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Home My WebLink About2012-10-22 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL Special Meeting Council Conference Room October 22, 2012 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 October 22, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Call to Order Closed Session Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH 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) Study Session 2. City Council Study Session with Senator Simitian Proposed Topics of Discussion CHAMBERS Special Orders of the Day 3. Presentation From the City of Heidelberg, Germany 4. Selection of Candidates to be Interviewed for the Public Art Commission for One Unexpired Term Ending on April 30, 2015 5. Selection of Candidates to be Interviewed for the Library Advisory Commission for One Unexpired Term Ending on January 31, 2014 6. Selection of Candidates to be Interviewed for the Parks and Recreation Commission for Four Terms Ending on December 31, 2015 2 October 22, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. City Manager Comments Minutes Approval September 18, 2012 Oral Communications Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Consent Calendar Items will be voted on in one motion unless removed from the calendar by two Council Members. 7. Policy and Services Committee Recommendation to Accept the Report on the Status of Audit Recommendations (June 2012) 8. Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of June 30, 2012 9. Approval of Increase to Purchase Order with One Workplace to Add $71,646 for a Total Amount Not to Exceed $703,794 for Standard Furniture for the Mitchell Park Library and Community Center 10. Approval of Annual Report of Williamson Act Contracts Within the City of Palo Alto 11. Approval of a Contract with NOVA Partners, Inc. in a Total Amount Not to Exceed $756,933 for Construction Management Services for the Main Library Measure N Project - Capital Improvement Program Project PE-11000 Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. 3 October 22, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 12. Approval of Letter of Intent to Participate in Cool Cities Challenge 13. Human Relations Commission Recommends Adoption of a Resolution In Support of an Amendment to the United States and California Constitutions to State "Corporations are Not People and Money is Not Speech" in Response to United States Supreme Court Decision of Citizen's United vs. Federal Communications Commission 14. Colleague’s Memo from Mayor Yeh, Council Members Price and Shepherd Regarding a Council Youth Commission Liaison Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council/Committee, but it is very helpful. 4 October 22, 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 Policy and Services Committee Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Quarterly Utilities Update for 4th Quarter of Fiscal Year 2012 City of Palo Alto Investment Activity Report for the First Quarter, Fiscal Year 2013 November 6 Election Information- Polling Places Public Letters to Council SET 1 SET 2 SET 3 SET 4 CITY OF PALO ALTO OFFICE OF THE CITY CLERK October 22, 2012 The Honorable City Council Palo Alto, California City Council Study Session with Senator Simitian Proposed Topics of Discussion Senator Simitian Study Session Proposed Agenda Topics Update from Senator Simitian Regional Housing Needs Allocation (RHNA) Transfer Request with Santa Clara County (Vice Mayor Scharff) With everything that has occurred relative to California High- Speed Rail and Caltrain over the last four years, what do you see happening, and what do you think should happen, with the Caltrain rail corridor going forward? (Richard Hackmann, Management Analyst) Department Head: Donna Grider, City Clerk Page 2 CITY OF PALO ALTO OFFICE OF THE CITY CLERK October 22, 2012 The Honorable City Council Palo Alto, California Selection of Candidates to be Interviewed for the Public Art Commission for One Unexpired Term Ending on April 30, 2015 Enclosed is one application submitted for one unexpired term, ending on April 30, 2015 on the Public Art Commission. At the Council Meeting on October 22, 2012, the City Council may move to interview the applicant, or reopen the recruitment. A copy of Orna Makleff’s application is attached. It has been redacted at the request of the applicant. The non-redacted application will be emailed to Council Members directly. ATTACHMENTS:  : Makleff Application (PDF) Department Head: Donna Grider, City Clerk Page 2 ·' '" . I Please Return to: Office oftbe City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2571 CITY OF PALO ALTO PUBUC ART COMMISSION SUPPLEMENTAL OUESTIONNAIRE Name: Oma Makleff Date: 9.28.2012 Please print or type your answers to the following questions and submit with your completed application. You may submit additional sheets. if necessaty. to complete your answers. 1. Have you attended the following meeting? • Public Art Commission Yes D (Date: ___ ----.I. 2. How did you Learn about the vaca:ncy on the Public Art Commission? No [l} CommUJJity Group: D Palo Alto Weekly: D The Daily Post: D website:DfYe5.Pleaseldentify: _____________ _ Email from City Clerk: D Libnay Bulletin Board: D Other. Please Specify: Conversation with current member FlyerlBookmark: D 3. Describe your involvement in community activities. vobmteer and civic organizations: The docent-training program at the Fine Arts Museums of San Francisco is a volunteer-based activity. During the past two years, it involved numerous hours of studying, driving. and docent practices in the museum. It is a manifestation of my commitment to completing the program and to do art outreach work. Past volunteer activities in Palo Alto included writing and editing a newsletter for a local group and school parent-volunteer activities in PTA and school events. I 4. What is it about the Public Art Co.mmission that interests you? What qualities. experience and expertise would you bring to tlKl Public Art Commission? Public art is just that-for the public to enjoy and benefit. Choosing artworks, placing them, and preserving them are decisions of great responsibility. It is a great challenge to balance the responsibilities towards the community, the artists, and the artworks themselves. My interest in art, education and involvement with the practice and theory of art and art history, and collecting experience will benefit any such process of decision-making. Another favorite challenge is to be an advocate for artworks that are not immediately endearing and opening someone's eyes to the hidden beauty of an artwork. Bds/Commissions -702-23 9/13/2011 .<' • 5. How would you see your role as board member when recommending policy and working with the Cowcil? If it were necessary to change current roles, how would you approach making such changes? As a board member, I see my role as advocating for art in the public sphere, artwork that will create interest and exchange of opinion and will reflect the varying interests of the community. Any changes in the role can be addressed when they arise, with the long-term goal of making Palo Alto an art-conscious community. 6. What are the current issues facing the Public Art Commission? Working within the available budget is always a concern in complicated economic times. However, apart from this more obvious concern, the commission might want to address new media and new forms of art that might appeal to a younger generation tuned to instant and ever changing communication and messages. Site-specific, temporary exhibits may be a more budget-conscious way to bring more art to the public. Palo Alto is fortunate to have Stanford University as its neighbor, and perhaps some cooperation is possible between the city and the University's art collection and museums. 7. What are your feelings about Palo Alto's current inventory/collection of Art in Public Places? What suggestions would you have for increasing the availability of more Art in Public Places? The public sculptures and murals are the most obvious and pleasing and whenever pOSSible, I would support these. Paintings can be exhibited in public buildings and schools, although they would reach a smaller audience. The current collection can benefit from increasing publicity and tours of the collection. The proximity to Silicon Valley is another benefit that can be utilized. Cooperation with local companies can be attempted either in funds, in loans of artworks, and in new exhibits of new media temporary artworks. 8. If apPOinted. what specific goals would you like to see the Public Art Commission achieve? Art enhances everyone's life. Even when people disagree about a specific artwork, we underestimate the benefits of the work just being there, creating interest, exchange. perhaps opening eyes to differences in style and unique approaches. The commission is already achieving that goal and should be encouraged to continue in that direction. Palo Alto is a varied and unique communily-are there other innovative ways to serve and advance the city with public art? The commission could consider an even wider role for art in the public sphere, temporary. auditory, participatory, and site-specific. In addition, the commission might consider how it is perceived by the public-are the commission's efforts acknowledged and appreciated, and are there any unanswered needs? Bds/Commissions -702-23 9/13/2011 CITY OF PALO ALTO OFFICE OF THE CITY CLERK October 22, 2012 The Honorable City Council Palo Alto, California Selection of Candidates to be Interviewed for the Library Advisory Commission for One Unexpired Term Ending on January 31, 2014 Enclosed is one application submitted for one unexpired term, ending on January 31, 2014 on the Library Advisory Commission. At the Council Meeting on October 22, 2012, the City Council may move to interview the applicant, or reopen the recruitment. This is the second time we have recruited for this vacancy. No applications were received the first time. Three terms on the Library Advisory Commission are set to expire in January 2013. Recruitment for those terms is scheduled to begin in mid-November. A copy of Howard Ocken’s application is attached. It has been redacted at the request of the applicant. The non-redacted application will be emailed to Council Members directly. ATTACHMENTS:  : Ocken Application (PDF) Department Head: Donna Grider, City Clerk Page 2 6, What do you see as some of the key challenges in implementing the recommendations of the Commission's December 2006 report to Council "Library Services Model Analysis and Recommendations: http://www.cityofpaloalto.org/knowzone/agendas/library.asp 1\t.-1-<:,0"" S~b ~-:> bt.., \'W~\ ,,~\~\,,~~(>~I-> S~~~~\ 1~ \S ~~ ov.\~\~ ,~\"J(,~ ~ 0.)V\s~f\,\d\'6V\ ~ 1~ lAJ.W \\~1ck1~ ~ A~ ~~Ii\JV.. 7, If appointed, what specific goals would you like to see the Library Advisory Commission achieve? EItcSUK. -'rU -\~ ~ ~~ ~(h ~1A,~h~ \.;. ttw~ ~ ~l d 1\rc.JiSo t.t<, ~ lW ",I ...\:k, 1'-' mle t 4lw 6 P ",.L \il+" \,\,v-.,\ '\~~. Bds/Commissions -702-23 9/13/2011 CITY OF PALO ALTO OFFICE OF THE CITY CLERK October 22, 2012 The Honorable City Council Palo Alto, California Selection of Candidates to be Interviewed for the Parks and Recreation Commission for Four Terms Ending on December 31, 2015 Enclosed are four applications submitted for four terms, ending on December 31, 2015 on the Parks and Recreation Commission. At the Council Meeting on October 22, 2012, the City Council will select the candidates to be interviewed for the Parks and Recreation Commission, with the interview date to be determined. Council may move to interview all applicants, only specific applicants, or reopen the recruitment. Copies of all applications are attached. Some applications may be redacted at the request of the applicant. A full set of non-redacted applications will be emailed to Council Members directly. The applicants are as follows: 1. Jennifer Hetterly 2. Ed Lauing 3. Keith Reckdahl 4. Nounou Taleghani ATTACHMENTS:  : Hetterly Application (PDF)  : Lauing Application (PDF)  : Reckdahl Application (PDF)  : Taleghani Application (PDF) Department Head: Donna Grider, City Clerk Page 2 Cm OF PALO ALTO BOARD AND COMMISSION APPLICATION PARKS AND RECREATION COMMISSION List relevant training and experience, certificates of training, licenses, or profession~1 registration . 1. Professional public policy experience as an appointee in the U.S. Department of Health and Human Services. Served in a variety of roles responsible for developing policy, negotiating legislation, writing and implementing regulations, coordinating program operations, and outreaCh, communication and negotiation with state and local government entities and non- governmental organizations. 2. Personal experience as a lifelong, avid and frequent user of Palo Alto's Parks and Recreation resources. As a child, teenager, adult and parent, I have used Palo Alto's open spaces for hiking, camping, fishing, mountain biking, bird watching, field trips, picnicking and sodallzlng. In those same capacities I have taken advantage of Palo Alto's neighborhood parks for organized and pick-up sports, picniCS, parties and play. I, and three generations of my family, have also indulged in the CitY's wealth of recreational offerings including participation in and patronage of Children's Theatre activities and frequent enrollment in community summer camps and dasses. Finally, my family and I maintain a plot in the community garden behind the Midtown Shopping Center. Although that Is not a City of Palo Alto garden, it has introduced us to a variety of challenges inherent in such a communal setting. 3. Volunteer experience as described in item #3 of the Supplemental Questionnaire. Parks and Recreation Commission Application Jennifer Chang Hetterly CITY OF PALO ALTO PARKS AND RECREATION COMMISSION Supplemental QuestioDoaire OHLONE ELEMENTARY SCHOOL Parliamentarian, PTA Executive Board, 2008/2009 -present· . I ensure that PTA actions, meetings, and activities comply with Ohlone's PTA bylaws, chair and convene a· Bylaws Committee, manage biennial revisions of bylaws and standing rules, and convene and advise a Nominating Committee to produce the slate of PTA officers for the following year. I also discuss and make decisions regarding long and short-term priorities for the PTA and deliberate on all questions before the Executive Board. Vice President for Community Building, PTA Executive Board, 2007/2008 I assisted and supported school volunteers running PTA sponsored community building activities, acted as liaison between event chairs' and the Executive Board[ oversaw event caler::ldar, helped with publicity and volunteer recruitment[ and tracked recommendations for improving future activities. I also helped develop long and short-term priorities for the PTA and deliberated on PTA concerns as they arose. Room Parent, 2006/2007 I advised classroom families about school events, organized class events, recruited classroom volunteers and field trip chaperones, and assisted the classroom teacher in various ways. Parent Volunteer, 2004 -present I provide instructional help in the classroom, check student work, chaperone field trips, provide maintenance and animal care on the .school farm[ set-up, participate and clean up for classroom events and school-wide fund raising events, community building events, and miscellaneous activities. GREENMEADOW COMMUNITY ASSOCIATION Secretary, Swim Team Executive Committee, 2008-2009 I drafted Committee positions regarding Association pOlicies, kept official minutes, discussed and made decisions regarding planning and day':'to-day management and operation of the swim team. This Committee formed in 2008 after several years without a swim team board or committee and significant recent transitions in program management[ pool usage and swim team leadership. The Committee'provided a coordinated approach·to swim team planning and operations, and communication with the Association and with the Junipero Serra Swim League. In this first year, we developed and instituted a comprehensive website for information, registration, meet participation, results tracking, volunteer coordination, Coach-in-Training activities and team schedules, and managed over 50% growth in enrollment. Parks and Recreation Commission Supplemental Questionnaire -Jennifer Chang Hetterly Page 2 CITY OF PALO ALTO PARKS AND RECREATION COMMISSION Supplemental. Questionnaire PARENTS NURSERY SCHOOL co-op Business Manager, Executive Board, 2004/2005,2005/2006 . I managed payroll and withholding for directors, teaching aides and resource teachers, managed the school's insurance policies, processed nonprofit and welfare exemption paperwork, filed bUSiness property statements with the County, and processed and filed federal and state payroll taxes. I also discussed and made decisions regarding long and short-term priorities as well asday-to-day management and operation of the school. Parent Volunteer, 2004/2005, 2005/2006 As co-op member, I taught in the classroom one day a week, participated in parent night meetings two or three times a month, and shared responsibility for fundraising/ site maintenance and day to day operations of the school. AYSO SOCCER Coach, Under 9 girls division, 2006 Parent Volunteer, kinders to' Under 12 girls divisions/ 2006 -present 4. What is it about the Parks and Recreation Commission that interests you? What qualities, experience and expertise would you bring to the Parks and Recreation Commission? I spent my childhood in Palo Alto, using the City's parks and recreation resources extensively. The recreational opportunities made available through Palo Alto's parks, open spaces and community activities provided a critical backbone for the lessons my parents and teachers taught me about sCience, nature and health, and about my place in society and on the planet. After several years on the East Coast, I returned with my family to Palo Alto In 2004 and have enjoyed those same resources even more as an adult and with a newgeneration of children. I am amazed and grateful that, decades later, all those assets have been preserved and improved. And I have wasted no time in exploiting them for the benefit of my own children's personal development. I am interested in the Parks and Recreation Commission because it plays a vital part in the Community Services Divisions' work for the preservation and continued . availability of Palo Alto's outdoor and indoor learning assets. Having benefited so greatly from those assets, I want to playa more active part in preserving and enhancing them. Because of the breadth of my experience in the federal government, as listed in my Application, I would bring to the Commission a well grounded understanding of government operations, skill at deciphering budgets and legislation, experience Parks and Recreation Commission Supplemental Questionnaire -Jennifer Chang Hetterly Page 3 CITY OF PALO ALTO PARKS AN.D RECREATION COMMISSION Supplemental Questionnaire facing the challenges of translating vision into sustainable policy, and skill at navigating through the interests of diverse and vocal stake holders. In addition to my personal interest and professional expertise, I wo~ld bring to the Commission the perspectives of a broad and ~ctive community of Palo Alto residents. In my work "for various boards and committees, I strive to understand the concerns of outspoken individuals and to reach out and solicit the opinions of less vocal members of the community. Through my volunteer activities and my participation In organized sports and community gardening, I have formed lasting relationships with a wide network of residents and community leaders from north to south Palo Alto. I would rely on their insights as a vital complement to my own opinions in considering Commission policy. Finally, I would bring to the Commission a lifelong love and respect for this community and our outdoor spaces. And a firm belief that passing on a commitment to our local resources, by our example, is critically Important to our children's development, to the protection of our finite natural resources, and to the preservation of our quality of life here in Palo Alto. 5. How would you see your role as a commissioner when recommending policy and working with the Council? My role as Commissioner would be to provide evenhanded conSideration of parks and recreation issues, informed by personal experience and input from a broad community of Palo Alto residents. As volunteers from within the community, the Commissioners serve as a valuable conduit for community input that can help bring to light relevant gaps in or between the Council's vision for the Department and the Divisions' practical implementation of parks and recreation policy. 6. What are the current issues that the Parks and Recreation Commission will face? • How to maintain and manage services, parks and open spaces in the face of drastically shrinking budgets. • Teen health and what the Divisions can do to improve services to that troubled cohort. • Baylands tranSitions, including composting and recycling operations, the proposed hotel/conference center at the Mings Restaurant site, and continued discussions about Increased/improved bike and pedestrian access at San Antonio and/or Colorado Avenue. • Opening .Foothills Park to non-resident access. Parks and Recreation Commission Supplemental Questionnaire -Jennifer Chang Hetterly Page 4 CITY OF PALO ALTO PARKS AND RECREATION COMMISSION Supplemental 'Questionnaire • Continued oversight of scheduled field usage at parks. • Continued discussion of options for expanding off leash opportunities and open space usage for dogs and their owners., 7. If apPointed, what specific goals would you like to see the Parks and Recreation Commission achieve? • Consider crosscutting ways to address teen health. For example: working together with schools to coordinate after school sports, homework, and enrichment activities to accommodate later start times. at secondary schools. • Ensure that any new development adjacent to the Baylands actively mitigates the impact of added pressures (due to increased foot, bicycle, and car traffic) on the Baylands Preserve. . . • Review watering and mowing schedules in neighborhood parks to reduce flooding and water waste. • Increase offerings and review coaching consistency for after school sports In middle schools. i • Ensure the continued availability of swings in our neighborhood parks. Parks and Recreation Commission Supplemental Questionnaire -Jennifer Chang Hetterly Page 5 CITY OF PALO ALTO PARK AND RECREATION COMMISSION SUPPLEMENTAL QUESTIONNAIRE Please Return to: Name: t? '1) tktA . .' tt1 ~ ----------------------~--------------------Office of the City Clerk 250 Hamilton Avenue Palo Alto, CA 9430 I 650-329-2571 Date: (01 ~ II 'V ----------------~(~~~--------------------- Please print or type your answers to the following questions and submit with your completed application. You may submit additional sheets, if necessary, to complete your answers. 1. Have you attended the following meeting? • Park and Recreation Commission Yes [iJ ~Cv-l! (5XN-r-) No (Date: IM.,..-3~') D 2. How did you Learn about the vacancy on the Park and Recreation Commission? Community Group: 0 Palo Alto Weekly: 0 The Daily Post: 0 Website: DIfyes, please identify website: _________________ __ Email from City Clerk: 0 Library Bulletin Board: 0 FlyerlBookmark: D Other, Please Specify: ______________________________ __ 3. Describe your involvement in community activities, volunteer and civic organizations: 4. Bds/Commissions -702-23 SSl that interests you? What qualities, experience and Ion Commission? 9/13/2011 5. How would you see your role as commissioner when recommending policy and working with the Council? If it were necessary to change current roles, how would you approach making such changes? 6. What are the current issues facing the Park and Recreation Commission? 7. If appointed, what specific goals would you like to see the Parks and Recreations Commission achieve? Bds/Cornrnissions -702-23 9/13/2011 ) ) ) ') CITY OF PALO ALTO PARKS AND RECREAnON COMMISSION lu.lem.Dtal QulltiODDlire 4. What is It about the Parks and Recreation CommiSsion that interests you? What qualities, experience and expertise would you bring to the Parks and Recreation Commission? + One could argue that parks and recreation are the essence of Palo Alto. Along with the school system it is a driving force as to why people dloose to live in our community. + I have demonstrated interest and involvement in the nueation community + I have served tirelessly on numerous boards and subcommittees; I know how to get things done effectively with fellow board members. + In my executive roles I have had to drive the "vision" as well as the activity of the organization. 5. How WQuld you see your role as a commissioner when recommending policy and working with the Council? +As stated the role is strictly adviSOry to the coundl. Commissioners have to do detailed homework on key issues and be effectively prepared to give counsel. The role i$ not unlike a legislative staff member who does background work to inform a representative so he/she can take up positions and make judgments on them. 6. What are the current issues that the Parks and Recreation Commission will face? + t don't presume to know in advance the Commission's priorities or fun scope of responsibilities. That said, I know one ongoing issue that I have been involved with In my nine years of youth baseball is field space for youth sports in Palo' Alto. Some real progress has been made, but this one is not totally fixed. + This is Simply an area I think I can add significant value to given my experience and Interest. 7. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve? + I would reference my answer to QUestion one. Please Return to: Office of the City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2571 CITY OF PALO ALTO PARK AND RECREATION COMMISSION SUPPLEMENTAL QUESTIONNAIRE Name: Keith Reckdahl Date: October 11, 2012 Please print or type your answers to the following questions and submit with your completed application. You may submit additional sheets, if necessary, to complete your answers. 1. Have you attended the following meeting? Yes No • Park and Recreation Commission D (Date: _____ -...L) o 2. How did you Learn about the vacancy on the Park and Recreation Commission? Community Group: D Palo Alto Weekly: D The Daily Post: D Website: DIfyes, please identify website: _____________ _ Email from City Clerk: D Library Bulletin Board: D FlyerfBookmark: D Other, Please Specify: suggested by Jen Hetterly 3. Describe your involvement in community activities, volunteer and civic organizations: Member of the Charleston Meadows Association board the last 4 years 4. What is it about the Park and Recreation Commission that interests you? What qualities, experience and expertise would you bring to the Park and Recreation Commission? We have two children (ages 11 and 13) and we extensively use the city parks and open space. Our kids rely on our neighborhood parks for recreation, so we understand the importance of city parks and how they affect our quality of life. I periodically bike to work, which has made me much more aware of the advantages and challenges of bicycle commuting. For my kids, their bikes are the lifeline to the outside world. Without safe and convenient bike routes, they would require much more parental driving, which would reduce their independence and increase car traffic. Bds/Commissions -702-23 9/13/2011 5. How would you see your role as commissioner when recommending policy and working with the Council? If it were necessary to change current roles, how would you approach making such changes? I see my role as a community conduit and an impartial advocate of park issues. The City Council mainta.ins a big picture view, while the Park and Rec staff are working in the trenches. I would help the staff shape the Council's vision, while also helping the staff to implement the Council's vision within the departments' many constraints. 6. What are the current issues facing the Park and Recreation Commission? The increasing population of Palo Alto and the valley is increasing the demand on Palo Alto parks and recreation, while tight city budgets make it difficult to maintain the status quo, much less improve facilities or programs. For example, the huge demand for athletic fields and the limited land and money to build additional fields. Similarly, Arastradero Preserve has become so popular that it is difficult to find parking on weekends. 7. If appointed, what specific goals would you like to see the Parks and Recreations Commission achieve? Making Palo Alto even more bike friendly, by increasing the number of bike routes and increased number and quality of bike racks in parks and shopping areas. Improving shade for spectators at athletic fields. Constructing a covered play structure, to provide recreation for stir-crazy kids on rainy days. Bds/Commissions -702-23 9/13/2011 5. How would you see your role as commissioner when recommending policy and working with the Council? If it were necessary to change current roles, how would you approach making such changes? 6. What are the current issues facing the Park and Recreation Commission? 7. If appointed, what specific goals wouid you like to see the Parks and Recreations Commission achieve? Bds/Commissions -702-23 9/13/2011 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR October 22, 2012 The Honorable City Council Palo Alto, California Policy and Services Committee Recommendation to Accept the Report on the Status of Audit Recommendations (June 2012) Municipal Code requires the City Auditor to issue an annual report to follow up on the implementation status of audit recommendations from completed audits. Our reporting summarizes the status of 64 audit recommendations from 8 completed audit reports. This includes 33 recommendations that were included in our last status report and 31 new audit recommendations from audit reports issued during this past fiscal year. Updates to the Audit of Employee Ethics Policies and the Audit of Citywide Cash Handling and Travel Expenses were provided and included since the meeting on September 11. The City Auditor’s Office recommends acceptance of the Report on the Status of Audit Recommendations (June 2012). At its meeting on September 11, the Policy and Services Committee approved and unanimously recommended the City Council accept the report. The Policy and Services Committee minutes are included in this packet. Respectfully submitted, Jim Pelletier City Auditor ATTACHMENTS:  Attachment A: Updated Report on the Status of Audit Recommendations (June 2012) (PDF)  Attachment B: Policy and Services Committee Meeting Minutes Excerpt (September 11, 2012) (PDF) Department Head: Jim Pelletier, City Auditor Updated: 10/17/2012 12:13 PM by Deniz Tunc Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR September 11, 2012 The Honorable City Council Attention: Policy & Services Committee Palo Alto, California Report on the Status of Audit Recommendations (June 2012) RECOMMENDATION We recommend the Policy and Services Committee review and accept the attached report. SUMMARY Municipal Code requires the City Auditor to issue an annual report to follow up on the implementation status of audit recommendations from completed audits. Our reporting summarizes the status of 64 audit recommendations from 8 completed audit reports. This includes 33 recommendations that were included in our last status report and 31 new audit recommendations from audit reports issued during this past fiscal year. A summary can be found in Attachment A. The ‘Current Status’ of each recommendation represents what was reported by City staff responsible for its implementation. Due to the nature and complexity of different audit findings, the Office of the City Auditor did not validate every response we received from City staff. Changes to the Report In an effort to provide better information to support City Council decision making, we have made many significant changes to how we report the status of audit recommendations. The report now includes columns for: Finding - a summary of the audit finding included in the audit report Rating - a rating system that has been developed to enable stakeholders to determine the relative importance of each recommendation (ratings were not set for ‘Completed’ recommendations): o Essential - Essential Recommendations are those that would help the City avoid a potentially critical negative impact involving loss of material assets, reputation, critical information, or ability to comply with the most important laws, regulations, code, contracts, agreements, policies, and/or procedures o Significant - Significant Recommendations are those that would help the City avoid a potentially significant negative impact to assets, reputation, information, Attachment A Updated: 9/5/2012 11:38 AM by Deniz Tunc Page 2 or ability to comply with important laws, regulations, code, contracts, agreements, policies, and/or procedures o Useful - Useful Recommendations are those that would help the City to improve controls, avoid problems in operations, and/or increase the efficiency and effectiveness in the use of City resources Target Date - the implementation date set by the department during this most recent follow up process o You will note that there are certain Audit Recommendations with a red circle () next to the New Target Date. This circle indicates recommendations that have not been implemented in a timely fashion. Current Status - this field has been updated to summarize comments from prior years’ reports and add the current year’s status Finally, we have included two versions of the report. The first, Attachment B, is a comprehensive report of all recommendations regardless of their current status. Recommendations that have been reported by management to be complete are in gray. The second report, Attachment C, includes only recommendations that are ‘In Process’ or ‘Not Started’ (excludes recommendations that have been completed). Noteworthy Outstanding Audit Recommendations There are many Audit Recommendations that have not been implemented in a timely fashion. In this year’s report, the OCA highlights those recommendations with a red circle (). I respectfully request that particular attention is given to these to ensure that City staff is taking appropriate actions to address the concerns represented by these recommendations. Respectfully Submitted, Jim Pelletier City Auditor ATTACHMENTS:  Attachment A: Summary of Audit Recommendations (PDF)  Attachment B: Status of Audit Recommendations (PDF)  Attachment C: Status of 'In Process' and 'Not Started' Audit Recommendations (PDF) Department Head: Jim Pelletier, City Auditor Attachment A Updated: 9/5/2012 11:38 AM by Deniz Tunc Page 3 Attachment A Attachment A: Summary of Audit Recommendations Table/Chart 1: Audit Recommendation Status by Audit Report Title Issue Date Completed*In Process Not Started Total Audit of Overtime Expenditures 11/18/2003 3 0 0 3 Audit of Restructuring Efforts & Mgt Span of Control 4/20/2004 1 0 0 1 Audit of Employee Ethics Policies 1/23/2008 1 2 0 3 Audit of Fleet Utilization & Replacement 4/14/2010 6 10 0 16 Audit of Citywide Cash Handling & Travel Expenses 9/5/2010 5 5 0 10 Audit of Purchasing Card Transactions 9/20/2011 6 0 0 6 SAP Security Audit 10/18/2011 13 2 6 21 Audit of the Use of Library Bond Proceeds 12/6/2011 3 1 0 4 TOTAL 38 20 6 64 *since last report Table/Chart 2: Audit Recommendation Ratings by Audit Report Title Issue Date Essential Significant Useful Not Rated*Total Audit of Overtime Expenditures 11/18/2003 0 0 0 3 3 Audit of Restructuring Efforts & Mgt Span of Control 4/20/2004 0 0 0 1 1 Audit of Employee Ethics Policies 1/23/2008 1 1 0 1 3 Audit of Fleet Utilization & Replacement 4/14/2010 0 8 2 6 16 Audit of Citywide Cash Handling & Travel Expenses 9/5/2010 0 4 3 3 10 Audit of Purchasing Card Transactions 9/20/2011 0 0 0 6 6 SAP Security Audit 10/18/2011 3 4 1 13 21 Audit of the Use of Library Bond Proceeds 12/6/2011 0 1 3 0 4 TOTAL 4 18 9 33 64 *Completed before rating system was established Audit Recommendation Status Audit Recommendation Ratings Completed* 60% In Process 31% Not Started 9% Audit Recommendation Status Completed* In Process Not Started Essential 6% Significant 28% Useful 14% Not Rated* 52% Audit Recommendation Ratings Essential Significant Useful Not Rated* Attachment A Attachment B: Status of Audit Recommendations (All Since Last Report) 1. AUDIT OF OVERTIME EXPENDITURES Issued: November 2003 Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 1 A number of SEIU contract provisions are confusing and subject to interpretation 13 Clarify the following contract provisions through use of specific examples: • That call-out pay begins from the time of the call out and specify how much time the employee is allowed for travel. The Merit Rules should be revised to reflect the SEIU call-out provision; • The intent of the rest period provision and how an employee is paid: (a) for the eight-hour rest period, and (b) if the rest period overlaps the regular work schedule; and • The intent of the in-lieu meal provision and its relationship to the rest period. Such clarification should be communicated to employees who are affected by the provisions as well as to timekeepers. Human Resources N/A Completed Recommendation reported as completed. Not started until the 2006 SEIU contract renegotiation and further delayed due to subsequent discussions with all bargaining units. The 2006-09 SEIU MOA clarified the provisions for meals, overtime, rest periods, and the meal relationship to rest periods. 2012 Management Update: Human Resources and the City Attorney's Office updated the Merit System Rules and Regulations to correspond with the SEIU Memorandum of Understanding (MOU) provisions to clarify and remedy inconsistencies between the two documents. The draft revision to the Merit Rules, Chapter 5, Section 511, addresses the call- out pay issues. Since the SEIU MOA supersedes Merit Rule provisions, City departments are responsible for managing and approving appropriate pay and overseen by HR in accordance with SEIU contract provisions. HR periodically trains managers to ensure pay is appropriately handled. Based on this, HR considers this recommendation closed.1 The City needs to review the FLSA designations of all employees 16 Human Resources should revise job descriptions and overtime policies and procedures to appropriately reflect the FLSA designation of each position. If within a single job classification, it is determined that some employees are exempt while others are non-exempt, then separate job descriptions/ classifications should be written. If the City determines that a particular employee meets the criteria to be deemed exempt for FLSA purposes but the City decides to pay that employee overtime, the job description, policies and procedures, other documentation, and the Lawson computer system should all clearly indicate that the position is exempt but that the City is paying overtime for the position. Human Resources N/A Completed Recommendation reported as completed. Not started until 2008 due to budget and staffing constraints. Fox Lawson completed the management classification and compensation study. The City Attorney’s Office contracted with outside council to review the FLSA designation of 93 positions in the management/professional group. FLSA designation changed for 10 classifications and have been reflected in the SAP system and also on the job descriptions. HR completed revision of the job descriptions for the management/professional group in July 2010. 