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2013-06-24 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers June 24, 2013 6:30 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 June 24, 2013 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. * The agenda now includes time estimates for each section or item. These are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. Call to Order Closed Session 6:30-6:45 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH CITY ATTORNEY – Potential Litigation Subject: Written liability claim against the City of Palo Alto by Chuck Fong & Grace Wood (Claim No. C12034) Authority: Government Code section 54956.9 Study Session 6:45-7:45 PM 2. From Infrastructure Committee: Preliminary Survey Findings Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. City Manager Comments 7:45-8:00 PM Oral Communications 8:00-8:15 PM Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. 2 June 24, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Consent Calendar 8:15-8:20 PM Items will be voted on in one motion unless removed from the calendar by two Council Members. 3. Approval of Monroe Place (formerly Palo Alto Bowl) Motor Court Names 4. Approval of Record of Land Use Action Approving a Request for Extension of a 2010 Site and Design Review Approval to June 2014 for a New Residence at 805 Los Trancos Road 5. Approval of Amendment Number 1 to Contract in the amount of $290,019 with The Planning Center | DCE to Provide Additional Services Associated with the Comprehensive Plan Amendment Project for a Total Not to Exceed Amount of $1,140,000 6. SECOND READING: Adoption of an Ordinance Approving and Adopting a Plan for Improvements from Eleanor Pardee Park (1st Reading, June 13, 2013 PASSED: 9-0) 7. SECOND READING: Adoption of a Park Improvement Ordinance for the San Francisquito Creek Bonde Weir Fish Passage Improvement and Channel Stabilization Project (1st Reading June 10, 2013, PASSED: 9-0) 8. Approval of an Agreement Between the City of Palo Alto and the Palo Alto Unified School District of Santa Clara County Concerning the Public Use, Brokering, and Maintenance of District-Owned Athletic Fields, Tennis Courts and Basketball Courts Jointly Used by School Students and the General Public 9. Technology and Connected City Committee Recommendation to Develop Work Plan to Evaluate the Feasibility of Building a Citywide Fiber-to-the-Premise Network in Palo Alto and Request the City Manager to Appoint a Community Advisory Committee to Assist Evaluation 10. Review and Approval of a Draft Letter to Valley Transportation Authority Board Chair Pirzynski on Peninsula Corridor Joint Powers Board Representation 11. Review and Approval of the Proposed Revisions to the Palo Alto City Council Rail Committee Guiding Principles 3 June 24, 2013 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. 8:20-9:00 PM 12. Recommendation from Finance Committee to Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Adopt a Resolution Amending the City of Palo Alto Merit Rules and Regulations (continued from June 17, 2013) 9:00-9:15 PM 13. Adoption of a Resolution Implementing Terms for Utilities Managers and Professionals Association of Palo Alto Pursuant to California Government Code Section 3505 (continued from June 17, 2013) 9:15-9:30 PM 14. Adoption of a Resolution Approving Terms for Palo Alto Police Managers' Association (continued from June 17, 2013) 9:30-10:30 PM 15. Highway 101 Bike and Pedestrian Bridge at Adobe Creek Project Update and Direction on Design Competition 10:30-11:00 PM 16. Status Report on Current High Speed Rail and Caltrain Electrification Issues Submitted for Council Review and Comment Council Member Questions, Comments and Announcements 11:00-11:15 PM Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council/Committee, but it is very helpful. 4 June 24, 2013 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 Council/Standing Committee Meetings Special City Council Meeting June 21, 2013 @ 2:30 PM Special City Council Meeting Cubberley Community Center June 24, 2013 @10:00 AM Special Policy and Services Committee Meeting June 25, 2013 @ 6:00 PM Special City Council Meeting June 28, 2013 @ 5:00 PM Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report El Camino Park Design Status Report And Decision Points Public Letters to Council Set 1 Set 2 Set 3 City of Palo Alto (ID # 3913) City Council Staff Report Report Type: Study Session Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: Infrastructure Baseline Survey Title: From Infrastructure Committee: Preliminary Survey Findings From: City Manager Lead Department: City Manager This report provides background material for the study session. Background On June 6, 2013, the City’s Infrastructure Committee reviewed the preliminary findings of a baseline survey assessing the community’s opinions about a potential finance measure to fund infrastructure needs. Attachment A provides the staff report for the meeting. The staff report presents the preliminary findings of the baseline survey. Supplemental information is also provided on the status of infrastructure project costs, currently available revenue sources, grant applications, potential revenue sources, and debt financing alternatives that is intended to support the Committee’s discussion and recommendations to the City Council about next steps. In addition, the staff report provides information on potential ballot measure packages that combine multiple projects, and a potential general tax measure used to fund infrastructure projects. No formal action was taken at the June 6 Infrastructure Committee meeting regarding recommendations to the City Council on next steps. Given the volume and complexity of the information, the Committee decided to continue its discussion after the Council recess, in early August. At the meeting, the Committee underscored the importance of Council determining in the near term whether to dedicate currently available and potential new revenue sources to infrastructure to making decisions about whether to pursue a finance measure. Examples of currently available revenue sources include Stanford Development Agreement Funds and the Infrastructure Reserve. Potential future revenue sources include new hotels, a potential digital message center along Highway 101, and repurposing a portion of the Municipal Services Center for an auto dealer or other revenue generating user. City of Palo Alto Page 2 In addition, the Committee provided some direction to staff on repackaging information for the next meeting in August 2013. Committee members were also asked to give further thought over the July recess to projects and funding mechanisms that the Committee may recommend eliminating for further study and projects that may be bundled into ballot measure packages for further study, based on the survey results. The minutes from the June 6, 2013 Infrastructure Committee meeting are included as Attachment B. Discussion This study session is being held to share the survey findings with the full Council prior to the July recess. The City’s public opinion research firm, Fairbank, Maslin, Maullin, Metz and Associates (FM3) will provide an overview of the baseline survey results at the study session. Attachment A of the Infrastructure Committee’s June 6 staff report provides the slides for this presentation. A color copy of the presentation will be provided to Council by email and at places prior to the study session. Discussion The Infrastructure Committee will reconvene in early August 2013 to continue discussions and formulate recommendations about next steps to the Council. It is anticipated that the Committee will bring forward their recommendations to the Council in late August, 2013. Attachments: : Attachment A. 6-6-2013 Infrastructure Committee Staff Report (PDF) : Attachment B. 6-06-2013 Infrastructure Committee Meeting Minutes (DOC) City of Palo Alto (ID # 3875) Committee for Potential Infrastructure Finance Measure Staff Report Report Type: Meeting Date: 6/6/2013 City of Palo Alto Page 1 Summary Title: Infrastructure Finance Measure Title: Review Baseline Survey Results and Make Recommendations to the City Council on Next Steps in Considering an Infrastructure Finance Measure From: City Manager Lead Department: City Manager Recommendation Staff recommends that the Infrastructure Committee review the preliminary public opinion survey results and make recommendations to the City Council on next steps in considering a potential infrastructure revenue measure. Background On September 18, 2012, the Council adopted a high level plan and timeline for consideration of an infrastructure revenue measure in the November 2014 election to fund infrastructure needs. Since last September, the City retained assistance of outside experts in two areas: 1) public opinion research and 2) public communications and educational outreach. In December 2012, the City hired the public opinion research firm, Fairbank, Maslin, Maulin, Metz and Associates (FM3) to assist the City with its opinion research. In February 2013, the City retained the communications firm, TBWB Strategies (TBWB) to help evaluate the feasibility of a finance measure and develop communications, messaging, and community engagement strategies. FM3 recommended a series of research efforts to assess public attitudes towards funding the City’s infrastructure needs, including: 1) initial baseline survey in the spring of 2013, 2) series of follow-up focus groups in the summer of 2013 if the initial baseline survey points to voter support for revenue increases to support infrastructure investments, 3) a potential tracking survey in the Fall of 2013, and; 4) a final feasibility survey in the Spring of 2014. The culmination of the research will be a series of recommendations to the City Council about whether and how to proceed with an infrastructure finance measure or measures. City of Palo Alto Page 2 In the first of a series of research efforts to access public attitudes, a baseline public opinion survey was conducted in late April and early May 2013 of approximately 600 residents in Palo Alto. The objectives of the survey were to: 1. Track public attitudes (compared to prior years’ surveys) on core measures like feelings about the City’s quality of life; the City Council’s management of civic affairs and finances; the condition of the local economy; and the need for additional revenue to fund various local services; 2. Gauge overall perceptions of the condition of the City’s infrastructure, and the specific areas that may be in greatest need of approval; 3. Test public support for the following 14 potential infrastructure improvement projects as directed by Council, given basic information about their substance and cost. Public Safety Building Parks Catch-up Bicycle/Pedestrian Plan Animal Services Center Bike Bridge Playing Fields (golf course) Fire Stations Ventura Community Center Accelerate Street Resurfacing Downtown Parking Garage Charleston/Arastradero Improvements California Avenue Parking Garage Sidewalks (surface catch-up) History Museum 4. Evaluate public support for several potential ballot measure packages that might combine several of the improvement projects in cohesive packages; 5. Evaluate types of funding mechanisms and levels of tax threshold the community is willing to support; 6. Determine the demographic profile of the respondents to provide the necessary categories for cross-tabulation of the data, and to ensure that the respondents are representative of the pool of likely November 2014 voters in Palo Alto. Discussion This staff report presents the preliminary findings of the baseline survey. Supplemental information is provided on the status of infrastructure project costs, currently available funding sources, grant applications, potential revenue sources, and debt financing alternatives to support the Committee’s discussion and recommendations to the City Council about next steps. In addition, the staff report provides information on two areas that drew public support as measured in the survey, potential ballot measure packages that combine multiple projects, and a potential general tax measure used to fund infrastructure projects. City of Palo Alto Page 3 The following provides some key policy questions and considerations that the Committee may want to consider in reviewing the survey findings and supplemental material and making its recommendations to the Council. 1. Removing projects that do not have strong support? 2. Focusing continued efforts around specific projects such as public safety and transportation (including bike and pedestrian) improvements? 3. Proceeding with further study on a bundled measure that combines multiple projects? 4. Proceeding with further study on funding for a public safety building individually or bundled with other projects? 5. Proceeding with further study on specific finance mechanisms that received more than simple majority support including a General Obligation Bond, Transient Occupancy Tax, business license tax, or real estate transfer tax and considering multiple measures? 6. Evaluating further the issuance of Certificates of Participation to fund infrastructure needs? 7. Designating current funding to infrastructure projects (that did not have strong support) that could be allocated at the Council’s discretion such as the Stanford Mitigation Funds? Preliminary Survey Findings and Conclusions FM3 conducted the initial baseline public opinion survey from April 28 – May 5, 2013. A telephone survey was conducted of 603 randomly-selected Palo Alto voters likely to cast a ballot in the November 2014 election. The margin of sampling error is +/-4.0 percent at the 95 percent confidence level; margins of error for population subgroups will be higher. For example, the split sampled questions (sampling 300) have margins of error of +/- 5.7%. Selected findings were compared to the results of prior City voter surveys in 2007 and 2008. FM3’s preliminary conclusions of the baseline survey are: 1. Voters express striking confidence in City government and its financial management. 2. The central challenge is that voters do not attach much urgency to infrastructure issues; they believe the City is handling them well and not much additional funding is required. 3. At the same time, 66% of voters are supportive of a ballot measure to finance infrastructure improvements – though most only tentatively. 4. A ballot measure to fully fund a public safety building is unlikely to receive two-thirds support; however, the public share of a public-private partnership could likely win approval as part of a broader package. 5. Chances for a measure’s success will likely be maximized by: Focusing ballot measures around public safety and transportation (including bike and pedestrian) improvements, subject areas which consistently draw the most support. Placing projects together in packages, which pair projects that draw enthusiastic public reaction with others that are more lukewarm. Using general obligation bonds as the financing mechanism to the extent possible at the two-thirds level; several other taxes could be feasible with a simple majority vote. Keeping costs close to the level of voters’ expressed willingness to pay, which seems to peak at $125 per year (for two-thirds support) and $200 per year (for majority support). City of Palo Alto Page 4 A full report of the survey findings and conclusions is included in Attachment A. Attachment B provides the survey questionnaire and the topline results. Status of Infrastructure Project Costs Attachment C provides an updated list of infrastructure projects and cost estimates, committed funding, potential funding, and the net cost that requires funding for each project. Committed funding includes awarded grants and project funding already appropriated through the capital budget, while potential funding consists of outstanding grant applications and the Jay Paul proposal for construction of a public safety building. The list of projects differs from past project cost summaries provided to the Infrastructure Committee and Council as follows: The Cubberley Replace/Expand and Municipal Services Center projects are not included since they are dependent on future studies and Council decisions The following projects will be funded from a variety of sources such as rates, user fees, lease revenues, expense reductions, and partner contributions and are not included. These include: Energy/Compost Facility, Golf Course, Airport, Post Office and Regional Water Quality Control Plant Master Plan The Los Altos Treatment Plant project is not included because it is proposed to be funded in the FY 2014 capital budget The cost estimates for the Streets and the Sidewalks projects have been increased to allow for accelerated work intended to significantly improve sidewalks and to achieve a citywide average Pavement Condition Index of 85 in 2016 (five years earlier than the initial goal of 2021). The History Museum at the Roth Building, Downtown and California Avenue parking garage projects have been added to the project list for public opinion feasibility polling and are included with the initial cost estimates that have been used in the polling. The current estimate of total project costs is $231.5 million. The net cost after committed funding is $219.3 million and the final net cost if outstanding grant applications are successful and if the Jay Paul proposal moves forward, is $171 million. If projects are excluded that were added to the list for polling purposes (History Museum at the Roth Building, Downtown and California Avenue parking garages, Ventura) the total project cost is $192.5 million. The net cost after committed funding is $180.3 million and the final net cost if outstanding grant applications are successful and if the Jay Paul proposal moves forward, is $132 million. Attachment C also provides the public opinion survey results for each specific project tested in the survey, presented as the percentage of the survey respondents that strongly support or somewhat support the projects. More than 2/3 of the survey respondents supported Fire Stations, Streets, Sidewalks, and Parks Catch-up Projects, while the Bike/Pedestrian Plan, Bike Bridge, Ventura Community Center, Public Safety Building, and Charleston/Arastradero Projects have support levels at or above a majority. The remaining projects received less than majority support. Bundling Infrastructure Projects City of Palo Alto Page 5 The survey also tested the level of public support for five different potential bond or tax measures that represent combinations of individual projects, with the wording of each potential measure structured as it might appear in an actual ballot measure – minus a funding mechanism and dollar figure. The survey results for these potential measures are useful for understanding the public response to a combination of projects that surround a given theme. Four measures were found to have support levels greater than two-thirds: 1. Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure (74%) 2. Palo Alto Vital Facilities and Services Protection Measure (72%) 3. Palo Alto Children and Families First Measure (71%) 4. Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure (68%) Attachment D presents the language tested for each measure and identifies the projects and project costs that might coincide with the language of each measure. The language of the Palo Alto Vital Facilities and Services Protection Measure, which received 72% support in the survey, was structured as a general tax measure that could be passed by simple majority vote and therefore does not specify projects and project costs that it may fund. The City may express its intent to use a general tax to fund a specific list of projects, though it would not be obliged by law to do so. To accomplish this, the City could put a general tax before the voters together with a Council-approved expenditure plan – which could either be approved legislatively or referred to the ballot for an advisory public vote accompanying the tax measure. It is a common practice for cities to adopt an expenditure plan associated with general tax measures when outlays are known. As described above, the survey found that the community has a high level of trust in the City government. Sixty-eight percent of residents surveyed stated that the City does an excellent or good job in providing services, 75 percent approved of the City’s work in maintaining city infrastructure, and 63 percent approved of the City’s efficiency in utilizing local tax dollars. The combination of the voters’ positive response to the language of a potential general infrastructure measure and overall approval for the City’s management of infrastructure and local tax revenues suggests that a general tax measure requiring only majority support may be a viable means of funding a portion of the City’s infrastructure needs. If the City decides to proceed with a general tax, a determination on the type of tax will need to be made, e.g. hotel stays (TOT), sales, real estate transfers, business licenses (BLT), utility use (UUT). As noted above, the survey findings indicated a ballot measure to fully fund a public safety building is unlikely to receive two-thirds support; however, according to FM3, the public share of a public-private partnership could likely win approval as part of a broader package. Currently, Jay Paul Company is proposing a Planned Community (PC) zone change at 395 Page Mill and 3045 Park Blvd. that, if approved, would allow construction of office buildings at 395 Page Mill Road, and a three-story approximately 44,500 square foot public safety building (as the primary proposed public benefit), along with associated parking. The applicant has estimated the value of the construction of the public safety building (including land) and City of Palo Alto Page 6 associated parking at $49.3 million. (There are additional costs—approximately $8 million-- to provide turn- key occupation of the completed building). Attachment E provides an update on the Public Safety Building associated with Jay Paul Company’s proposed development at 395 Page Mill Road. If Council proceeds with planning for a potential measure that combines multiple infrastructure projects, it is anticipated that Council will have the information needed to inform Council’s final decisions about placing an infrastructure finance measure on the ballot in the spring of 2014. The design review schedule assumes Council will consider Jay Paul Company’s development proposal and the feasibility of the EIR in March 2014. The City will be conducting its final feasibility poll in the spring of 2014 to inform Council’s final decisions about an infrastructure measure or measures. If the development proceeds it is anticipated that the City will need up to $8 million to complete the build out. If the development does not proceed and an alternate new location is needed for the public safety building, the City will not be prepared to proceed with a finance measure that addresses funding for a public safety building until 2016 to allow time for the acquisition of the property, and the plan/design/EIR review process. Grants, Currently Available Funding Sources, Other Potential Revenue Sources, and Financing Alternatives The following section provides an update on grants, currently available funding sources that Council could earmark for infrastructure, other potential/projected revenue sources, and revenue that could be generated from various finance mechanisms. Status of Grant Applications The City has applied for grant funding for the Bike Bridge and Charleston/Arastradero Corridor projects. The status of these grant requests is provided in Table 1. The Vehicle Emissions Reduction Based at Schools Grant request of $1 million to support the Charleston/Arastradero Corridor Project has been approved by the VTA Board of Directors. The VTA Technical Advisory Committee (TAC) recommended that the $4 million OBAG grant request for the Bike Bridge Project be approved, but did not recommend approval of the $5.5 million request for the Charleston/Arastradero Corridor Project. The TAC’s recommendations are scheduled to be considered by the VTA Board of Directors on June 4, 2013. Staff continues to monitor opportunities to leverage grant funding toward the cost of infrastructure projects. Table 1: Status of Infrastructure Project Grant Requests Bike Bridge Project Grant Request Request Amount Expected Timeline for Award Other Project Funding Total Project Cost City of Palo Alto Page 7 One Bay Area Grant for Bike Bridge $4 million1 June 2013 $5.35 million $10 million Charleston/Arastradero Corridor Project Grant Request Request Amount Expected Timeline for Award Other Project Funding Total Project Cost Environmental Enhancement and Mitigation Grant $0.35 million September 2013 $1.27 million $9.75 million One Bay Area Grant $5.5 million not recommended for award Vehicle Emissions Reduction Based at Schools Grant $1 million awarded 1 Recommended for approval by VTA Board of Directors Other Potential Funding Sources To further evaluate resource needs to fund infrastructure improvements, staff identified currently available funding sources that could be allocated to infrastructure projects at Council’s discretion. These funding sources are described below and include the Stanford Medical Center Development Agreement Funds, the Infrastructure Reserve, Impact Fees and Parking In-Lieu Fee Funds. Attachment F provides a summary of the funds that are available under “Currently Available Revenue Sources.” It is estimated that $44-$48 million could be available from current funding sources should the Council choose to allocate the revenue to infrastructure. Stanford Medical Center Development Agreement Funds $34.4M On May 6, 2013, staff provided Council a review of the status and balances of the six distinct Stanford University Medical Center Mitigation Funds. The two funds most applicable to the City’s infrastructure projects are the Infrastructure, Sustainable Neighborhoods and Affordable Housing Fund and the Sustainability Programs Fund. The former could be allocated to any of the City’s infrastructure projects. The latter could be allocated to projects addressing climate change and sustainability such as the Bike/Pedestrian Plan and the Bike Bridge, and potentially to other projects as well. It is estimated that upon receipt of the third payment from Stanford University anticipated in 2016-2017; repayment of short-term loans for affordable housing; and no use of funds to City of Palo Alto Page 8 provide local matches for successful grant requests through the One Bay Area Grant program, the following, future balances will be available: Stanford Infrastructure/Housing $22.1 million Stanford Sustainability 12.3 million Total $34.4 million The above represent one-time funding sources and Council decisions will be necessary for any drawdowns from these funds. For example, if the City uses Stanford funds for grant matches or forgives housing loans, fund availability will be reduced. The Finance Committee will be making a recommendation on using Stanford Funds for the Bike Bridge Project in May 2013. Infrastructure Reserve (IR) $6-10 Million The IR is drawn upon annually to fund infrastructure projects in the five-year Capital Improvement Program. It is replenished when the General Fund has an operating surplus and monies in the Budget Stabilization Reserve exceed 18.5 percent of budgeted operating expenses. Based on an expected surplus at the end of FY 2013 and funding for the proposed Capital Budget for Fiscal Year 2014 through FY 2018, the IR is estimated to have available $6 to $10 million to fund infrastructure projects. This availability is subject to use of the IR to purchase the Post Office and for higher than anticipated costs for library and community center projects. Use of IR monies for the Post Office is temporary in that debt will be issued eventually to replenish the IR. Impact Fees Other sources of funding, which have been and can be used for capital work include Impact and Parking In-Lieu fees. Impact fee revenue must be used for new projects or expanded facilities to accommodate new growth. They are dependent upon the number and timing of projects so it is difficult to estimate available resources. Staff expects to have more information available on impact fee balances at the Committee’s meeting. The current estimated balances less expected drawdowns for upcoming projects are as follows: Parks $1.0 million Community Centers $1.4 million Citywide Transportation $TBD Charleston-Arastradero $TBD Total $2.4 million Downtown Parking In-Lieu Fees $1.2M Downtown Parking In-Lieu fees are targeted for the construction of new or expanded parking garage spaces. They are one-time resources that would be used to offset the principal required for construction. Currently, a developer has proposed building a garage on Lot P. The City of Palo Alto Page 9 Developer’s proposal includes a City contribution from the In-Lieu fund of $1.0 million for construction. In addition, $0.5 million in in-lieu funds will be used to cover estimated permit and other fees. Between the $2.1 million available from the Lytton project and a current balance of $0.6 