is conditioned to provide landscaping and outdoor amenities. These details will be submitted and reviewed to assure the landscape elements are appropriate for the project and are low maintenance and drought tolerant. 15. The project exhibits green building and sustainable design that is energy efficient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. This finding can be made in the affirmative. The rehabilitation of the historic structure is an adaptive re-use of a historic resource and include new building systems (mechanical, electrical and plumbing) that meet the latest code requirements for energy and water efficiency; an open floor plan and new building skylights will allow natural daylight to be infused into the core of the building; the refurbished steel windows with new glazing will greatly assist building energy efficiency; bike storage facilities and showers in the building are provided to encourage bicycle usage for the occupants; and Green building materials and interior finishes will be incorporated into the project. In addition, the project’s associated Traffic Demand Management (TDM) plan that reduces vehicle trips to the site and related congestion, as well as off-site parking demand, furthers the goals of sustainable project design. 16. The design is consistent and compatible with the purpose of architectural review as set forth in subsection 18.76.020(a). This finding can be made in the affirmative in that the project design promotes visual environments that are of high aesthetic quality and variety. Page 10 of 27 SECTION 7. Context-Based Design Considerations and Findings. 1. Pedestrian and Bicycle Environment. The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements. This finding can be made in the affirmative in that the project, as conditioned, provides bike racks near the building entrances for short term use as well bike lockers and showering facilities in the garage to support the bicycle environment. The existing conditions with storefront awnings, provide pedestrian shelter and supports street activity. 2. Street Building Facades. Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s), to create an environment that supports and encourages pedestrian activity through design elements. This finding can be made in the affirmative in that new addition and entrance, along the alley (Centennial Walk), encourages the use of the alley and enlivens the immediate area. The facade includes glazing and balconies creating a visual connection to the alley. 3. Massing and Setbacks. Buildings shall be designed to minimize massing and conform to proper setbacks. This finding can be made in the affirmative in that the proposed addition complies with the CD-C setback requirements, and is set back three feet from the property line, where none is required. In addition to being set back from the existing building, the new façade incorporates articulation that facilitates the appearance of reducing the mass of the building. 4. Low-Density Residential Transitions. Where new projects are built abutting existing lower scale residential development, care shall be taken to respect the scale and privacy of neighboring properties. This finding is not applicable. 5. Project Open Space. Private and public open space shall be provided so that it is usable for residents, visitors, and/or employees of the site. This finding can be made in the affirmative in that the project provides open space with balconies and a roof-top terrace. 6. Parking Design. Parking needs shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment. Page 11 of 27 This finding can be made in the affirmative in that the project’s parking is located within the below-grade garage and does not detract from the above grade development or conditions. 7. Large (Multi-Acre) Sites. Large sites (over one acre) shall be designed so that street, block, and building patterns are consistent with those of the surrounding neighborhood. This finding does not apply. (8) Sustainability and Green Building Design. Project design and materials to achieve sustainability and green building design should be incorporated into the project. This finding can be made in the affirmative. The rehabilitation of the historic structure is an adaptive re-use of a historic resource and include new building systems (mechanical, electrical and plumbing) that meet the latest code requirements for energy and water efficiency; an open floor plan and new building skylights will allow natural daylight to be infused into the core of the building; the refurbished steel windows with new glazing will greatly assist building energy efficiency; bike storage facilities and showers in the building are provided to encourage bicycle usage for the occupants; and Green building materials and interior finishes will be incorporated into the project. SECTION 8. Architectural Review Approval Granted. Architectural Review approval is hereby granted for the Historic Rehabilitation Project by the City Council pursuant to Chapter 18.77 of the Palo Alto Municipal Code. SECTION 9. Plan Approval. The plans submitted for Building Permit shall be in substantial conformance with those plans prepared by Cody Anderson Wasney, consisting of 25 pages, and received May 28, 2014, except as modified to incorporate the conditions of approval in Section 10. A copy of these plans is on file in the Department of Planning and Community Development. SECTION 10. Conditions of Approval. A. Planning and Transportation Division 1. The project shall be in substantial conformance with the approved plans and related documents received May 28, 2014, except as modified to incorporate these conditions of approval. 2. The Conditions of Approval document shall be printed on all plans submitted for building permits related to this project. 3. The project shall include four additional short-term bike parking racks along the street frontage. The applicant shall provide details of the layout to staff for review and approval prior to building permit issuance. Page 12 of 27 4. The relocation of the existing plaques along Centennial Walk shall be reviewed and approved by staff prior to installation. 5. The applicant shall consult with Planning and Public Works staff to incorporate new street trees along Hamilton Avenue and Ramona Street where feasible prior to the submittal of building permits. 6. The applicant shall submit hardscape, landscape and furniture details for the roof-top terrace for the ARB Subcommittee to review prior to the submittal of building permits. 7. The designated trash room shall be sized to accommodate a 2- yard garbage bin, a 2-yard recycling bin, and a 96-gallon compost cart and used in the event extra storage of refuse is needed. 8. Plan sheet A2.2 shall be corrected regarding the notes and tags on the sheet; references in the plans to copper gutters on the addition shall also be corrected to reflect the use of steel gutters. 9. Prior to being credited with a historic rehabilitation floor area bonus, the property owner of the site shall enter into an unsubordinated protective covenant running with the land in favor of the city, in a form satisfactory to the city attorney, to assure that the property will be rehabilitated and maintained in accordance with the Secretary of Interior's Standards for Rehabilitation of Historic Buildings, together with the accompanying interpretive Guidelines for Rehabilitation of Historic Buildings, as they may be amended from time to time. 10. New construction and alterations in the CD-C zoning district ground floor space shall be designed to accommodate retail use and shall comply with the provisions of the Pedestrian (P) combining district. 11. Development Impact Fees are not applicable to this project since no new FAR is being constructed. 12. The proposed 6,304 sq. ft. parking facility, as shown on Sheet A2.0, shall be maintained as such and shall not be converted to any other uses for the life of the building, unless approved by the Director of Planning and Community Environment. Conversion to other use may result in payment to the City of the corresponding parking in-lieu fees. 13. The use of the 6,304 sq. ft. parking facility, as shown on Sheet A2.0, shall be by the building tenants only. The parking facility is solely for the use of the building tenants for the life of the building, unless approved by the Director of Planning and Community Environment. Page 13 of 27 14. The applicant shall submit a Parking Management Plan to be approved by the Director of Planning and Community Environment prior to the issuance of building permits for the site. The plan shall provide details of a valet program or something similar to assure the tandem spaces are being appropriately utilized. 15. The applicant shall submit a Transportation Demand Management plan to be approved by the Director of Planning and Community Environment prior to the issuance of building permits for the site. The plan shall include provisions such as passes or subsidies for all employees of the commercial space for using public transit, in addition to car sharing, bike facilities, transportation information kiosks, and the designation of a transportation demand coordinator for the building. 16. All future exterior signage shall be submitted for Architectural Review. 17. The project shall comply with the four recommendations of the project’s Historic Structures Report as listed on page 20 and shown below: a. Retain, repair, and restore the original steel multi-pane casement windows throughout. Replace in kind only when the condition is deteriorated to a state where repair is not feasible. b. Use simplified compatible tile at the restored storefronts. The plain tiles in the Fireclay Debris Series would be appropriate. c. Retain the post office signage as is, with no attempt to replicate the lettering. d. Design new decorative grille features as compatible yet differentiated replacements using a simplified design and similar color and finish treatments. 18. The ten Secretary of the Interior's Standards for Rehabilitation shall be printed on one of the initial sheets of the Building Permit Plan Set. 19. The current edition of the California Historical Building Code shall be applied to all eligible aspects of the historic rehabilitation of the exterior of the house when needed to preserve character-defining features. 20. No demolition or permanent removal of significant historic fabric that is not included in the project approval shall be carried out in any amount for any reason except with written permission by the Department of Planning and Community Environment. Unauthorized demolition may result in significant delay of the project including return to the Historic Resources Board. Page 14 of 27 21. Any revisions to approved materials and colors for the exterior of the house proposed during the project construction phase shall be submitted for review by the Historic Preservation Planner or the HRB subcommittee depending on the scope of the proposed revisions. 22. Any interior or exterior window film proposed to be added to the project shall be reviewed by the Historic Resources Board prior to installation on the windows. 23. Any new exterior lighting added to the project during the construction phase shall be reviewed by the Historic Preservation Planner with respect to the style, materials, and color of the fixtures, and the light bulb types. Light bulb glare that could impact neighboring properties shall be avoided. 24. If tempered glass is required for the project, the glass shall be non-reflective tempered glass. This project modification would require review and approval by the Historic Preservation Planner. 25. Prior to issuance of the building permit the Historic Preservation Planner shall review the Building Permit Plan Set (final full construction plans) for consistency with the Director of Planning's project approval based on the recommendations of the Historic Resources Board. 26. The Historic Preservation Planner shall participate in the Planning Department's Final Inspection of the completed project. 27. The project approval shall be valid for a period of one year from the original date of approval. In the event a building permit(s), if applicable, is not secured for the project within the time limit specified above, the ARB approval shall expire and be of no further force or effect. Application for extension of this entitlement may be made prior to the one year expiration. 28. Government Code Section 66020 provides that project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90- DAY PERIOD OR TO FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. Page 15 of 27 29. This matter is subject to the Code of Civil Procedures (CCP) Section 1094.5, and the time by which judicial review must be sought is governed by CCP Section 1094.6. B. Public Works Engineering SITE SPECIFIC COMMENTS 1. SIDEWALK, CURB & GUTTER: As part of this project, the applicant must replace those portions of the existing sidewalks, curbs, gutters or driveway approaches in the public right- of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non-standard, and must remove any unpermitted pavement in the planter strip. Contact Public Works’ inspector at 650-496-6929 to arrange a site visit so the inspector can determine the extent of replacement work. The site plan submitted with the building permit plan set must show the extent of the replacement work or include a note that Public Works’ inspector has determined no work is required. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Street Work Permit from Public Works at the Development Center. 2. CENTENNIAL ALLEY PAVER REPAIRS: Consider coordinating with neighboring property owners at 250 University for repair work on the decorative paving and driveway approach located at the alley entry and Hamilton Avenue. The owners of 250 University currently have a maintenance agreement with the city for most of the decorative paving within the Ramona/Hamilton/Bryant/University block and are considering replacing the paving in the near future. 3. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of-way along the property’s frontage(s). Call the Public Works’ arborist at 650- 496-5953 to arrange a site visit so he can determine what street tree work, if any, will be required for this project. The site plan submitted with the building permit plan set must show the street tree work that the arborist has determined, including the tree species, size, location, staking and irrigation requirements, or include a note that Public Works’ arborist has determined no street tree work is required. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way from Public Works’ arborist (650-496-5953). 4. STORM DRAIN CATCH BASIN: As part of the sidewalk replacement and public right of way improvements, remove and relocate the existing non-standard catch basin at the base of the curb ramp at Ramona and Hamilton with a city standard catch basin with hood either on Ramona or Hamilton depending on grades and direction of water flow. See Public Works Department details #301 and #303. Page 16 of 27 5. BASEMENT ABANDONMENT: All existing basement walls, floors, and non-critical structural elements that encroach into the city right-of-way shall be removed as part of the proposed basement work. 6. EASEMENTS: A Public Access Easement for the portions of sidewalk that overlap private property on the Ramona Street and Hamilton Avenue frontages and an access easement that formalizes the use of the garage ramp located on the neighboring property shall be recorded prior to building permit sign-off. 7. The following comments are provided to assist the applicant at the building permit phase. You can obtain various plan set details, forms and guidelines from Public Works at the City's Development Center (285 Hamilton Avenue) or on Public Works’ website: http://www.cityofpaloalto.org/gov/depts/pwd/default.asp. Include in plans submitted for a building permit: 8. STORM WATER POLLUTION PREVENTION: The City's full-sized Pollution Prevention - It's Part of the Plan sheet must be included in the plan set. Copies are available from Public Works at the Development Center or on our website: http://www.cityofpaloalto.org/civicax/filebank/documents/2732 9. STREET TREES: Show all existing street trees in the public right-of-way. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by Public Works' arborist (phone: 650-496-5953). This approval shall appear on the plans. Show construction protection of the trees per City requirements. 10. WORK IN THE RIGHT-OF-WAY: The plans must clearly indicate any work that is proposed in the public right-of-way, such as sidewalk replacement, driveway approach, or utility laterals. The plans must include notes that the work must be done per City standards and that the contractor performing this work must first obtain a Street Work Permit from Public Works at the Development Center. If a new driveway is in a different location than the existing driveway, then the sidewalk associated with the new driveway must be replaced with a thickened (6” thick instead of the standard 4” thick) section. Additionally, curb cuts and driveway approaches for abandoned driveways must be replaced with new curb, gutter and planter strip. 11. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Page 17 of 27 Development Center or on our website: http://www.cityofpaloalto.org/civicax/filebank/documents/2718 12. LOGISTICS PLAN: The contractor must submit a logistics plan to the Public Works Department prior to commencing work that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. The plan will be attached to a street work permit. C. Public Works Trees 1. One new Public tree shall be installed in the vacant tree site on the eastern side, approx. 20 feet from rear property line (Centennial Walk). 2. Second vacant tree site shall be abandoned on the Hamilton frontage (left of bus stop bench). 3. Third existing public tree (Australian willow) shall be replaced with one new public tree 4. Ramona frontage of four existing public trees shall be removed and replaced with four new trees. 5. Species for Hamilton Avenue: Chanticleer Pear. Ramona: New Bradford Pear (Holmford Pear). 24" box size with irrigation using Detail #513. 7. 7. Each tree shall have at least 800 cu ft. favorable root growing medium beneath the sidewalk, constructed in conjunction with the abandoned basement rebuild. 6. Site plan shall include the following note applying to all trees: Prior to demolition, a separate Public Tree Removal Permit and 14-day Notice shall be issued from the Urban Forestry section. D. Environmental Services – Water Quality Please note the following issues must be addressed in building plans prior to final approval by this department: 1. PAMC 16.09.170, 16.09.040 Discharge of Groundwater Prior approval shall be obtained from the city engineer or designee to discharge water pumped from construction sites to the storm drain. The city engineer or designee may require gravity settling and filtration upon a determination that either or both would improve the water quality of the discharge. Contaminated ground water or water that exceeds state or federal requirements for discharge to navigable waters may not be discharged to the storm drain. Such water may be discharged to the sewer, provided that the discharge limits contained in Palo Alto Municipal Code (16.09.040(m)) are not exceeded and the approval of the superintendent is obtained prior to discharge. The City shall be compensated for any costs it incurs in Page 18 of 27 authorizing such discharge, at the rate set forth in the Municipal Fee Schedule. 2. PAMC 16.09.055 Unpolluted Water Unpolluted water shall not be discharged through direct or indirect connection to the sanitary sewer system (e.g. uncovered ramp to garage area). 3. PAMC 16.09.180(b)(9) Covered Parking Drain plumbing for parking garage floor drains must be connected to an oil/water separator with a minimum capacity of 100 gallons, and to the sanitary sewer system 4. PAMC 16.09.180(b)(10) Dumpsters for New and Remodeled Facilities New buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, shall provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. 5. PAMC 16.09.180(b)(14) Architectural Copper On and after January 1, 2003, copper metal roofing, copper metal gutters, copper metal down spouts, and copper granule containing asphalt shingles shall not be permitted for use on any residential, commercial or industrial building for which a building permit is required. Copper flashing for use under tiles or slates and small copper ornaments are exempt from this prohibition. Replacement roofing, gutters and downspouts on historic structures are exempt, provided that the roofing material used shall be prepatinated at the factory. For the purposes of this exemption, the definition of "historic" shall be limited to structures designated as Category 1 or Category 2 buildings in the current edition of the Palo Alto Historical and Architectural Resources Report and Inventory. 6. PAMC 16.09.175(k) (2) Loading Docks Loading dock drains to the storm drain system may be allowed if equipped with a fail-safe valve or equivalent device that is kept closed during the non-rainy season and during periods of loading dock operation. Where chemicals, hazardous materials, grease, oil, or waste products are handled or used within the loading dock area, a drain to the storm drain system shall not be allowed. A drain to the sanitary sewer system may be allowed if equipped with a fail-safe valve or equivalent device that is kept closed during the non-rainy season and during periods of loading dock operation. The area in which the drain is located shall be covered or protected from rainwater run-on by berms and/or grading. Appropriate wastewater treatment approved by the Superintendent shall be provided for all rainwater contacting the loading dock site. Page 19 of 27 7. PAMC 16.09.180(b)(5) Condensate from HVAC Condensate lines shall not be connected or allowed to drain to the storm drain system. 8. PAMC 16.09.215 Silver Processing (e.g. photoprocessing retail) Facilities conducting silver processing (photographic or X-ray films) shall either submit a treatment application or waste hauler certification for all spent silver bearing solutions. 650-329-2421. 9. PAMC 16.09.180(b)(b) Copper Piping Copper, copper alloys, lead and lead alloys, including brass, shall not be used in sewer lines, connectors, or seals coming in contact with sewage except for domestic waste sink traps and short lengths of associated connecting pipes where alternate materials are not practical. The plans must specify that copper piping will not be used for wastewater plumbing. Undesignated Retail Space: 10. PAMC 16.09 Newly constructed or improved buildings with all or a portion of the space with undesignated tenants or future use will need to meet all requirements that would have been applicable during design and construction. E. Building 1. Sheet A2.1 (dated 7-17-2013): The exit passageway (Stair #3) along Grid Line (GL) A is currently opening at a location slightly passed GL 4. This is still being in the garage which is exit access component of means of egress. The exit passageway needs to continue further and open at exit discharge (GL 2). 2. Sheets A2.1, A2.3, A2.4 (dated 7-17-2013): Openings along GL G have only 5 feet fire separation distance. The need to be addressed in accordance with Section 705 of CBC. 3. Sheets A2.1, A2.2, A2.3, A2.4 (dated 7-17-2013): Openings along GL A and GL B need to be addressed in accordance with Section 705 of CBC. 4. Sheet L 1.0 (Roof plan): It is not clear who will have access to this roof. If this will be available to office staff on the second floor, then it may be treated as assembly area. Currently Stair # 2 is giving that access to all the levels below. 5. Sheet A2.3: Bedroom located on the corner of GL G and GL 6 is located somehow that is not complying with Section 1029 6. Sheets A2.1 through A2.4: Exterior wall openings facing GL 7 need to be addressed in accordance with Section 705 of CBC. F. Utilities- Electrical Engineering GENERAL Page 20 of 27 1. The applicant shall comply with all the Electric Utility Engineering Department service requirements noted during plan review. 2. The applicant shall be responsible for identification and location of all utilities, both public and private, within the work area. Prior to any excavation work at the site, the applicant shall contact Underground Service Alert (USA) at 1- 800-227-2600, at least 48 hours prior to beginning work. 3. The applicant shall submit a request to disconnect all existing utility services and/or meters including a signed affidavit of vacancy, on the form provided by the Building Inspection Division. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued after all utility services and/or meters have been disconnected and removed. THE FOLLOWING SHALL BE INCORPORATED IN SUBMITTALS FOR ELECTRIC SERVICE 1. A completed Electric Load Sheet and a full set of plans must be included with all applications involving electrical work. The load sheet must be included with the preliminary submittal. 2. Industrial and large commercial customers must allow sufficient lead-time for Electric Utility Engineering and Operations (typically 8-12 weeks after advance engineering fees have been paid) to design and construct the electric service requested. 3. Only one electric service lateral is permitted per parcel. Utilities Rule & Regulation #18. 4. This project requires a padmount transformer. The location of the transformer shall be shown on the site plan and approved by the Utilities Department and the Architectural Review Board. Utilities Rule & Regulations #3 & #16 (see detail comments below). 5. The developer/owner shall provide space for installing padmount equipment (i.e. transformers, switches, and interrupters) and associated substructure as required by the City. 6. The customer shall install all electrical substructures (conduits, boxes and pads) required from the service point to the customer’s switchgear. The design and installation shall be according to the City standards and shown on plans. Utilities Rule & Regulations #16 & #18. Page 21 of 27 7. Location of the electric panel/switchboard shall be shown on the site plan and approved by the Architectural Review Board and Utilities Department. 8. All utility meters, lines, transformers, backflow preventers, and any other required equipment shall be shown on the landscape and irrigation plans and shall show that no conflict will occur between the utilities and landscape materials. In addition, all aboveground equipment shall be screened in a manner that is consistent with the building design and setback requirements. 9. For services larger than 1600 amps, the customer will be required to provide a transition cabinet as the interconnection point between the utility’s padmount transformer and the customer’s main switchgear. The cabinet design drawings must be submitted to the Electric Utility Engineering Department for review and approval. 10. For underground services, no more than four (4) 750 MCM conductors per phase can be connected to the transformer secondary terminals; otherwise, bus duct must be used for connections to padmount transformers. If customer installs a bus duct directly between the transformer secondary terminals and the main switchgear, the installation of a transition cabinet will not be required. 11. The customer is responsible for sizing the service conductors and other required equipment according to the National Electric Code requirements and the City standards. Utilities Rule & Regulation #18. 12. Any additional facilities and services requested by the Applicant that are beyond what the utility deems standard facilities will be subject to Special Facilities charges. The Special Facilities charges include the cost of installing the additional facilities as well as the cost of ownership. Utilities Rule & Regulation #20. 13. Projects that require the extension of high voltage primary distribution lines or reinforcement of offsite electric facilities will be at the customer’s expense and must be coordinated with the Electric Utility. DURING CONSTRUCTION 1. Contractors and developers shall obtain permit from the Department of Public Works before digging in the street right-of-way. This includes sidewalks, driveways and planter strips. 2. At least 48 hours prior to starting any excavation, the customer must call Underground Service Alert (USA) at 1-800- 227-2600 to have existing underground utilities located and Page 22 of 27 marked. The areas to be check by USA shall be delineated with white paint. All USA markings shall be removed by the customer or contractor when construction is complete. 3. The customer is responsible for installing all on-site substructures (conduits, boxes and pads) required for the electric service. No more than 270 degrees of bends are allowed in a secondary conduit run. All conduits must be sized according to National Electric Code requirements and no 1/2 – inch size conduits are permitted. All off-site substructure work will be constructed by the City at the customer’s expense. Where mutually agreed upon by the City and the Applicant, all or part of the off-site substructure work may be constructed by the Applicant. 4. All primary electric conduits shall be concrete encased with the top of the encasement at the depth of 30 inches. No more than 180 degrees of bends are allowed in a primary conduit run. Conduit runs over 500 feet in length require additional pull boxes. 5. All new underground conduits and substructures shall be installed per City standards and shall be inspected by the Electrical Underground Inspector before backfilling. 6. The customer is responsible for installing all underground electric service conductors, bus duct, transition cabinets, and other required equipment. The installation shall meet the National Electric Code and the City Standards. 7. Meter and switchboard requirements shall be in accordance with Electric Utility Service Equipment Requirements Committee (EUSERC) drawings accepted by Utility and CPA standards for meter installations. 8. Shop/factory drawings for switchboards (400A and greater) and associated hardware must be submitted for review and approval prior to installing the switchgear to: Gopal Jagannath, P.E. Supervising Electric Project Engineer Utilities Engineering (Electrical) 1007 Elwell Court Palo Alto, CA 94303 9. Catalog cut sheets may not be substituted for factory drawing submittal. 10. All new underground electric services shall be inspected and approved by both the Building Inspection Division and the Electrical Underground Inspector before energizing. 11. Electric/switchboard room shall be located at a convenient location that is easily accessible for the meter Page 23 of 27 readers. AFTER CONSTRUCTION & PRIOR TO FINALIZATION 1. The customer shall provide as-built drawings showing the location of all switchboards, conduits (number and size), conductors (number and size), splice boxes, vaults and switch/transformer pads. PRIOR TO ISSUANCE OF BUILDING OCCUPANCY PERMIT 1. The applicant shall secure a Public Utilities Easement for facilities installed on private property for City use. 2. All required inspections have been completed and approved by both the Building Inspection Division and the Electrical Underground Inspector. 3. All fees must be paid. 4. All Special Facilities contracts or other agreements need to be signed by the City and applicant. G. WATER - GAS - WASTEWATER ENGINEERING 1. The existing sanitary sewer mains in Hamilton and Ramona are both 5.5” so the Max size of any new lateral is 4”. 2. The existing water mains in Hamilton and Ramona are both 6” so the Max size of any new fire service is 6”. 3. The applicant shall submit completed water-gas-wastewater service connection applications - load sheets for City of Palo Alto Utilities for each unit or place of business. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.p.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 4. The applicant shall submit improvement plans for any utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. Plans for new wastewater laterals and mains need to include new wastewater pipe profiles showing existing potentially conflicting utilities especially storm drain pipes, electric and communication duct banks. Plans for new storm drain mains and laterals need to include profiles showing existing potential conflicts with sewer, water and gas. Page 24 of 27 5. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). 6. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services. 7. The applicant's engineer shall submit flow calculations and system capacity study showing that the on-site and off-site water and sanitary sewer mains and services will provide the domestic, irrigation, fire flows, and wastewater capacity needed to service the development and adjacent properties during anticipated peak flow demands. Field testing may be required to determined current flows and water pressures on existing water and sewer mains. Calculations must be signed and stamped by a registered civil engineer. 8. For contractor installed water and wastewater mains or services, the applicant shall submit to the WGW engineering section of the Utilities Department four copies of the installation of public water, gas and wastewater utilities improvement plans (the portion to be owned and maintained by the City) in accordance with the utilities department design criteria. All utility work within the public right-of-way shall be clearly shown on the plans that are prepared, signed and stamped by a registered civil engineer. The contractor shall also submit a complete schedule of work, method of construction and the manufacture's literature on the materials to be used for approval by the utilities engineering section. The applicant's contractor will not be allowed to begin work until the improvement plan and other submittals have been approved by the water, gas and wastewater engineering section. After the work is complete but prior to sign off, the applicant shall provide record drawings (as-builts) of the contractor installed water and wastewater mains and services per City of Palo Alto Utilities record drawing procedures (see last condition). For projects that take more than one month to complete, the applicant shall provide progress record drawings of work completed on a monthly basis. 9. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line. RPPA’s for domestic service shall be lead free. Show the location of the RPPA on the plans. Page 25 of 27 10. An approved reduced pressure detector assembly is required for the existing or new water connection for the fire system to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive (a double detector assembly may be allowed for existing fire sprinkler systems upon the CPAU’s approval). reduced pressure detector assemblies shall be installed on the owner's property adjacent to the property line, within 5’ of the property line. Show the location of the reduced pressure detector assembly on the plans. 11. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. 12. Existing wastewater laterals that are not plastic (ABS, PVC, or PE) shall be replaced at the applicant’s expense. 13. Existing water services (including fire services) that are not a currently standard material shall be replaced at the applicant’s expense. 14. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 15. Each unit or place of business shall have its own water and gas meter shown on the plans. Each parcel shall have its own water service, gas service and sewer lateral connection shown on the plans. 16. All existing water and wastewater services that will not be reused shall be abandoned at the main per WGW utilities procedures. 17. Flushing of the fire system to sanitary sewer shall not exceed 30 GPM. Higher flushing rates shall be diverted to a detention tank to achieve the 30 GPM flow to sewer. 18. Sewage ejector pumps shall meet the following conditions: a. The pump(s) shall be limited to a total 100 GPM capacity or b. The sewage line changes to a 4” gravity flow line at least 20’ from the City clean out. c. The tank and float is set up such that the pump run time not exceed 20 seconds each cycle. Page 26 of 27 19. Utility vaults, transformers, utility cabinets, concrete bases, or other structures cannot be placed over existing water, gas or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas or wastewater mains/services or meters. New water, gas or wastewater services/meters may not be installed within 10’ or existing trees. Maintain 10’ between new trees and new water, gas and wastewater services/mains/meters. 20. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas & wastewater. SECTION 11. Indemnity. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”)from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. SECTION 12. Term of Approval. The Architectural Review approval of the Historic Rehabilitation shall be valid for one year from the original date of approval, pursuant to Palo Alto Municipal Code Section 18.77.090. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment Page 27 of 27 APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: Those plans prepared by Cody Anderson Wasney, consisting of 25 pages, and received May 28, 2014. May 12, 2014 Clare Campbell, Planner City of Palo Alto Department of Planning and Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 Re: Architectural Review Board Re-Submittal 261-267 Hamilton Avenue Ramona Street National Register District Palo Alto, CA 94301 Dear Clare and Members of the ARB, We have prepared the following submittal to respond to the comments we received from the Architectural Review Board at our public hearing on April 17, 2014 and to provide a comprehensive project overview. Designed by Birge Clark and constructed in 1929, this Spanish Colonial Revival building was originally known as the Medico-Dental building and served as ofces for local medical practitioners. It was also home to Palo Alto’s rst Post Ofce and provided the City’s rst underground parking structure. The importance of Clark’s work to the City of Palo Alto, and his shaping of the downtown core is well documented. This prominent historic building forms part of the Ramona Street National Historic District, anchoring the corner of Ramona Street and Hamilton Avenue. This building is currently listed on the City of Palo Alto’s Historic Inventory as a Category III structure. Given the building’s prominence, historical signicance, and that it is the largest historic structure within the Ramona Street National Historic District, the City and the Building Owners are proposing the building be re-classied as a Category II “Major Building” on the City’s registry. CAW Architects was engaged by Hamilton Ramona Partners LLC to evaluate the condition of the building and develop a building-wide rehabilitation plan to this aging building. The proposed scope of the project will perform an historic rehabilitation of the existing building, convert the existing basement space back into a parking garage, replace the ground oor non-historic aluminum storefronts with more historically compatible features, and construct a three story addition at the rear of the building facing Centennial Walk. Combining the removal of the basement space with the new addition will result in a smaller building area. Additional interior improvements will include wholesale replacement of all building systems, as well as complete seismic and life safety upgrades. These combined modications will signicantly improve the historic features and the public safety of this important Palo Alto landmark, enhance the street-level and public experience of the surrounding space, and enliven the street-scape along Centennial Walk. We describe each of these modications in detail below. Historic Rehabilitation We obtained original drawings from the Stanford Archives, which included complete exterior elevations, building sections, key exterior details, structural drawings, and ground oor storefront detailing. From the original drawings, key historic photographs, and extensive eld investigations of the current building, the non-historic building fabric was documented. This analysis forms the basis for the rehabilitation scope. 4 5 5 L a m b e r t A v e n u e | P a l o A l t o | C A 9 4 3 0 6 | 6 5 0 - 3 2 8 - 1 8 1 8 p h o n e | 6 5 0 - 3 2 8 - 1 8 8 8 f a x C O D Y A N D E R S O N W A S N E Y ARCHITECTS Received Via Email Tue 5/13/2014 9:03 AM The ground oor storefronts will be revitalized to improve the retail experience along Ramona Street and Hamilton Street by restoring the ground oor portion of the facade canopies and windows. The existing aluminum storefronts, transoms, and awnings, will be replaced with more historically compatible materials and designs consisting of wood transom windows, steel storefront windows, and wood rail and stile doors. The sills will be nished with historically compatible tile. At the ogee-styled arched openings, the wood spindle detailing will be reconstructed along with new awning boxes. The pointed arched openings will not have awnings. Similar to the original design, decorative ironwork will be provided at the ground oor doors along the Hamilton Avenue elevation. At the upper oors, much of the existing exterior facades will be refurbished to better preserve the original detailing. The existing clay tile will be removed and reinstalled in order to complete the seismic renovations. The tile will be numbered, removed, stored, and then reinstalled with each tile put back in its same location on the building. This effort preserves the signature tile color patterning of Birge Clark Buildings. The decorative iron grilles and balconies are damaged. These decorative items will be repaired or fully reconstructed to match the original detailing. The existing steel sash windows will be refurbished. The glass will be removed, and the frames will then be sandblasted to remove old paint and rust. Once cleaned, the windows will be repainted and reglazed with new, single pane glass. The exterior plaster nish on the original building will be cleaned and painted to closely resemble the original building color. Basement Conversion and Life Safety Improvements The existing basement currently houses basement ofce space. The project will convert the basement back to underground parking and increase the parking available on the site. Access to the underground parking at the basement level will be through an existing driveway on the adjacent property. As part of the project, an access easement should be created to allow driveway access from the adjacent property into the basement-level parking at 261 Hamilton. Since underground parking does not count towards usable building area, converting this ofce basement into parking reduces the existing building area. This excess area is used to create the three story addition at the northeast corner of the building, thus “transferring” basement oor area to the three story addition. Since the reduction in oor area at the basement exceeds the size of the addition, the proposed design results in less usable oor area than the original design and creates additional on-site parking. This proposed renovation project will signicantly improve several existing deciencies within the building. A new continuous exit stair will be added to the building to provide code compliant exiting throughout all oors. Currently only one,open stairwell located in the center of the building serves the upper oor tenants. Other key proposed improvements will include a new automatic re sprinkler system, re alarm system, and a seismic upgrade. The small existing elevator lift will be replaced with a code compliant, gurney-sized elevator serving all oors. Wholesale mechanical and electrical systems will be replaced. Every effort to install and replace major building systems to enhance the life safety and usability will be implemented with extreme care to preserve key dening historic fabric within the building. Building Addition Along Centennial Walk At the northeast quadrant of the original building, the existing single story section will be replaced with a new, three-story addition. As an addition to an existing historic structure, the work must comply with the Secretary of Interior Standards for Historic Rehabilitation in order to qualify as an historic renovation project. Strict guidelines are set for additions, which state the design of the addition must be compatible with the original portions of the historic building, yet the new work must differentiate itself from the original historic work. In order to address the board comments, we describe below the rationale for the design of the addition, a description of revisions that we have made since the last ARB meeting, and commentary related to various comments raised at our previous hearing. 4 5 5 L a m b e r t A v e n u e | P a l o A l t o | C A 9 4 3 0 6 | 6 5 0 - 3 2 8 - 1 8 1 8 p h o n e | 6 5 0 - 3 2 8 - 1 8 8 8 f a x Historic Compatibility vs. Differentiation We noted some comments that the facade detailing of the new elevations lacked appropriate compatibility with the original building, given that the addition was designed in the Spanish Style, and that further clarity should be given to the design of the new elevations. With the revised design, compatibility is established through use of a common vernacular, the Spanish Style, the massing, and the choice of materials. To maintain design consistency and clarity within the addition itself, and with its juxtaposition to the original building, the design relies upon typical materials commonly found within this vernacular. These include steel sash windows, clay tile roofs, iron balconies, iron ornamental detailing, as well as cement plaster nishes for the addition. In both the original and the revised submittal, the massing of the addition follows the cues found in the original building where the facade recesses back in various locations to break down the mass. The addition follows this approach to create two separate masses within the Centennial Walk elevation. The addition steps back approximately three feet where it connects to the original building along Centennial Walk, honoring the historic structure. This approach is used to create a compatible, unied elevation with the overall form. The new facade design is differentiated from the original building by some of the secondary elements, details, and proportions within the design of the addition. With this approach, we unify the facades through overall form, massing, and use of materials, yet differentiate the design through detailing. The middle section of the Centennial Walk elevation remains virtually unchanged from the original submittal to the ARB. We believe the originally proposed detailing achieves this differentiation. The middle section of the elevation inverts the ratio of solid wall to glass from the original building. The glass dominant portion of this elevation is distinctly different from the original building, yet compatible with the original form by establishing a similar ratio of between materials. This portion of the elevation is further differentiated through a horizontal canopy at the entrance, and continuous balconies at each oor. Here we are using similar design features found on the original building in different ways. The revised facade design of the stair tower along Centennial Walk serves as a counterpoint, appearing more compatible now with the original building, and balances out the overall elevation. The original design provided two windows with different proportions from the original building. These windows were asymmetrically organized on this portion of the facade. We have revised this portion of the facade by adding two additional windows and a decorative balcony at the second oor level to create a balanced and harmonious elevation at the stair tower. We believe that these changes address some board member comments to better connect the detailing within the overall design, establishing both strong compatibility and differentiation within the proposed Spanish design vernacular. Project Review by the National Trust and the California State Ofce of Historic Preservation This project is applying for state and federal tax credits for historic preservation. This requires project approvals from both the National Trust and State Ofce of Historic Preservation. Preliminary input from these agencies suggests that the design of the building addition must strongly consider the overall context of the Ramona Street Historic District. Thus, the appropriateness of a highly contrasting modern solution, or the use of modern materials, such as a standing seam metal roof, would likely be discouraged given the compatibility of material and style of the overall national district. Roof Terrace: We have revised our submittal to include an enlarged plan of the roof terrace. The design of the roof terrace will serve the fourth oor tenants of the building for business related functions. The design consists of a combination of soft seating, small tables and chairs, and patio styled landscaping. We have clustered a row of trees and low plantings in planters along the eastern edge of the roof terrace along Centennial Walk. Additional planters will be located on the roof terrace closer to the building. These planters will be lled with a combination of patio scaled trees approximately 8 feet tall, a range of ornamental grasses and low-growing herbaceous 4 5 5 L a m b e r t A v e n u e | P a l o A l t o | C A 9 4 3 0 6 | 6 5 0 - 3 2 8 - 1 8 1 8 p h o n e | 6 5 0 - 3 2 8 - 1 8 8 8 f a x shrubs, and small scale interest planting will be included in the surfaces of the planters. Only plants tolerant of the hot and sometimes windy micro climate found in the roof top zone will be selected. Where appropriate California native plant species will be used and the strong architectural character of the building will also  be taken into consideration. The oor nish will consist of pedestal mounted drainage tiles with either a cement or wood nish. Furniture will consist of high-end contract patio furnishings. Exterior Lighting and Miscellaneous Detailing: With our revised submittal, we have provided additional detailing, schematic sections, and product information pertaining to the detailing of the exterior building facade. At the addition, the stucco will consist of an integral colored plaster with a steel trowel nish. Where new plaster meets the original building, the new work will be recessed back creating a re-entrant corner and allowing the original historic building to stand as the primary form and nish. Outside plaster corners will be radiused. Additional balcony detailing are provided in the sections showing the style and quality of nish. Cut sheets of the new, exterior wall sconces are provided. These xtures are located in the central section of the addition at the second and third oor balconies. Five of the original Centennial Walk decorative wall sconces will be re-installed as shown after the project is complete. Lighting at the roof terraces will include similar wall sconces. We believe the proposed plans provide for all of the needs of the building for now and into the future. The addition, while providing additional ofce space on the upper oors, also drives signicant upgrades to the building including improved life-safety, seismic retrot, sprinklers,new utilities and ADA access throughout. It provides additional vehicle parking in the downtown and rehabilitates key architectural features that have been lost over time. CAW architects is proud of its long-running, extensive work in the Ramona Street Architectural District. The rm has renovated many of the buildings in this important National Register District over the past fteen years. We believe that our extensive knowledge of these buildings and through our thorough analysis, we have a plan that balances the owner goals for improving the building with the historic preservation interests of the community. This is a project designed to keep this building on the landscape for decades to come. We thank you for consideration of our plan. Sincerely, Brent McClure, AIA Principal Cody Anderson Wasney Architects, Inc. 4 5 5 L a m b e r t A v e n u e | P a l o A l t o | C A 9 4 3 0 6 | 6 5 0 - 3 2 8 - 1 8 1 8 p h o n e | 6 5 0 - 3 2 8 - 1 8 8 8 f a x October 18, 2013 Steven Turner, Advance Planning Manager City of Palo Alto Department of Planning and Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 Re: Historic Resources Board/Architectural Review Board Re-Submittal 261-267 Hamilton Avenue Ramona Street National Register District Palo Alto, CA 94301 Dear Steven and Members of the HRB/ARB, Designed by Birge Clark and constructed in 1929, this Spanish Colonial Revival building was originally known as the Medico-Dental building and served as ofces for local medical practitioners. It was also home to Palo Alto’s rst Post Ofce and provided the City’s rst underground parking structure. The importance of Clark’s work to the City of Palo Alto, and his shaping of the downtown core is well documented. This building is listed as a Category III but is clearly eligible to be considered a Category II “Major Building” on the City of Palo Alto’s Historic Inventory because of its signicance to the Ramona Street National Register Historic District. CAW Architects was engaged by Hamilton Ramona Partners LLC to evaluate the condition of the building and develop a building-wide rehabilitation plan to restore key architectural features of the building. Original drawings from the Stanford Archives assisted in the documentation of changes that had occurred to the original building since the time of construction. Extensive eldwork was performed by CAW to document how the building had changed over time. An October 9th, 2012 Executive Summary is attached to this letter that provides more detailed analysis of our ndings. This proposed renovation project will signicantly improve several existing deciencies within the building. A new continuous exit stair will be added to the building to provide code compliant exiting throughout all oors. Currently only one,open stairwell located in the center of the building serves the upper oor tenants. Other key proposed improvements will include a new automatic re sprinkler system, re alarm system, and a seismic upgrade. The small existing elevator lift will be replaced with a code compliant, gurney-sized elevator serving all oors. Wholesale mechanical and electrical systems will be replaced. Every effort to install and replace major building systems to enhance the life safety and usability will be implemented with extreme care to preserve key dening historic fabric within the building. The project will seek to restore deteriorating features of the building. The ground oor storefronts will be revitalized to improve the retail experience along Ramona Street and Hamilton Street by restoring the ground oor portion of the facade canopies and windows. The existing basement currently houses basement ofce space. The project will convert the basement back to underground parking and increase the parking available on the site. At the northwest corner of the site along Centennial Walk, a new three-story addition will be constructed to transfer the existing ofce space from the basement to the second and third oors of the building. The proposed design increases the parking count to the site and decreases the assess gross oor area of the building as noted on the drawings. 4 5 5 L a m b e r t A v e n u e | P a l o A l t o | C A 9 4 3 0 6 | 6 5 0 - 3 2 8 - 1 8 1 8 p h o n e | 6 5 0 - 3 2 8 - 1 8 8 8 f a x C O D Y A N D E R S O N W A S N E Y ARCHITECTS The new addition at the rear of the building takes its clues from Birge Clark’s original design. The addition steps in slightly to honor the original historic building before extending out again to align with the original facade in much the same way as Clark stepped in the structure on other facades to break down the mass of this large four-story building. Simple materials such as stucco, metal, wood and terra-cotta are the primary materials of Clark’s design and are the same materials proposed in the new addition. The new addition has been designed to be compatible with the historic building with some contemporary details primarily through window sizes and mullion patterns. Overall the exterior design of the new addition is compatible with the National Standards for Rehabilitation. We believe the proposed plans provide for all of the needs of the building for now and into the future. The addition, while providing additional ofce space on the upper oors, also drives signicant upgrades to the building including improved life-safety, seismic retrot, sprinklers,new utilities and ADA access throughout. It provides additional vehicle parking in the downtown and rehabilitates key architectural features that have been lost over time. CAW architects is proud of its long-running, extensive work in the Ramona Street Architectural District. The rm has renovated many of the buildings in this important National Register District over the past fteen years. We believe that our extensive knowledge of these buildings and through our thorough analysis, we have a plan that balances the owner goals for improving the building with the historic preservation interests of the community. This is a project designed to keep this building on the landscape for decades to come. We look forward to presenting the project to both the HRB and ARB. We thank you for consideration of our plan. Sincerely, Brent McClure, AIA Principal Cody Anderson Wasney Architects, Inc. 4 5 5 L a m b e r t A v e n u e | P a l o A l t o | C A 9 4 3 0 6 | 6 5 0 - 3 2 8 - 1 8 1 8 p h o n e | 6 5 0 - 3 2 8 - 1 8 8 8 f a x Cl TY 0 F Agenda Date: To: From: Subject: April 16, 2014 Historic Resources Board Dennis Backlund Historic Preservation Planner Historic Resources Board Staff Report Department: Planning and Community Environment 261 Hamilton Avenue [13PLN-00267]: Application by Cody Anderson Wasney Architects for Historic Resources Board review of a proposed reclassification of the 261 Hamilton Building, designed by Birge Clark in 1927 and located in the Ramona Street Historic District, from Category 3 on the City's Historic Inventory to Category 2. The application includes a request for Architectural Review and Historic Resources Board review of a Historic Rehabilitation of the building and review of a 5,910 square-foot addition at the rear of the building allowed by relocating square footage from the existing basement for a net zero gain in floor area; the approved Historic Rehabilitation would generate 15,000 square feet of Transferable Development Rights. Zone District: CD-C(GF)(P). Environmental Assessment: Exempt from the California Environmental Quality Act per Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. RECOMMENDATIONS Staff recommends that the Historic Resources Board (HRB): 1. Recommend that the City Council reclassify the building at 261 Hamilton from Category 3 on the Historic Inventory to Category 2 based on retention of the seven aspects of historic integrity as defined by the National Register Criteria for Evaluation, and consistent with the definition of a Category 2 building in PAMC Section 16.49.020(b). 2. Recommend that the Architectural Review Board and the Director of Planning and Community Environment find that the proposed scope of rehabilitation for the 261 Hamilton Building meets the definition of "historic rehabilitation" set forth in Municipal Code l 8.18.030(b) (Attachment A) and that the proposed historic rehabilitation plan complies with the Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings as presented in Attachments B ("Findings based on 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 1 of 12 the Secretary's Standards for Rehabilitation") and C (The Secretary's Standards), subject to the "Conditions of Approval" in Attachment D. PART I: RECLASSIFICATION OF THE BUILDING TO CATEGORY 2 Background The Historic Building The building at 261 Hamilton A venue is the second largest Spanish Colonial Revival building in Palo Alto after the President Hotel on University A venue. It was designed in 1927 by Birge Clark, generally considered Palo Alto's most important historic architect, and the city's master of the Spanish Colonial Revival style (Attachment E). The builder was Wells Goodenough who was the building contractor on most of Birge Clark's early projects and who was known for the highly skilled carpenters on his team. In 1986 eight buildings on Ramona Street and adjacent Hamilton A venue, including 261 Hamilton, were listed on the National Register of Historic Places as the Ramona Street Architectural District. 261 Hamilton shares many design characteristics with the other buildings in the District. The District is described in the National Register Nomination Form (Attachment F) as a unified Spanish village enlivened by a diversity of ornamental details and wall openings: "The significance of the Ramona Street Architectural District is that it represents an architecturally unified area of buildings which were built during a particular period (1924- 193 8). The buildings in the district remain largely unaltered, and the architectural district contains no intrusions. The total absence of intrusions in a district characterized by a single predominant architectural style makes this area quite unique. Not only are the individual structures attractive in their own right, their relationship with one another establishes the character of the street. The architecture of this street is reminiscent of an architecturally untutored Spanish village .... A simple palette of materials, carefully executed details, comfortable massing, and inviting plans with interior courts of the various buildings give this area its friendly human-scale quality. Thick stucco walls with recessed openings, carved wood, wrought iron, ceramic tile, and tile roofing are composed in a variety of forms which gives diversity to this visually unified area." The description of 261 Hamilton in the National Register Nomination Form indicates the diversity of architectural treatments and types of ornamentation and craftsmanship that characterize the building: "This four-story stucco-faced building has intersecting Spanish tile hipped roofs. On both Hamilton and Ramona Streets, the ground level facades are composed of a series of arched openings. The second and third floors have evenly spaced rectangle casement windows with nearly continuous wrought iron balconies. The dominant motif at the fourth floor is a series of colonnades, each having a unique column and capital treatment. A central recessed ten-foot- wide vertical slot on the Hamilton Street fac;ade features an open arched entrance to an elevator and stair lobby which serves the upper floors. This entry is accented at the entire second floor by three full-story-high semi-circular birdcage-shaped wrought iron grills. 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 2of12 Decorative glazed tile is used both in this entry as well as wainscoting at some ground level arches." The building's innovative approach to massing and fa9ade design is described in the project Historic Structure Report, on page 4: "The gabled roof varies slightly in height and pitch to create the illusion that the building comprises different elements constructed over time .... The building's south elevation faces Ramona Street and was designed to appear as if it were two separate buildings, with the left (west) section slightly lower than the right (east) section .... The varying roof pitches on the Hamilton Avenue fa9ade also create the illusion of three separate buildings." Historic photographs of the building, c. 1930, reveal the significant pedestrian interest provided by the original design of the first floor: Gothic pointed arches at store entries and display windows, arched and flattened transom windows decorated with screens of spindles, more colorful wall tile than there is today, hanging lanterns, and shed awnings that allowed the transom windows and spindles to be seen above the awnings. The Rehabilitation Plan presented in Part II of this report describes the restoration program planned for the first floor. The Historic Inventory and the Historic Categories Palo Alto's Historic Inventory was developed during 1978 in the course of a formal Survey of the older northern half of the City conducted by professional architectural historians Paula Boghosian and John Beach. The Survey was published with the title "Historical and Architectural Resources of the City of Palo Alto" in February 1979, and included an inventory or list of significant structures and a recommended historic district, Professorville. The Survey's principle tasks were to identify structures significant for architecture, notable persons, and events, and to provide guidelines for a preservation program and a historic review body. The Survey also recommended that the City develop a protective ordinance for the significant buildings that the Survey had identified. The origin of the development of the four Historic Categories that were eventually incorporated into the Historic Ordinance (Chapter 16.49 of the Municipal Code) is not entirely clear. It appears, however, that the Survey consultants did not assign Category numbers to the buildings they identified in the Survey. Although the Survey volume does contain a comprehensive list of identified historic resources with Category numbers ("Master List of Structures on Local Inventory," pages 54-63 of the Survey), the evidence is that this particular list with Categories was developed by the City, not the consultants, using historically knowledgeable citizen volunteers. The only statement in the Survey that references this list with Categories is on page 2 of the Survey: "The City of Palo Alto, recognizing it possessed such resources, has recently completed an inventory of those resources, and plans to utilize the inventory in future planning activities." There is no information in the Survey, or anywhere else that staff could locate, on the origin of the concept of the Categories or the methodology by which Category numbers for each significant building identified by the Survey were chosen. The Category numbers are defined in the Historic Ordinance but apart from the Ordinance it is unclear who made the recommendations for individual Category designations and how those recommendations were made. Consequently staff 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 3of12 has analyzed the proposed reclassification of 261 Hamilton A venue from Category 3 to Category 2 using other types of information to enlarge on the very brief definitions of the Categories in the Historic Ordinance. The Existing Category 3 Designation of261 Hamilton Avenue Staff began its analysis of the request to reclassify 261 Hamilton A venue with the Municipal Code's definition of a Category 3 building: '"Contributing building' means any building or group of buildings which are good local examples of architectural styles and which relate to the character of a neighborhood grouping in scale, materials, proportion or other factors. A contributing building may have had extensive or permanent changes made to the original design, such as inappropriate additions, extensive removal of architectural details, or wooden facades resurfaced in asbestos or stucco." This definition indicates that a Category 3 building is not considered an individual landmark but rather a building which supports a "neighborhood grouping" which is primarily significant as a group. That fact that a Category 3 building can have "extensive or permanent alterations which may even include "extensive removal of architectural details" indicates that a Category 3 building is considered to possess a contributing function in a very general sense but to be lacking in significance as an individual building. Staff then compared the definition of Category 3 with the description of 261 (formerly 267) Hamilton Avenue in the Historic Inventory Form: "A prominent visual landmark which performs major urban design functions .... This massively-scaled corner building is an important anchor for the Spanish Colonial Revival commercial row along Ramona" (Attachment G). This description of 261 Hamilton appeared to staff to be inconsistent with the Municipal Code definition of a Category 3 building. The description of 261 Hamilton in the Historic Inventory Form also raises the question of the intended meaning of the phrase "performs major urban design functions." Was this an aspect of historic significance or something else? Staff research revealed that the urban design functions of buildings and districts (areas of thematic continuity) were widely discussed throughout the country at the time of the development of the Historic Inventory Forms and had in fact been under discussion as a new chapter in the history of city planning ever since the 1960 publication of the seminal book on the subject of urban form and function, The Image of the City by Kevin Lynch, professor of urban planning at the Massachusetts Institute of Technology (MIT). Some of the language in Lynch's study is similar to the description of 261 Hamilton in the Historic Inventory Form: Lynch notes the role of harmonious unified settings as "a continuous anchor for [American] lives .... " Also, with the increasing rarity of continuities in contemporary urban environments, Lynch writes that Americans have been coming "to rely increasingly on systems of landmarks," with their "uniqueness and specialization," for their orientation and sense of place. Lynch found that two types of landmarks have especially forceful functions in cities: prominent landmarks that can be seen from many different places and consequently lend unity to urban environments, and landmarks with historical associations. Lynch concludes, "Once a history, a sign, or a meaning attaches to an object, its value as a landmark rises." 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 4of12 Examples and concepts presented by Lynch help explain the landmark presence of the 261 Hamilton Building and the nature of the major urban design functions performed by the building which are referenced in the Historic Inventory Form. Landmark functions performed by 261 Hamilton include its enhancement of urban unity on Ramona Street and in the vicinity due to its striking visibility at many different places in the central downtown. Also, the historical associations of the building's Spanish Colonial Revival style, especially on such a large architectural scale, function as a reminder to citizens of California's Hispanic origins, thereby endowing the building with that meaning which is partly factual and partly romantic and mythical. Upon reviewing these urban studies and specific information on the building itself, staff concluded that the Municipal Code definition of Category 3 contributing buildings on the Historic Inventory does not adequately cover the urban design and cultural landmark functions that are performed by 261 Hamilton A venue. The Proposed Category 2 Designation of 261 Hamilton Avenue A Category 2 building is defined in the Municipal Code as follows: "'Major building' means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have some exterior modifications, but the original character is retained." A Historic Structure Report (HSR) prepared by a professional consultant was submitted for the Historic Rehabilitation project but the legal need to reclassify the building emerged after the HSR was undertaken (Attachment H). After the need to reclassify the building was clarified, staff began its analysis of the reclassification with an evaluation of the appropriateness of the current Category 3 designation. Staff concluded in the analysis above that the language of the Historic Inventory Form is not consistent with the definition of Category 3 in the Municipal Code. Also, staff concluded that 261 Hamilton does perform those major design functions that in this case indicate the presence of a landmark historic building. Findings for Reclassification in Category 2 This section will demonstrate that the overall architectural design and character-defining features of 261 Hamilton are consistent with the Municipal Code definition of a Category 2 building, and that the building retains sufficient historic integrity to convey its significance. Staff presents the definition of a Category 2 structure in three parts which are rephrased in question form. 1. Is 261 Hamilton A venue a building of major regional importance? Staff interprets the term "regional" to refer to the nine-county Bay Area. 261 Hamilton is one of the largest individual Spanish Colonial Revival buildings in the Bay Area, and is described as "massively-scaled" in the Historic Inventory Form, and yet the National Register Nomination Form notes that the four-story building nevertheless "reflects Clark's sensitivity to the human scale character of the street." The massing of the building is varied so that 261 Hamilton seems a grouping of buildings and yet the design unity of the overall building is maintained. The successful attempt, so characteristic of Clark himself, 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 5of12 to humanize a very large building throughout its facades (which is enhanced above the main Hamilton entry by a whimsical group of three one-story-tall bird cage treatments in wrought iron) make this an unusual and civilized building of major regional importance. In 2006 a chapter on the work of Birge Clark was included in the book Signature Architects of the San Francisco Bay Area. 2. Is 261 Hamilton Avenue a meritorious work of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region? If one compares the works of Birge Clark to the medieval revival house by Carr Jones at 2101 Waverley, or the avant-garde Craftsman house by Bernard Maybeck at 1061 Bryant Street, or the Spanish Colonial Revival house by George Washington Smith at 13 3 6 Cowper, or the early modernist house by William Wurster at 2240 Cowper it is undeniable that those four architects possessed the stronger creative individuality. But Clark's National Register Norris House does not appear diminished in that distinguished company. In the context of Palo Alto houses in general Clark is clearly one of the best architects in Palo Alto, particularly when his National Register commercial, civic, and residential buildings are taken into account. The best buildings of Birge Clark can be styled "meritorious" not only because they manage to preserve overall unity while providing diverse massing and unexpected details, but because whatever their size they manage to leave the impression that the building is humanly scaled. Nothing in Clark's buildings suggests egoism or showing off; everything displays quiet confidence and humanism. In his design for 261 Hamilton A venue Clark was able to humanize this large impressive building and he managed to avoid the overpowering despite the building's scale. The differently designed facades on Ramona and Hamilton (which still result in overall design unity for the building), and the diverse roof and eave strategies which make the Ramona fa9ade look like two different buildings and the Hamilton fa9ade look like three different buildings, and the combination of Gothic elliptical and corbeled arches on the first floor which enhance the human scale character of the building at the street level all come together to produce an outstandingly innovative example of a Spanish Colonial Revival building. 3. Although 261 Hamilton A venue may have some exterior modifications, is the original character retained? A professional consultant has determined in the project Historic Structure Report (Attachment H) that the original character is retained. The National Register Nomination Form of 1986 states regarding 261 (formerly 267) Hamilton that "Minor alterations have only occurred to street-level facades and interiors to accommodate various tenants. The integrity of the original architectural design has not been compromised. "The Historic Structure Report of March 2014 contains a section entitled "Evaluation oflntegrity" which evaluated the building under the National Register's seven aspects of integrity and found in detail that the building retains high integrity of location, materials, workmanship, feeling, and association, good integrity of location, and that "the building strongly conveys its original design intent on the exterior" (Attachment H). 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 6of12 Conclusion Staff recommends the reclassification of 261 Hamilton A venue as a Category 2 building based on the building's retention of historic integrity and on the consistency of the building's outstanding and region.ally important architecture with the definition of Category 2 in Municipal Code Chapter 16.49. PART II: THE HISTORIC REHABILITATION PLAN Background Existing Building and Site Information The 261 Hamilton building occupies a 10,000 square foot lot at the comer of Hamilton A venue and the 500-block of Ramona Street. Since the 1920s the 500 block of Ramona has been one of the most prestigious shopping area in the downtown and today is stronger in this regard than it has ever been. In the last ten years the restoration of every building on the block has been made possible in large part by the City's Bonus Floor Area incentive for historic buildings. 261 Hamilton at 30,620 square feet above grade is one of the half-dozen largest buildings in the downtown and the second largest historic building in the city. The effect of the large building on the street is significantly enhanced by the complex design of the street-facing facades and the use of ornamental metal work and decorative tile throughout the building and the use of decorative columns and piers at the top floor. The Historic Rehabilitation Application for Oversized Buildings The City received an application for a Historic Rehabilitation of the building that would yield, upon approval, Transferable Development Rights (TD Rs). Details on the application are as follows: 261 Hamilton is classified as an "oversized building," meaning that it exceeds the maximum 3:1 floor area ratio. Per Palo Alto Municipal Code 18.18.070(a)(5) a building in Historic Category 1 or 2 that is undergoing historic rehabilitation and that currently exceeds a Floor Area Ratio (FAR) of 3.0:1, iflocated in the CD-C district, shall be allowed to obtain a floor area bonus of 50% of the maximum allowable floor area for the site of the building, based upon a FAR of 3.0:1 if in the CD-C district. The 10,000 square-foot project site would qualify for 15,000 square feet in Transferable Development Rights once the rehabilitation is approved. The Historic Rehabilitation Project Summary of the HRB Review Process The 261 Hamilton Historic Rehabilitation project is complex and includes many non-historic elements designed to bring the building up to code. Staff has organized the project review into a basic three-step historic procedure which will concentrate on historic issues. The first step is listing the character-defining features of the building, those features that the project must preserve. The second step is listing the components of the project description, those actions which may benefit the historic building or may impact character-defining features. The third step is to evaluate each proposed action of the project description for consistency with the Secretary's Standards for Rehabilitation. If the HRB finds that all components of the Historic Rehabilitation project description comply with the Secretary's Standards then the HRB may 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 7of12 approve the project. If the HRB finds that certain items of the project description are inconsistent with the Secretary's Standards, the HRB may establish Conditions of Approval whereby those items must be revised or deleted from the project. The staff report contains an attachment with a recommended evaluation of each element of the project description under each of the ten Secretary's Standards (Attachment B). Character-defining Features of 261 Hamilton Avenue The building's character-defining features are discussed and illustrated with photographs in the project's Historic Structure Report on pages 10-12. Standard 2 of the Secretary's Standards for Rehabilitation states, "The historic character of a property will be retained and preserved. The removal of distinctive materials or alteration of features, spaces and spatial relationships that characterize a property will be avoided." The character-defining features of the building include: • Four-story height of the building • Multi-level low pitched roofs • Red clay tile roofing with darker tiles at roof ridge feathering down to lighter tiles at eaves • Roof eaves with minimal overhang • Spanish downspouts at the eaves • Asymmetrical facades • Open arcaded porches at the fourth floor • Round column and square pier colonnades at the fourth floor arcaded porches • Steel casement windows on the upper three floors • Arched windows at the fourth floor • Iron balconies at the second and third floors • Second floor wraparound iron balcony on a base in the form of a row of stucco arches • Decorative iron window grilles at the fourth floor • Decorative iron grilles at attic openings within the gables • Group of three tall birdcage-style iron window grilles at the second floor • Decorative wall tile at the first floor • Four pointed arch storefronts with multi-pane transom windows • Storefronts with recessed entries and arched transom windows with wood spindle grilles • Storefronts with recessed entries and horizontal transom windows with ogee-shaped comers and wood spindle grilles • Original entrance lobby with beamed ceiling, tiled staircase, floor tile, and light fixture Project Description The project for Historic Resources Board review is a formal Historic Rehabilitation of the buil~ing. "Historic Rehabilitation" is defined in Municipal Code 18.18.030 as "returning a property to a state of utility, through repair or alteration, which makes possible an efficient contemporary use while preserving those portions and features of the property which are significant to its historic, architectural, and cultural values. 'Historic rehabilitation' shall remedy all the known rehabilitation needs of the building, and shall not be confined to routine repair and maintenance as determined by the director of planning and community environment." The Project Description lists the proposed treatments of the building in behalf of rehabilitation, restoration and 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 8of12 repair. All components of the Project Description will be required to preserve the character- defining features of the building by consistently adhering to the Secretary's Standards for Rehabilitation. The proposed project is summarized on Sheet AO.O of the Project Plans (Attachment I) as follows: "Rehabilitation and addition [to] a Category 3 historical mixed-use building by Birge Clark .... The project scope includes: • Demolition of one-story massing along Centennial Walk for a compatible three-story addition. • Code compliant exit stair • Voluntary seismic retrofit. • Restoration of existing historic storefronts, metal balconies & ornamental ironwork • New mechanical, electrical, plumbing, fire alarm & sprinklers. • Retrofit elevator with new gurney sized elevator. • New parking and bike facility." The applicant also submitted a letter to the Historic Resources Board, the Architectural Review Board, and staff, dated October 18, 2013, which describes the upgrades planned for the building. The letter includes a seven-page "Executive Summary" which thoroughly describes the proposed upgrades and rehabilitation in technical detail (Attachment J). The project continued to evolve over the past six months. The original plan to replace all the steel casement windows of the building, which is mentioned very briefly in the Executive Summary, has been deleted and those windows will all be retained and historically rehabilitated, as described on Plan Sheets A4. l, A4.2, A4.3, and A4.4. The most recent revision to the Rehabilitation Plan is the addition of a thorough rehabilitation and restoration of all the ground floor storefronts and transom windows which will reverse a half century of incompatible aluminum alterations to the ground floor. A new plan sheet was developed (Sheet A4.5) to present this restoration of the entire ground floor. Upon submission of Sheet A4.5 staff concluded that the scope of proposed rehabilitation of the building is fully consistent with the required scope of Historic Rehabilitation defined in the Municipal Code. In summary, the specific historic elements of the rehabilitation and restoration of the building include: • Repair of the red clay roof tiles and their secure re-attachment to the roof • Cleaning of the stucco surface of the building and repair of damaged stucco in all locations where damage has occurred • Restoration of all ornamental ironwork on the building • Historic rehabilitation of all the steel casement windows on the building • Restoration of all the storefronts on the Ramona and Hamilton facades as depicted on Plan Sheet A4.5 • Restoration of all the transom windows on the ground floor as depicted on Plan Sheet A4.5 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 9of12 The New Rear Addition The proposed rear 3-story addition is depicted on Plan Sheets A4.3, A4.4, and very thoroughly on Sheet A5.0. The addition uses colors and materials closely similar to the colors and materials of the historic building, and the fenestration patterns and balcony design were inspired by the existing building. The Historic Structure Report analyzes the compatibility of the addition on page 19 and finds that the addition meets Standard 9 of the Secretary's Standards because it is compatible and does not impact the significance of the historic building. Restoration of the Transom Windows and Storefronts Staff concluded that the proposed restoration of the original design of the entire ground floor of 261 Hamilton would be the most important enhancement of the character of the downtown city center and the most substantial pedestrian interest benefit that any historic project has ever provided. The applicant has included on Plan Sheet A4.5 detailed descriptions, storefront by storefront, of the work that is planned. The storefronts and transoms are proposed to be powder- coated steel in a bronze color that will be closely similar to the color of the original metal window frames that survive at the corner of Ramona Street and Hamilton Avenue (the storefront and transom color shown on Plan Sheet A4.5 is merely conceptual, not literal). Staff recommends that the HRB visit the ground floor window frames at the Ramona-Hamilton corner of the building to better understand the intended color of the new storefronts and transoms. As Sheet A4.5 indicates, the wood spindles in front of the transom windows will be replicated from the few spindles that survive. The placement of the spindles will be consistent with the original elevations of Birge Clark in the project plan. Plan Sheet A4.5 also revealed the high aesthetic quality and potential pedestrian interest of the restoration of the four original pointed storefront arches, two on the end of the Ramona elevation, and two on the end of the Hamilton elevation. The HRB is referred to the Historic Structure Report, Appendix C, pages C-2 and C-3, where historic photographs of the pointed storefront arches are shown inc. 1930. The pointed arches are strong character-defining features of the building's original design but they have not been seen from the street as they appear in the 1930 photographs for several decades because they have been covered by large awnings. On Plan Sheet A4.5 the notes clarify that the original awning boxes within the pointed arches will be restored. If shed awnings were installed in the restored awning boxes, then the pointed arches will be visible from the street above the awnings and, consequently, an important design element of the building will be restored to public. Staff recommends that the HRB review the historic photographs of the pointed arches in HSR Appendix C and determine public benefit of restoring the pointed arches to visibility, and discuss this subject with the applicant at the HRB meeting. The Historic Structure Report The City's Floor Area Bonus ordinance requires an application to include submission of a Historic Structure Report (HSR). Staff's review of the Report must determine whether the Report is consistent with Federal standards for such reports as described in "Preservation Brief 43: The Preparation and Use of Historic Structure Reports," published by the National Park Service. Staff concluded that the project Historic Structure Report by Architectural Resources Group (ARG) is consistent with the standards presented in Preservation Brief 43. 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 10of12 The requirement for a Historic Structure Report was placed into the Bonus Floor Area Ordinance to ensure that physical treatment of a significant historic building would not commence until substantial information about the building had been gathered: its character-defining features, its development over time, and its significance within local, state, and national contexts. Ideally, Historic Structure Reports are prepared early so that the report can guide development of the project plans. In practice in Palo Alto initial plans are often prepared and submitted before the Historic Structure Report is undertaken. Therefore, the project may contain elements that are inconsistent with the Secretary's Standards and Guidelines for Rehabilitation. The City's historic consultant, Architectural Resources Group (ARG) concluded that three initial project components did not comply with the Secretary's Standards: the proposal to replace all the building's steel casement windows, and the proposals to attempt replication of missing ornamental tile and metal grilles, and the missing post office signage. Subsequently, the applicant agreed to retain and rehabilitate all the steel casement windows, and to provide appropriately simplified new tile and grilles, and to delete the post office signage from the project. Because the "Focused Historic Structure Report" was organized by ARG specifically around the project that the Historic Resources Board will review, staff recommends that the HRB reserve adequate time to review the entire Report, with emphasis on the following pages: Pages 2, 3, 4, 9, and Appendix D (DPR Form) which describe the building's listing on the National Register as an example of the Spanish Colonial Revival style; Page 4 and Appendix D which describes the overall style of the building, Spanish Colonial Revival; Pages 13-14, and Appendix D which describe the building's high level of integrity; Pages 7-8, and Appendix D which provide a chronology of alterations; Pages 10-13 which list the building's character-defining features; Pages 14-15 (Project Description) which summarize the conditions of the building that warrant rehabilitation, repair, or replacement; Pages 15-19 which present a project "Assessment for Conformance with the Secretary's Standards." Page 20 which lists ARG's recommendations "To bring the [initial] proposed project into full compliance with the Standards ... " The applicant subsequently revised the project to incorporate all of ARG' s recommendations. 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 11 of 12 POLICY IMPLICATIONS The recommended action furthers the Comprehensive Plan goal and policies encouraging the conservation and preservation of Palo Alto's historic buildings. ENVIRONMENTAL REVIEW Upon approval of the project as consistent with the Secretary of the Interior's Standards for Rehabilitation, the project would be categorically exempt from the provisions of the California Environmental Quality Act (CEQA), per Section 15331. ATTACHMENTS Attachment A: Definition of "Historic Rehabilitation," (Municipal Code Section 18.18.030) Attachment B: Findings based on the Secretary's Standards for Rehabilitation Attachment C: Secretary of the Interior's Standards for Rehabilitation Attachment D: Conditions of Approval Attachment E: Palo Alto History.Com: Birge Clark Attachment F: The National Register Nomination Form for the Ramona Street District Attachment G: Historic Inventory Form for 261 Hamilton A venue Attachment H: Historic Structure Report by ARG, March 4, 2014 Attachment I: Project Plans, submitted by Cody Anderson Wasney, dated February 13, 2014 Attachment J: Applicant's Project Description Letter, dated September 18, 2012 COURTESY COPIES Cody Anderson Wasney Architects The staff report is distributed online on the HRB website. PREPAREDBY~')£2~ Dennis Backlund, Historic Preservation Planner REVIEWEDBY: ~~~ . Py s VEN TURNER ~ Advance Planning Manager 281 Hamilton A venue: Proposed Historic Reclassification and Historic Rehabilitation for TD Rs Page 12of12 City of Palo Alto Page 1 1 Historic Resources Board Meeting 2 Verbatim Minutes 3 April 16, 2014, 4 5 Excerpt 6 7 8 261 Hamilton Avenue [13PLN-00267]: Application by Cody Anderson Wasney Architects for 9 Architectural Review and Historic Resources Board review of a proposed reclassification of the 10 261 Hamilton Building, designed by Birge Clark in 1927 and located in the Ramona Street 11 Historic District, from Category 3 on the City’s Historic Inventory to Category 2. The 12 application includes a request for Architectural Review and Historic Resources Board review of 13 a Historic Rehabilitation of the building and review of a 5,907 square-foot addition at the rear of 14 the building allowed by relocating square footage from the existing basement for a net zero gain 15 in floor area; the approved Historic Rehabilitation would generate 15,000 square feet of 16 Transferable Development Rights. Zone District: CD-C(GF)(P). Environmental Assessment: 17 Exempt from the California Environmental Quality Act per Sections 15331 Historical Resource 18 Rehabilitation and 15301 Existing Facilities. 19 20 Chair Kohler: Ok we’re moving up to Item Number 2, 261 Hamilton Avenue. Application by 21 Cody Anderson Wasney Architects for Architectural Review and Historic Resources Board 22 (HRB) review of a proposed reclassification of 261 Hamilton Building, designed by Birge Clark 23 in 1927 and located in the Ramona Street Historic District, from Category 3 on the City’s 24 Historic Inventory to Category 2. That is really a historically long sentence. Maybe it breaks the 25 record, I don’t know. 26 27 The application includes a request for Architectural Review and HRB review of a Historic 28 Rehabilitation of the building and review of a 5,907 square-foot addition at the rear of the 29 building allowed by relocating square footage from the existing basement for a net zero gain in 30 floor area; the approved Historic Rehabilitation would generate 15,000 square feet of 31 Transferable Development Rights. Zone District: CD-C(GF)(P). Environmental Assessment: 32 Exempt from the California Environmental Quality Act (CEQA) per Sections 15331 Historical 33 Resource Rehabilitation and 15301 Existing Facilities. Ok, staff do you have comments and 34 reports for us? 35 36 Dennis Backlund, Planner: Thank you very much Members of the Board. This project as you 37 have seen in the various documents is a bonus floor area project. The applicant letter, which is 38 one of the attachments, there’s an applicant letter and then they’ve attached what they call an 39 executive summary that gives a lot of technical details about the upgrades of the building. Some 40 of them are not specifically historic, but are beneficial like accessibility upgrades on the interior. 41 So it’s simply that when there are upgrades there is the Board’s question do these comply with 42 the Secretary Standards? And this bonus project as outlined in the applicant’s letter is perhaps 43 the last of a series of bonus projects on Ramona Street. And it appears that if this building were 44 completely rehabilitated and restored under the Secretary Standards upon completion of a project 45 of that type that would virtually complete the Ramona Street Historical District. 46 47 City of Palo Alto Page 2 The Cardinal Hotel is the remaining building that is large that has not been a bonus project; 1 however, the owner of the Cardinal Hotel that family since 1944 was headed by the son of the 2 family who passed away fairly recently and he was a preservationist who lived with Julia 3 Morgan. And the family kept up the Cardinal Hotel all those years since the Forties when they 4 bought it. So that one is in really good shape and had had less alteration than some buildings on 5 Ramona. 6 7 So on the completion of an approved project for restoration and rehabilitation for 261 Hamilton 8 Avenue this would mark the restoration of the entire Ramona Street District. And that would be 9 a capital event for historic preservation in Palo Alto as the only commercial historic district that 10 we have. And it is one constructed by the two premiere architects that we can think of especially 11 in relation to Spanish buildings, Pedro De Lemos and Birge Clark. So this is an important 12 project and the staff recommendation recommended that the restoration and rehabilitation does 13 appear to comply with the Secretary Standards in staff’s review and to find out the Board’s 14 opinion with the final opinion on that subject we look forward to that this morning. 15 16 And the Board’s focus as always is on the exterior of the building. And we outlined some things 17 in the staff report starting in with the roof, the complete rehabilitation of the roof and the 18 underlayment, the removal and numbering of all of the tiles because the shading of the tiles 19 varies and Birge Clark had a very definite plan how the tiles would start darker way up at the 20 roof ridge and feather down to lighter as they got to the eaves. So all that will be preserved and 21 then underneath those eaves comes the stucco walls of the building. They are going to go over 22 the entire building and make repairs to all the stucco from the sidewalk all the way to the top. 23 And any patching things that need to be done will be done to match the existing appearance. 24 25 And the building after that stucco repair would be painted and I would make a comment that I 26 did not have in the staff report, but you will see on the submitted material board, which I will 27 hand out now the… thank you Steven. The color of the building is going to change from what it 28 is now. It had always been what that sample shows, a classic off-white Birge Clark type of white 29 and somewhere about five, six years ago the building was repainted. As we know for our 30 historic ordinance when painting is the only project it does not require a building permit and 31 consequently no historic review is required. Certainly the color they painted the building does 32 not violate the Secretary Standards, but it was darker than it had ever been. And one of the 33 advantages of the light white color that is proposed is that it sets up a more dramatic contrast 34 between the white walls and all the colored features that are all over the building. So we’ve 35 noticed that when the buildings are restored back to their original color the surfaces seem to 36 come alive because there is a vital contrast that appears between this very light which and then 37 the elements that are embedded in it like the darker window frames, the clay tile roof, and the 38 color that’s there now has a less dramatic contrast. So we think the painting project will be a 39 great benefit to the liveliness of Ramona Street and that area of the downtown. 40 41 So that is the stucco and because there are contrasting documents related to the steel frame 42 windows I wanted to clarify that while there was an initial proposal, for energy reasons was the 43 main one, to replace all of the steel frame windows that are historic with new replicas, replicas in 44 quotes because they would be double paned and so they would be constructed a little differently. 45 So we were notified by the applicant that they had recently that they had considered that proposal 46 and decided not to do it. Instead they have formally submitted the restoration and rehabilitation 47 of all of the steel frame windows. My understanding is that the preservation brief from the 48 National Park Service regarding the rehabilitation of steel windows will be referenced by the 49 City of Palo Alto Page 3 applicant because there’s a lot of good advice in that substantial document on how to rehabilitate 1 historic steel windows. And so those will be all redone and there are dozens of them. And so 2 that is a very large scale project that would benefit historic preservation. 3 4 We did put a condition of approval in there as an attachment to the staff report that any, no 5 discussion has been broached or proposal presented to put any window film on the window. 6 Discussions and revisions can occur along the way as a project is done so we put a condition in 7 there that if any discussion evolves about window film anywhere on the building that that would 8 be coming back for review with samples to the HRB and otherwise we’re anticipating that film 9 would not be used on the windows. Currently there is no proposal for that and we have a 10 condition if that changes. 11 12 And then there is the iron work on the building and it has of course been very exposed to the 13 weather. And iron is very susceptible to the weather over time so wherever ironwork occurs 14 there’s usually some deterioration over time and that’s been the case with this building. And 15 there is of course a great interest in retaining all of Birge Clark’s original iron. And in order to 16 assure that occurring in the future that it would be saved and that what Birge Clark chose and 17 oversaw the installation of will be the same ironwork that we will see in the future. So the 18 ironwork will be all rehabilitated. That’s a rather substantial job, so and it requires a good deal 19 of expertise. So that is another benefit that we see. 20 21 The collection of preservation benefits in total make up the balance between the granting of a 22 large incentive and the project. And we believe as staff in our opinion that that balance has been 23 met particularly because of the last item that I am going to mention before I turn to the new 24 addition and that is the remedy proposal for what has happened to the ground floor storefronts. 25 The Historic Structure Report had photos dating from 1930 that you saw with these, this very 26 wonderful and detailed appearance of the ground floor storefronts; different types of arches, a 27 fair amount of diversity of treatment of the ground floor that was done in a decorative way, and 28 so that ground floor in 1927 when the building was built and for years afterwards had one of the 29 greatest degrees of pedestrian interest in the entire downtown. And it’s understandable why 30 much of that was lost over the years particularly in the Fifties and Sixties there was no historic 31 environmental review, there was no HRB or ordinance. 32 33 And as shop fronts changed or in the case of this building one major business expanded into 34 various shop fronts where they converted those shop fronts so you no longer had doors that 35 opened and there were changes in the design mostly done in the classic Fifties to Sixties manner 36 of using classic in quotes to provide raw aluminum in a number of locations which is universally 37 considered an incompatible material for period buildings. And so that was a loss somewhat 38 mitigated by the very dramatic awnings that covered up a good deal of the ground floor so you 39 didn’t see it from the street. So those adverse changes at least were concealed over the years by 40 those big awnings. And now the project we had a plan sheet submitted by the applicant and that 41 was let’s see, it was A5 that showed all of the individual storefronts on Hamilton and Ramona. 42 A4.5 and the applicant has provided very detailed notes and one can compare the designs that 43 they are going to do for restoration and one sees that they almost entirely match Birge Clark’s 44 original drawings. 45 46 The material is changing to powder coated steel storefronts. I am not sure what the originals 47 were; it’s been so long since they were there. In the transom windows there is a lot of uses of 48 wood and there will be some wood elements that are going to be used in the transoms. But this 49 City of Palo Alto Page 4 powder coated steel is going to be in a color and texture that is closely compatible with how 1 historic storefronts looked and it will retain the or restore the original design. And so all of these 2 spindles there’s only one set of spindles in the transom windows that survive and that was a good 3 thing because they can provide the model for all the other ones, but we know from Birge Clark’s 4 drawing that the spindles were scattered the whole length of the transom window design on both 5 streets. And once again spindles are, it’s a very simple feature, but there are a lot of them and so 6 they add an aspect of pedestrian interest because of all of the detail that will be occurring. 7 8 And then to bring back the tile bases where they are missing it was found that tile that exactly 9 matched the historical pattern was not obtainable. And the Historic Structure Report looked at 10 that and under the Secretary Standards if you cannot exactly duplicate these complex patterns in 11 new tile looking just like the old ones in texture and finish and patina and particularly the ornate 12 design in the tile if that is not feasible then the Secretary Standards and Guidelines recommends 13 a simplified type of tile. In this case to take the place of what it missing. And so what the 14 applicant did was to get the colors right and then to use tile that was un-patterned and the author 15 of the Historic Structure Reports said that that was in full compliance with the Standards. And 16 so those will be at the bases of all of the fenestration on both streets and that will again enhance 17 the pedestrian interest. 18 19 We regarded the transom project, which is a big job they have to get rid of a number of adverse 20 changes that happened to those transom windows starting with I think what they call pigeon 21 spikes that you will have seen to keep birds from landing there, but they work. But they are one 22 of the most unattractive items that can be added to a building. They never confer visual benefit. 23 Those are going to be removed and the only elements that we will see in the restored ground 24 floor is the design that Birge Clark put there. And a number of the awnings are going to be shed 25 awnings located where they were in Birge Clark’s plans. And one advantage of those shed 26 awnings is they will fit into awning boxes that are below the spindles, which means that the 27 complex tops of all of the storefronts with spindle ornamentation and ornamentation of ogee 28 edges of some of the window arches all of that will be revealed to the street at all times because 29 the awnings will be below those. All of the awning boxes of the building are going to be rebuilt 30 and that Sheet A4.5 describes that that will be done. And staff offered an opinion that the Board 31 might like to suggest. 32 33 The applicant currently is proposing in four locations at the end of the Ramona façade, the end of 34 the Hamilton façade to put a large orange awnings similar to what has been there all of these 35 years that would cover the openings. And one of the rationales for that is that Birge Clark tried 36 successfully to break this building up by different rooflines and different treatments of the arches 37 and other details to make it seem like two buildings on Ramona and three buildings on Hamilton 38 and not just one vast structure, but to break down the design. And so a rationale for the orange 39 awnings is that that would provide also a degree of difference between those arched openings 40 and those that would have a differently colored shed awning. And that rationale is very logical. 41 42 It did occur to staff that the Board might like to discuss since all the awning boxes are being 43 restored that in those dramatic Gothic pointed arches that are down at the alley on Hamilton and 44 down on the end of the Ramona façade next to Nola restaurant those dramatic arches show up in 45 the historic photo in the Historic Structure Report and they are very dramatic. There’s another 46 building on Ramona Street across the street that has those pointed arches and they are very 47 dramatic. So staff suggested for the Board’s discussion if shed awnings were placed in those 48 openings as well the dramatic transoms and the points of the arches would then be always visible 49 City of Palo Alto Page 5 to the street above the awnings in their awning box and it would bring back the view of those 1 pointed arches from the street. The shed awnings would probably cover the windows a little bit 2 less than an awning that would cover the whole opening. In staff’s estimation it didn’t seem like 3 the shading provided by awnings would be very much less, just a little bit, but the gain of that 4 drama of the pointed arches would occur in this scenario; however, this is the Board’s discussion 5 how you would like to approach that subject. 6 7 And so those are the basic restorationist elements and we think all of this restoration the sort of 8 dramatic clarity of all of those restored windows and then the lighter color and then this 9 restoration of the ground floor that we ventured to call in the staff report one of the most 10 important productions of pedestrian interest that has ever occurred in the downtown area because 11 of the substantial size of the presentation to the street on two of the most major streets of the 12 downtown. For all those reasons we thought this is a project that we believe completely deserves 13 the bonus that they are getting and the financing of the bonus and the tax credits that would also 14 come from the Federal Government for this project. If the Federal Government approves it they 15 will look at your action as well at the federal level when they decide about that. That will 16 provide further funding for the building and we do believe as staff that this project does deserve 17 that. 18 19 There is one other major element and that is the addition. And as often happens the staff report 20 is released online when the packets go out. Some members of the public read those materials 21 and so just before the meeting questions can arise from the public. And we thought that it would 22 be a good thing if the Board could address a couple of the subjects that have come up relative to 23 the addition. 24 25 Staff has been handling the issue of how you can build an addition onto a building that is already 26 fully built out. And you can only do that if there’s no net gain in floor area. So we have 27 described to those inquiring how the square footage was transferred from the standpoint of 28 ordinance codes, zoning codes, transferred from the basement where it is now counted in square 29 footage because it is storage that is used as part of the retail use. Once you convert to parking 30 then, which is going to be done, then it is no longer counted so all that square footage in the 31 basement is eliminated from the project count. So it has come back in the form of the addition. 32 33 And regarding the addition I wanted to highlight that the Historic Structure Report made 34 comments about the addition. And one of the benefits of a Historic Structure Report is that it 35 brings onboard a personage working for the public agency for the City an architectural historian 36 who has demonstrated meeting the Secretary of the Interiors qualification standards in 37 architectural history. And that is who has reviewed this addition and on Page 19 of the Historic 38 Structure Report the architectural historian says in their opinion they recommend to the City that 39 the proposed addition’s proportion and design do not overwhelm or compete with the historic 40 building’s size and Spanish Colonial Revival styling. 41 42 There had been a different addition design proposed earlier that was much more contemporary. 43 The current addition is in a sort of a modern adaption of a Spanish Colonial Revival style. It is 44 that current design that was reviewed by the architectural historian that I’m reading. And so they 45 go on to say the addition is smaller in height than the original building and its rooflines will not 46 be visible from either of the principle street frontages. It is setback from the face of the existing 47 building where it connects on the north elevation. That’s where the addition attaches to the 48 City of Palo Alto Page 6 historic building there in the alley. And I scaled out the plans, the addition wall, main wall is set 1 in three feet from the face of the historic building. 2 3 And the Historic Structure Report goes on to say a recessed hyphen connects the two buildings 4 on the west elevation. The recessed hyphen is the main wall of the addition where the front door 5 is. It sets back three feet. Stylistically the new addition is designed for compatibility with the 6 characteristics of the Spanish Colonial Revival style, but the building reads as modern 7 interpretation of this historical style. That sentence is meant to address the standard of 8 differentiation. The windows and metal balcony railing it’s on the addition on the alley will be 9 simplified in design from the same features on the historic building and are compatible in size, 10 scale, and materials. Furthermore, the exterior finish of the addition will be differentiated from 11 the historical building, which has a “painted medium textured cement plaster finish.” The 12 addition will feature a smooth steel trowel integral colored cement plaster stucco. 13 14 According to the project architect the addition’s roof will not attempt to replicate the original 15 clay tile roof. The color will be a historically compatible color with some variation within the 16 tile, but it would not be the degree of variation or the placement of the different colors that Birge 17 Clark designed. There’s no attempt to replicate that on the new addition, but just to be 18 compatible in the new clay tile roof. And then the architectural historian concludes “for the 19 reasons discussed above, the proposed addition appears compliant with Standard Number 9,” and 20 that is the standard for compatibility of new additions and for differentiation. 21 22 Some of the, a couple of the questions that we received was about the height of the addition. It 23 does comply at its three stories. There was a couple of comments that the new windows are 24 larger than those of the historical building and it... that was a good comment from a public 25 member because there is a general recommendation in historic projects that a ratio of solid to 26 voids that is window sizes versus the amount of wall material around those windows, the ratio 27 between the solids and voids would be similar in a new addition to what you see on the historical 28 building. 29 30 The new windows are larger than what is on the historical building and the ratio such that there is 31 probably about double the void and then fill with glass than there is on the addition in the solid 32 plaster walls that are around that fenestration about double the amount that you see on the 33 historical building. The architect was aware of this and they believed that this would be 34 acceptable in this case for a couple of reasons that the Board can consider. One of them is that 35 under the Secretary Standards the addition could perhaps be a little more contemporary then it is. 36 This is a much more traditionally styled addition and therefore it provides a traditional context 37 for the larger windows that helps to mitigate the effect. And then also as you see on the second 38 and third floor there are the railings that are placed in front of the new windows, which will help 39 to conceal the bottom part of those windows and would help the windows to seem smaller than 40 they actually are because besides being windows they also contain doors into the balcony and 41 those have to be the code height of what is it? Seven to eight feet. So the windows are that 42 height for access into those balconies. 43 44 On the ground floor there’s also doors that need to have at least a code height, but the windows 45 and expanses of void relation to solids is much more on the ground floor, much more void area 46 compared to the stucco because of the big show windows. So the ground floor is the size of 47 fenestration that you get on the historic building. So that was automatically appearing not to be 48 an issue at all. 49 City of Palo Alto Page 7 1 And then there is the issue that although the building is recessed three feet there are some 2 projections in the balconies on the addition and then there’s the clay tile canopy above the top 3 floor of the addition. And there were planned pages looing down the alley where you could see 4 that those projections project out a little bit beyond the plane of the historical building. And so 5 we got a question asking how much that it projected and would this make the addition seem 6 more dominant than it would be if the whole addition were set in so that the projections 7 themselves like the balconies would be behind the plane of the historical building. And once 8 again it was the position of the project that the rather high compatibility of a Spanish type of 9 addition does help the whole addition to blend in and to if not strongly subordinate at least not 10 dominating the historical building because of the style of the addition. 11 12 But these were questions that we received and if the Board Members would like to discuss any of 13 these concerns in public that would be a good acknowledgement of public comment. So that in 14 essence is our staff report and we are here for any questions that you would like to offer us. 15 16 Chair Kohler: Thank you. Next on our list here is to applicant presentation 10 minutes limitation 17 or at the discretion of the Board. So please state your name and move forward to this… 18 19 Brent McClure, Principal, Cody Anderson Wasney Architects: My name is Brent McClure, I’m 20 the principal of Cody Anderson Wasney Architects. I want to thank staff for such a thorough 21 presentation here and I think Dennis has covered a lot of ground that we’re going to show you 22 some images here to kind of recap. And I want to thank staff as well for a really, really thorough 23 I think staff report that covered a lot of the issues inherent with the project. 24 25 This is a as Dennis mentioned to you, this is a tremendous building, a significant asset I think to 26 the Ramona Street the district. It’s sort of the last building on the anchor, anchors the corner. So 27 much of the historic fabric kind of as you see in the images here both along Ramona Street then 28 and what is today is still intact. I want to touch on briefly kind of what the overview and the 29 scope of the job is. This is what we’re going to be doing. In addition to the Historic 30 Rehabilitation there’s going to be a significant amount of work that we’re going to do to improve 31 the building from a seismic standpoint, Americans with Disabilities Act (ADA) upgrades, the life 32 safety and exiting features within the building are, need significant improvement and we only 33 have sort of one exit. So the work that we’ll be doing will be able to enhance that as well as the 34 addition and the renovation. 35 36 As it was mentioned by staff the occupied basement that is currently under use will be converted 37 back into parking. We’ll be adding parking spaces and then also adding street trees. Ultimately 38 the building’s square footage will be reduced from the gross square footage of 41,000 square feet 39 and then when we’re done down to 37,000 square feet. So we’re making the building smaller in 40 the amount of space that’s being used and adding parking outside. And I understand that this is 41 sort of outside the purview I think of the HRB. 42 43 The, at the ground floor level looking at the site plan at the top of the image we’ve got an 44 existing site plan up into here where the whole entire area is retail. We’re going to be adding an 45 office back in over on the backside to further animate Centennial Walk and the addition of street 46 trees as well. 47 48 City of Palo Alto Page 8 To kind of just walk through the plans and talk about I think the first standard, the compatibility 1 of use and what we’re going to be doing to the building, how does it fit in with what is existing 2 versus what was? Birge Clark originally had the ground floor many, many years ago as an 3 underground garage. So this square footage over here on the left is going to be converted back 4 into parking so we’re actually bringing that use back into a more I think compliant and consistent 5 use. On the first floor right now as Dennis had mentioned a lot of the storefronts had been 6 haphazardly reconstructed losing a lot of those recessed entries except for the one that’s on the 7 corner along Hamilton. And as we recreate the retail space on the ground floor we will be 8 reconstructing those to be consistent with the design from the original set. 9 10 As we go upstairs to the second and the third floor as I mentioned the existing design really has 11 just the one stair tower and fire escape over that’s in the center floor. We’ve got these sort of 12 dead end hallways and so we’re really, really limited on addressing exiting within the building. 