2012 Management Update: HR has developed a new job description for a classification that was concluded to have one exempt employee and two non-exempt employees. All salary schedules and job descriptions now clearly indicate which positions are exempt and which are non-exempt, eligible for overtime. HR believes that the revision of the overtime policies and procedures is helpful, but nor required at this time since SAP controls will not allow an Exempt employee to code overtime. Based on this, HR considers this recommendation closed.1 The City's practices are inconsistent with regard to the use of administrative leave 19 Human Resources should clarify, through a policy, union contracts and compensation plans, the appropriate uses of administrative leave and other additional paid time off that may be granted to employees. Human Resources N/A Completed Recommendation reported as completed. Implementation delayed due to contract renegotiations and subsequent discussions with all bargaining units 2012 Management Update: Since recommendation made, approval process has been updated. HR revised the Merit Rules, Chapter 8, Section 808, to clarify the appropriate uses of administrative leave. It includes additional language which states, “The reasons such leave is approved and deemed in the best interests of the City shall be documented on a Personnel Action Form with appropriate explanation and tracked in SAP.” HR staff has reviewed all policies and union contracts (there are no longer compensation plans) and determined that further updates are unnecessary because the overall rule used for granting administrative leave is reflected in the Merit rules. Report on the Status of Audit Recommendations as of June 30, 2012 Page 1 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 2. AUDIT OF RESTRUCTURING EFFORTS AND MANAGEMENT SPAN OF CONTROL Issued: April 2004 2 Improve position control over regular positions 13 Human Resources should reconcile and correct discrepancies in job titles between the SAP and Lawson computer systems and the employees’ job descriptions, position titles, compensation plans, the employee directory, organization charts, and the working titles that employees actually use. Human Resources N/A Completed Recommendation reported as completed. Implementation delayed due to complexity and required discussions with the different bargaining units. HR reports they have made progress in resolving discrepancies between SAP, the Management Compensation Plan, job descriptions, and the labor agreements. The management classification study also contributed to this effort. HR reports that there are 473 job titles within the City. The classification titles in the Management and Professional Compensation Plan and the SEIU Compensation Plan were reviewed and completed. 2012 Management Update: The classification titles for Firefighters (IAFF), Fire Chiefs' Association (FCA), and Police Officers (PAPOA) were reviewed during recent labor negotiations. One title change in FCA will be taken to Council for approval in September 2012. In addition, staff has found a solution to reflect working titles in SAP. HR considers this recommendation closed.3. AUDIT OF EMPLOYEE ETHICS POLICIES Issued: January 2008 3 The City should adopt an employee code of ethics and formalize its employee ethics program 4 The City should develop a code of ethics that employees can use as a guidepost for avoiding conflicts of interest, for ethical behavior, for deciding what actions are needed when conflicts of interest occur, and for making decisions. Employees should be required to read and sign an acknowledgment of the policy. City Manager Essential In Process Spring 2013 As of March 2011, the City retained the services of Dr. Tom Shanks of The Ethics Company to assist with the development of the City's values based ethics code of conduct, policy development and implementation, employee interviews, training implementation program and first round of citywide training. The project goal was to be completed by Spring 2012. 2012 Management Update: The consultant completed the internal staff interviews and met with the City’s Executive Leadership Team on numerous occasions. However, the consultant did not complete or provide to the City the deliverables related to the project. The City Attorney is now preparing a formal letter to terminate the contract with The Ethics Company and to collect any and all materials related to the project from Dr. Shanks. Staff is in the process of securing outside assistance to complete the project. 3 The City should adopt an employee code of ethics and formalize its employee ethics program 5 The City should formalize its policy on ethics training and ensure that employees attend periodic training updates. City Manager Significant In Process Spring 2013 As of March 2011, the City retained the services of Dr. Tom Shanks of The Ethics Company to assist with the development of the City's values based ethics code of coduct, policy development and implementation, employee interviews, training implementation program and first round of citywide training. The project goal was to be completed by Spring 2012. 2012 Management Update: The consultant completed the internal staff interviews and met with the City’s Executive Leadership Team on numerous occasions. However, the consultant did not complete or provide to the City the deliverables related to the project. The City Attorney is now preparing a formal letter to terminate the contract with The Ethics Company and to collect any and all materials related to the project from Dr. Shanks. Staff is in the process of securing outside assistance to complete the project. Report on the Status of Audit Recommendations as of June 30, 2012 Page 2 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 3 The City should establish an employee hotline and whistleblower protection policies and procedures 7 The City Manager should form a working group to (1) establish policies and procedures for handling employee complaints of waste, fraud, and abuse through normal supervisory channels; (2) establish and monitor a hotline for anonymously reporting fraud, waste and abuse; (3) develop procedures for reporting, investigating, handling, and following-up on hotline reports; and (4) develope whistleblower policies and procedures. City Manager N/A Completed Recommendation reported as completed. As of July 2012, the City contracted with EthicsPoint to provide an anonymous, employee- only fraud, waste, and abuse hotline. The City Auditor worked with the City Manager and City Attorney to create a policy for administering the hotline that was approved by both the Policy & Services Committee, as well as the full Council. The policy includes a section for whistleblower protection. The policy established a Hotline Review Committee comprised of the City Auditor, City Manager, and City Attorney to handle each case that comes through the hotline. The City Auditor is working with EthicsPoint to finalize setup and peripheral details. The hotline will be officially launched by the end of August 2012. 2012 Management Update: No Update Provided 2012 OCA Update: The City Auditor worked with the City Manager and City Attorney to develop the Policy for Administering the Fraud, Waste, and Abuse Hotline. The Hotline went live on 8/24/12. 4. AUDIT OF FLEET UTILIZATION AND REPLACEMENT Issued: April 2010 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 1 Public Works Department fleet management should continue to freeze replacement of non-urgent vehicles and equipment until it can reduce the size of the fleet and increase utilization. Public Works N/A Completed Recommendation reported as completed. All vehicle replacements are handled on an as-needed basis and purchases are made only after review and approval from the Fleet Review Committee (FRC). A total of 42 vehicles were removed, including 26 removed from fleet inventory and 16 moved to a communal motor pool. The elimination represents an over 10% fleet reduction. 2012 Management Update: Staff included a small CIP for FY 2013 that included the most critical replacements and is currently prioritizing and developing a FY 2013 midyear CIP adjustment for a few additional pieces of critical equipment. Additionally a 5 year CIP plan is being developed which will be revised annually during the normal budget cycles. Recommendations will be based on a thorough review of the need, seeking out alternatives, evaluation of cost effectiveness and ultimately approval by the FRC prior to inclusion in the budget. Underutilized vehicles are being evaluated every year through an established process during which the Fleet Manager makes recommendations to 1) remove vehicle from service 2) place vehicle in a pool environment 3) review in 12 mos. if there are extenuating circumstances leading to the underutilization or 4) exempt based on business needs. The recommendations then can be appealed by the departments during a one on one session with the FRC; however, the FRC's decisions are final and the future of the vehicle is based on this determination.4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 2 PWD Fleet Management should develop an action plan for increasing fleet utilization and identify an optimal fleet size and composition that includes eliminating or re- assigning underutilized vehicles, exploring opportunities to rent specialized equipment or seasonal use of equipment, not replacing vehicles, utilizing mileage reimbursement, rotating vehicles, and placing underutilized vehicles and equipment in a central motor pool. Public Works N/A Completed Recommendation reported as completed. Public Works and the FRC began the process of developing an optimization action plan, starting with evaluating underutilized transport vehicles, implementing a plan to reassign vehicles, and/or removing them from the fleet. The next step is evaluating specialized vehicles and equipment. 2012 Management Update: Underutilized vehicles are being evaluated every year through an established process during which the Fleet Manager makes recommendations to 1) remove vehicle from service 2) place vehicle in a pool environment 3) review in 12 mos. if there are extenuating circumstances leading to the underutilization or 4) exempt based on business needs. The recommendations then can be appealed by the departments during a one on one session with FRC; however, the FRC's decisions are final and the future of the vehicle is based on this determination. Staff has just received proposals for leasing of vehicles and after evaluation will take the findings to Council for direction. In addition an overall independent study of Fleet operations will be conducted this year to determine if additional operational efficiencies should be made. Results of this study will be brought to Council for review as part of the 2014 budget. Report on the Status of Audit Recommendations as of June 30, 2012 Page 3 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 3 The Public Works Fleet Management should complete implementation of a centralized Citywide vehicle and equipment pool, and make the Citywide pool accessible to all departments. Public Works Significant In Process 09/30/12 The existing automated pool vehicle management system located at the Municipal Services Center (MSC), Building B is being expanded and upgraded. Automated motor pools will be established at MSC, Building C, Civic Center, and the Utilities Department's Elwell Court locations. The pool vehicle management system will provide web-based or spontaneous vehicle reservation capability, and automated vehicle key management. Also, the feasibility of contracting out pool vehicles with a third-party provider is being evaluated. 2012 Management Update: Hardware has been installed in the vehicles and key kiosks installed to implement this program. Vendor is providing training to staff in mid-August and it is anticipated the system will be rolled out to the City in September. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 4 The City Manager's Office and the Public Works Fleet Manager staff should review the fleet's minimum utilization standards and consider increasing the standards to more cost· effective levels. Public Works Significant In Process 06/01/13 Staff drafted revisions to the Vehicle/Equipment Policy, including revised utilization standards. 2012 Management Update: Staff is currently reviewing proposals for Consultant Services for an operational study which will include a review of the City's utilization standards, evaluation of industry standards, other public agencies and recommendations for increasing Fleet operations efficiency and effectiveness. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 6 Public Works Fleet Management should develop written standards, forms, and assessment criteria for the Vehicle Equipment Review Committee in their evaluations of fleet utilization such as: number of similar units in the fleet, average annual miles hours of similar units, consideration and description of special uses, cost- benefit of retaining the item in terms of program efficiency and service delivery, and mechanical condition. Public Works N/A Completed Recommendation reported as completed. A comprehensive analysis/assessment form was completed, reviewed by the Auditor, and is being utilized. The Vehicle/Equipment Policy is being revised to incorporate the new forms and standards. 2012 Management Update: Forms have been used in the FRC process. Adjustments were made based on feedback and are now finalized. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 7 Public Works Fleet Management should conduct routine annual utilization assessments to identify vehicles and equipment for retirement, redeployment, or inclusion into a centralized vehicle and equipment pool. PWD Fleet Management should provide this information for the Vehicle Equipment Review Committee to review the appropriateness of vehicle and equipment exemptions based on established criteria from Recommendation #6 (above). Public Works N/A Completed Recommendation reported as completed. Underutilized transport vehicles have been evaluated with an implementation plan for reassignment or removal. Comprehensive vehicle analysis/assessment forms are completed and utilized, and utilization standards will be reviewed and revised as part of a comprehensive update to the Vehicle/Equipment Policy. 2012 Management Update: Underutilized vehicles are being evaluated every year through an established process during which the Fleet Manager makes recommendations to 1) remove vehicle from service 2) place vehicle in a pool environment 3) review in 12 mos. if there are extenuating circumstances leading to the underutilization or 4) exempt based on business needs. The recommendations then can be appealed by the departments during a one on one session with the FRC; however, FRC's decisions are final and the future of the vehicle is based on this determination. Staff has just received proposals for leasing of vehicles and after evaluation will take the findings to Council for their direction. Report on the Status of Audit Recommendations as of June 30, 2012 Page 4 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 8 Public Works Fleet Management should have the authority and responsibility to manage and operate the City fleet to ensure optimized use of fleet resources. Public Works Significant In Process 06/01/13 Staff is revising the Vehicle/Equipment Policy to include a new description of PWD Fleet Management's authority and responsibility to manage and operate the City fleet. 2012 Management Update: Staff and the FRC will revise the Vehicle/Equipment Policy to include a new description of PWD Fleet Management's authority and responsibility to manage and operate the City fleet. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 10 PWD Fleet Management should revise the policy and procedures to clarify the take-home policy and conduct routine follow-ups with departments to document adherence to the policy. Public Works Significant In Process 06/01/13 Staff is revising the Vehicle/Equipment Policy to include clarifications to the take-home policy and will require take-home vehicle users to provide documentation to ensure their adherence to the policy. 2012 Management Update: Staff and the FRC are continuing to revise the Vehicle/Equipment Policy. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 13 Public Works Fleet Management should develop written criteria for assessing the need of non-rolling stock equipment. Public Works Useful In Process 06/01/13 Staff is revising the Vehicle/Equipment Policy to include new standards and criteria for assessing the need of non-rolling stock equipment. 2012 Management Update: Staff and the FRC are continuing to revise the Vehicle/Equipment Policy. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 14 Public Works Fleet Management should routinely review the database inventory for completeness and accuracy and develop necessary processes for departments to provide accurate and timely utilization data. Public Works Useful In Process 06/01/13 Staff shortages have delayed the implementation of this recommendation. Equipment Management is currently in the process of recruiting a Fleet Services Coordinator. 2012 Management Update: Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface, training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. Additionally staff will conduct a manual visual inventory to confirm the inventory is accurate. Report on the Status of Audit Recommendations as of June 30, 2012 Page 5 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 15 PWD Fleet Management and ASD Budget should revise the methodology for charging user departments to include the total cost of operating the City fleet, and project CIP budget needs over the five-year CIP cycle. Public Works N/A Completed Recommendation reported as completed. PWD Equipment Management and ASD staff restructured the budget for the Equipment Management Division to more accurately reflect the organization of activities within the division. Additionally, a new shop labor rate was developed and an overhead charge for vehicle replacement projects are included in the calculation of ongoing replacement charges. Staff will complete a review once a full year of actual expenditures and revenues have been recognized. 2012 Management Update: Staff has evaluated the methodology during and at the end of FY 2012 and the new methodology and cost center structure provide more accurate costs and ease of running reports. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 18 PWD Fleet Management and the City Manager's Office should develop a strategy to align future fleet replacements with the City's other strategies that promote CPP goals. Public Works N/A Completed Recommendation reported as completed. Although a formal strategy has not yet been developed, staff advises that the vehicle analysis/assessment form (#6) includes criteria for evaluating the suitability of available alternatively-fueled and hybrid vehicles, so that Climate Protection goals will be considered during the purchase review and approval process. 2012 Management Update: Staff continues to seek alternative fuel options by including them in the proposal for leasing and by evaluating other programs such as THINK City Electric Vehicle (EV) program. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 19 PWD Fleet Management should work with the Administrative Services Department and Utilities Department (for CNG) to develop a system to reconcile fuel purchases, balances, and consumption reports. Public Works Significant In Process 12/01/13 Staff is working with the Utilities Department to obtain the data necessary to begin periodic reconciliations of CNG. 2012 Management Update: Staff continues to work with the Utility Department to obtain necessary data and with the implementation of the software upgrade to FuelFocus will have better reporting capabilities for consumption. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 20 PWD Fleet Management should complete implementation of the fueling system at all city pumps and evaluate its effectiveness at providing internal controls over fuel Pump transactions. Public Works Significant In Process 06/01/13 Staff is in the final implementation stage of the new fuel management system. 2012 Management Update: Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface, training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. This upgrade will also include the FuelFocus module ensuring accurate data is collected for transaction control. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 21 PWD Fleet Management should include requirements for securing vehicles and equipment within the fleet policies and procedures. Public Works Significant In Process 06/01/13 Staff started revising the Vehicle/Equipment Policy to incorporate requirements for securing vehicles and equipment. 2012 Management Update: Staff and the FRC are continuing to revise the Vehicle/Equipment Policy. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 22 PWD Fleet Management should conduct regular inventories of auto parts, develop a system to ensure the parts database is accurate and complete, and secure access to the auto parts inventory. Public Works Significant In Process 12/01/13 A newly constructed parts storeroom is complete. Equipment Management is working on surveying the existing parts and supply inventories, and finalizing a plan for conducting periodic inventory reconciliation. 2012 Management Update: Staff is continuing to work toward more accurate parts inventory control; however due to staffing shortages and higher level priorities, staff has not defined a permanent inventory system or reconciliation process. Report on the Status of Audit Recommendations as of June 30, 2012 Page 6 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 5. AUDIT OF CITYWIDE CASH HANDLING AND TRAVEL EXPENSES Issued: September 2010 5 The City's current cash handling policy is outdated and reliant upon a Cash Handling Manual that could not be found 1 ASD should update the Citywide Cash Handling policy and procedures to provide sufficient guidance on internal controls related to cash handling. ASD Significant In Process 10/31/12 A 1991 Administrative Instruction Manual has been updated to cover all areas of cash handling, including the three areas discussed in the Audit Report – segregation of duties, safeguarding of revenue, and proper documentation of all transactions. Staff also reviewed other jurisdictions’ cash handling manuals to integrate the most effective parts of each. Along with updating the central Cash Handling Manual, staff will review the written procedures from 18 facilities (all facilities covered by the Report, plus others such as Cubberley and the Development Center which were not in the scope of this Audit). Once the manual receives final approval, it will be distributed to all facilities for reference. Daily operating procedures for all facilities will be updated to ensure all directions in the manual are incorporated. ASD will also provide a checklist to ensure each facility fulfills each of the procedural requirements. 2012 Management Update: Cash Handling Manual has been revised and is posted on-line. The Policy and Procedures document itself is being reviewed and updates and or revisions will be completed by the end of October 2012. 5 The City should improve training and implement a more proactive oversight program for cash handling operations 2 ASD should improve its cash handling oversight program to include: 1) cash handling and internal controls training for employees who handle revenue and 2) routine visits and surprise cash reviews for revenue collection locations based on ASD’s risk assessment ASD N/A Completed Recommendation reported as completed. ASD-Revenue Collections is in the process of developing a more robust oversight program even though it has presented a challenge given already-reduced staff resources (e.g., 2.5 FTE reduction in the accounting division since 2005 and 1.5 FTE reduction in Revenue Collections in 2010). Great advances have been made in the following areas: - Improving the safeguarding of revenue for Animal Services - Protecting checking accounts from fraudulent transactions ASD Revenue Collections is in regular contact with the facilities and conducts site visits and surprise cash reviews on an annual basis. Revenue Collections also works closely with the Accounting Division to identify and resolve any deposit and documentation discrepancies. Once the Cash Handling Manual is updated and employees are trained in the new manual, they will sign off on their commitment to abide by its procedures annually. Additionally training will be scheduled as needed. All of the City’s cash handling facilities have differing business processes . While all financial data are integrated into SAP, each business area has utilizes a different application system to address their unique business needs. Therefore, Revenue Collections relies on each department to provide some of the training and instruction in their respective systems. 2012 Management Update: ASD has improved its cash handling oversight program. ASD- Revenue Collections is providing training and conducting surprise cash handling visits to locations. 5 Site visits revealed weaknesses that should be immediately addressed 3 ASD should develop procedures for processing on-line revenue (e.g. PayPal) to help ensure proper segregation of duties, safeguarding of revenue and proper authorization and approval of transactions ASD N/A Completed Recommendation reported as completed. Procedures for handling on-line revenue are documented for the sites that handle on-line transactions, but had not been incorporated into a centralized document. Within Police Department’s Project Safety Net/Track Watch program, which is mentioned in the report as an online payment-processing program, the City Manager’s Office monitors the PayPal donations, while all checks are processed by Revenue Collections. Previously, the City’s web site instructed donors to send checks to the Police Department, which recorded the donations and delivered the checks to Revenue Collections for processing. The Police Department has since initiated a process to change this procedure, and all check donations will now be sent directly to Revenue Collections. Procedures for accepting on-line payments have been incorporated into the draft of the revised Cash Handling Manual. 2012 Management Update: The updated Cash Handling Manual contains instructions for the establishment of electronic and online transactions. Report on the Status of Audit Recommendations as of June 30, 2012 Page 7 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 5 Site visits revealed weaknesses that should be immediately addressed 4 ASD should: • Work with the departments to immediately address weaknesses noted in the areas of safeguarding revenue, segregation of duties, and proper documentation and approval of certain types of transactions (e.g. voided transactions and issuance of receipts). • Ensure their list of approved revenue collection locations is complete and updated, and these locations have adequate procedures to safeguard revenue. ASD Significant In Process 02/28/13 The list for approved revenue collection locations has been updated and ASD-Revenue Collections will continue to work with these locations to address weaknesses. For locations with significant space and resource constraints (e.g., Animal Services and Foothills Park), mitigating controls will be considered to balance the relative weakness of the segregation of duties at these sites. Additionally, risk assessment and cost-benefit analysis will be performed to determine the level of controls implemented. Strengthening the controls at the Foothills Park beyond the basic training and monitoring levels would not be as beneficial as focusing on other sites with larger currency transactions, such as the Landfill, and/or larger- volume sites with identified areas of concern, such as Animal Services. ASD-Revenue Collections will work with all facilities beginning in May 2011 to update procedures to incorporate guidelines established by the revised Cash Handling Manual. Due to the number of facilities this process will be lengthy. Seventeen facilities have been identified for revised procedures and this does not include procedures for special events. Additionally all library locations have been counted as one facility. ASD believes that with more structured training and monitoring, the level of compliance among the departments will increase, but departments will also have to proactively improve their compliance with the proscribed procedures. 2012 Management Update: ASD-Revenue Collections began working with departments after the audit to address areas of concerns. For example, extensive time was spent with Animal Services addressing weaknesses identified in the audit and significant improvement has been made. The revised Cash Handling Manual contains an updated list of approved revenue collection locations. Revisions of policies and procedures for these locations are still in progress. 5 Oversight of employee travel expenses can be improved 5 ASD should ensure all travel payments are adequately and uniformly documented with appropriate oversight by: 1) requiring consistent documentation of travel expenses, including: receipts or other supporting documentation, appropriate travel forms, and explanation of the business purpose of expense, 2) performing spot checks of travel expenses. ASD N/A Completed Recommendation reported as completed. ASD has drafted policies and procedures that address the audit recommendations and clarify and simplify procedures. Travel forms have also been updated but will remain as two separate forms. The updated forms will be discussed as part of employee training. Many of the exceptions occurred prior to the hiring of the current A/P Manager or during a hiring freeze when the position was open. A/P staff currently reviews all employee travel reimbursement paid via check and spot checks other areas. The A/P Manager will also emphasize importance of IRS required documentation with A/P staff and during training of City staff. Any Petty Cash-related changes will be incorporated into the Petty Cash program, and ASD Revenue Collections will reimburse under the new guidelines. In addition, ASD will remind all staff of the Petty Cash documentation requirements. ASD staff will also be more diligent on follow-up with Executive Staff (ES) to ensure adequate documentation on the use of ES Card. ASD director will also discuss the requirements with ES. 2012 Management Update: The current process for reviewing travel expenses consists of: · Ensuring pre-travel authorization is attached; · Checking calculations; · Checking for proper per diem rates, if applicable; · Reviewing receipts to ensure accurate, complete and appropriate; · Ensuring authorization signature is appropriate; and · Ensuring description is adequate and matches pre-travel authorization. Report on the Status of Audit Recommendations as of June 30, 2012 Page 8 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 5 Oversight of employee travel expenses can be improved 6 ASD should review the nighttime meeting reimbursement policy. If the City decides to maintain this practice, ASD should report the amounts as income on employee Form W-2s to conform to IRS requirements. In addition, ASD should review other types of meal expense to ensure any reportable amounts are included on employee Form W-2s. ASD Significant In Process 08/30/12 Nighttime meeting reimbursement will be maintained. ASD has established new G/L numbers to capture taxable and non-taxable meals. Budget for the G/L numbers will be included in the FY 2012 budget. ASD has discussed changes needed by Purchasing staff for use of CAL-Cards. Budget and Purchasing changes will be made before implementation date of 7/1/2011. Taxable meals will be captured in a specific G/l account and added to the employees W2 for FY 2011. In addition, updated P&P and forms (A/P & Petty cash) will reflect specific coding for taxable meals. ASD also plans to have City-wide training once ELT approves draft P&P. 2012 Management Update: ASD updated the travel policy and disseminated it to staff citywide. Meal reimbursement has been updated and amounts will be included in the Form W-2, however employees are encouraged to seek reimbursement for only those meals within the IRS guidelines. ASD is in the process of updating the portion of the petty cash policy related to meal reimbursement. 2012 OCA Update: OCA could not validate that the A/P and Petty Cash policies, procedures, and forms have been updated to reflect the changes made in the travel policy. This recommendation will not be considered completed until existing inconsistencies among these policies and procedures are eliminated to clarify the requirements related to meal reimbursement.5 Oversight of employee travel expenses can be improved 8 The City Manager’s Office should include additional guidance to prevent gifts of public resources on the City’s Ethics Center intranet site. City Manager Useful In Process 12/31/12 The City retained the services of Dr. Tom Shanks of The Ethics Company in November 2010 to assist with the development of the City's values based ethics code of conduct, policy development and implementation, employee interviews, training implementation program, and first round of citywide training. The project will last approximately 12-18 months. 2012 Management Update: The CMO determined that guidance regarding the use of travel expenses should most appropriately be updated in the City’s Travel & Expense Policy. This clarification was completed in August 2012. The employee Intranet site will be updated once the Ethics Policy is complete. 5 The City should consolidate and coordinate existing travel payment processes 9 ASD should coordinate and improve the travel payment process through the following: • Update the City’s Travel Policy and integrate the pre- travel authorization form and travel expense report into one travel report form to document supervisory approval, business purpose of the trip, an accounting of actual expenses, and requirement for employees to certify they did not receive reimbursement from any other source. • Implement the City’s policy requirement to file travel expense forms with ASD Accounts Payable. Alternately, ASD could consider activating the travel expense management capabilities of SAP. ASD N/A Completed ASD has drafted policies and procedures that address the audit recommendations and clarify and simplify procedures. Travel forms have also been updated to require employees to certify that they have not received reimbursement from any other sources; however, they will remain as two separate forms. Filing travel reimbursement forms with A/P: ASD will clearly state in the updated policy that it is the department’s responsibility to send ASD complete forms with all supporting receipts regardless of the payment method. Use of SAP for travel expense management: ASD will consider this alternative for the future. To implement a new SAP module requires funding and staff time. Given the City’s continued strain on resources, a cost benefit analysis must be considered. For FY 2010, A/P staff reviewed and processed 33,977 transactions for a payment amount of $18.4 million. Of this, 1,695 transactions, or 3%, totaling $530,000, were related to travel. 2012 Management Update: ASD has updated the travel policy and disseminated to staff citywide.5 The City should revise the Travel Policy to ensure employees select economic travel methods 10 ASD should revise the City’s Travel Policy to help ensure employees select the most economical means of travel, including restricting the use of hotels during local travel and authorization for extended travel times. ASD N/A Completed ASD will emphasize in the Travel Policy that employees should always select the most economical means of travel. The prior audit of travel reimbursement processes instituted several check points to ensure employees took advantage of least-expensive opportunities. ASD will always encourage the use of the most economical means of travel, but it can only encourage the direction; it cannot ensure that employees comply. If it is evident that employees are not seeking such savings, ASD staff will bring it to the attention of the department head to address. ASD agrees that there should be a limitation to overnight stays within a certain distance of home or office. The policy will have exception for stays that require long days or early starts. ASD has drafted policies and procedures that address the audit recommendations and clarify and simplify procedures. Travel forms have also been updated but will remain as two separate forms. 2012 Management Update: ASD has updated the travel policy and disseminated to staff citywide. Report on the Status of Audit Recommendations as of June 30, 2012 Page 9 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 5 The City should reorganize existing budgetary accounts related to travel and meetings to assist in tracking of taxable activities 11 ASD should reorganize the existing budgetary travel- related accounts into a “Travel and Training” account for professional development and a “Meetings” account for tracking taxable forms of reimbursement, such as nighttime meeting meal expenses. ASD Useful In Process 08/30/12 ASD has established new G/L accounts, changed title of existing G/L account and eliminated use of one G/L account. Budget will reallocate budget to new G/L accounts for FY 2012 budget. Purchasing staff will update CAL-Cards to accept charges for new G/L accounts. Budget & Purchasing changes will be ready for 7/1/2011 implementation. A/P and Petty Cash forms will be updated once ELT approves draft policies and procedures. ASD Director will present draft to ELT for input by end of FY 2011. ASD will provide Citywide training once policies and procedures are finalized. 2012 Management Update: ASD has updated the travel policy and disseminated to staff citywide. New accounts have been established in SAP. 2012 OCA Update: It is not clear which G/L accounts have been added or eliminated to address this recommendation. There are no documented procedures, no budget has been established for G/L Account #33300 (Meals Taxable), and no transactions have been recorded in this account. This recommendation will not be considered completed until additional information is provided by ASD for clarification. 6. AUDIT OF PURCHASING CARD TRANSACTIONS Issued: September 2011 6 Finding 1: Most purchasing card transactions appear to comply with City policy, but additional improvements could enhance oversight. 1 City departments should ensure, with ASD oversight, that all purchasing card transactions contain descriptive annotations of items purchased and clear explanations of the business purpose of expenses. Administrative Services Department N/A Completed 05/01/12 Recommendation reported as completed. 2012 Management Update: CALCARD Program closed May 2012. In the new PCARD program, the description field is a mandatory field which holds up to 255 characters. 6 Finding 1: Most purchasing card transactions appear to comply with City policy, but additional improvements could enhance oversight. 2 ASD should evaluate options to improve the process related to external unauthorized card activity, ensuring it is consistent and well- documented. Administrative Services Department N/A Completed 05/01/12 Recommendation reported as completed. 2012 Management Update: CALCARD Program closed May 2012. In the new PCARD program, ASD staff is monitoring all purchasing activity, and any unauthorized purchases are followed up on immediately. 6 Finding 1: Most purchasing card transactions appear to comply with City policy, but additional improvements could enhance oversight. 3 ASD should strengthen its CAL-Card policies and procedures to identify clear disciplinary guidelines for policy violations and ensure that they are consistently applied. Administrative Services Department N/A Completed 05/01/12 Recommendation reported as completed. 2012 Management Update: CALCARD Program closed May 2012. In the new PCARD program, ASD has rewritten the policies and procedures in the PCard Guidebook, which includes disciplinary actions consistent with the City's disciplinary process. 6 Finding 1: Most purchasing card transactions appear to comply with City policy, but additional improvements could enhance oversight. 4 ASD should obtain more detailed transaction data and utilize reporting options available from its card provider to enhance oversight of CAL-Card program. In addition, ASD should consider utilizing data analysis software, such as ACL, to further enhance its review. Administrative Services Department N/A Completed 05/01/12 Recommendation reported as completed. 2012 Management Update: CALCARD Program closed May 2012. ASD has implemented some new reports and continues to evaluate the reporting options available in the new Pcard system. 