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2012-09-10 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Special Meeting Council Conference Room September 10, 2012 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 09/10/2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. REVISED ROLL CALL CLOSED SESSION Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. A. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Lalo Perez, Joe Saccio, Kathryn Shen, Sandra Blanch, Marcie Scott, Darrell Murray, Val Fong) Employee Organization: Utilities Management and Professional Association of Palo Alto (UMPAPA) Authority: Government Code Section 54957.6(a) 1. City Council Study Session with the Parks and Recreation Commission 7:00 PM OR AS SOON AS POSSIBLE THEREAFTER-CHAMBERS SPECIAL ORDERS OF THE DAY 2. Proclamation and Flag Ceremony Recognizing Sister City Linkoping, Sweden Week 3. Adoption of Resolution Expressing Appreciation to Marilyn Keller Upon the Completion of Her Term as a Utilities Advisory Commissioner STUDY SESSION 4. Request by Jay Paul Company for Council Prescreening of Preliminary Plans for Five (5) Sites within the Boundaries of the California Avenue Concept Plan: 1) Office Development at 395 Page Mill Road; 2) Public Safety Building/Parking Structure at 3045 Park Blvd.; 3) Public Parking Structure at 250 Sherman Avenue; 4) Public Park at 350 Sherman Avenue, and 5) Multi-Family Residential Development at 450 Sherman Avenue 2 09/10/2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. CITY MANAGER COMMENTS ORAL COMMUNICATIONS Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration or Oral Communications period to 30 minutes. APPROVAL OF MINUTES May 14, 2012 May 21, 2012 June 4, 2012 CONSENT CALENDAR Items will be voted on in one motion unless removed from the calendar by two Council Members. 5. Adoption of a Budget Amendment Ordinance Amending Fiscal Year 2013 Budget to Provide Additional Appropriations of $191,027 and Approval of a Purchase Order with RB Resources to add $191,027 for Total Amount Not to Exceed $287,524 for the Installation of Furniture and Equipment in the Development Center 6. Approval of Amendment Number 1 to Contract #C10131396 in the Amount of $1,299,122 with CDM Smith Inc. to Provide Additional Services Associated With the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Project WS- 08002, for a Total Not to Exceed Amount of $5,127,802 7. Request for Authorization to Increase the Legal Services Agreement with Moscone Emblidge Sater & Otis (formerly Otis & Iriki) by an Additional $150,000 for an Amount not to Exceed $235,000 for Legal Services Related to Public Works Construction Matters 8. Approval of Contract With Michael Gennaco and Stephen Connolly of OIR Group for up to Three Years in an Amount Not to Exceed $27,500 Per Year for Independent Police Auditor Services 9. Approval of Amendment No. 1 to Contract with Project Sentinel for Mediation Services 10. Approval of City Response to the Adopted Regional Housing Needs Allocation (RHNA) for the 2014-2022 Cycle (continued from September 4, 2012) 3 09/10/2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 11. Approval of Response to Grand Jury Report on Pension and Other Post-Employment Benefits (continued from September 4, 2012) 12. Adoption of an Amendment to Resolution of Intent No. 9245 of the Council of the City of Palo Alto to Set December 10, 2012 as the New Public Hearing Date for the Establishment of Underground Utility District Number 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster) 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 up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. ACTION ITEMS Include: Public Hearings, Reports of Committees/Commissions, Ordinances and Resolutions, Reports of Officials, Unfinished Business and Council Matters 13. City Council Annual Priority Setting Process 14. Colleagues Memo Requesting Council Pass a Resolution of the City Council of Palo Alto in Opposition to Measure C COUNCIL MEMBER QUESTIONS, COMMENTS, AND ANNOUNCEMENTS Members of the public may not speak to the item(s). ADJOURNMENT 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. AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council/Committee, but it is very helpful. 4 September 10, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. Policy and Services Meeting 09-11-12 City Council Rail Committee 09-13-12 Cubberley PAC 09-13-12 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Board and Commission Vacancies Notice of Vacancies on three Palo Alto Boards and Commissions Public Letters to Council ADA. The City of Palo Alto does not discriminate against individuals with disabilities. To request accommodations, auxiliary aids or services to access City facilities, services or programs, to participate at public meetings, or to learn about the City's compliance with the Americans with Disabilities Act (ADA) of 1990, may contact 650-329-2550 (voice), or e-mail ada@cityofpaloalto.org This agenda is posted in accordance with government code section 54954.2(a) or section 54956. Members of the public are welcome to attend this public meeting. AGENDA IS POSTED IN ACCORDANCE WITH GOVERNMENT CODE SECTION 54954.2(a) OR SECTION 54956 CITY COUNCIL AND PARKS AND RECREATION COMMISSION STUDY SESSION MEETING SEPTEMBER 10, 2012 AGENDA City Hall Council Conference Room 6:00PM Meeting 250 Hamilton Ave I. ROLL CALL II. AGENDA CHANGES, REQUESTS, DELETIONS III. ORAL COMMUNICATIONS Members of the public may address the Commission on any subject not on the agenda. A reasonable time restriction may be imposed at the discretion of the Chair. The Commission reserves the right to limit oral communications period to15 minutes. IV. BUSINESS Below are the potential topics of discussion for the joint study session with the Parks and Recreation Commission scheduled for September 10, 2012 at 6:00 PM: 1) 2011-12 Accomplishments 2) 2012-2013 Priorities 3) Other items ___________________________ _____________________ Rob de Geus PAM ANTIL Division Manager, Recreation Services Assistant City Manager Attachment: Parks and Recreation Commission Memo CITY OF PALO ALTO OFFICE OF THE CITY CLERK September 10, 2012 The Honorable City Council Palo Alto, California Proclamation and Flag Ceremony Recognizing Sister City Linkoping, Sweden Week ATTACHMENTS: Linkoping Week (DOC) Department Head: Donna Grider, City Clerk CITY OF PALO ALTO PROCLAMATION Linköping Week WHEREAS, the City of Palo Alto and the City of Linköping, Sweden established a Sister City relationship on January 26, 1987; and WHEREAS, Linköping, a city with a long and rich history, the capital of Östergötland County, founded in 1320, is an economic, cultural and educational center in southern Sweden; and WHEREAS, the City of Palo Alto and Linköping formed a Sister City linkage to foster friendship, appreciation, understanding, collaboration and citizen exchanges; and WHEREAS, the people of Palo Alto and Linköping have forged a bond of friendship and appreciation for 25 years through many cultural and educational exchanges, the arts, music and collaboration in community affairs; and WHEREAS, we are joined for this occasion by Mayor Ann-Cathrine Hjerdt and Officers representing the City of Linköping, Neighbors Abroad, Palo Alto’s official Sister City organization, and by citizens representing Linköping; and WHEREAS, Palo Alto warmly welcomes Mayor Ann-Cathrine Hjerdt and members of the Linköping community on the occasion of the 25th anniversary of the Palo Alto - Linköping Sister City relationship. NOW, THEREFORE, I, Yiaway Yeh, Mayor of the City of Palo Alto, on behalf of the City Council do hereby proclaim September 10 through September 14, 2012 as LINKÖPING, SWEDEN WEEK IN PALO ALTO Presented: September 10, 2012 ______________________________ Yiaway Yeh Mayor City of Palo Alto (ID # 3067) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 9/10/2012 Summary Title: Resolution for Marilyn Keller Title: Adoption of a Resolution Expressing Appreciation to Marilyn Keller Upon the Completion of Her Term as a Utilities Advisory Commissioner From: City Manager Lead Department: Utilities Attachments: Marilyn Keller Resolution (PDF) Prepared By: Marites Ward, Administrative Assistant Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager RESOLUTION EXPRESSING APPRECIATION TO MARILYN KELLER UPON THE COMPLETION OF HER TERM AS A UTILITIES ADVISORY COMMISSIONER WHEREAS, Marilyn Keller has served as a Commissioner on the Utilities Advisory Commission from October 18, 2005 through June 2012; and WHEREAS, Marilyn Keller has provided dedicated service to the residents and businesses of this community through review of Utilities policies and practices, employing her extensive knowledge of energy efficiency, research and development, and other Utilities matters; and WHEREAS, Marilyn Keller ably assisted the Utilities in the development of the 10-year Energy Efficiency Plan, the Renewable Portfolio Standard, the Utilities Strategic Plan, the Long-term Electric Acquisition Plan, the Gas Utility Long-term Plan, and the 2010 Urban Water Management Plan; and WHEREAS, Marilyn Keller, as a participant on the UAC’s Technology and Innovation subcommittee, provided substantial review of the proposed Utilities Emerging Technology program; and WHEREAS, of particular note, Marilyn Keller brought the added dimension of advocacy for the City’s schools and the role they can play in advancing water and energy efficiency programs; and WHEREAS, Marilyn Keller’s consideration of concerns raised by the public, and her willingness to listen to different points of view, resulted in joint recommendations by staff and the Commission to the City Council that were adopted by the Council; and WHEREAS, the City of Palo Alto desires to recognize the meritorious service of Marilyn Keller. NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of Palo Alto hereby commends the outstanding public service of Marilyn Keller and records its appreciation as well as the appreciation of the citizens of this community for the service and contribution rendered during her terms on the Utilities Advisory Commission. INTRODUCED AND PASSED: September 10, 2012 ATTEST: APPROVED: _____________________________ ________________________ City Clerk Mayor APPROVED AS TO FORM: _____________________________ ________________________ City Attorney City Manager City of Palo Alto (ID # 2949) City Council Staff Report Report Type: Study SessionMeeting Date: 9/10/2012 Summary Title: 395 Page Mill/3045 Park Blvd (Jay Paul) Prescreening Title: Request by Jay Paul Company for Council Prescreening of Preliminary Plans for Five (5) Sites within the Boundaries of the California Avenue Concept Plan: 1) Office Development at 395 Page Mill Road; 2) Public Safety Building/Parking Structure at 3045 Park Blvd.; 3) Public Parking Structure at 250 Sherman Avenue; 4) Public Park at 350 Sherman Avenue, and 5) Multi- Family Residential Development at 450 Sherman Avenue. From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that City Council conduct a preliminary review (pre-screening) of the proposed project and provide comments on the proposal to staff and the applicant, particularly focused on the proposed land uses and intensities and on the adequacy of proposed public benefits. No formal action may be taken at a pre-screening. Comments made on preliminary plans are not binding on the City or the applicant. Summary of Key Issues The applicant’s project description for the proposed Planned Community (PC) District is detailed in Attachment E. Staff has identified the following key issues for the Council’s specific consideration and comment: A. Zoning compliance, uses, and intensity of land use B. Comprehensive Plan amendment C. Adequacy of the proposed public benefits D. Parking E. Relationship to the California Avenue Concept Plan F. Conformance with Bicycle + Pedestrian Transportation Plan G. Relationship to and impacts on surrounding neighborhoods H. Environmental review In order to assist the Council, staff has provided analysis in addition to the applicant’s description of the project’s compliance with the required findings for the PC District and the proposed uses. Background A Planned Community (PC) Zoning application for a prior version for the proposed project on two parcels was submitted on October 17, 2011. However, after discussing that project with staff at the Development Review Committee meeting, the applicant chose to put the project on hold. On April 11, 2012, the applicant submitted a revised proposal that proposed significant public benefits such as a public safety building and proposed development on three sites located on Sherman Avenue. Given the significance of the project, staff has advised the applicant that this prescreening meeting would be the next appropriate step. Prescreening process Palo Alto Municipal Code (PAMC) Section 18.79.030(b) states that concurrence of the City Council is necessary to conduct a preliminary review. The purposes of a preliminary review, as stated in PAMC Section 18.79.010, are: a) To maximize opportunities for meaningful public discussion of development projects, at the earliest feasible time, for the guidance of the public, project proponents, and City decision makers. b) To focus public and environmental review of development projects on the issues of greatest significance to the community, including but not limited to: planning concerns; neighborhood compatibility; Comprehensive Plan consistency; economics; social costs and benefits; fiscal costs and benefits; technological factors; and legal issues. These procedures are not intended to permit or foreclose debate on the merits of approval or disapproval of any given development project. c) To provide members of the public with the opportunity to obtain early information about development projects in which they may have an interest. d) To provide project proponents with the opportunity to obtain early, non-binding preliminary comments on development projects to encourage sound and efficient private decisions about how to proceed. e) To encourage early communication between elected and appointed public officials and staff with respect to the implementation of City policies, standards, and regulations on particular development projects. f) To facilitate orderly and consistent implementation of the City’s Comprehensive Plan and development regulations. Planned Community Zone Change and Comprehensive Plan Amendment Processes Rezoning to a Planned Community (PC) district follows a unique set of procedures and standards, which are described in Chapter 18.38 of the Palo Alto Municipal Code (PAMC). After prescreening, the first step in the PC process will be Planning and Transportation Commission (P&TC) review of the preliminary plans, a development program statement and a draft development schedule. With favorable feedback from the P&TC, the development plan, site plan, landscape plan and design plans are submitted for review by the Architectural Review Board (ARB) in the same manner as any commercial or mixed-use project. The environmental document is prepared and circulated prior to ARB consideration, although a preliminary ARB review or reviews may be recommended. The development plan recommended for approval by the ARB is then returned to the P&TC, together with a draft zoning ordinance and environmental document, for its final review and recommendation to the City Council. As a part of the formal PC Zoning process, the PT&C and City Council will be required to make all of the following findings with respect to the application. (a) The site is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow the proposed development. (b) Development of the site under the provisions of the PC planned community district will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. In making the findings required by this section, the planning commission and city council, as appropriate, shall specifically cite the public benefits expected to result from use of the planned community district. (c) The use or uses permitted, and the site development regulations applicable within the district shall be consistent with the Palo Alto Comprehensive Plan, and shall be compatible with existing and potential uses on adjoining sites or within the general vicinity. Amending a site’s Comprehensive Plan land use designation also requires P&TC initiation, followed by preparation of an environmental document and resolution for P&TC review and recommendation for Council decision. Comprehensive Plan Map designation amendments are not subject to ARB review and recommendation. Project Description The proposed project is composed of two main parcels owned by the developer and three additional parcels currently owned by the City. The applicant’s project description and draft findings for a proposed PC rezoning are provided in Attachment E. Below is a parcel by parcel description of the five proposed project sites. 395 Page Mill Road Construction of two four-story R&D/Office buildings totaling 311,000 sf of floor area Retention of the existing three-story 219,377 sf R&D/Office (AOL) building 1,170 parking spaces provided in basement garages with a one level above grade parking deck. 546 parking spaces for the R&D/Office uses would be provided off-site at 3045 Park Blvd . o Given the site’s proximity to CalTrain, the applicant will be asking for a minor reduction to the required 1:300 parking ratio. Significant setback along Olive Ave. for use as stormwater retention and useable open space The applicant is proposing to provide the following public benefits on four sites: 3045 Park Blvd 44,420 sf Public Safety Building with 147 secured parking spaces. The Public Safety Building would be the lower and front half of a larger parking structure that would include 546 parking spaces for the 395 Page Mill Road tenants as noted above. o The City would be responsible for the cost of the interior improvements and 147 parking spaces 250 Sherman Avenue (City owned surface parking lot) Parking structure with surface parking and three (3) levels above grade for a total of 529 spaces and 6,600 sf of commercial floor area. o This would be a net gain of 125 parking spaces for the area o The City could use the proceeds from the applicant’s proposed purchase of 450 Sherman Avenue to offset the cost of construction o Applicant proposes to purchase the 6,600 sf of commercial space from the City 350 Sherman Avenue (City owned surface parking lot) Applicant would construct a new turn-key public park 450 Sherman Avenue (City owned surface parking lot) 116 unit high density housing development over two stories of podium parking o The applicant would purchase the lot from the City at market rate Discussion Conformance with Comprehensive Plan and California Avenue Concept Plan The California Avenue Concept Plan is currently in the final process stages. Unless directed otherwise by Council, staff will work with the City’s consultant to ensure the general parameters of the proposed project are integrated into the draft Concept Plan, or at least one alternative thereof. Staff will also need to work through the project’s conformance with the City’s Comprehensive Plan (Attachment C). While the proposal on the 395 Page Mill Road site is in conformance with the site’s Research/Office Park (RO) designation, the other proposed uses do not fit cleanly into the existing designations. Below are the current Comprehensive Plan and Zoning designations for each site (Table 1). Table 1: COMPREHENSIVE PLAN AND ZONING DESIGNATIONS Address Comprehensive Plan designation Zoning Designation 395 Page Mill Road Research/Office Research, Office, and Light Manufacturing 3045 Park Blvd Light Industrial General Manufacturing (Auto Dealer Overlay) 250 Sherman Ave Major Institution/SP Public Facilities 350 Sherman Ave Community Commercial Public Facilities 450 Sherman Ave Community Commercial Public Facilities The subject properties are located within 2,000 feet of the CalTrain station and within the Pedestrian and Transit Oriented Development (PTOD) zoning boundaries. While, the development may meet the City’s desire for additional development near transit, some of the sites will likely need a Comprehensive Plan Amendment in order to accommodate the proposed mix of uses and densities. Public Benefits The second of the three required PC approval findings is that: “Development of the site under the provisions of the PC planned community district will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. In making the findings required by this section, the P&TC and City Council at a later formal hearing shall specifically cite the public benefits expected to result from use of the planned community district.” The applicant’s project description includes a “List of Public Benefits”, the highlights of which are summarized below. 1. Public Safety building. The Jay Paul Company will provide the land, structure and exterior shell for a new Public Safety Building (PSB) that will be incorporated into the 3045 Park Blvd. parking structure. The City will be responsible for the interior improvements and storage, as well as the cost of the required parking for the use. The parking cost will be established on a pro-rata basis based on the overall parking garage cost. Preliminary estimates are that the cost to the City for the PSB and associated parking would approximate $20 million, while the costs to the applicant would be approximately $26.7 million. 2. High Density Housing. The Jay Paul Company proposes to purchase from the City an existing surface parking lot at 450 Sherman Avenue at market rate and construct 116 one and two bedroom units on the site, with an average unit size of 700 sf. The project would provide a new customer base for the retail, business, and service sectors on California Avenue and the proceeds from the sale of the land may be used by the City for development of the parking structure on the nearby public site noted below. The applicant estimates the current value of the site at $4.36 million. 3. Turn-key Public Park. The Jay Paul Company proposes to invest $1.26 million into a turn-key public park for the City at 350 Sherman Avenue. There would be no cost to the City for the park. 4. Public Parking Structure. At the City’s expense, the Jay Paul Company would construct a 529 parking space structure at 250 Sherman Avenue. This structure would replace spaces lost on the three existing surface parking lots (250, 350 and 450 Sherman Avenue) and would provide an additional 125 parking spaces. The parking structure would also include 6,600 sf of commercial space that the Jay Paul Company would purchase from the City. The applicant estimates that the cost to the City for the parking structure would be $13.33 million. The proposed costs and benefits to the City are summarized by the applicant in Attachment F. Staff has done only preliminary analyses of these initial costs and has not formally peer reviewed them nor attempted to estimate operating costs for any of these facilities. Development Standards and Relation to Public Benefits As discussed below and shown in the attached zoning comparison table (Attachment D), staff has analyzed the development standards for the proposed PC zone development in comparison to the current development standards. Floor Area Ratio The proposed FAR increase is the applicant’s main reason for requesting a Planned Community Rezoning. As shown below in Table 2, the requested FAR at 395 Page Mill Road is 1.23:1, whereas the maximum floor area ratio in the ROLM district is 0.4:1. However, if the FAR is averaged over 395 Page Mill Road and 3045 Park Blvd., the FAR would be 1.17:1. While the residential proposal at 450 Sherman Ave is well over the allowed FAR of 1:1, if the FAR was averaged with the Sherman Avenue properties, the FAR would be 0.86:1, in conformance with the allowed FAR of the PF Zoning district. Table 2: FAR COMPARISON Address Allowed FAR Proposed FAR Average FAR 395 Page Mill Road 0.4:1 1.23:1 1.17:1 – non-conforming 3045 Park Blvd. 0.5:1 0.71:1 250 Sherman Ave. 1:1* 0.12:1 0.86:1 - conforming 350 Sherman Ave. 1:1* 0.00:1 450 Sherman Ave. 1:1* 3.08:1 Average FAR over 5 sites 1.10:1 * allowed FAR for public facilities Relationship to Public Benefits The amount of excess square footage requested for 395 Page Mill Road amounts to 311,000 sf above the existing 219,377 sf in the current building. A simple calculation of the “benefit” of the Public Safety Building costs borne by the applicant in relation to the square footage allowed at 395 Page Mill Road and 3045 Park Boulevard would yield a “public benefit” of $95 per square foot of increased development allowance. An analysis for all five sites was not done at this time. The Sherman Avenue sites are currently owned by the City and zoned for public facilities, so the allowed FAR for private development is currently unknown. For comparison purposes, staff estimates that the “benefit” amount provided for the Lytton Gateway project was $177 per square foot (including the parking in-lieu fees as public benefit) or $134 per square foot, excluding the parking in-lieu fees. The Council may also wish to discuss whether the approach proposed by the applicant is a justifiable use of the Planned Community process, or whether public benefits should be more closely aligned to the purpose and intent of the proposed project. Use of City Property The three parcels located on Sherman Avenue are currently owned by the City of Palo Alto and appropriate appraisals and public hearings would be needed prior to moving forward with the applicant’s proposals for these sites (Table 3). Table 3: CITY OWNED PROPERTIES Address Acres 250 Sherman Ave 1.23 350 Sherman Ave 1.03 450 Sherman Ave 0.80 While the applicant has expressed an interest in having the City process the development on the City-owned sites in conjunction with the development on the privately owned sites, the two projects can be feasibly separated as they may involve different policy considerations as well as potentially different timelines. Traffic/Parking Many of the subject properties are located along Park Blvd., which is designated a Bicycle Boulevard in the City’s Bicycle + Pedestrian Transportation Plan. Care will need to be taken to minimize any safety concerns along this bicycle route. As a next step, the City’s Transportation staff will have a discussion with the applicant’s traffic consultant and a scope of work will be prepared for a traffic study. This Traffic Impact Analysis (TIA) and Parking Analysis will be evaluated by staff in conjunction with the environmental document. Staff expects that a full Environmental Impact Report (EIR) would be required for the project if it proceeds as proposed. South of Page Mill Road, the project will be providing a total of 1,865 on-site parking spaces. The Zoning Code requires a parking ratio of 1 space per 300 gross floor area for Administrative Offices, Research and Development, Manufacturing and Warehousing uses for a total of 1,917 required parking spaces. The project is therefore short 52 parking spaces (3 percent). However, all of the subject sites are within 2,000 feet of a CalTrain station making it eligible for a parking adjustment of up to 20 percent reduction if deemed appropriate by the Director of Planning and Community Environment and, in this case, the City Council. The Sherman Avenue portion of the project is located within the California Avenue Parking District and includes construction of a public parking garage with a total of 529 parking spaces at 250 Sherman Avenue. The residential project is proposed to be parked under code requirements. The existing number of parking spaces over the three existing surface lots is 404 spaces. The proposed project would result in a net gain of 125 public parking spaces. Neighborhood Compatibility The properties located at 395 Page Mill Road and 3045 Park Blvd have a height limitation of 35 feet and 25 feet for structures within 40 feet of a residential zone. There are special height and daylight plane requirements for PC zoned sites that abut residential property. Specifically, the PC zoning (PAMC 18.38.150) requires that the height limit shall be 30 feet when adjacent to R-1 zoning and that a daylight plane is to be established along that portion of the lot that abuts the neighboring residentially zoned property. The daylight plane is to be measured beginning at a height of 10 feet and increasing inward at a 45 degree angle. The project’s preliminary plans do not provide a daylight plane measurement but staff’s calculations confirm that a portion of the fourth floor of 395 Page Mill Road would encroach into the daylight plane requirement. The proposed height to this building is 56 tall with 15 additional feet for mechanical equipment, for an overall height of 71 feet. Whereas, the proposed height for the public safety building and parking garage at 3045 Park Blvd is proposed to be a maximum of 61 feet in height. Given the proposed buildings are over 35 feet in height and within 40 feet of a residential zone, height/daylight plane exceptions will be required. The City Attorney has previously stated that these types of exceptions may be granted as a part of a PC Ordinance, rather than requiring a variance, and such actions are within the authority of the Council. Therefore, the issue is more of a policy one for Council, regarding precedence and extent of the exceptions. Staff notes again that the exceptions are for minor compatibility purposes and do not adversely impact the adjacent properties, and findings to that extent are noted in the proposed PC ordinance. Staff believes that, if the request were for a height in excess of 50 feet for building areas comprising floor area, an undesirable precedent could be set through a PC process, though again the Council may have discretion to make such a determination. For the site at 450 Sherman Avenue, the height limitation in the PF zone is 50 feet and 35 feet for structures within 150 feet of a residential zone, with a daylight plane beginning at a height of 10 feet and increasing inward at a 1:2 ratio. However, given the most restrictive adjacent zone is CC-2 with a maximum height limit of 37 feet. The projects preliminary plans do not provide a daylight plane measurement but the proposed height of the building is 50 feet, within the allowed limits of the PF zone. Trees/Landscape As this review is only a prescreening, limited information regarding trees and landscaping has been provided. An Environmental Impact Report (EIR) would likely be required for the project, including an assessment of the impact on trees due to intensity of development and the addition of below grade parking. Achievement of urban forestry goals on a densely designed site of this nature will require creative and technological consideration. Staff will work with the applicant to explore urban and pedestrian design features that will help improve the site connections to CalTrain and create a greater sense of place for this area. Staff will continue to meet with the applicant team to discuss the areas that need to be addressed and set next steps for the design review. Community Outreach A notice of the public hearing was distributed to the owners and tenants of all propertieslocated within 600 feet of the project site and was posted on the City website. This staff report is also posted on the City’s website. Signage has been posted at the site to inform the public about the proposed change. Staff has been available to discuss the proposal with interested members of the public. Going forward, staff will work with the applicant to arrange for a series of community meetings with residents and business owners. Staff will also work with the applicant to develop a website, so community review and input can happen on a 24/7 basis. Next Steps 1. Applicant revisions in response to Council comments 2. P&TC (or Council) Consideration of initiation of Planned Community zoning 3. Coordination with California Avenue Concept Plan 4. Initiate Environmental Impact Report process and scoping meeting 5. ARB preliminary review hearing 6. ARB hearing and recommendation 7. P&TC hearing and recommendation 8. City Council hearing and action Resource Impact Applicants for any preliminary review/PC zoning submit a fee deposit, against which staff time to process the application is charged, as a part of the City’s cost recovery program. As part of the formal process, the applicant will submit a fiscal impact analysis to provide information on cost of benefits of the project to the City. However, the applicant has provided preliminary cost estimates for the proposed project as seen in Attachment F and summarized below. The proposed development would also result in a one-time development impact fee payment to the City. 3045 Park Blvd 44,420 sf Public Safety Building with 147 secured parking spaces. The City would be responsible for the cost of the interior improvements and 147 parking spaces Cost to the City for the PSB and associated parking would be approximately $20.1 million, while the costs to the applicant would be approximately $26.7 million. 250 Sherman Avenue (City owned property) Parking structure would include a net gain of 125 parking spaces for the area The City would be responsible for the cost of construction Applicant would purchase the commercial space and prorated share of parking from City The applicant estimates that the cost to the City would be $13.33 million. On-going maintenance performed by the City 350 Sherman Avenue (City owned property) New turn-key City park provided by the applicant at their cost of $1.26 million On-going maintenance performed by the City 450 Sherman Avenue (City owned property) The applicant would purchase the lot from the City for housing development The applicant estimates the current value of the site at $4.36 million. Environmental Assessment Environmental review is not required for a prescreening, as no formal action will be taken on the project. If the project proceeds, staff will work with the applicant to obtain and review all the environmental documents associated with the site. A complete environmental assessment and likely an Environmental Impact Report (EIR), including a traffic report, air quality and greenhouse gas analysis, arborist report, hazard report and noise report will be prepared in compliance with the California Environmental Quality Act (CEQA) guidelines prior to the ARB’s and Planning and Transportation Commission review of the PC zone request. Attachments: Attachment A: Parcel Reports for the Five Sites (PDF) Attachment B: Area Map (PDF) Attachment C: Comprehensive Plan Policies (DOC) Attachment D: Zoning Comparison Tables (PDF) Attachment E: Project Description and Draft Findings from Jay Paul Company (PDF) Attachment F: Preliminary Cost Estimates from Jay Paul Company (DOCX) Attachment G: Preliminary Plan Sets (Councilmembers and Libraries only) (TXT) Prepared By: Jodie Gerhardt, Planner Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager 132-37-049 132-37-048 132-37-044 132-37-042 132-38-046 132-32-026 132-32-025 132-32-034 132-32-033 132-32-028 132-25-050 132-17-080 132-17-075 132-25-006 132-18-074 132-18-095 132-18-076 132-17-032 132-17-077 132-17-016 132-17-017 132-18-090 132-18-006 132-18-086 132-18-086 132-18-085 132-13-076 132-17-012 124-33-019 124-33-018 124-33-016 124-32-043 132-37-018 132-37-017 132-37-004 132-37-008 132-37-040 132-37-039 132-37-038 132-37-037 132-37-036 132-37-035 132-37-033 132-36-069 132-36-070 124-32-022 4-32-021 9 124-31-049 124-31-039 124-31-072 124-31-083 124-33-001 124-33-022 124-33-020 124-32-035 124-32-042 132-36-073 124-32-001 124-32-032 124-31-042 124-28-012 124-28-014 124-28-020 124-28-018 124-27-030 124-28-023 132-39-017 132-39-018 132-38-059 132-38-055 132-38-011 132-33-050 132-38-040 132-38-058 132-38-041 132-38-013 132-38-043 132-38-060 132-38-061 132-32-036 132-26-076 132-26-079 124-29-025 124-29-027 124-29-026 1 2 3 DayCare 3 F Molly Stone's Market County Courthouseand Jail North County Mental Health Center Fry's Electronics Gas Station #2 Bldg 5 Bldg 6 Lot C-5 Parking Lot Bank ofthe West A B Bldg 8 Bldg 7 California Station Country Sun PARKING GARAGE K J H G E B D C A Landscape Overlay70' from center line ofpublic right of way For location of zone boundarySee Ord. # 4848 CALIFORNIA AVENUE GRANT AVENUE EL CAMINO REAL EL CAMINO REAL EL CAMINO REAL SHERMAN AVENUE SHERMAN AVENUE JACARANDA LANE ASH STREET NEW MAYFIELD LANE NEW MAYFIELD LANE EL CAMINO REAL CALIFORNIA AVENUE CALIFORNIA AVENUE PERAL LANE MIMOSA LANERO LANE CAMBRIDGE AVENUE T BIRCH STREET NEW MAYFIELD LANE CAMBRIDGE AVENUE BIRCH STREET BIRCH STREET COLLEGE AVENUE COLLEGE AVENUE PARK BOULEVARD CALIFORNIA AVENUE ALMA STREET PARK BOULEVARD SHERMAN AVENUE JACARANDA LANE PARK BOULEVARD EMERSON STREET RAMONA STREET COLO RADO AVENUE COLORA DO AVEN UE EMERSO N STREET HIGH STREET ALMA STREET ALMA STREET OREGON EXPRESSWAY BRY OREGON AVENUE GRANT AVENUE SHERMAN AVENUE SHERIDAN AVENUE SHERIDAN AVENUE ASH STREET BIRCH STREET BIRCH STREET GRANT AVENUE EL DORAD ASH STREET BIRCH PARK BOULEVARD PARK B ALMA STREET ACACIA AVENUE PORTAGE AVENUE OLIVE AVENUEPEPPER AVENUE ASH STREET PAGE MILL ROAD PAGE MILL ROAD EL CAMINO REAL ALMA STREET PAGE MILL ROAD PAGE MILL ROAD PAGE MILL ROAD NOGAL LANE JACARANDA LANE PENINSULA CORRIDOR JOINT POWERS BOARD PENINSULA CORRIDOR JOINT POWERS BOARD EL CAMINO REALEL CAMINO REAL EL CAMINO REAL EL CAMINO REALEL CAMINO REAL CC(2) RP PF (AS3) CS (AS1) PF PF R-2 PF CC(2) CC(2) R-2 PF ) PC-4127 PF CC(2) CC(2) (R)(P) RM-30 PF CS PF CN CC RM-40 CC(2) CN PC-2224 PF PF PC-4268 PC-2293 RM-40 PC-4354 PC-4463 PC-3028 PF PC-2952 PF PF R M-30 RM-30 RM-15 R-1 GM R M-30 R M-15 RM-40 ROLM GM CS CC(2)(P) GM GM(AD) C(AD CS PC-4831 RMD RM-40 PTOD CC(2) CC(2) PTOD This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Project Location Sites 0' 400' Lo c a t i o n M a p CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2012 City of Palo Alto jgerhar, 2012-08-27 17:28:33 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Attachment C Planned Community Prescreening 395 Page Mill Road 11PLN-00374 Applicable Comprehensive Plan Policies Land Use and Community Design Element Goal L-1: A well-designed, compact city, providing residents and visitors with attractive neighborhoods, work places, shopping district, public facilities and open spaces. Policy L-1: Continue current City policy limiting future urban development to currently developed lands within the urban service area. The boundary of the urban service area is otherwise known as the urban growth boundary. Policy L-5: Maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale. Policy L-6: Where possible, avoid abrupt changes in scale and density between residential and non-residential areas and between residential areas of different densities. Policy L-7: Evaluate changes in land use in the context of regional needs, overall City welfare and objectives, as well as the desires of surrounding neighborhoods. Goal L-2: An enhanced sense of “community” with development designed to foster public life and meet citywide needs. Policy L-10: Maintain a citywide structure of residential neighborhoods, centers, and employment districts. Integrate these areas with the City’s and the region’s transit and street system. Policy L-31: Develop the Cal-Ventura area as a well-designed mixed use district with diverse land uses, two- to three-story buildings, and a network of pedestrian oriented streets providing links to California Avenue. Goal L-5: High quality employment districts, each with their own distinctive character and each contributing to the character of the City as a whole . POLICY L-42: Encourage Employment Districts to develop in a way that encourages transit, pedestrian and bicycle travel and reduces the number of auto trips for daily errands. POLICY L-43: Provide sidewalks, pedestrian paths, and connections to the citywide bikeway system within Employment Districts. Pursue opportunities to build sidewalks and paths in renovation and expansion projects. Goal L-6: Well-designed buildings that create coherent development patterns and enhance city streets and public spaces. Policy L-48: Promote high quality, creative design and site planning that is compatible with surrounding development and public spaces. Program L-48: Use the Zoning Ordinance, design review process, design guidelines and Coordinated Area Plans to ensure high quality residential and commercial design. GOAL L-8: Attractive and Safe Civic and Cultural Facilities Provided in All Neighborhoods and Maintained and Used in Ways that Foster and Enrich Public Life. POLICY L-75: Minimize the negative physical impacts of parking lots. Locate parking behind buildings or underground wherever possible Transportation Element POLICY T-1: Make land use decisions that encourage walking, bicycling, and public transit use. PROGRAM T-1: Encourage infill, redevelopment, and reuse of vacant or underutilized parcels employing minimum density requirements that are appropriate to support transit, bicycling, and walking. POLICY T-22: Improve amenities such as seating, lighting, bicycle parking, street trees, and interpretive stations along bicycle and pedestrian paths and in City parks to encourage walking and cycling and enhance the feeling of safety. POLICY T-23: Encourage pedestrian-friendly design features such as sidewalks, street trees, on-street parking, public spaces, gardens, outdoor furniture, art, and interesting architectural details. GOAL T-8: Attractive, Convenient Public and Private Parking Facilities POLICY T-45: Provide sufficient parking in the University Avenue/Downtown and California Avenue business districts to address long-range needs. Housing Element Policy H-2: Identify and implement a variety of strategies to increase housing density and diversity in appropriate locations. Emphasize and encourage the development of affordable and attainable housing. Program H-1: Increase housing density immediately surrounding commercial areas and particularly near transit stations by either increasing allowed densities or encouraging development at the higher end of the existing density range for sites within 2,000 feet of an existing or planned transit station or along two major transit corridors, El Camino Real and San Antonio Road, wherever appropriate. Community Services and Facilities Element GOAL C-4: Attractive, Well-maintained Community Facilities That Serve Palo Alto Residents. POLICY C-22: Design and construct new community facilities to have flexible functions to ensure adaptability to the changing needs of the community. POLICY C-27: Seek opportunities to develop new parks and recreation facilities to meet the growing needs of residents and employees of Palo Alto. PROGRAM C-26: In conjunction with new development proposals, pursue creation of park, plaza, or other public gathering places that meet neighborhood needs. Business and Economics Element POLICY B-11: Encourage the use of public/private partnerships as a means of redeveloping and revitalizing selected areas. ______________________________________________________________________________ ATTACHMENT D ZONING COMPARISON TABLES 395 Page Mill Road 11PLN-00374 ____________________________________ Table 1: COMPARISON WITH CHAPTER 18.20 (ROLM DISTRICT) FOR 395 PAGE MILL ROAD SITE Regulation Proposed Existing ROLM (Research, Office and Limited Manufacturing) Minimum Site Area 9.86 acres 9.86 acres 1 acre Min. Front Setback (Page Mill Road) 25 ft 25 ft 50 ft from Page Mill Road, 20 ft, same if abutting or opposite residential zone Rear Yard Setback (Olive Street) 66 ft min. 31 ft 20 ft, same if abutting or opposite residential zone Min. Street Side Setback (Ash St/Park Blvd) 25 ft / 20 ft 300 ft / 25 ft 20 ft, same if abutting or opposite residential zone Max. Site Coverage 46% (199,518 sf) 25% (105,389 sf) 30% Max. Total Floor Area Ratio 1.23:1 (530,377 sf) 0.51:1 (219,377 sf) 0.4:1 Max. Building Height 56 ft (with additional 15 ft for mechanical) 50 ft (with additional 10 ft for mechanical) 35 ft, 25 ft within 40 ft of residential zone Table 1: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) Use Required Proposed Conformance Admin Offices, R&D, Manufacturing and Warehousing 1 per 300 sf of gross floor area (1,768 spaces)* 1170 spaces Non-conforming - 598 off-site parking spaces needed to conform (see below) * 1415 spaces would be required if the maximum 20% reduction is given for proximity to transit Table 2: COMPARISON WITH CHAPTER 18.20 (ROLM DISTRICT) FOR 3045 PARK BLVD SITE Regulation Proposed Existing GM (AD) General Manufacturing (Automobile Dealership) Minimum Site Area 1.41 acres 1.41 acres none Min. Front Setback 10 ft 30 ft 10 ft if abutting or opposite residential zone Rear Yard Setback 10 ft 50 ft none Interior Yard Setback 10 ft 30 ft min. none Max. Total Floor Area Ratio 0.71:1 (44,420 sf public safety bldg) 0.29:1 (17,957 sf) 0.5:1 Max. Site Coverage 82% (50,364 sf) 29% (17,957 sf) none Max. Building Height 61 ft Approx. 25 ft 35 ft, 25 ft within 40 ft of residential zone Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) Use Required Proposed Conformance Admin Offices 1 per 300 sf of gross floor area (149 spaces)* 695 spaces (147 spaces dedicated for public safety) Conforming – 149 spaces required, 546 spaces available for off-site parking * 120 spaces would be required if the maximum 20% reduction is given for proximity to transit Table 3: COMPARISON WITH CHAPTER 18.28 (PF DISTRICT) FOR 250 SHERMAN AVE Proposed Public Parking Structure Site Regulation Proposed Existing PF (Public Facilities) Minimum Site Area 1.23 acres 1.23 acres None Min. Front Setback 14 ft n/a Equal to the setback of the most restrictive abutting district, CC2, requires 1-10 ft to create an effective 8-12ft sidewalk width Rear Yard Setback 0 ft n/a 20 ft, same if abutting or opposite residential zone Interior Yard Setback n/a n/a 20 ft, same if abutting or opposite residential zone Max. Total Floor Area Ratio 0.12:1 (6,600 sf of retail space) n/a 1:1 Max. Site Coverage 89% (47,400 sf) n/a 30% Max. Building Height 37.5 ft n/a 50 ft, 35 ft within 150 ft of residential district Daylight plane none n/a, Res. to south 1:2 with initial height of 10 ft when abutting residential zone Table 3: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) Use Required/Existing Proposed Conformance Public Parking Structure 404 spaces exist over three City owned surface parking lots 529 spaces Conforming – with 125 additional parking spaces over existing Table 4: COMPARISON WITH CHAPTER 18.28 (PF DISTRICT) FOR 350 SHERMAN AVE Proposed Public Park Site Regulation Proposed Existing PF (Public Facilities) Minimum Site Area 1.03 acres 1.03 acres None Min. Front Setback 0 ft n/a Equal to the setback of the most restrictive abutting district, CC2, requires 1-10 ft to create an effective 8-12ft sidewalk width Rear Yard Setback 0 ft n/a 20 ft, same if abutting or opposite residential zone Max. Total Floor Area Ratio n/a n/a 1:1 Max. Site Coverage n/a n/a 30% Max. Building Height n/a n/a 50 ft, 35 ft within 150 ft of residential district Daylight plane n/a n/a 1:2 with initial height of 10 ft when abutting residential zone Table 4: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) Use Required Proposed Conformance Public Park None for passive recreation 0 spaces Conforming Table 5: COMPARISON WITH CHAPTER 18.28 (PF DISTRICT) FOR 450 SHERMAN AVE Proposed High-Density Housing Site Regulation Proposed Existing PF (Public Facilities) Minimum Site Area 0.80 acres 0.80 acres None Min. Front Setback 3-6 ft n/a Equal to the setback of the most restrictive abutting district, CC2, requires 1-10 ft to create an effective 8-12ft sidewalk width Rear Yard Setback 0 ft n/a 20 ft, same if abutting or opposite residential zone Interior Yard Setback 0-4 ft n/a 20 ft, same if abutting or opposite residential zone Max. Total Floor Area Ratio 3.08:1 n/a 1:1 Max. Site Coverage 82% (28,580 sf) n/a 30% Min. Usable Open Space 50 sf per unit and 5,600 sf common space n/a None (RM-40 would require 100 sq ft per unit) Max. Building Height 50 ft n/a 50 ft, 35 ft within 150 ft of residential district Daylight plane none n/a 1:2 with initial height of 10 ft when abutting residential zone Max. Residential Density 145 units/acre n/a n/a Table 5: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) Parking Spaces Required Proposed Conformance Residential 1.25 per studio unit, 1.5 per 1- bedroom unit, 2 space per 2- bedroom unit or larger (182) 134 spaces Nonconforming Residential Guest 33% of all units (60) 0 spaces Nonconforming * 194 total spaces would be required if the maximum 20% reduction is given for proximity to transit 3045 Park Avenue Public Safety Building City of Palo Alto Costs Jay Paul Company Contribution Cold Shell $17.70M Land Costs $ 9.00M Total $26.70M Notes: 1. Estimates are based on the most current plans submitted to the City and discussions between the Police department and DES. City could lease FF&E and IT to reduce its initial capital outlay. 