million, staff estimates that $1.2 million will be available for constructing a downtown garage. It is important to note that the City is currently conducting an Impact Fee study to determine the appropriate level for current fees and the potential for new fees. In June, staff will present to the Finance Committee a list of potential projects and infrastructure needs that can be funded via Impact Fees. As with the Stanford Development funds, it will be important to determine the level of drawdown on fee balances and commitments made in the CIP. Potential New Revenue Sources There are also a number of new sources that could provide revenue to fund infrastructure needs. The use of these potential funding sources for infrastructure projects is at the Council’s discretion and many of the sources are dependent on future policy and land use decisions. The potential sources are described below and include new hotel revenue, digital readerboard revenue, sales tax from an auto dealership at MSC, lease revenue from renting the current police building (after expenses associated with renovating the facility), and lease of the Los Altos Treatment Plant site. Attachment F also provides a summary of the potential and projected revenue increases discussed below. It is estimated that these new potential revenue sources collectively could yield $117.6 million to fund infrastructure needs. New Hotel Revenue $2.4M Annually In the near future, a number of new hotels are expected to open in the City. These include, for example, the Hilton Garden Inn, the Hilton Homewood Suites, and Casa Olga. The idea of earmarking revenues from these hotels for infrastructure work has emerged in Council discussions. This annual income stream could be allocated to debt service for large projects and/or for pay-as-you-go work. The IBRC, for example, identified $42 million in “catch-up” needs. The Commission recommended that the City spend $4.2 million per year over a ten year period to eliminate this backlog. At this time, it appears three new hotels will open sometime in 2014. Two other hotels have either not filed an application or indicated a construction date. An estimate of potential annual revenues is provided although opening dates are not known. Annual revenue from hotels expected to open in 2014 $1.7 million Annual revenue from hotels expected to open post 2014 $0.7 million Total expected revenue $2.4 million Other Potential New Sources of Revenue Over the past few years, staff has been exploring the potential for placing a digital message center along highway 101 and re-tooling a portion of the Municipal Services Center for lease to an auto dealer or other revenue generating user. These options have not been discussed with City of Palo Alto Page 10 Council. Staff roughly estimates that revenue streams of between $0.7 and $1.0 million could be generated annually from these two initiatives. In addition, should the Police Department (PD) be completely relocated to a new public safety building, the current building could be leased to an office tenant and create an estimated revenue stream of $1.4 million annually. If the costs for preparing the current PD space for office occupancy are financed with debt, part of the eventual rental income will be used for debt service. At this time, staff does not have an estimate for renovation expenses, but it is reasonable to assume costs of $1-$3 million to provide a space suitable for lessee tenant improvements to proceed. A cost of service study is being conducted and a preview of the methodology was presented to the Finance Committee. A capital component will be included in the proposed fees and, if approved by Council, could be used to fund future renovation and replacement costs. At this time, staff does not have an estimate of potential funding that could be available should updated fees based on the study be approved. The study is expected to be presented to the Finance Committee this summer. Finance Measure Results, Revenue Potential and Election Timing and Considerations The survey also tested a variety of financing mechanisms and levels of funding support for infrastructure related improvements. When respondents were asked about their willingness to pay additional taxes to fund infrastructure projects, the level of support peaked at $125 per year (for two-thirds support) and $200 per year (for majority support). Support for Household Additional Taxes for Infrastructure Annual Amount Polling Support (strongly and somewhat support) $100 75% $150 64% $200 53% $250 48% Attachment F also provides a summary of the funding mechanisms tested, level of support, potential revenue that could be generated by each type, and voter support needed for successful passage. The four financing mechanisms that received more than a majority support include the following. Other proposals such as increasing the sales or utilities users’ tax rate or creating a parcel tax received low approval ratings. 1. Issuing Bonds 64% 2. Transient Occupancy Tax 62% 3. Business License Tax 51% City of Palo Alto Page 11 4. Real Estate Transfer Tax 51% Based on the survey results it appears Palo Altans are willing to support the idea of issuing debt to finance infrastructure improvements. It also appears there is willingness to increase a tax that does not bear directly on Palo Altans themselves and to a lesser extent a tax on businesses and real estate transactions. For sizeable projects such as a public safety building, fire station replacements, and parking garages, it is more than likely that the City will need to issue debt. To support new, annual debt service payments, the City will need to increase, create, or earmark a revenue source. There are a variety of options for Council to consider. Increased or new taxes would be subject to approval by voters. Attachment F summarizes the potential funding available from these sources. Attachment G identifies potential funding mechanisms and their election requirements. The four funding mechanisms that received more than a majority support are discussed further below. Certificates of Participation (COPs), a financing vehicle that does not require voter approval, are also discussed. General Obligation Bonds General Obligation Bonds can be viewed as a new source of revenue to the City since a self- imposed assessment is approved by voters. These bonds require two-thirds approval by the voters and were used for Measure N library and community center improvements. Attachment F also displays the impact of varying levels of General Obligation bonds on the median assessed value of single family residences. In alignment with the survey results on willingness to pay, it is estimated that a 30 year general obligation bond at an annual tax of $125 would yield $72 million and a $200 a year assessment would yield $114 million. Transient Occupancy Tax A Transient Occupancy Tax, commonly known as the "hotel tax," is charged by the City to guests at hotels located in Palo Alto. The tax is computed by multiplying the rent charged by the hotel operator by the tax rate percentage. Hotel tax revenue accounts for 11.5 percent of the City's total general fund revenue. Based on current revenue levels, a one percent increase in the City’s transient occupancy tax can be expected to result in ongoing, annual revenues of $0.9 million which could be available to the City for any general capital improvements. Palo Alto’s transient occupancy tax rate was raised from 10% to 12% percent by the voters in the 2007 November General Election. Eighty- one percent of the electorate voted for the increase. Hotel tax rates vary from city to city. Across California, tax rates range from a low of 9.5% to a high of 15%. Attachment F provides a list of the TOT for surrounding communities. This type of tax can be structured either as a general tax requiring a simple majority vote or a special tax (for a special purpose) requiring 2/3 approval. TOT can also be part general tax and part special tax. Business License Tax City of Palo Alto Page 12 The City could consider new taxes to support debt or pay as you go financing. Palo Alto does not have a Business License Tax (BLT) which most municipalities levy. A Business License is an annual tax businesses pay each year for doing business in the City of Palo Alto. In the last analysis performed and taken to the voters in 2009, it was projected that a BLT would raise $3.3 million annually. The BLT, however, can be constructed to generate less or more than this amount. Like TOT, this type of tax can be structured as a general tax requiring a simple majority vote, a special tax requiring 2/3rds approval, or both. Staff would recommend beginning work immediately with the business community if Council proceeds with further study on a potential business license tax. Real Estate Transfer Tax A real estate transfer tax, commonly known as a “document transfer tax,” is a tax imposed on each recorded document in which real property is sold. The tax is paid at the time of recording a document transferring real property. Either the buyer or the seller pays the tax upon mutual agreement. In the City of Palo Alto it is traditional for the buyer and seller to equally share this tax. If a house is sold in Palo Alto for $1.5 million the current tax would equal $4,950. By increasing the tax by $1.10 per thousand dollars or by 33.3 percent, the incremental tax on this transaction would equal $1,650 for a total tax of $6,600. If the City were to increase its real estate transfer tax by $1.10, it would yield approximately $1.8 million annually. This tax is sensitive to the volume and mix (residential and commercial) of property transactions and can vary significantly from year-to-year. This type of tax can be a general tax requiring a simple majority vote, a special tax requiring 2/3rd approval, or both. Leveraging Revenues for Debt Financing: Certificates of Participation Existing, increased or new revenue sources can be used to fund infrastructure on a pay-as-you- go basis or by using debt financing. The primary financing vehicle that does not require voter approval is Certificates of Participation (COPs). The City has used this instrument previously for Golf Course and Civic Center improvements. Attachment F shows the estimated amount of principal that could be generated by issuing COPs for infrastructure work. Based on a number of assumptions (e.g. 4.5% to 5.5% interest rate and 30 amortization period), it is estimated that for each $1 million of annual debt service through Certificates of Participation, $13-$15 million of principal can be generated. Ballot Measure Costs and Voting The cost of placing a measure on the ballot is dependent on the type of election that is being held. The Registrar of Voters estimates that the cost to place a measure on the November 2013 ballot would be approximately $350,000. The cost for November 2014, a general municipal election, is estimated at $175,000. The cost for a special election held at any time other than the annual November election, is estimated at $500,000. The election year in which a measure is included on the ballot also influences the use of the revenue and the proportion of the vote needed for passage of the measure. If the revenue from the measure is to be available for use City of Palo Alto Page 13 for any purpose, it must be on the ballot for a general municipal election (even years) and requires a majority vote of the electorate. If the revenue is to be restricted to a specific use such as infrastructure, the measure may be on any ballot, but requires a two-thirds vote of the electorate. Timeline It is anticipated that the Infrastructure Committee will review the preliminary survey findings and supplemental information contained in this staff report and make recommendations to the City Council on the next steps in planning for an infrastructure measure. Based on Council’s direction and refinement of infrastructure priorities, staff anticipates conducting focus groups over the summer, developing and implementing a communications plan, and conducting a tracking survey in the fall of 2013. Resource Impact There is no immediate resource impact from this report. Future impacts are dependent upon Council action and election results. Attachments: Attachment A. Preliminary Survey Results (PDF) Attachment B. Questionnaire_Topline Results (PDF) Attachment C. Infrastructure Project Costs (PDF) Attachment D. Potential Bundled Infrastructure Measures (PDF) Attachment E. Public Safety Building Update (PDF) Attachment F. Potential New Revenue Sources (PDF) Attachment G. Funding Mechanisms and Election Requirements (PDF) 220-3577 Key Findings From a Citywide Survey Conducted April 28 – May 5, 2013 Infrastructure Finance Survey DRAFTAttachment A 1 DRAFT Methodology Telephone survey of 603 randomly-selected Palo Alto voters likely to cast a ballot in the November 2014 election Interviews were conducted via landline and cell phones Survey was conducted April 28 – May 5, 2013 The margin of sampling error is +/-4.0 percent at the 95 percent confidence level; margins of error for population subgroups will be higher Some percentages do not sum to 100% due to rounding 2 DRAFT Palo Alto voters are very pleased with the performance of City government, both generally and in specific policy areas. Only about half of voters see even “some need” for additional infrastructure funding. At the same time, about two-thirds of voters support hypothetical ballot measures to provide funding for public safety and transportation infrastructure. Just over half of voters support investing in the construction of a new public safety building; using a public-private partnership to reduce costs yields only slightly higher support. In the abstract, two-thirds of voters say they would vote for a ballot measure to finance infrastructure improvements. More than three in five voters back the use of bond measures or a transient occupancy tax increase to finance infrastructure improvements; other mechanisms receive less support. Key Findings 3 4 DRAFT Q3. Residents have generally favorable impressions of Palo Alto’s City government. 15% 53% 23% 6% 3% 0%20%40%60% Excellent Good Only fair Poor job Don't know Total Only Fair/ Poor Job 29% Total Excellent/ Good 68% How would you rate the overall job being done by Palo Alto city government in providing services to the City’s residents? Would you say the City is doing an…? 5 DRAFT Q3. Perceptions of the City’s performance have remained consistently positive. 16% 56% 22% 4% 2% 0% 20% 40% 60% 80% Excellent Good Only fair Poor job Don't know Total Only Fair/ Poor Job 26% Total Excellent/ Good 72% How would you rate the overall job being done by Palo Alto city government in providing services to the City’s residents? Would you say the City is doing an…? 15% 53% 23% 6% 3% 0% 20% 40% 60% 80% Total Only Fair/ Poor Job 29% Total Excellent/ Good 68% 2008 2013 6 DRAFT 28% 16% 14% 47% 46% 49% 14% 15% 19% 8% 8% 6% 14% 12% 0%20%40%60%80%100% Maintaining the City’s infrastructure Managing the City’s budget and finances Efficiently utilizing local tax dollars Strng. App.Smwt. App.Smwt. Disapp.Strng. Disapp.DK/NA Total Approve Total Disapprove 75%23% 62%23% 63%26% 4. I am going to read you a list of specific aspects of the City of Palo Alto’s work in managing City government. Please tell me whether you generally approve or disapprove of the job the City is doing in that area. Residents are particularly supportive of the City’s performance maintaining infrastructure. 7 DRAFT Q5. A slim majority of residents say the City has “little” or “no need” for additional funding; only five percent say there is a “great need.” 5% 35% 19% 31% 11% 0%20%40%60% Great need Some need Little need No need Don't know Total Little/No Need 50% Total Great/Some Need 40% How would you rate the City of Palo Alto’s need for additional funding? Is there a great need for additional funding, some need, a little need or no real need for additional funding? 8 DRAFT Q6/7. Being specific about infrastructure projects only slightly enhances perceptions of need. 10% 36% 22% 23% 9% 0% 20% 40% 60% 80% Great need Some need Little need No need Don't know 11% 43% 19% 22% 5% 0% 20% 40% 60% 80% More specifically, how would you rate the City of Palo Alto’s need for additional funding to maintain and improve infrastructure: is there a great need for additional funding, some need, a little need or no real need for additional funding? Total Little/No Need 45% Total Great/Some Need 46% More specifically, how would you rate the City of Palo Alto’s need for additional funding to maintain and improve public parks, streets, sidewalks and vital facilities like police and fire stations: is there a great need for additional funding, some need, a little need or no real need for additional funding? Total Little/No Need 41% Total Great/Some Need 54% 9 10 DRAFT 34% 31% 19% 27% 25% 22% 24% 47% 44% 55% 44% 42% 44% 40% 18% 20% 24% 25% 28% 30% 31% 5% 6% 6% 0% 20% 40% 60% 80% 100% Ext. Imp.Very Imp.Smwt. Imp.Not Imp./DK/NA Total Ext./Very Important 81% 75% 74% 70% 67% 66% 63% 8. I’m going to read you some of the objectives of the infrastructure projects identified through this process. Please tell me how important each objective is to you as a resident of Palo Alto: extremely important, very important, somewhat important, or not important. ^Not part of Split Sample Residents’ top infrastructure priorities relate to public safety and road maintenance. Ensuring a modern and stable 911 emergency communications network Providing safe routes to school for students Maintaining City streets and roads Ensuring vital City facilities like fire and police stations and the emergency command center are earthquake safe Providing safe routes for bicyclists and pedestrians Fixing potholes and paving City streets Ensuring all City facilities are earthquake safe 11 DRAFT 18% 20% 17% 18% 14% 20% 14% 13% 45% 40% 42% 39% 43% 37% 38% 37% 32% 33% 36% 39% 30% 29% 44% 42% 5% 7% 5% 12% 14% 5% 9% 0% 20% 40% 60% 80% 100% Ext. Imp.Very Imp.Smwt. Imp.Not Imp./DK/NA Total Ext./Very Important 63% 60% 59% 58% 58% 56% 51% 50% 8. I’m going to read you some of the objectives of the infrastructure projects identified through this process. Please tell me how important each objective is to you as a resident of Palo Alto: extremely important, very important, somewhat important, or not important. ^Not part of Split Sample Majorities also prioritize maintenance of parks and community centers. Providing safe sidewalks, paths and bridges for pedestrians Providing police officers with the facilities and resources needed to investigate and prosecute crimes commited in our community Maintaining community centers that serve Palo Alto children, families and seniors Maintaining City parks and recreation facilities ^Maintaining the City’s core infrastructure Reducing traffic congestion Repairing and maintaining City sidewalks Upgrading pipes, irrigation and landscaping to conserve water and save money 12 DRAFT 15% 15% 15% 13% 10% 10% 8% 33% 33% 33% 30% 28% 28% 21% 15% 39% 41% 42% 41% 44% 49% 50% 61% 12% 11% 10% 17% 17% 13% 21% 23% 0% 20% 40% 60% 80% 100% Ext. Imp.Very Imp.Smwt. Imp.Not Imp./DK/NA Total Ext./Very Important 49% 48% 48% 42% 38% 37% 29% 17% 8. I’m going to read you some of the objectives of the infrastructure projects identified through this process. Please tell me how important each objective is to you as a resident of Palo Alto: extremely important, very important, somewhat important, or not important. ^Not part of Split Sample Voters are less enthusiastic about support for community service organizations or historic restoration. Improving the energy efficiency and environmental sustainability of City buildings and land Making sidewalks, city buildings and parks accessible for people with disabilities Improving heating, ventilation, lighting and electrical systems to conserve energy and save money Providing adequate parking Investing in facilities that encourage economic growth and generate revenue for City programs and services Improving parks, playgrounds and playfields for youth and adult recreation Providing facilities to support Palo Alto’s community service organizations and non-profits Restoring Palo Alto’s historic buildings 13 DRAFT The survey tested several ballot measure concepts – without price tags or funding mechanisms. 10. I am going to read you a list of different types of bond or tax measures that might be placed on the Palo Alto ballot to fund improvements to different aspects of the City’s infrastructure. Please tell me if you would support or oppose increasing taxes to fund that particular set of improvements. ^Not part of Split Sample A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally- controlled funding to address local needs. These funds could not be taken away by the State and would be used to support general City services and facilities, including fire, paramedics, police, streets, sidewalks, parks, recreation, libraries and community centers. A Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure to fund improvements to keep Palo Alto safe, including construction of a new earthquake-safe public safety building and emergency response command center, replacing two obsolete fire stations with modern earthquake-safe buildings, and improving communication systems to ensure rapid 9-1-1 response to fires, accidents and other emergencies. A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure to fund repair and improvements to streets, sidewalks, and nine miles of off-road trails. This measure would provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety. A Parks, Open Space and Sustainability Measure that would fund improvements and investments to Palo Alto’s parks and open space, including repairing unsafe playground equipment, creating new playfields, improving walking and biking paths and trails, and improving irrigation systems to conserve water. It would also include funds to the restore the historic Roth Building and repair the Ventura Community Center A Palo Alto Children and Families First Measure that would fund improved facilities for preschool and childcare programs, safe routes to school, pedestrian and bike safety improvements, park and playground improvements and neighborhood traffic calming measures. 14 DRAFT 39% 33% 32% 39% 24% 34% 39% 38% 29% 41% 16% 13% 17% 17% 17% 8% 11% 10% 12% 15% 0% 20% 40% 60% 80% 100% Streets, Sidewalk Trails Measure ^Vital Facilities Measure Children & Families Measure Public Safety Measure Parks Open Space Measure Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.DK/NA Total Support Total Oppose 74%24% 72%24% 71%27% 68%30% 65%32% 10. I am going to read you a list of different types of bond or tax measures that might be placed on the Palo Alto ballot to fund improvements to different aspects of the City’s infrastructure. Please tell me if you would support or oppose increasing taxes to fund that particular set of improvements. ^Not part of Split Sample Support for each of these ballot measure concepts hovers between two-thirds and three-quarters. 15 DRAFT 13. Out of all of the potential improvements to buildings, facilities, and other infrastructure that we have discussed, which do you think should be the highest priority for City government? When forced to choose, a plurality of residents list street repair and related issues as their top priority. 32% 22% 12% 11% 8% 8% 6% 18% 0%10%20%30%40% Street repair/Sidewalk repair/Infrastructure/ Pedestrian safety Police and fire/Public safety Bike lanes Emergency services-earthquakes Parking Parks and playgrounds/Recreation/Children Schools/Childcare Other/DK/Nothing/Refused (Grouped responses shown; 6% and above) 16 DRAFT 33% 23% 25% 23% 31% 40% 45% 42% 43% 34% 15% 19% 20% 20% 16% 10% 9% 11% 11% 15% 0% 20% 40% 60% 80% 100% $14 million for Fire Department modernization $8 million for street improvement and repair $6 million for sidewalk improvement and repair $10 million for park improvement and repair $25 million for bike lanes and pedestrian paths Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total Support Total Oppose 72%25% 69%28% 67%31% 67%31% 65%31% 12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample When presented with specifics, voters’ priorities remain public safety and streets. 17 DRAFT 27% 19% 20% 21% 19% 34% 39% 35% 32% 33% 17% 23% 21% 21% 23% 20% 13% 19% 24% 22% 7% 0% 20% 40% 60% 80% 100% $6 million for Highway 101 pedestrian/bike bridge $3 million to renovate and upgrade the Ventura Community Center *$8 million for a new public safety and emergency response command center $8 million for improving the Charleston-Arastradero Corridor *$57 million to buy land and build a new public safety and emergency response command center Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total Support Total Oppose 61%37% 57%35% 55%40% 52%45% 52%45% 12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample The public safety building is middle-tier. 18 DRAFT Total Support Total Oppose 47%48% 46%52% 46%50% 44%53% 38%57% 15% 17% 15% 17% 9% 32% 29% 31% 27% 30% 29% 28% 29% 27% 34% 19% 24% 21% 26% 23% 5% 0% 20% 40% 60% 80% 100% $7 million for a new Animal Services Center $12 million for a new California Avenue parking garage $6 million for new playing fields and recreational facilities $21 million for a new downtown parking garage $3 million to restore the Roth building and house the Palo Alto History Museum there Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided 12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample Parking and historic restoration get less support. 19 DRAFT 12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample Streets, parks, and public safety reach two- thirds support. 72% 69% 67% 67% 65% 61% 57% 55% 52% 52% 47% 46% 46% 44% 38% 25% 28% 31% 31% 31% 37% 35% 40% 45% 45% 48% 52% 50% 53% 57% 60%45%30%15%0%15%30%45%60%75% Total Support Total Oppose Difference +47% +41% +36% +36% +34% +24% +22% +15% +7% +7% -1% -6% -4% -9% -19% $14 million for Fire Department modernization $8 million for street improvement and repair $6 million for sidewalk improvement and repair $6 million for park improvement and repair $25 million for bike lanes and pedestrian paths $6 million for Highway 101 pedestrian/bike bridge $3 million to renovate and upgrade the Ventura Community Center *$8 million for a new public safety and emergency response command center $8 million for improving the Charleston-Arastradero Corridor *$57 million to buy land and build a new public safety and emergency response command center $7 million for a new Animal Services Center $12 million for a new California Avenue parking garage $6 million for new playing fields and recreational facilities $21 million for a new downtown parking garage $3 million to restore the Roth building and house the Palo Alto History Museum there 20 21 DRAFT Two versions of the public safety building concept were tested. City-Funded Public-Private Partnership A $57 million project to purchase land and construct a new earthquake-safe public safety and emergency response command center, with upgraded dispatch technology for police, fire and paramedic service as well as more safe and secure space for interviewing crime victims and storing and analyzing crime evidence. $8 million of city investment to construct a new earthquake-safe public safety and emergency response command center, with upgraded dispatch technology for police, fire and paramedic service as well as more safe and secure space for interviewing crime victims and storing and analyzing crime evidence. $49 million in additional funding for the project would come from a private developer in exchange for rights to build new commercial offices near Page Mill Road and El Camino. 22 DRAFT 12n/o. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. Split Sample A public-private partnership draws only slightly higher support. 19% 33% 23% 22% 3% 0% 20% 40% 60% 80% Strong support Somewhat support Somewhat oppose Strong oppose Undecided Total Oppose 45% Total Support 52% 20% 35% 21% 19% 5% 0% 20% 40% 60% 80% Total Oppose 40% Total Support 55% $57 million to buy land and build a new public safety and emergency response command center $8 million for a new public safety and emergency response command center 23 DRAFT 27% 20% 10% 5% 11% 16% 10% 0% 20% 40% 60% 80% Definitely yes Probably yes Undecided, lean yes Undecided, lean no Probably no Definitely no Undecided 12n/o combined. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. Split Sample Taken together, support for either approach to the public safety building is no higher than in 2008. 20% 34% 22% 20% 4% 0% 20% 40% 60% 80% Strong support Somewhat support Somewhat oppose Strong oppose Undecided Total Oppose 43% Total Support 53% Conceptual Support for a $50M+ Public Safety Bond by Year 2008 2013 Total No 32% Total Yes 57% 24 25 DRAFT Q9. Close to 2/3 of residents say they would support a bond or tax measure to fund infrastructure maintenance and improvement after hearing a list of needed projects. 21% 44% 13% 14% 8% 0%20%40%60% Strong support Somewhat support Somewhat oppose Strong oppose Undecided Total Oppose 27% Total Support 65% Many of these projects and improvements are beyond the scope of the City’s existing budget and may require additional funding through a local voter- approved bond or tax measure. Based on what you’ve heard, do you think you would support or oppose a bond or tax measure to fund some group of these projects to maintain and improve Palo Alto’s infrastructure? 