13 The back portion over here is what is right now the roof of the single story piece that’s off the 14 back off of Centennial Walk and that’s where the addition, which is shown in a slightly darker 15 blue, is to be provided. The recess on that back edge where those balconies are with the addition 16 is shown on the right and then a fire rated enclosed sort of stair tower over on the back with 17 ADA upgrades and the stair tower over here in the middle. So we then do get the exiting. As 18 you then go up we then have a roof deck that’s over the top of the third floor so that that addition 19 in plan is less dominant and does not try to compete at all with the original Birge Clark building. 20 21 To talk a little bit about the standards we had the benefit of getting the from the Stanford 22 Archives the original drawings of the building, elevations, a lot of the detailing, and a lot of the 23 information. So we really have a complete record as to what was originally intended for the 24 building from the clay tile roof with the gradations in the color to the stucco, the lodges and the 25 balconies up at the top, the steel windows, the balconies down at the bottom, and the varied and 26 differentiated the Gothic arches, the OG cornered arches and with the wood spindles up at the 27 top and the tile bases. 28 29 As it was previously mentioned a lot of that has been renovated at the ground floors except for 30 the opening here in the middle and then the opening here on the corner. At those locations the 31 tile was still preserved and the windows were still intact so we have a really good record as to 32 what is there. And our plan is then to recreate and reconstruct the other openings along the edge 33 over here. You can see how some of the spindles have been taken away and we’ve got some of 34 the bird spikes up in here and around at the top. Here’s the image of the existing building 35 elevation and then so what we’re proposing to do is to carefully, I’ll just kind of start from the 36 top down. Basically from the second floor up is to do a complete rehabilitation and restoration 37 of the building because so much of that fabric is there. With the clay tile up at the top will be to 38 remove the tile, number and catalog them so that they all go back in precisely their same 39 location. We’ll have instructions to the contractor that any tiles that are broken would then be 40 replaced so the ones that if the top tile was somehow damaged that the one that gets replaced that 41 the one that’s upside down that gets converted over so that way that we’re able to then protect 42 and preserve a lot of those. 43 44 We’re going to refurbish the steel windows that are sort of throughout the building consistent 45 with the National Park Service recommendations on how to do so would be to remove the glass, 46 bead blast and/or sand off all of the paint to remove all of the rust and scale. The windows right 47 now are significantly, they got a significant amount of rust in a lot of locations. And then to 48 City of Palo Alto Page 9 refinish them and to re-glaze each of the windows, but so in essence to protect and preserve the 1 original windows that are there. The steel balconies will also be repaired and restored and then 2 as Dennis mentioned the stucco surfaces will be cleaned and repainted to kind of bring back the 3 original color of the building is what we’re looking to do. 4 5 At the ground floor level where I think most of the work will be done at the Ramona Street side 6 and also the Hamilton Street side is to recreate and reconstruct the Gothic arch openings with the 7 wood transoms up above. The steel storefronts with the powder coated finishes, we’re going to 8 provide wood doors that’ll be rail in style, which is consistent with the drawings and the details 9 that we have from the original Birge Clark drawings. And then also to have the awning boxes 10 with the projected sort of eve awnings that can go in and out of those awning boxes on the 11 elevations that are the four to the right so that we can then see the spindled openings of the 12 archways up above. 13 14 As we turn the corner and look at Hamilton a lot of the similar sort of distinguishing features that 15 are still more or less intact except for sort of at the storefront and the ground floor level. The 16 original openings that are still there would be this middle section that enters into the office in the 17 main lobby as well as this corner; however, all of the others along the streetscape have been 18 modified over time with the aluminum windows, elimination of the tile, so on and so forth. 19 20 The Post Office sign, which was noted in the Historic Structures Report, is still actually intact in 21 this photograph here. University Art’s address is shown. We’re proposing to keep that sign just 22 sort of as is, but not add any additional lettering or signage whatsoever and just have that as sort 23 of to echo what was once there. And then as we look at the Hamilton elevation the photos and 24 then what’s there today what we’re proposing to do again the work I described along the Ramona 25 Street would be consistent for the second floor up through into the roof and then at the ground 26 floor level would be to have the tile bases, the projected awning windows. We’re going to 27 reintroduce some decorative iron gating that’s in and around this entrance here and this entrance 28 here, which was shown originally on the Birge Clark drawings. The detailing though of that 29 would be simplified and then the pointed Gothic arch windows here. 30 31 As Dennis mentioned he had asked I think in our, whoop, hold on a second. In our proposal we 32 talked about and what we had shown were awnings over this opening here and then this opening 33 over here. And what we’re actually proposing to do is to remove those awnings and to not have 34 them as part of the project so that we only have the awnings that are part of the awning boxes 35 over the archways to the left and then the, allowing the Gothic arches to be shown in full view 36 and sort of animate the street and to be part of the streetscape as what we talked about before. 37 38 Here’s some images of the detailing that we have from before. As I mentioned we’ve got the 39 elevation of the building. We actually have building sections from Birge Clark that show the 40 [rail on] style door with the glass and the wood up above the bottom. The wood spindles are 41 detailed in over in here. Here’s a photograph that shows the wood spindles that are existing in 42 place so we’ve got a lot that we can, we believe that we can use to replicate and then the original 43 tile that’s down below. As far as the tile goes here’s a photograph of the corner and then a 44 photograph of the original tile base that shows sort of the decorative hand painted tiles that are 45 original and the tile boarder. And consistent with what was stated in the Historic Structures 46 Report what we’re proposing is to have the new tile be the fire clay field tile that’s shown here in 47 the photograph that’s also consistent with the sample that you have before you is that in the new 48 locations to only use these and to not interject I think some of the hand painted tiles to sort of 49 City of Palo Alto Page 10 simplify and to differentiate the new work from the original historic work. So on this is a shot 1 of the Hamilton Street, I’m sorry, this is the Ramona Street side and the two red openings here 2 are the originals whereas the ones over here you can kind of see how those would then be sort of 3 side by side and right next to each other. 4 5 As we look at the Centennial Walk side the, where the addition comes into play there’s the 6 photograph here of the end piece of the original Birge Clark building and then the single story 7 back end of the storage portion of the building that was originally part of, it’s part of University 8 Art right now. And it was determined in the Historic Structures Report that it’s that piece or that 9 single story is not so much of a key defining feature of the building. Over time and the current 10 conditions windows have been changed out and removed and then we’ve got some of the 11 doorways and some of the fenestration along this edge has further been, has obscured the 12 building; however, the corner piece here that kind of turns the corner and frames the end of 13 Hamilton still sits proud of the building. So we’re looking at the elevation in the photograph. 14 15 What we’re proposing to do with the addition and I think some of the images are before you as 16 Dennis mentioned the new addition here would be recessed back so that it does not compete with 17 the original Birge Clark buildings so that the main masses of the building can sit proud of the 18 addition that we’re doing along Centennial Walk. We’ve massed this in such a way as to be 19 somewhat compatible I think with how Birge Clark has divided the building up with the 20 elevations and breaking down the larger masses. At the end piece where the stair tower is 21 because of fire code reasons we have to keep that kind of completely enclosed and it has to be 22 fire rated so we cannot get a lot of fenestration over here on this back edge. But then to sort of 23 differentiate these two masses so that it starts to read in a similar fashion and fit in to some 24 degree and be compatible with the building but yet differentiate itself as piece period of today 25 with the tops, the straight top glazing on the upper floors and then the squared openings down on 26 the bottom floors. A more simplified metal canopy at the bottom and then having the balconies 27 railing design be of a similar material, but that the ornamentation on them would be much more 28 simplified so that it would appear as a period piece of our time. 29 30 As you kind of continue to turn the corner here’s the view looking west over the backs of down 31 Centennial Walk and I guess would be over the back of the adjacent property at the street level. 32 And then here’s the elevation. It’s a little obscured in this image, but the roof piece here with the 33 red tiled roof and then the mechanical well up at the top with the roof tiles as screening the 34 majority of that and then the elevation here being much, much lower while the original building 35 still sits proud and dominant over the addition. 36 37 Here’s an image of the rendering of what it would look like from an axonometric standpoint. 38 Here’s a before and after shot where we’ve superimposed what you see today as you look down 39 from Hamilton down Centennial Walk with the addition. And then here’s a view where the 40 balconies are shown poking out just a little tiny bit and this roof eve overhang a little bit to sort 41 of frame those balconies. However, the projection does not stick out any further than the iron 42 railings that the balconies that are on this back elevation here. So with that I’ll turn it over to 43 questions. 44 45 Chair Kohler: Let’s see, we know have Historic Board questions of applicant and staff. Why 46 don’t we start at Margaret’s end this time? Is that ok? 47 48 City of Palo Alto Page 11 Board Member Wimmer: There’s a lot, there’s a lot and I know that I’m the newest one on the 1 Board and there was one, I experienced one presentation before this one that Monty was here. 2 That was a while ago, but anyway I have to say the graphics I that’s they’re I think they’re really 3 well done. I’m really appreciating that, but that has nothing to do with the project. 4 5 I’m glad that you’re taking away those orange. It sounds like, which is not indicated in your 6 drawings, but you just said because that was one of my comments. I was hoping that you would 7 take those away. I do like the new awnings. I think they’re a little bit more subtle and they work 8 better with the architecture. I think the bright orange half round awnings really hid some of the 9 hidden treasures that are on that building I think. So that’s nice to hear that you’re going to 10 allow us to experience that again. 11 12 I guess my other question was I was trying to understand the parking and I think I found it. It 13 looks like there’s seven parking spaces in the adjacent building, which includes the ramp down 14 and now you’re adding nine new spaces in the basement? 15 16 Mr. McClure: That’s correct. 17 18 Board Member Wimmer: And that has allowed you to do that, that has allowed you to do this 19 project is the putting the parking spaces in the basement? You’re sort of essentially trading that 20 space to get a credit to do this project. I guess I’m backtracking, but that’s all… that’s already, I 21 was just having a hard time understanding the when you because in the description it says, 22 “relocating square feet from the existing basement.” 23 24 Mr. McClure: The City ordinance does not count parking as square footage for the building even 25 if it’s subgrade parking below the building itself. 26 27 Board Member Wimmer: Ok. 28 29 Mr. McClure: So the what, go back to that floor plan. 30 31 Board Member Wimmer: So the introduction of this parking, nine new parking spaces within the 32 footprint of the building is the trade? Is the relocating of square footage? I think. 33 34 Steven Turner, Advance Planning Manager: Board Member Kohler I might be able to add in too. 35 The it’s not a (interrupted) 36 37 Board Member Wimmer: [Unintelligible] to wrap my brain around that [unintelligible]. 38 39 Mr. Turner: No it’s ok. It’s a complex question. It’s not a complete one to one trade. So the 40 amount of parking that they’re adding to the project would not cover the additional office space 41 that is being added. Now the existing basement all counts as floor area and the proposal is to 42 remove a substantial portion of that and move it up to the addition. The basement which would 43 be converted into parking for the most part would not count as floor area, but they are making so 44 the building does not comply with the parking regulations, but it’s also in the parking assessment 45 district so they’re not required to provide parking. They are required to pay into a parking 46 assessment district for the spaces that they’re not providing; however, they’re making the 47 parking situation better by adding nine new spaces to the basement. So it doesn’t completely 48 alleviate the physical parking that an office might generate, but within the parking assessment 49 City of Palo Alto Page 12 district in downtown they don’t need to provide that parking. The basement has already been 1 assessed for the in lieu fee and parking in lieu fee is part of the parking assessment district, so 2 that is being converted up to the office space. So therefore there’s not a kind of an issue with the 3 number of parking spaces because they’re not required to provide them onsite, but they’re 4 making the situation better by providing actual onsite spaces. 5 6 Board Member Wimmer: By adding nine more spaces. And the accessibility of that if there’s 7 some tandem parking and it looks like it might be tricky to get your car in there, but you’ve 8 already studied… that’s not my, anyway. 9 10 And then I guess I wanted to comment on the new addition along Centennial Walk. I think this 11 is much more complementary to the existing historic building than what was proposed before. It 12 doesn’t look as modern; it’s more in keeping with some of the architectural elements that exist 13 on the historic building. I guess personally I would like to see a little bit more detailing and 14 maybe pulling in some simple things, like pulling in some of the decorative elements on the 15 wrought iron could be because the new wrought iron is very modern and very plain. Maybe 16 pulling in some decorative elements to that and maybe putting, copying your awning, the new 17 awning element with the spindles, the spindled transom above what’s on the existing building. I 18 think that would look kind of neat in the center in the main entrance and maybe a subtle arch or 19 something over that single door entry to the right, but I mean those are… I love that detail. I 20 think it makes it a lot richer and yes it is an addition and it’s done at a different time. I think we 21 could see a stronger thread of character pulled into the addition. That’s just my personal opinion. 22 23 And then one more thing I wanted to comment on the color. I would hate to have it too white 24 white. I see your sample board. I don’t know, I like a more creamier white that it doesn’t have 25 to be so white that it has so much contrast. I think to soften that white make it more like an 26 antique looking white. And I don’t know if on this Sheet A4.3 I think the color of the new 27 addition is different, but maybe you’re just trying to highlight the addition. This one see how 28 you’re not indicating color on that. You’re just indicating (interrupted) 29 30 Mr. McClure: Actually we are indicating that the color may be slightly different than the other 31 part of the building to further differentiate the addition from the original Birge Clark building. 32 33 Board Member Wimmer: I see. I like, I think this is too white compared to that, but that’s my 34 personal professional opinion. Thank you. 35 36 Board Member DiCicco: Thank you for your very complete presentation. I don’t want to belabor 37 this about the garage and the parking, but it seems to be a big issue in Palo Alto and it’s kind of 38 beyond our purview, but I’ve been down in that garage on Ramona so the additional parking is 39 all part of that same underground and it’s already existing or? Well, that’s what I wondered if it 40 went all the way to the? It’s just kind of confusing. 41 42 Mr. McClure: To give a little background I think that the basement property of 261 Hamilton 43 extends underneath the adjacent parcel so that as you see in the plan there’s extra space for that 44 parking that is there. 45 46 Board Member DiCicco: So is the original ramp that is from the original first underground 47 basement is what is going to be used? 48 49 City of Palo Alto Page 13 Mr. McClure: Yes. 1 2 Board Member DiCicco: That’s what I was wondering. Yeah. Ok. And I was kind of curious 3 too about the color when you say slightly different does that mean slightly dark whiter or a 4 different shade or for the new addition? 5 6 Mr. McClure: Yeah, it would be just slightly the white would be just slightly offset. 7 8 Board Member DiCicco: And are there still going to be some use of the canopy orange type 9 awnings or are they all going away and just the other ones and what color are they? Are they 10 more of a brown or? 11 12 Mr. McClure: The canopies that are let me go back. So looking at Ramona Street the two Gothic 13 arches to the left would have no canopies over them so there’s no orange awnings that are being 14 shown. The client has made a decision I think just prior for submittal that the, to have the Gothic 15 arches to be shown. The four openings to the right we then have those on eve awnings that come 16 out of the awning boxes that would then be in a bluish color is what we’re proposing. On the 17 Hamilton side it would be the two that are closest to the corner as shown in the elevation that 18 would have awnings and then the Gothic arches to the right would not have any orange canopies. 19 20 Board Member DiCicco: Thank you. That’s all I have. Thank you. 21 22 Board Member Bernstein: Thank you Brent. I have a question for Brent or staff. The conversion 23 of occupied basement on 261 to parking that’s a, that would be a requirement of the project for 24 this project to be approved, is that correct? 25 26 Mr. Turner: It’s not a requirement of the project to be approved. The project does not have to 27 provide any additional parking because it’s all being assessed as part of the parking assessment 28 district. So the property owner has been paying into the district for years for that basement area. 29 So that basement area really contributes to the overall floor area and impact and parking 30 requirements. And so the basement has been assessed for parking. 31 32 So the alternative to providing parking onsite would be to decommission that basement so it’s 33 effectively unusable, but since there is a ramp that leads down into the basement and there is an 34 ability to construct parking spaces in that basement we felt that that and I think the applicant did 35 as well, that that was a very good use of the basement for parking. It doesn’t count as floor area, 36 which is helpful as well, but it does provide some parking spaces for the tenants of the building. 37 38 Board Member Bernstein: If the building owner wanted to convert it back to occupied space 39 [unintelligible] no impact on the project [unintelligible]. 40 41 Mr. Turner: Well, it would have an impact in that that basement would be assessed as floor area 42 and that would be essentially adding new floor area to the site. With this project it’s no net new 43 floor area is being added. 44 45 Board Member Bernstein: Ok, my question is there, that’s what I was asking is it a requirement 46 that that stay unoccupied if it, if this project is approved as presented? 47 48 City of Palo Alto Page 14 Mr. Turner: Yes. I mean we would expect that the basement remains as a parking garage, a 1 parking facility as the plans indicate and if it’s approved that way. 2 3 Board Member Bernstein: Ok and then the access to that if it does get approved and then that’s 4 converted to parking the access to parking is from a different property, correct? 5 6 Mr. Turner: It appears so, yes. 7 8 Board Member Bernstein: Yeah, that’s correct. The access to that parking is not on, not from 9 261 Hamilton. You have to go through on a different property to get to (interrupted) 10 11 Mr. McClure: No, no, no, no. 12 13 Board Member Bernstein: Is that correct? 14 15 Mr. McClure: 261 Hamilton is the square that’s in over here. 16 17 Board Member Bernstein: Right. 18 19 Mr. McClure: The property itself within the title includes all of this basement space is actually 20 designated as part of this building. 21 22 Board Member Bernstein: Oh, ok. 23 24 Mr. McClure: So as the ramp comes down over into here it then opens up onto both sides of the 25 proposed design. 26 27 Board Member Bernstein: Oh, ok. Ok, so there’s access to the (interrupted) 28 29 Mr. McClure: And the owner of 261 also owns the adjacent parcel as well. 30 31 Board Member Bernstein: Ok, ok. Thanks. Ok. The, those were my questions for now. 32 33 Board Member Bunnenberg: I have questions about the relocation of the Centennial plaques and 34 I made some inquiries and it was my understanding that the City owns the plaques and the City 35 has the in essence owns Centennial Walk, the alleyway, paseo, whatever you want to call it. And 36 I have concerns about splitting up the Centennial plaques and you had not talked about those. 37 Would you like to talk a little bit about them or shall I explain my concerns first? 38 39 Mr. McClure: Why don’t you explain your concerns first? 40 41 Board Member Bunnenberg: Alright. 42 43 Mr. McClure: It will help me frame my answer to your question. 44 45 Board Member Bunnenberg: My concerns are that they were designed as a unit and people 46 contributed to them during the Centennial. And as often happens the big donors are usually at 47 the beginning and then you have other categories and then on these plaques it is a bit different 48 because the smaller individual donors run down the first part. If you pictured each one of those 49 City of Palo Alto Page 15 pieces as a triptych the first part is smaller donors, then the middle part talks about this is 1 Centennial Walk and all a bit about that and some big, big names there, and then there’s another 2 panel of smaller donors and those smaller donors run in that pattern A to Z using all of the 3 panels, and the last one for instance has the, or one of them has Mayors in the middle. And so 4 that it is a unit and as I understand your proposal it would be to take that Centennial logo, which 5 is the very middle of the whole thing and take it down to the other end to the University end and 6 put it on is it Wilkes Bashford or whatever that building is? And you would then end up splitting 7 and [unintelligible] very little to introduce what it is, has no way of knowing that this is the other 8 half of what you’re seeing. Fortunately the alphabet would run correctly from that direction as 9 well. 10 11 What, did you make other considerations because let’s see the in the plans that description is 12 A51 and then also you removed two of the lighting fixtures and all that Centennial Walk has 13 lighting fixtures that match. When you plan to build a new building why two of the lighting 14 fixtures are removed? Now on A51. 15 16 Mr. McClure: What we’re proposing to do to answer the lighting question is that we reinstalled 17 the other two lighting fixtures on the stairwell portion of the addition so that as you can see on 18 the right of the building on the other side is that those would actually be then reinstalled. So 19 we’re not getting rid of any of the light fixtures and then we’re sort of starting to spread the 20 lighting out to further animate and open up we think Centennial Walk. 21 22 We think that the plaque relocation it seems University Avenue seems to be a really strong 23 candidate as an entrance into Centennial Walk and then framing that as a key location to have the 24 main plaque and the main sign. The, as far as splitting the names up I don’t think that’s 25 something that had been fully considered; however, I think having the plaques at either ends the 26 idea was to have them as signposts to mark both entrances into Centennial Walk as opposed to 27 having it just at the one end. 28 29 Board Member Bunnenberg: Now then you have two lighting fixtures that are on the new 30 building, but it appeared to me that there were four within that section. 31 32 Mr. McClure: There’s a total of five. There’s three that are on the original end of (interrupted) 33 34 Board Member Bunnenberg: Yes. 35 36 Mr. McClure: The Birge Clark building and then where the single story addition was there was 37 the two that were right in over here. We’ve taken those two and we’ve relocated them to either 38 side of the end stair tower. 39 40 Board Member Bunnenberg: Ok, if you’re it’s important not to lose any of those. If any are 41 removed could they be maybe relocated in another place of Centennial Walk? And I wondered 42 whether you would consider as a thought, a recommendation, maybe a mitigation the making 43 another one of the Centennial symbol, which was in the middle for the far end? That would at 44 least give some connection (interrupted) 45 46 Mr. McClure: As a signpost to sort of anchor both ends of Centennial Walk? I think we can 47 consider finding accommodations for space for something to that effect. 48 49 City of Palo Alto Page 16 Board Member Bunnenberg: To do that kind of thing. And what are the plaques that you have 1 indicated as being the last part down at that University Avenue that says, “Birge Clark and Pedro 2 De Lemos plaques and Ramona Street Historic District”? Are those new plaques or are those 3 there’s one on I believe it’s Nola’s that talks about the Ramona Street Historic District that it’s 4 on the National Register I think it is. Are those new plaques? 5 6 Mr. McClure: I think that’s just designating that there could be space if the City so chooses to 7 consolidate where they wanted to place their plaques. 8 9 Board Member Bunnenberg: Ok. And then I also wanted to ask whether your tiles on the new 10 building are of a similar style or are they a different style tile from what’s on the building? 11 12 Mr. McClure: They are of a similar style to what’s on the building so that the color will closely 13 resemble the gradations that’s happening over with the original base; however, we don’t have the 14 benefit of 100 years of sunshine and patina. So that they will have a, they will be differentiated 15 to some degree with sort of the richness but still have the same kind of color properties and the 16 same style of firing that the tiles had. 17 18 Board Member Bunnenberg: Alright and I should disclose that I’ve seen this building looking 19 from the what the Fire Department is using now and it’s the most beautiful sample I have ever 20 seen of Birge Clark’s differentiation of the colors. It’s spectacular. 21 22 Board Member Bower: So let me quickly circle back just so I understand. Is the basement access 23 from the next door property is that an easement? So? 24 25 Mr. Turner: No. 26 27 Board Member Bower: There’s no easement. So the current owners own both buildings. They 28 could sell the Nola property and then access to the basement of 261 disappears? 29 30 Mr. Turner: No. 31 32 Board Member Bower: Well, whatever that building is, it’s 541-545. So I understand they are 33 both owned by the same person now, but what if they sell one of them and the one of them they 34 sell is the access to 261? That’s what I’m trying to understand. 35 36 Mr. McClure: That would be, I mean I think that would be under the purview of the 37 Architectural Review Board (ARB) as part of a discussion item. 38 39 Mr. Turner: Chair Kohler, I might have a comment as well. 40 41 Chair Kohler: Steven, please clarify. 42 43 Mr. Turner: Sure. If although we don’t have the conditions of approval for Architectural Review 44 where this topic would typically come up my sense is that a condition that we’ve placed on other 45 types of projects would be the establishment of an access easement for the driveway into the 46 garage even though currently the property owners may be the same at this point an access 47 easement that runs with the second property (interrupted) 48 49 City of Palo Alto Page 17 Board Member Bower: Ok, sorry. Perfect, that answers the question. Briefly what are you going 1 to do to the existing steel windows since they’re not going to be replaced? What kind of 2 renovation? 3 4 Mr. McClure: Of the steel windows? We’re going to remove the glass and then we’re going to 5 sand or bead blast the frames themselves to remove the paint and the rust, recoat the windows, 6 and then re-glaze them with single glazing and putty glazed windows consistent with steel 7 window preservation briefs. And we do not have plans to install any film at this time in 8 agreement with sort of the conditions of approval about the film and if that was to be discussed 9 we’d bring that back. 10 11 Board Member Bower: Ok, thanks. On the awnings I looked carefully at the existing or the old 12 historic photos, maybe that’s the best way to put it, and in almost all cases of these photos up 13 until 1978 the arch top were cathedral topped windows are uncovered and the other windows that 14 have a horizontal top have the awning below the wood lattice. Why not just remove all awnings 15 on those arch top windows? It looks to be in our plans like they’re coming back. 16 17 Mr. McClure: On the plans in front of you we are showing the awnings on the documents. Since 18 the submittal of those drawings and as we want to present before you here today we would ask 19 that it be accepted that we do not put awnings above the arch top windows. 20 21 Board Member Bower: Perfect, that’s exactly what I’d like. A couple of questions about the 22 addition on the side; I like the side addition. I like the fact that you’ve stepped it back and I like 23 the stairwell and I think it is a good example of differentiation. I’m a little concerned about the 24 square footage of the glass on that façade. And one question was where’s the property line and 25 do those projections actually project beyond the property line on that alleyway? 26 27 Mr. McClure: They comply with not projecting over the property line and we’re projecting only 28 out in as far as what we’re allowed to by code. 29 30 Board Member Bower: So why does, why do the balconies and the roof and the little balcony 31 over the entry door have to project beyond the face of the existing building? 32 33 Mr. McClure: Let me go to the… 34 35 Board Member Bower: Go to A4.4? Yeah, that’s the best, well you can’t really, yeah 4.4. I 36 mean I don’t think you have the existing building beyond shown unless it’s back behind; it’s at 37 the same plane as the stair. 38 39 Mr. McClure: If you look at the axonometric up on the screen the balconies do not project out 40 any further. They are in alignment with the balcony that is on the adjacent original building. 41 We’ve drawn them in such a way so that they can actually be usable by the tenant spaces. If we 42 start to pull those back any further they become a completely unusable space. 43 44 Board Member Bower: I was actually thinking you might pull the wall back, not the balconies. 45 So I understand that you’re holding the balconies at the same plane, but it just seems to me a 46 little awkward to have the balconies go beyond. You’ve nicely setback that façade. 47 48 Mr. McClure: Right. 49 City of Palo Alto Page 18 1 Board Member Bower: And yet the balconies then move back beyond the existing building, 2 which is the primary focus of our expectations (interrupted) 3 4 Mr. McClure: I think what we’re looking to try to do is sort of differentiate the new mass from 5 the existing mass to give it some by pulling it back as far as we have but then to give some 6 contrast by pulling those balconies out a little bit it then starts to echo and connect back with 7 some of the balconies that are on the other side of the building. 8 9 Board Member Bower: Ok. Is the, why did you put a shower in the basement? Two showers in 10 the basement? 11 12 Mr. McClure: It’s part of the Palo Alto code as far as (interrupted) 13 14 Board Member Bower: Is that in Palo Alto code (interrupted) 15 16 Mr. McClure: That’s part of the green code for bicycles. 17 18 Mr. Turner: Yeah, we’re looking for opportunities again for bicycle commuters to (interrupted) 19 20 Board Member Bower: Ok, thank you. Last question, so the postal sign, the University Art/261 21 Hamilton is University Art going to stay there even though they’re moving away? 22 23 Mr. McClure: No. 24 25 Board Member Bower: So just, just the 261? So what part of that you said I’m confused about 26 what’s going to stay. 27 28 Mr. McClure: We have a photo. 29 30 Board Member Bower: Maybe it’s just the type of sign that would stay? 31 32 Mr. McClure: The original building had a post office sign, where is it? There we go. So the 33 scroll top and the framed plaster sign backing is original to the building and then there was just 34 these applied letters that were put on top of it. What we’re proposing to do is to not have any 35 letters or any designations on the sign. 36 37 Board Member Bower: Ok, great. Thank you. 38 39 Chair Kohler: Ok, go ahead. Why don’t you ask your question? 40 41 Board Member DiCicco: Dennis I think this question would be to you. Is there any need or 42 would it be a good idea we’ve seen the color board here, but you have mentioned that all the 43 awnings that will be installed are going to be a shade of blue. Do you have input in that? 44 45 Mr. Backlund: We do not have a fabric sample at this time. And in addition while we generally 46 know from that sample what the white color will be at the time of the final City approval we 47 would want a manufacturer and exact color number from that manufacturer with a sample so we 48 City of Palo Alto Page 19 can really hone it down precisely. These are the materials that were ready that could be 1 distributed to the Board today so we did so. 2 3 Board Member DiCicco: Thank you. 4 5 Chair Kohler: Ok, I have one last couple questions. I’ve sort of I agree with almost everything 6 that everyone has said I just have a question about the Centennial plaques. I was wondering why 7 there are two double doors on the stair exit on the new addition in the alley. Pair of doors. If 8 you look on Page A22, wait no, not the right one. Where did it go? Page A2. 9 10 Mr. McClure: Having a single door limits our ability to move in and out of the upstairs and so 11 the client wanted to have a larger door than what is required by code. So we went with a pair 12 (interrupted) 13 14 Chair Kohler: But the stairs are only, how wide are the stairs? 15 16 Mr. McClure: But it’s to get furniture and other objects in and out of the building. 17 18 Chair Kohler: But I mean you go in there and the stairs are three feet wide and the hallway 19 (interrupted) 20 21 Mr. McClure: But there’s an open staircase that then allows you to go all the way to the top. 22 23 Chair Kohler: Well my point is that if you took and made a single door some width and extended 24 that wall there on the entry this other set of Centennial plaques would fit on that wall right there. 25 It would then be bracketing the new structure and have one side have one set of plaques and the 26 other side have the other set of plaques. To me… and [are you] move the wall. You move this 27 wall over where it says F6, you make that wall a little wider so the plaques fit. It’s not perfectly 28 symmetrical with the rest of the building, but that solves this whole Centennial plaque situation 29 and makes it much [unintelligible] it actually becomes bookends for your new addition. One 30 side’s got this set of plaques, the other side’s got this set of plaques and you don’t have to go 31 wandering around looking for it. 32 33 Mr. McClure: Given that the plaques are owned by the City on my client’s building I’m going to 34 ask that he probably addresses I think the Centennial Walk plaques. He can speak to that. 35 36 Chair Kohler: Who addresses it? 37 38 Mr. McClure: Roxy Rapp. He’s here today. 39 40 Chair Kohler: He has a card so why don’t you just come up now if you want to respond to that? 41 Ok. That’s my biggest comment. Otherwise I think it’s a fabulous project. 42 43 Mr. McClure: Thank you. 44 45 Chair Kohler: I think it’s gonna be it’s just having been here a long time that building’s always 46 been there (interrupted) 47 48 Mr. McClure: We’re really excited. 49 City of Palo Alto Page 20 1 Chair Kohler: As long as I’ve been here. 2 3 Mr. McClure: We’re really excited to renovate it, bring it up. 4 5 Chair Kohler: So my only issue is I think I just, I think it’s a shame to break up the Centennial 6 plaque situation in that alleyway and there ought to be a simple solution architecturally to make 7 those bookends. I mean it would make a lot of people happier. In fact I’m not even sure as a 8 Board Member I’m not sure I would approve it with the Centennial plaques being randomly put 9 out on University Avenue. 10 11 So ok, so we’re next on the agenda is comments from the public and I have a stack of cards here 12 and we’ll go as they came to me. You have about three minutes to discuss what you want to do 13 and we’ll start out with Jeff Levinsky followed by Neilson Buchanan. 14 15 Jeff Levinsky: Good morning Commissioners and staff, my name is Jeff Levinsky. I live at 1682 16 Hamilton Avenue. Many of us feel that this project is not yet ready for your review and here’s 17 one reason why. Almost 21 years ago to the day the City Council created a set of rules for 18 buildings that don’t meet the current building code in some way and this is known by the rather 19 quaint name of grandfathering. Those rules specifically cover 261 Hamilton because it’s too 20 large for its lot size. The Council wanted to ensure that such buildings could remain and the 21 Council wanted those buildings to be repaired and remodeled and not deteriorate. They struck a 22 compromise and said as long as you don’t make your building even bigger we’ll let you repair 23 and remodel it. So the Council wrote “Nor shall such remodeling, improvement or replacement 24 result in shifting of building footprint or increased height, length, building envelope, or any other 25 increase in the size of the facility.” 26 27 Now the term building envelope there means different things to different people. Twenty-one 28 years ago they knew we’d be confused today so they defined the envelope of the building right at 29 the beginning of the ordinance and it means the three dimensional special configuration of the 30 building’s volume and mass. In simple words they said a grandfathered building can’t increase 31 in volume or mass. 32 33 Before you today are plans to add an entire wing of about 6,000 square feet to 261 Hamilton. 34 Doing so will clearly increase its volume and mass and the law prohibits that. The staff report 35 that was given to the ARB fails to address this. It uses a different definition for building 36 envelope than what’s in the code and it omitted the words that prohibit any other increase in size, 37 but as you can see plainly the plans before you don’t comply with the code. I believe you should 38 defer this item until you receive plans that do comply. That avoids giving anyone the impression 39 you’re approving or even deliberating over something that isn’t legal. At a very minimum you 40 should get an opinion from the City Attorney’s Office as to how to proceed in such matters. 41 Thank you. 42 43 Chair Kohler: Thank you. We will go to Neilson Buchanan followed by Doria Summa. 44 45 Neilson Buchanan: I’m Neilson Buchanan. I live at 155 Bryant Street just down the road here. I 46 want to apologize for sending such a tedious e-mail to you yesterday, but it was appropriate for 47 City of Palo Alto Page 21 April the 15th since the City code is only rivaled by the tax code. You’ll hear from City staff that 1 much of what I’m going to raise is beyond your purview and I don’t fully accept that. 2 3 I had the privilege of working with one of Birge Clark’s sons who was an extra fine person. And 4 I am sure the people of Palo Alto and the surviving members of the Clark family will be very 5 proud of this project. I think it’s a wonderful continuation of Palo Alto’s finest; however, the 6 law of unintended consequences applies to this and you’ve touched upon it. In fact Steve Turner 7 put it into great clarification. The inconsistencies irrationality of paring and the parking 8 assessment district and I don’t have enough time to really get into that adequately for you. Like 9 the previous speaker I ask you to think very carefully about the multitude of issues that have 10 been raised and I don’t have a chance to explain them. 11 12 First of all I’d like to apologize for two omissions in my e-mail. That the post card notification 13 was not totally adequate, it was totally inadequate. That’s my typo and I’ll resubmit the e-mail 14 with just a couple of changes, but accept that they’re not substantive. 15 16 I ask you to dig into parking issues. One has been partially answered by Aaron Aknin and City 17 staff that the TDR’s do not compound the parking problem terribly. The City Council sort of put 18 a squash on some of the changes, but it’s not clear to the five or six of us that worked all 19 weekend and Monday that the City Council couldn’t reverse that decision at some point and add 20 to the parking deficit. Fairly technical issue for the short term it looks like the door’s closed, but 21 we’re not convinced it couldn’t’ be reopened in 18 months by the change in the rules. 22 23 The other issue is that the Floor Area Ratio (FAR) could be changed or how they’re interpreted 24 and I just simply don’t know. It sounds like the developer or another developer could actually 25 use that to compound the parking deficit. I don’t know quite what to do about any of this. The 26 City Council obviously has recognized the tidal wave of cars coming to the residents. Maybe 27 we’ll have permit parking which basically will be a dam against the parking intrusion into the 28 neighborhoods and then all the downtown core will have to deal with the deficits as they unfold. 29 I would love to have a real dialogue with you. I had hoped to have a beautiful City map with all 30 your historical homes pinpointed on it and show you how the parking intrusion ruins our 31 neighborhoods. 32 33 Bryant Avenue as you know Bryant Street is a bike lane. And I bet you don’t know that that’s 34 the largest commercial parking lot in Palo Alto, downtown that is. Yes surely that Bryant does 35 run through the commercial core a little bit, but if you look at the whole street from Embarcadero 36 to the creek it has more all day nonresident parking than any surface lot. So this is what you’re 37 dealing with and it’s peripheral to you and I know it’s going to be peripheral, I’m going to make 38 the same talk to the ARB tomorrow. My intent is to take this all the way to the City Council. 39 It’s only nine parking places. Roxy Rapp couldn’t have been more congenial in working with 40 me and I think this is a great project. I just don’t like its peripheral effect. If the parking demand 41 had been 90 this chamber would have been full and you would be faced with a real dilemma. 42 Because it’s nine it’s easy to plant loss over the principles. Thank you very much. 43 44 Chair Kohler: Thank you. Just an honest comment. That’s not really part of our purview today, 45 but it does seem like something in the future Professorville is one of our purviews and we might 46 take a look at that at some point. So that brings me to Doria Summa. 47 48 City of Palo Alto Page 22 Doria Summa: Good morning, Doria Summa. I live on Yale Street. Thank you for letting me 1 speak this morning and I want to start by thanking the applicant for proposing to preserve this 2 very important building. So the Secretary of Interior Standards state that additions are supposed 3 to be recessed, set back, and subordinate to the original building. And you’ve touched on this, 4 but along Centennial Walk for example the balconies protrude past the exiting historic building 5 thus creating the appearance of the prominence of the addition. So while the building face is 6 setback the balconies do create an issue. 7 8 The decorative tiles that were mentioned along the storefront I feel that they could be matched. 9 If not exactly there’s a lot of people that make those tiles now, they could be custom made and I 10 don’t think it would be appropriate to mix the modern ones though similar in color where 11 repairing the original tiles. 12 13 The height of the addition in the plans is shown to be lower when viewed from Centennial, but I 14 think as you experience it when walking towards Hamilton it looks as tall or even taller than the 15 original building. It also looks like, and maybe this is a clarification that the stair tower is on the 16 same plane as the original building and that would not be subordinate. 17 18 Some of these issues seem to conflict with the Standards, which is part of your purview. As staff 19 stated today this is the last of the buildings in the Ramona National Register Historic District and 20 that’s the only commercial district we have with that designation. So it’s crucial that nothing 21 about this project diminish the integrity of the building and thus the district. Thank you. 22 23 Chair Kohler: Turn on my microphone… next card is from Karen Holman. Never heard of her. 24 25 Karen Holman: Good morning. So I’m here in person instead of watching on TV this morning. 26 So I’m sort of your liaison stand in this morning and I’m here to speak to this project, but really 27 to a much more global issue. So Roxy I’m not picking on you. 28 29 This project however is on the National Register block and it has two prominent street face 30 corners or building façades, Ramona and Hamilton, and so to my point, glazing. Glazing is an 31 enormous issue for this Council Member, this person, because I’ve seen a lot of projects around 32 town historic and non-historic where the glazing has been highly reflective. And it really erodes, 33 really, really erodes and staff can comment on this if they wish, you can comment on this of 34 course if you wish, but it really erodes the quality of an historic preservation project. The high 35 reflectivity is so inconsistent with the historic fabric of a building. You all know that windows 36 are major character defining features. 37 38 I’ve heard nothing today to indicate that the windows are going to be replaced the glazing itself 39 is going to be replaced with what kind of glass, but I would suggest that this Board and for this 40 project, for all projects in the future that you identify a non-reflective glass that is consistent with 41 historic preservation goals and mission and spec those on a project and make sure that they are 42 carried out through the course of projects. We’re this Board owners, Roxy well knows this, and 43 you do a fine job that you’re stewards of our historic resources. Take that seriously and glazing 44 is an enormous issue. 45 46 So one other comment I’ll make just because I happen to be here is the Ramona Street District if 47 you look at the light fixtures on that district it would be really nice if this Board would make 48 some comment and take some action initiative about getting historic or at least replicated historic 49 City of Palo Alto Page 23 light fixtures on that street. Those fixtures that are there are very mundane. They are kind of an 1 embarrassment to that National Register Historic District. So if this Board would do something 2 and take some initiative to correct that that would be really terrific. Thank you so much. 3 4 Board Member Bunnenberg: Question, were you talking about the street lighting fixtures or the 5 (interrupted) 6 7 Ms. Holman: Yes, the street (interrupted) 8 9 Board Member Bunnenberg: Or the ones on Centennial Walk? 10 11 Ms. Holman: I was talking about the street fixtures, street along Ramona. Thank you. 12 13 Chair Kohler: Let’s see. One more is Roxy Rapp. 14 15 Roxy Rapp: Thank you all this morning. Dennis you still got that golden tongue. Thank you so 16 much for that nice report and Steven all your hard work getting this put together. 17 18 I’d like to talk to you a little bit about the major part of my [unintelligible]. Let me back up. 19 Karen I’m with you on the committee to check the glass because we had many discussions about 20 and I agree with you 100 percent so we will make sure that it is, but I’ll have you out to look at 21 the sample to make sure it’s right. 22 23 I’d like to talk about Centennial Alley. I was part of the development team and the owner of 250 24 University Avenue and we created Centennial Alley. And let’s go back, Beth remembers, 25 Dennis remembers, on the corner where 250 is was Crocker Bank. Crocker Bank on Ramona 26 Street had a big blank wall all the way down to a parking lot till you get to the restaurant there, I 27 can’t think of the name of it right now… pardon me? What did you? On Ramona Street there’s 28 a, the restaurant that’s there now. What’s the name? Nola’s. Nola’s restaurant. So you didn’t 29 have any retail along there at all. And then in the old days across the street was Walgreens 30 where it’s now it’s a hair store. And they filled in all the windows so you have a blank wall 31 there, but I learned at a very young age in retail that you really need something to pull you down 32 the block. You need windows, you need interest to pull you down and to feel good. So that’s 33 why we did what we did on Ramona Street is we put all those retail stores and opened up all the 34 glass and had the curvatures of sort of little inlets areas that drew you down and planted all new 35 trees and you remember back in the Sixties and Seventies even the Fifties Ramona Street was not 36 that strong. Waverly Street and Bryant Street were much stronger and now Ramona Street is the 37 number one street and it’s partly due to 250. 38 39 Now the Centennial Alley is my wife and I were going to Europe three or four times a year to 40 buy for the Roxy store, the clothing store, which is very young, very European clothing. And 41 what I noticed there was how vibrant the alleys were. How in Europe they, the cities took 42 advantage of their alleys and they put restaurants that fell out onto the alleys and just it was more 43 fun just sitting in the alley having dinner, etcetera. And I’d say it’s on my bucket list to make 44 these alleys successful and it has not been successful. Partly it was someone that’s no longer 45 here with City staff that kept fighting me on it, but I really see the way that the restaurants should 46 be able to come out there, put color awnings, have some better lighting Beth like you suggested, 47 and you need something to pull you down. 48 City of Palo Alto Page 24 1 And one of the interests on the that we’re doing on the entrance on our building is having those 2 windows and lights and the balconies is it has interest, architectural interest to pull you down 3 into the alley. As the owner of the Old Pro I promise you their lease is up for renew. I’m going 4 to get them to clean up that whole rear end and get rid of all that and I’m trying to and the new 5 City Manager is not new now, but we’ve talked to Stan about how we could redo the alleys and 6 I’ve been waiting to get this approved and then we’re going to work together on trying to open 7 up the restaurants and not have those bowl things with fences all around them so it’s more open 8 as you walk through and still be able to get a wheelchair through. The alleys are not being used 9 like they should be used. It’s mainly because of the interest. 10 11 And I think and last we talked about today about University Avenue and the plaques. I think if 12 we do the right sign Beth and Roger at that end that we, that this is Centennial Alley and have an 13 introduction to that plaque and then it goes down to the other end it gets more people off of 14 University Avenue enter the alley to pull them down and they see those balconies and go down 15 and read there at both ends. And you’re right Beth that the, there’s tours that actually come 16 around and read those plaques and it’s real important, but one of the nice things it it’ll get them 17 to walk down the alleyway to finish reading the other plaque or they can come in both ways now. 18 So I think it’s going to make the alleyway more vibrant. As I said it’s on my bucket list to do 19 that and it’s one of my big disappointments in developing 250 that we didn’t do that. But 20 Ramona Street is definitely very successful from my project at 250. Thank you. 21 22 Chair Kohler: Thank you. I have no other cards so I’m looking at the agenda. Applicant closing 23 comments. It’s been a few years since I’ve been Chairman. Not required. Ok. Applicant any… 24 you have an opportunity to say anything. Actually we’d prefer if you talk about the project at 25 hand, not just anything. 26 27 Mr. McClure: I just want to reiterate that I think that this is just a tremendous facility, a building 28 that anchors the corner of Ramona Street and we’re going to be able to really bring it back to its 29 glory, open up the ground floor levels and the streetscape to really create an asset to the City. 30 And to animate as Roxy was saying along Centennial Walk. That this building and this project 31 has this great opportunity to touch and express and connect with much more of its surroundings. 32 I think the balconies themselves as you were talking about add to that vibrancy. We can people 33 even upstairs being out on those balconies so that as you look down Centennial Walk it does start 34 to pull you in and I think that’s about it. So we’re looking forward to hearing what you have to 35 say. Thanks. 36 37 Chair Kohler: Ok. Thank you. Close the public hearing and we move on to Motions, 38 recommendations by the Board. Staff I’d like you to clarify what you’re looking for today. 39 40 Mr. Backlund: Yes, thank you. We did want to handle the project that we’ve just reviewed first 41 because there were people waiting to speak. The project according to the historic ordinance to 42 be a bonus project all buildings for that have to be a Category 1 or 2, so the Council does need to 43 reclassify this building in Category 2 in order for this project to move ahead. And we are 44 sending the reclassification, which is the first part of the staff report to the City Council within 45 the week or so. And the Council very much would like and appreciate the Board’s comments on 46 the reclassification. 47 48 City of Palo Alto Page 25 We tried to sum up the issue thoroughly, but to the point in the staff report and if I could just put 1 it in about three sentences or so what is there. On Page 14 there’s a discussion that the landmark 2 functions of the building and its design and architect do not correspond when closely inspected 3 with the Category 3 designation. And therefore a reclassification of some kind would be 4 apropos. And then on Page 15 of the staff report that’s the key page discussing the proposal for 5 Category 2 and we make three reclassification findings there whose language is drawn directly 6 from the definition of a Category 2. We’re anticipating that the Board had gone through this 7 before. Historic issues are something that the Council which is your Council who designates the 8 Board would very much appreciate any discussion or comment that you would make on the 9 reclassification and we will write down those comments and forward to them as part of the 10 Council’s staff report so that they see what your position is on this question. And I know it is 11 getting late by this time on a large project, but the Council would very much appreciate hearing 12 from you on this. 13 14 Chair Kohler: Thank you. So on Page 5 of 12, findings for reclassification to [unintelligible] you 15 have in Category 2. So you would like us to reinforce your statements here and agree that this 16 should be reassigned Category 2. Is that correct? 17 18 Mr. Turner: We’d like to have you take a look at the materials in the staff report specifically on 19 that page and then staff has made a recommendation as outlined in Point 1 on the first page of 20 the staff report on what our recommendation to the Board is. 21 22 Mr. Backlund: And in addition on Page 7 right at the top of the page we’ve got a one sentence 23 conclusion that sums up the staff’s take on this issue. 24 25 Chair Kohler: David? 26 27 MOTION 28 29 Board Member Bower: Chair Kohler I’d like to move that we, the HRB encourage the Council to 30 reclassify 261 Hamilton as a Category 2 building based on our review of this project and the 31 building today. 32 33 Mr. Backlund: If you would like to take a position on the three findings and the concluding 34 statement on the top of Page 7 you could do that. There were three reasons that we gave or 35 suggested to the Board and then we made one concluding sentence that summed it all up at the 36 top of Page 7. So you could if you choose to do so you could take a position to adopt the 37 language of the findings because we know that you reviewed all of that for today’s meeting, but 38 you could do an adoption and you could adopt the conclusion that is at the top of (interrupted) 39 40 Chair Kohler: You’re talking about on Page 5 proposed Category 2 designation? 41 42 Mr. Backlund: Yeah, the proposed Category 2 designation and then there are three findings 43 numbered Number 1 and 2 and 3 and those breakdown the definition of Category 2 into two, into 44 three parts and then we give a rationale for each of those parts and say why it appears to meet 45 Category 2. And then you can adopt the recommendation on Page 1 of the staff report that 46 recommends to the Board for the reclassification. So the possible adoptions are the 47 recommendation on Page 1, the three findings on Pages 5 and 6, and if you like you could also 48 adopt the conclusion at the top of Page 7 and that kind of covers the entire argument. 49 City of Palo Alto Page 26 1 Chair Kohler: Beth why don’t you go ahead? 2 3 FRIENDLY AMENDMENT 4 5 Board Member Bunnenberg: May I amend your Motion to say that we would accept the 6 proposals for Category 2 designation for Hamilton Avenue that is found in our staff report on 7 Page 5 and that that include well, 5 and 6, and the conclusions that are on Page 7 that it should be 8 reclassified and there is a reference to this on Page 1 of the staff report as well. 9 10 Mr. Backlund: The staff recommendation on Page 1. 11 12 Board Member Bunnenberg: Staff recommendation. 13 14 Chair Kohler: Let me back up here then. So that is one item, correct? The other item would be 15 our comments about the general? 16 17 Board Member Bunnenberg: Yes. This would separate it into two, two things because I think 18 (interrupted) 19 20 Chair Kohler: That’s what I’m trying to say. We’re going to so do you want to do this 21 reclassification first and then discuss? Ok. I have no problem with that. So there’s been 22 (interrupted) 23 24 Board Member Bunnenberg: Do you accept my? 25 26 FRIENDLY AMENDMENT ACCEPTED 27 28 Board Member Bower: I accept that amendment basically including the staff’s, the summary of 29 the staff’s recommendations and their inclusion. I think my Motion encompasses Number 1 on 30 the staff report, but if you need to put that back in there that’s fine. Yeah, I have no problem 31 with that. 32 33 SECOND 34 35 Board Member Bernstein: I’ll second that Motion. 36 37 Chair Kohler: Any discussion, comments? 38 39 Board Member Bernstein: Yes. 40 41 Chair Kohler: Ok. 42 43 Board Member Bernstein: The reason I’m supporting that Motion and seconding it is regarding 44 the findings clearly this is done by one of the best architects in town so it meets that finding. 45 The, even though there have been some exterior modifications to the existing structure the 46 important original character is still maintained. It meets that finding. And as far as the other 47 finding in our report about is it a building of major regional importance, Birge Clark because of 48 the size of the building and the prominence of the building it does meet national standards for 49 City of Palo Alto Page 27 recognition and yet because of its local connection it helped I think make a good landmark for 1 the City of Palo Alto. So it’s significant in that structure too. So that’s why I’m supporting the 2 Motion. 3 4 VOTE 5 6 Chair Kohler: Any other comments? Ok so we have a Motion on the table here (interrupted). I 7 know I’m trying to summarize. It’s been awhile at summarizing. So the Motion is to approve 8 the change from to Category 2 based on the comments previously made to staff Pages 1 and then 9 on 5 through 7. All those in favor? Aye. Opposed? That passes unanimously with Board 10 Member Makinen [Note-Vice-Chair] absent. 11 12 MOTION PASSED (6-0-1, Vice-Chair Makinen absent) 13 14 Chair Kohler: So now we move on to general comments. Is that correct Dennis? Staff? Steven 15 you’re looking for general comments on the project? 16 17 Mr. Backlund: Yes. Then there would be the second Motion for Part 2 of the staff report on the 18 project itself we’ve been reviewing today. 19 20 Chair Kohler: Ok. 21 22 Mr. Backlund: And the staff recommendation on the project is also on Page 1 of the staff report. 23 24 Chair Kohler: I think even though it sounds like I don’t know what I’m doing it does help for 25 people around to understand what we’re and [unintelligible] 26 27 Mr. Backlund: [Unintelligible] it’s been complicated today, thank you Roger. 28 29 Chair Kohler: Ok. So the recommendation, second one is the recommends that the ARB and the 30 Director of Planning and Community Environment find that the proposed scope of rehabilitation 31 for the 261 Hamilton building meets the definition of Historic Rehabilitation set forth in 32 Municipal Code 18.18.030b, Attachment A, and that the proposed Historic Rehabilitation plan 33 complies with the Secretary of Interior Standards for Rehabilitation and Guidelines for 34 Rehabilitating Historic Buildings as presented in Attachment B. Findings based on Secretary 35 Standards for Rehabilitation and C, the Secretary Standards subject to the conditions of approval 36 in Attachment D. So that’s what we’ve got to vote on next. Discussion? Oh, ok. What page is 37 that on? Good having assistants around. 38 39 Attachment D says that the project should, Number 1, the project shall be constructed in a 40 substantial conformance with the approved plans received April 1, 2014, except as modified to 41 incorporate these conditions of approval. Item 2, the Director of Planning’s approval, project 42 approval letter including approved conditions shall be printed on one of the initial sheets of the 43 building permit set. That actually brings up an issue we’ve had with other projects that the 44 historic building comments that we make never end up on the drawings, the working drawings 45 and this is good that this is on this list. Number 3, the ten Secretary of Interior Standards for 46 Rehabilitation shall be printed on one of the initial sheets of the building permit set. That’s a 47 good thing too. 48 49 City of Palo Alto Page 28 The current edition of the California Historic Building Code shall be applied in all eligible 1 aspects of this Historic Rehabilitation of the exterior of the building when needed to preserve 2 character defining features. No [unintelligible], Number 5, no demolition or permanent removal 3 of significant historic fabric that is not included in the project approval shall be carried out in any 4 amount for any reason except with written permission from the Department of Planning and 5 Community Environment. Unauthorized demolition may result in significant delay of the project 6 including return to the HRB. Item 6, any revisions to approved materials and colors for the 7 exterior of the building shall proposed during the project construction phase shall be submitted 8 for review by the Historic Preservation Planner or the HRB subcommittee depending on the 9 scoped of the proposed revisions. There’s only a couple more left. 10 11 Item 7, any interior or exterior window film proposed to be added to the project shall be 12 reviewed by the Historic Board prior to installation of windows. So we sort of covered some of 13 that today. Ok. Eight, any new exterior lighting added to the project during the construction 14 phase shall be reviewed by the Historic Preservation Planner with respect to the style, materials, 15 and colors of the fixtures and light bulbs. Light bulb glare that could impact neighboring 16 properties shall be avoided. So let me see this is, during construction is that what this is 17 implying or is it imply it says, “During construction shall be reviewed” and then it goes on to say 18 so that’s basically for during construction, is that right? 19 20 Mr. Backlund: Yes. And we don’t have a proposal for that lighting, but if it should occur this is 21 the standard that will apply. 22 23 Chair Kohler: Ok. Number 9, prior to issuance of the building permit the Historic Preservation 24 Planner shall review the building permit plan set, final full construction plans for consistency 25 with the Director of Planning’s project approval based on the recommendations of the HRB. 26 And Number 10, the Historic Preservation Planner shall participate in the Planning Department’s 27 final inspection of the completed project. That’s it. So that’s the, what we’re asked to approve 28 today. So (interrupted) 29 30 Board Member Bower: Mr. Chairman can I ask the staff a question? 31 32 Chair Kohler: Sure. 33 34 Board Member Bower: We’re being asked to approve an April 1, 2014, set of plans. I see on my 35 plans February 13, 2014. We saw today the, a set of drawings that were projected. Is that the set 36 of drawings that we’re approving because what we have shows awnings and the applicant has 37 said awnings aren’t going to be there? 38 39 Mr. Backlund: Yes. What you can do since that was changed in public today that you could be 40 approving the set of plans of the right date that you received… let’s see with the provision that 41 awnings at the four pointed arch openings are deleted from the project. That’s the change that 42 was made today. 43 44 Board Member Bower: So what’s the April 1st (interrupted) 45 46 Chair Kohler: I just [unintelligible]. 47 48 Board Member Bower: Submittal? What set? Is that what we’re looking at here? 49 City of Palo Alto Page 29 1 Mr. Turner: The April 1st submittal is the project plans that were stamped as received by the 2 Department. So that should be the set of plans that are in your packet. Those differ from what 3 was discussed today as Dennis described with the change to the awnings, but all the other project 4 information is consistent in the plans with what you’ve heard today beyond the awnings. 5 6 Board Member Bunnenberg: Do we make any statement about the new construction and its being 7 compatible with the? 8 9 Mr. Turner: The staff recommendation I believe includes that. It speaks mostly to the 10 rehabilitation, but I think the intent as well is to cover the entire project including the new 11 addition, but it might be helpful for the Board to make that clear as part of your Motion. 12 13 Mr. Backlund: Yeah the staff says that the scope of the project complies with Secretary 14 Standards and the addition is part of the scope, but you can refer to the addition specifically and 15 put your comment on that into a Motion if you like. 16 17 Board Member Bernstein: Thanks Chair Kohler. I have a question for staff. It’s still up on the 18 screen. I just don’t want to ignore the comment now from the member of the public about the 19 building envelope and he made some reference to cannot be expanded. Is that not in effect? 20 21 Mr. Turner: Thank you Board Member Bernstein and Board Members. No, we staff struggled 22 with this as well as we were reviewing the project and as a member of the public mentioned the 23 zoning code sometimes can be as complicated as the tax code and I think anybody who has kind 24 of read through the zoning ordinance will agree with that. Even the things that seem to be the 25 most clear and understandable could be up for interpretation and that’s less the case for things 26 like height and setbacks and floor area, but it is less clear for things such as grandfathered uses 27 and grandfathered facilities. 28 29 Strictly using the definition that’s provided in the municipal code would actually limit a project 30 for example to provide say life and health and safety access that may not occur if the applicant 31 didn’t talk about it today, but one of the big reasons I think for doing this project is to provide a 32 secondary means of egress for the building. Currently the building does not have ideal 33 secondary means of egress and in fact may violate codes with regards to that secondary means of 34 egress. Following the code there would be no way to add that type of portion or facility to the 35 building because it really wouldn’t meet that. And the definitions that are in there doesn’t 36 specifically limit say, life, health, and safety additions as exempt from that. So a lot of times we 37 have to look at the code kind of read it for what it is, understand the intent of the code and try to 38 move forward with it with a direction. Staff is, has done that. We feel that the project is 39 consistent with the code moving forward. We would like to have that interpretation because I 40 don’t think we’ve adequately described it. We certainly didn’t touch on it in the HRB staff 41 report. It has been reviewed as part of the ARB staff report going to the ARB tomorrow, but I 42 think we will come up with a more complete definition and make complete response to that 43 issue. But for the purposes of the HRB today we feel that the project is consistent with the 44 codes. 45 46 Board Member Bernstein: Great, thank you so much. 47 48 Chair Kohler: Any other questions? 49 City of Palo Alto Page 30 1 Board Member DiCicco: I don’t know if we need to mention also you are going to get Dennis the 2 color of the awnings before the final installation is done. 3 4 Mr. Backlund: The manufacturer and the number for the particular color to verify that and also 5 the awning fabric, but I’m glad that you brought that up because those final details are eligible 6 for the HRB to see later or it is eligible for an HRB subcommittee or the Board can ask for it to 7 go to the Historic Planner. You have all three options available for those awning fabrics and the 8 final colors. 9 10 Board Member DiCicco: And another point made by another member of the public about the 11 glass and the glazing. I was under the impression from the presentation of the applicant that it 12 was that the original was going to be replaced after repair was done. Is that correct? 13 14 Several people in the background: Yeah. 15 16 Board Member DiCicco: Or is it new glass? 17 18 Several people in the background: New glass. 19 20 Board Member DiCicco: But non-reflective new glass in all of the windows? 21 22 Man in background: glass that looks just like the original glass. 23 24 Board Member DiCicco: Yeah, a member of the public will review it. 25 26 Mr. Backlund: Board Member DiCicco, well based on my experience with glass such as it is if 27 they put in new glass in the windows that is what we would call standard window glass nothing, 28 no special formulas or anything. It’s just regular standard single pane window glass it should not 29 have the reflectivity issues that Councilwoman Holman presented, but if there is film put on or if 30 the glass is changed at some microscopic level and physically through tempering the glass then 31 the reflectivity that she spoke of could occur. So it could occur with film or it could occur with 32 tempering or many projects contain both film and tempering and that produces a more extreme 33 reflectivity, which I believe that Councilwoman Holman was emphasizing has happened. 34 35 So the verification would be is that it is standard window glass without film and without 36 tempering. You might want to clarify that with the applicant before the vote. Yes, if it has to be 37 tempered then and if it is not tempered now, but if the replacement glass is required by code to 38 be tempered it is going to have a reflectivity that comes with tempering that is not on the 39 building now. The Board may wish to clarify that with the applicant team. 40 41 Chair Kohler: Do you want to speak to that? Ok so let me back up, so are you asking for 42 (interrupted) 43 44 Board Member DiCicco: Could you clarify that? 45 46 Mr. Rapp: Roxy Rapp, Developer. We’ll definitely not put on a film. I’ll have to explore if they 47 make, I don’t know if legally if we have to put on if the building code calls for tempered glass. 48 City of Palo Alto Page 31 If they don’t I’ll put on just replace it exactly the way it is, but I’m sure we could probably find a 1 tempered glass that gives us no reflection. 2 3 Mr. Backlund: Yes, some tempered glass has a very much less reflectivity. It’s just a matter of 4 careful choice. Yeah. 5 6 Mr. McClure: I do know the tenant on Hamilton Avenue McCroskey Mattresses they actually 7 installed tempered non-reflective glass and they did that for business reasons. As you mentioned 8 you need people to draw [unintelligible] and glass is important for retail for sure. So they 9 intentionally I spoke with them, they intentionally ordered and had with permission of the 10 building owner to install non-reflective tempered glass. And you can really see the difference 11 you move from one tenant to the other ones and you see yourself and you go to McCroskey and 12 you see actually inside the full building. So the (interrupted) 13 14 Mr. Rapp: That’s a great example. I’ll make sure I check that out. 15 16 Mr. McClure: Yeah, so there is an example of how you have the tempered for the code and 17 safety and still get the non-reflectivity. There’s a good example at that store. 18 19 Mr. Rapp: Great. I’ll make sure Karen’s with me. 20 21 Board Member DiCicco: Yeah, and I’m glad to hear you’re going to be attending to the back end 22 of the Old Pro. 23 24 Mr. Rapp: Yes. 25 26 Chair Kohler: Ok, thank you. Let’s see, where are we now? Oh, go ahead Margaret. 27 28 Board Member Wimmer: I’ll say one thing. I’m so grateful that Martin had addressed this issue 29 with there seems to be a confusion with the public’s perception of what the codes are. It sort of 30 becomes a theme I think in a lot of these meetings and it’s confusing I think because I would 31 assume that this project it’s been in development for I’m sure years at this point and I’m sure it’s 32 been reviewed time and time again by the Planning Department and what have you, but when 33 people come and ask but why do the balconies overhang like that? And they have very simple 34 questions I guess when it gets to our level I would assume that all those things on the drawings 35 are sort of preliminary, preliminarily approved by Planning or else it wouldn’t make it to this 36 degree. I guess. So I’m just assuming that, but then when like these kind of issues come I don’t 37 know it just makes me feel a little uncomfortable because who do I listen to? Do I listen to the 38 public? And it seems like a lot of those issues just kind of get I don’t know someone starts 39 talking about something else and it doesn’t really get addressed. 40 41 So I mean I felt concern for the public and how they perceive the City and how they perceive 42 these kind of review meetings and I know it has to go to the ARB as well, but I just I think it’s 43 the challenge of the City to try to clarify that for us, for the applicants, and for the public because 44 this is confusing. These words are confusing. And I think I’m an architectural designer myself 45 and I can see how we can use this weakness of the written word to our benefit and why wouldn’t 46 you? I mean we all do it. I’m just saying I’m just putting it on the table. I think it’s a concern 47 so I think the City needs to address every time something like this comes up I think the City 48 needs to take a second look at how it’s worded and if it is confusing like this is you, the City has 49 City of Palo Alto Page 32 the power to rewrite it and to make it more clear. And I think we all just fumble around in this 1 confusion because no one really knows the answer. 2 3 And I’m not saying that I mean the applicant is, has done a fabulous job. I think it’s a beautiful 4 project. I don’t have a problem with it. I would I think it’s a great contribution, but someone 5 else can look at it and say well that’s total unfair, they shouldn’t be able to do all that. So I just 6 think we need to listen to all that and I think it’s the challenge of the City to make it more clear 7 to all of us. And it’s not any of us in particular, but I think it would help if we had more support 8 in that direction to understand these codes and ordinances. That’s all. 9 10 Chair Kohler: David wanted to. 11 12 Board Member Bower: So as a further comment to Margaret’s concern I approach review of 13 these projects with the assumption that staff and that’s all the City staff, is going to review code 14 compliance, legal compliance, and that you’re bringing these projects to us as having met those 15 concerns. That doesn’t mean the public’s concerns aren’t legitimate and I hear them today. We 16 heard about traffic, we hear about the increased volume, but I’m assuming again that both with 17 the architectural firm that brought this to us very experienced, they know these projects very 18 well, and the staff I mean as staff members you people are immersed in this that I’m assuming 19 and I think I can feel confident that you’ve already done this. 20 21 Our expertise is to apply the Secretary of Interior Standards. I think that this project meets all 22 the Standards. And again that’s an interpretation that each of us makes when we look at these 23 plans. So I’m comfortable moving forward with this project based on that, those assumptions. 24 And they’re just that, they’re just assumptions. 25 26 Chair Kohler: Thank you everybody. So we need to have a, we have a Motion started and is it 27 still in effect? I thought someone started… weren’t you motioning Beth? 28 29 Board Member Bunnenberg: No, I modified the first one and then I asked about compatibility 30 (interrupted) 31 32 Chair Kohler: Ok so would you like to do a Motion? 33 34 MOTION 35 36 Board Member Bunnenberg: Well I would like to recommend as Page 1, Number 2 that the ARB 37 and the Director of Planning and Community Environment find the proposed scope of 38 rehabilitation of 261 Hamilton building meets the definition of Historic Rehabilitation as set 39 forth in the municipal code. Shall I continue to read it or? 40 41 Chair Kohler: There’s just one more sentence. Just this one more sentence. 42 43 Board Member Bunnenberg: Municipal code 18.18.030b, which is Attachment A, and that the 44 proposed Historic Rehabilitation plan complies with the Secretary of Interior Standards for 45 Rehabilitation and Guidelines for Rehabilitating Historic Buildings as presented in Attachment B 46 of the Secretary Standards Rehabilitation and C) the Secretary Standards subject to conditions of 47 approval in Attachment D. And I would like to add that the new construction appears to comply 48 with Secretary of Interior Standards for compatibility. 49 City of Palo Alto Page 33 1 Chair Kohler: Ok. Is there discussion of the Motion? Second? 2 3 FRIENDLY AMENDMENT 4 5 Board Member Bower: Mr. Chairman? I’d like to make a friendly amendment that we notate, 6 note in this Motion that the five arched up windows are not going to have awnings. Is that 7 correct? Because there is a discrepancy between what we saw on the projection and what’s in 8 our plans so, Dennis? 9 10 Mr. Backlund: There are four of them. 11 12 Board Member Bower: Four. Ok. I counted five on the plans, but I guess I’m miscounting. 13 Five arched up windows. 14 15 Mr. Backlund: Oh, there’s one on the alley. 16 17 Board Member Bunnenberg: Yes. 18 19 Mr. Backlund: Thank you, you’re right. 20 21 Board Member Bower: So maybe it’s clearer to say all arched up windows will not have 22 awnings. Pointed, arched up windows. Pointed. 23 24 FRIENDLY AMENDMENT ACCEPTED 25 26 Board Member Bunnenberg: I will accept that Friendly Amendment. 27 28 Chair Kohler: And that was a second on your part? 29 30 SECOND 31 32 Board Member Bower: I’ll second the Motion 33 34 Chair Kohler: Ok. So we have Motion and a second to approve of the staff recommendations 35 with some exceptions. I don’t know if we need any other discussion? 36 37 Board Member Bunnenberg: Just basically I think it’s a great project. 38 39 Chair Kohler: Ok, well then we’ll (interrupted) 40 41 Board Member Bunnenberg: [Unintelligible]. 42 43 Chair Kohler: Martin? 44 45 Board member Bernstein: Yeah, thank you. I plan to vote in support of this Motion and one of 46 my main reasons for voting to support it is how clearly this meets the Secretary of Standards 47 Number 9 about compatibility and differentiation. And I’m particularly impressed how the 48 applicant is meeting the standard of differentiation. Smooth steel trowel interval color cement 49 City of Palo Alto Page 34 plaster versus the painted, the differentiation in the massing of window area to solid surface area 1 is a great contrast there, stepping back the building right along the alleyway. I have no problem 2 with the balconies intruding in too because I think that adds the visual excitement, but the 3 massing is still setback so there’s a differentiation for sure. It’s clearly subordinate to the 4 historic structure in terms of height and massing. As the public knows there’s a committee for 5 Professorville for guidelines and it’s the reason exactly the same ideas of having any new 6 addition being subordinate. So this is actually I think a very good role model of an example of 7 how to meet the idea of differentiation and I’m very impressed with the applicant for paying 8 attention to that aspect. So that’s why I’m in support of the Motion. 9 10 VOTE 11 12 Chair Kohler: Thank you. I have to agree with everything that’s been said. So all those in favor 13 of the proposed Motion say aye (Aye). All those opposed? That passes unanimously with Board 14 Member Makinen absent [Note-Vice-Chair]. Thank you very much. Look forward to seeing it. 15 I’ll have to go somewhere else to get my art supplies. 16 17 MOTION PASSED (6-0-1, Vice-Chair Makinen absent) 18 19 20 City of Palo Alto (ID # 4598) Architectural Review Board ARB Staff Report Report Type: Meeting Date: 4/17/2014 City of Palo Alto Page 1 Summary Title: 261 Hamilton Rehabilitation/Addition - TDR Generation Title: 261 Hamilton Avenue [13PLN-00267]: Request by Cody Anderson Wasney Architects for Architectural Review and Historic Resources Board review of a Historic Rehabilitation that includes the relocation of floor area from the existing basement to allow a 5,910 square foot addition at the rear of the building and establishment of a 1,196 square foot Mezzanine floor for a net zero gain in floor area for a Historic Resource located within the Ramona Street Historic District. The project also includes a request for reclassification from a Category 3 Historic Resource to a Category 2 Historic Resource to allow the approved Rehabilitation to generate 15,000 square feet of Transferable Development Rights. Zone District: CD-C(GF)(P). Environmental Assessment: Exempt from the California Environmental Quality Act per Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. From: Aaron Aknin Lead Department: Planning and Community Environment RECOMMENDATION Staff recommends that the Architectural Review Board (ARB) recommend the City Council approve the proposed project, based upon the required findings (Attachments A & B) and subject to the conditions of approval (Attachment C). EXECUTIVE SUMMARY The proposed project is the rehabilitation and remodel of a five-story building located within the Ramona Street Historic District. The remodel includes significant interior modifications on all floors, as well as the relocation of 5,910 square feet of existing floor area (from within and beneath the building) into exterior additions of the second, third and fourth floor levels to the rear of the building. City of Palo Alto Page 2 The building is currently listed on the City’s local historic inventory as a Category 3 Historic Resource. The applicant requests that Council reclassify this building to a Category 2 Historic Resource, allowing for 15,000 sq. ft. of Transferable Development Rights (TDR) to be requested following the proposed rehabilitation. The TDR area would not be associated with “bonus” parking spaces. On April 16, 2014, the Historic Resources Board (HRB) will review the project and make a recommendation on the proposed Historic Resource category. Based on the site’s historic evaluation, staff supports the reclassification. The proposed rehabilitation and request for Transferable Development Rights require HRB and ARB review. The City Council will have the opportunity to review the rehabilitation project in conjunction with the reclassification request. In order to allow the Council to consider the project as a whole, staff recommends that the ARB make its recommendation directly to Council and that Council make the final decision on design review. BACKGROUND ARB Purview This project is a major project for purposes of architectural review and under PAMC Section 18.77.070 is subject to review by the Architectural Review Board. Normally, the ARB makes a recommendation to the Planning Director on the findings contained in PAMC Section 18.76.020(d). In this case given the related historic re-classification needed for this project, staff recommends that the ARB’s recommendation be made directly to Council to permit Council to consider the project as a whole. (See Attachments A and B for findings.) Review Process The proposed rehabilitation and request for Transferable Development Rights require HRB and ARB review. The HRB will review the project on April 16, 2014. The HRB report is included as Attachment F for background information. Staff will provide an oral summary of the HRB’s recommendation and any concerns stated by the HRB members to the ARB on April 17. Staff will deliver the recommendations of the HRB and ARB to the City Council as part of the Historic Resource Reclassification Request review. The City Council will have the opportunity to review the rehabilitation project in conjunction with the reclassification request and will take action on the project as a whole. Site Information City of Palo Alto Page 3 The 10,000 sq. ft. project site is located in Downtown Palo Alto within the Downtown Parking Assessment District. The site is one block east of University Avenue, at the northern corner of Hamilton Avenue and Ramona Street, and abuts a 20 foot wide pedestrian and service alley known as Centennial Walk. The surrounding land uses are primarily ground floor restaurants and retail shops with office uses above. The taller buildings nearby include City Hall, the Cardinal Hotel, and the five-story office building located behind Centennial Walk at the corner of Hamilton Avenue and Bryant Street. On the Ramona Street frontage, the adjacent two-story building has an established restaurant use (the Old Pro) and is listed on Palo Alto’s inventory of historic resources as a Category 4 resource.  Historic Designation The five-story building, including a mezzanine level, is currently listed as a Category 3 Historic Resource, and is located within the National Register-listed Ramona Street Historic District. The District includes the buildings along the south side of Ramona Street and the two adjacent buildings west of the subject property on the north side of Ramona Street. Palo Alto Municipal Code Chapter 16.49 describes a Category 3 or 4 building as a “Contributing Building”, as “any building or group of buildings which are good local examples of architectural styles and which relate to the character of a neighborhood grouping in scale, materials, proportion or other factors. A contributing building may have had extensive or permanent changes made to the original design, such as inappropriate additions, extensive removal of architectural details, or wooden facades resurfaced in asbestos or stucco.” The architectural style of the historic building is Spanish Colonial Revival. The building was designed by Birge Clark in the mid-to-late 1920s. It retains numerous original elements, including the red-tile roof, elaborate ironwork, and decorative tile. The gabled roof varies slightly in height and pitch. This creates the illusion that the building comprises different elements, constructed over time. For additional information on the historic aspects of the project, please refer to the HRB staff report, Attachment F.  Existing Floor Area, Uses and Parking The historic structure contains approximately 41,900 sq. ft. of floor area, both above and below grade. It is an “oversized” building, exceeding the maximum 3:1 floor area ration (FAR); therefore, it is considered a legal non-complying facility with regard to FAR and building height. The existing building has ground-floor retail use (University Art) and office use on the upper four floors (Mezzanine, 2nd, 3rd, and 4th floors). The site includes a full basement that extends beyond the property lines under the City sidewalks. The University Arts store uses the City of Palo Alto Page 4 basement primarily for storage and additional work area. The basement is accessed via the connection to the adjacent basement of 541 Ramona Street. This adjacent basement provides the existing seven “on-site” parking spaces recorded at the time of the Downtown Parking Assessment. Vehicles enter and exit the subterranean garage via the alley (Centennial Walk). At the time of the Parking Assessment, the City determined the building contained 37,800 sq. ft. of floor area (including the basement floor area). The parking calculation was based on this floor area. Although it is not clear, the applicant suggests that the difference in the floor area of the existing conditions (41,900 sq. ft.) and the previously assessed floor area (37,800 sq. ft.) could be derived from the mezzanine level; it is likely this floor was not counted at the time of the assessment. To address the discrepancy, the applicant agrees to the City’s stipulation that the total floor area resulting from this project will not exceed the previously assessed 37,800 sq. ft. of floor area. Project Description The applicant proposes to modify all floors of the building, but does not propose to increase the building floor area beyond the 37,800 sq. ft. of floor area found in the City’s Downtown Parking Assessment District record.  Basement Floor Area The applicant proposes to fill in the 2,053 sq. ft. of basement area located under the City sidewalks, and convert 6,304 sq. ft. of basement floor area into a parking garage for nine automobiles and 14 to 15 bicycles; space for storage, mechanical/service rooms, and showers are also to be provided in the basement. The basement area, previously recognized and assessed as legitimate floor area, is requested be transferred elsewhere within the site. The converted basement area is greater than the sum of the 5,910 sq. ft. addition proposed for the rear corner of the building and the reduced 1,196 sq. ft. Mezzanine floor level. Staff has provided additional information about the basement in the Discussion section of this report.  Above-Grade Floor Area The applicant proposes to: 1. Reduce the first floor area by 188 sq. ft., such that the reduction would occur mainly along the alley-side of the building; 2. Reduce the mezzanine level to 1,196 sq. ft. (from 2,997 sq.ft.), and provide perfunctory spaces such as stairwells, elevator, and telecom closet; 3. Expand the second and third floors by 2,887 sq. ft. on each floor; and City of Palo Alto Page 5 4. Expand the fourth floor by 136 sq. ft., and provide an opening onto a 1,921 sq. ft. roof- top terrace. The bulk of the exterior addition will be seen at the second and third floor levels from Centennial Way. Table 1: Summary of Floor Area Changes Existing FAR Proposed FAR Change Basement 11,322 2,965 -8,357* First Floor 9,210 9,022 -188 Mezzanine 2,997 1,196 -1,801 Second Floor 6,267 9,154 +2,887 Third Floor 6,267 9,154 +2,887 Fourth Floor 5,879 6,015 +136 Total 41,942 SF 37,506 SF -4,436 SF *This figure is comprised of the 2,053 sq. ft. sidewalk in-fill and the 6,304 sq. ft. parking facility.  Exterior Rehabilitation Plan Sheet A4.5 (Attachment G) illustrates the components of the rehabilitation project. The applicant proposes to: o Repair and restore the existing roof tiles, o Clean the building facades and repair the stucco repair where damaged, o Refurbish all of the existing steel sash windows, o Repair wrought iron balconies, o Replace all existing storefront awnings, o Add a historically-compatible iron gate and accent tiles at the primary Hamilton entrance, City of Palo Alto Page 6 o Add a historically-compatible iron gate and a decorative grill above the secondary Hamilton entrance, and o Restore all storefront windows and transoms. The applicant also proposes to relocate three of the six Centennial Plaques located on the alley façade. Three are proposed to remain in place. The three relocated plaques would be embedded within the paved area of Centennial Walk. Plan sheet A5.1 shows alternative plaque locations, but the details are still being developed. Staff proposes to return to the ARB for review and approval of the final plaque relocation plans.  Addition and Façade Modifications at Alley The proposed addition would be set back 35 feet from the existing Hamilton façade. It would also be inset three feet from the building’s existing Centennial Walk façade. The new pedestrian entrance from the Centennial Walk façade would be accented with a metal canopy above the door. The alley elevation incorporates large windows and balconies to improve the building’s visual connection to the alley and facilitate pedestrian engagement. The more simplified mass at the end of the building would modulate outward three feet; in this way, a portion of the new wall would maintain the same alignment as the historic portion of the building. The project also includes an outdoor space for tenants and visitors, provided on a new 1,921 sq. ft. roof-top terrace above the addition. This terrace will be visible to the occupants of the adjacent five- story office building at 285 Hamilton Avenue. The details of the terrace (i.e. landscaping and furniture) have not been fully detailed. These details will need to be submitted for final ARB review and approval. The proposed upper-floor addition is compatible with the Spanish Colonial Revival style, given the use of a similar architectural style and similar building finishes, such as stucco plaster and red clay tiles on the roof/overhang. The new façade incorporates details from the existing building. These include balconies, light fixtures, decorative metal grille work, and tiles. These details would help tie the old and the new together, for a cohesive (yet differentiated) project. For additional project details, please refer to the applicant’s project description and plans (Attachments D & G). DISCUSSION “Grandfathered” Facilities City of Palo Alto Page 7 The existing building is considered a grandfathered, legal non-complying facility. Based upon the Palo Alto Municipal Code (PAMC) Chapter 18.18, ‘grandfathered’ uses and facilities are those existing on August 28, 1986, and which, when conducted or built were a complying facility. These facilities can remodel, improve or replace site improvements as long as the improvements do not result in increased floor area, shifting of the building footprint, an increase of the building envelope, height, length or other increase in the degree of noncompliance. The “building envelope” component of this code section refers to the legal, three dimensional, “buildable area” of a project site and not to the existing exterior walls of the building. The proposed addition to the grandfathered building is consistent with the allowed improvements cited above, and is therefore permitted. Zoning Compliance The proposed project is located within the CD-C(GF)(P) zone district. The existing building exceeds the maximum allowable 1:1 (10,000 sq. ft.) FAR for non-residential projects, and rises above the 50 foot height limit. The existing building has approximately 41,900 sq. ft. of floor area, and measures 68 feet to the top of the highest gable. As noted previously, the proposed addition would utilize existing floor area relocated from the basement, so the overall floor area would not increase beyond the existing legal non-complying floor area. The rear building addition would measure less than 50 feet in height. The proposed addition and interior improvements comply with the development standards of the CD-C(GF)(P) district (PAMC Chapter 18.18) as indicated in the attached zoning compliance table (Attachment E). Basement FAR Staff determined that the existing basement (11,322 sq. ft.) floor area was included in the Downtown Parking Assessment for this site and counts toward the existing FAR. The applicant proposes to place soil within the basement area underneath the City sidewalks and wall these areas off. The City supports this action because of the on-going maintenance issues with these sidewalk segments. The area to be in-filled (2,053 sq. ft., previously assessed and recognized as useable floor area), can be relocated to another location within the project site. This relocation of floor area is also being allowed for basement area converted to a below-grade parking facility (6,304 sq. ft). The current definition of FAR exempts below-grade parking facilities from FAR calculations, which makes it possible to relocate the 6,304 sq. ft. within the site. Parking The City evaluated the existing building at the time of the Downtown Parking Assessment and determined the 37,800 sq. ft. of floor area required 151 parking spaces. The building included City of Palo Alto Page 8 seven on-site parking spaces, located within the basement of 541 Ramona Street; therefore, it was assessed for 144 parking spaces not provided on site. As noted previously, the proposed improvements will reduce the floor area to 37,800 sq. ft., based on the current code definition of gross floor area. The applicant proposes to provide nine new spaces as well as 14-15 long-term bike lockers, in addition to the seven existing spaces located underneath 541 Ramona. Because of the relocation of assessed floor area, as discussed previously, there is no new floor area requiring more parking. Because the construction of the new addition is dependent on relocation of floor area from the basement, the new parking facility becomes a project requirement. A condition of approval ensures that the parking facility will be maintained in perpetuity for the use of the occupants of the building only, unless otherwise approved by the Planning Director. Historic Bonus for Oversized Buildings Palo Alto Municipal Code (PAMC) 18.18.070(a)(5) states, “a building in Historic Category 1 or 2 that is undergoing historic rehabilitation and that currently exceeds a FAR of 3.0:1, if located in the CD-C district, shall be allowed to obtain a floor area bonus of 50% of the maximum allowable floor area for the site of the building, based upon a FAR of 3.0:1 if in the CD-C district.” Because the building is currently a Category 3 resource, the property owner has requested a reclassification to a Category 2 resource. PAMC Chapter 16.49 defines a Category 2 historic resource as follows: “Category 2: "Major building" means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have some exterior modifications, but the original character is retained. Based on the site’s historic evaluation, staff supports the reclassification of this significant historic resource. The building is consistent with the Category 2 definition above in that the building is one of the largest individual Spanish Colonial Revival buildings in the Bay Area, designed by influential architect Birge Clark, and retains its original character. The 10,000 sq. ft. project site would then be eligible for Transferable Development Rights (TDRs) in the amount of 15,000 sq. ft. of floor area, once the reclassification and rehabilitation is approved. Please see the attached HRB report for additional details (Attachment F). City of Palo Alto Page 9 The process for securing TDRs includes obtaining credit for historic rehabilitation floor area bonus. The property owner of the site must enter into an unsubordinated protective covenant that runs with the land in favor of the city. The City Attorney reviews the form to assure that the property will be rehabilitated and maintained in accordance with the Secretary of Interior's Standards for Rehabilitation of Historic Buildings, together with the accompanying interpretive Guidelines for Rehabilitation of Historic Buildings. Pedestrian Shopping Combining District The project site is within the Pedestrian Shopping Combining District (P), which requires new construction and building alterations to:  provide design features intended to create pedestrian or shopper interest,  provide weather protection for pedestrians, and  preclude inappropriate or inharmonious building design and siting. The required P-district features include: (1) Display windows, or retail display areas; (2) Pedestrian arcades, recessed entryways, or covered recessed areas designed for pedestrian use with an area not less than the length of the adjoining frontage times 1.5 feet; and (3) Landscaping or architectural design features intended to preclude blank walls or building faces. The existing building and the addition provide glass storefront windows for the majority of the ground floor elevations, meeting the retail/display window requirements. The project site has 200 feet of street frontage, and therefore is required to provide 300 sq. ft. of covered recessed area for pedestrian use. The rehabilitation of the existing building includes the replacement of ten window awnings along the street sides and two additional awnings along the alley side. These covered areas meet the intent of the pedestrian protection requirement for Downtown projects. Downtown Urban Design Guide This project falls within the applicable boundaries of the Downtown Urban Design Guide (Guide). This Guide provides direction to the applicant, staff and ARB regarding development and design in the downtown area, and divides the downtown area into districts, each having a unique identity and design characteristics. The project site is located within the Civic Cross Axis District, which extends from City Hall to Cogswell Plaza. The Guide recommends emphasizing the pedestrian and visual connections between Lytton and Hamilton Districts by creating pedestrian linkages. The project supports this effort by enlivening Centennial Walk. Key City of Palo Alto Page 10 features will be added to the alley elevation, including a new building entrance, usable balconies and a roof-top terrace overlooking the alley. These building features will bring new energy to the alley and encourages use. Context-Based Design Considerations and Findings In addition to Zoning Compliance and Architectural Review approval findings, Context-Based Design Considerations and Findings found in PAMC Chapter 18.18 are applicable to projects in the downtown commercial zone district. The findings are discussed below and are included in Attachment B, Draft Context Based Design Findings. (1) Pedestrian and Bicycle Environment. The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements. This finding can be made in the affirmative in that the project, as conditioned, provides bike racks near the building entrances for short term use as well bike lockers and showering facilities in the garage to support the bicycle environment. The existing conditions with storefront awnings, provide pedestrian shelter and supports street activity. (2) Street Building Facades. Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s), to create an environment that supports and encourages pedestrian activity through design elements. This finding can be made in the affirmative in that new addition and entrance, along the alley (Centennial Walk), encourages the use of the alley and enlivens the immediate area. The facade includes glazing and balconies creating a visual connection to the alley. (3) Massing and Setbacks. Buildings shall be designed to minimize massing and conform to proper setbacks. This finding can be made in the affirmative in that the proposed addition complies with the CD-C setback requirements, and is set back three feet from the property line, where none is required. In addition to being set back from the existing building, the new façade incorporates articulation that facilitates the appearance of reducing the mass of the building. (4) Low-Density Residential Transitions. Where new projects are built abutting existing lower scale residential development, care shall be taken to respect the scale and privacy of neighboring properties. This finding does not apply. (5) Project Open Space. Private and public open space shall be provided so that it is usable for residents, visitors, and/or employees of the site. This finding can be made in the City of Palo Alto Page 11 affirmative in that the project provides open space with balconies and a roof-top terrace. (6) Parking Design. Parking needs shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment. This finding does not apply. This finding can be made in the affirmative in that the project’s parking is located within the below-grade garage and does not detract from the above grade development or conditions. (7) Large (Multi-Acre) Sites. Large sites (over one acre) shall be designed so that street, block, and building patterns are consistent with those of the surrounding neighborhood. This finding does not apply, the parcel is 10,000 sq. ft. (8) Sustainability and Green Building Design. Project design and materials to achieve sustainability and green building design should be incorporated into the project. This finding can be made in the affirmative. The rehabilitation of the historic structure is an adaptive re-use of a historic resource and include new building systems (mechanical, electrical and plumbing) that meet the latest code requirements for energy and water efficiency; an open floor plan and new building skylights will allow natural daylight to be infused into the core of the building; the refurbished steel windows with new glazing will greatly assist building energy efficiency; bike storage facilities and showers in the building are provided to encourage bicycle usage for the occupants; and Green building materials and interior finishes will be incorporated into the project. Comprehensive Plan The project design and intent is in general conformance with the Comprehensive Plan. The project is consistent with and supported by the following Land Use policies: Policy L-23: Maintain and enhance the University Avenue/Downtown area as the central business district of the City, with a mix of commercial, civic, cultural, recreational and residential uses. Promote quality design that recognizes the regional and historical importance of the area and reinforces its pedestrian character. Policy L-49: Design buildings to revitalize streets and public spaces and to enhance a sense of community and personal safety. Provide an ordered variety of entries, porches, windows, bays and balconies along public ways where it is consistent with neighborhood character; avoid blank or solid walls at street level; and include human-scale details and massing. City of Palo Alto Page 12 Policy L-51: Encourage public and private upkeep and preservation of resources that have historic merit, including residences listed in the Historic Inventory. Policy L-56: To reinforce the scale and character of University Avenue/Downtown, promote the preservation of significant historic buildings. Policy L-58: Promote adaptive reuse of old buildings. Architectural Review Findings See Attachments A and B for a full discussion of the design review findings. ENVIRONMENTAL REVIEW Pursuant to California Environmental Quality act (CEQA), this project is Categorically Exempt under CEQA Guidelines Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. The renovations will be consistent with the Secretary of Interior Standards. Attachments:  ATTACHMENT A: Draft ARB Findings for Approval (DOC)  ATTACHMENT B: Draft Context-Based Design Findings (DOC)  ATTACHMENT C: Draft Conditions of Approval (DOC)  ATTACHMENT D: Applicant's Project Description (PDF)  ATTACHMENT E: Zoning Compliance Table (DOC)  ATTACHMENT F: HRB staff report dated April 16, 2014 (PDF)  ATTACHMENT G: Development Plans for Board Members only* (TXT) City of Palo Alto (ID # 4821) Architectural Review Board ARB Staff Report Report Type: Staff Architectural Review Meeting Date: 6/5/2014 City of Palo Alto Page 1 Summary Title: 261 Hamilton Rehabilitation/TDR Generation - Second ARB Review Title: 261 Hamilton Avenue [13PLN-00267]: Request by Cody Anderson Wasney Architects for Architectural Review and Historic Resources Board review of a Historic Rehabilitation that includes the relocation of floor area from the existing basement to allow a 5,910 square foot addition at the rear of the building and establishment of a 1,196 square foot Mezzanine floor for a net zero gain in floor area for a Historic Resource located within the Ramona Street Historic District. The project also includes a request for reclassification from a Category 3 Historic Resource to a Category 2 Historic Resource to allow the approved Rehabilitation to generate 15,000 square feet of Transferable Development Rights. Zone District: CD-C(GF)(P). Environmental Assessment: Exempt from the California Environmental Quality Act per Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. From: Clare Campbell Lead Department: Architectural Review Board RECOMMENDATION Staff recommends that the Architectural Review Board (ARB) recommend the City Council grant the major architectural review permit and find the project consistent with the context-based findings for the downtown commercial district, based upon the required findings (Attachments B & C) and subject to the conditions of approval (Attachment D). EXECUTIVE SUMMARY The proposed project is the rehabilitation and remodel of a five-story building located within the Ramona Street Historic District. The remodel includes significant interior modifications on all floors, conversion of basement area into a parking facility, and above-grade additions onto the rear of the building at the upper floors. These additions, totaling 5,910 square feet, would be formed of existing, assessed floor area relocated from the basement and elsewhere. City of Palo Alto Page 2 The building is currently listed on the City’s local historic inventory as a Category 3 Historic Resource and the applicant requests reclassification to Category 2. Following reclassification and rehabilitation, and because of regulations for “oversized” building, the applicant is eligible to request 15,000 sq. ft. of Transferable Development Rights (TDR) because the building will undergo historic rehabilitation. In light of the City Council’s recent amendment to the Zoning Code, the TDR area would not qualify for “bonus” parking spaces and thus if transferred to a sender site must be fully parked. On April 16, 2014, the Historic Resources Board (HRB) recommended project approval. On April 17, the ARB reviewed the project and continued its review and the public hearing to June 5, 2014. The City Council will have the opportunity to review the rehabilitation and remodel project in conjunction with the reclassification request, and discuss the code interpretation regarding improvements to legal non-complying facilities. Council will make the final decision on the architectural review application and the reclassification request. BACKGROUND Previous Reviews Architectural Review Board On April 17, 2014, the ARB continued the public hearing to June 5, 2014, requesting that the applicant address the ARB’s comments, which were primarily focused on the design details of the addition’s façade, particularly the stair tower. The ARB did not like how the stair tower provided two windows with different proportions from the original building, and how the window design was asymmetrically organized. At the meeting, there were four public speakers, two of which were supportive and focused their comments on the project details. Two speakers expressed concern about the potential downtown parking impacts, the City’s meeting notification process, and staff’s interpretation of the zoning code (the “grandfathered” code section and the term “building envelope.”) The April 17th ARB staff report is attached for reference and provides additional background information (Attachment F). Historic Review Board On April 16, 2014, the HRB conducted a public hearing and unanimously recommended approval. A subcommittee of the HRB was formed to review project changes responding to the ARB direction, and met on May 15, 2014. The subcommittee, comprised of HRB members Kohler, Bunnenberg, and Bernstein, reviewed the design alternatives considered by the applicant, and conveyed support of the project modifications shown on Sheet A4.35 of the plans (Attachment J), finding that the revisions comply with the Secretary of Interior Standards for Rehabilitation. City of Palo Alto Page 3 Project Modifications The following minor adjustments have been made to address the concerns raised by the ARB:  Two additional windows were added, along with a decorative balcony at the second floor level, to create a balanced and harmonious elevation at the stair tower.  An enlarged decorative grille is proposed at the fourth floor level, as is a double- door entry with decorative metal grille work.  More information on the treatment of the roof-top terrace is provided, including specifications for landscaping and furniture (Sheet A2.2 of Attachment J).  Lighting details on the new addition, and schematic details have also been provided. The modifications create a stronger connection between the historic building and the addition, improving compatibility and differentiation within the proposed design vernacular. The plans also include references to new wall signage on the building elevations, but those details will be submitted in a separate application for Architectural Review. DISCUSSION Staff believes the applicant has addressed the ARB’s concerns and that the project complies with the design review findings and context based zoning standards. The primary outstanding issue hinges on the building’s “grandfathered” status and the definition of “building envelope.” The following discussion provides background information, zoning code language and long- standing code interpretations to explain staff’s position regarding this project. “Grandfathered” Facilities This existing building is considered “grandfathered” as a “legal non-complying” facility. When constructed in 1927, the building followed the development regulations in place at that time. These regulations are no longer applicable. In the 1970s and 1980s, the City modified the Downtown zoning code to establish maximum floor area ratio (FAR) and height limits. At that time, the building became “non-complying” because it exceeded the newly established FAR and height limits. The proposed improvements were deemed by staff to be consistent with the “grandfathered” section of the Commercial Downtown (CD) zoning code. Based on Palo Alto Municipal Code (PAMC) Section 18.18.120(b), “grandfathered” facilities are those existing on August 28, 1986, and which, when built were a complying facility. These facilities can remodel, improve or replace site improvements as long as the improvements do not result in increased floor area, shifting of the building footprint, an increase of the height, length, building envelope, or other increase in the size of the improvement, nor increase the degree of noncompliance except pursuant to the exceptions to FAR regulations of PAMC Section 18.18.070. Staff recognizes that the meaning of the Grandfathered Facilities code section [18.18.120(b)] can be interpreted in more than one way. This can be a reasonable source of confusion for those trying to understand and apply the zoning code. City of Palo Alto Page 4 Background During the 1970s and 1980s, zoning changes reduced the scale of proposed new construction, effectually downzoning new development. Prior to the downzoning, downtown buildings were generally allowed to be larger (from a floor area standpoint) and taller than new buildings developed under today’s Municipal Code. The downzoning made dozens of existing buildings “legal non-complying facilities” and many of these buildings are considered historic resources. Put plainly, under today’s zoning code, new buildings could not be constructed on vacant lots with the same floor area and height as these older and often historic buildings. In recognition of the non-complying status of many downtown buildings, the Council approved a “Grandfathered” ordinance. Grandfathered ordinances are commonly found in zoning ordinances. They generally exist to promote continued investment in properties, by recognizing the fact that the building may be worth more in its current state, such as a historic resource, than a new building built per the “downzoned” code. At the same time, the grandfathered ordinances typically prohibit “increasing the degree of non-compliance” to prevent non- complying situations from getting worse. For clarification, a “non-complying” building describes an existing building that does not adhere to the current development standards regulations (e.g. height, floor area, setbacks, etc.). The following is the grandfathered facilities section of the code that is applicable to projects in the Downtown CD zone district: 18.18.120 (b) Grandfathered Facilities (1) Any noncomplying facility existing on August 28, 1986 and which, when built, was a complying facility, may remain as a grandfathered facility and shall not be subject to the provisions of Chapter 18.70. (2) The grandfathered facilities specified in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site, provided such remodeling, improvement, or replacement: (A) shall not result in increased floor area; (B) shall not shift the building foot print; (C) shall not result in an increase of the height, length, building envelope, or any other increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070. Improvements to non-complying facilities located outside the CD zone are regulated by PAMC Chapter 18.70. Section 18.70.080 specifies that a non-complying facility can be enlarged providing there is no increase to the non-complying component of the building: 18.70.080 Noncomplying Facility - Enlargement. City of Palo Alto Page 5 (a) Except as specifically permitted by subsections (b) and (c) hereof or by Section 18.12.050(a), no enlargement, expansion, or other addition or improvement to a noncomplying facility shall be permitted which increases the noncompliance. This section shall not be construed to prohibit enlargement or improvement of a facility, otherwise permitted by this title, which does not affect the particular degree of or manner in which the facility does not comply with one or more provisions of this title. This code section above refers to the standard practice staff follows when considering improvements to legal non-complying buildings. It highlights the fact that the zoning code allows improvements to existing legal non-complying structures. In practice, over time, it appears staff has layered the code section referenced above [18.70.080] with the grandfathered facilities section of the CD zoning code [18.18.120(b)] for project reviews. Interpretation of PAMC Section 18.18.120(b)(2)(C) There are two possible ways to interpret the grandfathered code section. First, that the addition of above-ground square footage is not currently there and so cannot be permitted. Second, that the proposed addition at the rear of the site does not further increase the legal non-complying conditions of the site. Staff is of the opinion that the second interpretation is the better one. The overarching principle in which this interpretation is based is the grandfathered section of the code. This code section was adopted to protect the property owners’ rights for existing buildings and to encourage investment in historic buildings, rather than to deny property- owners’ rights under the then current code. Furthermore, below are the specific reasons, referencing the corresponding subsections of the code cited above: (A) The project does not propose an increase in floor area. The previously assessed floor area is being transferred from the basement. (B) The footprint of the building is not being increased. (C) The building’s height, length, building envelope and size are not increasing and are within the current code requirements. Building envelope and size are discussed further below. (D) Floor area and height are not increasing, therefore there would not be any increases in the degree of non-conformity. Building Envelope Past Code Interpretation The Municipal Code definition states "envelope means the three-dimensional spatial configuration of a building's volume and mass.” Historically, this has been interpreted to mean the building’s “volume and mass” as allowed by regulations for setbacks, height and daylight plane, floor area and lot coverage established in the current zoning code, which is typically referred to as the buildable area. This buildable area interpretation has allowed buildings to be City of Palo Alto Page 6 constructed in a manner consistent with current regulations, and still meet the “grandfathered” code section with no increases in the non-complying components of the project. As a comparison, the city of Ottowa (Canada)’s definition of building envelope is consistent with how staff has been interpreting and applying the Palo Alto code: Building envelope means the three-dimensional buildable area prescribed for a building by the regulations of this by-law [Zoning Code]. Figure 1: Illustration of "Building Envelope" (City of Ottowa, Canada) Regarding “size”, this has been interpreted for decades to mean that the floor area cannot be increased, and the maximum size of the building cannot exceed what is allowed under the municipal code. This interpretation also allows buildings to be constructed in a manner consistent with the Municipal Code, while prohibiting any increase in the degree of non- compliance. Additional Project Information The attached April 17, 2014 ARB staff report provides project details and discussion of zoning compliance, floor area, parking, bonus floor area, compliance with the Downtown Urban Design Guidelines and approval findings. Attachment I provides additional information explaining the Transfer of Development Rights program. ENVIRONMENTAL REVIEW Pursuant to California Environmental Quality act (CEQA), this project is Categorically Exempt under CEQA Guidelines Sections 15331 Historical Resource Rehabilitation and 15301 Existing Facilities. The renovations will be consistent with the Secretary of Interior Standards. Attachments:  Attachment A: Location Map (PDF)  Attachment B: Draft ARB Findings (DOC)  Attachment C: Draft Context-Based Design Findings (DOC) City of Palo Alto Page 7  Attachment D: Draft Conditions of Approval (DOC)  Attachment E: Applicant's Project Description Letter (PDF)  Attachment F: ARB Staff Report without Attachments, 04/17/2014 (PDF)  Attachment G: HRB Staff Report without Attachments 04/16/2014 (PDF)  Attachment H: Zoning Compliance Table (DOC)  Attachment I: Summary of Transfer of Development Rights Program (PDF)  Attachment J: Project Plans (Board Members Only)* (TXT) City of Palo Alto Page 1 Architectural Review Board Meeting 1 Verbatim Minutes 2 April 17, 2014 3 4 EXCERPT 5 6 7 8 261 Hamilton Avenue [13PLN-00267]: Request by Cody Anderson Wasney Architects for 9 Architectural Review and Historic Resources Board review of a Historic Rehabilitation that 10 includes the relocation of floor area from the existing basement to allow a 5,910 square foot 11 addition at the rear of the building and establishment of a 1,196 square foot Mezzanine floor for 12 a net zero gain in floor area for a Historic Resource located within the Ramona Street Historic 13 District. The project also includes a request for reclassification from a Category 3 Historic 14 Resource to a Category 2 Historic Resource to allow the approved Rehabilitation to generate 15 15,000 square feet of Transferable Development Rights. Zone District: Downtown Commercial 16 with Ground Floor and Pedestrian Overlay (CD-C(GF)(P)). Environmental Assessment: Exempt 17 from CEQA per CEQA Guidelines Sections 15331 Historical Resource Rehabilitation and 15301 18 Existing Facilities. 