2. Jay Paul Company contributes the land and cold shell for Public Safety Bldg. 3. The City of Palo Alto pays for the Warm Shell improvements, the cost of Public Services Building parking, interior improvements, and its prorated share of soft costs. 4. This number is preliminary, based on discussions between our IT consultant and the City. Sherman Avenue Project City of Palo Alto Costs Public Parking Costs (529 stalls) $14.92M Cost to park retail at 4 per 1000sf (27 stalls). Paid by JPC. -$0.76M Land Cost for Retail. Paid to City by JPC. -$0.825M Subtotal $13.33M Land Cost for Residential. Paid to City by JPC. -$4.36M Total Cost to City $8.97M Jay Paul Company Contribution Park Construction Costs $1.26M Notes: 1. Parking Costs based on $28,200 per stall times 529 stalls. 2. Assumes $125 per sq. ft. price for land. Land used by Jay Paul = 34848sf for residential + 6600sf for retail. Attachment F Warm Shell Improvements $3.2M Tenant Improvements $10.2M FF&E $720K /IT/Cabling/Equipment (see Technology note 4) $2.7M Soft Costs $1.3M Foundation / Underground Parking $1.8M HVAC $0.2M Total $20.1M 6111 Note. Page 1 City of Palo Alto (ID # 2791) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/10/2012 Council Priority: Land Use and Transportation Planning Summary Title: Development Center Space Planning Contract/BAO Title: Adoption of a Budget Amendment Ordinance Amending Fiscal Year 2013 Budget to Provide Additional Appropriations of $191,027 and Approval of a Purchase Order with RB Resources to add $191,027 for Total Amount Not to Exceed $287,524 for the Installation of Furniture and Equipment in the Development Center From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that: 1. Council adopt an ordinance (Attachment A) amending the budget for fiscal year 2013 to provide one-time appropriations of $191,027 to fund the purchase and installation of furniture and work space equipment for the second floor space at the Development Center to further implement the Blueprint process improvements. 2. Council approve and authorize the City Manager or his designee to execute a Purchase Order #4513000021 (Attachment B) with RBResources to add $191,027 for the purchase and installation of furniture for the second floor of the Development Center. The total purchase amount for RBResources for floors one and two shall not exceed $287,525. Background On December 5, 2012, Council approved a Budget Amendment Ordinance for $1,520,426 to further the Development Center Blueprint project. Of those appropriations, $161,739 was allocated for first floor office furniture, carpeting, and technology. To date, the front lobby and first floor conference room have been updated with new carpet, paint and art from the Palo Alto Art Center. An office for the newly hired Development Center Manager has been created adjacent to the front counter to increase oversight and customer service. On May 22, 2012, the rear portion of the first floor was updated with new carpet and data cabling for technology. On September 7, 2012 reconfiguration of the remaining portion of the first floor will begin with completion scheduled for September 16, 2012. On December 12, 2011, Council approved a three-year sublease agreement with Surveymonkey.com, LLC for additional office space on the second floor at the Development Center building (285 Hamilton Ave). No funds were allocated for furnishing the second floor at that time since space needs had not yet been designed. The actions recommended in this staff report further Council’s goal of streamlining and modernizing the City of Palo Alto’s permit process while focusing on customer satisfaction and inter-departmental efficiency. Discussion Following a formal solicitation process, the City selected RBResources to install furniture at the Development Center. Staff decided to complete only the first floor, phase 1, last year and the initial purchase order for $96,497.75 was within the City Manager’s contract authority level. Staff is now proceeding with the space improvements on the second floor and is requesting that Council authorize additional funds to purchase and install the furniture for that space and approve an amendment to the purchase order with RBResources to add $191,027 for the second floor improvements. The purchase of furniture and work station equipment will allow the City to occupy the second floor space. The relocation of inter-departmental staff to the second floor is a key component of the Blueprint project. It would increase proximity of inter- department services, providing the flexibility to draw on staff when work load demands are high. In approving this budget amendment and purchase order, Council will authorize the resources needed to complete the final phase of the space planning. Staff has also selected furniture that can be utilized at different venues should Council decide to relocate the Development Center in the future. With the new space on the second floor, staff is committed to ensuring that the work environment is structured and designed to meet work flow and customer needs as it is a priority of the Council’s approved Blueprint project. Timeline Completion of the final phase of furniture and equipment installation is scheduled to occur in December 2012. Resource Impact The City’s sublease to occupy the second floor of the Development Center expires December 2014, although it includes an option for either party to terminate in November 2013. The contractor estimate for furnishing the second floor totals $173,661. A ten percent contract contingency of $17,366 is included in the requested Budget Amendment Ordinance (Attachment A). Staff proposes that the appropriation for the furniture be allocated from the Budget Stablization Reserve as a one-time general fund expense. As of July 31, 2012, Development Center related revenues were at 24% of total budget for Fiscal Year 2013, or $2.0 million. Development Center related revenues for the same period of Fiscal Year 2012 were $1.01 million. Although it is early in the fiscal year and seasonal development may be expected to wane in coming months, comparing these figures implies an expected increase in development related revenues for Fiscal Year 2013. Policy Implications This action is consistent with Council’s previous direction and actions on December 5 and December 12, 2011, to upgrade the Development Center customer environment and to expand operations to the second floor. Environmental Review Interior alterations such as partitions and furniture in existing facilities are exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA guideline section 15301. Attachments: Attachment A: Budget Amendment Ordinance (PDF) Attachment B: Quotation from RB Resources for Office Reconfiguration (PDF) Prepared By: Khashayar Alaee, Administrator Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR FISCAL YEAR 2013 TO PROVIDE ADDITIONAL APPROPRIATION OF $191,027 FOR FURNISHING THE SECOND FLOOR OF THE DEVELOPMENT CENTER 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 18, 2012 did adopt a budget for Fiscal Year 2013; and B. On December 12, 2011 the Council approved a three year sublease agreement with Surveymonkey.com, LLC for second floor office space at 285 Hamilton Avenue (Staff Report 2389); and C. The City of Palo Alto issued a Request for Quotations on April 9, 2012 for the furnishing of the office space at 285 Hamilton Avenue; and D. Following the formal solicitation process, the City of Palo Alto selected RB Resources to provide and install furniture at the Development Center and approved a purchase order for furnishing the first floor; and E. One Hundred Ninety-one Thousand Twenty-seven Dollars ($191,027)is needed to add to the purchase order to provide funding for furnishing the second floor space, based on a bid total of One Hundred Seventy-three Thousand Six Hundred Sixty- one Dollars ($173,661) and a ten percent contract contingency amount of Seventeen Thousand Three Hundred Sixty-six Dollars ($17,366); and F. City Council authorization is needed to amend the Fiscal Year 2013 Operating Budget as hereinafter set forth. SECTION 2. The sum of One Hundred Ninety-one Thousand Twenty-seven Dollars ($191,027) is hereby appropriated to Other Contracts in the Planning and Community Environment Department and the Budget Stabilization Reserve is correspondingly reduced. SECTION 3. The General Fund Budget Stabilization Reserve is hereby reduced by One Hundred Ninety-one Thousand Twenty- seven Dollars ($191,027) to Twenty Seven Million Five Hundred Seventy Nine Thousand Dollars ($27,579,000). 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 Council of the City of Palo Alto hereby finds that this budget amendment ordinance is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager Director of Public Works Director of Administrative Services RBResources The Office Environments Company P.O. Box 1833 Novato, CA 94948-1833 Voice: 415 893 9524 Fax: QUOTATION Quotation #: 09221146 Date: 8/13/2012 Terms: Net 20 Shipped: 415 893 9534 Customer PO#: Bill To: • Note: This estimate is good for 30 days from the date shown above. Prices quoted are for quantities shown. Ship To: Khashayar"Cash"Alaee City of Palo Alto 250 Hamilton Ave Palo Alto, CA 94301 City of Palo Alto 285 Hamilton Ave Palo Alto, CA 94301 6503292230 6503292154 Qty Part # Description I 1 Mise As per attached KI quotation 11 MiSe 11 Key Board Trays with swivel mouse pad(10 Straight 1 comer) 1 Mise De mountable Wall as per attached 1 Mise Delivery/Installation 1 MiSe 10 Services call to site for ergonomic issues that may arise within the first 3 months after installation 1 Mise KMB5040 Aristotle Marker Board 50x40 1 MISC KCSS7220 Aristotle Executive Double Storage Door Credenza 72x20 Thank you for your business and we look forward to serving your future business needs. Authorization: Date ______ _ Print Name and Title,..,..,.-....,--_-,---,--:_..,--:--:=-:-_----, ____ -:-: 50% Deposit required before start of project. Balance due upon completion. 1 List Unit $104,998.00 EA $299.00 EA $27,950.00 EA $19,645.00 EA $645.00 EA $1,168.00 EA $1,503.00 EA SUBTOTAL FREIGHT SALES TAX TOTAL AMOUNT DEPOSIT Total Amount Tax $104,998.00 X $3,289.00 X $27,950.00 X $19,645.00 X $845.00 X $588.00 X $757.51 X $158,072.51 $2,350.00 $13,238.57 $173,661.08 $0.00 $173,661.08 City of Palo Alto -Dev Center Reconfiguration Project Z8S Hamilton Avenue, Palo Alto, CA REVISED 4-17/31/2012 Quantity U , 2 5 3 11 8 8 , , ~ 0 0 0 0 , 2 7 22 , 3 0 3 0 , 0 0 0 1 5 2 8 2 0 () 8 , () 0 0 0 21 12 Sec:ond Floor Panel System Fumture List of Product Paint Finish: Champagne Metallic Raceway: Metal-OIampagne Metallic Finish Indude Duplex/Data openings Top Cap Profile: Flat Fabric Panel System: Palin-lex/flint Fabric Demountable Walls: Pallas-Horilon Une/Aroma Glass: Satin Etched ~inate: Frosty White (except where noted differently) Edle Detail: Knife Edge Pull: Inset Pull Seating Fabric: Pallas -Unspun/Carbon locts on all Storage Ughts/lJtmps: lED Overhead Storage to meet ADA requirements i ,eh,ir;, Swivel ' I , Pailas-Un,pun I· .221 'w/(: ,Base wi "n I , Data "OURh. 48d, '44w <29h. ~ wi PVC ed,e. i • Maple wi PVC edge. 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T"v 'LED late",1 File, 2H, 3OW, 180, 21"H Indude FLOot to B"k File R,iI, . 2H, 42W , 180, ""H Indude FLOnI to B"k File Rail, ,3H,30W, '/4"H Indude FLOntto B"k File Rail" !late",1 file, 3H, 42W, 180, 39-1/4"H Include Frontto Book File R,iI" , SH, 3lJW, 180, I " , Indude Fmnt to B"k Fil. R,ils, Postin, Shelf, " SH, 42W, 'Bo, I " "ndude Front to B"k File R,iI" Po,tin, Shelf, ISto",. e,binet, 2 Shel,.s, 30"w, 180, 64"H ISto,,,~ 4 Shelve;, 30"w, 180 , I Mobil., ,Ped.,tal, 24"0 1700 , Ped-Box/Bo, I File ' No,"'!'Oepth I e~:~:~~'e;" f:;c,;;~~::;:::,::"eF~~;: I Ii i ! Ped.,tal File/Fil. -30" 0 i ,Ped"""" ,-30" 0 i ,Ped"'tall ,-20" 0 142" w ' i . 'B"d,84 , : edge fo, (, I 36"w Sto"ge unit,. 18"d, 72 142"+' I File,. 18"d,' '4"w : ed .. fo, (41 42" w , i ,Sel two,." b"klo back. 36"d, 84"w 16" P,rtition 10' 6" Bo, o"we". Unit Cost Extension S 4 .... 25 $ 5,451.00 $3"«7.70 $ -',447.70 $ S S 281.75 S 563.50 $ 1,380.00 • $ , - • 690.00 • -• 799.25 S $ - S 388.82 • 1,944.08 S 419.75 '.1,2§925 S 437.00 ., 4,807.00 , 457.70 's 3,661.60 • 132.25 , 1,058.00 • 149.50 : S 149.50 • 539.35 I , 539.35 S 569.25 I' .',,,850 • 531 .30 !. • "'7.40 • • . $ 195.50 • • 162.15 1$ - S 143.75 : • 143.75 • 149.50 • 299.00 S 46.85 !S 327.96 S 51.75 I' 1,138.50 • 287.50 I • 287.50 • 431.25 I. 1,293.75 • 299.00 ' S - , 316.25 •• - • 166.60 : • 585.80 S 488.75 ; S - . S 517.50 , $ 517.50 I' 4tO.55 Is - ' , 66125 1$ 1,322.50 i' 72t .05 IS I' 918.85 I' - : • 506.00 I' 506.00 '. 747.50 I S 3,737.50 ,S 327.75 , , 655.50 I' 373.75 1$ 2,990.00 I s 523.25 I S 1.046.50 IS 93.15 IS - Is 327.75 L $. - 1$ 382.25 I' 2,896.00 I. 299.00 IS 299.00 l'_20470 1$ _ - I $ 170.20 IS 1$ 323.15 I' - I, 307.05 I. IS tt.50 I , 241 .50 Is 2.30 Is 27.60 City of Palo Alto -Dev Center Reconfiguration Project 285 Hamilton Avenue, Palo Alto, CA REVlSED 4-]7/31/2012 Second Floor Panel System. Furnture list of Product Paint Finish: Champagne Metallic Raceway: Metal-Champacne Metallic FInish Indude Duplex/Data open/nJ'S Top Cap Profile: Flat Fabric Panel System: Pallas· Lex/Flint Fabric Demountable Walls: Pallas-Horizon Une/Aroma Glass: Satin Etched Laminate: Frosty White (except where noted dlfferentiy) Edge Detilll: Knife Edge Pull: Insg Pull Seating Fabric: Pallas ·Unspun/Carbon t.oc:ks OIl all Storage Ughb/litmpS: LED OVemead Storale to meet ADA requiremenb Quantity Description 11 Pencil Trays for Box Drawers 1 RacetrackTables w/ Metal -r ' Base, laminate w/ Knife edge, 36 x 72 0 Worlcsurface Peninsula Attachment ?tate 0 Extended Comer Worlcsunace, 24)( 36 II 72)( 24"w.(2) Grommets 0 Worksurface Edge Support with Lock. left 0 Worksurface Edge Support with Lock, Right 3 Trek Flip-Top, Rect,T Base 74P Edge 24)(60" 16 Torsion Air Task Annchairs. Uph Seat Mesh Back 1 700 Series Files File Top 18x102 74P Edge For Side by Side Units 2 Amadeus Racetrack Table Panel leg, Maple 36x72 1 700 Series Fites File Cabinet 2 Shelves 3Ox18x391/4 1 700 Series Files File Cabinet 2 Shelves 36111811391/4 1 Impress Task Chair T-Arms 1 700 Series Files File Cabinet 3 Shelves 30d8x63 1 700 Series File Moblie Ped-Box/File 30" Norm.nal Depth 2 700 SerIes File Supporting Ped File/File 30" Nonninal Depth 1 700 Series File Supporting Ped Box/Box/File 30-Norminal Depth 1 Rectangular Worksurface, Knife Edge. 30 x S4"W. (1) Grommet 1 Rectangular Worksurface, Knife Edge. 24)( 42"W. (1) Grommet 1 Rectangular Worksurface. Knife Edge. 24 x 6O"W. (0) Grommet 9 Rectangular Worlcsurface. Knife Edge. 30 x n"w. (2) Grommet 1 Rectangular Worksurface, Knife Edge, 30 x 30"W. (0) Grommet 1 RectangularWorksurface, Knife Edge, 30 II 42"W. (1) Grommet 9 RectangularWorksurface, Knife Edge, 30 II 48"W. (1) Grommet 10 Rectangular Worksurface, Knife Edge, 30 x 54"W. (1) Grommet 1 Rectangular Worksurface. Knife Edge, 30 II 6O"W. (1) Grommet 2 Rectangular Worksurface. Knife Edge, 30 x GO''W. (21 Grommet 12 RectangularWorksurface. Knife Edge, 30)( 84"W, (2) Grommet 2 Unite Countertop, 32H Panel Kn Edge 84W 0 Transaction Counter 92"l with Radius End with Supports 31 Standard cantilever Bracket. left ,. Standard Cantilever Bracket. Right 0 Center Panel Support leg. 18 x 29"H, left 8 Splice Plate, for 24 & 30" Deep Worksurface 1 Open Worksurface Support leg, 22 x 29"H. Orientation· Center at Wall 0 Open Worksurface Support leg. 22 x 29"H. Orientation -Center at Panel 0 Worltsurface Support leg with Insert. 24)( 29"H. Orientation -l: left at Panel 4 Worksurface Support leg with Insert, 24 x 29"H. Orientation -l; left 0 Worksurface Support leg with Insert, 24 II 29"H. Orientation· R; Right at Panel 5 Worksurface Support leg with Insert. 24 II 29"H. Orientation -R: Right 1 Worksurface Support Leg with Insert, 30)( 29"H. Orientation -l: left at Panel 1 Worksurface Support leg with Insert. 30 x 29"H. Orientation· l: left 1 Worksurface Support leg with Insert, 30 II 29"H. Orientation -R: Right at Panel 0 Worksurface Support Leg with Insert, 30 x 29"H. Orientation -R: Right 4 Worksurface Support leg, 30)( 29"H. Orientation 0 Wall Mount Kits 30" 0 64 ft, of undersurface wire management 1 Tackboard. Include load Bar 30w x 20h 2 Tackboard, Include load Bar 36w x 20h 0 Wall Mt. Tackboard, Include Load Bar 42w x 20h 0 Wall Mt. Tackboard. Indude load Bar 48w x 20h 8 2-Way 90 Degree -l" Corner, 32 . 64"H Unit Cost Extension • 3.77 $ 41.49 • 4.025.00 • 4.025.00 • 5.75 • -• 523.25 $ -• 11.50 • - $ 11.50 $ -• 534.75 $ 1,604.25 $ 339_25 $ 5,428.00 $ 304.75 $ 304.75 $ 3,852.50 • 7,705.00 $ 412.85 $ 412.85 $ 447.35 • 447,35 • 454.25 • 454.25 • 529.00 $ 529.00 • 339.25 $ 339.25 $ 327.75 • 655.50 • 362.25 • 362.25 $ 169_05 $ 169.05 $ 143.75 • 143.75 • 155.25 • 155.25 $ 195.50 • 1,759.50 • 132,25 • 132.25 • 149.50 • 149.50 • 166.75 $ 1,500.75 $ 170_20 • 1,702.00 • 178.25 $ 178.25 • 185.15 • 370.30 $ 220.80 • 2,649.60 $ 364.55 • 729.10 $ 555.45 • - $ 1265 • 392.15 $ 12.65 • 202.40 • 89.70 $ -• 19.55 $ 156_40 S 86.25 • 86.25 $ 128.80 $ - $ 126.80 $ $ 148.35 • 593.40 $ 142.60 $ $ 148.35 • 741.75 • 149.50 • 149.50 • 149.50 $ 149.50 • 142_60 $ 142.60 • 142.60 $ • 90.85 $ 363.40 • 11.50 $ • 20.29 • • 121.90 • 121.90 $ 138.00 $ 276.00 $ 133,79 • • 157.55 • • 92.00 • 736.00 City of Palo Alto· Dev Center Reconfiguration Project 285 Hamilton Avenue, Palo Alto, CA REVISED 4--1 7/31/2012 Second floor PoInei System fumture Ust of Product P.ilint Finish: Ot.ilmp.ilgne Metclilic RacewiIY: Metal -Ot.ilmpaane Metallic Finlsh Indude Duplex/Data openings Top Cap Profile: Rat Fabric P.ilnel System: Pallas-lex/Flint F.ilbric Demountable Walls: Pallas-Horizon Une/Aroma Glass: Satin Etched laminate: Frosty White lelcept where noted differently) Ed,e Detail: Knife Edge Pull: Inset Pull Seating Fabric: Pallas -Unspun/Carbon Locks on all Storage Ugflts/Lilmps: LED OVemead Storage to meet ADA requirements Quantity Description 0 2-Way 90 Degree "l-Corner, 4O"H 4 2-Way 90 Degree "l-Corner, 64"H 10 3-Way 90 Degree ''T'" Comer, 64"H 0 3-Way 90 Oegree "T" Corner, Trim 1 Side, 32· 64"H 1 4-Way X Intersection, Trim It Sides 32-64"H 2 End-of-Run Condition, 32"h 3 End-of-Run Condition, 4O"h 0 End-of-Run Condition, 64"h 1 Change of Height 1 Inline Panel Jumper, 6 Circuit, 12"l 0 Intersection Panel Jumper, 6 Orcuit, 16"l 8 Power Pass through, 10-Wire Svstem, 6 Circuit, 30" W Panel 0 Power Pass through, 100Wire System, 6 Circuit, 24" W Panel 0 Power Pass through, IO-Wire System, 6 Circuit, 36" W Panel 1 Power Pass through, 10-Wire System, 6 Circuit, 48" W Panel 4 Base Infeed with Bezel standard Base, 6 Circuit. 18 15 AMP Duplex Receptade with Bezel, 6 Circuit, Orcuit I 11 15 AMP Duplex Receptacle with Bezel, Raceway, 6 Orcult, Orcutt 2 7 15 AMP Duplex Receptacle with Bezel. Raceway, 6 Circuit, Circuit 3 0 Rigid Wireway, lO-Wire System, 6 Circuit, 30" W Panel 3 Rigid Wireway. lO-Wire System, 6 Orcuit, 36" W Panel 17 Rigid Wireway, 10-Wire System, 6 Circuit, 42" W Panel 10 Rigid Wireway, lO-Wire System, 6 Circuit, 48" W Panel 2 Mono Fabric Panel, Standard Base Raceway, 24 x 64"H. Flat Trim. NP 1 Mono Fabric Panel, Standard Base Raceway, 30x32"H. Flat Trim. NP 2 Mono Fabric Panel, Standard Base Raceway, 30 x 64"H. Flat Trim. P 1. Mono Fabric Panel, Standard Base Raceway, 30 I 64"H. Flat Trim. NP 0 Mono Fabric Panel, Standard Base Raceway, 36 x 64"H. Flat Trim. P 0 Mono Fabric Panel, Standard Base Raceway, 36 x 64"H. Flat Trim. NP 13 Mono Fabric Panel, Standard Base Raceway. 42 x 64"H Flat Trim. NP 0 Mono Fabric Panel, Standard Base Raceway, 42 I 64"H. Flat Trim. P 1 Mono Fabric Panel, Standard Base Raceway, 60 x 64"H. Flat Trim. NP 4 Mono fabric Panel, Standard Base Raceway, 48 I 64"H. Flat Trim. NP 0 Mono Fabric Panel, Standard Base Raceway, 48 I 64"H. Flat Trim. P 4 Mono Fabric Panel, Standard Base Raceway, 42 x 32"H. Flat Trim. P 10 Mono Fabric Panel, Standard Base Raceway, 48)( 64"H. Top Caps NP No Cutouts 4 Mono Fabric Panel, Standard Base Raceway, One Side Cutouts 48 I 64"H. Top Cap. 4 Mono Fabric Panel, Standard Base Raceway, with Cutouts 48 x 64"H_ Top Cap. NP 0 Keyboard Tray with TIlt & Swivel Mouse Tray 0 Flat Screen Support System. Single Grommet Mount or Top Edge Mount 0 Desk, Center Drawer, with lock NP 11 Torsioon on the Go Arm Chairs, Poly Back Mesh Back, Upholstered Seat_ Pneumatic Ht. Adj. Back TIlt Angle w/ (4) settings. TIlt Adjust. Seat Slider. Fabric: Pallas/ Unspun -Carbon 2 Guest Chairs on Casters w/ Adjustable ~r' Arm. Mesh Back, Upholitered Seat. Pneumatic Ht. Adjust. Swivel TIlt. 1 Fabric: Pallas/ Unspun -Carbon. 8 Unit Wall Track 30a 1 Unit Wall Track 64" 1 700 Series FiJies File Top 18x84 74P Edge for side by side DEMOUNTABLE WAUS Unit Cost Extension • 57.50 • · • 74.15 • 299.00 $ 74.75 • 747.50 $ 93.15 S • 90.85 $ 90.85 • 21.85 $ 43.70 • 23.00 S 69.00 $ 32.20 S $ 21.85 • 21.85 • 19.76 • 19.76 • 28.75 S S 52.90 • 423.20 $ 47.33 • $ 50.23 • • 51.75 • 51.75 S 67.85 • 271 .40 S 11.50 $ 207.00 $ 11.50 S 126.50 • 11.50 • 80.50 • 42.55 • · • 46.00 • 138.00 • 49.45 • 840.65 S 51.75 • 517.50 • 21275 • 425.50 , 178.25 • 178.25 S 247.25 • 494.50 • 316.25 • 5,060.00 • 257.44 S · • 257.44 • • 294.40 S 3,827.20 • 282.56 • • 372.39 • 372.39 $ 316.25 $ 303.81 S 303.81 • 303.81 • 205.85 • 823.40 • 316.25 • 3,162.50 $ 316.25 S 1,265.00 $ 316.25 $ 1.265.00 • 299.00 • · • 125.42 • · • 87.91 • · $ 377.48 $ 4,152.28 $ · S 309.24 • 618.47 • 79.35 $ 79.35 S 17.25 • 138.00 • 203.56 • 203.56 • . • · • . s City of Palo Alto· Dev Center Reconflguration Project 285 Hamilton Avenue, Palo Alto, CA REVISED 4-~ 7/31/2012 Second floor Panel System. Fumture Ust of Product Palnt finish: Champagne Metallic RoIceway: Metal· o,ampa,gne Metallic Rnish Indude Duplex/Data openings Top cap Profile: Flat Fabric Panel System: Palias-LeJl/FJint Fabric Demountable Walls: Pallas-Horizon Une/Aroma Glass: Satin Etched laminate: Frosty White (exupt where noted differently) lOdge Detail: KnIfe Edge Pull: Inset Pull Seatlnl Fabric: P~las -Unspun/Caroon Locks on 01/1 Storage U&frts/umps: LID OVerhead Storace to meet ADA requirements Quantity Description 64 lineal Feet of floor to Ceiling Demountable Walls Ht. Varies between 8' to 9'. 3.5" Thick Walls. To Include: fabric: Pallas/ HOriZOfl Une/ Aroma Powder Coat Paint finish: Champagne Metallic (3) Doo~ with hinged butt hinged doors: Monticello Maple finish on Maple Wood. Door Handle Harware: CYL. Satun AL50pd lockset, Schlage, 38.00", 626 Finish, Ives FS436. Glass start at 92" from Floor. 17" high: 1/4~ Clear Tempered -Vertical. Modularity to allow for the attachment of systems product as specified. Specialized attachment panels to allow finished attachments at wall, glass and drop ceilings. Construction to allow for removable of each segment without disruption to adjacent segments. finishes to match systems product. Integrated electrical as called for in plan. 0 Connection to panel system, including electrical a must. 0 Service calls to site for ergonomic issues that may arise within the first 3 months after Installation Subtotal Delivery/Installation Shipping Costs ra> Total $ S $ Unit Cost 27,950.00 - Extension S $ • S 104.998.00 • $ $ S 104,998.00 City of Palo Alto (ID # 2979) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/10/2012 Summary Title: El Camino Park/Mayfield Pump Station Amendment #1 Title: Approval of Amendment Number 1 to Contract #C10131396 in the Amount of $1,299,122 with CDM Smith Inc. to Provide Additional Services Associated With the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Project WS-08002, for a Total Not to Exceed Amount of $5,127,802 From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve Amendment Number 1 to Contract #C10131396 in the amount of $1,299,122 with CDM Smith Inc. to provide additional services associated with the reservoir, pump station, and well at El Camino Park and Mayfield Pump Station Augmentation Project WS-08002 (CMR:424:09) for a total revised contract not to exceed amount of $5,127,802. Background On November 9, 2009, Council awarded a contract to CDM Smith Inc. for the Design and Construction Management of El Camino Park Reservoir, Pump Station and Well and Mayfield Pump Station Augmentation Project (CMR 424:09). Council approved a total budget of $3,190,566 and a contingency amount of $638,114 for this project. To date, $218,000 of the original contingency amount has been used for additional services. The request for proposals for this project was sent to nineteen engineering consulting firms on August 5, 2009. CDM Smith Inc. was selected because of its professional qualifications, strength of the proposed project team, past successful experience designing similar complex projects, familiarity with the project design and construction issues and City procedures. This design contract supports the ongoing effort to improve the ability of the City’s water system 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 peak demand during periods of traditional supply curtailment. In response to CDPH’s recommendations, the City determined that a study was needed in order to identify possible capital improvements that could be implemented to meet CDPH requirements. The design basis and recommended capital improvements in rectifying system deficiencies to the emergency supply of water was addressed in the Water Wells, Regional Storage and Distribution System Study, dated December 1999, by Carollo Engineers. Discussion After the original contract with CDM Smith Inc. was signed and accepted by the City (CMR 424:09), both Operations and Engineering staff requested additional design features be added to the project to minimize legacy operations and maintenance impacts respond to recent changes to the CDPH requirements for new reservoirs and respond to the Community Services Department request to include further upgrades to El Camino Park upon completion of the utility work. In order to incorporate these items, additional design effort was required by CDM Smith Inc. As a result, the project completion date has been extended beyond what was originally anticipated and will therefore need additional funding to see the project through to completion. The following describes the additional work for each part of the expanded scope in the proposed contract amendment: Exhibit A – Phase I Reservoir, Pump Station and Well at El Camino Park and Mayfield Pump Station Augmentation; Exhibit B – Phase II El Camino Park Restoration Efforts; and Exhibit C – Emergency Water Well Expanded Use Study. Exhibit A – Phase 1 Reservoir, Pump Station and Well at El Camino Park and Mayfield Pump Station Augmentation Exhibit A includes additional scope that will be needed to see the project to completion. The work scope in Exhibit A increases the budget for these services by $682,236 and includes additional modeling, engineering and coordination for the preliminary design phase, reservoir concrete investigations and testing, incorporation of additional design items as requested by City staff, increased submittal review activities, increased construction independent inspections and testing, and City requested arborist services. The additional work on the existing hydraulic model was added to the scope of work so the City would have a working model that includes the emergency scenario described in the City’s 1999 report upon completion of the project. In addition, CDPH added new requirements to their standards regarding the type of concrete to be used in a new reservoir and in view of this new requirement, the Consultant was required to submit concrete cylinders to NSF (National Science Foundation) for testing and approval for use in the reservoir. All work that has been completed to date and is included in Exhibit A will be paid through the remaining available contingency of $420,114. The remaining uncompleted items listed in Exhibit A will be paid through Amendment No. 1 and account for an additional $262,122 requested. All work items listed in Exhibit A are out of scope items that are needed to see the project through to completion. Exhibit B – Phase II El Camino Park Restoration Efforts During the design phase of this project, the Community Services Department (CSD) indicated that it had funding available to further improve El Camino Park beyond the in-kind replacements funded by Utilities water rates. In order to keep on schedule with design, the Utilities Department needed to separate construction into two phases. Phase I would include all utility work and some minor park improvement work. Phase II would include all remaining park restoration improvement work and will be the cost responsibility of CSD. Phase II work is included in the proposed contract amendment. Phase II construction will begin upon the completion of all utility work at the site and is expected to be completed by September 2013. Exhibit B includes additional uncompleted work that is needed to design the Phase II improvements and increases the budget for these services by $397,000. The additional services include pre-design activities, final design activities, pre-construction activities, engineering services during construction and anticipated additional services that may be required. CSD has secured $2,503,496 through Park Development Impact Fees for the additional Phase II design and construction. The Phase II project was presented to the Park and Recreation Commission (PARC) and funding was recommended for approval on September 27, 2011. The approved additional work that will be included in Phase II includes the construction of a synthetic turf soccer field on the north side of the park, additional sports facilities on the south side of the park, new decomposed granite exercise pathway, security lighting, scorekeeper’s booth, and maintenance equipment storage shed. On April 23, 2012, CSD presented the project to City Council, who approved the recommended funding for the Phase II design and construction (ID #2411). Once the Phase II design work is complete, CSD will be presenting the plans to the Architectural Review Board (ARB) and City Council for approval. At this time, CSD will present an amended Park Improvement Ordinance for Council’s approval, should it be required. Exhibit C – Emergency Water Well Expanded Use Study After the original contract with CDM Smith Inc. was signed, the Utilities Department determined that it would be beneficial to evaluate expanding the permitted use of the City’s existing wells (Main Library Well, Eleanor Pardee Park Well, Hale Well, Rinconada Well, Peer’s Park Well, Fernando Well and Matadero Well) and one future well (El Camino Park Well). Currently the wells are permitted for emergency use only, but it may be valuable to have one or more of the wells available for supplemental supply in droughts or for extended use. The work scope described in Exhibit C is for investigating revisions to the existing permit with CDPH and providing recommendations to the City on how to proceed with such a permit change. Exhibit C includes additional uncompleted work associated with seeking alternative permits for the City’s existing wells and increases the budget for this project by $640,000. Additional Services include initial project planning, coordination with other relevant agencies, such as Stanford and the Santa Clara Valley Water District, a technical evaluation of the City’s existing well system and any associated additional services such as revisiting the EIR, that may emerge from the technical evaluation. The costs associated with the uncompleted additional out of scope work described in Exhibits A, B and C total $1,299,122 and bring the total cost of this contract to $5,127,802, which is comparable to other local projects of this magnitude (Graham Reservoir in Mountain View). Resource Impact The attached Amendment Number 1, Attachment A, requests an additional appropriation of $1,299,122 for the contract titled Design and Construction Management of El Camino Park Reservoir, Pump Station and Well and Mayfield Pump Station Augmentation Project. The Community Services Department will be transferring $609,702 to the Utilities Department for work associated with the Phase 2 design. Due to Proposition 218 requirements, the Utilities Department cannot fund the park improvements because the work is above and beyond replacement in kind. There is sufficient budget in the Emergency Water Supply Project (WS- 08002) to fund the additional work under this contract. Current staffing levels, and the need to maintain continuity with the design process, prevent City staff from performing this additional work. Amendment Number 1 will allow for additional design and construction management work needed to finish the project by the expected completion date. The incremental cost increase by project task is summarized in the following table: Exhibit Summary Breakdown Amendment One Exhibit A (Net Total less Contingency) $262,122 Exhibit B (New Scope) $397,000 Exhibit C (New Scope) $640,000 Sub-total Exhibits A, B and C $1,299,122 Original Contract Total w/ Contingency (CMR:424:09) $3,828,680 Revised Contract Grand Total $5,127,802 Policy Implications Amendment Number 1 does not represent a change to existing 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 certified an Environmental Impact Report (EIR) for this project in March 2007. The environmental aspects of the work contemplated by this Amendment Number 1 present no new significant environmental effects nor a substantial increase in the severity of previously identified significant effects beyond those discussed in the March 2007 EIR. Upon the completion of the well permitting evaluation described in Exhibit C, above, should Council decide to direct staff to expand the capacity of one or more of the Project’s wells, staff will consult with the City Attorney’s office to determine whether such changes will require a supplemental or subsequent EIR under Public Resources Code 15162 or 15163. Attachments: Attachment A: Amendment 1 (PDF) Prepared By: Jennifer Cioffi, Project Engineer Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager CITY OF PALO ALTO CONTRACT NO. 10131396 Page 1 EXHIBIT A TO SUPPLEMENTAL CONTRACT REVISION NO. 3 Scope of Services for Additional Professional Services Design and Construction Management Services for the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation City of Palo Alto BACKGROUND This Supplemental Contract Revision No. 3 amends the scope of professional services initiated in the Agreement between the City of Palo Alto (CITY) and CDM Smith Inc. (CONSULTANT) dated November 18, 2009. This amendment was prepared at the request of the City to address additional engineering planning and design activities associated with the predesign, design, and engineering support during construction phases of the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Project. CONSULTANT shall provide additional professional services as described below, some of which have been performed prior to the execution of this amendment. The tasks below have been numbered to correspond to the tasks identified in the Agreement. Subtask 1.7.1 is specifically related to additional work performed at the request of the City’s Parks and Recreation Division. Activities described under the remaining subtasks are specifically related to additional work performed at the request of the City’s Utilities Department. ADDITIONAL PROFESSIONAL SERVICES Subtask 1.1.3: Additional Modeling, Engineering, and Coordination for Preliminary Design Phase Additional engineering for the Preliminary Design Report is required in order for CONSULTANT to: Upgrade City’s existing hydraulic model to evaluate the emergency operating scenario described in the City’s 1999 Report, Review the results of the additional modeling with City staff to confirm approach and basis of design, City of Palo Alto Contract No.10131396 Page 2 Prepare for and attend additional preliminary design project coordination meetings with the County of Santa Clara, Palo Alto Unified School District, City Electrical group, City Parks and Recreation Division, and City Water Operations Section, Perform Project Management activities related to extended Preliminary Design Phase schedule. Approach: CONSULTANT shall perform the following work under this task: Upgrade the City’s existing hydraulic model to include the emergency scenario described in the City’s 1999 Report. If pressures exceed the City-desired range: Update the City’s existing model to incorporate planned pipeline improvements associated with the City’s Water Main Replacement Projects (21 CIP WS-07003 & 22 CIP WS-08017). If pressures continue to exceed the City-desired range, CONSULTANT will identify segments of pipeline with excessive headloss and remodel with suggested diameters until the desired maximum operating pressures are achieved. CONSULTANT will coordinate, prepare, attend, and develop summaries for additional meetings at the City’s request. Assumptions: The desired maximum pressure in the City’s distribution system during emergency operating conditions is 100 psi. CONSULTANT’s suggested pipeline improvements will be as necessary to reduce excessive system pressures during emergency conditions, and will not be meant to constitute a utility replacement plan which may be influenced by other factors such as cost, construction location and constructability, pipeline age and condition, impact to neighbors, etc. CONSULTANT assumes an additional 7 meetings with City staff and/or other interested Agencies will be required during the Preliminary Design phase. Deliverables: The results of this task will be included in the draft Preliminary Design Report (PDR), and incorporated into the Mayfield and Lytton pump station designs. Agendas, materials, and summaries associated with project meetings. Justification: CONSULTANT’s scope of work included its receipt of a working, calibrated copy of the City’s hydraulic model to confirm Mayfield and Lytton pump station design conditions. Although additional modeling and system validation was identified as a potential Additional Services task, the detailed modeling activities identified in this subtask were not included in CONSULTANT’s approved scope and task budget. The additional efforts to evaluate the performance of the City’s system under emergency conditions with the Charleston PRV and California PRV in the ‘open’ position requires additional modeling, meetings with City staff, review of pump sizes, review of electrical loads, and associated impacts on the sizing and design of the Mayfield Pump Station building were also not included in the CONSULTANT’s approved scope and task budget. City of Palo Alto Contract No.10131396 Page 3 Subtask 1.1.2 of CONSULTANT’s scope of work included 4 Preliminary Design User Group meetings with various City department staff. CONSULTANT anticipates that additional meetings with City staff will be required to review and discuss electrical and controls, modeling, and operational elements of the project, in addition to meetings with Stanford, County of Santa Clara, and Palo Alto Unified School District. The coordination, preparation, attendance, and summaries associated with these meetings is not included in the initial Agreement. Subtask 1.2.5: NSF 61 Concrete Investigation and Testing CONSULTANT will assist the City of Palo Alto with developing and executing a plan to meet a new requirement of California Department of Public Health (CDPH) that the concrete used in construction of the El Camino Reservoir be compliant with NSF 61. Based on discussions with the City and NSF International (NSF), the selected approach will be to pre-qualify local suppliers based on materials testing and identify these pre-approved vendors to bidding contractors to maximize competition and provide a cost-effective means of CDPH-approved NSF 61 compliance for the City. Approach: The NSF 61-related activities to be provided by CONSULTANT include: Research of NSF 61 policies and testing standards for concrete used for potable water containment. Identification of aggregate plants in the U.S. able to provide NSF 61 certified materials. Identification of local concrete batch plants interested in working with the City and CONSULTANT to test concrete samples. Development of a testing and construction plan for submittal to CDPH. At City’s request, developing a contract between CONSULTANT and NSF that addresses CDPH requirements, meets the City’s needs, and is acceptable to NSF and CONSULTANT. Coordination of concrete sampling and testing activities from up to three local suppliers. Associated NSF (for NSF 61 compliance) and Kleinfelder (for physical properties) testing fees. Incorporation of NSF 61 compliance plan and approved vendors into Contract Documents. Assumptions: CONSULTANT’s role in this work is to provide the NSF 61 testing described above. Under separate correspondence direct with CDPH, the City has verified that this proposed work will meet the new requirement of CDPH. CONSULTANT cannot and does not guarantee that the actual concrete materials delivered to the jobsite by the construction contractor will match those samples provided to CONSULTANT during the testing phase. Deliverables: Testing and construction plan for submittal to CDPH. Incorporation of NSF 61 compliance plan and approved vendors into Contract Documents. Justification: City of Palo Alto Contract No.10131396 Page 4 The requirement of testing the concrete used to construct a drinking water reservoir to NSF 61 standards is essentially without precedent. The coordination, preparation, sampling and testing, and design activities associated with this requirement is not included in the initial Agreement. Subtask 1.6: Incorporation of Additional Mayfield Pump Station Augmentation Project Design Items The expansion of the engineering for the Mayfield Pump Station Augmentation Project design is required in order for CONSULTANT to: Design and prepare associated drawings and specifications to incorporate additional pump station operational features and layout requested by the City. Prepare an erosion control plan drawing for the Mayfield Pump Station Augmentation Project design. Approach: At the City’s request, CONSULTANT will perform the following work under this task: Add two dedicated Pressure Area 1 pumps, and add interior vault and motorized valve to separate the two pressure zones within the pump station, Incorporate pipeline shut-downs in the vicinity of the Mayfield Pump Station performed using line-stop equipment, Review and revise Bid Documents to reflect Mayfield Reservoir construction sequence and shutdown period starting November 1, 2011 to correspond with other ongoing City utility improvements, Add reservoir water quality sampling piping and system to Mayfield Pump Station and reservoir, Redesign connections to existing piping within the Mayfield Reservoir in order to retain the use and mixing provided by existing manifold piping to the extent possible, Add programming control descriptions for Mayfield Pump Station, Make additional revisions to the City’s mechanical and electrical equipment preferences following submittal of 100% and initial Bid Set packages, Incorporate results of the field geotechnical and existing Mayfield Pump Station building material sampling results into the design package, Provide additional resubmittal of project Bid Documents following receipt of additional City review comments which were not available at the time of the first Bid Document submittal, Add erosion control drawings to include site specific locations of silt fences, fiber rolls, inlet protection devices, and tree protection. Assumptions: The proposed layouts of the Mayfield Pump Station reviewed and approved by City Engineering and Operations staff on July 19, 2010, will be used as the basis for the pump station design. Deliverables: The additional design elements described above will be reflected in all submittal packages of the Mayfield Pump Station Augmentation Project design that occur following completion of each element. Justification: City of Palo Alto Contract No.10131396 Page 5 The subtask will incorporate the City’s design preferences into the Mayfield Pump Station Augmentation Project design, which will increase the level of effort for all engineering disciplines involved with the design (civil, mechanical, process, landscaping, structural, electrical/instrumentation, architectural, and cost estimating). The nature of these preferences could not have been known at the time the Agreement was developed, or were made known to the CONSULTANT following associated field activities performed as Additional Services, and were not made known to CONSULTANT until after submittal of the draft Preliminary Design Report and subsequent design packages. Subtask 1.7.1: Additional El Camino Park Landscaping Alternatives Development and Design Activities; Period January 1 – May 5, 2012 In response to requests generated by the City’s Parks and Recreation Division, additional engineering and other professional services for the El Camino Park Reservoir, Lytton Pump Station, and Well Project design are required in order for CONSULTANT to: Design and prepare associated drawings and specifications to incorporate the synthetic turf surfacing and sports field layouts requested by the City at El Camino Park (taken to 90% design). Change the project concept to reflect construction of the El Camino Park park-related facilities under two distinct phases. Remove landscaping design elements from project Phase 1 documents in 100% and Bid Set documents. Prepare additional plan view drawings of park Phase 2 landscaping alternatives based upon a Parks and Recreation Division provided list of additional facilities, and additional meetings held with the City Park & Recreation Commission, City Council, and Architectural Review Board. Approach: CONSULTANT shall perform the following work under this task: Design and detailing the synthetic fields, subdrain system, and perimeter drain system including the collection system for runoff. Subsequent removal of these features for 100% design and Bid Set packages. Incorporation of the following El Camino Park ancillary facilities requested by the Parks and Recreation Division through 90% design package: spare underground conduits for future irrigation controllers and future softball scoreboard; “stub out” for the future installation of a new irrigation line to the Alma Street/El Camino Real planter island; site control satellite controller; and 20-foot high protection fencing at the south end of the soccer field. Subsequent removal of these features for 100% design and Bid Set packages. Cost estimating efforts associated with the addition and subsequent removal, of synthetic turf and associated Parks and Recreation Division requested improvements from the Phase 1 pump station, reservoir, and well design package. Preparation for and attendance at the Park & Recreation Commission Meeting on January 25, 2011. Developing revised Phase 2 landscaping alternative layouts and associated cost estimates for the Park & Recreation Commission Meeting on February 22, July 26, and September 27, 2011. Preparation for and attendance at the Architectural Review Board meetings on May 5, 2011, and on May 3, 2012, to present the Parks and Recreation Division’s preferred El Camino Park landscaping alternative, and associated restroom and sports buildings’ layouts and architectural renderings. City of Palo Alto Contract No.10131396 Page 6 Preparation of materials for and attendance at the City Council Meeting on June 13, 2011, and on April 23, 2012, to present the Parks and Recreation Division’s preferred El Camino Park landscaping alternative. Assumptions: CONSULTANT shall meet with City Parks and Recreation Division staff to determine the City’s desired size, use, and features for the new north field synthetic turf surfacing and other new park buildings and amenities. CONSULTANT shall attend two meetings with