26 DRAFT 45% 35% 25% 20% 30% 30% 28% 29% 8% 14% 19% 19% 13% 18% 24% 29% 0%20%40%60%80%100% $100 per year $150 per year $200 per year $250 per year Very Will.Smwt. Will.Smwt. Unwill.Very Unwill.DK/NA Total Willing Total Unwilling 75%21% 64%33% 53%43% 48%48% 11. Regardless of how the measure was structured, would your household be willing to pay ______ in additional taxes if it were dedicated to the types of Palo Alto infrastructure repairs and improvements we have been discussing? Predictably, voters are more willing to pay smaller amounts for an infrastructure measure. 27 DRAFT 25% 24% 18% 39% 38% 33% 16% 21% 22% 18% 12% 24% 0% 20% 40% 60% 80% 100% Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total Support Total Oppose 64%35% 62%33% 51%46% 14. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing. Please tell me if you would support or oppose using that particular way of raising new revenue for these purposes. Voters are more supportive of issuing bonds or increasing the transient occupancy tax than of other funding mechanisms. Issuing bonds, allowing the City to borrow money to complete the projects and pay it back over time with money from local property taxes Increasing the transient occupancy tax, charged to hotel and motel guests Increasing the real estate transfer tax rate – paid when a property is bought or sold 28 DRAFT 17% 8% 10% 6% 34% 33% 28% 24% 23% 20% 27% 28% 23% 34% 34% 41% 0% 20% 40% 60% 80% 100% Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total Support Total Oppose 51%46% 41%54% 38%61% 29%69% 14. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing. Please tell me if you would support or oppose using that particular way of raising new revenue for these purposes. A parcel tax, sales tax, and UUT get less support. Establishing a business license tax to be paid by any business operating in Palo Alto Establishing a flat tax on every parcel of property in Palo Alto Increasing the local sales tax rate paid by anyone who shops in Palo Alto Increasing the utility users tax, which is added to electricity, gas, water and phone bills 29 DRAFT 14. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing. Please tell me if you would support or oppose using that particular way of raising new revenue for these purposes. None of the funding concepts reaches a two- thirds super-majority. 64% 62% 51% 51% 41% 38% 29% 35% 33% 46% 46% 54% 61% 69% 75%60%45%30%15%0%15%30%45%60%75% Total Support Total Oppose Difference +29% +29% +5% +5% -13% -23% -40% Issuing bonds, allowing the City to borrow money to complete the projects and pay it back over time with money from local property taxes Increasing the transient occupancy tax, charged to hotel and motel guests Increasing the real estate transfer tax rate – paid when a property is bought or sold Establishing a business license tax to be paid by any business operating in Palo Alto Establishing a flat tax on every parcel of property in Palo Alto Increasing the local sales tax rate paid by anyone who shops in Palo Alto Increasing the utility users tax, which is added to electricity, gas, water and phone bills 30 31 DRAFT Voters express striking confidence in City government and its financial management. The central challenge is that voters do not attach much urgency to infrastructure issues; they believe the City is handling them well and not much additional funding is required. At the same time, 66% of voters are supportive of a ballot measure to finance infrastructure improvements – though most only tentatively. A ballot measure to fully fund a public safety building is unlikely to receive two- thirds support; however, the public share of a public-private partnership could likely win approval as part of a broader package. Chances for a measure’s success will likely be maximized by: –Focusing ballot measures around public safety and transportation (including bike and pedestrian) improvements, subject areas which consistently draw the most support. –Placing projects together in packages, which pair projects that draw enthusiastic public reaction with others that are more lukewarm. –Using general obligation bonds as the financing mechanism to the extent possible at the two-thirds level; several other taxes could be feasible with a simple majority vote. –Keeping costs close to the level of voters’expressed willingness to pay, which seems to peak at $125 per year (for two-thirds support) and $200 per year (for majority support.) Conclusions For more information, contact: 1999 Harrison St., Suite 1290 Oakland, CA 94612 Phone (510) 451-9521 Fax (510) 451-0384 Dave@FM3research.com APRIL 28, 30, MAY 1-5, 2013 CITY OF PALO ALTO INFRASTRUCTURE ISSUES SURVEY 220-3577-WT N=603 MARGIN OF SAMPLING ERROR ±4.0% (95% CONFIDENCE INTERVAL) DRAFT TOPLINE RESULTS Hello, I'm ___________ from F-M-Three, a public opinion research company. We are conducting an opinion survey about some important issues that concern residents of Palo Alto. I am definitely not trying to sell you anything, we are only interested in your opinions. May I speak to______________? (YOU MUST SPEAK TO THE VOTER LISTED. VERIFY THAT THE VOTER LIVES AT THE ADDRESS LISTED, OTHERWISE TERMINATE). 1. Before we begin, I need to know if I have reached you on a cell phone, and if so, are you in place where you can talk safely without endangering yourself or others? Yes, cell and in safe place----------------------------------33% Yes, cell not in safe place---------------------TERMINATE No, not on cell -----------------------------------------------67% (DON’T READ)DK/NA/REFUSED ------TERMINATE 2. First, I am going to describe several different types of elections. After I describe each one, please tell me if you vote in every election of that type, most of them, some, a few or if you never vote in that type of election. Here is the first one…(READ LIST; DO NOT ROTATE) EVERY MOST SOME FEW NONE (DK/NA) [ ]a. Statewide November general elections for Governor, Congress and the state legislature--------------------------------------------- 77%-----16%------7% --TERM.--TERM.-TERM. [ ]b. Statewide June primary elections for Governor, Congress and the state legislature -------------------------------------- 57%-----20%-----12% -----3%--------9% -------0% [ ]c. Special elections for local ballot measures---------------------------------------------- 47%-----20%-----18% -----6%--------7% -------1% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 2 3. (T) And how would you rate the overall job being done by Palo Alto city government in providing services to the City’s residents? Would you say the City is doing an…?(READ RESPONSES AND RECORD) EXCELLENT/GOOD-------------------68% Excellent ------------------------------------15% Good-----------------------------------------53% FAIR/POOR-------------------------------29% Only fair, or--------------------------------23% Poor job ---------------------------------------6% (DON'T READ)Don't know-------------3% 4. Next, I am going to read you a list of specific aspects of the City of Palo Alto’s work in managing City government. After I read each one, please tell me whether you generally approve or disapprove of the job the City is doing in that area.(IF APPROVE/DISAPPROVE, ASK:Is that strongly APPROVE/DISAPPROVE or just somewhat?) (RANDOMIZE) (DON’T STR. SW SW STR. READ)TOTAL TOTAL APP. APP. DISAPP. DISAPP. DK/NA APP. DISAPP. [ ]a. Maintaining the City’s infrastructure ------------------------- 28%-----47%-----14% ----- 8%-------3%75% 23% [ ]b. Managing the City’s budget and finances ---------------------------------------- 16%-----46%-----15% ----- 8%------14%62% 23% [ ]c. Efficiently utilizing local tax dollars------ 14%-----49%-----19% ----- 6%------12%63% 26% (RESUME ASKING ALL RESPONDENTS) 5. How would you rate the City of Palo Alto’s need for additional funding? Is there a great need for additional funding, some need, a little need or no real need for additional funding?(READ RESPONSES AND RECORD) GREAT/SOME NEED------------------40% Great need ------------------------------------5% Some need ----------------------------------35% LITTLE/NO NEED----------------------50% Little need, or------------------------------19% No need -------------------------------------31% (DON'T READ)Don't know-----------11% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 3 (SPLIT SAMPLE A ONLY) 6. More specifically, how would you rate the City of Palo Alto’s need for additional funding to maintain and improve infrastructure: is there a great need for additional funding, some need, a little need or no real need for additional funding?(READ RESPONSES AND RECORD) GREAT/SOME NEED------------------46% Great need ----------------------------------10% Some need ----------------------------------36% LITTLE/NO NEED----------------------45% Little need, or------------------------------22% No need -------------------------------------23% (DON'T READ)Don't know-------------9% (SPLIT SAMPLE B ONLY) 7. More specifically, how would you rate the City of Palo Alto’s need for additional funding to maintain and improve public parks, streets, sidewalks and vital facilities like police and fire stations: is there a great need for additional funding, some need, a little need or no real need for additional funding? (READ RESPONSES AND RECORD) GREAT/SOME NEED------------------54% Great need ----------------------------------11% Some need ----------------------------------43% LITTLE/NO NEED----------------------41% Little need, or------------------------------19% No need -------------------------------------22% (DON'T READ)Don't know-------------5% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 4 (RESUME ASKING ALL RESPONDENTS) NEXT I WOULD LIKE TO GIVE YOU SOME INFORMATION ABOUT ISSUES RELATED TO IMPROVING AND MAINTAINING PUBLIC BUILDINGS AND FACILITIES, AS WELL AS STREETS, SIDEWALKS, PARKS AND OTHER INFRASTRUCTURE IN PALO ALTO. AS YOU MAY KNOW, IN 2010, THE CITY COUNCIL APPOINTED A BLUE RIBBON CITIZENS’ ADVISORY COMMISSION TO EVALUATE THE CONDITION OF THE CITY’S STREETS, SIDEWALKS, PARKS, PUBLIC FACILITIES AND OTHER BASIC INFRASTRUCTURE. AS A RESULT THE COMMISSION IDENTIFIED APPROXIMATELY 300 MILLION DOLLARS IN NEEDED IMPROVEMENTS. 8. Now I’m going to read you some of the objectives of the infrastructure projects identified through this process. Please tell me how important each objective is to you as a resident of Palo Alto: extremely important, very important, somewhat important, or not important.(RANDOMIZE) (DON’T TOTAL EXT. VERY SMWT NOT READ)EXT/ IMP. IMP. IMP. IMP. DK/NA VERY [ ]a. Maintaining the City’s core infrastructure-----------14%-----43% ---- 30%------4% ------8%58% (SPLIT SAMPLE A ONLY) [ ]b. Maintaining City streets and roads--------------------19%-----55% ---- 24%------3% ------0%74% [ ]c. Reducing traffic congestion ----------------------------20%-----37% ---- 29%-----13% -----1%56% [ ]d. Providing safe sidewalks, paths and bridges for pedestrians-------------------------------------------------18%-----45% ---- 32%------5% ------0%63% [ ]e. Providing adequate parking ----------------------------13%-----30% ---- 41%-----16% -----1%42% [ ]f. Improving the energy efficiency and environmental sustainability of City buildings and land----------------------------------------------------15%-----33% ---- 39%-----11% -----1%49% [ ]g. Improving parks, playgrounds and playfields for youth and adult recreation--------------------------10%-----28% ---- 49%-----13% -----0%37% [ ]h. Ensuring vital City facilities like fire and police stations and the emergency command center are earthquake safe---------------------------------------27%-----44% ---- 25%------4% ------0%70% [ ]i. Providing facilities to support Palo Alto’s community service organizations and non- profits -------------------------------------------------------8% -----21% ---- 50%-----20% -----1%29% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 5 (DON’T TOTAL EXT. VERY SMWT NOT READ)EXT/ IMP. IMP. IMP. IMP. DK/NA VERY (SPLIT SAMPLE A ONLY CONT.) [ ]j. Providing police officers with the facilities and resources needed to investigate and prosecute crimes commited in our community ------------------20%-----40% ---- 33%------7% ------0%60% [ ]k. Making sidewalks, city buildings and parks accessible for people with disabilities ----------------15%-----33% ---- 41%-----10% -----1%48% [ ]l. Upgrading pipes, irrigation and landscaping to conserve water and save money -----------------------13%-----37% ---- 42%------7% ------2%50% (SPLIT SAMPLE B ONLY) [ ]m. Investing in facilities that encourage economic growth and generate revenue for City programs and services -----------------------------------------------10%-----28% ---- 44%-----14% -----3%38% [ ]n. Ensuring a modern and stable 9-1-1 emergency communications network -------------------------------34%-----47% ---- 18%------0% ------1%81% [ ]o. Providing safe routes for bicyclists and pedestrians-------------------------------------------------25%-----42% ---- 28%------5% ------1%67% [ ]p. Providing safe routes to school for students ----------------------------------------------------31%-----44% ---- 20%------3% ------2%75% [ ]q. Restoring Palo Alto’s historic buildings---------------2% -----15% ---- 61%-----22% -----1%17% [ ]r. Fixing potholes and paving City streets--------------22%-----44% ---- 30%------4% ------0%66% [ ]s. Repairing and maintaining City sidewalks-----------14%-----38% ---- 44%------5% ------0%51% [ ]t. Improving heating, ventilation, lighting and electrical systems to conserve energy and save money ------------------------------------------------------15%-----33% ---- 42%------8% ------2%48% [ ]u. Maintaining City parks and recreation facilities----18%-----39% ---- 39%------3% ------0%58% [ ]v. Ensuring all City facilities are earthquake safe -----24%-----40% ---- 31%------5% ------1%63% [ ]w. Maintaining community centers that serve Palo Alto children, families and seniors--------------------17%-----42% ---- 36%------4% ------1%59% (RESUME ASKING ALL RESPONDENTS) 9. Next, many of these projects and improvements are beyond the scope of the City’s existing budget and may require additional funding through a local voter-approved bond or tax measure. Based on what you’ve heard, do you think you would support or oppose a bond or tax measure to fund some group of these projects to maintain and improve Palo Alto’s infrastructure?(IF SUPPORT/OPPOSE, ASK: “Is that strongly or just somewhat?”) TOTAL SUPPORT ----------------------65% Strongly support ---------------------------21% Somewhat support-------------------------44% TOTAL OPPOSE ------------------------27% Somewhat oppose--------------------------13% Strongly oppose----------------------------14% (DON'T READ)Don't know-------------8% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 6 10. Next I am going to read you a list of different types of bond or tax measures that might be placed on the Palo Alto ballot to fund improvements to different aspects of the City’s infrastructure. After you hear each one, please tell me if you would support or oppose increasing taxes to fund that particular set of improvements. Here is the first one… ((IF SUPPORT/OPPOSE, ASK:“Is that strongly or just somewhat?”)RANDOMIZE) (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. (ALWAYS ASK a. FIRST) [ ]a. A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally-controlled funding to address local needs. These funds could not be taken away by the State and would be used to support general City services and facilities, including fire, paramedics, police, streets, sidewalks, parks, recreation, libraries and community centers.---------- 33%-----39%-----13% ---- 11%------4%72% 24% (RANDOMIZE) (SPLIT SAMPLE A ONLY) [ ]b. A Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure to fund improvements to keep Palo Alto safe, including construction of a new earthquake- safe public safety building and emergency response command center, replacing two obsolete fire stations with modern earthquake- safe buildings, and improving communication systems to ensure rapid 9-1-1 response to fires, accidents and other emergencies.---------- 39%-----29%-----17% ---- 12%------3%68% 30% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 7 (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. (SPLIT SAMPLE B ONLY) [ ]c. A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure to fund repair and improvements to streets, sidewalks, and nine miles of off-road trails. This measure would provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety.------------ 39%-----34%-----16% ----- 8%-------2%74% 24% (SPLIT SAMPLE A ONLY) [ ]d. A Parks, Open Space and Sustainability Measure that would fund improvements and investments to Palo Alto’s parks and open space, including repairing unsafe playground equipment, creating new playfields, improving walking and biking paths and trails, and improving irrigation systems to conserve water. It would also include funds to the restore the historic Roth Building and repair the Ventura Community Center---------------- 24%-----41%-----17% ---- 15%------3%65% 32% (SPLIT SAMPLE B ONLY) [ ]e. A Palo Alto Children and Families First Measure that would fund improved facilities for preschool and childcare programs, safe routes to school, pedestrian and bike safety improvements, park and playground improvements and neighborhood traffic calming measures.------------------- 32%-----38%-----17% ---- 10%------2%71% 27% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 8 (RESUME ASKING ALL RESPONDENTS) 11. Regardless of how the measure was structured, would your household be willing to pay ______ in additional taxes if it were dedicated to the types of Palo Alto infrastructure repairs and improvements we have been discussing?(IF WILLING/UNWILLING, ASK:)“Would that be very WILLING/UNWILLING,to pay that amount, or just somewhat? (SPLIT SAMPLE A READ TOP TO BOTTOM, SPLIT SAMPLE B READ BOTTOM TO TOP) (DON’T VERY SMWT SMWT. VERY READ)TOTAL TOTAL WILL. WILL. UNWL. UNWL. DK/NA WILL. UNWL. [ ]a. 250 dollars per year-------------------------- 20%-----29%-----19% ---- 29%------4%48% 48% [ ]b. 200 dollars per year-------------------------- 25%-----28%-----19% ---- 24%------4%53% 43% [ ]c. 150 dollars per year-------------------------- 35%-----30%-----14% ---- 18%------3%64% 33% [ ]d. 100 dollars per year-------------------------- 45%-----30%------8%----- 13%------3%75% 21% NOW I WOULD LIKE TO ASK YOU ABOUT SOME MORE SPECIFIC APPROACHES TO IMPROVING THE CITY’S INFRASTRUCTURE. 12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed before local voters. After you hear each one, please tell me whether you think you would vote to support or oppose that project. Here is the first one…(IF SUPPORT/OPPOSE, ASK:“Is that strongly or just somewhat?”) (RANDOMIZE) (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. [ ]a. A 14 million dollar project to replace and modernize two seismically-unsafe local fire stations, bring them up to code standards and increase the Fire Department’s capacity to respond to fires and other emergencies ---------------- 33%-----40%-----15% ---- 10%------2%72% 25% [ ]b. A 25 million dollar project to create a new network of on and off-street bike lanes, paths and pedestrian walkways to help ensure that children, commuters and recreational users have safe routes to work, school and other destinations------------------------------------ 31%-----34%-----16% ---- 15%------3%65% 31% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 9 (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. [ ]c. A six million dollar project to complete the funding for a year- round pedestrian and bicycle bridge over Highway 1-0-1 at Adobe Creek to connect South Palo Alto neighborhoods with the Baylands Nature preserve and recreational and employment opportunities------------- 27%-----34%-----17% ---- 20%------2%61% 37% [ ]d. An eight million dollar project that would augment existing funding to repair and improve streets, enhancing safety and accelerating the goal of ensuring that Palo Alto has excellent streets throughout the City -------------------------- 23%-----45%-----19% ----- 9%-------3%69% 28% [ ]e. A six million dollar project that would augment existing funding to repair and improve sidewalks throughout the City to improve pedestrian safety------------------------------ 25%-----42%-----20% ---- 11%------2%67% 31% [ ]f. A ten million dollar project to repair and improve parks and open space facilities, including replacing unsafe playground equipment; upgrading pipes and irrigation systems to conserve water; repairing and maintaining pathways, ballfields, and tennis courts; improving lighting; and replacing worn benches, drinking fountains and other park infrastructure -------------------- 23%-----43%-----20% ---- 11%------2%67% 31% [ ]g. Eight million dollars to complete the funding for a project to improve landscaping, lighting, traffic signals and signage along the Charleston- Arastradero Corridor, including bike lanes on both sides of the street; reduction from four lanes of traffic to three; crosswalk improvements to increase safety; and improvements to reduce traffic speed and congestion—especially around school pick up and drop-off points for children---------------------------- 21%-----32%-----21% ---- 24%------2%52% 45% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 10 (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. [ ]h. A six million dollar project to fund new playing fields and recreational facilities for local residents and youth athletic groups, located on ten acres of land at the golf course ------------ 15%-----31%-----29% ---- 21%------4%46% 50% [ ]i. A 21 million dollar project to increase parking availability by constructing a new downtown parking garage with approximately 350 additional spaces------------------------ 17%-----27%-----27% ---- 26%------3%44% 53% [ ]j. A 12 million dollar project to increase parking availability by constructing a new California Avenue parking garage with approximately 200 additional spaces------ 17%-----29%-----28% ---- 24%------2%46% 52% [ ]k. A seven million dollar project to fund the construction of a new and relocated Animal Services Center--------- 15%-----32%-----29% ---- 19%------5%47% 48% [ ]l. A three million dollar project to help fund the restoration of the historic Roth Building and to house the Palo Alto History Museum there ------ 9%------30%-----34% ---- 23%------4%38% 57% [ ]m. A three million dollar project to renovate and upgrade the Ventura Community Center to improve the quality of child care services for infants, toddlers and preschoolers offered there ---------------------------------- 19%-----39%-----23% ---- 13%------7%57% 35% (SPLIT SAMPLE A ONLY) [ ]n. A 57 million dollar project to purchase land and construct a new earthquake-safe public safety and emergency response command center, with upgraded dispatch technology for police, fire and paramedic service as well as more safe and secure space for interviewing crime victims and storing and analyzing crime evidence---------------------------------------- 19%-----33%-----23% ---- 22%------3%52% 45% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 11 (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. (SPLIT SAMPLE B ONLY) [ ]o. Eight million dollars of city investment to construct a new earthquake-safe public safety and emergency response command center, with upgraded dispatch technology for police, fire and paramedic service as well as more safe and secure space for interviewing crime victims and storing and analyzing crime evidence. Forty-nine million dollars in additional funding for the project would come from a private developer in exchange for rights to build new commercial offices near Page Mill Road and El Camino------------ 20%-----35%-----21% ---- 19%------5%55% 40% (RESUME ASKING ALL RESPONDENTS) 13. Next, out of all of the potential improvements to buildings, facilities, and other infrastructure that we have discussed, which do you think should be the highest priority for City government?(OPEN-END; RECORD VERBATIM RESPONSE) Street repair/sidewalk repair/infrastructure/pedestrian safety-------------------32% Police and fire/public safety-----------------------------------------------------------22% Bike lanes---------------------------------------------------------------------------------12% Emergency services-earthquakes-----------------------------------------------------11% Parking--------------------------------------------------------------------------------------8% Parks and playgrounds/recreation/children-------------------------------------------8% Schools/childcare--------------------------------------------------------------------------6% Need to manage the money they already have---------------------------------------4% Animal services ---------------------------------------------------------------------------3% Traffic---------------------------------------------------------------------------------------3% Other ----------------------------------------------------------------------------------------5% I don’t know -------------------------------------------------------------------------------6% Nothing -------------------------------------------------------------------------------------2% Refused -------------------------------------------------------------------------------------5% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 12 14. Finally, I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing. After you hear each one, please tell me if you would support or oppose using that particular way of raising new revenue for these purposes.FIRST/NEXT, would you support or oppose_____(RANDOMIZE)(IF SUPPORT/OPPOSE, ASK:)“Is that strongly SUPPORT/OPPOSE or just somewhat? (DON’T STRG. S.W. S.W. STRG. READ)TOTAL TOTAL SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP. [ ]a. Issuing bonds, allowing the City to borrow money to complete the projects and pay it back over time with money from local property taxes -------------------------------------------- 25%-----39%-----16% ---- 18%------2%64% 35% [ ]b. Increasing the transient occupancy tax, charged to hotel and motel guests------------------------------------------- 24%-----38%-----21% ---- 12%------5%62% 33% [ ]c. Increasing the utility users tax, which is added to electricity, gas, water and phone bills------------------------- 6%------24%-----28% ---- 41%------2%29% 69% [ ]d. Establishing a business license tax to be paid by any business operating in Palo Alto--------------------------------------- 17%-----34%-----23% ---- 23%------3%51% 46% [ ]e. Increasing the real estate transfer tax rate – paid when a property is bought or sold--------------------------------- 18%-----33%-----22% ---- 24%------4%51% 46% [ ]f. Increasing the local sales tax rate paid by anyone who shops in Palo Alto--------------------------------------------- 10%-----28%-----27% ---- 34%------2%38% 61% [ ]g. Establishing a flat tax on every parcel of property in Palo Alto ------------- 8%------33%-----20% ---- 34%------5%41% 54% HERE ARE MY LAST QUESTIONS, AND THEY ARE FOR STATISTICAL PURPOSES ONLY. 15. (T) Do you ...(READ LIST), Own a single family home ---------------59% Own a condominium------------------------7% Rent an apartment or home --------------30% (DON'T READ)Refused------------------5% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 13 (ASK Q16 IF CODE 1 OR 2 IN Q15) 16. (T) Did you buy your home before 1978 or in 1978 or after? Before 1978---------------------------------27% In 1978 or after ----------------------------72% (DON'T READ)Refused------------------1% (RESUME ASKING ALL RESPONDENTS) 17. (T) What was the last level of school you completed? Grades 1-8 ------------------------------------0% Grades 9-12-----------------------------------0% High school graduate------------------------4% Some college/vocational school---------10% College graduate (4 years) ---------------33% Post graduate work/professional school52% (DON'T READ)Refused------------------1% 18. (T) With which racial or ethnic group do you identify yourself: Latino or Hispanic, African American or Black, Caucasian or White, South Asian, some other Asian or Pacific Islander group or some other ethnic or racial background? (READ CHOICES BELOW) Hispanic/Latino------------------------------2% Black/African American--------------------2% Anglo/White--------------------------------71% South Asian-----------------------------------6% Some other Asian/Pacific Islander group9% Other (SPECIFY_____) -------------------0% (DON’T READ) MIXED -----------------1% (DON'T KNOW/REFUSED)------------8% 19. (T) I don’t need to know the exact amount, but I’m going to read you some categories for household income. Would you please stop me when I have read the category indicating the total combined income for all the people in your household before taxes in 2012? $50,000 or less-------------------------------8% $50,001 - $100,000 -----------------------17% $100,001 - $150,000----------------------20% $150,001 – $200,000 ---------------------12% More than $200,000-----------------------26% (DON'T KNOW/REFUSED)----------17% Attachment B. Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3577-WT PAGE 14 THANK AND TERMINATE GENDER (BY OBSERVATION):Male------------------------------------------48% Female---------------------------------------52% PARTY REGISTRATION:Democrat------------------------------------53% Republican----------------------------------16% No Party Preference-----------------------28% Other-------------------------------------------3% FLAGS P08------------------------------------------- 49% G08 ------------------------------------------ 75% P10------------------------------------------- 55% G10 ------------------------------------------ 75% P12------------------------------------------- 56% G12 ------------------------------------------ 94% Blank ------------------------------------------2% VOTE BY MAIL 1---------------------------------------------- 14% 2---------------------------------------------- 11% 3+ ------------------------------------------- 56% Blank ---------------------------------------- 19% AGE 18-29 ---------------------------------------- 15% 30-39 ---------------------------------------- 12% 40-49 ---------------------------------------- 18% 50-64 ---------------------------------------- 28% 65-74 ---------------------------------------- 13% 75+------------------------------------------ 14% PERMANENT ABSENTEE Yes------------------------------------------- 74% No-------------------------------------------- 26% HOUSEHOLD PARTY TYPE Dem 1 --------------------------------------- 28% Dem 2+------------------------------------- 18% Rep 1 ------------------------------------------9% Rep 2+----------------------------------------5% Ind 1+--------------------------------------- 26% Mix------------------------------------------- 15% Attachment B. Questionnaire and Topline Results Attachment C. Infrastructure Project Costs (all costs/revenues in millions of dollars) May 29, 2013 Projects costs and project‐specific funding Polling Support (sum of strongly & somewhat support) Project Estimated Cost Committed Funding Net Cost with Committed Potential Funding Net Cost with Committed and Potential 72%Fire Stations 14.2 0 14.2 0 14.2 69%Streets 80808 67%Sidewalks 60606 67%Parks Catch Up 9.8 0 9.8 0 9.8 Subtotal 38 0 38 0 38 65%Bike/Pedestrian Plan 25 1.5 23.5 0 23.5 61%Bike Bridge 10 8.35 1.65 0 1.65 57%Ventura Community Center 30303 52%Public Safety Building 57 0 57 48 9 52%Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13 Subtotal 104.75 12.12 92.63 48.35 44.28 47%Animal Services Center 6.9 0 6.9 0 6.9 46%Playing Fields (at Golf Course)60606 46%Cal. Avenue Parking Garage 12 0 12 0 12 44%Downtown Parking Garage 21 0 21 0 21 38%History Museum at Roth Building 30303 Subtotal 48.9 0 48.9 0 48.9 not polled Byxbee Park 3.6 0 3.6 0 3.6 not polled Surface Catch Up 8.8 0 8.8 0 8.8 not polled Buildings Catch Up 4.5 0 4.5 0 4.5 not polled Cubberley Deferred Maintenance 6.9 0 6.9 0 6.9 not polled Civic Center 16 0 16 0 16 Subtotal 39.8 0 39.8 0 39.8 Total 231.5 12.1 219.3 48.4 171.0 Total (excluding parking garages, History Museum, Ventura) 192.5 12.1 180.3 48.4 132.0 le s s th a n ma j o r i t y tw o ‐th i r d s ma j o r i t y The project information and cost estimate information on this sheet represent staff’s best information at this time. Staff will continue to refine the information as new and more precise information becomes available. Attachment D. Potential Bundled Infrastructure Measures Potential Bundled Infrastructure Measures Survey Bundled Project description Polling Support (sum of strongly and somewhat supportive) Potential Projects Estimated Cost Committed Funding Net Cost with Committed Potential Funding Net Cost with Committed and Potential Streets 80808 Sidewalks 60606 Bike/Pedestrian Plan 25 1.5 23.5 0 23.5 Bike Bridge 10 8.35 1.65 0 1.65 Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13 Cal. Avenue Parking Garage 12 0 12 0 12 Downtown Parking Garage 21 0 21 0 21 Totals:91.75 12.12 79.63 0.35 79.28 72% A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally-controlled funding to address local needs. Th Ventura Community Center 30303 Bike/Pedestrian Plan 25 1.5 23.5 0 23.5 Parks Catch Up 9.8 0 9.8 0 9.8 Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13 Streets 80808 Sidewalks 60606 Totals:61.55 3.77 57.78 0.35 57.43 Public Safety Building 57 0 57 48 9 Fire Stations 14.2 0 14.2 0 14.2 Totals: 71.2 0.0 71.2 48.0 23.2 74% 71% A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure to fund repair and improvements to streets, sidewalks, and nine miles of off‐road trails. This measure would provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety. A Palo Alto Children and Families First Measure that would fund improved facilities for preschool and childcare programs, safe routes to school, pedestrian and bike safety improvements, park and playground improvements and neighborhood traffic calming measures. A Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure to fund improvements to keep Palo Alto safe, including construction of a new earthquake‐ safe public safety building and emergency response command center, replacing two obsolete fire stations with modern earthquake‐safe buildings, and improving communication systems to ensure rapid 9‐1‐1 response to fires, accidents and other emergencies. A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally‐ controlled funding to address local needs. These funds could not be taken away by the State and would be used to support general City services and facilities, including fire, paramedics, police, streets, sidewalks, parks, recreation, libraries and community centers. 68% Information on potential projects is not provided for this measure, as it is structured as a general measure whose revenues would not be dedicated to specific uses. The project information and cost estimate information on this sheet represent staff’s best information at this time. Staff will continue to refine the information as new and more precise information becomes available. 1 5/29/2013 Attachment E: Public Safety Building Update The Planned Community (PC) zone change at 395 Page Mill and 3045 Park Blvd., if approved, would allow construction of two four‐story office buildings, totaling 311,000 square feet at 395 Page Mill Road, and a three‐story approximately 44,500 square foot public safety building (as the primary proposed public benefit), along with associated parking. The applicant has estimated the value of the construction of the public safety building (including land) and associated parking at $49.3 million. The project at this value also assumes that the applicant would build the public safety building and parking garage (at a presumably lower cost than the City could.) At the May 7, 2013 meeting of the Infrastructure Committee, staff reported that the City’s architect, Michael Ross of RossDrulisCusenberry Architecture Inc. (RDC), is working in an advisory role to the applicant’s architect, DES Architects and Engineers (DES), to address the key criteria for a successful public safety building. Since the May 7, 2013 meeting, Michael Ross has continued to work with City staff and DES to refine the building configuration and layout for the “Operational Basement” approach that is preferred by the Police Department. The proposed public safety building, along with the proposed office buildings at 395 Page Mill Road, is scheduled to be considered for initiation by the Planning and Transportation Commission at its May 29, 2013 meeting. The staff report to the PTC recommends initiation of the project, and describes the recent improvements to the public safety building proposal as follows: Construction of an approximately 44,500 square foot Public Safety Building with 191 dedicated parking spaces. The Public Safety Building would be located on the southern portion of the site with 191 parking spaces in two below grade levels. The below grade parking levels will be for the exclusive use of the Public Safety Building. Office parking of 388 spaces will be accommodated in the above grade portion of the parking garage. The PSB will have a 20 foot stand‐off (setback) from all property lines and a 45 foot stand‐off from the proposed parking garage. The building separation will allow for parking for a media truck and emergency vehicle. The additional front setback allows for improved security, and provides space for mature landscaping and a pedestrian plaza at the front of the building. The PSB frontage has been modified to provide 100 percent publicly accessible functions along the ground floor. This will help to enliven the street during the day and create a “lantern effect” at night along Park Blvd. The project now proposes a series of landscaped bulb‐outs that will visually narrow the streetscape while providing sufficient space for bicycle lanes. The proposed four (4) driveway ramps have been reduced to three (3) ramps, and will reduce conflicts with pedestrian and vehicular traffic. The FAR for this site has been reduced from 3.40 to 2.80 with the relocation of 51 parking spaces and further refinement of the parking garage design. 2 5/29/2013 Both Michael Ross and Police Department staff agree that the proposed public safety building site is workable, and that the proposed building with the recent improvements to the design is a strong public benefit that would be highly valuable to the community if approved. As reported to the Infrastructure Committee on May 7, 2013, Staff believes that enough progress can be made in the project’s review process to effectively inform decisions about the need for an infrastructure measure in December 2013 and is committed to work to that schedule. The project review process is currently proceeding according to the schedule that was provided on April 7, and which is also attached. It is anticipated that Council will be able to consider the project and the feasibility of the EIR in March 2014. Sep May Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 2012 2014 Sep Council Prescreening Dec-12 Applicant Submits Revised Plans Feb PTC Initiation 1st Hearing May Infrastructure Committee May Initiate EIR Jun Circulate NOP Jul PTC EIR Scoping Aug ARB Preliminary Hearing Nov Circulate EIR Dec PTC EIR Hearing Mar CC Hearing Feb PTC Hearing Jan ARB Hearing Jul - Aug Focus Groups Sep - Nov Potential Tracking Survey Apr - Jun Baseline Survey 395 Page Mill Road and 3045 Park Blvd. Planned Community Zone Change, EIR Schedule, Evaluation of the Proposed Public Benefit & Public Opinion Research for Potential Infrastructure Finance Measure May 7, 2013 May PTC Initiation 2nd Hearing Public Benefit Evaluation Public Opinion Research for Potential Infrastructure Finance Measure City Council Considers Infrastructure Committee Recommendations on Opinion Research Findings Sep Admin Draft EIR PSB Design Public Benefit Analysis Preliminary Traffic Study} Sep Council Update Feb - Apr Final Survey Attachment F. Potential Revenue Sources May 29, 2013 Potential Revenue Sources to Fund Infrastructure Projects Currently Available Revenue Sources (in millions)Potential Revenue Ballot Measure Types Infrastructure/Housing $22.1 Sustainability 12.3 Parks 1.0 Community Centers 1.4 Citywide Traffic TBD GO Bonds ($100 per year)57 GO Bonds ($150 per year)86 GO Bonds ($200 per year)114 Available 3.6 GO Bonds ($250 per year)143 Projected FY2013 End 6‐10 Total:$44.0 ‐ $48.0 Business License Tax 51%3.3 46.2 Parcel Tax ($200 per parcel) 41%4 56 Sales Tax 1/8 cent increase 38%2.6 36.4 Potential or Projected Revenue Increases Soure of New Revenue New Hotels (2014)1.7 23.8 New Hotels (after 2014)0.7 9.8 Cities TOT Rates Digital Readerboard 0.8 11.2 San Francisco 14.0% Auto Dealership at MSC 0.8 11.2 San Jose 10.0% Amount Oakland 14.0%$100 75% Menlo Park 12.0%$150 64% Lease LATP site 3 42 East Palo Alto 12.0%$200 53% Mountain View 10.0%$250 48% Total:8.4 117.6 Sunnyvale 9.5% Santa Clara 9.5% Redwood City 12.0% Santa Barbara 12.0% Anaheim 15.0% Potential Funding from New Tax Measures New tax measure Annual Revenue Sales tax increase of 1/8 cent 2.6 Transient Occupancy Tax increase of 1 percent 0.9 Documentary Transfer Tax increase of $1.10 per $100,000 of value 1.8 Utility User's Tax increase of 1 percent 2.2 Business License Tax (2009 analysis)3.3 Parcel Tax of $200 per parcel 4.0 46.2 56 One‐time Funding 36.4 12.6 25.2 30.8 Lease Current Police Building 1.4 19.6 One‐Time Revenue (30‐ year COPs) Support for Additional Taxes Estimated Annual Revenue 1 Note that polling support is with respect to the revenue measure type, not the amount of the tax or bond One‐Time Revenue (GO Bond, Annual Revenue Polling Support1 (sum of strongly and somewhat supportive) Type of Revenue Measure or Tax Increase Utility Users Tax 1% Increase 29%2.2 30.8 Transient Occupancy Tax 1% Increase 1.8 25.2 64% 62%0.9 12.6 Documentary Transfer Tax $1.1 per $100,000 increase 51% Stanford Medical Center Mitigation Downtown In‐Lieu Parking 1.2 Development Impact and In‐Lieu Fees Infrastructure Reserve Attachment G. Finance Mechanisms and Election Requirements Updated May 29, 2013 *General taxes can be coupled with an advisory measure expressing voters’ preference that tax be used for particular purpose. If the ballot language itself expressly restricts use of tax proceeds to infrastructure or other specific uses, it becomes a Special Tax. Special taxes require a 2/3 vote, but need not be placed on a General Election ballot. Funding Type Description General Election Required (Even years only) Vote Requirement Comments Taxes General Obligation (GO) Bond Property Tax based on % of assessed value No 2/3 Parcel Tax Property tax based on flat rate per parcel No 2/3 Sales Tax Tax on goods Yes, if structured as a general tax* Majority Can be increased in 1/8 increments up to 1% maximum Utility Users Tax Tax on utility charges Yes, if structured as a general tax* Majority Documentary Transfer Tax Tax on real property deeds Yes, if structured as a general tax* Majority Transient Occupancy Tax (Hotel Tax) Tax on hotel rates Yes, if structured as a general tax* Majority Business License Tax Tax on businesses Yes, if structured as a general tax* Majority City doesn’t currently have Other Funding Mechanisms Certificates of Participation (COPs) Financing lease that allows issuance of tax exempt debt N/A N/A Must have identified revenue stream for repayment. Utility Revenue Bonds Bonds secured by utility rates N/A N/A Must have identified revenue stream for repayment. Utility bonds cannot be used to fund General Fund operations. TRIP COP’s COP’s secured by City portion of gas tax N/A N/A California Communities sponsored program to leverage gas tax revenues. Can only be used for certain street improvements. INFRASTRUCTURE COMMITTEE WORKING MINUTES Page 1 of 16 Special Meeting Thursday, June 6, 2013 The Infrastructure Committee met on this date in the Council Conference Room at 5:04 P.M. Present: Berman, Klein (Chair), Scharff, Shepherd Absent: Oral Communications None Chair Klein announced that the meeting would end at 6:30 P.M., and an additional meeting regarding the baseline survey results would be scheduled the first week of August 2013. Action Items 1. Review Baseline Survey Results and Make Recommendations to the City Council on Next Steps in Considering an Infrastructure Finance Measure. Sheila Tucker, Executive Assistant to the City Manager, noted the Staff Report included supplemental information regarding revenue sources that could be dedicated to infrastructure projects. James Keene, City Manager, inquired whether the full meeting time would be devoted to survey results. Chair Klein did not believe the survey results would require the full time. Ms. Tucker reported Staff was prepared to discuss details of the survey results if the Infrastructure Committee (Committee) wished. Mr. Keene requested the order of topics be reversed. WORKING MINUTES Page 2 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Chair Klein wanted to cover the survey results, and requested Staff present the information in 15-20 minutes. Dave Metz, Fairbank, Maslin, Maullin, Metz, and Associates, reported demographic information for each question would not be covered in the presentation; however, the information was available. For each survey question, he separated the responses by demographic, geographic and attitudinal subgroups of the Palo Alto electorate. The presentation provided information regarding the essential recommendations. The survey covered a randomly selected sample of 603 voters in Palo Alto who, based on past voting behavior, were considered likely to vote in the November 2014 election. The survey was conducted at the end of April and beginning of May 2013. In a number of places in the data, he would draw comparisons with prior surveys he performed for the City for the Library Bond. Broadly, local voters remained overwhelming pleased with the performance of City government. This was different from other communities where many voters were unhappy with local government performance. One side effect of the happiness was that the community did not see a critical need for additional funding for infrastructure. Approximately half of local voters saw some need for funding for infrastructure projects. When voters were asked about a series of potential ballot measures that pulled together packages of infrastructure improvements under various subject headings, many packages received support from approximately two-thirds of voters. Those questions did not assign a specific funding mechanism or cost to those improvements. A majority, but not a super majority, of voters indicated they would support a Public Safety Building (PSB) fully funded by the City. Support was slightly higher for a public-private partnership for a PSB. In the abstract, approximately two-thirds of voters would be willing to vote for a ballot measure that would provide additional funds for infrastructure improvements. Specific funding mechanisms that generally received the strongest support were General Obligation (GO) bond measures or an increase in the transient occupancy tax (TOT), both of which received support from more than 3 in 5 voters. A variety of other mechanisms received less support. One of the first questions in the survey asked respondents how they would rate the overall job being done by City government as excellent, good, fair, or poor. More than two-thirds rated the City's performance as either excellent or good. Relatively few responses were in the excellent category; however, that was consistent with other communities. Approximately 1 in 20 voters believed the City was doing a poor job. Those numbers were comparable to the numbers generated in 2008. Another question asked voters how they felt about the City's performance in a variety of specific subject areas, with a response of approve or disapprove. By margins greater than 2 to 1, voters approved the City's performance. In the area of maintaining infrastructure, 75 percent of WORKING MINUTES Page 3 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 respondents felt the City was doing a good job, and 28 percent strongly approved. This was the first indicator in the data that voters did not see an infrastructure crisis. More broadly, voters did not see a need for additional funding for City services in the larger sense. Respondents were asked how they would rate the City of Palo Alto's need for additional funding broadly. Only 40 percent of voters perceived some need for additional funding for the City; 50 percent saw little or no need; and almost one-third saw no need for additional funding. In most cities, respondents were less satisfied with City government, did not believe they received the services they wanted, and perceived a need for more resources. Vice Mayor Shepherd inquired whether satisfaction with City government typically paired with the low need for additional funding. Mr. Metz indicated there was a logical connection between the two. Dissatisfaction with City government usually occurred because of service reductions, and voters tied service reductions to a lack of revenue. Additional questions asked more specifically about whether the public saw a great need or some need for funding to maintain and improve infrastructure. The sample was divided into groups, each of which was randomly selected. One half was asked about maintaining and improving infrastructure as a generic category. The second half was asked about specific categories. In neither formulation did two-thirds of voters perceive a need for more infrastructure funding. The more specific the question, the greater the constituency favored providing additional funding. In either formulation of the question, only 1 in 10 respondents indicated a great need for infrastructure funding. Again, the perception was that the City did a good job of handling these issues. It might seem as though respondents were not willing to provide funding for infrastructure. As respondents went through the remaining questions and heard specific ideas it became apparent that was not the case. The public did see some areas where improvements were needed and where they would be willing to fund them. He developed a series of questions moving from general to specific to try to understand how voters would rank a variety of potential infrastructure priorities. The first and most general question mentioned the Infrastructure Blue Ribbon Commission (IBRC) process and the City's most pressing infrastructure needs, and then provided respondents with a list of different categories of need that had been identified. Respondents were asked whether they thought each category was an extremely important, very important, somewhat important, or not important priority. Two-thirds or more of voters rated a number of items as either extremely important or very important, which was significant for a finance measure requiring a super majority vote. WORKING MINUTES Page 4 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 The two categories with the most support were public safety and transportation. Council Member Berman inquired about the difference between fixing potholes and paving City streets and maintaining streets and roads. Mr. Metz explained that language was used in a split-sample question describing the same types of projects in different ways to determine if the result was meaningfully different. Maintaining City streets and roads received slightly higher support, but the intensity of support was essentially the same. Approximately one-third of voters rated the top-ranked items as extremely important. Lesser ranked items were rated as extremely important by one-quarter of voters. Voters did not necessarily perceive many problems with the City's infrastructure; therefore, they were supportive but not with a lot of strength behind those sentiments. The second tier was comprised of items that at least half, but less than two- thirds, of voters said were very important priorities. Generally, park related issues tended to be in the tier behind public safety and transportation as public priorities. Less than half of voters rated the items lowest on the list as very important priorities. Mr. Keene suggested the Committee would want the data regarding geographic variances. Chair Scharff requested copies of the data for the Committee. Ms. Tucker had the information. Chair Klein felt asking questions and having Mr. Metz extract the information would be more productive than reading the data. Mr. Metz could do that. One question attempted to combine various infrastructure priorities into five items for ballot measures. One item was framed as being a general tax to support City services and facilities generally and requiring a simple majority approval. The other four items were framed around categories of services: public safety; traffic congestion and transportation; parks, open space, and sustainability; and services for children. He did this in order to understand the overall level of public support for collections of infrastructure projects and to determine any distinctions between them. He did not assign a cost or specify a funding mechanism, because those factors could reduce support. Almost all of the categories were within the range of receiving two-thirds support. Parks and WORKING MINUTES Page 5 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 open space did not receive two-thirds support, but was within the margin of error. The two categories with the most intense support were a Streets, Sidewalk, and Trails measure and a Public Safety measure. In terms of aggregate support, they all were close in support. Council Member Berman asked if the 6 percent increase in strong support was worth more than the 4 percent increase in total support when comparing a vital facilities measure to a public safety measure. Mr. Metz reported strong support was a critical indicator. The intensity of support for an early question was the most important indicator. At the end of the survey, respondents were asked to state of all the potential infrastructure improvements discussed, which ones stood out as the highest priority. A majority of respondents mentioned something related to streets, sidewalks, pedestrian safety improvements or police and fire and public safety improvements. The final survey question provided respondents with the list of potential improvements specified by the Committee along with a cost for each project. When asked if they would support or oppose spending the specific dollar amounts on each of the priorities, respondents answered within the same set of issues. Two-thirds of voters indicated they would support fire department modernization; street improvement and repair; sidewalk improvement and repair; and bike lanes and pedestrian paths. Interestingly, park improvement and repair was roughly equivalent to the others in support. The most intense support was for the Fire Department spending and bike lanes and pedestrian paths, with both exceeding 30 percent. Both PSB questions received a majority but not two-thirds support. Less than half of voters were willing to support parking, Animal Services, playing fields and recreational facilities, and the Roth Building; and a plurality would oppose funding for these projects. A split sample was utilized to test the response to a PSB fully funded by the City at $57 million; and to a PSB funded by the City at $8 million and by a private developer with $49 million in exchange for the right to build new commercial offices near Page Mill Road and El Camino Real. The difference in responses was within the survey's margin of error. In each case, a majority but less than two-thirds of respondents expressed support. Council Member Berman asked if the response was not accurate because of the lack of detail for the public-private partnership. Mr. Metz could have performed an entire survey on the PSB subject alone. Talking through detail would potentially impact people's support. The question was designed to state only the most salient points. Some voters could be hesitating to support a PSB project, because they wanted more WORKING MINUTES Page 6 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 details. He did not believe the City had public support for a two-thirds vote on the PSB alone. Survey results were a bit lower but close to the results of the 2007 survey. Vice Mayor Shepherd felt public support would not reach the two-thirds level no matter what the Council did. Mr. Metz agreed it would be difficult. The 2008 survey was not entirely equivalent to the 2013 survey; however, the general patterns were consistent over time. Support for a PSB did not appear to be close to the two-thirds level needed for a ballot measure. Council Member Berman asked if adding context to the questions would change support. Mr. Metz reported that based on survey results in 2007 and 2008, the level of support could increase; however, he was not confident it would reach a stable two-thirds percentage. One question generally asked the voters to indicate whether they supported a voter approved bond or tax measure to fund some group of infrastructure projects described in the survey. By a 65 to 27 margin, voters responded yes. The strong support was only 21 percent, but the question omitted many details. He was encouraged by this response, because earlier questions did not indicate a pressing need for additional infrastructure funds. Voters' willingness to spend money to support specific projects was relatively high and encouraging. Chair Klein noted a strong support of 21 percent and a somewhat support of 44 percent, which added up to 65 percent. The undecided group of 8 percent were people who would likely vote. Undecided voters generally split their vote with one-third supporting and two-thirds opposing. One-third of 8 percent added to 65 percent equaled 67.7 percent, slightly more than a two- thirds majority. There were other ways to view the numbers to receive a more positive result. Mr. Metz did not dispute that. The undecided category would vote one way or the other. Additional factors were the 4 percent margin of error and the lack of project details. Vice Mayor Shepherd inquired whether the next survey would have a directed focus. WORKING MINUTES Page 7 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Mr. Metz