19 20 Chair Lippert: Ok we will reconvene. And we’re moving on to Item Number 3, 261 Hamilton 21 Avenue: Request by Cody Anderson Wasney Architects for Architectural Review and Historic 22 Resources Board (HRB) review of a Historic Rehabilitation that includes the relocation of floor 23 area from the existing basement to allow a 5,910 square foot addition at the rear of the building 24 and establishment of a 1,196 square foot Mezzanine floor for a net zero gain in floor area for a 25 Historic Resource located within the Ramona Historic District. The project is also, also includes 26 a request for reclassification from a Category 3 Historic Resource to a Category 2 Historic 27 Resource to allow the approved Rehabilitation to generate 15,000 square feet of Transferable 28 Development Rights (TDR). Zone District: Downtown Commercial with Ground Floor and 29 Pedestrian Overlay (CD-C(GF)(P)). Environmental Assessment: Exempt from California 30 Environmental Quality Act (CEQA) per Guidelines Sections 15331 Historical Resource 31 Rehabilitation and 15301 Existing Facilities. If staff would like to introduce the project please? 32 33 Clare Campbell, Senior Planner: Yes, thank you. So I’d like to first begin by reviewing two key 34 points of the project and that’s Floor Area Ratio (FAR) and parking. The existing building has a 35 full basement that extends under the sidewalk on both sides on the Hamilton and Ramona Street 36 frontages. The basement is currently included in the buildings FAR and is used as storage and 37 additional workspace for University Art. The project includes the physical infill of the areas 38 under the sidewalk and the conversion of the majority of the remaining basement to a parking 39 facility. And that facility would provide nine spaces as well as long term bike parking. In the 40 CD zone district parking facilities when located below grade do not count in the FAR 41 calculation. The FAR that is being eliminated from the basement by the infill of the sidewalk 42 and the conversion to parking facility is allowed to be relocated above grade for an addition to 43 the building. 44 45 The proposed addition to the building is compliant with the CD-C zone development standards 46 and the allowable improvements to legal noncomplying facilities. The existing building is over 47 City of Palo Alto Page 2 the allowable FAR and exceeds the 50 foot height limit. With the proposed changes to the 1 basement the proposed addition would not increase the degree of noncompliance of the existing 2 building. There is no net gain in floor area and the height of the addition does not exceed the 50 3 foot height limit. 4 5 As described in the staff report this site was included in the Downtown Parking Assessment 6 District. At the time of the assessment it was determined that the building required 151 parking 7 spaces and 7 onsite spaces were provided in the adjacent below grade garage at 541 Ramona 8 Street. Because the project is not expanding the existing FAR no additional parking related to 9 FAR is required, but because the applicant wants to eliminate the FAR in the basement the 6,304 10 square foot parking facility must be maintained as such for the life of the building. 11 12 So now I’d like to just give you an update on the Historic Review that occurred yesterday. The 13 HRB reviewed this project and recommended approval with two added conditions. They 14 recommended that the proposed awnings covered by, the proposed awnings covering the five 15 Gothic windows along the street frontages should be removed. And as I understand it this is a 16 project change that the applicant wants to do for the project and the HRB was fully supportive of 17 this change. And the final building color, the paint color and awning materials will be submitted 18 to our Preservation Planner for final review and approval. 19 20 And for clarification the conditions of approval included with the Architectural Review Board 21 (ARB) report and those associated with the Historic Review with the two added conditions that I 22 just mentioned will be consolidated into one final set of conditions for the project that will be 23 forwarded to Council. If you’d like to review the Historic Conditions associated with the project 24 those are included in the staff report as part of Attachment F. And tentatively we have the 25 project scheduled for Council for June 2nd. And now I’d like to pass it over to Aaron. Thank 26 you. 27 28 Aaron Aknin, Assistant Planning Director: Thank you and good morning; Aaron Aknin, 29 Assistant Planning Director. I’d just like to reiterate a couple of points that Clare made as well 30 as go over a couple of questions that we’ve received from the public. I’m the first to admit the 31 code, Palo Alto’s zoning code is sometimes confusing and there’s many nuances to it so it’s 32 something even after being here for a couple of years you need to study and take a look at, but 33 what’s, the first thing the main questions we’re getting about this from the public is what is the 34 grandfathered buildings and grandfather buildings and what rights are entailed related to 35 grandfathered buildings? And the second kind of broad question we’re getting is how do TDR’s 36 work now that the Council adopted a new ordinance about six months ago. 37 38 So I’ll touch first on the grandfathered building ordinance. So I think first we have to look at 39 what is the intent behind the grandfathered building ordinance. I think it’s really twofold. The 40 first is that property owners maintain the rights that they received when they first constructed 41 their buildings and those rights don’t go away because a new ordinance has been passed. And I 42 think the second intent is also the preservation of historic buildings. If you give new property 43 owners greater rights than those grandfathered buildings there’s going to be an incentive to tear 44 down those older buildings and build new buildings. 45 46 So in this case there’s really two reasons why it’s a grandfathered building: it’s taller than what’s 47 currently allowed under code and there’s more floor area than is currently allowed under code. 48 When we take a look at this proposal A) the building’s not getting taller, and B) for the reasons 49 City of Palo Alto Page 3 that Clare specified the building’s not increasing in overall floor area. They are essentially 1 transferring assessed floor area from the basement area up into the upper stories and making that 2 basement area for parking. 3 4 There is a statute that says the building cannot expand or increase over the existing, over the 5 building envelope. And that term building envelope has been the source of confusion and 6 debate. It’s another one of those parts of our code that I understand why people are questioning 7 it. I think it’s important to go back to the point I made earlier is you do not want to deny 8 grandfathered buildings rights that current property owners have or you would create incentives 9 to tear down historic buildings and build new buildings. So in this case we’ve throughout the 10 past two decades we’ve always interpreted building envelope to mean the three dimensional 11 envelope of the existing building as well as the envelope allowed underneath the code. So 12 what’s the three dimensional allowed underneath the code? In this case the building fits within 13 that envelope and we do not interpret it to mean a sealed envelope around the existing building’s 14 outline because in this case everything that they are building would be allowed under the current 15 code. So that I could touch on that further if there’s any questions. 16 17 The second relates to TDR. The Council passed an interim ordinance back in October of last 18 year. It actually went into effect in December. It was not a moratorium and there’s a difference 19 between those two. Under an interim ordinance it is the law of the land right now and any 20 building that is approved under the law of the land has to comply with those laws. So in this 21 case any TDR associated with this building would only be good for floor area, would not be 22 good for parking. So if they were to take the TDR’s earned on this site and transfer them to 23 another building all of those additional floor area would have to be parked or would have to pay 24 in lieu fees. It would have to comply with the parking code essentially. There’s no free parking 25 associated with these TDR’s. We will also add a condition to the Director’s approval that further 26 clarifies that. Even if the law changes three years from now, two years from now the code that’s 27 into effect, in effect today is the code that rules. So that clarifies it. I think Clare did a good job 28 going over the FAR transfer from the basement to the upper stories and we could take any 29 questions you have at this time. 30 31 Chair Lippert: Ok, we have one question. Board Member Lew. 32 33 Board Member Lew: Great, thank you for that. I have just a quick clarification question around 34 floor area. So is it that the, you said that the basement is counting as square footage, right? But I 35 was sort of under the impression is it because it’s used as storage? Like I always think of 36 basements at least for houses as being exempt if they’re like less than three feet above grade and 37 so I was just asking about that. Why does the basement count? The existing basement count? 38 And then it doesn’t count. I understand that it doesn’t count if it’s parking. 39 40 Mr. Aknin: So the way our current code is and it’s really twofold, the way our current code is if 41 it’s an active use in the basement area it’s going to count towards FAR. The second layer to that 42 is it’s something that we use to determinate, to determine it over the past decades is was it 43 assessed as active floor area when there was the Parking Assessment District done decades ago? 44 And in this case the entire basement was assessed. What’s actually important to note too is that 45 the applicants say there’s actually additional floor area down there above what was actually 46 assessed. But we’re taking the more conservative approach and only giving them credit for the 47 floor area that was assessed. 48 49 City of Palo Alto Page 4 Board member Lew: Great. That’s a very tricky issue. Thank you. 1 2 Mr. Aknin: It is. 3 4 Chair Lippert: Ok. So we have a member from the ARB, HRB, sorry, who is going to speak first 5 and then I will open the public hearing. 6 7 David Bower, Historic Resources Board Member: Good morning, I’m David Bower; I’m a 8 member of the HRB. I’m here this morning to represent our Board. As you know we 9 deliberated on this application yesterday and I can tell you that we had extraordinarily strong 10 support for the application. This building 261 Hamilton is one of the largest Spanish Colonial 11 Revival buildings in the Bay Area. It is the biggest building of that type in Palo Alto. It’s an 12 extraordinarily important building in the Ramona Street Historic District. It is described 13 yesterday as an anchor of that District and it’s the last one to be renovated. So this is a really 14 important project from our perspective in maintaining and extending the life of this building for 15 another 50 or more years. 16 17 We had, we were unanimous in our reclassification of the building from a Category 3 to a 18 Category 2 building. That makes the TDR rights available to the applicant. And in exchange for 19 that the applicant has put forth a program that will remove a number of the changes made to the 20 building in the Sixties and Seventies that were negative in our consideration. They actually 21 removed historic fabric and they are going to put back quite a bit of the fabric either in the case 22 of the transoms above a number of the storefront windows it’s going to go back to exactly as it 23 was originally designed and in other cases where the tiles, decorative tiles were removed that 24 were unique to the building they are going to use a compatible tile that is differentiated from the 25 original so that you could clearly, one will clearly understand that this is not the original. 26 27 The addition on the back of the building is critical to maintaining the historic character of the 28 building. It is both deferential to the original and is distinguished by materials and by textures 29 and colors so that it’s very clearly not part of the original building and could in the future be 30 removed without detriment to the existing building as it now stands. 31 32 We had a number of public speakers for us, a number for you nothing that were concerned about 33 parking, about floor area expansion, about TDR transfers. We don’t have that purview and that’s 34 your lucky task of having to decide, but we were confident as a Board that this project does 35 move forward the purposes of the Historic Resources ordinances in the City of Palo Alto that this 36 building will be better for this project, and that and consequently we were unanimous in its 37 support. 38 39 Chair Lippert: Thank you very much Mr. Bower. Any other, any questions for Mr. Bower? Ok. 40 Thank you very much. With that I will open the public hearing. I have four speaker, four 41 speaker cards. We’ll start with Brett Vandusand followed by Neilson Buchanan. Oh, I’m sorry. 42 I’m sorry, the applicant’s presentation. Sorry about that. You’ll have 10 minutes. 43 44 Brent McClure, Principal, Cody Anderson Wasney Architects: I don’t get 15? My name’s Brett 45 McClure, Principal with Cody Anderson Wasney Architects. We’re really excited to be here for 46 this fantastic project and thank you to City staff for a really thorough report and to Board 47 Member Bower for really eloquently I think summing up a lot of the activities and discussions 48 from yesterday. 49 City of Palo Alto Page 5 1 This building is it’s a remarkable building. The image up on the slide on the screen right now 2 we’ve got sort of then and now shots of what it looked like at the top in the Thirties and you got 3 this little model I think it’s a Cadillac in the left upper corner and then shots of it today. So much 4 of the historic fabric on the exterior streets that faces Ramona Street and Hamilton Street are 5 virtually intact. As David mentioned it’s more or less at the ground floor area that changes have 6 occurred. This building is the last in the Ramona Street Historic District to be renovated and it’s 7 sort of we think acts as those gateway and forms an anchor to that important piece of Palo Alto. 8 It also has a tremendous amount of connections to the exterior and we see it as this project has a 9 great opportunity to provide a lot of public benefit to the exterior spaces, both along the streets of 10 Ramona it faces the City Hall Building here across with this large plaza and it also aligns with 11 Centennial Walk. All important pieces of the job. 12 13 We put together just a quick slide to give you an overview of all the things that we’re doing kind 14 of inside and out to sort of frame the context. In addition to the historic rehabilitation we’re 15 doing a seismic rehabilitation and improving the building to current seismic standards, 16 Americans with Disabilities Act (ADA) upgrades, right now the building has virtually nothing 17 that applies to the ADA as far as restrooms and elevators, and the life, safety, and exiting there’s 18 some significant aspects of this building that we’re looking to improve that I’ll talk about in a 19 minute. It’s got the office renovation. 20 21 And then the unique points that have been touched on already here I think that this project is very 22 rare in that we’ve got a private client who is looking to take the existing gross square footage 23 floor area that’s actually 41,000 square feet and when we’re done with the project we’ll have 24 usable square footage of 37,000 square feet. So we’re making the building smaller and we’re 25 providing nine new parking spaces within the basement as was discussed and will result in really 26 an underground garage that accounts for 16 total parking spaces as well as street tree 27 improvements. 28 29 Here’s the site plan looking at the building along Ramona Street as I mentioned new street trees 30 along this edge. Right now we just have the one tree over here in the front. We’re going to 31 improve the streetscape along this edge and maintaining a retail space in and along the frontages 32 of Hamilton as well as Ramona and then providing new office space in the back with an entrance 33 off of Centennial Walk. So with this new addition that we’ll show you in a minute with the 34 elevations is to really enliven and brighten and kind of begin to complete Centennial Walk as it 35 connects out at Hamilton. 36 37 The basement level to kind of walk through the building this sort of a dashed line around this 38 rectangle on the left is the existing basement plan, which is completely a retail space with the 39 staircase and elevator down here in the core in the middle. And there’s a ramp on the adjacent 40 parcel at 541 Ramona that is being used as open parking garage right now. And with our project 41 what we’re looking to do is create an easement, an access easement which was stated I think in 42 the conditions of approval so that the parking on this side and the new parking we create can all 43 be linked together to result in a total of 16 spaces. We’ve got restrooms and shower facilities to 44 meet with some of the sustainability and green ordinances within City of Palo Alto, underground 45 bike parking down here as well, and this blue represents a modest little bit of storage. 46 47 So the square footage that we’re taking away by our measure is 8,357 square feet of useable 48 building area that’s currently being assessed. As you then go upstairs the footprints remain the 49 City of Palo Alto Page 6 same. Right now it’s all retail with this single historic lobby and entrance over here off of 1 Hamilton and then on this side what we’re doing is part of the historic renovation is we’re going 2 to be renovating and pulling back the retail entrance doors to be more compatible with what was 3 once done by Birge Clark as well as with the addition on the back is to pull and recess that 4 entrance in slightly with the door over here. And one of the key important points is adding a 5 staircase off the back with the addition to give us fundamental life safety to this building on how 6 you exit the facility. 7 8 The mezzanine plan on the left as was touched on the blue space is what’s existing. And right 9 now we’re going to recreate the mezzanine, but it’s just going to be a modest little bridge so 10 we’re reducing the square footage here. As you go upstairs to the second and third floor this is 11 where the addition starts to show up in plan. On the left the Birge Clark building has this form, 12 this L shaped structure with just the single story piece in the back. So right now you’re looking 13 at the roof plan here. Our lobby core that’s existing now you’ve got an open four story stair 14 that’s just open to all floors and in the knuckle of the L is a fire escape that connects down back 15 and over here. No exiting over here because you’re on the roof and no exiting out here because 16 you’re right on top of Centennial Walk. And so with the addition on the second and third floors 17 of adding the square footage listed here we’re able to create a second fully fire rated staircase to 18 provide critical life safety to the building. As you go up to the fourth floor what we’re looking to 19 do is the addition stops at the third floor and then we have an enclosed roof, enclosed mechanical 20 well over here that you’ll see in the elevations and then a roof terrace so as that the addition as 21 David mentioned does not compete with the original structure of the building. 22 23 Here is just a quick summary that we had and it’s very consistent I think with what was in the 24 staffing report so that the total square footage change from a gross square footage to the new 25 proposed usable square footage after we remove the parking, create the parking in the basement 26 makes the building 4,436 square feet smaller. We’re adding seven parking spaces to bring a total 27 of 16 onsite and 15 bicycle parking. And I think what was stated was regardless my client still 28 pays completely into the Parking Assessment District. 29 30 As far as the life safety I think I touched on this already. Here’s a couple of shots if you’re to get 31 out of this building right now on the third floor you have two choices. Either you make it to the 32 fire escape right here which is on the roof at this location where the hand is. This is looking 33 down into the fire escape. You look directly into where the four story connecting existing 34 staircase is with absolutely no exiting here and no exiting here. And so by doing this addition 35 we’re significantly enhancing the life safety of this building as well as creating ADA cores. And 36 the fire sprinkler in the building we talked about is here on the second floor. 37 38 Alright so on the exteriors what we’ve got is we were really fortunate to have the original from 39 Stanford Archives the original Birge Clark drawings to pull a tremendous amount of information 40 from. This historic fabric as I mentioned is clearly intact as far as the clay tile roofs, the lodges 41 at the top, the steel decorative windows, and the balconies and the railings. We’re going to be 42 maintaining all of that fabric and we’re going to be refurbishing, removing the glazing on the 43 windows, bead blasting the frames to remove the rust and the paint, refinishing those, and 44 installing single pane glazing. Similar approaches with repairing and refurbishing the decorative 45 balconies and it’s at the ground floor primarily is where things begin to fall apart as David 46 mentioned. The dotted areas are the ones here are original to the building; however, everything 47 else has been filled with aluminum and these awnings and canopies. There is some historic tile 48 that’s left and some of the spindles at the ogee sort of cut arched transoms remains intact to pull 49 City of Palo Alto Page 7 from. And so as we look at on the Ramona Street elevation the drawings in front of you have 1 canopies that were over these two Gothic arched windows and as was stated we are, we really 2 want to remove those, reconstruct these transoms, refurbish and restore the upper floor facades, 3 and then construct we’ve got awning boxes here at the front so we’ll have projected awnings and 4 then expose and open up the wood spindles that we will recreate that’s in clear alignment with 5 the original Birge Clark drawings. 6 7 As you go to Hamilton Avenue there’s a very similar approach. There’s this varied style and 8 elevations of the arches. As you come to the middle the massing is sort of broken up into 9 separate pieces. As you get to Hamilton similar situation and then our plan here is to construct 10 the following varied openings as well with some decorative iron work in and around the original 11 doors. Here’s some of the tile that was mentioned with David. We’re going to have the 12 transoms reconstructed and then have historically compatible tile. As you work your way around 13 to the back of the addition though this is where the building begins to sort of fall apart with the 14 you can see as you look down Centennial Walk the, I’m seeing the yellow light’s on so I’m 15 going to go a little bit faster here. 16 17 Here’s where we are with the addition. Our approach to the mass is very similar to be 18 contextually compatible with what Birge Clark had done as far as breaking the single story 19 elevation and this mass into these three distinct parts, creating larger glazed openings (buzzer) 20 21 Chair Lippert: Can you wrap it up? 22 23 Mr. McClure: I can wrap it up in like one minute. 24 25 Chair Lippert: Great. 26 27 Mr. McClure: So that we’ve got the more storefront shape so that it’s, it echoes the current time 28 with the balconies. This talks a little bit about how that massing occurs so that we’re very, we’re 29 compatible with the existing building, but being distinct and separate from what was clearly 30 there. Here’s the elevation shot as you look over the top and down Centennial Walk with the 31 back of the staircase. You still see differentiated tile that’s not going to look the same as what’s 32 up at the top. Here’s a shot of what the rendering would look like from so that we’re bringing 33 these balconies in to enliven and really brighten and warm up the Centennial Walk itself. And 34 here’s some before and after shots that show what it looks like today on Centennial Walk and 35 what it’s going to look like when we’re done with the project. And then looking back again 36 having this building here at the end it starts to lead your eye and really pull you into this really 37 important sort of public asset of the space. And then I, we can save this slide for questions 38 because this talks about the Centennial art plaques themselves, which is sort of outside the 39 boundary of the project. 40 41 Chair Lippert: Thank you very much. Ok, with that I will now open the public hearing. And we 42 have Brett Vandusand followed by Neilson Buchanan. And you will have three minutes. 43 44 Brett Vandusand: Ok, thank you. Good morning. First of all I represent Inspire Real Estate 45 Holdings. We own the building on the corner of 250 University Avenue on the corner of 46 Ramona and University. We are also in an alleyway and maintenance agreement with the City 47 of Palo Alto and we are responsible for maintaining the Centennial Plaza Alleyway with 48 City of Palo Alto Page 8 infrastructure and maintenance and what have you. We do not have any, we are in support of 1 this project, but we do have a couple of quick concerns. 2 3 I did give some paper out. What we’d like to do is look at the entrance off Hamilton into the 4 alleyway. You’ll see a medallion. This is a brick infrastructure with a metal medallion in the 5 middle. It’s been posted in the past by the City as a hazard, slip hazard when it gets wet. People 6 have tripped on it. We would just like the architect to take the opportunity to maybe be, use this 7 as an opportunity to redesign this medallion and then have that incorporated into the project. 8 And then with the ARB’s approval then we could take that in the future and spread it out to the 9 over five medallions that still need to be replaced. But this is an opportunity for us and the 10 architect to possibly just redesign and with the ARB’s support to kind of redesign this medallions 11 that need to be done and eliminate this hazard. 12 13 The other item that we have is related to the, we saw in the documents relocating some of the 14 plaques. Some of it we’re to hang on our building and we just are kind of opposed to that. 15 Number 1 we’re an IFIS building and structurally we don’t think we can handle it and our walls 16 that they proposed were small as well as one was curved. So there are a couple other ideas in 17 there that we think would be better, but our building we just don’t feel is a good spot for those 18 plaques. Thank you. 19 20 Chair Lippert: Thank you very much. Neilson Buchanan followed by Doria Summa. 21 22 Neilson Buchanan: I’m Neilson Buchanan. I live at 155 Bryant Street, which as you know is one 23 of the Bike Boulevards. Also want to point out that Bryant Street from the creek to Embarcadero 24 is, the best I can calculate, is the largest commercial parking surface lot in Palo Alto. And that’s 25 primarily the reason I’m here is the whole parking intrusions into the neighborhoods. I want to 26 acknowledge that the City Council and staff are working very hard to deal with the dynamics of 27 all that with the Downtown Cap Study and the Permit Parking Taskforce that’s underway from 28 now till January. Frankly that couldn’t be much better as difficult as it is. 29 30 First comment says that the notification process and the short notice between announcement of 31 agendas and whatnot really does not conducive for citizens to be informed. In fact it results in us 32 being kind of more uninformed and hysterical. Thank God Aaron and some of the staff people 33 are willing to take e-mails over the weekend to kind of keep information flowing and I deeply 34 appreciate that. Notification was not broad enough and it jams us really hard over the weekends. 35 36 Two, three things about parking; one, Aaron has sufficiently addressed the paranoia over exactly 37 the new ordinance and is that permanent. And I accept that is what it is. It’s now in the public 38 record that the developer in a way has foregone some advantage that might have existed before 39 last September. I am thoroughly confused about the intersection, the nexus of FAR’s and 40 TDR’s. I don’t, can’t understand nor can other fairly involved citizens understand whether or 41 not some future advantage is passed to a developer to take advantage of parking advantage. 42 Final point is that Aaron just explained the mathematics of the building getting bigger or smaller 43 and that too has defied my ability to analyze. When I step back it’s almost impossible for me to 44 imagine that they’re not going to be more people requiring more parking in that wonderful new 45 building. And that unfortunately just isn’t addressed by current planning policy or techniques. 46 47 This is the best project I’ve seen on Hamilton Avenue in terms of parking. If you want to see a 48 horror story go to the Epiphany Hotel, go to 240 Hamilton and sit back and think about the 49 City of Palo Alto Page 9 negative parking impact. If permit parking goes in it’s no longer the problem of the 1 neighborhoods, it then becomes the problem for all the property owners and merchants 2 downtown. Thank you. 3 4 Chair Lippert: Doria Summa followed by Jeff Levinsky. 5 6 Doria Summa: Good morning, Doria Summa, Yale Street. Thank you for letting me speak and I 7 want to start out also by thanking the applicant for proposing to preserve this very important 8 building. But I did have some concerns and they are based on the Secretary of Interior Standards 9 stating that additions to historic buildings should be recessed, set back, and/or subordinate to the 10 original building. So I have concerns along Centennial Walk. The balconies protrude past the 11 existing historic building and in addition the building face of the stairway tower is on the same 12 plane as the existing building which would not be consistent with subordinate. 13 14 As to the decorative tiles that are to be replaced on the old building I think that a similar tile 15 could be made or manufactured as opposed to mixing in the tiles they would use on the new 16 portions of the building, which aren’t consistent. I’m also a little concerned about the height 17 shown on Centennial. It’ll look lower there, but I’m concerned as you’re walking towards the 18 building on Hamilton it’ll actually look taller than the original building. 19 20 So those were my main points. I also just wanted to reiterate how important this building is. It’s 21 the last building in the Ramona National Historic District to be redone. And so it’s very 22 important to maintain the integrity of it. And one other thing that came up at HRB yesterday, 23 which the applicant and HRB members had a conversation about and the applicant agreed to was 24 the importance of using the right kind of non-reflective glass. So thank you very much. 25 26 Chair Lippert: Thank you. Jeff Levinsky and if there are any other speakers, please submit a 27 speaker card now. 28 29 Jeff Levinsky: Good morning Commissioners and staff. A number of us have sent in questions 30 about the, how the grandfathering rules and municipal code apply to this project and as of this 31 morning we haven’t received any substantive answer. So let’s look at the actual grandfathering 32 code. First of all this was passed by the City Council just about 21 years ago and in order to 33 allow oversized buildings like 261 Hamilton to be repaired and remodeled and not deteriorate the 34 Council struck a compromise. It said as long as you don’t make your building even bigger we’ll 35 let you repair and remodel it. And here’s the actual code that they put in place. It says, “Nor 36 shall such remodeling and improvement or replacement result in shifting of building footprint or 37 increased height, length, building envelope or in any other increase in the size of the facility.” 38 39 Now we think the staff report misinterprets this code in two ways. First of all it does talk about 40 building envelope, but as Mr. Aknin said earlier the building envelope, he this is what’s in the 41 staff report as opposed to what he actually said. The building envelope component of this code 42 section refers to the legal three dimensional buildable area of a project site. That doesn’t make 43 any sense when you look at the code because remodeling a building couldn’t increase the 44 buildable area of the site. Here’s what the, but 21 years ago they knew you’d be confused. So 45 they actually put into the ordinance a definition of what envelope means. And it says that the 46 envelope of the building is the three dimensional special configuration of a building’s volume 47 and mass. In other words they said you can’t increase the building’s volume or mass. 48 49 City of Palo Alto Page 10 Before today, before you today are plans to add an entire wing of about 6,000 square feet. So 1 that would clearly increase the volume and mass of the building. If we go back to the actual rule 2 here there’s something else in it and it says it prohibits any other increase in the size of the 3 facility. And perhaps you chuckled when seeing this because the Council was anticipating that 4 clever architects, and there are a lot here today, would invent some other way to enlarge the 5 building. And the Council is saying no, no, no, you can’t increase the size in any way. 6 Unfortunately these words about increase in the size got omitted from the staff report given to 7 you. Everything else got in, but those words were omitted from the description of the 8 grandfathering rule. Even if you decide building envelope doesn’t mean what the code says it 9 means that’s still a way of measuring the size of the building and so again the building violates 10 the grandfathering code. 11 12 I don’t think this is a death sentence for the project. There’s a, there are ways, whoops. I’m 13 done. 14 15 Chair Lippert: Just wrap it up please? 16 17 Mr. Levinsky: Ok. I was going to say that I think you can find a way to allow the owner to 18 expand the value of the building and preserve its historic significance without violating the 19 grandfathering rule. Thank you very much. 20 21 Chair Lippert: Thank you. I have one last speaker card here, Roxy Rapp. If there are any other 22 speakers please submit a card at this point. You’ll have three minutes. 23 24 Roxy Rapp: Thank you. Roxy Rapp, 265 Lytton. Let me start off that I was the original 25 developer team partners for 250 University. And that’s the main entrance to Centennial 26 Walkway. And if you go back into history that corner was Crocker Bank and it had a big, huge 27 blank wall along Ramona Street and then it had a parking lot behind it. Ramona Street business 28 was kind of dead in those days. The big street was Waverley and Bryant Street. And one of the 29 things that I learned in retail is to draw people down the street you need windows, excitement, 30 movement, and something of interest to bring you down. And so that’s when we designed 250 31 we decided to put the shops opening up onto Ramona Street to draw them down. It’s been very, 32 very successful. 33 34 And at the same time we’re doing Ramona Street I was in the retail business and I had a clothing 35 stores and shoe stores. My wife and I would go to Europe four times a year at least. And one of 36 the things I loved about Europe was the alleyways, the use of the alleyways for restaurants, the 37 entrance into shops, and it was very nice to be able to sit outside when the weather was great. 38 And so I came up with the idea of doing this Centennial Walk, this and let the restaurants fall out 39 because as you know there’s a lot of restaurants on Ramona Street and at that time I forget the 40 name of the restaurant, not 42nd Street, but where 42nd Street is that fell out there. It’s probably 41 on my bucket list before I go I would like to make that more successful. I feel it is not successful 42 the way it should be and one of the things I want to do is to clean up the alleyways and make it 43 more inviting. 44 45 And one of the things that we did in this building, University Art building, is that’s why we put 46 the windows in and the balconies is to show some interest, to pull people from Hamilton down 47 into the alleys. And the plaques are not going on 250. They are going on the old [Congdon and 48 Chrome] building, JF Bank’s building, Patrick’s building on the side there. Not all the plaques, 49 City of Palo Alto Page 11 just three of them will be there. and what’s so great about that you’ll have because there’s so 1 much traffic on University Avenue as you’re walking down you’ll see a sign and be able to go 2 and check out the plaques and maybe go further on down the alleyways. In regards to the 3 (interrupted) 4 5 Chair Lippert: Can you wrap it up? 6 7 Mr. Rapp: Sure. In regards to the slipping on the design of the entrance to the alleyways I wish 8 you would have brought that to my attention when we did 278, but I’ll certainly we are going to 9 redo the entrance on Hamilton Street to the alley, but we’ll look for maybe some material or 10 something that we could coat it with that it won’t slip. I didn’t realize that was a problem, but 11 we redid the one on 278 Bryant Street. And thank you. 12 13 Chair Lippert: Thank you Mr. Rapp. Ok, I will close the public hearing and we will begin with 14 questions and comments. Board Member Malone Prichard. 15 16 Board Member Malone Prichard: Thank you for bringing this project forward. I was very 17 pleased to see the improvements you’re making to the street frontages on Hamilton and Ramona. 18 And I’m very much in support of what the HRB asked with regards to the Gothic windows. That 19 was actually the first thing I looked at was why are they keeping those awnings there, they’re 20 terrible and I see HRB wants those taken off as well. 21 22 As far as the floor area I did look at what you’re doing and what the sort of grandfathered rules 23 are and it’s interesting that the grandfathering actually specifically talk about not increasing the 24 footprint of the building. And I see that if you look at the first floor plan you’re actually 25 decreasing the footprint of the building somewhat. So I feel that what you’re doing is very much 26 in consistent with the zoning ordinance and the fact that that basement floor area in the CD zone 27 has been counted as floor area and has been assessed as floor area for many years also supports 28 what you’re doing. So I don’t have an issue with your floor area or your parking issues. 29 30 Regarding the addition in the back I see that you have a roof garden up there. Is that for the 31 office use? Maybe somebody can come up and speak about that. 32 33 Mr. McClure: Yes, it’s a patio for the fourth floor tenants. 34 35 Board Member Malone Prichard: Did you look at all about having more of a visual connection to 36 the alleyway with that? It looks as if it’s sort of hidden behind a tile roof, but I couldn’t tell from 37 the drawings. 38 39 Mr. McClure: Let me… What we’ve got here right now is that this ends up being at about 40 guardrail height so that the applicants actually can, the applicants. Hello. The tenants can 41 approach the edge. 42 43 Board Member Malone Prichard: That’s great and is that actually permanent planting I’m seeing 44 there? 45 46 Mr. McClure: I believe yes. 47 48 City of Palo Alto Page 12 Board Member Malone Prichard: Yeah. So I would encourage you to do something with that 1 area so that it actually is perceptible from the alley below as a useable space. So whether that be 2 bringing the planting forward or umbrellas, something. What I’m interested in really is what 3 Roxy Rapp said, enlivening that alleyway. 4 5 Mr. McClure: I think we’d be in support of adding things to further enliven even that, the top 6 floor. 7 8 Board member Malone Prichard: Great. And then didn’t really see any information on how 9 you’re going to be detailing this addition. It’ll be important to us to see how the materials come 10 together, how that stucco is wrapping into windows, and I think HRB will also want to look at 11 that at some point because of the historic regulations. 12 13 Can you tell me a little bit about the plaque locations? 14 15 Mr. McClure: Sure. In concept what we’re looking to do is take the existing plaques that are run 16 the length of our building and relocate three of them as well as the main marquee to the opposite 17 entrance off of University Avenue where the archway comes in we talked about before so you’d 18 have the three plaques here. This is Photoshopped onto the Joseph Banks building and then the 19 100 year sort of Centennial marking the walkway. So that would be located at this edge here still 20 maintaining the three plaques over on this edge here so that these begin to form sort of a gateway 21 into both sides of Centennial Walk. The idea that’s shown on these drawings on this image here, 22 which I think is also included in the set it was just our idea of suggesting maybe to the City and 23 it’s sort of outside the scope of the project is that if you were to continue to further develop 24 Centennial Walk and enliven that space to draw more people in is that you could possibly 25 consider other types of plaque locations down the middle. But that’s really outside the scope of 26 this project. 27 28 Board Member Malone Prichard: And I’m not sure who the property owner is on the Joseph 29 Banks building, but is that an acceptable location to them? Have they been approached? 30 31 Mr. Rapp (off microphone): My partner is talking to them. 32 33 Board Member Malone Prichard: So I hear that there is some discussion going on. 34 35 Mr. McClure: Yes. 36 37 Board Member Malone Prichard: That struck me as a very good location for that plaque if the 38 owner is amenable to it. 39 40 Mr. McClure: Thank you. 41 42 Board Member Malone Prichard: That’s all I’ve got for now. 43 44 Chair Lippert: Vice-Chair Popp. 45 46 Vice-Chair Popp: Alrighty. So I have to say I’m completely perplexed about the FAR here. I 47 don’t, I’m having trouble getting my head around this and the first question I have is we keep 48 City of Palo Alto Page 13 hearing the square footage of the building getting referred to as assessed area, but my 1 understanding is the assessed area of the building is the 37,506, not the 41,942. Is that correct? 2 3 Ms. Campbell: That is correct. 4 5 Vice-Chair Popp: Ok, so the way I guess I read this is if I do the math we’re shifting area around, 6 but ultimately we’re really adding about 39,000 square feet to this building, which I calculate as 7 needing 15.5 parking spaces. They’re adding 7 so we’re short 8.6 parking spaces at the end of 8 the day. And I’m not looking for an answer to this right now because I think there’s a lot more 9 that’s going to have to go on with this before we can get past this, but I mean it’s pretty clear to 10 me that the basement area that was storage is becoming viable office space now. And in 11 consideration of all the concerns we have and the heightened sensitivity to parking and all of 12 these other things we need to be very clear about what is current area that is assessed, what was 13 beyond that that wasn’t assessed and wasn’t being parked previously, and what they’re 14 essentially adding now that needs to have parking provided for it and the quantity of that. 15 16 I very much like what Roxy is talking about in terms of the character of Centennial Walk. I find 17 that a useful pathway in the City. It’s a unique pathway in the City. It’s a nice area to be in and I 18 think the addition that you’re suggesting here and the balconies and the windows and opening up 19 that side of the building which otherwise is very abrupt and hard would be a very nice addition. 20 And I agree with Board Member Malone Prichard’s comments about the placement of the 21 plaques. I think if you can really work with the property owner of the Joseph Bank that’s a 22 perfect location for those and bracketing at either end the way Mr. McClure said as gateways to 23 that would be a very appropriate approach to that. 24 25 While I very much respect the comments that we heard today from the HRB and Mr. Bower’s 26 comments were clear about that, I’m a bit concerned about the character of the addition. And I 27 wanted to just maybe ask staff if they could illustrate a little further. These elements usually 28 match or they are distinctly different and this one feels like it’s close but not the same. So was 29 there a discussion at HRB last night about that or was there a period of time where that was 30 discussed? 31 32 Mr. Aknin: Clare and myself weren’t actually at the HRB meeting. So I think the architect could 33 probably best answer that. 34 35 Vice-Chair Popp: Great, sounds fine. 36 37 Mr. McClure: Part of the importance of getting this project approved is that the client is pursuing 38 national and state or federal and state tax credits. And so getting and maintaining the historic 39 approvals through the City is going to be really, really important. Part of the Secretary of 40 Interior Standards talked about as you probably are aware of is the importance of compatibility 41 and differentiation with additions to new buildings. This building is really, really I mean as 42 we’ve heard from several an extremely prominent building by Birge Clark. It’s part of the entire 43 Ramona Street District and it’s bound on both sides kind of fits within a knuckle. 44 45 So the what was discussed yesterday I think was looking at fenestration, looking at openings, 46 looking at massing. How are we compatible with the original design by Birge Clark so that it is 47 seen as fitting in and a part of that building yet still what are the characteristics that then 48 differentiate it from the Birge Clark building so that we’re not like a green pair of pants and a 49 City of Palo Alto Page 14 green shirt that don’t really go very well together. So that was discussed by having the, this mass 1 recess back so that it starts to kind of fall away. So that on Centennial Walk the end elevation 2 really sits proud and prominent of the Birge Clark building and that even though the balconies 3 project out we’re looking at having simplified railings that have a slight twist to them so that 4 they don’t look or they’re not copying necessarily the balconies and the railings of the Birge 5 Clark building but echo some of the aspects of today’s time. And then the glass itself as well to 6 kind of open the building up, but yet have some proportionality that is similar to the adjacent 7 building. I don’t know if that answers part of your question or not? 8 9 Vice-Chair Popp: It does. Thank you very much. I think that’s the general questions I had now. 10 11 Mr. McClure: Did you have a question? I might of missed an answer to your question I’m sorry 12 if it’s ok to talk right now, but about the finishes as well differentiation there is that right now 13 they are sort of a slightly modeled texture to the stucco. It’s painted and so we’re going to be 14 differentiating that mass as well with the interval colored steel troweled stucco so that you’ll 15 have some slight differentiation with the color finish as well. And that the, and there’s a sample 16 board that I think was circulated around is that the building will be repainted the original Birge 17 Clark building. 18 19 Chair Lippert: Board Member Lew. 20 21 Board Member Lew: Hi. Thank you. I have a question for staff. So in the grandfathered code 22 provision I was wondering did Planning staff review all of that with the City Attorney’s Office 23 and have they reviewed all of Mr. Levinsky’s (interrupted) 24 25 Mr. Aknin: The answer is yes to both. We’ve reviewed this in depth with the City Attorney’s 26 Office not only with this application, but with the past applications and this is something that’s 27 been historically implemented this way. 28 29 Board Member Lew: Ok. Thank you very much for that. That seems to me to make sense. I 30 understand that from some other things in our code that there are interpretations and other things 31 that happen so that the code isn’t literally exactly what it says, so I know it’s complicated. 32 33 Mr. Aknin: One thing I will note over the last three to six months or so we’ve actually had the 34 City Attorney’s Office as well as the Director and myself reviewing all the staff reports before 35 they go to the ARB since there are additional, since there are a lot more people participating now 36 we want to make sure those other layers of review. 37 38 Board Member Lew: Ok, thank you very much for that. So I just want to say the, I think that it is 39 a great project. I was looking over the plans and I think all of the additions that you’ve been 40 making really improve the building and so I don’t really have any issues with the main parti. I 41 think my main concerns were I think more along the lines of Board Member Popp’s, which is 42 just details. And window details, how far, how much are they recessed in the new building? 43 What are the window frames? How different are they from the steel windows, the existing steel 44 windows? I think some of the renderings were showing maybe like I-beam steel, steel eves 45 perhaps or you’ve got some curved brackets holding up the balconies. And so I’d want to see 46 details for like all those, all of those elements. 47 48 City of Palo Alto Page 15 And then I do have a couple of questions for staff. The awnings, the existing awnings usually we 1 use, we count those are part of the pedestrian, I forgot, the pedestrian zone. You know as 2 providing depth and projections and whatnot. And so I think though they’re proposing to 3 remove some of them and then replace them with different types and stuff and I was wondering 4 if you’ve actually counted all of that? 5 6 Ms. Campbell: Since I heard what happened yesterday I actually haven’t had a chance to go back 7 and take a look at that. 8 9 Board Member Lew: Sure, so I mean it could potentially require a Design Enhancement 10 Exception (DEE) theoretically or whatnot. So then we would have to notice that if it does? 11 12 Ms. Campbell: That’s correct. 13 14 Board Member Lew: Great. And then also on the alleyway like on the… [unintelligible] and 15 then on the I’m sorry, the roof garden facing the Centennial Alley I think in the conditions of 16 approval you were saying that all of the furniture and whatnot has to come to the, back to the 17 Board or maybe subcommittee or whatnot. And I think we’ve had that concern on some of the 18 other projects that had like glass railings and were much more exposed to the public view. And I 19 think on this one, this one is so hidden that I’m not sure that the Board necessarily needs to see 20 all the furniture and whatnot. It seems like maybe we’d be concerned mostly with like the 21 decking or whatnot since it’s visible from maybe like the neighboring office building. 22 23 Ms. Campbell: Correct. 24 25 Board Member Lew: I think my hunch is that we’re not, we don’t really care about all of the like 26 furniture layouts and whatnot. 27 28 Ms. Campbell: Sounds good. We can modify that. 29 30 Board Member Lew: Yeah. And then I think my last question is, my last comment was on the on 31 all the plaques. So Dave Dockter came by this morning and he had some concerns about 32 splitting them. He keeps saying that there are groups of people who visit the plaques. There’s 33 like a scavenger hunt kind of thing and that they, so it’s like a destination and it’s tied to City 34 Hall. And so he had some concerns about splitting it and if it really makes sense to split them. I 35 don’t know. I don’t really, I don’t think I have a preference, but I just wanted to make sure that 36 the people who are using it are aware of that and I don’t know exactly how Centennial Alley is 37 maintained. 38 39 Mr. Rapp: You’re absolutely right. They do have this scavenger hunt and they bring busloads in 40 and kids from Stanford and the seniors they do this thing and they come by and it’s great to see, 41 it really is. But I think what’s more important is keeping the alleys vibrant and I think this would 42 be great because University Avenue definitely gets more traffic than Hamilton. So by splitting 43 the plaques I think it will encourage people to go to the other end and also look, just get more 44 walking back and forth which we’re not getting right now. 45 46 Board Member Lew: You just need the restaurants. I mean if you go to like San Francisco like 47 the alleys, and like Belden Place and all those I mean it’s really restaurants which would draw 48 (interrupted) 49 City of Palo Alto Page 16 1 Mr. Rapp: True, true. 2 3 Board Member Lew: More into the alley and (interrupted) 4 5 Mr. Rapp: I plan to try to get that changed and get rid of all those cattle fences around the seating 6 area and we used to have a, who will remain nameless, a planner that wanted the tables in a 7 certain spot with a certain color umbrella and a certain chair instead of just letting it happen. 8 That’s the best thing, ok? 9 10 Board Member Lew: You know the other thing Mr. Rapp is that Centennial Alley hasn’t drawn 11 that many people into it, but in a way that’s not a bad thing because the existing streets, Bryant 12 and Ramona, are so beautifully designed and so well maintained and so attractive to people that 13 it’s not such a bad thing in the end. It would be great if both sides like the streets and all of the 14 alleys were fully, fully occupied and whatnot, but it’s not necessarily a (interrupted) 15 16 Mr. Rapp: Basically these will be the only alleys that I know of any way where you can fall out 17 and eat in them. We’re going to try to do some lights going down to the alley to pull you in and 18 by the way the existing light fixtures on the building are going to go on the new part. So we’re 19 not taking away any lights. 20 21 Board Member Lew: Got it. Oh, and I was, that was my last question actually. Was the, so all of 22 the Centennial lights, the building [unintelligible] lights. How did the, how does that factor into 23 like the historic review? I guess maybe this is a question for staff. 24 25 Mr. Rapp: They were fine with it. We’re taking the two lights off the other and just moving 26 them to the stair tower. 27 28 Board Member Lew: Because the issue is it doesn’t affect the integrity of the building? Like 29 they could be removed if ever needed (interrupted) 30 31 Mr. Rapp: No, those were added when I build 250 University. 32 33 Board Member Lew: Great. Oh and this was actually my last one. Is that the last question is 34 also the, I think there are a lot of new lanterns being shown on the alley side and I think we need 35 all of those cut sheets and I think generally (interrupted) 36 37 Mr. Rapp: With the details we’ll have that for you. 38 39 Board Member Lew: Yeah. And just generally it’s like having more hidden for the new portion 40 of the building I think having more hidden or down lighting is preferable to having like lanterns 41 that shine outward in all directions. 42 43 Mr. Rapp: Sure, I understand. 44 45 Board Member Lew: Yeah, especially since there’s a building right across the street, right across 46 the alley. 47 48 Mr. Rapp: Ok. 49 City of Palo Alto Page 17 1 Chair Lippert: Board Member Gooyer. 2 3 Board Member Gooyer: I’m sort of I don’t know, stuck on this project in that I like the concept 4 and I think it does a lot to enhance the building in the sense of making it more viable and usable 5 building. But I still have a hard time with this whole concept of the FAR as far as where you’re 6 taking storage space in the basement turning it into useable office space and expecting that there 7 aren’t going to be more people and more parking associated with that. It, those two are not 8 comparable. 9 10 As far as the, I just have a couple, just a couple of questions. You mentioned as far as for the 11 architect that you said that you’re taking off the awnings on the various elevations yet here under 12 the proposed south elevation and the proposed east elevations you show those sort of half dome 13 awnings. Now are those there or not? 14 15 Mr. McClure: The drawings before you have been superseded by yesterday’s discussion at the 16 HRB where the HRB (interrupted) 17 18 Board Member Gooyer: So they are going to be removed. 19 20 Mr. McClure: [Unintelligible] awnings so the only awnings (interrupted) 21 22 Board Member Gooyer: They won’t be there then. Ok. 23 24 Mr. McClure: Only the ones with the awning boxes that project out. 25 26 Board Member Gooyer: Right. I don’t have a problem with those; I’m just not a big fan of fabric 27 awnings as architecture. going to the actual, the one of the speakers did make an interesting 28 point and I haven’t read the grandfathering clause exactly, but when it says building envelop and 29 it follows the three dimensional volume of the… it doesn’t seem to comply with this. I’m not 30 saying that there, apparently the City Attorney’s looked at it and doesn’t have a problem with it. 31 It just seems that if you’re talking about the three dimensional volume of the building it’s been 32 changed. It’s going from you can’t say that a building doesn’t look bigger or I should say just 33 because the FAR is the same that a building if you add this much bulk to it isn’t going to look 34 bigger than it did before, which automatically makes people assume that there’s going to be more 35 people, more parking, everything else. We don’t deal with parking here, but I’m just saying the 36 perception that people have. 37 38 Mr. McClure: Could I comment on that? 39 40 Board Member Gooyer: Sure. 41 42 Mr. McClure: From a perception standpoint I would say that right now the basement is 43 designated as occupiable space and the mezzanines are designated as occupiable space. And so 44 those could be, I heard discussion tonight, tonight. Today about it’s being used by University 45 Art today. It could be used as storage, it’s storage. How intense is that use? You know the use 46 can change and there’s nothing that says that you can’t put more people down there today 47 without having to do anything. So this project has a 41,000 square foot gross floor area building. 48 And when we’re done with this project we’re going to have a smaller building. So. 49 City of Palo Alto Page 18 1 Board Member Gooyer: I understand that completely, but that’s why I used the term perception 2 because something underground people don’t see when they walk by. Two additional floors and 3 a big addition on the back they see. So I mean I’m not going to sit there and here I’m just 4 throwing out my opinion on that. 5 6 As to the addition itself I’m well aware that it shouldn’t mimic or I should say exactly copy the 7 other building. I don’t think that’s ever been official. The only problem with this particular 8 addition is I just don’t think it really does anything to the quality of the craftsmanship or the 9 perceived craftsmanship of the existing building. Things such as the windows on the ground 10 floor, which I think are great especially the enhancement of the alley agree with all my fellow 11 Commissioners here that or Board Members that that helps a great deal, but the intricate shapes 12 of some of the larger windows on the other two elevations aren’t reflected here. Now that 13 doesn’t need to be an exact copy, but I think there needs to be some sort of an at least I don’t 14 know a similar concept that reflects what is being done on the other two elevations. 15 16 Mr. McClure: What we have here on this elevation is we’ve got the steel windows. We’ve got 17 the wood style doors so (interrupted) 18 19 Board Member Gooyer: Like I said you don’t need to argue the point with me. I’m just throwing 20 out my opinion as to (interrupted) 21 22 Mr. McClure: Ok, I didn’t know if it was a question or a statement. 23 24 Board Member Gooyer: That wasn’t really a question it was an opinion on my part. So as far as 25 the location of the plaques I think the, I guess Number 7 or whatever it is, is probably the best 26 solution. That way you’ve got some of the plaques at each end of the alleyway and it just 27 encourages people to use that alleyway. Having spent a lot of time in Europe I agree that some 28 of the nicest places are in some of the small little alleyways that you discover. I’d say that’s 29 probably it for now. 30 31 Chair Lippert: Thank you. I’m just going to take one moment outside of this specific item to just 32 make a general statement. A member of the public made a generalization about architects. And 33 we are all professionals here and I’m particularly offended that a generalization is made about all 34 architects. If there is a direct conflict of interest that any of us have here we are reminded 35 continually that we must recuse ourselves and step down. I surely would not like to go for 36 medical advice to somebody other than a medical doctor and a surely would not seek out legal 37 advice from any person other than an attorney. In this case all of the Board Members here are 38 licensed professionals as architects and my hope is that as licensed architects we’re sought out 39 for our professional expertise and that in fact if this Board did not have architects here then we 40 are subject to the expertise of lay individuals. And so I would want to be very careful about 41 members of the public making comments or generalizations about architects. So thank you. 42 43 With that I’m going to move on to the specifics of the building, which are really what we’re 44 reviewing here. And there are a couple of comments that were made by members of the public 45 that I want to first of all the HRB has done their review in regard to the Secretary of Interior 46 Standards. And this being a particularly important historic building an icon within Palo Alto and 47 in some ways the entitlements on this building or the way the square footage is interpreted is 48 integral to the updating of this building. Without looking at it in a different way and being able 49 City of Palo Alto Page 19 to reevaluate the uses of the building or the square footages and how they’re interpreted by 1 modern day codes simply the renovation of this building is not practical and it would in essence 2 fall into disrepair. We would also be not doing our duty in terms of trying to bring buildings up 3 to modern accessibility, in particular the ADA as well as the California Building Code. 4 5 Because this is a historic building it is subject to provisions of Chapter 8, which actually allow 6 for relief of a more stringent code when it comes to historic rehabilitation. And what I think is 7 probably paramount in this building is that they haven’t taken it to the standards of Chapter 8, the 8 Historic Building Code, but they’ve taken it beyond that into the realm of the California Building 9 Codes and what the requirements are specifically just putting in an elevator that would be 10 useable by individuals in wheelchairs and putting in modern day restroom facilities as well as the 11 building access goes way, way, way beyond Chapter 8 of the Historic Building Code. So from 12 that point of view this building renovation goes beyond what’s being asked for in terms of those 13 entitlements. 14 15 When it comes to the square footage that’s outside the realm of our Board; our Board is meant to 16 look at quality and character. If there is a problem as to how staff has reached this number that 17 needs to be addressed in a different vehicle not here in this forum. But with that in mind there, 18 one particular member of the public I think it was Ms. Summa had mentioned that the building 19 isn’t following the Secretary of Interior Standards in terms of the prominence of the building. 20 First of all, this building is seen on all sides. More visibly on Hamilton Avenue and Ramona 21 Street; those are the predominant sides of the building. The alleyway is really secondary. So if 22 you are locating a shall we say an annex or an addition to this building this is the appropriate side 23 that it be added to and that by having it step back the building does that. It doesn’t mean step 24 back 20 feet, it means the building should not be on the same plane and it is not on the same 25 plane. The balconies do project forward of that, but that’s not the face of the building and that’s 26 what’s being interpreted here. They are incidental to that building. 27 28 So I believe that there are a couple of things that have been done really well here. Number 1, it 29 doesn’t mimic the existing architectural style. It takes off from that, but if you were to look at it 30 you were to say, “Oh, this is the original building. This is the addition to the building.” and that 31 can be differentiated. Number 2, the building does step back away from the face of the original 32 building. Number 3, it doesn’t use the same window element or rhythm. It creates a totally 33 different element. And as far as the massing goes it is more diminutive, it is submissive to the 34 main building. It doesn’t exceed the building height. It’s not visible off of the prominent public 35 right of ways meaning Hamilton Avenue and Ramona Street. So I find that the building 36 complies with all of the rules for Historic Review and as well as meeting our standards of review 37 for Architectural Review. 38 39 As far as moving the plaques I think that that’s terrific. I think that that’s a great location for 40 them is closer to the arch. Members of the public will be able to see it even better because 41 they’ll come through the archway. And I’m in support of what Mr. Rapp had said earlier with 42 regard to public right of ways in Europe and streets and views. That right now there’s something 43 lacking from the Centennial Walk. It’s a little austere. It doesn’t have a beginning and an end. 44 The archway does help with the beginning. The Plaza Ramona building with its large archway 45 helps with the beginning. I think the areas of the of where the Centennial Walk falls apart is the 46 side that faces City Hall as well as off of Bryant Street behind Mr. Rapp’s new building. And 47 Mr. Rapp you being the master of the sidewalk I’m sure that you’re going to get the sidewalk 48 right this time. So. 49 City of Palo Alto Page 20 1 Ok, so we’ll return to the Board for one other round of comments and then hopefully we’ll have 2 a Motion in there. So I’m going to begin with Board Member Malone Prichard. 3 4 Board Member Malone Prichard: I don’t have a lot to add, just want to state that I’m going to 5 while I understand the strategy on the historic addition and whether or not you’re differentiating 6 it I’m going to defer to HRB on that. That is their job and that’s part of the Historic Review 7 process, but I think you’re headed in the right direction. That’s just my opinion. 8 9 And then there was just a minor clerical issue in our contextual finding Number 6 under parking 10 design it says the finding does not apply, but then it goes ahead and describes why the finding 11 applies. So let’s just strike the finding does not apply part. That’s all I’ve got. 12 13 Chair Lippert: Vice-Chair Popp. 14 15 Vice-Chair Popp: So I appreciate all the discussion and I like to hear your opinions about all of 16 this. I think that as I reviewed the project I had a bit of a different perspective and not having the 17 benefit additionally of the HRB’s conversation understanding it now and appreciate that they 18 were unanimous in their support of this, but there are elements of the addition that I’m 19 challenged with a little bit. and I think that it goes back to my earlier comment about it should 20 either be really compatible or it should be really different, but right now it’s kind of in between 21 and I’m having a little bit of trouble with that. I’m going to touch on a couple of points here that 22 I’m going to ask you to consider as you come back to us. 23 24 The addition really doesn’t match the order and symmetry of the building itself and I think that 25 that’s intentional, but it sort of goes to a kind of for me, I hate to describe it this way, but it’s 26 kind of a wishy-washy middle ground of the window sizes don’t match and the proportion 27 doesn’t match and there’s too many things that are sort of trying to be the same, but are trying to 28 be different. and I think the bulk of it comes down for me to window size, proportion, pattern, 29 and the way that they’re placed. And it seems to me that you have an opportunity here. You’re 30 removing a couple of floors worth of windows from this as you do these addition areas and it 31 seems that there’s an opportunity for you to reclaim those windows that you’re pulling out and 32 reuse those potentially. I’d like to suggest that you consider that as part of what you’re doing 33 here and that that in conjunction with a different textural pattern for the finish materials or setting 34 things in differently or we don’t have the benefit of all the details yet and so I can’t evaluate all 35 that, but it seems like there’s an opportunity there that hasn’t been taken advantage of yet. 36 37 Other elements like the little metal grills that are made of the same material but are 38 proportionally so different and so unique from other things that are on the building seem like 39 they’re sort of from a whole different place and they’re trying to match the style but they’re not 40 quite getting there for me. The shed roof is a little troubling for me. I think that because it’s a 41 different style of roof than the building has anywhere else right now I would suggest you use an 42 entirely different material. Why not go to something like a standing seam metal or something 43 entirely different there so that it really stands out and creates a break and a separation? I don’t 44 see how you’re handling the roof drains that are being removed. I’d like to understand how 45 that’s going to occur. It’s clear that there were a series of big conductor heads and leader lines 46 and things that were on the building before that are not showing now and I just want to 47 understand how water will get from the roof down. 48 49 City of Palo Alto Page 21 I appreciate Mr. Rapp’s comment about the lights being replaced, moved around on the building. 1 I just want you to evaluate what I’ll call sort of the tiny lights compared to the really big lights 2 and see whether they are the right size and the right shape and proportionally just on the 3 elevations they look sort of minuscule compared to the scale of these massive lights, which are 4 beautiful on the building right now and it may be that the new ones should just be oversized a 5 little bit or there’s a middle ground in between there. 6 7 I notice you were moving the pigeon spikes off of the building and I think we’ll all admit that 8 there’s a pigeon problem in Palo Alto that we deal with all the time. And so I’m wondering what 9 you’re going to replace that with in order to manage that. 10 11 And then just in general there’s a number of details that we need in the package like these that 12 we typically see for how materials come together, how windows are set, how the doors and tiles 13 and all those intersections work. We need to see some photometrics I think for the building and I 14 would like to see a landscape design for that roof terrace. I think that will be visible from 15 adjacent buildings and I would like to understand what the expectations are and the commitment 16 is to that. Thank you. 17 18 Chair Lipper: Board Member Lew do you have any follow ups? 19 20 Board Member Lew: No. I’m pretty much in agreement with Board Member [Note-Vice-Chair] 21 Popp on this one. Thank you. 22 23 Chair Lippert: Ok. Board Member Gooyer. 24 25 Board Member Gooyer: I was going to say the same thing. In the interest of time I pretty much 26 agree with Board Member [Note-Vice-Chair] Popp’s comments. 27 28 Chair Lippert: Well this is a really tough one for me. The issue here I think has to do with the 29 distinctness of the addition here. I think you’ve met the standards for the Secretary of Interior. I 30 thought about this a long time and thought gee, maybe it should be going more towards a modern 31 approach or contemporary approach. Something that’s completely different. And the problem 32 that I have is that because it’s located in the Historic Ramona District I think that we want 33 something that approximates what the other architects have done there; Pedro De Lemos as well 34 as Birge Clark. So that’s one of the reasons why I’m ok with the current architecture the way it 35 is. I really struggled with this a long time and thought gee, maybe if Ken Hayes was the 36 architect on this project, Ken’s doing the building across the street, it would be the right 37 approach. But in this case I think that Cody Anderson Wasney has really hit the nail on the head 38 and it is a diminutive, smaller version of the architecture that goes on in that whole district. 39 40 And I’m reminded by a couple of other things in the Ramona District that are particularly 41 important. The Plaza Ramona emulates the original building that was there. It is not the original 42 building that was there. In fact, Plaza Ramona the original building that was there I think was a 43 hotel. It came down and then it was replaced by the Crocker Bank and that came down, and 44 there was a brokerage in there for a while I think and that came down and then it was replaced by 45 Plaza Ramona. Immediately across the street where the little wine bar was that was also taken 46 down and completely rebuilt and yet we feel as though it’s always been there. The building 47 immediately adjacent to that where the French restaurant, it’s like… Chantilly, yeah, where 48 [Mansongura] are, that building has also undergone significant seismic rehabilitation and that has 49 City of Palo Alto Page 22 been in some ways taken down and yet we always feel these buildings have always been there. 1 And that’s the success I think of the current design is that we will always feel as though this is 2 not a blemish on the existing building, that it’s always been there. 3 4 So I’m just in a variance with some of my colleague’s comments. I think that’s the strength of 5 this Board is that we all see things differently and that there are no generalizations about who we 6 are. So if there is a Motion, do I have a Motion here? 7 8 MOTION 9 10 Vice-Chair Popp: I’ll move that we continue this item to a date to be selected and ask the 11 applicant to come back and address the comments that we’ve made today and continue our 12 discussion. I think there are elements of the package that need to be provided for us to 13 successfully review the project and potentially some review by staff in regard to floor area in 14 response to some public comments. And so we’ll need to reconvene on this in order to complete 15 the review. 16 17 Chair Lippert: Is there a date certain or are we just going to leave it up to the applicant? 18 19 Ms. Campbell: I think perhaps (interrupted) 20 21 Chair Lippert: I think Mr. Rapp is raising his hand. Please. 22 23 Vice-Chair Popp: I’m leaving it open so you can let us know whether you’d want to pick a 24 certain date or evaluate and see when you’re ready. 25 26 Mr. Rapp: Let me just sort of tell you what’s going on here. The building becomes completely 27 dark in June 1st. All the leases are gone. As you see University Art is moving out now. Over 28 half the offices upstairs are empty. So we’d like to get started on the construction as soon as 29 possible, at least the soft demo, which will take probably two months. 30 31 Just for your Randy, just for your or Lee I guess, all of you I guess, we originally had a more 32 contemporary design, but because of the conflict of the building across the street, the glass box 33 everyone called it we completely changed it and went more towards the Spanish style which we 34 are today. I feel happy to come back to you more on a consent calendar present you with the 35 actual materials we’re going to use, and the smoothness of the plaster, the thickness of the 36 wrought iron, the light fixtures, and give you some alternatives if you don’t like the tile. We can 37 do a glass thing there or come up with like you said metal shed, but the overall space and the life 38 safety of the stairway and you see the actual window trims, what we’re going to use the hopes 39 windows, the steel. I’d like to come back to you and present all that to you, which we would do. 40 41 Chair Lippert: Ok, do you have a specific date? 42 43 Mr. Rapp: Well, we’re going to do that with our construction drawings and we haven’t even 44 started our construction drawings yet. 45 46 Chair Lippert: Ok, well (interrupted) 47 48 Mr. Rapp: I can come back in June if you want to or (interrupted) 49 City of Palo Alto Page 23 1 Chair Lippert: We have a Motion on the table right now, which is to continue the item not 2 approving it. And so the question is I need a second on this. Is there a date you would like to 3 come back if this Motion has a second and it’s accepted? 4 5 Mr. Rapp: I’d feel better in our timing of getting started and getting the soft demo going and the 6 City’s already ready to move on that (interrupted) 7 8 Chair Lippert: Ok, I think what we’re going to do is I’m just going to leave it as a date uncertain 9 and you’ll have to work that out with staff. Is there a second on this Motion? 10 11 SECOND 12 13 Board member Gooyer: I’ll second. 14 15 Chair Lippert: Ok, we have a second. Any discussion here? Would you like to speak to your 16 Motion Mr. Popp? 17 18 Vice-Chair Popp: Yeah, and Roxy I’ll just respond to you. I think that the reason that I’m 19 suggesting we continue this is that the package as it’s submitted today is not robust enough for us 20 to really see all of the elements that you’re planning. Typically we get details and photometrics 21 and all of this stuff is really worked out and it feels a little preliminary right now just to be frank. 22 And I would encourage you to talk to the Building Department and start working on the interior 23 of the building, which is not constrained by the ARB and to resolve these exterior issues rapidly 24 with us. We’ll work as quickly as you can to get this resolved, but I think that the tension 25 between the differences of opinion and the information that will help us to get to an agreement 26 about that needs to come here before we can move forward and waiting until construction 27 documents is not going to be successful. 28 29 Chair Lippert: Board Member Gooyer do you have anything that you wish to add or do you wish 30 to speak to your second? 31 32 Board Member Gooyer: No, I pretty much agree. The inside that sort of thing you can do all the 33 construction documents, but I don’t think there’s enough here to warrant doing what we’re 34 supposed to be doing to make a final decision. 35 36 Chair Lippert: While I’m not in complete agreement with my colleagues here I do believe that 37 there is enough time for you to reconcile some of these issues and come back to us. I’ve known 38 for nine months that this building was being vacated. I mean University Avenue made it known 39 that they were going to be leaving Palo Alto and I’m sorry, University Art, sorry. University Art 40 had knew that they were going to be leaving Palo Alto and there was plenty of opportunity I 41 think for you to come forward maybe even with a prelim on this project at some point, some 42 sketches or whatever and we invite you to do so. So I think that there’s plenty of time to be able 43 to do this and maybe even make your schedule. Board member Malone Prichard. 44 45 Board Member Malone Prichard: I would just suggest that we select a date certain just because 46 of the complications of doing noticing. If it turns out they’re not ready for that data certain it can 47 be continued very easily, but that would give the applicant more flexibility. 48 49 City of Palo Alto Page 24 Ms. Campbell: So for June we have June 5th and June 19th available. June 5th? 1 2 Chair Lippert: June 5th. Ok, great. 3 4 AMENDED MOTION 5 6 Vice-Chair Popp: I’ll amend my Motion to continue this item to June 5th. 7 8 AMENDED MOTION ACCEPTED 9 10 Board Member Gooyer: That’s fine. 11 12 Chair Lippert: Ok, great. Aaron did you want to add anything to this? 13 14 Mr. Aknin: No, that’s fine. That gives us ample time to prepare for the next one and for the 15 architect to prepare as well. 16 17 Chair Lippert: But you won’t be with us. 18 19 Mr. Aknin: I will not. Maybe I’ll tune in. 20 21 VOTE 22 23 Chair Lippert: Thank you. Ok, so we have a Motion to continue this item to June 5th. All those 24 in favor say aye (Aye). Opposed? Ok. Motion passes 5-0-0. Thank you very much. 25 26 MOTION PASSED (5-0-0) 27 28 29 30 City of Palo Alto Page 1 Architectural Review Board Meeting 1 Draft Verbatim Minutes 2 June 5, 2014 3 4 Excerpt 5 6 Continued Business: 7 8 261 Hamilton Avenue [13PLN-00267]: Request by Cody Anderson Wasney Architects for 9 Architectural Review and Historic Resources Board review of a Historic Rehabilitation that 10 includes the relocation of floor area from the existing basement to allow a 5,910 square foot 11 addition at the rear of the building and establishment of a 1,196 square foot Mezzanine floor for 12 a net zero gain in floor area for a Historic Resource located within the Ramona Street Historic 13 District. The project also includes a request for reclassification from a Category 3 Historic 14 Resource to a Category 2 Historic Resource to allow the approved Rehabilitation to generate 15 15,000 square feet of Transferable Development Rights. Zone District: Downtown Commercial 16 with Ground Floor and Pedestrian Overlay (CD-C(GF)(P)). Environmental Assessment: Exempt 17 from CEQA per CEQA Guidelines Sections 15331 Historical Resource Rehabilitation and 15301 18 Existing Facilities. This item was continued from the meeting of April 17, 2014. 19 20 Acting Chair Popp: So for the first item today 261 Hamilton Avenue: request by Cody Anderson 21 Wasney Architects for Architectural Review and Historic Resources Board (HRB) review of a 22 Historic Rehabilitation that includes the relocation of floor area from the existing basement to 23 allow a 5,910 square foot addition at the rear of the building and establishment of a 1,196 square 24 foot Mezzanine floor for a net zero gain in floor area for a Historic Resource located within the 25 Ramona Street Historic District. The project also includes a request for reclassification from a 26 Category 3 Historic Resource to a Category 2 Historic Resource to allow the approved 27 Rehabilitation to generate 15,000 square feet of Transferable Development Rights (TDR). The 28 Zone District is (CD-C(GF)(P)). The Environmental Assessment is that it is exempt and I think 29 that’s what we’ve got. Do we have a presentation from staff? 30 31 Clare Campbell, Senior Planner: Yes, good morning. Thank you. This morning we have our 32 second Architectural Review Board (ARB) review of the proposed Historic Rehabilitation 33 project for 261 Hamilton. At the last ARB meeting on April 17th the Board voted to continue the 34 project so the applicant could further refine the details of the proposed addition, which they have 35 done and will present to you later this morning. Included in the staff report is a more extensive 36 discussion regarding the allowed improvements to grandfathered legal non-complying facilities. 37 The primary issue for this project hinges on the building’s grandfathered status and the definition 38 of building envelope. The report provides much more explanation, but to summarize staff has 39 been for many years interpreting building envelope to mean the legal three dimensional mass or 40 buildable area of a site once all the development regulations such as setbacks, height, Floor Area 41 Ratio (FAR) have been applied to the site. The Board is welcome to weigh in on this issue, but it 42 will ultimately be up to the City Council to affirm staff’s interpretation of the building envelope 43 for this project and for future ones. 44 45 City of Palo Alto Page 2 The project is scheduled for City Council review on June 23rd for consideration of the historic 1 reclassification request and the Historic Rehabilitation project. And Council will take final 2 action on this project. And this concludes staff’s presentation. Thank you. 3 4 Acting Chair Popp: Great, thank you very much. I’m, excuse me, I’m going to go back just for a 5 moment. I was reminded that I need to close the public comment period from the Oral 6 Communications element so we’ll do that now and move forward. 7 8 Do we have a, let’s see, I’ve got some speaker cards for this. And what we’ll do is we’ll take the 9 presentation from the applicant first and then I have two cards. If there is anyone else who 10 wishes to speak to this item go ahead and get your cards in. So do we have someone prepared to 11 speak today? Brent, great. 10 minutes. 12 13 Brent McClure, Principal, Cody Anderson Wasney Architects: Thank you. Good morning 14 Board. We put together a short presentation to I think more or less con, that focuses on a lot of 15 the comments that we heard at the April 17th Board meeting, which we saw as centered around 16 on sort of the façade design itself, it’s composition, discussion of differentiation versus 17 compatibility, how the façade itself is organized, some of the detailing, the ornament, the 18 windows. There was comments on the roof terrace itself wanting to see more information, how 19 the sort of how the fit and finish of the roof terrace itself would come together and then as well 20 as some of the exterior detailing and the exterior lighting. 21 22 So just to kind of recap and walk around the four elevations in the façade as to what we’re doing 23 to the building I wanted to just kind of touch on some of the features that are original to the 24 building. Birge Clark had a series of punched openings with this strong rhythm as it wraps 25 around the building with this singular form and then breaking them up with some windows up at 26 the top that are a little bit smaller and some of this playfulness with the lodges up at the top to get 27 that depth and relief and then the diff… the different types of balconies that he had with the 28 smaller balconies up at the top to just kind of give some punch and some accent. Meanwhile 29 having sort of this, the second floor level having a continuous band almost that wraps around the 30 entire building on the Ramona Street side and then I’ll show on the Hamilton side. 31 32 Our work as we talked about before is really focused on bringing back the storefronts and the 33 ground level kind of back to life, removing the fabric awnings, the red ones that are out there 34 now, restoring and enhancing sort of the tile at the ground floor. The pointed archways, the ogee 35 cornered archways, nothing really has changed in our submittal since the 17th on this elevation 36 except we’ve just identified just a couple of sign locations that we’ve included in this submittal. 37 38 As you go to the next, turn the corner you come around Hamilton again nothing really has 39 changed, but just echoing some of the detailing that Birge Clark had with at the end gable sort of 40 this recessed opening with a decorative iron grating and bars over the top. Again accenting the 41 top with some smaller windows that match, that are similar in style to the main windows that 42 wrap around the front of the buildings. Again we’ve added signage locations. This second floor 43 strong line of balconies at the second floor level and then the lodge appears again over here on 44 this elevation. The ground floor treatment here is consistent with what we presented again at the 45 last meeting. 46 47 So then we get to Centennial Walk and where the addition is and where a lot of the key features I 48 think were focused and the comments were coming from. So here’s the elevation that we 49 City of Palo Alto Page 3 submitted at the last meeting. On the original historic end piece on Centennial Walk we’re 1 reconstructing a new pointed sort of Gothic arch window that mimics and replicates some of the 2 archways and the windows that we have shown on the storefronts over on the Hamilton side. 3 And that’s the only real piece that we’re doing here. And then as you get into this here’s with 4 the addition the middle portion of the addition recesses back is what we presented with a series 5 of rectangular almost storefront like openings to kind of give this distinction between the 6 punched openings and the solid mass and then having a glassier front at the centerpiece. And 7 then we have the stair tower end elevation over here. And just to kind of touch on this what we 8 had presented at the last meeting we had two windows over here that were a little different in 9 size and proportion and window mullions. The elevation has there’s a little bit of a tilt to it in the 10 sense that they’ve got windows on one side and then some very Spartan ornamentation I think on 11 this side with just the glass block and then the squared off opening over here. 12 13 So the comments that we heard at the last meeting and we’ve kind of paraphrasing this on the 14 slide and I think we tried to capture I think more or less the essence of what we heard from the 15 Board as it related to the elevations here. One was I think the discussion centered around 16 compatibility versus differentiation and are we going really modern? Are we going to 17 compatible and can we and where does what we presented in April kind of seems to be floating 18 somewhere out in the middle. So we tried to capture this by saying well maybe the tile doesn’t 19 make sense and we should consider an alternative roof finish. We heard that maybe we need to 20 kind of focus in on the elevation here to find some more balance and kind of treat that elevation 21 at the stair tower end piece a little more graciously to balance out I think the end elevation up 22 against Birge Clark’s original building. And then also taking a look at how the ground floor 23 level is treated as well. Other comments that we heard were kind of looking at the actual 24 proportions and size a little more carefully and I think on some of the windows and some of 25 these, the detailing in through here. 26 27 So what we’re re-presenting is in essence we’ve kept more or less this middle section unchanged 28 and we’ve maintained in our proposal here today the clay tile roof would remain. I’ll talk about 29 that in a minute, but to focus we really focus in on this end elevation. We’ve added two 30 windows over here on the stairwell side. So these go into the office space. The proportions and 31 size and spacing are, the proportions and shape of the window match the Birge Clark window. 32 The only thing that we differentiated with is more or less the mullion pattern, but again that way 33 that the windows can stand out and be somewhat distinct and they’re not a direct match. We’ve 34 added another balcony to continue that line that we see on the other elevations as it wraps 35 around. And the idea and the thinking here is as you walk around the building and admiring the 36 original structure that we’re kind of arriving at this end point that’s sort of gracious and 37 completes the overall design of the building. 38 39 We changed the store, what was a glassy double door entrance into that stairwell into a solid 40 wood door. It’s a door that’s into a back staircase. It’s not really signifying an entrance and we 41 felt that the primary entrance into the tenant space is the one that would down be here at the 42 ground floor level and then adding an arch top over into here. 43 44 About the clay tile roof I want to just touch on briefly and we can, I can take questions and 45 comments if we want to talk about it further, that our client is applying for tax credits through the 46 State and the National Trust. And the review of the project at a preliminary level has indicated 47 that a more traditional approach to the design of the facility and the addition to be compatible 48 with this style they strongly urged about having the roof remain as tile. Elevations here virtually 49 City of Palo Alto Page 4 pretty much unchanged that we saw at the last meeting as well. Here’s a shot of the rendering 1 with it being updated with what the façade would look like here, and then a shot looking down 2 the street, and then a shot looking back from Hamilton back into the alley. So this kind of I just 3 want to reiterate to the Board that the project is part of the National, with our application to the 4 National Trust is that they’re being highly sensitive in looking at this as part of the Ramona 5 Street District and that sort of compatibility as the building and the addition fits within this 6 overall context and hence the choice with the clay tile roof. 7 8 At the roof terraces we’ve submitted with the drawings that you’ve seen. We’ve developed the 9 design much further. We’ve, listening to the Board comments we’ve put landscaping out at the 10 perimeter edge with patio trees, raised planters up at the edge to kind of get some life and some 11 warmth up at that street at the edge of Centennial Walk and having sort of Class A style contract 12 furnishings for seating in and around the edge as well as out in the middle. Some planting that 13 will be closer up against the edge of the building and through here. We’ve looked at the flooring 14 as well to have the raised wood. On the back side of the lighting as requested we’ve included 15 photometric studies. In essence the light levels are about two feet, two foot candles or less out at 16 the middle of the street and I think our brightest spot right at the door is about 3.6 foot candles. 17 Here’s the existing fixtures on the edge and this is the fixtures that we’re proposing for the 18 elevation here. And then lastly sort of showing the building in section and some of the detailing 19 with the gutters and the downspouts that we’ll have on the addition, which will be exposed gutter 20 with the downspout into a collector head with the concealed rainwater inside the building. The 21 stucco is going to have radiused edges; Lee had a comment. And I think that was it, seeing that 22 the yellow light’s on. We have a sample board in front of you as well so we’ve added actually 23 the fabric awning. 24 25 Acting Chair Popp: Go ahead and [unintelligible] 26 27 Mr. McClure: I was going to just, I was going to just touch on briefly we have an updated sample 28 board that’s in front of you to pass around with an updated stucco color that’s just a slightly 29 refined white, not as bright as what we presented before. We’ve added to the board the blue 30 fabric for the awning as a sample as well as the tile for the roof. I’m trying to think of what else. 31 I think that’s about it. 32 33 Acting Chair Popp: Great. Thank you very much. 34 35 Mr. McClure: Thank you. 36 37 Acting Chair Popp: Alright, let me open the public comment period. I have two cards for this 38 project. The first will be Jeff Levinsky followed by Doria Summa. You’ll have three minutes to 39 speak to the item. Please state your name and begin. 40 41 Jeff Levinsky: Thank you, my name if Jeff Levinsky. Good morning Commissioners [note—42 Board Members] and staff. I’d like to thank the staff for providing more information about the 43 grandfathering ordinance and specifically how it interprets the key phrase that remodeling a 44 nonconforming downtown building “Shall not result in an increase of the height, length, building 45 envelope or any other increase in the size of the improvement.” You’ve all seen legal contracts. 46 They typically begin by defining the terms within the contract. They do so because those same 47 terms might mean something different elsewhere. Well, an ordinance is the same. When the 48 grandfathering ordinance was written it explicitly defined the building envelope to mean “The 49 City of Palo Alto Page 5 three dimensional spacial configuration of a building’s volume and mass.” It did so to help us 1 here in 2014 interpret the term building envelope within the context of the ordinance. Now the 2 staff say that in the past they’ve used building envelope to mean buildable area and they’ve used 3 size to refer to floor area. No doubt they have at times in various settings, but the question today 4 is only how they have interpreted those terms when evaluating the grandfathering ordinance for 5 downtown buildings. That is we expected to hear about nonconforming downtown buildings that 6 were remodeled or replaced. We expected that such projects met all other requirements of the 7 grandfathering ordinance so that their approvals hinged just on what building envelope and size 8 meant. And then we expected to see that in those, in the reports for those projects building 9 envelope and size were indeed consistently interpreted as the staff say. 10 11 Palo Alto has a policy of government transparency. If the staff knows of such past reports we 12 ask that they share them with your Board and the public so that we may all examine them. There 13 is widespread concern in the community that the City government is not enforcing its own laws 14 regarding development. Faith in our local government and its boards and commissions is 15 declining as demonstrated in recent surveys run both by the City and others and by Measure D 16 last year. Here today is an opportunity to help turn that around by showing that our government 17 will uphold its laws. I urge you to take that opportunity. Thank you. 18 19 Acting Chair Popp: Thank you 20 21 Doria Summa: Morning ARB Members and staff. Doria Summa and we sent you an e-mail 22 yesterday that described in detail our concerns with the project at 261 Hamilton. In particular 23 how the project is in our opinion not in conformance with the Palo Alto Municipal Code. While 24 the applicant should be applauded for their intent to restore this important historic building I 25 believe that it is also important that the integrity of the building code be maintained. We agree 26 that it does comply with some of the conditions for grandfathering such as it does not increase 27 the FAR, but it does increase the overall size of the building and the building envelope, which 28 has expanded. By Palo Alto standards those things are not allowed set forth in our municipal 29 code. Regardless of what’s going on below ground the common person will see and experience 30 an expanded and larger building. Therefore I urge the ARB to consider the points that we raised 31 and I look forward to your response. 32 33 And I won’t be redundant with what Jeff the earlier speaker had said, but we would have 34 expected since we had brought these issues up earlier that staff might have provided a list of 35 buildings that had been interpreted this way. We still don’t think it would be correct because the 36 code is very explicit and whereas in some cases the code is very hard to understand here it’s very 37 simple and clear. So thank you very much. 38 39 Acting Chair Popp: Thank you and with that we’ll close the public hearing and return to the 40 Board for comments and perhaps a Motion. So why don’t we start with Board Member Malone 41 Prichard? Thank you. 42 43 Board Member Malone Prichard: Thank you. I am very much in support of the project as 44 proposed. I just had a couple of administrative things to go through regarding findings. If we 45 look at Attachment B, Findings, these are the Architectural Review Findings. Finding Number 2 46 I would like to strengthen. The finding states that the design is compatible with the immediate 47 environment of the site. I would like to add to that that the compatibility was also determined by 48 HRB based upon Secretary of Interior Standards. 49 City of Palo Alto Page 6 1 And Finding Number 5, “The design promotes harmonious transitions in scale and character in 2 areas between different designated land uses.” We should also make a statement that it is 3 maintaining the existing transition. And then the last one is a really minor note. On Sheet A2.2 4 there are some notes that aren’t matching up with their tags. So if you look for Note Number 10 5 it’s not matching what Note Number 10 reads. So if you could work with staff to resolve that so 6 that the final documents are correct. That’s all I have. 7 8 Acting Chair Popp: Thank you. Board Member Gooyer. 9 10 Board Member Gooyer: [Unintelligible – off microphone] the applicant met with me in my 11 office for about a half hour or so a week, week and a half ago, something like that. So I’ve got 12 some clarifications. I still have some problems with the project, but I think it’s I’ll just hold off 13 on those. I’m ok. 14 15 Acting Chair Popp: Board Member Lew. 16 17 Board Member Lew: Great, so I have some questions for staff again on the grandfathering issue. 18 So when I was reading the staff report I actually had the same reaction as Mr. Levinsky. I was 19 trying to think of precedents and I was trying to think of other projects that have come before the 20 Board where this has come up and I can’t really think of any. So I was wondering if there is a 21 way to make a list of other projects, maybe not for us, but at least the Council? Because it seems 22 like that’s the legal precedents are very important on this case. I mean I’m thinking of where this 23 could go down the road. It seems like that would be like really important to have. 24 25 Amy French, Chief Planning Official: I understand and it’s in the minutes and so we’ll do our 26 best to pull together a list before Council. 27 28 Acting Chair Popp: I’m actually seeing a hand from the audience. I’m seeing a hand from the 29 audience here; Mr. Rapp seems he may have something to add to the conversation. 30 31 Roxy Rapp: Roxy Rapp, the developer. Gosh. I guess it’s been probably 8 years ago, might 32 even be 10 years ago, 530 Ramona right across the street where Chantilly Restaurant used to be 33 that’s a Category 2 building historical. We did get the tax relief from the federal government and 34 State and we redid the whole rear end of the building. 35 36 Acting Chair Popp: Right. 37 38 Mr. Rapp: We added a whole third floor to the building. Before it was just one floor with 39 mezzanine. So that would be exactly right across the street. 40 41 Acting Chair Popp: Great. 42 43 Mr. Rapp: And I want to thank you. 44 45 Board Member Lew: And that project turned out really well. 46 47 Mr. Rapp: Thank you. 48 49 City of Palo Alto Page 7 Board Member Lew: I think just, just my… I don’t have the benefit of all the research and all the 1 precedents and stuff, but I mean if I just read the ordinance I’m sort of inclined to agree with Mr. 2 Levinsky because in downtown there aren’t any setbacks, right? So I would interpret the intent 3 of the ordinance when they mention envelope, building envelope, I actually would sort of be 4 inclined to think of that as actually the actual building and not like an allowable building area 5 because I mean we have no, there are no setbacks there’s just the height, right? And floor area, 6 which are already mentioned in the ordinance. But that being said because we don’t have any 7 setbacks really generally I mean there are some cases where various setbacks stand in the 8 downtown district, but I mean I think generally the idea is that they’re big urban buildings and 9 that so just in the spirit of this project I mean I think that just because it’s enlarging like the 10 volume to me it’s like so what? I mean that’s what the buildings downtown do. That’s they’re 11 urban, they are urban buildings. So I mean I think if the argument is for like no growth I think 12 that’s fine, but it seems like this one has a loophole which is in the code, which is they’ve 13 already paid into the basement’s paid into the parking, the Parking Assessment District and 14 they’re moving that upstairs, but there was already the footprint is already still the same, right? I 15 mean there’s already like at least the first floor and mezzanine on there. So there’s not enlarging 16 of the footprint. It’s not taller than 50 feet. So I can see, I can see a case for that. 17 18 And I think the other thing too is on historic buildings they are very challenging and if you look 19 at like the floor plate of this building some of the wings or one of the wings is as small as 35 feet 20 and in a contemporary office building like we have one today on VMware I mean it’s 120 feet 21 wide. And there’s just a huge difference between like an old building like this and what modern 22 office building would use and I think that some allowances have to be made for the historic 23 buildings. You talk about like there are a whole bunch of building code requirements which I 24 think were mentioned at the last hearing: big elevators, Americans with Disabilities Act (ADA) 25 accessible bathrooms and hallways and corridors. Those things when I work on projects, those 26 things take up a huge amount of space. It’s huge and it really is very important I think to allow 27 historic buildings like this to evolve and adapt. 28 29 So that being said I think I don’t really have a specific opinion on the grandfathering ordinance. 30 I mean I think that’s one for the attorneys and really hashed up all the precedents and we don’t 31 really have all of that information here. But I would encourage the staff to get more of that 32 because I think it’s going to just knowing the way things are in Palo Alto it’s going to come 33 down to that level of scrutiny. 34 35 On the regarding on the building I have some questions for the applicant. One is where is the 36 electrical transformer? That’s sort of in the conditions of approval. I know there’s probably an 37 existing one and then I’m curious if you need a new one. 38 39 Mr. McClure: Would you like me to come and just? 40 41 Board Member Lew: Yeah, I’ll just read my list of questions first and then in the conditions of 42 approval you know typically we don’t allow copper gutters on new buildings. And I think 43 you’re showing copper, copper in your plans. The new stair doors you’re showing as wood with 44 glazing and stuff and I was wondering that is an exit stair and there are usually some code issues 45 wit the doors and I was wondering if you had fleshed that out? And then also you’re showing 46 part of the basement being in filled like underneath the sidewalks and presumably there’s a 47 [unintelligible] replacing the sidewalks? And then so I was wondering if there’s a hardscape 48 plan for that? And I think that’s all that… Yeah, and I think that’s all that I have. 49 City of Palo Alto Page 8 1 Mr. McClure: As far as the transformers we’re going, the, we’re tapping in an electrical volt 2 existing service out at the Hamilton side we’re going to have a transformer in the basement. 3 There will be no surface mounted transformers anywhere on the exterior of the site. Your 4 second question I think was with the gutters. Correct? 5 6 Board Member Lew: Right, yeah. Copper. 7 8 Mr. McClure: Yes, so on the existing original historic building we’re going to be preserving and 9 maintaining the existing gutters. With the addition the gutters will be steel gutters that will have 10 a prefinished bronze finish to them with all of the downspouts that are exposed on the exterior. 11 Your third question was? 12 13 Board Member Lew: The stair door, the new (interrupted) 14 15 Mr. McClure: Stair door, yes. With it being a stair door to the exterior it’s going to have a wood 16 finish on the exterior and will likely be a steel door itself to maintain the fire rating. 17 18 Board Member Lew: So it’s like the veneer things? 19 20 Mr. McClure: Yeah. 21 22 Board Member Lew: I always looked at those. I always pause because they look kind of fake to 23 me, but I’ve never actually used, I’ve actually never used one. Are you confident about the 24 ability to make it look (interrupted) 25 26 Mr. McClure: Yes. 27 28 Board Member Lew: Like it should be? Ok, good. And then the sidewalk. 29 30 Mr. McClure: Oh, that’s right the sidewalk. 31 32 Board Member Lew: the landscape plans are in the conditions of approval to come back to the I 33 think subcommittee and I was wondering if that could come back (interrupted) 34 35 Mr. McClure: The sidewalk and streetscape work will be based upon City standards and 36 coordinated directly with the City. So the trees will be picked out by the City and so on and so 37 forth. There’s nothing (interrupted) 38 39 Board Member Lew: Right, so and then on the other projects downtown it’s come up with the 40 sidewalk color and textures and I know Roxy you’ve come, we’ve hashed it out before on other 41 buildings on what the sidewalk is. So color and patterns and stuff in the City’s standards allow 42 different options. So you do have to propose something to us I think is that’s the way it goes, 43 yeah. 44 45 Mr. McClure: Ok. 46 47 Board Member Lew: So yeah, so if that could come back to subcommittee. And I think that’s all 48 that I have at this time. 49 City of Palo Alto Page 9 1 Acting Chair Popp: Alright, thank you Alex. So we’ll turn back around here for any additional 2 oh, me. Right, me. Great. Actually I don’t have any questions for the staff at this point. While 3 I very much appreciate the comments that Alex has shared with us in regard to the transfer of 4 area and building envelope and some of those specifics, I really do believe that those items are 5 squarely in the staff and frankly the Planning and Transportation Commission’s (PTC) purview 6 and not something that the ARB has control over or is really responsible for recommending to 7 the Director. So maybe I’ll just jump forward and say I do have a couple of questions here for 8 the applicant. For the new deck the planters that you’re describing up there I assume you’ll have 9 irrigation for those and that will be set up properly? 10 11 Mr. McClure: Absolutely. 12 13 Acting Chair Popp: You did have a note about an optional green screen. What would be the 14 decision making factor for that? 15 16 Mr. McClure: That will be the tenant’s decision. 17 18 Acting Chair Popp: Ok, that’s fine. Just thank you for showing the previous and the current side 19 by side the way you did. I think it’s always really helpful when an applicant does that. I disclose 20 that I did meet with the, with you in advance and we went through some of the comments that we 21 had made before and I really appreciate the response that you’ve prepared here. 22 23 Mr. McClure: Thank you. 24 25 Acting Chair Popp: I think it’s very balanced and the character of the addition and the remodel 26 are much more in line with what I had hoped to see and at this point I’m completely prepared to 27 support the project moving forward. 28 29 Mr. McClure: Thank you. 30 31 Acting Chair Popp: I had the same question as Alex about the wood door. I’ve not seen that 32 done in that way before and if you’re confident about that I will be as well. So that’s all that I 33 had. Clare did you have anything further? 34 35 Board Member Malone Prichard: I just wanted to thank you for making the revisions that you 36 did. I think that the revisions you made to the stair tower in particular have really strengthened 37 the project. 38 39 Mr. McClure: Thank you. 40 41 Board Member Malone Prichard: And I also wanted to disclose that I did meet with the applicant 42 in my office just to review the changes. 43 44 Acting Chair Popp: Board Member Gooyer. 45 46 Board Member Gooyer: Yeah, I’m real close on the fence on this. It, this particular… I wasn’t 47 happy at all with the last go around. This one is a lot better so I can probably support it, but I’m 48 not thrilled about the solution. We spent an hour in my office arguing back and forth and they’re 49 City of Palo Alto Page 10 just, I would’ve approached it differently and I think the solution should have been done 1 differently. So I mean I’m not going to hold up the project just because the way I approached it 2 would have been different. I just don’t, I still have the a different concept of making something 3 or mimicking something versus making something a modern approach to an old building. And 4 that’s the way I’ve done various additions to registered landmarks and usually I’ve approached 5 them where they have the feel for the add… I should say the original building, but they don’t try 6 and match it. One of the problems I had was with the roof. Then I hear that one of the problems 7 they’re concerned with I guess is because of the trying to get the funding for it, but that doesn’t, 8 you know that’s out of my purview as you said whether they get funding or not funding, but 9 that’s why I said it’s just it’s a different opinion. 10 11 Acting Chair Popp: Alright, thank you. Alex any further thoughts or? 12 13 Board Member Lew: I do have one last question for the architect. So on the overhang over the 14 balcony the new overhang I think you’re showing it as like heavy timber. Do you also have to 15 have like sprinklers? Is that a, because it’s deep. I mean a lot of the projects that I’ve worked on 16 before like beyond I forgot what it is like three feet and it had to be (interrupted) 17 18 Mr. McClure: The projection is over five feet and we do not project out that far. 19 20 Board Member Lew: Got it. So you’re saying sprinklers over when they’re over five feet then 21 they… 22 23 Mr. McClure: Yes. 24 25 Board Member Lew: And then I think the thing that I have run into is that at least, I’m trying to 26 think, is that sometimes the fire departments will measure it on the diagonal, which kind of gets 27 screwed. But I think you don’t have a diagonal on this one so you’re ok. Ok, great. Thank you. 28 29 Acting Chair Popp: Alright, I have no further comments on this. Is there a Board Member who 30 is interested in making a Motion today? 31 32 MOTION 33 34 Board Member Lew: Ok, so I will move that we approve the project as conditioned in the staff 35 report with the following additions… so we’re amending Finding B2, Attachment B, Item 36 Number 2. And to add the HRB’s review of the Secretary of Interior Standards, right? B5. To 37 add that it’s maintaining the existing transition between different land uses. That Sheet A2.2 be 38 coordinated in the notes and the text and then that all of the notes regarding copper gutters in the 39 new addition are changed to steel with a bronze finish. And I think that’s it. And as just a 40 suggestion to the staff is to please work on the precedents for the Council. 41 42 Ms. French: Thank you. Just if I can you had also mentioned coming with to the subcommittee 43 with that sidewalk. 44 45 Board Member Lew: Thank you for reminding me. Yes. And I think you already have a 46 condition that the landscaping is going to return back to subcommittee. 47 48 Acting Chair Popp: Alright, do we have a second? 49 City of Palo Alto Page 11 1 SECOND 2 3 Board Member Malone Prichard: I’ll second. 4 5 Acting Chair Popp: Board Member Lew would you like to speak to your Motion? 6 7 Board Member Lew: No, I think that we already have. I think we’ve described everything. I 8 don’t think, I’m not sure I have anything new to add. 9 10 Board Member Malone Prichard: I have nothing further to add. 11 12 VOTE 13 14 Acting Chair Popp: Alright well then let’s vote. All in favor? Aye. All those opposed? 15 16 Board Member Gooyer: Nay. 17 18 Acting Chair Popp: Alright, so this item passes 3-1-1-0, with Board Member Gooyer dissenting 19 and Board Member Lippert absent. Thank you very much. 20 21 MOTION PASSED (3-1-1-0, Board Member Gooyer nay, Chair Lippert absent) 22 Minor, Beth From: Sent: To: Subject: Jeff Levinsky <jeff@levinsky.org> Tuesday, June 17, 2014 12:58 PM Council, City; Stump, Molly; Keene, James Fw: 261 Hamilton Ave. f'IIY 05 BAI 0 :A:lat91 &IA CfTY CLERK'S OFFICE I~ JUN 18 AH 8: U1 Below is a letter we sent to the ARB before its second hearing regarding 261 Hamilton and we wanted to be sure the letter gets into the packet for the upcoming council action on this project. Thanks, Jeff Levinsky -----Original Message ----- From: Jeff Levinsky To: arb@cityofpaloalto.org Sent: Wednesday, June 4, 2014 1:47 PM Subject: 261 Hamilton Ave. Dear Architectural Review Board Members: We appreciate that the new staff report for 261 Hamilton Ave. includes more complete information as to whether the project complies with the Palo Alto Municipal Code's laws for upgrading nonconforming downtown buildings. The report makes it even clearer that the project does not comply. The staff report presents alternative definitions to the ones in the code. But these alternative definitions do not make sense within the context of the actual law and are unnecessary. The law carefully defines what is legal and the project is not. The proposed expansion of approximately 6,000 sq. ft. violates two key clauses in the law: Building Envelope Palo Alto Municipal Code §18.18.120 {b) {2) (C) mandates that the 11 ••• remodeling, improvement, or replacement ... shall not result in an increase ofthe ... building envelope ... ," which it defines at §18.04.030 (a) (51.5) as "the three-dimensional spatial configuration of a building's volume and mass." Adding approximately 6,000 sq. ft. to the building will clearly increase its volume and mass and thus is not permitted by the law. 1) The staff report proposes an alternative definition for "building envelope," namely the: building's "volume and mass" as allowed by regulations for setbacks, height and daylight plane, floor area and lot coverage established in the current zoning code, which is typically referred to as the buildable area. However, the staff report fails to mention that this alternative definition for "building envelope" is nowhere to be found in the Palo Alto Municipal Code. 1 2} The staff report also fails to note that the "spatial configuration" definition of building envelope in the Municipal Code was specifically adopted as part of the grandfathering ordinance and is clearly the one intended to be used in interpreting the law. 3} The staff report's "build able area" definition doesn't make sense in the grandfathering law, which prohibits a non-conforming downtown building from increasing its building envelope. The owner of a building cannot increase its buildable area. Effectively, the staff definition makes the term "building envelope" moot in the grandfathering ordinance, which clearly wasn't the intent. 