City, one of which shall be conducted at El Camino Park, to review synthetic turf design and landscaping layout concepts, Parks and Recreation Division staff to provide template drawings for score keeper’s/announcer’s shack and associated storage booth. CONSULTANT’S costs associated with Subtask 1.7.1, as described herein, includes engineering and design related activities performed by CONSULTANT for the period January 1, 2011, through May 5, 2012. CONSULTANT understands that any additional related work performed by CONSULTANT after May 5, 2012, if requested by City, will be reimbursed by CITY under a separate supplemental amendment to the Agreement. Deliverables: The additional design elements described above will be reflected in the 100% and Bid Set submittals of the El Camino Park Reservoir, Lytton Pump Station, and Well Project design (Phase 1 package). The additional requested landscaping and architectural layout plans and renderings will be emailed in pdf format to the City for review and comment in preparation for the associated Parks and Recreation Committee Meetings, City Council Meetings, and ARB Meetings noted. Justification: CONSULTANT’s scope of work reflects restoration of all existing park landscaping using sod supported by an irrigation system. The subtask will incorporate new synthetic turf sports fields, and additional Parks and Recreation Division requested improvements- first as a part of the initial Phase 1 design package (but not included in the 100% or Bid Sets), and then as landscape restoration under a separate Phase 2 design package, which if implemented shall be authorized under a separate contract amendment. The nature of these items could not have been known at the time the Agreement was developed, and were not made known to CONSULTANT until after submittal of the draft Preliminary Design Report. Subtask 1.8: Incorporation of Additional El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 Design Items The expansion of the engineering and other professional services for the El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 design is required in order for CONSULTANT to: Design and prepare associated drawings and specifications to incorporate the additional pump station operational features and layout requested by the City. Prepare an erosion control plan drawing for the El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 design. Approach: At the City’s request, CONSULTANT will perform the following work under this task: City of Palo Alto Contract No.10131396 Page 7 Add interior vaults and motorized valves to separate the pressure zones within the pump station, Add programming control descriptions for new Lytton Pump Station, Make additional revisions to the City’s mechanical and electrical equipment preferences following submittal of 100% and initial Bid Set packages, Incorporate results of the existing Lytton Pump Station building material sampling results, performed as Additional Services, into the design package, Provide additional resubmittal of project Bid Documents following receipt of additional City review comments which were not available at the time of the first Bid Document submittal, Add Lytton Pump Station pump-to-waste piping (allowing buried reservoir to be drained using large pump), Add new localized drain inlet and gravity piping in southern half of El Camino Park (allowing El Camino Park Reservoir water removed by portable sump pump to be conveyed to off-site stormwater system), Add erosion control drawings to include site specific locations of silt fences, fiber rolls, inlet protection devices, and tree protection. Add tree protection and additional existing tree information drawings as requested by Architectural Review Board. Assumptions: The proposed layouts of the Lytton Pump Station reviewed and approved by City Engineering and Operations staff on July 19, 2010, will be used as the basis for the pump station design. Deliverables: The additional design elements described above will be reflected in all submittal packages of the El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 design that occur following completion of each element. Justification: The subtask will incorporate the City’s design preferences into the El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 design, which will increase the level of effort for all engineering disciplines involved with the design (civil, mechanical, process, landscaping, structural, electrical/instrumentation, architectural, and cost estimating). The nature of these preferences could not have been known at the time the Agreement was developed, or were made known to the CONSULTANT following associated field activities performed as Additional Services, and were not made known to CONSULTANT until after submittal of the draft Preliminary Design Report and subsequent design packages. Subtask 3.1.1.1: Increased Submittal Review Activities The completed designs for the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 include an increased number of elements to be reviewed during construction. The purpose of this subtask is to complete the review of the increased number of shop drawings, product data, and samples which are anticipated to be submitted by the construction general contractors. City of Palo Alto Contract No.10131396 Page 8 Approach: The Construction Manager (CM) will transmit to CONSULTANT all technical submittals provided by the general contractors for CONSULTANT’s review, comments, and recommendations as to how to respond to each submittal. In so doing, CONSULTANT shall select from the four review categories listed in the City’s standard specifications: 1) No Exceptions Taken; 2) Make Corrections Noted; 3) Revise & Resubmit; 4) Rejected. CONSULTANT shall maintain a log of submittals in a Microsoft Excel® spreadsheet for internal management and coordination with the Construction Manager. Assumptions: The number of submittals and resubmittals anticipated in total on the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 will be increased by 160, from 160 to a new total of 320. Deliverables: One copy of review comments for each submittal. Justification: The completed designs for the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 are expected to require an increased number of elements to be reviewed during construction. The nature of these changes and the resulting level of review effort was not known at the time the Agreement was developed. Subtask 3.2.1: Increased Construction Independent Inspection and Testing Services The purpose of this subtask is to increase the scope of work of the independent construction inspection and testing services subcontractor to that anticipated to be required to complete construction of the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1. Approach: Additional geotechnical services will be provided by Kleinfelder during excavation of Mayfield and Lytton pump station buildings’ footings, tank excavation at El Camino Park Reservoir, excavation of tank foundations at El Camino Park Reservoir, preparation of subgrade soils and compaction of aggregate base in the exterior flatwork and driveway areas. Other associated services will include report preparation, and sampling and laboratory testing of soils and aggregate base used in project construction. Special inspection services will be increased to cover the anticipated observation of reinforcing steel and concrete placement, with sampling and testing of the concrete; masonry placement observation, including testing of masonry units, masonry prisms, mortar, and grout; structural steel inspections (including shop and field welding inspections, with non-destructive testing methods; high strength bolt inspections; and anchor bolt/epoxies dowel installation observations. Kleinfelder will sample and test materials from two concrete mix designs for preliminary strength and shrinkage data. Assumptions: The increased number of inspections and testing associated with this task is based on the following documents: o “Mayfield Pump Station Augmentation Project” Bid Set, dated March 2011, City of Palo Alto Contract No.10131396 Page 9 o “El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1”, dated May 2011, o “Geotechnical Investigation, Palo Alto Reservoir, El Camino Park, El Camino Real, Palo Alto, California,” dated April 8, 2010, o “Geotechnical Investigation for the Mayfield Reservoir and Pump Station, Palo Alto, California,” dated December 2, 2010. Inspections and testing to be performed shall be as described in the approach for this subtask. Deliverables: Final letters and reports following completion of soils and material testing, as appropriate and/or as required. Justification: As a result of the facilities included in the final design, and additional clarity of City Building Department requirements during construction, it is anticipated that construction of the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 will require greater independent construction inspection and testing services than was estimated at the time the Agreement was developed. Subtask 3.2.2: Arborist Services During Construction in El Camino Park The purpose of this subtask is to add the services of a local, ISA Certified Arborist, Ray Morneau, to CONSULTANT’s team. Approach: Mr. Morneau will provide a Certified Arborist’s tree consultation and advice on the El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 to the extent of the assumptions stated below. Assumptions: Attendance at up to 3 project meetings (up to a total of 8 hours), Up to 3 site visits for inspection of tree protection fencing location/condition, after installation (up to a total of 8 hours), Additional hours for as-needed calls, questions, etc. (up to a total of 8 hours). Deliverables: Written documentation of recommendations and findings, as appropriate for the task at hand. Justification: The City has requested that an ISA Certified Arborist perform inspection or tree protection fencing and be available for general tree health consultation during the course of construction activities in El Camino Park. The nature of this request or associated scope of services was not known at the time the Agreement was developed. Task 5: Additional Services The purpose of this item is delete the text associated with Task 5 – Additional Services from the original Agreement, and replace it with the revised two paragraphs below: Approach: CONSULTANT shall provide the following additional services: City of Palo Alto Contract No.10131396 Page 10 Preparation of a geotechnical report supplement for the Mayfield site. Use the City’s existing hydraulic model to validate the new operating conditions for the pumps to be used at the new Mayfield and Lytton pump stations. Testing for hazardous materials such as lead paint, asbestos, PCBs, PCB caulking, heavy metals, VOC or petroleum contaminated soil, contaminated groundwater etc. at any of the project sites or existing facilities. Potholing (non-destructive excavation) to determine location of underground utilities. Preparation of landscape and irrigation design for the Mayfield site. These tasks are authorized under Task 5 with the not-to-exceed cost of $80,000, but can be performed in conjunction with, and billed under Consultant’s normal billings associated with Tasks 1-4. Subtask 5.1: Additional Services Approach: CONSULTANT shall provide the following additional services on an if- and as- requested basis within the limits of the available Subtask 5.1 Additional Services budget: Design of remediation for any hazardous materials, contaminated soil, contaminated groundwater, etc., encountered during construction. Noise testing or acoustic consultation. Design of enhancements or betterment of existing facilities at El Camino park e.g. new dugouts, new concession stand, new restrooms, new scoreboard, new sports equipment storage building, new lighting, etc. Preparation and printing of conformed drawings and specifications after the construction bid process. Additional on-site inspection and support during construction beyond the estimated meetings to discuss construction progress and technical issues. Additional engineering and design services during construction and additional CONSULTANT project management should the construction contract extend beyond 2012, with the construction periods running concurrently. Preparation of additional architectural options or renderings beyond those already described in the scope of work. Preparation of an Operations and Maintenance manual for the two facilities. Additional Construction Management should the construction contract extend beyond year 2012. Additional construction testing and ICC inspection beyond the scope of services added by Subtask 3.2.1 of this Amendment No. 3. Additional project management and QA/QC related to any Additional Service assignment. Additional construction submittals, resubmittals, and RFIs for the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1. Use of any portion of the Additional Services budget shall require written direction from the City’s Project Manager prior to proceeding with any of the services noted above. The City may, at its sole discretion, decline to authorize any or all work described in Task 5.1. COMPENSATION City of Palo Alto Contract No.10131396 Page 11 Compensation for the additional services will be on a time and materials basis according to CONSULTANT’s Billing Rate Schedule attached to the Agreement. The total cost for the services described herein is summarized below. Tasks Utilities Department Related Amount Parks and Recreation Division Related Amount Subtask 1.1.3: Additional Modeling, Engineering, and Coordination for Preliminary Design Phase $31,500 $0 Subtask 1.2.5: NSF 61 Concrete Investigation and Testing $58,000 $0 Subtask 1.6: Incorporation of Additional Mayfield Pump Station Augmentation Project Design Items $84,200 $0 Subtask 1.7.1: Additional El Camino Park Landscaping Alternatives Development and Design Activities; Period January 1 – May 5, 2012 $0 $147,736 Subtask 1.8: Incorporation of Additional El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 Design Items $82,800 $0 Subtask 3.1.1.1: Increased Submittal Review Activities $150,000 $0 Subtask 3.2.1: Increased Construction Independent Inspection and Testing Services $85,000 $0 Subtask 3.2.2: Arborist Services During Construction in El Camino Park $8,000 $0 Subtask 5: Additional Services (No monetary changes to the subtask amount of $80,000 approved in the Agreement) $0 $0 Subtask 5.1: Additional Services $35,000 $0 Subtotal $534,500 $147,736 TOTAL $682,236 CITY OF PALO ALTO CONTRACT NO. 10131396 Page 12 EXHIBIT B TO SUPPLEMENTAL CONTRACT REVISION NO. 4 Scope of Services for Additional Professional Services Design and Construction Management Services for the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation City of Palo Alto Background This Supplemental Contract Revision No. 4 amends the scope of professional services initiated in the Agreement between the City of Palo Alto (CITY) and CDM Smith Inc. (CONSULTANT) dated November 18, 2009. This amendment was prepared at the request of the City to address additional engineering planning and design activities associated with predesign, design, and engineering support during construction for the El Camino Park Restoration Project. CONSULTANT shall provide additional professional services as described below. The tasks below have been numbered to correspond to the tasks identified in the Agreement. The El Camino Park Restoration Project (a.k.a. Phase 2 Project) will restore and improve various park and landscaping elements at El Camino Park immediately following completion of the City’s El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 (a.k.a. Phase 1 Project) construction activities. During development of the El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 design package, the City decided to make several additional improvements to El Camino Park, rather than have it be replaced in-kind after Phase 1 Project construction, to improve its value and usefulness to the community. Due to their familiarity with the landscaping issues and role in the Phase 1 Project, and in an effort to execute this task as efficiently as possible for the City, Siegfried Engineering Inc will be leading the efforts associated with Tasks 6-10, and will be the Engineer of Record for the El Camino Park Restoration Project. Several potential park restoration and improvement concepts were developed by the design team and presented to the City and the Parks and Recreation Commission for feedback. As a result, it was decided that the following elements would be included in the design of the El Camino Park Restoration Project elements and paid for by Park Development Impact Fees: synthetic turf north soccer/lacrosse playing field; new storage building for maintenance equipment; expanded parking lot with trash enclosure; lighting conduit and footings for future lighting of north field; lighting conduit and footings for all new lights on south field; mulch for non-turf areas; all metal soccer catchment fencing; limited tree removal; new decomposed granite pathway with future lighting and three picnic tables. The following items, not paid for by City of Palo Alto Contract No.10131396 Page 13 Park Development Impact Fees, will also be included in the design as add-alternate items: Alma Road crossing; new restroom facility; and new scorekeeper booth, potentially attached to storage building. Restoration of the existing natural turf south softball/multi use playing field is also included in the Phase 2 Project design, the payment for which will be by the City Utilities Department as a Phase 1 Project construction restoration action. The basis for the layout and design of all El Camino Park Restoration Project elements is the package provided for the City Council Meeting held on April 23, 2012, and the Architectural Review Board (ARB) Study Session held on May 3, 2012 (during which only minor comments were received) (Attachment A). The entire park will be available for the contractor’s use during construction as the soccer and baseball field activities will be temporarily relocated by the City to another location. Following construction, the contractor will warrant the facilities for one year following substantial completion. Engineering services for this project include: site surveying as necessary to support the design elements, final design, preparation of construction drawings and specifications, bid period services, and construction phase design support services. This scope of work does not include layout or design of the dog park area or other improvements north of Alma Street. Scope of Work—CDM Smith Inc. (CONSULTANT) The scope of work is divided into the following three tasks. Task 6 – Phase 2 Predesign Task 7 – Phase 2 Design Task 8 – Phase 2 Pre-Construction Task 9 – Phase 2 Engineering Services During Construction Task 10 – Phase 2 Additional Services Task 6 – Phase 2 Predesign In response to requests generated by the City’s Parks & Recreation Division, City Council, and Architectural Review Board, additional engineering and other professional services for the El Camino Park Restoration Project design may be required in order for CONSULTANT to: Prepare additional preliminary plan view drawings of park Phase 2 landscaping alternatives based upon comments received from these meetings. Prepare Phase 1 Project change order drawings to account for any revised Phase 1 final base grades resulting from the final Phase 2 landscaping layouts. Approach: CONSULTANT shall perform the following work under this task: Revisions to Phase 2 landscaping alternative layouts and associated cost estimates as may be required prior to presentation of materials by Park’s Department at a future City’s Parks & Recreation Division or City Council Meeting. Revisions to final base grades in Phase 1 Project civil drawings, in the form of a Phase 1 construction change order, due to revised size and location of the synthetic field to be located on the north half of El Camino Park. City of Palo Alto Contract No.10131396 Page 14 Assumptions: CONSULTANT shall meet with City Parks and Recreation Division staff to confirm the City’s desired size, use, and features for the new north field synthetic turf surfacing and other new park buildings and amenities. CONSULTANT’s costs associated with Task 6 includes engineering and design related activities performed by CONSULTANT for the period commencing May 6, 2012. CONSULTANT understands that additional related work performed by CONSULTANT prior to May 6, 2012, will be reimbursed by CITY under Amendment #3 to the Agreement. Deliverables: The additional requested landscaping and architectural layout plans, renderings, and related materials will be emailed in pdf format to the City for review and comment in preparation for the associated meetings in which the material will be presented. Task 7 – Phase 2 Design Subtask 7.1 Phase 2 Project Meetings CONSULTANT will plan for meetings with the City’s Architectural Review Board (ARB) and with other members of City’s departments (User Group Meetings) during the design process, in addition to holding internal coordination meetings with CONSULTANT’s design team members. Approach: CONSULTANT shall prepare drawings, including architectural renderings in plan and profile, of the above ground structures and landscaping for presentation to the Architectural Review Board (ARB). Two meetings are planned: One to introduce the 65% design elements to the ARB and receive their suggestions, and a second presentation to confirm CONSULTANT’s incorporation of suggestions into the 100% design and hear any final comments prior to completing the Bid Set. Attendance at additional public meetings such as City Council, and the Parks and Recreation Commission are excluded. Up to three User Group workshops are planned during the design phase. Workshops are anticipated to include the following: Project Kick-off Meeting; 65% User Group Meeting; 90% User Group Meeting. The Consultant will determine which members of its design team will be present at the User Group workshops. Assumptions: The City’s User Group will include project management from the Community Services Department, a utilities engineering representative, construction, operations, maintenance, traffic, planning, public works storm division, and water quality staff. City staff will prepare meeting summaries and action item lists. Deliverables: Proposed agenda prior to each workshop – electronic and paper copies. City of Palo Alto Contract No.10131396 Page 15 Subtask 7.2 Phase 2 65 Percent Design Submittal The objective of this subtask is to provide the City with an interim set of documents at approximately 65 percent through the design process. With these documents the City will be able to confirm that its understanding of the project facilities from the preliminary design work is being appropriately implemented. Approach: Drawings and specifications will be in progress and will not be complete. However, it is important for the City to review the concepts and approaches shown thereon before the design progresses significantly further. This submittal packages will contain: Symbol, abbreviation, and standard legend drawings. Civil grading and drainage site plans. Civil yard and irrigation piping site plans. Building plan views for architectural, structural, and mechanical disciplines. Electrical site plans with major duct bank routing and outdoor lighting locations. Electrical single line drawings. Typical details for civil, structural, architectural, and electrical disciplines. Other drawings in progress that would be useful for review. Lists of drawings and specification sections anticipated for the Bid Set. Specifications in progress. Project construction schedule (provided 2 weeks following delivery of the design package). Updated preliminary construction cost estimate (provided 2 weeks following delivery of the design package). List of specific questions for City review and response. Traffic recommendations memo addressing a proposed configuration and/or the elimination of the proposed Alma Street crossing. Depending on the recommendations in the memo and City concurrence, the 65 percent submittal may not include sheets depicting the crossing. One User Group workshop will be held in conjunction with the delivery of this submittal. It will be facilitated by CONSULTANT and will serve to introduce the construction documents to the submittal reviewers. The City will review and provide consolidated written comments upon this submittal to CONSULTANT. These comments will be provided in a Microsoft Excel® spreadsheet. CONSULTANT shall write responses to all City comments and incorporate these comments into the next design submittal. CONSULTANT shall complete an internal quality assurance and quality control review at this stage concurrent with the City’s review. Results of this review will be incorporated into the next design progress submittal. Assumptions: It is assumed that the El Camino Park Restoration Project will include the design of the following principal facilities: 1) Synthetic turf north soccer playing field; 2) Natural turf south softball/lacrosse playing field; City of Palo Alto Contract No.10131396 Page 16 3) New restroom facility (included as an add-alternate item); 4) New storage building for maintenance equipment; 5) New scorekeeper booth, potentially attached to storage building (included as an add- alternate item); 6) Expanded parking lot with trash enclosure; 7) Alma Road crossing (included as an add-alternate item); 8) Lighting conduit and footings for future lighting of north field and new pathways; 9) Lighting conduit and footings for all new lights on south field; 10) Mulch for non-turf areas; 11) Soccer catchment fencing; 12) Bike racks; 13) Limited tree removal; 14) New decomposed granite pathway and three picnic tables. Additional assumptions include: The basis for the layout and design of all El Camino Park Restoration Project elements is the package provided for the Architectural Review Board Study Session held on May 3, 2012 (during which only minor comments were received), which includes the El Camino Park site plan graphics package prepared for the City Council Meeting on April 23, 2012 (Attachment A). This scope of work does not include layout or design of the dog park area or other improvements that the City plans to locate north of Alma Street. This design submittal will be reviewed by the City’s User Group. Drawings and specifications will be prepared to CONSULTANT standard format, layering and fonts; City’s standard border can be used if provided. City will be responsible for developing the Division 0 contracting document associated with the project (contracting conditions, General Construction, Special Provisions, etc). Drawings will be prepared in Autocad 2011. The City will provide one consolidated set of review comments (paper and electronic copy) on the 65 percent submittal within 14 calendar days of submission. CONSULTANT may continue to work on the design during this interim period. The City will provide an electronic copy of its current and standard specification Division 0 and 1 sections for CONSULTANT to edit for this project. CONSULTANT shall add Division 1 specification sections for this project. The contract documents will be based upon a competitive, public works bidding process. The estimated construction schedule will be prepared using Microsoft Project® software. The existing El Camino restroom and other facilities for demolition do not contain hazardous materials such as lead paint, asbestos, PCBs, PCB caulking, heavy metals, VOC or petroleum contaminated soil, contaminated groundwater etc. that needs to be tested, treated, or remediated as part of the field services, design, or construction of this project. If requested, these materials can be tested under Task 10. Traffic control plan, if required, will be provided by the construction contractor. New buildings will not include use of Kalwall or skylights in their design. Materials used for building walls and roof will be similar to those used for the Lytton Pump Station. All buildings shall be ventilated by natural/passive means. Forced ventilation and air City of Palo Alto Contract No.10131396 Page 17 conditioned heating and cooling are not included. Restrooms will not have heated water. Parking lot drainage patterns will be consistent with existing drainage patterns (i.e., from west to east where it ponds until it evaporates). Design does not include extension or improvements to existing storm drains. Design will not improve existing sanitary sewer capacity or materials; no sewer connection capacity or other sewer connection calculations or documents are required. Parking lot design does not include new lighting. The Alma Crossing does not include modifications within Caltrans Right of Way or the Cal Train Right of Way. The work for the Alma Street Crossing does not include acceleration, deceleration, turn pockets, re-grading, or re-paving along Alma Street. No traffic counts or modeling will be provided, the study will be based solely on historic counts and capacities provided by the City. The crossing study does not include discussions with CalTrain or Caltrans. The scope of work does not include an arborist’s services for reviewing and supporting the team’s recommendations within tree protection zones. This service shall be provided by City staff. Deliverables: Five sets of bound half-size drawings; one electronic copy of the drawings on CD- ROM. Five sets of bound specifications; one electronic copy of the specifications on CD- ROM. One paper and one electronic copy of response to City review comments. Subtask 7.3 Phase 2 90 Percent Design Submittal The purpose of the 90 percent submittal is to demonstrate that all City comments from the 65 percent submittal have been appropriately addressed. This is to be essentially the complete draft of the bid plans and specifications. Approach: This submittal package will include: All drawings required for the construction documents. All specification sections, excluding those Division 0 contractual documents prepared by the City. List of specific questions for City review and response. A User Group workshop will be held in conjunction with the delivery of this submittal. It will be facilitated by CONSULTANT and will serve to present the construction documents to the reviewers. The City will review and provide consolidated written comments upon this submittal to CONSULTANT. These comments will be provided in a Microsoft Excel® spreadsheet. CONSULTANT shall write responses to all City comments and incorporate these comments into the next design submittal. An updated construction schedule and construction cost estimate will be provided with the 90 percent submittal. City of Palo Alto Contract No.10131396 Page 18 Assumptions: This submittal will be reviewed by the City’s User Group. The City will provide one consolidated set of City review comments (paper and electronic copy) on the 90 percent submittal within 14 calendar days of submission. CONSULTANT shall continue to work on the design during this interim period. Deliverables: Five sets of bound half-size drawings; one electronic copy of the drawings on CD-ROM. Five sets of bound specifications; one electronic copy of the specifications on CD-ROM. Agenda for one User Group workshop. One paper and one electronic copy of response to City review comments. Subtask 7.4 Phase 2 100 Percent Design Submittal The purpose of the 100 percent submittal is to demonstrate that all City comments from the 90 percent submittal have been appropriately addressed, and that the documents are ready for final ARB and City Building Department Review. This is to be essentially the complete draft of the bid plans and specifications. Approach: This submittal package will include: All drawings required for the construction documents. All specification sections, excluding those Division 0 contractual documents prepared by the City. List of specific questions for City review and response. A User Group workshop will be held in conjunction with the delivery of this submittal. It will be facilitated by CONSULTANT and will serve to present the construction documents to the reviewers. The City will review and provide consolidated written comments upon this submittal to CONSULTANT. These comments will be provided in a Microsoft Excel® spreadsheet. CONSULTANT shall write responses to all City comments and incorporate these comments into the next design submittal. CONSULTANT shall present the 100% design to the ARB for approval, and will use the 100% design as the basis for preparing submittals for City Building department permitting review. Assumptions: This submittal will be reviewed by the City’s User Group. The City will provide one consolidated set of City review comments (paper and electronic copy) on the 90 percent submittal within 14 calendar days of submission. CONSULTANT shall continue to work on the design during this interim period. Deliverables: Five sets of bound half-size drawings; one electronic copy of the drawings on CD-ROM. Five sets of bound specifications; one electronic copy of the specifications on CD-ROM. Agenda for one User Group workshop. One paper and one electronic copy of response to City review comments. City of Palo Alto Contract No.10131396 Page 19 Subtask 7.5 Phase 2 Bid Set Submittal This subtask includes the remaining work to complete the project construction documents. Approach: The Bid Set submittal will be sealed by the responsible engineer/architect and signed by California PE or architect as appropriate, and shall comprise complete biddable construction document originals with all comments addressed from the 100 Percent design submittal. Assumptions: CONSULTANT shall print the construction documents for bidding and will retain ten sets for CONSULTANT’s use during the bid period. Deliverables: Five sets of half-size drawings and specifications. Two electronic copies of the drawings and specifications on CD-ROM. One paper and one electronic copy of the final construction cost estimate. One paper and one electronic copy of the final project construction schedule. Task 8 – Phase 2 Pre-Construction During the pre-construction (bid) period, the City will receive questions and general inquiries from general contractors, subcontractors, and vendors on specific aspects of the construction documents. These questions and inquiries often require written clarification to further communicate the project’s requirements. Additionally, one pre-bid conferences and job walk will be held to provide bidders with a formal opportunity to familiarize themselves with the project sites. The purpose of this task is to answer bid period questions and assist the City in conducting the pre-bid conferences and pre-bid site visits. Approach: CONSULTANT’s pre-construction period services will consist of the following work: Review and respond to bidder (general contractors, subcontractors, and vendors) questions as directed by the City. As required, prepare and distribute to the City for distribution by the City, addenda describing clarifications and revisions to the contract documents. Attend and assist at the pre-bid site visit. Assumptions: The City will distribute contract documents to potential bidders, maintain the bidders list, copy and distribute addenda, arrange and direct the pre-bid conference and job walk, and conduct the bid openings. One pre-bid conference which will include a job walk. Deliverables: Original camera ready copy of addenda, as required. Task 9 – Phase 2 Engineering Services During Construction CONSULTANT shall work directly with the City and the Construction Manager during the construction phase of the project on an as-needed basis and as described below. CONSULTANT’s Task 9 work does not include construction management, resident engineering, startup, testing, construction inspection, special inspection services, or punchlist generation. City of Palo Alto Contract No.10131396 Page 20 CONSULTANT’s contract does not include subcontractors for special inspection services, geotechnical testing, materials testing, or arborist services. Subtask 9.1 Phase 2 Submittal Review The purpose of this subtask is to provide the review of shop drawings, product data, and samples submitted by the contractor to the City. Approach: The Construction Manager (CM) will transmit to CONSULTANT all technical submittals provided by the general contractor for CONSULTANT’s review, comments, and recommendations as to how to respond to each submittal. In so doing, CONSULTANT shall select from the four review categories listed in the City’s standard specifications: 1) No Exceptions Taken; 2) Make Corrections Noted; 3) Revise & Resubmit; 4) Rejected. CONSULTANT shall maintain a log of submittals in a Microsoft Excel® spreadsheet for internal management and coordination with the Construction Manager. Assumptions: The number of submittals and re-submittals will be no more than 50. CONSULTANT shall write a summary memorandum of comments rather than annotate all copies of the submittal wherever possible. Only a very few submittals will require direct annotations (for example, some rebar placement drawings). CONSULTANT shall not be required to track submittal review labor hours or costs for individual submittals. The Construction Manager will review schedule, progress payment, and contractual issue submittals from the general contractor. The general contractor will not be allowed to submit multiple submittals for the same basic topic that unnecessarily increase the number of submittals (for example, guardrail embed locations separately from the guardrails). CONSULTANT shall not be required to re-write CONSULTANT’s review comments to incorporate City submittal review comments (if any). Submittal review will determine if the items covered by the submittals will, after installation or incorporation in the work, conform to the requirements of the construction documents and be compatible with the design concept of the completed project as a functioning whole as indicated in the construction contract documents. Submittal review and approval will not extend to means, methods, techniques, sequences or procedures of construction (except where a particular means, method, technique, sequence or procedure of construction is specifically and expressly called for by the construction contract documents) or to safety precautions or programs incident thereto. Deliverables: One copy of review comments for each submittal. Subtask 9.2 Phase 2 Site Visits and Meeting Attendance Periodic site visits, meeting attendance, and telephone conference calls will be required to complete intermittent technical review, specialty inspection, understand the progress of the construction, aid in resolution of requests for information and requests for clarifications, view architectural finishes, and to coordinate work with the Construction Manager. The deliverables listed below will be prepared and submitted. Approach: CONSULTANT shall make periodic site visits to observe the work and advise the City of Palo Alto Contract No.10131396 Page 21 Construction Manager if the work observed during the visit is being conducted so that the completed work of the construction contractor will in general conform to the design. CONSULTANT shall answer questions on the construction documents from City or Construction Manager. CONSULTANT shall attend progress meetings and attend special technical meetings with the Construction Manager and construction contractor, when requested and within the limits of the task budget. Assumptions: Up to 20 person trips will be required for weekly progress meetings and attend special technical meetings (assuming a 6 hour average trip). Meeting minutes for all meetings with be taken and prepared by others. Except to the extent specifically identified elsewhere in the Agreement, CONSULTANT shall not, during site visits during the construction phase, supervise, direct, of have control over any Contractor’s work nor shall CONSULTANT have authority over or responsibility for the means, methods, techniques, sequences, or procedures of construction selected by Contractor, for safety precautions and procedures and programs incident to the work of the Contractor, or for any failure of Contractor to comply with laws, rules, regulations, ordinances, codes, or orders applicable to Contractor furnishing and performing their work. Deliverables: None. Subtask 9.3 Phase 2 Clarifications Review During the construction period, the general contractor will ask questions on details of the contract, substitutions, and alternative approaches. Change orders may be required to address unforeseen conditions and provide clarifications of the contract documents. The purpose of this subtask is to review general contractor questions and provide written clarifications for City review and use by the Construction Manager. The deliverables listed below will be prepared and submitted by CONSULTANT. Approach: CONSULTANT shall interpret the contract documents, review unforeseen site conditions, and review alternative proposals by the construction contractor presented in Requests For Information (RFI’s) or Requests for Clarifications (RFC’s). Activities will typically include receiving and logging the request (email, letter, fax, or telephoned questions), researching the question, preparation of a written response, and coordination with construction management staff. Assumptions: The number of clarification requests will be no more than 20. Clarification requests related to the general contractor’s means and methods will be returned with the comment that the general contractor is responsible for means and methods. The goal is to respond to clarification requests within 7 calendar days. Approximately 10 percent of the total, designated as high priority, will be answered within 2 working days. Clarifications will not originate from City staff asking about design-related questions. Responses will typically be emailed to the Construction Manager. Deliverables: Memoranda or forms with responses to clarifications. These will typically be emailed to the Construction Manager. City of Palo Alto Contract No.10131396 Page 22 Subtask 9.4 Phase 2 Change Order Preparation and Review During the construction period, construction change orders may be required to address unforeseen conditions, new information, and resolve inconsistencies within the contract documents. The City may also wish to add work to this project for a variety of reasons. The Construction Manager will ask questions about the project and discuss issues with CONSULTANT. The purpose of this subtask is to provide support in construction issues, construction change orders and related activities. Approach: Design, write, and review change order documentation. Anticipated assignments may include: assistance in preparing requests to the general contractor for proposals for extra or changed work; assistance in research or contract documents to determine if work proposed by the general contractors for inclusion in a change order should be considered extra work for which a change order is appropriate; review of design calculations and intent; discussions with City staff; and review of cost estimates. Assumptions: Construction change orders will solely be to support the project scope of work at bid date. Change order documentation will not be drawn in computer generated form if hand drawn sketches or markups will adequately describe the work required. A total of 4 construction changes of varying size is assumed. Deliverables: Emails and memoranda on contractor requests that work be considered “extra.” Change order documentation – drawings, sketches, specifications. Supporting documentation of reasons to accept, modify, or refuse to issue contractor- requested change orders. Task 10 – Phase 2 Additional Services Approach: CONSULTANT shall provide the following additional services on an if- and as- requested basis within the limits of the available Task 10 budget: Testing for hazardous materials such as lead paint, asbestos, PCBs, PCB caulking, heavy metals, VOC or petroleum contaminated soil, contaminated groundwater etc. at the project sites or existing facilities. Potholing (non-destructive excavation) to determine location of underground utilities. Review of additional submittals, RFIs, attendance at additional meetings beyond the budget allocated for these items in Task 9 above. Other project-related work that is not included in Tasks 6-9. Use of any portion of the Task 10 budget shall require written direction from the City’s Project Manager prior to proceeding with any of the services noted below. The City may, at its sole discretion, decline to authorize any or all work described in Task 10. COMPENSATION City of Palo Alto Contract No.10131396 Page 23 Compensation for the additional services will be on a time and materials basis according to CONSULTANT’s Billing Rate Schedule attached to the Agreement. The total cost for the services described herein is summarized below. El Camino Park Restoration Project Design and Construction Support Costs Costs Task 6: Phase 2 Predesign $10,000 Task 7: Phase 2 Design $300,000 Task 8: Phase 2 Pre‐Construction $8,000 Task 9: Phase 2 Engineering Services During Construction $49,000 Task 10: Phase 2 Additional Services $30,000 Total $397,000 CITY OF PALO ALTO CONTRACT NO. C10131396 Page 24 EXHIBIT C TO SUPPLEMENTAL AMENDMENT NO. 5 Scope of Services for Additional Professional Services Evaluation of Groundwater Use to Supplement Existing Potable Water Supply City of Palo Alto Background This Supplemental Amendment No. 5 amends the scope of professional services initiated in the Agreement between the City of Palo Alto (CITY) and CDM Smith Inc. (CONSULTANT) dated November 18, 2009. CDM Smith was formerly known as Camp Dresser & McKee Inc. This amendment was prepared at the request of the City to evaluate the City’s proposal to supplement existing potable water supplies, currently provided by SFPUC, with existing groundwater resources. CONSULTANT shall provide additional professional services as described below. The tasks below have been numbered to correspond to the tasks identified in the initial Agreement and subsequent Amendments. CITY is a member agency of the Bay Area Water Supply and Conservation Agency (BAWSCA) which contracts with San Francisco Public Utilities Commission to provide potable water to the BAWSCA member agencies. The CITY purchases its normal potable water supply through this wholesale agreement. Under normal hydrologic conditions, the SFPUC provides sufficient water to meet the CITY’s water supply demands. The CITY has a supply assurance allocation with SFPUC of 17.1 million gallons per day (mgd) that will not meet CITY’s water supply demands under extended drought conditions. It is estimated that under SFPUC imposed Tier 2 drought conditions, the CITY water supply from SFPUC will be reduced by 24%, CITY recognizes that these cutbacks which would be beyond CITY’s control or input, would have significant impact to CITY’s water customers, citizens, business community and City facilities. Under direction from the California Department of Health Services (CDPH), the CITY has implemented its Emergency Storage and Water Supply Projects to provide new and rehabilitated groundwater wells and emergency storage to provide life safety supply under emergency conditions, such as a short-term interruption of SFPUC’s regional Hetch Hetchy water system, in order to supply eight hours of water under maximum day demands while maintaining fire fighting reserves. City of Palo Alto Contract No.10131396 Page 25 Objective The purpose of the work proposed under Amendment No. 5 is for CONSULTANT to assist CITY in evaluating the feasibility of re-permitting its wells in conjunction with potential blending, storage, groundwater treatment and other options to provide a supplemental water supply. This supplemental supply would: 1) provide additional supply certainty under drought or extended drought conditions and 2) increase CITY’s ability to meet life safety water requirements. The objective of the work proposed under Amendment 5 is to identify feasible alternatives and planning level cost estimates that meet various levels of service for supplemental water supply under drought conditions. Work will be specific to