replied yes. The point of this survey was to assess voters' reactions to all the building blocks that could be assembled into a measure. Reaction to the buildings blocks in this survey would provide a direction for the next survey and a more precise analysis. Another question asked respondents to indicate the amount they would be willing to pay in order to support infrastructure improvements regardless of the funding mechanism. Two-thirds of respondents would support paying $100 per year, and a simple majority would support paying $200 per year. Mayor Scharff inquired whether that question would apply to a bond measure or parcel tax. Mr. Metz explained any finance measure would have some fiscal impact which could be estimated for individual households. The ballot language for a parcel tax stated exactly how much each household would pay. Language for other funding mechanisms did not state a specific amount. Mayor Scharff asked if the results indicated a parcel tax in the amount of $100 per year per parcel would likely receive 75 percent support. Mr. Metz answered roughly yes. Mayor Scharff felt a bond was more difficult, because it varied by property value. Mr. Metz could review the geographic data, determine a rough estimate of the amount respondents would pay, and then match that amount to the amount they stated they were willing to pay. Mayor Scharff noted each homeowner paid a different amount due to Proposition 13. Mr. Metz could estimate the amount. Chair Klein recalled the Library Bond measure provided a great deal of detail for voters to understand the amount the average household would pay. Mayor Scharff requested the amount individual homeowners would pay under the Library Bond. Chair Klein answered approximately $120. WORKING MINUTES Page 8 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Mayor Scharff stated some households paid $600-$800. Council Member Berman explained the amount depended on the assessed value of the home. Mr. Metz added the amount was usually expressed per $100,000 of assessed value. Mayor Scharff inquired whether the Committee would receive that information. Mr. Keene indicated Staff knew the distribution of the value of houses. Mayor Scharff asked if support for a bond measure was more nuanced than for a parcel tax. Mr. Metz replied yes. In the next round of research, questions would contain specific proposals, and follow-up questions would allow the respondent to calculate the amount he would pay and state how that affected his willingness to support the proposal. Chair Klein noted the Library Bond measure was in the amount of $76 million, which cost homeowners approximately $125 per year. Joe Saccio, Assistant Director of Administrative Services, could provide some examples for the median assessed value. Mr. Metz reported one question asked the respondents whether they would support or oppose each funding mechanism in the abstract. The question provided a relative sense of which types of funding mechanisms seemed to be most palatable to voters. Bonds were at the top of the list. The TOT, real estate transfer tax and business license tax scored relatively well. Mayor Scharff inquired whether 52 percent support and a margin of error of 4 percent was really a majority. Mr. Metz stated the TOT, real estate transfer tax and business license tax were definitely in a second tier. The lower tier included parcel tax, sales tax, and utility users tax. WORKING MINUTES Page 9 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Council Member Berman asked if a bond received more support because of the aspect of paying it later. Mr. Metz felt that was one factor. Another factor was the concept of borrowing money to invest in a long-lasting resource. Mayor Scharff noted earlier in the discussion a parcel tax of $100 received strong support. This question indicated weak support for a parcel tax. He asked how those two points should be interpreted. Mr. Metz explained the $100 mentioned earlier was not specifically for a parcel tax. In this question, the parcel tax was less popular relative to the other funding mechanisms. If the City decided to have a parcel tax, then placing the amount at approximately $100 would increase the level of success. Support for a sales tax was significantly lower than typical, which may have resulted from the phrasing of the question and not specifying a rate. He urged the Committee not to discard a sales tax increase based on this data. A bond measure might be the way to proceed, because most voters expressed a willingness to support it. Based on the polling data, voters expressed high confidence in City government and its financial management paired with a low sense of urgency for infrastructure issues. That did not deter voters from being willing to support the idea of increasing their taxes to fund infrastructure improvements; however, the support was not intense. The burden would be on the City to educate the public regarding the necessity for improvements and the necessity for a tax increase. For the PSB, the idea of a public-private partnership packaged with other public safety improvements might be more likely to reach two- thirds support. Four things would significantly enhance the potential for success of a measure: focusing on public safety and transportation; combining projects in packages to the greatest extent possible; focusing on GO bonds as a funding mechanism to obtain two-thirds support; and remembering the levels of rough willingness to pay. Council Member Berman inquired whether a voter would be likely to support a package containing improvements the voter did and did not support. Mr. Metz reported in general packaging improvements with strong support with improvements not highly opposed would be the best combination. Future research could empirically test package combinations. Mayor Scharff stated the more intense the opposition to an improvement, the less likely it should be included in a package. WORKING MINUTES Page 10 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Mr. Metz agreed that intense opposition for an improvement was problematic for obtaining a two-thirds majority support. Mayor Scharff indicated a bond measure required a two-thirds vote, while increasing the TOT required a simple majority vote, Support for a bond measure was 64 percent, and support for increasing the TOT was 62 percent. Increasing the TOT was more likely to pass than a bond measure. Mr. Metz reported inclusion of the word tax generally had more impact than inclusion of the word bond. Vice Mayor Shepherd felt a new PSB was a fiduciary responsibility; yet, the public seemed ambivalent. She wanted to better understand how to interpret the public response. Mr. Metz explained that one question attempted to define implicitly the deficiencies in the public safety infrastructure and to place the PSB in the context of a system of public safety facilities. Respondents supported that with 68 percent total support and 39 percent strong support. However, the dollar amount and the funding mechanism were missing from the question. He believed the two-thirds support would remain when respondents received the full context. This type of concept could be tested in the future research. The whole could be greater than the sum of the parts. Vice Mayor Shepherd asked if the Committee should communicate better or focus on more polling to assist the communication process. Mr. Metz recalled in 2007 and 2008, the public had no idea of the deficiencies of the PSB. When the public received that type of information in focus groups, they were concerned. The City should create a communication program to communicate the need to the public. In terms of obtaining funding for improvements, the survey provided helpful information in terms of public safety. The net sum of all results seemed to indicate that a PSB was possible. Vice Mayor Shepherd preferred to have community support for full City funding of a PSB. She liked the idea of implementing a business license tax, because it could also fund economic needs. Chair Klein suggested comments were outside of Mr. Metz's area of expertise. WORKING MINUTES Page 11 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Council Member Berman noted the majority of residents supported a PSB; however, the support did not reach the two-thirds level. Mr. Keene stated polling on packages and different messaging that could change support would be performed. Mayor Scharff agreed there was strong support for a PSB, but it was not at the two-thirds level. Mr. Metz noted support for a PSB was consistent from 2008 forward. Mayor Scharff felt the community wanted a PSB; however, the challenge was funding a PSB. He asked if more polling should be conducted on the amount the public was willing to pay. Mr. Metz suggested the Committee should assess the amount of money resulting from various funding mechanisms. Even if the public favored one funding mechanism, it might not yield enough money to fund the number of projects needed. He could test that information if the Committee wished. Mayor Scharff felt that was true for a real estate transfer tax. Chair Klein noted the public supported an increase in the TOT by 81 percent in a previous election; however, the current survey indicated 62 percent support for an increase in the TOT. He asked if Mr. Metz could explain that disparity. Mr. Metz explained the current survey asked respondents to support a tax mechanism without indicating how the tax would be used. Chair Klein understood the City did not state how the funds would be used when campaigning for an increase in the TOT. Lalo Perez, Administrative Services Director, Chief Financial Officer, asked if the survey question indicated the percentage of tax increase. Mr. Metz answered no. Mr. Perez felt the difference may result from the previous measure stating the percentage of increase. WORKING MINUTES Page 12 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Mayor Scharff felt the City stated the uses for the funds generated by the tax increase. Mr. Keene reported the campaign and the materials indicated the uses. Chair Klein indicated a 2 percent increase in the TOT would generate slightly less than $2 million annually. Mr. Saccio added that amount did not include the new hotels. Chair Klein requested Mr. Metz comment on survey results which differed from other cities' results. Mr. Metz noted the largest difference was the initial juxtaposition of favorable attitudes toward City government with less perception of financial need. A number of other communities had higher support for investments in public safety, but generally those communities had much higher crime rates. Lack of support for a sales tax was the most counterintuitive result. Council Member Berman inquired whether the demographics of the survey aligned with the demographics of residents likely to vote. Mr. Metz reported it was exactly in line with likely voters. Ms. Tucker reported the Staff Report reviewed the costs for the 14 infrastructure projects. Attachment C indicated the level of support for the 14 infrastructure projects in terms of super majority, majority, or less than majority, and the costs. Staff included the Jay Paul Company proposal and receipt of outstanding grants when calculating the costs. The total project costs excluded the two parking garages, the History Museum and Ventura. Because bundled projects polled well, Staff reviewed packages that received a super majority vote and which projects could fit into that type of theme and the total cost. The four categories of revenue were existing revenue that could be earmarked for infrastructure; potential new revenue sources; the amount of funding resulting from the four types of funding mechanisms; and Certificates of Participation (COP). At the beginning of the Staff Report, Staff provided questions for the Committee to consider in determining which projects would be placed on a ballot measure. Chair Klein requested Staff combine Attachments C and F. Ms. Tucker would do so. WORKING MINUTES Page 13 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Chair Klein suggested the Committee begin eliminating projects without strong support and compiling project bundles. Mr. Saccio reviewed the potential revenue sources found on Attachment F. Vice Mayor Shepherd inquired whether Staff could isolate revenue from new hotels and earmark that as a revenue source for repaying a COP. Mr. Saccio reported Staff had information regarding the amount of tax each hotel generated. Vice Mayor Shepherd did not feel hotel revenue was a new revenue source in the traditional sense. Council Member Berman asked what would happen if a new hotel filed for bankruptcy in 2025. Mr. Saccio indicated the General Fund would be responsible for replacing that lost revenue. Chair Klein asked if Staff meant GO bond or COP in the far right column under Potential Revenue Ballot Measure Types. Brad Eggleston, Assistant Director of Public Works, stated the types were shown in the order of the amount of support received in the poll. Chair Klein did not understand the right-hand column. Mr. Eggleston indicated the title of the right column should state GO Bond, COP. Council Member Berman requested Staff review the table. Mr. Eggleston reiterated that polling questions related only to the type of tax or bond measure, not the percent of the increase. A $200 per parcel tax resulted in one-time funding of $56 million; whereas a $200 per year GO bond resulted in $114 million. Mr. Saccio noted the document transfer tax was based on $1.10 per $1,000 of value, not $100,000 of value. WORKING MINUTES Page 14 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Chair Klein asked if the State imposed a limit on the amount of increase for the real estate transfer tax. Mr. Saccio was not aware of such a limit. Mr. Perez reported the best method to receive the best rating from the rating agencies was to pledge full General Fund revenues as alternate revenues for COPs. Vice Mayor Scharff inquired about the total infrastructure dollar amount. Council Member Berman responded $132 million excluding the parking garages, History Museum and Ventura. Mr. Eggleston added that amount assumed the Jay Paul Company proposal was approved. Mayor Scharff requested the amount if the proposal was not approved. Mr. Eggleston replied $219 million with the parking garages, History Museum and Ventura. Without those items and the Jay Paul Company proposal, the total was $180 million. Chair Klein indicated the information was contained in Attachment C. Vice Mayor Shepherd felt it was unwise to deduct the cost for the PSB, because that appeared to indicate the Council would approve the proposal. Chair Klein stated the amount was not deducted. Mr. Saccio reported funding all $132 million in projects would result in each residential property owner paying approximately $226 based on a median average assessed valuation of $654,000. Mayor Scharff believed a bond would affect young families disproportionately. Mayor Scharff asked if the total infrastructure cost included $35 million for the Bicycle and Pedestrian Transportation Plan. Mr. Keene answered yes. WORKING MINUTES Page 15 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Mr. Eggleston added the total included $25 million for the Bicycle and Pedestrian Transportation Plan. The Bike Bridge was originally a part of the $25 million. Chair Klein requested Committee Members consider removing infrastructure projects and rank ordering the remaining projects. Attachment F indicated available resources totaled $44-$48 million and new revenue sources not requiring a vote totaled $70 million, for a grand total of $117 million. Because all those revenues sources might not occur, Committee Members should consider projects totaling $100 million. Mayor Scharff suggested Staff present information on potential revenue sources to allow the Committee to make recommendations to the Council. Chair Klein explained that was the reason he suggested projects total $100 million. Mayor Scharff felt the Committee needed that information in order to make choices. Chair Klein noted the Staff Report indicated Staff would present information regarding the reader board to the Finance Committee. Mr. Keene indicated Staff discussed presenting the information directly to the Council. He requested direction regarding presentation of reader board information. Chair Klein suggested Staff present the same information to the Committee and the Finance Committee. Mr. Perez added that the Policy and Services Committee was reviewing use of Stanford funds. Staff made recommendations to fund a portion of the Bicycle and Pedestrian Transportation Plan with Stanford funds. Chair Klein felt Committee Member's ranking of projects would shape the final recommendations to the Council. Vice Mayor Shepherd would apply rankings to new revenue sources as well. Chair Klein agreed ranking would work for projects and revenue sources. WORKING MINUTES Page 16 of 16 Infrastructure Committee Regular/Special Meeting Working Minutes: June 6, 2013 Mr. Perez read the language in Ballot M for an increase of the TOT. Chair Klein indicated the next meeting would be in August 2013, and he preferred to begin the meeting at 3:00 P.M. or 4:00 P.M. Mayor Scharff preferred 3:00 P.M. Adjournment: The meeting was adjourned at 6:40 P.M. City of Palo Alto (ID # 3853) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: Monroe Place (formerly PA Bowl) motor court names Title: Approval of Monroe Place (formerly Palo Alto Bowl) Motor Court Names From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve the new street names as recommended by the Palo Alto Historical Association for three new private streets that are part of the previously approved Palo Alto Bowl mixed use project. Executive Summary The Council is requested to approve the three street names for the interior streets within the residential community currently under construction on the former Palo Alto Bowl site. The three street names are Cole Court, Brassinga Court, and Gene Court. The streets are named after police officers who died in the line of duty, and as supported by the Palo Alto Historical Association. The location of each interior street is as shown on the site plan, provided as Attachment A. Background On December 14, 2009, the Council approved a Record of Land Use Action and Tentative Map for a new mixed use project for a four-story hotel and 26 residential units at the former Palo Alto Bowl site located at 4301-4329 El Camino Real. Vehicle access to the hotel would be from El Camino Real, while the residential units (Monroe Place) would be accessed from Monroe Drive via the private street, Ryan Lane, leading to the interior streets as shown on Attachment A. No street names were provided for the interior streets as part of the original approval. Ryan Lane was approved as part of the Tentative/Final Map process. City of Palo Alto Page 2 City policy establishes procedures for the naming of City streets as set forth by Council Resolution No. 5739. Naming City streets shall be the responsibility of the City Council. The City shall refer the street naming to the Palo Alto Historical Association (PAHA) for suggestions of appropriate historical names. The approved names, indicating the recommended choice, shall then be submitted to the City Council and shall be placed on the consent calendar. In the event that a street naming is removed from the consent calendar, it may be referred to the Policy and Services Committee for additional review. PAHA Board Review The PAHA board met on May 1, 2013 regarding the three street names. The Police Department provided the PAHA with their interest in having the streets named for police officers who had died in the line of duty. The names of the three officers are: 1. Lester Cole 2. Gene Clifton 3. Theodore Brassinga The PAHA is recommending the last names of Cole and Brassinga be used for two of the three streets. For the third street there is already a Clifton street name in Palo Alto (no relation to Gene Clifton). In discussion with Police Chief Dennis Burns, he suggested using "Gene" for the naming opportunity. The PAHA accepted this change and as such is recommending the name of Gene be used for the third street. The PAHA approval letter is attached (Attachment C). The recommended names are: 1. Cole Court 2. Brassinga Court 3. Gene Court Attachments: : Attachment A: Site Plan (PDF) : Attachment B: Council Resolution on Street Naming Policy (PDF) : Attachment C: Palo Alto Historical Association Recommendation (PDF) 148-05-031148-09-014 105. 45.3' 116.0' 278.4' 103.5' 116.0' 172.0' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 105. 45.3' 116.0' 278.4' 72.3' 20.0' 45.8' 150.8' 161.5' 56.6' 172.5' 141.2' 101.6' 20.0' 103.5' 49.2' 205.8' 17.3'19.1'.3'.1'16.2' 172.5' 17 .4'4.6' 205.8 167.8' 29.9' 165.3' 30.6' 161.8' 50.9' 45.6' 255.7' 13.2' 141.2' 234.5' 128.5' 267.7' 402.3' 278.1' 168.4' 314.4' 142.9' 6.1' 13.1' 4291 4329 4301 116114 112 4328 410 412416 418 411413417 419 410 412 416 418 411 413 417 419 410 412 416 418 411 413 417 419 420 421 E L C A M I N O R E A L M O N R O E D RIVE C A M I N O R E A L R Y A N L A N E C O LE C O U R T B R A S SIN G A C O U R T GE N E C OU R T This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 0' 76' Mo n r o e P l a c e St r e e t N a m e s CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2013 City of Palo Alto jnortz, 2013-06-12 15:40:08Parcel Report (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) City of Palo Alto (ID # 3921) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: 805 Los Trancos Site & Design Extension Request Title: Approval of Record of Land Use Action Approving a Request for Extension of a 2010 Site and Design Review Approval to June 2014 for a New Residence at 805 Los Trancos Road From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve the Draft Record of Land Use Action (RLUA, Attachment A) approving a one-year, final extension of Council’s June 21, 2010 Site and Design Review approval for a new residence located at 805 Los Trancos Road. Background In response to the decline in development due to the recession, the Council adopted on November 4, 2009, an ordinance (Ordinance 5061) allowing extensions of permits approved before June 30, 2010. Council’s adopted Extensions table is below on this page, with table footnotes following: City of Palo Alto Page 2 Time Extensions for Valid Planning Entitlements Effective November 4, 2009 Table 1 (Revised per COUNCIL action) Time Extension – Permit Life Permit Type Current Code Requirements Ordinance Initial Permit Life Allowed Extension(s)2 Automatic Extension Additional Maximum Extension2 Permit Life 3 ARB, DEE, CUP, VAR, IR, HIE, NPE (no automatic for historic incl. potentially eligible) 1 year 1 year 1 year after allowed extension 1-year extensions by Director with findings GREEN BUILDING Up to 4 years unless associated with a Vesting Tentative Map Site and Design Review (no automatic for historic) 2 years unless associated with a Vesting Tentative Map 0 1 year after allowed extension One extension by Council after PTC - one additional year GREEN BUILDING Up to 4 years unless associated with a Vesting Tentative Map Planned Community (no automatic for historic) Per development schedule 1 year 1 year after allowed extension One extension by Council after PTC - one additional year GREEN BUILDING Up to 3 years + timeline in development schedule 1. The ordinance applies to column one permit types valid from ordinance adoption through June 30, 2010. 2. Project applicants must apply for any extension (except automatic) prior to the permit expiration date. 3. Maximum permit life may be acquired through a combination of initial permit life, allowed extensions, additional extensions and automatic extension. The proposed project received a Site and Design Review permit for a new two-story residence on a 3.5 acre undeveloped property located in the southern portion of the city adjacent to Portola Valley. Existing Site and Context The existing vacant project site is located in the Palo Alto foothills, in an area predominately characterized by publicly and privately owned open space. The Open Space Zoning designation recognizes the foothills’ scenic and rural quality. The site was previously used as farmland, and some of the original olive trees for the farm still exist on site. The property is bordered by Los City of Palo Alto Page 3 Trancos Creek to the west and the Town of Portola Valley beyond, Los Trancos Road to the north and east, and a vacant parcel to the south, as shown on the attached location map (Attachment D). A small seasonal segment of Buckeye Creek, which traverses a narrow center portion of the site, eventually connects to Los Trancos Creek off site to the west. Due to the small size of Buckeye creek, the dominant riparian habitat is along Los Trancos Creek. Project Description The proposed project is the construction of a new two-story, 11,184-square foot single-family home (which includes the garage and basement areas), an access drive from Los Trancos Road, an 18-foot wide by 75-foot long swimming pool and landscaping improvements. Twenty-six trees are proposed to be planted around the residence, increasing landscape screening and reducing visibility from public roads. The residence would be set back a minimum of 120 feet away from Los Trancos Road. The project also includes placement of a wood bridge over Buckeye Creek. The building materials have been chosen to blend with the natural surroundings. A light- colored natural stone would be used for the base of many of the permeable areas that surround the home. Muted, natural colors have been chosen for both the siding and stucco that would constitute the majority of the wall areas that may be visible from both on and off-site. A treated and stained wood has been selected for all doors, window frames and railings to help reduce the reflectivity of these elements. A non-reflective Spanish style clay tile, in keeping with the overall architectural theme of the home, has been chosen as the roof material to mitigate any sun reflection that may naturally arise during the daylight hours. The new driveway would be located on the northeastern portion of the property and was originally used as a driveway when the site was an active farm. The improvements also include construction of a small five-foot wide by two-foot high culvert to allow for Buckeye Creek to continue to flow undisturbed under the new driveway and through the site. The remainder of the creek would be maintained undisturbed. The home is to be located on a relatively flat and open area of the site, approximately 70 to 120 feet from the top bank of the Los Trancos Creek and 190 feet from the top of bank of Buckeye Creek. All other elements of the development would be located at least 50 feet from the top of the Los Trancos creek bank. Passive landscaped open space and fencing is proposed approximately 20 feet from Buckeye Creek. Summary of Land Use Action Ordinance 5061 requires that City Council make a specific finding before granting an extension request. Specifically, the City Council must find that the project would not adversely affect public health or safety and would not substantially conflict with any applicable Zoning Code or Comprehensive changes that have been adopted by the City Council since the original application was deemed complete, and may otherwise adjust project conditions to address City of Palo Alto Page 4 minor changes. These findings can be made in the positive as there have been no substantive zoning or Comprehensive Plan changes in this area. The applicant intends to move forward with construction prior to the 2014 expiration of the extended Site and Design Review approval, should it be granted. Planning and Transportation Commission Review On June 12, 2013, the Planning and Transportation Commission unanimously recommended (7- 0 vote, on consent calendar) that the Council extend its Site and design Review approval one additional year. Meeting minutes are provided as Attachment C to this report. Policy Implications This is the second request received, pursuant to Ordinance 5061, for an extension of a City Council Site and Design Review Approval that has required Commission and Council review and action. The only other such request was for the recently approved Site and Design Review extension approval for the Ming’s Hotel project, which was granted in April of 2013. Extensions of Director’s decisions have been approved at the Director’s level. Comprehensive Plan The project site includes two Comprehensive Plan land use designations: 1) Streamside Open Space and 2) Open Space/Controlled Development. The Comprehensive Plan designation for site is designated Streamside Open Space because of its proximity to Los Trancos Creek. The Open Space/Controlled Development allows for very low density (0.1-1 dwelling unit per acre) single family uses. The intent of the Streamside Open Space designation is to protect the corridor of riparian vegetation along natural streams. The corridor can vary in width up to 200 feet on either side of the center line of the creek. The project has been designed to protect and enhance the riparian corridor and includes the construction of an earthen