6 Finding 1: Most purchasing card transactions appear to comply with City policy, but additional improvements could enhance oversight. 5 The Finance Committee should consider approving a performance audit of procurement, which would include an assessment of contract pricing accuracy, on the City Auditor’s FY 2012 Workplan. Administrative Services Department N/A Completed 05/01/12 Recommendation reported as completed. 2012 Management Update: Audit of Contract Oversight currently in progress. Report on the Status of Audit Recommendations as of June 30, 2012 Page 10 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 6 Finding 2: The City should take steps to increase usage of purchasing card program. 6 ASD should evaluate options to increase usage of purchasing card program, including: 1) evaluating options to mandate purchasing card usage under certain dollar thresholds, and 2) evaluating increasing purchasing card limits. Administrative Services Department N/A Completed 05/01/12 Recommendation reported as completed. 2012 Management Update: CALCARD Program closed May 2012. In the new PCARD program, ASD is increasing number of cardholders utilizing the PCARD program and allowing increased monthly limits based on assessment of operational needs. 7. SAP SECURITY AUDIT Issued: October 2011 7 Finding 1: ASD did not secure powerful system- provided user accounts, resulting in significant security vulnerabilities. 1 ASD should develop and implement formal policies and procedures addressing standard SAP user accounts in order to: • Secure standard user accounts and prevent unauthorized use. • Detect on an ongoing basis any unsecured standard accounts and any unauthorized use. • Ensure standard user accounts can only be managed by a designated individual(s). • Authorize use only if appropriate, and ensure there is accountability for any use. • Ensure any authorized use is monitored. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: • SAP* Account has been locked and authorization removed. • Two levels of monitoring and alert mechanisms have been established to detect SAP* login. • SAP special accounts are now grouped and maintained by a separate individuals rather than just the Basis Administrator. • SAP special account access log will be reviewed on a daily basis. 7 Finding 1: ASD did not secure powerful system- provided user accounts, resulting in significant security vulnerabilities. 2 ASD should further investigate the following: • Staff’s account that SAP* was left unsecured after installing an SAP support pack in December 2010. • Responsibility for the deletion and recreation of the SAP* user master record. • Responsibility for missing log records. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that an internal review of all available supporting materials, i.e. the user change log, access log, and security activity log was completed, and that it has collaborated with the Auditor’s Office to address the issues identified in this finding. The Department reports that it was unable to continue its investigation due to limited availability of log data, and that it has refocused its efforts on lessons learned and tightening controls over SAP* account maintenance by separating the administration rights from the SAP Basis function. 7 Finding 1: ASD did not secure powerful system- provided user accounts, resulting in significant security vulnerabilities. 3 To ensure the City can appropriately respond to SAP security incidents, ASD should develop and implement a comprehensive incident response plan that meets PCI DSS and NIST control standards and includes provisions to address: • Incident response policies and procedures • Incident response training • Monitoring and reporting • Roles and responsibilities • Business recovery and continuity procedures • Data back-up processes • Legal requirements in reporting compromises Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The SAP Program Management Office (PMO) has implemented an incident management procedure that includes the following elements: • Incident reporting, including date, report by, description, and evidence collection. • Incident recovery, including actions taken and communication. • Incident analysis, including business impact, root cause analysis and mitigation planning. • Incident review and approval: a formal review and sign off procedure is implemented through the SAP Program Office. 7 Finding 2: ASD violated two critical security principles by not properly restricting access for all user accounts. 4 To mitigate risks associated with assignment of unrestricted SAP access, ASD should: • Formally adopt policies and procedures addressing SAP user access that are consistent with the principles of least privilege and segregation of duties. • For emergency purposes, ASD should consider creating a single unrestricted account assigned the SAP_ALL profile that is appropriately secured and controlled in accordance with SAP guidelines and industry standards. • Implement policies and procedures to either prohibit or control the use of all other powerful system-provided SAP profiles. • Ensure needed SAP roles and profiles are approved by management and included in the City’s role authorization procedures, and that unauthorized roles and profiles are not assigned. • Develop procedures to detect any unauthorized roles or profiles assigned to users. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that during the audit period, staff updated the relevant processes and procedures, including the SAP Authorization Management process and procedure, SAP Special Account Monitoring, and the SAP System Monitoring Policy and Procedures to address the recommendations. The Department reports it has addressed the following areas: • Roles ownership for business transactions are established and reviewed by the business role owner to ensure that the principles of least privilege and segregation of duties are practiced. • A semi-annual authorization review is in place and findings and improvements are documented. • Adds, changes, and deletions to SAP authorization requests are tracked and approved by the Helpdesk. • Other SAP default special accounts are locked and passwords have been reset. • SAP default special account access logs are monitored daily. Report on the Status of Audit Recommendations as of June 30, 2012 Page 11 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 7 Finding 2: ASD violated two critical security principles by not properly restricting access for all user accounts. 5 To ensure SAP user account administration functions are properly separated, ASD should: • Segregate responsibilities for creating and maintaining roles/profiles, assignment of roles/profiles, and creating and maintaining user accounts. • Prohibit IT staff from maintaining Human Resources Department employee records. • Assign all SAP user administrators to a designated SAP user group, preventing them from managing their own and other administrators’ accounts and access levels, and designate an individual to manage the SAP user group. Information Technology Department Essential Not Started 12/31/12 2012 Management Update: The Department will be reviewing options to segregate responsibilities for creating and maintaining roles/profiles, assignment of roles/profiles, and creating and maintaining user accounts. The controls will prevent SAP user administrators from managing their own and other administrators' accounts and access levels. The Department has planned to implement an automated SAP user account creation process. The process will result in creation of SAP user accounts and updating email addresses in the SAP HR master file without requiring staff access to HR data. Expected implementation period: Q2-FY13 - Q3-FY13 7 Finding 3: ASD has not effectively managed all SAP user accounts to ensure system security. 6 Develop and implement policies and procedures to ensure SAP access for separated City employees is terminated in a timely manner and coordinated with Human Resources Department processes. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that NT Accounts and SAP user accounts will be terminated upon receiving a Termination Report from HR. The security risk resides largely in the employee termination business process, i.e. having the department fill out a Personnel Action Form (PAF) for each terminated employee. To mitigate the risk, staff has automated the SAP user account termination process and implemented controls to facilitate reconciliation between Human Resources data, Windows NT accounts, and SAP user accounts. These actions will ensure that access to SAP by separated City employees is monitored and terminated. 7 Finding 3: ASD has not effectively managed all SAP user accounts to ensure system security. 7 ASD should either eliminate the 52 generic CAL-Card user accounts, or develop policies and procedures to implement compensating controls to: • Ensure these accounts are secured. • Establish individual accountability for their use. • Allow use on an exception basis in meeting the City’s business needs. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that the new Purchase Card program has been fully implemented and that 52 CAL-Card generic user accounts were removed. 7 Finding 3: ASD has not effectively managed all SAP user accounts to ensure system security. 8 ASD should develop formal policies and procedures that clearly classify non-organizational users and define for each class: • Authorized access levels. • Duration of access. • Controls to ensure each class abides by the City’s security policies. • Controls to monitor SAP activity and to ensure SAP access levels and duration is consistent with policies and procedures. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The following controls were implemented: • Classification of non‐organizational users such as the business partner Greenwaste or support maintenance partners. • Sierra Infosys SAP support logins are reviewed and managed during the semi‐annual authorization process. • Non‐organizational User account creation to be tracked by the Helpdesk and approved by business owners with an expiration date. • Adds, changes, and deletions of authorizations are tracked by the Helpdesk and approved by the business owner. • Non‐organizational user account activities are monitored and reviewed as part of the Daily System Monitoring process. 7 Finding 3: ASD has not effectively managed all SAP user accounts to ensure system security. 9 ASD should develop policies and procedures to address use of non-dialog user accounts. These policies and procedures should address: • Authorization to use and assignment of non-dialog accounts. • Permitted use for each account. • Individual accountability for use. • Controls to monitor use. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that non‐dialog user accounts are broken down as follows: 7 “system” accounts, 3 “communication” accounts, 2 “service” accounts, and 1 “reference” user account. The accounts are used by SAP for specific purposes. These accounts cannot be used to logon to SAP; therefore, the risk is relatively low. To mitigate the risk, non‐organizational user account activities are monitored and reviewed as part of the Daily System Monitoring process. 7 Finding 3: ASD has not effectively managed all SAP user accounts to ensure system security. 10 ASD should as a rule prohibit the use of generic user accounts, in following PCI DSS and NIST control frameworks. ASD should develop policies and procedures to address the use of any generic user accounts on an exception basis to meet the City’s business needs and to ensure adequate compensating controls are implemented and include: • Formal authorization for use • Permitted levels of access • Duration of use and procedures to disable or remove • Permitted use or function • Individual accountability for use Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that Generic SAP user accounts such as “Data Migration” were setup during the Banner to SAP migration. The account has expired. There are other generic accounts such as EARLYWATCH used for SAP support. To mitigate the risk, non‐organizational user account activities are monitored and reviewed as part of the Daily System Monitoring process. Report on the Status of Audit Recommendations as of June 30, 2012 Page 12 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 7 Finding 3: ASD has not effectively managed all SAP user accounts to ensure system security. 11 ASD should establish policies, procedures, and processes to ensure: • SAP user administrators are aware of the required identification information for each type of SAP user account, and SAP is configured to require, to the extent possible, input of required information. • SAP user accounts contain all required user identification information, consistent with Human Resources Department records and/or other applicable independent authorized lists for City employees. • The City is compliant with PCI DSS and NIST SP 800- 53 standards in its management of SAP user accounts. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that the SAP user account information combines HR employee master information and information from the active Directory (Network and Email accounts). Therefore, any attempt to address the issue with SAP only is limited. Staff has reviewed HR new employee, employee change, and employee termination processes and automated the SAP account maintenance to ensure information consistency between HR, NT accounts and SAP accounts. 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 12 ASD should adopt and implement PCI DSS and NIST SP 800-53 information systems security control frameworks to help ensure security of the City’s key information systems. Information Technology Department Essential Not Started PCI: 03/30/2013 ISO: 06/30/2014 2012 Management Update: The Department reports the City's Information Security Committee has determined to implement ISO 27001 Information Security Management Systems (ISMS)] framework and standards at the City. The City's information security manager has planned to implement PCI-DSS security control framework by Q3-FY13. In addition the information security manager has planned to implement ISO 27001 based information systems security control frameworks by Q4-FY14 Security Countermeasures Implementation Roadmap: Implement PCI-DSS high risk countermeasures: Q3-FY13 (March 2013) Implement ISO 27001 framework at the City: Q4-FY14 (June 2014) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 13 ASD should develop and implement a formal and comprehensive security policy consistent with PCI DSS, NIST, the SAP Library, and other industry standards. Information Technology Department Essential Not Started SAP: 12/31/2012 ISO: 06/30/2013 2012 Management Update: The Department reports the City's Information Security Committee has determined to implement ISO 27001 [Information Security Management Systems (ISMS)] framework and standards at the City. Also The City’s Information Security Manager has planned to implement an SAP security policy by Q2-FY13. In addition, the Information Security Manager has plans to implement a formal and comprehensive ISO security policy. Security Countermeasures Implementation Roadmap: Implement SAP Security Policy: Q2-FY13 (December 2012) Implement ISO Information Security Policy: Q4-FY13 (June 2013) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 14 ASD should formally assign responsibility for SAP security. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that the City’s Chief Information Officer (CIO) has hired an Information Security Manager. 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 15 ASD should implement a formal security awareness and training program that meets minimum control standards stated in PCI DSS and NIST control frameworks. The program should include provisions to ensure SAP technical staff is trained on current SAP security controls and practices. Information Technology Department Significant Not Started SAP: 12/31/2012 ISO: 06/30/2014 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement ISO 27001 [Information Security Management Systems (ISMS)] framework and standards at the City. Also the City’s Information Security Manager has developed a strategy and roadmap to implement a Citywide information security awareness and training program including but not limited to providing PCI-DSS and SAP security controls and practices training to SAP technical staff. The City’s Information Security Manager has planned to provide training to all City employees including SAP technical staff. Security Countermeasures Implementation Roadmap: Train SAP technical staff for the PCI DSS security awareness: Q2-FY13 (December 2012) Train the City's employees for ISO security awarness: Q4-FY14 (June 2014) Report on the Status of Audit Recommendations as of June 30, 2012 Page 13 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 16 ASD should implement a formal risk assessment process that meets minimum standards stated in PCI DSS and NIST SP 800-53 to ensure key information system threats and vulnerabilities are routinely (at least annually) and effectively identified, ranked, and addressed. Information Technology Department Significant Not Started PCI: 12/31/2012 ISO: 03/30/2013 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement ISO 27001 - Information Security Management Systems (ISMS) framework and standards at the City. The City’s Information Security Manager has developed a strategy and roadmap to implement a formal risk assessment process through ISO 27001 standards, including a PCI-DSS risk assessment through the PCI-DSS Self-Assessment Questionnaire “D” and Attestation of Compliance. Beginning Q2-FY13 the City’s Information Security Manager will initiate a formal risk assessment process through PCI-DSS Self-Assessment Questionnaire “D” and ISO 27001 standards. Security Countermeasures Implementation Roadmap: Implement PCI-DSS risk assessment process:Q2-FY13 (December 2012) Implement ISO 27001 risk assessment process Q3-FY13 (March 2013) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 17 ASD should develop and implement formal policies and procedures to ensure SAP security parameters are properly configured and compliant with PCI DSS, NIST SP 800-53, and other applicable industry standards. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: . The Department reports the following SAP Security parameters have been updated to tighten security controls: • Disable multiple sapgui logons (for same SAP Accounts) • Minimum number of digits in passwords • Minimum number of letters in passwords • Minimum Password Length • Minimum number of lower-case characters in passwords • Minimum number of lower-case characters in passwords • Dates until password must be changed • Maximum number of days a password (set by the admin) can be unused (idle) • Maximum number of days a password (set by the user) can be unused (idle) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 18 ASD should ensure access to SAP system parameters is restricted to only authorized staff, and that policies and procedures incorporate change controls stated in NIST SP 800-53 to ensure all changes are properly planned, authorized, executed, and monitored. Information Technology Department Significant In Process 12/31/12 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement the ISO 27001 [Information Security Management Systems (ISMS)] framework and standards at the City. Also the SAP team may make changes to the profile Parameters based on a number of reasons that may or may not be related to security. For instance, a change to a profile Parameter may be required due to a performance problem and recommendations made by SAP support personnel or a Specific SAP note. Access to the SAP System Parameters is restricted to authorized individuals and change to profile parameters must go through a work order system for tracking and approval. In addition, profile parameter changes can be monitored and reviewed manually at the operating system level by comparing the profile information in the database with the profile existing on the operating system. Expected implementation period: Q1-FY13 - Q2-FY13 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 19 ASD should develop policies and procedures and implement minimum NIST SP 800-53 and PCI DSS controls applicable to log management in order to ensure: • SAP and Oracle log data is secured using appropriate “write-once” media and/or backup procedures. • Access to SAP and Oracle logs is restricted based on the principles of least privilege and segregation of duties. • Accountability is established for monitoring SAP and Oracle logs and for reporting any incidents to the appropriate levels of management. • SAP and Oracle are properly configured to ensure logs capture appropriate information and retain the information for an appropriate duration. Information Technology Department Significant Not Started 06/30/13 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement ISO 27001 - Information Security Management Systems (ISMS) framework and standards at the City. SAP/ IT staff has provided supporting documents per the IT Security Manager's request for his development of new policies and procedures. The IT Security Manager will develop new policies and procedures specifically for the City following the ISO 27001 standard for the four areas addressed in the recommendation. Expected implementation period: Q3 FY13 - Q4 FY13 Report on the Status of Audit Recommendations as of June 30, 2012 Page 14 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 20 ASD should develop policies and procedures consistent with PCI DSS, NIST SP 800-53, and NIST SP 800-122 to ensure: • Any sensitive production data used in the SAP quality assurance system is anonymized or otherwise properly safeguarded through implementation of recommended controls. • Transfer of any sensitive production data is formally authorized by departments or individuals responsible for the data. Information Technology Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reports that a custom ABAP program was developed to scramble customer sensitive data in the quality assurance environment. 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 21 To enhance the Auditor’s Office’s efficiency and independence in conducting audits, and its ability to ensure compliance with generally accepted government auditing standards, we recommend ASD implement the AIS tool and provide the Auditor’s Office with access to it. Information Technology Department Useful In Process 12/31/12 2012 Management Update: The Department reports that two custom made SAP authorization roles (CPA_AUDITOR and CPA_AIS_HR_AUDITOR) were created for testing. Expected implementation period: Q1-FY13 - Q2-FY13 8. AUDIT OF THE USE OF LIBRARY BOND PROCEEDS Issued: December 2011 8 Finding 1: The City has used Library Bond monies appropriately, policies and procedures should be formalized. 1 ASD should complete the IRS Governmental Bond Financings Compliance Check Questionnaire as a basis to evaluate compliance with IRS post-issuance requirements. Administrative Services Department N/A Completed Recommendation reported as completed. 2012 Management Update: The Department reported the IRS form has been completed and provided the following details: 1) Part 1 – “Post –Issuance Compliance – General” This requirement primarily deals with having written procedures for proper use of bond proceeds. Administrative Service Department (ASD) has long established practices which incorporate what more formal written policy and procedures typically contain. Based on these, the City has met all regulatory and debt covenant requirements on all City bonds. ASD does maintain a checklist of debt covenant requirements for all City bonds. Library bonds have been added to this list. In addition, Public Works does have an internal written process for payment processing. To further codify this practice, a "Disbursement of Bond Proceeds Procedure" is being worked on. 2) Part II – “General Record Keeping” City is in compliance – requires City have federal tax filing, audited financial statements, bond issuance documents, Council approved resolution authorizing the bond issuance, trustee statements, etc. 3) Part III – “Investments and Arbitrage Compliance” City is in compliance – requires keeping interest earning records, records on investment instruments that the City isn’t using (e.g. bond insurance and guaranteed investments contracts, swaps, etc.), arbitrage documents, etc. 4) Part IV – “Expenditures and Assets” City is in compliance – as the title implies it requires supporting documents to be kept for all bondable expenditures and keeping list of bond financed assets. 5) Part V – Private Business Use 8 Finding 1: The City has used Library Bond monies appropriately, policies and procedures should be formalized. 2 ASD and PWD should formalize policies and procedures regarding the oversight and expenditure of Library Bond funds to ensure continued compliance with federal and state regulations and best practices. Administrative Services Department Significant In Process 09/28/12 2012 Management Update: The Department reports that ASD and Public Works are in the process of writing a formal written procedure codifying existing guidelines and practices. This will incorporate the existing written Accounts Payable procedures for paying GO bondable expenditures. A draft has been completed; further work is needed and will be completed as time allows. 8 Finding 1: The City has used Library Bond monies appropriately, policies and procedures should be formalized. 3 The City Council should consider providing policy guidance on the use of bond funds to pay for bondable staff labor costs related to the Library Projects and future bond funded projects. Administrative Services Department N/A Completed Recommendation completed. 2012 City Auditor's Update: The Finance Committee passed a motion during a December 6, 2011 meeting to recommend the City Council affirm that no Measure N proceeds will be used to pay for bondable Staff costs. The audit report was approved by the City Council on February 21, 2012. Report on the Status of Audit Recommendations as of June 30, 2012 Page 15 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 8 Finding 1: The City has used Library Bond monies appropriately, policies and procedures should be formalized. 4 ASD should ensure that the City’s contracting requirements are met prior to the delivery of services or payment and consider developing a checklist of steps to take to properly execute contracts. Administrative Services Department N/A Completed Recommendation reported as completed. 2012 Management Update: Recommendation reported as completed. The Department reports that the Attorney’s Office and ASD have created a checklist that requires the parties to review contract needs for bond issuance services prior to initiation of a bond process in order to provide sufficient time to ensure that contracts are executed in a timely manner. Report on the Status of Audit Recommendations as of June 30, 2012 Page 16 Attachment A Attachment C: Status of 'In Process' and 'Not Started' Audit Recommendations Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 3. AUDIT OF EMPLOYEE ETHICS POLICIES Issued: January 2008 3 The City should adopt an employee code of ethics and formalize its employee ethics program 4 The City should develop a code of ethics that employees can use as a guidepost for avoiding conflicts of interest, for ethical behavior, for deciding what actions are needed when conflicts of interest occur, and for making decisions. Employees should be required to read and sign an acknowledgment of the policy. City Manager Essential In Process Spring 2013 As of March 2011, the City retained the services of Dr. Tom Shanks of The Ethics Company to assist with the development of the City's values based ethics code of conduct, policy development and implementation, employee interviews, training implementation program and first round of citywide training. The project goal was to be completed by Spring 2012. 2012 Management Update: The consultant completed the internal staff interviews and met with the City’s Executive Leadership Team on numerous occasions. However, the consultant did not complete or provide to the City the deliverables related to the project. The City Attorney is now preparing a formal letter to terminate the contract with The Ethics Company and to collect any and all materials related to the project from Dr. Shanks. Staff is in the process of securing outside assistance to complete the project. 3 The City should adopt an employee code of ethics and formalize its employee ethics program 5 The City should formalize its policy on ethics training and ensure that employees attend periodic training updates. City Manager Significant In Process Spring 2013 As of March 2011, the City retained the services of Dr. Tom Shanks of The Ethics Company to assist with the development of the City's values based ethics code of coduct, policy development and implementation, employee interviews, training implementation program and first round of citywide training. The project goal was to be completed by Spring 2012. 2012 Management Update: The consultant completed the internal staff interviews and met with the City’s Executive Leadership Team on numerous occasions. However, the consultant did not complete or provide to the City the deliverables related to the project. The City Attorney is now preparing a formal letter to terminate the contract with The Ethics Company and to collect any and all materials related to the project from Dr. Shanks. Staff is in the process of securing outside assistance to complete the project. 4. AUDIT OF FLEET UTILIZATION AND REPLACEMENT Issued: April 2010 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 3 The Public Works Fleet Management should complete implementation of a centralized Citywide vehicle and equipment pool, and make the Citywide pool accessible to all departments. Public Works Significant In Process 09/30/12 The existing automated pool vehicle management system located at the Municipal Services Center (MSC), Building B is being expanded and upgraded. Automated motor pools will be established at MSC, Building C, Civic Center, and the Utilities Department's Elwell Court locations. The pool vehicle management system will provide web-based or spontaneous vehicle reservation capability, and automated vehicle key management. Also, the feasibility of contracting out pool vehicles with a third-party provider is being evaluated. 2012 Management Update: Hardware has been installed in the vehicles and key kiosks installed to implement this program. Vendor is providing training to staff in mid-August and it is anticipated the system will be rolled out to the City in September. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 4 The City Manager's Office and the Public Works Fleet Manager staff should review the fleet's minimum utilization standards and consider increasing the standards to more cost· effective levels. Public Works Significant In Process 06/01/13 Staff drafted revisions to the Vehicle/Equipment Policy, including revised utilization standards. 2012 Management Update: Staff is currently reviewing proposals for Consultant Services for an operational study which will include a review of the City's utilization standards, evaluation of industry standards, other public agencies and recommendations for increasing Fleet operations efficiency and effectiveness. Report on the Status of Audit Recommendations as of June 30, 2012 Page 1 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 8 Public Works Fleet Management should have the authority and responsibility to manage and operate the City fleet to ensure optimized use of fleet resources. Public Works Significant In Process 06/01/13 Staff is revising the Vehicle/Equipment Policy to include a new description of PWD Fleet Management's authority and responsibility to manage and operate the City fleet. 2012 Management Update: Staff and the FRC will revise the Vehicle/Equipment Policy to include a new description of PWD Fleet Management's authority and responsibility to manage and operate the City fleet. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 10 PWD Fleet Management should revise the policy and procedures to clarify the take-home policy and conduct routine follow-ups with departments to document adherence to the policy. Public Works Significant In Process 06/01/13 Staff is revising the Vehicle/Equipment Policy to include clarifications to the take-home policy and will require take-home vehicle users to provide documentation to ensure their adherence to the policy. 2012 Management Update: Staff and the FRC are continuing to revise the Vehicle/Equipment Policy. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 13 Public Works Fleet Management should develop written criteria for assessing the need of non-rolling stock equipment. Public Works Useful In Process 06/01/13 Staff is revising the Vehicle/Equipment Policy to include new standards and criteria for assessing the need of non-rolling stock equipment. 2012 Management Update: Staff and the FRC are continuing to revise the Vehicle/Equipment Policy. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 1: The City recently avoided spending about $2.5 million in Fiscal Year 2010 through a temporary freeze on non-urgent fleet replacements (of which $948,000 would have been for underutilized units), but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet 14 Public Works Fleet Management should routinely review the database inventory for completeness and accuracy and develop necessary processes for departments to provide accurate and timely utilization data. Public Works Useful In Process 06/01/13 Staff shortages have delayed the implementation of this recommendation. Equipment Management is currently in the process of recruiting a Fleet Services Coordinator. 2012 Management Update: Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface, training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. Additionally staff will conduct a manual visual inventory to confirm the inventory is accurate. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 19 PWD Fleet Management should work with the Administrative Services Department and Utilities Department (for CNG) to develop a system to reconcile fuel purchases, balances, and consumption reports. Public Works Significant In Process 12/01/13 Staff is working with the Utilities Department to obtain the data necessary to begin periodic reconciliations of CNG. 2012 Management Update: Staff continues to work with the Utility Department to obtain necessary data and with the implementation of the software upgrade to FuelFocus will have better reporting capabilities for consumption. Report on the Status of Audit Recommendations as of June 30, 2012 Page 2 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 20 PWD Fleet Management should complete implementation of the fueling system at all city pumps and evaluate its effectiveness at providing internal controls over fuel Pump transactions. Public Works Significant In Process 06/01/13 Staff is in the final implementation stage of the new fuel management system. 2012 Management Update: Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface, training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. This upgrade will also include the FuelFocus module ensuring accurate data is collected for transaction control. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 21 PWD Fleet Management should include requirements for securing vehicles and equipment within the fleet policies and procedures. Public Works Significant In Process 06/01/13 Staff started revising the Vehicle/Equipment Policy to incorporate requirements for securing vehicles and equipment. 2012 Management Update: Staff and the FRC are continuing to revise the Vehicle/Equipment Policy. Individual policy sections are currently being developed but finalization will not occur until after the operational study. 4 Finding 2: Funding stability and improved processes are needed to adequately fund fleet replacement and maintenance 22 PWD Fleet Management should conduct regular inventories of auto parts, develop a system to ensure the parts database is accurate and complete, and secure access to the auto parts inventory. Public Works Significant In Process 12/01/13 A newly constructed parts storeroom is complete. Equipment Management is working on surveying the existing parts and supply inventories, and finalizing a plan for conducting periodic inventory reconciliation. 2012 Management Update: Staff is continuing to work toward more accurate parts inventory control; however due to staffing shortages and higher level priorities, staff has not defined a permanent inventory system or reconciliation process. 5. AUDIT OF CITYWIDE CASH HANDLING AND TRAVEL EXPENSES Issued: September 2010 5 The City's current cash handling policy is outdated and reliant upon a Cash Handling Manual that could not be found 1 ASD should update the Citywide Cash Handling policy and procedures to provide sufficient guidance on internal controls related to cash handling. ASD Significant In Process 10/31/12 A 1991 Administrative Instruction Manual has been updated to cover all areas of cash handling, including the three areas discussed in the Audit Report – segregation of duties, safeguarding of revenue, and proper documentation of all transactions. Staff also reviewed other jurisdictions’ cash handling manuals to integrate the most effective parts of each. Along with updating the central Cash Handling Manual, staff will review the written procedures from 18 facilities (all facilities covered by the Report, plus others such as Cubberley and the Development Center which were not in the scope of this Audit). Once the manual receives final approval, it will be distributed to all facilities for reference. Daily operating procedures for all facilities will be updated to ensure all directions in the manual are incorporated. ASD will also provide a checklist to ensure each facility fulfills each of the procedural requirements. 2012 Management Update: Cash Handling Manual has been revised and is posted on-line. The Policy and Procedures document itself is being reviewed and updates and or revisions will be completed by the end of October 2012. Report on the Status of Audit Recommendations as of June 30, 2012 Page 3 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 5 Site visits revealed weaknesses that should be immediately addressed 4 ASD should: • Work with the departments to immediately address weaknesses noted in the areas of safeguarding revenue, segregation of duties, and proper documentation and approval of certain types of transactions (e.g. voided transactions and issuance of receipts). • Ensure their list of approved revenue collection locations is complete and updated, and these locations have adequate procedures to safeguard revenue. ASD Significant In Process 02/28/13 The list for approved revenue collection locations has been updated and ASD-Revenue Collections will continue to work with these locations to address weaknesses. For locations with significant space and resource constraints (e.g., Animal Services and Foothills Park), mitigating controls will be considered to balance the relative weakness of the segregation of duties at these sites. Additionally, risk assessment and cost-benefit analysis will be performed to determine the level of controls implemented. Strengthening the controls at the Foothills Park beyond the basic training and monitoring levels would not be as beneficial as focusing on other sites with larger currency transactions, such as the Landfill, and/or larger- volume sites with identified areas of concern, such as Animal Services. ASD-Revenue Collections will work with all facilities beginning in May 2011 to update procedures to incorporate guidelines established by the revised Cash Handling Manual. Due to the number of facilities this process will be lengthy. Seventeen facilities have been identified for revised procedures and this does not include procedures for special events. Additionally all library locations have been counted as one facility. ASD believes that with more structured training and monitoring, the level of compliance among the departments will increase, but departments will also have to proactively improve their compliance with the proscribed procedures. 