City wells and will build on relevant aspects of regional work CONSULTANT has performed under separate planning contracts with Bay Area Water Supply & Conservation Agency (BAWSCA). Scope of Work—CDM Smith Inc. (CONSULTANT) The scope of work is divided into the following three primary tasks. Task 11 – Initial Well Project Planning Task 12 – Well System Technical Evaluation Task 13 – Well System Additional Services Task 11 – Initial Well Project Planning Subtask 11.1 Kickoff Meeting The purpose of this subtask is to hold an introductory meeting with the Project PM to obtain and review available City-provided information and literature associated with the proposed project, and to plan the City Stakeholder Group (CSG) workshops of Subtask 11.2. Approach: A kickoff meeting will be held with the City’s PM and his/her support staff to discuss the project. Assumptions: CONSULTANT to review initial project-support materials as provided by the City. CONSULTANT, with City’s assistance, will develop a plan for the initial CSG Kickoff Workshop. Deliverables: CONSULTANT will provide an agenda, materials, and summary associated with the project Kickoff Meeting. Subtask 11.2 City Stakeholder Group Workshops The purpose of the City Stakeholder Group (CSG) workshops is to understand the background and the challenges associated with the City's interest to increase groundwater use to supplement existing potable water supplies. This subtask will develop and utilize a City Stakeholder Group, comprised of members invited to participate from various City Departments, to identify the City's level of service and operational goals, and how these may be met by different project Alternatives in light of their potential implementation and long-term costs. City of Palo Alto Contract No.10131396 Page 26 Approach: Discussion topics to be covered by the CSG will likely include, but not be limited to, the following: City’s objectives for the project, Developing groundwater supply alternatives for consideration, Drought planning scenarios, Developing evaluation criteria for alternatives, Implementation timelines for alternatives, Existing and future cost of water, City’s desired level of service to customers, Review and effect of previous City environmental documents and City water supply decisions, City’s institutional preferences for implementing the project, Project funding opportunities, Selection of a final alternative for future additional engineering analysis, which are not a part of this scope. Assumptions: City will assist with advertising/inviting City staff to this meeting, and determining a meeting location and date. Up to 5 of CONSULTANT’s staff will attend each meeting. Assumes the following 4 meetings will be required: o Kickoff Workshop: Identify City need and discuss the project. Discuss challenges, materials that CONSULTANT and stakeholders need to review, ongoing other local BAWSCA and SFPUC activities, level of service to customers to be maintained. o 2nd & 3rd (if needed) Workshops: Discuss progress in reviewing available data. Refine alternative(s) to be evaluated. o Final Workshop: Presentation of results from project investigations and technical evaluations, with a goal of selecting a final alternative to advance into future, preliminary design. Deliverables: CONSULTANT will provide an agenda, workshop materials, and workshop summary for each CSG workshop. It is assumed that up to 10 City staff will attend the workshops. Subtask 11.3 Meetings with Other Agencies Meetings with other local and/or governing agencies will be needed to obtain some of the information and answers desired by CONSULTANT and the CSG during the Initial Well Project Planning Phase. Approach: In order to obtain the information desired, CONSULTANT anticipates that meetings may need to be held with each of the following groups: CDPH, Santa Clara Valley Water District, Stanford, and possibly others. Assumptions: Up to 12 project meetings with other agencies have been assumed. An average of 2 of CONSULTANT’s team members may be required at each meeting. City of Palo Alto Contract No.10131396 Page 27 Deliverables: Agendas, materials, and summaries associated with project meetings. Task 12 – Well System Technical Evaluation Subtask 12.1 Review of Project Reference Materials CONSULTANT shall review existing data from City regarding the City’s water system, water supply and use agreements, rehabilitated groundwater wells, local geologic and hydrogeologic studies, and other project related documentation as provided and suggested for review by the City. Consultant shall also review other background information available from CDPH, BAWSCA, Santa Clara County, etc. Approach: As stated under the subtask description. Assumptions: Documents for review shall either be provided by the City, or readily available from the internet, City website, etc. Deliverables: None. Subtask 12.2 Evaluate Groundwater Basin Characteristics CONSULTANT’s well and groundwater specialty subcontractor, Luhdorff & Scalmanini (LSCE), will review existing City-supplied or publically available materials to better understand the impact of increased pumping from the groundwater basin. Approach: The needs of the groundwater basin evaluation subtask will become better defined as a result of the initial CSG Kickoff Workshop, however, the evaluations will likely focus on the following questions: What is the yield of the basin aquifers that the Palo Alto wells may affect? How much of this yield is available for drought use by Palo Alto? What level of drawdown might be experienced by the basin given short to extended periods of pumping? Might well operation potentially affect other users in the basin? What is the anticipated water quality from the wells? Will the groundwater meet primary/secondary standards? Aquifer Storage Recovery (ASR) feasibility to minimize subsidence potential and to recharge basin. Assumptions: No intrusive work will be performed as a part of the groundwater basin evaluations. Estimates of yield, drawdown and potential impacts to others will be preliminary in nature based on review of existing information and regional understanding of the basin aquifers. Modeling of the groundwater basin is not included as a part of the groundwater basin evaluations. Development of a groundwater model is included in Subtask 12.5. City of Palo Alto Contract No.10131396 Page 28 Deliverables: Technical Memorandum summarizing the groundwater basin evaluation. Subtask 12.3 City Distribution System Modeling CONSULTANT will use the City’s existing distribution system hydraulic model to evaluate the impact of operating the target groundwater wells for the desired periods of time. Approach: The needs of the distribution system modeling subtask will become better defined as a result of the initial CSG Workshops, however, the evaluations will likely focus on answering the following questions: How will operation of selected groundwater wells affect typical City distribution system pressures? How will operation of selected groundwater wells affect typical City distribution system water quality? E.g., CONSULTANT will attempt to determine which customers might receive only groundwater vs. those that would receive a blend of groundwater and SFPUC water? Assumptions: City’s existing model is sufficiently complete to perform the anticipated modeling subtask. Modeling of the system will be performed to support up to 8 different groundwater well locations and flow rate and operation scenarios, as agreed to with the CSG. CONSULTANT assumes one additional meeting with City staff to receive and review the City’s existing model will be necessary at the onset of this subtask. Deliverables: Electronic copy of modeling files developed by this subtask. The hydraulic model, analysis, results, and conclusions of this subtask will be included as a separate appendix in the Draft Well System Feasibility Report. Subtask 12.4 Engineering Evaluations of Technical Issues Working as described below CONSULTANT shall provide and perform a variety of engineering services as may be necessary to evaluate the proposed project alternatives as identified by the CSG. The purpose of this subtask is to apply additional engineering consideration to the study, in ways not already captured by the scope of the other subtasks, but not to the extent or detail that would be associated with a Preliminary Design. Approach: The needs of this subtask will become better defined as a result of the initial CSG Workshops, however, the engineering evaluation of technical issues may include some or all of the following: Operating conditions and annual capacity for the wells and system (i.e. are there any limits on operation?). Will blending with SFPUC water address water quality issues? If so, how might blending be best achieved? Is water treatment needed and in what form—ammonia, Fe/Mn, other? How might these water treatment systems be implemented? What permits might be required to implement the preferred alternatives? What are the requirements of these permits? City of Palo Alto Contract No.10131396 Page 29 Proposed system implementation cost estimates (feasibility level for capital and O&M). Assumptions: Subtask does not include any intrusive work, sampling, or testing. Any cost estimates provided will be at a feasibility level. Subtask does not include detailed cost estimates or financing studies. City will provide site layout for each of the existing well sites, and potential other uses for those sites, as part of feasibility level evaluation of well site improvements. Deliverables: The results of this subtask will be included in the Draft Well System Feasibility Report. Subtask 12.5 Groundwater Basin Model Development and Application Alternatives developed by the CSG that include local groundwater will be assessed to estimate how much yield the groundwater wells will be able to reliably provide, and if there are any impacts to other basin users that must be considered in the evaluation process. Potential impacts to other groundwater users could limit the quantity and timing of groundwater extraction. This subtask includes the development and application of a groundwater model and tools for evaluation of the alternatives. Approach: Identify which agencies near the City have existing groundwater projects, or may have existing hydrologic information and groundwater models for the region (e.g., BAWSCA). The use of an existing model, or parts of an existing model, could reduce the costs and time it will take to complete this subtask. Contact the City and other agencies in the area to obtain geologic, hydrogeologic, and groundwater model information (including United States Geologic Survey [USGS], Santa Clara Valley Water District [SCVWD]). Review and summarize available geotechnical, hydrogeologic, and hydrologic information, models, and related data. Identify other groundwater pumpers that may potentially by affected by the identified regional groundwater projects. Develop a groundwater basin model using MODFLOW software. Utilize the groundwater basin model to evaluate the groundwater pumping alternatives. Develop preliminary estimate yields of groundwater projects and assess potential impacts of projects on other basin users using the groundwater model. Identify possible mitigations or limits to pumping capacity of proposed alternatives that could reduce or eliminate these potential impacts and/or concerns. Prepare a technical memorandum (TM) summarizing groundwater modeling results, including the estimation of groundwater projects yields and the assessment of potential impacts of projects on other basin users. Assumptions: City will assist CONSULTANT with obtaining access to available hydrologic and geologic related reports, and existing groundwater models that may be in use by local agencies. City will assist CONSULTANT with facilitating discussions with other pumpers in the vicinity to be evaluated by the modeling. Deliverables: Electronic copy of groundwater basin model developed by this subtask. City of Palo Alto Contract No.10131396 Page 30 TM summarizing groundwater modeling results, including the estimation of groundwater projects yields and the assessment of potential impacts of projects on other basin users. The groundwater basin model TM will be included as a separate appendix in the Draft Well System Feasibility Report. Subtask 12.6 Well System Feasibility Report CONSULTANT shall generate a final report, summarizing the results of the activities performed during Tasks 11-13. The report will discuss the basis for and viability of each of the initial CSG selected alternatives, and identify a recommended preliminary plan for moving the final selected alternative into Preliminary Design. Approach: CONSULTANT shall submit the draft report for review by City and incorporate requested changes into the final document. Assumptions: City shall compile the comments received by multiple City reviewers into one deliverable for CONSULTANT, and shall resolve any conflicting City comments prior to sending to CONSULTANT. City comments will be provided to CONSULTANT in a Microsoft Excel® spreadsheet and CONSULTANT shall respond to comments by making entries into this spreadsheet. Deliverables: Consultant shall deliver 10 draft copies of the report to City for review. Consultant shall incorporate City comments and deliver 10 final copies and one electronic pdf copy. Task 13 – Well System Additional Services Approach: CONSULTANT shall provide the following additional services on an if- and as- requested basis within the limits of the available Task 13 budget of $50,000: Additional meetings with CSG or other local agencies (e.g., CDPH, SCVWD). Groundwater water quality sampling and testing, Identification of additional environmental and regulatory documentation required to modify the current approved use for the wells, Permitting support and compliance assessment documentation, Additional distribution system modeling activities, Additional project management and QA/QC related to any Additional Service assignment. Use of any portion of the Task 13 budget shall require written direction from the City’s Project Manager prior to proceeding with any of the services noted below. The City may, at its sole discretion, decline to authorize any or all work described in Task 13. Project Management CONSULTANT shall manage its staff and subconsultants, coordinate with the City’s project manager, and shall prepare and submit monthly project invoices as described in the initial Agreement. City of Palo Alto Contract No.10131396 Page 31 Project Schedule and Time of Completion The schedule is assumed for the project activities: Initial Kickoff Meeting with PM: Within 2 weeks of Notice to Proceed. CSG Kickoff Workshop: Approximately 1 month after initial kickoff meeting with PM, depending on City staff availability. 2nd and 3rd CSG Workshops: Approximately 1-2 months apart, depending on work to be performed in the interim and City staff availability. Final CSG Workshop: After completing necessary evaluations. Draft Well System Feasibility Report: Follows 5-6 weeks after Final CSG Workshop. Final Report: Follows 5-6 weeks after receipt of City comments on Draft Well System Feasibility Report. The time for all work to be completed is estimated to be approximately 12 months. Key Personnel Key personnel assigned to work on Tasks 11-13 are: Project Manager Jon Toyoda Project Engineer Bill Brick Subconsultants Key subconsultants working on Amendment No. 5 are as follows: 1. Luhdorff & Scalmanini Consulting Engineers – geohydrology and well permitting No change of either key personnel or subconsultants as listed above may be made without the written approval by the City’s Project Manager. Compensation Compensation for the additional services will be on a time and materials basis according to CONSULTANT’s Billing Rate Schedule attached to the initial Agreement. The total cost for the services described herein is summarized below. El Camino Park Restoration Project Design and Construction Support Costs Costs Task 11: Initial Well Project Planning $180,000 Task 12: Well System Technical Evaluation $385,000 Task 13: Well System Additional Services $75,000 Total $640,000 CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY September 10, 2012 The Honorable City Council Palo Alto, California Request for Authorization to Increase the Legal Services Agreement with Moscone Emblidge Sater & Otis (formerly Otis & Iriki) by an Additional $150,000 for an Amount not to Exceed $235,000 for Legal Services Related to Public Works Construction Matters Dear Members of the Council: The City Attorney's Office requests authorization to increase and amend the existing contract with the law firm of Moscone Emblidge Sater & Otis (formerly Otis & Iriki), Attorneys at Law, by an additional $150,000 for a total not to exceed amount of $235,000 for legal and professional services relating to the Mitchell Park Library and Community Center. This amendment includes construction litigation as well as expert witness services. Funding for this contract does not require additional budgetary authority as it is a proper expense against the Library bond funds. Department Head: Molly Stump, City Attorney Updated: 9/5/2012 3:19 PM by Stacy Lavelle Page 2 CITY OF PALO ALTO OFFICE OF THE CITY CLERK September 10, 2012 The Honorable City Council Palo Alto, California Approval of Contract With Michael Gennaco and Stephen Connolly of OIR Group for up to Three Years in an Amount Not to Exceed $27,500 Per Year for Independent Police Auditor Services RECOMMENDATION Staff is requesting the City Council approve a new contract for independent police auditor services with Michael Gennaco and Stephen Connolly of OIR (Office of Independent Review) Group in an amount not to exceed $27,500 per year. The contract would be for up to three- years, however, the City retains the right to terminate for any reason with ten days’ notice. BACKGROUND In August 2009, the City Council approved a three-year contract with the OIR Group to provide audit of the Palo Alto Police Department. DISCUSSION The attached agreement will allow the police audit services that OIR Group has provided to the City for the past 6 years to continue. The contract provides the following services: - Review citizen complaints of sworn personnel. - Review internal investigations and confer with the police department to consider criminal and administrative implications, potential policy violations, and investigative priorities of sworn personnel. - Review all reports of taser deployment. - Consultant will produce two reports during the year summarizing its findings and reporting in detail on each investigation and disposition. RESOURCE IMPACT Funds for the agreement were approved as part of the City Council budget for FY 2012-13. POLICY IMPLICATIONS This agreement is consistent with City policies. Updated: 9/6/2012 10:27 AM by Dennis Burns Page 2 ATTACHMENTS: C13147474 Independent Auditor for Police FINAL Rev 09042012L (PDF) Department Head: Donna Grider, City Clerk Professional Services Rev. June 2, 2010 1 CITY OF PALO ALTO CONTRACT NO. C13147474 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MICHAEL GENNACO AND STEPHEN CONNOLLY FOR PROFESSIONAL SERVICES INDEPENDENT POLICE AUDITOR This Agreement is entered into on this day of September, 2012, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MICHAEL GENNACO AND STEPHEN CONNOLLY, as individuals, located at 1443 East Washington Boulevard, Suite 223, Pasadena, California, Telephone: (323) 849-7015 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to contract for independent Police audit services (“Project”) and desires to engage a consultant to provide said 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 date of its full execution through 08/31/2013 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. Professional Services Rev. June 2, 2010 2 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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 Twenty Seven Thousand Five Hundred Dollars ($27,500.00). The CITY reserves the option to extend this contract for two additional one year terms. 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 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, Professional Services Rev. June 2, 2010 3 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Michael Gennaco, Email: michael.gennaco@oirgroup.com , Telephone: (323) 849-7015 , as the Director to have supervisory responsibility for the performance, progress, and execution of the Services and Stephen Connolly, Email: stephen.connolly@oirgroup.com , Telephone: (714) 834-5445 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 Dennis Burns, Police Chief, Police Department, 275 Forest Avenue, Palo Alto, CA 94303, Email: Dennis.Burns@CityofPaloAlto.org , Telephone: 650) 329-2103. 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 Professional Services Rev. June 2, 2010 5 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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. 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. Professional Services Rev. June 2, 2010 6 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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 insura snce bu iness 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 eServic s 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 Professional Services Rev. June 2, 2010 7 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if thi es Agre ment 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. Professional Services Rev. June 2, 2010 8 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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. 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 Professional Services Rev. June 2, 2010 9 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc posting waste. In particular, Consultant shall comply with the following zero waste requirem m of 30% or greater post-consumer material and products and from the facility accepting the pallets to verify that pallets are not being disposed. Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or com ents: 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 minimu 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 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 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. 5.1. This Agreement will be governed by the laws of the State of California. 2 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 Professional Services Rev. June 2, 2010 10 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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 m any a endments 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 de part of this Agreement. emed to be a 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. / / / / / / / / / / / / / / / / / / / / / / Professional Services Rev. June 2, 2010 11 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc 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. 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 ____________________________ Purchasing Manager APPROVED AS TO FORM: __________________________ Senior Asst. City Attorney Dated: MICHAEL GENNACO By:___________________________ Name:_________________________ Title:________________________ STEPHEN CONNOLLY By:___________________________ Name:_________________________ Title:________________________ Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: COMPENSATION EXHIBIT “C”: INSURANCE REQUIREMENTS Professional Services Rev. June 2, 2010 11 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc EXHIBIT “A” SCOPE OF SERVICES Consultant shall perform the following services: 1. Citizen Complaints Intake – The Consultant will arrange to receive an e-mail synopsis of each citizen complaint within three (3) working days of the date the complaint is originally made. Consultant will then converse with the intake officer by telephone to clarify the nature of the complaint. Initial investigation – As soon as an investigator is assigned to the citizen complaint, Consultant will confer with the Personnel & Training Coordinator by telephone and discuss the investigative plan. Follow-up – Consultant will confer with the Personnel & Training Coordinator within two weeks of the original complaint to evaluate results and determine whether further investigation is necessary. Disposition – When the investigation is complete, Consultant will confer with the Police Chief to recommend a disposition or to resolve any issues about process not previously resolved. Status and tracking – Consultant will track case status and disposition on an updated chart and will include current charts in all reports. Meet to discuss trends – Consultant will meet quarterly with the City Manager and Police Chief to present current tracking charts and discuss citizen complaint trends, procedural problems identified and any potential policy issues. Semi-Annual Reports – Cumulative tracking charts and findings as to identified trends will be included in semi-annual reports. 2. Internal Affairs Investigations Decision to initiate investigation – Consultant will confer with the police department executive who requests the investigation to consider criminal and administrative implications, potential policy violations, and investigative priorities. Investigation Plan – Consultant will discuss the investigation plan with the Personnel & Training Coordinator and arrange for a mutually convenient way to update Consultant on the progress of the investigation. Follow up: Additional investigation – Consultant will confer with the Professional & Training Coordinator periodically to evaluate results and determine whether further Professional Services Rev. June 2, 2010 2 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc st further investigation from the investigator and/or the investigator’s chain of command. of disposition, if needed, or to resolve any issues about process not previously resolved. se status and disposition on an updated chart and will include current charts in all reports. citizen complaint trends, procedural problems identified and any potential policy issues. 3. Review Taser Deployment investigation is necessary. When appropriate, Consultant will reque Disposition – When the investigation is complete, Consultant will review the file and then confer with the Police Chief to recommend a change Status and tracking – Consultant will track ca Meet to discuss trends – Consultant will meet quarterly with the City Manager and Police Chief to present current tracking charts and discuss l recommend to the Police Chief modifications in the policy and/or training as appropriate. 4. Reports Consultant will be promptly notified of an review each Taser deployment Palo Alto Police Department to review and recommend to the Police Chief whether deployment was consistent with the Police Department’s Taser policy and training. Should systemic issues arise out of Taser deployment, Consultant wil onsensus as to solutions. Consultant will document the Department’s efforts in its reports. Consultant will produce two reports during the year summarizing its findings and reporting in detail on each investigation and disposition. It will meet with the City Council to present each report and discuss any issues or questions raised. Prior to finalizing each report it is Consultant’s practice to discuss significant identified problems and recommendations that the report will contain with the Police Department and the City Manager. Consultant will solicit the Police Department’s response and attempt to reach a c Professional Services Rev. June 2, 2010 14 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc EXHIBIT “B” 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 below. Compensation shall be calculated based on Consultant’s hourly billing rates up to the not to exceed amount of the contract. The hourly billing rate for Michael Gennaco is $215.00 per hour and the hourly billing rate for Stephen Connolly is $190.00 per hour. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (Basic Services) and reimbursable expenses, including travel shall not exceed $27,500.00 per year with a potential of extending it for two one-year periods. Travel expenses shall be a portion of the total compensation. CONSULTANT agrees to complete all Services, including reimbursable and travel 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 below. Task 1 Review, intake, investigation, and disposition of an estimated 16-22 citizen complaints per year; monitor any related remedial action. Task 2 Internal Affairs investigation planning, monitoring, evaluation and recommendations for an estimated 5 investigations per year; monitor any related remedial action. Task 3 Review Taser policy and training, review each Taser deployment, estimated at 6 per year, to determine if consistent with training and policy. Task 4 Meet with the City Manager and Police Chief quarterly and with City Council semiannually. Task 5 Two semi-annual reports. Total Basic Services and Travel Expenses per year $27,500 Maximum Total Compensation per year $27,500 EXHIBIT “C” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES 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 No 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 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 June 2, 2010 18 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc Professional Services Rev June 2, 2010 19 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Sole Source\147474 Auditor for Police Department\C13147474 Independent Auditor for Police; FINAL Rev 09042012L.doc MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF HE COMPANY UNDER THIS POLICY. . NOTICE OF CANCELLATION 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 T C TY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: ADMINISTRATION PALO ALTO, 94303 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 THIR 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 PURCHASING AND CONTRACT CITY OF PALO ALTO P.O. BOX 10250 CA City of Palo Alto (ID # 3093) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/10/2012 Summary Title: Project Sentinel Contract Extension Title: Approval of Amendment No. 1 to Contract with Project Sentinel for Mediation Services From: City Manager Lead Department: Community Services Recommendation Staff recommends that the Council approve, and authorize the City Manager to execute, an amendment number one to contract S10133562 (Attachment A), with Project Sentinel, a California Non-Profit Corporation, to extend the contract term , currently set to expire December 31, 2012, to June 30, 2013. This extension of the term will provide staff with more time to develop specifications for the next Request for Proposal cycle and to align the contract term with the City’s fiscal year, not the calendar year. Executive Summary The Agreement between the City of Palo Alto and Project Sentinel to provide Mediation Services for dispute resolution was entered into on January 1, 2010. The term of this agreement, as amended, is now January 1, 2010 through June 30, 2013. The compensation to the consultant for performance of the services was $63,465.00 annually for the first and second year term. This compensation was reduced due to budget constraints by 2% to $62,197 for the third year which goes from January 1, 2012 to December 31, 2012. Staff is requesting to extend the contract six (6) months beyond its current three-year term. Background At its October 15, 2001 meeting, the Council passed the Mandatory Response Ordinance (MRO), which provides a neutral forum for discussing issues including, but not limited to, rent increases. The MRO amended the Rental Stabilization Ordinance by requiring landlords to provide written notification to tenants about their rights and responsibilities. The ordinance also requires landlords who own more than one single-family home rental to register with the City. Project Sentinel is the non-profit organization that administers the Palo Alto Mediation Program (PAMP), which facilitates the training of Palo Alto residents to provide volunteer mediation services for a broad range of community disputes, including landlord-tenant and neighbor-to-neighbor, and has successfully done so for almost thirty years. PAMP provides an essential service to the City, and that without their program, it is believed that there would be a heavier burden on Police and Code Enforcement staffs to respond to Palo Alto citizens involved in these types of disputes. During its March 20, April 12 and September 15, 2007 meetings, members of the Human Relations Commission (HRC) heard testimony from PAMP mediators and staff from Project Sentinel requesting that their services be changed from a Human Services Resource Allocation Process (HRSAP) funded service to one supported by the general fund, as they are implementing a goal embodied in the Palo Alto Municipal Code. A motion was made to recommend to the Council that Project Sentinel be removed from HSRAP along with its current funding and be funded instead through a contract with the City. The Commission’s motion of recommendation was passed unanimously. On November 14, 2007, staff forwarded the HRC request to the Policy and Services Committee for review. Policy and Services Committee concurred with this request and it was forwarded to Council on December 10, 2007. The Council approved the recommendation from Policy and Services Committee to remove funding of mediation services from HSRAP to a direct general fund contract. This motion passed the Council 9-0. Discussion The scope of the contract for Project Sentinel is designated to operate and implement Palo Alto Municipal Code Chapter 9.72, the Mandatory Response to Request for Discussion of Disputes between Landlords and Tenants Ordinance, adopted on October 15, 2001 by the Council. The request for approval of contract term extension is made in order that the contract’s expiration date will be June 30, 2013, not December 31, 2012. This would align the contract’s term with the City’s fiscal year. Resource Impact Staff will be implementing a Request for Proposals for mediation services and drafting a final contract to align with the City’s fiscal year. The total compensation for the six month extension is $31,098 of which $22,102 is encumbered from the FY 2011-12 budget of the Office of Human Services. The balance of $8,996 is available in the Office of Human Services’ FY 2012-13 budget. Attachments: Attachment A - ProjectSentinelContractnew (PDF) Prepared By: Minka VanDerZwaag, Department Head: Greg Betts, Director, Community Services City Manager Approval: ____________________________________ James Keene, City Manager 1 120829 sm 010 AMENDMENT NO. 1 TO CONTRACT NO. S10133562 BETWEEN THE CITY OF PALO ALTO AND PROJECT SENTINEL This Amendment No. 1 to Contract No. S10133562 (“Contract”) is entered into September ______, 2012 by and between the CITY OF PALO ALTO, a charter city and a municipal corporation of the State of California (“CITY”), and PROJECT SENTINEL, a California Non-Profit Corporation, located at 298 S. Sunnyvale Avenue, Suite. 209, Sunnyvale, California 94086 Telephone: (408) 720-988-8760 (“CONTRACTOR”). R E C I T A L S: A. The Contract was entered into between the parties for the provision of Mediation Services for dispute resolution. B. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 is hereby amended to read as follows: “SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution, January 1, 2010, through June 30, 2013, unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. 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 “B” entitled “SCHEDULE OF PERFORMANCE”. 2 120829 sm 010 SECTION 3. 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. APPROVED: __________________________ City Manager APPROVED AS TO FORM: __________________________ Senior Asst. City Attorney Date: PROJECT SENTINEL By:___________________________ Name:_________________________ Title:________________________ Attachments: EXHIBIT "B": SCHEDULE OF PERFORMANCE Professional Services Rev. September 2009 S:\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-CM FOLDERS\OTHERS - ADRIAN\Contract Amendments\S10133562 Project Sentinel Amendment No 1\S10133562 Amendment No. 1 Exhibits; FINAL.doc EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each Service as required, to the reasonable satisfaction of the City. TIME/SCHEDULE REQUIREMENTS: Services shall commence on January 1, 2010 and shall continue through June 30, 2013, unless terminated by CITY. Semiannual progress reports shall be completed and submitted to the CITY on the fifteenth day after each six month period. City of Palo Alto (ID # 3128) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/10/2012 Summary Title: City Response to Adopted ABAG RHNA Allocation - contd. Title: Approval of City Response to the Adopted Regional Housing Needs Allocation (RHNA) for the 2014-2022 Cycle(continued from September 4, 2012 Council Meeting) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council approve and direct the Mayor to execute the attached letter (Attachment A) to the Association of Bay Area Governments (ABAG) regarding the City’s response to the adopted Regional Housing Needs Allocation (RHNA) for the 2014-2022 Cycle. Discussion The Council continued this item from its September 4, 2012 agenda. This report provides additional information in response to Council questions regarding the RHNA Allocation appeal process. The Council particularly asked whether the draft letter is the City’s final opportunity to “appeal” the allocations or whether there will be subsequent chances for appeal. Staff has concluded, based on the information below and contact with ABAG, that the current response period (through September 18) is intended to provide jurisdictions with an opportunity to request revisions, and that appeal is not yet timely. According to State law, ABAG has 60 days following the “revision and comment” period to respond to comments, and then will issue its final determinations. Cities and counties will then have another 60-day period to formally appeal the ABAG allocations. The following summarizes State law. Appeal Process Each regional council of governments (i.e. ABAG in Palo Alto) is free to establish its own deadlines for assigning and appealing RHNA allocations, provided this schedule is consistent with the overall RHNA framework established in State Housing Element Law. Government Code Section 65584.05 establishes a two-part process for appealing the RNHA allocation. The first step is that the City may request “a revision of its share of the regional housing need.” Government Code Section 65584.05(b). The statute also specifies that this request “must be based upon comparable data available for all affected jurisdictions and accepted planning methodology, and supported by adequate documentation.” Under the statute, ABAG has 60 days after the request is submitted to either “accept the proposed revision, modify its earlier determination, or indicate, based upon the information and methodology described in [State law], why the proposed revision is inconsistent with the regional housing need.” Government Code Section 65584.05(c). Second, if ABAG does not modify the proposed revision to the satisfaction of the requesting party, the City may file a formal “appeal.” Government Code Section 65584.05(d). The two grounds for appeal are specified in the statute as follows: (1) ABAG failed to adequately consider the information submitted under State law, or a significant and unforeseen change in circumstances has occurred in the local jurisdiction that merits a revision of the information submitted pursuant to that subdivision. (2) ABAG failed to determine its share of the regional housing need in accordance with the information described in, and the methodology established under State law. Timeline The statutory scheme requires ABAG to conduct a public hearing on all appeals within “60 days after the date [ABAG] established to file appeals.” Government Code Section 65584.05(e). Consistent with this statute, ABAG has established a comprehensive schedule for the RHNA allocation. In particular, ABAG has scheduled September 18, 2012 as the “Deadline for Local Requests for Revisions to Draft Allocation” and January 11, 2013 as the “Deadline for Local Appeals to Draft Allocation.” (Exhibit B.) This schedule is publicly posted on ABAG’s One Bay Area website. On July 25, 2012, the City received a letter from ABAG stating: “The deadline to submit an appeal or to request for [sic] a revision is September 18, 2012.” (Note this has created confusion because under the statutory scheme and published schedule, September 18, 2012 was the deadline for filing a “request for revision”, not an appeal. Staff has verified with ABAG, however, that they intend to follow the statutory two-step process nevertheless.) A very similar process was conducted for the previous RHNA cycle where Palo Alto filed a request to revise its RHNA share, ABAG partially granted this request by reducing the share and Palo Alto elected to further appeal and ABAG ultimately denied the appeal. Revised ABAG Letter To better delineate between the “request for revision” and “appeal” City staff has updated the ABAG letter (Attachment A), particularly the opening paragraph. Based on both the statute and ABAG’s posted schedule, staff believes the City’s deadline for appeal of the Draft Allocation will be January 11, 2013. Staff plans on returning to Council in November/December prior to January 11 for further direction. Staff believes the current letter adequately preserves the City’s formal appeal rights for the second phase of the two-step process. Attachments: Attachment A: Revised Draft RHNA Allocation Response Letter (DOCX) Attachment B: RHNA Schedule 2014-2022 (PDF) Attachment C: Staff Report and Attachments, City Council Meeting of September 4, 2012 (PDF) Prepared By: Aaron Aknin, Assistant Director Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager Page 1 of 3 September 11, 2012 Mr. Mark Luce, President Association of Bay Area Government Joseph P. Bort Metro Center P.O. Box 2050 Oakland, CA 94607-4756 Re: City of Palo Alto Request for Revision to Adopted Draft RHNA Methodology for the 2014-2022 Housing Cycle Dear Mr. Luce: Thank you for ABAG’s July 25, 2012 memo to Bay area cities and counties, which provided an overview of the adopted Regional Housing Needs Assessment (RHNA) methodology and jurisdictional allocations for the 2014-2022 housing cycle. While the adopted allocations appear to have taken into consideration some of the concerns and comments expressed by member jurisdictions, the target projections are still unrealistic. In Palo Alto, the built-out nature of the city and multiple school, service and infrastructure constraints make these projections unattainable. Therefore, the purpose of this letter is to request a revision to the draft allocation, to reduce the total number of units assigned to the City of Palo Alto. In support of this request, the following reiterates the City of Palo Alto’s ongoing concerns regarding the long-term Sustainable Communities Strategy (SCS) projections and the potential impact on future RHNA cycles. Furthermore, this letter provides information about our ongoing effort to facilitate a joint agreement for transfer of units to the County of Santa Clara for housing on Stanford lands. In summary, the City of Palo Alto’s comments are as follows: 1. The regional forecast of jobs and housing for the region continues to substantially overstate growth for the overall SCS period (through 2040) and continues to ignore the updated demographic forecasts of the State’s Department of Finance (DOF). This not only creates an unrealistic scenario for the upcoming cycle, but also creates the effect of “back-loading” the housing numbers and potentially creating unreasonable and unachievable housing mandates in future housing cycles. Although the SCS process does allow for adjustment of long-term growth projections on a periodic basis, the City encourages ABAG to regain public confidence of its numbers by working with HCD to reduce the 2010-2040 projections by 41% to reflect the adaptations already made by the Department of Finance to the changing State of California demographics. Furthermore, current and future projections should be adjusted so they are more consistent with Page 2 of 3 historical growth patterns and/or a range of projections should be adopted that reflect meaningful planning scenarios in response to market changes over time. An analysis of the inadequacy of the current long-range projections, authored by Palo Alto Councilmember Greg Schmid, was submitted to ABAG during the Alternative Scenario selection process and is attached to this letter. Tables outlining the discrepancies between the most recent DOF projections and those prepared by ABAG for the SCS are also attached. 2. The proposed RHNA allocation assigns 77 housing units to the County of Santa Clara (unincorporated), although Stanford University’s General Use Permit with the County of Santa Clara County allows and plans for up to 1,500 residential units to be built on Stanford lands within the SCS timeframe. The City acknowledges that these units have not been otherwise assigned to the City of Palo Alto, but at least some of them are proximate to El Camino Real and the University Avenue Caltrain station, and would be consistent with the objectives of the SCS and SB375. Specifically, approximately 350 planned units on two sites on Quarry Road just west of El Camino Real appear appropriate to include somewhere in the housing analysis. City staff has met with staff from the County and Stanford to discuss the possibility of a joint agreement to a “transfer” of a similar allocation of units from the City of Palo Alto to the County of Santa Clara. This is an ongoing effort, and we will keep ABAG apprised of our progress. The City requests that ABAG remain open to such a transfer if an agreement between the City, the County and Stanford is reached. 3. As stated in previous letters, the City of Palo Alto is a national leader in policies and programs that reduce GHG emissions. Examples of key City sustainability programs include an aggressive Climate Action Plan, the provision of clean energy to Palo Alto customers via the City owned and operated electric utility, various utility programs to reduce emissions, leadership in Green Building and sustainable design, affordable housing programs, higher density land uses near transit, and numerous “complete streets” oriented policies and projects. An attached letter, sent to ABAG on March 5, 2012, provides additional detail on these programs. The City encourages ABAG to allow flexibility within the SCS for local jurisdictions to provide further means, such as those outlined in the letter, of reducing land use/transportation related emissions. 4. The City of Palo Alto continues to have concerns regarding the potential negative environmental, school capacity and infrastructure capacity (recreational, utilities, transit, etc.) impacts the overstated housing mandates may create. The City will, of course, be conducting an environmental review to fully assess the impacts of these mandates during the preparation of our Housing Element for this planning period. Once again, thank you for the opportunity to comment on the adopted RHNA methodology for the 2014-2022 Housing Cycle. As stated earlier, the City official is requesting a reduction in the proposed allocation for the reasons stated above. If you have questions or need additional information, please contact Curtis Williams, the City’s Director or Planning and Community Environment, at (650) 329-2321 or curtis.williams@cityofpaloalto.org. Page 3 of 3 Sincerely, Yiaway Yeh Mayor Attachments: 1. March 5, 2012 Letter from Mayor Yeh to Mark Luce (ABAG), including two attachments: a) November 15, 2011 Memorandum: “California Demographic Forecasts: Why Are the Numbers Overestimated,” prepared by Palo Alto Councilmember Greg Schmid b) “Regional Land Use and Transportation SCS: Achieving Statewide GHG Reduction Rates,” prepared by Contra Costa Transportation Authority. 