berm to clearly delineate and protect the riparian corridor along a 50-foot setback from the top of bank. No building or other work is proposed within the riparian corridor. The applicant has developed a planting plan that is non-invasive and compatible with the riparian and rural nature of the site. The applicant is maintaining most of the existing trees onsite. Given the proposed design of the project, potential effects to the surrounding residential uses and sensitive riparian habitat have been minimized. The project is considered consistent with Comprehensive Plan Open Space policies. The project is specifically consistent with the Comprehensive Plan Program N-7 of the Natural Environment Element, which provides policy to protect natural creeks. A border of native riparian vegetation would be planted at least 25 feet along the creek bank. The project is consistent with Program N-7 in that it protects and enhances the creek and riparian habitat. The Comprehensive Plan provides for flexibility in the corridor width because it recognizes that conditions will vary site to site. City of Palo Alto Page 5 Because the project was designed to protect and enhance the Los Trancos Creek riparian corridor, it has been deemed to be consistent with the Comprehensive Plan. Resource Impact The applicant will be required to pay developmetn impact fees and other fees in place at the time of buildnig permit issuance. Environmental Review A Negative Declaration for this project was adopted by the Council on June 21, 2010. Courtesy Copies Mark Conroe Attachments: Attachment A: Draft Record of Land Use Action (PDF) Exhibit 1: 805 Los Trancos Final Record of Land Use Action (PDF) Attachment B: Planning & Transportation Commission Staff Report and Attachments, June 12, 2013 (PDF) Attachment C: Planning & Transportation Commission Excerpt Minutes, June 12, 2013 (PDF) Attachment D: Location Map (PDF) 1 APPROVAL NO. 2013-________ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 805 LOS TRANCOS ROAD: File 13PLN-00185 EXTENSION OF COUNCIL APPROVAL OF SITE AND DESIGN (Extension of Site and Design Review of FILE 04IPT-2217) (Langenskiold Family Trust, OWNERS) At its meeting on _________,2013, the Council of the City of Palo Alto approved the requested Extension of its Site and Design Review for a new 11,184 square foot single family home and site modifications to residential property at 805 Los Trancos Road in the City’s Open Space District (“the Property”), making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On June 22, 2010, City Council approved the Site and Design Review application by Mark Conroe for construction of an 11,184 square foot single family home and site modifications (The Project”) (Exhibit 1, Record of Land Use Action 2010-6). A request for extension was filed on April 30, 2013 to extend the Site and Design Review Approval for an addition, final year, in accordance with Ordinance 5061. B. The Planning and Transportation Commission reviewed the extension request on June 12, 2013, and recommended approval of the extension. C. The City Council finds that the project would not adversely affect public health of safety and would not substantially conflict with any applicable Zoning Code or comprehensive changes that have been adopted by the City Council since the original application was deemed complete. SECTION 2. Environmental Review The City as the lead agency for the Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA) under Guideline section 15070, Decision to Prepare a Negative or Mitigated Negative Declaration. An environmental impact assessment was prepared for the project and it was determined that, with the implementation of mitigation measures, no potentially adverse impacts would result from the development, therefore, the project would have a less than significant impact on the environment. The 2 original Mitigated Negative Declaration was made available for public review beginning February 19, 2010 through March 10, 2010. A revised Mitigated Negative Declaration was prepared, advertised and circulated for 30 days beginning March 5, 2010. The Environmental Impact Assessment and Mitigated Negative Declaration are attached in CMR: 277:10. SECTION 3. Site and Design Review Permit Extension Finding The project would not adversely affect public health or safety and would not substantially conflict with any applicable Zoning Code or Comprehensive Plan changes that have been adopted by the City Council since the original application was deemed complete, and may otherwise adjust project conditions to address minor changes. These findings can be made as the project does not adversely affect public health or safety and there have been no substantive zoning changes in this area. The applicant intends to move forward with construction as originally approved prior to the 2014 expiration of the extended Site and Design Review approval. SECTION 4. Site and Design Approvals Granted Site and Design Approval is granted by the City Council under Palo Alto Municipal Code (PAMC) Section 18.82.070 for application 04IPT-2217, subject to the conditions of approval in Section 8 of this Record. SECTION 5. Plan Approval The plans submitted for Building Permit shall be in substantial conformance with those plans prepared by BKF, Devon Construction Incorporated, Heacox Associates Landscape Architects, and Lea and Braze Engineering Inc. titled “Langenskiold Family Trust 805 Los Trancos Road”, consisting of 15 pages, dated received on April 28, 2010,except as modified to incorporate these conditions of approval. A copy of these plans is on file in the Department of Planning and Community Development. These conditions of approval shall be printed on the cover sheet of the plan set submitted with the Building Permit application. SECTION 6. Indemnity To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”)from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized 3 hereby for the Project, including (without limitation) reimbursing the City its actual attorneys fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. SECTION 7. Conditions of Approval The same conditions of Council approval in Exhibit 1 shall apply to the extended Approval. SECTION 8. Fees, Dedications or other Exactions The California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90- DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. SECTION 9. Judicial Review This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. SECTION 10. Term of Approval Site and Design Approval. In the event actual construction of the project is not commenced within one year of the date of City Council approval, the approvals shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.82.080 and Ordinance 5061. PASSED: AYES: 4 NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: 1. Those plans prepared by BKF, Devon Construction Incorporated, Heacox Associates Landscape Architects, and Lea and Braze Engineering Inc. titled “Langenskiold Family Trust 805 Los Trancos Road”, consisting of 15 pages, dated received on April 28, 2010, and landscape plans prepared by Heacox Associates Landscape Architects titled “Langenskiold Family Trust”, dated received April 28, 2010. City of Palo Alto (ID # 3867) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 6/12/2013 City of Palo Alto Page 1 Summary Title: 805 Los Trancos Site & Design Permit Extension Title: Approval of 805 Los Trancos Road Site and Design Permit Extension From: Elena Lee, Senior Planner Lead Department: Planning & Transportation Commission Recommendation Staff recommends that the Planning and Transportation Commission (Commission) recommend that Council approve the Draft Record of Land Use Action (RLUA, Attachment A) approving a one-year, final extension of Council’s June 21, 2010 Site and Design Review approval for the construction of a new single family residence at 805 Los Trancos Road. Background In response to the decline in development due to the recession, the Council adopted on November 4, 2009, an ordinance (Ordinance 5061, Attachment H) allowing extensions of permits approved before June 30, 2010. Council’s adopted Extensions table is below on this page, with table footnotes following: Time Extensions for Valid Planning Entitlements Effective November 4, 2009 Table 1 (Revised per COUNCIL action) Time Extension – Permit Life Permit Type Current Code Requirements Ordinance Initial Permit Life Allowed Extension(s)2 Automatic Extension Additional Maximum Extension2 Permit Life 3 ARB, DEE, CUP, VAR, IR, HIE, NPE (no automatic for historic incl. potentially eligible) 1 year 1 year 1 year after allowed extension 1-year extensions by Director with findings GREEN BUILDING Up to 4 years unless associated with a Vesting Tentative Map City of Palo Alto Page 2 Site and Design Review (no automatic for historic) 2 years unless associated with a Vesting Tentative Map 0 1 year after allowed extension One extension by Council after PTC - one additional year GREEN BUILDING Up to 4 years unless associated with a Vesting Tentative Map Planned Community (no automatic for historic) Per development schedule 1 year 1 year after allowed extension One extension by Council after PTC - one additional year GREEN BUILDING Up to 3 years + timeline in development schedule 1. The ordinance applies to column one permit types valid from ordinance adoption through June 30, 2010. 2. Project applicants must apply for any extension (except automatic) prior to the permit expiration date. 3. Maximum permit life may be acquired through a combination of initial permit life, allowed extensions, additional extensions and automatic extension. On June 21, 2010, Council approved a Site and Design Review application for a new two-story residence on a 3.5 acre undeveloped parcel of land. This parcel is located in the southern portion of the city adjacent to Portola Valley. The floor area of the home would be 11,184 square feet, including the garage and basement areas. The home would be accessed by a private driveway from Los Trancos Road and a wooden bridge over Buckeye Creek. A swimming pool and landscaping improvements are included in the project. This project was first reviewed by the Commission on March 24, 2010 and recommended for approval on May 19, 2010. The project plans have not been revised since Council approval. The Council approved the environmental review and project, with a RLUA that included the Commission’s suggested approval condition requiring the applicant to provide temporary construction access on both sides of Buckeye Creek to avoid impacting the creek during construction. A copy of the approved RLUA is provided as Exhibit 1 for the draft RLUA (Attachment A). The applicant is requesting the Site and Design Review Approval Extension to complete the construction drawings and obtain a construction loan. Mr. Conroe is planning to start construction later this year. Under Ordinance 5061, Site and Design Review Approval Extensions must be recommended by the Commission prior to Council approval. Council’s approval of the extension would result in a total permit life of four years, with commencement of construction by June 2014. Existing Site and Context City of Palo Alto Page 3 The project site is located in the Palo Alto foothills, in an area predominately characterized by publicly and privately owned open space. The Open Space Zoning designation recognizes the foothills’ scenic and rural quality. The site was previously used as farmland and some of the olive trees originally planted for the farm still exist on site. The property is bordered by Los Trancos Creek to the west and the Town of Portola Valley beyond, Los Trancos Road to the north and east, and a vacant parcel to the south, as shown on the attached location map (Attachment E). A small segment of Buckeye Creek traverses a narrow center portion of the site, which eventually connects to Los Trancos Creek offsite to the west. Due to the small size of Buckeye creek, the dominant riparian habitat is along Los Trancos Creek. Project Description The proposed project is the construction of a new two-story, 11,184-square foot single-family home (which includes the garage and basement areas), an access drive from Los Trancos Road, a swimming pool (18’ x 75’) and landscaping improvements. Twenty-six trees are proposed to be planted around the residence, increasing landscape screening and reducing visibility from public roads. The residence would be set back a minimum of 120 feet from Los Trancos Road. The building materials and colors would blend with the natural surroundings. These include a light-colored natural stone base and permeable paving areas; muted, natural siding and stucco colors since the walls may be visible from off-site views; treated and stained wood doors, window frames and railings; and non-reflective Spanish style clay tile. The new driveway would be located on the northeastern portion of the property and was originally used as a driveway when the site was an active farm. The improvements also include construction of a small five-foot wide by two-foot high culvert to allow for Buckeye Creek to continue to flow undisturbed under the new driveway and through the site. The remainder of the creek would be maintained undisturbed. The home is to be located on a relatively flat and open area of the site, approximately 70 to 120 feet from the top bank of the Los Trancos Creek and 190 feet from the top of bank of Buckeye Creek. All other elements of the development would be located at least 50 feet from the top of the Los Trancos creek bank. Passive landscaped open space and fencing is proposed approximately 20 feet from Buckeye Creek. Summary of Land Use Action The Planning and Transportation Commission is requested to recommend that Council extend the Site and Design Review Approval for one additional year or until 2014. In order to grant the extension, the City Council must find that the project would not adversely affect public health or safety and would not substantially conflict with any applicable Zoning Code or Comprehensive Plan changes that have been adopted by the City Council since the original application was deemed complete, and may otherwise adjust project conditions to address minor changes. These findings can be made as the project does not adversely affect public City of Palo Alto Page 4 health or safety and there have been no substantive zoning changes in this area. The applicant intends to move forward with construction prior to the 2014 expiration of the extended Site and Design Review approval. Policy Implications This is the second request received, pursuant to Ordinance 5061, for an extension of a City Council Site and Design Review Approval that has required a Commission and Council review and action. Permit extensions of Director’s decisions have been approved at the Director’s level. The only other request for extension of a Council approved project was the Site and Design Review extension for the hotel project on the Ming’s restaurant site. Comprehensive Plan The Comprehensive Plan designation for site is designated Streamside Open Space because of its proximity to Los Trancos Creek. A very small portion of the southeast corner of the property is designated Open Space/Controlled Development, which does allow for single family uses. The intent of the Streamside Open Space designation is to protect the corridor of riparian vegetation along natural streams. The corridor can vary in width up to 200 feet on either side of the center line of the creek. The project has been designed to protect and enhance the riparian corridor and the project includes the construction of an earthen berm to clearly delineate and protect the riparian corridor along a 50-foot setback from the top of bank. No other work is proposed within the riparian corridor. No buildings are proposed within the riparian corridor. The applicant has developed a planting plan that is non-invasive and compatible with the riparian and rural nature of the site. The applicant is maintaining most of the existing trees onsite. The proposed berm will help protect the corridor by defining a line between developable and undevelopable areas. Application of the maximum 200-foot open space buffer allowed under the Streamside Open Space designation would render the site undevelopable. The Comprehensive Plan provides for flexibility in the corridor width because it recognizes that conditions will vary site to site. Because the project was designed to protect and enhance the Los Trancos Creek riparian corridor, it has been deemed to be consistent with the designation. The Open Space/Controlled Development land use designation allows residential densities from 0.1 to 1 dwelling unit per acre. Adjacent surrounding land uses are residential uses on large parcels. Given the proposed design of the project, which minimizes potential effects to the surrounding uses (residential), it is compatible with all adjacent development. The project is considered consistent with Comprehensive Plan Open Space policies and the land use designation of Streamside Open Space. City of Palo Alto Page 5 Comprehensive Plan Program N-7 of the Natural Environment Element provides policy to protect natural creeks. The policy states that the City should adopt regulations to prohibit structures, ornamental landscaping or outdoor active area within 100 feet of the top of a creek bank. However, it states that passive or intermittent outdoor activities and pedestrian, equestrian and bicycle pathways where there are adequate setbacks to protect the riparian vegetation. A border of native riparian vegetation should be planted at least 25 feet along the creek bank. The project is consistent with Program N-7 in that it protects and enhances the creek and riparian habitat. Although a portion of the building is within 70 feet of the top of the Los Trancos Creek bank, the majority of the development occurs outside of the 100 foot setback from the top of bank. The applicant proposes to construct a natural earth berm along the 50-foot setback line from the top of the Los Trancos Creek bank to protect and enhance the existing riparian corridor between the berm and the creek. Conditions of approval require that native riparian vegetation replace invasive species at least 50 feet along the Los Trancos Creek bank and planting of native riparian vegetation at least 25 feet from the Buckeye Creek top of bank. The building is also located more than 100 feet beyond the top of the Buckeye Creek bank. Attachment G provides in detail the project’s compliance with the 12 applicable development criteria for Program N-7. Criterion 13 does not apply because the project site is located with the Palo Alto city limits. The Stream Corridor Protection Ordinance adopted in 2007 in response to the Program N-7 recognized that flexibility to determine the minimum riparian setback from the top of a creek bank was warranted. It identifies a slope stability protection area that is smaller than the 100 feet minimum from the Comprehensive Plan. The regulation states that development shall be located outside of the slope stability protection area, which is within 20 feet landward from the top of bank or to a point measured at a ratio of 2:1 landward from the toe of bank. Lesser setbacks are appropriate as long as the creek and riparian corridor are protected. The applicant proposes no development within 50 feet from the top of Los Trancos Creek bank, which allows for the protection of the riparian corridor and creek. The project also includes carefully chosen native and noninvasive plant species consistent with the ordinance. Program N-7 also recognizes that flexibility can be granted to existing development within 100-feet setback. Although the site was vacant, the City granted the property the ability to be developed with a residential use. The lot’s odd triangular shape and two creeks limit development. The policy allows development within the 100 feet provided where the redevelopment is designed to be consistent with basic creek habitat objectives and improve the condition. The applicant designed the home to ensure protection and enhancement of the creek. Timeline The extension request is tentatively scheduled to go to City Council in June 2013. Environmental Review City of Palo Alto Page 6 A Mitigated Negative Declaration for this project was adopted by the Council on June 21, 2010. Courtesy Copies Mark Conroe Attachments: Attachment A: Extension ROLUA (PDF) Exhibit 1: 805 Los Trancos RLUA final (PDF) Attachment B: 03.24.10 P&TC Staff Report and Minutes (PDF) Attachment C: 05.19.10 P&TC Staff Report and Minutes (PDF) Attachment D: MND (PDF) Attachment E: Location Map (PDF) Attachment F: Applicant Letter (PDF) Attachment G: Open Space Development Criteria (PDF) Attachment H: Ordinance 5061 Permit Extension (PDF) 1 APPROVAL NO. 2013-________ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 805 LOS TRANCOS ROAD: File 13PLN-00185 EXTENSION OF COUNCIL APPROVAL OF SITE AND DESIGN (Extension of Site and Design Review of FILE 04IPT-2217) (Langenskiold Family Trust, OWNERS) At its meeting on _________,2013, the Council of the City of Palo Alto approved the requested Extension of its Site and Design Review for a new 11,184 square foot single family home and site modifications to residential property at 805 Los Trancos Road in the City’s Open Space District (“the Property”), making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On June 22, 2010, City Council approved the Site and Design Review application by Mark Conroe for construction of an 11,184 square foot single family home and site modifications (The Project”) (Exhibit 1, Record of Land Use Action 2010-6). A request for extension was filed on April 30, 2013 to extend the Site and Design Review Approval for an addition, final year, in accordance with Ordinance 5061. B. The Planning and Transportation Commission reviewed the extension request on June 12, 2013, and recommended approval of the extension. C. The City Council finds that the project would not adversely affect public health of safety and would not substantially conflict with any applicable Zoning Code or comprehensive changes that have been adopted by the City Council since the original application was deemed complete. SECTION 2. Environmental Review The City as the lead agency for the Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA) under Guideline section 15070, Decision to Prepare a Negative or Mitigated Negative Declaration. An environmental impact assessment was prepared for the project and it was determined that, with the implementation of mitigation measures, no potentially adverse impacts would result from the development, therefore, the project would have a less than significant impact on the environment. The 2 original Mitigated Negative Declaration was made available for public review beginning February 19, 2010 through March 10, 2010. A revised Mitigated Negative Declaration was prepared, advertised and circulated for 30 days beginning March 5, 2010. The Environmental Impact Assessment and Mitigated Negative Declaration are attached in CMR: 277:10. SECTION 3. Site and Design Review Permit Extension Finding The project would not adversely affect public health or safety and would not substantially conflict with any applicable Zoning Code or Comprehensive Plan changes that have been adopted by the City Council since the original application was deemed complete, and may otherwise adjust project conditions to address minor changes. These findings can be made as the project does not adversely affect public health or safety and there have been no substantive zoning changes in this area. The applicant intends to move forward with construction as originally approved prior to the 2014 expiration of the extended Site and Design Review approval. SECTION 4. Site and Design Approvals Granted Site and Design Approval is granted by the City Council under Palo Alto Municipal Code (PAMC) Section 18.82.070 for application 04IPT-2217, subject to the conditions of approval in Section 8 of this Record. SECTION 5. Plan Approval The plans submitted for Building Permit shall be in substantial conformance with those plans prepared by BKF, Devon Construction Incorporated, Heacox Associates Landscape Architects, and Lea and Braze Engineering Inc. titled “Langenskiold Family Trust 805 Los Trancos Road”, consisting of 15 pages, dated received on April 28, 2010,except as modified to incorporate these conditions of approval. A copy of these plans is on file in the Department of Planning and Community Development. These conditions of approval shall be printed on the cover sheet of the plan set submitted with the Building Permit application. SECTION 6. Indemnity To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”)from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized 3 hereby for the Project, including (without limitation) reimbursing the City its actual attorneys fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. SECTION 7. Conditions of Approval The same conditions of Council approval in Exhibit 1 shall apply to the extended Approval. SECTION 8. Fees, Dedications or other Exactions The California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90- DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. SECTION 9. Judicial Review This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. SECTION 10. Term of Approval Site and Design Approval. In the event actual construction of the project is not commenced within one year of the date of City Council approval, the approvals shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.82.080 and Ordinance 5061. PASSED: AYES: 4 NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: 1. Those plans prepared by BKF, Devon Construction Incorporated, Heacox Associates Landscape Architects, and Lea and Braze Engineering Inc. titled “Langenskiold Family Trust 805 Los Trancos Road”, consisting of 15 pages, dated received on April 28, 2010, and landscape plans prepared by Heacox Associates Landscape Architects titled “Langenskiold Family Trust”, dated received April 28, 2010. TO: FROM: PLANNING & TRANSPORTATION DIVISION STAFF REPORT PLANNING & TRANSPORTATION COMMISSION Lorraine Weiss, Contract Planner Elena Lee, Senior Planner DEPARTMENT: Planning and Community Environment AGENDA DATE: March 24, 2010 SUBJECT: 805 Los Trancos Road [04IPT-2217]: Request for Site and Design review of a new 11,184 square foot single family home. Environmental Review: An Initial Study has been completed and a Draft Mitigated Negative Declaration has been prepared for this project in accordance with the California Environmental Quality Act (CEQA) requirements. Zone District: Open Space (OS). RECOMMENDATION Staff recommends that the Planning and Transportation Commission (PTC) review the Open Space home plans, take public testimony and recommend that the City Council adopt the Mitigated Negative Declaration (Attachment C) and approve the Site and Design Review application for a new home in the OS (Open Space) Zone District based upon the Open Space Design Criteria and the Site and Design findings and subject to the recommended conditions of approval in the Record of Land Use Action (Attachment B). BACKGROUND The application was submitted on May 7, 2004 and in review since then. There have been on- going discussions about the Open Space Zoning district development standards since then. However, the project is subject to the development standards in effect at the time of the application submittal. Per Palo Alto Municipal Code (PAMC) Chapter 18.28.070(k), any substandard lot that was a lawfully buildable site on July 5, 1972 would be considered a developable site. The subject site has been a legal parcel since the 1850s prior to incorporation into the City of Palo Alto, and therefore would be allowed to be developed. Si te Information The 3.55 acre vacant project site is located in the Palo Alto Foothills. The site is located in an area predominately characterized by publicly and privately owned open space. The Open Space Zoning designation recognizes the foothills' scenic and rural quality. In fact, the site was City of Palo Alto Page 1 previously used as farmland and some of the olive trees originally planted for the farm still exist on site. The site is currently vacant. The property is bordered by Los Trancos Creek to the west and the Town of Portola Valley beyond, Los Trancos Road to the north and east, and a vacant parcel to the south, as shown on the attached location map (Attachment A). Views from the portion of the site to be improved and constructed on are to the west towards Portola Valley. A snlall segment of Buckeye Creek traverses a narrow center portion of the site, which eventually connects to Los Trancos Creek offsite to the west. The creek originally ran along the southern boundary of the property to connect with Los Trancos Creek. However, approximately 50-80 years ago, a concrete culvert was constructed southeast of the site to artificially redirect the creek, which is why the current alignment is considered a bypass. Buckeye Creek measures approximately three to five feet in width, measured to the top of bank and is subject to minor modification as part of this project. Due to the small size of the creek, the dominant riparian habitat is along