4} The staff report correctly notes that "building envelope" is defined differently in other places. It cites the law in Ottawa, Canada, which says, "Building envelope means the three-dimensional buildable area prescribed for a building by the regulations of this by-law." But Ottawa's definition is worded very differently than the one in the Palo Alto code. If Palo Alto's law had intended "building envelope" to mean what it does in Ottawa, our law would use words similar to Ottawa's. 5} The confusion created by differing definitions of "building envelope" helps explain why Palo Alto's grandfathering ordinance explicitly defined the term. We should use that definition. 6) The staff report claims that the "buildable area" definition has been historically used in Palo Alto. If so, it should have been easy to provide examples of comparable projects in Palo Alto where that definition was specifically used to interpret the grandfathering ordinance. Not a.single example has been provided to your commission or the public to our knowledge. 7) Even if there have been occasions when the definition of "building envelope" in the grandfathering ordinance was not followed, that does not compel us to keep using the wrong definition going forward. Rather, with a clearer understanding of what the ordinance says, we can resume abiding by it. Or more plainly, "two wrongs don't make a right." 8} The staff report claims: There are two possible ways to interpret the grandfathered code section. First, that the addition of above-ground square footage is not currently there and.so cannot be permitted. Second, _that the proposed addition at the rear of the site does not further increase the legal non-complying conditions of the site. There is a third interpretation, which is that an increase in the volume or mass of a nonconforming building cannot be permitted. This is quite distinct from the two choices given by the report, since they are concerned with square footage and non-complying conditions, neither of which are at issue in this case. The problem is that the project will increase the volume and mass of the buildl_ng, which is explicitly prohibited by the law. Size Palo Alto Municipal Code §18.18.120 (b) (2) (C) also mandates that the" ... remodeling, improvement, or replacement ... shall not result in ... any other increase in the size of the improvement." So even if the staff were right that the term "building envelope" is different than as defined in the grandfathering law, then volume and mass are other measures of a building's size and cannot increase. So once again the proposed project does not comply with the law. 2 1) The staff report says that the term "size" in the code should be interpreted to mean the "floor area." But · increasing the building's "floor area" is banned just two lines above in the same ordinance, so why would the law have needed to say it again? 2} If you substitute "floor area" into the law, it makes no sense. The law would then preclude, "an increase of the height, length, building envelope, or any other increase in the floor area of the improvement." But increases in height, length, and building envelope (no matter how defined} aren't the same as floor area. 3) The words surrounding "size" show it was not meant to refer to one specific measure but rather as a catch-all for any manner in which the building might increase in size. This is a common technique in drafting legal text. 4) The staff report claims that "size" has been interpreted for decades as "floor area." Again, that should have made it easy to provide examples of comparable projects in Palo Alto where that interpretation was used specifically in connection with the grandfathering ordinance. Not a single example has been provided to your commission or the public to our knowledge. 5) Again, as with "building envelope," if the term "size" has been misunderstood in the context of the ordinance in the past, we should still use the correct interpretation going forward. 6} The three-story addition of approximately 6,000 square feet will clearly make the building bigger. The addition will be visible from parts of Hamilton Avenue, Ramona Street, and Centennial Alley. To say the building will not increase in size defies common sense. Other Issues While discussing laws of other cities, the staff report says that "grandfathered ordinances typically prohibit 'increasing the degree of non-compliance.111 While no examples are provided, please note that Palo Alto's own grandfathering ordinance for downtown buildings prohibits far more than just increasing the degree of non- compliance. Specifically, our law prohibits many other ways that a building might expand, even if these do not increase the degree of non-compliance. For example, a non~conforming building might be under the 50 foot height limit and thus compliant on that basis. Yet our code still prohibits that building from increasing its height. Furthermore, it is not the case that our grandfathering ordinance was intended to protect historic buildings specifically. Palo Alto has other laws that protect and benefit historic buildings. Rather, the purpose of grandfathering is to ensure that existing properties do not lose rights once laws become more restrictive, which would be an unconstitutional "taking." When Palo Alto imposed lower height limits and more restrictive FAR requirements, the grandfathering ordinance allowed buildings in excess of those limits to remain and even be updated or replaced. However, the law does not allow them to further expand .if they want to preserve their grandfathered exemption. Going Forward We urge you to ask the staff to provide you and the public with clear examples of where they have used their alternative definitions of "building envelope" and "size" in past projects. Such uses may have been incidental and unrelated to situations involving the grandfathering law. Such incidental uses are then not relevant precedents. 3 To be clear, we do not oppose the remodeling of 261 Hamilton. We simply share the goal of all Palo Altans in having projects comply with the law. As it stands, this proposed project does not. Sincerely, Doria Summa Jeff Levinsky Michael Hodos 4 Minor, Beth Cll' I OF PALO ALI 0. Mi From: Sent: To: Cc: Subject: Thanks Keene, James Tuesday, June 17, 2014 2:20 PM Jeff Levinsky Council, City; Stump, Molly; Grider, Donna Re: 261 Hamilton Ave. CtTY CLERK'S OFFICE 14 JUN I 8 AH 8: 14 James Keene City Manager Palo Alto, California Sent from my i phone On Jun 17, 2014, at 12:58 PM, "Jeff Levinsky" <jeff@levinsky.org> wrote: Below is a letter we sent to the ARB before its second hearing regarding 261 Hamilton and we wanted to be sure the letter gets into the packet for the upcoming council action on this project Thanks, Jeff Levinsky -----Original Message ----- From: Jeff Levinsky To: arb@cityofpaloalto,org Sent: Wednesday, June 4, 2014 1:47 PM Subject: 261 Hamilton Ave. Dear Architectural Review Board Members: We appreciate that the new staff report for 261 Hamilton Ave. includes more complete information as to whether the project complies with the Palo Alto Municipal Code's laws for upgrading nonconforming downtown buildings. The report makes it even clearer that the project does not comply. The staff report presents alternative definitions to the ones in the code. But these alternative definitions do not make sense within the context of the actual law and are unnecessary. The law carefully defines what is legal and the project is not. The proposed expansion of approximately 6,000 sq. ft. violates two key clauses in the law: Building Envelope Palo Alto Municipal Code §18.18.120 (b) (2) (C) mandates that the" ... remodeling, improvement, or replacement ... shall not result in an increase of the ... building envelope ... ," which it defines at §18.04.030 (a) (51.5) as "the three-dimensional spatial configuration of a 1 1 Campbell, Clare From:Tamale, Diana on behalf of Architectural Review Board Sent:Thursday, June 05, 2014 7:58 AM To:Campbell, Clare; Alexander Lew; Clare Malone Prichard (clare@fgy-arch.com); Lippert, Lee; Randy Popp; Robert Gooyer Cc:French, Amy; Reich, Russ Subject:FW: 261 Hamilton Ave. Placing it at places at the meeting.  Diana  From: Jeff Levinsky [mailto:jeff@levinsky.org] Sent: Wednesday, June 04, 2014 1:48 PM To: Architectural Review Board Subject: 261 Hamilton Ave. Dear Architectural Review Board Members:  We appreciate that the new staff report for 261 Hamilton Ave. includes more complete information as to  whether the project complies with the Palo Alto Municipal Code’s laws for upgrading nonconforming  downtown buildings.  The report makes it even clearer that the project does not comply.  The staff report presents alternative definitions to the ones in the code.  But these alternative definitions do  not make sense within the context of the actual law and are unnecessary.  The law carefully defines what is  legal and the project is not.  The proposed expansion of approximately 6,000 sq. ft. violates two key clauses in the law:  Building Envelope  Palo Alto Municipal Code §18.18.120 (b) (2) (C) mandates that the “… remodeling, improvement, or  replacement … shall not result in an increase of the … building envelope …,” which it defines at §18.04.030  (a) (51.5) as “the three‐dimensional spatial configuration of a building's volume and mass.” Adding  approximately 6,000 sq. ft. to the building will clearly increase its volume and mass and thus is not permitted  by the law.  1)The staff report proposes an alternative definition for “building envelope,” namely the: building’s “volume and mass” as allowed by regulations for setbacks, height and daylight plane, floor  area and lot coverage established in the current zoning code, which is typically referred to as the  buildable area.  However, the staff report fails to mention that this alternative definition for “building envelope” is  nowhere to be found in the Palo Alto Municipal Code.  2 2) The staff report also fails to note that the “spatial configuration” definition of building envelope in the  Municipal Code was specifically adopted as part of the grandfathering ordinance and is clearly the one  intended to be used in interpreting the law.  3) The staff report’s “buildable area” definition doesn’t make sense in the grandfathering law, which  prohibits a non‐conforming downtown building from increasing its building envelope.  The owner of a  building cannot increase its buildable area.  Effectively, the staff definition makes the term “building  envelope” moot in the grandfathering ordinance, which clearly wasn’t the intent.  4) The staff report correctly notes that “building envelope” is defined differently in other places.  It cites the  law in Ottawa, Canada, which says, “Building envelope means the three‐dimensional buildable area  prescribed for a building by the regulations of this by‐law.”  But Ottawa’s definition is worded very  differently than the one in the Palo Alto code.  If Palo Alto’s law had intended “building envelope” to mean  what it does in Ottawa, our law would use words similar to Ottawa’s.  5) The confusion created by differing definitions of “building envelope” helps explain why Palo Alto’s  grandfathering ordinance explicitly defined the term.  We should use that definition.  6) The staff report claims that the “buildable area” definition has been historically used in Palo Alto.  If so, it  should have been easy to provide examples of comparable projects in Palo Alto where that definition was  specifically used to interpret the grandfathering ordinance.  Not a single example has been provided to  your commission or the public to our knowledge.  7) Even if there have been occasions when the definition of “building envelope” in the grandfathering  ordinance was not followed, that does not compel us to keep using the wrong definition going  forward.  Rather, with a clearer understanding of what the ordinance says, we can resume abiding by  it.  Or more plainly, “two wrongs don’t make a right.”  8) The staff report claims:  There are two possible ways to interpret the grandfathered code section. First, that the addition of  above‐ground square footage is not currently there and so cannot be permitted. Second, that the  proposed addition at the rear of the site does not further increase the legal non‐complying conditions  of the site.  There is a third interpretation, which is that an increase in the volume or mass of a nonconforming building  cannot be permitted.  This is quite distinct from the two choices given by the report, since they are concerned  with square footage and non‐complying conditions, neither of which are at issue in this case.  The problem is  that the project will increase the volume and mass of the building, which is explicitly prohibited by the law.  Size  Palo Alto Municipal Code §18.18.120 (b) (2) (C) also mandates that the “… remodeling, improvement, or  replacement … shall not result in … any other increase in the size of the improvement.”  So even if the staff  were right that the term “building envelope” is different than as defined in the grandfathering law, then  volume and mass are other measures of a building’s size and cannot increase.  So once again the proposed  project does not comply with the law.  3 1) The staff report says that the term “size” in the code should be interpreted to mean the “floor area.”  But  increasing the building’s “floor area” is banned just two lines above in the same ordinance, so why would  the law have needed to say it again?  2) If you substitute “floor area” into the law, it makes no sense.  The law would then preclude, “an increase  of the height, length, building envelope, or any other increase in the floor area of the improvement.”  But  increases in height, length, and building envelope (no matter how defined) aren’t the same as floor area.  3) The words surrounding “size” show it was not meant to refer to one specific measure but rather as a  catch‐all for any manner in which the building might increase in size.   This is a common technique in  drafting legal text.  4) The staff report claims that “size” has been interpreted for decades as “floor area.”  Again, that should  have made it easy to provide examples of comparable projects in Palo Alto where that interpretation was  used specifically in connection with the grandfathering ordinance.  Not a single example has been provided  to your commission or the public to our knowledge.  5) Again, as with “building envelope,” if the term “size” has been misunderstood in the context of the  ordinance in the past, we should still use the correct interpretation going forward.  6) The three‐story addition of approximately 6,000 square feet will clearly make the building bigger.  The  addition will be visible from parts of Hamilton Avenue, Ramona Street, and Centennial Alley.  To say the  building will not increase in size defies common sense.  Other Issues  While discussing laws of other cities, the staff report says that “grandfathered ordinances typically prohibit  ‘increasing the degree of non‐compliance.’” While no examples are provided, please note that Palo Alto’s own  grandfathering ordinance for downtown buildings prohibits far more than just increasing the degree of non‐ compliance.  Specifically, our law prohibits many other ways that a building might expand, even if these do not  increase the degree of non‐compliance.  For example, a non‐conforming building might be under the 50 foot  height limit and thus compliant on that basis.  Yet our code still prohibits that building from increasing its  height.    Furthermore, it is not the case that our grandfathering ordinance was intended to protect historic buildings  specifically.  Palo Alto has other laws that protect and benefit historic buildings. Rather, the purpose of  grandfathering is to ensure that existing properties do not lose rights once laws become more restrictive,  which would be an unconstitutional “taking.”  When Palo Alto imposed lower height limits and more  restrictive FAR requirements, the grandfathering ordinance allowed buildings in excess of those limits to  remain and even be updated or replaced.  However, the law does not allow them to further expand if they  want to preserve their grandfathered exemption.  Going Forward  We urge you to ask the staff to provide you and the public with clear examples of where they have used their  alternative definitions of “building envelope” and “size” in past projects.  Such uses may have been incidental  and unrelated to situations involving the grandfathering law.  Such incidental uses are then not relevant  precedents.  4 To be clear, we do not oppose the remodeling of 261 Hamilton.  We simply share the goal of all Palo Altans in  having projects comply with the law.  As it stands, this proposed project does not.  Sincerely,  Doria Summa  Jeff Levinsky  Michael Hodos ) I apologize in advance for this very late email. It illustrates how difficult it is for citizens 2 to be engaged and informed when short notice is given for important, complex J projects. I want to my position clearly into the public record. Later tonight there will be two other separate meetings of neighborhood leaders to discuss the impact of this project. I don't know what their reaction will be because I have not had time to consult with them. I am, however, very certain that all citizens will recognize the merits of the 261 Hamilton project as an improved commercial property of major historical and architectural significance. First, two of the purposes of the ARB: • Enhance the desirability of residence and investment in the City • Enhance the desirability of living conditions upon the immediate site or in the adjacent areas. As you all know the Comprehensive Plan encourages commercial development but not at the expense of adjacent neighborhoods. In my opinion, you have the authority and obligation to address parking. My concerns are simply the parking impact on the adjacent commercial and neighborhood properties. If the ARB feels that parking impact is not a concern for this project, then simply state the opinion into the public record. Yesterday the HRB staff clearly stated that there is no example of any HRB in the entire United States that concerns itself with parking impact on neighborhoods. Perhaps I am misquoting the verbal report and we can get clarification from the video tapes later. Three questions about parking impact, in my opinion, are unanswered. First, I dont fully understand the nexus between TDRs and FARs. Does this project allow the current developers or another development to add to the current, growing parking space deficit? Since the City Council has taken a major actions to completely study and partially remedy the fact that commercial parking space demand is outpacing parking space supply, please ask staff to explain the relationship between TORs/FARs and parking space demand. I ask this question out of sheer ignorance despite my effort and others to research TOR/FAR relationships. Second, City staff has been very responsive last week, over the weekend and this week to answer the TOR questions relative to their parking free provisions. I understand that Aaron Aknin will clarify this today. In particular, we want the public record to show that ) ) these development incentives are permanent and cannot be reinstated by a future city council or change in ordinance. Third, the 6000sf addition creates a minimum demand for 24 parking spaces. Nine parking spaces are being added. Conceivably 20% to 50% of the tenants occupying the 6000 sf wilt take public transportation. The staff report is deficient because it does not state the amount or location of parking impact assuming office density is one worker per 250 sf. Thank you. Neilson Buchanan 155 Bryant Street Palo Alto, CA 94301 650 329-0484 650 537-9611 cell cnsbuchanan@yahoo.com -----Forwarded Message----- From: Neilson Buchanan <cnsbuchanan@yahoo.com> To: Steven Turner <steven.turner@cityofpaloalto.org>; Dennis Backlund <dennis.backlund@cityofpaloalto.org>; "hrb@cityofpaloalto.org" <hrb@cityofpaloalto.org> Cc: Aaron Aknin <aaron.aknin@cityofpaloalto.org>; Jessica Sullivan <jessica.sullivan@cityofpaloalto.org>; Roxy Rapp <roxy@roxyrapp.com>; Chase Rapp <chase@roxyrapp.com>; Joe Martignetti <jmartignetti@ventanaps.com> Sent: Tuesday, April 15, 201411:19AM Subject: April 16 HRB I am not sure if I have the correct email address for the HRB. Please forward this email to its members, if necessary. The proposed project at 261 Hamilton is important for at least two reasons. First, it has historical and architectural significance. Second, it has a small negative impact on the widely recognized, most visible problem in downtown Palo Alto ..... all -day parking. I want to put the parking issue into context for the HRB, ARB and, if necessary, the City Council. #1 Parking Impact a. 261 Hamilton adds 9 [later corrected to 15] parking spaces to the critically high parking space deficit for the commercial core. By the time the project is completed, it is possible that permit parking solutions will have been implemented to stem the 9 space negative impact upon residential neighborhood by January 5, 2015; however, the ) impact in this case will add to the deficit of commercial parking spaces for downtown workers and shoppers. b. Accumulated impact has not been addressed whatsoever in the staff report. In reality 261 is just one of 8 known major negative development impacts on Hamilton Avenue . The City Council has acknowledged that residential neighborhoods adjacent to the University Avenue Commercial Core will be impacted. The staff report must reflect the accumulating parking space deficits generating from these projects. Here is a partial list of development just on Hamilton. Cumulatively these projects impact residential neighborhoods negatively; the only question is "HOW MUCH IMPACT?" • 135 Hamilton (under construction and under parked?) • 180 Hamilton (83 room Epiphany Hotel added no parking for its employees and restaurant patrons. Maximum of 40 valet parking spaces on Everett Avenue for hotel guests) • 201 Hamilton (tenant intensification?: conversion of retail to University of New Haven offices) • 215 Hamilton (tenant intensification: conversion of Didham's retail to Institute for the Future offices) • 240 Hamilton (under construction with essentially no parking added) • 433 & 435 Hamilton (conversion of retail and restaurant to offices) • 537 Hamilton (under construction and under parked?) c. Residents worked over the weekend and Monday to resolve the question about TDRs and parking entitlements. We now understand that this project does not enable the TDRs with parking entitlements. However, we do not understand if a future City Council or Planning Director could, for example, (as soon as 18 or 24 months) reinstate parking related TDRs for this project. The staff report is silent and no ordinary citizen is able to analyze the staff report with certainty about short and long term parking impact. d. The TDRs apparently provide the developer with some ability to exceed FARs. This issue is not adequately explained in the staff report and must be framed by its the potential negative impact on the chronic deficit in commercial parking spaces. e. A map of the proposed permit parking area will be presented the HRB to show current locations of historically important homes located between Embarcadero, Alma, Palo Alto and Guinda. This map shows the profound saturation of non-resident parked vehicles. However, residents have not had time to show how non-resident parking impacts each of those historical residential properties. #2 Process a. 261 is a complex project and residents have not sufficient time to research the issues above and other issues that may be discovered. At least 15 additional working days are needed in provide adequate citizen analysis and comments. ) ) b. The map of parked vehicles(to be present at the April 16 HRB meeting) establishes the context of non-resident parked vehicles in historical important spaces in Palo Alto .... particularly saturation of Professorville. This is clearly a "past and unresolved" issue within the domain of the HRB. The intrusion of non-resident vehicles parked all day is not static; it is growing. This should be one of the main concerns of the HRB and not avoided because of traditional HRB procedures. ... c. The postcard notification sent to property owners is totally ~~equate. Several thousand residential property owners and unknown number~f historically significant properties will be impacted by 261 Hamilton. The City's policies for public notification are outdated and result in under-informed citizens. Bottom Line: A Request Please continue your April 16 meeting until mid-May to enable staff to respond to the issues above and to enable residents to map the historically important properties on the parked vehicle map. In closing, I want to thank City Staff and 261 Hamilton developers (Roxy Rapp and his associates) for timely responses to residents' questions. Some questions have been answered; other issues are unresolved. Furthermore, Mr. Rapp is considering other ideas which may mitigate the negative 9 parking space impact. Neilson Buchanan 155 Bryant Street Palo Alto, CA 94301 650 329-0484 650 537-9611 cell cnsbuchanan@yahoo.com Page 1 of 2 Examples of Improvements to Legal Non-Complying Sites in the Downtown The Palo Alto Municipal Code (PAMC) Section 18.18.120(b) states that “grandfathered” facilities are those existing on August 28, 1986, and which, when built were a complying facility. These facilities can “remodel, improve or replace site improvements” as long as the improvements do not result in increased floor area, shifting of the building footprint, an “increase of the height, length, building envelope, or any other increase in the size of the improvement,” or an increase in “the degree of noncompliance” except pursuant to the exceptions to FAR regulations of PAMC Section 18.18.070. There are two possible ways to interpret the grandfathered code section cited above with regard to expanding the “building envelope.” The strictest interpretation would be that no improvements can be made that expand the existing non-complying building. Note that a non- complying status may be for the setback, height, FAR, or other site specific condition. Using this strict interpretation, a site that is under-developed and has a historic structure located within a special setback cannot be expanded upon (and demolition and new complying construction is the only way to maximize development on the lot). The broader interpretation of the code would be that improvements can be made to a site providing those improvements are compliant with current development standards and that the non-complying conditions are not expanded. Using the example just stated, the under-developed site can add on to the existing building and make improvements within the legal buildable area; they cannot further increase the encroachment into the special setback. Staff is of the opinion that the second interpretation is the better one based on the intent of this section of the code, which was adopted to protect the rights of property owners to use and improve existing buildings and to encourage investment in historic buildings specifically. The Municipal Code definition states "’envelope’ means the three-dimensional spatial configuration of a building's volume and mass” (PAMC Section 18.04030(a)(51.5)). Historically, this has been interpreted to mean the building’s volume and mass as allowed by regulations for setbacks, height and daylight plane, floor area and lot coverage established in the current zoning code, which is typically referred to as the “buildable area.” This buildable area interpretation of “building envelope” appears more reasonable than the alternative, since the code could use the word “building” rather than “building envelope” if the intention was to limit improvements entirely to those within the existing building walls and roof. The following list provides examples of more recent projects that were existing legal non- complying buildings that were either completely demolished and rebuilt or added onto: Page 2 of 2 1. 278 University Avenue (2008): The original two-story building (≈18,000 sq. ft. FAR) was an existing legal non-complying facility because it was over the allowable FAR (maximum allowed 6,000 sq. ft.). This building was completely rebuilt to replace the non-complying FAR with a taller building; it went from a two-story to a staggered four-story building. 2. 317-323 University Avenue (2007): The original one to one and a half story buildings (totaling ≈15, 500 sq. ft. FAR) were existing legal non-complying facility because they were over the allowable FAR (maximum allowed 5,000 sq. ft.). The approved 15,000 sq. ft. FAR three-story project included the filling in of the basement area under the sidewalk (area returned to the City) to allow a comparable above grade addition, historic rehabilitation earning a 2500 sq. ft. bonus used on-site to an existing historic building. The remaining basement was reduced to a head height of less than five feet so it would not count in the project’s FAR calculation. This in turn allowed for additional above grade improvements. 3. 164 Hamilton Avenue (2005): The original four-story building (13,000 sq. ft. FAR) was an existing legal non-complying facility because it was over the allowable FAR (maximum allowed 4,500 sq. ft.). The project converted the existing four-story building into a three- story (10,168 square feet) by removing the existing interior walls, floors and front and rear facade. The project was constructed within the existing building walls, except for the enclosure of the two existing alcoves (light wells) due to fire safety issues. 4. 270 University Avenue (2001): The original one-story building with full basement (10,000 sq. ft.) was an existing legal non-complying facility because it was over the allowable FAR (maximum allowed 4,931 sq. ft.). The project demolished the building and constructed two stories above grade and one level of basement, recapturing the non-complying FAR and an additional 2,600 sq. ft. for a seismic rehabilitation bonus. United States Department of the Interior National Park Service OM8 No. 10IM-c>018 Exp.10-31-84 For NPS UM only FEC; received !.; National Register of Historic Places Inventory-Nomination Form date enter9d Mt See instructions In How to Complete National Register Forms Type all entries-complete applicable sections 1. Name historic Ramona Street Architectural District and/or common Ramona Street 2. Location street & number 518 to 581 Ramona & 247 & 255 to 267 Hamil ton N /.A_ not for publication city, town Palo Alto Nl8_ vicinity of state California code 06 county Santa Clara 3. Classification Category _x_ district _ bulldlng(s) _structure _site _object Ownership _public _x._ private _both Public Acquisition _In process _ being considered x N/A Status .x..-occupied _ unoccupied _ work In progress Acce•slble _ yes: restricted .,x__ yes: unrestricted _no 4. Owner of Property name see continuation sheet street & number city, town _vicinity of Present Use _ agriculture -X-commercial _educational _ entertainment _ government _ Industrial _military state 5. Location of Legal Description courthouse, registry of deeds, etc. Santa Clara County Recorders Office street & number 70 West Hedding Street, East Wing code 085 _museum _park _ private residence _religious _ scientific _ transportation _other: city, town San Jose state California 95110 6. Representation in Existing Surveys title see continuation sheet has this property been determined ellglble? _ yes -X-no date __ federal _ state _ county -. _ loc1t depository for survey records city, town state 7. Description Condition _excellent _x_good _fair Check one _ deteriorated _ unaltered _ ruins _x_ altered _unexposed Check one -X-original site _moved date __ N..._/A _______ _ Describe the present and orlglnal (If knownt physical appearance The Ramona Street Architectural District is located just south of the main downtown co111T1ercial street, University Avenue. The buildings are all in good to excellent condition. The 1920s Period Revival buildings draw heavily on Hispanic imagery and complement one another and together impart a unique character to the street. The syncopated rhythm of the streetscape is achieved by repetitive motifs of rooflines, balconies, arches, and recesses. The eight buildings form a cohesive area of special architectural character, planned and developed in the period 1924-1938; subsequent alterations are minimal. The buildings' heights range from one to four stories and are of the Monterey Colonial and Spanish Colonial Revival style, except the Cardinal Hotel, which has Classic elements. All the buildings, except the hotel, are characterized by stucco walls in muted colors and Spanish tile roofs of varying heights. Arches, balconies, wrought iron, and decorative glazed tiles are used throughout the district. Craftsman style woodworking details are present in both exteriors and interiors of several buildings in such elements as staircases and hand-adzed beamwork. Building plans were executed by designer Pedro de Lemos and architects Birge Clark and William H. Weeks. While many of the buildings were designed for an owner's specific use (i.e., dress shop, savings and loan, housewares, professional offices, hotel), some were commissioned by the Palo Alto Improvement Company. The block is well recognized, and the two contributions of de Lemos are typically cited. A Guide to Architecture in San Francisco and Northern California (Revised 1976) by David Gebhardt et al. contains a separate entry for this block in p. 155 referring to this area as "A fine bit of commercial stage setting in the then-approved Spanish Colonial Revival Style ..• impressive for Northern Ca 1 i forn i a." This application comes at a time when the City of Palo Alto is preparing both a new zoning ordinance for this downtown area, which will limit new growth and pressure property owners to maximize the allowable floor area ratio, and a seismic ordinance which could sunset non-conforming buildings. State and, eventually, national listings will aid preservation efforts. NOTE: The buildings on the even-numbered side of Ramona Street will be discussed first. All buildings in the district are classified as contributing structures. 518-522 Ramona Street This commercial structure was designed in 1925 by Pedro de Lemos and was built by Damant and Son, Contractors. The entire first floor housed an exclusive womens' clothing shop, the Gotham Shop. 8. Significance Period _ prehistoric _ 1400-1499 _ 1500-1599 _ 1600-1699 _ 1700-1799 _ 1800-1899 __x_ 1900-1938 Areas of Significance-Check and justify below _ archeology-prehistoric -"-community planning _ landscape architecture_ religion _ archeology-historic _ conservation _ raw _ science _ agriculture _economics _ literature _ sculpture -X--architecture _ education _ military _ social/ -art -engineering _ music humanitarian _ commerce _ exploration/settlement _ phllosophy _theater _ communications _ industry _ politics/government _ transportation _ Invention _other (specify) Specific dates Between 1924 & 1938 Builder/Architect See Statement of Si gni fi cance below. Statement of Significance (In one paragraphl Summary The significance 9f the Ramona Street Architectural District is that it represents an architecturally unified area of buildings which were built during a particular period (1924-1938). The buildings in the district remain largely unaltered, and the architectural district contains no intrusions. The total absence of intrusions in a district characterized by a single predominant architectural style makes this area quite unique. Not only are the individual structures attractive in their own right, their relationship with one another establishes the character of the street. The architecture of this street is reminiscent of an architecturally untutored Spanish village. Context for Evaluation Excellent examples of Monterey Colonial, Spanish Colonial Revival, and to a lesser extent, Craftsman Style architecture, line both sides of the tree-lined street. Although contemporary, Cardinal Hotel with its modified Neo-Classical elements is the one exception in the district that does not fall neatly into these other two categories. Nonetheless, the building is included in. the district for two reasons. First, the structure is an important urban design element as it balances the four-story Medico-Dental building on the opposite corner. Second, the Cardinal Hotel, which is finished with many of the materials identical to those of the other buildings in the district, complements these other structures and reinforces the visual character of the street. These taller structures at the corner of Ramona Street and Hamilton Avenue complete the form of the street which is otherwise composed of one-to three-story structures. A simple palette of materials, carefully executed details, comfortable massing, and inviting plans with interior courts of the various buildings give this area its friendly human-scale quality. Thick stucco walls with recessed openings, carved wood, wrought iron, ceramic tile, and tile roofing are composed in a variety of forms which gives diversity to this visually unified area. The relatively few alterations done to the buildings over the years have been sensitively handled and in no way detract from their original character. 9. Major Bibliographical References See continuation sheet 1 O. Geographical Data Acreage of nominated property l /5 acres Quadrangle name Pa 1 o A 1 to UT M References All&J lsl71412,s,ol l411 l414l3161ol Zone Easting Northing cWl~l~......._.-1 I ______ _ E LLJ I I I .._I ...----.. ........... G w I I I I_...._ _______ ...... aw I I I Zone Easting ow I I FW I I HW I I Quadrangle scale 1 :2400 I I I I I Northing I I I I I I Verbal boundary description and justification Ramona Street Archi tectura 1 District includes portions of Ramona Street between University Avenue and Hamilton Avenue and the buildings at the northwest and southwest corners of the intersection of Ramona Street and Hamilton Avenue. It is located on Assessor's Parcel No.s 120-26-(69,70,71 ,72,67,66,65,73). Boundaries are <{:.~f ~11o ~a·~= a1n<ll cl~~ffes wrot <j_~0i~m~i\5v\rt ahp~~ni Os~iiJ 'i,~ cVuCi.~j tt)1,Cyf;.1U'.aJ8 _r tret a S hand d ~rte S hl own on the a ac e s1 e p an. state N/ A code N/ A county N/ A code NI A state N/ A code N/ A county N/ A code N/A 11. Form Prepared By name/title Carolyn George, Chairperson organization City of Palo Alto Historic Resources Board date May 21, 1985 (c/o P1ann1ng street & number c/o Planning Dept/250 Hami 1 ton Avenue telephone ( 415) 329-2441 Department) 494-0561 city or town Palo Alto state Cali furnj a 94301 12. State Historic Preservation Officer Certification The evaluated significance of this property within the state Is: _ national __ state .$.._ local As the designated State Historic Preservation Officer for the National Historic Preservation Act of 1966 (Public Law 89- 665), I hereby nominate this property for Inclusion In the National Register and certify that It has been evaluated according to the criteria and procedures set forth by the National Park Service. State Historic Preservation Officer signature , ~~--<.:.: title State Historic Preservation Officer date d2.. For NPI UM only I~ owtlfy M .._ .... left¥ NPS Form 10-900·• (3-12) OMB No. 1024-0018 Exp. 10-31-84 United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet # 1 Street Address 520 Ramona 528 Ramona 535 Ramona 536 Ramona 540 Ramona 541 Ramona 255 Hamilton 231 Hamilton Item number 4 Owner of Propert)Page 1 RAMONA STREET ARCHITECTURAL DISTRICT PROPERTY OWNERS Assessor's Parcel Number 120-26-069 120-26-070 120-26-071 120-26-067 120-26-072 120-26-066 120-26-065 120-26-073 Property Owner de Lemos Properties P. 0. Box 555 Palo Alto, CA 94302 Frank Crist and Eugenie M. Trustee P. 0. Box 90 550 Hamilton Avenue Palo Alto, CA 94301 de Lemos Properties P. 0. Box 555 Palo Alto, CA 94302 Helwig, Norman C. and Jeanine C. 200 Lye 11 Street Los Altos, CA 94022 Dukes, Darrel E. and Angelin M. et al. Fisher, Joseph and Armeda Darrel E. Dukes 1156 N. 45th Street San Jose, CA 95112 A 1 house Re al t y 2450 El Camino Real Palo Alto, CA 94306 Alhouse Realty 2450 El Camino Real Palo Alto, CA 94306 Bjarne Dahl 1363 Arbor Los Altos, CA 94022 NPS Form 10·900·• (3-12) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form OMB No. 1024-0018 Exp. 10-31-84 Continuation sheet # 2 Item number 6 -Representation Page 1 Boghosian, Paula; Historical and Architectural Resources of City of Palo Alto. February, 1979 and revised in 1982 City of Palo Alto Main Library Palo Alto, California Santa Clara County Heritage Resources Inventory 1979 City of Palo Alto Main Library Palo Alto, California Historic American Buildings Survey 1980 National Park Service, Department of the Interior Washington, D. C. No Local No County No Federal NPS Form 10·900·• (3-12) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet # 3 Item number 7 Des c ri pt ion OMB No. 1024-0018 Exp. 10-31-84 Page 1 The building is an irregularly massed one-to three-story stucco clad 11L11 shaped complex in an eclectic Spanish Colonial Revival style. It was one of the first Bay Area buildings to integrate natural surroundings into its design with its central courtyard built around a large oak tree. The exterior incorporated architectural and decorative spoilia salvaged from various sources, including materials from the 1906 earthquake-damaged Stanford University buildings. At the front of the building was a one-story section with a stone chimney and Spanish tiled hipped roof. At the south side of this front section was an arch-covered entry (later removed) courtyard. The entry court led to an outside stone staircase with wrought iron railing that terminated at a second floor landing on the three-story rear section. One-half of the first and second floors at this rear section projected forward and was capped by a tiled shed roof. The third floor of this rear section sits under the Spanish tiled gable roof. Three strongly over-scaled donners and a stucco-clad tapered chimney pierced the roof. Randomly placed fenestration of varying proportions heightened visual interest on the north alley facade. Over the years, there have been various remodelings. Currently, the building is undergoing an extensive remodeling prompted by the removal of the diseased oak tree and the necessity of seismic upgrading. The one-story front section will return to its original facade composition with the entry door positioned in the center and the window returned to the south facade. The central courtyard will be filled in with a two-story Spanish tiled hipped roof addition, which will incorporate windows, doors, and wrought iron railings from the second floor facade of the rear section. The building has been continuously owned by descendants of the de Lemos family, and it is their intention to preserve the spirit of the original design in execution of the current remodeling. 526-530 Ramona Street This two-story Monterey Colonial Building was designed in 1926 by architect Birge Clark as an expansion of the Gotham Shop. Wells Goodenough was the builder for Mr. Philip M. Lansdale, a banker, and Mr. Edward C. Thoits, councilman for forty years. The entrances of the new and old sect·i ons of the Gotham Shop shared a common courtyard. Large irregularly shaped stone pavers help to unify the entrances. The first floor facade consists of three large arched bays. At the second level, five pairs of French doors open to the wooden gallery which extends across the entire facade. Over the years, the interior alterations have included: second floor deck (1971), fireplace restoration (1972), enclosed balcony (1973), and a glass enclosure (1981). NPS Form 10·900-• (3-12) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet #4 Item number 7 Description 532-536 Ramona Street OMB No. 1024-0018 Exp. 10-31-84 Page 2 This one-and two-story office/conmercial building was built by Wells Goodenough in 1926 for the Palo Alto Improvement Company. It was designed by architect Birge Clark specifically to further establish the visual character of the street. The building contains three narrow shops which are entered through an arcade with two Gothic arches and one corbeled arch. The entrances are unified by irregular shaped concrete pavers which extend the full length of the arcade and continue to the next building at the south side. The two-story roofline steps down to one story, which reduces the bulk of the building and relates it to the neighboring south structure. Two finely detailed wrought iron balconies project out from the second story and are accessed by French doors. Mezzanines are reached by heavy planked stairways with banisters of wide, flat boards pierced by band-saw open work. Both the interiors and exteriors of the building are remarkably unchanged. 538-542 Ramona Street This one-and two-story galleried retail/office structure was also designed by Birge Clark in 1926 and built by Wells Goodenough. The exterior organization was intended to have one structure appear as two, a scaled device typical of this district. The street level facade of the one-story section has a corbeled arch under which are two large tiled roof display cases which precede the recessed showcase window and entrance. The interior of the one-story section was designed for a specific tenant, a men's clothing store, Phelps-Turkel. The rough plaster walls are accented by a peaked beamed ceiling and numerous large wrought iron lighting fixtures. The rear half of the store is defined by a raised floor and arched entry with a brick and stucco fireplace as the focal point. This part of the store was the suit area, which the architect described as having a tweedy country club atmosphere with lounge chairs, a bowl of tobacco, and relatively little visible merchandise. The two-story section has two round arches on the street level facade and a recessed balcony trimmed with hand-adzed posts and beams at the second level. The interiors and exteriors remain substantially unchanged in both sections of the building. NPS Form 10·900·• (3-12) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet #5 Item number 7 Description 231-247 Hamilton (556 Ramona Street) OMB No. 1024-0018 Exp. 10-31-84 Page 3 The three-story Cardinal Hotel was designed by William H. Weeks in 1924 for the Palo Alto Improvement Company as part of its effort to bring cor1111ercial development to Hamilton Avenue. Birge Clark was the supervising architect. This stucco-clad three-story building is more formal and massive in appearance than the other district buildings because of its unifonn roofline, regular fenestration, and classic elements. The one-and-a-half ground floor elevation has entrances on Hamilton and Ramona Streets which are framed by decorative, terra-cotta marquees, pilasters, and spiraled columns with Corinthian capitals. Showcase windows on both streets are terminated by clerestorys delineated by wood spindles and narrow stained glass windows. These showcase windows have been partially altered by various tenants. Fenestration on the second and third floors is partially framed by decorative terra-cotta borders. Squares of terra-cotta with various motifs are inserted between windows at the second and third levels. Two wrought iron balconies define the base of second-level windows on Hamilton Street. The flat roof is terminated by Spanish tiles and an egg and dart cornice. Both stucco and terra-cotta on the top two floors have been painted a unifonn cream color which alters the original palette. Today, the original dining room is an antique store in which most of the original wall and ceiling stenciling is well preserved, as well as the Art Deco chandeliers and sconces. The lobby has seen the addition of a mezzanine staircase but still contains some of the early pieces of furniture, glazed tile floor, and all the large wrought iron sconces and torchieres. Lobby architectural pieces that remain are: columns, boxed beams, fireplace with massive mantel, and skylight. The original stenciling of columns and beams has been painted over, as has the gold leaf wall treatment. NPS Form 10-900·• (3.&2) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet #6 Item number 7 Description 255-267 Hamilton Avenue (551-581 Ramona) OMB No. 1024-0018 Exp. 10-31-84 Page 4 The Medico-Dental building was designed by Birge Clark and built by Wells Goodenough in 1927 for the Palo Alto Improvement Company. In 1929, the City's first auto garage was constructed in the basement. The northern portion of the Hamilton Avenue frontage housed the United States Post Office until 1933. This four-story stucco-faced building has intersecting Spanish tile hipped roofs. On both Hamilton and Ramona Streets, the ground level facades are composed of a series of arched openings. The second and third floors have evenly spaced rectangle casement windows with nearly continuous wrought iron balconies. The dominant motif at the fourth floor is a series of colonades, each having a unique column and capital treatment. A central recessed ten-foot-wide vertical slot on the Hamilton Street facade features an open arched entrance to an elevator and stair lobby which serves the upper floors. This entry is accented at the entire second floor by three full-story-high semi-circular birdcage-shaped wrought iron grills. Decorative glazed tile is used both in this entry as well as wainscotting at some ground level arches. Minor alterations have only occurred to street-level facades and interiors to accommodate various tenants. The integrity of the original architectural design has not been compromised. 541-545 Ramona Street This one-and two-story stucco-clad building was designed by Birge Clark in 1929 and built by Wells Goodenough. The building was designed for specific tenants, the Home Savings and Loan, and the Homeware Store (which featured speciality housewares). The entire facade of the one-story building consists of a rounded arch whose upper portion is filled with an elaborate wrought iron grill. The building's facade has heavy Craftsman-type timbering at the second level. Significant alterations on the ground floor facade include covering of decorative glazed tiles and reducing the size of one showcase window. NPS Form 10-900·• (3-12) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet # 7 Item number 7 Description 535-537 Ramona Street OMB No. 1024-0018 Exp. 10-31-84 Page 5 This two-story commercial/office building, designed and built in 1938 by Pedro de Lemos, echoes the eclectic Spanish Colonial Revival style of his earlier building across the street at 520 Ramona. The building is axial both in plan and elevation. The central three-story section is flanked by two-story sections. The central bay's open arched entrance is capped by a wrought iron balcony with a bracketed tile roof which leads to a large interior open courtyard with a continuous gallery at the second floor. Colorful handmade tiles, quarry tile, decorative paving that includes textural uses of pebbles set in patterns, and delicate wrought iron work adds to the charm of the complex. Small fountains, niches, stair risers, window seats, and mailboxes are consistent in this decorative treatment. Recent (1984) modifications for handicapped access to the central patio area were thoughtfully made and do not spoil the building's integrity. Over the years, there have been minor interior and exterior changes to meet the needs of various tenants. The property, located at 535-537 Ramona Street, known as the Courtyard Building, within the proposed architectural district was built in 1938. Nonetheless, it has been included in the district application as a building of exceptional importance, integral to the district. Its inclusion within the district is vital to its cohesion and completeness. The designer, Pedro de Lemos, built the first structure within the district in 1926 at 518-520 Ramona Street and set the design precedent for the later buildings. This last building reaffirms this vision and contributes significantly to the architectural character of the district. It is one of the best buildings from a unique designer, whose style and philosophy made considerable impact within the Bay Area. The building is currently included in the Santa Clara County Heritage Resource Inventory and thus is included in the California Inventory of Historic Resources. NPS Form 10·900·• C3-82> United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet # 8 Item number 8 Significance OMB No. 1024-0018 Exp. 10-31-84 Page 1 The regionally prominent designer Pedro de Lemos and architects Birge M. Clark and William H. Weeks designed the structures. Some of de Lemos' more notable works outside this district include the Allied Arts Guild in Menlo Park and his home in Palo Alto, "Waverly Oaks". Clark's more significant buildings of the era include the Dunker residence, the United States Post Office on Hamilton Avenue, and the Lou Henry Hoover house at Stanford (all listed on the National Register), the Palo Alto Community Center, the Kathleen Norris residence, and the Lucie Stern house. Weeks' architectural realizations are more common in Monterey County, although he designed several buildings in the Bay Area. The Masonic Hall on University Avenue in Palo Alto is one of his other local works. He was the architect of the Milias Hotel in Gilroy and, on the basis of that structure, presumably was commissioned to design the Cardinal Hotel. The development of Ramona Street was an early successful attempt to expand laterally the central commercial district. De Lemos, a craftsman, graphic artist, and curator of the Stanford Museum, had been concerned with the larger scale, somewhat impersonal linear development along University Avenue. He felt that an informal architecture full of whimsy and integrated with nature was indeed compatible with commercial businesses. He, his family, and friends personally crafted many of his designs. The apparent smaller scale buildings designed by de Lemos (and later, Clark) adopted the then popular Spanish Colonial Revival architectural style. The four-story Medico-Dental building at the corner of Ramona Street and Hamilton Avenue reflects Clark's sensitivity to the human scale character of the street. The street level tenant spaces of this structure which, incidentally, was Palo Alto's first building to have below-grade parking, contain Gothic elliptical and corbeled arches all on the same facade. The attempt to grant a tenant his own identity through stylized differences was indeed successful and adds to the small scale ambience of this architectural district. The district has been identified as architecturally significant in the local historical and architectural survey; it has also been adopted by the City of Palo Alto as a landmark district. The 500 Block of Ramona Street has been identified by David Gebhardt, et al. in A Guide to Architecture in San Francisco and Northern California and has been recorded by the Historic American Buildings Survey. NPS Form 10·900·• (3-12) United States Department of the Interior National Park Service National Register of Historic Places Inventory-Nomination Form Continuation sheet Item number 9 Bib 1 i ography BIBLIOGRAPHY AAUW. Exploring Palo Alto's Past. 1977. OMB No. 1024-0018 Exp. 10-31-84 Page 1 Boghosian, Paula. Historical and Architectural Resources of the City of Palo Alto. February 1979. Rev. 1982. Clark, Birge. Commercial Buildings in Palo Alto Designed by the Office of Birge M. Clark. 1976. Clark, Birge. Memoirs: An Architect Grows Up in Palo Alto. 1983. Historic American Buildings Survey. 1980. (HABS No. CA-2067.) Miller, Guy C. Palo Alto Community Book. Palo Alto, CA., A. H. Cawson, 1952. Palo Alto Times. 02/11/22, 11/02/22, 09/12/25, 10/15/25, 09/29/26, 02/10/34, 03/18/38, 10/28/52, 12/06/54. Santa Clara County. Heritage Resource Inventory. San Jose, CA., June 1979. Gebhardt, David, et al., A Guide to Architecture in San Francisco and Northern California. Santa Barbara and Salt Lake City, 1973. G-3439H • 518-52·~~--....-./I -120 -'UO ·OG,<?J 526-530 ~~,,..,., -I '2.0 .. 2<#_• 070 / N 6 SCALE: l"-80' RAMONA STREET ARCHITECTURAL DISTRICT 518-581 Ramona St. & 231-247 & 255-267 . Hamilton Avenue Palo Alto, Santa Clara County, California NOTE: The Legend with Categories 1-4 was for City Planning Off ice use only ATTACHMENT #1 Sketch Map ITEM 10 541'""".545 -~EGEND category 1 category 2 category 3 category 4 addresses n.o -2' · ~" , 't---assessor s parcel no. STRICT Attachment J City of Palo Alto Historic Resources Inventory Detail Date: 25-Jan-95 Historic Building Inventory ID: 223 location Historic name: Medico-Dental Building Common or current name: Hamilton Building (University Art Center) Number & street: 267 Hamilton Avenue status ownership use City: Palo Alto Alternate Address: Past Address: Category: 3 Historical District: Ramona Street Architectural District Owner: Alhouse-Hamilton Address: 2450 El Camino Real City: Palo Alto, CA Present: Offices and Commercial Original: Offices and Commercial Past: ZIP: 94301 County: Santa Clafa D National Registry D State Registry 0 public @ private ZIP: 94306 description This massively-scaled corner building is an important anchor for the Spanish Colonial Revival commercial row along Ramona. The elegant ironwork' of the period embroiders the rather severe massing. Some alteration to accomodate shops has occurred at street level. Photo Date: 1978 page 471 Property Size frontage: 100 depth: 100 acreage: Condition: excellent Alteration: Altered Surroundings: D Open D Scattered Buildings D Densely Built Other: Threats: D ~ D Residential Commercial Industrial ~ None Known D Vandalism D Public Works D Zoning D Private Developmen Other: description Architect: Birge Clark (cont.) Builder: Wells P. Goodenough Date: 1927 @ factual 0 estimated Notes: Features: D Barn D Carriage House OtherFeatures: D Formal Garden D Windmill Exterior Material: wood Other Material: Reinforced concret Original Site: original D Outhouse D Shed Theme: architecture D Watertower 12] None significance A prominent visual landmark which performs major urban design functions, this building was planned by the important local architect, Birge Clark, for the owner, the Palo Alto Improvement Co. On the Ramona Street frontage, a definite effort was made to make it appear as though it consisted of several buildings built at different periods of time. The first story of the northern portion on Hamilton Avenue housed the post office, 1928-1933, and the city's first drive-in auto parking area was in the basement. Prior to purchase by T.N. Fuller for the Improvement Co. the site had been owned by E.A. Hettinger, prominent local contractor, and was occupied by two houses. SOUrCeS P.A. Times 9/11/26, 719127, 10/22/27, 8/3/28; Birge Clark Commercial Inventory. preparation Organization: By: Historic Resources Board; P.A. Hist. Assn. Date: 1981, 1985 DB Record Date: 7/8/94 Address: 250 Hamilton Avenue City: P·alo Alto Phone: State: CA ZIP: 94301 page 472 prepared for City of Palo Alto prepared by Architectural Resources Group San Francisco, California March 4, 2014 Focused Historic Structure Report 261 Hamilton Avenue Palo Alto, CA Attachment K Focused Historic Structure Report (FHSR) 261 Hamilton Avenue Palo Alto, CA March 4, 2014 TABLE OF CONTENTS 1. INTRODUCTION AND METHODOLOGY ................................................................................................................... 1 2. SUMMARY OF FINDINGS .......................................................................................................................................... 2 3. SITE AND BUILDING DESCRIPTION ........................................................................................................................ 3 3.1 Site Description ........................................................................................................................................................................................... 3 3.2 Building Description ................................................................................................................................................................................... 4 4. HISTORICAL BACKGROUND AND CONTEXT .......................................................................................................... 6 4.1 Palo Alto ....................................................................................................................................................................................................... 6 4.2 Birge Clark ................................................................................................................................................................................................... 7 5. BUILDING CHRONOLOGY & DEVELOPMENT OF USE ............................................................................................ 7 5.1 Building Chronology .................................................................................................................................................................................. 7 5.2 Development of Use ................................................................................................................................................................................... 8 6. STATEMENT OF SIGNIFICANCE AND EVALUATION OF INTEGRITY ....................................................................... 9 6.1 Statement of Significance ........................................................................................................................................................................... 9 6.2 Character-Defining Features .................................................................................................................................................................... 10 6.3 Evaluation of Integrity.............................................................................................................................................................................. 12 7. PROPOSED PROJECT DESCRIPTION & CONFORMANCE WITH THE SECRETARY’S STANDARDS ....................... 14 7.1 Project Description .................................................................................................................................................................................... 14 7.2 Assessment for Conformance with the Secretary’s Standards ............................................................................................................ 15 7.3 Recommendations ..................................................................................................................................................................................... 20 8. BIBLIOGRAPHY ....................................................................................................................................................... 21 APPENDICES Appendix A: The Secretary of the Interior’s Standards for Rehabilitation Appendix B: Existing Conditions Photographs of 261 Hamilton Avenue Appendix C: Historic Photographs of 261 Hamilton Avenue Appendix D: DPR 523A and 523B Forms Appendix E: Drawings of Proposed Project (provided by Cody Anderson Wasney Architects) ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 1 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 1. INTRODUCTION AND METHODOLOGY Architectural Resources Group, Inc. (ARG) has completed this Focused Historic Structure Report (FHSR) for the proposed rehabilitation of the property at 261 Hamilton Avenue in Palo Alto. This report includes a summary of past historic evaluations of the property, a historical summary of the property and its surroundings, and an assessment of the proposed project’s consistency with the Secretary of the Interior’s Standards for Rehabilitation. The building at 261 Hamilton Avenue was designed by the prominent architect Birge Clark, who was responsible for designing hundreds of buildings in Palo Alto and the surrounding area during the first half of the 20th century. For many years, the building was referred to as the Medico-Dental Building, since many doctors and dentists had offices on the upper floors. The U.S. Post Office operated out of the ground floor of 261 Hamilton Avenue until 1933, when the stand-alone Post Office building at 380 Hamilton Ave, also designed by Birge Clark, was completed. Palo Alto’s first drive-in parking garage was also located below the building at 261 Hamilton Avenue. The former Medico-Dental Building is now known as the Hamilton Building. It is recognized as a Category 3 structure on Palo Alto’s Historic Inventory and is listed as a contributor to the National Register-listed Ramona Street Architectural District. The proposed rehabilitation of 261 Hamilton Avenue entails constructing a new three-to-four-story portion at the northwest corner of the building. The existing portion’s interior will be rehabilitated and non-historic exterior elements will be replaced with historically-compatible elements. (A more detailed project description is included below in Section 7.1.) To complete the FHSR for 261 Hamilton Avenue, ARG: • Conducted a site visit to examine and photograph the project area and its surroundings on November 13, 2013; • Reviewed existing historic evaluations of 261 Hamilton Avenue; • Conducted additional research as necessary to supplement the existing record, including permit research at the Palo Alto Development Center and archival research at the Palo Alto Historical Association; and • Reviewed proposed project drawings prepared by Cody Anderson Wasney Architects, dated October 18, 2013. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 2 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 2. SUMMARY OF FINDINGS As a contributor to the National Register-listed Ramona Street Architectural District, the property at 261 Hamilton Avenue is an identified historic resource. It is also recognized as a Category 3 building on the City of Palo Alto’s Historic Inventory. A Category 3 building is described as follows: A "Contributing Building"…is a good local example of an architectural style and relates to the character of a neighborhood grouping in scale, materials, proportion or other factors. A contributing building may have had extensive or permanent changes made to the original design, such as inappropriate additions, extensive removal of architectural details, or wooden facades resurfaced in asbestos or stucco.1 Although the building retains a great deal of its original architectural elements and materials, some of the openings at ground level have undergone alterations, most notably to the east (Hamilton Avenue) elevation, over the years to accommodate different businesses. However, ARG believes the building retains sufficient integrity to convey its historic significance. Additionally, in ARG’s professional opinion, specific components of the proposed project are not in conformance with the Secretary of the Interior’s Standards for Rehabilitation, and therefore the project is not compliant overall. 1 Historic Inventory Category Information, http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=539&TargetID=127 (Accessed December 12, 2013). Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 3 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 3. SITE AND BUILDING DESCRIPTION 3.1 Site Description The building at 261 Hamilton Avenue is located within Downtown Palo Alto on the northern corner of the Hamilton Avenue and Ramona Street intersection. The building is within the National Register-listed Ramona Street Architectural District, which includes the buildings along the south side of Ramona Street and the two adjacent buildings west of the subject property on the north side of Ramona Street (See Figure 1). Figure 1. Map of Ramona Street Architectural District (Source: National Register of Historic Places Nomination Form) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 4 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 3.2 Building Description Figure 2. 261 Hamilton Avenue, south (Ramona Street) and east (Hamilton Avenue) elevations Figure 3. 261 Hamilton Avenue, east and north (Centennial Way) elevations The property at 261 Hamilton Avenue sits at the northern corner of Ramona Street and Hamilton Avenue and consists of a stucco-clad, four-story building with a basement and mezzanine level. The building’s footprint is generally square in plan; however, the two main façades – the south (Ramona Street) and east (Hamilton Avenue) – rise an additional three floors above the ground floor and mezzanine, thus creating an L-shape along those elevations. At the ground level on both primary elevations, the openings typically consist of large, non-historic aluminum windows and doors. Some of the original tile and transom details at these openings remain. At the upper levels, fenestration mainly consists of divided-light metal casement windows. The overall style is Spanish Colonial Revival and retains numerous original elements, including red-tile roof, elaborate ironwork, and decorative tile. The gabled roof varies slightly in height and pitch to create the illusion that the building comprises different elements constructed over time. The building’s south elevation faces Ramona Street and was designed to appear as if it were two separate buildings, with the left (west) section slightly lower than the right (east) section. At ground level, the portion to the left features two pointed-arch entryways. The right portion has four openings consisting of two central openings with oblong-arched transoms flanked on either side by an opening with a rectangular transom with ogee-shaped corners. The opening to the center right contains a recessed shop entry decorated with tile. At the second and third floors, the portion to the left (west) consists of four bays of metal, divided-light windows, while the portion on the right consists of eight bays. Both portions feature a small decorative iron balcony. Both sections feature arched colonnades with different column styles at the fourth floor. An iron balcony with an arched base wraps around the south and east façades between the first and second floors. The varying roof pitches on the Hamilton Avenue façade also create the illusion of three separate buildings. The left (south) portion features two large windows with transom flanking a smaller doorway at the ground floor. Fenestration at the upper floors is identical to the east portion of the Ramona Street façade, but this section contains five bays instead of eight. The gable end features an opening covered with a decorative iron grille. The narrow central section consists of an arched entry at ground level and two bays of windows on the upper floors. The rectangular widows on the second floor are covered with an ornately-decorated, birdcage-like covering. This narrow portion also features a slightly shallower- pitched roof than the flanking portions. The northernmost section features two pointed arches with metal windows flanking a central doorway at the ground floor and six bays of windows on the second and Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 5 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. third floors. Below all six windows on the second floor and the two central windows on the third floor are decorative iron balconies. The top floor features an arched colonnade flanked on either side by a casement window covered by an iron grille. At the ground floor, the north elevation along Centennial Way consists of a four-story portion to the east and a two-story portion to the west. The eastern portion features a large arched opening with metal window on the ground floor. The second and third floors contain four bays of windows, the center two at the third floor featuring a decorative iron balcony. The fourth floor has six bays of arched divided-light casement windows and a rectangular divided light one on each end. An opening in the gable features a decorative iron grille with scroll motif. The upper-floor elevations facing north and west that make up the interior of the L-shape consist of divided-light casement windows and are minimally decorated since they are not easily visible from street level. The building’s ground floor on the west elevation abuts against the adjacent building; however, the three floors above ground level feature metal casement windows at the second and third floors. Arched casement windows at the top floor mimic the arched colonnades on the primary façades. Metal casement windows flank the faux colonnade. The gable contains an opening covered with a metal grille. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 6 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 4. HISTORICAL BACKGROUND AND CONTEXT 4.1 Palo Alto Although the land was once occupied by the Ohlone and later part of vast Spanish land grants, modern- day Palo Alto was formed in the late 1800s by Leland and Jane Stanford, the founders of Stanford University. The Stanfords “decided that the new university should have an accompanying college town to provide a clean-living place for student housing and other services.”2 After both the neighboring towns of Menlo Park and Mayfield refused to stop serving alcohol, Stanford decided to create his own dry town and called it University Park. In contemporary advertisements, the area was described as “a tract of beautiful oak-park land, immediately opposite and adjoining the grounds of the Leland Stanford Junior University.”3 The land was “subdivided into villa blocks, comprising about five acres each… in the most artistic manner, with broad avenues intersecting each other at picturesque angles.”4 University Park officially became Palo Alto in 1892. By the turn of the twentieth century, Palo Alto was a developing town that “had solved many of the basic problems of survival by installing an efficient water system, paving the roads, establishing schools, developing sewage management, and other municipal functions.”5 Sanborn Maps dating to the 1890s indicate the area directly surrounding the subject property consisted of empty lots and largely remained that way until the early 1900s, when some lots were occupied by single- family dwellings. The main commercial area was one block west on University Avenue, between High and Emerson Streets. By 1924, University and Hamilton Avenues and the streets between them were becoming more developed with businesses and offices, including automobile services, bakeries, clothing stores, restaurants, printers, and numerous others. The Palo Alto Improvement Company, which was formed to “expand downtown in the vicinity of Hamilton, Ramona, and Bryant streets,” envisioned a downtown area close to the railroad station. The Palo Alto Improvement Company constructed the Cardinal Hotel in 1924 as the anchor for subsequent development in that part of Downtown.6 During this period in Palo Alto’s history, “the Palo Alto Improvement Company appears to have played a major role in the development of this new area.”7 Prior to the construction of the Medico-Dental Building in 1927, the lot was owned by prominent local contractor E.A. Hettinger and was occupied by two single-family dwellings. The Palo Alto Improvement Company purchased the property and commissioned architect Birge Clark to design the building at 261 Hamilton Avenue.8 Upon its completion, the Medico-Dental Building was “the first substantial building of its type [professional offices] in Palo Alto,” since many professional medical offices in Palo Alto were located in private homes up until this time.9 2 Pamela Gullard and Nancy Lund, History of Palo Alto: The Early Years, (San Francisco: Scottwall Associates, 1989), 83. 3 Ibid., 85. 4 Ibid. 5 Ibid., 137. 6 Michael Corbett and Denise Bradley, “Final Survey Report, Palo Alto Historical Survey Update, August 1997-August 2000,” (February 2001), 1-8. 7 Ibid., 4-10. 8 Historic Resources Board, Historic Resource Inventory (DPR 523) Form, 1981-1985. 9 Corbett, 6-99. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 7 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 4.2 Birge Clark The son of Arthur B. Clark – a noted architect in his own right – and Grace Clark, Birge was born on April 16, 1893 in San Francisco. His parents had moved to Palo Alto the year before when Arthur began a professorship at Stanford University teaching architecture and art. Birge himself studied architecture at Stanford University and later at Columbia University. He earned a Silver Star for gallantry in World War I, after which he returned home to Palo Alto, where he enjoyed a successful career in architecture. Birge resided in Palo Alto until his death on April 30, 1989. Over the course of his prolific career, Birge Clark was considered by many to be the “man who built Palo Alto.” When he opened his practice in 1922, Birge was only one of two licensed architects between San Jose and San Francisco.10 His early works include the Lou Henry and Herbert Hoover House (1920) at Stanford University, for which his father Arthur was the head architect, and several cottages on the school’s campus. In addition to the building at 261 Hamilton Avenue, Birge also designed many of the buildings on Ramona Street that are now contributors to the National Register-listed Ramona Street Architectural District. Birge also received the commission for the U.S. Post Office in Palo Alto, which was completed in 1933. Many of Birge’s designs are in the “Early California” style – his term for Spanish Colonial Revival. Birge Clark’s architectural contributions to Palo Alto cannot be understated, having designed over four hundred residential and commercial buildings in Palo Alto and the surrounding area. 5. BUILDING CHRONOLOGY & DEVELOPMENT OF USE 5.1 Building Chronology Construction History City building permits indicate that the building at 261 Hamilton Avenue has undergone numerous alterations over the years. Most of the changes, however, have been to the building’s interior and typically included demolishing existing partitions and remodeling, likely to accommodate changing tenants. Most significantly, the entire ground floor was reconfigured in 1967 to accommodate the expansion of the University Art store into the existing retail spaces. Although there are few permits to indicate exactly what work was performed on the exterior, a visual investigation and limited building permit records indicate that there have been some alterations to the ground floor windows and storefronts over the years. Building permits indicate that in July of 1968 there was a fire at the shop within the building located at 581 Ramona Street, but the building appears to have sustained only interior damage. Historic photographs (see Appendix B) show changes were made before the late 1970s. The Palo Alto Development Center only retains building permits from as early as the 1960s, so formulating a complete building history is not possible. Permits indicating alterations to the building’s exterior are listed below: Permit #24498 1/13/65 Remodel storefront; int. remodel and alter 10 Dave Weinstein, Signature Architects of the San Francisco Bay Area (Layton, UT: Gibbs Smith, 2006), 70. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 8 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. Permit #A31165 9/18/72 Install glass window display and close off partitions of lobby as per plan 5.2 Development of Use The building at 261 Hamilton Avenue was known historically as the Medico-Dental Building. In the first few decades after the building first opened, tenants on the upper-floor offices typically included physicians, dentists, and medical laboratories, with a few lawyers and other professionals. In more recent decades, the tenants in the upper floors varied from doctors, lawyers, architects, and real estate brokers to Christian Science practitioners, telephone answering services, and bail bondsmen. The ground floor has been used for commercial purposes since the building’s construction. A branch of the Jenkel-Davidson Optical Co. and a pharmacy operated from the storefronts along Ramona Street (571- 581 Ramona Street) for many years. The storefront on the ground floor at 265-267 Hamilton Avenue included the U.S. Post Office, which remained there until 1933, when it moved to a stand-alone building further north on Hamilton Avenue. After the Post Office relocated, the space was used by various furniture and interior décor shops, including the Littlefield Furniture Co. and Henriques. University Art, an artists’ supply store, has occupied the space since 1964; the store eventually expanded to include the shops along Ramona Street and now occupies the entire ground floor. Palo Alto’s first drive-in parking garage operated below the building at 261 Hamilton Avenue. An advertisement on the cover of the 1932 City Directory described the garage as “absolutely fireproof” and providing services such as “washing – storage – polishing” and “oiling and greasing – 24 Hour Service.” According to the City Directory, the underground garage operated at the site from 1928 to 1965. Currently, the garage space is used for tenant storage. Figure 4. Palo Alto City Directory Advertisement, 1932 (Source: Palo Alto Historical Association) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 9 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 6. STATEMENT OF SIGNIFICANCE AND EVALUATION OF INTEGRITY 6.1 Statement of Significance Statement of Significance The building at 261 Hamilton Avenue has already been evaluated for its historic significance. It recognized as a Category 3 building on Palo Alto’s Historic Inventory. It is also a contributor to the Ramona Street Architectural District, which was listed on the National Register in 1986. The National Register Nomination Form states the significance of the district as follows: The significance of the Ramona Street Architectural District is that it represents an architecturally unified area of buildings which were built during a particular period (1924-1938). The buildings in the district remain largely unaltered, and the architectural district contains no intrusions. The total absence of intrusions in a district characterized by a single predominant architectural style makes this area quite unique. Not only are the individual structures attractive in their own right, their relationship with one another established the character of the street. The architecture of this street is reminiscent of an architecturally untutored Spanish village. Excellent examples of Monterey Colonial, Spanish Colonial Revival, and to a lesser extent, Craftsman Style architecture, line both sides of the tree-lined street…. These taller structures [the Cardinal Hotel and 261 Hamilton Avenue] at the corner of Ramona Street and Hamilton Avenue complete the form of the street which is otherwise composed of one- to three-story structures. A simple palette of materials, carefully executed details, comfortable massing, and inviting plans with interior courts of the various buildings give this area its friendly human-scale quality. Thick stucco walls with recessed openings, carved wood, wrought iron, ceramic tile, and tile roofing are composed in a variety of forms which gives diversity to this visually unified area. The relatively few alterations done to the buildings over the years have been sensitively handled and in no way detract from their original character.11 Period of Significance The period of significance is the span of time in which a property attained its historic significance. 261 Hamilton Avenue is architecturally significant as a good representative example of the Spanish Colonial Revival Style and is part of the architecturally cohesive Ramona Street Architectural District. The period of significance for the buildings at 261 Hamilton Avenue is the year of the building’s construction in 1927. As a contributor to the Ramona Street Architectural District, the building’s period of significance extends from 1927 to 1938.12 11 National Register of Historic Places Inventory Nomination Form, Ramona Street Architectural District, prepared by Carolyn George, May 21, 1985. 12 The period of significance for the Ramona Street Architectural District identified in the National Register nomination extends from 1924 when the first contributor to the district was constructed to 1938 when the last one was constructed. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 10 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 6.2 Character-Defining Features This section identifies the exterior character-defining features of 261 Hamilton Avenue. A character- defining feature is an aspect of a building’s design, construction, or detail that is representative of the building’s function, type, or architectural style. Generally, character-defining features include specific building systems, architectural ornament, construction details, massing, materials, craftsmanship, site characteristics, and landscaping within the period of significance. In order for an important historic resource to retain its significance, its character-defining features must be retained to the greatest extent possible. An understanding of a building’s character-defining features is a crucial step in developing a rehabilitation plan that incorporates an appropriate level of restoration, rehabilitation, maintenance, and protection. Exterior Character-Defining Features of the 261 Hamilton Avenue include: • Red-tile roof • Varied roof heights • Four-story height • Stucco finish • Arched openings at ground level • Transoms at ground floor windows and entryways • Tile work at ground floor windows and storefronts • Original entrance lobby with beamed ceiling, floor tile, staircase, and light fixture • Ironwork, including balcony railings, grilles, and birdcage-style window covering • Colonnades at top floor • Metal casement windows • Wraparound balcony with arched base • Minimal eave overhang See Table 1 below for an illustrated list of character-defining features. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 11 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. TABLE 1. Illustrated Table of Character-Defining Features Varied roof heights, Ramona Street elevation Birdcage-style iron window covering, east elevation Varied roof heights and four-story height, Hamilton Avenue (east) elevation Colonnade at top floor and iron balconies, east elevation Transom above ground floor windows, south elevation Wraparound balcony with arched base, east elevation Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 12 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. TABLE 1. Illustrated Table of Character-Defining Features (continued) Metal casement windows, ironwork, and minimal eave overhang, east elevation Decorative tile at Ramona Street storefront, south elevation Original entrance lobby with beamed ceiling, floor tile, staircase, and light fixture Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 13 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 6.3 Evaluation of Integrity Integrity is the authenticity of a historical resource’s physical identity evidenced by the survival of characteristics that existed during the resource’s period of significance. Integrity involves several aspects including location, design, setting, materials, workmanship, feeling, and association. These aspects closely relate to the building’s significance and must be primarily intact for eligibility. Location Location is the place where the historic property was constructed or the place where the historic event occurred. 261 Hamilton Avenue has not been moved from its original location. Therefore, its integrity of location is high. Design Design is the combination of elements that create the form, plan, space, structure, and style of a property. The building at 261 Hamilton Avenue retains high integrity of design. Historic photographs of the building reveal that the building appears to have retained its original architectural features, overall massing, form, and Spanish Colonial Revival design elements. Despite some changes to the ground level openings, the exterior has not been significantly altered. Most of the alterations to the building have been performed on the interior. Thus, the building strongly conveys its original design intent on the exterior. Setting Setting is the physical environment of a historic property, constituting topographic features, vegetation, manmade features, and relationships between buildings or open space. The building at 261 Hamilton Avenue retains good integrity of setting. At the time of the building’s construction, this area of Palo Alto was becoming increasingly commercial. The adjacent buildings on Ramona Street, which were built in the 1920s and 1930s, were designed by three architects: Birge Clark, Pedro de Lemos, and William H. Weeks. Today, those buildings still stand and, along with the subject property, are contributors to the Ramona Street Architectural District. The building directly adjacent to the north and the Palo Alto City Hall building across Hamilton Avenue to the east are later additions to the neighborhood. Materials Materials are the physical elements that were combined or deposited during a particular period of time and in a particular pattern or configuration to form a historic property. The building at 261 Hamilton Avenue retains high integrity of materials. Apart from replaced windows and altered openings at the ground level, the exterior retains many of its original exterior materials, including ironwork, steal sash windows, tile work, tile roof, and stucco cladding. Workmanship Workmanship is the physical evidence of the crafts of a particular culture, people, or artisan during any given period in history or pre-history. The building at 261 Hamilton Avenue retains high integrity of workmanship associated with its Spanish Colonial Revival-style detailing on the exterior. Feeling Feeling is a property’s expression of the aesthetic or historical sense of a particular period of time. The building at 261 Hamilton Avenue retains high integrity of feeling. The building displays strong characteristics of a 1920s commercial building and conveys its relationship to Ramona Street and the adjacent buildings through its coherent stylistic elements. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 14 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. Association Association is the direct link between an important historic event or person and a historic property. The building at 261 Hamilton Avenue retains high integrity of association. It is most closely associated with the architect Birge Clark and still retains many of its original architectural elements and materials that link it to Birge’s trademark Spanish Colonial Revival style. In summary, the building has retained a significant amount of its historic features since it was first constructed. The changes made to the building to accommodate different tenants resulted in interior modifications that have been fairly minor. The only significant exterior modifications have been to the ground-floor storefronts. Thus, considering all aspects together, the building retains sufficient integrity to communicate its historic significance. 7. PROPOSED PROJECT DESCRIPTION & CONFORMANCE WITH THE SECRETARY’S STANDARDS 7.1 Project Description The following project description is excerpted from a letter dated October 18, 2013 to the City of Palo Alto and provided by CAW Architects: This proposed renovation project will significantly improve several existing deficiencies within the building. A new continuous exit stair will be added to the building to provide code compliant exiting throughout all floors. Currently only one open stairwell located in the center of the building serves the upper floor tenants. Other key proposed improvements will include a new automatic fire sprinkler system, fire alarm system, and a seismic upgrade. The small existing elevator lift will be replaced with a code compliant, gurney-sized elevator serving all floors. Wholesale mechanical and electrical systems will be replaced. Every effort to install and replace major building systems to enhance the life safety and usability will be implemented with extreme care to preserve key defining historic fabric within the building. The project will seek to restore deteriorating features of the building. The ground floor storefronts will be revitalized to improve the retail experience along Ramona Street and Hamilton Street by restoring the ground floor portion of the façade canopies and windows. The existing basement currently houses basement office space. The project will convert the basement back to underground parking and increase the parking available on the site. At the northwest corner of the site along Centennial Walk, a new three-story addition will be constructed to transfer the existing office space from the basement to the second and third floors of the building. The proposed design increases the parking count to the site and decreases the assess[ed] gross floor area of the building as noted on the drawings. The new addition at the rear of the building takes its clues from Birge Clark’s original design. The addition steps in slightly to honor the original historic building before extending out again to align with the original facade in much the same way as Clark stepped in the structure on other facades to break down the mass of this large four-story building. Simple materials such as stucco, metal, wood and terra-cotta are the primary materials of Clark’s design and are the same materials proposed in the new addition. The new addition has been designed to be compatible Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 15 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. with the historic building with some contemporary details primarily through window sizes and mullion patterns. Overall the exterior design of the new addition is compatible with the National Standards for Rehabilitation. The addition, while providing additional office space on the upper floors, also drives significant upgrades to the building including improved life-safety, seismic retrofit, sprinklers, new utilities and ADA access throughout. It provides additional vehicle parking in the downtown and rehabilitates key architectural features that have been lost over time. 7.2 Assessment for Conformance with the Secretary’s Standards This section provides an analysis of the project drawings prepared by Cody Anderson Wasney Architects and dated October 18, 2013 and the proposed project’s compliance with the Secretary of the Interior’s Standards for Rehabilitation. (See Appendix C for an overview of the Secretary’s Standards.) Where the project does not meet the Standards, recommendations to bring the project to compliance are provided in Section 7.3. 1. A property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. The building at 261 Hamilton Avenue will continue to serve commercial purposes at the ground level and house offices on the upper floors. This property is architecturally significant as an example of the Spanish Colonial Revival style and as a contributor to the National Register-listed Ramona Street Architectural District. The plans for the project call for the removal of the “existing one-story building construction, including but not limited to the floor slab, foundation, columns, beams, exterior walls, parapet, roofing system, roof slab, beams, and joists” at the building’s north corner. This north corner is along the building’s secondary elevation and contains no character-defining features. As such, the proposed project is compliant with Standard 1. 2. The historic character of a property shall be retained and preserved. The removal of historic materials or alteration of features and spaces that characterize a property shall be avoided. In general, the proposed project will retain and preserve the majority of the character-defining features identified above in Section 6.2, including the original ironwork, storefront window detailing, entrance lobby off Hamilton Avenue, stucco cladding, and overall form. The roof tiles will be removed, numbered, and salvaged for reinstallation in their original locations. According to the Architect, removal and replacement is necessary to properly wire-tie the clay tiles.13 Though most character defining features will remain, all original steel sash windows are proposed for removal and replacement. The historic windows are a significant building element and are character- defining features. While the plans propose to replace the original windows with modern replicas, removal of the historic windows would constitute a significant loss of original material could greatly compromise the historic character of the property. Additionally, modern windows, even if designed to replicate the historic, many times do not completely capture the character of the original windows and 13 Email correspondence with Brent McClure, AIA at Cody Anderson Wasney Architects, November 26, 2013. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 16 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. can notably alter the look and feel of a historic building. As such, the proposed window removal is not compliant with this Standard (also see discussion under Standard 5 and 6 below). 3. Each property shall be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or architectural elements from other buildings, shall not be undertaken. The proposed project includes the recreation of the Post Office lettering on the existing historic sign located above the northernmost doorway on the east elevation. The architect proposes to use the original drawings to recreate the incised lettering. Though the historic drawings provide information on the original design intent of the post office signage, we do not feel that the existing information provides sufficient information on the original “as-built” conditions of the signage. When replicating an architectural feature, the National Park Service calls for “adequate historical, pictorial, and physical documentation…so that the feature may be accurately reproduced.”14 While Birge Clark’s design intent is represented in the original drawings, a craftsperson would have completed the work and there is no documentation to show how the lettering actually looked originally (size or depth of the letters, stylistic qualities of the lettering). Without historical photographs of the sign as originally constructed, this proposed alteration could present a false representation of the signage, and is therefore not compliant with this Standard. New iron gate enclosures are proposed for the three door openings on the east elevation. They are of a simplified design and are appropriate in material. The finish and color of the new gates are not specified, but should be compatible with that of the existing metalwork. As shown on Sheet 4.2 of the proposed plans, a new decorative iron grill is proposed for installation above the former Post Office entrance. In the drawings, the design of this element is very similar to the existing original ironwork in the balcony above. The use of such a similar design risks presenting a false sense of historical development and is not compatible with this Standard. Overall, the proposed project is not compliant with Standard 3. 4. Most properties change over time; those changes that have acquired historic significance in their own right shall be retained and preserved. Alterations to the building over time have primarily focused on the building interior and on the storefront areas at street level. Research did not indicate that any of these alterations have attained significance over time. Therefore, the proposed project is compliant with Standard 4. 5. Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a property shall be preserved. The proposed project will retain and preserve most of the distinctive exterior features that characterize the property at 261 Hamilton Avenue, including: 14 “Standards for Rehabilitation and Guidelines for Rehabilitating Historic Structures,” at http://www.nps.gov/hps/tps/standguide/rehab/rehab_approach.htm (accessed 11 December 2013). Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 17 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. • Red-tile roof • Colonnades at top floor • Ironwork, including balcony railings, grilles, and birdcage-style window covering • Original tile work at ground floor windows and storefronts • Arched cornice with iron railing • Stucco cladding • Turned wood spindles at ground floor transoms • Entrance lobby: stair and stair rail, floor tile, light fixture, and elevator shaft The treatment of the above-listed features is compliant with this Standard. However, as discussed under Standard 2 above (and Standard 6 below), the project proposes to remove and replace all original windows, a change which will remove distinctive features of the property and which is not compliant with Standard 5. 6. Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence. The project drawings dated October 18, 2013 indicate that some historic materials, such as the roof, decorative ironwork, and wood transoms, will be repaired and where materials are too deteriorated, replaced in kind. According to the project architect, the wood detailing and transoms: …along the ground floor that are found in sound condition will remain. These elements will receive refinishing only, matching the original colors. Where damaged historic detailing occurs, these will be replaced and/or recreated following the original Birge Clark drawings. Non-historic features at the ground floor, such as aluminum transoms and window systems will be removed. Overall at the ground floor level, we will attempt maintain and preserve the original historic fabric where possible and then recreate damaged or missing features.15 Building plans indicate the roof tiles will removed and salvaged for reuse. In order to properly wire-tie the clay tiles, all existing clay roof tiles will be numbered, removed, and then reinstalled in the original pattern. Reinstallation of the original roof tiles is compliant with Standard 6. Where damaged tiles require replacement, new tiles should match the existing in material, color, texture, and other visual qualities. Missing features to be replaced include the decorative tile at selected storefronts of the south and east elevations. The original project drawings indicate where tile was located historically and some of the original tile remains in place. According to the Architect: The ceramic tile bases and insets along the street level elevations will be recreated with a pattern of clay tile manufactured by Fireclay tile. The tile manufactured by Fireclay highly resembles the original tile in its texture, glaze, size, color and detailing. The new insets will attempt to replicate the original installation by use of this material.16 15 Email correspondence with Brent McClure, AIA at Cody Anderson Wasney Architects, December 2, 2013. 16 Email correspondence with Brent McClure, AIA at Cody Anderson Wasney Architects, November 26, 2013. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 18 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. ARG reviewed examples of the tile proposed for installation at the previously altered storefronts and finds that the design and other aesthetic qualities do not sufficiently match that of the original tile. The specific qualities of the original hand painted tile will be difficult to replicate, and a more compatible yet differentiated tile is suggested for the rehabilitated storefronts on the historic building (see discussion under Standard 9 below). For the reasons discussed above, the proposed new tile work is not compatible with this Standard. As previously discussed, the proposed plans call for removal and replacement of all multi-pane steel casement windows. The historic windows are a significant building element and are character-defining features. A comprehensive window survey to identify the full extent of damage to the original windows has not been conducted, and the existing conditions photos presented to ARG for review do not demonstrate that the windows are deteriorated to a degree that rehabilitation is not an option. The photos show surface corrosion, which is an expected condition in older steel windows, but the existing steel windows appear to be in generally sound condition. As such, the proposed replacement of the multi-pane steel sash windows is not compliant with this Standard. As discussed under Standard 3 above, the recreation of the Post Office signage is not based on sufficient documentary or pictorial evidence and the proposed replication is not compatible with this Standard. In summary, the treatment of the roof tiles as discussed above is compliant with this Standard. However, the use of proposed decorative tile work, multi-pane steel window replacement, and post office sign replication are not compliant with this Standard. 7. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible. In a memo dated December 10, 2013, the architect has specified that the: …textured painted stucco will the cleaned using a low-pressure water wash, supplemented by scrubbing with soft natural bristle brushes and non-ionic detergents as recommended by the Secretary of the Interior’s Standards Preservation Brief 22, Preservation and Repair of Historic Stucco. This proposed cleaning approach is sensitive to the historic fabric and is compliant with Standard 7. 8. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken. An archeological evaluation is beyond the scope of this analysis. However, should materials be found during the demolition or construction process, a qualified archeologist should be consulted for assessment and mitigation recommendations. 9. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment. The project plans call for the removal of the “existing one-story building construction, including but not limited to the floor slab, foundation, columns, beams, exterior walls, parapet, roofing system, roof slab, Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 19 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. beams, and joists” at the building’s north corner. This portion of the building is less detailed, and more utilitarian in nature than the two prominent street-facing facades (along Hamilton and Ramona), and does not play a major role in defining the character of the building. Therefore, replacement of this portion of the building with a new addition will not affect the building’s ability to convey its historic significance. The proposed addition’s proportions and design do not overwhelm or compete with the historic building’s size and Spanish Colonial Revival styling. The addition is smaller in height than the original building, and its rooflines will not be visible from either of the principal street frontages. It is set back from the face of the existing building where it connects on the north elevation, and a recessed hyphen connects the two buildings on the west elevation. Stylistically, the new addition is designed for compatibility with the characteristics of the Spanish Colonial Revival style, but the building reads as a modern interpretation of this historical style. The windows and metal balcony railing will be simplified in design from the same features on the historic building, and are compatible in size, scale, and materials. Furthermore, the exterior finish of the addition will be differentiated from the historic building, which has a “painted, medium textured, cement plaster finish.” The addition with feature “a smooth, steel trowel integral colored cement plaster stucco.”17 According to the project architect, the addition’s roof “will not attempt to replicate the original clay tile roof. The color will be a historically compatible color with some variation within the tile.”18 For the reasons discussed above, the proposed addition appears compliant with Standard 9. The proposed project calls for restoration of the historic storefront configurations along the east, north, and south elevations. The proposed Fireclay tile (specifically the Cuerda Seca series tiles) is not a precise enough match to be considered a suitable replication of the original tile, but is also not differentiated enough from the existing original tile to be compatible and differentiated. Though the original tile does have a weathered patina, the proposed Cuerda Seca tiles are designed to imitate historic tiles, and will not provide a sufficient level of visual differentiation when applied to the historic building. As such, the proposed Cuerda Seca tiles do not appear to be compliant with this Standard. 10. New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired. Proposed alterations have been designed in such a manner that they will be perceived as clearly additive to the existing building and can be removed in the future without negatively impacting the building’s historic materials or overall significance. Although the proposed addition requires removal of the northernmost portion of the building, it is not a primary elevation and it does not contain character- defining features. Conclusion Based on the above analysis, ARG concludes that the though several aspects of the proposed project are in keeping with the Secretary of the Interior’s Standards for Rehabilitation, the proposed project is not compliant overall. The primary modifications found not to be compliant with the Standards include the comprehensive replacement of the original steel multi-pane windows, the proposed Cuerda Seca tile work at the storefront windows, and the proposed replication of the Post Office Signage. 17 Email correspondence with Brent McClure, AIA at Cody Anderson Wasney Architects, December 2, 2013. 18 Email correspondence with Brent McClure, AIA at Cody Anderson Wasney Architects, November 26, 2013. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 20 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 7.3 Recommendations To bring the proposed project into full compliance with the Standards, ARG recommends the following: • Retain, repair, and restore the original steel multi-pane casement windows throughout. Replace in kind only when the condition is deteriorated to a state where repair is not feasible. • Use simplified compatible tile at the restored storefronts. The plain tiles in the Fireclay Debris Series would be appropriate. • Retain the post office signage as is, with no attempt to replicate the lettering. • Design new decorative grille features as compatible yet differentiated replacements using a simplified design and similar color and finish treatments. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 21 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. 8. BIBLIOGRAPHY . California Register and National Register: A Comparison, Technical Assistance Series 6. Sacramento, CA: California Department of Parks and Recreation, 2001. . User’s Guide to the California Historical Resource Status Codes & Historic Resources Inventory Directory, Technical Assistance Bulletin 8. Sacramento, CA: California Department of Parks and Recreation, 2004. California Office of Historic Preservation. California Register of Historical Resources: The Listing Process, Technical Assistance Series 5. Sacramento, CA: California Department of Parks and Recreation, n.d. California Office of Historic Preservation. California Register and National Register: A Comparison, Technical Assistance Series 6. Sacramento, CA: California Department of Parks and Recreation, 2001. California Office of Historic Preservation. User’s Guide to the California Historical Resource Status Codes & Historic Resources Inventory Directory, Technical Assistance Bulletin 8.Sacramento, CA: California Department of Parks and Recreation, 2004. Clark, Birge. An Architect Grows Up in Palo Alto, Memoirs of Birge M. Clark, F.A.I.A. September 1982. Corbett, Michael and Denise Bradley. “Final Survey Report, Palo Alto Historical Survey Update, August 1997-August 2000.” February 2001. George, Carolyn. National Register of Historic Places Inventory Nomination Form. Ramona Street Architectural District Nomination Form. May 1985. http://pdfhost.focus.nps.gov/docs/NRHP/Text/86000592.pdf (Accessed November 25, 2013) Gullard, Pamela and Nancy Lund. History of Palo Alto: The Early Years. San Francisco: Scottwall Associates, 1989. Hamilton Building, Historic Resources Inventory Form (DPR 523). Prepared by the Historic Resources Board; Palo Alto Historical Association. 1981, 1985. Historic Environment Consultants. “Historical and Architectural Resources of the City of Palo Alto.” Prepared by Paula Boghosian and John Beach. February 1979. Pacific Coast Architecture Database. https://digital.lib.washington.edu/architect/architects/759/ (Accessed November 11, 20130) Palo Alto Times. “New P.O. Building Sketched: Style of New Structure To Stress Spanish Note; Work to Begin In July.” May 14, 1927. National Park Service. How to Apply the National Register Criteria for Evaluation, National Register Bulletin 15. Washington, DC: United States Department of the Interior, 1997. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Page 22 of 22 ARCHITECTURAL RESOURCES GROUP Architects, Planners & Conservators, Inc. National Park Service. How to Complete the National Register Registration Form, National Register Bulletin 16A. Washington, DC: United States Department of the Interior, 1997. Sanborn Map Company Fire Insurance Maps for the City of Palo Alto Weinstein, Dave. Signature Architects of the San Francisco Bay Area. Layton, UT: Gibbs Smith, 2006. Appendix A: The Secretary of the Interior’s Standards for Rehabilitation 261 Hamilton Avenue  Palo Alto, CA Focused Historic Structure Report Architectural Resources Group Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix A A-1 APPENDIX A: THE SECRETARY OF THE INTERIOR’S STANDARDS FOR REHABILITATION The Secretary of the Interior is responsible for establishing standards for all programs under Departmental authority and for advising Federal agencies on the preservation of historic properties listed in or eligible for listing in the National Register of Historic Places. The Standards for Rehabilitation (codified in 36 CFR 67 for use in the Federal Historic Preservation Tax Incentives program) address the most prevalent treatment. “Rehabilitation” is defined as “the process of returning a property to a state of utility, through repair or alteration, which makes possible an efficient contemporary use while preserving those portions and features of the property which are significant to its historic, architectural, and cultural values.” Initially developed by the Secretary of the Interior to determine the appropriateness of proposed project work on registered properties within the Historic Preservation Fund grant-in-aid program, the Standards for Rehabilitation (the Standards) have been widely used over the years—particularly to determine if a rehabilitation qualifies as a Certified Rehabilitation for Federal tax purposes. In addition, the Standards have guided Federal agencies in carrying out their historic preservation responsibilities for properties in Federal ownership or control; and State and local officials in reviewing both Federal and nonfederal rehabilitation proposals. They have also been adopted by historic district and planning commissions across the country. The intent of the Standards is to assist the long-term preservation of a property’s significance through the preservation of historic materials and features. The Standards pertain to historic buildings of all materials, construction types, sizes, and occupancy and encompass the exterior and interior of the buildings. They also encompass related landscape features and the building’s site and environment, as well as attached, adjacent, or related new construction. To be certified for Federal tax purposes, a rehabilitation project must be determined by the Secretary of the Interior to be consistent with the historic character of the structure(s), and where applicable, the district in which it is located. The Standards are to be applied to specific rehabilitation projects in a reasonable manner, taking into consideration economic and technical feasibility. The ten Standards are: 1. A property shall be used for its historic purpose or be placed in a new use that requires minimal change to the defining characteristics of the building and its site and environment. 2. The historic character of a property shall be retained and preserved. The removal of historic materials or alteration of features and spaces that characterize a property shall be avoided. 3. Each property shall be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or architectural elements from other buildings, shall not be undertaken. 4. Most properties change over time; those changes that have acquired historic significance in their own right shall be retained and preserved. 5. Distinctive features, finishes, and construction techniques or examples of craftsmanship that characterize a property shall be preserved. Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix A A-2 6. Deteriorated historic features shall be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence. 7. Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible. 8. Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken. 9. New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment. 10. New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired. Appendix B: Existing Conditions Photographs of 261 Hamilton Avenue 261 Hamilton Avenue  Palo Alto, CA Focused Historic Structure Report Architectural Resources Group Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-1 Ramona Street, view looking southeast (Architectural Resources Group, November 2013) South side of Ramona Street, view looking southeast toward Hamilton Avenue (Architectural Resources Group, November 2013) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-2 261 Hamilton Avenue, south (Ramona Street) façade (Architectural Resources Group, November 2013) South (Ramona Street) and east (Hamilton Avenue) elevations (Architectural Resources Group, November 2013) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-3 Corner of Hamilton Avenue and Ramona Street, view looking north (Architectural Resources Group, November 2013) South (Ramona Street) and east (Hamilton Avenue) elevations (Architectural Resources Group, November 2013) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-4 Lobby entrance at 261 Hamilton Avenue (Architectural Resources Group, November 2013) Lobby interior (Architectural Resources Group, November 2013) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-5 East (Hamilton Avenue) and north (Centennial Way) elevations (Architectural Resources Group, November 2013) North (Centennial Way) elevation (Architectural Resources Group, November 2013) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-6 North elevations (Architectural Resources Group, November 2013) North elevations, view looking southeast along Centennial Walk (Architectural Resources Group, November 2013) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix B – Existing Conditions B-7 Centennial Way, view looking southeast (Architectural Resources Group, November 2013) Appendix C: Historic Photographs of 261 Hamilton Avenue 261 Hamilton Avenue  Palo Alto, CA Focused Historic Structure Report Architectural Resources Group Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix C – Historic Photographs C-1 Artist’s rendering of 261 Hamilton Avenue before its completion, 1927 Notice the building’s design is different than what was actually constructed (Source: Palo Alto Times, May 14, 1927, Palo Alto Historical Association) View of Hamilton Avenue including the Medico-Dental Building (at center), c. 1928 (Source: Palo Alto Historical Association) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix C – Historic Photographs C-2 Ramona Street, with Medico-Dental building at the corner (right), c. 1930 (Source: Palo Alto Historical Association) The Cardinal Hotel on Hamilton Avenue with the Medico-Dental Building in the background, c. 1944 (Source: Palo Alto Historical Association) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix C – Historic Photographs C-3 The Medico-Dental Building, c. 1930 (Source: Palo Alto Historical Association) A view of the University Arts storefront from Ramona Street across a municipal parking lot, c. 1960s (Source: Palo Alto Historical Association) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix C – Historic Photographs C-4 Birge Clark with 261 Hamilton Avenue in the background, c. 1978 (Source: Palo Alto Times, February 2, 1978, Palo Alto Historical Association) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix C – Historic Photographs C-5 261 Hamilton Avenue, c. 1978 (Source: Historic Resources Inventory (DPR 523) Form) East and north façades, 1989 (Source: Peninsula Times Tribune, April 26, 1989, Palo Alto Historical Association) Focused Historic Structure Report March 2014 261 Hamilton Avenue  Palo Alto, CA Appendix C – Historic Photographs C-6 East façade, c. 1995 (Source: Tile Heritage, Vol. 11, No. 1, Palo Alto Historical Association) East façade, 1999 (Source: Palo Alto Historical Association) Appendix D: DPR 523A and 523B Forms for 261 Hamilton Avenue 261 Hamilton Avenue  Palo Alto, CA Focused Historic Structure Report Architectural Resources Group State of California  The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI # PRIMARY RECORD Trinomial NRHP Status Code 1D Other Listings Review Code Reviewer Date DPR 523A (1/95) *Required information Page 1 of 6 *Resource Name or #: 261 Hamilton Avenue P1. Other Identifier: Medico-Dental Building; Hamilton Building; University Art Center *P2. Location:  Not for Publication  Unrestricted *a. County: Santa Clara and (P2b and P2c or P2d. Attach a Location Map as necessary.) *b. USGS 7.5' Quad: Date: T ; R ; ¼ of ¼ of Sec ; M.D. B.M c. Address: 261 Hamilton Avenue City: Palo Alto Zip: 94301 d. UTM: Zone: 10 ; mE/ mN (G.P.S.) e. Other Locational Data: (e.g., parcel #, directions to resource, elevation, etc., as appropriate) APN: 120-26-065 *P3a. Description: (Describe resource and its major elements. Include design, materials, condition, alterations, size, setting, and boundaries) The property at 261 Hamilton Avenue sits at the northern corner of Ramona Street and Hamilton Avenue and consists of a stucco- clad, four-story building with a basement and mezzanine level. The building’s footprint is generally square in plan; however, the two main façades – the south (Ramona Street) and east (Hamilton Avenue) – rise an additional three floors above the ground floor and mezzanine, thus creating an L-shape along those elevations. At the ground level on both primary elevations, the openings typically consist of large, non-historic aluminum windows and doors. Some of the original tile and transom details at these openings remain. At the upper levels, fenestration mainly consists of divided-light metal casement windows. The overall style is Spanish Colonial Revival and retains numerous original elements, including red-tile roof, elaborate ironwork, and decorative tile. The gabled roof varies slightly in height and pitch to create the illusion that the building comprises different elements constructed over time. *P3b. Resource Attributes: (List attributes and codes) HP7. 