2. Tables Detailing Discrepancies Between Department of Finance (DOF) and SCS Projections cc: City Council Planning and Transportation Commission James Keene, City Manager Curtis Williams, Director of Planning and Community Environment Ezra Rapport, Executive Director, ABAG Miriam Chong, Interim Planning Director, ABAG 2014‐2022 RHNA / SCS Schedule This schedule aligns the milestones for the RHNA with those of the SCS/RTP. The dates for each milestone take statutory requirements for public comment, local government response, etc. into account. ABAG RHNA Milestones SubRHNA Milestones SCS/RTP Milestones 1 Subregions Form Mar. 2011 2 Present SCS Alternative Scenario Concepts for Initial Review June 10, 2011 3 Release Block Grant Concept July 2011 4 Review RHNA Methodology Concepts at ABAG Executive Board Sept. 2011 5 Transportation Project Assessment to MTC Planning Committee Oct./Nov. 2011 6 Release SCS Alternative Scenario Results for Public Review Dec. 2011 7 County Public Workshops Jan. 2012 8 Dept. of Housing and Community Development (HCD) Issues RHND1 Feb. 24, 2012 9 Release Draft SCS Jobs‐Housing Connection Scenario & OneBayArea Grant Proposal Mar. 2012 10 Release Preliminary Draft RHNA Method Mar. 2012 11 MTC and ABAG Adopt SCS Jobs‐Housing Connection Scenario & OneBayArea Grant May 2012 12 EIR Kick‐Off (Scoping) Public Meeting May 2012 13 ABAG Releases Draft Method and Assigns Preliminary Subregional Shares2 Action to be taken by ABAG Executive Board May 17, 2012 14 Public hearing on Draft Method and Preliminary Subregional Shares at ABAG Regional Planning Committee3 June 6, 2012 15 ABAG Adopts Final Method Action to be taken by ABAG Executive Board July 19, 2012 16 ABAG Releases Draft Allocation4 Action to be taken by ABAG Executive Board July 20, 2012 17 Deadline for Local Requests for Revisions to Draft Allocation5 Sept. 18, 2012 18 Release Draft SCS/RTP and Draft EIR Nov. 2012 19 Release Draft Air Quality Conformity Analysis Jan. 2013 20 ABAG Responds to Requests for Revisions6 By Nov. 15, 2012 21 Deadline for Local Appeals to Draft Allocation Jan. 11, 2013 22 Respond to Comments on Draft SCS/RTP EIR and Air Quality Conformity Analysis Feb. 2013 23 Public Hearing on Local Appeals of ABAG Response to Revision Requests7 Between Feb. 20 ‐25, 2013 24 Deadline for Subregions to Submit Final Allocation and Resolution of Consistency with the SCS to ABAG for Review and Possible Consultation Feb. 1, 2013 25 ABAG Issues Final Allocation8 April 12, 2013 26 Adopt RTP/SCS, Certify EIR, Make Conformity Determination April 2013 27 ABAG Adopts Final Allocation at Public Hearing9 Action to be taken by ABAG Executive Board May 16, 2013 28 Local Governments Adopt Housing Element Revision Oct. 2014 1 The date for HCD to determine the RHND has been set at this date by mutual agreement between ABAG and HCD. 2 The survey of local governments regarding the statutory RHNA factors must be conducted within the 6 months prior to this date. GC §65584.04(b) 3 GC §65584.04(h) requires a public hearing and 60‐day comment period on the draft method. 4 There is no statutory requirement that there be a gap between adoption of the final method and issuance of the draft RHNA. 5 Local jurisdictions have 60 days to review allocation and request revisions. GC §65584.05(b) 6 ABAG has up to 60 days to respond to requests for revisions, may be compressed. GC §65584.05(c) 7 A hearing must take place no earlier than 40 days and no more than 45 days after the deadline to file appeals. GC §65584.05(e) 8 Must occur within 45 days after completion of appeal process. Could be compressed to 0 days. GC §65584.05(f) 9 Must occur within 45 days of issuance of final allocation. No minimum interval required. GC §65584.05(h) Updated May 1, 2012 City of Palo Alto (ID # 3084) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/4/2012 Summary Title: City Response to Adopted ABAG RHNA Allocation Title: Approval of City Response to the Adopted Regional Housing Needs Allocation (RHNA) for the 2014-2022 Cycle From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council approve and direct the Mayor to execute the attached letter (Attachment A) to the Association of Bay Area Governments (ABAG) regarding the City’s response to the Adopted Regional Housing Needs Allocation (RHNA) for the 2014-2022 Cycle. Background On July 19, 2012 the ABAG Executive Board adopted the Regional Housing Needs Allocation (RHNA) methodology for the 2014-2022 housing cycle (Attachment B). For the City of Palo Alto, ABAG projects a need for 2,179 new housing units at various income levels during this time period. This allocation represents the City of Palo Alto’s share of the 187,990 units the California Department of Housing and Community Development (HCD) projects will be needed within the Bay Area over that same time period (Attachment C). The City’s number is up slightly from the ABAG’s most recent prior projection, but is reduced substantially from earlier iterations. The allocation is also significantly less than the 2,860 housing units assigned during the 2007-2014 period. That said, it still represents a substantial number of units for a built-out city. A new and important aspect of this RHNA cycle is that the cycle does not stand alone. It is an integral part of, and must be consistent with, the Sustainable Community Strategy (SCS) for the region. The SCS attempts to guide Bay Area growth through the year 2040. This planning effort is intended to implement Senate Bill 375, which expects to reduce greenhouse gas (GHG) emissions by supporting higher intensity development near transit along with substantial increases in transportation investments. As part of the SCS process, the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) selected the Draft Preferred Land Use Scenario, known as the “Job-Housing Connection Strategy.” This scenario assumes that the Bay Area will need to accommodate 1.1 million new jobs and 660,000 new housing units through the year 2040. The preferred scenario anticipates as many as 29,650 new jobs and 7,410 new housing units in the City of Palo Alto over that time period. The City has until September 19, 2012 to appeal the RHNA allocation determination. ABAG, however, is requesting responses by September 11 to accommodate the ABAG Executive Board meeting schedule. Given the reduction in overall units relative to earlier projections, staff believes that an appeal may not be necessary for this cycle, but that the City should register some of its continuing concerns. These concerns relate to continued objections to long-term population and growth projections, as well as to the proposed allocations for housing on unincorporated Stanford lands. Discussion A draft letter is provided as Attachment A. Based upon past input from the Regional Housing Mandate Committee (RHMC) and the City Council, the letter focuses on four key points: 1. The regional forecast of jobs and housing for the region, including the inconsistency with recent historical patterns, and the City’s concerns about the implications of overstated growth. The overall projections continue to ignore the updated demographic forecasts from the State Department of Housing (Population Projections, May 2012). For the upcoming housing cycle, ABAG reduced the overall housing numbers, primarily based on the depressed statewide housing market and glut of vacant, foreclosed homes. However, long-term growth assumptions essentially remained the same. This creates the effect of “back-loading” the housing numbers, and creating unreasonable and unachievable housing mandates in the current and future housing cycles. The SCS process will allow long-term growth projection adjustments on a periodic basis, but staff believes it is appropriate to continue to register the City’s concerns and oppositions to the projections. The letter therefore encourages ABAG to adjust future projections so they are more consistent with historical growth patterns and to consider a range of forecasts, as well as to recent lower forecasts by the State Department of Finance (DOF). The City’s March 5, 2012 letter to ABAG and Councilmember Schmid’s projections analysis have been attached to the letter, along with a chart staff prepared comparing DOF projections to ABAG projections for the Sustainable Communities Strategy. 2. The proposed RHNA allocation only assigns 77 housing units to the County of Santa Clara (unincorporated area), while Stanford University’s General Use Permit (GUP) with Santa Clara County allows for up to 1,500 more residential units to be built on Stanford lands within the SCS timeframe. The letter acknowledges that those units have not been allocated to Palo Alto, but that at least some of them are proximate to El Camino Real and the University Avenue Caltrain station and would be consistent with the objectives of the SCS and SB375. Specifically, the approximate 350 units on two sites on Quarry Road just west of El Camino Real would appear appropriate to include somewhere in the housing analysis. City staff has met with staff from the County and Stanford to evaluate the potential for an allocation of those units or some portion thereof and County agreement to a “transfer” of a similar number of units from the City of Palo Alto. The letter to ABAG identifies the issue (previously noted in a June 28, 2012 letter to ABAG included as Attachment D) and requests that ABAG remain open to such a transfer. Staff does not believe that ABAG would alter the overall allocation in the absence of agreement between the City, County, and Stanford. Those adjustments do not have to meet the September 18 deadline for responses, so long as the net total number of units between the jurisdictions does not change. 3. The letter encourages ABAG to provide flexibility within the SCS for local jurisdictions to provide further means of reducing land use/transportation related emissions. Detailed examples of Palo Alto GHG reduction policy initiatives were included in the March 5 correspondence to ABAG, and the conclusion provides a list of these initiatives for future reference. 4. The City continues to have concerns regarding the potentially negative environmental, school capacity and infrastructure impacts the overstated housing mandates may create. Additionally, the City will be conducting an environmental review to assess the full impacts of these mandates. Regional Housing Mandate Committee (RHMC) Comments The Regional Housing Mandate Committee met on August 28, 2012 and provided comments on the draft letter to ABAG. The comments are included in the summary above, and will be incorporated into the final, draft letter presented to the City Council for review. In summary, the comments are as follows: Additional wording should be added stating that the overall projections continue to ignore the updated demographic forecasts from the State Department of Finance (Population Projections, May 2012) and therefore overstate growth for the overall SCS period, through 2040. The letter should specify that the overstated growth projections create an unrealistic and unachievable housing mandate for the current and future housing cycles. Additional wording should be added stating that the City encourages ABAG to regain public confidence of its numbers by acknowledging the adaptations already made the Department of Finance to the changing State of California demographics. Wording should be revised to clarify that City staff has met with staff from the County and Stanford to discuss the possibility of a joint agreement to transfer a similar allocation of units from the City of Palo Alto to the County of Santa Clara. The concluding paragraph of the draft, which encourages ABAG to provide greater flexibility in GHG reduction strategies and details various GHG emission reduction strategies the City has adopted, should be made into the third bullet point to provide greater emphasis. A fourth bullet point should also be added stating that the City continues to have concerns regarding the potential negative environmental, school capacity and infrastructure capacity impacts the overstated housing mandates may create, and that the City will be conducting an environmental review to fully assess the impacts of these mandates. An additional document, prepared by Planning staff and which details the discrepancies between the Department of Finance projections and Sustainable Community Strategy projections, should be attached to the letter. The Committee voted 4-0 to recommend that the Council approve the letter as modified. Next Steps ABAG has requested responses by September 11, so they may be included for the Executive Board’s meeting on the 18th. Staff expects to conclude discussions with the County and Stanford in September or October, but any adjustments resulting from those discussions could still be accommodated, so long as the net total number of units does not change. The current draft Housing Element has been submitted to the State, and a response is expected in October. Work on the next Housing Element should proceed quickly following the certification of the current Element, hopefully in early 2013. Policy Implications The Regional Housing Needs Assessment and Sustainable Communities Strategy relate directly to the City’s Comprehensive Plan, zoning, and transportation policies, so that a key objective of the City is to assure that the regional plan continues to allow for implementation of those goals, policies, and codes. Resource Impacts Staff had retained planning and economic consultants for an additional $25,000 for economic consultant services to provide input to the City’s response to the Alternative Scenarios and follow-up regarding the specific impacts and options for the City. Given the recent reduction in overall housing units, the consultant’s services are on hold, and therefore no additional funding is required at this time. Environmental Review No environmental review is necessary by the City to comment on the proposed allocation. An Environmental Impact Report is expected to be prepared by ABAG and MTC for the Preferred Land Use Scenario of the Sustainable Community Strategy. Environmental review will be required for the City’s Housing Element proposed to address the allocations. Attachments: Attachment A: Draft RHNA Allocation Response Letter (see note) (PDF) Attachment B: July 25, 2012 Letter from ABAG re: Final RHNA Allocations and Timeline (PDF) Attachment C: February 24, 2012 HCD RHND Letter to ABAG (PDF) Attachment D: June 29, 2012 Letter to ABAG re: County RHNA Allocation (PDF) Prepared By: Aaron Aknin, Assistant Director Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager Page 1 of 3 September 5, 2012 Mr. Mark Luce, President Association of Bay Area Government Joseph P. Bort Metro Center P.O. Box 2050 Oakland, CA 94607‐4756 Re: City of Palo Alto Response to Adopted RHNA Methodology for the 2014‐2022 Housing Cycle Dear Mr. Luce: Thank you for ABAG’s July 25, 2012 memo to Bay area cities and counties, which provided an overview of the adopted Regional Housing Needs Assessment (RHNA) methodology and jurisdictional allocations for the 2014‐2022 housing cycle. The adopted allocations appear to have taken into consideration many of the concerns and comments expressed by member jurisdictions. The target projections will be difficult to attain in Palo Alto, however, given the built‐out nature of the city and multiple school, service and infrastructure constraints and impacts. The purpose of this letter is to reiterate the City of Palo Alto’s ongoing concerns regarding the long‐term Sustainable Communities Strategy (SCS) projections and the potential impact on future RHNA cycles. Furthermore, this letter provides information about our ongoing effort to facilitate a joint agreement for transfer of units to the County of Santa Clara for housing on Stanford lands. In summary, the City of Palo Alto’s comments are as follows: 1. Although adjustments were made for this housing cycle, the regional forecast of jobs and housing for the region continues to substantially overstate growth for the overall SCS period (through 2040) and continues to ignore the updated demographic forecasts of the State’s Department of Finance (DOF). This creates the effect of “back‐loading” the housing numbers and potentially creating unreasonable and unachievable housing mandates in the current and future housing cycles. Although the SCS process does allow for adjustment of long‐term growth projections on a periodic basis, the City encourages ABAG to regain public confidence of its numbers by working with HCD to reduce the 2010‐2040 projections by 41% to reflect the adaptations already made by the Page 2 of 3 Department of Finance to the changing State of California demographics. Furthermore, future projections should be adjusted so they are more consistent with historical growth patterns and/or a range of projections should be adopted that reflect meaningful planning scenarios in response to market changes over time. An analysis of the inadequacy of the current long‐range projections, authored by Palo Alto Councilmember Greg Schmid, was submitted to ABAG during the Alternative Scenario selection process and is attached to this letter. Tables outlining the discrepancies between the most recent DOF projections and those prepared by ABAG for the SCS are also attached. 2. The proposed RHNA allocation assigns 77 housing units to the County of Santa Clara (unincorporated), although Stanford University’s General Use Permit with the County of Santa Clara County allows and plans for up to 1,500 residential units to be built on Stanford lands within the SCS timeframe. The City acknowledges that these units have not been otherwise assigned to the City of Palo Alto, but at least some of them are proximate to El Camino Real and the University Avenue Caltrain station, and would be consistent with the objectives of the SCS and SB375. Specifically, approximately 350 planned units on two sites on Quarry Road just west of El Camino Real appear appropriate to include somewhere in the housing analysis. City staff has met with staff from the County and Stanford to discuss the possibility of a joint agreement to a “transfer” of a similar allocation of units from the City of Palo Alto to the County of Santa Clara. This is an ongoing effort, and we will keep ABAG apprised of our progress. The City requests that ABAG remain open to such a transfer if an agreement between the City, the County and Stanford is reached. 3. As stated in previous letters, the City of Palo Alto is a national leader in policies and programs that reduce GHG emissions. Examples of key City sustainability programs include an aggressive Climate Action Plan, the provision of clean energy to Palo Alto customers via the City owned and operated electric utility, various utility programs to reduce emissions, leadership in Green Building and sustainable design, affordable housing programs, higher density land uses near transit, and numerous “complete streets” oriented policies and projects. An attached letter, sent to ABAG on March 5, 2012, provides additional detail on these programs. The City encourages ABAG to allow flexibility within the SCS for local jurisdictions to provide further means, such as those outlined in the letter, of reducing land use/transportation related emissions. 4. The City of Palo Alto continues to have concerns regarding the potential negative environmental, school capacity and infrastructure capacity (recreational, utilities, transit, etc.) impacts the overstated housing mandates may create. The City will, of course, be conducting an environmental review to fully assess the impacts of these mandates during the preparation of our Housing Element for this planning period. Page 3 of 3 Thank you once again for the opportunity to comment on the adopted RHNA methodology for the 2014‐2022 Housing Cycle. If you have questions or need additional information, please contact Curtis Williams, the City’s Director or Planning and Community Environment, at (650) 329‐2321 or curtis.williams@cityofpaloalto.org. Sincerely, Yiaway Yeh Mayor Attachments: 1. March 5, 2012 Letter from Mayor Yeh to Mark Luce (ABAG), including two attachments: a) November 15, 2011 Memorandum: “California Demographic Forecasts: Why Are the Numbers Overestimated,” prepared by Palo Alto Councilmember Greg Schmid b) “Regional Land Use and Transportation SCS: Achieving Statewide GHG Reduction Rates,” prepared by Contra Costa Transportation Authority. 2. Tables Detailing Discrepancies Between Department of Finance (DOF) and SCS Projections cc: City Council Planning and Transportation Commission James Keene, City Manager Curtis Williams, Director of Planning and Community Environment Ezra Rapport, Executive Director, ABAG Miriam Chong, Interim Planning Director, ABAG March 5, 2012 Mr. Mark Luee, President Association of Bay Area Govemments Joseph P. Bort Metro Center P.O. Box 2050 Oakland, CA 94607-4756 Ci!JgfPaloNto Office of the Mayor and City Council Re: City of Palo Alto Comments on Sustainable Communities Strategy (SCS) Alternative Scenarios Dear Mr. Luce: Association of Bay Area Govemments (ABAG) staff has requested local agency comments on its proposed land use Altemative Scenarios developed as a part of the One Bay Area Sustainable Community Strategy (SCS). We look forward to the fUlther discussion and refinement of the Preferred Scenario before the final Regional SCS is completed early in 2013. However, at this juncture we believe it is necessary for the City to express its concerns regarding the SCS Altemati ve Scenarios and the related regional jobs and housing forecasts, and to suggest altcl11ative approaches to the Preferred Scenario. This letter provides the City of Palo Alto's (City) comments, which have been formulated following the City'S considerable review and analysis of the Alternative Scenarios and related regional job and housing forecasts. Tbe City acknowledges and appreciates the fact that the SCS process will continue following release of ABAG's Preferred Scenario, scheduled for March 8, 2012. In summary, the City's concerns are as follows: • The City of Palo Alto has been a national leader in implementing policies and programs that reduce greenhouse gas (GHG) emissions and the effectiveness of these efforts should be considered as a part of the SCS and achieving regional GHG emission reduction targets. • The regional forecast of jobs and housing being considered as part of the SCS likely overstates future growth in the Bay Area and at a minimum is highly uncertain; ABAG should recognize the distinct possibility that actual growth rates in the Bay Area over the next 30 years may be lower and should phase job and housing allocations and implementation accordingly. • Palo Alto's allocation of jobs and housing units under all of the Alternative Scenarios is excessive by reference to its historical growth trends and development capacity; these allocations should more accurately consider policy constraints, market feasibility, and the high infrastructure costs and local fiscal impacts of such intensive redevelopment. Prh~h:J wHh mY-\)lIsed inks (In 11)0';1" recycled rarer pro(e~8ed without chlorine. P.O. Box 10250 Palo Alto, CA 94303 650.329.2477 1 650328.3631 fax ABAG: SCS Alternative Scenarios March 5, 2012 • The land use changes contemplated in the SCS Alternative Scenarios have a propottionately small contribution to achieving AB32/SB375 GHG reduction targets and there are very limited differences shown between the Alternative Scenarios; the considerable effort and investment needed to affect these land use changes should be re-directed to more cost- effective regional and local GHG reduction measures. While the City retains serious concerns regarding the Regional Forecast of jobs and housing and also the allocation of future development under the Alternative Scenarios, Palo Alto is firmly committed to doing its share to achieve the State-mandated (AB32/SB375) GHG reduction targets. The measures already adopted by the City provide ample evidence of this commitment. Going forward, the City expects to cooperate with ABAG and our other regional pattners in the future efforts needed to achieve substantial reductions in GHG emissions through realistic and achievable regional and local policies, programs, and investments. The following items elaborate on the summary points listed above. 1. The City of Palo Alto has been a national leader ill implementillg policies and programs that reduce GHG emissiolls. ' Over the past decade, the City of Palo Alto has adopted a range of policies, programs and projects to reduce GHG emissions, focused upon improving energy efficiency, enhancing multi- modal transportation alternatives to the single-occupant vehicle, and creating walkable, mixed- use districts. Implementing these policies, programs, and investments the City has become a national leader in reducing GHG emissions. Some of the key programs include: a. City of Palo Alto Climate Protection Plan (CPP): The CPP, adopted by the City Council in December 2007, includes goals for the reduction of CO2 from a 2005 baseline level as a result of changes in City operations and from CO2 reduction efforts within the community. • The City has surpassed its short term goal of a 5% reduction in emissions by 2009 for a total reduction of 3,266 metric tons of CO2. • By 2020, the City and community will reduce emissions by 15% from 2005 levels, equal to 119,140 metric tons of CO2, consistent with State emission reduction goals. b. Availability of Clean Energy: The City of Palo Alto is in a unique position as owner and operator of its electric utility to make available and provide clean energy to City customers. In this regard, the City Council adopted a goal to have 33% of the electricity supply to be provided by renewable electricity suppliers by 2015, five years in advance of the State requirement. • For FY2011, renewable electricity supplies account for 20% of the City's needs. • Contracts are in place with suppliers to provide 26% of the City's electrical needs as renewable by FY2014 with the potential to reach 30% from contracts that are still under negotiations. • CUiTently, 24% of the City's customers participate in the Palo Alto Green program, paying a surcharge on electric service to support renewable electricity supplies. • The City's Utilities Department is preparing a plan to be released later this year for the electric portfolio to be carbon neutral. 2 ABAG: SCS Alternative Scenarios March 5, 2012 c. Utility Programs to Reduce Emissions: In addition to providing clean energy options for its customers, the Utilities Department offers programs such as rebates, assistance, information, and workshops to help customers increase electricity efficiency and cost savings that reduce emissions. These successes of these programs are measurable: In FY20 II, Palo Alto customers reduced CO2 emissions by 12,557 tons through the use of electric and natural gas efficiency programs, incentives for solar photovoltaic (PV) and solar hot water systems, and other program efficiencies. d. Leadership in Green Building and Sustainable Design: In FY 2009, the City Council adopted the City's Green Building Ordinance to build a new generation of efficient buildings in Palo Alto that are environmentally responsible and healthy places in which to Jive and work. This program was one of the first in the nation to mandate green building requirements and certifications for virtually all public and private buildings. • In FY 20 II , the City initiated the first LEED-ND pilot program (LEED for Neighborhood Development) in the United States for assessing a development site's ability to qualify as a sustainable neighborhood project, including features that reduce dependence on automobile use, increase walkability, and encourage healthy li ving. • The City also rolled out energy use disclosure requirements for existing buildings undergoing small renovation work to better understand the existing buildings' current performanee and areas where education, policy, and programs can be influential in reducing energy usage. • The amount of CO2 diverted from the environment has increased sinee the adoption of the 2009 ordinance and programs. In 20 I 0, the first full year of the ordinance, CO2 was reduced by approximately 1,013 tons. In 2011, C02 was reduced by approximately 2,818 tons, a 178% increase over the previous year. • Prior to the City's ordinance, as few as six green building projects existed throughout the City. By the end ofFY 2011, more than 240 green buildings have been completed or are under construction. 'e. Affordable Housing: The City of Palo Alto has been a leader in providing for affordable housing in one of the most expensive housing markets in the nation. • In 1974, Palo Alto became one of the first cities in the United States to adopt an inclusionary housing program that required the provision of below market rate (BMR) residential units in new multiple-family dwelling projects. • Today, the City oversees 239 ownership units and 198 rental BMR units that are available to qualified applicants. As the cost for housing in Palo Alto continues to increase, the value of these affordable units to provide hOUSing within the urbanized Bay Area has also increased. BMR housing provides greater opportunity for lower income families to Jive closer to their jobs and utilize public transit. • Recently, Palo Alto welcomed two new BMR housing projects, including the Tree House Apartments, a 35-unit complex with a Green Point Rating of 193 (the highest score in Palo Alto for multiple family housing) and Alta Tone, a 56-unit complex for very low- income seniors. • Construction is underway at 801 Alma Street, a 50-unit family affordable project immediately adjacent to CalTrain and within walking distance to shops and services on University Avenue in downtown. 3 ABAG: SCS Alternative Scenarios March 5, 2012 f. Higher Density Land Uses Near Transit: The City's Comprehensive Plan designates two areas of the City (downtown and California A venue) as appropriate for 'Transit Oriented Residential," in a 2,OOO-foot radius of the City's two Caltrain stations. These areas are identified for higher intensity residential and mixed-use development focused around a walkable, bieyc\e- friendly environment. • In 2006, two years before the adoption of SB375, the City Council adopted the Pedestrian and Transit Oriented Development combining district (PTOD) for the area around the California A venue CalTrain station. This district allows for residential densities at 40 units per acre, increased floor area ratios, increased building heights, reduced parking requirements, and density bonuses for the provision of BMR housing in mixed-use and multiple family projects. • In 2007, Council supported the designation of this area as a PriOlity Development Arca (PDA) as part of ABAG's FOCUS program that would eventually evolve into Plan Bay Area. This land use planning effort is one example of a pattern of early-adoption decisions made by the City Council to address growth, transit and greenhouse gas emissions within our community. • The Council has directed that housing sites proposed in the City's Housing Element should be focused in transit-proximate areas, and that increased height and intensity may be considered in those locations. g. Transportation Policies and Projects: The City of Palo Alto has developed transpOltation policies, programs and projects to implement a transit-oriented, walkable and bicycle-friendly vision that demonstrate leadership of the "Complete Streets" concept promoted by the Metropolitan Transportation Commission. Some of these key recent measures include: • Bicycle and Pedestrian Transportation Plan: The City is completing its updatcd plan to accommodate enhanced bicycle and pedestrian facilities and programs, and to elcvate the City's Bicycle-Friendly Community status from Gold to Platinum Icvel. • Stanford AvenuefEl Camino Real Intersection Improvements: The City has recently completed improvements at this intersection to enhance safety for pedestrians and cyclists, including children who use the intersection as a route to school, and to upgrade the aesthetic qualities of the intersection and of El Camino Real. Wc expect thc project will serve as a template for improving intersections throughout the Grand Boulevard corridor. • Safe Routes to School: The City's Safe Routes to School program has resulted in a phenomenal increase in school children bicycling and walking to school over thc past decade. In the 2011 fiscal year, City staff coordinated 140 in-class bike and pedestrian safety education programs in 12 elementary schools, reaching 4,250 students. Recent surveys of how children usually get to elementary school showed an average of 42% choosing to walk, bike or skate to school, compared to a national average of only 13% (figures for middle schools and high schools are even greater). A reccnt grant will allow the City to prepare Safe Routes maps for every elemcntary school in the city as well as to expand our education cuniculum into middle schools and to adults. • Traffic Calming on Residential Arterials: The City has an ambitious traffic calming program along "residential arterials" in efforts to support our Safe Routes to School program and to enhance bicycle and pedestrian safety. In parricular, the ongoing 4 ABAG: SCS Alternative Scenarios March 5, 2012 Charleston Road-Arastradero Road Corridor project has provided substantial safety improvements and selective lane reductions to enhance bicycling and walking while maintaining efficient levels of vehicle throughput similar to those prior to the traffic calming improvements. • Bicycle Parking Corrals: The City has recently installed six green "bicycle parking corrals" in the Bay Area, with each corral providing for up to 10 bicycle parking spaces in highly visible, signed on-street areas in downtown. Up to a dozen more such installations are planned in the downtown and Califoll1ia Avenue areas. • Califoll1ia A venue Streetscape Improvements: A pending grant would support the substantial upgrade of Califoll1ia Avenue to a more pedestrian and bicycle-friendly roadway, incorporating "complete street" principles, and also enhancing access to the Califoll1ia Avenue Cal train station. • Local Shuttles: The City, with support from the Caltrain JPB, offers local shuttle services for commuters, school children, seniors and others between points of interest within the city. These shuttles futther reduce the need for single-occupant vehicle trips and reduce traffic congestion and parking needs. Accordingly, the City of Palo Alto requests that ABAG consider the effectiveness of these local GHG emission reduction effOlts, incorporate them as a part of the SCS and related regional GHG reduction targets, and provide "credits" to those jurisdictions that have demonstrated implementation of meaningful GHG reduction measures. 2. The Regional Forecast of jobs alld hOl/sillg being considered as part of the SCS appears to overstate future growth in the Bay Area. The regional jobs and housing forecast used for the Altell1ative Scenarios is lower than the forecast for the Initial Vision Scenario and the Core Concentration Unconstrained Scenario, reflecting comments received from the local agencies following review of the Initial Vision Scenario. However, in the City of Palo Alto's view, the most recent jobs and housing forecasts for the three "constrained" Altell1ative Scenarios remain at the high end of plausible Bay Area jobs and housing growth over the next 30 years. The City is disappointed and dismayed at the minimal public discourse around the development of these projections, though we do appreciate Dr. Steven Levy's recent presentation of the analysis behind the projections. At this point, however, ABAG has provided insufficient justification for the methods and results of the regional job and housing forecasts used in the Altell1ative Scenarios. An evaluation of the Regional Forecast prepared late last year by Councilmember Greg Schmid provides an assessment of Califoll1ia growth forecasts (see Attachment A), indicating the tendency for forecasts to overstate growth as compared to actual figures from the Census, and discussing some of the key factors that will influence Califoll1ia's future growth. a. Jobs. Regarding the ABAG jobs forecast, a comparison with the last 20 years is noteworthy. Average job increases between 1990 and 2010 approximated 10,000 net new jobs annually. Excluding the three years that included the Great Recession where substantial jobs losses occurred (i.e. 2008-2010), the Bay Region added jobs at an average annual rate of 25,200 between 1990 and 2007. The ABAG jobs forecast used for the Altell1ative Scenmios assumes that the Region will add an average of over 33,000 jobs annually from 2010 to 2040, 5 ABAG: SCS Alternative Scenarios March S, 2012 a 32% increase over the pre-recession trend line. The method used to arrive at the jobs forecast assumes a "shift-share" of a national jobs growth forecast that itself is subject to question. As a palt of revisions to the regional jobs forecast, ABAG should consider a more fundamental economic assessment that identifies the key industries in the Bay Area that will drive job growth and also the distinct possibility that future jobs and housing may be closer to recent historical growth trends. b. Housing. Regarding the ABAG housing forecast used for the Alternative Scenarios, an additional 770,800 households are shown added to the Bay Area between 2010 and 2040 -an annual average growth of 25,700 households. The average annual housing growth rate between 1990 and 2010 was 21,000. At the present time, two years into ABAG's forecast period, the Bay Area, like much of the United States, remains in a weak housing market characterized by very limited new development, low pricing, slow sales of existing homes, tight credit, and an oversupply of homes resulting from a historically high number of foreclosed and distressed propelties. These conditions are expected to continue for several more years until the existing inventory is reduced and substantial improvement in the job market and related increases in household income occurs. In any event, the Bay Area will need to be in "catch-up" mode, meaning even higher additional households per year must be realized to meet the SCS forecast growth rates, once more normal housing market conditions emerge. Moreover, ABAG's regional housing forecast is based on a fixed share of a national population forecast prepared by the U.S. Census Bureau that presumed international in- migration (primarily of Asian and Hispanic peoples) would continue and comprise approximately 80 percent of all population growth nationwide. c. Housing Affordability. In addition to questions regarding job growth (the ultimate cause of housing demand) there are a number of other questions regarding ABAG's housing forecast including those related to affordability. A presentation made by Karen Chapple of UC Berkeley at the ABAG's January Regional Advisory Working Group (RA WG) suggested that given likely wages paid by the new jobs expected, over 70 percent of all new households formed in the 2010 to 2040 period will be "moderate" income or below. In many Bay Area locations, especially the inner Bay Area urbanized areas that are the focus of growth under the SCS Alternative Scenarios, such "affordable" housing units must be subsidized in one fashion or another, either as "inclusionary" units burdened upon the market rate units constructed or by public subsidies such as (now eliminated) redevelopment agency funding and federal tax credits. Given the loss of redevelopment powers and funding and recent court cases affecting inclusionary programs (Palmer, Patterson) there is no assurance that adequate housing subsidy funding will be available. d. RHNA. Then there is the matter of the Regional Housing Needs Allocation (RHNA). As presently proposed, the regional forecast and related Preferred Scenario allocations to be released as a draft on March 8th will apparently serve as the basis of the future RHNA for each city and county, which will require a one-third of the overall Preferred Scenario housing allocation to cities in each 8-year "planning period" regardless of any assessment of realistic development capacity (note: recent information from ABAG indicates that less than one-third of the 2010-2040 forecast is likely for the 2015-2022 period, however, due to the economic 6 ABAG: SCS Alternative Scenarios March 5, 2012 housing downturn). This approach seems highly arbitrary, insensitive to local conditions and constraints, and far beyond what can realistically be expected from an economic perspective. Accordingly, given all of these concerns, the City strongly recommends that the jobs and housing forecasts for the Preferred Scenario be reduced to reflect mOrc accurately current conditions, historical trends, and more fundamental assessment of economic (job) growth potential in the Bay Area. Developing a more realistic jobs and housing forecast would reduce the implied need to intensify land uses, reduce projected GHG emissions by lowering energy consumption, congestion and single occupancy vehicle trips, and require less costly transit and highway infrastructure investments. The SCS effort is to be revisited and updated every four years, so that there would be future opportunities to re-evaluate whether a higher forecast is appropriate and adjustments would be needed. 3. Palo Alto's allocation of jobs and 1I0using UlIitS rmder tile Altemative Scellarios is higilly unrealistic and excessive relative to lIistorical growth trends and develapment capacity. Santa Clara County dominates all other Bay Area counties in the allocation of ABAG's regional forecast of jobs and housing, absorbing 30 percent of the regional job forecast and 26 percent of the regional housing forecast. Palo Alto is allocated new jobs ranging from 18,040 Outward Growth) to 26,070 (Focused Growth). Palo Alto households allocated range from 6,107 (Outward Growth) to 12,250 (Constrained Core Concentration and Focused Growth). These allocations have been made without regard to existing development capacity in Palo Alto (use of remaining vacant land and redevelopment of existing developed areas), the likely match between new household affordability and local housing prices, or a range of other potential local costs for achieving the required high density development. a. Jobs. The City presently contains approximately 62,300 jobs, according to ABAG. During the past decade (2000 to 2010), Palo Alto experienced a 14 percent decline in employment reflecting the combined effect of the "dot-com" bust and the Great Recession. While economic conditions are expected to improve, there have been stluctura\ changes in technology industries that have driven growth in the Silicon Valley over the past 50 years that portend only modest growth. The Alternative Scenarios assume that Palo Alto's job growth by 2040 will increase over the 20 I 0 estimate by between 27 percent and 40 percent. b. Housing. The housing projections in the Alternative Scenarios represent a 25-50 percent increase in housing units from 2010-2040, up to approximately 400 new units per year. The City has in the past 40 years (1970-2010) produced an average of 148 units per year. To more than double that output in a relatively built-out city is again entirely unrealistic and using such an assumption as the basis for growth scenarios and transportation investments will likely result in failure of the planning effort. c. Constraints. The City of Palo Alto is highly built out, and the existing limited number of vacant sites and redevelopment opportunity sites severely limit how the households and jobs allocated to Palo Alto in the SCS Alternative Scenarios could be accommodated. The "constrained" scenarios clearly do not appear to consider the many constraints to new development in Palo Alto, including limited school capacity and funding for infrastructure. 7 ABAG; SCS Alternative Scenarios March 5, 2012 Accordingly, the City requests that the allocations of jobs and housing units in Palo Alto should be lowered substantially to more accurately consider policy constraints, market feasibility, and infrastructure and local fiscal impacts of such intensive redevelopment, 4. The land use changes contemplated ill tlte SCS Altemaiive Scenarios have a proportionaiely small contributioll to achieving AB32/SB375 GHG reduction targets. The AB32/SB375 target for Califomia is a reduction to 85 million equivalent metric tons per year by 2050, an 80 percent reduction from current levels, To retum to 1990 levels of 427 million tons, an 80 million ton reduction of projected 2020 levels is required, Of this 80 million ton reduction, approximately 96 percent is proposed to be achieved from improved fuel standards, energy efficiency, industrial measures, and other methods needed to curb emissions from the construction, manufacturing, and agricultural sectors. Only four percent, however, or 3.2 million tons, would be achieved by altering land use pattems, This is shown effectively on the graph (Attachment B) prepared by the Contra Costa County Transportation Authority (CCTA) in their letter dated February 15,2012. a, Negligible Difference Between Alternatives: The potential contributions of the land use changes contemplated in the SCS Alternative Scenarios show reductions in GHG emissions through 2040 range from 7.9 percent (Outward Growth) to 9.4 percent (Constrained Core Concentration), Compared to the initial Current Regional Plan Scenario, the Altemative Scenarios reduce GHG emissions by 0.9 percent to 2.4 percent of the remaining 4 percent affected by land use and transportation patterns. This is a negligible difference between the land use scenarios and argues for a more flexible approach that combines other GHG emission reduction strategies with a more realistic land use scenario. b, Regional Transportation Pricing and Policies: The MTC analysis of various transportation plicing and policy changes (e.g" telecommuting, electric vehicle strategies, parking pricing) may account for at least a 6,5% further reduction in GlIG emissions, considerably more significant than the differences between the land use pattems in the Alternative Scenarios. c, Cost Effectiveness. Given the numerous challenges associated with fundamental changes in the way that Bay Area land use patterns would otherwise evolve, including wholesale changes to land use regulations, presuming changes in market characteristics and preferences of homebuyers, and the need for substantial public investments and subsidies, we question the feasibility and cost-effectiveness of the Altemative Scenarios. Regarding market feasibility, there is no evidence that the resulting housing capacity and prototypes would match buyer preferences and affordability, Regarding cost-effectiveness, the comparable costs (mostly borne by local jurisdictions) of implementing the Alternative Scenarios may be far higher than other altematives for achieving comparable GlIG emission reductions, Accordingly, the City of Palo Alto recommends that a performance-based approach, involving establishing GHG reduction targets for the local jurisdictions along with a menu of options for achieving these targets (including feasible and realistic alterations inland use policy) should become the basis of the proposed SCS, B Conclusion ABAG: SCS Alternative Scenarios March 5, 2012 In conclusion, the City of Palo Alto suggests that the Preferred Scenario for the Sustainability Communities Strategy should include: • A focus on GHG emission reductions, with the flexibility for each city and county to provide for a reasonable minimum amount of housing plus options for other commitments to GHG emission reductions; • Grant funding for transportation and planning oriented to Priority Development Areas (PDAs); • Realistic housing forecasts limited to each upcoming 8-year RHNA cycle, with review every four years to update projections; and • Longer range projections that are not allocated to cities and counties, but are used to provide context for regional transportation investments. Thank you again for the opportunity to comment in advance of your proposal for a Draft Preferred Scenario. If you have questions Or need additional information, please contact Curtis Williams, the City's Director of Planning and Community Environment, at (650) 329-2321 or curtis. williams@cityofpaloalto.org. Sincerely, /),0 -f Yiaway Yeh Mayor City of Palo Alto Attachments: Attachment A: November IS, 2011 Memorandum: "California Demographic Forecasts: Why are the Numbers Overestimated," prepared by City of Palo Alto Councilmember Greg Schmid Attachment B: "Regional Land Use and Transportation SCS: Achieving Statewide GHG Reduction Rates," prepared for Contra Costa Transportation Authority cc: Adrienne J. Tissier, Chair, Metropolitan Transportation Commission Steve Heminger, Metropolitan Transportation Commission Ezra Rapport, Association of Bay Area Governments John Ristow, Valley Transportation Authority Palo Alto City Council 9 California Demographic Forecasts: Why are the numbers over- estimated? Prepared by City of Palo Alto November 15, 2011 Actual Califomia Population growth IAttachment A • 1 Over the last decade, the state of California added 3.4 million people, to reach a total of 37.3 million, This was an increase of 10% over the decade. This growth rate follows the gradual slowing that started after 1990, down dramatically from the very high rates of the post-World War II era. Note that the Department of Finance's (DOF) 2007 projections reflect a very high growth perspective. The DOF numbers are currently used as the population forecasts for all state and local projects-they are not schedu led to be revised until 2013. Table 1, California's population growth over tbe last five decades (average growth from census to census) 1960s 19705 19805 19905 20005 2010s 2020s 20305 ~ 29.2 18.5 25.7 13.8 10.0 Dept of Finance Projections (2007) 14.8 12.8 11.6 10.2 Source: US Census Bureau actual Census numbers; California Department of Finance 2007 Projections. Recent State forecasts have been consistently over-estimated Even after the sharp decline in growth during the 19905, forecasters consistently tended to be overly optimistic about population growth rates through the 20005. In 2005, the Public Policy Institute of California issued a report ("California 2025: Taking on the Future") that included the population projections of all the key demographic forecasters. The consensus forecast from this group was some 40% higher than the actual outcome for the state: Table 2. California Population Forecasts for 2010 made before 2005 (Percentage growth expected from 2000-2010) California Dept of Finance 15.2 U5C Population Dynamics 11.6 UC Berkeley (Lee, Miller) 13.9' Public Polley Institute of CA 15.2' CCSeE 17.2 UCLA Anderson Forecasting 16.6 Average of six 2005 forecasts 15.0 '''center point of band Source: Public Policy Institute of California, "California 2025: Taking on the Future", 2005, Page 29. 