Los Trancos Creek. Project Description The proposed project is the construction of a new two-story, 11,184-square foot single-family home (which includes the garage and basement areas) on the 3.5 acre undeveloped site, an access drive fronl Los Trancos Road, amenities including an 18 feet wide by 75 feet long swimming pool, and landscaping improvements (see Attachment I, page A-O). The new driveway would be located on the northeastern portion of the property and was originally used as a driveway when the site was an active farm. The improvements also include construction of a small five-foot wide by two-foot high culvert to allow for Buckeye Creek to continue to flow undisturbed under the new driveway and through the site. The remainder of the creek will be maintained undisturbed. The applicant will be required to obtain permits from state agencies that regulate the watershed, including the Department of Fish and Game. The honle is to be located on a relatively flat and open area of the site, approximately 70 to 120 feet from the top bank of the Los Trancos Creek and 190 feet from the top of bank of Buckeye Creek. All other elements of the development would be located at least 50 feet from the top of the Los Trancos creek bank. Passive landscaped open space and fencing is proposed approximately 20 feet from Buckeye Creek. The applicant has been working carefully with the planning arborist on the landscaping plans for several years. Trees The tree survey prepared for the site found 54 trees onsite. One oak tree fell during a storm in December 2009 and was removed from the site. There are 13 remaining protected trees, but no protected trees are proposed for removal. The applicant proposes to remove two dead trees (bay and willow) and seven other trees (three bays, one willow, one walnut and two olive) due to poor health and to accommodate the new driveway or other fill area. The applicant proposes to plant twenty-six new trees around the residence. New landscaping will consist of native grasses and non-invasive trees, grape vines and shrubs. Only four ornamental trees are proposed to be planted within the new courtyard at the back of the building. A condition of approval would require that no ornamental vegetations be planted within 100 feet of the top of the Los Trancos Creek bank. Two canary island date palm trees are proposed to be planted at the center of the site, outside of the 100-foot riparian zone. New landscaping 100 feet from the top of bank of Los Trancos Creek and 25 feet from Buckeye Creek will be fire retardant and conlpatible with the riparian and rural environment. City of Palo Alto Page 2 Riparian Corridor The applicant proposes to construct a natural earth berm, two to three feet in height, along the 50 feet top of back setback area to clearly define and protect what would be the undisturbed riparian corridor. No landscaping changes, or other activity, are proposed between the berm and Los Trancos Creek. Between fifty and 100 feet of the top of the Los Trancos Creek bank, the applicant proposes minimal grading and landscaping consistent with the rural character of the area. All vegetation in this area would be native, drought resistant landscaping materials. Other than the culvert used to allow Buckeye Creek to continue flow undisturbed under the new driveway, no changes are proposed to Buckeye Creek. No improvements are proposed to the north side of the creek. The applicant also proposes to maintain the existing condition on the first twenty feet on the south side of the creek. Grading Minimal grading (5 cubic yards of cut, 625 cubic yards of fill) would be needed as the chosen site area for the proposed structure is primarily flat. A majority of the grading work will be done for the building pad, swimming pool, culvert for Buckeye Creek and where the driveway meets Los Trancos Road, all located at least 70 feet from the top of the Los Trancos Creek bank. Materials and color have been chosen to be compatible with the natural surroundings of the site. A condition of approval will require the applicant to obtain and submit all required permits or letters stating permits are not required from outside agencies, including the Department of Fish and Game and the US Army Corps of Engineers, for the proposed culvert and creek work as appropriate. Commission Purview All sites in the Open Space district are subject to the Site Design and Review COIIlbining District regulations (Per the City of PAMC Chapter 18.28.070(b). In this case, a Site and Design review is required because the proposal includes the construction of a new residence that must be evaluated for consistency with the intent and review criteria of the Open Space Zoning District regulations. The purview of the PTC is to review the project plans to ensure the project meets the Site and Design Review approval findings, the Open Space zoning regulations and the Comprehensive Plan. The PTC is to recommend approval, approval with suggested changes or denial, based on whether site and design approval findings can be made. The Record of Land Use Action provides draft findings. SUMMARY OF KEY ISSUES The proposed residence meets the standards for development in the Open Space Zoning District and nearby creeks that were applicable at the time the application was submitted in 2004. The project's compliance with the updated open space standards of 2009 are shown in Table 1 (Attachnlent F) for comparison purposes. Though the project application was not deemed complete in 2004, the City'S practice has been to allow projects submitted to follow development standards in place at the time of submittal. The application was submitted prior to the adoption of PAMC Chapter 18.40.140 Stream Corridor Protection section, but the project was designed to be consistent with these requirements. The City's Green Building requirements and development impact fees are applicable. The applicant has submitted a Build-it-Green checklist (Attachnlent E) and has confirmed that the intention is to meet the Green Building requirement. City of Palo Alto Page 3 Development Visibility Site development will occur on the southern portion of the site, which will leave it potentially visible from the slopes located to the west of the site towards Portola Valley. It is not anticipated to be visible from public open space. Views from neighboring slopes to the east and south will be minimal, given the dense screening that would be directly adjacent to the home, which would be intermittently visible through the existing foliage and trees from the adjacent Los Trancos Road. Twenty-six trees are proposed to be planted around the residence, increasing landscape screening and reducing visibility from public roads. The residence would be set back a minimum of 120 feet away from Los Trancos Road. Story poles have been erected on the site to indicate the proposed construction, for the benefit of the public and P&TC in their consideration of the project. Photos illustrating the visibility of the story poles from Los Trancos road have been provided in Attachment D by the applicant. The building materials have been chosen to blend with the natural surroundings. A light-colored natural stone would be used for the base of many of the permeable areas that surround the home. Muted, natural colors have been chosen for both the siding and stucco that would constitute the majority of the wall areas that may be visible from both on and off-site. A treated and stained wood has been selected for all doors, window frames and railings that should help reduce the reflectivity of these elements. A non-reflective Spanish style clay tile, in keeping with the overall architectural theme of the home, has been chosen as the roof material to mitigate any sun reflection that may naturally arise at given times during the daylight hours. Riparian Setback and Landscaping The applicant has worked with planning staff and the planning arborist to develop a plan that would protect and enhance the Los Trancos Creek riparian corridor and Buckeye Creek while allowing the development of a residence and an appropriate planting plan. As previously stated, the application was submitted prior to the 2007 adoption of the Stream Corridor Protection chapter which regulates streamside development including identifying setbacks for development. However, the applicant has worked with staff to be consistent with the intent of those regulations. The purpose of this chapter is to preserve riparian resources and most importantly the area within 50 feet of the top of the creek bank. The applicant is proposing to construct a protective natural earth berm to make distinct the existing riparian corridor at the fifty feet setback along Los Trancos Creek. There is no work proposed between the berm and the creek, maintaining a natural riparian corridor. However, because this area has been impacted by invasive vegetation, a condition of approval would require the applicant to work with staff to replace the invasive vegetation with natural riparian species. On the other side of the berm, the applicant is proposing landscaping that is compatible with the rural character of the property. All plant materials would be non-invasive and fire retardant species. The residence would be placed 70 to 130 feet from the top of Los Trancos Creek. The applicant is also proposing minimal work for Buckeye Creek and its immediate surroundings. The only work proposed is the installation of a culvert to allow the driveway to be constructed above without changing the location of the creek or its flow direction. The applicant is proposing work only on one side of Buckeye Creek. On the south side of Buckeye Creek, a condition of approval requires relocation of the fence to at least 25 feet from the top of bank. The first 25 feet would be planted only with native riparian plant materials. No activity, other than restorative plantings, would occur twenty feet landward from the top of bank of either creek. All plant materials have been carefully City of Palo Alto Page 4 reviewed by staff for compatibility with the habitat. Overall, the project would enhance the riparian corridor by creating a distinct riparian area and replacing invasive species with more compatible ones. Impervious Areas Consistent with the regulations of the Open Space District, a maximum of 5,407 sq. ft. or 3.5% of impervious surfaces are proposed with this project. All driveway surfaces, as well as the majority of walkways and outdoor areas, would remain either natural or make use of permeable materials, such as gravel. The patio areas directly adjacent to the residence would be constructed of pavers that would be at least 75% permeable. The area of permeable materials, regardless of percentage of permeability, is not counted toward impervious coverage. The swimming pool is also not counted against the impervious coverage maximum. A detailed break-down of the proposed impervious areas can be found on sheet A-O of Attachment I. The project would not exceed the maximum impervious area permitted in pre-2009 open space regulations. Open Space Development Criteria Section 18.28.070(0) of the Palo Alto Municipal Code (PAMC) requires that the Open Space Development Criteria be used by the Planning and Transportation Commission and City Council to evaluate the proposed project. These criteria are set forth below, followed by analyses of the project's compliance with them: 1. The development should not be visually intrusive from public roadways and public parklands. As much as possible, development should be sited so it is hidden from view. The proposed construction would not be visible from any identified view sheds (map L-4 of the Palo Alto Comprehensive Plan). The project is located directly adjacent to Los Trancos Road, and is screened from Los Trancos Road by a dense canopy of existing trees and shrubs. Visibility from Los Trancos Road is anticipated to be intermittent at most based on visual study from story pole placement. During the spring, visibility would be reduced due to the deciduous trees gaining more foliage. It is not expected that this project would be visible from any public parklands. 2. Development should be located away from hilltops and designed to not extend above the nearest ridge line. The proposed house would be located in a valley floor and not located near any ridges. 3. Site and structure design should take into consideration impacts on privacy and views of neighboring properties. Given the proposed house location at the bottom of a narrow valley, the privacy impacts from this development on neighboring residences would be minimal. Additionally, the dense perimeter screening would reduce visibility of the development from off-site to a less than significant impact. 4. Development should be clustered, or closely grouped, in relation to the area surrounding it to make it less conspicuous, minimize access roads, and reduce fragmentation of natural habitats. The proposed site improvements would be located at one end of the existing flat meadow area to keep development at one part of the property and to maximize the distance of development from Los Trancos Road. City of Palo Alto PageS 5. Built forms and landscape forms should mimic the natural topography. Building lines should follow the lines of the terrain, and trees and bushes should appear natural from a distance. The landscape plan calls for maintaining the majority of existing natural landscaping and trees. The house would be built at existing grade, which is flat. 6. Existing trees with a circumference of 37.5 inches, measured 4.5 feet above the ground level, should be preserved and integrated into the site design. Existing vegetation should be retained as much as possible. The majority of the trees on-site would be preserved. The tree survey prepared for the site found 54 trees onsite, including fourteen protected trees. One protected oak tree (Tree #21) fell during a storm in December 21,2009 and was removed from the site. But no protected trees are proposed for removal. The applicant proposes to remove two dead trees (bay and willow) and seven other trees (three bay, one willow, one walnut and two olive) due to poor health and to accommodate the new driveway or other fill area. Eight other trees that are in or near proposed driveway or are in potential fill area are proposed to be relocated onsite. The fallen tree has been removed from the site. The applicant will be required to work with City staff, including the City Arborist, to ensure that existing trees and landscaping are maintained and that new landscaping will be consistent with the existing and the project will be conditioned to protect existing trees that are proposed to be preserved. 7. Cut is encouraged when it is necessary for geotechnical stability and to enable the development to blend into the natural topography. Fill is generally discouraged and should never be distributed within the driplines of existing trees. Locate development to minimize the needfor grading. The project is located on a relatively flat meadow (with approximately three percent slope from Los Trancos Road towards Los Trancos Creek). Thus, very little cut (five cubic yards) or fill (625 cubic yards) would be required. No fill is proposed within the dripline of any trees. 8. To reduce the needfor cut andfill and to reduce potential runoff, large, flat expanses of impervious surfaces should be avoided. There are no large expansive areas of impervious surface proposed with this project. Impervious surfaces would be mainly used for the building's concrete foundation. 100% permeable surfaces (decomposed granite) are proposed for the driveway. All other permeable surfaces would be at least 75% permeable. 9. Buildings should use natural materials and earth tone or subdued colors. Natural building materials in earth tones are proposed. All proposed building materials are natural with earth tone colors that would blend with the surroundings. Conditions of approval require non-reflective roofing and window surfaces. 10. Landscaping should be native species that require little or no irrigation. Immediately adjacent to structures, fire retardant plants should be used as a fire prevention technique. The proposed landscaping incorporates a large number of native species plantings which would minimize the need for irrigation. The conditions of approval will ensure the use of fire retardant plants. All other plants are compatible and non-invasive to the rural nature of this site. City of Palo Alto Page 6 11. Exterior lighting should be low-intensity and shielded from view so it is not directly visible from off-site. Conditions of approval will require that lights be low-intensity and shielded from view to ensure that off-site lighting impacts are minimized. 12. Access roads should be of a rural rather than urban character. (Standard curb, gutter, and concrete sidewalk are usually inconsistent with the foothills environment.) The proposed driveway consists of decomposed granite and no curb, sidewalk or gutters. A copy of these criteria can also be found attached into the Record of Land Use Action (Attachment B). Site and Design Findings Section 18.030(G).060 of the PAMC requires the Commission to review the project and recommend approval or changes such that the project is compatible with the following Site and Design findings: 1. To ensure construction and operation of the use in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. City standards and regulations will help to ensure that the use, or operation, of the site will be conducted in a manner that is compatible with the single-family uses located in the immediate area. The project would also be consistent with the Open Space Development Criteria and compatible with the general area. During construction, it is expected that there will be temporary impacts to the area in terms of construction-related noise, dust/debris and traffic. These impacts will be offset by applicable City construction standards, such as restrictions on hours of constructioIi, the City's noise ordinance, and the mitigation measures found in the attached draft Mitigated Negative Declaration (Attachment C). 2. To ensure the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. As this site is located in and surrounded by single-family uses, the addition of a new single family residence on the vacant lot should not reduce the overall desirability of the immediate area. Single family homes are expressly permitted in the Palo Alto Municipal Code, and can be found on other nearby Open Space (OS) properties, such as 810 Los Trancos Road. 3. To ensure that sound principles of environmental design and ecological balance shall be observed. This application was subject to an environmental impact assessment (EIA), and it was determined that with appropriate mitigation measures, detailed in the attached Mitigated Negative Declaration (Attachment C), there will be no significant environmental impacts associated with the proposed development. 4. To ensure that the use will be in accord with the Palo Alto Comprehensive Plan. Per the above discussion, this project will be in compliance with the intent of the Palo Alto Comprehensive Plan and applicable Open Space policies as they relate to development in the Open Space areas of the City. The project was also designed to be consistent with the Open Space Development Criteria findings. City of Palo Alto Page 7 The proposed findings are incorporated into the Record of Land Use Action (Attachment B). POLICY IMPLICATIONS Comprehensive Plan The Comprehensive Plan designation for site is designated Streamside Open Space because of its proxinlity to Los Trancos Creek. A very small portion of the southeast comer of the property is designated Open Space/Controlled Development. The intent of the Streamside Open Space designation is to protect the corridor of riparian vegetation along natural streams. The corridor can vary in width up to 200 feet on either side of the center line of the creek. The project has been designed to protect and enhance the riparian corridor and the project includes the construction of an eal1hen beml to clearly delineate and protect the riparian corridor along a 50-foot setback from the top of bank. No other work is proposed within the riparian corridor. No buildings are proposed within the riparian corridor. The applicant has developed a planting plan that is non-invasive and compatible with the riparian and rural nature of the site. The applicant is maintaining most of the existing trees onsite. The proposed berm will help protect the corridor by defining a line between developable and undevelopable areas. Application of the nlaximum 200-foot open space buffer allowed under the Streamside Open Space designation would render the site undevelopable. The Comprehensive Plan provides for flexibility in the corridor width because it recognizes that conditions will vary site to site. Because the project was designed to protect and enhance the Los Trancos Creek riparian corridor, it has been deemed to be consistent with the designation. The Open Space/Controlled Development land use designation allows residential densities from 0.1 to 1 dwelling unit per acre. The site has a Zoning Designation is OS (Open Space District). Single family dwellings are a permitted use in the OS District. Adjacent surrounding land uses are residential uses on large parcels. Given the proposed design of the project, which minimizes potential effects to the surrounding uses (residential), it is compatible with all adjacent development. The project is considered consistent with Comprehensive Plan Open Space policies and the land use designation of Streamside Open Space. Comprehensive Plan Program N-7 of the Natural Environment Element provides policy to protect natural creeks. The policy states that the City should adopt regulations to prohibit structures, ornamental landscaping or outdoor active area within 100 feet of the top of a creek bank. However, it states that passive or intermittent outdoor activities and pedestrian, equestrian and bicycle pathways where there are adequate setbacks to protect the riparian vegetation. A border of native riparian vegetation should be planted at least 25 feet along the creek bank. The project is consistent with Program N-7 in that it protects and enhances the creek and riparian habitat. Although a portion of the building is within 70 feet of the top of the Los Trancos Creek bank, the majority of the development occurs outside of the 100 foot setback from the top of , bank. The applicant proposes to construct a natural earth berm along the 50-foot setback line from the top of the Los Trancos Creek bank to protect and enhance the existing riparian corridor between the berm and the creek. A condition of approval would require that native riparian vegetation replace invasive species at least 50 feet along the Los Trancos Creek bank. A condition of approval would require the applicant to plant native riparian vegetation at least 25 feet from the Buckeye Creek top of bank. This will require the applicant to move a fence five City of Palo Alto Page 8 feet southerly towards the house. The building is also located more than 100 feet beyond the top of the Buckeye Creek bank. The Stream Corridor Protection Ordinance adopted in 2007 in response to the Program N7 recognized that flexibility to determine the minimum riparian setback from the top of a creek bank was warranted. It identifies a slope stability protection area that is smaller than the 100 feet minimum from the Comprehensive Plan. The regulation states that development shall be located outside of the slope stability protection area, which is within 20 feet landward from the top of bank or to a point measured at a ratio of 2: 1 landward from the toe of bank. Lesser setbacks are appropriate as long as the creek and riparian corridor are protected. The applicant proposes no development within 50 feet from the top of Los Trancos Creek bank, clearly providing for the protection of the riparian corridor and creek. The project also includes carefully chosen native and noninvasive plant species consistent with the ordinance. Program N-7 also recognizes that flexibility can be granted to existing development within 100-feet setback. Although the site was vacant, the City granted the property the ability to be developed with a residential use. The lot's odd triangular shape and two creeks limit development. The policy allows development within the 100 feet provided where the redevelopment be designed to be consistent with basic creek habitat objectives and improve the condition. The applicant has worked closely with staff to develop a project to meet the objectives of designing a house while protecting and enhancing the creek. Zoning 805 Los Trancos is in the Open Space District (OS), regulated by the Palo Alto Municipal Code (PAMC) Chapter 18.28. The OS district is intended to: protect the public health, safety, and welfare; protect and preserve open space land as a limited and valuable resource; permit the reasonable use of open space land, while at the same time preserving and protecting its inherent open space characteristics to assure its continued availability for the following: as agricultural land, scenic land, recreation land, conservation or natural resource land; for the containment of urban sprawl and the structuring of urban development; and for the retention of land in its natural or near-natural state, and to protect life and property in the community from the hazards of fire, flood, and seismic activity; and coordinate with and carry out federal, state, regional, county, and city open space plans. Single-fan1ily uses are permitted in this zone district and the project would maintain open space characteristics of the site. The proposed residence meets the standards for development in the Open Space Zoning District and nearby creeks that were applicable at the time the application was submitted in 2004. Though the project application was not deemed complete in 2004, the City's practice has been to allow projects submitted to follow development standards in place at the time of submittal. Although the application was also submitted prior to the adoption of PAMC Chapter 18.40.140, the Stream Corridor Protection standards, those standards have been used as a guide for this project design. TIMELlNE If the P&TC recommends approval or approval with conditions, the project application will be forwarded to the City Council for final action upon conclusion of the 30-day CEQA public review period. Architectural Review Board (ARB) approval is not required for developing one single-family residence (or accessory facilities) in the Open Space district. City of Palo Alto Page 9 ENVIRONMENTAL REVIEW The project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA). An environmental impact assessment was prepared for the project and staff detennined that, with the implementation of mitigation measures, no potentially adverse impacts would result from the development, and therefore, the project would have a less than significant impact on the environment. The original Mitigated Negative Declaration was initially made available for public review beginning February 19, 2010 through March 10, 2010. The Mitigated Negative Declaration, revised to provide a more detailed description and address the Buckeye Creek culvert component of the project, was advertised and re-circulated on March 5 for 30 days (period ends April 5, 2010). The revised version is attached to this staff report (Attachment C). Summarized below are the mitigation measures, which were not modified, and can be found in the Mitigated Negative Declaration: Mitigation.Measure D-I: Removal of anyon-site trees shall be conducted between September 1 and February 1 to avoid roosting bats and nesting migratory birds. If tree removal must be conducted outside this period, a survey of the tree must be performed by a qualified biologist. Should any species be found, an exclusion zone with a radius to be detennined by project biologist, but no less than 50 feet, should be established. Mitigation Measure F -I: In1plementation of the construction techniques and erosion control measures required by the City of Palo Alto Public Works Department and requirements listed in the Geotechnical Investigation prepared by Murray Engineers, Inc. (dated September 2007) wo~ld reduce the geotechnical impacts to a less than significant level. Such measures include: • A grading pennit will be required. Include a table on the 'site plan showing the quantities of cut and fill. • The plan set must include a grading and drainage plan prepared by a licensed professional that includes existing and proposed spot elevations and drainage flow arrows to demonstrate proper drainage of the site. Adjacent grades must slope away from the house a minimum of 2%. Downspouts and splash blocks should be shown on this plan, as well as any site drainage features such as swales, inlets and outlets. Condition of Approval: The revised Mitigated Negative Declaration has noted that a condition of approval has been incorporated into the project that would require the applicant to obtain other agency approvals for any construction activity or changes to Los Trancos Creek or Buckeye Creek. ATTACHMENTS: Attachment A: Location Map Attachment B: Draft Record of Land Use Attachment C: Mitigated Negative Declaration Attachment D: Photos of Story Poles * Attachment E: Green Building Checklist Attachn1ent F: Zoning Compliance Table Attachment G: Project Description Letter* Attachment H: Correspondence Attachment I: Site Plans (Commissioners only)* City of Palo Alto Page 10 *Prepared by Applicant COURTESY COPIES: Mark Conroe, applicant Langenskiold Family Trust, Property OwnerlMarc Zucker Trustee, 2310 Middlefield Avenue, Palo Alto, CA 94301 PREPARED BY: REVIEWED BY: Lorraine Weiss, Contract Planner Elena Lee, Senior Planner Amy French, Manager of Current Planning DEP AR1MENTIDIVISION HEAD APPROV AL:~ ~~1 ~IW':"'\. Curtis Williams, Director City of Palo Alto Page 11 1 Planning and Transportation Commission 1 Verbatim Minutes 2 March 24, 2010 3 4 EXCERPT 5 6 805 Los Trancos Road*: Request by Mark Conroe, on behalf of Langenskiold Family Trust, for 7 Site and Design Review of a new 11,184 sq. ft. single family home at 805 Los Trancos Road. 8 Environmental Assessment: An Initial Study and Draft Mitigated Negative Declaration have 9 been prepared in accordance with California Environmental Quality Act (CEQA) requirements. 