3+ story commercial building *P4. Resources Present: Building Structure Object Site District Element of District Other (Isolates, etc.) P5b. Description of Photo: (View, date, accession #) South and east elevations, view looking north; November 13, 2013 *P6. Date Constructed/Age and Sources: Historic Prehistoric Both 1927/Ramona Street Architectural District National Register Nomination Form *P7. Owner and Address: *P8. Recorded by: (Name, affiliation, and address) Architectural Resources Group Pier 9, The Embarcadero San Francisco, CA 94111 *P9. Date Recorded: November 13, 2013 *P10. Survey Type: (Describe) Intensive *P11. Report Citation: (Cite survey report and other sources, or enter "none.") Ramona Street Architectural District National Register Nomination Form (1985); DPR 523 form (1981, 1985) *Attachments: NONE Location Map Sketch Map Continuation Sheet Building, Structure, and Object Record Archaeological Record District Record Linear Feature Record Milling Station Record Rock Art Record Artifact Record Photograph Record  Other (List): P5a. Photo or Drawing (Photo required for buildings, structures, and objects.) State of California  The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI# BUILDING, STRUCTURE, AND OBJECT RECORD Page 2 of 6 *NRHP Status Code 1D *Resource Name or # (Assigned by recorder) 261 Hamilton Avenue DPR 523B (1/95) *Required information B1. Historic Name: Medico-Dental Building B2. Common Name: Hamilton Building; University Art Center B3. Original Use: B4. Present Use: *B5. Architectural Style: Spanish Colonial Revival *B6. Construction History: (Construction date, alterations, and date of alterations) See Continuation Sheet, p. # *B7. Moved? No Yes Unknown Date: Original Location: *B8. Related Features: None B9a. Architect: Birge Clark b. Builder: Wells P. Goodenough *B10. Significance: Architecture Theme: Spanish Colonial Revival Area: Period of Significance: 1927 Property Type: Commercial Applicable Criteria: C/3 (Discuss importance in terms of historical or architectural context as defined by theme, period, and geographic scope. Also address integrity.) The DPR 523 form prepared by the Palo Alto Historic Resources Board in 1981-1985 states the building’s significance as follows: A prominent visual landmark which performs major urban design functions, this building was planned by the important local architect, Birge Clark, for the owner, the Palo Alto Improvement Co. On the Ramona Street frontage, a definite effort was made to make it appear as though it consisted of several buildings buit at different periods of time. The first story of the northern portion on Hamilton Avenue housed the post office, 1928-1933, and the Ciyt’s first drive-in auto parking area was in the basemetn. Prior to purchase by T.N. Fuller for the Improvement Co. the site had been owned by E.A. Hettinger, prominent local contractor, and was occupied by two houses. B11. Additional Resource Attributes: (List attributes and codes) *B12. References: See Continuation Sheet, p. # B13. Remarks: *B14. Evaluator: Architectural Resources Group Pier 9, The Embarcadero San Francisco, CA 94111 *Date of Evaluation: November 13, 2013 (Sketch Map with north arrow required.) (This space reserved for official comments.) State of California  The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI# CONTINUATION SHEET Trinomial Page 3 of 6 *Resource Name or # 261 Hamilton Avenue DPR 523L (1/95) *Required information *P3a. Description (continued from page 1) The building’s south elevation faces Ramona Street and was designed to appear as if it were two separate buildings, with the left (west) section slightly lower than the right (east) section. At ground level, the portion to the left features two pointed-arch entryways. The right portion has four openings consisting of two central openings with oblong-arched transoms flanked on either side by an opening with a rectangular transom with ogee-shaped corners. The opening to the center right contains a recessed shop entry decorated with tile. At the second and third floors, the portion to the left (west) consists of four bays of metal, divided- light windows, while the portion on the right consists of eight bays. Both portions feature a small decorative iron balcony. Both sections feature arched colonnades with different column styles at the fourth floor. An iron balcony with an arched base wraps around the south and east façades between the first and second floors. The varying roof pitches on the Hamilton Avenue façade also create the illusion of three separate buildings. The left (south) portion features two large windows with transom flanking a smaller doorway at the ground floor. Fenestration at the upper floors is identical to the east portion of the Ramona Street façade, but this section contains five bays instead of eight. The gable end features an opening covered with a decorative iron grille. The narrow central section consists of an arched entry at ground level and two bays of windows on the upper floors. The rectangular widows on the second floor are covered with an ornately-decorated, birdcage-like covering. This narrow portion also features a slightly shallower-pitched roof than the flanking portions. The northernmost section features two pointed arches with metal windows flanking a central doorway at the ground floor and six bays of windows on the second and third floors. Below all six windows on the second floor and the two central windows on the third floor are decorative iron balconies. The top floor features an arched colonnade flanked on either side by a casement window covered by an iron grille. At the ground floor, the north elevation along Centennial Way consists of a four-story portion to the east and a two-story portion to the west. The eastern portion features a large arched opening with metal window on the ground floor. The second and third floors contain four bays of windows, the center two at the third floor featuring a decorative iron balcony. The fourth floor has six bays of arched divided-light casement windows and a rectangular divided light one on each end. An opening in the gable features a decorative iron grille with scroll motif. The upper-floor elevations facing north and west that make up the interior of the L-shape consist of divided-light casement windows and are minimally decorated since they are not easily visible from street level. The building’s ground floor on the west elevation abuts against the adjacent building; however, the three floors above ground level feature metal casement windows at the second and third floors. Arched casement windows at the top floor mimic the arched colonnades on the primary façades. Metal casement windows flank the faux colonnade. The gable contains an opening covered with a metal grille. B6. Construction History (continued from page 2)1 Construction History City building permits indicate that the building at 261 Hamilton Avenue has undergone numerous alterations over the years. Most of the changes, however, have been to the building’s interior and typically included demolishing existing partitions and remodeling, likely to accommodate changing tenants. Most significantly, the entire ground floor was reconfigured in 1967 to accommodate the expansion of the University Art store into the existing retail spaces. Although there are few permits to indicate exactly what work was performed on the exterior, a visual investigation and limited building permit records indicate that there have been some alterations to the ground floor windows and storefronts over the years. Building permits indicate that in July of 1968 there was a fire at the shop within the building located at 581 Ramona Street, but the building appears to have sustained only interior damage. Historic photographs (see Appendix B) show changes were made before the late 1970s. The Palo Alto Development Center only retains building permits from as early as the 1960s, so formulating a complete building history is not possible. Permits indicating alterations to the building’s exterior are listed below: Permit #24498 1/13/65 Remodel storefront; int. remodel and alter Permit #A31165 9/18/72 Install glass window display and close off partitions of lobby as per plan 1 Compiled from building permits, courtesy of the Palo Alto Development Center State of California  The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI# CONTINUATION SHEET Trinomial Page 4 of 6 *Resource Name or # 261 Hamilton Avenue DPR 523L (1/95) *Required information B10. Significance (continued from page 2) Integrity Analysis Location 261 Hamilton Avenue has not been moved from its original location. Therefore, its integrity of location is high. Design The building at 261 Hamilton Avenue retains high integrity of design. Historic photographs of the building reveal that the building appears to have retained its original architectural features, overall massing, form, and Spanish Colonial Revival design elements. Despite some changes to the ground level openings to accommodate different businesses over time, the exterior has not been significantly altered. Most of the alterations to the building have been performed on the interior. Thus, the building strongly conveys its original design intent on the exterior. Setting The building at 261 Hamilton Avenue retains good integrity of setting. At the time of the building’s construction, this area of Palo Alto was becoming increasingly commercial. The adjacent buildings on Ramona Street, which were built in the 1920s and 1930s, were designed by three architects: Birge Clark, Pedro de Lemos, and William H. Weeks. Today, those buildings still stand and, along with the subject property, are contributors to the Ramona Street Architectural District. The building directly adjacent to the north and the Palo Alto City Hall building across Hamilton Avenue to the east are later additions to the neighborhood. Materials The building at 261 Hamilton Avenue retains high integrity of materials. Apart from replaced windows and altered openings at the ground level, the exterior retains many of its original exterior materials, including ironwork, steal sash windows, tile work, tile roof, and stucco cladding. Workmanship The building at 261 Hamilton Avenue retains high integrity of workmanship associated with its Spanish Colonial Revival-style detailing on the exterior. Feeling The building at 261 Hamilton Avenue retains high integrity of feeling. The building displays character of a 1920s commercial building and conveys its relationship to Ramona Street and the adjacent buildings through its coherent stylistic elements. Association The building at 261 Hamilton Avenue retains high integrity of association. It is most closely associated with the architect Birge Clark and still retains many of its original architectural elements and materials that link it to Birge’s trademark Spanish Colonial Revival style. Statement of Significance The building at 261 Hamilton Avenue has already been evaluated for its historic significance. It recognized as a Category 3 building on Palo Alto’s Historic Inventory. It is also a contributor to the Ramona Street Architectural District, which was listed on the National Register in 1986. The National Register Nomination Form states the significance of the district as follows: The significance of the Ramona Street Architectural District is that it represents an architecturally unified area of buildings which were built during a particular period (1924-1938). The buildings in the district remain largely unaltered, and the architectural district contains no intrusions. The total absence of intrusions in a district characterized by a single predominant architectural style makes this area quite unique. Not only are the individual structures attractive in their own right, their relationship with one another established the character of the street. The architecture of this street is reminiscent of an architecturally untutored Spanish village. Excellent examples of Monterey Colonial, Spanish Colonial Revival, and to a lesser extent, Craftsman Style architecture, line both sides of the tree-lined street…. These taller structures [the Cardinal Hotel and 261 Hamilton Avenue] at the corner of Ramona Street and Hamilton Avenue complete the form of the street which is otherwise composed of one- to three-story structures. A simple palette of materials, carefully executed details, comfortable massing, and inviting plans with interior courts of the various buildings give this area its friendly human-scale quality. Thick stucco walls with recessed openings, carved wood, wrought iron, ceramic tile, and tile roofing are composed in a variety of forms which gives diversity to this visually unified State of California  The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI# CONTINUATION SHEET Trinomial Page 5 of 6 *Resource Name or # 261 Hamilton Avenue DPR 523L (1/95) *Required information area. The relatively few alterations done to the buildings over the years have been sensitively handled and in no way detract from their original character.2 Period of Significance The period of significance is the span of time in which a property attained its historic significance. 261 Hamilton Avenue is architecturally significant as a good representative example of the Spanish Colonial Revival Style and is part of the architecturally cohesive Ramona Street Architectural District. The period of significance for the buildings at 261 Hamilton Avenue is the year of the building’s construction in 1927. As a contributor to the Ramona Street Architectural District, the building’s period of significance extends from 1927 to 1938.3 B12. References: (continued from page 2) Clark, Birge. An Architect Grows Up in Palo Alto, Memoirs of Birge M. Clark, F.A.I.A.. September 1982. Corbett, Michael and Denise Bradley. “Final Survey Report, Palo Alto Historical Survey Update, August 1997-August 2000.” February 2001. George, Carolyn. National Register of Historic Places Inventory Nomination Form. Ramona Street Architectural District Nomination Form. May 1985. http://pdfhost.focus.nps.gov/docs/NRHP/Text/86000592.pdf (Accessed November 25, 2013) Gullard, Pamela and Nancy Lund. History of Palo Alto: The Early Years. San Francisco: Scottwall Associates, 1989. Hamilton Building, DPR 523 Historic Resources Inventory Form. Prepared by the Historic Resources Board; Palo Alto Historical Association. 1981, 1985. Historic Environment Consultants. “Historical and Architectural Resources of the City of Palo Alto.” Prepared by Paula Boghosian and John Beach. February 1979. Pacific Coast Architecture Database. https://digital.lib.washington.edu/architect/architects/759/ (Accessed November 11, 20130) Palo Alto Times. “New P.O. Building Sketched: Style of New Structure To Stress Spanish Note; Work to Begin In July.” May 14, 1927. Palo Alto Building Permits Palo Alto City Directories Sanborn Map Company Fire Insurance Maps for the City of Palo Alto Weinstein, Dave. Signature Architects of the San Francisco Bay Area. Layton, UT: Gibbs Smith, 2006. 2 National Register of Historic Places Inventory Nomination Form, Ramona Street Architectural District, prepared by Carolyn George, May 21, 1985. 3 The period of significance for the Ramona Street Architectural District identified in the National Register nomination extends from 1924 when the first contributor to the district was constructed to 1938 when the last one was constructed. State of California  The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI# CONTINUATION SHEET Trinomial Page 6 of 6 *Resource Name or # 261 Hamilton Avenue DPR 523L (1/95) *Required information South façade, upper floors of east end (Architectural Resources Group, November 2013) East façade (Architectural Resources Group, November 2013) West and south façades (Architectural Resources Group, November 2013) Detail of ironwork, east façade (Architectural Resources Group, November 2013) North façade (Architectural Resources Group, November 2013) Storefront with original tile along south façade (Architectural Resources Group, November 2013) Appendix E: Drawings of Proposed Project Provided by Cody Anderson Wasney Architects 261 Hamilton Avenue  Palo Alto, CA Focused Historic Structure Report Architectural Resources Group ARCHITECTURAL A0.0 COVER SHEET A0.1 EXISTING CODE ANALYSIS A0.2 PROPOSED CODE ANALYSIS A0.3 NEIGHBORHOOD CONTEXT A0.4 SITE PLAN A1.0 DEMOLITION BASEMENT & FIRST FLOOR PLAN A1.1 DEMOLITION MEZZANINE & SECOND FLOOR PLAN A1.2 DEMOLITION THIRD & FOURTH FLOOR PLAN A2.0 PROPOSED BASEMENT & FIRST FLOOR PLAN A2.1 PROPOSED MEZZANINE & SECOND FLOOR PLAN A2.2 PROPOSED THIRD & FOURTH FLOOR PLAN A4.1 SOUTH ELEVATION - RAMONA STREET A4.2 EAST ELEVATION - HAMILTON STREET A4.3 NORTH ELEVATION - CENTENNIAL WALK A4.4 WEST ELEVATION A5.0 RENDERINGS A5.1 CENTENNIAL PLAQUE RELOCATION T-1 TREE PROTECTION A0.0 COVER SHEET Client/Owner Name/Title Email Ventana Property Services 975 High Street Roxy Rapp roxy@roxyrapp.com Palo Alto, CA 94301 Joe Martignetti JMartignetti@ventanaps.com Jerry Evans jevans1206@aol.com 650.847.2000 Architect Cody Anderson Wasney Architects 455 Lambert Avenue Monty Anderson Principal mea@cawarchitects.com Palo Alto, CA 94041 Daniel Pho Project Manager dpho@cawarchitects.com Caroline Lebar clebar@cawarchitects.com 650.328.1888 Structural Engineer SEI (Structural Engineers Incorporated) 4970 El Camino Real Samuel Koerper Principal skoerper@structuralengineersinc.com Suite 100 Stephen Lord Project Manager SLord@structuralengineersinc.com Los Altos, CA 94022 650.938.2200 Mechanical Engineer Encon 801 East Charleston Road Robert Trifunovic Principal bobencon.com Suite A Vy Truong Project Manager vytruong@encon.com Palo Alto, CA 94303 650.433.4900 Geotechnical Engineer Romig Engineers, Inc 1390 El Camino Real Richard Woodard Principal dick@romigengineers.com Second Floor Coleman Ng Project Manager coleman@romigengineers.com San Carlos, CA 94070 650.591.5224 W-1 F-1 C-1 B-1 1 A5.0D B C A 1 A6.0 1 A4.1 1 A4.0 REHABILITATION & ADDITION TO 261 HAMILTON BUILDING 261 HAMILTON AVENUE PALO ALTO, CA 94301 VICINITY MAP GENERAL NOTES ABBREVIATIONS PROJECT DIRECTORY WORK, CONTROL, OR DATUM POINT SEE LEGEND ON DRAWINGSFOR EXPLANATION OF EACH NOTE KEYNOTE DETAIL NUMBER DETAIL SECTION SECTION NUMBER ELEVATION NUMBER INTERIOR ELEVATION ROOM NAME ROOM IDENTIFICATION DIMENSION @ FACE OF STUD, MASONRY OR FRAMING (U.O.N.) DIMENSION @ CENTERLINE DIMENSION @ FACE OF FINISH PROPERTY LINE NEW OR FINISHED CONTOURS EXISTING CONTOURS "CLOUD" INDICATES REVISED AREA ON DRAWINGS REVISION NUMBER COLUMN LINE DOOR ID DOOR MARK OR SEQUENCE NUMBER WINDOW ID PLUMBING ID APPLIANCE ID CHANGE IN FLOOR FINISHES ALIGN FACE OF FINISH WALL TYPE ID A-1 P-1 A 1 1 SHEET WHERE DETAIL IS DRAWN SHEET WHERE SECTION IS DRAWN ROOM NUMBER SHEET WHERE ELEVATION IS DRAWN CEILING MATERIAL FLOOR MATERIAL BASE/TRIM MATERIAL WALL MATERIAL WINDOW MARK OR SEQUENCE NUMBER ROOM FINISH ID ELEVATION ELEVATION NUMBER SHEET WHERE ELEVATION IS DRAWN (E) CONSTRUCTION (N) CONSTRUCTION (E) CONSTRUCTION TO BE REMOVED SYMBOLS HRB/ARB RESUBMITTAL SET THE CONTRACTOR IS SOLELY RESPONSIBLE FOR THE CONSTRUCTION MEANS, METHODS, TECHNIQUES, SEQUENCES AND PROCEDURE AND FOR ALL SAFETY PROGRAMS AND PRECAUTIONS IN CONNECTION WITH THE PROJECT. NEITHER THE OWNER NOR THE ARCHITECT IS RESPONSIBLE FOR THE CONTRACTOR'S FAILURE TO FOLLOW PROPER SAFETY PROCEDURES. ALL CODES HAVING JURISDICTION ARE HEREBY MADE A PART OF THIS DOCUMENT AND ARE TO BE STRICTLY OBSERVED BY THE CONTRACTOR IN THE CONSTRUCTION OF THE PROJECT. IN THE EVENT OF CONFLICT BETWEEN THESE DOCUMENTS AND THE CODE, THE CODE SHALL PREVAIL. ANY CONFLICT OR DISCREPANCY SHALL IMMEDIATELY BE BROUGHT TO THE ATTENTION OF THE ARCHITECT. ALL WORK, TO BE ACCEPTABLE, MUST BE IN COMPLIANCE WITH THESE DRAWINGS AND SPECIFICATIONS, AND MUST BE OF A QUALITY EQUAL OR BETTER THAN THE STANDARD OF THE TRADE. FINISHED WORK SHALL BE FIRM, WELL-ANCHORED, IN TRUE ALIGNMENT, PLUMB, LEVEL, WITH SMOOTH, CLEAN, UNIFORM APPEARANCE. CONTRACTOR SHALL AT ALL TIMES PROVIDE PROTECTION AGAINST WEATHER, RAIN, WINDSTORMS, OR HEAT SO AS TO MAINTAIN ALL WORK, MATERIALS, EQUIPMENT AND APPARATUS FREE FROM INJURY OR DAMAGE. CONTRACTOR SHALL VISIT THE SITE OF THE PROJECT, EXAMINE FOR HIMSELF/HERSELF THE NATURE OF THE EXISTING CONDITIONS AND ALL OTHER CONDITIONS RELEVANT TO THE SATISFACTORY COMPLETION OF THE PROJECT. SUBMISSION OF A BID FOR CONSTRUCTION SHALL BE CONSIDERED EVIDENCE OF SUCH EXAMINATION BY THE CONTRACTOR. CONTRACTOR SHALL REMOVE FROM SITE ALL EXISTING CONSTRUCTION AND IMPROVEMENTS NECESSARY FOR COMPLETION OF THE PROJECT, PROTECT FROM DAMAGE OR INJURY ALL EXISTING TREES, LANDSCAPING AND IMPROVEMENTS INDICATED BY THE ARCHITECT. ALL WORK SHALL CONFORM TO THE CONTRACT DOCUMENTS, WHICH INCLUDE THE PROJECT MANUAL WITH SPECIFICATIONS, THE ADDENDA AND MODIFICATIONS ISSUED BY THE ARCHITECT. ALL WORK NOTED "BY OTHERS" OR "N.I.C." SHALL BE PROVIDED BY THE OWNER UNDER SEPARATE CONTRACT. INCLUDE SCHEDULE REQUIREMENTS FOR THIS "OTHER" WORK IN CONSTRUCTION PROGRESS SCHEDULES AND COORDINATE AS REQUIRED TO ASSURE ORDERLY SEQUENCE OF INSTALLATION. DO NOT SCALE DRAWINGS COLUMN CENTER LINES (OR GRID LINES) ARE SHOWN FOR REFERENCE ONLY. IN CASE OF CONFLICT OR DISCREPANCIES IN CONTRACT DOCUMENTS, CONTRACTOR SHALL NOTIFY THE ARCHITECT IN WRITING PRIOR TO PROCEEDING. PRIOR TO BEGINNING WORK, CONTRACTOR SHALL VERIFY ALL DIMENSIONS AND ENSURE THAT ALL WORK IS BUILDABLE AS SHOWN. CONDITIONS THAT ARE NOT REFLECTIVE OF THAT WHICH IS SHOWN SHALL BE REPORTED TO THE ARCHITECT IN WRITING PRIOR TO COMMENCING CONSTRUCTION. "TYPICAL" OR "TYP." SHALL MEAN THAT THE CONDITION IS REPRESENTATIVE FOR SIMILAR CONDITIONS THROUGHOUT, UNLESS OTHERWISE NOTED (U.O.N.). DETAILS ARE USUALLY KEYED AND NOTED "TYP." ONLY ONCE, WHEN THEY FIRST APPEAR. "ALIGN" SHALL MEAN TO ACCURATELY LOCATE FINISH FACES IN THE SAME PLANE "SIMILAR OR "SIM." MEANS COMPARABLE CHARACTERISTICS FOR THE CONDITIONS NOTED. VERIFY DIMENSIONS AND ORIENTATION ON PLANS AND ELEVATIONS. FEATURES OF CONSTRUCTION NOT FULLY SHOWN SHALL BE OF THE SAME CHARACTER AS SHOWN FOR SIMILAR CONDITIONS. ALL DIMENSIONS MARKED "CLEAR" SHALL BE MAINTAINED AND SHALL ALLOW FOR THICKNESS OF ALL FINISHES. SEE 'ABBREVIATIONS & SYMBOLS' ON THIS SHEET FOR GRAPHIC CONVENTIONS OF NEW VERSUS EXISTING CONSTRUCTION. IN ALL NOTES ON ALL DRAWINGS ALL WORK SHALL BE NEW WORK UNLESS SPECIFICALLY LABELED AS EXISTING (E). CONTRACTOR TO PROVIDE BLOCKING AND/OR BACKING PLATES AT ALL WALL HUNG OR WALL BRACED DEVICES. COORDINATE AND COOPERATE WITH OWNER REGARDING ACCESS ROUTE AND SCHEDULING OF MATERIAL DELIVERIES. COORDINATE ALL WORK OCCURRING IN OCCUPIED AREAS WITH OWNER. SCHEDULE WORK AS REQUIRED. SCHEDULE AND COORDINATE ACTIVITIES BY OWNER. ALL ACTIVITIES MUST BE ACCOMMODATED WITHIN THE CONTRACT TIME. ALL INFORMATION SHOWN ON THE DRAWINGS RELATIVE TO EXISTING CONDITIONS IS GIVEN WITH THE BEST PRESENT KNOWLEDGE. WHERE ACTUAL CONDITIONS CONFLICT WITH THE DRAWINGS, THEY SHALL BE REPORTED TO THE ARCHITECT IN WRITING, SO THE PROPER REVISIONS CAN BE MADE. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. REGULATORY STANDARDS 1 A 1" 1" 1" 1 1 NAME ## Da t e : 10 / 1 7 / 1 3 Tim e : 11 : 2 5 : 2 2 A M Fil e n a m e : 12 0 0 9 _ A 0 .0 _ C o v e r .v w x ADJ. A.F.F. APPROX. ARCH. BLDG. BLKG. BM. CAB. C.J. CLG. CLO. CLR. C.M.U. C.O. COL. CONC. C.T. C.W. DBL. DEPT. DET. D.F. DIA. DIM. DN. DS. DW DWG.DRAWING EA. E.J. ELECT./ELEC. ENCL. E.O.S. EQ. EQUIP./EQPT. EXST or (E) AND AT DIAMETER or ROUND ACOUSTICAL ADJUSTABLE ABOVE FINISHED FLOOR APPROXIMATE ARCHITECTURAL BUILDING BLOCKING BEAM CABINET CONTROL JOINT CEILING CLOSET CLEAR CONCRETE MASONRY UNIT CLEANOUT or CASED OPENING COLUMN CONCRETE COLLAR TIE COLD WATER DOUBLE DEPARTMENT DETAIL DOUGLAS FIR or DRINKING FOUNTAINDIAMETER DIMENSION DOWN DOWNSPOUT DISHWASHER EACH EXPANSION JOINT ELECTRICAL ENCLOSURE EDGE OF SLAB EQUAL EQUIPMENT EXISTING GYPSUM BOARD/GYPSUM GALVANIZED SHEET METAL MAX. MECH. MEZZ. MFR. MIN. MISC. MTL./MET. N. (N) or NEW N.I.C. NO. or # N.T.S. o/ O.C. O.D. OPNG. P.E.N. PERF. PL. P.LAM. PLYWD. PREFAB. PTD. P.D.F. I.D. IN. or (") INSUL.INT. JAN. JST. KIT. LAM. LAV. HT./HGT. HTR. H.W. HDWD. MAXIMUM MECHANICAL MEZZANINE MANUFACTURER MINIMUM MISCELLANEOUS METAL NORTH NEWNOT IN CONTRACT NUMBER NOT TO SCALE OVER ON CENTER OUTSIDE DIAMETER OPENING PLYWOOD EDGE NAILING PERFORATED PLATE OR PROPERTY LINE PLASTIC LAMINATE PLYWOOD PREFABRICATED PAINTED INSIDE DIAMETER (DIM.)INCH OR INCHES INSULATIONINTERIOR JANITOR JOIST KITCHEN LAMINATE LAVATORY HEIGHT HEATER HOT WATER HARDWOOD POWDER DRIVEN FASTENER PRESSURE TREATEDP.T. w/WITH w/o WITHOUT W.C.WATER CLOSET WD.WOODW.H.WATER HEATER WP.WATERPROOF W.W.F.WELDED WIRE FABRIC SPEC.SPECIFICATION(S) SQ.SQUARE S.ST.STAINLESS STEEL S.S.D.SEE STRUCTURAL DRAWINGS STL.STEEL STOR.STORAGE STRUCT./STRL.STRUCTURAL SUSP.SUSPEND SYM.SYMBOL or SYMMETRICAL T.&B.TOP AND BOTTOM T.&G.TONGUE AND GROOVE T.TREAD TEL.TELEPHONE THRU THROUGH T.O.C.TOP OF CURB T.O.P./TP TOP OF PAVEMENT T.O.W./TW TOP OF WALL T.P.H.TOILET PAPER HOLDER T.P.D.TOILET PAPER DISPENSER TV.TELEVISION TYP.TYPICAL U.L.UNDERWRITERS LABORATORIES U.O.N.UNLESS OTHERWISE NOTED VERT.VERTICAL V.I.F.VERIFY IN FIELD RISER RAD.RADIUS R.D.ROOF DRAIN REF.REFERENCE REINF.REINFORCE REQ'D REQUIRED R.O.ROUGH OPENING RWD.REDWOOD R.W.L.RAIN WATER LEADER S.4.S. SURFACED 4 SIDES S.C.SOLID CORE SCHED.SCHEDULE S.D.SOAP DISPENSER or SMOKE DETECTOR SEL.SELECT SHT.SHEET SIM.SIMILAR STD.STANDARD GYP. BD./GYP. G.S.M. & @ ø ACOUS. FIRE RETARDANT TREATEDFRT H.C. HDWR./HDWE. H.M.HORIZ. H.B. HOLLOW CORE HARDWARE HOLLOW METALHORIZONTAL HOSE BIB R. V.G.VERTICAL GRAIN PROJECT SUMMARY INDEX PROJECT DESCRIPTION: CITY OF PALO ALTO ZONING ORDINANCE, TITLE 18 OF THE MUNICIPAL CODE 2010 CALIFORNIA BUILDING CODE (CBC) PART 2, CBSC 2010 CALIFORNIA HISTORICAL BUILDING CODE (CHBC) PART 8, CBSC 1. 2. 3. REHABILITATION AND ADDITION OF A CATEGORY 3 HISTORICAL MIXED-USE BUILDING DESIGNED BY BIRGE CLARK AND CONSTRUCTED BY WELLS GOODENOUGH IN 1926. THE PROJECT SCOPE INCLUDES: - DEMOLITION OF 1 STORY MASSING ALONG CENTENNIAL WALK FOR A COMPATIBLE 3 STORY ADDITION. - CODE COMPLIANT EXIT STAIR - VOLUNTARY SEISMIC RETROFIT. - RESTORATION OF EXISTING HISTORIC STOREFRONT, METAL BALCONY & ORNAMENTAL IRONWORK. - NEW MECHNICAL, ELECTRICAL, PLUMBING, FIRE ALARM, & SPRINKLER. - RETROFIT ELEVATOR WITH NEW GURNEY SIZED ELEVATOR. - NEW STEEL FRAMED WINDOWS TO MATCH EXISTING HISTORIC WINDOWS. -NEW PARKING AND BIKE FACILITY APN:120-26-065 ZONE DISTRICT:CD-C (GF)(P) PARKING DISTRICT:UNIVERSITY AVENUE HISTORICAL DESIGNATION:CATEGORY 3, RAMONA STREET HISTORIC DISTRICT FLOOD PLAIN:NONE EASEMENTS: NONE SETBACKS:7' HAMILTON AVE. SPECIAL SETBACK OCCUPANCY TYPE:MERCANTILE (M), OFFICES (B), AND STORAGE (S-2) NUMBER OF STORIES: 4-STORIES & 1 STORY BASEMENT - BASEMENT (COMMERCIAL/STORAGE) - 1ST FLOOR (COMMERCIAL) - MEZZANINE (OFFICE) - 2ND - 4TH FLOOR (OFFICE) CONSTRUCTION TYPE:II FIRE PROTECTION:NONE, EXISTING Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 1 1 2 2 A0.1 EXISTING CODE ANALYSIS N TRUE NORTH 14 ' - 0 " 10 ' - 3 " 10'-3 3/4" 35'-8 5/8" 9'- 0 " 1'- 7 " (E) MEZZANINE FLOOR 4,535 SF 2'-3" 2'- 1 0 " 55'-0 1/2" 15 ' - 0 " 15 ' - 8 1 / 2 " 19'-5 1/2" 865 SF 99'-5" 60 ' - 9 1 / 2 " 32 ' - 0 " 10'-4" 100'-0" 10 ' - 3 " 3,181 SF 6,079 SF 331 SF 1,025 SF 46'-7 1/2" 48 ' - 6 1 / 2 " 96'-7" 9'- 4 " 31 ' - 7 1 / 2 " 32'-7" 2,263 SF 3,054 SF 304 SF 9'-10" 24'-6"49'-11 1/2" 16 ' - 1 0 " 749 SF412 SF 15'-10 1/2"24'-3 1/2" 15 ' - 1 1 / 2 " 8'-9" 11 ' - 7 1 / 2 " 9'- 7 1 / 2 " 7'-7 1/2" 27 ' - 0 1 / 2 " 429 SF367 SF 102 SF 73 SF 3'-4 1/2" 3'- 4 " 3'-9" 100'-0" 1,616 SF 822 SF 3,492 SF 336 SF 17 ' - 3 " 17'-5 1/2"49'-5 1/2" 4,220 SF 2'-5" 3'-4" 3'- 3 1 / 2 " 7'- 8 1 / 2 " 9'-11"31'-4"10'-8" 12 ' - 8 1 / 2 " 3'- 9 " 697 SF 70 ' - 1 1 " 113 SF 63 SF 140 SF 43 SF 39 SF 49 SF 50'-0" 32 ' - 4 " 16 ' - 3 1 / 2 " 9'- 4 " 34 ' - 1 1 " 35'-11 1/2" 50'-5 1/2" 97'-8" 100'-0" 13 SF 48 SF 26 SF 35 SF 103 SF33 SF 97'-0" 22'-4 1/2" 43 ' - 2 1 / 2 " 46 ' - 1 0 " 100'-0" 1,616 SF 822 SF 3,492 SF 336 SF 50'-0" 32 ' - 4 " 16 ' - 3 1 / 2 " 9'- 4 " 34 ' - 1 1 " 35'-11 1/2" 50'-5 1/2" 46 ' - 1 0 " 3'- 3 1 / 2 " 4EXISTING BASEMENT PLAN SCALE: 1/16" = 1-0'1EXISTING SECOND FLOOR PLAN SCALE: 1/16" = 1-0' 5EXISTING FIRST FLOOR PLAN SCALE: 1/16" = 1-0' 2EXISTING THIRD FLOOR PLAN SCALE: 1/16" = 1-0' 6EXISTING MEZZANINE PLAN SCALE: 1/16" = 1-0'3EXISTING FOURTH FLOOR PLAN SCALE: 1/16" = 1-0' GROSS FLOOR AREA LOT COVERAGE EXISTING COVERAGE: EXISTING LOT SIZE: LOT SIZE = 100'-0" X 100'-0" COVERAGE PERCENTAGE: 9,202 SF / 10,000 SF = 0.9202 TOTAL ALLOWABLE: PER CPA 18.18.60 TABLE 2 NO RESTRICTIONS 9,202 SF 10,000 SF EXISTING: BASEMENT FLOOR: FIRST FLOOR: (MEZZANINE: SECOND FLOOR: THIRD FLOOR: FOURTH FLOOR: TOTAL: 92% 11,313 SF 9,202 SF 2,997 SF ** 6,266 SF 6,266 SF 5,879 SF 38,926 SF VEHICLE & BIKE PARKING REQUIREMENTS PARKING ASSESSMENT RECORDS DESIGNATE THAT THERE ARE 7 EXISTING PARKING SPACES. TOTAL ALLOWABLE: PER CPA 18.18.60 TABLE 2 30,000 SF * M / S B / M B / S) B B B Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fi l e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 * (E) HISTORIC BUILDING WAS CONSTRUCTED PRIOR TO CPA ZONING ORDINANCE AND EXCEEDS CURRENT FAR REQUIREMENTS. EXISTING AND PROPOSED CONDITIONS WILL REMAIN (E) NON-CONFORMING. ** ORIGINAL MEZZANINE CONSTRUCTION WAS NOT INCLUDED IN THE GROSS FLOOR AREA AS EXPECTED BY THE PARKING ASSESSMENT RECORDS. USE: ASSESSED: 1 1 ASSESSED: (E) BASEMENT IS UTILIZED AS USABLE AREA FOR RETAIL TENANT ON GROUND FLOOR AND DOES NOT CURRENTLY CONTAIN ANY PARKING. THE 7 ASSESSED PARKING SPACES ARE LOCATED ON THE ADJACENT PROPERTY, AT 541 RAMONA, WHICH SHARES A DRIVEWAY TO THE PROPERTY. BIKE FACILITIES ARE NOT PROVIDED AS PART OF (E) BUILDING. (E) HISTORIC BUILDING WAS CONSTRUCTED PRIOR TO CITY OF PALO ALTO ZONING ORDINANCE & PRECEDED THESE REQUIREMENTS. EXISTING: TOTAL:37,800 SF DN 22 risers @6.54" UP UP DN 22 risers @6.54" DN UPDN 19 risers @6.57" UP 19 risers @6.73" 14 ' - 0 " 10 ' - 3 " 10'-3 3/4" 35'-8 5/8" 9'- 0 " 1'- 7 " UPDN 19 risers @6.52" 10 ' - 1 1 " 2'-3" 2'- 1 0 " 17 ' - 3 " 17'-5 1/2"49'-5 1/2" 32 ' - 1 " 2'-5" 10 ' - 1 1 " 9'- 6 " 6'- 7 " 94'-0" 3'-0" 43 ' - 3 1 / 2 " 46 ' - 9 1 / 2 " 19 ' - 3 " 99'-5" 60 ' - 9 1 / 2 " 32 ' - 0 " 100'-0" 50'-0" 50'-6" 46'-4 1/2" 20 ' - 0 " 3'-7 1/2" 85 SF 49'-5" 34 ' - 1 1 " 32 ' - 4 " 16 ' - 3 1 / 2 " 3,057 SF 56 SF (N) 135 SF 6" SECOND FLOOR BUILDING ADDITION: 2,888 SF FOURTH FLOOR BUILDING ADDITION: 135 SF MEZZANINE USABLE FLOOR AREA: 1,196 SF BASEMENT USABLE FLOOR AREA: 3,010 SF 3'-0" (N) 989 SF (N) 1,764 SF 37 ' - 1 1 1 / 2 " 20 ' - 0 " 46'-5" 15 ' - 6 1 / 2 " 7'-9" 31'-10" 9'- 8 " 20'-8" 25'-0"18 ' - 7 1 / 2 " 308 SF 407 SF 1,763 SF 822 SF 336 SF (N) 135 SF 1,616 SF 3,492 SF 9'- 4 " 34 ' - 1 1 " 100'-0" 14'-6 1/2" 50'-0" 50'-6"49'-5" 34 ' - 1 1 " 32 ' - 4 " 16 ' - 3 1 / 2 " 3,057 SF THIRD FLOOR BUILDING ADDITION: 2,888 SF 37 ' - 1 1 1 / 2 " 20 ' - 0 " 46'-5" 822 SF 336 SF 1,616 SF 3,492 SF 9'- 4 " 34 ' - 1 1 " 100'-0" 14'-6 1/2" (N) 989 SF (N) 1,764 SF (N) 135 SF 46'-7 1/2" 48 ' - 6 1 / 2 " 9'- 4 " 31 ' - 7 1 / 2 " 2,263 SF 3,054 SF 304 SF 3'-4 1/2" 3'- 4 " 3'-9" 3'-4" 3'- 3 1 / 2 " 7' - 8 1 / 2 " 9'-11"31'-4"10'-8" 12 ' - 7 1 / 2 " 3'- 9 " 13 SF 48 SF 26 SF 35 SF 103 SF33 SF 14'-6 1/2" 35'-11" 927 SF 25 ' - 9 " 532 SF 22'-4 1/2" 26 SF 23 SF 16 SF 63 SF140 SF 43 SF 39 SF 49 SF 4,398 SF 4,069 SF 96 SF 33 SF 128 SF 94'-7 1/2" 7'-9" 11 ' - 0 " 16 ' - 7 1 / 2 " 3'-0" 2171 SF 772 SF 729 SF 2193 SF 396 SF 16 ' - 2 1 / 2 " 24'-3 1/2" 22 ' - 5 1 / 2 " 67'-7" 29'-11 1/2"17'-5 1/2" 3'-0" A0.2 4PROPOSED BASEMENT PLAN SCALE: 1/16" = 1-0'1PROPOSED SECOND FLOOR PLAN SCALE: 1/16" = 1-0' 5PROPOSED FIRST FLOOR PLAN SCALE: 1/16" = 1-0'2PROPOSED THIRD FLOOR PLAN SCALE: 1/16" = 1-0' 6PROPOSED MEZZANINE PLAN SCALE: 1/16" = 1-0'3PROPOSED FOURTH FLOOR PLAN SCALE: 1/16" = 1-0' LOT COVERAGE EXISTING COVERAGE: EXISTING LOT SIZE: LOT SIZE = 100'-0" X 100'-0" COVERAGE PERCENTAGE: 9,202 SF / 10,000 SF = 0.9202 TOTAL ALLOWABLE: PER CPA 18.18.60 TABLE 2 NO RESTRICTIONS 9,202 SF 10,000 SF 92% PROPOSED COVERAGE: PROPOSED LOT SIZE: LOT SIZE = 100'-0" X 100'-0" PROPOSED COVERAGE PERCENTAGE: 9,001 SF / 10,000 SF = 0.9001 8,995 SF 10,000 SF BASEMENT FLOOR: FIRST FLOOR: MEZZANINE: SECOND FLOOR: THIRD FLOOR: FOURTH FLOOR: TOTAL: 90% 3,010 SF 8,995 SF 1,196 SF 9,154 SF 9,154 SF 6,014 SF 37,523 SF S B / M B B B B PROPOSED CODE ANALYSIS THE TRANSFER OF USABLE FLOOR AREA FROM THE BASEMENT TO THE NEW ADDITION WILL ALLOW FOR PARKING AND BIKE ACCOMMODATIONS TO BE PROVIDED IN THE BUILDING. THE BASEMENT WILL CONTAIN 7 EXISTING PARKING SPACES AT 541 RAMONA, 9 NEW PARKING SPACES (8 STANDARD AND 1 ACCESSIBLE), AND 10 BIKE STORAGE LOCKERS. PROPOSED: Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 N TRUE NORTH GROSS FLOOR AREA EXISTING: BASEMENT FLOOR: FIRST FLOOR: (MEZZANINE: SECOND FLOOR: THIRD FLOOR: FOURTH FLOOR: TOTAL: 11,313 SF 9,202 SF 2,997 SF ** 6,266 SF 6,266 SF 5,879 SF 38,926 SF VEHICLE & BIKE PARKING REQUIREMENTS PARKING ASSESSMENT RECORDS DESIGNATE THAT THERE ARE 7 EXISTING PARKING SPACES. TOTAL ALLOWABLE: PER CPA 18.18.60 TABLE 2 30,000 SF * M / S B / M B / S) B B B * (E) HISTORIC BUILDING WAS CONSTRUCTED PRIOR TO CPA ZONING ORDINANCE AND EXCEEDS CURRENT FAR REQUIREMENTS. EXISTING AND PROPOSED CONDITIONS WILL REMAIN (E) NON-CONFORMING. ** ORIGINAL MEZZANINE CONSTRUCTION WAS NOT INCLUDED IN THE GROSS FLOOR AREA AS EXPECTED BY THE PARKING ASSESSMENT RECORDS. USE: ASSESSED: 1 1 ASSESSED: (E) BASEMENT IS UTILIZED AS USABLE AREA FOR RETAIL TENANT ON GROUND FLOOR AND DOES NOT CURRENTLY CONTAIN ANY PARKING. THE 7 ASSESSED PARKING SPACES ARE LOCATED ON THE ADJACENT PROPERTY, AT 541 RAMONA, WHICH SHARES A DRIVEWAY TO THE PROPERTY. BIKE FACILITIES ARE NOT PROVIDED AS PART OF (E) BUILDING. (E) HISTORIC BUILDING WAS CONSTRUCTED PRIOR TO CITY OF PALO ALTO ZONING ORDINANCE & PRECEDED THESE REQUIREMENTS. EXISTING: TOTAL:37,800 SF PROPOSED:USE: 2 R A M O N A S T R E E T HAM I L T O N ST R E E T C E N T E N N I A L W A L K Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 1AERIAL VIEW SCALE: NTS A0.3 NEIGHBORHOOD CONTEXT 4RAMONA STREET SCALE: NTS 3HAMILTON STREET SCALE: NTS 2CENTENNIAL WALK SCALE: NTS SUBJECT PROPERTY SUBJECT PROPERTY SUBJECT PROPERTY GO O G L E E A R T H 2 0 1 3 N TRUE NORTH SITE PLAN SCALE: 1/16" = 1-0'1 A0.4 SITE PLAN UPDN 19 risers @6.57" 285 HAMILTON 235 HAMILTON 533-535 RAMONA 533-535 RAMONA528-530 RAMONA 540 BRYANT 530-536 BRYANT 518-526 BRYANT HAMILTON AVE. BR Y A N T S T . RA M O N A S T . CE N T E N N I A L W A L K E G W G W W WW 1 E W 538-542 RAMONA 536-532 RAMONA 45 3 541-545 RAMONA SSSS W G SS E E SUBJECT PROPERTY 261 HAMILTON G E W E W G G W SS 6 2 92 ' - 9 " 12 ' - 1 1 " RIG H T O F W A Y 11'-10" RIGHT OF WAY 100'-0"10'-1"10'-1" HAMILTON SPECIAL SETBACK7' - 0 " LEGEND PROPERTY LINE EXISTING STREET TREES THAT WILL REQUIRE TREE PROTECTION PER SHEET T-1 & PER CITY OF PALO ALTO'S TREE PROTECTION MANUAL (E) FIRE HYDRANT EXISTING STREET TREES SPECIAL SETBACK LINE - HAMILTON AVE. KEYNOTES 1 (E) FIRE STANDPIPE TO REMAIN 2 FIRE SEPARATION DISTANCE TO CENTER LINE OF ALLEY 3 (E) MAIL BOXES ON SIDE WALK TO REMAIN 4 5 (E) TRASH BIN AND NEWSPAPER RACK ON SIDEWALK TO REMAIN. (E) BENCH ON SIDEWALK TO REMAIN. 6 (E) RAMP ACCESS TO BUILDING BASEMENT. PUBLIC RIGHT OF WAY FROM CENTENNIAL WALK. Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 1 N TRUE NORTH 2 Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 A1.0 DEMOLITION BASEMENT PLAN DEMOLITION FIRST FLOOR PLAN 14 ' - 0 " 1 9 10 ' - 3 " PUBLIC RIGHT OF WAY UNDER SIDEWALK 10'-3 3/4" 2 3 ELEV DN 35'-8 5/8" 3'- 8 " 9'- 0 " 9'- 1 0 " 9'- 0 " 7'- 6 " 9'- 0 " 1'- 7 " 9'-7 3/4"18'-0"18'-0"18'-8 1/8" 9'-0" 2'-1 3/4" STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' 9" APPROX. SLOPE: 3:12 UP FSR SD SUMP AND SEWER SWITCH GEAR/ METERS FURNACE BOILER TEL/DATA (E) STORAGE (E) STORAGE (E) GARAGE (ADJACENT PROPERTY) SPACES: 7 (E) STORAGE (ADJACENT PROPERTY) (E) OPEN STORAGE SPACE/ RETAIL TENANT WORK AREA PU B L I C R I G H T O F WA Y U N D E R SI D E W A L K (E) UTILITY ROOM TYP. 123 4 5 6 7 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " 2(E) FIRST PLAN SCALE: 1/8" = 1'-0" 3 2 6 5 4 TYP. TYP. 7 7 7 7 8 8 7 7 7 7 88 (E) RETAIL (E) RETAIL (E) RETAIL (E) RETAIL ELEV (E) KITCHEN (E) NON-ACCESSIBLE RESTROOM FA (E) FOYER 7 TYP. OF 3 TYP. OF 3 10 7 UP 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " 1(E) BASEMENT FLOOR PLAN SCALE: 1/8" = 1'-0" 1 2 3 KEYNOTES REMOVE (E) SHEET METAL STORM WATER COLLECTION SYSTEMS IN ITS ENTIRETY. PREPARE SPACE UNDER SIDEWALK FOR CITY STREET INFILL CONSTRUCTION AND BASEMENT WALL INFILL CONSTRUCTION. REMOVE (E) CABLE ELEVATOR. PREPARE SHAFT FOR NEW CODE COMPLIANT ELEVATOR SYSTEM. ELEVATOR SHAFT SHALL REMAIN. REMOVE AND REBUILD STUD WALLS AS REQUIRED TO FIT NEW ELEVATOR. REMOVE (E) 1-STORY BUILDING CONSTRUCTION SHOWN SHADED INCLUDING BUT NOT LIMITED TO FLOOR SLAB, FOUNDATION, COLUMNS, BEAMS, EXTERIOR WALLS, ETC. (E) HISTORIC FOYER & STAIR TO REMAIN. REMOVE AND SALVAGE THREE CENTENNIAL PLAQUES FOR RE-LOCATION. THREE (E) CENTENNIAL PLAQUES TO REMAIN. REMOVE NON-HISTORIC ALUMINUM STOREFRONT WIINDOW SYSTEM. PREPARE OPENING FOR NEW STEEL STOREFRONT WINDOWS. REMOVE (E) MEZZANINE AND SOFFIT CONSTRUCTION. (E) RAMP TO REMAIN. RAMP TO OCCURS ON ON ADJACENT PROPERTY REMOVE (E) FURRED OUT CONDUIT CHASE. SALVAGE CENTENNIAL WALK LETTERING FOR RE-USE LEGEND (E) CONSTRUCTION TO REMAIN DEMO (E) CONSTUCTION GENERAL NOTES 1. 2. 3. 4. ALL HISTORIC FEATURES ON THE BUILDING EXTERIOR INCLUDING AND NOT LIMITED TO THE FOYER AND HISTORIC STAIRS SHALL REMAIN AND BE PROTECTED FROM DAMAGE DURING CONSTRUCTION. TERRACOTTA ROOF TILES SHALL BE REMOVED AND SALVAGED FOR RE-USE. DOCUMENT EXACT LOCATION OF TILES REMOVED FOR RE-INSTALLATION. A PRE-CONSTRUCTION MEETING SHALL BE HELD BETWEEN THE OWNER, ARCHITECT AND CONTRACTOR TO REVIEW REHABILITATION SCOPE. REMOVE AND REPLACE MECHANICAL, ELECTRICAL, PLUMBING, TELECOM, FIRE ALARM AND SPRINKLER SYSTEM FOR THE BUILDING, TYPICAL. SURVEY IF (E) FIRE ALARM AND TELECOM SYSTEMS CAN BE SALVAGED FOR RE-USE. 4 5 6 7 8 9 10 N TRUE NORTH 2 Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 1(E) MEZZANINE FLOOR PLAN SCALE: 1/8" = 1'-0"2(E) SECOND FLOOR PLAN SCALE: 1/8" = 1'-0"A1.1 DEMOLITION MEZZANINE PLAN DEMOLITION SECOND FLOOR PLAN UP 3 4 ELEV 1 1 (E) OFFICE(E) WORK ROOM (E) OFFICE(E) OFFICE (E) STORAGE UP EXHAUST 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " (E) OFFICES(E) CORRIDOR (E) OPEN OFFICE 2 34 ELEV 5 5 5 5 6 8 6 TYP. TYP. 7 UP UP FLU DN 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " 1 2 3 KEYNOTES REMOVE (E) MEZZANINE CONSTRUCTION SHOWN SHADED REMOVE (E) EMERGENCY ESCAPE STAIR REMOVE (E) CABLE ELEVATOR. PREPARE SHAFT FOR NEW CODE COMPLIANT ELEVATOR SYSTEM. ELEVATOR SHAFT SHALL REMAIN. REMOVE AND REBUILD STUD WALLS AS REQUIRED TO FIT NEW ELEVATOR. (E) HISTORIC STAIR TO REMAIN REMOVE (E) SKYLIGHTS REMOVE (E) ROOFTOP MECHANICAL EQUIPMENT REMOVE (E) 1-STORY CONSTRUCTION SHOWN SHADED BUT NOT LIMITED TO PARAPET, ROOFING SYSTEM, ROOF SLAB, BEAMS, JOISTS, ETC REMOVE (E) UTILITY CHASE LEGEND (E) CONSTRUCTION TO REMAIN DEMOLISH (E) CONSTRUCTION GENERAL NOTES (SEE A1.0 FOR ADDITIONAL NOTES) 4 5 6 7 8 1. ALL FACILITIES ON THE SECOND, THIRD AND FOURTH FLOOR ARE DESIGNATED AND USED AS OFFICE N TRUE NORTH Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 2(E) FOURTH FLOOR PLAN SCALE: 1/8" = 1'-0"1(E) THIRD FLOOR PLAN SCALE: 1/8" = 1'-0"A1.2 DEMOLITION THIRD FLOOR PLAN DEMOLITION FOURTH FLOOR PLAN 34 2 ELEV (E) OFFICE (E) OFFICE (E) OFFICES (E) OFFICE (E) CORRIDOR (E) NON-ACCESSIBLE RESTROOM DN DN FLU 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " ELEV CAB (E) CORRIDOR (E) OFFICES (E) OFFICES ELEV CAB 34 2 (E) OFFICES (E) OFFICES TYP.TYP. (E) NON-ACCESSIBLE RESTROOM (E) OFFICES DN UP FLU UP UP FLU UP UP FLU 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " 1 2 3 KEYNOTES NOT USED REMOVE (E) EMERGENCY ESCAPE STAIR REMOVE (E) CABLE ELEVATOR. PREPARE SHAFT FOR NEW CODE COMPLIANT ELEVATOR SYSTEM. ELEVATOR SHAFT SHALL REMAIN. REMOVE AND REBUILD STUD WALLS AS REQUIRED TO FIT NEW ELEVATOR. (E) HISTORIC STAIR TO REMAIN LEGEND (E) CONSTRUCTION TO REMAIN DEMOLISH (E) CONSTRUCTION GENERAL NOTES (SEE A1.0 FOR ADDITIONAL NOTES) 4 1. ALL FACILITIES ON THE SECOND, THIRD AND FOURTH FLOOR ARE DESIGNATED AND USED AS OFFICE N TRUE NORTH UP 19 risers @6.73" 14 ' - 0 " 5 8'-7" 10 ' - 3 " 10'-3 3/4" ELEV CAB 2 4 4 GARAGE (ADJACENT PROPERTY) SPACES: 7 STORAGE (ADJACENT PROPERTY) DN 8 TYP. 9 9'- 0 " 5'- 0 " 18'-0"7'-0 1/2" 13 10 6'- 3 " 9'- 0 " 9'- 0 " 3'- 9 " 9'- 0 " 9'- 0 " 9'- 9 " 3'- 9 " 6'- 1 " 4'- 0 " 35'-8 5/8" 123 4 5 6 7 3'- 8 " 9'- 0 " 9'- 1 0 " 9'- 0 " 7'- 6 " 9'- 0 " 1'- 7 " 9'-7 3/4"18'-0"18'-0"18'-8 1/8" 9'-0" 2'-1 3/4" 9" STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' STANDARD 9' X 18' 21'-6" 22'-8 1/2" 2 APPROX. SLOPE: 3:12 STANDARD 9'X18' STANDARD ACCESSIBLE SUMP PUMP 1 6 7 PARKING SPACES: 9 STAIR CORE MEP 3 4 BICYCLE STORAGE SPACES: 10 (2'-6"X 6') 2 5 SHOWER/ LOCKERS CORRIDORSTORAGE STORAGE STANDARD STANDARD STANDARD STANDARD 1 TRASH HOLDING AREA 1 1 STANDARD 8 STANDARD 9'X18' 9 1 1 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 34 ' - 1 1 " 15 ' - 6 1 / 2 " 8' - 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " 15 ' - 1 1 " 12 ' - 3 1 / 2 " 2.3 9'-1"14'-6" 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 RETAIL TENANT 2 OFFICE SPACE RETAIL TENANT 3RETAIL TENANT 1 BATHROOM STORAGE CORRIDOR UPDN 19 risers @6.57"SHAFT STAIR CORE 1 2 1 1 1 1 1 ELEV CAB 22 3 5'- 0 " 5'-0" 6 5'-0" 11 4'- 1 " TELECOM ELEC. CLOSET SHAFT 12 1 77 1 UTILITY SHAFT 9 FOYER TYP. 7 7 TYP. TYP. 1 14 1 2 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " 2PROPOSED FIRST FLOOR PLAN SCALE: 1/8" = 1'-0"1PROPOSED BASEMENT PLAN SCALE: 1/8" = 1'-0"A2.0 PROPOSED BASEMENT PLAN PROPOSED FIRST FLOOR PLAN 1 2 3 KEYNOTES NEW COMPATIBLE STEEL STOREFRONT SYSTEM. SEE EXTERIOR ELEVATIONS CODE COMPLIANT ELEVATOR ACCESSIBLE RESTROOM FACILITIES SIDEWALK INFILL CONSTRUCTION COORDINATE WITH CPA PUBLIC WORKS. GARAGE DOOR WITH FUSABLE LINK ACCESSIBLE HI-LOW DRINKING FOUNTAIN SHOTCRETE RETROFIT TO INTERIOR WALLS TO BRACE SOFTSTORY CONDITION ON 1ST FLOOR (*8 THICK WALL) (E) RAMP TO BASEMENT THROUGH ADJACENT PROPERTY (E) HISTORIC STAIRS TO REMAIN ELECTRICAL LOCKER MEZZANINE ABOVE CENTENNIAL PLAQUES TO REMAIN, SEE SHEET A5.1 FOR PLAQUE RELOCATION PLAN HANDICAP PARKING SIGNAGE METAL CANOPY ABOVE LEGEND 4 (E) CONSTRUCTION TO REMAIN (N) CONCRETE CONSTRUCTION (N) STUD WALL CONSTRUCTION 5 6 7 8 9 10 11 12 13 N TRUE NORTH 214 2 OPEN OFFICE SPACE STAIR CORE BATHROOM UP DN 22 risers @6.54" JANITORS CLOSET ELEC/ TELECOM CLOSET ELEV CAB 2 3 4" SHAFT TY P . 3'-0" 6 6 3 4 SHAFT SHAFT UPDN 1 CL EQ . EQ . 1'- 6 " T Y P . 6'-0" 2 3'-0" 7 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " MEZZANINE STAIR CORE OPEN TO BELOW OPEN TO BELOW OPEN TO BELOW UPDN 19 risers @6.52" OPEN TO BELOW ELEV CAB 2 TELECOM/ELEC. CLOSET SHAFT UPDN 1 5 OPEN TO BELOW 1 2 8 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fi l e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 2PROPOSED SECOND FLOOR PLAN SCALE: 1/8" = 1'-0"1PROPOSED MEZZANINE FLOOR PLAN SCALE: 1/8" = 1'-0"A2.1 PROPOSED MEZZANINE PLAN PROPOSED SECOND FLOOR PLAN 1 2 3 PLAN KEYNOTES (E) HISTORIC STAIRS TO REMAIN CODE COMPLIANT ELEVATOR ACCESSIBLE RESTROOM FACILITIES ACCESSIBLE HI-LOW DRINKING FOUNTAIN GUARDRAIL FOR MEZZANINE MAINTAIN (E) CONCRETE BULKHEAD HEADER WOOD BALCONY WITH METAL GUARDRAIL METAL CANOPY LEGEND 4 (E) CONSTRUCTION TO REMAIN (N) CONCRETE CONSTRUCTION (N) STUD WALL CONSTRUCTION 5 N TRUE NORTH 6 2 7 8 Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2DN ROOF GARDEN OPEN OFFICE SPACE MECHANICAL BATHROOM STAIR TO 3RD FLOOR JANITORS CLOSET STORAGE ROOM ELEV CAB 2 3 1 TYP. SHAFT 11 10 10 10 7 SHAFT SHAFT DN. 9 OPEN OFFICE SPACE 6 6 13 2 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8' - 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " ELEV CAB OFFICE SPACE STAIR TO 4TH FLOOR UTILITY SHAFT BATHROOM DN 22 risers @6.54" JANITORS CLOSET STORAGE UP STORAGE ROOM ELEV CAB ELEV CAB 2 3 5 10 10 10 5 8 BATHROOM 3 1 TYP. UTILITY SHAFT TELECOM/ ELEC. CLOSET CL EQ . EQ . 12 UPUPUP 3'-0" 1'- 6 " T Y P . 6'-0" 2 3'-0" CL EQ . EQ . 1 A 2 3 25'-10 1/2" 4 12'-4"12'-10 1/2" 4.4 5 B D 34 ' - 1 1 " D.1 C 15 ' - 6 1 / 2 " 8'- 2 1 / 2 " 10 ' - 8 " 10 ' - 3 " E F 15 ' - 1 1 " 12 ' - 3 1 / 2 " G H 2.3 9'-1"14'-6" F.6 20 ' - 0 " 16 ' - 3 " 3.1 49'-11 1/2" 37 ' - 1 1 1 / 2 " 49'-5 1/2" 6"24'-3" 6" 3'- 9 " 2PROPOSED FOURTH FLOOR PLAN SCALE: 1/8" = 1'-0"1PROPOSED THIRD FLOOR PLAN SCALE: 1/8" = 1'-0"A2.2 PROPOSED THIRD FLOOR PLAN PROPOSED FOURTH FLOOR PLAN 1 2 3 PLAN KEYNOTES (E) HISTORIC STAIRS TO REMAIN CODE COMPLIANT ELEVATOR ACCESSIBLE RESTROOM FACILITIES NOT USED MAINTAIN (E) CONCRETE BULKHEAD HEADER PARAPET WALL MECHANICAL EQUIPMENT ROOFTOP SHAFT HI-LOW DRINKING FOUNTAIN SKYLIGHTS GRAVITY RELIEF VENT ON ROOFTOP WOOD BALCONY AND METAL GUARDRAIL LINE OF CLAY TILE ROOF OVER MECHANICAL EQUIPMENT WELL ABOVE LEGEND 4 (E) CONSTRUCTION TO REMAIN (N) CONCRETE CONSTRUCTION (N) STUD WALL CONSTRUCTION 5 6 7 8 9 10 11 12 N TRUE NORTH 2 2 13 NON-HISTORIC ALUMINUM STOREFRONT WINDOW SILL AND TRANSOM HEADER, TYP ORIGINAL TILED WINDOW SILL AND STEEL STOREFRONT NON-HISTORIC ALUMINUM STOREFRONT ENTRANCE WOOD DETAILING MISSING TRANSOM WINDOW RE-PURPOSED FOR EXHAUST AIR VENTING (E) FIRE STANDPIPES LOCATION TO REMAIN.University Art CenterUniversity Art CenterUniversity Art Center A4.1 REPAIR WROUGHT IRON BALCONY TO PREVENT FURTHER DETERIORATION NEW HISTORICALLY COMPATIBLE STOREFRONT & AWNING (WINDOW SYSTEM, TILE & TRANSOM) REPAIR AND RESTORE EXISTING ROOF TILES NEW HISTORICALLY COMPATIBLE STOREFRONT & RETRACTABLE AWNING (WINDOW SYSTEM, TILE & TRANSOM) REPAIR WROUGHT IRON BALCONY TO PREVENT FURTHER DETERIORATION (E) STOREFRONT TO REMAIN, REPLACE (E) AWNING WITH NEW HISTORICALLY COMPATIBLE AWNING CLEAN BUILDING FACADE, REPAIR STUCCO WHERE DAMAGED. MEZZANINE 10'-5" THIRD FLOOR 29'-11 1/2" HEIGHT LIMIT 50'-0" FIRST FLOOR 0'-0" FOUTH FLOOR 40'-11 1/2" BASEMENT -9'-9 1/2" SECOND FLOOR 18'-11 1/2" 66 ' - 1 0 " 64 ' - 1 1 " 64 ' - 2 " 68 ' - 1 " PROPOSED - SOUTH ELEVATION SCALE: 1/8" = 1'-0" ORIGINAL - SOUTH ELEVATION SCALE: 1/8" = 1'-0" (E) CONDITIONS - SOUTH ELEVATION SCALE: 1/8" = 1'-0" Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fi l e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL232 1 SOUTH ELEVATION RAMONA STREET MEZZANINE 10'-5" THIRD FLOOR 29'-11 1/2" HEIGHT LIMIT 50'-0" FIRST FLOOR 0'-0" FOUTH FLOOR 40'-11 1/2" BASEMENT -9'-9 1/2" SECOND FLOOR 18'-11 1/2" NEW HISTORICALLY COMPATIBLE STOREFRONT & AWNING (WINDOW SYSTEM, TILE & TRANSOM) REPAIR WROUGHT IRON BALCONY TO PREVENT FURTHER DETERIORATION NEW HISTORICALLY COMPATIBLE STEEL WINDOWS TYP. (E) STORE FRONT TO REMAIN, REPLACE (E) AWNING WITH NEW HISTORICALLY COMPATIBLE AWNING NEW HISTORICALLY COMPATIBLE IRON GATE, DECORATIVE GRILL & U.S. POSTAL OFFICE SIGNAGE NEW HISTORICALLY COMPATIBLE IRON GATE & ACCENT TILE AT BUILDING ENTRY U.S. POST OFFICE PALO ALTO CALIFORNIA REPAIR AND RESTORE EXISTING ROOF TILES NEW HISTORICALLY COMPATIBLE STOREFRONT & AWNING (WINDOW SYSTEM, TILE & TRANSOM) CLEAN BUILDING FACADE, REPAIR STUCCO WHERE DAMAGED. 64 ' - 2 " 61 ' - 2 " 68 ' - 1 " A4.2 Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fi l e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 EAST ELEVATION HAMILTON STREET NON-HISTORIC ALUMINUM STOREFRONT NON-HISTORIC STOREFRONT SHAPE WOOD DETAILING MISSING NON-HISTORIC STOREFRONT SYSTEM AND WINDOW SILL NON-HISTORIC ALUMINUM ENTRANCE SYSTEM STEEL RAILING DETERIORATION University Art Center University Art261 Hamilton PROPOSED - EAST ELEVATION SCALE: 1/8" = 1'-0" ORIGINAL - EAST ELEVATION SCALE: 1/8" = 1'-0" (E) CONDITIONS - EAST ELEVATION SCALE: 1/8" = 1'-0"3 2 1 (E) WINDOW MOUNTED AIR CONDITIONERS (E) ELECTRICAL PANELS & CONDUIT (E) CONDUIT CUTS INTO WINDOWS NON-HISTORIC STOREFRONT SYSTEM AND WINDOW SILL (E) CENTENNIAL WALK PLAQUES (E) NON-HISTORICAL METAL GATE (E) METAL FIRE ESCAPE (E) EXPOSED METAL FIRE EXHAUST (N) MECHANICAL EQUIPMENT SHOWN DOTTED REPAIR WROUGHT IRON BALCONY AS NEEDED TO PREVENT FURTHER DETERIORATION NEW HISTORICALLY COMPATIBLE STOREFRONT & AWNING (WINDOW SYSTEM, TILE & TRANSOM) NEW HISTORICALLY COMPATIBLE STEEL WINDOWS TYP. REPAIR AND RESTORE EXISTING ROOF TILES MEZZANINE 10'-5" THIRD FLOOR 29'-11 1/2" HEIGHT LIMIT 50'-0" FIRST FLOOR 0'-0" FOUTH FLOOR 40'-11 1/2" BASEMENT -9'-9 1/2" SECOND FLOOR 18'-11 1/2" CLEAN BUILDING FACADE, REPAIR STUCCO WHERE DAMAGED. (E) CENTENNIAL PLAQUES STUCCO METAL GUARDRAIL CLAY TILE ROOF 52 ' - 8 " 61 ' - 2 " DECORATIVE METAL GRILLE METAL STOREFRONT WOOD BALCONY LIGHT FIXTURE STUCCO METAL CANOPY METAL STOREFRONT 44 ' - 6 " Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fi l e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 A4.3 NORTH ELEVATION CENTENNIAL WALK PROPOSED - NORTH ELEVATION SCALE: 1/8" = 1'-0" ORIGINAL - NORTH ELEVATION SCALE: 1/8" = 1'-0" (E) CONDITIONS - NORTH ELEVATION SCALE: 1/8" = 1'-0"3 2 1 2 (E) WINDOW MOUNTED AIR CONDITIONERS (E) CONDUIT BOXES OUTLINE OF ADJACENT PROPERTY 541-545 HAMILTON 20 ' - 7 1 / 2 " REPAIR WROUGHT IRON BALCONY AS NEEDED TO PREVENT FURTHER DETERIORATION NEW HISTORICALLY COMPATIBLE STEEL WINDOWS TYP. REPAIR AND RESTORE EXISTING ROOF TILES CLEAN BUILDING FACADE, REPAIR STUCCO WHERE DAMAGED. (N) MECHANICAL EQUIPMENT SHOWN DOTTED OUTLINE OF ADJACENT PROPERTY 541-545 HAMILTON MEZZANINE 10'-5" THIRD FLOOR 29'-11 1/2" HEIGHT LIMIT 50'-0" FIRST FLOOR 0'-0" FOUTH FLOOR 40'-11 1/2" BASEMENT -9'-9 1/2" SECOND FLOOR 18'-11 1/2" STUCCO 64 ' - 1 1 " CLAY TILE ROOF WOOD RAFTERS METAL GUARDRAIL WOOD BALCONY METAL CANOPY Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fi l e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 A4.4 WEST ELEVATION PROPOSED - WEST ELEVATION SCALE: 1/8" = 1'-0" ORIGINAL - WEST ELEVATION SCALE: 1/8" = 1'-0" (E) CONDITIONS - WEST ELEVATION SCALE: 1/8" = 1'-0"3 2 1 2 Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 1261 HAMILTON RENDERINGS SCALE: NTS A5.0 RENDERINGS VIEW FROM ADJACENT BUILDING: 285 HAMILTON AXONOMETRIC VIEW EXISTING AERIAL VIEW VIEW FROM HAMILTON STREETVIEW TOWARDS HAMILTON STREET 2 Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 1CENTENNIAL PLAQUE RELOCATION SCALE: NTS A5.1 CENTENNIAL PLAQUE RELOCATION VIEW TOWARDS HAMILTON STREET VIEW TOWARDS UNIVERSITY AVENUE CENTENNIAL PLAQUE CENTENNIAL WALK POTENTIAL PLAQUE LOCATIONS BIRGE CLARK & PEDRO DE LEMOS PLAQUES - RAMONA STREET HISTORIC DISTRICT Copyright © 2012 by CODY ANDERSON WASNEY ARCHITECTS, INC. C o d y A n d e r s o n W a s n e y A r c h i t e c t s, I n c. 455 L a m b e r t A v e n u e • P a l o A l t o, CA 94306 6 5 0 . 3 2 8 . 1 8 1 8 • F a x 3 2 8 . 1 8 8 8 STAMP CONSULTANTS REVISION DATE PROJECT NAME SHEET TITLE SHEET REHABILITATION & ADDITION TO PROJECT NO. DRAWN BY CHECKED BY 12009 6/18/13HRB/ARB SUBMITTAL Fil e n a m e : Un t i t l e d 6 261 HAMILTON BUILDING 261 HAMILTON PALO ALTO, CA, 94301 E. MERLINO / C. LEBAR M. ANDERSON/ D. PHO 8/7/13 HRB/ARB PLAN REVIEW COMMENTS1 10/16/13HRB/ARB RESUBMITTAL2 T-1 TREE PROTECTION PLAN ATTACHMENT L Page 1 of 1 ZONING COMPLIANCE TABLE 261 Hamilton Avenue / File No. 13PLN-00267 CD-C(GF)(P) ZONE DEVELOPMENT STANDARDS STANDARD PROPOSED PROJECT CONFORMS Lot Size 10,000 sf Minimum Building Setback Front - Hamilton Avenue Special Setback 7’ No Change 7’ existing Yes Rear None Required No Change None Existing Yes Interior Side (Centennial Walk) None Required No Change None Existing Yes Street Side (Ramona St) None Required No Change None Existing Yes Maximum Site Coverage (building footprint) None Required 8,995 sf / 90% Yes Maximum Height (measured to the average height of highest gable) 50’ Existing: 66’-7” Addition: 49’-8” Yes Daylight Plane Same as abutting residential zones Not Applicable Not Applicable Floor Area Ratio (FAR) 10,000 sf (1:1) No New FAR 37,789 sf Yes – existing legal non-complying building Parking Requirement (within the Downtown Parking Assessment District) 151 spaces 1 space/250 sf comm. area 14 spaces 7 spaces existing 7 spaces added Yes* Bicycle Parking 15 spaces (6 LT/9 ST) 1 space/commercial 2,500 sq. ft. 40% LT & 60% ST Long Term: 14-15 Short Term: 8 Yes, as conditioned *At the time of the Downtown Parking Assessment, this site was determined to be 37,800 sq. ft. and required 151 parking spaces; seven spaces were identified on-site (basement of 541 Ramona St) and the property owner was assessed for 144 parking spaces. Planning & Community  Environment Department  TO: Interested Parties  FROM: Hilary Gitelman, Director  SUBJECT: Summary of “Floor Area Bonuses” and “Transfer of  Development Rights” in the CD Zone District    DATE: April 29, 2014  This memo provides background information about the use of Transfer of Development Rights  in Palo Alto and is intended to provide general information. This memo should not to be used in  lieu of the applicable sections of Palo Alto Municipal Code.  The purpose of the Transfer of Development Rights (TDR) program is to implement the  Comprehensive Plan by encouraging seismic rehabilitation of buildings in Seismic Categories I,  II, and III, and encouraging historic rehabilitation of buildings or sites in Historic Category 1 and  2, and by establishing standards and procedures for the transfer of specified development  rights (floor area) from such sites to other eligible sites. Except as described in Palo Alto  Municipal Code (PAMC)  18.18.080(e)(1) and for city‐owned properties as described in PAMC  18.28, the TDR program is applicable only to properties located in the CD zone district.  The following types of floor area bonuses can be considered by the City and can be utilized on‐ site as a floor area bonus or transferred to eligible receiver sites as TDRs.  1.Seismic Rehabilitation Bonus A building that is in Seismic Category I, II, or III, and is undergoing seismic rehabilitation,  but is not in Historic Category 1 or 2, shall be allowed to increase its floor area by 2,500  square feet or 25% of the existing building, whichever is greater, without having this  increase count toward the FAR. Such increase in floor area shall not be permitted for  buildings that exceed a FAR of 3.0:1 in the CD‐C subdistrict or a FAR of 2.0:1 in the CD‐N  or CD‐S subdistricts.  2.Historic Rehabilitation Bonus A building that is in Historic Category 1 or 2, and is undergoing historic rehabilitation,  but is not in Seismic Category I, II, or III, shall be allowed to increase its floor area by  2,500 square feet or 25% of the existing building, whichever is greater, without having  this increase count toward the FAR, subject to the restrictions in PAMC subsection  18.18.070(b). Such increase in floor area shall not be permitted for buildings that exceed  a FAR of 3.0:1 in the CD‐C subdistrict or a FAR of 2.0:1 in the CD‐N or CD‐S subdistricts,  except as allowed for over‐sized historic building.  Attachment M Page 2 of 3    3. Combined Historic and Seismic Rehabilitation Bonus    A building that is in Historic Category 1 or 2, and is undergoing historic rehabilitation,  and is also in Seismic Category I, II, or III, and is undergoing seismic rehabilitation, shall  be allowed to increase its floor area by 5,000 square feet or 50% of the existing building,  whichever is greater, without having this increase count toward the FAR, subject to the  restrictions in PAMC subsection 18.18.070(b). Such increase in floor area shall not be  permitted for buildings that exceed a FAR of 3.0:1 in the CD‐C subdistrict or a FAR of  2.0:1 in the CD‐N or CD‐S subdistricts, except as allowed for over‐sized historic building.    4. Historic Bonus for Over‐Sized buildings    A building in Historic Category 1 or 2 that is undergoing historic rehabilitation and that  currently exceeds a FAR of 3.0:1 if located in the CD‐C subdistrict or 2.0:1 if located in  the CD‐S or CD‐N subdistricts shall nevertheless be allowed to obtain a floor area bonus  of 50% of the maximum allowable floor area for the site of the building, based upon a  FAR of 3.0:1 if in the CD‐C subdistrict and a FAR of 2.0:1 in the CD‐S and CD‐N  subdistricts, subject to the restrictions in subsection 18.18.070(b) and the following  limitation that the floor area bonus shall not be used on the site of the Historic Category  1 or 2 building, but instead may be transferred to another property or properties under  the provisions of PAMC Section 18.18.080.    The City established the TDR program in 1986 to encourage private property owners to upgrade  seismically unsafe buildings and to encourage preservation and rehabilitation of known historic  buildings in the downtown area. Lacking the financial resources to provide monetary incentives  for safety upgrades and historic preservation, the City instead adopted development regulations  that would provide property owners in the downtown area incentive to upgrade and preserve  their properties through a floor area bonus and TDR program.     Prior to October 2013, the generated floor area bonuses also came with the provision that  parking was not required for up to 5,000 sq. ft. of bonus floor area or TDRs used at a site. This  parking exemption was eliminated by Council action on October 21, 2013 (CMR #4139). All TDRs  established prior to this Council action are still eligible to use the parking exemption.    Based on staff research at the time of the 2013 Council action previously mentioned, City  records showed the downtown had approximately 78 buildings eligible for a seismic or historic  bonus under the TDR program. These buildings fall into three general categories: (1) properties  which have applied for and received TDRs under the City’s ordinance; (2) properties which have  been seismically or historically upgraded, but which have not applied for or received TDRs and  (3) properties which may be eligible for TDRs, but which have chosen not to upgrade. While all  eligible properties have not taken advantage of the TDR program, the City’s data collected to  date shows that the TDR program was successful in incentivizing the private redevelopment and  upgrade of historic and seismically unsafe buildings in the downtown.      Page 3 of 3    As a condition that must be completed prior to a site being credited with a historic  rehabilitation floor area bonus, whether for use on‐site or for transfer, the owner of the site  shall enter into an unsubordinated protective covenant running with the land in favor of the city  (or, if the city is the owner, in favor of a qualified and disinterested third party if the property is  to be rehabilitated after the sale of the transfer of development rights), to assure that the  property will be rehabilitated and maintained in accordance with the Secretary of Interior's  Standards for Rehabilitation of Historic Buildings, together with the accompanying interpretive  Guidelines for Rehabilitation of Historic Buildings, as they may be amended from time to time.     The summary provided within this document does not supersede the related regulations that  are specified in the Zoning Code, sections 18.18.070 and 18.18.080. If there are any perceived  conflicts between this document and the Zoning Code, the Code overrules.  11080.txt Council Members and Libraries Only Page 1 City of Palo Alto (ID # 4779) City Council Staff Report Report Type: Action Items Meeting Date: 6/23/2014 City of Palo Alto Page 1 Summary Title: 1451-1601 Cal Ave AR appeal and Tmap Title: PUBLIC HEARING: Council Action Regarding an Appeal of the Director of Planning and Community Environment's Decision Approving a Project on an Approximately 17-acre Site in the RP (AS2) Zoning District located at 1451- 1601 California Avenue, and Council Approval of a Tentative Map to Subdivide Three Parcels Into 83 Parcels at the Same Site. The Proposal Would Authorize Demolition of Approximately 290,220 Square Feet of Existing R&D/Office Space and Construction of 180 Dwelling Units, Which Includes 68 Detached Single Family Units and 112 Multi-Family Units as Anticipated in the 2005 Mayfield Development Agreement. Environmental Assessment: City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (State Clearinghouse No. 2003082103). From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council: 1) Uphold the Director of Planning and Community Environment’s decision to approve the Architectural Review (AR) application for demolition of approximately 290,220 sf of existing R&D/Office Space and construction of 180 dwelling units on a 16.96 acre site located at 1451-1601 California Avenue, as envisioned in the 2005 Mayfield Development Agreement (Attachment A). 2) Approve a Tentative Map to subdivide three existing parcels into 83 parcels to accommodate the proposed development based on the attached (draft) Record of Land Use Action (Attachment B) containing Findings and Conditions of Approval. Executive Summary The 2005 Mayfield Development Agreement between the City and Stanford University gave Stanford the right to construct up to 250 dwelling units on two sites in the Stanford Research Park, and to relocate 300,000 square foot of R&D/office elsewhere in the Research Park. This application relates to the market rate housing portion of that agreement. To proceed with this City of Palo Alto Page 2 project component, Stanford must obtain the City’ approval of the project design (Architectural Review) and a Tentative (subdivision) Map, and must comply with mitigation measures and other requirements of the Development Agreement. (The applicant has already received approvals for a mixed use project with 70 below market rate units at another site on El Camino Real.) The subject application for Architectural Review of a project with 180 units was received by the City in October 2013, and the application for a tentative map was received in April 2014. On April 18, 2014, the Director of Planning and Community Environment approved the Architectural Review (AR) application for replacement of an office/research & development campus with 180 residential units, a community center, a fitness building, swimming pool, and open space amenities on the 1451-1601 California Avenue site, following a March 20th public hearing and recommendation by the Architectural Review Board (ARB). The Director’s decision was appealed to the City Council and on June 9th and the Council voted to remove the item from the consent calendar and schedule the hearing for June 23, 2014. The City Council’s hearing on the appeal is “de novo,” meaning that the Council will be able to consider additional evidence beyond what was presented at the ARB hearing. The appeal hearing is being combined with a public hearing on the tentative map application for the project, which would subdivide three parcels into 83 parcels. This tentative map was reviewed by the Planning and Transportation Commission (PTC) at their May 28th hearing, at which time they recommended approval. The issues raised in the appeal and in comments on the tentative map application relate to the configuration and width of the proposed streets, safety concerns, the desire for an additional driveway, and concerns about the potential for hazardous materials on the site. All of these issues are discussed in detail below. Background In 2005, the City of Palo Alto and Stanford University entered into the Mayfield Development Agreement (MDA). Under the MDA terms, Stanford University was to lease to the City of Palo Alto the 6-acre Mayfield site, located at the corner of Page Mill Road and El Camino Real, for $1 per year for 51 years. Stanford was to construct soccer fields on the Mayfield site at its expense and turn the fields over to the City upon completion, which was done in 2006. In turn, the MDA provided Stanford with vested rights to build 250 housing units on two sites in the Stanford Research Park, where R&D/office buildings exist today. Given the City’s historic jobs/housing imbalance, the MDA recognized that the additional housing would be a mutual benefit to Stanford and the City. The MDA also granted Stanford the right to relocate 300,000 square feet (sf) of R&D/office floor area elsewhere within the Stanford Research Park. (This amount of floor area is less than the amount of non-residential floor area to be demolished at the two designated housing sites.) In addition, the City accepted the lease of the Mayfield soccer fields as mitigation for any potential community service impacts upon the City resulting from all future development at Stanford, as authorized by the General Use Permit, which was approved by the County of Santa Clara in December of 2000. Information regarding the MDA and City of Palo Alto Page 3 associated Environmental Impact Report are located on the City’s website at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp The designated housing sites are commonly known as 2450, 2470, and 2500 El Camino Real (collectively referred to as the “El Camino Sites”), and 1451, 1501 and 1601 California Avenue (collectively referred to as the “California Sites”). The MDA required Stanford to submit AR applications for at least 185 of the 250 housing units by the end of 2013, which has been done. The project plans (#13PLN-00433) for the subject site may be viewed at http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2436&TargetID=319). The mixed use building on the El Camino Real sites will provide both ground floor commercial space and 70 below market rate housing units (Application # 13PLN-00469), plans may be viewed at http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2505&TargetID=319); The Director’s AR approval for the El Camino mixed use project was not appealed to Council. All 250 housing units can be counted towards the City’s next Housing Element cycle. Site Information The project site is 16.96 acres located on the southwestern side of California Avenue, one parcel south of the California Avenue/Hanover Street intersection. The site is comprised of three parcels (site) (1451, 1501 and 1601 California Avenue) developed with three one-story and two story buildings containing a total of 290,220 square feet of floor area for office and research & development (R&D) uses, and surface parking lots. The site is surrounded by a mix of residential and commercial buildings. One and two-story single family residences are located along California Avenue to the west (College Terrace), two-story office and R&D buildings are located to the east along Page Mill Road, two-story office buildings are located to the north along Hanover Street, and a multi-story residential development is located outside the boundaries of Palo Alto to the south (Peter Coutts Circle; Stanford Lands in the jurisdiction of Santa Clara County). A location map is provided (Attachment D) Project Description The project includes the demolition of approximately 290,220 square feet of existing office and R&D buildings and the construction of 180 residential units comprised of 68 two-story single family detached dwelling units and 112 multi-family dwelling units, located within two (2) three- and four-story buildings. Additionally, the project will include a 2,582 square feet community center, a 1,709 square foot fitness building, and approximately 2.67 acres in common usable open space. Infrastructure development on the site will include private streets, sidewalks, landscaping, storm water treatment, and underground utilities. All single family residences will have side-by-side, two car garages, and 57 of the 68 single family residences will also have two-car driveway aprons. Multi-family residential parking spaces will be provided in a one level underground parking garage located under each multi- family residential building. Two parking spaces will be provided for each multi-family residential City of Palo Alto Page 4 unit. The entire development will provide 108 visitor parking spaces located along the private streets within the development. The Tentative Map application is the first of a two-phased process to subdivide the existing three (3) parcels, totaling 16.96 acres, into 68 single-family lots, two (2) condominium lots, and 13 private street/common area parcels, for a total of 83 parcels. Each single family lot would be developed with a single family home. The condominium lots would each be developed with three- and four-story buildings for a total of 112 multi-family units. Stanford intends to sell the units via long-term residential leaseholds to members of the University faculty. To finalize the subdivision of the condominium units, Stanford must apply to the California Bureau of Real Estate for the final phase of the land division. The lots would be accessed from California Avenue, by way of three new private rights-of-way and other internal streets constructed on the site. Each entrance is designed as an extension of the existing College Terrace grid pattern of residential streets: Columbia, Bowdoin and Amherst Streets. The applicant has also offered to provide construction access to Page Mill Road for the first phases of construction. The applicant’s project description is provided as Attachment E. Discussion on Appeal of Director’s Decision The Council is requested to review the appeal (Attachment C) of the Director of Planning and Community Environment’s approval (Attachment A). As prescribed by Palo Alto Municipal Code Section 18.77.070 (f), the Council voted to hear this item “de novo,” taking into consideration all previous and new information that may be presented on the project, following which the City Council shall adopt findings and take action on the application. Mayfield Development Agreement Review Process and Purview As permitted in the MDA, the Applicant elected to use the AS2 Alternative Development Standards contained in the Palo Alto Municipal Code (PAMC) Chapter 18.60. The AS2 development standards table [PAMC Section 18.60.060(A)] outlines the physical constraints for the project. The AS2 standards establish the permitted residential and accessory uses, setbacks, building heights, parking ratios, design standards for residences along California Avenue, maximum floor area ratio (FAR), maximum site coverage, and minimum usable open space. The only limitation on uses is the prohibition against any age-restricted housing. The MDA also prescribed a specific review process, limiting the ARB’s purview and therefore the Council’s purview to the following project elements:  Determine whether the project complies with the AS2 development standards and Architectural Review findings; and  Review and approve the lighting, noise levels, landscaping, and selection of the exterior materials and finishes of the buildings and other structures; and City of Palo Alto Page 5  Review is limited to the California Avenue edge of the California Sites, and then only to the extent that the projects submitted for approval do not already: o “Approximate the horizontal rhythm of building-to-side yard setback and façade areas, including the relationship of first and second stories, of California Avenue residential properties; and o Reflect the eclectic nature of the design of residences on the north side of the street and include similar opportunities for landscaping.” In reviewing these limited issues, the ARB and Council on appeal must make the necessary Architectural Review findings set forth in Section 18.76.020 of our Code. (See Attachment B, Section 3.) ARB Recommendation and Director’s Approval At the March 20th ARB hearing, after testimony from the public and a hearty discussion of the issues, the ARB members unanimously recommended approval of the proposed project. The March 20, 2014 staff report and verbatim meeting minutes are provided for Council review (Attachment G). The Director then received and considered comments and suggestions regarding the draft conditions of approval, including a peer-review of the project’s fire access and site circulation submitted by Mr. Balin on March 29, 2014. After receipt of these materials and staff discussions with both the applicant and neighborhood residents, the Director approved the project with final conditions of approval on April 18, 2014. Response to Appeal letter Fred Balin (Appellant), a resident of College Terrace, submitted an appeal of the Director’s decision on May 2, 2014, within the 14 day appeal period. The appellant’s objections are related to four main topics as discussed below and further described in the appeal letter (Attachment C). 1) Fire Code provisions – the appellant asserts they have not been followed, 2) Concerns about unsafe routes to school and the Stanford campus, 3) Concerns about congestion on Columbia Street, and 4) Concerns about the use of mirrors as a safety device at the garage entrance and exit for multi-family building #1. Major Architectural Review requires the City to make 16 findings (Attachment A). The appeal relates to Finding #10 which states: “Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles.” 1) Fire Code Provisions (a) Turnaround Provision for Dead End Roads The Appeal letter cites Fire Code Section D103.4 of Appendix D, which states that “Dead-end fire apparatus access roads in excess of 150 feet shall be provided with width and turnaround City of Palo Alto Page 6 provisions in accordance with Table D103.4” and argues that turnarounds are required at the end of Driveways A and B. In doing so, the Appeal assumes that the entire 250+- foot length of Driveways A and B constitute fire access roads so that turnarounds are required. According to the City’s Fire Marshal, a generally accepted interpretation of Appendix D Section D103.4 considers Fire Access Roads those portions of the road or driveway needed for fire vehicles to reach a ‘pre-connect’ hose distance of the structures on site. PAMC Section 15.05.110 further establishes 150 feet as the maximum distance from the exterior wall of building to the fire vehicle access road. This could be considered the distance a firefighter must travel on foot from the vehicle. In the review of the ARB proposal, the Fire Marshal determined that fire vehicles would not need to travel more than 150 feet along the driveways in question, in order to meet this ‘hose reach’ requirement. The Fire Marshal respectfully disagrees that the entire length of Driveways A and B need to be considered Fire Access Roads for purposes of determining whether a turnaround is necessary. (b) Minimum Road Width When Hydrants Present The Appeal letter cites Fire Code Section D103.1 of Appendix D, which states that “where a fire hydrant is located on a fire apparatus access road, the minimum road width shall be 26 feet exclusive of shoulders” and argues that the minimum road width on Columbia and Amherst Streets is 24 feet where 26 feet is required. The proposed roadway widths were reviewed by the Fire Marshal as a part of the ARB review process to ensure that Fire Code requirements were met. As required by Palo Alto Municipal Code (PAMC) Section 15.05.120, fire apparatus access roads shall have an unobstructed width of 20 feet. This allows one fire department vehicle to pass another vehicle. Additionally, Appendix D requires the roadway to be increased to 26 feet where hydrants are located. This is generally required for a distance of 20 feet on either side of the hydrant, as shown in the figure to the right. The remaining roadway width may be 20 feet. The intent is to provide additional clearance at fire hydrants for hydrant operations and for another fire department vehicle to pass. According to the City’s Fire Marshal, and confirmed by the State Fire Marshal’s Office, it is a generally accepted interpretation of Appendix D, Section D103.1 to consider rolled curbs and/or engineered sidewalks to be included in road width, as the only specific prohibition in that section is against using (unpaved) road shoulders to comply with the required width. The Fire Marshal respectfully disagrees with the Appellant’s assertion that the only method to provide 26 feet of fire access width for Columbia and Amherst Streets is to have the 26 feet measured between the curbs. The proposed road width will provide adequate area to park City of Palo Alto Page 7 emergency vehicles and operate a hydrant, while the rolled curb will allowed adequate width for a second emergency vehicle to pass. The State Fire Marshal’s Office has also confirmed, via email, that the Palo Alto Fire Department is within their purview to make interpretations and implement our locally adopted Fire Code. 2) Concerns about Unsafe Routes to School and Campus As noted by the appellant, Palo Alto Unified School District has yet to assign the home school for the future California Avenue housing site(s). The appellant is also correct that the existing “Walk and Roll” Maps for Escondido School show Bowdoin and Hanover as suggested routes for children to use, rather than Columbia Street. As a result, the appellant suggests that conditions 14a and 14c be removed and Council direct staff to begin a process with the neighborhood to determine the “best and safest pathways and solutions for bicyclists and pedestrians heading in and out of the development…” (Conditions 14a and 14c require various pedestrian crossing and signage improvements at the three new California Avenue intersections.) Pedestrian activity to and from the project site is anticipated due to the site’s proximity to parks, libraries, and commercial areas, in addition to nearby schools. Therefore, staff reviewed the project’s access to ensure adequate pedestrian accessibility at each intersection, independent of current recommended routes to schools. The existing “Walk and Roll” maps do not account for the new California Avenue housing, and were not used to evaluate the proposal. The maps are for existing conditions based on existing housing and were developed through a community outreach process with current students and parents of Escondido School. The City will work with school administration, parents, and students to update these maps when new housing comes on-line or as parent input regarding new travel patterns is identified. Based on the configuration of the proposed project, staff believes that while pedestrians may use any one of the three project intersections, a majority of them would use Columbia Street, since this is the most direct path to schools and commercial uses from the main entry to the new housing. Columbia Street also serves as the most direct route between Stanford Avenue and South California Avenue west of Hanover Street. Transportation conditions 14a and 14c were included in the project to ensure pedestrian safety, including new pedestrian crossings at all three intersections and appropriate signage at the Colombia Street intersection. 3) Concerns about Congestion on Columbia Street As noted by the appellant, the Circulation and Access analysis (Analysis) concluded that 66 percent of the project traffic is likely to use the Columbia Street entrance/exit to gain access to the property, while the appellant believes this number would be closer to 75 percent. While we all agree a majority would use the Columbia Street entrance, City staff does not agree that it will be an area of “potential gridlock.” As described in the analysis, the AM peak hour is estimated at 39 outbound trips, of which approximately 26 would use the Columbia Street exit, City of Palo Alto Page 8 which is roughly one vehicle every two minutes. During the PM peak hour, there would be an estimated 61 inbound trips, of which approximately 40 vehicles would enter the site at Columbia Street, which is less than one vehicle per minute. In addition, the site’s interconnected streets would allow vehicles to use any of the three California Avenue access points. This redundancy in access provides another safeguard against severe congestion on Columbia Street. A concern regarding the safety of bicyclists and pedestrians on Columbia Street was also expressed. As noted in staff’s March 20th staff report to the ARB, the 12 foot proposed lane widths of the Columbia Street extension are the same width as the existing portion of Columbia Street (36 feet within a 60 foot right of way (ROW)). The existing Columbia Street width includes space for parallel parking on both sides of the street. The proposed Columbia extension would be 24 feet wide, consisting of two 12 foot wide travel lanes, where it intersects California Avenue, and would widen to 36 feet (58 ft ROW) after the street entrance, to allow parking on both sides of the street. While not required per the MDA, the 36 foot street width complies with the City’s Private Streets ordinance (adopted after the MDA), which requires that private streets serving five or more lots have a ROW width of no less than thirty-two feet. The narrow curb-to-curb dimensions (24 feet rather than 32 or 36 feet) at the Columbia Street entrance are intended to restrict on street parking at that location, ensuring that ingress/egress is not slowed by cars trying to park and to provide for a safer bicycle and pedestrian environment given the shorter crossing distance (see figure), in conformance with Comprehensive Plan Policy T-35. The network of inter-connected streets also provides redundancy for bicycle and pedestrian traffic rather than forcing them onto any particular street. The appeal states that “to more equally disperse travel in and out of the project, a 4th curb cut should be added near Dartmouth Street…” Based on the trip generation estimates presented above, staff believes that the project will not create “gridlock” as suggested, and that additional access capacity is not required. 4) Concerns about Use of Mirrors at the Garage Entrance and Exit for Multi-Family Building #1. City of Palo Alto Page 9 The appellant also takes issue with the City’s requirement that the project install mirrors leading into the garage of the Multi-Family Building #1. He claims this measure is not effective as mirrors can be vandalized. While City staff agrees mirrors can be vandalized, such vandalism is more likely to happen in locations that are open to the public, versus this situation where the mirrors are located in an area only used by the building’s residents. The building will be part of a professionally managed Homeowners Association, which would be established by Stanford, and these mirrors would be designated in the CC&Rs as a maintenance responsibility of the Association. With regard to the appellant’s statement that the Hexagon circulation report should have considered a straight driveway in lieu of a 90 degree turn, staff believes that the mirror solution initially identified is adequate, and does not point to an inadequacy of the proposed site plan requiring project revisions. During the ARB process, staff reviewed the proposed 24 foot wide driveway and determined that it would provide adequate turning radius for large vehicles, such as an SUV or large pick-up truck. The requirement for mirrors was added as an extra safety precaution. Stanford could also install “bottdots” along the center line of the driveway to help ensure drivers stay in their own lane as they enter and exit the garage, but these would also be an additional safety precaution, not an indication of an unsafe or inadequate configuration. Additional areas of community interest In addition to the issues raised in Mr. Balin’s appeal, members of the community have expressed a number of other concerns about the Director’s approval and/or the proposed tentative map. These additional issues are discussed below. 5) Construction Access Road Throughout the review process associated with the application for Architectural Review, staff heard suggestions from College Terrace residents that access for construction (and secondary access for the project itself) should come from Page Mill Road rather than California Avenue. Staff encouraged dialog between the residents and the applicant’s representatives, believing that the MDA constrains the City’s ability to require alternate access across another parcel. In a March 13, 2014 letter to Brent Barker, President of the College Terrace Residents’ Association, Stanford committed to providing the requested construction access until September 30, 2015. 6) Hazardous Materials At the PTC hearing on the tentative map and again on June 9, Mr. Robert Moss expressed concerns about the possibility of TCE contamination on the site. As required by the Development Agreement MMRP, Stanford submitted several environmental site assessment reports (e.g. Phase I and II reports) for review by the State’s Department of Toxic Substance Control (DTSC), the oversight agency for the three sites included within the area affected by the proposed tentative map. Based on the review of data submitted, the 1451 California Ave and 1501 California Ave sites have received “no further action” status and City of Palo Alto Page 10 development approval from DTSC. (Related documents are available on DTSC’s Envirostor website.) The third site at 1601 California Ave will be subject to additional investigation and, if necessary, remediation following demolition of the existing building on the property, and the applicant will be working with DTSC on a full investigation of the soil, soil vapor and groundwater pursuant to an established process for site assessment and risk assessment referred to as the Preliminary Endangerment Assessment process. If warranted, the applicant would develop a corrective action plan for long-term residential use of the site. Any required remediation would be completed prior to redevelopment of the site, and if it is not possible to fully remediate the site, the project would incorporate measures to prevent exposure consistent with DTSC’s requirements. The applicant has been in communication with staff of the Regional Water Quality Control Board (RWQCB) regarding monitoring wells on the site. Regarding Mr. Moss’s specific concern that clean-up levels used for TCE are now lower than they were when the earlier studies were prepared, the US EPA lowered TCE toxicity thresholds in 2011 and issued draft guidance about supplemental evaluations for vapor intrusion in April 2013 and a final guidance in December 2013. The applicant’s site investigations of the 1451 and 1501 California sites were completed in 2013, so they considered the lower thresholds from 2011. The applicant’s consultants have indicated that their vapor intrusion analysis was also in keeping with relevant recommendations of the 2013 guidance document. Upcoming investigations of the 1601 California site will also address the “new” toxicity thresholds and guidance. The MMRP remains in effect, and Planning staff will review final regulatory sign-off of site remediation prior to approval of construction activities on each of the three sites. 7) Provision of Sidewalks Several residents have expressed a concern about the lack of a sidewalk along the western portion of the proposed Amherst Street. While the Architectural Review purview does not extend to interior site design issues, the Council does have the ability to review this issue in connection with the Tentative Map (see discussion on Tentative Map below). The applicant is proposing dual sidewalks along most streets with a single sidewalk along the Amherst extension. This was done in order to preserve mature trees located along the perimeter of the property. As shown on Sheet C4, of the ARB plan set, the project includes retaining walls throughout the site, with walls along Amherst ranging in height from 2 feet to 7 feet. The addition of a western sidewalk along the Amherst extension would likely increase the height of these proposed retaining walls, detracting from the appearance of the area and complicating driveway access to these parcels. Tentative Map Discussion Council Purview on Tentative Map City of Palo Alto Page 11 The standards for reviewing Tentative Maps are set forth in Title 21 of the Palo Alto Municipal Code and Government Code Section 66474. Palo Alto Municipal Code Section 21.12.090 requires the Council to review whether the proposed subdivision complies and is consistent with the Subdivision Map Act (in particular Government Code 66474), Title 21 of the Palo Alto Municipal Code, the Palo Alto Comprehensive Plan, and other applicable provisions of the Palo Alto Municipal Code and State law. In conducting this review, however, the MDA limits the Council’s ability to impose additional conditions or project modifications, including limiting the City’s ability to require additional dedications for park, recreation or open space (MDA Section 6.4.8); ability to impose additional traffic mitigations (except for those identified in supplemental circulation study) (MDA Section 6.4.9); limitations on use and density (MDA Section 6.10) and limitations on Comprehensive Plan and Zoning consistency (MDA Sections 6.11). The necessary findings for approval of the Tentative Map are contained in State law and incorporated into Title 21 of the Municipal Code. Under the Subdivision Map Act, the Council must make a series of “reverse” findings to justify approval. If the findings cannot be made, the subdivision must be approved. In particular, under Government Code Section 66474, the Council shall deny a Tentative Map if it makes any of the following findings: a) That the proposed map is not consistent with applicable general and specific plans. b) That the design or improvement of the proposed subdivision is not consistent with applicable general and specific plans. c) That the site is not physically suitable for the type of development. d) That the site is not physically suitable for the proposed density of development. e) That the design of the subdivision or the proposed improvements are likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat. f) That the design of the subdivision or type of improvements is likely to cause serious public health problems. g) That the design of the subdivision or the type of improvements will conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. While the MDA imposes significant limitations on the City’s ability to modify or condition the Tentative Map, staff believes this purview gives the Council the ability to consider many of the issues raised in the appeal of the Director’s decision if the Council finds changes are required to address public health and safety. Staff does not believe such changes are required for the reasons provided above and the PTC recommended approval of the Tentative Map as proposed on May 28, 2014. Zoning Compliance As allowed by the MDA, the applicant followed regulations of the AS2 zoning district, which allows a maximum of 15 dwelling units per acre of gross area. The proposed development, with 180 units on approximately 17 acres, would be 10.6 dwelling units per acre of gross land area, City of Palo Alto Page 12 and therefore within the allowed maximum density. While the AS2 zoning district has no minimum lot size, the average single family home lot would be approximately 4,600 square feet and the two (2) condominium lots would be approximately 1.5 acres each. Staff determined that the proposed project is in compliance with the applicable AS2 development standards. A summary indicating the project’s conformance with these standards is provided in Attachment H. Circulation and Access The site would be developed with private, inter-connecting streets that would access California Avenue at three locations. These access points would be aligned directly across from the existing public streets (Amherst, Bowdoin, and Columbia Streets). The existing roadway of Amherst Street is 24 feet wide (within the 60 ft Right of Way (ROW)). The proposed Amherst extension would also be 24 feet wide, consisting of two 12 foot wide travel lanes, where it intersects California Avenue. Amherst would have a curb-to-curb width of 36 feet (within a 53 ft ROW) after the street entrance (Tentative Map plan set sheet TM6.1), to allow parking of automobiles on both sides of the street. The existing roadways of Bowdoin and Columbia Streets are 36 feet wide curb-to-curb (within the 60 ft ROW), which includes space for parallel parking on both sides of the street. On the project site, Bowdoin would be 36 feet wide curb- to-curb (within the 58 ft ROW) allowing for parking on both sides, and Columbia would be 24 feet wide, consisting of two 12 foot wide travel lanes, where it intersects California Avenue. The width of Columbia Street would be 36 feet curb-to-curb (within the 58 ft ROW) after the street entrance (Tentative Map plan set sheet TM6.2), to allow parking on both sides of the street. While not required per the MDA, these street widths comply with the Private Streets ordinance adopted by the City subsequent to the MDA, in that private streets serving five or more lots must have a ROW of no less than thirty-two feet wide. Pedestrian circulation would consist of a continuous sidewalk throughout the site providing connectivity between the existing neighborhood and the proposed community, with the exception of the western edge of the Amherst extension (the location of 18 homes). As previously described, given the terrain in this location, the addition of a sidewalk is not proposed as it would create the need for increased retaining wall heights at the back of the sidewalk. A sidewalk would be provided on the other side of the Amherst extension. Compliance with Mandatory Solar Option Law Effective January 1, 2011, all subdivisions of over 50 single family homes must comply with a new State law called the Mandatory Solar Option Law (codified at Cal. Pub. Res. Code §25405.5). Under this law, home sellers must provide optional solar energy systems to potential buyers. Production homes are defined as “single-family residence(s) constructed as part of a development of at least 50 homes per project”. This offered home solar energy system must provide at least one kilowatt, but no more than five megawatts. This is the first qualifying single family home project to be entitled in Palo Alto. City of Palo Alto Page 13 Resource Impact One time revenues would include development impact fees of approximately $376,126.84. Policy Implications The proposed project is consistent with the Comprehensive Plan, in that the site is designated “Research/Office Park”, a land use category that supports “residential or mixed uses that would benefit from the proximity to employment centers”. Single family and multi-family uses are consistent with the MDA and the site’s AS2 zoning. Design and compatibility policies were addressed by the ARB during public hearings, as was the project’s compliance with the AS2 zoning. The Director’s decision to approve the application is consistent with both staff and ARB’s recommendation to approve the project based upon the ARB findings and subject to the conditions of approval. Environmental Review In conformance with the California Environmental Quality Act (CEQA), an Environmental Impact Report was certified by the City Council for the Mayfield Development Agreement in 2005. The City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (EIR) (State Clearinghouse No. 2003082103) concluded that the proposed project would not have a significant effect on the environment with mitigation as proposed except there would be significant and unavoidable Noise impacts, due to the use of heavy equipment during construction. The certified, Final EIR is available for review on the City’s web site at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp Per the attached Environmental Confirmation Memo (Attachment I), there are no substantive changes to the previously approved project or circumstances under which the project is being undertaken and no new information, therefore the EIR provides the necessary environmental clearance for this subject project. All mitigation measures as stated in the approve Mitigation Monitoring and Reporting Program (MMRP) (Attachment J) have been incorporated into the project as conditions of approval. Public Outreach The property owners and occupants within a 1,800 foot radius were sent public hearing notices for the June 23rd Council hearing and the date was announced at the Council’s June 9th hearing. Staff has been available to discuss the proposal with interested members of the public and has sent e-mails to residents of the College Terrace neighborhood to answer questions and inform the stakeholders of this public hearing. The applicant has also met with members of the College Terrace Residences’ Association. Signage has been posted at the site to inform the public about the proposed project. The Council Agenda has been available on the City’s website, which includes a copy of the staff report. Next Steps City of Palo Alto Page 14 If Council approves the project, the applicant may apply for a final subdivision map (Final Map), the second phase of the subdivision process. The applicant will also be required to obtain official street names for the new streets. Street names are determined in conformance with the Palo Alto Municipal Code, Sections 21.20.140 and 21.28.160. This process would be completed concurrent with the Final subdivision map. Prior to entering the Final Map phase, the applicant will be required to submit improvement plans for the design of the new private right-of-ways including sidewalks, crosswalks and utilities. The Final Map, once submitted, is reviewed only by City Council on consent calendar. During the project’s Building permit review, the City will ensure the applicant is adhering to the conditions of approval. Condition of approval #49 requires the contractor to prepare a Logistics Plan and obtain a street work permit, to the satisfaction of the Director of Public Works, prior to commencing work. This Logistics Plan must address all impacts to the City’s right-of-way, including, but not limited to: truck routes, contractor’s parking, work hours, noise and dust control, etc. Stanford has committed to continuing their discussions with the College Terrace Residents’ Association to ensure they are consulted and made aware of the details of the logistics plan before it is approved by the Director of Public Works. Condition of approval #4 requires that all mitigation measures contained within the City of Palo Alto/Stanford Development Agreement and Lease Project, Upper California Avenue Housing Development, Mitigation Monitoring and Reporting Plan (MMRP) shall be implemented as a part of this project. The MMRP is a CEQA requirement and clearly delineates how and when mitigation measures will be implemented, who is responsible for their implementation, and how the implementation will be monitored/ensured. Courtesy Copy Fred Balin, appellant Christopher Wuthmann: cwuthman@stanford.edu Attachments:  Attachment A - Director's Approval Letter (PDF)  Attachment B - Record of Land Use Action (PDF)  Attachment C - May 2, 2014 Appeal letter (PDF)  Attachment D - Project Location Map (PDF)  Attachment E - Applicant's Project Descriptions (PDF)  Attachment F - PTC June 12, 2013 Study Session and Minutes (PDF)  Attachment G - ARB March 20, 2014 Staff Report and Minutes w/o attachments (PDF)  Attachment H - AS2 Conformance Standards (PDF)  Attachment I - Environmental Confirmation Memo (PDF)  Attachment J - Mitigation Monitoring and Reporting Plan (PDF)  Attachment K - PTC May 28, 2014 Staff Report and Minutes w/o attachments (PDF)  Attachment L - Council June 9, 2014 Appeal Staff Report and Minutes w/o attachments (PDF)  Attachment M - Transportation Division response (PDF) City of Palo Alto Page 15  Attachment N - Fire Department response (DOCX)  Attachment O - Hexagon response to traffic questions (PDF)  Attachment P - RJA response to fire code questions (PDF)  Attachment Q - H&A response to hazards questions (PDF)  Attachment R: Project Plans (TXT) Attachment A APPROVAL NO. 2014-04 RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 1451-1601 CALIFORNIA AVENUE: ARCHITECTURAL REVIEW AND TENTATIVE MAP APPLICATION [FILE NO. 13PLN-00433 AND 14PLN-00119] On June 23, 2014, the City Council upheld the Director’s approval of the Architectural Review application and approved the Tentative Map application, to construct 68 single family homes and 112 multi-family homes and subdivide three existing parcels totaling 16.97 acres into 68 lots for single family use, two (2) condominium lots for 112 multi-family units, and 13 private street/common area lots for a total of 83 parcels, making the following findings, determination and declarations: SECTION 1. BACKGROUND. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On October 16, 2013, Chris Wuthmann of the Board of Trustees of the Leland Stanford Jr. University applied for an Architectural Review application for replacement of an office and research & development campus with 180 residential units, a community center, a fitness building, swimming pool, and open space amenities including a park, tot lots, courtyards and tree- lined walkway. B. On April 14, 2014, Chris Wuthmann of the Board of Trustees of the Leland Stanford Jr. University applied for a Tentative Map application to subdivide three existing parcels totaling 16.97 acres into 68 lots for single family use, two (2) condominium lots for 112 multi- family units, and 13 private street/common area lots for a total of 83 parcels. The site would be developed with private, inter-connecting streets that would access California Avenue at three locations. These access points would be aligned directly across from the existing public streets (Amherst, Bowdoin, and Columbia Streets). C. While the AS2 zoning district has no minimum lot size, the average single family home lot would be approximately 4,600 square feet and the two (2) condominium lots would be approximately 1.5 acres each. Staff has determined that the proposed project is in compliance with the applicable AS2 development standards. D. Following staff review, the Architectural Review Board (ARB) considered and recommended approval of the Architectural Review application on March 20, 2014 and the Director of Planning and Community Environment approved the application on April 18, 2014. This application was appeal to the City Council on May 2, 2014. E. Following staff review, the Planning and Transportation Commission (Commission) reviewed and recommended approval of the Tentative Map on May 28, 2014. Page 1 SECTION 2. ENVIRONMENTAL REVIEW. In conformance with the California Environmental Quality Act (CEQA), an Environmental Impact Report was certified by the City Council for the Mayfield Development Agreement in 2005. The City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (EIR) (State Clearinghouse No. 2003082103) concluded that the proposed project(s) would not have a significant effect on the environment with mitigation as proposed except there would be significant and unavoidable Noise impacts, due to the use of heavy equipment during construction. The certified, Final EIR is available for review on the City’s web site at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp. In March 2014, Staff prepared an Environmental Confirmation Memo and determined there are no substantive changes to the previously approved project or circumstances under which the project is being undertaken and no new information, therefore the EIR provides the necessary environmental clearance for this subject project. All mitigation measures as stated in the approved Mitigation Monitoring and Reporting Program (MMRP) have been incorporated into the conditions of approval. SECTION 3. ARCHITECTURE REVIEW BOARD FINDINGS The design and architecture of the proposed improvements, as conditioned, furthers the goals and purposes of the Architectural Review Board (ARB) Ordinance as it complies with the Standards for Architectural Review as required in Chapter 18.76.020 of the PAMC): 1) The design is consistent and compatible with elements of the Palo Alto Comprehensive Plan. This finding can be made in the affirmative in that the design is consistent and compatible with applicable elements of the City's Comprehensive Plan in that the project meets numerous policies related to the change in land use (housing element and policies L-75, L-77, and H-3), housing (policies H-1, H-2) sustainable/green building design (policies N-15, N-17, N-28, and N- 47), encourage alternate modes of transportation (program T-1, policy T-15), open space/amenities (policies N-15 and N-22), and relationship to adjacent properties (policies N- 39, and N-40); 2) The design is compatible with the immediate environment of the site. The project, as conditioned, is compatible with the immediate environment of the site in that it provides a transition between the established single family homes of the College Terrace neighborhood and the office buildings in the Stanford Research Park. 3) The design is appropriate to the function of the project. The design is appropriate to the function of the project in that it expresses residential characteristics through the building design, site layout, and landscaping. 4) In areas considered by the board as having a unified design character or historical character, the design is compatible with such character. This finding is made in an affirmative. As noted above, the project will reflect the eclectic nature of the surrounding neighborhood. Page 2 5) The design promotes harmonious transitions in scale and character in areas between different designated land uses. The design promotes harmonious transitions in scale and character in areas between different designated land uses in that the site would serve as a transition between existing industrial/commercial uses and single-family residences within the neighborhood. Densities and scale have been reduced as the site transitions from the commercial/industrial edge conditions towards the adjacent residential sites. 6) The design is compatible with approved improvements both on and off the site. The proposed project is compatible with both on and off the site improvements in that residential infill development will enhance, maintain, or improve existing infrastructure with the addition of interconnected private streets, sidewalks for pedestrians, and crosswalks at a signed intersection for the safe travel of residents using alternate modes of transportation. 7) The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community. The proposed layout provides private and public spaces for interaction by residents and visitors. The proposed single family homes along California Avenue will be detached and reflect the eclectic nature of the design of residences on the north side of the street. Project landscaping and the central location of the main park/community building work to create a cohesive new development within, and connected to, an existing vibrant neighborhood. 8) The amount and arrangement of open space are appropriate to the design and the function of the structures. This finding can be made in the affirmative in that the project meets the usable open space requirement of the AS2 standards. The project provides 2.67 acres of common usable open space. Common areas include a central park area with a community building and swimming pool, two tot lots, a tree lined walkway, recreation courtyard around the fitness building, and separate courtyards within each multi-family building. Planter strips with tree lined sidewalks are proposed throughout the entire development as well as approximately two acres of open space devoted to landscaped perimeter setbacks. 9) Sufficient ancillary functions are provided to support the main functions of the project and the same are compatible with the project’s design concept. This finding can be made in the affirmative in that the project site will be provided with sufficient amounts of common and private open spaces as would be expected with a new residential development. Given the projects location within one mile of the California Avenue Business District, new residents will have easy access to commercial/retail uses that are a necessary part of quality neighborhoods. 10) Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles. This finding can be made in the affirmative in that the project has been designed with private, inter-connecting streets that would access California Avenue at three locations. These access points would be aligned directly across from the existing public streets (Columbia, Bowdoin, and Amherst Streets) for the convenience and safety of pedestrians, cyclists and vehicles. Project streets would be developed with sidewalks to encourage pedestrian activity Page 3 and narrow roadway widths will slow traffic to allow for the integration of cyclists on the project streets. The project complies with the Private Streets Ordinance (though not legally required to do so) and the City’s local Fire Code. 11) Natural features are appropriately preserved and integrated with the project. This finding can be made in the affirmative in that the natural features have been appropriately preserved and integrated with the project in that the primary natural feature on site (i.e., existing trees) has been preserved where possible and that a comprehensive tree inventory has been developed and endorsed by the City Arborist to integrate the development within the existing tree network, as well as to propose additional trees where applicable; 12) The materials, textures, colors and details of construction and plant material are appropriate expression to the design and function, and whether the same are compatible with the adjacent and neighboring structures, landscape elements and functions. This finding can be made in the affirmative in that the materials are of high quality and appropriately express the residential nature of the development. The landscaping is cohesive with a variety of tree and plant materials to add vibrancy to the site. Many of the existing perimeter trees will be retained to help the projects more quickly integrate with the surrounding properties. 13) The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment and whether the landscape concept depicts an appropriate unity with the various buildings on the site. The proposed landscaping and open space areas would provide a visually desirable and functional environment. The project provides common and private open space areas for residents. The landscape concept depicts an appropriate unity with the various buildings on the site in that a variety of species types have been chosen to integrate amongst the existing trees to be preserved and amongst the various structures. 14) Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety, which would tend to be drought-resistant and to reduce consumption of water in its installation and maintenance. The drought resistant plant material is suitable and adaptable to the site, and capable of being properly maintained in that the combination of California native plants with exotic and ornamental materials would have low maintenance and water use requirements. 15) The design is energy efficient and incorporates renewable energy design elements including, but not limited to: (A) Exterior energy design elements; (B) Internal lighting service and climatic control systems; and (C) Building siting and landscape elements; The project exhibits green building and sustainable design that is energy efficient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. This finding can be made in the affirmative in that the project will comply with Built It Green, GreenPoint Rated program requirements as stated in PAMC Title 16 with the incorporation Page 4 of various elements such as cool roofs, steel framing, and use of materials with recycled content. Additional details are provided in the project’s Green Building Checklist that is included in the plan set. 16) The design is consistent and compatible with the purpose of architectural review, as set forth in section18.76.020 (a). The project is design, as conditioned, would promote an environment that is of high design quality and variety. The design is consistent and compatible with the purpose of architectural review, which is to: a. Promote orderly and harmonious development in the city; b. Enhance the desirability of residence or investment in the city; c. Encourage the attainment of the most desirable use of land and improvements; d. Enhance the desirability of living conditions upon the immediate site or in adjacent areas; and e. Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each other. SECTION 4. TENTATIVE MAP FINDINGS A legislative body of a city shall deny approval of a Preliminary Tentative Map, if it makes any of the following findings (California Government Code Section 66474): 1. That the proposed map is not consistent with applicable general and specific plans as specified in Section 65451: This finding can not be made in the affirmative. The proposed subdivision is consistent with applicable Comprehensive Plan policies and programs and the design requirements of the Subdivision Ordinance, in that the project would be consistent with the Subdivision Ordinance (PAMC Section 21.20) and that the proposed subdivision is consistent with the AS2 zoning district, the design requirements of the Subdivision Ordinance (PAMC 21.20), and would be consistent with the City’s Housing Element and Comprehensive Plan Goal H-2: Support the construction of housing near schools, transit, parks, shopping, employment and cultural institutions and Policy H1.4 Assure that new developments provide appropriate transitions from higher density development to single family and low density residential districts in order to preserve neighborhood character in that the project includes 180 residential units that will increase opportunities for housing in the area and the development heights will set up as they move away from existing single family residences. 2. That the design or improvement of the proposed subdivision is not consistent with applicable general and specific plans: This finding can not be made in the affirmative. The site is physically suitable for the type of development proposed in that the proposed 68 single family units and the 112 multi-family units are within the density range allowed by existing zoning and compatible with the pattern and scale of neighboring development. There is no specific plan designated for the area; 3. That the site is not physically suitable for the type of development: This finding can not be made in the affirmative. The site can accommodate the proposed 68 single family units and the 112 multi-family units. The site is adjacent to other residential neighborhoods. The design Page 5 of the subdivision will not cause significant environmental impacts, except temporary construction noise impacts, that were reviewed as part of an Environmental Impact Report and a Mitigation Monitoring Report Program prepared for the project. Further hazardous materials reports submitted to the City show that all hazardous materials on the site either have been or will be remediated to a level that is acceptable for housing, under the supervision of the Department of Toxic Substances Control. 4. That the site is not physically suitable for the proposed density of development: This finding can not be made in the affirmative. The subdivision would be consistent with the site development regulations of the AS2 zoning district. The proposed density of 10.6 units is less than the allowable density of 15 dwelling units per gross acre. 5. That the design of the subdivision or the proposed improvements is likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat: The subdivision would not cause environmental damage or injure fish, wildlife, or their habitat. The project site is located in an established urban area with no riparian or tree habitat for the candidate, sensitive, or special status species in the area. The project will comply with Mitigation Measure BR-3.1 to protect nesting common birds. 6. That the design of the subdivision or type of improvements is likely to cause serious public health problems: This finding can not be made in the affirmative. The subdivision of the existing parcels will not cause serious health problems. The resulting 68 single family parcels and the 112 condominium development will not cause a public health problem in that it is designed to provide access for emergency services, will supply necessary utility services, such as sanitation and water, is consistent with the local Fire Code, and is designed per City and State standards to ensure public safety. The development of faculty housing near the University will encourage alternate modes of transportation. Further hazardous materials reports submitted to the City show that all hazardous materials on the site either have been or will be remediated to a level that is acceptable for housing, under the supervision of the Department of Toxic Substances Control. 7. That the design of the subdivision or the type of improvements will conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. In this connection, the governing body may approve a map if it finds that alternate easements, for access or for use, will be provided, and that these will be substantially equivalent to ones previously acquired by the public. This subsection shall apply only to easements of record or to easements established by judgment of a court of competent jurisdiction and no authority is hereby granted to a legislative body to determine that the public at large has acquired easements for access through or use of property within the proposed subdivision. This finding can not be made in the affirmative. The subdivision of the existing parcels will not conflict with existing public easements. New utility easements and new private rights of way will be created as necessary. Page 6 SECTION 5. Conditions of Approval. These approvals are subject to the conditions of approval in Attachments B1 and B2. SECTION 6. Term of Approval. Architectural Review Approval. The project approval shall be valid for a period of one year from the original date of approval. In the event a building permit(s), if applicable, is not secured for the project within the time limit specified above, the ARB approval shall expire and be of no further force or effect. Application for extension of this entitlement may be made prior to the one year expiration. Tentative Map Approval. Within two years of the approval or conditional approval of a tentative map the subdivider shall cause the subdivision or any part thereof to be surveyed, and a final map, as specified in Chapter 21.08, to be prepared in conformance with the tentative map as approved or conditionally approved, and in compliance with the provisions of the Subdivision Map Act and this title and submitted to the city engineer PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Assistant City Attorney Page 7 ATTACHMENT B1 REVISED CONDITIONS OF APPROVAL Mayfield Development Agreement California Avenue Sites 1451-1601 California Avenue / 13PLN-00433 PLANNING DIVISION 1. The project shall be implemented as shown on the plans submitted March 12, 2014 and related documents on file with the City of Palo Alto Planning Division except as modified by these conditions of approval. In addition, the project shall conform to any subsequent staff level review agreement as referred by the ARB. 2. A copy of this Conditions of Approval document shall be included in all plans submitted for building permits. 3. The project approval shall be valid for a period of one year from the original date of approval. In the event a building permit(s), if applicable, is not secured for the project within the time limit specified above, the ARB approval shall expire and be of no further force or effect. Application for extension of this entitlement may be made prior to the one year expiration. 