2 The consensus forecast was some 50% above the actual numbers. The only forecaster who produced a number below the actual 10% growth was the UC Berkeley group who stated that there was a 5% chance thatthe growth rate would be lower than 7,1%. The 2005 PPIC Report stated that "Recenttrends make population projections for California especially difficult...For these reasons, planners should consider alternative population scenarios ... as useful alternatives for planners." (PPIC, 2005, pages 27- 28) Even as late as the end of 2009, on the eve of the decennial census, estimates by the California Dept. of Finance (the organization responsible for the numbers that are used for all state allocation formulas) remained strikingly high at 14.1% which was 1.5 million or 44.7% above the above the contemporaneous and more accurate Census Bureau's Current Population Estimates. Critical Components of Change and the Future The Census data provide a nice detailed perspective on the actual components of change during the decade. While the 3.1 million people added through natural increase (births minus deaths) were the largest single growth factor, the 2 million net gain from foreign immigration was important In overcoming a net outflow of 1.6 million from native born emigration, primarily to other states. Table 3. Components of Population Change in California. 2000·2010 (millions of people) Births Deaths +5.45 -2.35 Net Domestic migration -1.63 Foreign Immigration +2.58 Foreign emigration -0.59 Military, etc -0.07 TOTAL +3.38 Source: USC. Population Dynamics Research Group, "What the Census would show", February 2011. 3 The challenge for projecting change In the future is the dramatic shifts in some of these base categories. With the aging population, we know that, even with slight increases in longevity, the aging population in California will raise the annual number of deaths in California from 271K in 2011 to 462K in 2039, while the number of births will rise slightly from 532K in 2011 to 5511n 2039. The natural Increase will fall from some 260K today to 90K in 2040. Thus, over time any increase in California's population will Increasingly rely on migration. Since net domestic migration has averaged a net outflow of some 160K per year since the early 1990s, any growth in population will be increasingly dependent on foreign migration, (Source: USC, Population Dynamics Groups, April 2011). There is little reason to see a major shift in domestic migration with California's high cost and high unemployment rate. That leaves foreign migration as the critical component source of long-term population growth. The most dynamic source for California's growth has been immigration from Mexico, both legal and illegal. All observers (The Dept of Homeland Security, the Pew Charitable Trust Hispanic Center, and the Mexican Migration Project at Princeton) agree that net immigration from Mexico has been down dramatically in recent years with the stricter enforcement of border crossing and the prolonged recession in the US. Pew estimates that the illegal immigrant population In the US fell by some 7% between 2007 and 2010. The important debate about the future is whether this is a business cycle phenomenon or part of a longer term trend. The group that has the best data source and takes the longer term look is the Mexican Migration Project at Princeton. For decades they have been tracking migration patterns from Mexico and doing annual surveys of thousands of families from migration centers in Mexico. They found that the percent of first time immigrants from the Mexican communities of highest immigration fell from 1.2% of adults in 2000 to 0.6% in 2005 to zero in 2010. They identify that the changes are due to Mexican demographic and economic factors as much as from U.S. conditions. They identified five internal factors of change in Mexico: 4 • Fertility rates are falling dramatically from 6.8 births per women in 1970 to 2.8 in 1995 to 2 in 2010 (replacement level). • The number of young people entering the labor market has fallen from one million a year in the 1990s to 700K today and demographic factors will bring that down to about 300K in 2030, not enough to meet local job needs. • The rate of college attendance and college completion has doubled over the last decade, raising the career path of an increasing share of young workers. • The wage disparity between Mexico and the U.S. is narrowing sharply with average wage gaps falling from 10:1 in the 1960s to some 3.7:1 in the early 20005. • The cost of migration has risen dramatically for illegal entrants, further narrowing the earnings gap. All of these factors point to the need, at the least, of looking at alternative scenarios of population growth in California that are more sensitive to possible underlying changes in migration patterns. 5 Sources of Demographic projections about California US Bureau of the Census (responsible for the decennial census and does updated estimates each year of state populations-has been much closer to actual numbers than the Cal Dept. of Finance) California Department of Finance (responsible for state population estimates between the Census years-forecasts used as key source for state government planning). Statewide estimates for 2010 (made in 2009) were 41% higher than the 2010 Census numbers for the state, 83% over for the nine Bay Area counties and 137% higher for the three West Bay counties. Ronald lee, UC Berkeley, Center for Economics and Demographics of Aging, "Special Report: The Growth & Aging of California's Population", 2003 (an important repolt that identified the detailed assumptions that went into the Department of Finance's long-term projections). Hans Johnson, Public Policy Institute of California, "California 2025: Taking on the Future", Chapter 2 'California's Population in 2025' (a report that gathered projections from eight academic and government sources). Johnson concluded that "population projections for California are especially difficulL.ln addition to overweighting contemporary trends, forecasters are notoriously bad at predicting fundamental demographic shifts ... For these reasons, planners should consider alternative population scenarios." Pages 27-28. John Pitkin & Dowell Myers, USC Population Dynamics Research Group, "The 2010 Census Benchmark for California's Growing and Changing Population", February 2011; "Projections of the Population of California by Nativity and Year of Entry to the U.S.", April 2, 2011. (Pitkin and Myers had the lowest of the forecasts in the 2005 study-though still overestimating growth by 16%. They are working with the California Department of Finance on components for a new longer-term forecast; they are still assuming a net immigration number of 160,000 holding steady in the future.) Steve Levy, Center for the Continuing Study of the California Economy UCLA Anderson Forecasting Project Greg Schmid October 2011 Required Reductions: Year Tons· By 2020 ........... 80 By 2050 ......... 715" 850 800 750 700 650 600 -550 c Q) .~ 500 .H-450 427 0" 400 u 350 '" c ~ 300 .!::! 250 I 8O"k l: ~ 200 c 150 .2 Tons' CD 2020 Emissions ................................. 507 ® Target 2020 Emissions 11990) ............ · .. ·427 @ Forecast 2050 Emissions ...................... 800" o Target 2050 Emissions (20"10 of 1990) ...... · 85 ® Target 2035 Emissions fonlefpalatedJ ...... 275 'Million Metric Tons C02 Equivalent "E>timcte based on Colifomia Council on Science end T e<hnclcgy Report, 2011 5{)7 CD ~ ; 427 : '2' ~\6J Bay Area Regional Contribution Scenarios 7.0'Yo CUfTent Regional Plans ------: 7.9"., Outward Growth ~ 8.2'% Initial VISion/Core ConcenfTation 9.1% Focused Growth ------~ 9.4% Constrained Core Concentrotion ~75i® I .. ~ I .. , , 0% 15% ~ 100 5 . r.-. t r "\!t 50 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 Projected Land Use & Transportation Emissions Reductions REGIONAL LAND USE & TRANSPORTATION (SCS) LOW CARBON FUEL STANDARDS IMPROVED FUEL EFFICIENCY (PAVLEY I & II) ; NON-TRANSPORTATION EMISSIONS REDUCTION ACTUAL/PROJECTED EMISSIONS 2050 ;e iii C'l ::r 3 (J) ::l ~ III Comparison of Department of Finance (DOF) Interim Projections released on May 2012 and the Preferred Sustainable Community Strategy (SCS) Projections released on May 2012 Department of Finance (DOF) Interim Population Projections for California and Counties: July 1, 2015 to 2050 in 5‐year Increments DOF 'Pop. Growth 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050 2010 ‐ 2040 Bay Area Region 6,805,677 7,165,778 7,365,127 7,593,463 7,805,868 8,023,484 8,240,104 8,433,609 8,585,622 8,726,594 1,267,831 Alameda County 1,448,768 1,513,251 1,547,734 1,584,797 1,619,555 1,650,596 1,678,473 1,705,642 1,722,773 1,734,695 192,391 Contra Costa County 953,675 1,052,024 1,102,534 1,161,014 1,209,433 1,263,049 1,323,005 1,381,576 1,438,880 1,496,207 329,552 Marin County 247,424 252,727 253,757 255,502 257,117 259,060 261,982 264,910 267,590 270,275 12,183 Napa County 124,601 136,659 141,951 146,582 152,439 158,538 165,088 171,625 178,478 183,352 34,966 San Francisco County 778,942 807,048 813,090 820,135 826,850 834,693 842,065 845,750 844,247 840,712 38,702 San Mateo County 708,384 719,467 735,025 751,480 765,495 776,862 786,730 791,781 793,885 794,162 72,314 Santa Clara County 1,687,415 1,787,267 1,846,126 1,917,070 1,980,661 2,048,021 2,110,906 2,164,936 2,195,432 2,220,174 377,669 Solano County 395,991 413,154 428,106 446,513 468,039 490,381 512,695 533,041 552,869 574,705 119,887 Sonoma County 460,477 484,181 496,803 510,370 526,280 542,284 559,160 574,347 591,469 612,312 90,166 Projections Prepared by Demographic Research Unit, California Department of Finance, May 2012 Draft Sustainable Community Strategy (SCS) Population Projections for Bay Area Counties: 2010 to 2040 SCS 'Pop. Growth 2000 2010* 2015 2020 2025 2030 2035 2040 2045 2050 2010 ‐ 2040 Bay Area Region 6,784,400 7,150,739 7,787,000 8,133,885 8,497,000 9,299,159 2,148,420 Alameda County 1,510,271 1,988,032 477,761 Contra Costa County 1,049,025 1,334,968 285,943 Marin County 252,409 285,317 32,908 Napa County 136,484 163,609 27,125 San Francisco County 805,235 1,085,656 280,421 San Mateo County 718,451 906,070 187,619 Santa Clara County 1,781,642 2,425,645 644,003 Solano County 413,344 511,482 98,138 Sonoma County 483,878 598,380 114,502 Projections Prepared by ABAG, May 2012 * 2010 SCS based on actual 2010 Census counts Percentage Difference between 2010 and 2040 DOF Interim and SCS Population Projections for Bay Area, comparing SCS to DOF Interim Population Projections May 2012 2040 Pop. Difference SCS & DOF 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050 2040 Bay Area Region ‐0.3%‐0.2% 2.5% 4.2% 5.9% 10.3% 865,550 Alameda County ‐0.2%16.6% 282,390 Contra Costa County ‐0.3%‐3.4%‐46,608 Marin County ‐0.1%7.7% 20,407 Napa County ‐0.1%‐4.7%‐8,016 San Francisco County ‐0.2%28.4% 239,906 San Mateo County ‐0.1%14.4% 114,289 Santa Clara County ‐0.3%12.0% 260,709 Solano County 0.0%‐4.0%‐21,559 Sonoma County ‐0.1%4.2% 24,033 Percentage Difference 2010‐2040 Projected Population Rate of Growth, comparing SCS to DOF Interim Population Projections May 2012 2010 ‐ 2040 Net Gain Difference SCS & DOF 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050 2010 ‐ 2040 Bay Area Region 48.8% 57.0% 69.5% 880,589 Alameda County 148.3% 285,370 Contra Costa County ‐13.2%‐43,609 Marin County 170.1% 20,725 Napa County ‐22.4%‐7,841 San Francisco County 624.6% 241,719 San Mateo County 159.4% 115,305 Santa Clara County 70.5% 266,334 Solano County ‐18.1%‐21,749 Sonoma County 27.0% 24,336 Estimate Projections Estimate Projections Estimate Projections Estimate Projections ASSOCIATION OF BAY AREA GOVERNMENTS Representing City and County Governments of the San Francisco Bay Area July 25, 2012 San Francisco Bay Area City Managers and Planning/Community Development Directors, The Regional Housing Need Allocation (RHNA) process for the San Francisco Bay Area reached its second milestone. On July 19, 2012, the ABAG Executive Board adopted the Draft RHNA Methodology and Preliminary Subregional Shares for the fifth cycle: 2014 - 2022 for all jurisdictions and subregions by income category. The adoption finalized the Draft RHNA Methodology according to the recommendations submitted by ABAG Staff in response to the input received during the 60-day public comment period that began on May 18, 2012 and closed on July 16, 2012. This milestone was reached through your involvement and the diligent efforts performed by the Housing Methodology Committee (HMC). The HMC represents a diverse set of interests that reflect both local and regional needs. This regional committee created the adopted Draft RHNA Methodology through an iterative process of workshops and meetings that began in January 2011. As we have reached the half-way point in the RHNA process, this memo provides an overview of the adopted RHNA Methodology and Subregional Shares as reflected in Resolution(s) 12-12 and 12-13. Finally, this memo details the next RHNA steps for local jurisdictions and subregions. Page 2 of 6 Final Draft RHNA Methodology 1. Sustainability Component This component advances the goals of SB 375; this factor is based on the Jobs-Housing Connection Strategy, which allocates new housing development into Priority Development Areas (PDAs) and non-PDAs. By concentrating new development in PDAs, the Strategy helps protect the region’s natural resources, water supply, and open space by reducing development pressure on rural areas. This allows the region to consume less energy, reducing household costs and the emission of greenhouse gases. Following the land use distribution specified in the Jobs-Housing Connection Strategy, 70% (131,593) of the 187,990 units determined by HCD will be allocated to PDAs and the remaining 30% (56,397) will be directed to non-PDA locations. As of July 19, 2012, the Jobs-Housing Connection Strategy has been modified to a feasible growth concentration over the 2014-2022 RHNA cycle. This new distribution results in a shifting of approximately 3,500 units or 1.5 percent of the total regional allocation. This modification shifts housing units from Oakland, Newark, and San Jose primarily to medium sized cities within the employment commute shed of these cities. 2. Fair Share Component This component achieves the requirement that all cities and counties in California work to provide a fair share or proportion of the region’s total and affordable housing need. In particular, cities that had strong transit networks, high employment rates, and performed poorly on the 1999-2006 RHNA cycle for very-low and low income units received higher allocations. Fair Share scoring is addressed through the factors listed below. Upper Housing Threshold: If growth projected by the Jobs-Housing Connection Strategy in PDAs meets or exceeds 110% of the jurisdiction’s household formation growth, it is not assigned additional growth outside the PDA, which ensures that cities with large PDAs are not overburdened. Page 3 of 6 Minimum Housing Floor: Jurisdictions are assigned a minimum of 40 percent of their household formation growth but not to exceed 1.5 times its 2007–2014 RHNA. This factor encourages all jurisdictions to produce a fair proportion of total housing need. Past RHNA Performance: In non-PDA areas, the total low- and very-low income units that were permitted in the 1999–2006 RHNA cycle were used as a factor for this cycle. For example, cities that exceeded their RHNA obligation in these two income categories received a lower score. Employment: In non-PDA areas, the employment was factored using the 2010 job estimates for a jurisdiction. Jurisdictions with higher employment received a higher score. Transit: In non-PDA areas, transit was factored for each jurisdiction. Jurisdictions with higher transit frequency and coverage received a higher score. 3. Income allocation (Amended as of July 19, 2012) The income allocation factor ensures that jurisdictions that already supply a large amount of affordable housing receive lower affordable housing allocations. This also promotes the state objective for increasing the mix of housing types among cities and counties equitably. The income allocation requirement is designed to ensure that each jurisdiction in the Bay Area plans for housing people of every income. The income distribution of a jurisdiction’s housing need allocation is determined by the difference between the regional proportion of households in an income category and the jurisdiction’s proportion for that same category. Once determined, this difference is then multiplied by 175 percent. The result becomes that jurisdiction’s “adjustment factor.” The jurisdiction’s adjustment factor is added to the jurisdiction’s initial proportion of households in each income category. The result is the total share of the jurisdiction’s housing unit allocation for each income category. Page 4 of 6 On July 19, 2012, the calculation of current income groups by jurisdiction was modified. This calculation was based on the regional median household income instead of the county median household income. This adjustment provided a better regional alignment of the income distribution formula of 175 percent. Using the median income for the region eliminates this disparity and places all counties on equal footing. This adjustment did not change a jurisdiction’s total allocation, but shifted the distribution across its income categories. Counties with residents that are above the regional median household income (Contra Costa, Marin, San Mateo, and Santa Clara) experienced a shift towards a greater concentration of units in the very-low, low, and moderate income categories. Counties with residents below the regional median household income (Alameda, Napa, San Francisco, Solano, and Sonoma) experienced shifts towards a greater concentration in the above moderate income category 4. Sphere of Influence Adjustments Every city in the Bay Area has a Sphere of Influence (SOI) which can be either contiguous with or go beyond the city’s boundary. The SOI is considered the probable future boundary of a city and that city is responsible for planning within its SOI. The SOI boundary is designated by the county’s Local Area Formation Commission (LAFCO). The LAFCO influences how government responsibilities are divided among jurisdictions and service districts in these areas. The allocation of the housing need for a jurisdiction’s SOI where there is projected growth within the spheres varies by county. In Napa, San Mateo, Santa Clara, Solano, and Sonoma counties, the allocation of housing need generated by the unincorporated SOI is assigned to the cities. In Alameda and Contra Costa counties, the allocation of housing need generated by the unincorporated SOI is assigned to the county. In Marin County, 62.5 percent of the allocation of housing need generated by the unincorporated SOI is assigned to the city and 37.5 percent is assigned to the county. Page 5 of 6 Subregions Shares Napa, San Mateo and Solano counties with the inclusion of all cities within each county have formed the three subregions for this RHNA cycle. These counties are each considering an alternative housing allocation methodology. The share of the RHND total for each of these subregions is defined by the ratio between the subregion and the total regional housing growth for the 2014 to 2022 period in the Jobs-Housing Connection Strategy, which is the same ratio as in RHNA. Napa will receive 0.7883%, San Mateo will receive 8.7334%, and Solano will receive 3.7113% of the region’s total RHND. Next Steps The most recent adoption authorizes the beginning of the 60-day Revisions and Appeals process. During this period, each jurisdiction and subregion are allowed to request for revisions to its allocation or submit an appeal to the RHNA process.1 The objective of the appellate process is to allow ABAG Staff to work directly with local jurisdictions and subregions to discuss its proposed allocation of housing units for the 5th 2014-2022 RHNA cycle. The deadline to submit an appeal or to request for a revision is September 18, 2012. To ensure that ABAG Staff will have adequate time to respond to requests before or by the next Executive Board Meeting on September 20, 2012, we are recommending that jurisdictions and subregions submit their request by September 10, 2012. Requests or questions regarding the Revision and Appeals process should be sent to RHNA_Feedback@abag.ca.gov. By April 2013, ABAG will issue Final Allocations that will be subject to a final adoption by the ABAG Executive Board. In June and July 2013, the Department of Housing and Community Development (HCD) will review the San Francisco Bay Area RHNA Plan. Thank you for your involvement in this process. By the end of August we will be distributing a technical report that details the mechanics of the RHNA methodology. In this report, you will find worksheets and explanations to each step we took to calculate the individual allocations to jurisdictions and subregions. For a list of the upcoming phases for the RHNA process, please see the attached list of events at the end of the enclosed packet. 1 Government Code §65584.05(b) Page 6 of 6 Respectfully, Miriam Chion Acting Director of Planning and Research, ABAG Attachment A: Draft RHNA (released on July 19, 2012) DRAFT REGIONAL HOUSING NEED ALLOCATION (2014‐2022) Very Low 0‐50% Low 51‐80% Moderate 81‐120% Above Moderate 120%+ Total REGION 46,680 28,940 33,420 78,950 187,990 Alameda County Alameda 442 247 282 745 1,716 Albany 80 53 57 144 334 Berkeley 530 440 581 1,395 2,946 Dublin 793 444 423 615 2,275 Emeryville 275 210 258 749 1,492 Fremont 1,707 922 974 1,829 5,432 Hayward 862 490 625 2,044 4,021 Livermore 835 472 494 916 2,717 Newark 328 166 157 422 1,073 Oakland 2,050 2,066 2,803 7,782 14,701 Piedmont 24 14 15 7 60 Pleasanton 713 389 405 551 2,058 San Leandro 502 269 350 1,156 2,277 Union City 316 179 191 415 1,101 Alameda County Unincorporated 428 226 294 814 1,762 9,885 6,587 7,909 19,584 43,965 Contra Costa County Antioch 348 204 213 677 1,442 Brentwood 233 123 122 278 756 Clayton 51 25 31 34 141 Concord 794 442 556 1,670 3,462 Danville 195 111 124 125 555 El Cerrito 100 63 69 165 397 Hercules 219 117 100 243 679 Lafayette 146 83 90 107 426 Martinez 123 72 78 194 467 Moraga 75 43 50 60 228 Oakley 316 173 174 500 1,163 Orinda 84 47 53 42 226 Pinole 80 48 42 126 296 Pittsburg 390 253 315 1,058 2,016 Pleasant Hill 117 69 84 176 446 Richmond 436 304 408 1,276 2,424 San Pablo 55 53 75 264 447 San Ramon 514 278 281 338 1,411 Walnut Creek 601 353 379 892 2,225 Contra Costa County Unincorporated 372 217 242 530 1,361 5,249 3,078 3,486 8,755 20,568 RHNA Methodology adopted by ABAG Executive Board on July 19, 2012. ABAG is scheduled to issue Final Allocation in April 2013 and to adopt in May 2013. DRAFT REGIONAL HOUSING NEED ALLOCATION (2014‐2022) Very Low 0‐50% Low 51‐80% Moderate 81‐120% Above Moderate 120%+ Total Marin County Belvedere 4345 16 Corte Madera 22 13 13 24 72 Fairfax 16 11 11 23 61 Larkspur 40 20 21 51 132 Mill Valley 41 24 26 38 129 Novato 111 65 72 166 414 Ross 6444 18 San Anselmo 33 17 19 37 106 San Rafael 239 147 180 437 1,003 Sausalito 26 14 16 23 79 Tiburon 24 16 19 19 78 Marin County Unincorporated 55 32 37 60 184 617 366 422 887 2,292 Napa County American Canyon 116 54 58 164 392 Calistoga 6 2 4 15 27 Napa 185 106 141 403 835 St. Helena 8 5 5 13 31 Yountville 4238 17 Napa County Unincorporated 51 30 32 67 180 370 199 243 670 1,482 San Francisco County San Francisco 6,207 4,619 5,437 12,482 28,745 6,207 4,619 5,437 12,482 28,745 RHNA Methodology adopted by ABAG Executive Board on July 19, 2012. ABAG is scheduled to issue Final Allocation in April 2013 and to adopt in May 2013. DRAFT REGIONAL HOUSING NEED ALLOCATION (2014‐2022) Very Low 0‐50% Low 51‐80% Moderate 81‐120% Above Moderate 120%+ Total San Mateo County Atherton 36 27 29 14 106 Belmont 116 63 67 121 367 Brisbane 25 13 15 30 83 Burlingame 280 149 158 388 975 Colma 20 8 9 30 67 Daly City 408 194 225 681 1,508 East Palo Alto 64 54 83 266 467 Foster City 148 87 76 119 430 Half Moon Bay 52 31 36 67 186 Hillsborough 50 29 34 16 129 Menlo Park 237 133 145 219 734 Millbrae 193 101 112 272 678 Pacifica 121 68 70 154 413 Portola Valley 21 15 15 13 64 Redwood City 706 429 502 1,147 2,784 San Bruno 365 166 208 555 1,294 San Carlos 195 107 111 183 596 San Mateo 859 469 530 1,172 3,030 South San Francisco 576 290 318 922 2,106 Woodside 23 13 15 11 62 San Mateo County Unincorporated 100 61 72 106 339 4,595 2,507 2,830 6,486 16,418 Santa Clara County Campbell 252 137 150 390 929 Cupertino 354 206 230 269 1,059 Gilroy 235 159 216 473 1,083 Los Altos 168 99 112 96 475 Los Altos Hills 46 28 32 15 121 Los Gatos 200 112 132 173 617 Milpitas 1,000 568 563 1,145 3,276 Monte Sereno 23 13 13 12 61 Morgan Hill 272 153 184 315 924 Mountain View 810 490 525 1,088 2,913 Palo Alto 688 430 476 585 2,179 San Jose 9,193 5,405 6,161 14,170 34,929 Santa Clara 1,045 692 752 1,586 4,075 Saratoga 147 95 104 92 438 Sunnyvale 1,780 992 1,027 2,179 5,978 Santa Clara County Unincorporated 22 13 14 28 77 16,235 9,592 10,691 22,616 59,134 RHNA Methodology adopted by ABAG Executive Board on July 19, 2012. ABAG is scheduled to issue Final Allocation in April 2013 and to adopt in May 2013. DRAFT REGIONAL HOUSING NEED ALLOCATION (2014‐2022) Very Low 0‐50% Low 51‐80% Moderate 81‐120% Above Moderate 120%+ Total Solano County Benicia 94 54 56 123 327 Dixon 50 24 30 93 197 Fairfield 861 451 514 1,664 3,490 Rio Vista 15 12 16 56 99 Suisun City 105 40 41 169 355 Vacaville 287 134 173 490 1,084 Vallejo 283 178 211 690 1,362 Solano County Unincorporated 16 9 12 26 63 1,711 902 1,053 3,311 6,977 Sonoma County Cloverdale 39 29 31 111 210 Cotati 35 18 18 66 137 Healdsburg 31 24 26 75 156 Petaluma 198 102 120 321 741 Rohnert Park 180 107 126 482 895 Santa Rosa 943 579 756 2,364 4,642 Sebastopol 22 17 19 62 120 Sonoma 24 23 27 63 137 Windsor 120 65 67 187 439 Sonoma County Unincorporated 219 126 159 428 932 1,811 1,090 1,349 4,159 8,409 REGION 46,680 28,940 33,420 78,950 187,990 RHNA Methodology adopted by ABAG Executive Board on July 19, 2012. ABAG is scheduled to issue Final Allocation in April 2013 and to adopt in May 2013. June 29, 2012 Ezra Rapport, Executive Director Association of Bay Area Governments P.O. Box 2050 Oakland, CA 94604-2050 Re: Regional Housing Needs (RHNA) Allocations for Stanford University Campus/Santa Clara County Dear Mr. Rapport: Thank you for the opportunity to provide input regarding the draft regional housing needs allocations (RHNA) to be considered by the ABAG Board in July. The City of Palo Alto in general concurs with the principle that housing within Santa Clara County should be allocated to a city with jurisdiction over the sphere of influence (SOI), as the County has strong programs in place to direct cities to annex pockets of unincorporated areas. We do have a specific and substantial concern with allocations of housing for Santa Clara County, as it pertains to the Stanford University campus area, however. The Stanford University Campus lies within Palo Alto’s Sphere-of-Influence (SOI), but new campus development generates population and housing needs that are governed by Santa Clara County, not the City, and are not subject to potential annexation by the City of Palo Alto (pursuant to a tri-party agreement between the City, County and Stanford). In the prior RHNA cycle (2007-2014), the “Stanford share” of the allocation increased the City of Palo Alto’s allocation by 645 units. It was not until the appeal period, however, that this correction was made, and the units redistributed to the County, with the concurrence of the City, County and Stanford. The proposed RHNA figures allocate only 58 units to Santa Clara County (as compared to 1,090 units in the prior planning period). According to the most recent annual report (see http://www.sccplanning.org/SCC/docs/Planning,%20Office%20of%20(DEP)/attachments/Stanfo rd/AR10_all.pdf) regarding Stanford’s General Use Permit (GUP) with the County, however, approximately 1,000-1,500 new housing units are planned on the campus over the next 10 years or so. Those units do not appear to be accounted for in any way in the County’s allocation, although they are already planned and zoned appropriately. The City understands that there is no Priority Development Area for lands on the campus, but there are some designated housing sites that are located immediately proximate to El Camino Real and near the University Avenue Caltrain station. These two sites (H and I in the report) are planned to accommodate a minimum of 350 units. These sites would be within VTA’s El Camino Corridor area if it was applied on the west side of El Camino Real. The City of Palo Alto requests that the RHNA numbers reflect some of this housing development in the County’s allocation, which we believe is consistent with the County’s current housing element. While we understand that the reallocation of units does not mean that they reduce Palo ABAG: Draft RHNA Allocations: June 29, 2012 Page 2 Alto’s allocation accordingly, it would seem that some of them, particularly those nearest El Camino and the train station, would have that effect. The City of Palo Alto hopes these allocation issues may be addressed in a timely manner so there is no need to protest the final numbers, as happened in the prior cycle, and to allow a more thoughtful evaluation and allocation as part of the current review. The City of Palo Alto has broached this subject with the County and Stanford, and will continue to meet with them to assure there are not impacts or unintended consequences for them. Thank you again for your consideration of the City’s suggestion. If you have any questions, please feel free to contact Curtis Williams, the City’s Director of Planning and Community Environment, at (650) 329-2321 or Curtis.williams@citofpaloalto.org. Sincerely, James Keene, City Manager City of Palo Alto cc: Palo Alto City Council Palo Alto Planning and Transportation Commission James Keene, Palo Alto City Manager Bill Shoe, Santa Clara County Planning Office Charles Carter, Stanford University Ken Kirkey, Planning Director, ABAG Hing Wong, ABAG Justin Fried, ABAG Page 1 of 3 September 511, 2012 Mr. Mark Luce, President Association of Bay Area Government Joseph P. Bort Metro Center P.O. Box 2050 Oakland, CA 94607-4756 Re: City of Palo Alto Response Request for Revision to Adopted RHNA Methodology for the 2014-2022 Housing Cycle Dear Mr. Luce: Thank you for ABAG’s July 25, 2012 memo to Bay area cities and counties, which provided an overview of the adopted Regional Housing Needs Assessment (RHNA) methodology and jurisdictional allocations for the 2014-2022 housing cycle. The While the adopted allocations appear to have taken into consideration many some of the concerns and comments expressed by member jurisdictions. , the target projections are still unrealistic. The target projections will be difficult to attain in In Palo Alto, however, given the built-out nature of the city and multiple school, service and infrastructure constraints and impacts make these projections unattainable. Therefore, the purpose of this letter is to request a revision to the draft allocation, to reduce the total number of units assigned to the City of Palo Alto. In support of this request, the following reiterates the City of Palo Alto’s ongoing concerns regarding the long-term Sustainable Communities Strategy (SCS) projections and the potential impact on future RHNA cycles. Furthermore, this letter provides information about our ongoing effort to facilitate a joint agreement for transfer of units to the County of Santa Clara for housing on Stanford lands. In summary, the City of Palo Alto’s comments are as follows: 1. Although adjustments were made for this housing cycle, the The regional forecast of jobs and housing for the region continues to substantially overstate growth for the overall SCS period (through 2040) and continues to ignore the updated demographic forecasts of the State’s Department of Finance (DOF). This not only creates an unrealistic scenario for the upcoming cycle, but also creates the effect of “back-loading” the housing numbers and potentially creating unreasonable and unachievable housing mandates in the current and future housing cycles. Although the SCS process does allow Page 2 of 3 for adjustment of long-term growth projections on a periodic basis, the City encourages ABAG to regain public confidence of its numbers by working with HCD to reduce the 2010-2040 projections by 41% to reflect the adaptations already made by the Department of Finance to the changing State of California demographics. Furthermore, current and future projections should be adjusted so they are more consistent with historical growth patterns and/or a range of projections should be adopted that reflect meaningful planning scenarios in response to market changes over time. An analysis of the inadequacy of the current long-range projections, authored by Palo Alto Councilmember Greg Schmid, was submitted to ABAG during the Alternative Scenario selection process and is attached to this letter. Tables outlining the discrepancies between the most recent DOF projections and those prepared by ABAG for the SCS are also attached. 2. The proposed RHNA allocation assigns 77 housing units to the County of Santa Clara (unincorporated), although Stanford University’s General Use Permit with the County of Santa Clara County allows and plans for up to 1,500 residential units to be built on Stanford lands within the SCS timeframe. The City acknowledges that these units have not been otherwise assigned to the City of Palo Alto, but at least some of them are proximate to El Camino Real and the University Avenue Caltrain station, and would be consistent with the objectives of the SCS and SB375. Specifically, approximately 350 planned units on two sites on Quarry Road just west of El Camino Real appear appropriate to include somewhere in the housing analysis. City staff has met with staff from the County and Stanford to discuss the possibility of a joint agreement to a “transfer” of a similar allocation of units from the City of Palo Alto to the County of Santa Clara. This is an ongoing effort, and we will keep ABAG apprised of our progress. The City requests that ABAG remain open to such a transfer if an agreement between the City, the County and Stanford is reached. 3. As stated in previous letters, the City of Palo Alto is a national leader in policies and programs that reduce GHG emissions. Examples of key City sustainability programs include an aggressive Climate Action Plan, the provision of clean energy to Palo Alto customers via the City owned and operated electric utility, various utility programs to reduce emissions, leadership in Green Building and sustainable design, affordable housing programs, higher density land uses near transit, and numerous “complete streets” oriented policies and projects. An attached letter, sent to ABAG on March 5, 2012, provides additional detail on these programs. The City encourages ABAG to allow flexibility within the SCS for local jurisdictions to provide further means, such as those outlined in the letter, of reducing land use/transportation related emissions. 4. The City of Palo Alto continues to have concerns regarding the potential negative environmental, school capacity and infrastructure capacity (recreational, utilities, transit, etc.) impacts the overstated housing mandates may create. The City will, of Page 3 of 3 course, be conducting an environmental review to fully assess the impacts of these mandates during the preparation of our Housing Element for this planning period. Thank you once Once again, thank you for the opportunity to comment on the adopted RHNA methodology for the 2014-2022 Housing Cycle. As stated earlier, the City is officially requesting a reduction in the proposed allocation for the reasons stated above. If you have questions or need additional information, please contact Curtis Williams, the City’s Director or Planning and Community Environment, at (650) 329-2321 or curtis.williams@cityofpaloalto.org. Sincerely, Yiaway Yeh Mayor Attachments: 1. March 5, 2012 Letter from Mayor Yeh to Mark Luce (ABAG), including two attachments: a) November 15, 2011 Memorandum: “California Demographic Forecasts: Why Are the Numbers Overestimated,” prepared by Palo Alto Councilmember Greg Schmid b) “Regional Land Use and Transportation SCS: Achieving Statewide GHG Reduction Rates,” prepared by Contra Costa Transportation Authority. 2. Tables Detailing Discrepancies Between Department of Finance (DOF) and SCS Projections cc: City Council Planning and Transportation Commission James Keene, City Manager Curtis Williams, Director of Planning and Community Environment Ezra Rapport, Executive Director, ABAG Miriam Chong, Interim Planning Director, ABAG City of Palo Alto (ID # 3138) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/10/2012 Summary Title: Approval of Response to Grand Jury Title: Approval of Final Response to Grand Jury Report on Pension and Other Post-Employment Benefits From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council approve the City response to the Grand Jury report on pension and healthcare. Discussion Council reviewed the draft response to the Grand Jury report on September, 4 2012 (Attachment B). Council provided input, which staff has incorporated into the attached response (Attachment A). With Council approval staff will submit the letter, under the Mayor’s signature, to the Grand Jury by the September 15 deadline. Attachments: Attachment A: Letter to Grand Jury (PDF) Exhibit 1: Labor guiding principles (PDF) Exhibit 2: Colleague Memo - report 2986 (PDF) Attachment B: Grand Jury Response Review by Council - Report 3081 (PDF) Prepared By: David Ramberg, Assistant Director Department Head: Lalo Perez, Chief Financial Officer City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2716) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/9/2012 April 09, 2012 Page 1 of 3 (ID # 2716) Summary Title: Labor Guiding Principles Title: Recommendation from Policy & Services Committee to Approve Labor Guiding Principles From: City Manager Lead Department: Human Resources Recommendation Staff and the Policy and Services Committee recommend that the Council approve the attached Labor Guiding principles. Background The concept of Labor Guiding Principles arose when the City modified its Impasse procedure last year to incorporate a new state law allowing employee organizations to request nonbinding fact finding after impasse is declared. Staff originally proposed incorporating key principles as a reference for City in making employee compensation decisions into the Impasse procedure, requiring the fact- finder to consider these principles when making a recommendation. However, after several discussions staff decided that the concept of guiding principles applied to many labor related issues and should not be limited to impasse. Thus, Staff proposed draft Labor Guiding Principles as a stand-alone document to the Policy & Services Committee on February 14, and after review and discussion brought a second draft with revisions on March 13 to provide for public, employee and labor input to Council before adoption of the Principles. The Committee recommends Council consideration and adoption of the attached Labor Guiding Principles. Discussion April 09, 2012 Page 2 of 3 (ID # 2716) One purpose of Labor Guiding Principles is to establish a transparent policy framework to guide labor relations. The City has 7 recognized bargaining units and one unrepresented group of managers and professionals. The contract terms and specific issues vary from unit to unit. While the City is required to meet and confer in good faith to set compensation and terms and conditions of work with each bargaining unit, the City values labor’s input and strives to work collaboratively with all employees and labor to solve problems and develop creative solutions to meet bargaining objectives. The Labor Guiding Principles may also help all bargaining teams by providing a common understanding between all the parties involved in labor negotiations; allowing them to look at how specific proposals fit with overall Council objectives. Given that the City continues to face budget challenges driven in part by significantly rising employee benefit costs, the Principles support a balance between the need for strong financial stewardship and maintenance of a productive and positive work environment. While each of the Labor Guiding Principles are important, Principle #3, Timing of Negotiations, was the focus of much discussion at the Committee level. Labor expressed some concern that to achieve this goal bargaining time would be limited. Committee members expressed strong desire to complete bargaining for a successor contract by the time the current contract expires yet not truncate the process. Language was added by the Committee stating the parties should work together to begin negotiations at such time that allows for sufficient bargaining in good faith in order to reach agreement by the time the current contract expires. That will require, at a minimum, starting formal negotiations earlier than in the past. The Council is not required to adopt guiding principles for labor negotiations. However as the challenging fiscal environment continues at the City, State and national levels, it is important for City staff and labor to partner to explore and find solutions to these challenges, at the same time enhancing collaboration and communication. Guiding Labor Principles can help create a uniform, clear framework to guide labor relations and the efforts of staff and labor. The Committee unanimously recommended the attached Labor Guiding Principles for consideration and adoption by the Council. April 09, 2012 Page 3 of 3 (ID # 2716) Environmental Review This is not a project under the California Environmental quality Act (CEQA). Attachments: : Revised Labor Principles 3-26-12 (PDF) : 03-13-12 LABOR GUIDING PRINC EXCERPT (PDF) : CMR ID#2643 3-13-12 (PDF) : CMR ID#2550 2-14-12 (PDF) Prepared By: Sandra Blanch, Interim Director, Human Resources Department Department Head: Sandra Blanch, Interim Director, Human Resources Department City Manager Approval: ____________________________________ James Keene, City Manager Revised 3/26/12 Labor Guiding Principles Palo Alto City Council Adopted _____ To help maintain and support stronger working relationships between the City and Labor that are grounded in the standards of good faith bargaining, transparency, open communication and mutual respect, the Council hereby adopts the following principles to provide Labor, employees and the public with a policy framework of principles intended to guide the City’s labor relations policies and priorities: 1. City Services/Programs/Activities: The City’s core mission is to provide services, programs, and activities that align with the priorities of the public and the City Council; levels of employee compensation should support the City’s long-term ability to continue providing those services. 2. City Finances: The City should be able to meet the cost of any compensation commitment from current and projected on-going City revenues. 3. Timing of Negotiations: The City shall, to the maximum extent possible, reach agreement on the successor MOA with recognized employee organizations on matters within the scope of representation prior to expiration of their existing MOA. The City will work with employee groups to set an appropriate starting time for negotiations. 4. Total Compensation: In making compensation decisions, the City shall consider the total costs of a position including salary, pension, and all other benefits and shall communicate such information to all employees, labor and the public. 5. Equity Across Employee Groups: The City should strive to set and make similar structural changes to compensation and benefits for all employee groups, while recognizing that some flexibility may be required to fairly address issues specific to individual units and/or achieve the objectives of other guiding principles. 6. Recruitment & Retention: When economically feasible, the City’s compensation should be set at levels sufficient to recruit, train and retain qualified employees who are committed to the City’s goals, programs and delivery of high quality services. The City should pursue hiring and training strategies that further the City’s goal of finding and growing staff that are critical to maintaining its goals, programs, and services. 7. Transparency: The structure and components of compensation of City employees should be easy for Councilmembers, employees, labor and the public to understand, and as efficient as possible for staff to administer. 8. Management of Increasing Benefit Costs: The City should pursue short term and long term strategies to curtail increasing employee benefit costs. It should move away from providing benefits that place the burden on the City to pay the cost of automatic Revised 3/26/12 increases and toward benefit structures that require negotiations to determine how much and who will pay for such costs. 9. Innovation in Employment and Compensation: Providing broader and more creative choices regarding benefits may further the concepts set forth in Guiding Principles 1-8. The City should consider innovative alternatives to traditional models of public employment and public employee benefits such as Governor Brown’s 2011- 2012 public employee pension proposal and other innovative alternatives including, for example, but not limited to hybrid pension plans, cafeteria plans, scaled compensation in lieu of guaranteed benefits, benefit buyout options, and similar ideas. POLICY AND SERVICES COMMITTEE Regular Meeting March 13, 2012 Chairperson Holman called the meeting to order at 7:05 p.m. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Holman (Chair), Espinosa, Klein, Schmid Absent: 2. Recommendation Regarding Approval of Labor Guiding Principles. Sheila Tucker, Assistant to the City Manager, reminded Committee Members this item was heard in February. She indicated Staff was directed to make revisions to the Principles. She stated Marci Scott would present the suggested changes. Marci Scott, Acting Assistant Human Resources Director, had two areas of comment: 1) an overview of the main changes made since the last meeting; and 2) feedback from one labor group. She reported the introductory paragraph had been changed to provide an overview of the purpose of the Guidelines, and to state the goal of maintaining positive and strong relationships with labor. She indicated Staff and labor had maintained open communication and continued to work together to solve problems over the last few years. She stated there were minor changes, but she would focus on four areas of major adjustment. She said Guiding Principle No. 3 was probably the most important discussion item at the last meeting. She indicated the new language was clear and direct in stating that successor contracts would be finalized by the expiration of the current contract. She stated this would not necessarily mean a shorter process, but rather earlier start times. She reported Staff was re-evaluating resource needs to make this happen, and proposed that this Guiding Principle become effective for contracts expiring in Fiscal Year 2013 and beyond. She indicated Guiding Principle No. 5 was newly added regarding equity across employee groups. She noted Guiding Principle No. 6 was recruitment and retention, which had a few changes focusing on recruiting, training and retaining qualified employees committed to the City's goals and delivery of services. She said this would be an increasingly important element to discuss in the future. She reported Guiding Principle No. 9, innovation in employment and compensation, now contained a reference to Governor Brown's Public Employee Pension proposal as an example of an innovative reform of the City's pension plan. She stated she sent a copy of the packet to Labor prior to the February 14 meeting, and sent a communication to all labor groups last Thursday. She received feedback from one labor group, and was in a discussion today with Service Employees International Union (SEIU) representatives in the monthly labor management meeting. She indicated the group's main concern was their belief that the City conveyed a disinterest in the bargaining process, specifically in Guiding Principle No. 3. She reported they discussed the City's commitment to the meet-and-confer process, the City's proposal to phase in this provision, and the City's intention not to shorten or limit the bargaining process. Council Member Espinosa asked if the labor group suggested language for changing Item No. 3. Ms. Scott stated they did not. Brian Ward, SEIU Representative, questioned why the City would need these Guiding Principles, when they had worked well together and the Guiding Principles did not contain any objectionable ideas. Regarding Item 3, protracted negotiations, he felt the City was saying it did not want protracted negotiations. He asked how they were to work collaboratively. He explained interest-based bargaining. He indicated SEIU wanted to understand the purpose of the Guiding Principles in order to report to its members. Council Member Klein stated the general idea of the Guiding Principles was to express the general principles to which everyone could agree. He supported No. 3 whether it was a Guiding Principle or policy, because the current system was in the union's favor. He explained the lack of savings to the City due to the recent negotiations with the Public Safety unions. He thought both sides should have an incentive to complete negotiations by the date of the contract expiration. Mr. Ward agreed. He thought they were in agreement with all of the Principles. He asked if the Guiding Principles needed to be exerted and drawn out. He felt it was a valid point that the City did not realize a savings in extended negotiations. He asked what would happen if negotiations extended past the contract expiration date. He indicated union members wanted to know if there was a "stick" coming. Council Member Klein indicated there would be further changes if the economic situation continued and referred to Governor Brown's 12 principles. Mr. Ward stated lobbying efforts should be concentrated on the Public Employees' Retirement System (PERS) to effect changes. Council Member Schmid stated the term "protracted negotiations" implied an emotional content, which was not true. He noted Molly Stumps' statement at the prior meeting that it was difficult to begin serious negotiations until the budget process began with the long- range financial forecast. He said waiting until the budget process began would provide approximately four months for negotiations, which would not be enough time for serious negotiations. He asked if it was possible to begin bargaining earlier, and if some issues could be dealt with prior to the budget process. He suggested that Guiding Principle No. 3 not start with the term protracted, but contain language acknowledging the fact that negotiations involve important long-term issues for both sides and could take some time to resolve. He thought the ending time was important. MOTION: Council Member Klein moved, seconded by Council Member Espinosa to Change Labor Guiding Principle No. 3; 1) by removing the first sentence, Protracted negotiations creates uncertainty for the City and employees, and 2) make the beginning sentence: The City shall to the maximum extent possible reach agreement on the… Council Member Klein thought this was an important policy as he noted earlier. He believed the City could begin negotiations earlier and disagreed with the idea of needing the long-range forecast to begin bargaining. He noted historically not all labor contracts ended on June 30, and there was no legal requirement for union contracts to end on June 30. Council Member Espinosa noted that Guiding Principle No. 1 and No. 3 did not begin with "the City shall" as the other Principles did. He pointed out there had been broad support for formalizing guiding principles. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER TO include in Labor Guiding Principle No. 3; The City will work with the employee groups to set the appropriate starting time for negotiations. Council Member Espinosa thought people supported this type of language, because it provided a clear understanding that the City was not attempting to truncate in any way the amount of time for negotiations. Ms. Scott explained that the City was preparing for negotiations with SEIU, and SEIU was open to the City's goal of starting negotiations earlier. She said Staff planned to discuss the budget and financials, and set a foundation for moving forward. She indicated discussions thus far had been positive. Chair Holman supported the Motion and appreciated the Amendment. She felt the Amendment highlighted the importance of having a fair and collaborative process. Council Member Klein expressed concerns over Principle No. 4 and Principle No. 7. He noted his conversation with a City employee regarding increased compensation. He referenced Council Member Shepherd's suggestion of publicizing true compensation costs. He referenced the language in Principle No. 4. He suggested the City needed to publicize more or in a better way. He felt the average employee did not view the City's increased payments to health insurance and pension as being increases in compensation. Ms. Scott reported Staff had discussed this issue and was reviewing a means to produce an annual compensation statement. She thought employees did not understand the City's contribution to pension She said Staff was interested in providing a statement which would list each benefit. Council Member Klein recalled discussions during negotiations with Public Safety people and SEIU concerning listing all benefits. He asked if Staff could suggest language for the Principle, whether it was a combination of their discussions or language contained in Principle No. 7 and Principle No. 4. Council Member Espinosa inquired if Council Member Klein's goal was to share total compensation information with employees in a way that they could understand. Council Member Klein stated his goal was for employees to understand their true compensation. He suggested adding language regarding publicizing compensation information, so that union members and the general public had an understanding of these costs. Ms. Scott said this language would provide compensation costs to all bargaining-unit members and all employees, and indicated Staff could do this. Council Member Espinosa expressed concern over using the word "publicize." He suggested "share" or "communicate." INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the last sentence of Labor Guiding Principle No. 4; and shall communicate information so the public and employees understand the costs. Chair Holman indicated these language revisions were for Guiding Principle No. 4, and asked if there was a revision to Guiding Principle No. 7. Council Member Klein did not have any revisions to No. 7. Chair Holman agreed with Guiding Principle No. 7, but felt they needed to understand compensation costs as well. Council Member Espinosa asked if, by "they", Chair Holman meant the City Council. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change the first sentence of Labor Guiding Principle No.7 to; compensation of City Employees should be easy for Council Members, employees, and the public. Council Member Espinosa stated this expressed the idea of the Council also needing to understand the costs. Chair Holman agreed, and felt this language was inclusive. Council Member Klein thought No. 7 was slightly different from No. 4 in that No. 7 discussed pay grades. Council Member Schmid suggested clarifying the language in No. 5 regarding changes in benefits at similar levels to focus on structural change. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change the first sentence Guiding Principle No. 5 to; The City should strive to set and make similar structural changes to compensation and benefits for all employee groups. Council Member Schmid referenced data stating the City had 50 percent of employees within ten years of retirement. He noted the City had to search for employees to fill senior positions. He thought the City should hire young people and grow them to fill senior positions. He suggested a revision to No. 6 to place emphasis on hiring and training young people with talent. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change the last sentence Guiding Principle No. 6 to; that further the City’s goal of finding and growing Staff that are critical to maintaining. Molly Stump, City Attorney, thought his point was hiring people earlier in their career irrespective of chronological age. Ms. Scott reported Staff was reviewing apprenticeship programs in order to build and train employees. Council Member Espinosa was not opposed to the proposed revision to No. 6, but did not agree with the reasons for the revision. Council Member Schmid said the City would be filling many retirement positions. He recalled the previous City Manager stating the biggest problem was Staff retirements and the City needed to be ready. He noted the City was in the same position eight years later. MOTION AS AMENDED PASSED: 4-0 City of Palo Alto (ID # 2643) Policy and Services Committee Staff Report Report Type:Meeting Date: 3/13/2012 March 13, 2012 Page 1 of 2 (ID # 2643) Summary Title: Labor Guiding Principles Title: Recommendation Regarding Approval of Labor Guiding Principles From:City Manager Lead Department: Human Resources Recommendation Staff recommends that the Policy & Services Committee review and recommend that Council approve guiding principles for labor negotiations. Background City staff presented a first draft of proposed labor guiding principles on February 14th. These principles are intended to express the main values that guide bargaining with all 7 bargaining units, which vary in terms of timing of negotiation schedules and specific issues addressed. Discussion Committee members provided feedback at the February 14th meeting, requesting changes to the language in the principles on Timing of Negotiations, Recruitment & Retention and Innovation in Employment and Compensation. The Committee also requested a new principle to incorporate the concept of equity across bargaining groups. Staff has edited the proposed guiding principles based on Committee feedback. A new introductory statement was added as well as minor changes to Guiding Principle 6 (Recruitment & Retention) and Guiding Principle 9 (Innovation in Employment and Compensation). Most significantly, Committee members requested specific changes to Guiding Principle 3, Timing of Negotiations. Committee members asked that the language be clearer and more direct to indicate that successor agreements should be reached with Labor before expiration of the current Memorandum of Agreement (MOA). However, given the current workload, staffing levels and active bargaining 2 Packet Pg. 80 March 13, 2012 Page 2 of 2 (ID # 2643) tables, a transition period is necessary in order to ensure that the City can implement this principle. Staff requires additional time to evaluate the resources needed to effectively meet this expectation and is developing a strategy to satisfy this guideline. Therefore, staff recommends that Guiding Principle 3 (Timing of Negotiations) be implemented beginning with MOAs that expire in FY 13. Conclusion The Council is not required to adopt guiding principles for labor negotiations. However as the City continues to face a challenging fiscal environment in the current and future years, it is important for City staff and Labor to partner to explore and find solutions to these challenges, at the same time enhancing collaboration and communication. Guiding principles can help create a transparent policy framework to guide labor relations and the efforts of staff and Labor. Attachments: ·-:Labor Guiding Principles 3-13-12 (PDF) ·-:ID#2550 Recommendation Re Approval of Labor Guiding Principles 2-14-12 (PDF) ·-:2-14-12 PS Item 2 Labor Excerpt (PDF) Prepared By:Elizabeth Egli, Administrative Assistant Department Head:Sandra Blanch, Interim Director, Human Resources Department City Manager Approval: ____________________________________ James Keene, City Manager 2 Packet Pg. 81 Revised 3/13/12 Labor Guiding Principles Palo Alto City Council Adopted _____ To help maintain and support stronger working relationships between the City and Labor that are grounded in the standards of good faith bargaining, transparency, open communication and mutual respect, the Council hereby adopts the following principles to provide Labor, employees and the public with a policy framework of principles intended to guide the City’s labor relations policies and priorities: 1. City Services/Programs/Activities: The City’s core mission is to provide services, programs, and activities that align with the priorities of the public and the City Council; levels of employee compensation should support the City’s long-term ability to continue providing those services. 2. City Finances: The City should be able to meet the cost of any compensation commitment from current and projected on-going City revenues. 3. Timing of Negotiations: Protracted negotiations create uncertainty for the City and employees; the City shall reach agreement on the successor MOA with recognized employee organizations on matters within the scope of representation prior to expiration of their existing MOA. 4. Total Compensation: In making compensation decisions, the City shall consider the total costs of a position including salary, pension, and all other benefits. 5. Equity Across Employee Groups: The City should strive to set and make changes to compensation and benefits at similar levels for all employee groups, while recognizing that some flexibility may be required to fairly address issues specific to individual units and/or achieve the objectives of other guiding principles. 6. Recruitment & Retention: When economically feasible, the City’s compensation should be set at levels sufficient to recruit, train and retain qualified employees who are committed to the City’s goals, programs and delivery of high quality services. The City should pursue hiring and training strategies that further the City’s goal of filling positions that are critical to maintaining its goals, programs, and services. 7. Transparency: The structure and components of compensation of City employees should be easy for employees and the public to understand, and as efficient as possible for staff to administer. 8. Management of Increasing Benefit Costs: The City should pursue short term and long term strategies to curtail increasing employee benefit costs. It should move away from providing benefits that place the burden on the City to pay the cost of automatic increases and toward benefit structures that require negotiations to determine how much and who will pay for such costs. 2.a Packet Pg. 82 -: L a b o r G u i d i n g P r i n c i p l e s 3 - 1 3 - 1 2 ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) Revised 3/13/12 9. Innovation in Employment and Compensation: Providing broader and more creative choices regarding benefits may further the concepts set forth in Guiding Principles 1-8. The City should consider innovative alternatives to traditional models of public employment and public employee benefits such as Governor Brown’s 2011- 12 public employee pension proposal and other innovative alternatives including, for example, but not limited to hybrid pension plans, cafeteria plans, scaled compensation in lieu of guaranteed benefits, benefit buyout options, and similar ideas. 2.a Packet Pg. 83 -: L a b o r G u i d i n g P r i n c i p l e s 3 - 1 3 - 1 2 ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) ATTACHMENT B ID# 2550 Recommendation Regarding Approval of Labor Guiding Principles 2‐14‐12 Recommendation Staff recommends that the Policy & Services Committee review and recommend that the Council approve guiding principles for labor negotiations. Background The concept of guiding principles for labor negotiations arose in Palo Alto in late 2011 when the City amended its local impasse resolution rules to address the new Meyers‐ Milias Brown Act rule which allows employee organizations to request nonbinding fact‐ finding after impasse is declared and before a local agency may implement the terms of its last, best and final offer. Staff originally proposed including decision “factors” describing key considerations for labor negotiations that the fact‐finder would be required to consider in making recommendations. However, in refining those factors and discussing the issue with labor, staff ultimately determined that such considerations are not and should not be limited to impasse resolution. More importantly, approval of stand‐alone guiding principles gives the Council and the public the opportunity to have a broader discussion about main values that it wants to guide the City’s approach to labor issues. Discussion The City currently has 7 recognized bargaining units and one unrepresented group of managers and professionals. While the City is required to engage in the bargaining process to set compensation and terms and conditions of work with each bargaining unit, the City’s goal is to work collaboratively with all employees and labor to solve problems and develop creative solutions to meet bargaining objectives. Goals for bargaining units and managers have much in common and labor and management have engaged together effectively in the past. The focus of collaboration should continue to be on ways to contribute positively to the organization and maintain effective services for the community. Developing and communicating Guiding Principles will inform on‐ going, meaningful dialogue between managers and bargaining units at all levels. At the same time the City is partnering with labor in a collaborative manner, the City must properly distribute responsibility and accountability to ensure management and delivery of services consistent with Council and community expectations. In order to 2.b Packet Pg. 84 -: I D # 2 5 5 0 R e c o m m e n d a t i o n R e A p p r o v a l o f L a b o r G u i d i n g P r i n c i p l e s 2 - 1 4 - 1 2 ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) meet these expectations the City must maintain management rights and direct operational decision‐making. Analysis A. Current challenges to City budget and rising employee costs have been and will continue to be key issues in labor negotiations for the foreseeable future. The City exists to provide a forum for governance and to effectively and efficiently deliver services to the community. A substantial portion of the general fund operating budgets for those services, approximately 66%, goes to fund salaries and benefits for the staff necessary to deliver services. As the City heads into its fourth consecutive year of budget shortfalls, it must continue examining the cost of employee salaries and benefits and their impacts to the budget. Recent negotiations with employee groups have helped to address some of the budget shortfalls. For example, where the City once paid the entire amount of the employee PERS contribution (in addition to the Employer contribution) and the full amount of health care premiums, most groups now pay at least a portion of the employee PERS contribution and up to 10% of the medical premium. However, even with these and other cost‐saving measures, personnel costs associated with pension, health, and retiree medical have continued to increase at rates that exceed revenue growth. The average budgeted cost for an employee position has increased 20% since 2009, and the benefit portion of salary and benefits has increased approximately 12% in just the past two years. Continued increases in costs for employee salaries and benefits are projected, driven primarily by health and pension costs. Additionally, the valuation of the liability for post‐employment health care is growing and has grown from $105 million to $133 million in the last 2 years. The fact that on‐ going revenues have not been able to cover expenditure growth over the past few years and into the projected future years indicates a fundamental structural imbalance that needs long‐term solutions to restore balance and provide a sustainable means to deliver services to the community. This is due to more than the recent economic crisis in the United States. Past local government decisions in California over the past 10‐15 years granted significant benefit increases that would not be granted today. Yet those decisions have cost implications that will last for years many years into the future. Additionally, the local government tax structure is increasingly disconnected from the economy itself, so that even improvements in today’s economy do not translate into commensurate increases in 2.b Packet Pg. 85 -: I D # 2 5 5 0 R e c o m m e n d a t i o n R e A p p r o v a l o f L a b o r G u i d i n g P r i n c i p l e s 2 - 1 4 - 1 2 ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) local government revenue. In short, the slope of increase for expenses can be expected to rise more sharply than revenues going forward, without continued expense reductions. Because personnel costs are such a large part of operating expenditures, and salaries and benefits are determined through the labor negotiations process, it is important for the City to address these issues in current and future labor negotiations. Guiding principles for those negotiations can help the City, including managers, employees and labor, remain mindful of the fiscal challenges and service needs of the City, align the bargaining process with the City’s primary function of providing services to the community, and establish transparent principles to guide the City in making decisions about employee salaries and benefits. B. Proposed Guiding Principles. Based on the issues identified above, staff has identified the following key principles to guide adoption of labor agreements and compensation plans: 1. City Services/Programs/Activities: The City’s core mission is to provide services, programs, and activities that align with the priorities of the public and the City Council; levels of employee compensation should support the City’s long‐term ability to continue providing those services. 2. City Finances: The City should be able to meet the cost of any compensation commitment from current and projected on‐going City revenues. 3. Timing of Negotiations: Protracted negotiations create uncertainty for the City and employees; the City should endeavor to reach agreement with recognized employee organizations on matters within the scope of representation prior to adoption of the City’s budget for the ensuing fiscal year. 4. Total Compensation: In making compensation decisions, the City should consider the total costs of a position including salary, pension, healthcare and all other benefits. 5. Recruitment & Retention: The City’s compensation should be set at levels sufficient to attract and retain qualified employees who are committed to the City’s goals, programs and delivery of high quality services, understanding that those levels must be economically feasible. 2.b Packet Pg. 86 -: I D # 2 5 5 0 R e c o m m e n d a t i o n R e A p p r o v a l o f L a b o r G u i d i n g P r i n c i p l e s 2 - 1 4 - 1 2 ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) 6. Transparency: The structure and components of compensation of City employees should be easy for employees and the public to understand, and as efficient as possible for staff to administer. 7. Management of Increasing Benefit Costs: The City should pursue short term and long term strategies to curtail increasing employee benefit costs. It should move away from providing benefits that place the burden on the City to pay the cost of automatic increases and toward benefit structures that require negotiations to determine how much and who will pay for such costs. 8. Innovation in Employment and Compensation: Providing broader and more creative choices regarding benefits may further the concepts set forth in Guiding Principles 1‐7. The City should consider innovative alternatives to traditional models of public employment and public employee benefits including, for example, hybrid pension plans, cafeteria plans, scaled compensation in lieu of guaranteed benefits, benefit buyout options, and similar ideas. In addition, staff recommends that the Council consider reviewing the Principles annually to ensure that they remain relevant and accurately convey the City’s priorities. Policy Impacts The Council is not required to adopt guiding principles for labor negotiations. However, Guiding Principles can help establish a transparent policy framework to guide the City’s labor relations and clearly communicate City priorities regarding labor issues to employees, labor, and the community. The Principles can also assist the negotiating team by establishing overall objectives against which it can measure specific proposals, as well as enhance accountability by providing a more concrete way to measure or evaluate the outcome of negotiations. The City’s bargaining team will continue to meet and confer in good faith with flexibility to partner with labor to craft solutions to individual unit issues that also meet the uniform policy framework provided by these Guiding Principles. 2.b Packet Pg. 87 -: I D # 2 5 5 0 R e c o m m e n d a t i o n R e A p p r o v a l o f L a b o r G u i d i n g P r i n c i p l e s 2 - 1 4 - 1 2 ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) ATTACHMENT C 2-14-12 P&S ITEM 2 LABOR EXCERPT P&S 1 POLICY AND SERVICES COMMITTEE DRAFT EXCERPT Regular Meeting February 14, 2012 Labor Guiding Principles Marcie Scott, Acting Assistant Human Resources Director gave a brief presentation. The concepts being presented rose in discussion in May of 2011 with the changes to the Binding Interest Arbitration provision. The Governor approved a new law, AB646, which implemented a fact finding process in the impasse procedure for labor disputes. Palo Alto had decided to modify the impasse procedures to incorporate the fact finding process. Through the course of discussions with the labor groups it was agreed the Guiding Principles were not in the appropriate location. Staff felt the Guiding Principles should not be limited to impasses but could serve a broader purpose which was open for Council discussion. The concepts in the Guiding Principles were not new to labor discussions in Palo Alto and some had been specifically negotiated at the table. The City currently did not have a document that described the Council’s goals and vision on priority issues such as managing pension costs. Staff believed there was value in having a written document expressing what the Council would be looking for in terms of labor principles. Written principles would be a useful communication tool for employees and for the public. Staff believed the employee groups and the City had common interests in addressing and resolving issues and having a written guiding policy would make the negotiations more efficient. The City needed to maintain management rights and directed operational decision making as the labor processes were in motion. Council Member Espinosa asked Staff to focus on the Guiding Principles and allow time for questions if they arose. Ms. Scott stated there were eight Guiding Principles that should support the City’s delivery of services to the community. The bargaining efforts should result in efficiencies, improved services, and quality of life. Additionally; technology use should be reviewed, approaches to working smarter, and the primary focus should be on City services. City Finances were the second principle and Staff had taken Council direction to locate structural long term changes in the budget 2.c Packet Pg. 88 -: 2 - 1 4 - 1 2 P S I t e m 2 L a b o r E x c e r p t ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) ATTACHMENT C 2-14-12 P&S ITEM 2 LABOR EXCERPT P&S 2 process. It was important to discuss City finances at the negotiation table and inform the employees so there was a common understanding. The third principle was the timing of the negotiations which was not intended as a hard and fast timeline but a goal statement to help communicate to all parties involved to avoid long periods of limbo. Total compensation was the fourth principle focusing on the full cost of City benefits including base salary, City paid pension, City paid healthcare, workers compensation costs, unemployment insurance, special pay such as K-9 and bilingual Recommended principle number five was recruitment and retention which was challenging because it required trade offs between the budget status and attracting and retaining skilled personnel. Proposed principle six was transparency which was more important now than previously determined because of public expectations with regard to understanding public sector salary and compensation, sharing information at the bargaining table to ensure both sides were equally familiar, and a goal was to make compensation easily understood for the employee and the public. Management of increasing benefits costs was principle number seven; an example would be the 90/10 percent medical cost sharing program so as healthcare premiums rose the employees would be contributing different amounts while maintaining the 10 percent cost share. The final proposed principle was innovation in employment and compensation. The function of the principle was for the City to look for ways to provide flexibility for employees within compensation. She noted there were other public agencies exploring new approaches such as an incentive for employees to opt out of their retiree medical program. Council Member Klein had a concern with principle number three. He felt the timing and negotiation should be a hard and fast deadline and not a goal statement. His understanding was Staff was bringing a standardized guideline with each contract so the City could reach the goal of having a resolution by the budget discussion time. The past few years the goals had not been met and the end result had been a higher cost for the City. Ms. Scott said the challenge Staff faced was there was an obligation to meet and confer in good faith; although, there was no clear definition on the number of meetings or a specific amount of type of discussion. She understood the concern. Council Member Klein said in order to make the budget deadline the schedule to meet and confer may need to be moved back. At the present time there was no incentive or reason for the union to live within the goals set by Staff. He had an issue with the verbiage between should and shall; he was comfortable with should in most cases. In principle number four he preferred “shall” since he did not see the argument for not considering total compensation. He felt there 2.c Packet Pg. 89 -: 2 - 1 4 - 1 2 P S I t e m 2 L a b o r E x c e r p t ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) ATTACHMENT C 2-14-12 P&S ITEM 2 LABOR EXCERPT P&S 3 should be a paragraph added that reflected the idea in conducting the negotiations, the City was respectful of the unions’ positions and their legal rights, and the City wanted to hear their views on how to improve the organization. He saw the aspiration of having a good ongoing relationship with the unions as one of the Guiding Principles. He requested the equality across the bargaining units be incorporated. Ms. Scott noted the equality had been a driving principle but not without challenges. Council Member Klein said Staff recommended reviewing the Guiding Principles on an annual basis; he was not in favor of the recommendation. Council Member Schmid endorsed the deadline of having the agreements needing negotiations end with appropriate time to have resolved for the budget cycle. Under total compensation he felt it was important to make a distinction between the current obligations and an honest assessment of future obligations. With regard to recruitment and retention; Staff had a remarkable number of the eligible retirement populations, he suggested verbiage be added to note hiring and training employees to fill the positions rather than merely filling the retirement gaps. He felt strongly about identifying Governor Brown’s proposed Pension and Benefits Reform Plan into principles seven and eight. Council Member Espinosa had concern with the lack of a timeline for principle three since the matter had been discussed in previous conversations and was an important element. In order to have a goal it was a necessity to have a specific start time, milestones that needed to be reached by a certain point so when the budget time was reached the resolution was accomplished. He stated he wanted verbiage of mutual respect incorporated. Ms. Scott said Staff could take the concept of building and maintaining a relationship with labor and incorporate it into the Guiding Principles. She confirmed the verbiage with respect to the timeline was a critical piece and the language could be stronger, acknowledging the obligation to meet and confer and yet incorporating a strong statement of the intended accomplishment. Council Member Espinosa understood there were parameters out of the City’s control; he merely was surprised to not see the information included after the discussions. Council Member Klein reiterated his concern was not to have the deadlines met 2.c Packet Pg. 90 -: 2 - 1 4 - 1 2 P S I t e m 2 L a b o r E x c e r p t ( 2 6 4 3 : L a b o r G u i d i n g P r i n c i p l e s ) City of Palo Alto (ID # 2550) Policy and Services Committee Staff Report Report Type:Meeting Date: 2/14/2012 February 14, 2012 Page 1 of 6 (ID # 2550) Summary Title: Labor Guiding Principles Title: Recommendation Regarding Approval of Labor Guiding Principles From:City Manager Lead Department: Human Resources Recommendation Staff recommends that the Policy & Services Committee review and recommend that the Council approve guiding principles for labor negotiations. Background The concept of guiding principles for labor negotiations arose in Palo Alto in late 2011 when the City amended its local impasse resolution rules to address the new Meyers-Milias Brown Act rule which allows employee organizations to request nonbinding fact-finding after impasse is declared and before a local agency may implement the terms of its last, best and final offer. Staff originally proposed including decision “factors” describing key considerations for labor negotiations that the fact-finder would be required to consider in making recommendations. However, in refining those factors and discussing the issue with labor, staff ultimately determined that such considerations are not and should not be limited to impasse resolution. More importantly, approval of stand- alone guiding principles gives the Council and the public the opportunity to have a broader discussion about main values that it wants to guide the City’s approach to labor issues. February 14, 2012 Page 2 of 6 (ID # 2550) Discussion The City currently has 7 recognized bargaining units and one unrepresented group of managers and professionals. While the City is required to engage in the bargaining process to set compensation and terms and conditions of work with each bargaining unit, the City’s goal is to work collaboratively with all employees and labor to solve problems and develop creative solutions to meet bargaining objectives. Goals for bargaining units and managers have much in common and labor and management have engaged together effectively in the past. The focus of collaboration should continue to be on ways to contribute positively to the organization and maintain effective services for the community. Developing and communicating Guiding Principles will inform on-going, meaningful dialogue between managers and bargaining units at all levels. At the same time the City is partnering with labor in a collaborative manner, the City must properly distribute responsibility and accountability to ensure management and delivery of services consistent with Council and community expectations. In order to meet these expectations the City must maintain management rights and direct operational decision-making. Analysis A.Current challenges to City budget and rising employee costs have been and will continue to be key issues in labor negotiations for the foreseeable future. The City exists to provide a forum for governance and to effectively and efficiently deliver services to the community. A substantial portion of the general fund operating budgets for those services, approximately 66%, goes to fund salaries and benefits for the staff necessary to deliver services. As the City heads into its fourth consecutive year of budget shortfalls, it must continue examining the cost of employee salaries and benefits and their impacts to the budget. February 14, 2012 Page 3 of 6 (ID # 2550) Recent negotiations with employee groups have helped to address some of the budget shortfalls. For example, where the City once paid the entire amount of the employee PERS contribution (in addition to the Employer contribution) and the full amount of health care premiums, most groups now pay at least a portion of the employee PERS contribution and up to 10% of the medical premium. However, even with these and other cost-saving measures, personnel costs associated with pension, health, and retiree medical have continued to increase at rates that exceed revenue growth. The average budgeted cost for an employee position has increased 20% since 2009, and the benefit portion of salary and benefits has increased approximately 12% in just the past two years. Continued increases in costs for employee salaries and benefits are projected, driven primarily by health and pension costs. Additionally, the valuation of the liability for post-employment health care is growing and has grown from $105 million to $133 million in the last 2 years. The fact that on-going revenues have not been able to cover expenditure growth over the past few years and into the projected future years indicates a fundamental structural imbalance that needs long-term solutions to restore balance and provide a sustainable means to deliver services to the community. This is due to more than the recent economic crisis in the United States. Past local government decisions in California over the past 10-15 years granted significant benefit increases that would not be granted today. Yet those decisions have cost implications that will last for years many years into the future. Additionally, the local government tax structure is increasingly disconnected from the economy itself, so that even improvements in today’s economy do not translate into commensurate increases in local government revenue. In short, the slope of increase for expenses can be expected to rise more sharply than revenues going forward, without continued expense reductions. Because personnel costs are such a large part of operating expenditures, and salaries and benefits are determined through the labor negotiations process, it is February 14, 2012 Page 4 of 6 (ID # 2550) important for the City to address these issues in current and future labor negotiations. Guiding principles for those negotiations can help the City, including managers, employees and labor, remain mindful of the fiscal challenges and service needs of the City, align the bargaining process with the City’s primary function of providing services to the community, and establish transparent principles to guide the City in making decisions about employee salaries and benefits. B.Proposed Guiding Principles. Based on the issues identified above, staff has identified the following key principles to guide adoption of labor agreements and compensation plans: 1.City Services/Programs/Activities: The City’s core mission is to provide services, programs, and activities that align with the priorities of the public and the City Council; levels of employee compensation should support the City’s long-term ability to continue providing those services. 2.City Finances: The City should be able to meet the cost of any compensation commitment from current and projected on-going City revenues. 3.Timing of Negotiations: Protracted negotiations create uncertainty for the City and employees; the City should endeavor to reach agreement with recognized employee organizations on matters within the scope of representation prior to adoption of the City’s budget for the ensuing fiscal year. 4.Total Compensation: In making compensation decisions, the City should consider the total costs of a position including salary, pension, healthcare and all other benefits. February 14, 2012 Page 5 of 6 (ID # 2550) 5.Recruitment & Retention: The City’s compensation should be set at levels sufficient to attract and retain qualified employees who are committed to the City’s goals, programs and delivery of high quality services, understanding that those levels must be economically feasible. 6.Transparency: The structure and components of compensation of City employees should be easy for employees and the public to understand, and as efficient as possible for staff to administer. 7.Management of Increasing Benefit Costs: The City should pursue short term and long term strategies to curtail increasing employee benefit costs. It should move away from providing benefits that place the burden on the City to pay the cost of automatic increases and toward benefit structures that require negotiations to determine how much and who will pay for such costs. 