2012 Management Update: ASD-Revenue Collections began working with departments after the audit to address areas of concerns. For example, extensive time was spent with Animal Services addressing weaknesses identified in the audit and significant improvement has been made. The revised Cash Handling Manual contains an updated list of approved revenue collection locations. Revisions of policies and procedures for these locations are still in progress. 5 Oversight of employee travel expenses can be improved 6 ASD should review the nighttime meeting reimbursement policy. If the City decides to maintain this practice, ASD should report the amounts as income on employee Form W-2s to conform to IRS requirements. In addition, ASD should review other types of meal expense to ensure any reportable amounts are included on employee Form W-2s. ASD Significant In Process 08/30/12 Nighttime meeting reimbursement will be maintained. ASD has established new G/L numbers to capture taxable and non-taxable meals. Budget for the G/L numbers will be included in the FY 2012 budget. ASD has discussed changes needed by Purchasing staff for use of CAL-Cards. Budget and Purchasing changes will be made before implementation date of 7/1/2011. Taxable meals will be captured in a specific G/l account and added to the employees W2 for FY 2011. In addition, updated P&P and forms (A/P & Petty cash) will reflect specific coding for taxable meals. ASD also plans to have City-wide training once ELT approves draft P&P. 2012 Management Update: ASD is in the process of updating the portion of the travel and petty cash policy related to meal reimbursement. Once the policy is finalized it will be implemented and will incorporate the changes established above. 5 Oversight of employee travel expenses can be improved 8 The City Manager’s Office should include additional guidance to prevent gifts of public resources on the City’s Ethics Center intranet site. City Manager Useful In Process 12/31/12 The City retained the services of Dr. Tom Shanks of The Ethics Company in November 2010 to assist with the development of the City's values based ethics code of conduct, policy development and implementation, employee interviews, training implementation program, and first round of citywide training. The project will last approximately 12-18 months. 2012 Management Update: The CMO determined that guidance regarding the use of travel expenses should most appropriately be updated in the City’s Travel & Expense Policy. This clarification was completed in August 2012. The employee Intranet site will be updated once the Ethics Policy is complete. Report on the Status of Audit Recommendations as of June 30, 2012 Page 4 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 5 The City should reorganize existing budgetary accounts related to travel and meetings to assist in tracking of taxable activities 11 ASD should reorganize the existing budgetary travel- related accounts into a “Travel and Training” account for professional development and a “Meetings” account for tracking taxable forms of reimbursement, such as nighttime meeting meal expenses. ASD Useful In Process 08/30/12 ASD has established new G/L accounts, changed title of existing G/L account and eliminated use of one G/L account. Budget will reallocate budget to new G/L accounts for FY 2012 budget. Purchasing staff will update CAL-Cards to accept charges for new G/L accounts. Budget & Purchasing changes will be ready for 7/1/2011 implementation. A/P and Petty Cash forms will be updated once ELT approves draft policies and procedures. ASD Director will present draft to ELT for input by end of FY 2011. ASD will provide Citywide training once policies and procedures are finalized. 2012 Management Update: See Recommendation #6 above. 7. SAP SECURITY AUDIT Issued: October 2011 7 Finding 2: ASD violated two critical security principles by not properly restricting access for all user accounts. 5 To ensure SAP user account administration functions are properly separated, ASD should: • Segregate responsibilities for creating and maintaining roles/profiles, assignment of roles/profiles, and creating and maintaining user accounts. • Prohibit IT staff from maintaining Human Resources Department employee records. • Assign all SAP user administrators to a designated SAP user group, preventing them from managing their own and other administrators’ accounts and access levels, and designate an individual to manage the SAP user group. Information Technology Department Essential Not Started 12/31/12 2012 Management Update: The Department will be reviewing options to segregate responsibilities for creating and maintaining roles/profiles, assignment of roles/profiles, and creating and maintaining user accounts. The controls will prevent SAP user administrators from managing their own and other administrators' accounts and access levels. The Department has planned to implement an automated SAP user account creation process. The process will result in creation of SAP user accounts and updating email addresses in the SAP HR master file without requiring staff access to HR data. Expected implementation period: Q2-FY13 - Q3-FY13 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 12 ASD should adopt and implement PCI DSS and NIST SP 800-53 information systems security control frameworks to help ensure security of the City’s key information systems. Information Technology Department Essential Not Started PCI: 03/30/2013 ISO: 06/30/2014 2012 Management Update: The Department reports the City's Information Security Committee has determined to implement ISO 27001 Information Security Management Systems (ISMS)] framework and standards at the City. The City's information security manager has planned to implement PCI-DSS security control framework by Q3-FY13. In addition the information security manager has planned to implement ISO 27001 based information systems security control frameworks by Q4-FY14 Security Countermeasures Implementation Roadmap: Implement PCI-DSS high risk countermeasures: Q3-FY13 (March 2013) Implement ISO 27001 framework at the City: Q4-FY14 (June 2014) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 13 ASD should develop and implement a formal and comprehensive security policy consistent with PCI DSS, NIST, the SAP Library, and other industry standards. Information Technology Department Essential Not Started SAP: 12/31/2012 ISO: 06/30/2013 2012 Management Update: The Department reports the City's Information Security Committee has determined to implement ISO 27001 [Information Security Management Systems (ISMS)] framework and standards at the City. Also The City’s Information Security Manager has planned to implement an SAP security policy by Q2-FY13. In addition, the Information Security Manager has plans to implement a formal and comprehensive ISO security policy. Security Countermeasures Implementation Roadmap: Implement SAP Security Policy: Q2-FY13 (December 2012) Implement ISO Information Security Policy: Q4-FY13 (June 2013) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 15 ASD should implement a formal security awareness and training program that meets minimum control standards stated in PCI DSS and NIST control frameworks. The program should include provisions to ensure SAP technical staff is trained on current SAP security controls and practices. Information Technology Department Significant Not Started SAP: 12/31/2012 ISO: 06/30/2014 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement ISO 27001 [Information Security Management Systems (ISMS)] framework and standards at the City. Also the City’s Information Security Manager has developed a strategy and roadmap to implement a Citywide information security awareness and training program including but not limited to providing PCI-DSS and SAP security controls and practices training to SAP technical staff. The City’s Information Security Manager has planned to provide training to all City employees including SAP technical staff. Security Countermeasures Implementation Roadmap: Train SAP technical staff for the PCI DSS security awareness: Q2-FY13 (December 2012) Train the City's employees for ISO security awarness: Q4-FY14 (June 2014) Report on the Status of Audit Recommendations as of June 30, 2012 Page 5 Attachment A Rpt #Finding Rec #Recommendation Responsible Department Rating Current Status Target Date Current Status 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 16 ASD should implement a formal risk assessment process that meets minimum standards stated in PCI DSS and NIST SP 800-53 to ensure key information system threats and vulnerabilities are routinely (at least annually) and effectively identified, ranked, and addressed. Information Technology Department Significant Not Started PCI: 12/31/2012 ISO: 03/30/2013 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement ISO 27001 - Information Security Management Systems (ISMS) framework and standards at the City. The City’s Information Security Manager has developed a strategy and roadmap to implement a formal risk assessment process through ISO 27001 standards, including a PCI-DSS risk assessment through the PCI-DSS Self-Assessment Questionnaire “D” and Attestation of Compliance. Beginning Q2-FY13 the City’s Information Security Manager will initiate a formal risk assessment process through PCI-DSS Self-Assessment Questionnaire “D” and ISO 27001 standards. Security Countermeasures Implementation Roadmap: Implement PCI-DSS risk assessment process:Q2-FY13 (December 2012) Implement ISO 27001 risk assessment process Q3-FY13 (March 2013) 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 18 ASD should ensure access to SAP system parameters is restricted to only authorized staff, and that policies and procedures incorporate change controls stated in NIST SP 800-53 to ensure all changes are properly planned, authorized, executed, and monitored. Information Technology Department Significant In Process 12/31/12 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement the ISO 27001 [Information Security Management Systems (ISMS)] framework and standards at the City. Also the SAP team may make changes to the profile Parameters based on a number of reasons that may or may not be related to security. For instance, a change to a profile Parameter may be required due to a performance problem and recommendations made by SAP support personnel or a Specific SAP note. Access to the SAP System Parameters is restricted to authorized individuals and change to profile parameters must go through a work order system for tracking and approval. In addition, profile parameter changes can be monitored and reviewed manually at the operating system level by comparing the profile information in the database with the profile existing on the operating system. Expected implementation period: Q1-FY13 - Q2-FY13 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 19 ASD should develop policies and procedures and implement minimum NIST SP 800-53 and PCI DSS controls applicable to log management in order to ensure: • SAP and Oracle log data is secured using appropriate “write-once” media and/or backup procedures. • Access to SAP and Oracle logs is restricted based on the principles of least privilege and segregation of duties. • Accountability is established for monitoring SAP and Oracle logs and for reporting any incidents to the appropriate levels of management. • SAP and Oracle are properly configured to ensure logs capture appropriate information and retain the information for an appropriate duration. Information Technology Department Significant Not Started 06/30/13 2012 Management Update: The Department reports that the City's Information Security Committee has determined to implement ISO 27001 - Information Security Management Systems (ISMS) framework and standards at the City. SAP/ IT staff has provided supporting documents per the IT Security Manager's request for his development of new policies and procedures. The IT Security Manager will develop new policies and procedures specifically for the City following the ISO 27001 standard for the four areas addressed in the recommendation. Expected implementation period: Q3 FY13 - Q4 FY13 7 Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 21 To enhance the Auditor’s Office’s efficiency and independence in conducting audits, and its ability to ensure compliance with generally accepted government auditing standards, we recommend ASD implement the AIS tool and provide the Auditor’s Office with access to it. Information Technology Department Useful In Process 12/31/12 2012 Management Update: The Department reports that two custom made SAP authorization roles (CPA_AUDITOR and CPA_AIS_HR_AUDITOR) were created for testing. Expected implementation period: Q1-FY13 - Q2-FY13 8. AUDIT OF THE USE OF LIBRARY BOND PROCEEDS Issued: December 2011 8 Finding 1: The City has used Library Bond monies appropriately, policies and procedures should be formalized. 2 ASD and PWD should formalize policies and procedures regarding the oversight and expenditure of Library Bond funds to ensure continued compliance with federal and state regulations and best practices. Administrative Services Department Significant In Process 09/28/12 2012 Management Update: The Department reports that ASD and Public Works are in the process of writing a formal written procedure codifying existing guidelines and practices. This will incorporate the existing written Accounts Payable procedures for paying GO bondable expenditures. A draft has been completed; further work is needed and will be completed as time allows. Report on the Status of Audit Recommendations as of June 30, 2012 Page 6 Attachment A Policy and Services Committee EXCERPT Page 1 of 8 Special Meeting Tuesday, September 11, 2012 Report on the Status of Audit Recommendations (June 2012). Jim Pelletier, City Auditor, presented the annual report on the status of audit recommendations. The report summarized the status of 64 audit recommendations from eight completed audit reports, including 33 recommendations from the prior status report and 31 new recommendations from audit reports issued during the prior fiscal year. Changes to the report included the finding each recommendation was based on, a rating system for recommendations based on his judgment, and a target date for implementation of audit recommendations. The red circles in the report indicated items he judged were not implemented in a timely manner. Council Member Espinosa suggested Mr. Pelletier notify Staff when he had concerns. He asked Mr. Pelletier to comment on the many audit recommendations not implemented in a timely fashion. Mr. Pelletier wanted the Policy and Services Committee (Committee) and ultimately the City Council to indicate if the amount of time that had passed from acceptance of audit recommendations was acceptable. Council Member Espinosa appreciated the reminder to Council but he did not have the information needed to answer the question. If Mr. Pelletier identified an audit recommendation as needing attention, he presumed Mr. Pelletier would raise the issue with Mr. Keene and the Department head to determine if the Council should be involved. Mr. Pelletier agreed. Council Member Klein asked if the City Manager's Staff was prepared to respond. Attachment B DRAFT MINUTES Page 2 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Sheila Tucker, Assistant to the City Manager, indicated the City Manager would work with Mr. Pelletier to reach a consensus on a timeline to complete implementation of the audit recommendations. Mr. Pelletier reported he had not discussed the issue with the City Manager but would do so. Council Member Klein preferred to have the City Manager response. He requested color copies be used in future. Council Member Espinosa reiterated the need for discussion with the City Manager and Department heads prior to the Committee or City Council becoming involved. Mr. Pelletier apologized for the wording in his report and stated it was not intended to be strongly worded. His intent was to notify the Committee to open issues. Council Member Espinosa recalled previous reports which included a column indicating the Department head's agreement or explanations. Mr. Pelletier stated the information in the status update column was provided by the Departments. Council Member Espinosa stated an update was different from agreement or explanation. Mr. Pelletier indicated the report did not include information on the timeliness of implementation. Council Member Schmid noted the first two items, overtime and management span of control, dated back to 2003/2004 and had legal issues that needed to be resolved. He asked how Mr. Pelletier would deal with such issues. Mr. Pelletier reported those two audits were closed. The two audits were unique in that they were very complicated with legal issues that required negotiation. Attachment B DRAFT MINUTES Page 3 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Audits taking that long to close may be reasonable based on all those factors. Had they not been completed they would not have been timely. Council Member Schmid inquired whether the issues were relevant by the time they were settled. Yuki Matsuura, Senior Performance Auditor, reported the City Attorney's Office provided supporting documentation which indicated past actions addressed the finding and allowed closure of the audits for overtime expenditures and audit restructuring. Council Member Schmid asked if the audits could have been settled previously. Ms. Matsuura stated that it was a matter of interpretation but the additional communication helped resolve the issues. Council Member Schmid believed the base problem was information and personnel changes as the issues aged. Mr. Pelletier indicated his Staff discussed timeliness and relevance of the issues and had discussions with the departments. The departments had already taken action to address the recommendations; therefore, the audits were closed. Council Member Schmid stated no update was provided for Number 3, audits open from January 2008. Ms. Tucker suggested there was an oversight in providing the update to the Auditor. Assistant City Manager Pam Antil reported on the status of this item. The consultant did not complete the work and did not provide the final deliverables. Staff was working with the City Attorney's Office to terminate the consultant's contract and would need to secure outside assistance to complete the project. Council Member Schmid asked if the issues needed to be redefined. Attachment B DRAFT MINUTES Page 4 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Ms. Tucker stated it was an important issue for City Manager Keene. If the records could not be recovered Staff would need to start over. Council Member Schmid suggested reviewing the audit to ensure it was targeted at the current issues rather than the issues at the time of the audit. Chair Holman asked when the consultant stopped working and producing information. Mr. Pelletier believed he stopped working in January 2012. Chair Holman inquired when the work was expected to be completed. Ms. Tucker would obtain that information. She believed a work plan was prepared for completion of the work. Chair Holman stated it was a three to four year plan to accomplish the work. Ms. Tucker indicated the City did not retain the consultant's services until 2011. Council Member Schmid said the reports must have been coming in every quarter and the Committee should have raised that issue. He asked for comment on the four target dates of August 30, 2012 regarding packet page 28 regarding cash handling. David Ramberg, Assistant Director Administrative Services Department reported Staff issued an updated travel policy to City Staff which completed the recommendation; however, it was not issued in time to be included in the report. Item number 1, an updated cash handling policy, had a target date of October 31, 2012 and Staff intended to issue the policy by that date. Council Member Schmid recalled other groups were providing oversight of the library's finances and asked how the City Auditor's assessment was different or unique. Mr. Pelletier indicated the Auditor's Office could achieve more detail than the other agencies. Attachment B DRAFT MINUTES Page 5 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Houman Boussina, Senior Performance Auditor reported the focus of the audit was to review controls in terms of policies and procedures to ensure bond funds were used in accordance with the bond measure and any applicable Internal Revenue Service (IRS) provisions. The audit perspective was control, effectiveness, and compliance. Mr. Pelletier stated the major difference was reviewing the processes and controls underlying expenditures. Council Member Schmid said the Library Bond Oversight Committee (LBOC) was performing a high level review while the Auditor was reviewing the procedures. Mr. Pelletier indicated the Auditor was reviewing the process of how expenditures were made and how they complied with specific requirements of the bond measure or IRS requirements. Council Member Schmid inquired whether the Auditor performed a yearly audit. Mr. Pelletier reported only one time. Council Member Schmid asked if the Auditor assumed the correct procedures were in place as the project continued. Mr. Pelletier stated the goal was to identify good controls to ensure ongoing compliance with the requirements. Council Member Schmid inquired whether the Auditor would perform the same work if another large bond issue was approved. Mr. Pelletier indicated he would if the Council asked for it or if he felt it was a higher risk. Council Member Schmid asked if the Council could have confidence that the procedures were correct. Attachment B DRAFT MINUTES Page 6 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Mr. Pelletier answered yes. Council Member Klein recalled the Committee strongly recommended the rating of recommendations and inquired whether the Auditor's Office received the necessary cooperation and implementation of the audit recommendations. Mr. Pelletier felt Staff considered the recommendations seriously and took action. Staff faced limited resources and many priorities making it difficult to complete all priorities. Council Member Klein asked for Mr. Pelletier's comments regarding the three recommendations listed under the SAP Security Audit. Mr. Boussina felt most of the SAP Security Audit recommendations should be high priority. The Information Technology (IT) Department had taken the recommendations seriously as shown by the number of completed recommendations and changes in the IT Department. With regard to Recommendation Number 5, segregation of duties in terms of account administration functions, one of the significant findings that concerned Staff was potentially having the ability to upgrade their own access in the system. This was a key area of control recognized in information systems. The recommendation was essential because of the nature of what could happen if someone with technical knowledge and know-how had capabilities that should be separated. Mr. Pelletier reported the City's Information Security Manager, Raj Patel and Chief Information Officer, Jonathon Reichental were present for additional questions. Mr. Boussina reported Recommendation Number 12, adoption and implementation of information system security control frameworks, was considered essential because it established a framework and baseline of controls to ensure that IT was secure throughout the system. Payment Card Industry (PCI) and Data Security Standard (DSS) were also mandated. Attachment B DRAFT MINUTES Page 7 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Recommendation Number 13, development of the formal and comprehensive security policy consistent with security frameworks, existed to ensure the City had a policy of communicating, understanding, and being aware of security. Because of the security component the Auditor Staff felt it was an essential recommendation. Council Member Klein noted the recommendations were in progress and asked if Staff was comfortable with the timetable. Mr. Boussina believed the IT Department was taking the recommendations seriously. Mr. Pelletier reported the Information Security Manager established a steering committee, developed a comprehensive plan and strategy for information security, and developed a timeline for implementation of the plan and strategy. He was comfortable with their efforts and steps to move in the right direction. Council Member Espinosa asked why the recommendations were listed as not in progress. Mr. Boussina indicated there was a plan for implementation of the recommendations. The recommendations were being addressed, even though the specific recommendation had not been started. Mr. Pelletier stated the IT Department's plan was logical in terms of timing. It was a large and comprehensive undertaking and the plan addressed the entire issue over a reasonable period of time. Council Member Espinosa believed thought should be given to coming to Committee meetings with recommendations identified as essential as well as recommendations not being addressed in a timely fashion. He suggested Mr. Pelletier, City Manager Keene, and Department heads discuss essential recommendations not being addressed in a timely fashion. Mr. Pelletier agreed. Attachment B DRAFT MINUTES Page 8 of 8 P&S Committee Special Meeting Draft Minutes 09/11/12 Council Member Klein recommended calling those recommendations essential and not on track. Ms. Tucker asked the Committee to consider amending the report to note her verbal update. MOTION: Council Member Schmid moved, seconded by Council Member Klein that the Policy & Services Committee: 1) accept the Auditor’s Office Audit Recommendations (June 2012) and recommend City Council approval including the response to the audit recommendation from the Audit of Employee Ethics Policies provided to the City Auditor by the City Manager and the updated travel and Cash Handling policies, and 2) include sections on “essential and not on track” MOTION PASSED: 4-0 Attachment B CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR October 22, 2012 The Honorable City Council Palo Alto, California Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of June 30, 2012 The City Auditor’s Office recommends acceptance of the Auditor’s Office Quarterly Report as of June 30, 2012. At its meeting on September 11, 2012, the Policy and Services Committee approved and unanimously recommended the City Council accept the report. The Policy and Services Committee minutes are included in this packet. Respectfully submitted, Jim Pelletier City Auditor ATTACHMENTS:  Attachment A: Auditor's Office Quarterly Report as of June 30, 2012 (PDF)  Attachment B: Policy and Services Committee Meeting Minutes Excerpt (September 11, 2012) (PDF) Department Head: Jim Pelletier, City Auditor Updated: 10/16/2012 6:53 PM by Deniz Tunc Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR September 11, 2012 The Honorable City Council Attention: Policy & Services Committee Palo Alto, California Auditor's Office Quarterly Report as of June 30, 2012 RECOMMENDATION The City Auditor’s Office recommends the Policy and Services Committee review and recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of June 30, 2012. SUMMARY OF RESULTS In accordance with the Municipal Code, the City Auditor prepares an annual work plan and issues quarterly reports to the City Council describing the status and progress towards completion of the work plan. This report provides the City Council with an update on the fourth quarter and end of year report for FY 2012. Respectfully submitted, Jim Pelletier City Auditor ATTACHMENTS:  Attachment A: Auditor's Office Quarterly Report as of June 30, 2012 (PDF) Department Head: Jim Pelletier, City Auditor Attachment A Updated: 9/5/2012 12:04 PM by Deniz Tunc Page 2 Attachment A Fiscal Year 2012 “Promoting honest, efficient, effective, and fully accountable city government." Attachment A 1 July 2012 CONTENTS INTRODUCTION ................................................................................................................................................................... 2 OVERVIEW OF THE OFFICE OF THE CITY AUDITOR (OCA)...................................................................................................................... 2 OCA’S CORE PRODUCTS & SERVICES ............................................................................................................................................... 2 PROFESSIONAL STANDARDS ............................................................................................................................................................ 3 THE OCA TEAM ........................................................................................................................................................................... 3 SUMMARY OF 2012 ACCOMPLISHMENTS ............................................................................................................................ 6 OVERVIEW .................................................................................................................................................................................. 6 AUDITS ....................................................................................................................................................................................... 6 SPECIAL ADVISORY MEMORANDUM (SAM) ...................................................................................................................................... 8 OTHER MONITORING AND ADMINISTRATIVE ASSIGNMENTS .................................................................................................................. 8 OTHER OCA ACCOMPLISHMENTS .................................................................................................................................................. 10 Attachment A 2 July 2012 INTRODUCTION Overview of the Office of the City Auditor (OCA) The OCA conducts performance audits of City departments, programs, and services. Performance audits provide the City Council, City management, and the public with independent and objective information regarding the economy, efficiency, and effectiveness of City programs and activities. Our goal is to help the City achieve its strategic, operational, reporting, and compliance objectives using a systematic, disciplined approach to evaluating and recommending improvements to the effectiveness of the City’s risk management, control, and governance processes. Through our audit activities, the OCA supports the key governance roles of Oversight, Insight, and Foresight as described below: Oversight Insight Foresight OCA provides oversight of City management on behalf of the City Council and the residents of Palo Alto by evaluating whether departments have established efficient and effective means of doing what they are required to do, spending funds for intended purposes, and complying with applicable laws and regulations. OCA provides insight to assist City management by assessing the adequacy of internal controls; sharing best practices and benchmark information; and looking across departments to help management identify opportunities to borrow, adapt, or re-engineer good practices. OCA helps City management look forward by identifying trends and bringing attention to emerging challenges before they become crises. These issues often represent long-term risks that can sometimes receive low priority for attention where scarce resources drive more short-term focus on urgent concerns. OCA’s Core Products & Services Audits – OCA’s core product addressing performance (efficiency and effectiveness), compliance, and information technology matters that provide management with value-added recommendations focused on mitigating risks and improving internal control. Audits are designed to support the achievement of the City’s strategic, operational, reporting, and compliance objectives and the City Council’s priorities. Service Efforts and Accomplishments (SEA) and Citizen Centric Report (CCR) – The SEA is an annual report that provides data about the costs, quality, quantity, and timeliness of City services. The report includes a variety of comparisons to other cities and the results of a citizen survey. The goal is to provide the residents of Palo Alto, the City Council, City Staff, and other stakeholders with information on past performance to strengthen public accountability, improve government efficiency and effectiveness, and support future decision making. Prepared in coordination with the annual SEA report, the CCR is intended to be a brief, easy to read document that provides a quick snapshot of the City’s progress over the year. Based on guidance from the Association of Government Accountants, the report is a method to foster innovative means of communication between the City and the public. Administration of the Fraud, Waste, and Abuse Hotline (Hotline) – The Hotline provides an anonymous mechanism for employees to report fraud, waste, and/or abuse of City resources. The OCA is responsible for partnering with an outside vendor to administer the Hotline and ensure that all calls are reviewed and acted upon by the Hotline Review Committee. The OCA may, as necessary, investigate certain cases. Additionally, the OCA will provide quarterly reporting of Hotline activity to the City Council. Attachment A 3 July 2012 Special Advisory Memorandums (SAMs) – Utilized for time critical engagements including limited assessments, reviews, or evaluations as requested by management or the Council. These services do not typically conform to the rigorous audit standards required for Audits, but allow for important information to be provided to management in a quick, flexible manner and can be focused on singular issues. Comprehensive Annual Financial Report (CAFR) and Single Audit Report – Each year, the OCA contracts with an independent, certified public accountant to perform both the City’s annual financial audit as well as the annual Single Audit. Sales and Use Tax Monitoring – The OCA conducts sales and use tax monitoring internally and contracts with an external vendor for quarterly sales and use tax recovery and information services. The purpose of this monitoring is to identify misallocations of local sales and use tax generated by companies doing business in Palo Alto. In addition, the external vendor prepares quarterly sales and use tax summary reports that are provided to the City Council as informational items. Professional Standards The OCA must adhere to a set of professional standards in conducting its work. The Palo Alto Municipal Code requires the OCA to adhere to Government Auditing Standards issued by the US Government Accountability Office. These standards require that we plan and perform our audits to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on the objectives of each audit. The OCA’s compliance with these standards is reviewed every three years by an external firm. The OCA Team Jim Pelletier, CIA City Auditor Jim has over 14 years of internal audit and business process improvement experience in both the private and public sectors. Prior to joining the City in 2012, Jim was the Chief of Audits for the County of San Diego’s Office of Audits and Advisory Services (OAAS) where he led a team of fourteen professionals in the execution of the annual, risk-based audit plan. Under his leadership, the OAAS received the National Association of Counties 2011 Achievement Award for Accountability & Transparency of ARRA Funds as well as the 2010 Achievement Award for the Management Control Initiative. Additionally, the County received Honorable Mention for the Government Finance Officers’ Association’s (GFOA) Award for Excellence in Government Finance for the Management Control Initiative. Additional auditing experience was gained from PETCO Animal Supplies, Inc., the California State University (Chancellor’s Office), State Street Corporation, and General Electric. In addition to his Bachelor of Science in Computer Information Systems from Bentley University, Jim graduated from General Electric’s Leadership Development Program, a management training program geared toward leadership development and broad business exposure through cross-functional, rotational assignments and training in Six Sigma process improvement methodologies. Jim is also a Certified Internal Auditor (CIA) and a member of the Institute of Internal Auditors (IIA). His article titled “Adding Risk Back Into the Audit Process” was published in the August 2008 issue of the IIA’s Internal Auditor magazine and was selected as the John B. Thurston award winner for literary excellence in the field of Attachment A 4 July 2012 Internal Auditing. Houman Boussina, CIA, CISA, CGAP, CRMA Senior Performance Auditor Houman has over seven years of local government audit experience. Houman was a Performance Auditor at the City and County of San Francisco and was promoted to Audit Manager prior to joining the City as a Senior Performance Auditor in June 2010. Houman has conducted audits covering a variety of subject areas including contract management and compliance, effectiveness and efficiency of business processes and information systems, use of government funds, and investigations. Houman has emphasized use of computer-assisted audited techniques and database analytic procedures in audit work, resulting in high impact audits, such as a 2009 contract compliance audit which led to recuperation of over $4 million for the City and County of San Francisco and a 2011 information system security audit, which identified serious security vulnerabilities in the City's SAP Enterprise Resource Planning system. These two audits received the prestigious Knighton Award from the Association of Local Government Auditors (ALGA). Since 2010, Houman has also worked on the City’s Service Efforts and Accomplishments (SEA) and Citizen-Centric Reports, which have been awarded the Gold Certificate of Achievement in Service Efforts and Accomplishments Reporting and the Certificate of Excellence in Citizen- Centric Reporting from the Association of Government Accountants (AGA). Houman has a Bachelor of Arts in Applied Sciences from the University of the Pacific and a Master of Science in Accountancy from San Jose State University. Houman is a Certified Internal Auditor (CIA), a Certified Internal Systems Auditor (CISA), and a Certified Government Auditing Professional (CGAP). He also has been awarded by the Institute of Internal Auditors (IIA) the Certification in Risk Management Assurance (CRMA) and the William S. Smith Certificate of Honor for a high score on the CIA examination. Mimi Nguyen Senior Performance Auditor Mimi has over 11 years of accounting, finance, business improvement, and audit experience in both the private and public sectors. As a Controller in the private sector, Mimi developed business strategies to ensure fiscal responsibility. Mimi spearheaded many business process improvements, the most robust being the successful conversion of a fully integrated accounting, billing, project management, and timekeeping software system from cradle to grave. The conversion included conducting a project management needs assessment, implementing an efficiency plan, cleansing and converting large data sets, and developing a collective, collaborative transition plan through implementation. The system conversion received honorable recognition from the software company. Mimi joined the City in 2006 and has demonstrated a commitment to improving the efficiency and effectiveness of City programs in her roles as a Senior Accountant and Senior Financial Analyst. Mimi participated in compiling and preparing the City’s Comprehensive Annual Financial Report (CAFR) and Operating Budget document, which received the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting and the California Society of Municipal Finance Officers (CSMFO) Certificate of Award for Excellence in Operating Budgeting, respectively. Since joining the audit team, Mimi has worked on the 2011 SAP Security Audit which received the prestigious Knighton Award from the Association of Local Government Attachment A 5 July 2012 Auditors (ALGA) and the