4. Mitigation Monitoring and Reporting Program. All mitigation measures contained within the City of Palo Alto/Stanford Development Agreement and Lease Project, Upper California Avenue Housing Development, Mitigation Monitoring and Reporting Plan shall be implemented as a part of this project. 5. Trees and other landscaping. To ensure there is no harm done to trees and landscaping that are proposed to remain, the project will include tree protection measures as required by these conditions, including the Municipal Code Section 8.10.30 and the City’s Tree Technical Manual, as further discuss in the Urban Forestry Section conditions of approval. 6. During and after construction, the site shall be kept clear of debris on a regular basis. 7. Demolition. All demolition shall be done in conformance with Federal, State and Local laws and regulations, to avoid any possible exposure of construction workers and/or the public to asbestos, lead-based paint and other hazardous materials. 8. Construction Noise. In conformance with the City’s Noise Ordinance (PAMC Chapter 9.10), the project shall include the following short-term temporary construction measures: a. Construction hours shall be limited to 8:00am to 6:00pm Monday through Friday and 9:00am to 6:00pm on Saturdays, unless otherwise approved by the Director of Planning and Community Environment. No construction is allowed on Sundays or Holidays as specified in Title 9 of the Muni Code. b. No individual piece of equipment shall produce a noise level exceeding one hundred ten dBA at a distance of twenty-five feet. c. The noise level at any point outside of the property plane of the project shall not exceed 110 dBA. d. Rules and regulation pertaining to all construction activities and limitations identified in this permit, along with the name and telephone number of a developer appointed disturbance coordinator, shall be posted in a prominent location at the entrance to the job site. 1451-1601 California Avenue (13PLN-00433) Page 1 of 25 9. Post-construction Noise. In conformance with Section 9.10.040 of the Palo Alto Municipal Code all noise producing equipment shall be limited to no more than eight dB above the local ambient at any property plane adjacent to commercial uses and six dB above ambient when adjacent to residential uses. To further reduce potential noise impacts, all mechanical equipment shall be screened from view of public and private right of ways. 10. Indemnity: The Applicant shall indemnify, protect, defend, reimburse, and save and hold harmless the City from and against any claim, action or proceeding brought by a third party to attack, set aside or void any permit or approval for the Project. The Applicant’s obligations hereunder shall include, but not be limited to, the burden and expense of defending all claims, suits and administrative proceedings, even if such claims, suits or proceedings are groundless, false or fraudulent; conducting all negotiations of any description; and promptly paying and discharging when due any and all attorneys’ fees and costs adjudged due against the City. Prior to retaining counsel to defend such claim, action or proceeding, the Applicant shall obtain the City’s written approval of the identify of such counsel, which approval shall not be unreasonably withheld, conditioned or delayed. 11. Development Impact fees (including Parks, Community Centers, Libraries, and Citywide Transportation Impact Area fees) with an estimated total of $376,125.84 must be paid prior to building permit issuance. This is an estimate and the final total may change based on date of building permit submittal. 12. 90-day Protest Period: California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. GREEN BUILDING 13. The project is required to comply with the City’s Green Building Ordinance found in PAMC 16.14 and Recycled Water Ordinance found in PAMC 16.12 at the time of building permit submittal. TRANSPORTATION 14. In accordance with the Access and Circulation Analysis, dated March 10, 2014, the following items shall be completed to the satisfaction of the Director of Planning and Community Environment. a. At the intersection of California Avenue and Columbia Street, pedestrian crosswalks shall be added to all four approaches of the intersection. “Pedestrian Crossing Ahead” signage should be added in both directions on California Avenue, and ADA-compliant ramps will need to be added to serve the crosswalks. 1451-1601 California Avenue (13PLN-00433) Page 2 of 25 b. Stop signs shall be provided at each access point to control traffic leaving the site. c. New crosswalks shall be constructed across California Avenue on both sides of Columbia, both sides of Bowdoin, and the north side of Amherst where those streets enter the project site from California Avenue. Directional ADA-compliant ramps shall be construction, to the satisfaction of the Director of Planning and the Director of Public Works, on all four corners of the Columbia/California Avenue and Bowdoin/California Avenue intersections, and on two corners at the intersection of Amherst/California Ave. d. Mirrors shall be installed on the driveway leading into the garage of Multi- Family Building #1 because of the lack of sight distance at this corner. e. In order to preserve sight distances at all intersections, care should be taken in the landscaping plan and maintenance to ensure that no large vegetation will restrict sight distances in the future at the corners of Driveways A, B, C, and D and where Amherst, Bowdoin, and Columbia intersect California Avenue. Tree plantings should be set back from the corners and have a lower canopy of seven (7) feet or greater. Shrubbery that tends to grow at motorists’ eye level should be avoided. Landscaping at intersections shall be 30 inches or lower from the sidewalk level (36” or lower from vehicle/street level). f. All elevators in the Multi-Family Buildings shall allow bicycles and shall be large enough to easily accommodate them so that cyclists can use the elevator from the garage to the ground level and then exit on foot with their bicycles. PUBLIC WORKS ENGINEERING 15. Final/Parcel Map shall be completed in accordance with Chapter 3, Article 4 or 5, sections 66452 or 66456 of the Subdivision Map Act and per City of Palo Alto Municipal Code (PAMC) Title 21 Subdivision and Other Divisions of Land. Map shall be recorded prior to issuance of any building permit. 16. Project shall dedicate easements for public utilities, public access and emergency vehicle access [PAMC 21.24.010] No building structures or retaining walls shall be designed or constructed within the area designated as public easement. Note that any improvements offered for dedication shall be designed per Palo Alto standards. 17. Map(s), shall include monuments at the intersection. If monuments are not installed prior to recordation of the map, then bonds may be required. 18. Plot all private and public easements on the Tentative Map for review. 19. Sheet C1.0 shows existing easement that serve the adjacent property. The tentative Map shall indicate if these easements will be abandoned, vacated, or plot new easements to be dedicated for the adjacent properties. 20. Verify if the inside and outside curb returns of the parking bays will be accessible for a street sweeper. 21. Fire hydrant placement shall be coordinate with the Fire Department, however verify that on- street parking spaces do not conflict with the proposed hydrant locations. 22. Streets shall be designed to drain, preliminary plans only show limited number of grate inlets, and these are not necessarily at all low points. In addition the City recommends installing 1451-1601 California Avenue (13PLN-00433) Page 3 of 25 through curb openings rather than grate inlets due to potential clogging and ponding that occurs more frequently with grate inlets only. 23. SIDEWALK, CURB & GUTTER: As part of this project, the applicant must replace those portions of the existing sidewalks, curbs, gutters or driveway approaches in the public right- of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non- standard, and must remove any unpermitted pavement in the planter strip. Contact Public Works’ inspector at 650-496-6929 to arrange a site visit so the inspector can determine the extent of replacement work. The site plan submitted with the building permit plan set must show the extent of the replacement work or include a note that Public Works’ inspector has determined no work is required. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Street Work Permit from Public Works at the Development Center. 24. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of-way along the property’s frontage(s). See “Tree Removal” below. Call the Public Works’ arborist at 650-496-5953 to arrange a site visit so he can determine what street tree work, if any, will be required for this project. The site plan submitted with the building permit plan set must show the street tree work that the arborist has determined, including the tree species, size, location, staking and irrigation requirements, or include a note that Public Works’ arborist has determined no street tree work is required. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way from Public Works’ arborist (650-496-5953). 25. CONCEPTUAL GRADING AND DRAINAGE: Best Management Practices (BMP’s) shall be incorporated into the Storm Water Pollution Prevention Plan (SWPPP) that will be required for the project. The SWPPP shall include permanent BMP’s to be incorporated into the project to protect storm water quality. (Resources and handouts are available from Public Works -Engineering. Specific reference is made to Palo Alto’s companion document to “Start at the Source”, entitled “Planning Your Land Development Project”). The elements of the PWE-approved conceptual grading and drainage plan shall be incorporated into the building permit plans. 26. SWPPP: This proposed development will disturb more than one acre of land. Accordingly, the applicant must apply for coverage under the State Water Resources Control Board’s (SWRCB) NPDES general permit for storm water discharge associated with construction activity. A Notice of Intent (NOI) must be filed for this project with the SWRCB in order to obtain coverage under the permit. The General Permit requires the applicant to prepare and implement a Storm Water Pollution Prevention Plan (SWPPP). The applicant is required to submit two copies of the NOI and the draft SWPPP to the Public Works Department for review and approval prior to issuance of the building permit. The SWPPP should include both permanent, post- development project design features and temporary measures employed during construction to control storm water pollution. 27. STORM WATER TREATMENT: This project shall comply with the storm water regulations contained in provision C.3 of the NPDES municipal storm water discharge permit issued by the San Francisco Bay Regional Water Quality Control Board (and incorporated into Palo Alto Municipal Code Chapter 16.11). These regulations apply to land development projects that create or replace 10,000 square feet or more of impervious surface, including a residential subdivision. In order to address the potential permanent impacts of the project on storm water quality, the applicant shall incorporate into the project a set of permanent site design measures, source controls, and treatment controls that serve to protect storm water quality, subject to the approval of the Public Works Department. The 1451-1601 California Avenue (13PLN-00433) Page 4 of 25 applicant shall identify, size, design and incorporate permanent storm water pollution prevention measures to treat the runoff from a “water quality storm” specified in PAMC Chapter 16.11 prior to discharge to the municipal storm drain system. Effective February 10, 2011, regulated projects, must contract with a qualified third-party reviewer during the building permit review process to certify that the proposed permanent storm water pollution prevention measures comply with the requirements of Palo Alto Municipal Code Chapter 16.11. The feasibility worksheet, certification form, 2 copies of approved storm water treatment plan, and a description of Maintenance Task and Schedule must be received by the City from the third-party reviewer prior to approval of the building permit by the Public Works department. Within 45 days of the installation of the required storm water treatment measures and prior to the issuance of an occupancy permit for the building, third-party reviewer shall also submit to the City a certification for approval that the project’s permanent measures were constructed and installed in accordance to the approved permit drawings. 28. STORMWATER MAINTENANCE AGREEMENT: The applicant shall designate a party to maintain the control measures for the life of the improvements and must enter into a maintenance agreement with the City to guarantee the ongoing maintenance of the permanent C.3 storm water discharge compliance measures. The maintenance agreement must be submitted to the Public Works’ plan reviewer prior to building permit issuance and shall be executed prior to the first building occupancy sign-off. The City will inspect the treatment measures yearly and charge an inspection fee. There is currently a $350 C.3 plan check fee that will be collected upon submittal for a grading or building permit. 29. SUBDIVISION MAP: A subdivision map will be required for this development. The applicant shall submit an application for a major subdivision with the Planning Division. 30. IMPROVEMENT PLANS: The applicant shall arrange a meeting with Public Works Engineering, Utilities Engineering, Planning, Fire, and Transportation Departments after approval of the tentative subdivision map to determine the on-site and off-site improvements required, which may include utility services, replacement of the sidewalk, curb & gutter, and resurfacing of the City streets adjacent to the site. The off-site improvement plans must be completed and approved by the City along with submittal of the final map. On-site improvement plans will be reviewed and approved after final map recordation. 31. SUBDIVISION AGREEMENT: A subdivision agreement is required to secure compliance with the conditions of approval and security of improvements onsite and offsite. No grading or building permits will be issued until final map is recorded with County Recorder. 32. BONDS: The developer shall post a bond prior to the recording of the final map to guarantee the completion of the onsite and offsite improvements. The developer shall submit a cost estimate of the improvements, which the City will review and use to determine the amount of the performance and payment bonds. 33. FINAL MAP: The final map must be recorded prior to issuance of a building permit. 34. DEVELOPER’S PROJECT MANAGER: The project subdivision includes significant complexity involving the final map and coordination of infrastructure design and construction. Developer shall appoint a Project Manager to coordinate with Public Works and Utility engineering staff. Public Works will conduct communication with the appointed project manager in order to facilitate timely review and approval of design and construction matters. 1451-1601 California Avenue (13PLN-00433) Page 5 of 25 35. SCVWD: The project storm drain system discharges directly into a watercourse, which is within the jurisdiction of the Santa Clara Valley Water District (SCVWD). A permit must be obtained from SCVWD and a copy of the permit provided to the City prior to the recordation of the final map. The following comments are provided to assist the applicant at the building permit phase. You can obtain various plan set details, forms and guidelines from Public Works at the City's Development Center (285 Hamilton Avenue) or on Public Works’ website: www.cityofpaloalto.org/depts/pwd/forms_permits. Include in plans submitted for a building permit: 36. BELOW-GRADE PARKING DRAINAGE: Due to high groundwater throughout much of the City and Public Works prohibiting the pumping and discharging of groundwater, perforated pipe drainage systems at the exterior of the basement walls or under the slab are not allowed for this site. A drainage system is, however, required for all exterior basement- level spaces, such as lightwells, patios or stairwells. This system consists of a sump, a sump pump, a backflow preventer, and a closed pipe from the pump to a dissipation device onsite at least 10 feet from the property line, such as a bubbler box in a landscaped area, so that water can percolate into the soil and/or sheet flow across the site. The device must not allow stagnant water that could become mosquito habitat. Additionally, the plans must show that exterior basement-level spaces are at least 7-3/4” below any adjacent windowsills or doorsills to minimize the potential for flooding the basement. Public Works recommends a waterproofing consultant be retained to design and inspect the vapor barrier and waterproofing systems for the basement. 37. GARAGE/BASEMENT SHORING: Shoring for the basement/underground parking excavation, including tiebacks, must not extend onto adjacent private property or into the City right-of-way without having first obtained written permission from the private property owners and/or an encroachment permit from Public Works. 38. DEWATERING: Basement excavations may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is disallowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater level. We recommend a piezometer to be installed in the soil boring. The contractor must determine the depth to groundwater immediately prior to excavation by using the piezometer or by drilling an exploratory hole if the deepest excavation will be within 3 feet of the highest anticipated groundwater level. If groundwater is found within 2 feet of the deepest excavation, a drawdown well dewatering system must be used, or alternatively, the contractor can excavate for the basement and hope not to hit groundwater, but if he does, he must immediately stop all work and install a drawdown well system before he continues to excavate. Public Works may require the water to be tested for contaminants prior to initial discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for the contaminants Public Works specifies and submit the results to Public Works. Public Works reviews and approves dewatering plans as part of a Street Work Permit. The applicant can include a dewatering plan in the building permit plan set in order to obtain approval of the plan during the building permit review, but the contractor will still be required to obtain a street work permit prior to dewatering. Alternatively, the applicant must include the above dewatering requirements in a note on the site plan. Public Works has a sample dewatering plan sheet and dewatering guidelines available at the Development Center and on our website. 1451-1601 California Avenue (13PLN-00433) Page 6 of 25 39. GRADING & DRAINAGE PLAN: The plan set must include a grading & drainage plan prepared by a licensed professional that includes existing and proposed spot elevations and drainage flow arrows to demonstrate proper drainage of the site. Adjacent grades must slope away from the house a minimum of 2%. Downspouts and splashblocks should be shown on this plan, as well as any site drainage features such as swales. Grading will not be allowed that increases drainage onto, or blocks existing drainage from, neighboring properties. Public Works generally does not allow rainwater to be collected and discharged into the street gutter, but encourages the developer to keep rainwater onsite as much as feasible by directing runoff to landscaped and other pervious areas of the site. See the Grading & Drainage Plan Guidelines for New Single Family Residences on our website. 40. GRADING & EXCAVATION PERMIT: An application for a grading & excavation permit must be submitted to Public Works when applying for a building permit. The application and guidelines are available at the Development Center and on our website. 41. STORM WATER POLLUTION PREVENTION: The City's full-sized "Pollution Prevention- It's Part of the Plan" sheet must be included in the plan set. Copies are available from Public Works at the Development Center or on our website. 42. OIL/WATER SEPARATOR: Parking garage floor drains on interior levels shall be connected to an oil/water separator prior to discharging to the sanitary sewer system. 43. DUMPSTER: If the project includes construction of dumpster and recycling areas at the exterior of a building/structure, City guidelines require that this area be covered. 44. STORM DRAIN: The applicant is required to paint the “No Dumping/Flows to Matadero Creek” logo in blue color on a white background, adjacent to all storm drain inlets. Stencils of the logo are available from the Public Works Environmental Compliance Division, which may be contacted at (650) 329-2598. A deposit may be required to secure the return of the stencil. Include the instruction to paint the logos on the construction grading and drainage plan. Include maintenance of these logos in the Hazardous Materials Management Plan, if such a plan is part of this project. 45. STREET LIGHTS: The applicant is encouraged to investigate and incorporate the use of LED streetlights throughout the proposed development and project frontage. 46. STREET TREES: Show all existing street trees in the public right-of-way. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by Public Works' arborist (phone: 650-496-5953). This approval shall appear on the plans. Show construction protection of the trees per City requirements. 47. WORK IN THE RIGHT-OF-WAY: The plans must clearly indicate any work that is proposed in the public right-of-way, such as sidewalk replacement, driveway approach, or utility laterals. The plans must include notes that the work must be done per City standards and that the contractor performing this work must first obtain a Street Work Permit from Public Works at the Development Center. If a new driveway is in a different location than the existing driveway, then the sidewalk associated with the new driveway must be replaced with a thickened (6” thick instead of the standard 4” thick) section. Additionally, curb cuts and driveway approaches for abandoned driveways must be replaced with new curb, gutter and planter strip. 48. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The 1451-1601 California Avenue (13PLN-00433) Page 7 of 25 Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. 49. LOGISTICS PLAN: The contractor shall prepare a logistics plan, to the satisfaction of the Director of Public Works, prior to commencing work that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. The plan will be attached to a street work permit. 50. Project shall be consistent with Mitigation Measures AQ-1.1, NO-1.1 and TR-1.1. URBAN FORESTRY SECTION PRIOR TO DEMOLITION, BUILDING OR GRADING PERMIT ISSUANCE 51. BUILDING PERMIT SUBMITTAL- PROJECT ARBORIST CERTIFICATION LETTER. Prior to submittal for staff review, attach a Project Arborist Certification Letter that he/she has; (a) reviewed the entire building permit plan set submittal and, (b)* verified all his/her updated TPR mitigation measures and changes are incorporated in the plan set, (c) affirms that ongoing Contractor/Project Arborist site monitoring inspections and reporting have been arranged with the contractor or owner (see Sheet T-1) and, (d) understands that design revisions (site or plan changes) within a TPZ will be routed to Project Arborist/Contractor for review prior to approval from City. a. *(b above) Other information. Building Permit submittal set shall be accompanied by the project site arborist’s typed certification letter that the plans have incorporated design changes to be consistent with the following minimum Standards, Regulations and information. b. Applicant/project arborist’s final revised Tree Protection Report (TPR) with design changes and corresponding mitigation measures. (e.g.: a Pier/grade beam?=soils report w/ specs required by Bldg. Div.; a Standard foundation?= mitigation for linear 24” cut to all roots in proximity. c. Palo Alto Tree Technical Manual Standards, Section 2.00 and PAMC 8.10.080. d. Specialty items. Itemized list of any activity impact--quantified and mitigated, in the Tree Protection Zone (TPZ) for each tree. e. Oaks. Landscape and irrigation plans are consistent with CPA Tree Technical Manual, Section 5.45 and Appendix L, Landscaping under Native Oaks and PAMC 18.40.130. 52. RESOLVE TREE CONFLICTS. Trees to be preserved have not been individually evaluated by the arborist with regard to grading, gas lines, electric, water and other trenching. Each tree to be preserved should be reviewed for final grading and landscaping impact issues resolved, with the arborist notes reflected on individual sheets. Street trees along California Avenue with new sidewalk sections require specific TPR comment. At the end of Dartmouth St, along the property line border, the mature specimen trees designated to remain appear threatened by an existing CPA transformer pad, building footprint and grading. This sensitive and important area functions as screening and retention of important legacy trees that have the capacity to grow for decades with proper attention. Other trees on the project 1451-1601 California Avenue (13PLN-00433) Page 8 of 25 site may have conflicts that need to be individually evaluated by the project arborist and then reviewed by the City’s Arborist. 53. UPDATED TREE PROTECTION REPORT (TPR) (Reference: CPA Tree Technical Manual, Section 6.30). Where construction activity will be in the dripline (radius 10-times diameter of a trunk) of a protected tree, then a tree protection report must be prepared by a certified arborist based on review of all current plans and essential elements affecting regulated trees. a) Tree Preservation Assessment/Impact Mitigation. Both Site Plan and the updated prepared TPR shall agree and show and describe the relationship of proposed grading and utility trenching & improvements to the trees designated for preservation and recommend mitigations. The architect/engineer/arborist shall address and recommend design changes and/or viable mitigation measures for the tree(s). The TPR shall specifically describe foreseeable impacts and recommend design adjustments or alternatives needed to reduce or eliminate impacts to retained trees deemed acceptable by staff. Applicant and arborist shall use the criteria set forth in the tree preservation ordinance, PAMC 8.10.030/080, and the CPA Tree Technical Manual, Section 3.00, 4.00 and 6.30, available at: (http://www.cityofpaloalto.org/environment/urban_canopy.asp). b) Tree Appraisal Section. Existing trees to be retained in place, including those in the right-of-way and any relocated tree (transplanted) shall be assessed. For the purposes of a security deposit agreement, the monetary market or replacement value shall be determined using the most recent version of the “Guide for Plan Appraisal”, in conjunction with the Species and Classification Guide for Northern California. c) Unless otherwise mitigated and approved by the Director on the basis of a final updated TPR in agreement with building permit plans, all development activity shall be located outside the dripline of a protected tree, including any grading, foundation, excavation, fill, etc. An approved TPR will also provide information for the following critical areas: • Tree Protection Zone (TPZ). List the precise recommended TPZ fencing placement for each tree, specify Type I around protected trees and Type II around street trees to be enclosed. Specify fence placement changes after demolition occurs. • Design changes. The TPR must propose mitigation measures or design changes for drainage, grading, underground trenching, foundations, cut, fill, compaction, exclusion area from irrigation, etc. Water drainage shall be directed away from oaks. For the purposes of the TPR, existing utilities to be accessed, upgraded remain or repaired shall be considered for mitigation.. • Inspections during construction. The TPR will outline a proposed site arborist inspection and reporting schedule to be followed for all trees retained, protected and relocated. Site inspections are required for the implementation and success of the TPR. See Sheet T-1 Checklist. 1451-1601 California Avenue (13PLN-00433) Page 9 of 25 • To avoid improvements that may be detrimental to the regulated tree health, the TPR will review the landscape and irrigation plans submitted by the applicant to ensure the new landscape is consistent with CPA Tree Technical Manual, Section 5.45 and Appendix L, Landscaping under Native Oaks. 54. BUILDING PERMIT/REVISIONS--COVER LETTER. Please provide a separate cover letter with Correction List along with the revised drawings when resubmitting. Note most significant tree impact notations and indicate the sheet number and/or detail where the correction has been made and provide: 1) corresponding revision number and 2) bubble or highlights for easy reference. Responses such as “see plans or report” or “plans comply” are not acceptable. Your response should be clear and complete to assist the re-check and approval process for your project. 55. TREE REMOVAL—PROTECTED & RIGHT-OF-WAY TREES. Existing trees (Publicly- owned or Protected) to be removed, as shown accurately located on all site plans, require approval by the Urban Forestry Tree Care Permit prior to issuance of any building, demolition or grading permit, and shall also be referenced in the required Street Work Permit from Public Works Engineering a. Add a note for each tree to be removed, “Tree Removal. Contractor shall obtain a completed Urban Forestry Tree Care Permit # ________________ separate from the Building or Street Work Permit. Permit notice hanger and conditions apply. Contact (650-496-5953).” b. The completed Tree Care Permitshall be printed on Sheet T-2, or specific approval communication from staff clearly copied directly on the relevant plan sheet. The same Form is used for private Protected tree removal requests available from the Urban Forestry webpage: http://www.cityofpaloalto.org/gov/depts/pwd/trees/default.asp 56. Gas Service may need to be bored in certain areas. ID where these need to be. How deep will it be? The bore depth to be specified, versus open trench. The 10' clear from existing or new trees needs to apply to SS also. 57. The project arborist for the applicant will need to check for this clearance and flag it as a discrepancy to be resolved between the civil engineer and City utilities engineer prior to building permit issuance. See #1 above. 58. SITE PLAN REQUIREMENTS. The final Plans submitted for building permit shall include the following information and notes on the relevant plan sheets: a. Sheet T-1_Tree Protection-it's Part of the Plan (http://www.cityofpaloalto.org/environment/urbancanopy.asp ), Applicant shall complete the Tree Disclosure Statement. Inspections and monthly reporting by the project arborist are mandatory. (All projects: check #1; with tree preservation report: check #2-6; with landscape plan: check #7.) b. The Tree Preservation Report (TPR). All sheets of the TPR approved by the City, Tree Inventory & Tree Protection Report, prepared by Ray Morneau, Arborist, dated October 14, 2013 shall be printed on numbered Sheet T-1 (T-2, T-3, etc) and added to the sheet index. 1451-1601 California Avenue (13PLN-00433) Page 10 of 25 c. Protective Tree Fencing Type. Delineate on grading plans, irrigation plans, site plans and utility plans, Type II fencing around Street Trees and Type I fencing around Protected/Designated trees as a bold dashed line enclosing the Tree Protection Zone (per the approved Tree Preservation Report) per instructions on Detail #605, Sheet T-1, and the City Tree Technical Manual, Section 6.35-Site Plans. d. Tree Disposition Sheet showing trees to be retained, protected fencing, relocated with permanent location, removed, etc. e. Site Plan Notes. Note #1. Apply to the site plan stating, "All tree protection and inspection schedule measures, design recommendations, watering and construction scheduling shall be implemented in full by owner and contractor, as stated in the Tree Protection Report on Sheet T-1, T-2 etc. and the approved plans”. Note #2. All civil plans, grading plans, irrigation plans, site plans and utility plans and relevant sheets shall include a note applying to the trees to be protected, including neighboring trees stating: "Regulated Tree--before working in this area contact the Project Site Arborist at 650-964-7664"; Note #3. “Basement or foundation plan. Soils Report and Excavation for basement construction within the TPZ of a protected tree shall specify a vertical cut (stitch piers may be necessary) in order to avoid over-excavating into the tree root zone. Any variance from this procedure requires Urban Forestry approval, please call (650) 496-5953.” Note #4. Utility plan sheets shall include the following note: “Utility trenching shall not occur within the TPZ of the protected tree. Contractor shall be responsible for ensuring that no trenching occurs within the TPZ of the protected tree by contractors, City crews or final landscape workers. See sheet T- 1, T-2, for instructions.” 59. REGULATED TREE REMOVAL (Reference: CPA Tree Technical Manual, Section 3.05). Provide an evaluation and summary for any Regulated Tree proposed to be removed with findings recognized by the tree ordinance; including replacement tree Mitigation Measures using the Tree Canopy Replacement Standard in the Tree Technical Manual, Section 3.00. 60. NEW TREES--SOIL. Unless otherwise approved, each new large* tree shall be provided with 1,200 cubic feet of rootable soil area, utilizing Standard Dwg. #604/513. Deep root shall mean compaction less than 90% over the area, not including sidewalk base areas except when mitigated. Sidewalk Mitigation in lieu of compacted root conditions may use Alternative Base Material methods such as: structural grid, Engineered Soil Mix base or other method as approved. a. Minimum soil volume for tree size growth performance (in cubic feet): Large: 1,200 cu.ft. Medium: 800 cu.ft. Small: 400 cu.ft. b. Landscape plan. When qualifying for parking area shade ordinance compliance (PAMC 18.40.130) trees shall be labeled (as S, M or L). c. Minimum soil volume for tree size growth performance shall range depending upon site constraints. Area available shall be considered in determination of rootable soil volume. Soil volume shall range from 400 to 1,200 Cubic Feet, depending on mature tree size (s, M, L). For California Avenue right-of-way trees, a set volume will be based on a 10’ wide right of way and 3’ depth of rootable soil or alternative base material. Length of rootable area will range from 10’ minimum when constrained by site conditions, to a goal size of 20’ length. When possible, Engineered Soil Mix may extend under new roadway areas in order to increase the rootable area 1451-1601 California Avenue (13PLN-00433) Page 11 of 25 d. ENGINEERED SOIL MIX (ESM). When applied, Engineered Soil Mix base material shall be utilized in specified areas, such as sidewalk base, to achieve expected shade tree rooting potential and maximum service life of the sidewalk, curb, parking surfaces and compacted areas. Plans and Civil Drawings shall use CPA Public Works Engineering ESM Specifications, Section 30 and Standard Dwg. #603a. Designated areas will be identified by cross-hatch or other symbol, and specify a minimum of 24" depth. The technology may be counted toward any credits awarded for LEED or Sustainable Sites certification ratings.. 61. Provide a Tree Preservation Bond/Security Guarantee. The natural tree resources on the site include significant protected trees and neighborhood screening, including trees proposed for relocation. Prior to building permit submittal, the Tree Security Deposit for the total value of the replaced or relocated regulated trees, as referenced in the Tree Technical Manual, Section 3.26, Security Deposits, shall be posted to the City Revenue Collections in a form acceptable by the City Attorney. As a security measure, the project shall be subject to a Memorandum of Understanding between the City of Palo Alto and the Applicant describing a tree retention amount, list of trees, criteria and timeline for return of security, and conditions as cited in the Record of Land Use Action for the project. The applicant and project arborist shall coordinate with the City Urban Forester to determine the amount of bonding required to guarantee the protection and/or replacement of the regulated trees on the site during construction and within five years after occupancy. The applicant shall bond for 150% of the value for the relocated trees, and 50% of the appraised value of the remaining regulated trees to be protected during construction (as identified in the revised and final approved Tree Protection Report). The applicant shall provide the proposed level of bonding as listed in the Tree Value Table, with the description of each tree by number, value, and total combined value of all the trees to be retained. A return of the guarantee shall be subject to an annual followed by a final tree assessment report on all the relocated and retained trees from the project arborist as approved by the City Urban Forester, five years following final inspection for occupancy, to the satisfaction of the director. A copy of the MoU draft available from the Urban Forestry section. 62. LANDSCAPE PLANS. a. Include all changes recommended from civil engineer, architect and staff, including planting specifications as called for by the arborist, (if any) b. Provide a detailed landscape and irrigation plan encompassing on-and off-site plantable areas out to the curb. A Landscape Water Use statement, water use calculations and a statement of design intent shall be submitted for the project. A licensed landscape architect and qualified irrigation consultant will prepare these plans, to include: i. All existing trees identified both to be retained and removed including street trees. ii. Complete plant list indicating tree and plant species, quantity, size, and locations. iii. Irrigation schedule and plan. iv. Fence locations. v. Lighting plan with photometric data. vi. A note that trees to be retained shall be irrigated, aerated and maintained as necessary. 1451-1601 California Avenue (13PLN-00433) Page 12 of 25 vii. All new trees planted within the public right-of-way shall be installed per Public Works (PW) Standard Planting Diagram #603 or 604 (include on plans), and shall have a tree pit dug at least twice the diameter of the root ball. viii. Landscape plan shall include planting preparation details for trees specifying digging the soil to at least 30-inches deep, backfilled with a quality topsoil and dressing with 2-inches of wood or bark mulch on top of the root ball keeping clear of the trunk by 1-inch. ix. Automatic irrigation shall be provided to all trees. For trees, PW Detail #513 shall be included on the irrigation plans and show two bubbler heads mounted on flexible tubing placed at the edge of the root ball. Bubblers shall not be mounted inside an aeration tube. The tree irrigation system shall be connected to a separate valve from other shrubbery and ground cover, pursuant to the City's Landscape Water Efficiency Standards. Irrigation in the right-of-way requires a street work permit per CPA Public Works standards. x. Landscape Plan shall ensure the backflow device is adequately obscured with the appropriate screening to minimize visibility (planted shrubbery is preferred, painted dark green, decorative boulder covering acceptable; wire cages are discouraged). c. Planting notes to include the following mandatory criteria: i. Prior to any planting, all plantable areas shall be tilled to 12” depth, and all construction rubble and stones over 1” or larger shall be removed from the site. ii. Note a turf-free zone around trees 36” diameter (18” radius) for best tree performance. d. Mandatory Landscape Architect (LA) Inspection Verification to the City. The LA of record shall verify the performance measurements are achieved with a separate letter of verification to City Planning staff, in addition to owner’s representative for each of the following: i. Percolation & drainage checks have been performed and are acceptable. ii. Fine grading inspection of all plantable areas has been personally inspected for tilling depth, rubble removal, soil test amendments are mixed and irrigation trenching will not cut through any tree roots. iii. Tree and Shrub Planting Specifications, including delivered stock, meets Standards in the CPA Tree Technical Manual, Section 3.30-3.50. Girdling roots and previously topped trees are subject to rejection. 63. TREE PROTECTION VERIFICATION. Prior to demolition, grading or building permit issuance, a written verification from the contractor that the required protective fencing is in place shall be submitted to the Building Inspections Division. The fencing shall contain required warning sign and remain in place until final inspection of the project. DURING CONSTRUCTION 64. EXCAVATION RESTRICTIONS APPLY (TTM, Sec. 2.20 C & D). Any approved grading, digging or trenching beneath a tree canopy shall be performed using ‘air-spade’ method as a preference, with manual hand shovel as a backup. For utility trenching, including sewer line, roots exposed with diameter of 1.5 inches and greater shall remain intact and not be damaged. 1451-1601 California Avenue (13PLN-00433) Page 13 of 25 If directional boring method is used to tunnel beneath roots, then Table 2-1, Trenching and Tunneling Distance, shall be printed on the final plans. 65. PLAN CHANGES. Revisions and/or changes to plans before or during construction shall be reviewed and responded to by the (a) project site arborist, (name of certified arborist of record and phone #), or (b) landscape architect with written letter of acceptance before submitting the revision to the Building Department for review by Planning, PW or Urban Forestry. 66. TREE PROTECTION COMPLIANCE. The owner and contractor shall implement all protection and inspection schedule measures, design recommendations and construction scheduling as stated in the TPR, and is subject to code compliance action pursuant to PAMC 8.10.080. The required protective fencing shall remain in place until final landscaping and inspection of the project. Project arborist approval must be obtained and documented in the monthly activity report sent to the City. A mandatory Monthly Tree Activity Report shall be sent monthly to the City beginning with the initial verification approval, using the template in the Tree Technical Manual, Addendum 11. 67. TREE DAMAGE. Tree Damage, Injury Mitigation and Inspections apply to Contractor. Reporting, injury mitigation measures and arborist inspection schedule (1-5) apply pursuant to TTM, Section 2.20-2.30. Contractor shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged during the course of construction, pursuant to Title 8 of the Palo Alto Municipal Code, and city Tree Technical Manual, Section 2.25. 68. GENERAL. The following general tree preservation measures apply to all trees to be retained: No storage of material, topsoil, vehicles or equipment shall be permitted within the tree enclosure area. The ground under and around the tree canopy area shall not be altered. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. PRIOR TO OCCUPANCY 69. URBAN FORESTRY DIGITAL FILE & INSPECTION. The applicant or architect shall provide a digital file of the landscape plan, including new off-site trees in the publicly owned right-of-way. A USB Flash Drive, with CAD or other files that show species, size and exact scaled location of each tree on public property, shall be delivered to Urban Forestry at the tree and landscape inspection. 70. LANDSCAPE INSPECTION LETTER. The Planning Department shall be in receipt of a verification letter that the Landscape Architect has inspected all trees, shrubs, planting and irrigation and that they are installed and functioning as specified in the approved plans. 71. PROJECT ARBORIST INSPECTION LETTER. The contractor shall call for a final inspection by the Project Arborist to evaluate all trees to be retained and protected, as indicated in the approved plans, of the activity, health, welfare, mitigation remedies for injuries, if any, and for the long term care of the trees for the new owner. a. The final project arborist letter report shall be provided to the Planning Department prior to written request for temporary or final occupancy. The final report may be used to navigate any outstanding issues, concerns or security guarantee return process, when applicable. 72. PLANNING INSPECTION. Prior to final sign off, contractor or owner shall contact the city planner (650-329-2441) to inspect and verify Special Conditions relating to the conditions for structures, fixtures, colors and site plan accessories. 1451-1601 California Avenue (13PLN-00433) Page 14 of 25 POST CONSTRUCTION 73. MAINTENANCE. All landscape and trees shall be maintained, watered, fertilized, and pruned according to Best Management Practices-Pruning (ANSI A300-2001 or current version). Any vegetation that dies shall be replaced or failed automatic irrigation repaired by the current property owner within 30 days of discovery. PUBLIC WORKS – WATERSHED PROTECTION GROUP Please note the following issues must be addressed in building plans prior to final approval by this department: 74. PAMC 16.09.170, 16.09.040 Discharge of Groundwater: The project is located in an area of suspected or known groundwater contamination with Volatile Organic Compounds (VOCs). If groundwater is encountered then the plans must include the following procedure for construction dewatering: Prior to discharge of any water from construction dewatering, the water shall be tested for volatile organic compounds (VOCs) using EPA Method 601/602 or Method 624. The analytical results of the VOC testing shall be transmitted to the Regional Water Quality Control Plant (RWQCP) 650-329-2598. Contaminated ground water that exceeds state or federal requirements for discharge to navigable waters may not be discharged to the storm drain system or creeks. If the concentrations of pollutants exceed the applicable limits for discharge to the storm drain system then an Exceptional Discharge Permit must be obtained from the RWQCP prior to discharge to the sanitary sewer system. If the VOC concentrations exceed the toxic organics discharge limits contained in the Palo Alto Municipal Code (16.09.040(m)) a treatment system for removal of VOCs will also be required prior to discharge to the sanitary sewer. Additionally, any water discharged to the sanitary sewer system or storm drain system must be free of sediment. 75. PAMC 16.09.180(b)(11) Carwash Required: New Multi-family residential units and residential development projects with 25 or more units shall provide a covered area for occupants to wash their vehicles. A drain shall be installed to capture all vehicle wash waters and shall be connected to an oil/water separator prior to discharge to the sanitary sewer system. The oil/water separator shall be cleaned at a frequency of at least once every six months or more frequently if recommended by the manufacturer or the Superintendent. Oil/water separators shall have a minimum capacity of 100 gallons. The area shall be graded or bermed in such a manner as to prevent the discharge of storm water to the sanitary sewer system. 76. PAMC 16.09.055 Unpolluted Water: Unpolluted water shall not be discharged through direct or indirect connection to the sanitary sewer system (for example, ramps to parking garage, if uncovered, should drain to storm drain system). 77. PAMC 16.09.180(b)(9) Covered Parking: Drain plumbing for parking garage floor drains must be connected to an oil/water separator with a minimum capacity of 100 gallons, and to the sanitary sewer system 78. PAMC 16.09.180(b)(10) Dumpsters for New and Remodeled Facilities: New buildings and residential developments providing centralized solid waste collection, except for single- family and duplex residences, shall provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. 1451-1601 California Avenue (13PLN-00433) Page 15 of 25 79. PAMC 16.09.180(b)(14) Architectural Copper: On and after January 1, 2003, copper metal roofing, copper metal gutters, copper metal down spouts, and copper granule containing asphalt shingles shall not be permitted for use on any residential, commercial or industrial building for which a building permit is required. Copper flashing for use under tiles or slates and small copper ornaments are exempt from this prohibition. Replacement roofing, gutters and downspouts on historic structures are exempt, provided that the roofing material used shall be prepatinated at the factory. For the purposes of this exemption, the definition of "historic" shall be limited to structures designated as Category 1 or Category 2 buildings in the current edition of the Palo Alto Historical and Architectural Resources Report and Inventory. 80. PAMC 16.09.175(k) (2) Loading Docks a. Loading dock drains to the storm drain system may be allowed if equipped with a fail-safe valve or equivalent device that is kept closed during the non-rainy season and during periods of loading dock operation. b. Where chemicals, hazardous materials, grease, oil, or waste products are handled or used within the loading dock area, a drain to the storm drain system shall not be allowed. A drain to the sanitary sewer system may be allowed if equipped with a fail- safe valve or equivalent device that is kept closed during the non-rainy season and during periods of loading dock operation. The area in which the drain is located shall be covered or protected from rainwater run-on by berms and/or grading. Appropriate wastewater treatment approved by the Superintendent shall be provided for all rainwater contacting the loading dock site. 81. PAMC 16.09.180(b)(5) Condensate from HVAC: Condensate lines shall not be connected or allowed to drain to the storm drain system. 82. PAMC 16.09.180(b)(b) Copper Piping: Copper, copper alloys, lead and lead alloys, including brass, shall not be used in sewer lines, connectors, or seals coming in contact with sewage except for domestic waste sink traps and short lengths of associated connecting pipes where alternate materials are not practical. The plans must specify that copper piping will not be used for wastewater plumbing. 83. 16.09.180(12) Mercury Switches: Mercury switches shall not be installed in sewer or storm drain sumps. 84. PAMC 16.09.205(a) Cooling Systems, Pools, Spas, Fountains, Boilers and Heat Exchangers: It shall be unlawful to discharge water from cooling systems, pools, spas, fountains boilers and heat exchangers to the storm drain system. 85. PAMC 16.09.165(h) Storm Drain Labeling: Storm drain inlets shall be clearly marked with the words "No dumping - Flows to Bay," or equivalent. GARBAGE, RECYCLING AND COMPOST 86. In order to adequately service this facility, the hauler is recommending a three yard bin for garbage, a four yard bin for recycling, and a 2 yard bin for compost. During the building permit process, the applicant shall work with the hauler to come to a satisfactory solution that will be reviewed and approved by the Planning Division. 1451-1601 California Avenue (13PLN-00433) Page 16 of 25 87. PAMC 18.23.020 Trash Disposal and Recycling: (A) Assure that development provides adequate and accessible interior areas or exterior enclosures for the storage of trash and recyclable materials in appropriate containers, and that trash disposal and recycling areas are located as far from abutting residences as is reasonably possible. (B) Requirements: (i) Trash disposal and recyclable areas shall be accessible to all residents or users of the property. (ii) Recycling facilities shall be located, sized, and designed to encourage and facilitate convenient use. (iii) Trash disposal and recyclable areas shall be screened from public view by masonry or other opaque and durable material, and shall be enclosed and covered. Gates or other controlled access shall be provided where feasible. Chain link enclosures are strongly discouraged. (iv) Trash disposal and recycling structures shall be architecturally compatible with the design of the project. (v) The design, construction and accessibility of recycling areas and enclosures shall be subject to approval through the architectural review process, in accordance with design guidelines adopted by that board and approved by the city council pursuant to Section 18.76.020. 88. Garbage, Recycling, and Yard Waste/Compostables cart/bin location and sizing for Multi-Family Residential. The proposed multi-family development must follow the requirements for recycling container space. All residential developments, where central garbage, recycling, and compostables containers will serve five or more dwelling units, must have space for the storage and collection of recyclables and compostables. This includes the provision of recycling chutes and the placement of compostables collection where garbage chutes are provided. Project plans must show the placement of recycling and compostables containers, for example, within the details of the solid waste enclosures. a. Enclosure and access should be designed for equal access to all three waste streams – garbage, recycling, and compostables. b. Collection cannot be performed in underground. Underground bins locations require a minimum of 77” of vertical clearance. Pull out charges will apply. In instances where push services are not available (e.g., hauler driver cannot push containers up or down ramps), the property owner will be responsible for placing solid waste containers in an accessible location for collection. c. All service areas must have a clearance height of 20’ for bin service. d. New enclosures should consider rubber bumpers to reduce wear-and-tear on walls. For questions regarding garbage, recycling, and compostables collection issues, contact Green Waste of Palo Alto (650) 493-4894. 89. PAMC 5.24.030 Construction and Demolition Debris (CDD): Covered projects shall comply with construction and demolition debris diversion rates and other requirements established in Chapter 16.14 (California Green Building Code). In addition, all debris generated by a covered project must haul 100 percent of the debris not salvaged for reuse to an approved facility as set forth in this chapter. Contact the City of Palo Alto’s Green Building Coordinator for assistance on how to recycle construction and demolition debris from the project, including information on where to conveniently recycle the material. UTILITIES ELECTRICAL 90. The applicant shall comply with all the Electric Utility Engineering Department service requirements noted during plan review. 1451-1601 California Avenue (13PLN-00433) Page 17 of 25 91. The applicant shall be responsible for identification and location of all utilities, both public and private, within the work area. Prior to any excavation work at the site, the applicant shall contact Underground Service Alert (USA) at 1-800-227-2600, at least 48 hours prior to beginning work. 92. The applicant shall submit a request to disconnect all existing utility services and/or meters including a signed affidavit of vacancy, on the form provided by the Building Inspection Division. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued after all utility services and/or meters have been disconnected and removed. THE FOLLOWING SHALL BE INCORPORATED IN SUBMITTALS FOR ELECTRIC SERVICE 93. A completed Electric Load Sheet and a full set of plans must be included with all applications involving electrical work. The load sheet must be included with the preliminary submittal. 94. Industrial and large commercial customers must allow sufficient lead-time for Electric Utility Engineering and Operations (typically 8-12 weeks after advance engineering fees have been paid) to design and construct the electric service requested. 95. Only one electric service lateral is permitted per parcel. Utilities Rule & Regulation #18. 96. If this project requires padmount transformers, the location of the transformers shall be shown on the site plan and approved by the Utilities Department and the Director of Planning through the architectural review process. Utilities Rule & Regulations #3 & #16 (see detail comments below). 97. The developer/owner shall provide space for installing padmount equipment (i.e. transformers, switches, and interrupters) and associated substructure as required by the City. 98. The customer shall install all electrical substructures (conduits, boxes and pads) required from the service point to the customer’s switchgear. The design and installation shall be according to the City standards and shown on plans. Utilities Rule & Regulations #16 & #18. 99. Location of the electric panel/switchboard shall be shown on the site plan and approved by the Director of Planning through the architectural review process and Utilities Department. 100. All utility meters, lines, transformers, backflow preventers, and any other required equipment shall be shown on the landscape and irrigation plans and shall show that no conflict will occur between the utilities and landscape materials. In addition, all aboveground equipment shall be screened in a manner that is consistent with the building design and setback requirements. 101. For services larger than 1600 amps, the customer will be required to provide a transition cabinet as the interconnection point between the utility’s padmount transformer and the customer’s main switchgear. The cabinet design drawings must be submitted to the Electric Utility Engineering Department for review and approval. 102. For underground services, no more than four (4) 750 MCM conductors per phase can be connected to the transformer secondary terminals; otherwise, bus duct must be used for connections to padmount transformers. If customer installs a bus duct directly between the transformer secondary terminals and the main switchgear, the installation of a transition cabinet will not be required. 1451-1601 California Avenue (13PLN-00433) Page 18 of 25 103. The customer is responsible for sizing the service conductors and other required equipment according to the National Electric Code requirements and the City standards. Utilities Rule & Regulation #18. 104. If the customer’s total load exceeds 2500 kVA, service shall be provided at the primary voltage of 12,470 volts and the customer shall provide the high voltage switchgear and transformers. 105. For primary services, the standard service protection is a padmount fault interrupter owned an maintained by the City, installed at the customer’s expense. The customer must provide and install the pad and associated substructure required for the fault interrupter. 106. Any additional facilities and services requested by the Applicant that are beyond what the utility deems standard facilities will be subject to Special Facilities charges. The Special Facilities charges include the cost of installing the additional facilities as well as the cost of ownership. Utilities Rule & Regulation #20. 107. Projects that require the extension of high voltage primary distribution lines or reinforcement of offsite electric facilities will be at the customer’s expense and must be coordinated with the Electric Utility. 108. Ten feet of working space free and clear shall be provided directly in front of utility transformers and switches. Removable bollards shall be installed adjacent to utility equipment subject to and shielding it from traffic. DURING CONSTRUCTION 109. Contractors and developers shall obtain permit from the Department of Public Works before digging in the street right-of-way. This includes sidewalks, driveways and planter strips. 110. At least 48 hours prior to starting any excavation, the customer must call Underground Service Alert (USA) at 1-800-227-2600 to have existing underground utilities located and marked. The areas to be check by USA shall be delineated with white paint. All USA markings shall be removed by the customer or contractor when construction is complete. 111. The customer is responsible for installing all on-site substructures (conduits, boxes and pads) required for the electric service. No more than 270 degrees of bends are allowed in a secondary conduit run. All conduits must be sized according to National Electric Code requirements and no 1/2 – inch size conduits are permitted. All off-site substructure work will be constructed by the City at the customer’s expense. Where mutually agreed upon by the City and the Applicant, all or part of the off-site substructure work may be constructed by the Applicant. 112. All primary electric conduits shall be concrete encased with the top of the encasement at the depth of 30 inches. No more than 180 degrees of bends are allowed in a primary conduit run. Conduit runs over 500 feet in length require additional pull boxes. 113. All new underground conduits and substructures shall be installed per City standards and shall be inspected by the Electrical Underground Inspector before backfilling. 114. The customer is responsible for installing all underground electric service conductors, bus duct, transition cabinets, and other required equipment. The installation shall meet the National Electric Code and the City Standards. 1451-1601 California Avenue (13PLN-00433) Page 19 of 25 115. Meter and switchboard requirements shall be in accordance with Electric Utility Service Equipment Requirements Committee (EUSERC) drawings accepted by Utility and CPA standards for meter installations. 116. Shop/factory drawings for switchboards (400A and greater) and associated hardware must be submitted for review and approval prior to installing the switchgear to: Gopal Jagannath, P.E. Supervising Electric Project Engineer Utilities Engineering (Electrical) 1007 Elwell Court Palo Alto, CA 94303 117. Catalog cut sheets may not be substituted for factory drawing submittal. 118. All new underground electric services shall be inspected and approved by both the Building Inspection Division and the Electrical Underground Inspector before energizing. AFTER CONSTRUCTION & PRIOR TO FINALIZATION 119. The customer shall provide as-built drawings showing the location of all switchboards, conduits (number and size), conductors (number and size), splice boxes, vaults and switch/transformer pads. PRIOR TO ISSUANCE OF BUILDING OCCUPANCY PERMIT 120. The applicant shall secure a Public Utilities Easement for facilities installed on private property for City use. 121. All required inspections have been completed and approved by both the Building Inspection Division and the Electrical Underground Inspector. 122. All fees must be paid. 123. All Special Facilities contracts or other agreements need to be signed by the City and applicant. FIRE 124. Applicant shall provide a Fire Apparatus Access map showing the travel routes, hydrants and Fire Department connections for fire engines and an aerial fire truck and that all locations on the property are accessible for firefighting operations. 125. Applicant shall work with Fire to assure that any areas which cannot be reached with fire hose deployed off of fire engines will be protected by hose outlets or other approved features. 126. Fire sprinklers and fire alarm systems required in accordance with NFPA 13, NFPA 24, NFPA 72 and State and local standards. Sprinkler, fire alarm and underground fire supply installations require separate submittal to the Fire Prevention Bureau. 127. Sprinkler main drain must be coordinated with plumbing design so that the 200 gpm can be flowed for annual main drain testing for 90 seconds without overflowing the collection sump, and the Utilities Department approved ejector pumps will be the maximum flow rate to sanitary sewer. 128. Applicant shall work with Utilities Department to provide acceptable backflow prevention configuration. 1451-1601 California Avenue (13PLN-00433) Page 20 of 25 129. All floor levels in multi-family buildings must be served by an elevator capable of accommodating a 24 x 84 inch gurney without lifting or manipulating the gurney. 130. Low-E glass and underground parking areas can interfere with portable radios used by emergency responders. Please provide an RF Engineering analysis to determine if additional devices or equipment will be needed to maintain operability of emergency responder portable radios throughout 97% of the multi-family buildings in accordance with the Fire Code Appendix J as adopted by the City of Palo Alto. A written report to the Fire Marshal shall be provided prior to final inspection. 131. PAMC 105.8.2 Site Map and Floor plans. The Fire Chief or fire code official may require as a condition of final permit approval, a site map including the use of standard or approved Palo Alto Fire Department .symbols. Features would include interior floor plans, on-site hydrant locations, FDC locations, key safe locations, alarm panel locations, electrical panel locations, stairwell and elevator locations, water shut off locations, hazardous materials locations, and other significant design elements or fire service features. The site map is to be provided in a format compatible with the City's Geographic Information System (GIS) at time of construction. This requirement applies to newly constructed buildings, facilities where hazardous materials are used or stored in quantities exceeding permit amounts in Section 105, additions or permitted remodels when in the opinion of the fire code official a site map is warranted. UTILITIES WATER GAS WASTEWATER PRIOR TO ISSUANCE OF DEMOLITION PERMIT 132. Prior to demolition, the applicant shall submit the existing water/wastewater fixture unit loads (and building as-built plans to verify the existing loads) to determine the capacity fee credit for the existing load. If the applicant does not submit loads and plans they may not receive credit for the existing water/wastewater fixtures. 133. The applicant shall submit a request to disconnect all utility services and/or meters including a signed affidavit of vacancy. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued by the building inspection division after all utility services and/or meters have been disconnected and removed. FOR BUILDING PERMIT 134. The applicant shall submit separate completed water-gas-wastewater service connection applications - load sheets for City of Palo Alto Utilities for each residential unit or place of business. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.p.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 135. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. Plans for new wastewater laterals and mains need to include new wastewater pipe profiles showing existing potentially conflicting utilities especially storm drain pipes, electric and communication duct banks. Existing duct banks need to be daylighted by potholing to the bottom of the ductbank to 1451-1601 California Avenue (13PLN-00433) Page 21 of 25 verify cross section prior to plan approval and starting lateral. Installation plans for new storm drain mains and laterals need to include profiles showing existing potential conflicts with sewer, water and gas. 136. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). 137. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services. 138. The applicant's engineer shall submit flow calculations and system capacity study showing that the on-site and off-site water and sanitary sewer mains and services will provide the domestic, irrigation, fire flows, and wastewater capacity needed to service the development and adjacent properties during anticipated peak flow demands. Field testing may be required to determined current flows and water pressures on existing mains. Calculations must be signed and stamped by a registered civil engineer. 139. The applicant is required to perform, at his/her expense, a flow monitoring study of the existing sewer main to determine the remaining capacity. The report must include existing peak flows or depth of flow based on a minimum monitoring period of seven continuous days or as determined by the senior wastewater engineer. The study shall meet the requirements and the approval of the WGW engineering section. No downstream overloading of existing sewer main will be permitted. 140. For contractor installed water and wastewater mains or services, the applicant shall submit to the WGW engineering section of the Utilities Department digital plans and four copies of the installation of public water, gas and wastewater utilities improvement plans (the portion to be owned and maintained by the City) in accordance with the utilities department design criteria. All utility work within the public right-of-way shall be clearly shown on the plans that are prepared, signed and stamped by a registered civil engineer. The contractor shall also submit a complete schedule of work, method of construction and the manufacture's literature on the materials to be used for approval by the utilities engineering section. The applicant's contractor will not be allowed to begin work until the improvement plan and other submittals have been approved by the water, gas and wastewater engineering section. After the work is complete but prior to sign off, the applicant shall provide record drawings (as- builts) of the contractor installed water and wastewater mains and services per City of Palo Alto Utilities record drawing procedures. For projects that take more than one month to complete, the applicant shall provide progress record drawings of work completed on a monthly basis. 141. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new commercial or multifamily water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line per the CPAU WGW Standards. RPPA’s for domestic service shall be lead free. Show the location of the RPPA on the plans. 142. An approved double check assembly (DCA) shall be installed for water connections to single family residencies that are fire sprinklered. Double check assemblies shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line 1451-1601 California Avenue (13PLN-00433) Page 22 of 25 per the CPAU WGW Standards. DCAs for domestic service shall be lead free. Show the location of the DCAs on the plans. 143. An approved reduced pressure detector assembly is required for existing or new dedicated water connections for fire systems to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. Reduced pressure detector assemblies shall be installed on the owner's property adjacent to the property line, within 5’ of the property line per the CPAU WGW Standards. Show the location of reduced pressure detector assemblies on the plans. 144. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. 145. Existing wastewater laterals that are not plastic (ABS, PVC, or PE) must be abandoned per the latest WGW Utility Standards. 146. Existing water services (including fire services) that are not a currently standard material must be abandoned per the latest WGW Utility Standards. 147. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 148. Each residential unit or place of business shall have its own water and gas meter shown on the plans. Each parcel shall have its own water service, gas service and sewer lateral connection shown on the plans. 149. Onsite public water mains will be 8” diameter minimum limited to the one loop through the property and will require a minimum 20’ wide public utility easement with limited street parking (where not in a public ROW). All city owned water meters shall be within the public ROW or a public utility easement outside of the paved street surface (locate in the sidewalk or planting strip). All other onsite water lines downstream of the City water meter shall be private water lines and shall be designated as such on the plans. No dead end water lines will be allowed on the public water main except short runs ending at a fire hydrant or blow-off valve that meets the recommended flushing velocity to maintain water quality. 150. Public water mains shall have a minimum of 10’ clear distance from the parallel running sanitary sewer lines and 4’ minimum from the storm and as specified by the state health code. Where the public water lines cross storm or sanitary sewer lines the state health code separation and material requirements shall be adhered to. Onsite public water mains shall be 5’ minimum from the edge of the easement. 151. A separate water meter(s) and backflow preventer(s) is required to irrigate the approved landscape for non-single family home landscaping areas in excess of 1,500 SF (including tree canopies). Show the location of the irrigation meter(s) on the plans. This meter shall be designated as an irrigation account an no other water service will be billed on the account. The irrigation and landscape plans submitted with the application for a grading or building permit shall conform to the City of Palo Alto water efficiency standards. 152. New water service line installations for domestic usage are required. Water meters 2”and smaller shall be located in the public right of way or PUE per the CPA WGW Utilities Standards. Show the location of the new water services and meters on the plans. 1451-1601 California Avenue (13PLN-00433) Page 23 of 25 153. New water service line installations for fire system usage are required. Show the location of the new fire services on the plans. The applicant shall provide to the engineering department a copy of the plans for fire systems including all fire department's requirements. 154. Onsite public gas mains will be limited to one loop through the property in private/public streets in the same minimum 20’ easement with the water main or a dedicated minimum 10’ public utility gas easement. Show the gas and electric/comm on the Civil Utility plans, so the City can evaluate spacing and placement. 155. Gas mains will follow a straight route through the development and be within 3’ of the curbline. Gas mains shall be in a separate trench (gas is not allowed in a joint trench). A separate gas service is required for each building. Gas meters shall be ganged at one location for each separate multiunit building per the WGW Utility Standards 156. Show the new gas meter locations on the plans. The gas meter locations must meet the WGW Utility Standards. The City of Palo Alto normal service pressure is 7” WC (.25 PSI). Increased pressure must be requested in writing and is only provided if the houseline size calculates out at greater than 2” diameter for domestic (note: domestic can only be increased to 14” WC max.) and greater than 4” diameter for commercial at standard houseline pressure (7” WC) or the appliance requires increased pressure at the inlet. Further, due to meter limitations there must a minimum of 800 CFH demand for pressures greater than 14” WC. The only available pressure increments above 7” WC are 14” WC (1/2 psi), 1#, 2# and 5# after approval. Pressures in excess of 14” WC, will require testing the house piping at not less than 60 psig for not less than 30 minutes per the California Plumbing Code section 1204.3.2, witnessed by Palo Alto Building Inspection. The City of Palo Alto will not provide increased pressure just to save contractor money on the houseline construction. Requests to increase the pressure will be evaluated with the following submittals: The manufacturer’s literature for the equipment requiring increased pressure; the specific pressure you are requesting; the gas load; and the length of house gas piping from the gas meter to where the gas houseline starts branching off. 157. The applicant shall create a separate detailed public mains and services gas plan under the direction of CPAU. The applicant shall supply CPAU with an AutoCAD copy of the approved gas plan. 158. New sewer lateral installations are required. Show the location of the new sewer laterals on the plans. Sanitary sewer mains and laterals on private streets are to be privately owned and maintained and shall be designated as such on the plans. The Cities responsibility for wastewater will start at a cleanout where the onsite wastewater system enters the public street right of way (this shall be included in the CCRs) 159. The applicant shall secure a public utilities easement for facilities installed in private property. The applicant's engineer shall obtain, prepare, record with the county of Santa Clara, and provide the utilities engineering section with copies of the public utilities easement across the adjacent parcels as is necessary to serve the development. 160. Where public mains are installed in private streets/PUEs for condominium and town home projects the CC&Rs and final map shall include the statement: “Public Utility Easements: If the City’s reasonable use of the Public Utility Easements, which are shown as P.U.E on the Map, results in any damage to the Common Area, then it shall be the responsibility of the Association, and not of the City, to Restore the affected portion(s) of the Common Area. This Section may not be amended without the prior written consent of the City”. 1451-1601 California Avenue (13PLN-00433) Page 24 of 25 161. All existing water and wastewater services that will not be reused shall be abandoned at the main per WGW utilties procedures. 162. Flushing of the fire system to sanitary sewer shall not exceed 30 GPM. Higher flushing rates shall be diverted to a detention tank to achieve the 30 GPM flow to sewer. 163. Sewage ejector pumps shall meet the following conditions: a. The pump(s) shall be limited to a total 100 GPM capacity or b. The sewage line changes to a 4” gravity flow line at least 20’ from the City clean out. c. The tank and float is set up such that the pump run time not exceed 20 seconds each cycle. 164. Utility vaults, transformers, utility cabinets, concrete bases, or other structures cannot be placed over existing water, gas or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas or wastewater mains/services or meters. New water, gas or wastewater services/meters may not be installed within 10’ or existing trees. Maintain 10’ between new trees and new water, gas and wastewater services/mains/meters. 165. To install new gas service by directional boring, the applicant is required to have a sewer cleanout at the front of the building. This cleanout is required so the sewer lateral can be videoed for verification of no damage after the gas service is installed by directional boring. 166. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas & wastewater. 1451-1601 California Avenue (13PLN-00433) Page 25 of 25 ATTACHMENT B2 TENTATIVE MAP - CONDITIONS OF APPROVAL Mayfield Development Agreement California Avenue Sites 1451-1601 California Avenue / 14PLN-00119 PUBLIC WORKS ENGINEERING 1. Final/Parcel Map shall be completed in accordance with Chapter 3, Article 4 or 5, sections 66452 or 66456 of the Subdivision Map Act and per City of Palo Alto Municipal Code (PAMC) Title 21 Subdivision and Other Divisions of Land. Map shall be recorded prior to issuance of any building permit. 2. Project shall dedicate easements for public utilities, public access and emergency vehicle access [PAMC 21.24.010] No building structures or retaining walls shall be designed or constructed within the area designated as public easement. Note that any improvements offered for dedication shall be designed per Palo Alto standards. 3. Map(s), shall include monuments at the intersection. If monuments are not installed prior to recordation of the map, then bonds may be required. 4. Plot all private and public easements on the Tentative Map for review. 5. Sheet C1.0 shows existing easement that serve the adjacent property. The tentative Map shall indicate if these easements will be abandoned, vacated, or plot new easements to be dedicated for the adjacent properties. 6. Verify if the inside and outside curb returns of the parking bays will be accessible for a street sweeper. 7. Fire hydrant placement shall be coordinate with the Fire Department, however verify that on-street parking spaces do not conflict with the proposed hydrant locations. 8. Streets shall be designed to drain, preliminary plans only show limited number of grate inlets, and these are not necessarily at all low points. In addition the City recommends installing through curb openings rather than grate inlets due to potential clogging and ponding that occurs more frequently with grate inlets only. 9. SIDEWALK, CURB & GUTTER: As part of this project, the applicant must replace those portions of the existing sidewalks, curbs, gutters or driveway approaches in the public right-of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non-standard, and must remove any unpermitted pavement in the planter strip. Contact Public Works’ inspector at 650-496-6929 to arrange a site visit so the inspector can determine the extent of replacement work. The site plan submitted with the building permit plan set must show the extent of the replacement work or include a note that Public Works’ inspector has determined no work is required. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Street Work Permit from Public Works at the Development Center. 10. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of-way along the property’s frontage(s). See “Tree Removal” below. Call the Public Works’ arborist at 650-496-5953 to arrange a site visit 1451-1601 California Avenue (13PLN-00433) Page 1 of 7 so he can determine what street tree work, if any, will be required for this project. The site plan submitted with the building permit plan set must show the street tree work that the arborist has determined, including the tree species, size, location, staking and irrigation requirements, or include a note that Public Works’ arborist has determined no street tree work is required. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way from Public Works’ arborist (650-496-5953). 11. CONCEPTUAL GRADING AND DRAINAGE: Best Management Practices (BMP’s) shall be incorporated into the Storm Water Pollution Prevention Plan (SWPPP) that will be required for the project. The SWPPP shall include permanent BMP’s to be incorporated into the project to protect storm water quality. (Resources and handouts are available from Public Works -Engineering. Specific reference is made to Palo Alto’s companion document to “Start at the Source”, entitled “Planning Your Land Development Project”). The elements of the PWE-approved conceptual grading and drainage plan shall be incorporated into the building permit plans. 12. SWPPP: This proposed development will disturb more than one acre of land. Accordingly, the applicant must apply for coverage under the State Water Resources Control Board’s (SWRCB) NPDES general permit for storm water discharge associated with construction activity. A Notice of Intent (NOI) must be filed for this project with the SWRCB in order to obtain coverage under the permit. The General Permit requires the applicant to prepare and implement a Storm Water Pollution Prevention Plan (SWPPP). The applicant is required to submit two copies of the NOI and the draft SWPPP to the Public Works Department for review and approval prior to issuance of the building permit. The SWPPP should include both permanent, post- development project design features and temporary measures employed during construction to control storm water pollution. 13. STORM WATER TREATMENT: This project shall comply with the storm water regulations contained in provision C.3 of the NPDES municipal storm water discharge permit issued by the San Francisco Bay Regional Water Quality Control Board (and incorporated into Palo Alto Municipal Code Chapter 16.11). These regulations apply to land development projects that create or replace 10,000 square feet or more of impervious surface, including a residential subdivision. In order to address the potential permanent impacts of the project on storm water quality, the applicant shall incorporate into the project a set of permanent site design measures, source controls, and treatment controls that serve to protect storm water quality, subject to the approval of the Public Works Department. The applicant shall identify, size, design and incorporate permanent storm water pollution prevention measures to treat the runoff from a “water quality storm” specified in PAMC Chapter 16.11 prior to discharge to the municipal storm drain system. Effective February 10, 2011, regulated projects, must contract with a qualified third-party reviewer during the building permit review process to certify that the proposed permanent storm water pollution prevention measures comply with the requirements of Palo Alto Municipal Code Chapter 16.11. The feasibility worksheet, certification form, 2 copies of approved storm water treatment plan, and a description of Maintenance Task and Schedule must be received by the City from the third-party reviewer prior to approval of the building permit by the Public Works department. Within 45 days of the installation of the required storm water treatment measures and prior to the issuance of an occupancy permit for the building, third-party reviewer shall also submit to the City a certification for 1451-1601 California Avenue (13PLN-00433) Page 2 of 7 approval that the project’s permanent measures were constructed and installed in accordance to the approved permit drawings. 14. STORMWATER MAINTENANCE AGREEMENT: The applicant shall designate a party to maintain the control measures for the life of the improvements and must enter into a maintenance agreement with the City to guarantee the ongoing maintenance of the permanent C.3 storm water discharge compliance measures. The maintenance agreement must be submitted to the Public Works’ plan reviewer prior to building permit issuance and shall be executed prior to the first building occupancy sign-off. The City will inspect the treatment measures yearly and charge an inspection fee. There is currently a $350 C.3 plan check fee that will be collected upon submittal for a grading or building permit. 15. SUBDIVISION MAP: A subdivision map will be required for this development. The applicant shall submit an application for a major subdivision with the Planning Division. 16. IMPROVEMENT PLANS: The applicant shall arrange a meeting with Public Works Engineering, Utilities Engineering, Planning, Fire, and Transportation Departments after approval of the tentative subdivision map to determine the on-site and off-site improvements required, which may include utility services, replacement of the sidewalk, curb & gutter, and resurfacing of the City streets adjacent to the site. The off-site improvement plans must be completed and approved by the City along with submittal of the final map. On-site improvement plans will be reviewed and approved after final map recordation. 17. SUBDIVISION AGREEMENT: A subdivision agreement is required to secure compliance with the conditions of approval and security of improvements onsite and offsite. No grading or building permits will be issued until final map is recorded with County Recorder. 18. BONDS: The developer shall post a bond prior to the recording of the final map to guarantee the completion of the onsite and offsite improvements. The developer shall submit a cost estimate of the improvements, which the City will review and use to determine the amount of the performance and payment bonds. 19. FINAL MAP: The final map must be recorded prior to issuance of a building permit. 20. DEVELOPER’S PROJECT MANAGER: The project subdivision includes significant complexity involving the final map and coordination of infrastructure design and construction. Developer shall appoint a Project Manager to coordinate with Public Works and Utility engineering staff. Public Works will conduct communication with the appointed project manager in order to facilitate timely review and approval of design and construction matters. 21. SCVWD: The project storm drain system discharges directly into a watercourse, which is within the jurisdiction of the Santa Clara Valley Water District (SCVWD). A permit must be obtained from SCVWD and a copy of the permit provided to the City prior to the recordation of the final map. The following comments are provided to assist the applicant at the building permit phase. You can obtain various plan set details, forms and guidelines from Public Works at the City's Development Center (285 Hamilton Avenue) or on Public Works’ website: www.cityofpaloalto.org/depts/pwd/forms_permits. Include in plans submitted for a building permit: 1451-1601 California Avenue (13PLN-00433) Page 3 of 7 22. BELOW-GRADE PARKING DRAINAGE: Due to high groundwater throughout much of the City and Public Works prohibiting the pumping and discharging of groundwater, perforated pipe drainage systems at the exterior of the basement walls or under the slab are not allowed for this site. A drainage system is, however, required for all exterior basement-level spaces, such as lightwells, patios or stairwells. This system consists of a sump, a sump pump, a backflow preventer, and a closed pipe from the pump to a dissipation device onsite at least 10 feet from the property line, such as a bubbler box in a landscaped area, so that water can percolate into the soil and/or sheet flow across the site. The device must not allow stagnant water that could become mosquito habitat. Additionally, the plans must show that exterior basement-level spaces are at least 7-3/4” below any adjacent windowsills or doorsills to minimize the potential for flooding the basement. Public Works recommends a waterproofing consultant be retained to design and inspect the vapor barrier and waterproofing systems for the basement. 23. GARAGE/BASEMENT SHORING: Shoring for the basement/underground parking excavation, including tiebacks, must not extend onto adjacent private property or into the City right-of-way without having first obtained written permission from the private property owners and/or an encroachment permit from Public Works. 24. DEWATERING: Basement excavations may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is disallowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater level. We recommend a piezometer to be installed in the soil boring. The contractor must determine the depth to groundwater immediately prior to excavation by using the piezometer or by drilling an exploratory hole if the deepest excavation will be within 3 feet of the highest anticipated groundwater level. If groundwater is found within 2 feet of the deepest excavation, a drawdown well dewatering system must be used, or alternatively, the contractor can excavate for the basement and hope not to hit groundwater, but if he does, he must immediately stop all work and install a drawdown well system before he continues to excavate. Public Works may require the water to be tested for contaminants prior to initial discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for the contaminants Public Works specifies and submit the results to Public Works. Public Works reviews and approves dewatering plans as part of a Street Work Permit. The applicant can include a dewatering plan in the building permit plan set in order to obtain approval of the plan during the building permit review, but the contractor will still be required to obtain a street work permit prior to dewatering. Alternatively, the applicant must include the above dewatering requirements in a note on the site plan. Public Works has a sample dewatering plan sheet and dewatering guidelines available at the Development Center and on our website. 25. GRADING & DRAINAGE PLAN: The plan set must include a grading & drainage plan prepared by a licensed professional that includes existing and proposed spot elevations and drainage flow arrows to demonstrate proper drainage of the site. Adjacent grades must slope away from the house a minimum of 2%. Downspouts and splashblocks should be shown on this plan, as well as any site drainage features such as swales. Grading will not be allowed that increases drainage onto, or blocks existing drainage from, neighboring properties. Public Works generally does not allow rainwater to be collected and discharged into the street gutter, but encourages the developer to 1451-1601 California Avenue (13PLN-00433) Page 4 of 7 keep rainwater onsite as much as feasible by directing runoff to landscaped and other pervious areas of the site. See the Grading & Drainage Plan Guidelines for New Single Family Residences on our website. 26. GRADING & EXCAVATION PERMIT: An application for a grading & excavation permit must be submitted to Public Works when applying for a building permit. The application and guidelines are available at the Development Center and on our website. 27. STORM WATER POLLUTION PREVENTION: The City's full-sized "Pollution Prevention- It's Part of the Plan" sheet must be included in the plan set. Copies are available from Public Works at the Development Center or on our website. 28. OIL/WATER SEPARATOR: Parking garage floor drains on interior levels shall be connected to an oil/water separator prior to discharging to the sanitary sewer system. 29. DUMPSTER: If the project includes construction of dumpster and recycling areas at the exterior of a building/structure, City guidelines require that this area be covered. 30. STORM DRAIN: The applicant is required to paint the “No Dumping/Flows to Matadero Creek” logo in blue color on a white background, adjacent to all storm drain inlets. Stencils of the logo are available from the Public Works Environmental Compliance Division, which may be contacted at (650) 329-2598. A deposit may be required to secure the return of the stencil. Include the instruction to paint the logos on the construction grading and drainage plan. Include maintenance of these logos in the Hazardous Materials Management Plan, if such a plan is part of this project. 31. STREET LIGHTS: The applicant is encouraged to investigate and incorporate the use of LED streetlights throughout the proposed development and project frontage. 32. STREET TREES: Show all existing street trees in the public right-of-way. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by Public Works' arborist (phone: 650- 496-5953). This approval shall appear on the plans. Show construction protection of the trees per City requirements. 33. WORK IN THE RIGHT-OF-WAY: The plans must clearly indicate any work that is proposed in the public right-of-way, such as sidewalk replacement, driveway approach, or utility laterals. The plans must include notes that the work must be done per City standards and that the contractor performing this work must first obtain a Street Work Permit from Public Works at the Development Center. If a new driveway is in a different location than the existing driveway, then the sidewalk associated with the new driveway must be replaced with a thickened (6” thick instead of the standard 4” thick) section. Additionally, curb cuts and driveway approaches for abandoned driveways must be replaced with new curb, gutter and planter strip. 34. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. 35. LOGISTICS PLAN: The contractor shall prepare a logistics plan, to the satisfaction of the Director of Public Works, prior to commencing work that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, 1451-1601 California Avenue (13PLN-00433) Page 5 of 7 noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. The plan will be attached to a street work permit. 36. Project shall be consistent with Mitigation Measures AQ-1.1, NO-1.1 and TR-1.1. FIRE DEPARTMENT 37. Applicant shall continue to work with the Fire Marshal to ensure that all fire access, water supply and other fire protection issues are adequately addressed. PLANNING 38. The subdivider shall enter into a subdivision agreement with the City of Palo Alto. The agreement shall be recorded with the approved final map at the office of the Santa Clara County Recorder and shall include the following agreements: a. The subdivider shall be responsible for installing any required off-site improvements, including utilities, to the satisfaction of the Utilities, Public Works, and Planning Departments. These improvements shall be guaranteed by bond or other form of guarantee acceptable to the City Attorney. b. The subdivider shall grant the necessary public utility easements to the City for the location and maintenance of required utilities. The required easements shall be shown on the face of the subdivision map. c. The subdivider shall preserve all existing trees shown for preservation on the site plan and shall include all trees in the final landscape plans. d. All exterior building and landscape improvements shall be maintained as shown on the approved plans unless approved for revision by the City’s Architectural Review Board. 39. All mitigation measures identified in the Mitigation Monitoring and Reporting Program shall be incorporated into the project implementation. 40. The project is subject to meeting all the requirements of Palo Alto Municipal Code Chapter 18.44, the City’s Green Building Ordinance. 41. The final subdivision map shall be filed with the Planning Division within two years of the approval of the tentative subdivision map, as shown on the plans submitted May 20, 2014 and related documents on file with the City of Palo Alto Planning Division. 42. Indemnity: The Applicant shall indemnify, protect, defend, reimburse, and save and hold harmless the City from and against any claim, action or proceeding brought by a third party to attack, set aside or void any permit or approval for the Project. The Applicant’s obligations hereunder shall include, but not be limited to, the burden and expense of defending all claims, suits and administrative proceedings, even if such claims, suits or proceedings are groundless, false or fraudulent; conducting all negotiations of any description; and promptly paying and discharging when due any and all attorneys’ fees 1451-1601 California Avenue (13PLN-00433) Page 6 of 7 and costs adjudged due against the City. Prior to retaining counsel to defend such claim, action or proceeding, the Applicant shall obtain the City’s written approval of the identify of such counsel, which approval shall not be unreasonably withheld, conditioned or delayed. 43. Development Impact fees (including Parks, Community Centers, Libraries, and Citywide Transportation Impact Area fees) with an estimated total of $376,125.84 must be paid prior to building permit issuance. This is an estimate and the final total may change based on date of building permit submittal. 44. 90-day Protest Period: California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. 1451-1601 California Avenue (13PLN-00433) Page 7 of 7 Attachment C Fir e S t a t i o n # 2 A B Buildings 4 3 2 PF RP (L) PF RP RP (A S 2 ) CALIFORNIAAVENUE DARTMOUTHSTREET CA LIFORNIAAVENUE EMILLROAD DARTMOUTHSTREET COLUMBIASTREET BOWDOIN STREET CO LLEGEAVENUE CALIFORNIAAVENUE HANOVERSTREET PAGE MILLROAD AMHERSTSTREET COLLEGEAVENUE COLUMBIASTREET WDOINSTREET MEARS COURT P ET E R C O U T T S C I RCL N D RIV E PETERCOUTTSROAD PETERCOUTTSROAD 50 2170 2190 2196 2200 2216 2230 2250 2282 2274 2270 230023082316 2250 2225 2215167116511627 1670 1680 21952136 2130 2120 2102 2131 2121 03 2147 1660165016421610 2150 2144 2140 1560 21652175 2155 2110 21102120 2075 2065 1506 1528 1540 2149 2137 2125 2115 2111 20452035 5 2150 2140 2100 2090 2070 2040 2 2109 212 2024 2002 2034 55 2095 2085 23202338 2350 23702390 1664164816301612 2344 2345 2331 2321 23262328 2320 2303 2310 2286 2284 2275 2389 2264 2256 1611 15671551 1585 22512265 229122952301 2315 23312345 23262344 2310 2302 15501532 1590 1487 2291 2283 2315 1531 1535 2240 225022822286 1510 2295 23202340 14401410 2385 2361 2341 2339 2325 2321 2311 1601 15011451 2150 2140 2135 2195146014501436143014201400 86 1467 22492261 2260 2254 2255 2231 13851375349 145314351411 2141 2149 21702172 22 12961266 2357 23 2271 225226022802300 2310 2325 23262344 2345 2341 13602390 133023412349 1290 267 5 2631 1400 1450 1454 2680 2670 2626 2550 1500 1530 1520 300 0 2400 2690 2440 2625 2627 2475 2349 2334 2331 1510 2145 2335 2395 2300 2118 Th i s m a p i s a p r o d u c t o f t h e Ci t y o f P a l o A l t o G I S Th i s d o c u m e n t i s a g r a p h i c r e p r e s e n t a t i o n o n l y o f b e s t a v a i l a b l e s o u r c e s . Le g e n d Zo n e D i s t r i c t s B o u n d a r i e s Pr o j e c t S i t e s ( 1 4 5 1 - 1 6 0 1 C a l i f o r n i a A v e ) Ci t y J u r i s d i c t i o n a l L i m i t s B o u n d a r y ab c Zo n e D i s t r i c t L a b e l s 0' 30 0 ' Stanford Mayfield Development Agreement Upper California Ave Sites 1451 - 1601 California Avenue CITY O F PALO A L TO I N C O R PO RATE D C ALIFOR N IA P a l o A l t o T h e C i t y o f A P RIL 16 1894 Th e C i t y o f P a l o A l t o a s s u m e s n o r e s p o n s i b i l i t y f o r a n y e r r o r s . © 1 9 8 9 t o 2 0 1 4 C i t y o f P a l o A l t o rri v e r a , 2 0 1 4 - 0 3 - 0 4 1 0 : 0 6 : 0 4 ( \ \ c c - m a p s \ g i s $ \ g i s \ a d m i n \ P e r s o n a l \ P l a n n i n g . m d b ) AT T A C H M E N T D City of Palo Alto (ID # 3787) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 6/12/2013 City of Palo Alto Page 1 Summary Title: Mayfield Development Agreement Overview Title: Study session for the purposes of providing: 1) an overview of the 2005 Mayfield Development Agreement and 2) an opportunity to review and discuss the upcoming submissions for the 250 units of housing Stanford will provide under the 2005 Mayfield Development Agreement (MDA). From: City Manager Lead Department: Planning & Transportation Commission Recommendation Staff recommends that the Planning and Transportation Commission (PTC) and the Architectural Review Board (ARB) review this 2005 Mayfield Development Agreement informational memo for the purposes of the upcoming development applications for the construction of 250 housing units at sites located on El Camino Real (2450, 2470, and 2500 El Camino) and California Avenue (1451, 1501 and 1601 California Avenue). Background In 2005, the City of Palo Alto and Stanford University entered into the Mayfield Development Agreement (MDA) dated as of May 24, 2005. Under the MDA, Stanford is entitled to build 250 housing units. An architectural review application for at least 185 of the required 250 housing units was required to be submitted by the end of 2013. This informational memo summarizes the following elements of the MDA: x Major components of the MDA x Proposed housing x Housing development standards x City review process x Environmental review process and mitigation measures "55"$).&/5F City of Palo Alto Page 2 x Impact fees For historical reference purposes the following documents are attached: x February 3, 2005 PTC Staff Report prepared by former City Attorney Wynne Furth (Attachment A). x Mitigation Monitoring Report and Reporting Plans for the housing developments (Attachment B). Before approving the MDA, the City engaged in lengthy negotiations with Stanford, considered extensive public comment, completed and certified a full Environmental Impact Report (EIR), and carefully reviewed the Development Agreement at PTC and City Council meetings. Specific zoning overlays (provided as Attachment C) were developed for the housing sites. The City Council made formal findings approving the MDA and adopted a Mitigation Monitoring and Reporting Plan to mitigate the environmental impacts of each project element. Palo Alto Municipal Code Chapter 18.60, Alternative Development Standards for Stanford Lands (Attachment C), was adopted and included in the City’s code. Summary of Key Issues Outline of Approved Terms Under the terms of the MDA, Stanford University was to lease to the City of Palo Alto the 6-acre Mayfield site, located at the corner of Page Mill and El Camino Real, for $1 per year for 51 years. Stanford was to construct soccer fields on the Mayfield site at Stanford’s cost and turn them over to the City upon completion. Stanford constructed the playing fields in 2006. In addition, Stanford was granted the vested right to build 250 units of housing on two sites in the Stanford Research Park where R&D/office buildings exist today. Further, the City was to grant Stanford the right to relocate 300,000 sq. ft. of R&D/office space (less than the amount of area to be demolished on the housing sites) elsewhere in the Stanford Research Park. In addition, the City accepted the lease of the Mayfield Site as mitigation for any community service impacts on the City resulting from all future development at Stanford that was authorized by the General Use Permit approved by the County of Santa Clara in December of 2000. For the purposes of this informational memo, only the Housing Sites under the MDA are discussed. The complete MDA and EIR are located on the City’s website at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp City of Palo Alto Page 3 MDA Housing Under the MDA Stanford obtained a vested right to develop and construct 250 housing units at the El Camino Real and California Avenue sites. By the end of 2013 Stanford must submit applications for architectural review for at least 185 of the 250 housing units. This date was selected based on the timing of the expiration of commercial ground leases on the sites designated for required housing. The designated housing sites are the existing leaseholds commonly known as 2450, 2470, and 2500 El Camino Real (collectively referred to as the “El Camino Sites”), and 1451, 1501 and 1601 California Avenue (collectively referred to as the “California Sites”). All 250 housing units are planned for review by the ARB before the end of 2013 (as described below). El Camino Real Below Market Rate Housing The MDA requires Stanford to construct at least twenty percent or 50 units of below market rate (BMR) housing. To satisfy its responsibility to provide BMR units Stanford may either a) construct a 70 BMR unit project at the El Camino Sites, or b) construct 50 BMR units which shall be located on the El Camino Sites and California Avenue Sites and integrated into the market rate housing to be constructed under the terms of MDA. Stanford has elected to construct the 70 BMR unit alternative. Under the 70 unit alternative, Stanford shall provide a 100% BMR development at the El Camino Sites. The housing shall be high quality rental housing affordable to low and very low income households for a term of 55 years from the initial lease-up of the project. Stanford shall provide priority to Palo Alto residents or workers. No more than 30% of the units may be leased to tenants who neither work nor limve in Palo also but which include at least one individual who is both (1) an employee of Stanford University and (2) not a student at Stanford University. (MDA, Ex. C-2, para. 4.) On April 11, 2013 Stanford submitted an application for Preliminary ARB review for a new four- story 70 BMR unit project. The project will provide 70 one, two, and three-bedroom high- quality BMR rental units, indoor common areas for the residents and approximately 7,000 square feet of ground-floor space that will be used either for non-profit services supportive of residential use or other non-residential uses (Project Description provided as Attachment D ). The project is anticipated for review by the ARB on June 20, 2013. City of Palo Alto Page 4 California Avenue Housing Stanford has chosen to construct the 70 BMR unit alternative on the El Camino Site, therefore the remaining 180 housing units will be constructed at the California Avenue Sites. On May 30, 2013 Stanford submitted an application for Preliminary ARB review for 180 residential units comprised of 68 single family detached homes and 112 apartments located in two multi-story multifamily buildings. Additionally, the project will include approximately 2,500 square feet in two shared community facilities, including a fitness area and community center, and approximately 2.35 acres in common usable open space. Onsite infrastructure development on the 17-acre parcel will include subdivision streets, sidewalks, landscaping, stormwater treatment, and underground utilities (Project Description provided as Attachment E). Staff anticipates a mid-July ARB hearing for the preliminary ARB application. Housing Development Standards Per the Development Agreement, Stanford may elect to develop the whole of the El Camino Sites or the whole of the California Sites in accordance with the the following options: a) the site development regulations of the following zoning districts as set out in the 2003 Rules: RM-15 for the California Sites, and RM-40 for the El Camino Sites; or b) pursuant to subsequent rules, provided that the residential density shall not exceed 15 units per acre for the California Sites and 40 units per acre for the El Camino Sites; or c) under the site development regulations of the following zoning districts as set out in the Modified 2003 Rules: the AS1 Alternative Development Standards for the El Camino Sites and the AS2 Alternative Development Standards for the California Sites as provided in Palo Alto Municipal Code (PAMC) Chapter 18.60 or d) under a PC zoning district. Stanford may make separate choices for the El Camino Sites and the California Sites. Once Stanford has decided to proceed with new development under one of the options described above, that option shall apply to all development on the El Camino Sites or the California Sites. Stanford plans to construct the El Camino Sites under the AS1 Alternative Development City of Palo Alto Page 5 Standards (Option C above). Among other provisions, the AS1 standards establish permitted residential and non-residential uses, setbacks, sidewalk and parking requirements (and parking reduction provision subject to approval by the Director), maximum FAR, a height limit of 50 feet, and minimum usable open space. The AS1 standards permit non-profit social services supportive of the residential use, as well as eating and drinking services, retail and other uses; Stanford anticipates including approximately 7,000 square feet of these AS1 conforming uses in addition to the 70 apartments and associated common areas. Stanford Plans to construct the California Sites under the AS2 Alternative Development Standards (Option C above). The AS2 standards establish permitted residential and accessory uses, setbacks, building heights (ranging from 30 to 50 feet. See Attachment F), parking ratios, design standards for residences along California Avenue, maximum FAR, maximum site coverage, and minimum usable open space. The only limitation on uses is the prohibition against any age-restricted housing. At this time, the housing is anticipated to be for Stanford faculty. Process for Obtaining City Approvals Because Stanford is electing to use the AS1 and AS2 Alternative Development Standards, the MDA process for design review is ARB, Planning Director and on appeal City Council. The AS1 and AS2 standards prescribe the level and standards for design review. As the uses are all permitted uses under the MDA the only remaining entitlement required for the projects is a Tentative Map for the California Sites. A Tentative Map is needed because Stanford intends to issue long term ground leases for faculty housing. The PTC reviews the Tentative Map with final review by the City Council. ARB Review The MDA limits the ARB review and approval to the following: a) to determine whether the housing complies with the AS1 and AS2 development and architectural review standards; b) to approval of lighting, noise levels, landscaping and of the exterior materials and finishes of the buildings and other structures; and c) to approval of massing, roof forms, and the site plan. The City’s authority for the approval of massing, roof forms and the site plan shall not apply to the El Camino Sites if proposed for City of Palo Alto Page 6 development under the AS1 Standards. With respect to the California Sites, because the proposed development is being developed under the AS2 Standards the City’s review is limited to the California Avenue edge of the California Sites, and then only to the extent that the projects submitted for approval do not already (1) “approximate the horizontal rhythm of building-to-sideyard setback and façade areas, including the relationship of first and second stories, of California Avenue residential properties; and (2) reflect the eclectic nature of the design of residences on the north side of the street and include similar opportunities for landscaping.” (MDA, Para. 6.4.10.) Procedurally, any appeal of the ARB’s recommendation and the subsequent Director’s decision would be heard by the City Council. PTC Review Stanford plans to enter into individual ground leases for single-family faculty housing units, therefore the plan is to submit a Tentative Subdivision Map (Tentative Map) to the PTC after the MDA-required architectural review process has been conducted by the ARB. As described above, the development’s consistency with AS2 zoning, its physical appearance, lighting, noise levels and landscaping will have been addressed by the ARB before the map reaches the PTC. Under the MDA, the scope of the PTC’s and City Council’s review of the Tentative Map, like the City’s ARB review, is more limited than normal. Municipal Code section 21.12.090 lists the determinations the City must make regarding the Tentative Map. These include the Tentative Map’s compliance with the Subdivision Map Act and other state law, Comprehensive Plan consistency, and Municipal Code compliance in this case limited to the Modified 2003 Rules. The City would ordinarily be required to deny the Tentative Map if the site were not physically suitable for the type or proposed density of development, or the design of the subdivision or the proposed improvements were likely to cause substantial environmental damage, substantially and avoidably injure fish or wildlife or their habitat, cause serious public health problems, or conflict with established public easements for access through, or use of, the property. The MDA again limits the City’s scope of review in two important respects. First, it expressly makes some of the required findings, such as Comprehensive Plan consistency. The MDA also includes a finding that the site is physically suitable for the type and proposed density City of Palo Alto Page 7 of the development. (MDA, para. 6.10.) Second the MDA limits the City’s ability to deny the project or impose conditions that reduce the density of intensity of development. Thus, the PTC and Council purview over the Tentative Map will be to ensure that it is consistent with the California Sites housing development standards (AS2) as described and regulated in the MDA, and that the Tentative Map meets the technical requirements of the Subdivision Map Act. California Environmental Quality Act (CEQA) Compliance The City prepared and certified an EIR and has imposed certain mitigation measures as part of the MDA. Stanford shall perform those mitigation measures when and where applicable. ”Because this Agreement and the EIR are intended to mitigate all impacts which can feasibly be mitigated, City shall not impose on the Designated or Housing projects, as a condition to Architectural Review Approval or any Subsequent Approval or Discretionary Action, any additional mitigation measures under CEQA except measures that City is required to impose by other state, regional or federal law or authorized to impose by this Agreement.” In addition, the MDA prohibits the City from undertaking additional CEQA review unless required to do so by sections 15162-15164 of the CEQA Guidelines. Under this provision, the City’s ability to conduct additional CEQA review is limited in two ways. First, additional CEQA review is only triggered by subsequent discretionary decisions over the housing projects which are very limited under the MDA. Second, as to any of the remaining discretionary actions (e.g., ARB review and Tentative Map for California Avenue site), the City could conduct additional CEQA review only if substantial evidence showed new significant impact or a substantial increase in the severity of environmental effects identified in the 2005 EIR caused by (1) substantial changes made to the project, (2) substantial changes in the circumstances under which the project is undertaken or (3) new information, not known at the time the previous EIR was certified.. (CEQA Guidelines Section 15162.) Staff has not identified any significant project changes or new information that would trigger additional CEQA analysis. Some of the more important provisions dealing with mitigation are summarized below. CEQA Mitigation Measures Stanford shall comply with the approved CEQA Mitigation Monitoring and Reporting Plan (Attachment A). Most mitigation measures are to be implemented at the construction stage. For example, Stanford must submit its Construction Traffic Management Plan to the City for review and approval before the City will issue a grading or building permit. (Mitigation Measure TR-2.1.) Other mitigation measures are due earlier. For the El Camino Real Housing, Stanford will submit a tree survey and tree protection and preservation plan (Mitigation Measures BR-2.1, 2.4 and 2.5) and hazardous materials assessments and plans (Mitigation Measures HM-1.1, 1.2, 1.3 and 3.1) with its formal ARB application. For the California Avenue Housing, Stanford will submit a tree survey City of Palo Alto Page 8 and tree protection and preservation plan (Mitigation Measures BR-2.1, 2.4 and 2.5), hazardous materials assessments and plans (Mitigation Measures HM-1.1, 1.2, 1.3 and 3.1), and geological hazards investigation (Mitigation Measure GE-1.1) with, or prior, to its formal ARA application. Finally, the MDA requires Stanford to submit a site-specific circulation analysis for review by the city’s Traffic Engineer. The analysis shall inlcude only an analyis of the number and locations of curb cuts and the connections of on-site streets and drives to the public street system. Stanford shall implement any traffic mitigation recommended by the study. (MDA, para. 6.4.3.) Dedications, Impact Fees and Improvement Requirements The MDA requires the oniste implementation of Policy L-43 and Program L-44 of the Comprehensive Plan regarding the provision of sidewalks, pedestrian paths and connections to the city-wide bikeway system in Employment Districts. Improvement requirements must be imposed on a non-discriminatory basis and must not unreasonably interfere with or burden development of the housing. The only Development Impact Fees that Stanford is required to pay for the 70 BMR unit development on El Camino Real are for Parks, Community Centers and Libraries. The fees shall be paid for 50 of the required BMR units and are waived for the remaining 20 BMR units. Because the fees vary with unit size, the total Development Impact Fees payable shall be five- sevenths of the total Devlopment Imapct Fees at the 2003 rates. In contrast to the 70 BMR units, the Upper California Housing project must pay the Citywide Transportation Impact Fee, the Stanford Research Park/ El Camino Real Transportation Impact fee, and the Development Impact Fee for Parks, Community Centers and Libraries at current rates. (The Quimby Act Ordinance, requiring park land dedication, and the subsequent “Park Land Dedication or Fee In-Lieu Thereof” ordinance, were enacted after the MDA.) Timeline: June 20, 2013 Prelim ARB Hearing-El Camino Housing July/August, 2013 Prelim ARB Hearing-California Housing August, 2013 Formal ARB Hearing-El Camino Housing October, 2013 Formal ARB Hearing-California Housing October, 2013 Tentative Map Submission-California Housing Attachments: City of Palo Alto Page 9 x Attachment A: Wynne Furth Letter (PDF) x Attachment B: Mitigation Monitoring and Reporting Plan (PDF) x Attachment C: Alternative Development Standards (PDF) x Attachment D: Below Market Rate Housing Plan (PDF) x Attachment E: California Avenue Housing Plan (PDF) x Attachment F: California Avenue Height Diagram (PDF) x Attachment G: California Avenue Site Plan (PDF) x Attachment H: Below Market Rate Site Plan (PDF) x Attachment I: CTRA Letter (PDF) City of Palo Alto (ID # 4552) Architectural Review Board ARB Staff Report Report Type: Meeting Date: 3/20/2014 City of Palo Alto Page 1 Summary Title: Mayfield California Avenue Sites (1451-1601 California Avenue) Title: Mayfield California Avenue Sites (1451-1601 California Avenue) [13PLN- 00234]: Request by Chris Wuthmann of Stanford Real Estate on behalf of the Board of Trustees of Leland Stanford Jr. University for Architectural Review of the demolition of approximately 290,000 square feet of existing R&D/office space and construction of 180 dwelling units, which includes 68 detached single family units and 112 multi-family units, as part of the 2005 Mayfield Development Agreement. Zone: RP(AS2) From: Jodie Gerhardt Lead Department: Architectural Review Board RECOMMENDATION Staff recommends that the Architectural Review Board (ARB) recommend the Director of Planning and Community Environment approve the proposed project, based upon the Architectural Review findings (Attachment D) and subject to the conditions of approval (Attachment E). EXECUTIVE SUMMARY The ARB is requested to review this single-family and multi-family residential, market-rate housing project, submitted by Stanford University (Applicant). The ARB’s purview is limited by an existing Development Agreement (Mayfield Development Agreement). The project is the replacement of an office and research & development campus with 180 residential units, a community center, a fitness building, swimming pool, and open space amenities including a park, tot lots, courtyards and tree-lined walkway. The development is to be served by private streets with sidewalks, and the multi-family component is proposed at the back portion of the site. All 68 of the detached single family homes would have two car garages and most would have driveway aprons, while the