8.Innovation in Employment and Compensation:Providing broader and more creative choices regarding benefits may further the concepts set forth in Guiding Principles 1-7. The City should consider innovative alternatives to traditional models of public employment and public employee benefits including, for example, hybrid pension plans, cafeteria plans, scaled compensation in lieu of guaranteed benefits, benefit buyout options, and similar ideas. In addition, staff recommends that the Council consider reviewing the Principles annually to ensure that they remain relevant and accurately convey the City’s priorities. Policy Impacts The Council is not required to adopt guiding principles for labor negotiations. However, Guiding Principles can help establish a transparent policy framework to guide the City’s labor relations and clearly communicate City priorities regarding February 14, 2012 Page 6 of 6 (ID # 2550) labor issues to employees, labor, and the community. The Principles can also assist the negotiating team by establishing overall objectives against which it can measure specific proposals, as well as enhance accountability by providing a more concrete way to measure or evaluate the outcome of negotiations. The City’s bargaining team will continue to meet and confer in good faith with flexibility to partner with labor to craft solutions to individual unit issues that also meet the uniform policy framework provided by these Guiding Principles. Prepared By:Elizabeth Egli, Administrative Assistant Department Head:Sandra Blanch, Interim Director, Human Resources Department City Manager Approval: ____________________________________ James Keene, City Manager CITY OF PALO ALTO OFFICE OF THE CITY CLERK July 2, 2012 The Honorable City Council Palo Alto, California Colleagues Memo From Vice Mayor Scharff and Council Members Burt, Holman, and Schmid on Council Direction Regarding “Benefits Strategy” BACKGROUND In recent years, the cost of employee benefits and pensions has risen dramatically for the City of Palo Alto, reducing the funds available for our community’s necessary and valued services and infrastructure: --The proportion of dollars paid for employee benefits to salaries rose from 23% in 2002 to 54% in 2010; --The Long Range Financial Forecast projects employee benefits exceeding salaries by 2022; --Employee benefits now make up 27% of total General Fund expenditures; --Governor Brown and the California League of Cities have outlined a Pension Reform Plan that attempts to put state and local government employers “on a more sustainable path to providing fair public retirement benefits”. In addition, San Jose and San Diego voters have recently adopted significant pension and benefit reform initiatives. PURPOSE The Council should provide policy direction regarding future reforms and innovations in employee benefits, pensions, compensation and other aspects of employment with the goal of building a modern, flexible workplace environment for Palo Alto City employees while also assuring sustainable costs for its citizens. This initiative will invite creative solutions from employee and employer Updated: 6/27/2012 9:16 AM by Beth Minor Page 2 perspectives, providing policy direction and long term strategies. Many of these issues are subject to bargaining and would be negotiated with the City’s recognized bargaining units. The considerations will address the issues raised in the Governor’s and the League of Cities’ pension reform proposals as well as broader considerations, including: How should the costs of pensions be shared between employers and employees? Should the City encourage changes in state law that would allow the City to establish a hybrid plan combining defined benefits, defined contributions and social security? What is the appropriate and sustainable vesting for pension rights? Should any part of health benefits vest on retirement? What retirement age would make for a proper transition to Medicare coverage for retiree healthcare? Should the City encourage changes in state law to give cities the option of setting a later retirement age? Are retroactive pension increases justifiable and, if not, how can they be prohibited? How do we establish fair criteria for retirees’ contributions to health benefits? Should the city move toward fixed health benefit contributions? How can the city provide greater employee choice in health benefits? Should the city encourage changes in state law that would allow the City to Updated: 6/27/2012 9:16 AM by Beth Minor Page 3 offer employees a choice of significantly reduced pension packages in exchange for more desirable near term compensation and employment terms? Can and should the City structure and finance an optional program to buy out existing post-employment obligations that may be vested? How should training, education, job flexibility, at-will employment and seniority operate within a modernized employment program that seeks to attract and retain a high-performing workforce and foster a desirable workplace during a time of changes to traditional benefits? How should the timing of negotiations and the City’s position in negotiations relate to the Long Range Financial Forecast? How should the timing of negotiations relate to the City’s annual budget process? Are there alternative considerations that merit discussion on how to accomplish a healthy work place and foster job satisfaction and cost savings thru non-economic employee benefits? PROPOSAL The Council will agendize a public discussion of sustainable pension, retiree health care, other benefits and terms of employment. Discussion will include whether the Council supports the proposals of the Governor and the League of Cities. In addition, the Council will establish a vision toward sustainable benefit options and a more flexible, modern workplace environment. Representatives from the City’s bargaining units will be invited to participate in the discussion of the proposals and the current dynamic between benefits and salaries. The Council recognizes that changes in terms and conditions of employment that are within the scope of bargaining under state law are subject to collective bargaining. Updated: 6/27/2012 9:16 AM by Beth Minor Page 4 TIMING Discussion of the topics raised in this Memo will occur by September of 2012. Whether further consideration of these and related topics should be necessary will be determined during this discussion. RESOURCES Staff support in outlining the options available under current law, key cost elements in the current benefits program and the cost impacts of various reform proposals. Department Head: Donna Grider, City Clerk City of Palo Alto (ID # 3081) City Council Staff Report Report Type: Action ItemsMeeting Date: 9/4/2012 Summary Title: Grand Jury Report Title: Approval of Response to Grand Jury Report on Pension and Other Post- Employment Benefits From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council review, provide input, and approve the following response to the 2011-2012 Santa Clara County Civil Grand Jury Report “An Analysis of Pension and Other Post Employment Benefits.” Background On June 13, 2012, the Civil Grand Jury of Santa Clara County released a report seeking to answer the question: “Is the cost of providing pension and other post employment benefits interfering with the delivery of essential City services and is the ultimate cost to the taxpayers a bearable burden?” A copy of the Grand Jury report is included as Attachment A. Discussion The Grand Jury’s Report culminates in seven findings and recommendations (see pages 26-28 of the Report). The following discussion responds to the recommendations. Recommendation 1 – Cities should adopt pension plans to extend the retirement age beyond current retirement plan ages. Response: Agree. Palo Alto has already created a second tier for Miscellaneous (non-public safety) employees extending the retirement age for new hires from 55 to 60. In the past year it has also extended the retirement age for new safety employees from 50 to 55. Because the City participates in the CalPERS retirement system, it is limited to the retirement formulas offered by CalPERS. Retirement age is a factor in those retirement formulas and cannot be altered by the City. In addition, although the extended age retirement formulas set the standard retirement age at a higher level, employees may still choose to retire at an earlier age. For example, with respect to the Miscellaneous 2% at 60 tier, retirement at the age of 60 is not required; an employee may retire beginning at age 50 for a lower benefit factor, or after age 60 for a higher benefit factor. In fact, the formula would go as high as 2.418% for an employee who retires at the age of 63 or as low as 1.426% at the age of 50. Lastly, CalPERS offers a 1.25% at 65 formula, but only for state employees who are in the Social Security system; Palo Alto would not qualify because it does not participate in Social Security. Recommendation 2A - Some cities, including Palo Alto, have adopted second tier plans, but further changes are needed. Second tier plans should be implemented for both Miscellaneous and Public Safety. Response: Agree. Since the Grand Jury questionnaire was submitted, Palo Alto has now adopted second tier plans for safety employees as well as miscellaneous. Recommendation 2B – Cities which have not already done so should implement second tier plans for Miscellaneous and public safety employees. Response: Agree. As discussed above, Palo Alto has already implemented this recommendation. Recommendation 2C – All Cities’ new tier of plans should close the unfunded liability burden they have pushed to future generations. The new tier should include raising the retirement age, increasing employee contributions, and adopting pension plan caps that ensure pensions do not exceed salary at retirement. Response: Agree. However, as discussed above, the City’s options are currently limited to the pre-determined formulas and other optional benefits established by CalPERS. The City has taken steps to address issues associated with some of its optional benefits, but also would like to see CalPERS offer more options for additional cost containment. As discussed in the response to Recommendation 1, the City has already raised the retirement age for new employees in the Miscellaneous and Safety groups. In addition, as discussed in Recommendation 4, nearly all employee groups are now paying (or will be paying in the near future) the full amount of the PERS employee share. CalPERS does not offer the option of adopting pension caps within its current formulas. The City has, however, taken steps to minimize increases to final compensation. State law establishes several “optional benefits” that CalPERS offers to employers that may result in increasing an employee’s final compensation beyond the actual final salary amount. In some cases, the application of these benefits may result in an annual pension allowances that exceed the take- home pay the employee received before retiring. The City has taken steps to reduce or eliminate some of these benefits in recent years. For example, the City had an optional benefit that allowed employer-paid member contributions to be converted to pay-rate in the final compensation period. To the extent that employees are now paying all or part of the member contribution, that conversion and the resulting increase has been reduced or eliminated. Similarly, the City had adopted an optional benefit that designated the final year as the final compensation period. The City has now moved back to the three-year averaging for new tier employees, and intends to implement it for all formulas by August 2013 The City believes that these types of reforms are important and appropriate and will continue pursuing them to the extent possible under existing law. Recommendation 3 – The Cities should adopt policies that do not permit benefit enhancements unless sufficient monies are deposited, such as in an irrevocable trust, concurrent with enacting the enhancement, to prevent an increase in unfunded liability. Response: Agree. This recommendation is addressed by the Labor Guiding Principles adopted by City Council on April 9, 2012. The Principles include #2, which provides that “The City should be able to meet the cost of any compensation commitment from current and projected on- going City revenues,” and principle #8 which provides that “The City should pursue short term and long term strategies to curtail increasing employee benefit costs. It should move away from providing benefits that place the burden on the City to pay the cost of automatic increases and toward benefit structures that require negotiations to determine how much and who will pay for such costs.” Therefore the Council has in effect already implemented this recommendation. Recommendation 4A – The Cities should require all employees to pay the maximum employee contribution rate of a given plan. Response: Agree. This recommendation has been a key goal of the City in recent negotiations and has now been implemented across all employee groups with the exception of the Fire Chiefs Association (FCA), Police Managers Association (PMA), and the Utility Managers Association. These groups comprise 55 positions out of a total of 1,016 citywide. The City has proposed this contribution level for FCA and for the Utility Managers Association and expects to bring PMA in line with the other groups in the next round of negotiations. Recommendation 4B – Cities should require employees to pay some portion of the Past Service Cost associated with the unfunded liability in proportion to the Benefits being offered. Response: Agree. The first step in this direction was to bring employees up to paying their entire employee share of pension costs. In future labor contract negotiations, the City may explore with employee groups additional measures to ensure that past service costs are distributed in an equitable and sustainable manner. Moreover, the City would welcome legislative change that would prohibit retroactive improvements. Recommendation 5 – Cities should immediately work toward implementing policy changes and adopting measures aimed at making full OPEB ARC payments as soon as possible. Response: Agreed. Palo Alto approved a policy to make full OPEB ARC payments in 2007 (CMR:438:07) when the City established the trust with CalPERS for retiree medical. Recommendation 6 – This recommendation pertains to the City of San Jose and is not applicable to Palo Alto. Recommendation 7 – Cities should transition from defined benefit plans to defined contribution plans as the new tier plans are implemented. Response: Agree in principle. The Council has recognized the importance of new and more creative options for post-employment benefits going forward and views defined contribution plans as an important option. The City already offers all employees, in addition to their CalPERS pension, the option of participating in a IRC 457 retirement plan and contributing a portion of their pre-tax earnings for retirement. However, this is another area where CalPERS currently limits the City’s ability to make changes. As a CalPERS participant, the City cannot opt out of the defined benefit plans offered by CalPERS without a prohibited exit cost, or otherwise reduce the proportion of retirement needs to be met through the defined benefit program. As a result, changes in state law would be necessary before the City could fully implement this recommendation. A July 2, 2012 Colleagues Memo to Council raised this and many of the other issues contained in the Grand Jury Report. Council requested a series of community discussions about pensions, health care and other employee benefits to take place in September and October, 2012. This Grand Jury response is a prelude to a broader discussion in the commfunity of these very same issues. Additional Information and Clarification Unfunded Liability On page 10 of the Report, Table 3 shows unfunded liability for pension and OPEB for 8 cities in Santa Clara County, as well as the County itself, in total and on a per-resident basis. Staff has reproduced that table below: FY 2010 Unfunded Liabilities (Not in Risk Pool) City Pension OPEB Total Liability per Resident Santa Clara County 1,455,835,322 1,300,000,000 2,755,835,322 $ 1,547.00 Cupertino 18,581,728 18,069,366 36,651,094 $ 629.00 Gilroy 35,100,000 4,900,000 40,000,000 $ 819.00 Milpitas 70,166,975 31,230,798 101,397,773 $ 1,518.00 MV 104,121,296 29,396,467 133,517,763 $ 1,803.00 Palo Alto 153,941,000 105,045,000 258,986,000 $ 4,021.00 San Jose 1,434,696,471 1,706,081,881 3,140,778,352 $ 3,320.00 Santa Clara 223,667,947 23,855,000 247,522,947 $ 2,125.00 Sunnyvale 149,300,000 92,800,000 242,100,000 $ 1,728.00 Total 3,645,410,739 3,311,378,512 6,956,789,251 It appears from the above Table that Palo Alto has a high ratio of unfunded liability per resident; however several factors must be considered to place this ratio in perspective. The table does not appear to take into account the level of service and the unique services that Palo Alto provides in comparison to other cities in the County. First, Palo Alto is the only of the above cities operating its own utilities: gas, electric, water, waste water collection, refuse, storm drain, waste water treatment and fiber optic. Utility operations account for 40% of the Palo Alto workforce. The General Fund administration provides services (HR, finance, etc.) to the Utilities which they reimburse annually. The other cities would not have the same staffing levels as a result of Palo Alto having more utilities. Furthermore, the compensation offered to Utilities employees must be competitive with equivalent private-sector utilities; salaries in the Enterprise Funds tend to be higher, and they participate in the CalPERS pension based upon their salaries. Second, Palo Alto services include five libraries, theatres, and extensive arts and children’s programs – far more than comparable cities. These community services, valued by residents as a part of the lifestyle in Palo Alto, require more employees than the average Parks and Recreation department. Also to be noted is that Cupertino, with the highest number of residents per active employee, outsources its public safety services and the figures above apply to its miscellaneous employees only. Third, Palo Alto offers regional services, such as our Water Quality Control Plant, our Animal Services, and our Fire Services provided to Stanford, for which we receive offsetting revenue. However the full liability is captured in the table. Fourth, the Cities have unique attributes that make up the OPEB liability, which should be considered in detail. For instance, comparing Palo Alto to Mountain View’s OPEB liability, Palo Alto’s is higher due, in part, to covering the cost of dependent healthcare coverage for retirees while Mountain View does not. Palo Alto also has a greater number of retirees, 860 compared to Mountain View’s 304. The actuarial calculation of OPEB liability for the two cities differs in a key assumption related to assumed annual increase in healthcare expense, which increases the cost of future year liability. Palo Alto’s OPEB actuarial report assumes that healthcare will increase 9.4% in 2013 and then at least 7.8% per year through 2020. Mountain View’s, on the other hand, assumes healthcare will increase 7.6% in 2012 down to 5.5% through 2019 and beyond. Palo Alto’s healthcare cost estimates are very likely to materialize given the recent trend in healthcare increases. These important differences are a significant factor in while Palo Alto’s valuation is higher than Mountain View’s. If we next compare the unfunded liability per employee or per retiree, Palo Alto does not stand out as much. City Unfunded liability per active employee Unfunded liability per retiree Unfunded liability/active employee or retiree (combined) Cupertino $ 226,241 $ 172,883 $ 97,998 Gilroy $ 173,913 $ 156,863 $ 82,474 Milpitas $ 272,575 $ 492,222 $ 175,429 Mountain View $ 256,272 $ 463,603 $ 265,040 PA $ 264,002 $ 202,649 $ 125,615 Santa Clara $ 261,376 $ 398,588 $ 157,859 Sunnyvale $ 270,201 $ 239,941 $ 127,087 AVERAGE $ 191,620 $ 236,305 $ 102,281 Sick Leave Payout A recent article in the press described the option in some local governments for employees to get cash for unused sick leave at the time of retirement. Palo Alto made changes to this practice in the 1980s. Presently there are only 9 long-term employees eligible to receive sick leave payout. Eventually, all employees eligible will have left the city. Additional Clarifications 1. On page 15 of the Grand Jury Report (Attachment A), Table 5: Pension Benefit Plan Changes does not capture Palo Alto’s second tier and employee contribution changes. The Palo Alto line items should read as follows: 1st Tier Plan 2nd Tier Plan City year of increase Original Plan Benefit Increase Employee- Paid contrib. Plan Name Year Adopted Employee- Paid contrib. Palo Alto 2007 Misc. 2% at 50 Misc. 2.7% at 55 2% - 5.75% 2% at 60 2010 2% to 7% Palo Alto 2002 Public Safety 2% at 50 Public Safety 3% at 50 0%-9% 3% at 55 2011- 2012 6.25% to 9% 2. On page 17 of the report, it mentions “Mountain View, Sunnyvale and Cupertino are commended for having begun to implement a “pay forward” strategy [for Retiree Medical], which demonstrates fiscal responsibility.” Staff wishes to point out that Palo Alto has executed a “pay forward” strategy since 2007. 3. On page 20 of the report, it mentions that “all Cities surveyed [with a few exceptions]...either reimburse for accrued unused sick time or permit it to be converted into service time for purposes of determining pension. Staff wishes to point out that in Palo Alto, sick leave payouts do not count towards pension credit. In conclusion, staff requests Council input and final approval of responses to the Grand Jury report. A final response from the City of Palo Alto regarding the recommendations by the Grand Jury must be delivered by September 15, 2012. Staff prepared this report before the Governor's proposal on pension reform was approved. Staff will update the Council on the Governor's proposal during upcoming discussions on pension and healthcare. It is likely that elements of the proposal will address the recommendations contained in the Grand Jury report, but staff will need time to evaluate the proposal before making a final determination. Resource Impact There is no immediate fiscal impact resulting from this report. Policy Implications This report is consistent with Council policy to maintain a balanced budget and to pursue structural changes in employee benefits. Environmental Review There is no environmental review required for this report. Attachments: Attachment A: 2011-2012 Santa Clara County Civil Grand Jury report (PDF) Prepared By: David Ramberg, Assistant Director Department Head: Lalo Perez, Chief Financial Officer City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto (ID # 2947) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/10/2012 Summary Title: Amend Resolution of Intent No. 9245 Title: Adoption of an Amendment to Resolution of Intent No. 9245 of the Council of the City of Palo Alto to Set December 10, 2012 as the New Public Hearing Date for the Establishment of Underground Utility District Number 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster) From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve an amendment to Resolution of Intent No. 9245 setting December 10, 2012 as the Public Hearing date for the establishment of Underground Utility District (UUD) No. 47. Background At its May 7, 2012 meeting, Council adopted Resolution of Intent No. 9245, declaring its intention to amend Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code by establishing UUD No. 47 (City Council Staff Report # 2531). Section 6 of that resolution gave notice that the public hearing would occur on Monday, July 23, 2012. Because of several items already on the agenda on that date and limited time, the proposed public hearing scheduled for July 23, 2012 did not occur. In the meantime, staff has determined that it needs additional time to design the UUD No. 47 project. Staff requests that Council adopt an amendment to Resolution No. 9245. The amendment will establish Monday, December 10, 2012 as the date of the Public Hearing where the Council would hear all protests and receive evidence for and against the action proposed, and determine when and where the Council would consider whether the public necessity, health, and safety require the establishment of the Underground Utility District. Discussion This underground project will result in the removal of 34 poles and provide underground services to 82 residential and commercial properties. Completion of UUD No. 47 will eliminate overhead distribution lines in an area bordered by existing underground utility districts, enhance reliability of electric distribution system, and improve street-view aesthetics. Staff Report ID#2531 (attached) outlined the process that will be followed once the underground district is created. Timeline The new project schedule resulting from the postponement of the public hearing is shown in the following table. Action Date 1. Amendment to Resolution of Intent No. 9245 September 10, 2012* 2. Letter to property owners with Resolution of Intent, Payment Option Plan, Service Conversion Cost Estimate, and Update September 24, 2012 3. Request the Preparation of the Ordinance to Establish Utility Underground District No. 47 October 8, 2012* 4. Public Hearing and First Reading of Ordinance Establishing Project Area as Utility Underground District No. 47 December 10, 2012* 5. Second Reading of Ordinance January 7, 2013* 6. Letter to Property Owners with Approved Ordinance Chapter 12.167 of Municipal Code, and Update February 11, 2013 7. Award of Construction Contract and Joint Construction Agreement with AT&T/Comcast July 2013* 8. Substructure (conduits, vaults, etc.) Installation by Contractor August 2013 through November 2013 9. Installation of Underground facilities (cable, switches, etc.) December 2013 through March 2014 10. Resolution Determining Properties Electing to Pay Service Conversion Cost over a Period of 10 Years June 2014 through August 2014 11. Service Conversion Work by Property Owners June 2014 through August 2014 12. Pole Removal and Project Completion September 2014 through November 2014 *Denotes Council Action Resource Impact The Utilities Department has provided details in Staff Report #2531 regarding the impact on resources due to creation of this underground district. Policy Implications Amendment to the existing Resolution of Intent does not represent any changes 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 (CEQA) under Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground). Attachments: Attachment A: UG 47-Boundary Map (PDF) Amendment B: Amendment to Resolution of Intent No. 9245 (PDF) Attachment C: City Council Staff Report # 2531 (PDF) Prepared By: Gopal Jagannath, Supervising Electric Proj. Engineer Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager *NOT YET APPROVED* 1 120815 dm 6051766 Resolution No. ____ Amendment to Resolution No. 9245 of the Council of the City of Palo Alto to Set December 10, 2012 as the New Public Hearing Date for the Establishment of Underground Utility District No. 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster) R E C I T A L S A. At its May 7, 2012 meeting, Council adopted Resolution of Intent No. 9245, 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 District No. 47 (City Council Staff Report # 2531). B. Although Section 6 of that resolution gave notice that the public hearing would occur on Monday, July 23, 2012, because of several items already on the agenda on that date and limited time, the proposed public hearing scheduled for July 23, 2012 did not occur. C. In the meantime, staff has determined that it needs additional time to fully design the Underground District No. 47 project and requests that Council adopt an amended Resolution No. 9245 setting Monday, December 10, 2012 as the date of the Public Hearing where the Council would hear all protests and receive evidence for and against the action proposed, and when and where the Council would consider and finally determine whether the public necessity, health and safety require the establishment of Underground Utility District No. 47. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. In its opinion, the public necessity, health and safety require, and it is the intention of the Council, pursuant to Section 12.16.040 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”), to amend Section 12.16.020 of Chapter 12.16 of the Code, by ordering the establishment of an Underground Utility District (“District”) and to prohibit the construction in and require the removal from the proposed District of all poles and overhead lines and associated overhead structures used or useful in supplying electric, communication or similar and associated services. SECTION 2. The number of the proposed District is Underground Utility District Number 47 of the City of Palo Alto, commonly known to include street and avenue portions of Homer, Cowper, Addison, Middlefield, Channing and Webster. SECTION 3. The description of the area comprising the District is as follows: “All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of the following avenues, roads, and streets: Homer, Cowper, Addison, Middlefield, Channing and Webster, all as more particularly described on that *NOT YET APPROVED* 2 120815 dm 6051766 certain map entitled “Proposed Underground Utility District No. 47 Homer/Cowper/Addison/ Middlefield/Channing/Webster,” on file in the office of the City Clerk.” SECTION 4. From and after the effective date of the establishment of the proposed District, no person or utility shall erect or construct within the District any pole, overhead lines or associated overhead structure used or useful in supplying electric, communication or similar associated services. SECTION 5. Within ninety (90) days from the date of the completion and acceptance of the proposed underground facilities within the District to be constructed by the City of Palo Alto, Comcast of California IX, Inc. and Pacific Bell Telephone Company dba AT&T California, all poles and overhead lines and associated structures used or useful in supplying electric, communication or similar and associated services in the proposed District shall be removed, and from and after the date no person or utility shall use or maintain such facilities within the proposed District. Additional notice shall be given after the completion date has been precisely determined. SECTION 6. NOTICE IS HEREBY GIVEN that Monday, the 10th day of December, 2012, at the hour of 7:00 p.m., in the regular meeting place of its City Council, Civic Center, Palo Alto, California, is hereby fixed as the time and place when and where the Council shall hear all protests and receive evidence for and against the action herein proposed, and when and where the Council shall consider and finally determine whether the public necessity, health and safety require the establishment of the District and the removal of poles, overhead wires, and associated overhead structures, and the underground installation of wires and facilities for supplying electric, communication and similar or associated services in the District hereinabove described. SECTION 7. At the public hearing, all persons interested shall be given an opportunity to be heard. The hearing may be continued from time to time as determined by the Council. SECTION 8. The Electrical Engineering Manager, Department of Utilities, City of Palo Alto, is hereby designated as the person to answer inquiries regarding the protest proceedings, to be had herein and may be contacted during regular office hours at 1007 Elwell Court, Palo Alto, California, 94303, or by calling (650) 566-4548. SECTION 9. The City Clerk shall give notice of the public hearing by publishing notice of the public hearing and the director of utilities shall mail copies of this resolution to all property owners within the proposed District as shown on the last equalized tax roll of the City, and to all utilities supplying electric, communication or similar or associated services within the proposed District, the mailing to be completed at least thirty (30) days prior to the date of the public hearing. The Clerk is authorized to include in the notice to be mailed a statement to the effect that any affected property owner has the option of paying the cost of converting his or *NOT YET APPROVED* 3 120815 dm 6051766 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. SECTION 10. This project is categorically exempt from CEQA under Public Resources Code Section 15302(d) (Conversion of overhead electric utility distribution system facilities to underground). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ______________________________ _________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ______________________________ _________________________ Senior Deputy City Attorney City Manager _________________________ Director of Utilities City of Palo Alto (ID # 2531) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/7/2012 May 07, 2012 Page 1 of 4 (ID # 2531) Summary Title: Underground District No. 47 Resolution Title: Adoption of a Resolution of Intent to Establish Underground Utility District No. 47( Middlefield Road/ Addison Ave/ Cowper Street/ Homer Ave) by Amending Section 12.16.020 of the Palo Alto Municipal Code From: City Manager Lead Department: Utilities Recommendation Staff recommends that the Council adopt the attached Resolution of Intent to establish Underground Utility District No. 47 (UUD 47) by amending Section 12.16.020 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code. Background The Electric Utility’s undergrounding project areas are selected and recommended to Pacific Bell Telephone Company dba AT&T California (AT&T) and Comcast of California IX, Inc. (Comcast), the two other entities participating in undergrounding projects, based on the age and maintainability of the existing overhead electric system. AT&T and Comcast determine whether the recommended areas meet their criteria for undergrounding based on guidelines established by the California Public Utilities Commission (CPUC) and qualify for financial contribution to the project. UUD 47 is bounded by Middlefield Road, Addison Avenue, Cowper Street, and Forest Avenue (see Attachment B). The area proposed as UUD 47 integrates with the existing neighborhood, where the overhead utility lines are already underground, and is one of the few remaining areas that meet both City and CPUC guidelines for undergrounding overhead utility lines and therefore where AT&T and Comcast will share in the cost of construction. At Council’s request, Staff is in the process of developing a comprehensive plan and strategy for undergrounding the overhead utilities for the remainder of the City. The attached Attachment C provides additional background and history on undergrounding of electric utilities. Discussion The formation of UUD 47 will result in the removal of 34 utility poles and provide underground service to 82 properties, mostly residential, of which a small percentage are commercial May 07, 2012 Page 2 of 4 (ID # 2531) properties. Completion of formation of UUD 47 will eliminate overhead distribution lines in an area bordered by existing underground utility districts, enhance reliability of the electric distribution system, and improve street-view aesthetics. Once the underground utility district is created, the Utilities Department will design and obtain bids for the installation of the underground substructure required prior to placing the overhead electric, telephone, cable TV (CATV), street light and City communication facilities underground. After the new underground systems (cable, transformers, switches, etc.) have been installed, the property owners will connect to the new underground system, utilizing their own contractors. City crews will then remove the overhead power lines, and telephone crews will complete the project by removing the remaining telephone and CATV overhead facilities and the poles. City staff is currently in discussion with AT&T concerning the allocation of costs and responsibilities for joint trench applications. As both parties agree that joint participation on projects is mutually beneficial, these discussions should not have an impact on the timeline of the project. The discussions are on-going, but staff does not foresee a significant change in cost allocation for projects with joint trench participation from AT&T. On February 1, 2011, a letter was sent to the property owners in the proposed district, introducing the project and inviting them to a meeting. During the March 10, 2011 meeting (attended by 19 property owners), staff explained the details of the project and answered questions from the property owners. A questionnaire, which was included with the letter, was used to determine the level of support for the project. Staff has received completed questionnaires from 33 property owners, 17 (52%) of whom are in favor of the project, 12 (36%) of whom are not in favor of the project, and 4 (12%) having no preference. Timeline The first step in the establishment of the district is the Council’s adoption of a Resolution of Intent to establish Underground Utility District No. 47. The Resolution defines the district boundaries and sets a time and place for a public hearing on the matter. The public hearing has been tentatively scheduled for the City Council meeting on July 23, 2012. At the public hearing, the property owners will have an opportunity to comment on the project. The adoption of the Resolution of Intent will also serve as a formal action that is required by AT&T and Comcast prior to starting engineering design. Action Date 1. Resolution of Intent to establish Underground District No. 47 May 7, 2012* 2. Letter to property owners with Resolution of Intent, Payment Option Plan, Service Conversion cost Estimate, and update May 14, 2012 May 07, 2012 Page 3 of 4 (ID # 2531) 3. Request the preparation of the Ordinance to establish underground district June 22, 2012* 4. Public Hearing July 23, 2012* 5. Second Reading of Ordinance August 6, 2012* 6. Letter to property owners with approved Ordinance, Chapter 12.167 of Municipal Code, and update September 7, 2012 7. Award of construction contract and Joint Construction Agreement with AT&T/Comcast January 2013* 8. Substructure (conduits, vaults, etc.) installation by Contractor February 2013 through July 2013 9. Installation of underground facilities (cable, switches, etc.) August 2013 through October 2013 10. Resolution determining properties electing to pay service conversion cost over a period of 10 years December 2013* 11. Service conversion work by property owners January 2014 through March 2014 12. Pole removal and project completion June 2014 through August 2014 * Denotes Council Action Resource Impact Funds for UUD 47 are included in the FY 2008-09 and 2009-10 Utilities Department Electric Capital Improvement Program budget. Due to resource constraints this project was not started during the year it was budgeted. Funds allocated for this project have been carried forward into FY 2011-12 & 2012-13. The only cost to the property owners will be that of replacing the overhead service drops to their buildings with underground service. It is estimated that the average cost per property owner will be approximately $5,000. Property owners will be offered the option of financing their service conversions under Section 12.16.091 of Palo Alto Municipal Code which provides for City loans to property owners to fund the service conversions. Property owners repay the loan and administrative costs, which are added to their property tax bills, over a ten-year period, at an interest rate approved by the Council. Policy Implications The resolution of intent does not represent any change to existing City policy and is consistent with the Council-approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. Environmental Review May 07, 2012 Page 4 of 4 (ID # 2531) This project is categorically exempt from CEQA under Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground). Attachments: Attachment A - Resolution of Intent for Underground Utility District 47 (PDF) Attachment B - UG 47 (Boundary Map) (PDF) Attachment C - Background & History on Undergrounding of Electric Utilities (PDF) Prepared By: Patrick Valath, Management Specialist Department Head: Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager *NOT YET APPROVED* 1 120320 dm 0073735 Resolution No. Resolution of the Council of the City of Palo Alto Declaring its Intention to Establish Underground Utility District Number 47 (Portions Of Homer, Cowper, Addison, Middlefield, Channing And Webster) By Amending Section 12.16.020 Of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. In its opinion, the public necessity, health and safety require, and it is the intention of the Council, pursuant to Section 12.16.040 of Chapter 12.16 of Title 12 of the Palo Alto Municipal Code (“Code”), to amend Section 12.16.020 of Chapter 12.16 of the Code, by ordering the establishment of an Underground Utility District (“District”) and to prohibit the construction in and require the removal from the proposed District of all poles and overhead lines and associated overhead structures used or useful in supplying electric, communication or similar and associated services. SECTION 2. The number of the proposed District is Underground Utility District Number 47 of the City of Palo Alto, commonly known to include street and avenue portions of Homer, Cowper, Addison, Middlefield, Channing and Webster. SECTION 3. The description of the area comprising the District is as follows: “All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of the following avenues, roads, and streets: Homer, Cowper, Addison, Middlefield, Channing and Webster, all as more particularly described on that certain map entitled “Proposed Underground Utility District No. 47 Homer/Cowper/Addison/ Middlefield/Channing/Webster,” on file in the office of the City Clerk.” SECTION 4. From and after the effective date of the establishment of the proposed District, no person or utility shall erect or construct within the District any pole, overhead lines or associated overhead structure used or useful in supplying electric, communication or similar associated services. SECTION 5. Within ninety (90) days from the date of the completion and acceptance of the proposed underground facilities within the District to be constructed by the City of Palo Alto, Comcast of California IX, Inc. and Pacific Bell Telephone Company dba AT&T California, all poles and overhead lines and associated structures used or useful in supplying electric, communication or similar and associated services in the proposed District shall be removed, and from and after the date no person or utility shall use or maintain such facilities within the proposed District. Additional notice shall be given after the completion date has been precisely determined. *NOT YET APPROVED* 2 120320 dm 0073735 SECTION 6. NOTICE IS HEREBY GIVEN that Monday, the 23rd day of July, 2012, at the hour of 7:00 p.m., in the regular meeting place of its City Council, Civic Center, Palo Alto, California, is hereby fixed as the time and place when and where the Council shall hear all protests and receive evidence for and against the action herein proposed, and when and where the Council shall consider and finally determine whether the public necessity, health and safety require the establishment of the District and the removal of poles, overhead wires, and associated overhead structures, and the underground installation of wires and facilities for supplying electric, communication and similar or associated services in the District hereinabove described. SECTION 7. At the public hearing, all persons interested shall be given an opportunity to be heard. The hearing may be continued from time to time as determined by the Council. SECTION 8. The Electrical Engineering Manager, Department of Utilities, City of Palo Alto, is hereby designated as the person to answer inquiries regarding the protest proceedings, to be had herein and may be contacted during regular office hours at 1007 Elwell Court, Palo Alto, California, 94303, or by calling (650) 566-4543. SECTION 9. The City Clerk shall give notice of the public hearing by publishing notice of the public hearing and the director of utilities shall mail copies of this resolution to all property owners within the proposed District as shown on the last equalized tax roll of the City, and to all utilities supplying electric, communication or similar or associated services within the proposed District, the mailing to be completed at least thirty (30) days prior to the date of the public hearing. The Clerk is authorized to include in the notice to be mailed a statement to the effect that any affected property owner has the option of paying the cost of converting his or her or their service connection to underground locations over a period of years. Such notice shall conform to Section 12.16.092 of Chapter 12.16 of Title 12 of the Code. // // // // // *NOT YET APPROVED* 3 120320 dm 0073735 SECTION 10. This project is categorically exempt from CEQA under Section 15302(d) (Conversion of overhead electric utility distribution system facilities to underground). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ______________________________ _________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ______________________________ _________________________ Senior Asst. City Attorney City Manager _________________________ Director of Utilities ATTACHMENT B City of Palo Alto (ID # 3136) City Council Staff Report Report Type: Meeting Date: 9/10/2012 Summary Title: Council Priority Setting Process Title: City Council Annual Priority Setting Process From: City Manager Lead Department: City Manager Staff recommends that this item be deferred to the September 24, 2012 City Council meeting. Prepared By: Sheila Tucker, Assistant to the City Manager Department Head: James Keene, City Manager City Manager Approval: ____________________________________ James Keene, City Manager City of Palo Alto COLLEAGUES MEMO September 10, 2012 Page 1 of 2 (ID # 3134) DATE: September 10, 2012 TO: City Council Members FROM: Yeh, Scharff, Klein SUBJECT: COLLEAGUES MEMO REQUESTING COUNCIL PASS A RESOLUTION OF THE CITY COUNCIL OF PALO ALTO IN OPPOSITION TO MEASURE C RECOMMENDATION That the City Council pass a resolution in Opposition to Measure C as set forth in the accompanying resolution. BACKGROUND In 1996, California voters enacted Proposition 215, the Compassionate Use Act, which exempts patients and their primary caregivers from criminal liability under State law for possession and cultivation of marijuana for personal medical use. Subsequently, the State Legislature adopted the Medical Marijuana Program Act, which also exempts patients and caregivers who participate in medical marijuana collectives or cooperatives from State criminal liability for possession and cultivation. However, the Federal Controlled Substances Act prohibits possession, cultivation, and distribution of marijuana and contains no exception for medical use. In 1996, the City Council adopted an ordinance prohibiting medical marijuana dispensaries in Palo Alto. Currently, there are no dispensaries operating in Palo Alto. Measure C is an initiative that would amend the Palo Alto Municipal Code to permit three medical marijuana dispensaries to operate in Palo Alto in any commercial or industrial zone subject to certain prescribed zoning criteria. The proposed ordinance would amend the Palo Alto Municipal Code as follows: (1) The ordinance would require the City to issue three medical marijuana dispensary permits, and to have three permits issued and outstanding at all times. (2) Permits would be issued for one year and could be renewed annually. (3) The ordinance would allow dispensaries to sell marijuana to minors if the minor has a prescription. (4) Marijuana must be allowed to be grown or cultivated on the premises. September 10, 2012 Page 2 of 2 (ID # 3134) The establishment and regulation of medical marijuana dispensaries has been the subject of extensive litigation and there are several cases pending before the California Supreme Court relating to cities' ability to permit, regulate or ban medical marijuana dispensaries. If the City issues permits for marijuana to be grown and sold within the City of Palo Alto, it is unclear what the legal ramifications of this could be. However, these ramifications could range from federal criminal prosecution of those aiding and abetting the cultivation and sale of Marijuana to the City losing any ability to regulate the marijuana dispensaries. Federal prosecutors are cracking down on California’s medical marijuana industry. The California Supreme Court is reviewing the state of the law. On the advice of its city attorney in October of 2011, the Redwood City Council unanimously voted to ban medical marijuana dispensaries. Mountain View, Menlo Park, Sunnyvale, Cupertino and most if not all peninsula communities ban medical marijuana dispensaries. On February 14, 2012, the San Jose City Council repealed the Medical Marijuana Regulatory Ordinance and medical marijuana dispensaries are not currently legal in San Jose, although a number of them are still operating. In San Jose, for the 18 months prior to the repeal, 77 complaints had been received, including public nuisance, illegal drug use, harassment of passersby, loitering, smoking too close to schools and day cares, and disturbing the peace. We should not make Palo Alto the center of the Peninsula for this commercial activity with demonstrated negative impacts as other cities move to ban pot dispensaries. CONCLUSION The treatment of marijuana as “medicine” sends an unwarranted message to young people and others that consuming marijuana is a benign activity or even beneficial to health. Without an efficient or effective mechanism to determine if someone is driving impaired while under the influence of marijuana, issues around safe driving and law enforcement would increase. Many people continue to struggle with drug addiction, which can lead to poor school performance, job loss and serious medical problems. The presence of marijuana dispensaries can lead to negative “secondary effects” on our neighborhoods, such as illicit drug sales, loitering, and even criminal activity. Therefore, we urge our colleagues to support the accompanying resolution to oppose Measure C. ** NOT YET APPROVED ** 120906 sh 8261599 1 Resolution No. ______ Resolution of the Council of the City of Palo Alto in Opposition to Measure C WHEREAS, under the Federal Controlled Substances Act, it is a crime to cultivate, transport, distribute, possess or consume marijuana; and WHEREAS, there is no exception under Federal law for medical need or medical use; and WHEREAS, in 1996, California voters enacted Proposition 215, the Compassionate Use Act, exempting patients and their primary caregivers from criminal liability under State law for possession and cultivation of marijuana for personal medical use; and WHEREAS, in 2004, the State Legislature adopted the Medical Marijuana Program Act, which provided patients and caregivers access to medical marijuana through “collective, cooperative cultivation projects” and allowed cities to adopt and enforce laws consistent with these State laws; and WHEREAS, in 1996, the City Council adopted an ordinance prohibiting medical marijuana dispensaries in Palo Alto; and WHEREAS, currently there are no medical marijuana dispensaries operating in Palo Alto; and WHEREAS, on November 6, 2012, Palo Alto voters will vote on whether to adopt Measure C, an initiative ordinance that would require Palo Alto to issue three medical marijuana dispensary permits; and WHEREAS, treating marijuana as “medicine” sends an unwarranted message to young people and others that consuming marijuana is a benign activity or even beneficial to health; and WHEREAS, many people continue to struggle with drug addiction, which can lead to poor school performance, job loss and serious medical problems; and WHEREAS, the presence of marijuana dispensaries can lead to negative “secondary effects” on our neighborhoods, such as illicit drug sales and use, loitering, and even criminal activity NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The City of Palo Alto opposes passage of Measure C. 120906 sh 8261599 2 SECTION 2. No City funds or resources shall be expended on campaigning or be used to implement this Resolution. SECTION 3. The Council finds that this Resolution is not subject to review under the California Environmental Quality Act (“CEQA”). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ City Attorney City Manager