City’s Service Efforts and Accomplishments (SEA) and Citizen-Centric Reports, which were awarded the Gold Certificate of Achievement in Service Efforts and Accomplishments Reporting and the Certificate of Excellence in Citizen-Centric Reporting from the Association of Government Accountants (AGA). Mimi received training in Intermediate and Advanced Governmental Accounting and Budgeting from the Government Finance Officers Association (GFOA) and Governmental Auditing from the Graduate School in Washington D.C. She is currently pursuing the Certified Fraud Examiner (CFE) and Certified Government Auditing Professional (CGAP) certifications. Yuki Matsuura, CPA, CCSA, CRMA Senior Performance Auditor Yuki has over 12 years of professional experience including 8 years as a local government auditor. Prior to joining the City in May 2012, Yuki worked as a Supervising Senior Auditor for the County of San Diego’s Office of Audits and Advisory Services (OAAS) where she led a number of audit and advisory service projects while providing hands-on training to audit staff. Yuki was also responsible for Internal and External Quality Assessments and developed innovative solutions to increase efficiency and effectiveness of the internal audit activity. Examples include developing a Management Control Initiative Handbook to provide County management and staff with expert guidance and training to promote risk management; developing standard risk assessment and testing procedures for the Financial Risk Assessment and Controls Project to increase involvement of the process owners; and developing and building standard audit procedures and tools into the Audit Management System to ensure staff compliance with professional standards. Her diverse professional and educational background formed her strong critical thinking and problem solving skills. After obtaining a bachelor’s degree in Education in Japan, she went to work for JIEC Co., Ltd. In Tokyo as a Systems Engineer and received extensive IT training. She later provided IT consulting services to clients in both public and private sectors. She then attended graduate school and obtained a Master of Pacific International Affairs (MPIA) from the University of California, San Diego (UCSD), where she studied how management, public policy, and international interactions shape strategic decision-making. Upon graduation, she joined an inaugural scholarship foundation as a Marketing Coordinator and helped coordinate fundraising, sponsor relations, and a successful inaugural benefit concert. She returned to UCSD and received a Professional Certificate in Accounting before joining the County of San Diego. Yuki is a Certified Public Accountant (CPA) licensed in California and a member of the American Institute of Certified Public Accountants (AICPA). She is also a member of the Institute of Internal Auditors (IIA) and has Certifications in Control Self-Assessment (CCSA) and Risk Management Assurance (CRMA). Her article titled “Using the Whole Mind for Risk Management” was published in the April 2012 issue of the IIA’s Internal Auditor magazine. Lisa Wehara Performance Auditor (part-time) Lisa has auditing and accounting experience in both the public and private sectors. She was previously a senior auditor for the City for four years, and returned part-time in 2004 to primarily identify and correct sales and use tax misallocations to increase the City’s revenue (over $400,000 to date). Lisa also assists wherever needed including providing quality control for the Service Efforts and Accomplishments report and other audit reports to Attachment A 6 July 2012 ensure the reports are adequately supported by documentation. Prior to joining the City, Lisa audited for five years at government entities including the California State Auditor – Bureau of State Audits, the California State Legislature – Office of the Auditor General, the City and County of San Francisco, and the County of Alameda. Her previous accounting experience was gained at the University of California at Berkeley and other employers. Lisa has earned her certifications as a Certified Public Accountant and Certified Internal Auditor (licenses inactive). Summary of 2012 Accomplishments Overview In FY 2012, the OCA succeeded in our mission of promoting honest, efficient, effective, and fully accountable city government. The City Manager and staff helped us achieve this by agreeing to take action on the 31 recommendations we made in our audit reports. Additionally, our nationally recognized Service Efforts and Accomplishments Report strengthened public accountability and provided information to improve the City’s efficiency and effectiveness and to support future decision making. The audit function is essential to the City of Palo Alto’s public accountability. The Office of the City Auditor’s independence and accountability, mandated by the City Charter and municipal code, means the public, the Council, and City staff can rely on us for objective information and practical advice. We thoroughly review and analyze City performance to give you the information you need about complex and difficult issues. Taking action on our audit recommendations will help the City to reduce risks and protect its good reputation. Audits In Fiscal Year 2012, the OCA completed five Performance Audits with an additional three in process, as summarized below: Title Objective(s) Status Results/Comments Service Efforts & Accomplishments / Citizen Centric Report To provide consistent, reliable information on the performance of City services to:  Assist users in assessing whether the City is achieving its goals and objectives in an efficient and effective manner  Assist the City in meeting its responsibilities to be publicly accountable in the stewardship over public resources Completed These reports provide comprehensive and historical data and analysis that is not available in any other single report in the City. The SEA and CCR are available online or hardcopy from the OCA. Attachment A 7 July 2012 Title Objective(s) Status Results/Comments Audit of Library Bond Proceeds Evaluate the controls over the use of the general obligation bond funds to ensure they are used efficiently in compliance with federal regulations for the use of tax exempt bond funds. Completed The City has used Library Bond funds appropriately and established oversight processes to help ensure the proper use of bond funds. However, ASD and PWD should formalize policies and procedures to ensure ongoing compliance with Federal and State regulations. Audit of Purchasing Card Transactions Determine the adequacy of controls over purchasing card transactions and assess compliance with existing guidelines and procedures. Completed While our review found most purchasing card transactions appear to comply with City policy, some improvements could enhance oversight. Additionally, while the City has established purchasing cards as a method of payment for low dollar goods and services, opportunities exist for the City to further increase purchasing card usage and realize additional operational efficiencies. Utilities Department Risk Assessment To identify areas of strengths as well as opportunities for improvement within each division of the Utilities Department. Completed Worked with an external utilities consultant. Results were incorporated into the OCA Risk Assessment process. SAP Security Audit To assess controls required to proper secure SAP. Completed The City has not formally adopted and implemented all controls needed to secure SAP and comply with the Payment Card Industry Data Security Standard and other applicable security control frameworks. Contract Administration Audit (Audit of Contract Oversight) To assess whether internal controls are effective and adequate to ensure that City contracts are administered in accordance with Municipal Code and relevant policies and procedures. The audit focused on the City’s contract with OfficeMax. In Process (Reporting) TBD Utilities Reserves Audit To determine the appropriateness and adequacy of utilities reserves, reserve policy, reserve guidelines, and its usage. In Process (Reporting) TBD Attachment A 8 July 2012 Title Objective(s) Status Results/Comments Human Resources Employee Benefits To determine whether the Human Resources Department has adequate controls over employee benefits to ensure that health premiums and administrative fees are calculated and paid accurately for eligible active and retired employees in accordance with applicable labor agreements, laws, and regulations. In Process (Fieldwork) TBD Special Advisory Memorandum (SAM) The SAM was introduced in 2012 to allow for important information to be provided to the Council and management in a quick, flexible manner. While no SAMs were planned for 2012, an issue was identified that was a good fit for the use of the SAM. Please see the summary below: Title Objective(s) Status Results/Comments SAM – Security Vulnerability in the City’s SAP Enterprise Resource Planning System To inform the City Council of the results of a review of a significant SAP security vulnerability that allowed certain individuals with SAP access to view employee personal information they did not have a business need to know. Complete OCA worked collaboratively with ASD and IT staff to ensure appropriate actions are being taken to address overall SAP security. Other Monitoring and Administrative Assignments Other assignment completed by OCA in FY 2012 include: Title Objective(s) Status Results/Comments Alternative Fuel Tax Credit Recoveries Revenue monitoring and recoveries of the Federal government’s alternative fuel tax program (extended through December 31, 2011). Complete Working with ASD and the Utilities Department, the OCA prepared and filed claims for $49,235. The City received payment for the claims in early 2012. Attachment A 9 July 2012 Title Objective(s) Status Results/Comments Sales and Use Tax Allocation Reviews The OCA conducts sales and use tax monitoring in-house and also contracts with an outside vendor. Ongoing In FY 2012, the OCA submitted multiple inquiries to the State Board of Equalization. As of the end of FY 2012, the City received $111,253 in total Sales and Use Tax Recoveries ($82,773 from OCA inquiries and $28,480 from vendor inquiries). Also, due to processing lags at the State Board of Equalization, there are 53 potential misallocations waiting to be researched and processed (29 from OCA and 24 from the vendor). City Manager Loan Review The terms of the loan specify that each year the ASD will recalculate, and the OCA will confirm, the payment amount for the next twenty-six installments of the City Manager’s loans. Complete We found that ASD has in all material respects correctly calculated the FY 2013 payment installments for the City Manager’s loans. We did not verify the City’s portfolio rate, payments already made by the City Manager, the remaining term of the loan, or the accuracy of the loan balance as reported by ASD. We found an immaterial discrepancy between our calculation and ASD’s calculation of the interest and principal amounts applicable each pay period for the loan balance. We have brought this discrepancy and the underlying cause to the attention of ASD Staff. Quarterly Reporting Each quarter, the OCA prepares Quarterly Status Updates and Sales Tax Digest Summaries for Council review. Complete N/A Contracting for CAFR and Single Audit Report Each year, the OCA contracts with an independent, certified public accountant to perform both the City’s annual financial audit as well as the annual Single Audit. Complete N/A Attachment A 10 July 2012 Other OCA Accomplishments Other Key Accomplishments for FY 2012 include:  An external quality control review coordinated through the Association of Local Government Auditors, found that the OCA’s internal quality control system was suitably designed and operating effectively to provide reasonable assurance of compliance with Government Auditing Standards for audits and attestation engagements during the period July 2008 through June 2011  The OCA received the Gold Award for excellence in Service Efforts and Accomplishments reporting as well as the Certificate of Excellence in Citizen Centric Reporting from the Association of Government Accountants  The OCA received a 2011 Honorable Mention Knighton Award for best performance audit in the Small Audit Shop category by the Association of Local Government Auditors (ALGA)  The OCA conducted community outreach on the Service Efforts and Accomplishments Report and the Citizen-Centric Report, meeting with the Library Advisory Commission and the City/School Liaison Committee  Worked closely with the City Manager and City Attorney in the development of the Hotline Administration Policy  Senior Performance Auditor, Houman Boussina, earned two professional certifications: Certified Information Systems Auditor (CISA) and Certification in Risk Management Assurance (CRMA)  Senior Performance Auditors, Houman Boussina and Mimi Nguyen, presented the SAP Security Audit to the Bay Area Association of Local Government Auditors  Hired a new Senior Performance Auditor, Yuki Matsuura  Senior Performance Auditor, Yuki Matsuura, was published in Internal Auditor magazine for her article titled “Using the Whole Mind for Risk Management”  Senior Performance Auditor, Ian Hagerman, participated in the quality assurance peer review for the city of Portland, OR Attachment A Policy and Services Committee EXCERPT Page 1 of 11 Special Meeting Tuesday, September 11, 2012 Auditor's Office Quarterly Report as of June 30, 2012. Jim Pelletier, City Auditor, presented the quarterly status update of the accomplishments for the fiscal year audits completed. The audit of contract administration was in process and Staff issued the final draft report on September 7, 2012. Staff had five weeks to respond; those responses would be incorporated into the report and Staff would present the final report to the Policy and Services Committee (Committee). The Utility Reserves audit was in process. Exit conferences were scheduled for September 17, 2012. The final audit in process was the Human Resources Employee Benefits audit which it was currently in the field work stage. The Service Efforts and Accomplishments (SEA) audit was also in process. Staff would shift their efforts to the SEA audit in the next few weeks. Council Member Espinosa suggested including a timeline for the audits in process. Mr. Pelletier reported one temporary, part-time position had been changed to a regular, part-time position. That position recovered approximately $138,000 in the prior fiscal year in sales and use tax. The position paid for itself from the recovery perspective and the employee was a former auditor who had the experience to assist with other assignments. The Audit Department passed the external quality control review in full compliance with standards. The City received a Knighton Award for the SAP Security Audit. Staff completed the hotline administrative policy, and the hotline went live on August 16, 2012. Council Member Klein asked if the hotline had received any calls. Mr. Pelletier noted one call to the hotline concerning a policy. Staff obtained Attachment B DRAFT MINUTES Page 2 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 a response from the Human Resources Department and answered the caller's question. Council Member Schmid suggested the status include dates. He did not recall an audit report from the Utilities Department risk assessment but assumed it was included in the Audit Department's overall work plan. Mr. Pelletier indicated results of the Utilities Department risk assessment was incorporated into the City's overall risk assessment. There was no separate report for that item. Council Member Schmid asked if there was a separate list of recommendations from that. Mr. Pelletier answered no. That was purely an assessment. Council Member Schmid inquired whether the Audit Department was tracking the impacts. Mr. Pelletier stated there was nothing to track. Council Member Schmid asked if there were two full audits in process. Mr. Pelletier stated three audits were in process: contract administration, utilities reserve, and human resources. Council Member Schmid noted one objective of the human resources audit was to ensure that health premiums and administrative fees were paid accurately. He felt a critical risk area was accurately calculating the premiums and fees. Mr. Pelletier stated part of the accuracy check was to ensure that payments were accurate. Council Member Schmid suggested including that in the objectives. Mr. Pelletier agreed. Council Member Schmid noted the lack of Special Advisory Memoranda (SAM) and asked how those could be announced. Mr. Pelletier reported the SAMs tool would be utilized outside the normal audit process. Issues that did not require 600-800 hours for an audit could be reported quickly using a SAM. Attachment B DRAFT MINUTES Page 3 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 Council Member Schmid inquired whether SAMs would be included in the quarterly reports. Mr. Pelletier reported a certain number of hours were budgeted for SAMs and he wanted to ensure those hours were utilized for important ideas. Council Member Schmid noted the sales and use tax numbers in the tables were not identified. The last tables describing the geographic component were year numbers rather than quarterly numbers, even though they were given each quarter. He suggested discussing that prior to preparation of the next report. Mr. Pelletier indicated he would request the vendor make that change. Council Member Schmid suggested the report include a breakdown of where resources were spent in the prior year to allow a comparison of the prior year with the current year. Mr. Pelletier did not have the data he needed to put that together for the current report but it was his intention to include it in the next report. MOTION: Council Member Espinosa moved, seconded by Council Member Schmid that the Policy & Services Committee accept the Auditor’s Office Quarterly Report as of June 30, 2012 and recommend City Council approval. MOTION PASSED: 4-0 1. Report on the Status of Audit Recommendations (June 2012). Jim Pelletier, City Auditor, presented the annual report on the status of audit recommendations. The report summarized the status of 64 audit recommendations from eight completed audit reports, including 33 recommendations from the prior status report and 31 new recommendations from audit reports issued during the prior fiscal year. Changes to the report included the finding each recommendation was based on, a rating system for recommendations based on his judgment, and a target date for implementation of audit recommendations. The red circles in the report indicated items he judged were not implemented in a timely manner. Council Member Espinosa suggested Mr. Pelletier notify Staff when he had concerns. He asked Mr. Pelletier to comment on the many audit Attachment B DRAFT MINUTES Page 4 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 recommendations not implemented in a timely fashion. Mr. Pelletier wanted the Policy and Services Committee (Committee) and ultimately the City Council to indicate if the amount of time that had passed from acceptance of audit recommendations was acceptable. Council Member Espinosa appreciated the reminder to Council but he did not have the information needed to answer the question. If Mr. Pelletier identified an audit recommendation as needing attention, he presumed Mr. Pelletier would raise the issue with Mr. Keene and the Department head to determine if the Council should be involved. Mr. Pelletier agreed. Council Member Klein asked if the City Manager's Staff was prepared to respond. Sheila Tucker, Assistant to the City Manager, indicated the City Manager would work with Mr. Pelletier to reach a consensus on a timeline to complete implementation of the audit recommendations. Mr. Pelletier reported he had not discussed the issue with the City Manager but would do so. Council Member Klein preferred to have the City Manager response. He requested color copies be used in future. Council Member Espinosa reiterated the need for discussion with the City Manager and Department heads prior to the Committee or City Council becoming involved. Mr. Pelletier apologized for the wording in his report and stated it was not intended to be strongly worded. His intent was to notify the Committee to open issues. Council Member Espinosa recalled previous reports which included a column indicating the Department head's agreement or explanations. Mr. Pelletier stated the information in the status update column was Attachment B DRAFT MINUTES Page 5 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 provided by the Departments. Council Member Espinosa stated an update was different from agreement or explanation. Mr. Pelletier indicated the report did not include information on the timeliness of implementation. Council Member Schmid noted the first two items, overtime and management span of control, dated back to 2003/2004 and had legal issues that needed to be resolved. He asked how Mr. Pelletier would deal with such issues. Mr. Pelletier reported those two audits were closed. The two audits were unique in that they were very complicated with legal issues that required negotiation. Audits taking that long to close may be reasonable based on all those factors. Had they not been completed they would not have been timely. Council Member Schmid inquired whether the issues were relevant by the time they were settled. Yuki Matsuura, Senior Performance Auditor, reported the City Attorney's Office provided supporting documentation which indicated past actions addressed the finding and allowed closure of the audits for overtime expenditures and audit restructuring. Council Member Schmid asked if the audits could have been settled previously. Ms. Matsuura stated that it was a matter of interpretation but the additional communication helped resolve the issues. Council Member Schmid believed the base problem was information and personnel changes as the issues aged. Mr. Pelletier indicated his Staff discussed timeliness and relevance of the issues and had discussions with the departments. The departments had Attachment B DRAFT MINUTES Page 6 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 already taken action to address the recommendations; therefore, the audits were closed. Council Member Schmid stated no update was provided for Number 3, audits open from January 2008. Ms. Tucker suggested there was an oversight in providing the update to the Auditor. Assistant City Manager Pam Antil reported on the status of this item. The consultant did not complete the work and did not provide the final deliverables. Staff was working with the City Attorney's Office to terminate the consultant's contract and would need to secure outside assistance to complete the project. Council Member Schmid asked if the issues needed to be redefined. Ms. Tucker stated it was an important issue for City Manager Keene. If the records could not be recovered Staff would need to start over. Council Member Schmid suggested reviewing the audit to ensure it was targeted at the current issues rather than the issues at the time of the audit. Chair Holman asked when the consultant stopped working and producing information. Mr. Pelletier believed he stopped working in January 2012. Chair Holman inquired when the work was expected to be completed. Ms. Tucker would obtain that information. She believed a work plan was prepared for completion of the work. Chair Holman stated it was a three to four year plan to accomplish the work. Ms. Tucker indicated the City did not retain the consultant's services until 2011. Council Member Schmid said the reports must have been coming in every Attachment B DRAFT MINUTES Page 7 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 quarter and the Committee should have raised that issue. He asked for comment on the four target dates of August 30, 2012 regarding packet page 28 regarding cash handling. David Ramberg, Assistant Director Administrative Services Department reported Staff issued an updated travel policy to City Staff which completed the recommendation; however, it was not issued in time to be included in the report. Item number 1, an updated cash handling policy, had a target date of October 31, 2012 and Staff intended to issue the policy by that date. Council Member Schmid recalled other groups were providing oversight of the library's finances and asked how the City Auditor's assessment was different or unique. Mr. Pelletier indicated the Auditor's Office could achieve more detail than the other agencies. Houman Boussina, Senior Performance Auditor reported the focus of the audit was to review controls in terms of policies and procedures to ensure bond funds were used in accordance with the bond measure and any applicable Internal Revenue Service (IRS) provisions. The audit perspective was control, effectiveness, and compliance. Mr. Pelletier stated the major difference was reviewing the processes and controls underlying expenditures. Council Member Schmid said the Library Bond Oversight Committee (LBOC) was performing a high level review while the Auditor was reviewing the procedures. Mr. Pelletier indicated the Auditor was reviewing the process of how expenditures were made and how they complied with specific requirements of the bond measure or IRS requirements. Council Member Schmid inquired whether the Auditor performed a yearly audit. Mr. Pelletier reported only one time. Attachment B DRAFT MINUTES Page 8 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 Council Member Schmid asked if the Auditor assumed the correct procedures were in place as the project continued. Mr. Pelletier stated the goal was to identify good controls to ensure ongoing compliance with the requirements. Council Member Schmid inquired whether the Auditor would perform the same work if another large bond issue was approved. Mr. Pelletier indicated he would if the Council asked for it or if he felt it was a higher risk. Council Member Schmid asked if the Council could have confidence that the procedures were correct. Mr. Pelletier answered yes. Council Member Klein recalled the Committee strongly recommended the rating of recommendations and inquired whether the Auditor's Office received the necessary cooperation and implementation of the audit recommendations. Mr. Pelletier felt Staff considered the recommendations seriously and took action. Staff faced limited resources and many priorities making it difficult to complete all priorities. Council Member Klein asked for Mr. Pelletier's comments regarding the three recommendations listed under the SAP Security Audit. Mr. Boussina felt most of the SAP Security Audit recommendations should be high priority. The Information Technology (IT) Department had taken the recommendations seriously as shown by the number of completed recommendations and changes in the IT Department. With regard to Recommendation Number 5, segregation of duties in terms of account administration functions, one of the significant findings that concerned Staff was potentially having the ability to upgrade their own access in the system. This was a key area of control recognized in information systems. The Attachment B DRAFT MINUTES Page 9 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 recommendation was essential because of the nature of what could happen if someone with technical knowledge and know-how had capabilities that should be separated. Mr. Pelletier reported the City's Information Security Manager, Raj Patel and Chief Information Officer, Jonathon Reichental were present for additional questions. Mr. Boussina reported Recommendation Number 12, adoption and implementation of information system security control frameworks, was considered essential because it established a framework and baseline of controls to ensure that IT was secure throughout the system. Payment Card Industry (PCI) and Data Security Standard (DSS) were also mandated. Recommendation Number 13, development of the formal and comprehensive security policy consistent with security frameworks, existed to ensure the City had a policy of communicating, understanding, and being aware of security. Because of the security component the Auditor Staff felt it was an essential recommendation. Council Member Klein noted the recommendations were in progress and asked if Staff was comfortable with the timetable. Mr. Boussina believed the IT Department was taking the recommendations seriously. Mr. Pelletier reported the Information Security Manager established a steering committee, developed a comprehensive plan and strategy for information security, and developed a timeline for implementation of the plan and strategy. He was comfortable with their efforts and steps to move in the right direction. Council Member Espinosa asked why the recommendations were listed as not in progress. Mr. Boussina indicated there was a plan for implementation of the Attachment B DRAFT MINUTES Page 10 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 recommendations. The recommendations were being addressed, even though the specific recommendation had not been started. Mr. Pelletier stated the IT Department's plan was logical in terms of timing. It was a large and comprehensive undertaking and the plan addressed the entire issue over a reasonable period of time. Council Member Espinosa believed thought should be given to coming to Committee meetings with recommendations identified as essential as well as recommendations not being addressed in a timely fashion. He suggested Mr. Pelletier, City Manager Keene, and Department heads discuss essential recommendations not being addressed in a timely fashion. Mr. Pelletier agreed. Council Member Klein recommended calling those recommendations essential and not on track. Ms. Tucker asked the Committee to consider amending the report to note her verbal update. MOTION: Council Member Schmid moved, seconded by Council Member Klein that the Policy & Services Committee: 1) accept the Auditor’s Office Audit Recommendations (June 2012) and recommend City Council approval including the response to the audit recommendation from the Audit of Employee Ethics Policies provided to the City Auditor by the City Manager and the updated travel and Cash Handling policies, and 2) include sections on “essential and not on track” MOTION PASSED: 4-0 2. Input on Outreach and Development Process for Update of Comprehensive Plan Business and Economics Element. Chair Holman suggested documents be provided in color or use colors that would reproduce clearly in black and white. FUTURE MEETINGS AND AGENDAS Attachment B DRAFT MINUTES Page 11 of 11 P&S Committee Special Meeting Draft Minutes 09/11/12 Chair Holman indicated the Agenda for October 9, 2012 had two Items: human habitation of vehicles and fire resources services and the utilization study update. She asked if the Items would be ready for the October 9th meeting. Sheila Tucker, Assistant to the City Manager answered yes. Council Member Schmid asked if both Items would be substantial. Chair Holman responded yes. She was uncertain if the meeting should be held in the Council Conference room or in Council Chambers. Ms. Tucker suggested the meeting be held in Council Chambers. Chair Holman noted Staff would poll for a second meeting date in October. Ms. Tucker inquired about the start time of the meeting. Council Member Klein suggested 7:00 P.M. Council Member Espinosa would not be available for an early start time. Chair Holman was uncertain if she would be present on October 9, 2012. Ms. Tucker indicated City Manager Keene would not be available on October 9, 2012. She suggested polling for another date for the meeting. Council Member Espinosa wanted to keep the date of October 9th if possible. Chair Holman stated the meeting would be held on October 9, 2012, with Staff polling for a second meeting date in October. Council Member Schmid noted the second date could be earlier or later. Chair Holman suggested moving one of the Items on the October 9th Agenda to the second date if necessary. ADJOURNMENT: The meeting was adjourned at 7:20 P.M. Attachment B City of Palo Alto (ID # 3117) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/22/2012 City of Palo Alto Page 1 Summary Title: Approval of Change to Purchase Order with One Workplace Title: Approval of Increase to Purchase Order with One Workplace to Add $71,646 for a Total Amount Not to Exceed $703,794 for Standard Furniture for the Mitchell Park Library and Community Center From: City Manager Lead Department: Library Recommendation Staff recommends that Council approve and authorize the City Manager or designee to approve a $38,646 increase to Purchase Order (PO) #4512000787 to One Workplace for the standard furniture for the Mitchell Park Library and Community Center project and to authorize a $33,000 contingency for a total not to exceed amount of $703,794. The PO was originally issued for $632,148. Background The Mitchell Park Library and Community Center, located at 3700 Middlefield Road, is a joint facility funded by the November 2008 voter-approved Measure N. The Library will be a two- story 41,000 square foot facility adjacent to the 15,000 square foot single story community center, requiring the provision and installation of 1,163 pieces of 85 different furniture bid items. A request for quotation for the provision of the selected standard furniture was issued in November 2011. Three proposals were received and the staff recommended that Council approve and authorize the City Manager or designee to execute a purchase order with One Workplace in the amount of $632,148 for standard furniture for the joint facility. At that time, the facility was expected to open in Fall 2012. Discussion In May 2012, it became clear to City staff that the project would be delayed and notified One City of Palo Alto Page 2 Workplace to hold off on placing the order for the standard furniture based on analysis that it would be more cost-effective to pay material price increases to purchase the furniture at a later date than to order the furniture and pay storage costs until the building was ready for furniture installation. In July 2012, project schedules showed that standard furniture installation would begin in or around November 2012, so staff gave One Workplace approval to place the order. However, price increases have occurred since the delay that the City must cover. Staff has analyzed the increases and recommends that $38,646 be added to the PO to cover those increases. In addition, staff is also recommending adding a contingency of $33,000 that would cover storage costs should the delivery and installation of the furniture be delayed again. The facility is expected to be completed in Spring 2013. Resource Impact There is no impact on the General Fund. The purchase is fully funded by the Palo Alto Library Foundation donation adopted in a Budget Amendment Ordinance on December 19, 2011. (CMR 2258) Attachments:  Attachment A: One Workplace Price Quote 9-06-12 (PDF) ONE WORKPLACE Date 9/6/2012 Project Title MITCHELL PARK LIBRARY & COMMUNITY CENTER STANDARD FURNITURE Request for Quotations (RFQ) number 143993 (Mitchell Park Library) ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 1 3 EA sB-1 - Davis Bench 3002 - A103 Entry Library (Per Specs) $856.00 $2,568.00 9 Weeks 2 16 EA sCC-3A / Café Chair (outdoor armchair) A235/A236 (Per the attached specifications)$426.20 $6,819.20 16 Weeks 3 16 EA sCC-3B / Café Chair (outdoor) (Per the attached specifications)$292.00 $4,672.00 16 Weeks 4 12 EA sCL-1 / Lounge Chair (Per the attached specifications)$1,365.54 $16,386.48 6 Weeks 5 24 EA sCL-2 / Lounge Chair (Per the attached specifications)$1,546.39 $37,113.36 8 Weeks 6 24 EA sCL-3 / Lounge Chair (Per the attached specifications)$1,457.32 $34,975.68 8 Weeks 7 8 EA sCL-4A / Lounge Chair (children's) (Per the attached specifications)$925.00 $7,400.00 8 Weeks 8 3 EA sCL-4B / Lounge Chair (children's) (Per the attached specifications)$1,317.00 $3,951.00 8 Weeks 9 10 EA sCL-5 / Lounge Chair (children's) (Per the attached specifications)$1,035.48 $10,354.80 6 Weeks City of Palo Alto 143993 Rev. 09/06/2012 QUOTATION REVISION DATE: SEPTEMBER 6TH, 2012 ONE WORKPLACE Date 9/6/2012 SECTION III - SPECIFICATIONS ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 10 4 EA sCL-6 / Lounge Booth (children's) (Per the attached specifications)$2,343.00 $9,372.00 5 Weeks 11 4 EA sCL-7A / Lounge Chair (preschool) (Per the attached specifications)$1,219.00 $4,876.00 8 Weeks 12 2 EA sCL-7B / Lounge Chair (preschool) (Per the attached specifications)$2,016.00 $4,032.00 8 Weeks 13 1 EA sCL-8 / Lounge Booth (preschool) (Per the attached specifications)$6,715.00 $6,715.00 8 Weeks 14 8 EA sCL-13 / Lounge Chair (teen) (Per the attached specifications)$1,310.00 $10,480.00 5 Weeks 15 2 EA sCL- 14A / Lounge Booth (teen) (Per the attached specifications)$3,763.95 $7,527.90 5 Weeks 16 2 EA sCL- 14B / Lounge Booth (teen) (Per the attached specifications)$1,820.00 $3,640.00 5 Weeks 17 2 EA sCL-14C1 / Lounge Booth (teen) (Per the attached specifications)$1,745.00 $3,490.00 5 Weeks 18 32 EA sCM-1 / Meeting Chair (Per the attached specifications)$0.00 $0.00 5 Weeks 19 30 EA sCR-1A / Reader Chair (with arms) (Per the attached specifications)$572.28 $17,168.40 9 Weeks 20 30 EA sCR-1B / Reader Chair (without arms) (Per the attached specifications)$452.45 $13,573.50 9 Weeks 21 18 EA sCR-2 / Reader Chair (teen) (Per the attached specifications)$288.32 $5,189.76 3 Weeks 22 7 EA sCR-3 / Reader Chair (children's) (Per the attached specifications)$347.30 $2,431.10 8 Weeks 23 12 EA sCR-4 Reader Chair (preschool) (Per the attached specifications)$340.92 $4,091.04 10 Weeks City of Palo Alto 143993 Rev. 09/06/12 ONE WORKPLACE Date 9/6/2012 SECTION III - SPECIFICATIONS ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 24 6 EA sCR- 5 / Reader Stool (children's) (Per the attached specifications)$358.00 $2,148.00 10 Weeks 25 4 EA sCR-6 / Reader Stool (teen) (Per the attached specifications)$231.30 $925.20 3 Weeks 26 30 EA sCS- 1A / Stacking Chair (banquet) (Per the attached specifications)$294.00 $8,820.00 4 Weeks 27 30 EA sCS- 1B / Stacking Chair (Per the attached specifications)$268.00 $8,040.00 4 Weeks 28 64 EA sCT-1 / Technology Chair (Per the attached specifications)$454.00 $29,056.00 5 Weeks 29 4 EA sCT-2 / Technology Stool (Per the attached specifications)$519.00 $2,076.00 5 Weeks 30 2 EA sDC-1 / Chair Dolly (Per the attached specifications)$233.23 $466.46 4 Weeks 31 12 EA sOS-1 / Outdoor Seating (Per the attached specifications)$215.18 $2,582.16 6 Weeks 32 4 EA sOT-1 / Outdoor Table (Per the attached specifications)$389.35 $1,557.40 16 Weeks 33 6 EA sOT-2 / Outdoor Table (Per the attached specifications)$327.23 $1,963.38 16 Weeks 34 8 EA sTC-3 / Café Table (outdoor) (Per the attached specifications)$1,105.00 $8,840.00 16 Weeks 35 12 EA sTS-3 / Side table (Per the attached specifications)$730.16 $8,761.92 8 Weeks 36 2 EA sTS-4 / Side table (teen) (Per the attached specifications)$932.64 $1,865.28 6 Weeks 37 12 EA sTM-1 / Meeting Table (nesting) (Per the attached specifications)$769.00 $9,228.00 5 Weeks City of Palo Alto 143993 Rev. 09/06/12 Page 13 of 21 ONE WORKPLACE Date 9/6/2012 SECTION III - SPECIFICATIONS ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 38 1 EA sTM-2A / Meeting Table (conference) (Per the attached specifications)$5,489.00 $5,489.00 10 Weeks 39 1 EA sTM-2C / Meeting Table (conference) (Per the attached specifications)$4,647.26 $4,647.26 10 Weeks 40 1 EA sTM-2D / Meeting Table (conference) (Per the attached specifications)$3,846.00 $3,846.00 10 Weeks 41 4 EA sTR-1 / Reader Table (preschool) (Per the attached specifications)$379.12 $1,516.48 7 Weeks 42 9 EA sTT-1 / Technology Table (Per the attached specifications)$825.00 $7,425.00 5 Weeks 43 11 EA sM-1 / Clocks (Per the attached specifications)$172.00 $1,892.00 4 Weeks 44 7 EA sM-2 / Waste Receptacle (Per the attached specifications)$373.66 $2,615.62 7 Weeks 45 9 EA sM-3 / Recycle Receptacle (Per the attached specifications)$373.66 $3,362.94 7 Weeks 46 2 EA sM-4 / Lectern (Per the attached specifications)$2,245.00 $4,490.00 2 Weeks 47 1 EA cTT-2 Brodart Computer Station with (2) Benches (per specification)$1,710.23 $1,703.70 12 weeks 79 1 EA A144 - Willy the