two, two- and three-story, multi-family buildings (containing 112 dwelling units) would provide below grade parking facilities. Visitor parking is to be Attachment G City of Palo Alto Page 2 provided along the private streets, which would be accessible from California Avenue and aligned with College Terrace streets (Columbia, Bowdoin and Amherst). The proposed development is consistent with the Palo Alto Comprehensive Plan, Zoning Ordinance, Mayfield Development Agreement and Performance Criteria. Therefore Staff is recommending approval of the proposed Architectural Review (AR) application. The Applicant will submit a Tentative Map for staff review, Planning and Transportation Commission (PTC) recommendation, and City Council approval. The Director’s decision on the AR application is appealable to City Council. BACKGROUND Mayfield Development Agreement In 2005, the City of Palo Alto and Stanford University entered into the Mayfield Development Agreement (MDA). Under the terms of the MDA, Stanford University was to lease to the City of Palo Alto the 6-acre Mayfield site, located at the corner of Page Mill Road and El Camino Real, for $1 per year for 51 years. Stanford was to construct soccer fields on the Mayfield site at its expense and turn the fields over to the City upon completion, which was done in 2006. In turn, the MDA provided Stanford with vested rights to build 250 housing units on two sites in the Stanford Research Park, where R&D/office buildings exist today. Stanford was also granted the right to relocate 300,000 square feet (sf) of R&D/office space elsewhere in the Stanford Research Park, which is less than the amount of commercial area to be demolished at the two designated housing sites. In addition, the City accepted the lease of the Mayfield soccer fields as mitigation for any potential community service impacts upon the City resulting from all future development at Stanford, as authorized by the General Use Permit, which was approved by the County of Santa Clara in December of 2000. The designated housing sites are commonly known as 2450, 2470, and 2500 El Camino Real (collectively referred to as the “El Camino Sites”), and 1451, 1501 and 1601 California Avenue (collectively referred to as the “California Sites”). As required by the MDA, Stanford has submitted applications for Architectural Review for at least 185 of the 250 housing units by the end of 2013. These projects include the subject project for 180 units on the California Sites, and a second project for a new mixed use building including ground floor commercial and 70 below market rate housing units on the El Camino Sites (Application # 13PLN-00469). Additional information regarding the MDA and associated Environmental Impact Report are located on the City’s website at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp Review Process and ARB Purview City of Palo Alto Page 3 As permitted in the MDA, the Applicant has elected to use the AS2 Alternative Development Standards contained in the Palo Alto Municipal Code (PAMC) Chapter 18.60. The modified Architectural Review process, as prescribed in the Development Agreement, applies to this development proposal. The AS2 development standards table [PAMC Section 18.60.060(A)] outlines the physical constraints for the project. The AS2 standards establish the permitted residential and accessory uses, setbacks, building heights, parking ratios, design standards for residences along California Avenue, maximum floor area ratio (FAR), maximum site coverage, and minimum usable open space. The only limitation on uses is the prohibition against any age- restricted housing. At this time, the housing is anticipated to be for Stanford faculty. The MDA addresses the review process, which limits the ARB’s purview to the following project elements: xDetermine whether the project complies with the AS2 development standards and Architectural Review findings; and xReview and approve the lighting, noise levels, landscaping, and selection of the exterior materials and finishes of the buildings and other structures; and xReview is limited to the California Avenue edge of the California Sites, and then only to the extent that the projects submitted for approval do not already: x“Approximate the horizontal rhythm of building-to-side yard setback and façade areas, including the relationship of first and second stories, of California Avenue residential properties; and xReflect the eclectic nature of the design of residences on the north side of the street and include similar opportunities for landscaping.” Site Information The project site is a 17 acre site located on the southwestern side of California Avenue, one parcel south of the California Avenue/Hanover Street intersection. The project site is comprised of three commercial parcels (site) (1451, 1501 and 1601 California Avenue) developed with three buildings containing a total of 290,220 square feet of floor area within one and two-story office and research and development (R&D) buildings, and surface parking lots. The site is surrounded by a mix of residential and commercial buildings; one and two-story single family residences along California Avenue to the west (College Terrace), two-story office and R&D buildings to the east along Page Mill Road, two-story office buildings to the north along City of Palo Alto Page 4 Hanover Street, and a multi-story residential development to the south (Peter Coutts Circle; Stanford Lands). Project Description The project includes the demolition of approximately 290,220 square feet of existing office and R&D buildings and the construction of 180 residential units comprised of 68 two-story, single family detached dwelling units and 112 multi-family dwelling units located within two (2) three- and four-story buildings. Additionally, the project will include a 2,582 square feet community center, a 1,709 square foot fitness building, and approximately 2.67 acres in common usable open space. Infrastructure development on the 17 acre site will include private streets, sidewalks, landscaping, storm water treatment, and underground utilities (Project Description provided as Attachment A). Access to the interior of the development is located along California Avenue at three separate private street entrances. Each entrance is designed as an extension of the existing College Terrace grid pattern of residential streets at Columbia, Bowdoin and Amherst Streets. All single family residences will have side-by-side, two car garages and 57 of the 68 single family residences will also have two-car driveway aprons. Multi-family residential parking spaces will be provided in a one level underground parking garage located under each multi-family residential building. Two parking spaces will be provided for each multi-family residential unit. The entire development will provide 108 visitor parking spaces located along the private streets within the development. DISCUSSION Zoning Compliance A summary indicating the project’s conformance with the Development Standards of the Alternative Standards Overlay District (AS2), set forth in PAMC Chapter 18.60, is provided on Sheet G.01 of the project plans and in Attachment C. Staff has reviewed the zoning information provided by the applicant and has determined that the proposed project is in compliance with the applicable AS2 development standards. The project has also been reviewed with respect to the City’s Performance Criteria (PAMC Chapter 18.23) and Parking Facility Design Standards (PAMC Chapter 18.54). Height and Massing City of Palo Alto Page 5 The height and massing of the residential buildings are driven by the terms of the MDA, particularly in relation to California Avenue edge of the project and how buildings must relate to the College Terrace residences located directly across the street from the development. The MDA states: “Dwelling units along California Avenue shall be detached and shall reflect the eclectic nature of the design of residences on the north side of the street. Buildings shall approximate the horizontal rhythm of building-to-side yard setback and façade areas, and the relationship of upper and lower stories, of California Avenue residential properties located across the street from, or in the vicinity of the Upper California Site. The development pattern shall provide similar opportunities for landscaping. At the applicant’s election, some or all buildings along California Avenue may be two stories. Automobile access may be from the rear of the dwellings.” The Applicant worked to accomplish this requirement along the California Avenue edge of the project through the use of a variety of single family floor plans, style types, front setbacks and building heights. The California Avenue edge of the project would be developed with 12 detached single family dwelling units, varying in height from one to two-stories, all of which would be below the required 30 foot height limit. Homes would range in size from 1,884 square feet to 2,719 square feet with only four of the 12 two-car garage doors facing California Avenue. As shown on Sheets SF.9 through SF.36, the project design includes 11 different floor plans with 29 different architectural styles, a variety of which would be used along California Avenue. It should be noted that all commercial properties on the southern side of California Avenue are required to maintain a 50 foot landscaping setback. The existing two-story commercial building to the northeast of this property is located approximately 55 feet from the front property line. The proposed single family home on Lot 1 would have a 20 foot setback, consistent with the zoning standards. Staff would appreciate receiving the ARB’s comments on the front setback and left side elevation of this home, as it would be visible from the public right of way. Although, several existing trees are proposed to be retained in this area, which will help buffer the home from the street. Parking City of Palo Alto Page 6 Per the AS2 standards, dwelling units with two (2) or more bedrooms must provide two (2) parking spaces per unit and 0.25 parking spaces for guests in an area with unrestricted access. As noted above, the proposed project would include a two car garage for all single family dwelling units and two parking spaces per multi-family dwelling unit in a one level underground parking garage. The entire development would provide 108 visitor parking spaces located along the private streets within the development, for a total of 0.6 guest parking spaces per unit. While the MDA has no requirement for bicycle parking, the applicant is proposing to provide 112 spaces. Lighting As shown on Sheet L3, proposed lighting would include pole lighting as well as building mounted and bollard style lights. All lighting would be directed downward to ensure very minimal spillover of light across property lines. All proposed lighting would be installed along the private street and drive aisles, with additional lighting surrounding the two multi-family buildings. The lighting would provide an average ‘foot-candle’ of 0.49 across the entire site. The proposed street lights along California Avenue would cast a light of 0.30 foot-candle onto the properties across the street, which is needed for safe travel on this main thoroughfare. Noise Section 9.10.040 of the Palo Alto Municipal Code limits noise generation to no more than 6 dB above the local ambient when adjacent to residential development, and no more than 8 dB when adjacent to commercial development. The existing ambient noise level in the area is approximately 60 Ldn. Post-construction noise from the project would primarily emanate from standard residential mechanical equipment, such as HVAV units. Commercial rooftop mechanical equipment normally generates 60 to 75 dBA at 50 feet. While residential development utilizes equipment for heating and cooling, these units are normally smaller than commercial equipment and generate less noise. For single family homes, the City requires any noise producing equipment be placed within the buildable area. During the Building permit phase, Planning will ensure the projects adherence to this regulation. For the multi-family units, most of the mechanical equipment is proposed to be located within the underground parking garage. Any additional mechanical elements, if and when proposed, would be required to be screened from public view in accordance with PAMC Section 18.23.050, and would be subject to Architectural Review and review of the equipment and equipment housing to ensure noise ordinance compliance. Regarding construction noise, the EIR found that the proposed development would result in significant impacts. Housing would be built within 100 feet of residential property lines. Consequently, construction noise would have potential to impact existing sensitive receptors located across the street, even with noise mitigation measures. These temporary increases in noise levels could substantially exceed ambient noise levels. Construction of the site could also City of Palo Alto Page 7 create vibration for adjacent sites. However, since construction would be outside of sleep hours, this was considered acceptable, and a less than significant impact. During the Building Permit review process, the Applicant will be required to create a Construction Logistic Plan that will include best management practices and subject to the review and approval of the Public Works Director. The Applicant team is already starting to think through the logistics. Some options include (1) developing the homes in phases, which would increase the length of construction noise, or (2) concurrent development of all homes and structures, thereby creating an intense but reduced construction period. The Applicant team is also looking to provide a construction service road, for a limited period, directly to Page Mill Road through the property located at 1450 Page Mill, as this site is also owned and controlled by Stanford. These and other options will be reviewed as a part of the Logistics Plan review by the Department of Public Works during the Building Permit process. Landscaping As previously mentioned, the project provides 2.67 acres of common usable open space. Common areas include a central park area including a community building and swimming pool, two tot lots, a tree lined mews area, recreation courtyard around the fitness building, and separate courtyards within each multi-family building. Planter strips with tree lined sidewalks are proposed throughout most of the development as well as approximately two acres of open space devoted to landscaped perimeter setbacks. A comprehensive landscape plan is provided in the plan set along with tree disposition sheets. The City Arborist has some minor concerns about the survivability of several of the existing trees that are to remain. The Applicant and it’s consulting arborist, the City Arborist and project planner will continue to work together to ensure the tree protection fencing is adequately placed to ensure that the protected and designated trees will remain in good condition. Building Design and Materials The plan for the 68 single family dwelling units includes 11 different floor plans with 29 different architectural styles, a variety of which would be used along California Avenue. Exterior wall materials would include stucco; painted horizontal fiber cement siding (with various exposures from 4" to 7" to 10.75", varied from smooth to wood-textured); painted fiber cement sidewall shingle siding; vertical board & batten siding; and stained cedar horizontal siding. Roofing will include red clay tile, asphalt shingles, standing seam metal, and flat concrete tiles. Roof pitches, fascia/barge board and rain gutter profiles & details will vary by style. Accent materials will include brick, tile, river rock, and ledger stone veneers. All windows on single family residences will be wood-clad windows (Anderson 400 series). Window trims will vary by elevation condition. Window shape and divided lite (exterior applied) conditions will vary by elevation. City of Palo Alto Page 8 The Multi-family building will have a combination of traditional and contemporary materials. The Applicant’s goal was to select durable materials that will retain the highest level of quality over time. Cement fiber panels, siding (vertical and horizontal), and cement plaster are the primary wall materials. Additionally, stone tile and cementitious panels would be used as accent materials at prominent locations on the buildings. Weather-resistive fiber reinforced horizontal screens, metal railings, and cement panel railings would be installed on balconies and along open-air corridors. Exposed wood rafters at select locations are intended to add interest and warmth to the material palette. Finally, board-formed concrete at the base of the building would complete the palette; the Applicant’s intention is to provide a clean look at the ground level. Additional detail for both the single family and multi-family residential buildings will be shown on the color and materials board that will be presented at the ARB hearing. Trash Disposal and Recycling Placement of trash enclosures for the multi-family dwellings is proposed to be within the parking garage, screened from public view per PAMC Section 18.23.020. As shown on Sheet MF.5, these containers will need to be moved up to the auto court area in front of the multi- family buildings on collection days. The trash and recycling facilities for single family homes are to be provided on each of the leased properties, and also would be screened from public view. Circulation and Access The site would be developed with private, inter-connecting streets that would access California Avenue at three locations. These access points would be aligned directly across from the existing public streets (Amherst, Bowdoin, and Columbia Streets). The existing roadway of Amherst Street is 24 feet wide (60 ft Right of Way (ROW)). The proposed Amherst extension would be 24 feet wide, consisting of two 12 foot wide travel lanes, where it intersects California Avenue and would widen to 36 feet (53 ft ROW) after the street entrance to allow parking on both side. The existing roadways of Bowdoin and Columbia Streets are 36 feet wide (60 ft ROW), which includes space for parallel parking on both sides of the street. On the project site, Bowdoin would be 36 feet wide (58 ft ROW) allowing for parking on both sides, Columbia would be 24 feet wide, consisting of two 12 foot wide travel lanes, where it intersects California Avenue and would widen to 36 feet (58 ft ROW) after the street entrance to allow parking on both side of the street. These street widths comply with the Private Streets ordinance in that private streets serving five or more lots shall have a ROW of no less than thirty-two feet wide. Per the Development Agreement, a project level access and circulation analysis is required. The City’s traffic analysis is limited to this analysis as other aspects of traffic were certified in the EIR. The access and circulation analysis concluded that 66 percent of the project traffic is likely to use the Columbia Street entrance/exit to gain access to the property. This is also the likely intersection students would use when walking to school. Therefore, the City has included a City of Palo Alto Page 9 condition of approval for installation of stop signs and crosswalks at this intersection. In addition to the circulation analysis, the memo also provided an analysis related to total vehicle trips. Staff only utilized this part of the analysis to confirm that the total vehicle trips generated by this project are less than the total analyzed in the adopted EIR. Subdivision The Applicant plans to enter into individual ground leases for the single-family, faculty dwelling units, and will submit a Tentative Subdivision Map (Tentative Map) for review by staff and the PTC after review of the development plans by the Architectural Review Board per the MDA. ENVIRONMENTAL REVIEW In conformance with the California Environmental Quality Act (CEQA), an Environmental Impact Report was certified by the City Council for the Mayfield Development Agreement in 2005. The City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (EIR) (State Clearinghouse No. 2003082103) concluded that the proposed project would not have a significant effect on the environment with mitigation as proposed except there would be significant and unavoidable Noise impacts, due to the use of heavy equipment during construction. The certified, Final EIR is available for review on the City’s web site at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp Per the attached Environmental Confirmation Memo (Attachment F), there are no substantive changes to the previously approved project or circumstances under which the project is being undertaken and no new information, therefore the EIR provides the necessary environmental clearance for this subject project. All mitigation measures as stated in the approve Mitigation Monitoring and Reporting Program (MMRP) (Attachment G) would be incorporated into the project as conditions of approval. PUBLIC OUTREACH The property owners and occupants within a 1,800 foot radius were sent public hearing notices for the ARB hearing. Staff has been available to discuss the proposal with interested members of the public and has emailed the College Terrace Neighborhood multiple times to answer questions and inform them of this public hearing. The applicant has also met with members of the College Terrace Residences’ Association. Signage has been posted at the site to inform the public about the proposed project. The ARB Agenda has been available on the City‘s website, which includes a copy of the staff report. Over the past few months, residents have expressed concern about the following items: 1.construction traffic, 2.increased cut-through traffic, City of Palo Alto Page 10 3.visitor parking supply, 4.lack of sidewalks on both sides of the extension of Amherst Street and Holly Way, 5.desire for improvements to the existing bike trail that leads to Kite Hill area (off-site), 6.addition of a Spine Road that would serve to break up the existing mega-blocks (no such City Policy). Items 1, 2, and 3 were addressed as a part of the 2005 MDA and EIR and are not under the purview of this ARB review. Items 1 is also subject to the review and approval of the Public Works Director. Off-site improvements such as 5 & 6 are also beyond the scope of this review. Area residents have also had the opportunity to review the applicant’s traffic memo, dated December 11, 2013. They continue to have concerns about the traffic analysis that was done as a part of the EIR and have responded with two letters. The applicants concerns as they relate to the traffic analysis are attached to this report. The applicant’s response to their concerns is also attached. COURTESY COPY Christopher Wuthmann: cwuthman@stanford.edu Prepared by: Jodie Gerhardt, AICP, Planner Reviewed by: Amy French, AICP, Chief Planning Official Approved by: Aaron Aknin, AICP, Assistant Director Cara Sliver, Senior Assistant City Attorney Attachments: xAttachment A: Applicant's Project Description 10-16-13 (PDF) xAttachment B: Project Location (PDF) xAttachment C: Zoning Compliance Table (DOC) xAttachment D: ARB Findings (DOC) xAttachment E: Conditions of Approval (DOC) xAttachment F: Environmental Confirmation Memo (DOC) xAttachment G: Mitigation Monitoring and Reporting Program (PDF) xAttachment H: Access and Circulation Analysis, March 10, 2014 (PDF) xAttachment I: CTRA comments on Access and Circulation Analysis (PDF) xAttachment J: Applicant's response to CTRA's comment letters (PDF) City of Palo Alto Page 11 xAttachment K: Development Plans (Board Members Only)* (TXT) City of Palo Alto Page 1 1 Thursday, March 20, 2014, Meeting 2 8:30 AM, Council Chambers 3 4 Public Hearings: 5 6 1451-1601 California Avenue [13PLN-00433]: Request by Chris Wuthmann of Stanford 7 Real Estate on behalf of the Board of Trustees of Leland Stanford Jr. University for Architectural 8 Review of the demolition of approximately 290,220 square feet of existing R&D/office space and 9 construction of 180 dwelling units, which includes 68 detached single family units and 112 10 multi-family units, as part of the 2005 Mayfield Development Agreement. Environmental 11 Assessment: City of Palo Alto/Stanford Development Agreement and Lease Project 12 Environmental Impact Report (State Clearinghouse No. 2003082103). Zone: RP(AS2) 13 14 Chair Lippert: Ok, we’ll move on to Item 2. This is a public hearing a major review for 1451-15 1601 California Avenue: Request by Chris Wuthmann of Stanford Real Estate on behalf of the 16 Board of Trustees of Leland Stanford Junior University for Architectural Review of the demolition 17 of approximately 290,220 square feet of existing R&D/office space and construction of 180 18 dwelling units, which includes 68 detached single family units and 112 multi-family units, as 19 part of the 2005 Mayfield Development Agreement. Environmental Assessment: City of Palo 20 Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (EIR). 21 Do I have to read the State Clearinghouse number? Do I have to read the State Clearinghouse 22 number on the, ok. And it’s zone district RP(AS2). And with that Ms. Gerhardt if you’d like to 23 introduce the project please? 24 25 Jodie Gerhardt, Senior Planner: Thank you. The project site is a 17 acre site located at the 26 southwest side of California Avenue and it comprises three commercial properties at 1451, 27 1501, and 1601 California Avenue. They are currently developed with three office buildings and 28 surface parking lots. The site is surrounded by single family homes to the west, office buildings 29 to the east and north, and a multi-story residential development to the south. The proposed 30 project is the replacement of these office buildings with 180 residential units. This would 31 include 68 single family homes and 112 multi-family dwelling units. There are also included in 32 the project a community center, a fitness building, swimming pool, and approximately 2.7 acres 33 of useable open space, which includes a central park, tot lots, courtyards, and walkways. The 34 site would be developed with private streets that are interconnecting and would access 35 California Avenue at three locations. These access points would be aligned directly across from 36 the existing public streets of Amherst, Bowdoin, and Columbia. 37 38 The plan for the 68 dwelling units includes 11 different floor plans and 29 different architectural 39 styles a variety of which will be used along California Avenue. And we do have a display up on 40 the wall here for you to take a look at if you’d like. All of the detached homes would have two 41 car garages and many of them would have driveway aprons as well. For the multi-family units 42 they would also be provided with two parking spaces in below grade parking basements. Also 43 on the private streets there would be 108 visitor parking spaces, which is above the 44 ARCHITECTURAL REVIEW BOARD EXCERPT MEETING MINUTES City of Palo Alto Page 2 requirement and Stanford has included 112 bicycle spaces mostly in the basement of the multi-1 family buildings. 2 3 We have preformed an access and circulation analysis, which concluded that a majority of the 4 traffic would be using the Columbia Street access point given that’s the direct route to the 5 multi-family buildings. This is also a likely intersection for students to be using to walk to 6 school. And so the City has included a condition of approval for installation of crosswalks and 7 appropriate signage at this intersection. 8 9 This proposed site is part of the Mayfield Development Agreement that was put together in 10 2005 with the City of Palo Alto and Stanford University. Under the terms of the agreement 11 Stanford constructed a soccer field at the corner of Page Mill and El Camino. In turn the 12 Development Agreement provided Stanford with the vested rights to build 250 housing units on 13 two sites in the Research Park area. The first site is the subject site that we’re discussing today 14 and the second housing site would be 2450 through 2500 El Camino Real, which will be the 15 subject of a future Architectural Review Board (ARB) hearing. 16 17 The ARB is requested to review the proposed 180 housing development; however, your purview 18 is limited based upon that Development Agreement to the three following project elements: we 19 are to determine the project’s compliance with the AS2 Development Standards and 20 Architectural Review findings; number two, we are to review and approve the lighting, noise, 21 landscaping, and selection of exterior materials and finishes of the building and other 22 structures; and three, limit review to the California edge of the property to determine if the 23 project approximates the horizontal rhythm of building to side yard setback and façade areas 24 including the relationship of the first and second stories and reflects the eclectic nature of the 25 design of the residence across the street. 26 27 Staff has found that the project is in conformance with the AS2 standards as further described 28 in Attachment C. As far as landscaping several existing trees will remain and the City Arborist 29 and staff will continue to work with the applicant to ensure that there’s adequate tree 30 protection fencing. Regarding the height and massing of the dwelling units we do believe that 31 the proposal on California Avenue does reflect the eclectic nature of the homes across the 32 street, but we would ask you to take a detailed review of that. 33 34 And for environmental as was stated an EIR has been prepared for this project. There have 35 been some updated reports since that time. Staff reviewed all of those reports, preformed an 36 environmental confirmation memo, and determined that none of the impacts or conclusions in 37 the EIR have changed and therefore all of the mitigation measures from the MMRP will be 38 incorporated into the project as conditions of approval. 39 40 We also the project was also noticed to an 1,800 foot radius. The College Terrace residents 41 were also separately noticed. We do have several comment letters that we recently received 42 and these have been at places. We also have color and material boards if you’d like to take a 43 look at those. And we have had some discussions, recent discussions with Stanford. They do 44 have some minor concerns about the conditions of approval. I think there’s just some small 45 tweaks about when exactly things have to be turned in and how exactly mechanical equipment 46 has to be screened. They can discuss those in further detail, but I think they are minor enough 47 that staff feels comfortable discussing those with the applicant after the hearing should you 48 recommend approval. We could work out those minor changes after the hearing and move 49 forward with the project. So staff is recommending approval of the proposed project and 50 City of Palo Alto Page 3 asking the ARB to recommend approval to the Director of Planning based on the architectural 1 review findings and the conditions of approval. Thank you. 2 3 Chair Lippert: Thank you. And before we move forward do any of my colleagues have 4 disclosures they wish to make? 5 6 Board Member Gooyer: Yes, I got a telephone call from Mr. Wuthmann I think it was Tuesday 7 and we talked for 10 minutes, something like that on the phone. 8 9 Chair Lippert: Do you have any disclosures? 10 11 Board Member Malone Prichard: I did meet with the applicant actually about another project 12 and we briefly discussed this project, but no information was exchanged that is not in the 13 packet. 14 15 Chair Lippert: Vice-Chair Popp? 16 17 Vice-Chair Popp: My disclosure is the same as Clare’s. I met with the applicant about a 18 separate project and during that discussion we referred to this project, but no additional 19 information was shared. 20 21 Chair Lippert: Board Member Lew? 22 23 Board Member Lew: And I exchanged e-mails with the applicant, but no information that’s not 24 in the packet was exchanged. 25 26 Chair Lippert: And I’ll disclose I was not contacted. I feel left out. Ok, before we get going 27 here I see we have somebody here from Transportation staff. Are they here to speak on this 28 item also? Do you have anything that you want to add before we go to the applicant’s 29 presentation? You can join staff at the table. You’re a staff member. 30 31 Rafael Ruiz, Transportation Engineer: Rafael Ruiz from Transportation Department; I don’t have 32 anything to add, just here if you have any questions. To answer any questions you may have. 33 34 Chair Lippert: Ok, and if there are members of the public that have questions for Transportation 35 staff he’s here as well. And then Ms. Gerhardt I have a couple of questions before we get, 36 procedural questions. Is this the only public hearing for this item or does this go to Planning 37 and Transportation? What is the route? What is the… this goes to City Council? 38 39 Ms. Gerhardt: The proposed development the ARB would be the final decision body unless the 40 project was appealed. There is a tentative map and a final map that will go through the 41 standard process, but as far as design the ARB is the main decision body. 42 43 Chair Lippert: Ok. And then with regard to the development agreement that’s already been 44 bundled up and put to bed and with regard to the EIR the EIR period is closed and that’s been 45 bundled up and put to bed as well, correct? Ok. Staff is nodding their head, so I just wanted 46 to (interrupted) 47 48 Unidentified Male: That is correct. 49 50 City of Palo Alto Page 4 Chair Lippert: I just want to make that very clear. Ok, with that we will have a presentation by 1 the applicant and then what I would, you’ll have 10 minutes. And then what I’d like to do is I 2 know that there’s a representative here from Stanford and they had some minor concerns and I 3 think we just simply have Stanford raise what their minor, present what their minor concerns 4 are and then I’ll open the public hearing because I want to be able to have the public be able to 5 respond to both the applicant as well as any of Stanford’s concerns. 6 7 Chris Wuthmann, Stanford Real Estate: Good morning, I’m Chris Wuthmann. Thank you for this 8 opportunity to be with you Board Members. I’m with Stanford University Real Estate and 9 manager of the California Avenue/Mayfield Housing Project. As has been mentioned this 10 housing development is a second obligation following the soccer fields that we are fulfilling 11 under the Development Agreement that the City initiated over 10 years ago regarding the 12 future of the Stanford Research Park. The purpose of the agreement was to achieve 13 community and environmental benefits and specific rules were set to enable and govern 14 implementation over 25 years. We appreciate the work that staff has done reviewing these 15 rules and their application as this project’s been developed and also the feedback that you gave 16 us at the preliminary ARB and that we’ve received from the College Terrace neighborhood as 17 expressed over many meetings. 18 19 We would like to emphasize to College Terrace that this ARB meeting is not the end of our 20 dialog with College Terrace. An important requirement of the Development Agreement’s 21 mitigation plan is City approval of a detailed construction traffic management plan after City 22 approval of such and before grading and building permits. Stanford and the City will be 23 working on this over the coming months and we hereby reiterate our commitment to include 24 College Terrace in the discussions involvement development of this plan. When construction 25 commences we will maintain an informational construction website and 24/7 hotline number 26 whereby concerns can be brought to our immediate attention and receive response throughout 27 the project’s duration. This has been a successful means of regular communications most 28 recently used for the Olmsted and Comstock housing projects on the north side of College 29 Terrace. Ok? 30 31 This major, these major ARB plans represent project revisions and refinements in three main 32 areas to respond to the preliminary ARB and staff and College Terrace comments. First, find 33 California Avenue frontage. We’ve reduced the number of front driveways from seven to four 34 out of 12 houses. We have refined roof pitches and we have resized a large gap that existed 35 between two of the houses in the area of greater topography. We’ve enhanced the quality and 36 balance of the exterior materials of all of the homes including incorporating some contemporary 37 materials and styles along with the traditional plans. And finally we have brought as 38 recommended a child’s play area forward to Columbia Street for better visibility and access. 39 Our project team will now illustrate these moves as well as address adherence to the 40 Development Agreement requirements. 41 42 Ron Nestor, William Hezmalhalch Architects: Good morning, my name is Ron Nestor. I’m a 43 Senior Principal with William Hezmalhalch Architects and joining me today is my partner Bill 44 Hezmalhalch and we are the designers of the single family homes. The California Avenue 45 frontage is composed of three blocks that match the street grid of College Terrace. On the 46 three blocks there are 12 single family homes along California Avenue. The ARB asked us to 47 include the first home on Amherst at the intersection of California as a 13th home for your 48 review. These 13 homes comprise seven different floor plans in 11 architectural styles. Three 49 of them are one story homes and two homes have had their roof pitches reduced as suggested 50 City of Palo Alto Page 5 by the ARB. Per the requirements of the AS2 standards the homes reflect the eclectic nature of 1 the design of residences on the north side of the street. Next slide. 2 3 The project will preserve street trees plus add additional street trees to fill in gaps. The homes 4 will have a broadly diverse array of exterior materials, colors, textures, roof forms, roofing, 5 accent elements and details authentic to their particular styles. And you see a sampling of that 6 on the bottom of the wall there. They will also have a high level of individualized front yards 7 with additional trees, customized paving, and landscape. Of the 12 California frontage homes 8 only 4 have garages and driveways oriented to California. Maintaining the continuity of the 9 parkway and providing maximum street tree opportunities. Next slide. 10 11 The homes approximate the horizontal rhythm of building to side yard setback and façade areas 12 and the relationship of upper and lower stories of residential properties located across the 13 street from or in the vicinity of the site. And distances between houses on California Avenue 14 vary from about 10 feet up to 27 feet in areas where rear garages occur. On this block 15 between Bowdoin and Amherst the homes have been repositioned to lessen a large gap as 16 suggested by ARB and a Spanish style courtyard home has been introduced in the middle of the 17 block. Next slide. 18 19 This photo montage was requested by the City and it shows the end of California at Amherst 20 Street, the existing house to the right, the pathway to Kite Hill in the center and the 1st house 21 or the 13th house shown to the left. And the uphill site of Amherst is designed to reflect 22 existing Amherst with uphill sloping front yards. Next slide. 23 24 This slide demonstrates some of the variety of homes along California Avenue. The first 25 example is a Spanish style home with red clay tile roof, Santa Barbara finish stucco, ornamental 26 tile and iron detailing, and a wood trimmed Spanish bay window. Another example is a split 27 level brick Prairie house at the corner of Amherst that features extensive brick detailing, cast 28 stone caps and detail elements, a broad porch, and a second floor roof balcony. And a third 29 example is a Craftsman style home that features fiber cement shingle siding with an articulated 30 brick base, painted wood trim with distinctive Craftsman shaped details, and textured asphalt 31 shingled roofing. And now let me introduce David Israel. 32 33 David Israel, BAR Architects: Good morning, I’m David Israel, Principal in charge with BAR 34 Architects in San Francisco. We’ve been responsible for the multi-family housing component as 35 well as the fitness facility and the community recreation building. In response to the input that 36 we received from ARB the primary changes to the multi-family have included further enrichment 37 and variety in the materials applied to include a combination of cement fiber panels both 38 horizontal and vertical, cementitious siding, individual board siding as well as board form 39 concrete at the base of the building, and stone accent panels both at entry and major arrival 40 points in the project. I’d be happy to answer any other specific questions when we get to that 41 point. Thank you very much. 42 43 Paul Lettieri, The Guzzardo Partnership: I’m Paul Lettieri with The Guzzardo Partnership, 44 Landscape Architects. One of the things that we’ve emphasized in the plan I think it’s pretty 45 obvious when you look at it is that we have a really strong street tree pattern that we’ve been 46 able to create all the way through this site including California Avenue, which includes retaining 47 existing trees as well as supplementing with new trees. And that whole tree pattern will be 48 worked on with Dave Dockter in some detail going forward in terms of species and details. 49 50 City of Palo Alto Page 6 We’ve also have a really diverse and varied plant palette partially along California Avenue with 1 draught tolerant California natives, naturalized plant material, and really sort of semi-custom 2 yard design for each one of those houses. The landscape design is trying to be as varied as the 3 housing design is so that they really do feel like individual homes that were built over time. 4 And that rationale will continue through the rest of the site as well relative to the single family. 5 6 The tot lot idea that was talked about we’ve, I don’t know if you can see it on the plan… 7 [unintelligible] this doesn’t work does it? Here we go. We’ve moved it out to Columbia so that 8 it is more inclusive and more visible as opposed to where it was before, which is sort of hidden 9 back here with these homes. Hierarchically the Columbia entry now has a 12 foot or 11 and a 10 half foot wide planting strip in it as opposed to the typical 5 foot wide one that’s elsewhere. It 11 sort of moves the pedestrians a bit further away from the street so as you, where there’s no 12 parking that’s the condition that we have, which is true at the throat of the entryway. We’re 13 saving on the order of 203 trees on the site, saving or relocating. And we can go to the next 14 one. 15 16 We’ve also updated the lighting a bit. One of the comments we had was to try to have a little 17 bit more modern kind of light fixtures and so this is illustrative of the more modern light fixtures 18 that would be on the site. And also the orange dots show onsite bike racks. There’s three 19 locations shown on the plan where there’s bike racks. There are also 112 bike parking spaces 20 under the multi-family building split roughly equally. And also the blue dot, which is very 21 difficult to see on the screen here is up here, which is really just (interrupted) 22 23 Chair Lippert: Can you wrap it up please? 24 25 Mr. Lettieri: I am wrapping it up. The, which is where the trash pickup would be on pickup day 26 only. Otherwise the trash is stored under the multi-family building, brought out, picked up, and 27 then put back. And with that I’d like to thank you for your attention and our whole team is 28 here and would be happy to answer any questions you have. 29 30 Chair Lippert: Thank you very much. Yeah. Chris did you want to just very briefly outline the 31 concerns that Stanford had just so we’ve got those on the record? 32 33 Julie Jones, Perkins Coie: Hi, I’m Julie Jones from Perkins Coie working with Stanford on this 34 project and on the Mayfield Development Agreement. We just got I think as everyone did the 35 conditions of approval on Monday afternoon. We hadn’t had a chance to see them before then 36 and we haven’t had a chance to talk with staff about what our concerns are and resolving them. 37 Most of them are completely minor technical points. The other points in here that I had noticed 38 and we haven’t yet had a chance to go through are things like construction noise. We think 39 that there are some statements made about construction noise for example that we think are 40 not quite matching what’s in the construction ordinance, the noise ordinance. We don’t intend 41 to have construction from 8:00 a.m. to 8:00 p.m. Monday through Friday. Our understanding 42 of the requirements is 8:00 a.m. to 6:00 p.m. That’s just an example of the kind of thing that 43 we’d like to clean up. There’s an indemnity provision in here that we haven’t seen in other 44 Mayfield approvals, so we want to discuss that with the City. There are some timing questions 45 and kind of minor I think there are some tree questions that we’d like to resolve. But as I say 46 we haven’t had a chance to discuss those yet with staff and anticipate that we would be able to 47 do that in the next few days and clean these up. 48 49 Chair Lippert: I appreciate that. What I want to try to avoid is if we do move forward and we 50 do approve the project today I want to avoid any substantive changes that would have to 51 City of Palo Alto Page 7 return either to the Board or the subcommittee. And so that’s really the main reason why I 1 want them on the record. Do you have anything else that you want to add to that? 2 3 Ms. Jones: I don’t and I think all of the types of things that we’re talking about are types of 4 issues that are not within the scope of what ARB is discussing. They are much more the type of 5 ordinary staff various City department conditions of approval that you would see in any project. 6 So I don’t think that there’s anything in here that would involve coming back to ARB for further 7 discussion, but of course we would discuss that with the City. 8 9 Chair Lippert: Ok. I see that we have Cara Silver here today. Cara is there anything that you 10 need to add to that as well from a legal point of view? Ok, great. Thank you very much. With 11 that what I will do is I’m going to open the public hearing. I have a number of speaker cards. 12 You’ll all have three minutes apiece. If anyone has not handed in a speaker card then please 13 do so at this time. The first speaker will be Brent Barker followed by Margit Aramburu. 14 15 Brent Barker: Good morning Chairman Lippert and Board Members. Thank you for the 16 opportunity to speak. My name is Brent Barker. I’m President of the College Terrace Resident’s 17 Association. You’re going to hear three sets of issues today. The first set really within the 18 purview of the ARB and other concerns outside. The construction traffic before the project 19 begins and the traffic after the project begins and there were the two conditions that we set 20 forward in a petition to Stanford University about three/four weeks ago signed by 600 residents 21 of College Terrace expressing our concerns. We wanted all traffic off of California Avenue, all 22 construction traffic and we were hoping for a relief road if you will or route outside after the 23 construction was complete. Now we have a commitment from President Hennessy that there 24 will be a construction road corridor coming in off of Page Mill Road until September 30, 2015. 25 If the construction were to start tomorrow that would give us roughly an 18 month window and 26 we’ll see that narrow because the construction is not going to start right away. We’re looking 27 for more. We’d like to have more. We have met with the City and with Stanford this past week 28 to begin the process of the construction management plan and this is an ongoing plan and 29 we’re actually quite pleased with the reception that we’ve gotten. 30 31 The second issue, the traffic coming out afterwards is a much more sharply divided issue and it 32 really stems from one single number that got baked into the Mayfield Agreement in 2005. So it 33 has the imprimatur of law, but to give you an analogy that expresses the pretzel of logic that 34 goes with this is a landlord speaks to his tenant, says “You’ve been renting for 12 years the 35 rent’s been $1,000 a month and I want to reduce that.” He says, “Great, what?” “To $1,400.” 36 He says, “Wait a minute, that’s an increase.” “No, because I have a legal paper here that says 37 I can charge you $3,400 a month and I’m going to reduce that $2,000 and down to $1,400.” 38 And the tenant says, “Wait a minute, that’s an increase.” And the landlord said, “No, that’s a 39 reduction.” And that’s where we are. That’s kind of a silly analogy, but that’s where we’re 40 divided. And we would hope that if we’re right and Stanford is wrong and that there’s a surge 41 of traffic coming out of this project after completion that the City and Stanford will work with us 42 to mitigate this. If you can’t do the mitigation with a road coming out before then you’ll work 43 with us afterwards. Thank you. 44 45 Chair Lippert: Thank you very much. Margit Aramburu followed by Ed Schmidt. 46 47 Margit Aramburu: I always know who they’re calling. Thank you. Margit Aramburu, I live at 48 227 Amherst Street. I’m also on the College Terrace Resident’s Association Board as a Stanford 49 Research Park Observer and I have been participating representing the Board in the discussions 50 City of Palo Alto Page 8 with Stanford and we’ve also met with the City to talk about the project. And I wanted to talk 1 today briefly about two issues. 2 3 Noise, the staff report says the ambient noise on California is about 60, the EIR noise levels 4 monitored by the EPI Associates are almost 57.6, but two recent ambient noise studies have 5 been done on California Avenue that are much lower, they are 46 and 48. So we’d like to 6 recommend that a new ambient noise study be done as a reference point when all commercial 7 or all the business activities leave the project site and then that would be an appropriate 8 reference for the conditions that are in the staff conditions of approval. And then I also thank 9 you for correcting that construction only goes until 6:00 p.m. When I saw the 8:00 p.m. my 10 eyes kind of rolled around in my head. So that would be extremely helpful to correct the 11 Condition of Approval 8A. And then adding the new ambient noise level could be added to Staff 12 Approval 9. 13 14 And then at the last meeting the Board talked a lot about connectivity and linkages and there is 15 a condition at the City for them to review the streets linking up to the public streets and the 16 curb cuts, etcetera. For local schools we’re still waiting to hear because the School District has 17 not yet decided if the children will go to Nixon up that Kite Hill Path, which you’d hope would 18 get redone, which is not yet been proposed or to Escondido. For both those options we would 19 like to support continued work on a safe path to school for the children. For Nixon students 20 they would definitely need to redo that Kite Hill Path and to get children to Escondido we do 21 believe there should be a crosswalk. I’m not sure if there should be one at Columbia, maybe it 22 should be at Bowdoin which links directly to a crosswalk across Stanford. 23 24 For sidewalks I really want to emphasize that the City, the Draft Environmental Impact Report 25 (DEIR) talked about that the City would require sidewalks where there are none and I really 26 would like to require, have the Board recommend sidewalks on all the new streets including 27 both sides of Amherst and Holly. Right now they only have one side of Holly and one side of 28 Amherst and I think that is a big mistake and not consistent with the EIR. And we for bikeways 29 we’d like to have safety; we’d like to have a painted bikeway on California Avenue. Right now 30 the EIR also said that there were bikeways adjacent to all the residential sites and there are, if 31 it is it’s only in our mind because there is no designated bikeway and we will have a lot more 32 bikes coming out of the project. 33 34 And finally I’m concerned about the street design. They are all different widths and then a lot 35 of them have the bulb at the entrance. So if they could be consistent with each other and with 36 the existing College Terrace streets that would be very helpful. Thank you. 37 38 Chair Lippert: Thank you. Ed Schmidt followed by Travis Giggy. 39 40 Ed Schmidt: Hi, I’m Ed Schmidt and I’ve been a Columbia, I’ve lived at Columbia Street for the 41 last 27 years. I’ve been a resident in Palo Alto for the last 45. That’s it. Thank you. 42 43 I’ve worked in an industry where there was a lot of scrutiny, peer review, and things like that 44 and when I read the, this last report by Hexagon I was really appalled by the way they’ve 45 stretched the truth and made it, made exaggerations like the example that Brent started talking 46 about and I will continue here. The Traffic Engineers Institute have put together a set of tables 47 and this is how they misused them. They put down all the data from different square footage 48 of different in this case office buildings. Instead of using Research and Development (R&D) 49 facilities they use office building tables. Those are the data points that are exposed and then 50 they do the best curve fit through that, those data points. Let me see if I can [unintelligible] 51 City of Palo Alto Page 9 this… I don’t know if you can see the yellow line there, but it does cover all those points and 1 then that yellow triangle is the estimated points based on the amount of square footage that 2 the buildings that are being torn down would have and they say, ok, well that’s the amount of 3 traffic that’s produced there. Well, that wasn’t done. The, that red line was produced as some 4 average value giving you the red triangle, which is almost twice as big as the yellow triangle. 5 So that’s just an example. 6 7 I think that we have been realistic in our approach. We’ve actually gone ahead and looked at a 8 neighboring community to help address how much traffic is going to be going toward Stanford 9 University and away from University. This is the current College Terrace traffic routes. We’re 10 asking for more cut through curb cuts allowing, and we’re asking also Stanford to be generous 11 and give up a strip of land 24 feet wide by a couple of hundred feet long to allow people to 12 come out of that Mayfield Housing Project onto Page Mill Road and then can go down Peter 13 Coutts or anyplace else in the area. A number of questions that we had were which way are 14 the traffic going? And the Hexagon report as well as Stanford have concluded that almost 15 nothing is going toward Stanford, everything is going in the other direction. We did a study at 16 Peter Coutts and we showed that the traffic was approximately split. 17 18 Chair Lippert: Could you wrap that up please? 19 20 Mr. Schmidt: Ok. Is the desire to make every nickel count so strong that we can’t put a few 21 more curb cuts and access to Page Mill to diffuse the truck and later the residential traffic? If 22 we are right and Stanford is wrong how will Stanford or the City of Palo Alto mitigate the 23 problem after the Mayfield facility housing is completed under its current design? 24 25 Chair Lippert: Thank you very much. Travis Giggy followed by Douglas Shaker. 26 27 Travis Giggy: I’d like to give permission to Fred Balin to speak on my behalf. 28 29 Chair Lippert: Ok. Fred, you’re at the end so… Douglas Shaker followed by Eric Carlson. 30 31 Douglas Shaker: I’m Doug Shaker. I live at the corner of College and Hanover so I’m someone 32 who would be significantly impacted by the traffic flow through the neighborhood. I’m not 33 really qualified to comment on process. I have to say that aesthetically I kind of like it. If 34 that’s the main characteristic that you’re passing on it looks like a nice project. I’m not qualified 35 to read the traffic projections that have been made in the EIR or the criticisms thereto, but to 36 me as a citizen, as a resident the idea that the traffic through the neighborhood won’t be 37 significantly increased kind of strains my credulity. I don’t have any concerns about pedestrian 38 or bike traffic. I do have concerns about vehicular traffic. 39 40 In some ways I guess what I just want to say is the traffic is, turns out to be really bad College 41 Terrace is relatively well organized and politically active. I’ve heard people of other 42 neighborhoods in Palo Alto say why does College Terrace always get what they want? Well, 43 we’re well organized and politically active. And I believe there will be a response if the traffic 44 through the neighborhood is excessive. I for one would be interested in more traffic bumps on 45 California Avenue or closure of more Amherst or Bowdoin or Columbia or all three with bollards. 46 I just, I’m heavily concerned that additional traffic through the neighborhood will make it 47 dangerous and less livable and I know that College Terrace will respond if that’s what actually 48 happens. So I think a more useful thing would be if we were to address that before the project 49 is built rather than after. Thank you. 50 51 City of Palo Alto Page 10 Chair Lippert: Thank you very much. Eric Carlson followed by Stewart Carl. 1 2 Eric Carlson: Good morning Board Members, my name is Eric Carlson. I moved to College 3 Terrace in June 2010. I live at 1532 South California Avenue so I am at ground zero. I am 4 right in between Columbia Avenue and Bowdoin Avenue. So I’m one of those eclectic houses 5 across the street from the housing development. I live there with my wife and two daughters, 6 my fifth grade daughter and my eighth grade daughter. Next door to us is a single mom with 7 her daughter who is 14 years old and on the corner of California and Bowdoin is a house with 8 three girls under the age of 7. So on the block directly across the street from the only two out 9 of the three outlets of the 180 housing units live seven girls and we’re not an exception to the 10 neighborhood; seven young girls who are learning to bike ride, who are learning to roller blade, 11 who are having lemonade stands out in the front. What I’d like to say is that one of the things 12 I love about College Terrace is that the children use the neighborhood. They are growing up 13 there and in fact we are teaching them to cross the streets and look both ways and so forth and 14 no doubt about that, that plays a role, but my hope is that as a neighbor Stanford University 15 they would recognize that, they would want to do everything possible to ensure the safety of 16 the children in the neighborhood and in fact having only two outlets or three outlets going 17 directly onto California Avenue is a compromise to that safety. The fact is is that with more 18 outlets out to Page Mill or perhaps down to Hanover the traffic would be relieved and the safety 19 of our children will be better ensured. Thank you. 20 21 Chair Lippert: Thank you very much. Eric, I’m sorry, Stewart Carl followed by Ann, oh, Ann 22 Lafargue, I’m not even going to go for the middle name, Balin. 23 24 Stewart Carl: Hi, my name’s Stewart Carl and since this is an ARB I’ll address the architectural 25 issue. I would like to strongly disagree with the architects and staff that they have managed to 26 capture the character of College Terrace. As I look at the project what it feels like to me is I 27 have this impression of camouflage. During World War II you would from a distance put 28 different coverings on things to disguise them as something else and that’s really what I feel 29 like this project is, it’s a kind of a Disneyland version of College Terrace and they’ve really failed 30 to capture the real character of our neighborhood. And I think the reason that is is because 31 College Terrace has 800 house and probably 800 architects. And what we have is one 32 architect, 13 floor plans, and a variety of fake architectural styles applied to the outside of the 33 houses. And I think that’s why they have failed to capture the true nature of our neighborhood, 34 which grew organically. Really what we have here is a Planned Community (PC) disguised or 35 camouflaged to look like College Terrace. Thank you. 36 37 Chair Lippert: Thank you very much. Ann La… 38 39 Ann Lafargue -Balin: Lafargue (interrupted) 40 41 Chair Lippert: Lafargue, that’s a F. Ok, thank you. Lafargue -Balin. Yes, ok. Great. 42 43 Ms. Lafargue -Balin: Good morning Board, my name is Ann Lafargue -Balin and I’m a native 44 Palo Altoan. I live on the corner of Columbia and California Avenue and I would basically agree, 45 I wouldn’t say maybe Disneyland, but I would agree with Stewart that it’s a proximity. It 46 doesn’t feel authentic. I still feel the ARB, sorry, Stanford, the applicant, architects have not 47 really gone and done outreach enough since the last meeting with you to talk with us. There’s 48 really the architect the builder or the applicant could have done more regarding these fronting 49 properties. So on block one, Dartmouth to Columbia in College Terrace the styles are European 50 Cottage, Cape Cod, and Bungalow. There are four parcels proposed for the Mayfield site. 51 City of Palo Alto Page 11 Therefore the horizontal rhythm of the building to side yard setback loses much meaning when 1 side yards across California Avenue are offset. Shouldn’t there only be three homes on the 2 Mayfield site as well? 3 4 We live in a single story California Bungalow built in 1918 with 100 foot section on California 5 Avenue that includes the main house and detached two car garage. See the photos. Ok. The 6 proposed Mayfield single family home across the street on Lot 4 it’s called Lane Woods under 7 Floor Plan 9SF.18 is two stories high and the massing and relationship of first and second 8 stories does not approximate ours as we have no second story. We have a simple, gable 9 pitched roof. Lane Woods has a dormer, a second story with a dormer. As for the façade our 10 front door and entranceway is on Columbia Street. So again, there is no approximation. The 11 one story Spanish style home on Lot 3 is much more compatible. We ask that you recommend 12 that the Spanish style be across from our home at the corner of Columbia Street. Either one of 13 the two Plan 9 buildings on this block is better suited across from the Cape Cod in the center of 14 the block. The others should be removed and a single story structure should be placed as the 15 third and final Mayfield house on the block across from the European Cottage at the corner of 16 Dartmouth and Columbia. Thank you. 17 18 Chair Lippert: Thank you. Getting down to the bottom of the list here so if there are any other 19 speakers, members of the public that wish to speak to this item please fill out a speaker card 20 and give it to the clerk. We’ll go with Karina Cheng followed by Fred Balin. 21 22 Karina Cheng: Hello Board I’m Karina Cheng. I’m born and raised on 2321 Amherst Street since 23 the Fifties, so my comparison is fields and horses from El Camino all the way past 280. 280 24 was not built so the sound level was quite different. I’d like to speak to the plans that were 25 submitted by Stanford and specifically in the street scene that they showed driving up California 26 Avenue what they omitted was the transformer that will be three feet by three feet by three 27 feet with an eight foot clearance. Your landscaping drawings conveniently show it covered by 28 shrubs. In the plans it states that there must be an eight foot clearance facing down towards El 29 Camino for electrical access and I confirmed that with the City of Palo Alto Utilities Engineering. 30 So the landscape drawings are misleading regarding the visible nature of that and so that’s not 31 consistent with the rhythm and harmony of the neighborhood. 32 33 I’d also like to talk about the two story garages, the two car garages. There are four 2 car 34 garages on California Avenue and they all have a second story above them. If you look at the 35 existing homes there’s only three houses that I can see that had 2 car garages. The one that 36 the Balin’s have has nothing above it. It’s freestanding; it’s one story for 2 car garage. There’s 37 another one, but it’s behind the house at Dartmouth and California so it’s hidden from the 38 street. There may be other ones that I couldn’t see and the only other one between Amherst 39 and Bowdoin is recessed into the ground so that the residential floor that’s above it is really a 40 first floor. So the massing is quite different. 41 42 Also on parking the AS2 states that no parking is permitted within the 20 foot setback. Two of 43 the four garages facing California have wide aprons, wider than a driveway. They take up over 44 35 percent possibly 50 percent of the fronting width of the lot and will presumably be used for 45 parking besides turning around. I’d also like to mention that there’s a house at Lot 7; oh, I sent 46 a handout to you so it should be in your packet. There’s a porte-cochère at Lot 7. For those of 47 us who don’t know what a porte-cochère is when you go to a gas station you’re standing under 48 that roof, that’s a porte-cochère. So across there’s Plan 7 has a house that’s 46 feet wide 49 including a 19 foot wide porte-cochère. I would like somebody to point out to me anywhere in 50 City of Palo Alto Page 12 College Terrace that has a gas station roof 19 feed wide at the front of the lot. I would propose 1 that that should be removed. There are other Plan 7’s that don’t have it. 2 3 And then I’d also like to just point out that there are air conditioners in the fronts of the house 4 that create noise; again, no air conditioners in the front of the house. They could like the rest 5 of the homes they could be moved to the back, 8 of the 12 houses have the air conditioner in 6 the back. The ones on the side should go to the back and please have Stanford observe the 7 fence laws and observe the site distance triangles so that cars can back out of the driveway 8 without having their view obscured by the fences. Thank you very much. 9 10 Chair Lippert: Thank you. Ok, we have Fred Balin and Fred Balin is actually going to be 11 speaking for Doria Summa, [unintelligible], and Travis Giggy. So you will have a total of nine 12 minutes Mr. Balin. 13 14 Fred Balin: This will be under six, please don’t till we’re all cued up. 15 16 Chair Lippert: And following Mr. Balin will be Lee Brokaw. 17 18 Mr. Balin: Six minutes, go. Fred Balin, College Terrace Board, good morning. 180 units of 19 Mayfield housing all Stanford facility and family. Amherst, Bowdoin, and Columbia Streets, the 20 ABC streets blocked at Stanford Avenue. Dartmouth also blocked at Werry Park. Rotate 45 21 degrees for the schematic. The most direct route to and from campus, Escondido, and Bing 22 schools is through the ABC street segments then down College Avenue and across Hanover, 23 next Harvard or further down. Note the U-shape with horizontal ABC street rungs. Here it is 24 again amid green icon housing units whose vehicles must access it. 180 housing units in 25 Mayfield as well as 201 in College Terrace. Mayfield almost doubles the number of homes and 26 arguably doubles the number of vehicle trips along this ladder shaped corridor. 27 28 But now look inside Mayfield; 68 single family, 112 multi-family residences. As the vehicles exit 29 they will distribute towards Stanford or down California Avenue, but first all of them will 30 traverse the smaller more congested Mayfield streets with 75 percent on the Columbia Street 31 extension because it is the route to the garage under the multi-family complex. Crowded? Not 32 to worry, alternate modes of travel we are assured will handle it. But our resident team sat 33 outside Peter Coutts housing next door to us for two days counting cars and the reductions 34 were much, much less than claimed by Stanford’s consultants that were claimed for Mayfield. 35 And we also recorded the directionality; as Ed Schmidt pointed out about 50/50 to or from Page 36 Mill Road or Stanford Avenue. 37 38 A Mayfield only easement from the rear to Page Mill Road would ease internal traffic 39 congestion. The University calls this an incompatible use, but at the Mayfield/El Camino site the 40 only road will be rear easements, will be via a rear easement between the surrounding banks. 41 Eduardo Martinez, as courteous and respected a Planning Commissioner as you will find said, 42 “Our hands are tied, but Stanford your hands are not. Your response that it’s incompatible to 43 do this or that strikes me as very arrogant. Go back to your community and to your neighbors 44 and make it work better for them.” 45 46 And what about access for emergency vehicles and potential evacuation? The California Code 47 allows an exception to a second access road if there are sprinklers in the multi-story building, 48 but should it be invoked if the travel is longer and more congested? Here’s the code. What can 49 be done? 50 51 City of Palo Alto Page 13 Review Board Members skillfully address the items within your purview, but you have a right, 1 even an obligation to speak to the needs of future residents. July 2013 Vice-Chair Lew, 2 generally the smaller the block pattern the better. Planners and urban designers do agree with 3 that. The giant superblocks are really not good urban design. You want smaller. The 4 community is looking for something like that too and I just don’t want to preclude future things 5 that could happen. It seems like the underlying structure should have more connectivity. Staff, 6 Transportation, and Planning your analysis of mitigations are limited to the number and 7 locations of curb cuts and the connections of onsite streets and drives to the public street 8 system. Both are inadequate. The top heavy Columbia Street distribution requires a curb cut 9 at Dartmouth with connections to the adjacent driveway so that the garbage trucks don’t have 10 to back out [unintelligible] other trucks onto Columbia and also circulation to the rear with a 11 new garage lane and a curb cut out and away from California Avenue. 12 13 Stanford faculty interested in the housing ask any questions until you are satisfied this project 14 will work for you. Stanford powers that be respectfully stop telling us that all is fine. When 600 15 of your neighbors sign a petition and say there is a problem then there is a problem. I played 16 hooky yesterday so I could study the plans at our lovely College Terrace Branch Library. It 17 stands there today because at least two generations of residents fought the City’s considerable 18 attempts to consolidate it. That included the late Jim Culpepper whose notable efforts 19 preserved Kite Hill as open space so future Peter Coutts residents could enjoy it as well. 20 21 Stanford you’ve helped us with funding for traffic calming and the parking permit program that 22 has helped protect and enhance the neighborhood. Work together with the community now to 23 ensure this project is a success by implementing the needed changes or at a minimum redesign 24 it with an enhanced internal circulation contingency plan as well as secure an easement on the 25 adjacent parcel so in the event after occupancy your consultants analyses prove invalid we 26 together with our new Mayfield neighbors are not here again upset but with very limited 27 options. Thank you. 28 29 Chair Lippert: There’ll be no applause. This is a public hearing and what it does is it 30 discourages other members of the public from speaking whether you express emotion either by 31 clapping or jeering it’s just not appropriate here. So I appreciate your compliance with that. 32 Mr. Brokaw you’ll be our last speaker unless I get another speaker card and then we will take a 33 five minute recess and then reconvene. 34 35 Lee Brokaw: My name’s Lee Brokaw. I’ve lived for 40 years at 2080 Hanover and that’s halfway 36 between Stanford and College. I lived there when it was a raceway before Jim Culpepper was 37 able to get the barricades in to have traffic calming. And what we have right now with the 38 mothers in the SUV’s and the one child per vehicle dropping kids off at 8:00 for Escondido 39 School sometimes parking in our driveways when we come out and say, “But you can’t park 40 here.” And they say, “Don’t worry, I’ll be right back. I’m walking my kid to school.” We’ve got 41 a bottleneck of traffic at 8:00. The traffic impact from this additional housing on Hanover 42 Street is going to be a nightmare. 43 44 The Fire Department and the paramedics multiple times a day go roaring down Hanover Street 45 to parts unknown toward Stanford campus. When they have not been going by with their lights 46 flashing I have walked out into the street and stopped them and I have said “What are you 47 going to do when you have an emergency at 8:00 in the morning and Hanover Street is bumper 48 to bumper people trying to get through that intersection at Stanford and Hanover? How are 49 you going to do your emergency service?” And they said “We are extremely worried. Please 50 take this to the powers to be at the City. We can’t do anything, you guys can. You can get 51 City of Palo Alto Page 14 Stanford to play ball with us.” Apparently the deal on housing is already set, but you actually, 1 they actually have to come to you to get permission to do what they’re doing and I think the 2 traffic is the biggest issue. There needs to be another way out. At the Escondido meeting I 3 asked some representative from Stanford why aren’t you cutting California Avenue up to Peter 4 Coutts so people can come out and go left up to Peter Coutts? And he said the hill was too 5 steep. I guess the traffic engineers that built San Francisco streets have a little bit better 6 handle on hills than the ones that work for Stanford. 7 8 Chair Lippert: Thank you Mr. Brokaw. Ok, we’re at an hour and a half for our meeting this 9 morning so we’ll take a five minute break so that we can use the restrooms. 10 11 THE BOARD TOOK A BREAK 12 13 Carina Chiang: Hello Board, thank you. I wanted to point out that for Lot 21, the one which is 14 uphill at the top of California Avenue and Amherst it has a, if you look at that drawing over 15 there, the driveway is as soon as you get into the lot, into the property and it’s somewhat 16 obscured by trees and shrubs. So when the car there needs to back out it’s going to be a blind 17 backing out. So for the safety it might be worth considering flipping it so that the driveway’s a 18 little bit further in and they get a little bit more distance to see as the cars are coming into the 19 property. 20 21 I’d also like to point out in the lengthy handout that I sent you the reason I cited so many 22 different sheets is that there is a great deal of inconsistency between the way given lots and 23 the layout of the property is portrayed. You’ll see for example on Lot 8 the air conditioner 24 moves around to different locations: side of the house, back of the house… so I don’t see how 25 that can be a commitment to the design as design elements are being moved. Also for the four 26 properties that have the driveways facing onto California Avenue if you look at the different 27 drawings the location of the [widen] aprons changes and in some cases those [widen] aprons 28 have multiple wide driveway aprons cutting into California Avenue for a single property. So that 29 seems to be in violation of AS2 with the parking and the excessive amounts of parking within 30 that 20 foot setback. 31 32 Also as we look at the different drawings we see that one of the properties crosses into the 33 setback line. So again I don’t see consistency amongst the drawings and that’s a concern. As 34 far as the fences go I wanted to point out that the fences on California Avenue on the existing 35 homes they’re all 36 inches or below and two of the three of those are open fences, they are 36 like 40 to 60 percent open space and the one solid one is heavily covered with vegetation. 37 What Stanford is proposing are fences up to 42 inches. So I’m talking about the ones that are 38 facing the streets. Thank you very much. 39 40 Chair Lippert: Thank you. Ok, with that I don’t have any other speaker cards so I will close the 41 public hearing. And at this point I’m going to give Stanford five minutes to sort of make some 42 closing statements and also any additional comments you want to make with regard to anything 43 that the members of the public have addressed here today. So you have five minutes. 44 45 Mr. Wuthmann: Sure, we remain ready to answer questions that you may have of course. We 46 have not prepared a closing statement so this could be ad hoc. I would welcome anybody on 47 the team that feels that there’s an objective correction that needs to be made to come up and 48 offer that. One that I would make off the top has to do with the statement about our street 49 widths. There is an implication that they are less than the corresponding street widths across 50 the street in College Terrace the Amherst, Bowdoin, Columbia street widths. Our street widths 51 City of Palo Alto Page 15 are actually, our travel lanes and street widths are equal to or larger than those existing in 1 College Terrace. We do have two streets, Amherst and Columbia where we have not had 2 parallel street parking at the street entrances to smooth the turning in and out of our project 3 for safety reasons and then open up to street parking once you get into the site. Our travel 4 lanes at those “narrow entrances” are actually 12 foot travel lanes versus the 11 foot travel 5 lanes otherwise in our project and otherwise in College Terrace. So we actually have larger 6 travel lanes for better and safer turning. Once inside our project we have 11 foot travel lanes 7 and 7 foot parking, which is equal to College Terrace actually. So that’s a correction I wanted 8 to make. 9 10 A statement with respect to the one sidewalk on Amherst; the reason that was done is that’s 11 the area of greatest topography in our site and so some of our lots are lost to slope. In an 12 interest of maintaining reasonable lot sizes there we looked at the possibility of just one 13 sidewalk on that lot to leave as much land in this topographic area for lot area and we felt since 14 this, the sidewalks on this block serve the fewest number of residences in the project that one 15 sidewalk on that block would be appropriate. 16 17 With respect to the extensive traffic conversations again these topics were extensively dealt 18 with during the Development Agreement analysis and adoption in the EIR and Development 19 Agreement process. I will say that as required we’ve had a third party access a circulation 20 memo done, a technical engineering memo done for Transportation. Two thirds of the units 21 are on Columbia Street. The projection there is that during the a.m. peak one vehicle will be 22 coming out Columbia Street every minute and three quarters and that’s the peak hour traffic on 23 Columbia to answer that question what kind of traffic will there be on Columbia? Staff has 24 recommended in the conditions of approval the addition of crosswalks and a stop sign on 25 California Avenue as a condition on our project. We did not object to that and if staff requires it 26 and College Terrace neighbors support it we certainly will comply with that. Yes? Thanks. 27 28 Jean McCown, Stanford University: I wanted to comment on one aspect of some of the 29 concerns that you heard and this has to do with this question of how will faculty residents who 30 live in these new homes get to their, get to campus? It’s not in your purview, but I just want to 31 make two quick points. Our data over the last 10 years and this is actual data of our 32 transportation demand programs has shown that we have succeeded in dropping the drive 33 alone percentage of people who come to campus to work from 70 percent, so 70 percent in 34 2000 a single person would drive in a car to get to campus. It’s now under 50 percent. It’s 35 now like 48 percent as a result of a myriad of different programs. I won’t get into the details. 36 37 Secondly faculty members who live on [unintelligible] campus neighborhoods including the 38 neighborhoods up near Peter Coutts and within a mile and a half I believe of campus only 36 39 percent of the faculty who are eligible to buy a parking permit to park on campus actually buy a 40 parking permit. I think that’s an indicator and that’s actually real data, is an indicator of the 41 extent to which our nearby faculty members take advantage of the closeness to be able to walk 42 and get to their work walking and bicycling or taking Marguerite and not driving. 43 44 Chair Lippert: I have just a quick question, a follow up. Does Mar… as part of this proposal is 45 the Marguerite Shuttle going to be (interrupted) 46 47 Ms. McCown: It currently runs right there to the corner of California and Hanover. I think 48 whether an even more specific shuttle might serve that, the new residents there is something 49 we’re definitely open to. Right now there is a Marguerite Shuttle service that comes California 50 Ave. to Hanover and over into the Research Park and back onto campus. 51 City of Palo Alto Page 16 1 Chair Lippert: Yeah, I’m familiar with the one that runs into the Research Park. So it is possible 2 to divert or readjust the routes? 3 4 Ms. McCown: Yeah, I mean again whether that walking down to the corner of Hanover to get 5 is… whether we need to adjust that will be certainly something we’d be open to looking at. 6 7 Chair Lippert: Thank you very much. Ok, with that I’d like staff to take a moment to address 8 some of the traffic issues. Mr. Aknin? 9 10 Aaron Aknin, Assistant Director: Thank you and good morning. As we heard today and as 11 we’ve heard over the last six months or so as we’ve been meeting with College Terrace folks 12 there really are a number of concerns, but there’s two primary concerns as they relate to traffic. 13 First is the overall traffic patterns and the second is traffic as it relates to during the 14 construction period. So this has been said before by staff, but it is worth reiterating because I 15 sense the frustration and I understand the frustration on the resident’s behalf. The limit of our 16 traffic review is limited by the EIR that was publicly reviewed and approved in 2005 as well as 17 the Development Agreement. And it really boils down to one key number and that is are the 18 total number of units that were approved and reviewed from a traffic standpoint consistent with 19 what is being proposed today by Stanford and the answer is yes. In fact there’s less units than 20 we reviewed and approved by the EIR a number of years ago. 21 22 The second is the limitation of our review was to access and circulation. We did do that review 23 and there are conditions related to crosswalks and stop signs that are proposed within the 24 conditions of approval as it relates to access and circulation. So that review was both done by 25 our third party consultant as well as verified by our in house staff. As it relates to construction 26 traffic we’ve had a number of meetings including a kickoff meeting with some of the College, 27 the most involved College Terrace folks earlier this week with our Public Works staff as well as 28 Planning staff and we are committed and we encourage the College Terrace residents to remain 29 committed to having these meetings and better understanding how we could relieve any 30 temporary construction traffic to the best of our legal abilities. And that’s going to be working 31 with our Public Works staff to the maximum extent possible during this process. So with that I 32 will turn it over to our Senior Assistant City Attorney. 33 34 Cara Silver, Senior Assistant City Attorney: Thank you Aaron. Cara Silver, Senior Assistant City 35 Attorney. I thought it would be helpful to frame the purview issues and the legal framework 36 that we’re operating under here. As we’ve discussed there is a Development Agreement that 37 was entered into a number of years ago that limits the City’s ability to review these projects. 38 And the reason why a Development Agreement was entered into of course is it was in 39 connection with the earlier Mayfield Playing Fields and in exchange for granting the public 40 benefit of the Mayfield Soccer Field the City agreed to essentially freeze the zoning entitlements 41 for Stanford University on these housing sites and some other commercial property in the 42 Research Park. So it’s essentially a contract, which is a little bit different than a more typical 43 zoning application. It’s important to keep that framework in mind. 44 45 In connection with the Development Agreement an EIR was conducted and the particular 46 housing project that was proposed in the Development Agreement was analyzed as Aaron 47 mentioned. The housing project was analyzed with even more units on this particular site. A 48 full EIR was done and what’s important to note in that EIR is that the EIR not only assumed the 49 baseline traffic situation, but it also projected future traffic impacts. So as the City grows of 50 course additional traffic is added and so the future base, the future traffic conditions were 51 City of Palo Alto Page 17 considered in the EIR that was conducted in 2005. The EIR also assumed that the housing 1 would be dedicated to faculty and so it assumed traffic patterns going to the University. So all 2 of that was discussed in the EIR. 3 4 To satisfy staff’s concern that there could be new circumstances or new information that had 5 developed over the period of time since the EIR was conducted staff conducted additional 6 research. And once an EIR is certified there are three limited situations where further 7 environmental review can take place. Those three situations we’ve discussed before, but just to 8 review is: Number 1 if there is new or more severe impacts identified with a particular project 9 that is being proposed; if there is a change in circumstances; or Number 3 if there is new 10 information. And staff went through the project in great detail and determined that none of 11 those three circumstances applied here and therefore additional environmental review was not 12 required. And there is an environmental memo attached to your packet with all of that staff 13 work in it. 14 15 That being said there is… given the fact that the environmental review is really not on the table 16 at this point of course the ARB’s purview is limited to the AS2 standards that were identified in 17 the Development Agreement. Those AS2 standards of course are very limited and there is 18 however you do need to make your typical architectural review findings. Finding 10 relates to 19 internal circulation and it requires you to look at the access to the property and circulation 20 thereon are safe and convenient for pedestrians, cyclists, and vehicles. In recognition of this 21 finding staff requested Stanford to prepare a separate circulation study and that’s also attached 22 in your staff report and there are some recommendations that the consultant is making with 23 respect to that finding that will improve the situation. And really as to the traffic issues that’s 24 the limited purview of the ARB is the review of that particular study and recommendations on 25 that finding. However, instead what the ARB should of course focus on is the AS2 standards 26 and the particular area that the staff report discusses on let’s see, on Page 3. Thank you. 27 28 Chair Lippert; Ok. With that we will return to the Board for any questions and comments. And 29 I think I’m going to begin with Board Member Malone Prichard. And you’ll have a soft five 30 minutes. 31 32 Board Member Malone Prichard: I don’t believe I’ll need the full five minutes. In recognition of 33 the very strict limits I have only looked at the structures along the California edge of the 34 California sites because the rest of the project is not within our purview as my understanding. I 35 feel that the architect here has done a very good job of staying within the requirements of the 36 Development Agreement and indeed being lower than the heights allowed and less units than 37 allowed, etcetera. I had a couple of small questions. I assume we’re going to do a round two 38 or aren’t we? 39 40 Chair Lippert: Yeah. 41 42 Board Member Malone Prichard: Ok, so I have very, very small questions for round two, detail 43 oriented. I am in support of all of the findings that the staff has put forward and that’s all I 44 have to say at this point. 45 46 Chair Lippert: Vice-Chair Popp. 47 48 Vice-Chair Popp: Thank you. I want to start out by expressing my appreciation for everyone 49 who’s come here today and it’s always great to see a turnout and it’s important to understand 50 what your concerns are. And while I share many of the concerns, maybe not all, but many of 51 City of Palo Alto Page 18 the concerns I want to be really clear about what our role is here today. And our role is outside 1 of many of the things that you talked about. We are very limited in terms of what we can 2 respond to and what we have purview over and it’s challenging for me to hear comments that 3 we have no ability to respond to. And so I want to just acknowledge that I hear you and I 4 understand what your concerns are, but the Development Agreement is the Development 5 Agreement. That process occurred and we are where we are today. 6 7 With that I will echo the comments made by Clare. I’m appreciative of the design and the 8 character of this project. I think that what I see is a project that is within the limitations or less 9 than in many cases the constraints that would be what many developers would go right up 10 against the maximums in terms of height and floor area and all these things. And so I’m 11 appreciative of where we are and I have a couple of other minor comments, but I’ll leave that 12 till the next round. 13 14 Chair Lippert: Ok. Board Member Gooyer. 15 16 Board Member Gooyer: I have to agree with my colleagues. I know there was some concern 17 expressed by some of the audience indicating that the architects was only one architectural 18 firm, they really haven’t caught the essence of the adjoining neighborhood, but actually having 19 done this for numerous years I think the architect did a very commendable job coming up with 20 the variety that’s there and the I think relative accuracy of the variety that’s been shown. So 21 actually I have to commend them that once this gets built or if it gets built in this exact 22 configuration in 20 years it won’t, it definitely in fact almost immediately it won’t look like a PC. 23 I think it will have a tendency to blend in with the adjoining neighborhood. 24 25 I don’t know if this is the time, but a couple of small comments I guess. One of the a question 26 came up about Lot 1 as far as the side elevation of the particular residence and I do agree that 27 looking through this all the other lots that are a corner situation 4, 5, 8, 17, 20, and 21 do a 28 pretty good job at treating the corners or sort of the two sides are enhanced, but that isn’t the 29 case on Lot 1 and I think that probably can get some enhancement. I don’t think it needs to go 30 that far, but it’s more the articulation to get it up to that. 31 32 Also a couple of other things on going through the various styles the Prairie style I think to 33 make it a little bit more realistically Prairie style the pitch of the roof probably ought to be a 34 little flatter and the overhang a little bit larger. The Monterey Progressive I think you call it, I’m 35 not a big fan of combining hip and gable roofs or ends on the same roof so I think it ought to 36 be either one or the other. And all the other ones I think I’m relatively happy with so I think 37 that’s fine at this point. 38 39 Chair Lippert: Board Member Lew. 40 41 Board Member Lew: Great, so I have a couple questions for Stanford and this is just based on 42 the conditions of approval that I looked at today. So I think the staff is requiring a car wash 43 and I think it’s come up on some of our other big housing projects and I was wondering where 44 that was going to be located? 45 46 Mr. Wuthmann: Yes, we have discussed this with staff. It will be located in one of the 47 underground garages underneath one of the multi-family buildings, what we call Building 2 in 48 particular. 49 50 City of Palo Alto Page 19 Board Member Lew: Great, thank you. I have more questions for you Chris, thanks. And then 1 on [unintelligible] there are no fence details. I think there are descriptions of them and there 2 are some illustrative (interrupted) 3 4 Mr. Wuthmann: Correct. 5 6 Board Member Lew: Things like fences in some of the drawings. I think that, I was wondering 7 if that could be included or are you intending that to be included in the future submittal or 8 conditions of approval? The actual fence designs. 9 10 Mr. Wuthmann: Are you suggesting property line fences dividing houses or front yard 11 (interrupted) 12 13 Board Member Lew: Actually like all of that I mean that’s normally so on a regular project, not 14 this particular one, but I mean on other projects we would normally review them. I know this is 15 a little different case, but I think that we have if I’m reading this correct we do have the full 16 purview over landscaping? 17 18 Mr. Wuthmann: Yes. It’s correct, we have not detailed out all of the possibilities given the 19 amount of variety we will have. We do have some suggested details included in the plans. 20 Obviously we will comply with City ordinances with respect to fence heights and so forth, lines 21 of sight. Those will obviously have to be developed in the building permit submittal plans, but 22 we have not and we’ll be working with staff and being held to those standards in that process. 23 24 Board Member Lew: Great. And then I guess I have a question for you and maybe this is also 25 both for staff. There was a description saying that there’s no parking in the front setback along 26 California Avenue and [unintelligible] I guess maybe clarify for staff is that the parking is the 27 covered, is it just covered parking like the parking garage has to be at a setback? Right, but 28 the driveway? 29 30 Ms. Gerhardt: The required parking, single family homes are required to have one covered 31 space one uncovered. These have (interrupted) 32 33 Board Member Lew: Two. 34 35 Ms. Gerhardt: Two car garages so the driveway spaces are extra and not required. 36 37 Board Member Lew: Got it. That was my understanding too. Thank you. And I was wondering 38 also is there any, was there any discussion about mailboxes? So central… I mean now the Post 39 Office is requiring like central mailbox clusters and my main concern is that it’s if you’re doing 40 one for the whole project they’re big and they take up usually like parking spaces and whatnot. 41 And I was wondering if there was any general idea about how that would happen. 42 43 Mr. Wuthmann: We have not succeeded in having a conversation yet with the Postal Service. 44 45 Board Member Lew: They are very difficult. 46 47 Mr. Wuthmann: You may be aware that that’s difficult even after many requests. Our recent 48 project on the other side of College Terrace, the Olmsted Terrace on Stanford Avenue 39 49 homes, but again a small subdivision there we succeed in having clusters of mailboxes rather 50 City of Palo Alto Page 20 than one mailbox for the 39 homes. We hope to succeed in receiving approval of the same 1 kind of approach in this community. 2 3 Board Member Lew: Ok. How am I doing on time? I might wait until the next round. 4 5 Chair Lippert: You have another minute. Go ahead. But it’s soft. 6 7 Board Member Lew: Yeah, I know. I will wait. 8 9 Chair Lippert: Ok. 10 11 Mr. Wuthmann: Chairman Lippert may I just mention that in response to we had a backup slide 12 response to Board Member Gooyer’s comment about Lot 1 and how it will look driving up 13 California Avenue. It’s actually illustrated there. There’s very, very dense vegetation and some 14 major trees that Urban Forester wants us to retain and we will be retaining, so it will be actually 15 largely obscured. That said we will look at the articulation of that side of the house. Yep. 16 17 Board Member Gooyer: Yeah, I’m sorry I don’t buy there’s a tree in the way so I don’t need to 18 do the architecture behind it so… 19 20 Chair Lippert: Yeah, trees die. Ok, first of all I want to thank the applicant as well as the 21 members of the public for coming today. The elephant in the room obviously is traffic and 22 while we don’t directly have any purview over those issues today we’re here to review the 23 architecture and the quality and character of the development these issues will need to be 24 addressed because they are the most obvious. And so my suggestion to members of the 25 public, particularly Stanford is that with regard to traffic the impacts are that the neighbors 26 have concerns about going through the College Terrace neighborhood. So I think that Stanford 27 needs to enter into a dialogue with the residents there and begin to talk about and address the 28 concerns because they are simply not going to go away. 29 30 The flip side of that however is that I’m really appreciative of Jean McCown’s comments with 31 regard to some of the programs that Stanford has in place and the number of Stanford faculty 32 and workers that actually commute to the campus and how they do so. I know that Stanford 33 has a very robust Transportation Demand Management (TDM) program as well as an iPhone 34 and I assume Android app that actually tracks and monitors their employees because they do 35 get renumerated for their ability to use the TDM program. And so it’s to those I guess 36 resident’s benefit to find alternative means of transportation because they are actually 37 monitored and they are renumerated by the University to do that. So I think part of the 38 problem has been ultimately taken care of. Ultimately I think the Marguerite Shuttle will also 39 assist in trying to mitigate some of those impacts as well. Perhaps something can be done in a 40 dialogue with the College Terrace residences. 41 42 With regard to the design I, you’ve listened to our comments and you’ve come back. You’ve 43 addressed the majority of the concerns. I have a few very minor concerns that maybe the 44 project architects and planners Paul can you just briefly go through and talk a little bit about 45 how pedestrians and cyclists are going to be able to move through the site because that’s 46 ultimately important. Yeah. You’re the landscape architect, right? 47 48 Mr. Lettieri: Yeah. Yes I am. Thank you. Maybe the overall plan would be good, yes? 49 50 City of Palo Alto Page 21 Chair Lippert: Yes because particularly what’s important is how they move to El Camino Real 1 and how they move to Stanford University. 2 3 Mr. Lettieri: Well I mean I need to use the mouse. We have bicycles are really going to be 4 shared on the road all through the site because we have relatively low traffic counts on the 5 majority of the site. We have significant pedestrian circulation all the way around. We’ve got 6 sidewalks adjacent to all of the streets with the exception of the, on the right side of the plan 7 on Amherst. And we also have interconnections which are a little bit harder to see on the plan, 8 so that’s why I wanted the mouse. So we have a connection here that would take you between 9 homes down some stairs into this central open space, which has there’s a bunch of existing 10 oaks in this area that we’re saving. This coloration is those trees. So you can come down into 11 the space and walk over to the community center or walk out to California. You could also 12 obviously walk out to California this way, but you have this kind of internal circulation crossings 13 and the intersections have been enhanced to help slow down traffic at those points that we 14 think are major pedestrian crossings as at Columbia, here as well. 15 16 All the sidewalks are separated from the curb five feet nominally with the exception of Columbia 17 which is 12 to the face of curb so 11 and a half feet of planting area in that zone. So there’s, 18 and there are sidewalks on both sides. Circulation through the site even if you exit the multi-19 family you can come out this way and walk out to California on either one of these streets. And 20 internally the pedestrian circulation through the cottage patch area takes you out through a 21 little plaza space out to the street here as well. So we think we have a pretty good network of 22 pedestrian circulation all the way through and the ability to walk anywhere you want on the site 23 was out really a lot of conflicts with vehicles. 24 25 Chair Lippert: I just want to make one other statement here, which is a number of years ago 26 the City Council had actually requested that when new developments move forward actually I 27 think there might even be an ordinance on it that they follow the street patterns of existing 28 streets to reinforce those streets. And so in case of looking at this with regard to all of the 29 College Terrace streets those are meant to reinforce the existing street network. 30 31 Mr. Lettieri: Yes, absolutely. 32 33 Chair Lippert: Ok, we’ll go to a second round of questions and comments and hopefully a 34 Motion here and maybe we can get this wrapped up. Board Member Malone Prichard. 35 36 Board Member Malone Prichard: So as far as the design of the homes themselves the, just for 37 the public’s benefit these are not required to match the exact spacing and design of the other 38 houses. They are just supposed to approximate the rhythm and reflect the eclectic nature. I 39 do believe they’ve done a very good job of that. 40 41 The smaller items I have to talk about one of them is the fences along California. I was having 42 some difficulty understanding where exactly the fences are. I don’t know Paul if you want to 43 get up and talk a little more about that? But I’m specifically interested in there’s some corner 44 lots, Bowdoin and California, Columbia and California, Dartmouth and California, and all of the 45 houses on Block 1 some of the drawings appear to show fences coming all the way out to the 46 front property line. I was wondering if that was really the intent or if that’s just a drafting 47 glitch? 48 49 Mr. Lettieri: There’s a variety of fences and there’s also a number of lots that have no fences as 50 well. Again, picking up on the eclectic aspect and having a relationship to what’s happening in 51 City of Palo Alto Page 22 College Terrace so they’re not out to the property line. I’m not sure which lot you’re seeing 1 does that. We’re about five feet behind the sidewalk in just about every case where there’s a 2 fence. Looking at the corner of Columbia and California we do have a fence that returns, but 3 it’s five feet away from the sidewalk. It’s just sort of shown as a typical little fence diagram 4 with a little box with a line and box and a line (interrupted) 5 6 Board Member Malone Prichard: Yeah, with the dots in it. 7 8 Mr. Lettieri: Yeah. The other places where you’ll see just simple lines or just header boards 9 that are dividing plant material separations. 10 11 Board Member Malone Prichard: Ok. So I may have been reading some header boards there. I 12 was just concerned. I didn’t want this to feel more closed off than the rest of the neighborhood 13 again trying to reflect the eclecticism. If you look at and this may not be your drawing… 14 15 Mr. Lettieri: Oh it’s, no it’s not. 16 17 Board Member Malone Prichard: That one, SF.7A, thank you. If you look at the corner there 18 I’m seeing fencing all along and you’re right it is five feet back from the sidewalk but all along 19 that corner sort of closing off the front yard. I’m not sure any of the other projects do that 20 across the street. 21 22 Mr. Lettieri: At the corners? Which lot are you looking at in that? 23 24 Board Member Malone Prichard: That’s Lot 8. 25 26 Mr. Lettieri: Lot 8, ok. Yeah and (interrupted) 27 28 Board Member Malone Prichard: Lot 5 the same thing. 29 30 Mr. Lettieri: And there’s steps coming out. Lot 8 is one of those lots that also has a step in the 31 house itself, so there’s steps coming out to California so the garage entrance is flush with the 32 street coming in. But you’re right in that it does go all the way around, but it is also setback. 33 34 Board member Malone Prichard: So I wanted (interrupted) 35 36 Mr. Lettieri: It’s a yeah, low, it’s a yeah low decorative. These are not (interrupted) 37 38 Board Member Malone Prichard: It is a low fence, ok. There was one sheet note that showed it 39 as a six foot fence elsewhere. 40 41 Mr. Lettieri: No, no, no, no, no, no, no. Never is a six foot fence in the front. The only six foot 42 fences we have are property line fences that are behind; they start at the garage or a little 43 behind the garage between lots. Nothing in the foreground behind, in front of that. The 44 maximum height of those fences is 42 inches and those will probably vary too. There will 45 probably be some 36 inch high ones and some 42 inch high ones and I don’t think it’s our intent 46 to have any completely solid fences going down the entire space. It’s wood pickets, some 47 metal, there might be depending on the Santa Barbara house has some little bit of stucco, but 48 it’s still going to be low and it’s probably unlikely to be continuous either. So we’re trying to 49 have transparency there and have plant material do some separation. We have some hedges 50 on some of the houses that don’t have fences. We don’t have much in the way of hedges on 51 City of Palo Alto Page 23 the ones that have fences. There’s grass plantings that are in a row, so not really a hedge. So 1 that’s kind of how that works. 2 3 Board member Malone Prichard: Well, that’s what I’m looking for is some transparency on the 4 front so. 5 6 Mr. Lettieri: Yes, absolutely. 7 8 Board Member Malone Prichard: Great. Air conditioning unit locations I also picked out that 9 they seem to jump around a little bit. I just want to be sure that when they are placed that 10 they’re able to be meeting the noise ordinance. So that’s just a comment and something for 11 staff to follow up on. 12 13 And then the other one was just a finding comment on, not a finding, sorry. A condition of 14 approval comment on Page 10 of the conditions of approval and the Urban Forestry there’s a 15 comment about the landscape plans. And I believe it should clarify that we are reviewing the 16 landscape along the California Avenue frontage only. That’s Comment 59B. And that’s all. 17 18 Chair Lippert: Thank you very much. Vice-Chair Popp. 19 20 Vice-Chair Popp: Thank you very much. I too feel that the diversity of materials is very 21 reflective of Palo Alto and I think the richness of the landscape is pretty great. I like the limited 22 driveways and I think that the major contrast that I see here is that the cars and the driveways 23 are basically hidden off of California Avenue as you drive up that you won’t see those in the 24 same way that you do on the opposite side of the street. So I see some great improvements 25 there. 26 27 I’d like to ask staff I think Margit Aramburu handed you something as she was finishing. She 28 mentioned two additional studies that were done about noise. Do you have any information 29 about who performed those studies or what that was? Was it a professional study that was 30 done or something that was more ad hoc or how was that? 31 32 Ms. Gerhardt: We just received the studies a minute ago so I don’t, I haven’t had time to 33 review them. It looks like JET Mechanical did a sound level test at 1601 California and then 34 there’s a I guess a chiller maybe was going in at I don’t have an address for the second one. 35 36 Vice-Chair Popp: It’s just not clear what those are about yet, but ok. Thank you. I appreciate 37 that. That’s just what I needed to know. 38 39 The only comment that I have I think that isn’t resolved for me that hasn’t been mentioned 40 already is the issue of the building attached lighting on the houses along California Avenue. I 41 saw in your photometric study you’ve got information about the beams spread from the street 42 lighting, but I didn’t see identification of the types of light fixtures that will be mounted on the 43 house or what they will be. Did I miss that in the package? Or it’s a pretty thick little book 44 here so I’ll admit I may have missed something, but if that’s not detailed if you want to describe 45 that a little bit that would be great. Otherwise I think that’s something we’ll just ask you to 46 provide for us or provide for staff review to make sure that it complies with the night sky 47 regulations. 48 49 Chair Lippert: Does the house architect want to respond to that at all? 50 51 City of Palo Alto Page 24 Mr. Nestor: These frankly have not been selected at this point. They’ll be appropriate to the 1 individual styles of the houses. We are aware of dark sky ordinances so they will be shielded 2 where possible and they’re going to be typical of the kind of fixtures you would find in the 3 neighborhood or a typical house. 4 5 Vice-Chair Popp: Great. Alright, thank you very much. I think that’s all I have. Thank you. 6 7 Chair Lippert: Board Member Gooyer. 8 9 Board Member Gooyer: I don’t have any additional comments at this point. 10 11 Chair Lippert: Ok. Board Member Lew. 12 13 Board Member Lew: So I have some questions about the or maybe one question about the 14 materials for the multi-family housing. So I think I just have a comment first on the material is 15 that I think that, I think generally the palette is fairly handsome. I think there’s, we have a lot 16 of multi-family projects in the vicinity and a lot of them are pretty ugly. They all used like 17 cement board, but I think that your addition of board formed concrete stone and also having 18 like the vertical siding actually helped give it more richness and character than the typically very 19 blocky looking things that we’ve been seeing in the area. I do have a question about the 20 vertical siding. I was wondering if that is hardy panel and if it is like the vertical siding is a 21 panel not siding so I was wondering how are you doing all the joints because typically there 22 would be a baton or a vinyl channel or whatnot. 23 24 Mr. Israel: There will be, it will be a board and baton pattern. So we’re definitely using vertical 25 boards to express that verticality. It’s not just a curve in a panel. 26 27 Board Member Lew: Good, that’s great because there’s one, there are a couple of those hardy 28 panel things that don’t, would not pass muster here on the Board. So that’s a good answer. 29 30 And then you’re also showing two choices in railings and I was wondering if that’s are you 31 asking us for this or these are things you’re considering (interrupted) 32 33 Mr. Israel: Those are things we’ve been considering. WE haven’t studied them in detail so if 34 any of the members of the Board have specific preferences along that line we know what they 35 are not going to be, but we have not designed them specifically. 36 37 Board Member Lew: Great. And then on are there I think you’re showing that both buildings 38 are the same architecturally, but I was wondering are there variations between the two 39 buildings? 40 41 Mr. Israel: 8There’s variation in scale and how the materials, how they’re placed and where 42 they’re placed and obviously differences in the geometries. But we are trying to share that 43 characteristic so that it doesn’t get overly busy. 44 45 Board Member Lew: Ok that’s what, thank you for mentioning that. I think there are projects 46 here in Palo Alto that were not designed by you, but are too busy. And they made a whole 47 bunch of patterns in order to mask the bulk, but there’s no genuine variety. So at the end of 48 the day all the things that they did still look like a big bulky building and the, I think that the 49 key is just to [unintelligible] choice is just to figure out the right balance and I think that is the 50 from what I’m seeing I’m thinking you’re on the right track. I think that you’re doing the right 51 City of Palo Alto Page 25 moves from what I’m seeing. We don’t have all the plans or anything of your building so I can’t 1 really tell. I can’t make a complete judgment on that (interrupted) 2 3 Mr. Israel: Well thank you, but it is something that the Board mentioned last time. If you recall 4 we had a palette of materials and colors and I think the Board specifically referenced adding a 5 little additional richness and a little additional variety, which we responded to and think the 6 outcome of that has actually been quite successful and it has tended to warm up the character 7 of homes and so we’re quite pleased with that direction that we received. 8 9 Board Member Lew: Great. So thank you for that. And then I have some comments just on 10 the houses. One is I think you have a [unintelligible] some very interesting floor plans and 11 that’s not our purview, but it’s an interesting mix. I think you have done a good job of 12 providing a good mix of styles and although I don’t, I think that the adjacent neighbors are 13 complaining that it’s not, it doesn’t perfectly match and I think I would actually agree with them 14 that it doesn’t perfectly match what’s on the other side of the street I do feel like it does 15 capture the eclectic nature of College Terrace and College Terrace is very, very eclectic and I 16 mean I’d be hard pressed to figure out exactly what’s going on exactly in College Terrace, but I 17 think that you have more variety than we’ve seen in most of the other housing projects in Palo 18 Alto and the details, sort of illustrative details that you’re showing on the houses I think is at a 19 higher level than we typically see on other comparable projects. I think it’s basically it’s like all 20 it’s looking and just saying it’s generally the trend is looking good. Some of them are better 21 than others. I hope that the ones I think Board Member Gooyer mentioned a couple of them 22 and I agree with him. I think that I hope that those can look a little bit better going forward. 23 And I do like that you have a mix of one and two story houses. That’s sort of unusual these 24 days, but I think it’s very important to do that. 25 26 And I do have a question about let’s see… the, I guess this is a landscaping question. Your I 27 guess it’s Lots P1 and P10. I’m not sure if this may be out of our purview, but if it’s landscaping 28 maybe it’s in our purview. So I do support your shifting of the tot lot and I think the only thing 29 that I think makes it confusing is maybe trying to find the entrances to those houses. Like if 30 you were a visitor how would you kind of know to sort of go through the little tot lot to get to a 31 house? 32 33 Mr. Lettieri: Well you don’t actually go through the tot lot. I saw that comment. 34 35 Board Member Lew: Yeah. 36 37 Mr. Lettieri: Graphically it may be a little hard to see it, but we have a big probably transplanted 38 oak in the middle of that little plaza. There’s a, it says parent/guardian area with sea wall and 39 furniture. So you walk in through that space, which is outside the tot lot and then 40 [unintelligible] curve your way into the that paseo that runs through. You have some direction 41 from the folks that live there I think in terms of walking in at that spot. Tot lot will be 42 something that’s visible. It has a landmark to it so you can say it’s at the tot lot not through 43 the tot lot. And that’s the only, and that walkway is also connected to the crosswalk that goes 44 across Columbia so that even if you parked as a visitor on one of the streets anywhere you 45 would be able to walk across the street, either crosswalk and walk into that space. It is a little 46 bit, it’s a more secluded sort of little neighborhood there, but it’s still pretty accessible. 47 48 Board Member Lew: Can I say in a lot of developments like this there’s usually like some sort of 49 arbor or something to sort of pop out. 50 51 City of Palo Alto Page 26 Mr. Lettieri: Yeah we’re kind of using the, we’re really kind of using the tot lot furniture as that 1 marker because they’ll be, there’s three or four pieces of equipment there and we didn’t want 2 to just use the architectural analogy to busy up that whole thing with yet another structure. 3 (interrupted) 4 5 Board Member Lew: Right [unintelligible] 6 7 Mr. Lettieri: [Unintelligible] the play structure actually even though you don’t walk under them 8 or through them will be pretty visible. It won’t be screened out above eye level. You’ll be able 9 to see them when you drive in even. I think that’s important just from a neighborhood 10 surveillance eyes on the street sort of approach. 11 12 Board Member Lew: And is the tot lot fenced? 13 14 Mr. Lettieri: Yes. 15 16 Board Member Lew: Ok. 17 18 Mr. Lettieri: The fence is shown on the plans. Low fence. 19 20 Board Member Lew: Got it. Yeah, I saw that I just wasn’t sure exactly what that (interrupted) 21 22 Mr. Lettieri: And there’s a gate off that little parent/guardian area so that you would walk in 23 through a gate into the play zone itself. 24 25 Board Member Lew: Thanks. 26 27 Mr. Lettieri: You’re welcome. 28 29 Chair Lippert; Ok, I’ve got just a couple of questions. First of all I’m in agreement with Board 30 Member Popp’s comment with regard to the light fixtures. I think it’s particularly important and 31 integral to the design of the house. You just don’t simply go down to Home Depot and slap a 32 light fixture on there. So that’s something that’s particularly important to me. 33 34 In terms of the quality and character of a project what I tell my own clients there are three 35 things, four things that you’ll how should we say, either appreciate or curse me to my grave. 36 And those are your faucets because you touch them every single morning and if they’re hollow 37 you’ll know it and you’ll like go “Why did I put this faucet in?” The second thing is the 38 doorknobs. If they’re hollow you’ll curse me and everyday say, “Why did I bother to put those 39 in?” and you’ll change those out. We don’t have any purview over those. Your light fixtures 40 are particularly important because you turn them on every day and if they don’t look good and 41 they don’t create good lighting again you’re going to curse me. And so the last thing are the 42 windows and so I want to find out from the architect what kind of windows are we looking at 43 here in terms of this project? And when I say windows I’m very mindful that when you put 44 windows in a house you’re buying a car. 45 46 Mr. Nestor: Yes, the windows are set to be Andersen 400 Series windows. So they’re pretty 47 high quality windows. 48 49 Chair Lippert: So they are all clad aluminum? Ok, and then what about the exterior of the 50 houses? They are all integral stucco unless you’re using some other material? 51 City of Palo Alto Page 27 1 Mr. Nestor: That’s right. 2 3 Chair Lippert: Ok, great. And then the last question is the roof. I notice that you’re using some 4 comp shingle there and some of the roofs are tile and then there’s another one that’s a 5 cementitious material and then there’s a comp shingle. 6 7 Mr. Nestor: That’s right. 8 9 Chair Lippert: So any possibility of using like a simulated wood shingle on some of those? 10 11 Mr. Nestor: I suppose we can talk about that for sure. 12 13 Chair Lippert; Ok, because I think that that’s pretty important especially in… you know you’ve 14 gone to the length of putting a tile on the Spanish (interrupted) 15 16 Mr. Nestor: Clay tile, not concrete tile. 17 18 Chair Lippert: Correct, on those houses and then just simply for the Bungalow style I mean the 19 Arts and Crafts and the Prairie style houses, not so much on the Prairie style houses, but I think 20 on the Arts and Crafts style houses it would benefit from having some sort of simulated wood 21 shingle perhaps. 22 23 Mr. Nestor: Good suggestion. We will talk about that for sure. 24 25 Chair Lippert; Ok. So with that do I have a Motion? Mr. Popp. Vice-Chair Popp. 26 27 MOTION 28 29 Vice-Chair Popp: Yeah, I would be happy to make a Motion. So I’d like to move that we 30 approve this project based on the recommendations in the architectural review findings and 31 subject to the conditions of approval and any alterations that occur in further discussion of that 32 as long as it doesn’t substantially change an aspect which would be important for the ARB to 33 consider with the following items to be returned to staff for review, which would include the 34 fences and their details, material, placement and height. That we adjust in Attachment E, the 35 Conditions of Approval, Item Number 59B in the first sentence insert between the word “curb” 36 and “shall” the statement “along California Avenue.” That the building mounted fixtures for the 37 residential units along Cal Avenue, the light fixtures, excuse me, the light fixtures be submitted 38 for review and confirmation of their compliance with the requirements and that the composition 39 shingle roof be reconsidered for something of a different material and quality that might be 40 more compatible with the other roofs. That’s it. 41 42 Chair Lippert: Do I have a second on that? 43 44 SECOND 45 46 Board Member Gooyer: I’ll second. 47 48 Chair Lippert; Board Member Gooyer do you wish to speak to that? The second? 