Bookworm - Picture Book Seats $1,235.00 $1,235.00 8 Weeks $15,252.00 $8,930.50 $30,158.91 $395,721.43 8.25% Sales Tax Freight Charges All items Delivery and Installation Costs All items 01 through 46 Total Base Bid, items 01 through 46, including sales tax: (Community Center) ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 47 4 EA sCC-1A / Café Chair (indoor/outdoor) (Per the attached specifications)$271.00 $1,084.00 16 Weeks 48 8 EA sCC-1B / Café Chair (indoor/outdoor) (Per the attached specifications)$219.00 $1,752.00 16 Weeks 49 9 EA sCC-2 / Café Stool (indoor/outdoor) (Per the attached specifications)$543.50 $4,891.50 16 Weeks SECTION III - SPECIFICATIONS ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 50 12 EA sCC-4 / Café Chair (teen) (Per the attached specifications)$439.00 $5,268.00 12 Weeks 51 10 EA sCC-5 / Café Stool (teen) (Per the attached specifications)$721.00 $7,210.00 12 Weeks 52 2 EA sCL-1 / Lounge Chair (Per the attached specifications)$1,337.50 $2,675.00 6 Weeks 53 4 EA sCL-9 / Lounge Chair (teen) (Per the attached specifications)$1,201.32 $4,805.28 13 Weeks 54 2 EA sCL-10 / Lounge Chair (teen) (Per the attached specifications)$1,419.70 $2,839.40 6 Weeks 55 4 EA sCL-11 / Lounge Booth (teen) (Per the attached specifications)$1,275.00 $5,100.00 6 Weeks 56 1 EA sCL-12 / Lounge Booth (teen) (Per the attached specifications)$6,872.66 $6,872.66 6 Weeks 57 12 EA sCM-1 / Meeting Chair (Per the attached specifications)$0.00 $0.00 5 Weeks 58 96 EA sCS-1A / Stacking Chair (Per the attached specifications)$198.48 $19,054.08 4 Weeks 59 240 EA sCS-1B / Stacking Chair (Per the attached specifications)$161.00 $38,640.00 4 Weeks 60 24 EA sCS-2 / Stacking Chair (ECR) (Per the attached specifications)$265.00 $6,360.00 10 Weeks 61 24 EA sCT-1 / Technology Chair (Per the attached specifications)$415.00 $9,960.00 5 Weeks 62 28 EA sDC-1 / Chair Dolly (Per the attached specifications)$233.23 $6,530.44 4 Weeks 63 5 EA sDT-1 / Table Dolly (Per the attached specifications)$720.43 $3,602.15 7 Weeks City of Palo Alto 143993 Rev. 09/6/12 Page 15 of 21 ONE WORKPLACE Date 9/6/2012 SECTION III - SPECIFICATIONS ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 64 4 EA sTC-1A / Café Table (square) (Per the attached specifications)$350.81 $1,403.24 16 Weeks 65 4 EA sTC-1B / Café Table (round) (Per the attached specifications)$395.32 $1,581.28 16 Weeks 66 3 EA sTC-1C / Café Bar Table (round)(Per the attached specifications)$429.19 $1,287.57 16 Weeks 67 4 EA sTC-2 / Café Table (teen) (Per the attached specifications)$370.00 $1,480.00 16 Weeks 68 1 EA sTS-1 / Side Table (Per the attached specifications)$969.00 $969.00 10 Weeks 69 2 EA sTS-2 / Side Table (teen) (Per the attached specifications)$1,925.22 $3,850.44 7 Weeks 70 54 EA sTM-1 / Meeting Table (nesting) (Per the attached specifications)$719.38 $38,846.52 5 Weeks 71 1 EA sTM-2B / Meeting Table (conference) (Per the attached specifications)$5,292.00 $5,292.00 10 Weeks 72 30 EA sTM-3 / Meeting Table (banquet) (Per the attached specifications)$496.77 $14,903.10 7 Weeks 73 6 EA sTM-4 / Meeting Table (ECR) (Per the attached specifications)$777.00 $4,662.00 10 Weeks 74 12 EA sTT-1 / Technology Table (Per the attached specifications)$772.00 $9,264.00 5 Weeks 75 9 EA sM-1 / Clocks (Per the attached specifications)$155.45 $1,399.05 4 Weeks 76 9 EA sM-2 / Waste Receptacle (Per the attached specifications)$386.00 $3,474.00 7 Weeks 77 9 EA sM-3 / Recycle Receptacle (Per the attached specifications)$386.00 $3,474.00 7 Weeks 78 2 EA sM-4 / Lectern Custom Stain (Per the attached specifications)$2,716.00 $5,432.00 8 Weeks City of Palo Alto 143993 Rev. 09/06/12 Page 16 of 21 ONE WORKPLACE Date 9/6/2012 SECTION III - SPECIFICATIONS ITEM QTY UNIT PLAN CODE & DESCRIPTION UNIT PRICE TOTAL PRICE ARO* 79 1 EA sM-5 / Pool Table (Per the attached specifications)$2,204.00 $2,204.00 5 Weeks 80 1 EA sM-6 / Ping Pong Table (Per the attached specifications)$879.00 $879.00 5 Weeks 81 1 EA sM-7 / Foosball table (Per the attached specifications)$511.00 $511.00 5 Weeks 82 1 EA SM-8 / Air Hocky Table (Per the attachesd specifications)$699.00 $699.00 5 Weeks Total $4,293.00 $13,201.00 $12,651.00 $20,963.87 $275,071.58 City of Palo Alto 143993 Rev. 09/06/12 Page 17 of 21 Freight Charges All items Delivery and Installation Costs All items 47 through 82 8.25% Sales Tax Total Base Bid, items 47 through 82, including sales tax: Total in words : Two hundred sixty two thousand four hundred twelve dollars and seventeen cents. ONE WORKPLACE Date 9/6/2012 SECTION III - SPECIFICATIONS Total Mitchell Park Base Bid (Items 01 through 46)………………………………………………………… $395,721.43 Total Community Center Base Bid, (items 47 through 82) ……………………………………………… $275,071.58 Total Community Center Alternate Bid, (items 83 through 85)………………………………………. Number not included in total Grand Total (Mitchell Park Library plus Community Center Bid Totals):$670,793.01 Total in words: Six Hundred Seventy Thousand, Seven Hundred Ninety Three Dollars and One Cent QUANTITIES: Material quanitits as specified are approximate and no guarantee is implied that the exact amount will be purchased. DELIVERY: Delivery terms shall be F.O.B. Destination, Freight Prepaid in accordance with the attached terms and conditions. Signature must be the same as signatiure(s) in Section I - Request for Quotation Signature: ______________________________________________________________________ (Signature) Linda M Repola (Print Name) City of Palo Alto 143993 Rev. 09/06/12 Page 18 of 21 City of Palo Alto (ID # 3139) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/22/2012 Summary Title: Approval of Annual Report of Williamson Act Contracts Title: Approval of Annual Report of Williamson Act Contracts Within the City of Palo Alto From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council review the Williamson Act Properties Report for Calendar Year 2012 (Attachment A), approve the renewal of 19 contracts, and direct staff to file the current list of Williamson Act properties with the appropriate agencies. Background The California Land Conservation Act of 1965, commonly known as the Williamson Act, is a state program to discourage agricultural lands from being converted to urban uses. The program provides property tax relief to owners of agricultural land who agree to limit the use of their property to agricultural or other approved compatible uses. On July 24, 1974, the City of Palo Alto adopted Ordinance No. 2663 to establish rules for both establishing and administering Williamson Act contracts for Palo Alto properties. Highlights of the rules regarding administration of established contracts include:  Contracts limit the allowable uses of the property to what is described in the contract.  Contracts remain in place when a property is sold and new owners are subject to the same use restrictions.  Contracts are for 10-year terms and have a renewal date of January 1.  Each year—at least 80 days prior to that renewal date—the Council reviews the contracts and, at that time, may initiate a notice of nonrenewal for any contract or approve a notice of nonrenewal submitted by a landowner. If the Council takes such action, then that contract does not renew on January 1 and terminates nine years later.  Under certain conditions, the Council may also approve a landowner’s request to cancel a contract.  Contracts, for which the Council has not approved a notice of nonrenewal or a cancellation, automatically renew for another 10-year term each January 1. Discussion The attached report and map (Attachments A & B), describe the parcels that were under contract during calendar year 2012. No notices of nonrenewal have been received since the last report. At this time, the Council may initiate a notice of nonrenewal for any contract and have that notice take effect this year. If the Council does not initiate any notices of nonrenewal at this time, and approves the attached list, then this list will be filed in the City Clerk’s Office and the information will be forwarded to the appropriate agencies. Under the California Open Space Subvention Act (OSSA), the City is entitled to partial replacement of local property tax revenue foregone by participating in the Williamson Act. Planning staff will file the information with the State Department of Conservation, Division of Land Resource Protection. Then, on January 1, 2013, the nineteen contracts will renew for another 10-year term. Notes are included on the attached report and map to clarify that, although the Palo Alto Hills Golf and Country Club is under Williamson Act contract, no tax benefits accrue to the owners. Although a golf course is a permitted use, only golf courses that are open to the public and charge minimal green fees are eligible for tax benefits. The California Department of Conservation’s Williamson Act Program requires participating cities and counties to fill out and submit applications for an Open Space Subvention Act payment per Government Code section 16144, which states: "On or before October 31 each year, the governing body of each county, city, or city and county shall report to the Secretary of the Resources Agency the number of acres of land under its regulatory jurisdiction which qualify for state payments pursuant to the various categories enumerated in Section 16142, together with supporting documentation as the secretary by regulation may require.” Planning staff recommends renewal of the existing contracts but, due to the uncertainty about benefits of the program (see Resource Impacts section below), proposes to include in the next year’s work plan a comprehensive review and analysis of the Williamson Act properties and will provide a recommendation to the City Council as to whether or not to discontinue the contracts, particularly those that comprise residential homes on lots of 10 acres or less in size (the minimum lot size in the Open Space zone). Policy Implications The recommended action implements Ordinance 2663 regarding the administration of the Williamson Act for Palo Alto properties. The Williamson Act in general complies with the land use policies of the Comprehensive Plan and specifically supports Goal L-1 regarding growth management as well as Policy L-1 regarding the extent of urban development Environmental Review The recommended action is ministerial and pursuant to Title 14 of the California Code of Regulations, Section 15061(b)(3), is exempt from the requirements of the California Environmental Quality Act (CEQA) in that this action of approving the attached report does not have the potential for causing a significant effect on the environment. Resource Impacts Minimal resource impacts would result from the recommended action. Taxable income changes are not significant from these properties. Historically, the City of Palo Alto has been receiving approximately $1,000 a year in subvention payments from the State; however, recent legislation has resulted in the essential suspension of State funding for these payments. Assembly Bill X4 was enacted on July 24, 2009 and resulted in a total subvention allowance of $1,000 for all participating California counties. As a result of this bill, Palo Alto received $0.03 in subventions for fiscal year 2009-10. On October 19, 2010 Senate Bill 863 provided a one-time allocation of $10,000,000 for the program and an option for participating cities and counties to recapture 10% of the benefits provided by the contracts; however, on March 24, 2011, Senate Bill SB80 eliminated these provisions. The most recent legislation, Assembly Bill 1265, passed on July 15, 2011, again allows participating cities and counties to recapture 10% of the benefits; however, implementation of this provision is generally only cost effective for cities and counties that have significant acreage under contract. Attachments:  Attachment A : Williamson Act Report of Properties Under Contract in 2012 (PDF)  Attachment B: Williamson Act Map of Properties Under Contract as of 2012 (PDF) Prepared By: Chitra Moitra, Planner Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager Williamson Act Properties Report for Calendar Year 2012 On the following pages is a list of the 23 Palo Alto properties that were enrolled in the Williamson Act during the calendar year of 2012. About the Williamson Act About this List/Report The California Land Conservation Act of 1965, commonly known as the Williamson Act is a state program to discourage agricultural lands from being converted to urban uses. The program provides property tax relief to owners of agricultural land who agree to limit the use of their property to agricultural or other approved compatible uses. On July 24, 1974, the City of Palo Alto adopted Ordinance No. 2663 to establish rules for both establishing and administering Williamson Act contracts for Palo Alto properties. Highlights of the rules regarding administration of established contracts include: Contracts limit the allowable uses of the property to what is described in the contract. Contracts remain in place when a property is sold and new owners are subject to the same use restrictions. Contracts are for 10-year terms and have a renewal date of January 1. Each year—at least 80 days prior to that renewal date—the Council reviews the contracts and, at that time, may initiate a notice on nonrenewal for any contract or approve a notice of nonrenewal submitted by a landowner. If the Council takes such action then that contract does not renew on January 1 and terminates 9 years later. Under certain conditions, the Council may also approve a landowner's request to cancel a contract. Contracts, for which the Council has not approved a notice of nonrenewal or a cancellation, automatically renew for another 10-year term each January1. 19 contracts will renew on January 1, 2013 if the Council approves this report. 4 contracts will not renew because Notices of Nonrenewal have been approved. See individual records for termination dates. Note: One of the 19 contracts does not include tax benefits. Although the Palo Alto Hills Golf Course is under contract the use is not eligible for tax benefits--see notes for this parcel. 10/15/2012 Page 1 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 Will Renew on January 1, 2013 Palo Alto Hills Golf and Country Club at 3000 Alexis Drive Although this property is under contract, there are no tax benefits.A golf course may only be eligible for tax benefits if it is open to the public and charges minimal green fees. Prime Owner: 1 Assessed Value: Land Class: 5/1/1973Contract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Palo Alto Hills Golf and Country Club, Inc., 3000 Alexis Drive, Palo Alto, CA 94304 Acreage: General Notes: 119.92 182-35-035APN: 2010:$1,308,145.00 2011:$1,317,995.00 Value Notes: 4279Resolution No: 2012:$1,344,354.00 No address; adjacent to Country Club at 3000 Alexis Drive Prime Owner: 2 Assessed Value: Land Class: 5/1/1973Contract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Palo Alto Hills Golf and Country Club, Inc., 3000 Alexis Drive, Palo Alto, CA 94304 Acreage: General Notes: 5.52 182-35-008APN: 2010:$47,468.00 2011:$47,825.00 Value Notes: 4279Resolution No: 2012:$48,781.00 Open Space land adjacent to the Arastradero Preserve Prime Owner: 3 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: City of Palo Alto, 250 Hamilton Ave., Palo Alto, CA 94301 Acreage: General Notes: 11.42 182-33-014APN: 2010:$0.00 2011:$0.00 Value not assessed because owned by public/quasi public agencyValue Notes: UnknownResolution No: 2012:$0.00 9/19/2012 Page 2 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 El Camino Park (east of Palo Alto Ave to University Ave) Prime Owner: 4 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Leland Stanford Jr., Univ. Board of Trustees, P.O.Box 10250, Palo Alto, CA 94303 Acreage: General Notes: 10.00 120-31-009APN: 2010:$118,153.00 2011:$118,153.00 The City of Palo Alto leases this land for public use; however, it is privately owned.Value Notes: UnknownResolution No: 2012:$127,999.00 El Camino Park (west of Palo Alto Ave to the creek) Prime Owner: 5 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Leland Stanford Jr., Univ. Board of Trustees, P.O.Box 10250, Palo Alto, CA 94303 Acreage: General Notes: 0.72 12031001APN: 2010:$8,492.00 2011:$8,492.00 The City of Palo Alto leases this land for public use; however, it is privately owned.Value Notes: UnknownResolution No: 2012:$9,199.00 No address; on Page Mill Road; below Foothill Open Space Preserve Non Prime Owner: 6 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Richard D. Guhse Trustee, 37 Babras Court, Hollister, CA 95023 Acreage: General Notes: 20.01 351-05-043APN: 2010:$923.00 2011:$923.00 Value Notes: UnknownResolution No: 2012:$1,000.00 3837 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 7 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: David P. and Cynthia Lautzenheiser Trustee, 3837 Page Mill Road, Palo Alto, CA 94022 Acreage: General Notes: 10.00 minus 1 acre for Homesite = 9.00 351-05-042APN: 2010:$363,863.00 2011:$366,599.00 Value Notes: UnknownResolution No: 2012:$373,957.00 9/19/2012 Page 3 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 3845 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 8 Assessed Value: Land Class: 2/16/1976Contract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Judith A. Block Trustee, 412 Webster St., Palo Alto, CA 94301 Acreage: General Notes: 8.72 minus 1 acre for Homesite = 7.72 351-05-024APN: 2010:$47,823.00 2011:$48,180.00 Value Notes: UnknownResolution No: 2012:$49,166.00 3849 Page Mill Rd, Palo Alto, 94306 Non Prime Owner: 9 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Jeffrey A. and Mary L. Thomas, 3849 Page Mill Road, Palo Alto, CA 94022 Acreage: General Notes: 10.00 351-05-050APN: 2010:$1,373,360.00 2011:$1,350,000.00 Value Notes: UnknownResolution No: 2012:$1,411,375.00 3855 Page Mill Rd, Palo Alto, 94306 Non Prime Owner: 10 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Patrick K. Suppes, 599 College Avenue, Palo Alto, CA 94306 Acreage: General Notes: 10.00 351-05-049APN: 2010:$474,962.00 2011:$478,538.00 Value Notes: UnknownResolution No: 2012:$488,108.00 3865 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 11 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Grace Carland Trustee, 3865 Page Mill Road, Palo Alto, CA 94022 Acreage: General Notes: 10.00 minus 1 acre for Homesite = 9.00 351-05-048APN: 2010:$32,847.00 2011:$33,091.00 Value Notes: UnknownResolution No: 2012:$33,779.00 9/19/2012 Page 4 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 3875 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 12 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Richard D. Kniss Trustee & Et Al, 1985 Cowper Street, Palo Alto, CA 94301 Acreage: General Notes: 10.00 351-05-047APN: 2010:$461.00 2011:$461.00 Value Notes: UnknownResolution No: 2012:$500.00 3885 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 13 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: William W. and Sharon T. Luciw Trustee, 3885 Page Mill Road, Palo Alto, CA 94022 Acreage: General Notes: 8.45 minus 1 acre for Homesite = 7.45 351-05-046APN: 2010:$952,905.00 2011:$900,000.00 Value Notes: UnknownResolution No: 2012:$979,301.00 3895 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 14 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Lawrence Markosian, 635 Wildwood Lane, Palo Alto, CA 94303 Acreage: General Notes: 10.00 minus 1 acre for Homesite = 9.00 351-05-045APN: 2010:$231,826.00 2011:$233,568.00 Value Notes: UnknownResolution No: 2012:$238,266.00 3905 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 15 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Michael R. Lowry, 3905 Page Mill Road, Palo Alto, CA 94022 Acreage: General Notes: 6.43 minus 1 acre for Homesite = 5.43 351-05-044APN: 2010:$1,030,019.00 2011:$1,037,775.00 Value Notes: UnknownResolution No: 2012:$918,000.00 9/19/2012 Page 5 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 4201 Page Mill Rd, Palo Alto, 94304 Non Prime Owner: 16 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Bruce A Leak, 4201 Page Mill Road, Palo Alto, CA 94022 Acreage: General Notes: 11.31 minus 1 acre for Homesite = 10.31 351-25-015APN: 2010:$1,459,262.00 2011:$1,470,236.00 Value Notes: UnknownResolution No: 2012:$1,499,757.00 5061, 5065, 22601 Skyline Blvd Non Prime Owner: 17 Assessed Value: Land Class: 3/6/1973Contract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Irene V. Fogarty Trustee & Et Al, 1009 Rosewood Ave., San Carlos, CA 94070 Acreage: General Notes: 139.59 minus 1 acre for Homesite = 138.59 351-12-006APN: 2010:$34,499.00 2011:$34,699.00 Value Notes: 4707Resolution No: 2012:$35,894.00 22601 Skyline Blvd, Palo Alto, 94306 Non Prime Owner: 18 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Harvey D. Jr. and Pamela K. Loucks Trustee, Rt 2 Box 332, La Honda, CA 94020 Acreage: General Notes: 10.39 351-12-062APN: 2010:$509.00 2011:$509.00 Value Notes: UnknownResolution No: 2012:$552.00 No address; adjacent to 22601 Skyline Blvd Non Prime Owner: 19 Assessed Value: Land Class: UnknownContract Start: Unchanged; contract will continue for at least another 10 years.Contract Status: Harvey D. Jr. and Pamela K. Loucks Trustee, Rt 2 Box 332, La Honda, CA 94020 Acreage: General Notes: 12.35 minus 1 acre for Homesite = 11.35 351-12-063APN: 2010:$290,556.00 2011:$292,738.00 Value Notes: UnknownResolution No: 2012:$298,637.00 9/19/2012 Page 6 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 Will Not Renew on January 1, 2013 because a Notice of Nonrenewal has been approved Open Space within Foothill Open Space Preserve Non Prime Owner: 1 Assessed Value: Land Class: 2/27/1979Contract Start: Notice of Nonrenewal approved on 10/6/2008; contract will terminate on 12/31/2017Contract Status: Midpeninsula Regional Open Space District, 330 Distel Circle, Los Altos, CA 94022 Acreage: General Notes: 27.34 351-04-031APN: 2010:$0.00 2011:$0.00 Value not assessed because owned by public/quasi public agencyValue Notes: 5657 and 5658Resolution No: 2012:$0.00 Open Space within the Montebello Open Space Preserve Non Prime Owner: 2 Assessed Value: Land Class: 2/28/1973Contract Start: Notice of Nonrenewal approved on 10/6/2008; contract will terminate on 12/31/2017Contract Status: Midpeninsula Regional Open Space District, 330 Distel Circle, Los Altos, CA 94022 Acreage: General Notes: 8.74 351-12-043APN: 2010:$0.00 2011:$0.00 Value not assessed because owned by public/quasi public agencyValue Notes: 4706Resolution No: 2012:$0.00 Open Space within the Montebello Open Space Preserve Non Prime Owner: 3 Assessed Value: Land Class: 2/26/1975Contract Start: Notice of Nonrenewal approved on 10/6/2008; contract will terminate on 12/31/2017Contract Status: Midpeninsula Regional Open Space District, 330 Distel Circle, Los Altos, CA 94022 Acreage: General Notes: 10.72 351-25-014APN: 2010:$0.00 2011:$0.00 Value not assessed because owned by public/quasi public agencyValue Notes: 5067Resolution No: 2012:$0.00 Open Space within the Montebello Open Space Preserve Non Prime Owner: 4 Assessed Value: Land Class: 2/28/1973Contract Start: Notice of Nonrenewal approved on 10/6/2008; contract will terminate on 12/31/2017Contract Status: Midpeninsula Regional Open Space District, 330 Distel Circle, Los Altos, CA 94022 Acreage: General Notes: 24.00 minus 1 acre for Homesite = 23.00 351-06-017APN: 2010:$0.00 2011:$0.00 Value not assessed because owned by public/quasi public agencyValue Notes: 4708Resolution No: 2012:$0.00 9/19/2012 Page 7 of 7S:\PLAN\PLADIV\Advance Planning\Williamson Act\2012 2012 1/1/13 Note: Although the Palo Alto Hills Golf and Country Club is under contract, it is not eligible to receive tax benefits; only golf cources open to the public are eligible. City of Palo Alto (ID # 3177) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/22/2012 City of Palo Alto Page 1 Summary Title: Main Library Construction Management Services Contract Title: Approval of a Contract with NOVA Partners, Inc. in a Total Amount Not to Exceed $756,933 for Construction Management Services for the Main Library Measure N Project -Capital Improvement Program Project PE-11000 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: Authorize the City Manager or his designee to execute the attached contract in a total amount not to exceed $756,933, with NOVA Partners, Inc. (Attachment A) for construction management services for the Main Library Measure N Project (Capital Improvement Program project PE-11000) Executive Summary The attached contract with NOVA Partners, Inc. is to provide construction management services for the Main Library renovation and expansion project. The contract is needed to provide professional construction management of the project during completion of the design, constructability review, bidding processes, and construction for the Main Library facility. Background Main Library is the third and final project to be funded by the Measure N bond passed by Palo Alto voters in 2008. The Palo Alto Main Library renovation and addition is currently in the final phase of design by Group 4 Architecture, Research + Planning, Inc. The project incorporates upgrades to the historic City of Palo Alto Page 2 building’s structural, electrical and mechanical systems, a new Teen Room, and Americans with Disabilities Act upgrades while preserving the integrity of the original architect Edward Durrell Stone’s iconic design. A new addition includes a program room and additional restrooms to extend the services of this heavily- used branch. The project targets Leadership in Energy and Environmental Design (LEED)certification. Discussion The scope of work to be performed under this contract includes all aspects of day- to-day construction management for the Main Library project, including coordination of site logistics to ensure public access to the adjacent community gardens and the Art Center, minimizing disruption to the adjacent neighborhoods, project documentation, project communication, schedule management, budget management, quality assurance, inspection,testing, and project closeout tasks. The services are needed because current staffing levels are not sufficient for a project of this complexity and magnitude. Staff is recommending closing the Main Library for construction in early 2013 before the Mitchell Park Library and Community Center is open to the public. This would allow the Main Library renovation and expansion to occur with a targeted completion date by the end of summer 2014.Prior to the start of construction, a temporary Main Library will be established in the auditorium of the adjacent Art Center. A large portion of the Main Library book collection will be placed in storage. Summary of Solicitation Process A Request for Proposals (RFP)was issued by Palo Alto on July 24, 2012. The proposal period was 36 days. A total of nine firms submitted proposals ranging from $725,784 to $2,314,648. City of Palo Alto Page 3 Proposal Description/ Number Main Library Construction Management Services Proposed Length of Project 36 months Number of RFPs Mailed 24 Total Days to Respond to RFP 36 Pre-proposal Meeting Date August 7, 2012 Number of Company Attendees at Pre-proposal Meeting 19 Number of Proposals Received: 9 Company Name Location (City, State)Selected for interview? 1.PMA Consultants, LLC San Francisco, CA No 2. Greystone West Company Sonoma, CA No 3. Heery International,Inc.San Francisco, CA No 4.Swinerton Management & Consulting San Francisco, CA Yes 5. NOVA Partners, Inc.Palo Alto, CA Yes 6. Critical Solutions, Inc.Walnut Creek, CA No 7. Cambridge CM, Inc.Palo Alto, CA No 8. Griffin Structures, Inc.Laguna Beach, CA Yes 9.Vanir Construction Management, Inc. San Jose, CA No An evaluation committee consisting of staff from Public Works reviewed the proposals.The committee carefully reviewed the firms’qualifications and experience in response to the criteria identified in the RFP. Three finalists were identified and invited to present their qualifications in person and participate in oral interviews. City of Palo Alto Page 4 The interview panel consisted of staff from Public Works. The panel selected NOVA Partners, Inc. based on their qualifications and past experience with similar projects in the City, including the Palo Alto Children’s Library, College Terrace Library, and the Palo Alto Art Center. NOVA Partners, Inc. also demonstrated a “take charge” attitude that is very important in ensuring that projects are completed on time and budget. Key Components of Scope of Services for Main Library As the Council knows, the Mitchell Park Library and Community Center project has experienced delays and other problems. Based on that experience, Staff has included specific provisions in the scope of services for the Main Library project that are intended to promote effective and efficient construction management for this project. Key components of the scope include: ·Constructability review: The contract requires a very detailed constructability review that is focused on the completeness and internal consistency of the plans, in addition to identifying scheduling improvements and opportunities for value engineering. The constructability review is key to assuring that the plans and specifications that will go out for bid are complete, thereby minimizing change orders and delays. ·Not-to-exceed contract: The contract clearly states that the specified compensation is the total compensation regardless of whether the project is completed according to the estimated schedule, and that the consultant is responsible for completing the services even if the project length exceeds the estimated schedule. This contract structure incentivizes the construction management firm to manage the project for completion according to the schedule. ·Prequalification of subcontractors: The prequalification provisions of the contract require the construction manager to include prequalification of up to six subcontractors working in key disciplines for each contractor that wishes to submit a project construction bid. Prequalification of subcontractors is intended to ensure that the most important City of Palo Alto Page 5 subcontractors have the relevant experience and qualifications for successfully completing the work. ·Establishment and tracking of deadlines: The contract has detailed provisions requiring the construction management firm to work with City staff, the Contractor, and the Architect to establish deadlines and tracking mechanisms for submittal of and response to requests for information (RFI), deferred submittals, construction coordination drawings, construction schedules, inspection requests, change order requests, and claims. Careful management of these important documents is necessary to maintain the project schedule. Timeline Following approval of the construction management services contract, NOVA Partners, Inc. will begin its design phase services with the constructability review of the Main Library construction documents. Staff is recommending closing the Main Library for construction in early 2013 before the Mitchell Park Library and Community Center is open to the public. This would allow the Main Library renovation and expansion to occur with a targeted completion date by the end of summer 2014. Resource Impact Funding for construction management services for the Main Library renovation and expansion project are funded by the general obligation Measure N Bond and are budgeted in Capital Improvement Program Project PE-11000 (Main Library). The proposed total cost of $756,933 for Main Library construction management services is less than the amount that had been budgeted for these services in the project budget. The most recent project budget for the Main Library project is a total project cost of $22.7 million, which is $2.6 million greater than the engineer’s project budget of $20.1 million. This estimate reflects the most recent construction cost estimate that is based on the 95% construction documents, as well as updated costs for automatic book handling systems, book security systems, and self-checkout kiosks. The estimate also includes an estimated cost for a future architectural construction administration contract that was not City of Palo Alto Page 6 included in previous project budgets. The changes to the project budget include increases and decreases, with the net total project cost of $22.7 million being $1.0 million more than the figure reported to Council in the most recent Mitchell Park Library and Community Center Bimonthly Report (Attachment B) on September 24, 2012. Attachment C provides a detailed project budget sheet for Main Library. As presented in the Mitchell Park Bimonthly Report, project savings on the Mitchell Park Library and Community Center project are expected to be sufficient to offset the increase in cost for the Main Library project. However, there is some uncertainty regarding the final project costs for Mitchell Park Library and Community Center. It is important to note that many of the components in the scope approved by Council for Main Library can be considered deferred maintenance items. Examples of these items include the following: ·Replace roofing; ·Refurbish landscaping and walkways; ·Replace fire sprinkler system; ·Reface exterior siding at staff area; ·Replace basement sump pumps; ·Upgrade stormwater treatment; ·Upgrade parking lot lighting; and ·Replace windows and sliding doors. The total project cost for these items, including both design and estimated construction cost, is approximately $1.3 million. In the event that savings from the Mitchell Park Library and Community Center project do not cover the full increase in cost for Main Library, staff may consider recommending that the costs for the deferred maintenance scope increases be funded by the Infrastructure Reserve. Policy Implications The recommendation is consistent with Council’s previous direction on the library projects and Measure N. It does not represent a change in City policy. City of Palo Alto Page 7 Environmental Review On July 21, 2008, the Council confirmed the Director of Planning and Community Environment’s approval of a 2007 Addendum to the 2002 final Environmental Impact Report for the Main Library. Attachments: ·A -S13146948_Nova Signed (PDF) ·B -Mitchell Park Bimonthly Report (PDF) ·C –Main Library Project Budget (PDF) CITY OF PALO ALTO CONTRACT NO. S13146948 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND NOVA PARTNERS INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this day of October, 2012, ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and NOVA PARTNERS, INC., a corporation in the state of California, located at 855 EI Camino Real, Suite 307, Palo Alto, CA 94301 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to renovate, upgrade and expand Main Library in Palo Alto ("Project") and desires to engage a consultant to provide professional Construction Management 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 andlor 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. D Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements. ) Services will be authorized by the City, as needed, with a Task Order assigned and approved by the City's Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-I. Each Task Order shall designate a City Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and the City may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. Professional Services Rev. June 2, 2010 SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached as Exhibit "B" unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit "B", attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY's agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed six hundred eighty-eight thousand one hundred twenty-one Dollars ($688,121.00). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Seven hundred Fifty-six Thousand Nine Hundred Thirty-three Dollars ($756,933). The applicable rates and schedule of payment are set out in Exhibit "C-1", entitled "HOURLY RATE SCHEDULE," which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C". CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit "A". SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT's billing rates (set forth in Exhibit "C-1 "). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT's payment requests shall be subjectto 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. OUALIFICATIONS/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. 2 Professional Services Rev. June 2. 2010 All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY's stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULT ANT, 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. DOption A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. 00ption B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: Consolidated Engineering Laboratories 3 Professional Services Rev. June 2,2010 CONSULTANT shall be responsible for directing the work of any sub consultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign David Marks as the Project Principal and Senior Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Hans de Roos as the project lead Construction Manager and Field Superintendent 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 orreplacement 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 Matt Raschke, Senior Engineer, Public Works Department, Engineering Services Division, PO Box 10250 Palo Alto, CA 94303, Telephone:650-496-5937. The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will pennit 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 4 Professional Services Rev. June 2, 2010 ("Claims") resulting from, arising out of or in any manner related to performance or nonperformance by CONSULT ANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT's services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best's Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State ofCalifomia. 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 subjectto the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY's Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. 5 Professional Services Rev. June 2, 2010 SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the perfonnance of the Services, in whole or in part, or tenninate 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 perfonnance of the Services. 19 .2. CONSULTANT may tenninate this Agreement or suspend its perfonnance of the Services by giving thirty (30) days prior written notice thereofto CITY, but only in the event of a substantial failure of perfonnance by CITY. 19.3. Upon such suspension or tennination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT's services which are of direct and immediate benefit to CITY as such detennination may be made by the City Manager acting in the reasonable exercise ofhislher discretion. The following Sections will survive any expiration or tennination of this Agreement: 14, 15, 16, 19.4,20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 6 Professional Services Rev. June 2, 2010 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the City's Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of3 0% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verifY that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of 7 Professional Services Rev. June 2,2010 Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the . fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5( d) about a California resident ("Personal Information"), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City's express written consent. 8 Professional Services Rev. June 2, 2010 25.9 All unchecked boxes do not apply to this agreement. 25.1 0 The individuals execnting 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 du1y authorized representatives executed this Agreement on the date ftrst above written. CITY OF PALO ALTO Purchasing Manager By:.~~~~~ ______ _ APPROVED AS TO FORM: Name: Do.."'\ \o.t\C\V4~ Title: '/1 Ge R (~.s I DeNT Senior Asst. City Attorney Attachments: EXHIBIT "A": EXHmIT "B": EXHIBIT "C": EXHIBIT "C-l": EXHIBIT "0": SCOPE OF WORK SCHEDULE OF PERFORMANCE COMPENSATION SCHEDULE OF RATES INSURANCE REQUIREMENTS 9 Professional Services Rev. Juna 2, 2010 INTRODUCTION EXHIBIT "A" SCOPE OF SERVICES MAIN LIBRARY CONSTRUCTION MANAGEMENT SERVICES In November 2008, voters approved Measure N, which provided for the upgrade, replacement and/or expansion of three libraries in Palo Alto: the Downtown Library, the Mitchell Park Library & Community Center, and the Main Library. Environmental clearance has been completed and approved for the three sites. Construction of the Downtown Library is complete and construction of the Mitchell Park Library & Community Center is ongoing. The Main Library, located at 1213 Newell Road, will have both an interior renovation and an expansion. The renovation to the existing historic structure will consist of seismic, accessibility, and systems upgrades as well as minor expansions and reconfigurations. In addition, a detached building of approximately 4,500 square feet will be constructed. The 2012 estimated construction cost is $16 million which is based upon the 60% construction documents plans. The construction cost estimate excludes design costs, construction contingency, inflation, escalation, permits, testing, fixtures and furnishings. Measure N bond proceeds pay for the design, construction management and the fixed construction costs, but not for fixtures, furnishings and equipment, which are funded separately by the City and must be tracked separately by the construction manager. The City has contracted with Group 4 Architects (Architect) of South San Francisco to provide the architectural and engineering design and construction administration for all the Measure N projects including the Main Library. The design plans for the Main Library have been reviewed by City boards and commissions and have been presented to the community. SCOPE OF SERVICES The Main Library is an historic building and, per this project, is expected to attain a LEED Silver rating. All work described below will be done in conjunction with the City's ongoing review and approval process for the Main Library project described above. The Consultant's services shall include full construction management services as required to assist City staff in the management of the final design, bidding phase and construction of the Main Library project, as well as with any claims or other contract disputes that may arise. All work performed by Consultant shall be in accordance with the professional standard and quality that prevail among professional construction managers in the Peninsula region. If at any time, the City is not satisfied with the performance of Consultant's staff, the City reserves the right to request the services of a different individual. Iffor any reason Consultant proposes a change of staffing during the course of the project, the City reserves the right to approve any new staff. Staffing changes must be approved a minimum of2l calendar days in advance of any staffing changes, in writing, by the City's Project Manager (PM). 11 Professional Services Rev. June 2, 2010 Office space or trailer, computers, cell phones, furnishings and other equipment needed for Consultant's staff shall be provided by Consultant. Consultant may arrange, at Consultant cost, to have the City's general contractor (Contractor) provide trailer space and furnishings. Task 1: Preconstruction Services Consultant shall in accordance with the professional standard and quality that prevail among professional construction managers in the Peninsula region perform the following services: Document review: Consultant shall: • become familiar with the project history and site • become familiar with the overall Measure N bond measure budgetary history and procedures • assist the Architect and City staff as needed to obtain building permits • develop an independent estimate of probable construction cost based on the 100% construction documents provided for constructability review and reconcile the estimate to the Architect's estimate • provide a constructability review of the 100% construction documents to verify that the construction documents are complete and are internally consistent, and to identify opportunities for value engineering. The principle objectives of the constructability review are to ensure that the construction documents contain all of the necessary detail to prevent delays from occurring during construction and to avoid project change orders resulting from any inadequacy of the construction documents. Following the constructability review, report to the City all shortcomings identified with a focus in the following areas: site logistics and constraints; clarity of documents; completeness of documents; internal consistency of documents; technical constructability; building code compliance; quality control; compatibility of contract plans, specifications, and applicable standards; utility clearances for constructability; project schedule; and pedestrian and vehicular safety and access. Review shall be performed by engineers or contractors who have experience in relevant fields such as mechanical, electrical, civil, etc. • following modifications to the 100% construction documents resulting from the constructability review, develop a revised independent estimate of probable construction cost that accounts for the modifications • prior to the solicitation of construction bids, coordinate any significant construction document revisions that need to be included in the bid with the Architect and City staff. Minor design changes can be included after the bid is advertised as part of an addendum. • assist the City's Contracts Manager with the preparation of the "Instructions to Bidders" which will define the scope of work that must be included in the bid packages and other related bid documents needed to ensure a complete bid package. The Architect will prepare the technical specifications. • become familiar with the various City department functions and requirements for project coordination • coordinate and prepare any construction signage or outreach materials that may be needed Contractor and Key Subcontractor Pregualification: Prior to the construction bid phase, the Consultant shall work with the Public Works, Purchasing and City Attorney's Departments to Professional Services Rev. June 2, 2010 12 prepare prequalification forms and rating systems required for Contractor and key subcontractor pre qualification ("Pre qualification"). Prequalification will occur for up to six subcontractors in key disciplines to be identified by the City, with input from Counsultant, for each Contractor seeking prequalification. The City shall issue the request for prequalifications and the Consultant shall administer the feedback from responders, including but not limited to: answering questions from contractors and subcontractors, coordinating responses with the City's Purchasing Division and Public Works Department, preparing spreadsheets or other documentation necessary to compile and compare contractor responses, preparing a recommended bidder's list with a brief report summarizing findings, assist in representing the City in any subsequent hearings challenging the validity of the results, and any follow-up documentation resulting from said hearings. Bidding: Contractor bids shall be processed by the City's Purchasing Division. Consultant shall review the contractor bids for compliance with the technical portions of the bid requirements as set forth in the specifications and make a recommendation for award or rejection. Consultant shall assist with the bid period work items including clarifications and bid evaluation relative to the contract documents. Consultant shall review the subcontractor list for completeness and compliance with the bid documents. The City Purchasing Division will verifY Consultant's recommendation in order to finalize the decision. Addenda: If changes to the construction documents are required during the bidding period, Consultant shall prepare the addenda items with the assistance from the Architect. The City will issue the addenda. Meetings: During the bidding process, Consultant shall be prepared to address comments and concerns of the contractors interested in bidding on the project with Architect and City Staff on an as-needed basis. Pre-bid Conference and Pre-construction Meeting: Consultant shall coordinate and facilitate the Pre-bid Conference and Pre-construction Meeting including preparation of the agendas and meeting minutes. Hazardous Material Abatement: A hazardous materials study and termite report has already been completed for the Main Library. Hazardous materials will likely be removed from the existing structure prior to the start of the primary construction effort by means of a City hazardous materials contract, however they may be included as part of the construction bid package. In either event, Consultant shall assist City staff in the preparation of plans and specifications, assist in the bidding (if removal is by means of a separate contact) and coordinate the remediation contractor's efforts. A third-party consultant shall be employed by the City to survey, test, develop and implement removal procedures, monitor abatement and report results. Consultant shall coordinate as-needed between the hazardous materials removal contractor and the third- party consultant hired to monitor the removal. Relocation of Existing Library Services: The City will secure the services of a moving contractor ("Mover"). The Consultant shall coordinate between the Mover and City staff in order to relocate library staff, services, equipment and materials: 13 Professional Services Rev. June 2, 2010 • out of the Main Library and into a temporary Main Library located in the auditorium of the adjacent Art Center; • out of the Main Library and into the new Mitchell Park Library; • out of a temporary Mitchell Park Library located at the Cubberley Community Center on Middlefield Road and into the new Mitchell Park Library; • out of a temporary Teen Center located at the Cubberley Community Center on Middlefield Road and into a new Teen Center at the new Mitchell Park Community Center; • move Technical Services out of the Main Library and into a temporary location at the former temporary Teen Center at the Cubberley Community Center. The following sites will need to be renovated as part of the moving effort. Consultant shall assist staff in developing a scope of work and construction cost estimate, assist in the construction bidding process and coordinate between the Consultant, selected contractor and City staff: • Once staff has moved into the new Mitchell Park Library, the temporary Mitchell Park Library at the Cubberley Community Center will be renovated back to a leasable space. Existing ceiling fans will need to be raised and flooring replaced along with other minor changes. Estimated construction cost is roughly $100,000. • The temporary Teen Center at Cubberley will need to be changed into a workspace for Technical Services staff moving from the Main Library. This work will primarily entail new cubicles, phone and data lines. The estimated construction cost is approximately $5,000. Task 2: Construction Phase Services Consultant shall in accordance with the professional standard and quality that prevail among professional construction managers in the Peninsula region: Consultant shall be the point of contact for the Contractor and shall enforce compliance with all of Contractor's contractual requirements, as follows: Budget: Consultant shall work with the City to develop a construction budget format and tracking system. Consultant shall track all project construction and soft-cost expenses, including non-bondable costs (furniture, fixtures, etc.) and shall reconcile these costs monthly with Public Works staff. Daily Construction Management: Consultant shall oversee the day-to-day construction work performed by the Contractor. Consultant shall track the construction process, logistics, Request for Information (RFI), Architect's Supplemental Information (AS!), Change Order (CO) and other information or requests. Consultant shall oversee the construction activities and ensure that all aspects of LEED construction requirements are followed and documented and shall work closely with the project's Commissioning Agent, who is a subconsultant to the Architect, and the Architect. Consultant shall work with the Contractor and any involved parties to implement logistical and 14 Professional Services Rev. June 2, 2010 communications measures to minimize any impacts to the nearby residential neighborhood, park, fire station, and the various schools in the vicinity. Consultant shall implement expeditious methods for resolving conflicts. Consultant shall handle the coordination between the City staff, Contractor, and Architect. If night time, holiday or weekend work is required periodically to minimize impacts or due to delay in the schedule, Consultant services shall still be required in full effect, but will be compensated as Additional Services for costs incurred. Work on the following City holidays shall not be considered Additional Services and shall be regular working days for the Contractor and Consultant, with the cost for same included in the Consultant's fee: the third Monday in January (Martin Luther King Day), the second Monday in October (Columbus Day), November 11 (Veteran's Day), the Friday following Thanksgiving Day (the fourth Thursday in November), and December 24 (Christmas Eve). Establishment of deadlines: Consultant shall coordinate with City staff, Contractor, and Architect to establish deadlines for submittal of and response to RFI's, deferred submittals, construction coordination drawings, construction schedules, inspection requests, change order requests, and claims. Consultant shall track all such requests and submittals to ensure compliance with deadlines. Consultant shall track all requests and submittals in a format acceptable to City staff, and shall make the tracking document available to City staff through electronic file sharing. Consultant shall increase its project staffing in a timely manner if needed to process requests and submittals in accordance with the established deadlines and to avoid delays. Outreach: Consultant shall provide monthly construction updates, including project cost-tracking, and shall attend quarterly meetings with the Library Bond Oversight Committee (LBOC) and with the Stakeholders group. At these meetings, Consultant shall discuss project progress, distribute recent jobsite photos and answer questions that might arise. In addition, for the LBOC meetings, Consultant will compare and reconcile project cost data (invoices, Additional Services, etc.) with Public Works and Administrative Services Division staff so that a reconciled cost spreadsheet can be presented to the LBOC. Consultant shall coordinate with City staff representing the Art Center and Contractor to minimize any negative Main Library construction impacts on the operation of the Art Center. Consultant shall respond within 24 hours to resident questions and complaints. Consultant shall provide updates suitable for uploading onto the City's website or other information site. Printing of any needed flyers, presentation boards, advertisement and other related outreach material costs shall be considered a Reimbursable expense, the cost for which shall be approved in writing in advance by the PM. Meetings: Throughout the construction process, Consultant shall be prepared to address comments and concerns of the Contractor, Architect, PM, City Staff, and the general public on an as-needed basis. Consultant shall set up and conduct weekly progress meetings and any other meetings necessary to facilitate the project work. City will provide the administrative support to provide a meeting room and invite attendees. Consultant shall write and distribute the meeting 15 Professional Services Rev. June 2, 2010 agendas and meeting minutes, including: City-Consultant meetings, regular site meetings, and meetings with the City .staff, contractors, various City departments, and the public. The meeting minutes will explicitly track who has the responsibility for each action item with expected completion dates. Field Inspection and Supervision: Consultant shall provide a CM Field Superintendent (CMFS) who shall maintain a field presence whenever work is under way by the Contractor. The role of the CMFS will be to enforce the Construction Contract daily in the field to ensure that the work is being constructed in compliance with the contract documents, the approved shop drawings, the current RFI answers, and other Construction Contract documents, and in general, to protect the interest of the City daily in the field. The CMFS will also observe and report daily field problems with respect to quality, cost and schedule. The CMFS will develop and maintain deficiency, incomplete work item, and preliminary punch list reports and will maintain a daily construction report, as the daily history of the project, to include significantjobsite field events that occur each day. The CMFS will periodically monitor any 'time and materials' work performed by the Contractor to ensure that the work being performed is being charged appropriately to Field Order and not to contract work. The CMFS will not be responsible for means and methods of the Contractor, nor for safety of any of the Contractor's employees, but will have the authority, although not the responsibility, to observe and report concerns with regard to such issues. Documentation: Consultant shall oversee, manage and track the Contractor's preparation and/or review of all necessary documentation for the project including, but not limited to: daily logs and inspection progress reports, photos/videos, RFI, ASI, correspondence, and shop drawings. Consultant shall maintain all files and documentation related to managing the project. Responses, approvals, and decisions relative to Contractor's documents shall be provided in a timely marmer and as required in the construction documents. Consultant shall review and comment on any project-related correspondence as requested by the City. Routine correspondence that is related to product information or minor design issues may be prepared and answered by Consultant on its letterhead, with a copy of the response directed to PM and Architect. Correspondence requiring City response, including but not limited to correspondence with residents, cost or contractual issues, may be drafted by Consultant, but shall be signed only by City. Submittals: Consultant shall manage, log and track all project submittals (i.e. shop drawings, product information, substitution request, and samples) for approval in a timely marmer as required by the construction documents and in order to prevent any delays to the project. Comments from different reviewers of the submittal shall be compiled before being returned to the Contractor for revisions. All submittals shall be sent directly between the Contractor and the Architect, with copies, documentation and management reports submitted to and managed by the Consultant. Electronic me sharing: Consultant shall contract with, host and maintain an electronic me sharing internet site, like Sharepoint, in order for the Consultant, City staff, Architect, Contractor, City contractors, and others as appropriate to post project documents for shared viewing. Documents shall include: architectural plans and specifications, submittals, RFI's, ASI's, 16 Professional Services Rev. June 2, 2010 inspection logs, schedules, meeting agendas and minutes, and any other project documents requested to be posted by City or that will benefit the various parties involved. Construction Schedule: Consultant shall review the Contractor's construction schedule. Consultant shall analyze, monitor, and request updates for the master schedule as the project progresses. Consultant shall analyze the schedule for construction constraints, level of critical activities and to verify progress in conjunction with the analysis of pay applications. Consultant shall review Contractors' individual Critical Path Method (CPM) schedules, monitor Contractor's progress, notify the City of any slippage, and coordinate Contractor recovery plans. Progress Pavrnents: Consultant shall review progress payment requests submitted by Contractor within five (5) days of receipt and verify the accuracy and percentage of completion against the schedule and resolve any discrepancies in the invoices. Consultant shall review the invoices and backup for completeness and compliance with contract documents and make a recommendation to PM for payment ofthe progress payment requests. Change Order Monitoring and Processing: Consultant shall review all change orders submitted to the City for accuracy, completeness, appropriateness, and compliance with the City contract documents. Consultant shall work with the Architect to determine the validity of change order requests, however, the Architect will not be expected to provide input on the validity of the dollar value of the claim, only input as to whether the work is indeed 'extra'. In instances when the work is determined to be extra, Consultant shall make recommendations to the City on the pricing of the change orders using compensation methodologies specified in the Construction Contract. If necessary or if requested by the City, Consultant shall prepare an independent estimate of the value of the additional work to verify the reasonableness of fixed price change orders. Consultant shall reject change order requests that are determined to be invalid. Consultant shall process change order requests according to the schedule developed under "Establishment of deadlines", and shall coordinate response with the City and Architect. Claims: Consultant shall analyze any claims from the Contractor (i.e., compensation and delay) as to whether they are excusable, inexcusable, or compensable and prepare a response for City. Consultant shall process claims according to the schedule developed under "Establishment of deadlines" . City Contractors: The City intends to contract with several contractors directly to provide the fixtures, furnishings and equipment (FF&E) for the project as these costs are not bondable and must be separately tracked. Consultant shall assist the City in the procurement, scheduling, submittal review, documentation and management of these City contractors and, in particular, with the coordination of their work with the Contractor's work. Quality Control and Assurance: Consultant shall monitor and document the Contractor's work for any deviations in scope, schedule, or performance and keep the City informed of and assist in resolving any issues that may arise. Record Drawings: Consultant shall coordinate the preparation of record drawings with the Contractor and Architect on a regular basis, both during the construction and post-construction 17 Professional Services Rev. June 2, 2010 phases, and review the drawings for "as-built" accuracy. Commissioning: Consultant shall work with the commissioning agent, Architect, and the Contractor to ensure that all new equipment have been installed in accordance with the contract documents, are working properly as stand-alone equipment, and are working properly as part of a complete system. Substantial Completion: As per the construction contract, once the Contractor requests substantial completion and it is determined to be warranted, Consultant shall prepare and compile a project punch list with the assistance from the City and Architect to be forwarded to the Contractor. Consultant shall oversee the completion of the punch list items before the final notice of completion is issued. Groundbreaking: Consultant shall coordinate the logistics related to a groundbreaking and to a ribbon-cutting ceremony, including working with committees, identifYing power sources, etc. Costs for beverages, materials, and photographs shall not be the responsibility of the Consultant. Close Out: Consultant shall ensure completion and delivery of all required close out documents including operation and maintenance (O&M) manuals, record drawings, and warranties. Consultant shall review all these materials for compliance with the contract documents and for completeness and report any deficiencies or discrepancies to Contractor for corrections and re- submittal. Consultant shall work under the direction of the PM to resolve any contract claim issues that may arise (stop work notices, bonding, delays, extra work, etc). As-Built drawings shall be scanned by Consultant for archiving by City. Files: Consultant shall consolidate and deliver all project files and documentation to be retained by the City. Task 3: Testing and Special Inspections Testing and Special Inspections: A testing and inspection agency(s) shall be under contract with and paid for by the Consultant. Consultant shall coordinate with the Contractor in scheduling the testing agency services for materials testing and special inspections needed for the life of the project. This testing includes, but is not limited to, soils tests, concrete strength and weld inspection. Consultant shall ensure that all required sign-offs are reviewed and distributed and are in compliance with the specifications and the California Building Codes. Physical oversight of the geotechnical engineer's work that relates to the design of the construction project shall be contracted by the Architect. Geotechnical inspections are provided by the Architect, and are not provided by the Consultant. Task 4: Electronic Documentation Electronic Documents: The City is using an electronic document filing and retrieval system (called "E-docs") in order to improve maintenance and any future remodeling projects. Such a system stores as-builts and closeout documentation, like manufacturers' installation, maintenance and warranty information, and provides an easy, computer-based retrieval means. Consultant shall provide this sort of service, E-Docs or approved equal, for the Main Library, including labor 18 Professional Services Rev. June 2, 2010 to input all documentation. Task 5: Photographic Recording Project Documentation -Photographic Record: Based upon a build period of sixteen (16) months, Consultant shall provide a photographic record of the following: pre-construction site- survey of existing conditions; sixteen (I 6) maximum exterior progressions; interior progressions; six (6) maximum interior mechanical, electrical and plumbing; pre-concrete slab pour; exterior elevation, including window-flashing and waterproofing; three (3) maximum roofing showing the roof at various stages of the project; and finished condition prior to occupancy. All documentation shall include consultations with City identifying project-specific needs, appropriate photographic intervals, schedules, determination of optimal locations based on the site plans, a representative number of digital photographs at such intervals and for such durations and at the specified milestones; linking each photo set to the appropriate location on the site plans and floor plans; online web hosting of the documentation on the Multivista website for the construction period covered by the documentation and for a minimum period of I-year thereafter; password protected access to the documentation; and two CD or DVD ROM copies of the entire documentation upon completion. Task 6: Allowance for Additional Testing The construction contract requires the Contractor to reimburse the City for re-testing that results from failed inspections. The City does not, however, have an administrative mechanism to return/rebate re-testing fees to the Consultant. The Consultant shall therefore carry a budget to pay for any additional re-testing that may be required. This allowance shall only be expended if authorized in advance, in writing, by the City's Project Manager. Task 7: Post Construction Services Move-back: Consultant shall oversee the efforts related to moving back to the Main Library: • Technical services from the Cubberley Community Center back to the Main Library; • Main Library staff from the Mitchell Park Library back to the Main Library. The temporary sites occupied by Main Library staff during construction of the Main Library will need to be converted back to their original uses. Any design effort shall be by separate contract with Architect, or by staff. Consultant shall coordinate the modification work between Architect, staff and contractor(s). Record Drawings and Close-Out: Within 60 calendar days after the "Notice of Completion to the Contractor", Consultant shall: • Coordinate the preparation of record drawings with the Contractor and review these Professional Services Rev. June 2,2010 19 drawings for "as-built" accuracy • Ensure completion and delivery of all Contractor required close-out documentation including O&M manuals, record drawings, warranties, etc. • Consolidate all project files and documentation maintained by the CM to be retained by the City • Under the direction of the City's Project Manager, work to resolve any contract claim issues (stop notices, bonding, delays, extra work etc.), that may arise • Consultant will set up and coordinate contractor-provided training of City staff as required by the contract documents and as necessary to ensure that the appropriate City personnel are adequately trained and familiar with the new and refurbished equipment • Consultant shall, as requested by the City's Project Manager, respond to and coordinate with the Contractor or responsible party to repair and/or replace defective work items that are included in the project's I-year warranty period, which may extend to one year from the Notice of Completion. Post Construction and Warranty Services: Consultant shall meet with Library and Public Works staff monthly for three months commencing after the building is open to the public in order to complete any remaining punch-list items and/or to contact the Contractor for any warranty issues that might arise. After the initial three month period, Consultant shall contact the Staff quarterly for a period of nine months to determine whether any new building or systems issues have been identified. Systems deficiencies that cannot be resolved by the Contractor shall be reported to the Commissioning Agent, Architect and City. Commissioning Verification: Consultant shall participate in the post-construction activities of the Commissioning Agent as follows: Participate in an off-season testing (i.e., testing the heating system prior to winter) session and work with the Contractor to correct any deficiencies. Compile the final testing documentation for inclusion in the Commissioning Record and in the O&M manuals. 12 Month Warranty Follow Up: Consultant shall return to the site at month 10 of the 12 month warranty period and review operating conditions with City facility staff and the Commissioning Agent in order to identifY any outstanding issues related to the original and seasonal commissioning. The Commissioning Agent will interview facility staff and identifY problems or concerns that they have with operating the building as originally intended. The Commissioning Agent will make suggestions for improvements and for recording these changes in the O&M manuals. The Commissioning Agent will identifY areas that may come under warranty or under the original construction contract. The Consultant shall work with the Contractor to resolve any warranty issues. 20 Professional Services Rev. June 2, 2010 EXHIBIT "B" SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the time specified below. The time to complete each milestone may be increased or decreased my mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. Consultant shall provide a detailed schedule of work consistent with the schedule below within two weeks of receipt of the Notice to Proceed. The estimated construction duration for the Main Library (excluding hazardous materials removal) is 14 months. The completion dates for the Milestones below are approximate. Milestone Completion Award of Consultant Contract and NTP October 1012 Phase 1-Design Phase Review Construction Documents November 2012 Contractor Prequalification January 2013 Hazardous Materials Contract March 2013 Construction Contract Award May 2013 Phase II -Construction Phase Construction Start June 2013 Substantial Completion July 2014 Project Close-Out (1 mo.) August 2014 Phase 111-Post-Construction Phase Warranty Period (12 mos.) August 2015 CITY agrees to compensate CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the Compensation schedule attached in Exhibit C. Compensation shall be calculated based on the hourly rate schedule attached as Exhibit C-1, up to the not to exceed budget amounts set forth in Exhibit C. CONSULTANT acknowledges and agrees that, if for any reason the project schedule described in this Exhibit B goes beyond the completion milestones set forth above, CONSULTANT shall complete all services and that compensation for those. services will not exceed the not-to-exceed amounts in Exhibit C unless the cause of the extended duration is the result of a significant change or addition to the project scope which neither party could reasonably anticipate at the time this Agreement was entered into. 21 Professional Services Rev. June 2, 2010 EXHIBIT "C" COMPENSATION The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "A" (Basic Services) and reimbursable expenses shall not exceed $688,121. Consultant agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $68,812. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. CITY'S PROJECT MANAGER may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $688,121 and the total compensation for Additional Services does not exceed $68,812. DESCRIPTION 1. BASIC SERVICES Task 1-Preconstruction Services Task 2-Construction Services Task 3-Testing and Inspection Services Task 4-Electronic Documentation Task 5-Photographic Recording Task 6-Additional Testing Allowance Task 7-Post Construction Services BASIC SERVICES SUBTOTAL Reimbursables: OfficelTrailer Equipment Allowance NOT-TO-EXCEED AMOUNT $107,384 $422,850 $90,000 ($10,000 Geotech +$80,000 Structural) $15,000 $23,902 $10,000 $13,485 $682,621 $2,500 $3,000 TOTAL BASIC SERVICES + REIMBURSABLES $688,121 2. ADDITIONAL SERVICES 10% of Basic Services TOTAL SERVICES: 22 $68,812 $756,933 Professional Services Rev. June 2, 2010 REIMBURSABLE EXPENSES: EXHIBIT "c" COMPENSATION -Continued Reimbursable expenses include, but are not limited to, preparation of public outreach materials, cost of copying plans and specifications, and other tasks not included herein. Postage (with the exception of delivery oflarge items such as contract documents or overnight mail, travel, meals, computers, bridge tolls, telephone, administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance, other ordinary business expenses and other related overhead costs are included within the scope of payment for services and shall not be considered as reimbursable, but shall be included in the overall project costs. CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. Additional Services include, but are not limited to, attendance at Council and Commission meetings not originally intended in the scope of work and reimbursable expenses not included in the base fee. The CONSULTANT, at the CITY'S project Manager's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT'S proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-l. The additional services scope, schedule, and maximum compensation shall be negotiated and agreed to in writing by the City's project manager prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this agreement. 23 Professional Services Rev. June 2, 2010 Team Member Proj ect Princapal Senior Project Manager Proj ect Manager Project Engineer Administrator Senior Materials Engineer Testing Inspection Proj ect Manager Testing Inspection Field Supervisor EXHIBIT "C-l" HOURLY RATE SCHEDULE Rate ($) 2012 Rate ($) 2013 175 185 145 -155 150 -160 130-140 135-145 120 128 90-100 100-105 150 157 125 131 105 110 24 Rate($)2014 190 160-170 142-155 136 105-110 168 143 120 Professional Services Rev. June 2, 2010 EXHIBIT "D" INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REOUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH YES YES YES YES YES YES OCCURRENCE AGGREGATE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000 LIABILITY COMBINED. BODILY INJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 $1,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 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 ANYRESULTANT 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 I1',SUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AiW 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, WIlli RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. . B. CROSS LIABILITY THE NAMING OF MORE TI!AN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL 25 Professional Services Rev. June 2, 2010 NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION I. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON·PA YMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON·PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 26 Professional Services Rev. June 2, 2010 Awarded Future Projected Total PE-11000 MAIN LIBRARY (95% CD Estimate) Construction Contractor Costs Future Construction Contract General Construction 12,950,000 15,319,000 15,319,000 (2,369,000) Future Parking & Circulation Art Center Credit (500,000)(500,000)500,000 Future Hazmat Abatement CPA Support Contract 250,000 14,495 235,505 315,000 (65,000) Future Custom Casework CPA Support Contract 400,000 400,000 400,000 0 Future Artwork CPA Support Contract 125,000 90,000 35,000 125,000 0 Future Graphics&Signage CPA Support Contract 250,000 250,000 250,000 0 Building Built In Technology Future AHM Book Handling CPA Support Contract 100,000 374,713 374,713 (274,713) Future Book Security CPA Support Contract 15,000 37,130 37,130 (22,130) Future Self Check Out CPA Support Contract 10,000 32,670 32,670 (22,670) Design C09130744 Architecture - Design 1,800,000 1,645,818 750,000 2,395,818 (595,818) 0 Construction Management & Inspections 0 C10131631 CM services 850,000 92,500 688,121 780,621 69,379 0 Other Costs 0 Future Permit, Fees & Expenses City Departments 1,000,000 1,000,000 1,000,000 0 Plan Check West Coast 39,200 16,300 22,900 39,200 0 Future Offsite Utility Installation CPA Utility Department 50,000 50,000 50,000 0 Sub Totals 17,839,200 1,859,113 18,695,039 20,619,152 (2,779,952) Project Contingency 10%Authorized 2,250,000 171,607 1,869,504 2,041,111 208,889 20,089,200 2,030,720 20,564,543 22,660,263 (2,571,063) revised 10/10/2012 TOTALS BUDGET RESERVESCONTRACTSOctober 2012 Palo Alto Library Projects Bi-Monthly Progress Report July – August 2012 Mitchell Park Library & Community Center Main Library Mitchell Park Main Entry Table of Contents Mitchell Park Library  Status Report  Management Summary  Action Items  Schedule Milestones Main Library  Status Report  Management Summary Library Closure Plan Financial Summary Mitchell Park Library & Community Center 3700 Middlefield Road, Palo Alto The new Mitchell Park Library and Community Center is a highly sustainable joint-use facility that will be a vibrant destination for civic, cultural, social, educational, and recreational activities. The new center, which will replace undersized and aged facilities, is made possible through Measure N and the strong partnership between the city and the community. During construction, temporary library and teen center facilities are available at the Cubberley Community Center. PROJECT CONSTRUCTION CONSTRUCTION BEGAN: September 2010 ANTICIPATED OPENING: Spring 2013 PROJECT TEAM OWNER: City of Palo Alto Public Works (650) 329-2295 ARCHITECT: Group 4 Architecture, Research + Planning Inc. South San Francisco, CA (650) 871-0709 GENERAL CONTRACTOR: Flintco Pacific, Inc. Roseville, CA (916) 757-1000 CONSTRUCTION MANAGER: Turner Construction Company San Jose, CA (408) 918-1600 FOR MORE INFORMATION www.cityofpaloalto.org/libraryprojects KEY ACCOMPLISHMENTS Exterior Wall Finishes Glass Installation Start of Drywall UPCOMING ACTIVITIES Stonework Exterior Painting and Trim Interior Ceilings Drywall Continues Library West Fascia Installation Library Roofing Started Window Trim Installation at Multi Purpose Solar Hot Water Panels Installed Clerestory Glass for Natural Lighting Community Center with Library Beyond Library Plaster Finished Library Window Sealant Installation Bldg A South Plaster Installation Library Window Water Testing Mitchell Park Library & Community Center Management Summary July - August 2012 Noteworthy Accomplishments Exterior Glass, Plaster and Metal Siding are complete Solar Hot Water Panels are installed Raised Flooring nears completion and drywall has started Current Project Challenges: Processing the high volume of change documentation and providing direction Settle tube steel and exterior wall framing changes (Ready for Council approval) Settle waterproofing and sheet metal changes (Estimate complete) Significant number of new COR to review Submittals impacting material delivery and inspection (In progress but nothing completed) Photovoltaic systems need separate permits Deferred submittals for glass railings, elevators and library shelving need to complete plan check Safety Public Safety is a priority outside the fence. No incidents reported to date School resumed smoothly without any safety issues from construction Quality Control City and Special Inspection Work: Work needs to be ready when inspection is requested Work should pass inspection the first time around Quality Control Observation Reports : 56 have been issued and 12 remain open Courtyard Concrete benches finishes need remedial work. Exposed exterior steel needs welds ground smooth and finished with a protective coating Firewall Construction modified assembly needs Building Department approval Glazing contractor is having difficulty meeting quality control standards Sliding glass doors don’t meet specification Water testing 100% of windows due to high failure rate. Costs: Since the last report, the City issued 7 Change Orders dealing with over 50 Change Order Requests Flintco resumed Change Order Request submittals with an equivalent number of new requests. Schedule: No progress on completion date – August schedule still shows 9 months left. (May 2013) The Contractor needs adequate manpower to support the planed schedule. Next Key Milestones: Drywall finish Library 10/4 Teen Center 10/4 Community Center 10/3 Stonework finish Library 10/24 Teen Center 10/10 Community Center 9/19 Ceilings start Library 9/25 Teen Center 9/20 Community Center 9/25 Mitchell Park Library & Community Center Schedule Milestones July - August 2012 ACTIVITY ACTIVITY I.D.Bldg-A Bldg-B Bldg-C Pad Certification 10/27/10 10/27/10 10/27/10 Foundation Complete 12/28/11 1/16/11 1/7/11 Frame & Place Slab on Grade 2/11/11 5/6/11 5/3/11 Top out Structural Steel Frame 5/31/11 4/15/11 5/12/11 2nd Floor Poured 4/16/11 X X Roof Poured 5/31/11 6/24/11 6/21/11 Frame Ext Walls EXT 4000 9/2/11 9/26/11 9/2/11 Building Dried In EXT 5555 6/8/12 6/8/12 6/8/12 Frame Interior Walls INT 1130 5/24/11 6/1/11 7/1/11 Hang Drywall Start 1 INT A1085 B1080 C2330 9/6/12 8/8/12 8/6/12 Ceiling Start (MEP inspections pass) 2 INT A.B.1220, C1270 9/25/12 9/20/12 9/25/12 Drywall Finished INT A1080 B1080 C1090 10/4/12 10/4/12 10/3/12 Ceiling Tile Finished FIN 1120 11/27/12 11/8/12 11/12/12 Permanent Power 3 INT A2120, EQU B2010, C2020 9/27/12 9/27/12 9/27/12 Heat & Air Conditioning Online EQU A1100, BC1090 10/16/12 1/9/13 1/18/13 Casework Start Date 4 FIN A10049, BC1090 10/19/12 9/20/12 10/9/12 Elevator Complete AEQU1090 10/23/12 x x Owner/Arch Punchlist - Start PCO A5000 B2020 C3030 3/11/13 1/24/12 2/11/12 Parking Paving & Driveways Complete STE 1840 1/7/13 x x Substantial Completion 5 PCO A1555 B2555 C3555 2/26/13 2/28//13 3/8/13 Certificate of Occupancy PCO 5020/1555 4/12/13 4/12/13 4/12/13 Building Air out and Commissioning EQU 1070 4/17/13 4/2/13 4/26/13 Footnotes 1. Actual from Inspection log 2. Schedule dates passed - used inspector's estimate 3. Per Flintco at 9/5 weekly meeting 4. need walls finished and HVAC online 5. Temporary Certificate of Occupancy Completion DateFlintco Monthly Schedule update 8-15-12 Completed Main Library 1213 Newell Road, Palo Alto Exterior View PROJECT CONSTRUCTION CONSTRUCTION STARTS: Summer 2013 ANTICIPATED OPENING: Fall 2014 PROJECT TEAM OWNER: City of Palo Alto Public Works (650) 329-2295 ARCHITECT: Group 4 Architecture, Research + Planning Inc. South San Francisco, CA (650) 871-0709 CONSTRUCTION MANAGER: TBD FOR MORE INFORMATION www.cityofpaloalto.org/libraryprojects KEY ACCOMPLISHMENTS Budget Update complete based on current construction UPCOMING ACTIVITIES Plan Check Submittal is anticipated by the end of September The Palo Alto Main Library renovation and addition is in the final phase of design “Better Libraries for Palo Alto” projects, funded by the passage of Measure N by voters in 2008. The project incorporates upgrades to the historic building’s structural, electrical and mechanical systems while preserving the integrity of architect Edwards Durrell Stone’s iconic design. The new addition includes a program room and additional restrooms to extend the services of this heavily-used branch. The project targets LEED certification. Library Closure Plan July - August 2012 20 1 4 Main Library Opening to the Public in 2014 Downtown Library re-opened Mitchell Park Library and Community Center construction started, College Terrace Library re-opened Mitchell Park Library & Community Center Anticipated Public Public Opening in the Spring 2013 Main Library Closes for construction Mid 2013 20 1 0 20 1 1 20 1 2 20 1 3 printed 9/11/2012 MEASURE N ENGINEER'S ESTIMATE PROJECTED RESERVES 09010 Cubberley Temporary Library 645,000 619,687 25,313 09005 Downtown Library 4,000,000 5,212,000 4,418,111 793,889 09006 Mitchell Park Library & C.C.50,000,000 49,043,000 41,411,673 7,631,327 11000 Main Library 18,000,000 20,100,000 21,682,800 -1,582,800 11010 Art Center Temporary Library 500,000 500,000 0 Bonding and Financing Costs 4,000,000 500,000 500,000 0 BONDED AMOUNT 76,000,000 76,000,000 69,132,271 6,867,729 data 8/28/12 - - - July - August 2012 Update PALO ALTO LIBRARIES BOND MEASURE N PROJECTS FINANCIAL SUMMARY BUDGET COSTS The combined projects currently have projected cost reserves of $6,867,729. Notes on Projected Cost: Temporary Library at Cubberley finished below estimate. Balance is held for move out costs. Downtown Library is now finished. Final Cost will update when all contracts are closed out. Mitchell Park Library and Community Center bids were significantly below estimate. Pending Design and C.M. Contract amendments are not included and will affect Reserves. Bond costs were reforecast and the financing budget was reduced to $500,000. Main Library is still the June 2012 estimate Turner's updated estimate is under review by Public Works Engineering. Council increased Project Scope. Projected Cost includes current estimated cost increases. Projected Costs are based on contracts awarded to date with their full contingency authorization. Projected Costs for contracts not yet awarded are based on the current estimate. Reserves will adjust as future contract awards are made. City of Palo Alto (ID # 3170) City Council Staff Report Report Type: Action ItemsMeeting Date: 10/22/2012 Council Priority: Environmental Sustainability Summary Title: Cool Cities Challenge Title: Approval of Letter of Intent to Participate in Cool Cities Challenge From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council authorize the City Manager or his designee to sign the Letter of Intent to participate in the Cool Cities Challenge (Attachment A) being organized and implemented by David Gershon, the Empowerment Institute and its partner organizations. Background David Gershon, author of the Low Carbon Diet, co-founder of the Empowerment Institute (EI), and a leading social change practitioner, has visited Palo Alto on several occasions in preceding months to invite our participation in the ambitious Cool City Challenge (CCC) community engagement program. This has led to the current invitation to Palo Alto to formalize this potential working partnership through a Letter of Intent (LOI). The purpose of the CCC is to scale up a proven community-based social innovation to achieve dramatic greenhouse gas emission reductions in three early adopter American cities and three neighborhoods in San Paolo, Brazil of comparable size to the American cities, and then disseminate this model worldwide. The ultimate goal of the CCC is to develop a scalable social innovation capable of making a dramatic change to retard climate change. With international climate change legislation failing to get traction in adoption or implementation, and the long timeframe required to scale up technological solutions, there is a need now for viable and scalable strategies for addressing global warming. Cities represent 70% of the planet’s CO2 emissions and in developed countries citizens’ daily lifestyle choices represent at least 50% of these emissions with huge opportunities for efficiency. This provides the potential for a high leverage opportunity to address global warming if cities can achieve substantial behavior change among its citizens by taking individual behavior change to a communitywide scale. Further, this could serve as a demand-side driver for local green economic development. The Empowerment Institute—a leader in environmental behavior change and community engagement—over the past two decades has developed a methodology to help cities empower citizens to reduce their carbon footprint by 25% through the Low Carbon Diet EcoTeam program and a strategy to achieve between 25% and 75% household participation. This methodology has been tested on a smaller scale in over 300 US cities and 6 countries including China. The CCC is designed to bring this potentially transformative social innovation to scale (community-wide) first in the three California demonstration cities and Sao Paulo and then to the wider world based on the experience and lessons learned in the demonstration cities. The Empowerment Institute (EI) will provide each of the cities deep technical assistance in its implementation. This Institute has a successful track record in designing and implementing successful behavior change programs and community engagement strategies for cities both in the United States and Europe. The content of these behavior change programs include Low Carbon Lifestyles, Green Living, Livable Neighborhoods, and Disaster-resilient Communities. In particular, their Low Carbon Diet Program has been disseminated to over 300 US cities with 46 of those cities in California. To enable this project to be most effectively disseminated after this prototype phase, EI has enlisted the commitment of major research institutions to study, evaluate, and assist in the analytics. EI reports that these partners are Lawrence Berkeley National Laboratory, UC Berkeley, UC Davis and Stanford. EI assumes that cities do not have resources to implement this type of social innovation, and has committed to raising the funds for the cities. One of the purposes of the Letters of Intent with potential demonstration cities is to indicate potential participation by cities that will aid in the Empowerment Institute’s fund raising goals. If EI is successful in raising the funds to provide the support and staffing in the demonstration cities over the three year program period, then EI will issue Requests for Proposals from cities for evaluation and final selection of the demonstration cities to participate in the program. That proposal process is expected to occur sometime later in 2013. Discussion The Cool Cities Challenge gives Palo Alto a chance to contribute to developing a potentially game changing local solution to climate change. Palo Alto is already a leader in climate protection in many ways, so this is an opportunity to achieve the next level and advance our climate action and energy efficiency goals. CCC potentially provides the City with a platform that allows for integration of its many sustainability programs and which can be applied literally block by block across our community. Neighborhood groups would allow Palo Alto to get better take up in these programs; it also allows for efficiency in the financial investments that will create and distribute these programs. The CCC provides Palo Alto an opportunity to more tightly knit together the social fabric of the community. It also allows for the integration of sustainable community outreach efforts. Resource Impact No significant direct costs to the City are associated with the staff recommendation to sign the LOI. Staff will continue to work with EI, and other partners (Cool Davis, California Air Resources Board, Lawrence Berkeley National Labs), to advance the City’s community engagement goals and our efforts to reduce GHG emissions. As indicated in the attached LOI, fiscal impacts associated with long-term participation in this ambitious program will be offset by funding secured by EI; as mentioned earlier in this report, the Cool Cities Challenge program will only occur if EI is able to secure adequate funding. Indirect fiscal impacts associated with the implementation of a household based demand-side carbon reduction program are undetermined. While this initiative is based on EI providing new funding to support this effort, a program as ambitious and as far reaching as this in its intent and design will certainly draw on existing city staff, Council, and community capacity. On the other hand, staff anticipates that local businesses and entrepreneurs could respond as local demand for carbon reduction products and services emerge as one outcome of this program. While submission of a LOI by the City signals our serious interest in this initiative, it commits to no binding obligation. The City will again need to carefully review the results this initiative may produce and the investment that this initiative will require, if and when EI issues the formal Request for Proposals later in 2013. By that point, the City should be able to have a clearer understanding of the costs of participation that may occur beyond the funding EI provides and a better sense of our citizens’ interest in participating. If the Council approves the LOI, and as staff learns of EI’s success in fundraising, staff will return to Council with a process to test community interest through targeted outreach to key stakeholders and some method of surveying household interest. A good understanding of the receptivity of our citizens to participating in a multi- year high touch outreach and behavior change program such as this would be important as a prelude to our submission of any formal proposal to EI when they issue their Request for Proposals in 2013. Policy Implications Participation in the Cool Cities Challenge would assist Palo Alto in implementing its Climate Protection Plan and is fully consistent with the Greenhouse Gas reduction goals of that plan. Environmental Review Submitting a LOI to participate in the Cool Cities Challenge does not constitute a project under the California Environmental Quality Act (CEQA). Attachments: ·Cool City Challenge Letter of Intent (DOCX) Prepared By:Philip L. Bobel, Interim Asst. Director, Engineering Services Department Head:J. Michael Sartor, Director City Manager Approval: ____________________________________ James Keene, City Manager DRAFT COOL CITY CHALLENGE LETTER OF INTENT Dear Mr Gershon, Thank you for the invitation to be considered as a candidate for the Cool City Challenge. We understand that Empowerment Institute and Lawrence Berkeley National Laboratory are in the process of raising the finances and wish to have non-binding letters of intent from candidate cities to share with potential funding sources. We would like to be considered as one of the Cool City Challenge communities. We have briefly responded below to the five criteria in the city selection process document and have read the strategic plan. We feel that we meet these criteria. We understand there is a two-step process. First we submit this letter of intent and then, when financing is secured, we will be invited to submit a more substantive competitive application. We believe we are good candidates for the Cool City Challenge because: 1.Palo Alto has a commitment to bold carbon reduction with a proven track record, deep commitment, and measurable goals set by the Palo Alto City Council to achieve ambitious carbon reduction in the short and mid-term. 2.Palo Alto has a commitment to community engagement with recognition by the Palo Alto City Council of the need to engage community members in reducing their carbon footprint and a demonstrated track record in doing so. 3.Palo Alto has a commitment to the Cool City Challenge goals with the strong buy-in of the Palo Alto City Council and other civic leaders to local GHG reduction goals and a demonstrated willingness to invest political capital in realizing them. 4.Palo Alto has a track record as an early adopter city including a desire to take on big challenges, lead the way for other cities, civic pride in past accomplishments, high tolerance for experimentation, and a can-do community culture. 5.Palo Alto has a commitment to be a learning and teaching city:Since this is a bold social learning endeavor each city needs to be a committed partner with Empowerment Institute and Lawrence Berkeley National Laboratory in the research and learning. And when feedback dictates, to be willing to evolve the program. Further, since the goal of this endeavor is to develop a scalable model, to also be willing to serve as a teaching city for other cities to learn from. Thank you for considering this letter of intent and for your important work. Sincerely, James Keene Palo Alto City Manager Attachment A City of Palo Alto (ID # 3196) City Council Staff Report Report Type: Action ItemsMeeting Date: 10/22/2012 City of Palo Alto Page 1 Summary Title: HRC Resolution in response to US Supreme Court Decision Citizen's United vs. FCC Title: Human Relations Commission Recommends Adoption of a Resolution In Support of an Amendment to the United States and California Constitutions to State "Corporations are Not People and Money is Not Speech" in Response to United States Supreme Court Decision of Citizen's United vs. Federal Communications Commission From: City Manager Lead Department: Community Services Recommendation The City of Palo Alto’s Human Relations Commission’s (HRC) recommends that the Council review and accept the HRC’s recommendation (6 votes affirmative, 1 member absent), to adopt a resolution in support of an amendment to the United States and California Constitutions to state that: 1) Only human beings, not corporations, are endowed with rights that are protected by the constitution, and 2) Money is not speech, and therefore the expenditure of money to influence the electoral process is not a form of constitutionally protected speech and therefore may be regulated. Background This policy issue was brought to the HRC by participants of Santa Clara County “Move to Amend,” a local chapter of a national movement which seeks to amend the United States and California Constitutions to state that “corporations are not people and money is not speech.” On September 13, 2012, the Human Relations Commission voted unanimously to request the Council to adopt a resolution, calling for an amendment to the United States and California Constitutions to recognize and establish that, first, only human beings, not corporations, have rights that are constitutionally protected and, second, the expenditure of money during City of Palo Alto Page 2 elections by corporations is not constitutionally protected speech, therefore, government may regulate these corporate expenditures. The resolution is promoted and inspired by Move to Amend, Santa Clara County chapter, a coalition of organizations and individuals with chapters around the country; its website advocates in favor of an amendment to the United States and California Constitutions “to unequivocally state that inalienable rights belong to human beings only, and that money is not a form of protected free under the First Amendment and can be regulated in political campaigns.” This constitutional amendment movement arose in response to the 2010 U.S. Supreme Court 5-4 decision in Citizen United v. Federal Election Commission. In Citizens United, Justice Kennedy, speaking for the majority, held that, under the First Amendment, government may not suppress political speech on the basis of the speaker’s corporate identity, thus, section 203 of the Bipartisan Campaign Reform Act of 2002, which barred independent expenditures by corporations and unions from using their general treasuries to fund “electioneering communications,” was invalid on its face. In effect, Congress could not validly adopt a law to restrict independent political expenditures by corporations and unions that intend to engage in political speech, which a number of Court opinions have characterized as “indispensable to decision making in a democracy.” The majority decision determined that Section 203 adopted an outright ban on corporate political speech, backed by criminal sanctions, thus it suppressed that speech altogether. Justice Stevens, speaking for the minority, chided the majority decision for concluding that Section 203 was invalid on its face, when that argument was not presented by Citizens United in the first instance. The majority decision, Stevens observed, failed to recognize the impact of, and failed to defer to long- standing legislative determinations and actions to deal with the appearance of, corruption and undue influence in political elections, and it elided the distinction between corporations and individuals and the general societal interests at stake in campaign finance regulations. Corporations, Stevens noted, “are not themselves members of “We the People” by whom and for whom our Constitution was established.” The proposed resolution was first presented to the HRC at its meeting on June 14, 2012. At that time, the recommendation to Council to adopt the resolution was the subject of a vote of 3 ‘yes’ and 2 ‘abstain’. Those who abstained wanted to review the Supreme Court‘s decision, which was an impetus of the Move to Amend movement, before casting a ‘yes’ or ‘no’ votes. After the June HRC meeting, staff consulted with the City Attorney’s Office on the implication of the votes cast. The City Attorney’s Office opined that under Palo Alto Municipal Code section 2.22.030(c), four affirmative votes are required to take action, and an “abstain” vote is not considered an “affirmative” vote. Therefore, the HRC reconsidered this matter at its September 13, 2012 regular meeting and the Santa Clara County chapter of the Move to Amend movement presented again. Among the many attachments provided to the HRC was a link to the full United States Supreme Court decision on Citizens United vs. Federal Elections Commission. City of Palo Alto Page 3 Discussion Several members of the Santa Clara County Move to Amend movement addressed the HRC at its June, 2012 and September, 2012 meetings and made the following key points for consideration.  Corporations are not people and money is not speech: Corporations are not people in the same sense that natural humans are people, and money is not speech itself but a tool to amplify a speech.  The first ten amendments to United States Constitution as well as 14th amendment were written for the purpose of giving legal clarity to the rights of natural people. These amendments were not written with any concern of any rights of corporations.  The people need to clarify the U.S. and California Constitutions and to clarify that the Constitutions’ purposes are to define democratic relationships among natural people to govern themselves. Corporations should not have the same rights under the constitution as natural people do.  The Move to Amend movement is asking for regulations and limitations on the concept that corporations are an artificial construction of human society. They also spoke about the importance of corporations being regulated. As to why this issue should matter to Palo Altans, Debbie Mytels, a member of the Santa Clara County Move to Amend movement, stated that 1) local government and political decisions are vulnerable to disruption by massive corporate contributions to campaigns and other processes, and 2) change will not happen at the national level without strong local support. In preparation for the hearing of this matter at the September 12, 2012 HRC meeting, the HRC Chair Claude Ezran was persuaded by U.S. Supreme Court Justice John Paul Stevens’ dissent in the Citizens United case. Chair Ezran believes that saying that corporations are people defies common sense. People are influenced by political ads and that heavy spending by corporations can drown out any other voice; he feels that this is undemocratic. All these arguments apply to Palo Alto at the local level. For instance, Pacific Gas and Electric Company contributed close to $50M for Proposition 16 which, if it had passed, would have made it much harder for municipalities to start or expand their own power utility. Chair Ezran believes that starting this effort at the local level will be effective. Corporations are often motivated by profit. And while there is nothing wrong with this objective, corporations do not have same interest as the rest of the people. Corporations do not have the national interest in mind and they don’t necessarily have the best interest of people in mind. Commissioner Ray Bacchetti made a comment that local elections are not easily bought and local voters pay attention to issues. So this resolution expresses support for an initiative that is a benefit to the nation at the level where it has a best City of Palo Alto Page 4 chance of being thoughtfully considered, rather than influenced by someone with a particular outcome in mind and the money to influence that outcome. Resource Impact There is no resource impact associated with the adoption of this resolution. Policy Implications There are no policy implications associated with the adoption of this resolution. Attachments:  : Attachment A - Excerpt June 2012 HRC mtg (DOC)  : Attachment B - September 2012 HRC Agenda Packet (PDF)  : Attachment C - Excerpt Sept 2012 HRC mtg (DOC)  : Attachment D - 00710100 RESO Citizens United decision (PDF)  : Attachment E - Public Comments (PDF) 1 DRAFT EXCERPT FROM HUMAN RELATIONS COMMISSION – JUNE 14, 2012 2. DISCUSSION AND ACTION ON RESOLUTION PRESENTED BY SANTA CLARA COUNTY MOVE TO AMEND CHAPTER REGARDING THE CITIZENS UNITED SUPREME COURT DECISION Ms. Debbie Mytels, a Palo Alto resident spoke about how democracy matters to everyone. Human Rights are being excerpted by corporations. Corporations have too much power and there should be limits on the rights of corporations. She explained that the Supreme Court’s ruling in the Citizen’s United vs. Federal Communications Commission cannot be changed without an amendment to the constitution. She is asking for the Commission to pass a resolution that corporations are not people and money is not speech. Mr. Gerald Gras, a Palo Alto resident spoke about the history of corporate personhood. Ms. Anne Wilson, a Palo Alto resident spoke about her concern that the aim of corporations by their charter is to make a profit. Mr. Paul George, Director of the Peninsula Peace and Justice Center spoke about how the Citizen’s United ruling was the most recent decision but is not the main reason for the resolution. Corporations have the rights but not the responsibilities that citizens have. That equality is thrown out of balance. Ms. Stephanie Reader, a Los Alto resident spoke about how many people are upset with this amendment and are concerned about the decision. Rich people are able to put unlimited amounts of money towards political campaigns. The League of Women Voters will be taking up this issue as well. Mr. Aram James, a Palo Alto resident said that The Peninsula Peace and Justice Center also participates in campaign contributions. We are lumping together for profit corporations as well as non-profit contributions. We have the most robust First amendment on the planet. The ACLU is taking the stand of the constitution. He strongly opposes this resolution and encouraged the commissioners to read the entire brief and decision. Commissioner Bacchetti said he wondered if there are two issues being confused. The question is not about the first amendment but more about regulating corporations. He likes the proposal because the capacity to distort processes is great. He thinks it is relevant to take up this issue locally and approve the resolution. Commissioner O’Nan said she is not sure that pouring money into a campaign is not a 2 guarantee of its success. Not all people are fooled by campaigns. Criminal law says that corporations can be prosecuted. Commissioner Ezran said electorates can be influenced and this is an important issue. He agrees that things are out of hand and he would support the resolution. Commissioner Savage said she thinks this is worthy but she is not sure about the wording. She would like to re-write the resolution to make it a positive statement. Commissioner Ezran recommended some language changes in the resolution. Commissioner O’Nan asked for more time because she would like to read the original decision so that she can make a more informed decision. Commissioner Ezran made a motion that the HRC approve the resolution and forward it to City Council for approval. Seconded by Commissioner Savage, who also added that the resolution include the changes suggested by Commissioner Ezran. Commissioner Ezran agreed. AYES: 3, ABSTAINED: 2. Councilmember Holman said that there may be a question from City Council as to why only 3 out of 5 commissioners voted tonight. She suggested postponing the vote for a future meeting, so that those who abstained have more time to make a decision. 1 DRAFT EXCERPT FROM HUMAN RELATIONS COMMISSION – SEPTEMBER 13, 2012 3. DISCUSSION AND ACTION ON RESOLUTION THAT CORPORATIONS ARE NOT PEOPLE AND MONEY IS NOT SPEECH PRESENTED BY SANTA CLARA COUNTY MOVE TO AMEND. Presented by Santa Clara County Move to Amend Santa Clara County Move to Amend returned to the HRC to re-present their request that the HRC endorse a draft resolution and to forward the resolution to the City Council with the endorsement of the HRC. Ms. Mary Klein, Palo Alto resident, spoke and set the legal historical context. Corporations are not people and money is not speech these are to say corporations are not people in the same sense that natural humans are people and money is not speech itself but a tool to amplify a speech. Ms. Klein said the first ten amendments to US constitution as well as 14th amendments were written for the purpose of giving legal clarity to the rights of natural people. These Amendments were not written with any concern of any rights of corporations. Ms. Klein said that the people need to clarify the constitution and to clarify the constitution’ purpose is to define democratic relationships among natural people to govern themselves. The corporations do not have the same rights under the constitution as natural people do. Ms. Debbie Mytels, a Palo Alto resident, said the group is asking for regulations and limitations on corporation as an artificial construction of human society. Also spoke about the importance of these entities being regulated. Ms. Mytels spoke about why this issue matters to Palo Alto and also why local government should address it: Two reasons for Palo Alto to add voice: First reason, local government and political decisions are vulnerable to disruption by massive corporate contributions to campaigns and other processes. Second reason, a change will not happen at the national level without strong local support. Ms. also talked about 2 methods to add amendment to the constitution. Comments from public: Ms. Diane Rolphe, Palo Alto resident, called upon the HRC to uphold the resolution and said the democracy is impaired and threatened. Ms. Edie Keating said this is a very local issue and gave examples that corporate or business influences are too strong and their impact locally. 2 Ms. Stephanie Reader, President of peace and justice, (have to listen again on this) Any questions about the issues raised by ACLU‘s position. Mr. Gerry G. said the democracy is in a distress and many people believe corporation is part of the problem. Ms. Nancy Neff, Board member of California Clean Money campaign said Clean Money Campaign endorses the efforts to amend the constitution and encourage supporting this and asking the city council to support as well. Ms. Susan Stewart spoke about the extreme difficulty for the court to revisit this issue. Ms. Stewart talked about the avenue to try to curtail the concept that the corporations have the same rights as people. Chair Ezran noted 2 things to discuss and decide upon: 1. Whether HRC to endorse the resolution 2. If endorse, then discuss whether to refer resolution to City Council with HRC endorsement. HRC Chair Claude Ezran was persuaded by Supreme Court Justice John Paul Stevens’s dissent summary of Citizens United vs. Federal Communication Commission. Chair Ezran believes that saying that corporations are people defies common sense. People are influenced by political ads and heavy spending by corporations can drown out any other voice; he feels that this is undemocratic. All these arguments apply to Palo Alto at the local level, for instance PG&E contributed close to $50M for Proposition 16 which, if passed, would have made it much harder for municipalities to start or expand their own power utility. Chair Ezran believes that starting at local level will be effective. Corporations are motivated by profit and while there is nothing wrong with this, they do not have same interest as the rest of the people. Corporations do not have the national interest in mind and they don’t have the best interest of people in mind. Commissioner Ray Bacchetti made a comment that local elections are not easily bought and people don’t think of it. So this resolution is a way of starting something that is a benefit to the nation at the level where it has a best chance of being thoughtfully considered rather than influenced by someone with a particular outcome. 1. Motion to approve by Commissioner Bacchetti and seconded by Commissioner Verma. Motion passed unanimously with Commissioner Savage absent. 2. Commissioner Bacchetti motion to move forward resolution to the City Council to approve, seconded by Commissioner Verma. Motion passed unanimously with Commissioner Savage absent. *NOT YET APPROVED* 21005 dm 00710100 Resolution No. _________ Resolution of the Council of the City of Palo Alto In Support Of An Amendment To the United States and California Constitutions To State That Corporations Are Not People and Money Is Not Speech A. Democracy means governance by the people, the citizens of the City of Palo Alto, who hope to protect democracy in our community and our nation. B. Corporations are artificial entities separate from human beings and are not naturally endowed with conscience or the rights of human beings, yet they are creations of law and are only permitted to do what is authorized under law. C. Corporations are not mentioned in the United States Constitution, and the People have never granted constitutional rights to corporations. D. Corporations claim to be persons, possessing the rights of personhood, including free speech and other constitutional freedoms guaranteed by the Bill of Rights and the 14th Amendment to the Constitution of the United States. E. Corporations have unduly influenced and unfairly interfered with democratic processes by pressuring our legislators and dominating election campaigns with virtually unlimited contributions. F. When freedom to speak is equated with freedom to spend money, millions of people who have less money are essentially disenfranchised, as their free speech is overwhelmed by the message of those spending millions of dollars. NOW, THEREFORE, the Council of the City of Palo Alto does hereby resolve, as follows: SECTION 1. The Council of the City of Palo Alto, on behalf of the Palo Alto community, hereby proclaims its support for a call to amend the Constitutions of the United States and California to establish that: A. Only human beings, not corporations, are endowed with rights that are protected by the constitution. B. Money is not speech, and therefore the expenditure of money to influence the electoral process is not a form of constitutionally protected speech and may be regulated. // // // *NOT YET APPROVED* 21005 dm 00710100 SECTION 2. The Council of the City of Palo Alto hereby calls on our state and federal representatives to enact resolutions and legislation to advance this effort. INTRODUCED AND PASSED: AYES: NOES: ABSENTIONS: ABSENT: ATTEST: APPROVED: ____________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: _____________________________ _____________________________ Senior Asst. City Attorney City Manager _____________________________ Director of Utilities _____________________________ Director of Administrative Services City of Palo Alto COLLEAGUES MEMO October 22, 2012 Page 1 of 2 (ID # 3249) DATE: October 22, 2012 TO: City Council Members FROM: Mayor Yeh, Council Members Price and Shepherd SUBJECT: COLLEAGUE’S MEMO FROM MAYOR YEH, COUNCIL MEMBERS PRICE AND SHEPHERD REGARDING A COUNCIL YOUTH COMMISSION LIAISON Request for Addition of a City Council Youth Liaison and the Addition of an “Impact on Youth” Section in Staff Reports Recommendation That the City Council create the new role of Youth Liaison, appointed by the Mayor each year, to integrate and coordinate youth issues with the City Council and separately, to direct staff to include a new section of impact on youth into City Council agenda item staff reports. Since the number of youth-focused groups is significant, we are recommending that there also be an alternate to the Youth Liaison who would assist with coverage and sharing information on upcoming events and programs. Background To sustain the integration of youth well-being in City policy making and administration, we propose that there be a Youth Liaison created for the City Council for the purpose of keeping the City informed and engaged in youth activities and interests. This position is intended to ensure a Councilmember is delegated as a hub for the City Council’s efforts to promote collaboration and partnerships among youth-serving groups in Palo Alto. This position would ensure that the City Council agenda integrates youth and would expand on existing Council relationships such as serving as the liaison to Project Safety Net. It would support information sharing between PSN and other youth efforts in the City with the City Council. This would support and promote youth group collaborations and partnerships and strengthen the connections with other commissions and programs, thereby helping to eliminate the duplication of efforts and interests. The Youth Liaison Position would include the following responsibilities: ・ Liaison to City-organized Palo Alto Youth Council. ・ Liaison to Project Safety Net. October 22, 2012 Page 2 of 2 (ID # 3249) ・ Outreach and relationship building with City-sponsored youth and teen organizations such as the Children’s Theater, Teen Art Council, Junior Museum and Zoo, Children’s Library and others as appropriate. ・ Keep the City Council informed of community initiatives and the calendar of events focused on or organized by youth and teens. ・ Work with City Council leadership to schedule one study session a year for the City Council that highlights youth and teen issues and includes representatives of various youth groups in Palo Alto. Furthermore, to integrate an understanding of the impact on youth arising from the many issues and decisions that come before the City Council every year, we propose that staff: ・ Create an Impact on Youth section in appropriate staff reports which explicitly point out how policies or actions recommended in the report would affect youth and teens in our community. A similar impact statement approach has already been created and implemented by Santa Clara County. This Colleagues Memo does not recommend that staff incorporate an Impact on Youth Section in every staff report but only in those that have any clear and direct impact on youth and teens. Conclusion The City Council continues to take important steps to support and empower our youth in Palo Alto. As the Community Collaborative for Youth Health and Well-Being reaches its third year as a City Council priority, by creating a Youth Liaison and integrating impact on youth into staff reports, we would formalize and further strengthen the City Council's and the City's commitment to youth. Therefore, we request our colleagues support our recommendations outlined in this memo.