49 50 Board Member Gooyer: Yes. 51 City of Palo Alto Page 28 1 Chair Lippert: Do you have anything you want to add? 2 3 Board Member Gooyer: No, I’m fine. 4 5 Chair Lippert: Ok, great. Anything you want to say? Ok. Any other Board Members? Any 6 discussion? Ok. So with that do you have anything you want? 7 8 Board Member Lew: I just wanted to clarify so in our findings I just want to clarify that it’s of 9 the limit, it’s the limited purview that we have and that staff is actually reviewing a more 10 broader scope than what we have had to review, right? So. 11 12 Vice-Chair Popp: Right. My Motion is only in respect of the items which are within the ARB’s 13 purview today. Do I need to read those or? 14 15 Amy French, Chief Planning Official: Staff is reviewing the rest of the project for compliance 16 with City codes and standards for sure. So it’s just that the architectural review findings do not 17 have to be made for the remainder of this site. 18 19 Mr. Aknin: You don’t have to reiterate them. We know. 20 21 Vice-Chair Popp: Great, thank you. 22 23 Chair Lippert: So with that we’ll vote on this, on the Motion. All those in favor say Aye (aye). 24 Opposed? Ok and that passes 5-0-0-0, unanimously it passed. 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$FFHVVDQG&LUFXODWLRQ$QDO\VLVIRU&DOLIRUQLD$YHQXH+RXVLQJ3URMHFW0DUFK $UERULVW7UHH6XUYH\DQG7UHH3URWHFWLRQDQG3UHVHUYDWLRQ3ODQ$XJXVW *HRWHFKQLFDO,QYHVWLJDWLRQ6HSWHPEHU 3KDVH,DQG,,IRU&DOLIRUQLD$YHQXH 3KDVH,DQG,,IRU&DOLIRUQLD$YHQXH 3KDVH,IRU&DOLIRUQLD$YHQXH 1R)XUWKHU$FWLRQ5HTXHVWHGOHWWHUVIRUDQG&DOLIRUQLD$YHQXH 'HVFULSWLRQRI3KDVH,,,QYHVWLJDWLRQ$FWLYLWLHVIRU&DOLIRUQLD$YHQXH  A t t a c h m e n t J City of Palo Alto (ID # 4778) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 5/28/2014 City of Palo Alto Page 1 Summary Title: 1451-1601 Cal Ave - Tmap at PTC Title: 1451-1601 California Avenue [11PLN-00203]: Request by The Board of Trustees of the Leland Stanford Jr. University for a Tentative Map to Subdivide Three Parcels Totaling 16.97 Acres Into 83 Parcels: 68 Lots for Single Family Use, Two Condominium Lots for 112 Multi-Family Units, and 13 Private Street/Common Area Lots. Zone District: RP (AS2). Environmental Assessment: City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (State Clearinghouse No. 2003082103). From: :ŽĚŝĞ'ĞƌŚĂƌĚƚ͕^ĞŶŝŽƌWůĂŶŶĞƌ Lead Department: Planning and Community Environment Recommendation Staff recommends that the Planning and Transportation Commission (PTC) recommend that the City Council approve the tentative map based on the attached (draft) Record of Land Use Action (Attachment A) containing Findings and Conditions of Approval. Executive Summary The PTC is requested to review the Tentative Map application submitted by Stanford University (Applicant). The PTC’s purview is limited by an existing Development Agreement (Mayfield Development Agreement). The subject Tentative Map is consistent with the Palo Alto Comprehensive Plan, Zoning Ordinance, Mayfield Development Agreement and Performance Criteria. Therefore, staff recommends approval of the proposed Tentative Map application. The Director of Planning and Community Environment approved an Architectural Review (AR) application for development of this site, following public hearings and recommendation by the Architectural Review Board (ARB). On May 2nd, the Director’s approval was appealed to City Council. The appeal will appear on the Council consent calendar of June 2, 2014. The project includes replacement of an office/research & development campus with 180 residential units, a community center, a fitness building, swimming pool, and open space amenities. In order to ensure consistency between the Tentative Map and the separate AR, which is on appeal, Staff will defer Council’s action on the map until Council has decided whether to grant the AR appeal. Attachment K City of Palo Alto Page 2 Background Mayfield Development Agreement In 2005, the City of Palo Alto and Stanford University entered into the Mayfield Development Agreement (MDA). Under the MDA terms, Stanford University was to lease to the City of Palo Alto the 6-acre Mayfield site, located at the corner of Page Mill Road and El Camino Real, for $1 per year for 51 years. Stanford was to construct soccer fields on the Mayfield site at its expense and turn the fields over to the City upon completion, which was done in 2006. In turn, the MDA provided Stanford with vested rights to build 250 housing units on two sites in the Stanford Research Park, where R&D/office buildings exist today. The MDA granted Stanford the right to relocate 300,000 square feet (sf) of R&D/office floor area elsewhere within the Stanford Research Park. This amount of floor area is less than the amount of non-residential floor area to be demolished at the two designated housing sites. In addition, the City accepted the lease of the Mayfield soccer fields as mitigation for any potential community service impacts upon the City resulting from all future development at Stanford, as authorized by the General Use Permit, which was approved by the County of Santa Clara in December of 2000. Information regarding the MDA and associated Environmental Impact Report are located on the City’s website at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp Housing Sites The designated housing sites are commonly known as 2450, 2470, and 2500 El Camino Real (collectively referred to as the “El Camino Sites”), and 1451, 1501 and 1601 California Avenue (collectively referred to as the “California Sites”). The MDA required Stanford to submit AR applications for at least 185 of the 250 housing units by the end of 2013. Applications for the housing sites projects were submitted in 2013 and the Director approved the applications, following ARB hearings and recommendation. The subject project site is to be developed with 68 single family units and 112 multi-family units as proposed per application #13PLN-00433 (plans may be viewed at http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2436&TargetID=319). The mixed use building on the El Camino Real sites will provide both ground floor commercial space and 70 below market rate housing units (Application # 13PLN-00469), view plans at http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2505&TargetID=319); the Director’s AR approval for the El Camino mixed use project was not appealed to Council. All 250 housing units can be counted towards the City’s next Housing Element cycle. Applicable Zoning Standards The MDA allowed the applicant to use the AS2 Alternative Development Standards, contained in the Palo Alto Municipal Code (PAMC), Title 18 (Zoning), Chapter 18.60. The AS2 development standards table [PAMC Section 18.60.060(A)] outlines the physical constraints for the project. The AS2 standards establish the permitted residential and accessory uses, setbacks, building heights, parking ratios, design standards for residences along California Avenue, maximum floor City of Palo Alto Page 3 area ratio (FAR), maximum site coverage, and minimum usable open space. The only limitation on uses is the prohibition against any age-restricted housing. At this time, the housing is anticipated to be for Stanford faculty. MDA Architectural Review Process The MDA addresses the review process, applying the following limitations to the ARB’s purview: x Determine whether the project complies with the AS2 development standards and Architectural Review findings; and x Review and approve the lighting, noise levels, landscaping, and selection of the exterior materials and finishes of the buildings and other structures; and x Review is limited to the California Avenue edge of the California Sites, and then only to the extent that the projects submitted for approval do not already: o “Approximate the horizontal rhythm of building-to-side yard setback and façade areas, including the relationship of first and second stories, of California Avenue residential properties; and o Reflect the eclectic nature of the design of residences on the north side of the street and include similar opportunities for landscaping.” Commission Purview on Tentative Map The scope of the PTC review for the purposes of this Tentative Map application is limited to the "design" and "improvement" of the proposed subdivision. In this context, the terms "design" and "improvement" are defined in the Subdivision Map Act as follows: "Design" means: (1) street alignments, grades and widths; (2)drainage and sanitary facilities and utilities, including alignments and grades thereof; (3) location and size of all required easements and rights-of-way; (4) fire roads and firebreaks; (5) lot size and configuration; (6) traffic access; (7) grading; (8) land to be dedicated for park or recreational purposes; and (9) other specific physical requirements in the plan and configuration of the entire subdivision that are necessary to ensure consistency with, or implementation of, the general plan or any applicable specific plan as required pursuant to Section 66473.5. (Government Code, Subdivision Map Act Section 66418). The Subdivision Map Act (Government Code, section 66419) ,defines improvement as: (a) "Improvement" refers to any street work and utilities to be installed, or agreed to be installed, by the subdivider on the land to be used for public or private streets, highways, ways, and easements, as are necessary for the general use of the lot owners in the subdivision and local neighborhood traffic and drainage needs as a condition precedent to the approval and acceptance of the final map thereof; and (b) "Improvement" also refers to any other specific improvements or types of City of Palo Alto Page 4 improvements, the installation of which , either by the subdivider, by public agencies, by private utilities, by any other entity approved by the local agency, or by a combination thereof, is necessary to ensure consistency with, or implementation of, the general plan or any applicable specific plan. This purview is further limited by the Mayfield Development Agreement as described on pages 6 and 7 of the Study Session staff report that was present to the PTC on June 12, 2013 (Attachment E). For your reference, verbatim minutes from this meeting have also been attached (Attachment F). The design and improvement of the subdivision should be distinguished from the design of the approved structures to be located within the subdivision, which as previously mentioned, were reviewed and recommended for approval by the ARB and approved by the Director prior to the filing of an appeal. Site Information The project site is a 17 acre site located on the southwestern side of California Avenue, one parcel south of the California Avenue/Hanover Street intersection. The site is comprised of three parcels (site) (1451, 1501 and 1601 California Avenue) developed with three one-story and two story buildings containing a total of 290,220 square feet of floor area for office and research and development (R&D) uses, and surface parking lots. The site is surrounded by a mix of residential and commercial buildings. One and two-story single family residences are located along California Avenue to the west (College Terrace), two-story office and R&D buildings are located to the east along Page Mill Road, two-story office buildings are located to the north along Hanover Street, and a multi-story residential development is located outside the boundaries of Palo Alto to the south (Peter Coutts Circle; Stanford Lands in the jurisdiction of Santa Clara County). A location map is provided (Attachment B). Project Description The tentative map application is the first of a two-phased process to subdivide the existing three (3) parcels, totaling approximately 17 acres, into 68 single-family lots, two (2) condominium lots, and 13 private street/common area parcels, for a total of 83 parcels. Each single family lot would be developed with a single family home and two covered parking spaces. The condominium lots would each be developed with three- and four-story buildings for a total of 112 multi-family units. Parking facilities for each of the multifamily residential structures would be provided in an underground garage located under each building. Stanford intends to lease the units to members of the University faculty. The lots would be accessed from California Avenue, by way of three new private rights-of-way and other internal streets constructed on the site. Each entrance is designed as an extension of the existing College Terrace grid pattern of residential streets; Columbia, Bowdoin and Amherst Streets. 108 visitor parking spaces will be located along the private streets within the development. The applicant’s project description is provided as Attachment C. City of Palo Alto Page 5 Discussion Relationship to Appealed AR Application As noted, the Director approved the Architectural Review application, following public hearings and recommendation by the ARB; this approval was recently appealed and is subject to Council consideration on June 2, 2014. Should the Council remove the item from consent calendar and schedule the item for a Council public hearing, the June 23, 2014 Council meeting is currently targeted for that public hearing. This is the same hearing date staff has targeted for Council consideration of the Tentative Map application. The building footprints shown as building outlines on the Tentative Map are identical to the building locations shown in the plan sets reviewed by the ARB and Director. The AR approval findings recommended by staff and the ARB, and amended conditions of AR approval were included with the Director’s approval (Attachment D). The development was also reviewed for conformance with the City’s performance criteria for multi-family development during the AR process. The March 20, 2014 ARB staff report and excerpt verbatim minutes are provided as Attachment G and H, respectively. Zoning Compliance As allowed by the MDA, the applicant followed regulations of the AS2 zoning district, which allows a maximum of 15 dwelling units per acre of gross area. The proposed development, with 180 units on approximately 17 acres, would be 10.6 dwelling units per acre of gross land area, and therefore within the allowed maximum density. While the AS2 zoning district has no minimum lot size, the average single family home lot would be approximately 4,600 square feet and the two (2) condominium lots would be approximately 1.5 acres each. Staff determined that the proposed project is in compliance with the applicable AS2 development standards. A summary indicating the project’s conformance with these standards is provided in Attachment I. Circulation and Access The site would be developed with private, inter-connecting streets that would access California Avenue at three locations. These access points would be aligned directly across from the existing public streets (Amherst, Bowdoin, and Columbia Streets). The existing roadway of Amherst Street is 24 feet wide (within the 60 ft Right of Way (ROW)). The proposed Amherst extension would also be 24 feet wide, consisting of two 12 foot wide travel lanes, where it intersects California Avenue. Amherst would have a width of 36 feet (within a 53 ft ROW) after the street entrance (Plan set sheet TM6.1), to allow parking of automobiles on both sides of the street. The existing roadways of Bowdoin and Columbia Streets are 36 feet wide (within the 60 ft ROW), which includes space for parallel parking on both sides of the street. On the project site, Bowdoin would be 36 feet wide (within the 58 ft ROW) allowing for parking on both sides, and Columbia would be 24 feet wide, consisting of two 12 foot wide travel lanes, where it City of Palo Alto Page 6 intersects California Avenue. The width of Columbia Street would be 36 feet (within the 58 ft ROW) after the street entrance (Plan set sheet TM6.2), to allow parking on both sides of the street. These street widths comply with the Private Streets ordinance, in that private streets serving five or more lots must have a ROW of no less than thirty-two feet wide. Pedestrian circulation would consist of a continuous sidewalk throughout the site providing connectivity between the existing neighborhood and the proposed community, with the exception of the western edge of the Amherst extension. Given the terrain in this location, the addition of a sidewalk is not proposed as it would only serve 18 homes and would create the need for additional retaining walls at the back of the sidewalk. A sidewalk would be provided on the eastern side of the Amherst extension for use by all community members. Compliance with Mandatory Solar Option Law Effective January 1, 2011, all subdivisions of over 50 single family homes must comply with a new State law called the Mandatory Solar Option Law (codified at Cal. Pub. Res. Code §25405.5). Under this law, home sellers must provide optional solar energy systems to potential buyers. Production homes are defined as “single-family residence(s) constructed as part of a development of at least 50 homes per project”. This offered home solar energy system must provide at least one kilowatt, but no more than five megawatts. This is the first qualifying single family home project to be entitled in Palo Alto. POLICY IMPLICATIONS The proposed Tentative Map is consistent with the Comprehensive Plan, in that the site is designated “Research/Office Park”, a land use category that supports “residential or mixed uses that would benefit from the proximity to employment centers”. Single family and multi-family uses are consistent with the MDA and the site’s AS2 zoning. Design and compatibility policies were addressed by the ARB during public hearings, as was the project’s compliance with the AS2 zoning. As noted, the Director’s approval following the ARB’s recommendation has been appealed and will be considered by the City Council on June 2nd. ENVIRONMENTAL REVIEW In conformance with the California Environmental Quality Act (CEQA), an Environmental Impact Report was certified by the City Council for the Mayfield Development Agreement in 2005. The City of Palo Alto/Stanford Development Agreement and Lease Project Environmental Impact Report (EIR) (State Clearinghouse No. 2003082103) concluded that the proposed project would not have a significant effect on the environment with mitigation as proposed except there would be significant and unavoidable Noise impacts, due to the use of heavy equipment during construction. The certified, Final EIR is available for review on the City’s web site at: http://www.cityofpaloalto.org/gov/topics/projects/landuse/mayfield.asp Per the attached Environmental Confirmation Memo (Attachment J), there are no substantive changes to the previously approved project or circumstances under which the project is being undertaken and no new information, therefore the EIR provides the necessary environmental clearance for this subject project. All mitigation measures as stated in the approve Mitigation Monitoring and City of Palo Alto Page 7 Reporting Program (MMRP) (Attachment K) have been incorporated into the project as conditions of approval. PUBLIC OUTREACH The property owners and occupants within a 1,800 foot radius were sent public hearing notices for the PTC hearing. Staff has been available to discuss the proposal with interested members of the public and has sent e-mails to residents of the College Terrace neighborhood to answer questions and inform the stakeholders of this public hearing. The applicant has also met with members of the College Terrace Residences’ Association. Signage has been posted at the site to inform the public about the proposed project. The PTC Agenda has been available on the City’s website, which includes a copy of the staff report. NEXT STEPS Following this PTC review and recommendation, the Tentative Map application will be presented in a public hearing to the City Council for a decision. If Council approves the project, the applicant may apply for a final subdivision map (Final Map), the second phase of the subdivision process. The applicant will also be required to obtain official street names for the new streets. Street names are determined in conformance with the Palo Alto Municipal Code, Sections 21.20.140 and 21.28.160. This process would be completed concurrent with the Final subdivision map. Prior to entering the Final Map phase, the applicant will be required to submit improvement plans for the design of the new private right-of-ways including sidewalks, crosswalks and utilities. The Final Map, once submitted, is reviewed only by City Council on consent calendar. COURTESY COPY Christopher Wuthmann: cwuthman@stanford.edu Attachments: x Attachment A: Draft Record of Land Use Action TMap CalAve (DOC) x Attachment B: Location Map (PDF) x Attachment C: Applicants Project Description (PDF) x Attachment D: Directors Approval (PDF) x Attachment E: PTC Staff Report Mayfield DA Overview June 12, 2013 (PDF) x Attachment F: PTC Excerpt Minutes June 12, 2013 (PDF) x Attachment G: ARB Staff Report - March 20, 2014 (PDF) x Attachment H: ARB Excerpt Verbatim Minutes - March 20, 2014 (PDF) x Attachment I: AS2 Conformance Standards (PDF) x Attachment J: Environmental Confirmation Memo (PDF) x Attachment K: Mitigation Monitoring and Reporting Program (MMRP) (PDF) Planning and Transportation Commission 1 Draft Verbatim Minutes 2 May 28, 2014 3 4 EXCERPT 5 6 1451-1601 California Avenue (14PLN-00119): Request by Chris Wuthmann, on behalf of The 7 Board of Trustees of the Leland Stanford Jr. University, for a Tentative Map to subdivide three parcels 8 into 68 single family lots, one condominium lot for 58 multifamily units, and one condominium lot for 54 9 multifamily units for a total of 70 parcels in the RP-AS2 Zoning District. For more information, contact 10 Jodie Gerhardt at Jodie.gerhardt@cityofpaloalto.org 11 12 Chair Michael: So the next item is a concerns a Tentative Map to subdivide three parcels into 68 single 13 family lots, one condominium lot for 58 multifamily units, and one condominium lot for 54 multifamily 14 units for a total of 70 parcels in the RP-AS2 Zoning District and it’s located at 1451-1601 California 15 Avenue. And let’s begin this item with a staff report after Cara Silver educates us on our ethical 16 obligations and our purview. 17 18 Cara Silver, Senior Assistant City Attorney: Thank you. I just wanted to announce that Commissioner 19 Rosenblum will be recusing himself from this item on the grounds that his wife is employed by Stanford 20 University. So he will not be participating in this matter. 21 22 Chair Michael: Also I understand that in the agreement that between Stanford University and the City 23 there’s something will come up in the report from staff, but thank you very much. Well, I’m just going to 24 step out for just a moment. Hang on one second. Ok. And Jodie Gerhardt will give us the staff report. 25 Thank you very much. 26 27 Jodie Gerhardt, Senior Planner: Good evening, Jodie Gerhardt, Senior Planner for the City. Tonight the 28 Planning and Transportation Commission (PTC) is requested to review a Tentative Map application that 29 was submitted by Stanford University. The project site is approximately 17 acres located on the 30 southwestern end of California Avenue. It’s comprised of three commercial parcels that being 1451, 31 1501, and 1601 California Avenue. As described earlier the site is part of the Mayfield Development 32 Agreement, which in part provides Stanford with vested rights to build 250 housing units on two sites in 33 the Research Park area. The first site is the subject property and the second site is located at 2450 34 through 2500 El Camino Real. And I will have the City Attorney explain this in further detail in a moment. 35 36 The Tentative Map proposes to subdivide the three parcels into 68 single family lots, 2 condominium lots, 37 and 13 parcels for private streets and common area for a total of 83 parcels. The lots would be accessed 38 from California Avenue by three private driveways that extend the College Terrace grid pattern and would 39 accommodate 108 visitor parking spaces. 40 41 The proposal is consistent with the Comprehensive Plan. The sites AS2 zoning and the proposed street 42 widths comply with the City’s private street ordinance. The building footprints that are shown on the 43 Tentative Map are identical to the Architectural Review Board (ARB) application that was approved by the 44 Director on April 18th. This approval was recently appealed and will be the subject of Council 45 consideration on June 9th. Environmental review of the project was accomplished with certification of an 46 Environmental Impact Report (EIR) in 2005. This clearance was recently reviewed as part of the ARB 47 application and was determined to be in compliance with State and local regulations. 48 49 The PTC is therefore requested to review this proposal for 83 parcels and make a recommendation to the 50 City Council. I’d now like to turn it over to Cara Silver our Assistant City Attorney to better explain the 51 limited purview of the PTC tonight. Thank you. 52 53 Ms. Silver: Thank you Jodie. This is the first Tentative Map that the PTC has reviewed in quite some 54 time. Since we don’t have large developable pieces of property in the, in town it’s not very common to 55 1 have a Tentative Map come through this body. So I wanted to just explain what the Commission’s 1 purview is in connection with Tentative Map. 2 3 This is governed by a body of State law known as the Subdivision Map Act. We also have a series of 4 local regulations that are codified not in the City’s Zoning Code, but in Title 21 of the Palo Alto Municipal 5 Code. And what the State law and the series of local regulations do is they anticipate that the Planning 6 Commission is going to make a recommendation to the City Council. And the Planning Commission limits 7 its review to really the layout of the subdivision that is being proposed by the applicant. And when they 8 are reviewing that subdivision they look at several different consistency findings basically. And the 9 consistency findings that you will be making is that the subdivision the layout, the streets, the driveways, 10 the placement of the lots, residential lots, the common areas, the parks, that type of thing are consistent 11 with the Subdivision Map Act, consistent with Title 21 of the Municipal Code, consistent with the 12 Comprehensive Plan, with the Municipal Code, and with State law. 13 14 So this is a very in one sense broad purview. What you really the bulk of the findings are contained in 15 the State Subdivision Map Statute, which is very awkwardly framed in terms of negative findings. So it 16 says that you must deny a project if you can’t make, if you can make certain findings. So the inverse of 17 that is that you must approve the project if you cannot make the findings. This is one of these statutes 18 that practitioners wrestle with because of that double negative in there. So basically the Subdivision Map 19 Act findings that you will be looking at are contained in the staff report and those findings again written 20 in the negative are in Exhibit A of the staff report, Section 2. So that’s the general purview under 21 Subdivision Map law. 22 23 Then what you also need to do is to look at this with the gloss of course that this is subject to the 2005 24 Development Agreement. And so the Development Agreement places certain limitations on your 25 purview. As Jodie mentioned, the Development Agreement gives Stanford a vested right to construct a 26 certain number of housing units. And so the map is laid out to accommodate that number of housing 27 units. If you wanted to eliminate the number of the units built on the property you couldn’t do that 28 because the Development Agreement does grant that vested right to construct a certain number of units. 29 Also the Development Agreement of course was examined through a prior California Environment Quality 30 Act (CEQA) process so the traffic impacts, the construction impacts, all of the impacts of this project were 31 previously examined and mitigated through the earlier EIR. And so we have done some analysis to 32 refresh and update that CEQA process, but for the most part you must rely on the prior 2005 EIR. 33 34 And then finally the Development Agreement places limitations on the City’s ability to require certain 35 dedications in the subdivision map. It’s common for cities to require dedications of things like parks and 36 streets in these large developments and those provisions are being incorporated into this project, but 37 they were previously agreed upon in the earlier Development Agreement. So with that I will turn it back 38 to the Commission. 39 40 Chair Michael: I’m wondering after hearing the staff report and clarification on our purview is there 41 anyone from the applicant, from Stanford University, who is here this evening who would like to address 42 the Commission in support of the application? Sure. And you can have up to 15 minutes if you need. 43 Thanks. 44 45 Chris Wuthmann, Stanford University Real Estate Office: This will be shorter. Thank you very much 46 Commissioners, good evening. My name is Chris Wuthmann. I am with the Stanford University Real 47 Estate Office and Manager of the Upper California Housing, Mayfield Housing Project for which we are 48 seeking approval this evening of the Tentative Subdivision Map. My colleagues Tiffany Griego and Julie 49 Jones and I are responsible for implementing the 2005 Mayfield Development Agreement, which requires 50 Stanford to build this proposed housing. We appreciate the thorough and great work that Jodi Gerhardt 51 and other of City staff have done in preparing the project for tonight’s review. We are very excited to be 52 at this point in the project implementing a vision shaped 14 years ago when Stanford responded to the 53 City of Palo Alto’s request for help in finding sites within the Stanford Research Park for specific 54 community needs including 250 units of much needed housing, all of which are counted toward the City’s 55 next Housing Element cycle. 56 2 1 We are pleased that this Upper California Avenue Housing Project received the Director’s approval 2 following unanimous approval by the ARB on March 20th. The Tentative Subdivision Map for the Upper 3 California Project that you’re reviewing this evening will enable Stanford to sell the residences that will be 4 built to faculty members via leasehold interests. The map we are presenting tonight is the detailed 5 development of site plan concepts that were presented to you in study session almost one year ago now 6 reflecting numerous comments that have been made over this period. 7 8 Three key priorities have guided development of the site plan and Tentative Map. First, creation of a 9 community that transforms this corner of the Research Park and establishes its primary relationship as 10 with the College Terrace neighborhood through tying into the existing street grid pattern and complying 11 with and using the zoning’s graduated height limits to 1) cohere with your residential scale and character 12 of the existing homes fronting California Avenue; 2) to reflect the lot and house sizing of College Terrace 13 as much as possible; and 3) to enhance the buffering from the adjacent commercial properties and Page 14 Mill Road District. Second, assurance of safety through avoidance of sight and traffic blocking street 15 parking at project entrances, inclusion of connections to reach any residence from any of the three 16 entrances, and incorporation of Fire Department design comments with respect to fire suppression and 17 emergency response. And third, environmental consciousness through the adoption of College Terrace’s 18 extensive pedestrian circulation pattern protected from streets by landscape strips and the use of private 19 streets to avoid unnecessary overuse of hardscape and excessive creation of storm water runoff. 20 21 We and our many consultants who are here tonight would welcome the opportunity to address questions 22 that you have in more detail that we do not want to presume in our introduction. Thank you for your 23 attention this evening to these plans that have been developed to enable the effective and smart 24 functioning as well as attractive orientation of this community to the neighborhood to which it will relate. 25 Thank you. 26 27 Chair Michael: I just had just one maybe two questions before you sit down. One when I was out and 28 about the other day I looked at the local Palo Alto Post and it noted that there was an appeal that had 29 been lodged relative to compliance with the Fire Codes and you just referenced that in your remarks. 30 Can you clarify your understanding of how this development is in compliance with those Fire Codes or 31 maybe this is a question for staff. 32 33 Mr. Wuthmann: I do believe staff is prepared to address that. We have a consultant as well, Fire Code 34 consultant as well here to speak to it who has provided his professional third party review. The appeal 35 primarily does relate to Fire Code questions and their application to the project. We have met numerous 36 times with Palo Alto Fire Department as the site plan and Tentative Map have been developed, have 37 received their comments and made adjustments accordingly. Rather than explaining proper 38 understanding and application of the Fire Code myself I think I’ll take guidance from staff as to whether 39 staff should come up first before our consultant. 40 41 Ms. Gerhardt: Yes, we do have representatives from the Fire Department here if you have specific 42 questions related to the project and they can come speak with you. 43 44 Chair Michael: Ok, so perhaps we’ll get to that later. Then the other question I had was you indicated 45 that the housing is intended to be sold via long term leases to faculty? 46 47 Mr. Wuthmann: Correct. 48 49 Chair Michael: And then the Housing Element there’s issues related to low income, moderate income, 50 etcetera. Is it your understanding that of these units how that may be allocated among those such 51 categories? 52 53 Mr. Wuthmann: The Development Agreement provided two options for providing affordable housing 54 within the Mayfield, the required Mayfield housing. We selected the option that produces actually more 55 affordable units and that is done by creating a 100 percent affordable project at the El Camino site. So 56 3 that will provide 70 Below Market Rate (BMR) units in one community and they will be all provided within 1 that one community to take advantage among other things of tax advantaged financing to make that 2 possible and lower levels of affordability possible. So within the California Avenue project there will not 3 be any BMR units. 4 5 Chair Michael: Are there other questions of the applicant before he sits down or? Vice-Chair Keller. 6 7 Vice-Chair Keller: Just as a clarification on Chart TM5.4 indicates that there are two large parcels, pieces 8 of the parcel that have, are labeled for condominium purposes. I assume that those are some sort of 9 structured condos, multistory and that this Tentative Map provides for that and that that won’t come 10 back before us this is just indicating that that will be further subdivided, is that correct? I’m not sure if 11 that’s staff or the applicant that answers that question. 12 13 Amy French, Chief Planning Official: Yeah it’s a condominium map proceeds at a different track. This is a 14 two, there are two parcels within this application reflected and it’s noted that they’re for condominiums. 15 16 Vice-Chair Keller: So what’s the approval process for those condominium maps? Does that go through us 17 or is that simply staff level process? 18 19 Ms. French: Its Department of Finance I believe with the State that perfects those, you can tell we 20 haven’t gone through a lot of them here, but (interrupted) 21 22 Chair Michael: And for the (interrupted) 23 24 Ms. Gerhardt: From a City perspective where it’s just a one lot condo, but the details of that the CC&R’s 25 and things like that go through the State Department. 26 27 Chair Michael: So and for the minutes the first part of the answer was given by Current Planning Director 28 Amy French. 29 30 Vice-Chair Keller: Thank you. That clarifies the process. I have some of the in terms of the building and 31 that whole that building process will happen on all of these parcels. The building approval by the City? 32 This is just a Tentative Map. 33 34 Ms. Gerhardt: Yes, we have a multifamily condo building on those two parcels. We also have the 68 35 single family homes. Those were reviewed by the ARB and will of course get their building permits. 36 37 Vice-Chair Keller: Great, thank you. 38 39 Chair Michael: Ok, with that thank you very much. Let’s move to speaker cards from members of the 40 public. Vice-Chair Keller I believe we have some cards and if anybody else who has arrived would like to 41 submit a card and be recognized please come on up. 42 43 Vice-Chair Keller: Yes, the first card is from Fred Balin and you will have three minutes. 44 45 Fred Balin: Good evening, Fred Balin of College Terrace. This hearing is premature. I am the appellant 46 regarding the approval prior to this hearing. The grounds are solid as there are clear violations of the 47 Fire Code as adopted by the City last fall. I have been in contact with the State Fire Marshall’s Office 48 trying to talk to the highest levels and the most senior person I have spoken to and who is in the 49 department that develops the State Code agrees with my appeal on this issue. If this appeal is heard by 50 the Council and action is taken the Map will need to be withdrawn. It would seem more logical to wait 51 for Council decision on the appeal prior to this hearing. 52 53 But as we are here I’ll mention two other items. In addition to fire roads and fire breaks the definition of 54 design in the Subdivision Map Act quoted in the staff report includes such items as street alignments and 55 widths, traffic access, and grading. First, tonight’s staff report on circulation and access and Mr. 56 4 Wuthmann’s comments makes reference to various street segments that are in compliance with the 1 private streets initiative; however, significant sections of those streets are not in compliance that being at 2 least 150 foot stretch of Columbia Street, a 30 foot stretch of Amherst, and each of the four dead end 3 streets referred to as residential driveways, all 26 feet or less than 26 feet. 4 5 Finally, with regard to grading this project is on an incline. In College Terrace across California Avenue 6 properties lay in a straight line up the slope, but there are still sidewalks on each side of the street. 7 Mayfield will be terraced and the applicant proposes to build a sidewalk on only one side of Amherst 8 Street, of the Amherst Street extension into the project because it would only serve 18 homes. That’s 9 over a quarter of the single family units in the development. Why should expense be shared to deprive 10 these units of sidewalks? This comment has been mentioned in the context of the ARB findings, which 11 are equivalent to the Map Act findings here except stated in a kind of alternate way as the City Attorney 12 described. Thank you. 13 14 Vice-Chair Keller: The next speaker is Robert Moss. You’ll also have three minutes. 15 16 Robert Moss: Yeah thank you Commissioners. There’s an issue that is being overlooked in developing 17 this site and as an example on the last portion you got it talks about the environment. Page 9 talks 18 about hazardous materials and it completely overlooks the fact that this area is impacted by the toxic 19 plume from 640 and 1501 Page Mill. The plume doesn’t go as far as California Avenue, but in recent 20 years there’s been a lot of new information. It’s only been a year and a half that it was certified that 21 trichloroethene (TCE) is a carcinogen. And it’s been less than a year ago that it was also verified that if 22 woman who was pregnant is exposed to TCE for as little as three months the fetus is almost highly 23 probable to have birth defects. 24 25 Now because the plume doesn’t extend as far as California Avenue at first I thought there wasn’t going to 26 be a problem on these sites, but early this year in Mountain View I’m also I’ve been a member of the 27 Grant Park Association Foundation for over a quarter century and the Environmental Protection Agency 28 (EPA) gave us oversight of the toxics in Palo Alto, the Superfund Sites. And for 17 years I’ve been a 29 member of the Restoration Advisory Board at Moffett Field, which is looking at the toxics in Mountain 30 View and with Moffett Field. And just earlier this year EPA did some studies looking for toxics, TCE as far 31 as a half mile away from the plume and they found extremely high concentrations, over 100,000 part per 32 billion (ppb) of TCE. 33 34 For your information along El Camino opposite Sheridan there’s a monitoring well which has TCE 35 concentrations of 440 ppb and the acceptable level for residential areas, right now this is nonresidential is 36 .5. So we have toxic levels about 880 times higher than what would be allowed in a residential area. 37 And there are no provisions made for doing extensive surveys to find out how far the TCE plume extends 38 and no requirements that the housing be built with proper mitigation such as vapor barriers and sub slab 39 ventilation. As an example when a project came in which you may recall at the Santa Clara Valley 40 Transportation Authority (VTA) site at 2755 El Camino originally there was no comment made about the 41 toxics. When I mentioned it to Roger Pappler at the Regional Water Quality Control Board and it’s the 42 Water Board you should be talking to, not VTSC, he came back with a stack of requirements for anything 43 that was built on that site in order to mitigate the exposure of people who live there to toxics, especially 44 TCE. So in this case you should better step back, fully examine the site, fully examine where the toxics 45 are and if any mitigations are required impose them otherwise people will die. 46 47 Vice-Chair Keller: And our final speaker is Herb Borock. Herb? 48 49 Herb Borock: Thank you, sorry for the delay. I expected, I thought they had more speaker cards. I 50 believe you should continue this item until after the Council acts on the appeal of the Architectural 51 Review application and decision of the Director. In the past staff has brought Tentative Map applications 52 such as this to you after project approval for the simple reason that you’re being asked to approve a map 53 for a specific project. There is no project that has been approved. That’s what the appeal has done; the 54 appeal has stopped the approval and essentially suspended or reversed it. 55 56 5 The scheduling of this hearing was based upon the assumption that there was an approval of 1 Architectural Review. It did not take into account that there would be an appeal and there has been no 2 action taken legally anymore on the Architectural Review approval. In fact, the record of land use action 3 that you’re being asked to make a recommendation to the Council on talks about a future approval. It is 4 assuming that there’s been an approval on June 23rd by the City Council. So the process that you’re 5 being asked to take I believe is a violation of the Planning and Zoning Law and therefore a prejudicial 6 abuse of discretion and a violation of the CEQA. For that reason I believe the appropriate action for you 7 is to continue this hearing and leave the public hearing open until after the Council acts on the appeal 8 that Mr. Balin has made. Thank you. 9 10 Chair Michael: Ok, so that concludes the speaker cards that have been submitted thus far. I’m a retired 11 lawyer. Like Mr. Alcheck I often fall back on that training in moments of problem solving. It’s not always 12 appropriate, but perhaps I’m turning to staff and Senior Assistant City Attorney Silver if the issue of 13 sequence in which the Commission and the Council are acting on this is as alleged maybe inappropriate 14 in that first thing should come first. If the appeal is granted that seems to address issues of design of 15 the streets perhaps with respect to compliance with the Fire Code, which is under dispute and we’re not 16 going to resolve that here tonight. Then it seems it would come back to us, it would reopen the question 17 of the design that would be in compliance with the applicable rules. So can you maybe advise us as to 18 the appropriateness of our acting in this this evening or perhaps waiting until the appeal has run its 19 course and Council has used its responsibilities? 20 21 Ms. Silver: Yes, thank you Chair Michael and Commission. So there are obviously different options here. 22 If the applicant, what the applicant is hoping is that the appeal will be denied and so the applicant has 23 requested that the, this application go forward at the Planning Commission. And they are entitled to 24 have the Commission hear the item and then if the Commission makes a recommendation, the appeal is 25 denied, and then it goes up to Council then the sequence is fine. There would be no problems there. If 26 the Commission makes a recommendation to Council tonight, and the appeal is granted then, and the 27 Council hears the item and makes suggestions for redesigning the streets that would have an impact on 28 the subdivision then it’s possible that the Council would benefit from additional review by this body. It’s 29 also possible that the Council’s recommendations or ruling on the appeal are limited to an extent where 30 the subdivision map could actually go forward to the Council. 31 32 So it’s I think that it’s… we’re talking theoretically here and the appeal itself is not before this Commission 33 of course and we haven’t gotten into analyzing those issues. So my recommendation would be to go 34 forward with this hearing tonight and then if the Council does grant the appeal staff will certainly 35 evaluate whether it makes sense from an efficiency standpoint to delay Council’s action on the 36 subdivision map. 37 38 Ms. Gitelman: Maybe I can jump in on that and just say, make one clarifying comment, which is the City 39 Council is the final decision maker on the map. So you’re making a recommendation this evening, the 40 Council will be the final decision maker on the appeal and on the map. And so we think it’s appropriate 41 for you to make your recommendation this evening as Cara has indicated. There’s a possibility that 42 Council if this all goes in the direction of upholding the appeal could want to send it back to you, but 43 there’s also a possibility that they could either deny the appeal or in upholding the appeal not make such 44 substantive changes that it would have to come back to you for another recommendation since as I said 45 they are the final decision maker on the map. So we’ve given this quite a bit of thought. We think it is 46 appropriate for the Commission to consider this matter this evening. 47 48 Chair Michael: Thank you, that’s helpful. And we have no more speaker cards. Let’s come back to the 49 Commission and give people five minutes. Who would like to start? 50 51 Ms. Gitelman: Chair Michael if I could ask your indulgence there was another comment about the 52 hazardous materials issue that I was hoping that staff could respond to on the record? 53 54 Chair Michael: Yes, please. 55 56 6 Ms. Gerhardt: Thank you. At the end of your packet is the environmental confirmation memo 1 (interrupted) 2 3 Chair Michael: And this is Jodie Gerhardt speaking. 4 5 Ms. Gerhardt: Yes, Jodie Gerhardt, Senior Planner. Staff did as part of the ARB and the Tentative Map 6 application staff took a look at the 2005 EIR that was certified by Council. We made sure that all of the 7 relevant information was current. Part of what Stanford did in the time between 2005 and now they 8 have done extensive hazardous material analysis. They have Phase 1 and Phase 2 reports that were 9 turned into the City and more importantly were turned into DCSC. On two of the parcels they have 10 already received letters of no further action required. On the 1601 property there is additional analysis 11 required, but mainly that’s because there’s an existing building and existing tenant so they weren’t able 12 to go into that property and do as much analysis as required, but we assume that very quickly there will 13 be a no further action letter on that property as well. And that will be, Planning will follow through on 14 that through the building process assuming we get there. 15 16 Chair Michael: Thank you for clarifying that. So just to set the stage a bit it’s my understanding as we’ve 17 been instructed that the appeal has been lodged from the ARB decision is not before the Planning 18 Commission tonight. That’s going to Council. So that may be granted, it may be denied, it may have 19 merits or not, but that’s not our issue. The EIR compliance with CEQA and all that is also not on our 20 plate tonight. But what we have according to our purview is any recommendations relating to the design 21 or improvements as defined in the materials that we have and with that we can make a valuable 22 contribution to the Palo Alto process. That correct? Ok. Who wants to start? Commissioner Alcheck. 23 24 Commissioner Alcheck: Ok, thank you staff. I agree with that assessment. I think we have, we’re in a 25 unique opportunity here to potentially speed up a process, be very efficient. If for some reason this has 26 to come back to us it will and we have the public here and they’ve been noticed and I think it’s a really 27 good opportunity to give them an opportunity to address us. So I’m glad that we’re pursuing this review. 28 And thanks for that last, it’s unfortunate you stepped out at that moment because I think that 29 environmental response would have benefited our one speaker on that issue. 30 31 I reviewed the staff report and I have a lot of faith in our staff and the Director’s approval. It seems to 32 me like they’ve met every condition of the Agreement and the potential issues of controversy are the size 33 of the widths of the street and this sidewalk. Would you mind just spending a minute or two explaining 34 sort of the significance of the, someone said the 18 homes? I think that represents actually 10 percent of 35 180 units. So can you just shed some light on the significance of this one little area of sidewalk? 36 37 Ms. Gerhardt: Yes, just one second. So the map in front of you and on the screen here is actually the 38 ARB approved site plan so that a little more detailed than is needed for tonight, but may help in the 39 conversation. The sidewalk that was discussed earlier by the public on Amherst on the I guess right 40 hand side as we’re seeing it here, that side of Amherst on this new property would not have a sidewalk 41 because of the terrain it would force additional retaining walls to happen in that area if we were to put a 42 sidewalk there (interrupted) 43 44 Commissioner Alcheck: Is that the. 45 46 Ms. Gerhardt: There is a sidewalk on the other side of Amherst. 47 48 Commissioner Alcheck: Is that the side 21 through 31? 49 50 Ms. Gerhardt: Those are, yeah, 31 through 20 something, yes. Sorry, my eyes are getting older. And so 51 that’s where there are only sidewalks on one side of the new Amherst. And as far as you were asking 52 about street widths as well, there are some the right of way, I think it’s either 58 for, 58 foot right of way 53 for the new Bowdoin. We have whereas the existing right of ways are 60 feet so we’re talking about two 54 feet less of right of way. The drive aisles, the actual driving space is 12 foot drive aisles. Those are the 55 same on the old Bowdoin, the new Bowdoin, on all of the different streets there. What happens is at the 56 7 entrance when you’re first entering the project on all of those three ABC streets there is sort of bulb outs. 1 So landscaping bulb outs that do narrow down that kind of entrance, but it’s really just narrowing down 2 you can’t park there at the entrance, but it’s still the same drive aisle width. And so once you get onto 3 the project then you’re able, it widens up so that there is room for parking. 4 5 Commissioner Alcheck: And is there something that makes the Columbia Street different? I mean where 6 the, I guess the width is a little bit smaller, is that right? And is there other circumstances that make that 7 street a little different on both sides or just on the project side? 8 9 Ms. Gerhardt: You’re asking about Amherst? 10 11 Commissioner Alcheck: I’m asking about Columbia. 12 13 Ms. Gerhardt: About Columbia? 14 15 Commissioner Alcheck: Or did I read that wrong? Was Columbia less? 16 17 Ms. Gerhardt: Columbia is the one that dead ends into the multifamily. 18 19 Commissioner Alcheck: Right. 20 21 Ms. Gerhardt: And Columbia, on Columbia I believe the… so the right of way for that is the 58 foot right 22 of way with the 36 foot wide street that accommodates drive aisles and parking. What happens on 23 Columbia is that there’s more of a bulb out. So there’s at the entrance is sort of longer on that particular 24 street than the other streets. 25 26 MOTION 27 28 Commissioner Alcheck: Ok. Ok, alright. Thank you for that explanation. Well, I support recommending 29 to Council that they approve this Tentative Map and I was, I will pay attention to the appeal and the 30 result of that appeal. I don’t think the item appealed is part of our review at all so, but I’m sort of 31 delighted to see that the all the requirements were met and in some cases actually they didn’t necessarily 32 push the limit of some of those sort of standards that are set. So I guess I’ll make a Motion that we 33 approve, that we accept, that we accept staff’s recommendation and I’ll allow the Commissioners to sort 34 of discuss it and second it on their time. 35 36 SECOND 37 38 Chair Michael: So it was a Motion by Commissioner Alcheck and second by Commissioner King, but before 39 I ask you to speak to the Motion let’s just continue with the round of questions or comments. 40 Commissioner King would you like to go next? 41 42 Commissioner King: Thank you, yes. I really don’t have anything to add. It seems like the appeal will 43 deal with the issues downstream. I recommend, I believe in moving it forward. In fact, if in fact the 44 appeal, well regardless of whether the appeal is successful or unsuccessful the sooner the project starts 45 my understanding from reading the documents is that Stanford has, does have some capacity to have a 46 through route for construction trucks at the initial stages through a date certain in 2015. And so the 47 sooner the project gets started the more benefit from that to the residents. So I’m excited to move 48 forward and get some more housing. Thanks. 49 50 Chair Michael: Commissioner Gardias? 51 52 Commissioner Gardias: Just a quick question to add to the questions that prior Commissioner had about 53 Amherst. What was the condition that precluding of widening Amherst as it enters the development area 54 by this two feet? What was the limitation? 55 56 8 Ms. Gerhardt: The limitation is grading. The site as you go towards Amherst the site is climbing up 1 towards the Peter Coutts area. And so there’s, it gets steeper and steeper as you get closer to that side 2 of the property. And so it just requires additional retaining walls if we were to put in a sidewalk on the 3 second side of the street. 4 5 Commissioner Gardias: I understand, but I think that this is the same as it on Amherst today, right? 6 Because they are the same grading unless it’s greater than existing one? 7 8 Ms. Gerhardt: There is existing houses on both side of the existing portion of Amherst that has hilly 9 terrain as well. That portion of Amherst is also fairly narrow whereas this new portion of Amherst is 10 trying to meet current standards. 11 12 Commissioner Gardias: I see. Thank you. 13 14 Chair Michael: Commissioner Tanaka. 15 16 Commissioner Tanaka: Yes, can you tell me which is the road that’s going to be going to the 17 construction? Like through road? Which one is it ABC? Do you know? 18 19 Ms. Gerhardt: You’re asking about the construction traffic? I believe it’s out through Page Mill. Stanford 20 has offered a temporary construction route that will be further defined through our logistics plan and that 21 I believe is through 1450 Page Mill. 22 23 Commissioner Tanaka: Ok, but that’s not indicated on the map anywhere in terms of how that’s... 24 25 Ms. Gerhardt: No, because again it will be further refined in the logistics plan that Public Works will 26 approve. But that’s been documented in letters from Stanford that the construction access would be 27 through 1450, but they do have a date limit to that. 28 29 Commissioner Tanaka: Ok. Is there any reason why that road can’t continue even after the project’s 30 been built? 31 32 Ms. Gerhardt: That’s Stanford owned property so we’d want to ask them that question, but it is not a 33 requirement. We did the traffic analysis and that was not deemed to be necessary as through that 34 process. 35 36 Commissioner Tanaka: I realize Amherst is more narrow on the College Terrace side versus this property. 37 And then I realize from the comments that it would take a retaining wall to have a sidewalk there, but to 38 be consistent I mean I think there actually is some retaining walls on the Amherst side. Why I guess I’m 39 trying to understand why would you or why would the property not be consistent and why would they 40 not have sidewalks on both sides? 41 42 Ms. Gerhardt: I’d want to look up the height of the existing retaining walls. I need to confirm it, but I 43 have a feeling that the existing proposed walls are in the three foot range and I don’t know what we 44 would be talking about five to six foot retaining walls if we were trying to get a sidewalk in there. So I’d 45 need to confirm those numbers, but that was the sense we have and the reason we didn’t push the 46 issue. 47 48 Commissioner Tanaka: Ok. Can someone from Stanford talk about how the I guess the two questions I 49 asked staff: one, which is the construction route; and the second is the reasons why that can’t continue 50 through the property? 51 52 Tiffany Griego, Stanford Research Park: Good evening, my name’s Tiffany Griego. I’m the Director of the 53 Stanford Research Park. I’m really pleased to be here tonight and really grateful to staff for preparing an 54 excellent staff report. I’m happy to respond to the questions. Some of you probably recall that I 55 responded to similar questions about a year ago. 56 9 1 And so in terms of the construction access route we have been engaged in multiple years of community 2 dialog with College Terrace and in fact Brent Barker’s not here tonight, but I would actually like to thank 3 him on the public record for a really cordial and productive conversation that we’ve had with him. He has 4 been very forthcoming that construction impacts has been the number one priority of the neighborhood. 5 And we have listened to him very seriously and taken their concerns very seriously. And while 6 construction traffic impacts were indeed studied as part of the certified EIR and no basis was determined 7 for what we have offered, we have gone ahead and found ourselves in a fortuitous circumstance where 8 there’s no underlying ground lease at 1450 Page Mill and as a result we can make something happen 9 there. So what we have done in response to their primary concern is made a commitment through a 10 date certain that we will have our heaviest truck traffic go through that route. It will be a supplemental 11 route. We will still need access through other portions of the site and really that’s to expedite the project 12 as quickly as possible because clearly everybody wants this to get done as quickly as possible. But the 13 period of time in which we’re willing to offer this additional route through 1450 coincides really well with 14 the heaviest truck traffic and demolition and grading and all the off haul associated with that. So we are 15 willing to honor that commitment and we’ve said so in writing. 16 17 To the permanent access we as we discussed tonight have studied the traffic impacts as part of the 18 certified EIR in 2005. And traffic will be reduced as compared to the existing traffic here from the 19 commercial properties. So there’s no basis for asking for a commercial parcel to be permanently turned 20 into a public road. And so we think that really the goal here as Chris so eloquently stated, the goal is to 21 stitch the seam to bring the neighborhood into a position where it integrates well with College Terrace, it 22 becomes part of that neighborhood, it’s done through planning and that was always the guiding principle 23 when this Development Agreement was signed. And we think that not only is it probably unsafe to route 24 people through a commercial parcel, through the middle of a parking lot, it’s just in our view not 25 appropriate and it mixes incompatible uses and so we are not offering that. Thank you for asking the 26 question, I appreciate the opportunity to discuss it. 27 28 Commissioner Tanaka: Can I ask one last question? So is there access currently today from these parcels 29 to the other parcel? 30 31 Ms. Griego: There are actually trees that are blocking 1450 Page Mill and the property line that you see 32 where the construction route would happen we recently received approval from Dave Dockter to remove 33 those trees to make way for the construction access. So no there’s not currently a connection. 34 35 Commissioner Tanaka: Ok, thank you. 36 37 Ms. Griego: Thank you. 38 39 Chair Michael: Vice-Chair Keller. 40 41 Vice-Chair Keller: Thank you, a few questions for staff. The first question is with respect to the Private 42 Street Ordinance. Under the Development Agreement does the Private Street Ordinance actually apply to 43 this project? 44 45 Ms. Silver: No, it doesn’t. The Development Agreement does lock in the ordinances that were in place in 46 2005. So technically it does not apply, but my understanding is that the project voluntarily is going to be 47 complying with the Private Streets Ordinance. 48 49 Vice-Chair Keller: Thank you and did the Private Streets Ordinance require a sidewalk or not? What was 50 the nature of that if to the extent that this complies? 51 52 Ms. Gerhardt: The Private Streets Ordinance just requires the 32 foot right of way and normally in 32 feet 53 you would not be able to accommodate a sidewalk that would usually just be drive aisles and parking and 54 that’s even fairly small for that. 55 56 10 Vice-Chair Keller: Thank you. Also to what extent is the presence or absence of sidewalks a something 1 which is within the purview of our Tentative Map approval or not? Could you give us guidance on that? 2 3 Ms. Silver: Generally sidewalks, curb and gutter, and pavement of streets is within your purview. 4 5 Vice-Chair Keller: Thank you. And to what extent when I guess what happens when this ordinance, 6 sorry, when the appeal goes before the City Council and let’s assume that the City Council modifies the 7 Tentative Map. What’s the threshold as to, modifies the project in such a way that the Tentative Map 8 may need amendment. To what extent is the threshold for whether it comes back before us or not? 9 10 Ms. Silver: Well I, there really isn’t a codified threshold. I think that it would be upon direction of the 11 Council. So if the Council were able to quickly decide the subdivision map issue without your 12 recommendation then it could take up the item. If there was substantive restructuring or reconfiguration 13 then it’s most likely that either staff would recommend that it go back to you or just bring it back to you 14 in the first instance or Council would order it back to the Commission. 15 16 Vice-Chair Keller: Thank you. And finally I’ll reference the comment that was made by one of the 17 members of the Commission also, which is that to the extent that this project is delayed there will be to 18 my understanding reduced ability to use the pathway to for construction to Page Mill Road. And thereby 19 delay of this project further will increase the impact on the neighborhood and I personally am voting on 20 this with the understanding that we are not considering the appeal and that the appeal requires 21 consideration further by the Council and that will be done that will occur. And then if the appeal is 22 decided in such a way that no further consideration is needed by the Commission then obviously this 23 does expedite it so that the neighborhood could benefit from the faster time to the project starting 24 construction so that roadway can be used more for a longer period of time. Thank you. 25 26 Chair Michael: As is often the case a number of the questions or comments that I might have considered 27 have been raised by my colleagues, but I just want to acknowledge that when this matter came before 28 us in a prior step in the process there was a considerable discussion with representatives from the 29 College Terrace Neighborhood Association who had pretty serious concerns about I think the construction 30 noise. And I think that’s been addressed this evening and with reference to the fact that discussions 31 have been had with the applicant and the Neighborhood Association over the years and recently and I 32 am going to infer from the absence of representatives of the Neighborhood Association this evening that 33 those discussions were productive and fruitful and participated in sincerely by both sides. And I want to 34 just congratulate all sides for engaging and having that quality of collaboration because it was quite 35 serious last time and it’s very quiet now; so good job. 36 37 So with that I think our process will have the maker of the Motion have the chance to make comments 38 followed by the seconder. And then I want to ask the applicant to come and add any remarks that you’d 39 like to make in relationship to the Motion if any. So Commissioner Alcheck you made the Motion. 40 41 Commissioner Alcheck: Thank you. I hadn’t heard that quote about stitching the neighborhood, the 42 seam. I love that. That is exactly what my review concluded and I’m almost sort of shocked at this sort 43 of ongoing discussion about finding a path through the neighboring parcel. I’m philosophically opposed 44 to the notion that you could burden a neighboring parcel with a right of way simply because people want 45 to cut through, which is exactly what it’s about in my opinion. This discussion about opening a road 46 through the neighboring parcel is an opportunity for College Terrace residents to get to Page Mill faster. 47 And I think it would absolutely destroy the neighborhood feel that you’re going to try to create here, a 48 safe space for 180 potential families or 180 residents of different not necessarily all of them will be 49 families. 50 51 But we discuss a lot about housing in the last several meetings and I don’t think anybody here is 52 insensitive to the notion that the cost of housing here is tremendous and I applaud Stanford’s effort to 53 provide housing to its staff that is more affordable than the existing housing stock immediately 54 surrounding the University. If only Palo Alto would provide its own staff. Seriously, it’s something to 55 think about. 56 11 1 And I don’t know if this is why you set a time limit to this construction access path, but I encourage you 2 and any other private developer to learn from this, which is to provide incentives to your community to 3 work with you so that you can get your project done quicker. I don’t think that you set the time limit 4 because you wanted to encourage them to get your approval faster because if they don’t they’re going to 5 feel the pain of construction more, but it’s a good lesson that we can’t just take, take, take and once you 6 put an agreement down that we should really be working as hard as possible to move this project 7 through considering that it literally meets every single one of the requirements of the Development 8 Agreement. I mean I’m just impressed by that. So that’s all I want to say about my Motion. 9 10 Chair Michael: Commissioner King. 11 12 Commissioner King: Thank you. Just briefly I think I’m excited it’s a project that’s moving our 13 jobs/housing imbalance in the right direction taking what was office space and converting it to housing 14 and it looks the project, the map looks appealing to me. So I think it’s good. Thanks. 15 16 Chair Michael: At this point would the applicant like to make any remarks? You don’t have to, but you 17 just have this opportunity. 18 19 Mr. Wuthmann: Thank you. Just very quickly this may be sticking our neck out a bit, but we’ve actually 20 stated and committed to this publicly with respect to our dialogue with the College Terrace neighbors. 21 Planner Gerhardt mentioned that a construction traffic management logistics plan will have to be 22 developed with staff and approved prior to grading and building permits. We’ve committed to continue 23 our dialogue with College Terrace and with respect to the development of this plan and to hear their 24 concerns and dialogue with them on those. So I just thought that would be important to make you 25 aware of. 26 27 Also with respect to all the issues that have been brought up tonight we’ve spent extensive time vetting 28 those with many sections and people in staff and the plans have been modified accordingly and with 29 respect to many, many comments. So although you won’t hear, haven’t heard from all the staff tonight a 30 lot of work has gone on in all these issues over the past year. Thank you. 31 32 Chair Michael: You’re welcome. So before we vote on the Motion does anybody have any, Commissioner 33 Tanaka? 34 35 Commissioner Tanaka: It’s a question for staff. So I know that there’s a kind of a deadline so to speak of 36 the construction traffic. Can there be a condition that we place to actually enable this to go longer as 37 part of this approval process or recommendation process? 38 39 Ms. Silver: I’ll answer that from a legal perspective (interrupted) 40 41 Chair Michael: And your name is? 42 43 Ms. Silver: Yes, Cara Silver, Senior Assistant City Attorney. So this is requiring construction traffic to go 44 through another adjoining piece of property that’s not subject to the application. And so whenever that 45 occurs there are some takings, real property interests that are involved and so we would not recommend 46 that as a best practice. I think that to the extent the applicant is agreeable to the timeline that they’ve 47 committed to and the fact that there’s currently not a tenant there, we have documented that 48 commitment. However, once you get further along there might be some tenanting issues on that 49 property and so I wouldn’t recommend that. 50 51 Commissioner Tanaka: I guess I appreciate what staff is trying to do in terms of being a good neighbor I 52 think Stanford has been has certainly made the attempt to be a good neighbor, which I think everyone 53 appreciates, but there’s appeals, there’s rain delays, you never know what happens, right? And so while 54 we may not have necessarily the purview for it I would certainly encourage as much as possible for this 55 construction route to be used versus California Avenue. 56 12 1 Chair Michael: Alright. Commissioner Gardias. 2 3 Commissioner Gardias: Just a small comment in regards to the continuing cooperation, collaboration 4 between Stanford and the community. I looked at the grading map and also Googled pictures of 5 Amherst and it doesn’t support the claim of the three feet tall retaining walls. It looks like there is a 6 parking lot at the beginning of the part of the property that’s adjacent to California Avenue. So maybe 7 those houses they may accommodate sidewalk in front of them. So if it would be possible to take a look 8 at this sidewalk along extend it on Amherst Street on the other side I would appreciate it. Thank you. 9 10 Chair Michael: Jodie. 11 12 Ms. Gerhardt: Thank you, Jodie Gerhardt, Senior Planner. What you may not have the benefit of, is the 13 ARB package, which has a more detailed grading plan in it. There are currently two foot retaining walls 14 at the front of these properties on Amherst. There’s also four to five foot retaining walls in their rear 15 yards and these lots are not as deep as the existing Amherst lots are and a lot of that has to do with 16 existing perimeter trees. We’re trying to maintain those existing mature trees and therefore of course 17 the land underneath them needs to be preserved at the same grade. So there’s two sets of retaining 18 walls that are making this a difficult issue. 19 20 Chair Michael: Commissioner Gardias. 21 22 Commissioner Gardias: I understand. That was just asking about the opportunity. Maybe there is room 23 to accommodate both, right? Maybe sidewalk doesn’t have to go all the way to the back of the property. 24 Maybe it could extend only half the way, but it looks like there is an opportunity. Thank you. 25 26 VOTE 27 28 Chair Michael: So I think we’re ready for a vote on the Motion. All in favor say aye (Aye). Any opposed? 29 So it’s approved unanimously. Thank you very much. With Commissioner Rosenblum not participating 30 due to his conflict. 31 32 MOTION PASSED (6-0-1, Commissioner Rosenblum recused) 33 34 Commission Action: Commissioner Rosenblum was recused due to conflict of interest. Motion by 35 Commissioner Alcheck, second by Commissioner King to approve staff recommendation for the PTC 36 recommend that the City Council approve the tentative map based on the draft Record of Land Use 37 Action containing Findings and Conditions of Approval. Motion passed 6-1 (Commissioner Rosenblum 38 recused) 39 13 PLACEHOLDER 1 Gerhardt, Jodie From:Rius, Rafael Sent:Thursday, May 29, 2014 5:05 PM To:Gerhardt, Jodie Subject:California Avenue - Mayfield Housing Appeal Response   Hi Jodie,    In response to the Appeal of the approval for this project, the Transportation Department Staff has the following  responses to the issues related to transportation.  These points are general responses to the concerns, and remain  consistent with our previous discussions and  from an email on May 15, 2014.                     Walk and Roll Maps:  The existing Walk and Roll Maps for Escondido School do not account for the new California Avenue/Mayfield  housing project.  The maps are for existing conditions based on existing housing and developed through a  community outreach process from current students/parents  of Escondido School.  PAUSD has yet to assign the  home school for the future California Avenue housing site(s).  The City will update the maps when new housing  comes on‐line or as parent input regarding new travel patterns is identified.  Regardless of the Walk and Roll  Maps, the City’s general practice is to provide adequate pedestrian facilities and to bring substandard facilities  up to current design standards and regulations.     Marked Pedestrian Crossings at S California Avenue & Columbia Street:  Columbia St is the most direct path to Escondido School and from a large portion of the new housing sites main  entry. Columbia Street also serves as the most direct route between Stanford Avenue and South California  Avenue west of Hanover Street so adequate pedestrian crossing facilities are proposed as a safety improvement  for the existing and future communities.  Accommodating all modes of travel including appropriate pedestrian  access with accessible ramps connecting to and from new project sites is consistent with the city’s “Complete  Streets” policies as well as general best design practices.  The alternative of not providing adequate and  accessible pedestrian facilities would go against the City’s policies as well as several state and federal  requirements.     Congestion on Columbia Avenue:  Staff agrees with the assessment and estimated traffic demands presented by the applicant’s transportation  consultant.  The amount of vehicles anticipated during the peak hours are not anticipated to result in severe  congestion or potentially significant impacts.  The proposed street widths are ideal and typical of local  residential streets for both motor vehicle and bicycle use.    Please feel free to contact me to discuss if you have any questions.  Thanks,  Rafael    ____________________________ Rafael Rius, P.E. Transportation Project Engineer City of Palo Alto, Planning and Transportation 250 Hamilton Avenue, 5th Floor Palo Alto, California 94301 t. 650.329.2305 f. 650.617.3108  MEMORANDUM Date: May 15th, 2014 To: Jodie Gerhardt From: Rich Dean Subject: Cal Ave/Mayfield Project Appeal Response Dear Jodie, Below is the official response from the fire department regarding the fire items as they relate to the Cal Ave/Mayfield project appeal. I contacted California State Fire Marshal Tonya Hoover who put me in contact with Chief Kevin Reinertson, Code Development and Analysis Division. Chief Reinertson confirmed that the State of California does not adopt Section 503 or Appendix D. We are not in conflict with the California Fire Code. 1) Fire Code Provisions (a) Turn Around Provision for Dead End Roads Fire Code Section D103.4 of Appendix D states that “Dead-end fire apparatus access roads in excess of 150 feet shall be provided with width and turnaround provisions in accordance with Table D103.4” (Attachment B) The Appeal assumes that the entire 250+-foot length of Driveways A and B constitute fire access roads so that turnarounds are required. It is a generally accepted interpretation of Appendix D, Section D103.4 to only consider as Fire Access Roads the portions of the road or driveway needed for fire vehicles to reach within pre-connect hose distance of the structures on site. PAMC Section 15.05.110 further establishes 150 feet as the maximum distance from the exterior wall of building to the fire vehicle access road. This could be considered the distance a firefighter must travel on foot from the vehicle. In the review of the ARB proposal, the Fire Marshal determined that fire vehicles would not need to travel more than 150 feet along the driveways in question to meet this hose reach requirement. Additionally, Section 503.1.1 allows the Fire Code Official to increase the 150’ length if the building is equipped with an approved automatic fire sprinkler system which is the case for this project. The Fire Marshal respectfully disagrees that the entire length of Driveways A and B need to be considered Fire Access Roads for purposes of determining whether a turnaround is necessary. The Fire Marshal further maintains that turnarounds for Driveway A & B would only serve as a post incident convenience but would not improve emergency operations. (b) Minimum Road Width When Hydrants Present – As noted in the appellant’s attachments, Fire Code Section D103.1 of Appendix D states that “where a fire hydrant is located on a fire apparatus access road, the minimum road width shall be 26 feet exclusive of shoulders” (Attachment B) The Appeal indicates that the minimum road width on Columbia and Amherst Streets is 24 feet where 26 feet is required. Palo Alto Municipal Code (PAMC) Section 15.05.120 requires fire apparatus access roads to have an unobstructed width of 20 feet. This allows one fire department vehicle to pass another vehicle. Appendix D requires the roadway to be increased to 26 feet where hydrants are located. This is generally for 20 feet before and after the hydrant, as shown in Figure D103.1 of Attachment B. The remaining roadway may be 20 feet in width. The intent is to provide additional clearance directly at fire hydrants for hydrant operations and to have another fire department vehicle pass. The proposed roadway widths were reviewed by the Fire Marshal as a part of the ARB process to ensure that the intent of this requirement is met. It is a generally accepted interpretation of Appendix D, Section D103.1 to consider rolled curbs and/or engineered sidewalks to be included in road width, as the only specific prohibition in that section is against using (unpaved) road shoulders to comply with the required width. The Fire Marshal respectfully disagrees that the only method to provide 26 feet of fire access width for Columbia and Amherst Streets is to have 26 feet in between the curbs. The proposed width will provide adequate area to park emergency vehicles and operate a hydrant. As both of the above Fire Code Sections are locally adopted, the Palo Alto Fire Department is within their purview to make these determinations and is not in conflict with the California Fire Code. Sincerely, Rich Dean Acting Deputy Chief, Fire Marshal Palo Alto Fire Department Office 650.329.2347 Fax 650.327.6951 Cell 650.444.5092 May 19, 2014 Mr. Chris Wuthmann Stanford Real Estate 3160 Porter Drive, Suite 200 Palo Alto, CA 94304 Re: Response to Appeal Filed with the City of Palo Alto in Connection with the Director’s Decision on the California Avenue Housing Project Dear Mr. Wuthmann: Hexagon Transportation Consultants, Inc. has reviewed the appeal filed with the City of Palo Alto by Mr. Fred Balin on May 2, 2014 regarding the decision by the Director of Planning and Community Environment to approve the residential development at 1451, 1501 and 1601 S. California Avenue. The site is identified as the location for development under the Mayfield Development Agreement (MDA) finalized between Stanford University and the City of Palo Alto in 2005. The appeal comments on the memorandum prepared by Hexagon to comply with the MDA’s requirement for a site-specific circulation analysis. We appreciate this opportunity to respond to those comments. One of the areas addressed by the appeal is titled “Congestion on Columbia Street.” As noted in our report, the Columbia Street access point will likely be used by significantly more residents than the Amherst Street and Bowdoin Street access points, but we do not agree that it will be “congested” or an area of “potential gridlock”. As calculated in our report, during the AM peak hour there would be an estimated 39 outbound trips, of which approximately 26 would use the Columbia Street exit, which is roughly one vehicle every two minutes. During the PM peak hour, there would be an estimated 61 inbound trips, of which approximately 40 vehicles would enter the site at Columbia Street, which is less than one vehicle per minute. Based on these estimates, Columbia Street would clearly not be “congested” or “gridlocked”. The appeal states that Columbia Street is the “sole vehicular access into and out of the two underground garages serving the 112 multi-family units.” That is not correct. The circulation plan for the site allows vehicles from anywhere within the site to use any of the three access points. Although we would expect that most residents will use the access point closest to their home, a resident could choose to use any of the three streets leading in and out of the site. This redundancy in access provides another safeguard against any congestion on Columbia Street. If there is a brief period when multiple vehicles are headed towards the Columbia exit point, a vehicle from one of the multi-family garages could easily use Bowdoin Street instead. Further, the site plan does not “force” bicycle and pedestrian traffic onto any particular street. Bicycles heading toward campus may choose to use the Amherst, Bowdoin or Columbia Street access points if they are going to Stanford Avenue because all three connect to College Avenue. Similarly, pedestrians will be able to cross California Avenue at Amherst, Bowdoin, and Columbia Streets, as the project will provide crosswalks at all three streets as required by 14c of the Conditions of Approval associated with the Architectural Review approval of the project. Mr. Chris Wuthmann May 19, 2014 Page 2 of 3 The appeal states that “to more equally disperse travel in and out of the project, a 4th curb cut should be added near Dartmouth Street…” Hexagon does not believe there is any need to provide a fourth access point to the project site. The connectivity of the project’s internal circulation already provides multiple access points, as noted above. Further, the trip generation estimates for the project do not indicate any need for additional capacity. There is no requirement that the project to be designed such that the three access points would be utilized equally; the presence of multi-family residences on the site means that one street will be more heavily used than the other two, but that does not mean it will be overly congested. The appeal states that a fourth access point is also needed for fire access to the residences on Driveways A and B. It is Hexagon’s understanding that the Palo Alto Fire Department was consulted with regard to emergency vehicle access to the project and that they found that the proposed access was adequate. Hexagon defers to the local fire department on matters related to fire access and meeting the provisions of the fire code. The section of the appeal related to the fire code states that a fourth curb cut “opens the option to provide even more relief from an overly and unnecessarily crowded and narrow Columbia Street within the project…” We note that the 12-foot lane widths of Columbia Street where it enters the site are the same width as the existing portion of Columbia, and that Columbia Street will be 36 feet wide within the project where on-street parking is permitted. The appeal also takes issue with the City’s requirement that the project install mirrors leading into the garage of the Multi-Family Building #1. The traffic engineer who reviewed Hexagon’s report noted that mirrors are frequently vandalized. Mirrors in locations that are open to the public are more likely to be vandalized than mirrors in locations used only by a building’s residents, but Hexagon agrees that Stanford will need to maintain the mirrors in good order. With regard to the appeal’s statement that Hexagon’s report should have considered a straight driveway in lieu of a 90 degree turn, there is no requirement that Hexagon consider all possible solutions to the problem we initially identified. Hexagon’s responsibility was to assess the adequacy of the site plan proposed by the applicant. The first site plan we reviewed provided only a 20-foot wide driveway, which would not have provided adequate turning radius for large vehicles, such as an SUV or large pick-up truck. The applicant modified the building design and site plan to provide 24-foot wide driveways, which would provide an adequate turning radius. The addition of mirrors is an extra safety precaution. Stanford could also install “bottdots” along the center line of the driveway to help ensure drivers stay in their own lane as they enter and exit the garage, but these would also be an additional safety precaution. The appeal also includes a section titled “Inappropriate Safe Route to School and Campus.” Hexagon did not define a Safe Route to School as part of its memo. Palo Alto has a process for designating safe routes to school that includes input from its Safe Routes to School team, school staff, and input from parents and students. That process will commence when it is determined which school the site’s children will attend and was not addressed in our memo. As noted above, the provision of crosswalks across California Street is based on the engineering judgment, as articulated in the City of Palo Alto’s Conditions of Approval, that the project should include crosswalks at its access points. Mr. Chris Wuthmann May 19, 2014 Page 3 of 3 We appreciate this opportunity to provide comments on the appeal. Please feel free to contact us if you have any further comments or questions. Sincerely, HEXAGON TRANSPORTATION CONSULTANTS, INC. Gary Black, President © 2014 Rolf Jensen & Associates, Inc. All Rights Reserved May 21, 2014 Via Email: cwuthman@stanford.edu Mr. Chris Wuthmann Stanford University Real Estate 390 Serra Mall Stanford, CA 94305 CALIFORNIA AVENUE FACULTY HOUSING 1451, 1501, 1601 CALIFORNIA AVENUE, PALO ALTO CA Dear Mr. Wuthmann: At your request, we are addressing the two Fire Code items in Mr. Fred Balin’s Appeal of Director’s Decision on this property, dated May 2, 2014. Mr. Balin’s Appeal states: 1A – Residential driveways A and B are about 250 feet in length from Columbia Street. As these driveways exceed 150 in length, a turnaround is necessary for fire department vehicles by Appendix D, Section 103.4 and Table 103.4. 1B – Appendix D, Section 103.4 requires that the main fire access road be 26 feet where a fire hydrant is located. Apparently, the proposed development has roadway where the width is 24 feet. CALIFORNIA BUILDING CODE It is important to note that the State of California does not adopt Appendix D of the fire Code. In addition, the State of California does not adopt Section 503 of the model Fire Code (International Fire Code [IFC]) titled Fire Apparatus Access Roads. The State of California has not mandated any provisions in regards to fire apparatus access roads. Because it is the City of Palo Alto, rather than the State of California, that has adopted Appendix D and Section 503, all requirements are interpreted by the local authority. CALIFORNIA AVENUE FACULTY HOUSING S63559 – Page 2 1451, 1501, 1601 CALIFORNIA AVENUE, PALO ALTO, CA May 21, 2014 TURNAROUND PROVISIONS FOR DEAD-END ROADS The Appeal indicates that, based upon Appendix D, Table 103.4, dead-end fire access roads 151 to 500 feet long must have turnaround provisions at the end of the road. The Appeal assumes that the entire 250+-foot length of Driveways A and B constitute fire access roads so that turnarounds are required. The Palo Alto Fire Department has instead treated as fire access roads only those portions of the driveways necessary to meet distance reach requirements. When establishing fire department vehicle access, it is important to evaluate the entire site. The City of Palo Alto has adopted and amended IFC Section 503, Fire Apparatus Access Roads, as part of the Fire Code. This section establishes the starting point to determine fire department vehicle access limits. Section 503.1.1 (Municipal Code §15.05.110) establishes 150 feet as the maximum distance from the exterior wall of building to the fire vehicle access road. This could be considered the distance a firefighter must travel on foot from the vehicle. It is not the intent of the code to require all dead-end streets or driveways longer than 150 feet to include a turnaround. The travel distance to the exterior wall, along with a maximum 150 feet dead-end “drive” distance is used. This is the common practice in use by fire departments in reviewing fire department vehicle access limits. Again, it is not the intent of the Fire Code to limit the dead-end distance of the road or driveway, but rather the combined distance of on-foot firefighter travel and the maximum dead-end distance permitted. It is our understanding that this is how the fire department reviewed the drawings. ROADWAY WIDTH The Appeal indicates that the minimum road width on Columbia and Amherst Streets is 24 feet where 26 feet is required by Appendix D, Section D103.1. Palo Alto’s version of Fire Code (CFC) Section 503.2.1 (Municipal Code § 15.05.120) requires fire apparatus access roads to have an unobstructed width of 20 feet. This allows one fire department vehicle to pass another. Appendix D requires the roadway to be increased to 26 feet where hydrants are located. This is generally for 20 feet before and after the hydrant. The remaining roadway may be 20 feet in width. The intent is to provide additional clearance directly at fire hydrants for hydrant operations and to have another fire department vehicle pass. IJNFi& nuJRICH 13 June 2014 File No. 40779-113 Stanford Real Estate 3160 Porter Drive, Suite 200 Palo Alto, California 94304 Attention: Mr. Chris Wuthmann Haley & Aldrich, Inc. 1956 Webster Street Suite 450 Oakland, CA 94612 Tel: 510.879.4544 Haley Aldrich. com Subject: Environmental Site Assessment Protocols and Regulatory Requirements 1451, 1501, and 1601 California Avenue (Mayfield Upper California Avenue Housing Site) Palo Alto, California Dear Mr. Wuthmann: Haley & Aldrich, Inc. (Haley & Aldrich) has prepared this letter to describe the environmental site assessment protocols and regulatory requirements that Stanford University (Sta,nford) will follow regarding the environmental evaluation of property located at 1451, 1501, and 1601 California Avenue, Palo Alto, California (Site). Stanford has retained Haley & Aldrich to conduct environmental investigation and evaluation of the Site in preparation for redevelopment and conversion to residential uses and associated infrastructure improvements. Haley & Aldrich personnel have years of experience evaluating and remediating environmental issues related to residential developments and have successfully completed many projects working under EPA, DTSC and Water Board oversight. The 2005 Mayfield Development Agreement between Stanford and the City of Palo Alto (City) requires that Stanford comply with all requirements set forth in the Mayfield Development Agreement Mitigation Monitoring and Reporting Plan (MMRP) as it relates to any hazardous materials located in, on or under the Site. In order to comply with the MMRP requirements and all applicable laws and regulations, Stanford has elected to work cooperatively with the California Environmental Protection Agency's Department of Toxic Substances Control (DTSC) under its Voluntary Clean-up Program (VCP) to ensure the protection of human health and the clean-up of the environment prior to the City's issuance of a building permit, as stipulated in the MMRP. The purpose of the Voluntary Clean-Up Program is to allow a responsible party who so desires to enter into a binding Voluntary Clean-up Agreement (VCA) to investigate the environmental condition of a site and remediate, if warranted, on an agreed-upon schedule between the responsible party and the DTSC. Stanford has elected to follow this approach in conformance with the DTSC's VCP and is prepared to remediate in order to secure DTSC's approval for residential uses on the Site, if warranted. Stanford has successfully completed its obligations under the VCA for 1451 California Avenue and 1501 California Avenue, and accordingly, Stanford has secured DTSC's approval for development of these properties for residential use. Haley & Aldrich personnel (while employed at AMEC) conducted the environmental site assessment of the 1451 California Avenue and 1501 California Avenue sites, including the evaluation of soil, soil vapor, and groundwater. Data was evaluated using State of California and U.S. Environmental Protection Agency residential Stanford Real Estate 13 June 2014 Page 2 environmental screening levels, 1•2•3 and potential risk was additionally evaluated, as necessary, on a site- specific basis using established guidance and procedures from these agencies. Based on the sampling data, the DTSC concluded there are no environmental impacts that pose a risk to human health or to the environment under a residential use scenario, and therefore no further investigation or remediation is necessary. Both the 1451 California Avenue and 1501 California Avenue sites have received "No Further Action" status and development approval from the DTSC (and documents are available on DTSC's Envirostor website4•5). As a result, the DTSC agrees that a Corrective Action Plan and Site Management Plan are not warranted for the 1451 California Avenue or 1501 California Avenue sites . . The 1601 California Avenue site has historically been used for electronics· research and development and smaller-scale manufacturing operations, which presumably would have used various chemicals. Because the current occupant at 1601 California A venue is entitled to occupy the building until December 2014, it is anticipated the investigative work will commence once the occupant vacates the building and the building is demolished so that thorough sampling can be conducted beneath the building slab. Stanford has communicated this approach verbally and in writing to DTSC and DTSC has confirmed its approval of this approach in the DTSC letter entitled "California Avenue Housing Phase II Site, 1501 California Avenue, Palo Alto No Further Action Letter" and dated December 13, 2013. The letter states, "Stanford University has conveyed its intent to work with DTSC under its Voluntary Cleanup Program to investigate and if necessary, remediate the 1601 California Avenue property once the existing building on the property is demolished, which is anticipated in early 2015." As was done for the 1451 California Avenue· and 1501 California Avenue sites, Stanford will enter into a VCA with the DTSC, which will require a full investigation of soil, soil vapor and groundwater with DTSC regulatory oversight. The results of the enviroi:nnental investigation will be used to evaluate the potential for risk associated with any chemicals detected at the site. We anticipate the process will follow DTSC's Preliminary Endangerment Assessment (PEA) process for site investigation and risk assessment. If warranted, Stanford would be required to develop a Corrective Action Plan to remediate site conditions in order to allow for long-term residential use of the site, and such remediation would be completed prior to the commencement of redevelopment activities. Should it not be possible to fully remediate any identified environmental impacts, mitigation measures to prevent exposure to such environmental impacts will be incorporated into the design of the project consistent with DTSC's published regulations, and requirements. 6 Remediation and/or mitigation measures, if required, will be conducted in a manner consistent with DTSC's requirements, including evaluation of remedial 1 California Human Health Screening Levels (CHHSLs): Cal/EPA Office of Environmental Health Hazard Assessment, 2010, Human Exposure-Based Screening Numbers Developed to Aid Estimation of Cleanup Costs for Contaminated Soils, January (soil CHHSLs updated September 23, 2010). 2 Regional Screening Levels (RSLs): U.S. EPA, Region 9, 2013, Regional Screening Levels (RSLs) for Chemical Contaminants at Superfund Sites, May. 3 Environmental Screening Levels (ESLs): California Regional Water Quality Control Board, San Francisco Bay Region, 2013, 2013 Update to Environmental Screening Levels, Interim Final, May. 4 1451 California Avenue: http://www .envirostor.dtsc.ca.gov/public/profile _report.asp?global_id=60001837 5 1501 California Avenue: http://www .envirostor.dtsc.ca.gov/public/profile _report.asp?global_id=60001911 6 Department of Toxic Substances Control, California Environmental Protection Agency, 2011, Vapor Intrusion Mitigation Advisory, Final, October. Stanford Real Estate 13 June 2014 Page 3 alternatives and opportunity for public comment. Project documents will be available to the public through DTSC's Envirostor website once the investigation has commenced. By way of additional background information about the 1601 California Avenue site, there were four groundwater monitoring wells present at 1601 California Avenue in association with groundwater remediation efforts being conducted by Hewlett-Packard (HP) resulting from a groundwater plume originating from HP's 1501 Page Mill Road site. The wells were designed to sample groundwater at depths of 250 feet and greater. HP's investigation and remediation effort is regulated and overseen by the California Regional Water Quality Control Board, San Francisco Bay Region (Water Board). In 2013, the Water Board determined that groundwater sampling results from the deep wells located at 1601 California Avenue indicated that the groundwater plume originating from 1501 Page Mill Road did not extend to the 1601 California Avenue site; therefore, the 1501 Page Mill Road site does not pose a risk for future residential redevelopment of 1601 California Avenue. As a result, the Water Board determined the groundwater monitoring wells located on the 1601 California Avenue site were no longer needed and granted its approval to close and remove the wells from the 1601 California Avenue site. The letter and subsequent email from the Water Board describing the rationale for decommissioning and destroying the wells is attached. Sincerely yours, HALEY & ALDRICH, INC. fJdfo~ Peter Scaramella Senior Risk Assessor ~~~ Susan M. Gallardo, P.E. Principal Consultant c: Xavier Bryant, California Environmental Protection Agency's Department of Toxic Substances Control (DTSC) Roger Papler, California Regional Water Quality Control Board, San Francisco Bay Region (Water Board) Annette Walton, Associate Director, Environmental Management, Stanford University Attachments: April 23, 2013 Stantec letter re: Request to Decommission Monitoring Wells MW-135 through MW-138 and MW-164 for the Groundwater Monitoring Program at 1501 Page Mill Road, Palo Alto, California July 24, 2013 Email from Water Board re: Well Decommissioning Request \ \OAK\common\Stanford Real Estate\Mayfield CA Properties\ 160 I California \deliverables\Environmental Process Ltr _ 20140613\2014 _ 0613 _HAl_ Env Process Ltr_1601 CA.docx HALEY l~:.,:~ ALDRICH Stantec April23, 2013 Mr. Roger Papler Stantec Consulting Services Inc. 15575 Los Gatos Boulevard, Building C Los Gatos CA 95032 Tel: (408) 356-6124 Fax: (408) 356-6138 California Regional Water Quality Control Board San Francisco Bay Region 1515 Clay Street, Suite 1500 Oakland, CA 94612 RE: Request to Decommission Monitoring Wells MW-135 through MW-138, MW-163 and MW-164 for the Groundwater Monitoring Program at 1501 Page Mill Road, Palo Alto, California Dear Mr. Papler: On behalf of Hewlett Packard Company (HP), Stantec Consulting Services Inc. (Stantec) presents this request to decommission groundwater monitoring wells MW-135 through MW-138, MW-163, and MW-164 located downgradient (i.e., off site) of HP's 1501 Page Mill Road, Palo Alto, California site facility (Site). Wells MW-135 through MW-138 are located at 1450/1454 Page Mill Road, and wells MW-163 and MW-164 are located at 1601 California Avenue in Palo Alto, California (Figure 1). Three of the wells (MW-136, MW-138, and MW-163) are screened in the Gamma 1 Zone and the remaining three wells (MW-135, MW-137, and MW-164) are screened in the Gamma 2 Zone. Decommissioning of the wells is required to facilitate redevelopment construction activities on those properties by the property owner, Stanford. Stanford intends to redevelop the properties, including the locations where the wells are located, as single family residences in late fall or early winter 2013 and has requested that HP remove the wells from the properties. Wells MW-135, MW-136, and MW-164 are sampled annually as part of the current groundwater monitoring program for the Site. Wells MW-137, MW-138, and MW-163 are not used for groundwater sampling, but have been used for the annual measurement of groundwater level levels in the vicinity of the Site. The six monitoring wells are not considered essential to the monitoring program and decommissioning of the wells would not adversely affect the monitoring objectives of the current monitoring program. Historical analytical data for the wells are presented in Table 1 and a brief discussion of each well follows. Gamma 1 Zone Wells Well MW-136. This well is located on the 1450/1454 Page Mill Road property. Trichloroethane (TCE) is the principal volatile organic compound (VOC) detected in the groundwater at well MW-136. TCE concentrations in the groundwater from this well are stable and have remained below the Federal and State Maximum Contaminant Levels (MCLs; 5 !Jg/L) since April1996 (Table 1). Well MW-138. This well is located on the 1450/1454 Page Mill Road property. The well was sampled four times between July 1993 and May 1994. No VOCs were detected in the groundwater from this well, and the well was subsequently removed from the list of wells sampled for the groundwater monitoring program in 1994. The well is currently only used for the measurement of groundwater levels on an annual basis. Stantec Mr. Roger Papler April23, 2013 Page 2 of 2 Well MW-163. This well is located on the 1601 California Avenue. The well was sampled 14 times between August 1993 and July 1997. No volatile organic compounds (VOCs) were detected in the groundwater from this well, and the well was removed from the list of wells sampled for the groundwater monitoring program in 1997. The well is currently only used for the measurement of groundwater levels on an annual basis. Gamma 2 Zone Wells Well MW-135. This well is located on the 1450/1454 Page Mill Road property. Historically, TCE has been the principal VOC detected in the groundwater at this well. TCE concentrations in the groundwater have been relatively stable ranging from 6 to 85 IJg/L for the last 10 monitoring events (August 2003 through August 2012). Well MW-137. This well is located on the 1450/1454 Page Mill Road property. The well was sampled nine times between July 1993 and April1997. No volatile organic compounds (VOCs) were detected in the groundwater from this well, and the well was subsequently removed from the list of wells sampled for the groundwater monitoring program in 1997. The well is currently only used for the measurement of groundwater levels on an annual basis. Well MW-164. This well is located on the 1601 California Avenue property downgradient of 1501 Page Mill Road site. The well has been sampled as part of the groundwater monitoring program since 1993. No volatile organic compounds (VOCs) have been detected in the groundwater from this well. In summary, the six off-site monitoring wells are not considered essential to the monitoring program and decommissioning of the wells would not adversely affect HP's ability to monitor VOC-impacted groundwater plume. Upon your approval to decommission the wells, the wells will be destroyed to facilitate the proposed redevelopment of the properties at which they are located. The wells will be destroyed consistent with well destruction guidelines of the Santa Clara Valley Water District. Please contact Mr. Paul Paschke of HP at (970) 898-0573 if you have questions regarding this request. Sincerely, STANTEC CONSULTING SERVICES INC. Howard H. Koltermann, PG, CEG, CHG Senior Hydrogeologist Tel: (408) 356-6124 Cell: (408) 210-6573 howard.koltermann@stantec.com Attachments: Figure 1 -Site Plan Mark Becker Senior Scientist Tel: (408) 356-6124 Cell: (831) 246-0711 mark.becker@stantec.com Table 1-Historical Groundwater Analytical Results for Wells MW-135 through MW-138, MW-163, and MW-164 cc: Paul Paschke, Hewlett-Packard Company Annette Walton, Stanford ~ ~ "' Q ' ~~~ .:;··~~o.o -~~~-: ~.; ..... '.so, .(b ~tl:!'V:' .:;t;J'-~.' .Qt& <o Former IBM Tab Tab ~. ·~ ., ~ Alza~ HP1601 California Ave eN-8ilili1N.• Alza 1454"' Page ~ill Rd ... MW~~tMN-41 :.~ •. IBM .~MW:~p .. 41"53'\,MW-tsJI ~MW-t04,~ MW-~14 , MW-f6s .. MW..SS . MW-67 Former IBM EW-6~ . •' Ew-7~ ~~~MW:~t9 . .'~~~-~1 :MW-1~1/ ~~~~-a~MW-20 MW-30MW-21~-142 MW-25 MW-144 ~ ., EW-1 MW~3·MW~ ~~-is~. ' --...... : • ' MW-80 ~~~~.81 -: .. -. ),~:,_~~ 'iil'ew-2 MW-65 -$-MW-145 ~... , ... +-'' ,:::,#·MN-€6 ., . ~~~ip ~-• =1~~~7· ... r • , •;.• . , -~71~02 ,.~ . ._ ~ & Q_fli.. • MW-?? MW~~~W~71 ew-3»' $MW.ss ~W-111 -$-PZ-126 81 M~;;.~MW.SO M\V"i':"' ~MW:.-~~!_:.:_,g• ~;!J;~oss -~ MW:';~t~~ ~MW_,;;, , MW-150 ~MW.::n;• B2 ~~13~~-141 .-, •.. . ·. ;':;:;.~~~~~,:::·,f;~~!':";MW-97• .. ~:.,,~ ··. "::::· ~;. :-#Mw-130··. 84 MW~~MW-;~-122 . Mw-96 ~.Ss_! _______ ,_ .. ~ MW-62 $-....,.V~11~' VW-t ~1 "". i1 MW~t;7: +MW-45 ~;;..-49 . +PZ-123 MW-98·MW-112 PZ-t2sH 83 86 >*r.rN..sz •m-4s :·$MW-140 MW-6~-· ; $-MW-44 ;$-MW-83:-S¥W--93 ".~~!4+, MW-106 MW-82<(f$ ·•MW-8 ·-..... :·~. B6A <$MW:S2 .-$-MW..SO ~, ·:. ·;i.,~~~~w. ~ $ ~" ~W·12A-$--Wl-75 .~ '-$-'MW~1 MW-1oA+. Fo.rr:ner HP' ;·. • .. B28C ~~~'f;. •,' :~;. '-·:$,.,MW~9 }~:···· ~rt.zs .:'"' ·,v """" \lo;d1004-f0$1WoriUIIOUPI01221\a~\122'140012_det._boose_mgmt\0Nbe.su\1$S1023117\0rawln!j\MXD\.1501\2012.Q9.19\185702367_1501_Fig01_SIIePIIn.mxd Rll\l!led:2012·10.{)1By.utro•zkaU ,· .-~.· --~ " ... ____ " :o/~40'6 ·~ft . -'~ ···•>;;~ ..... ""-"~-#i·· 111!·30p~ ··* Legend South Side Area Alluvium Zone and Santa Clara Zone 1 + Monitoring or Piezometer Well Location II Inactive Extraction Well Location S.Zone + Monitoring or Piezometer Well Location (t Active Extraction Well Location iJ Inactive Extraction Well location Gamma -A Zone + Monitoring or Piezometer Well Location Gamma - 1 Zone + Monitoring or Piezometer Well Location ") Active Extraction Well Location iJ Inactive Extraction Well Location Gamma-2 Zone + Monitoring or Piezometer Well Location ~ Active Extraction Well II Inactive Extraction Well Location Gamma - 3 Zone -$-Monitoring or Piezometer W~ll Location iJ Inactive Extraction Well Location Gamma - 4 Zone ~ Monitoring or Piezometer Well Location -~ Inactive Extraction Well Location 1. Coordinate System: NAO 1983 StatePiane California Ill FIPS 0403 Feet 2. Aerial imagery provided by Digital Globe, 2010. Site Plan WeiiiD Sample Flow Sample Twe Zone Date MW-135 Gamma-2 Zone 1/21/1993 MW-135 Gamma-2 Zone 5/12/1993 MW-135 Gamma-2 Zone 6/18/1993 MW-135 Gamma-2 Zone 8/6/1993 MW-135 Gamma-2 Zone 9/23/1994 MW-135 Gamma-2 Zone 12/2/1994 MW-135 Gamma-2 Zone 1/13/1995 MW-135 Gamma-2 Zone 4/20/1995 MW-135 Dup Gamma-2 Zone 4120/1995 MW-135 Gamma-2 Zone 7/7/1995 MW-135 Dup Gamma-2 Zone 7/7/1995 Table 1 Historical Groundwater Analytical Results for Wells MW-135 through MW-138, MW·163 and MW-164 Hewlett-Packard Company 1501 Page Mill Road Site Palo Alto, California TCE PCE 1,1,1-TCA 1,1-DCA 1,1-DCE cis-1,2-DCE Benzene Toluene Ethylbenzene Xylenes, Total <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 14 <0.5 <0.5 <0.5 <0.5 <0.5 ----- 19 <0.5 <0.5 <0.5 <0.5 <0.5 --- 27 <0.5 <0.5 <0.5 <0.5 <0.5 ----- 20 <0.5 <0.5 <0.5 <0.5 <0.5 --- <0.5 <0.5 <0.5 <0.5 33 <0.5 --- 18 <0.5 <0.5 <0.5 0.54 1.6 ------- 37 <0.5 <0.5 <0.5 <0.5 2.2 --- 43 <0.5 <0.5 <0.5 <0.5 2.2 ------ 30 <0.5 <0.5 <0.5 <0.5 0.86 ----------- 31 <0.5 <0.5 <0.5 <0.5 1.1 ---- ------ MW-135 Gamma-2 Zone 10/20/1995 36 <0.5 <0.5 <0.5 <0.5 0.67 ---- ------ MW-135 Gamma-2 Zone 1/5/1996 24 <0.5 <0.5 <0.5 <0.5 <0.5 ----- ------ MW-135 Gamma-2 Zone 4/10/1996 19 <0.5 <0.5 <0.5 <0.5 <0.5 ------ ------ MW-135 Gamma-2 Zone 7/9/1996 16 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Gamma-2 Zone 10/9/1996 20 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- MW-135 Gamma-2 Zone 1/9/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------- MW-135 Gamma-2 Zone 4114/1997 17 <0.5 <0.5 <0.5 <0.5 <0.5 ----- ----- MW-135 Gamma-2 Zone 7/15/1997 15 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Gamma-2 Zone 10/9/1997 17 <0.5 <0.5 <0.5 <0.5 <0.5 --- ------ MW-135 Gamma-2 Zone 1/8/1998 16 <0.5 <0.5 <0.5 <0.5 <0.5 --- ----- MW-135 Dup Gamma-2 Zone 1/8/1998 16 <0.5 <0.5 <0.5 <0.5 <0.5 --- ------ MW-135 Gamma-2 Zone 4/10/1998 20 <0.5 <0.5 <0.5 <0.5 <0.5 ---- ------ MW-135 Gamma-2 Zone 7/9/1998 12 <0.5 <0.5 <0.5 <0.5 <0.5 ------ ------ MW-135 Gamma-2 Zone 10/8/1998 14 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Gamma-2 Zone 1/5/1999 13 <0.5 <0.5 <0.5 <0.5 <0.5 ---- ---- MW-135 Dup Gamma-2 Zone 1/5/1999 14 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- MW-135 Gamma-2 Zone 4/12/1999 13 <0.5 <0.5 <0.5 <0.5 <0.5 ------ MW-135 Gamma-2 Zone 7/14/1999 15 <0.5 <0.5 <0.5 <0.5 <0.5 -------- MW-135 Gamma-2 Zone 10/8/1999 14 <0.5 <0.5 <0.5 <0.5 <0.5 -------- MW-135 Gamma-2 Zone 1113/2000 14 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Gamma-2 Zone 8/21/2000 13 <0.5 <0.5 <0.5 <0.5 <0.5 --------- MW-135 Gamma-2 Zone 8/27/2001 17 <0.5 <0.5 <0.5 <0.5 <0.5 --- ------ MW-135 Gamma-2 Zone 8/21/2002 22 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- MW-135 Dup Gamma-2 Zone 8/21/2002 24 <0.5 <0.5 <0.5 <0.5 <0.5 --------- MW-135 Gamma-2 Zone 8/19/2003 43 <0.5 <0.5 <0.5 <0.5 3.2 -------- MW-135 Gamma-2 Zone 10/5/2004 68 <0.5 <0.5 <0.5 <0.5 <0.5 ------ MW-135 Gamma-2 Zone 8/31/2005 58 <1 <1 <1 <1 <1 --------- MW-135 Gamma-2 Zone 8/31/2006 5.9 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Gamma-2 Zone 8/15/2007 27 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Gamma-2 Zone 8/20/2008 71 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- MW-135 Dup Gamma-2 Zone 8/20/2008 63 <0.5 <0.5 <0.5 <0.5 <0.5 --------- MW-135 Gamma-2 Zone 8/312009 73 <0.50 <0.50 <0.50 <0.50 <0.50 ---------- MW-135 Gamma-2 Zone 8/3/2010 74 <0.50 -&50 <0.50 <0.50 <0.50 ----------- MW-135 Gamma-2 Zone 8/1/2011 85 <0.50 <0.50 <0.50 <0.50 <0.50 ------------ MW-135 Gamma-2 Zone 8/13/2012 75 <0.50 <0.50 <0.50 <0.50 <0.50 --- ------ Stantec E:\HP\weii_Destructions\20130411-Table 1 -MW-135-138, MW-163,164.xlsx Other Constituents CHLFM -0.98; CHLFM -0.84; CHLFM -0.88; CHLFM-1.2; CHLFM -1.1; CHLFM -1.1; CHLFM = 1.1; CHLFM = 1; CHLFM= 1.2; CHLFM = 0.77; CHLFM = 6.3; CHLFM =5.4; CHLFM= 1.5; CHLFM = 1.3; I I 185702205.200.044 Page 1 of4 WeiiiD Sample Flow Tvoe Zone MW-136 Gamma-1 Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-1 Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-136 Gamma-! Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Dup Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-137 Gamma-2 Zone MW-138 Gamma-1 Zone MW-138 Gamma-! Zone MW-138 Gamma-! Zone MW-138 Gamma-! Zone Stantec Table 1 Historical Groundwater Analytical Results for Wells MW-135 through MW-138, MW-163 and MW-164 Hewlett-Packard Company 1501 Page Mill Road Site Palo Alto, California Sample TCE PCE· 1,1,1-TCA 1,1-DCA 1,1-DCE cis-1 ,2-DCE Benzene Toluene Ethyl benzene Xylenes, Total Date 2121/1993 14 <5 <5 <5 <5 <5 <5 <5 <5 <5 3/9/1993 46 <5 <5 <5 <5 <5 <5 <5 <5 <5 5/12/1993 40 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 12/3/1994 18 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 4/19/1995 30 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 10/20/1995 11 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 4/13/1996 1.7 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 10/18/1996 0.57 <0.5 <0.5 <0.5 <0.5 <0.5 --- -------- 4/15/1997 0.7 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 10/9/1997 0.77 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 1/8/1998 0.95 <0.5 <0.5 <0.5 <0.5 <0.5 -------- 417/1998 0.53 <0.5 <0.5 <0.5 <0.5 <0.5 -------- 717/1998 1 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ------ 10/9/1998 2.9 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 117/1999 3.0 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 417/1999 4 <0.5 <0.5 <0.5 <0.5 <0.5 --- -------- 7/13/1999 3.5 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 10/8/1999 2.2 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 1/13/2000 3.7 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 8/28/2000 0.75 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 8/28/2001 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 8/9/2002 2 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 8/15/2003 2.7 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 10/5/2004 3.9 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 8/16/2005 3.4 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 8/31/2006 4.3 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 8/15/2007 4.2 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 8/20/2008 4.1 <0.5 <0.5 <0.5 <0.5 <0.5 --- -------- 8/3/2009 3.9 <0.50 <0.50 <0.50 <0.50 <0.50 ------ 8/2/2010 4.0 <0.50 <0.50 <0.50 <0.50 <0.50 ------ 811/2011 4.3 <0.50 <0.50 <0.50 <0.50 <0.50 --------- 8/13/2012 4.1 <0.50 <0.50 <0.50 <0.50 <0.50 -------- 7/20/1993 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 8/18/1993 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 8/18/1993 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 11119/1993 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 3/2/1994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 1112011994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 -------- 4114/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------- -- 1011311995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 4112/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 4/2111997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 711511993 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 1112311993 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 2/2511994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 5113/1994 <0.5 <0.5 --~0.5 <0.5 <0.5 <0.5 ------ -- E:\HP\weii_Destructions\20130411-Table 1 -MW-135-138, MW-163,164.xlsx Other Constituents CHLFM=0.6; MC=6.2; CHLFM = 0.69; CHLFM = 0.55; CHLFM = 0.72; CHLFM = 0.58; Acetone -36; MEK-240; Acetone = 22; MC = 5.5; MEK = 440; MC=5.7; 185702205.200.044 Page 2 of4 WeiiiD Sample Flow Type Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-163 Gamma-1 Zone MW-164 Gamma-2 Zone MW-164 Dup Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-1!)4 Dup Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Dup Gamma-2 Zone MW-164 Gamma-2 Zone MW-164 Gamma-2 Zone Stantec Table 1 Historical Groundwater Analytical Results for Wells MW-135 through MW-138, MW-163 and MW-164 Hewlett-Packard Company 1501 Page Mill Road Site Palo Alto, California Sample TCE PCE 1,1,1-TCA 1,1-DCA 1,1-DCE cls-1,2-DCE Benzene Toluene Ethyl benzene Xylenes, Total Date 8/27/1993 <5.00 <5.00 <5.00 <5.00 <5.00 ---54 50.8 <5.00 <5.00 8/2511994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ---- 11/23/1994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 - ------- 1/19/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ----- 4/19/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ------ 7/13/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 10/20/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ---------- 1110/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 4/10/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 - ------- 7/10/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------ ----- 10/17/1996 .<0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ------ 1/8/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 4/11/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 7/16/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 9/17/1993 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 911711993 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 8/24/1994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 11/23/1994 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 1/18/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ----- 4/18/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ------ 7/12/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 10114/1995 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --------- 1/11/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------ ------ 4/12/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ------ 7/10/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- ------ 10/17/1996 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 1/8/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- 4114/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------ ----- 7116/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 - ------ 10/9/1997 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 10/13/1998 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- ------ 10/7/1999 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --------- 8/28/2000 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 - ------ 9/6/2001 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 8/9/2002 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- ------ 8/9/2002 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ----------- 8/14/2003 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 -------- 10/5/2004 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 -------- 8/16/2005 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 --- --- ------ 8/30/2006 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 -------- -- 8/15/2007 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 8/20/2008 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 ------------ 8/3/2009 <0.50 <0.50 <0.50 <0.50 <0.50 <0.50 ----- 8/2/2010 <0.50 <0.50 <0.50 <0.50 <0.50 <0.50 ----- 8/2/2010 <0.50 <0.50 <0.50 <0.50 <0.50 <0.50 --- -------- 8/1/2011 <0.50 <0.50 <0.50 <0.50 <0.50 <0.50 ------ 8/13/2012 <0.50 <0.50 <0.50 <0.50 <0.50 <0.50 --- ------- E:\HP\weii_Destructions\20130411 -Table 1 -MW-135-138, MW-163, 164.xlsx Other Constituents 185702205.200.044 Page3 of4 Stantec Abbreviations: --= Not analyzed All results reported in ug/L, except for lead. TCE =Trichloroethane 1,1,1-TCA = 1,1,1-trichloroethene 1,1-DCA = 1 ,1 dichloroethane 1,1-DCE = 1,1-dichloroethene cis-1,2-DCE = cis-1,2-dichloroethene PCE =tetrachloroethane (perchloroethene) CHLFM = Chloroform MC = Methylene Chloride MEK = Methyl Ethyl Ketone E:\HP\weii_Destructions\20130411-Table 1-MW-135-138, MW-163,164.xlsx Table 1 Historical Groundwater Analytical Results for Wells MW-135 through MW-138, MW-163 and MW-164 Hewlett-Packard Company 1501 Page Mill Road Site Palo Alto, California Other Constituents 185702205.200.044 Page4of4 From: To: Cc: Subject: Date: Hello Paul: papler. Roger@Waterboards pascbke. pay! E <pay! paschke@bp.com) Walton. Annette; Marls Becker CMark.Bec!ser®stantec.com); howard ko!termann@stantec.com HP/PA -1501 PMR: Comments -Well Decom Request Wednesday, July 24, 2013 6:41:16 PM Thank you for submitting the 23April13 Request to Decommission Monitoring Wells MW-135 through MW-138, MW-163 and MW-164 (Request). Regional Water Board staff reviewed the Request and we have the following comments. It is our understanding that the off-property wells were installed during the remedial investigation phase of the subject site. Since that time, the groundwater monitoring data indicates that the groundwater plumes associated with the site are within the subject site. Based on well screening data provided by your consultant, MW-138 and MW-137 are screened in the Gamma 1 and 2 Zone wells and too deep to be used as sentry wells upgradient of 1050 Mill Road. Based on the above, the Request is acceptable. Please let us know if you need a Regional Water Board letter. Respectfully, Roger W. Papler P.G. Engineering Geologist San Francisco Bay Regional Water Quality Control Board 1515 Clay Street, Suite 1400 Oakland, CA 94612 11168.txt Council Members Only Page 1