10 Zone District: Open Space (OS). 11 12 Ms. Elena Lee, Senior Planner: Thank you Chair Garber. The Site and Design Review 13 application was submitted in 2004 and is therefore subject to the zoning ordinance in effect at 14 that time. The applicant proposes to construct a new two-story residence with a basement, 15 swimming pool, and landscaping. 16 17 The project includes grading for a driveway and the home site, installing a culvert for the flow of 18 the intermittent Buckeye Creek under the driveway, constructing a berm along Los Trancos 19 Creek, and restoring the Los Trancos Creek bed riparian vegetation. The applicant has worked 20 closely with the City’s Arborist to develop a landscaping and riparian restoration plan. The 21 grading and drainage plan, on plan Sheet C-2 and ER-1indicated approximately five cubic yards 22 of cut and 625 cubic yard of fill are proposed. Grading will raise the terrain for the home by an 23 average of four feet. A more specific statement about existing and proposed grading levels is 24 provided in Staff’s answer to Commissioner Martinez’s email questions. 25 26 An initial study and Mitigated Negative Declaration has been circulated for the required 30-day 27 public comment period starting March 5, 2010. Copies of the study were routed to State 28 Clearinghouse for distribution and Staff also sent additional copies to the State Department of 29 Fish and Game, the State Water Quality Control Board, the Town of Portola Valley, and the 30 Midpeninsula Regional Open Space District to expedite review. Staff has not yet received 31 comments from Fish and Game and the Water Board agencies, however, Fish and Game has 32 indicated they will be submitting comments within the 30-day comment period. Staff has 33 worked with the applicant and Portola Valley and the Open Space District to share information 34 and address their concerns regarding potential wildlife impacts and visual impacts to Portola 35 Valley. The applicant has modified the project changing the palm tree species from Canary 36 Island Palm to the lower growing Sabal Palmetto and removing a large amount of fencing along 37 Los Trancos Road and Buckeye Creek introducing barriers within an established animal 38 crossing. The Town of Portola Valley and the Midpeninsula Open Space District have submitted 39 letters, which have been provided to you at places, stating they no longer have any objections to 40 either the project or the Mitigated Negative Declaration. 41 42 A letter was received today from a member of the public regarding biological resources and 43 significance findings sections of the Mitigated Negative Declaration. These letters are available 44 on the table in the back of the Chamber and to Commissioners. It is the Commissioners 45 discretion to either wait for feedback from Fish and Game and the Water Board before 46 forwarding a recommendation to Council or move the project forward and if necessary Staff 47 could revise and recirculate the Mitigated Negative Declaration depending upon the results of the 48 feedback. 49 2 1 Also provided at places are letters from the public received subsequent to the packet distribution. 2 Responses to Commissioner questions, including clarification on the Zoning Compliance Table, 3 Attachment F, clarifying regarding the projects conformance to the 2007 ordinance, a table 4 breaking down the impervious coverage, a context map showing parcel lines and owner names, 5 color copies of the story pole photos, and a table showing that the project is compliant with the 6 2007 Stream Corridor Protection Ordinance. 7 8 One of the Commissioners concerns is to ensure that visual impacts to public open space are 9 fully evaluated. Staff has carefully reviewed the topography of the area and consulted both with 10 the City’s Arborist, Dave Dockter, and the Supervisor for Open Space for Community Services 11 Department, Lester Hodgins. Both Staff members confirm that there will not be a visual impact 12 to any public open space areas. This is due to the hilly topography of both Foothills Park and 13 Arastradero Preserve, which are the only public open space areas proximate to the site. Also 14 because there is existing mature vegetation on site and the fact that the project is located within a 15 valley along with Los Trancos Creek the subject site is located too far away to provide 16 meaningful context via photo from the two open space areas. However, the applicant has 17 provided photos from areas in Foothill Park where the site would most likely be visible and that 18 has been made available at places. The photos confirm Staff’s assessment. The applicant has 19 also provided a color elevation and a color materials board here tonight. The elevations show the 20 use of darker colors and non-reflective materials to help it blend into the surroundings. 21 22 Staff recommends that the Commission provide comments and recommend to the City Council 23 to adopt the Mitigated Negative Declaration and approve the Site and Design Review 24 application. Both Staff including Dave Dockter and the applicant are available to answer 25 questions. This concludes Staff’s report. 26 27 Chair Garber: The applicant, would you like to make a presentation? You will have 15 minutes 28 if you would like. 29 30 Mr. Mark Conroe, representing the owner/applicant: Good evening honorable members of the 31 Planning Commission, City Staff, ladies and gentlemen. As Staff mentioned we have been in the 32 pipeline for awhile, about over four years. It has been a combination of a couple of things. First 33 of all just internal planning within our large family to figure out what we are going to build, and 34 second of all to do a thorough job we working with Dave Dockter revised the arborist report a 35 number of times and increased the scope of the tree survey over time. We are glad to be here 36 tonight. Staff has been great to work with, very responsive. Our goal is to have people embrace 37 this project, this home. 38 39 As is noted in the Staff materials it is a home that is 7,276 square feet of habitable area excluding 40 the basement, which is 2,691 that has storage and some equipment space as well as other uses, 41 but no windows, and then has a four-car garage. 42 43 We were able to dialogue with the Town of Portola Valley and the Midpeninsula Open Space 44 District when we go their comments a couple of days ago. We immediately got on the phone 45 with them and tried to address their concerns, in one case essentially eliminating effectively all 46 the fence, 97 percent of the fence, along Los Trancos Road to not inhibit the travel of deer or any 47 other animals. The Town of Portola Valley’s comments are really two-fold screening and palm 48 trees. On the screening we said we are happy to do additional screening if they would like. 49 3 They wanted us to do some offsite on our neighbor’s land between our land and Los Trancos 1 Road. We are happy to do that assuming our neighbor approves us planting trees on their land. 2 We have had some discussions with that neighbor and we think that they would give us 3 permission. That is really the Town of Portola Valley. Midpeninsula, I think you received their 4 letter. Their final paragraph I would like to read because I think it gives a fair assessment of the 5 project. I quote, “Although the project will add a built feature the size, location, design of the 6 project is in keeping with the surrounding rural residential area. Views into the project area are 7 undisturbed. The structure is visible in areas where the view shed is already impacted by 8 surrounding structures and is not visible in areas where there are no structures visible. No other 9 project concerns were identified. The District appreciates the efforts of the project proponent 10 and the City to reduce the project footprint and to provide continued public and agency review of 11 the project.” 12 13 What I would principally like to do is just answer questions as they come up. I think Staff has 14 done a fair assessment and again our goal was to go within the guidelines that were in place 15 when we started this process four years ago. It is sort of bad timing that this falls on the heels of 16 a meeting a couple of weeks ago on the recent Open Space dialog. So Staff has asked and we 17 provided materials comparing this project as if it was being reviewed under those standards and 18 it was close to being compliant. If we knew four years ago what was going to be passed six 19 months ago we probably would have made it compliant to the standards that were in the future. I 20 am open to answering any questions and I appreciate and ask for your support. 21 22 Chair Garber: Thank you. Commissioners, the process and procedures for this item we will use 23 the standard procedure here. We will go to Commissioner questions first, clarifying questions, 24 and then we will open it up to the public of which we have one speaker at the moment. Then we 25 will come back to discussion and action on the Commission’s part. 26 27 Mr. Conroe: Commissioner Garber, may I insert one remark. 28 29 Chair Garber: I’m sorry I thought you had finished. 30 31 Mr. Conroe: I was but I just forgot one comment, sorry. On the letter we received a few hours 32 ago from Mr. Stoecker the principle issue seems to be around Buckeye Creek, which flows 33 across our property at one point. We sort of anticipated and respect this as well as Los Trancos 34 Creek and have a 25 foot minimum setback to that Buckeye Creek as well as 50 foot to Los 35 Trancos Creek. A couple of years ago we thought for the driveway we thought putting in a 36 culvert was simpler. If it seemed to be or if Fish and Game thought bridging this instead of 37 disturbing the existing waterway was better to do, a bridge versus a culvert, we are agreeable to 38 that. That is acceptable to us. So that’s all. Thank you. 39 40 Chair Garber: Okay, thank you. So in any case, clarifying questions, public hearing, and then 41 back to the Commission. So Commissioner questions. I have lights from Commissioners Tuma 42 and then Lippert. 43 44 Vice-Chair Tuma: First, pursuant to our Commission policies I will disclose the fact that I 45 visited the site this morning and toured around. Mr. Conroe was there. We did have some 46 discussion that was mostly information that was contained in the Staff Report. Information that I 47 learned that is not in the Staff Report or other materials are things that I don’t think are relevant 48 but they are things like the types of people that used to inhabit that land, fruit trees and other 49 4 types of trees that used to be on the land, so a little bit of history about the area. Everything else 1 we discussed was information I think that is contained in the report. 2 3 So with that a few questions first of Staff. Do we have a deemed complete date on this 4 application? 5 6 Ms. Lee: I’m sorry give me just a few minutes to find that. 7 8 Chair Garber: Commissioner Tuma, perhaps while Staff is trying to find that maybe I can just 9 ask the other Commissioners if they have visited the site and/or have any other declarations. I 10 will go first. I too have met with the owner and walked the property, and had no questions or 11 other information with the exception of learning some more about the history was discussed at 12 that time. Commissioner Fineberg. 13 14 Commissioner Fineberg: I too toured the property. I had a brief conversation with the applicant. 15 The conversation was over the phone solely regarding access and he was not present during the 16 tour. So I did walk the property. 17 18 Chair Garber: Others? Commissioner Lippert. 19 20 Commissioner Lippert: I visited the site but I didn’t meet with the owner. It is actually on my 21 bicycle route and I was out there. 22 23 Chair Garber: Thank you. Commissioner Martinez. 24 25 Commissioner Martinez: I visited the site at the same time with Commissioner Fineberg. The 26 only company we had was a family of deer. 27 28 Chair Garber: All right, do we have an answer Staff? 29 30 Ms. Lee: Sorry about that. I guess it would be December 20, 2009. 31 32 Vice-Chair Tuma: Okay, thank you. There is something in the Record of Land Use Action, 33 page 16, Condition 19 referring to a proposed stone wall. Is that something that was proposed at 34 some point and now is not and has been replaced by something? I didn’t see anywhere where 35 there was a stone wall. 36 37 Mr. Conroe: I am not it has morphed over time. Currently what is being proposed is a type one 38 fence, which the bottom half of the five or five and a half foot fence is stone and the top half is 39 sort of a wood and mesh fence. 40 41 Vice-Chair Tuma: It is on page 16 of the Record of Land Use Action, Condition 39 and it refers 42 to a letter from Mr. Conroe received on February 26, 2010, stone wall. 43 44 Ms. Campbell: I think this was specifically regarding flooding and whether or not the existing – 45 do you recall? 46 47 Vice-Chair Tuma: What I understand is there is an earthen berm being proposed along the 48 backside dividing a portion of the property from the creek. But the stone wall? 49 5 1 Mr. Conroe: There is no berm proposed between Buckeye Creek and there is a berm between 2 the home and Los Trancos Creek. The location of the type one fence and Sheet L-2 it shows the 3 detail of type one fence, but from memory it is about a five and a half foot tall fence, the bottom 4 roughly three feet are stone and the top two and a half feet, the balance, are fence. We gave Staff 5 a copy and I have a copy of a picture of one of our neighbors’ fences that we are going to sort of 6 use for both the type one and type two fence to give people an idea of what it looks like, which I 7 can provide. 8 9 Vice-Chair Tuma: So the type one fence is essentially what surrounds most sides of the 10 structure, is that right? 11 12 Mr. Conroe: Type one yes, exactly. 13 14 Vice-Chair Tuma: Okay. If you have a photograph of that it would be helpful. So that first 15 three feet would be solid and wouldn’t allow for ingress or egress of any type of wildlife or 16 anything like that, correct? Okay. 17 18 Just for the record, the applicant responded off mike that the answer was correct. My statement 19 was correct. 20 21 Was interested if Staff had any comments --- 22 23 Mr. Conroe: That is currently located at 706 Los Trancos Road. 24 25 Vice-Chair Tuma: Sorry, I am confused. 26 27 Mr. Conroe: This would be the type two fence. So if you just put on the bottom where the mid-28 span is stone down there that is how the type one fence would look. 29 30 Vice-Chair Tuma: Got it, okay. Does Staff have any comments, or questions, or responses I 31 know we just received the letter from Mr. Stoecker. 32 33 Ms. Lee: Staff believes that we followed CEQA process. We have provided copies of initial 34 study and the Mitigated Negative Declaration to the State Clearinghouse. Usually we can wait 35 for the State Clearing House to submit the initial study but we went ahead and forwarded copies 36 to the Fish and Game. I have contacted Fish and Game and they have said that they are currently 37 reviewing it and will be submitting comments within the 30-day period. Staff has received 38 biotics reports and has used knowledge from the biotics report as well as Staff to complete the 39 initial study. We believe the initial study is accurate. However, we would wait for Fish and 40 Game to provide their technical analysis. In addition, we have also routed the copies to the 41 Midpeninsula Regional Open Space District and they have indicated that they were concerned 42 about wildlife along Los Trancos Creek. They never mentioned any concern about Buckeye 43 Creek. 44 45 Vice-Chair Tuma: Okay. Then just a couple of quick questions for the applicant. The earthen 46 berm along the backside, is that something that serves a function? 47 48 6 Mr. Conroe: The only real function was to demark or kind of designate the home improvement 1 area and separate it from the riparian corridor that we are trying to respect. Also to the extent 2 there is runoff in the home area it would contain it in the home area so it wouldn’t, and again 3 feeling that it was an environmentally sensitive move to put something like this in that looked 4 natural that kind of kept the developed part of the site away from the undeveloped part of the 5 site. 6 7 Vice-Chair Tuma: Okay. Not saying we are necessarily going to go there but would it be a 8 problem if that wasn’t allowed? 9 10 Mr. Conroe: No. 11 12 Vice-Chair Tuma: Okay. 13 14 Mr. Conroe: It wasn’t there for flood purposes as was asserted by Mr. Stoecker. 15 16 Vice-Chair Tuma: Thank you. The type of palm tree that you discussed this evening, the newer 17 type, do you have some idea as to what the maximum height that those grow to is? 18 19 Mr. Conroe: We defer to Dave Dockter on this and told him basically most any kind of palm we 20 would be happy with. He gave us three types we picked one of them, which is a sable palm. It 21 indicates the typical height is 40 feet. It doesn’t state the maximum height. We are completely 22 open on this. It seems to be a controversial topic so we are all ears when it comes to palm trees. 23 24 Vice-Chair Tuma: Thank you. 25 26 Chair Garber: Commissioners Lippert, Fineberg, Martinez. 27 28 Commissioner Lippert: I have a couple of questions. Number one, I am having difficulty 29 understanding where the fence is being omitted from. Is there a diagram? 30 31 Mr. Conroe: Sure, I can provide that right now. 32 33 Commissioner Lippert: So yellow is the fence that you have eliminated. So basically it is from 34 the tip of the property, I will just call it…. 35 36 Mr. Conroe: It is the entire frontage except for 20 feet flanking the driveway entrance. So it is 37 about 97 percent of the frontage along Los Trancos that was eliminated. 38 39 Commissioner Lippert: Okay. Then the blue is indicating the fence that would remain? 40 41 Mr. Conroe: I forgot how I color coded it. 42 43 Chair Garber: The applicant was stating that blue is type one and red is type two. 44 45 Mr. Conroe: Yes, as noted on the diagram. This was also provided to Staff a couple of days ago 46 or three or four days ago. 47 48 Commissioner Lippert: Okay. How are you handling the fencing around the swimming pool? 49 7 1 Mr. Conroe: There is no proposed fencing around the swimming pool. 2 3 Commissioner Lippert: Okay. By Building Code it is required to have a fence around the 4 swimming pool. 5 6 Chair Garber: Or a cover. 7 8 Commissioner Lippert: Yes. Are you going to cover the pool? 9 10 Mr. Conroe: We will cover. 11 12 Commissioner Lippert: Okay. Then the site is very problematic because of the narrowness of 13 the site. I am looking at the Fire Department or the Building Department’s point number 42, 14 provide 100-foot defensible space between the house and the wild land interface. How is that 15 accomplished? Your site is barely 100 feet in certain portions. 16 17 Mr. Conroe: From the beginning as is stated in the applicant’s letter application a lot of focus 18 was put on this and basically we pushed as far away as we could from Los Trancos Creek also 19 recognizing Buckeye Creek is on the other side. So we are basically in between the two. 20 21 Commissioner Lippert: Okay, the house is noncombustible material? 22 23 Mr. Conroe: I hope so. 24 25 Commissioner Lippert: Well, describe to me what is used. 26 27 Mr. Conroe: It is a wood frame stucco house with the tile roof. It requires fire sprinklers of 28 course and noncombustible material around the house as required. 29 30 Commissioner Lippert: So is your fire sprinkler system coming off of domestic water or are you 31 going to have a tank on the property? 32 33 Mr. Conroe: We have not gotten to that level of detail but we would do what is appropriate and 34 typical. 35 36 Commissioner Lippert: The reason I am asking the question is if it is coming off of domestic 37 there are no impacts on the site, but if there is a tank that is a Site and Design aspect that needs to 38 be considered. 39 40 Mr. Conroe: There has never been any discussion nor have we talked about putting a tank so we 41 would pull off the domestic, the same line, and just have the proper backflow prevention devices 42 to keep the domestic water safe. 43 44 Commissioner Lippert: With a swimming pool it is a shame that use can’t be made of the 45 swimming pool for such a use. 46 47 Mr. Conroe: I’m sorry, for what kind of use? 48 49 8 Commissioner Lippert: I said with a swimming pool for such an emergency it is a shame that a 1 swimming pool cannot be used for emergency sprinkling of the house. 2 3 Chair Garber: That is a current proposal for the Open Space if I am not mistaken, and is not a 4 requirement as part of the way the application has been made today. 5 6 Commissioner Lippert: So would they be using the pool as their water source for sprinkling? 7 8 Chair Garber: If I understand the code correctly the way that the code read when the application 9 was submitted in 2004 they cannot or can they without approval? 10 11 Mr. Curtis Williams, Planning Director: The issue isn’t so much whether they can. The Fire 12 Department has to look and determine whether or not they can use it. The issue under our 13 zoning code is simply whether it counts as or is considered permeable or not. I think the way the 14 most recent code was written is that it continues to be considered permeable if it can be used for 15 that fire purpose. They were under the pervious code so it doesn’t matter whether it can or not. 16 If it can that is all the better but it is not a zoning code issue it is just a matter of whether fire 17 thinks it is usable. 18 19 Commissioner Lippert: Okay. I will just make a comment and then we will go onto the next 20 Commissioner. In some way capacity needs to be made for fire sprinkling the house. What I am 21 used to is Santa Cruz mountains people put tanks in there all the time and it is not appropriate in 22 our open space. So it either has to come off the domestic system or use has to be made of the 23 pool and it is a shame if the pool can’t be made usable for such purpose. 24 25 Chair Garber: Yes, I am familiar with other jurisdictions although not specifically in the Open 26 Space. It could also, if it is required by the Fire Department, be undergrounded as well. 27 28 Commissioner Lippert: Yes, it could be a cistern. 29 30 Mr. Conroe: We have offered the pool to put in the plumbing required to stub off of it or 31 alternatively run it directly into the fire sprinkler system if that was deemed desirable by the Palo 32 Alto Fire Department. I have visited the site with them and talked about other issues but they 33 didn’t seem to be insistent about this. 34 35 Chair Garber: Okay. We can do another round. Commissioner Fineberg, Martinez, and then 36 Keller. 37 38 Commissioner Fineberg: I would like to go back a moment to the question Commissioner Tuma 39 asked about when the application was deemed complete. Staff said it was deemed complete 40 December 28, 2009 but in the Staff Report on page three it says that the City’s practice has been 41 to allow projects submitted to follow development standards in place at the time of submittal. So 42 is this project only being required to comply with what was in place in 2004 or must they comply 43 with whatever was in place as of December 28, 2009? 44 45 Ms. Lee: It would be City’s practice to require them to comply with whatever was in place at the 46 time the application was submitted, so 2004. 47 48 Commissioner Fineberg: Even though the application was not deemed complete? 49 9 1 Ms. Lee: Yes. 2 3 Commissioner Fineberg: Okay, so in the intervening years where we have had code changes and 4 new programs and policies as outlined in Attachment F the fact that they are compliant with 5 those new regulations is strictly voluntary? 6 7 Ms. Lee: Yes. 8 9 Commissioner Fineberg: I would like to have a few questions about the riparian habitat and the 10 area with the steelhead trout on both Los Trancos Creek and Buckeye Creek. Understanding that 11 environmental analysis has many subspecialties there can be soils, geotechnical, historic, noise, 12 is there some subspecialty or credentialed type of environmental analyst that specializes in 13 riparian corridors and fish, endangered species? 14 15 Ms. Lee: Yes. Staff is aware of specialties such as that. In this case the applicant has provided 16 the biotics report and we are relying on Fish and Game to provide their technical expertise on the 17 topic. 18 19 Commissioner Fineberg: Okay. But if I heard you correctly earlier we don’t have Fish and 20 Game’s response yet. 21 22 Ms. Lee: No, not yet. 23 24 Commissioner Fineberg: Okay, so how do I as a Commissioner make a determination of the 25 adequacy of a Mitigated Negative Declaration if we don’t have the review and the feedback to 26 tell us whether there is no impact or significant impacts regarding fish and riparian corridor? 27 28 Ms. Lee: It would be the Commission’s discretion to wait to hear comments back if that is what 29 you choose to do. 30 31 Chair Garber: Commissioner Tuma. 32 33 Vice-Chair Tuma: Yes, something I have been thinking about ever since they said we don’t have 34 that feedback. I think there are a couple of avenues we can go. If we get to the point where we 35 are going to move approval presumably or possibly adding some other conditions we could add 36 that condition that when those comments come back if there is anything greater than no impact 37 that it come back to us for further review. We could also have it come back to us on Consent 38 subject to that particular impact. They may come back and say it is a big deal and do something 39 differently or they may come back and say it is not a big deal. I think we can try to get through 40 and those issues are going to be open because we don’t have that analysis for sure. 41 42 Commissioner Fineberg: In the hypothetical of how we could also pursue it there is also the 43 possibility, I am not sure what the right answer is, but there is also the possibility of a 44 continuance if there is substantive information. So just sort of add that to the sort of hypothetical 45 three things. 46 47 10 So that is for me just a huge open question, needing to understand more about the comments 1 from Mr. Stoecker. Do we know if NOAA or DFG have been notified and is there a requirement 2 that they be notified? 3 4 Ms. Lee: Staff has submitted the environmental clearance documents to the State Clearinghouse. 5 It is the State Clearinghouse responsibility to direct it to all state agencies that would have 6 jurisdiction over the project. In addition Staff has routed separate copies to Fish and Game for 7 their comments to make sure that we did get them. 8 9 Mr. Williams: I would like to just add the DFG is Department of Fish and Game so it did go to 10 them. NOAA is (National Oceanic and Atmospheric Agency) National Federal Agency so we 11 don’t rout it to them. Fish and Game would consider that as part of their review the role that 12 NOA would play. But Fish and Game is the operative agency that we work through in terms of 13 any of those federal or state regulations. 14 15 Commissioner Fineberg: All right, thank you. Trees. Forgive me for not asking for this earlier 16 but it would have been helpful to have, and maybe it is here tonight, an inventory of the 17 protected trees and a map of the protected trees. I don’t know. Mr. Dockter is here if that is 18 something he has available. Specifically I am wondering there are four mature olive trees that 19 will be transplanted. Is it okay, Chair Garber if I direct these questions to our Planning Arborist? 20 21 Chair Garber: Yes. 22 23 Commissioner Fineberg: There are four mature olive trees. I think I know where they are 24 located. Can we confirm their location and can you tell us if there is a probability that a mature 25 olive tree, those trees in the condition they are in will they survive relocation? 26 27 Mr. Dave Dockter, Planning Arborist: Our review of the project included the olive trees. They 28 are very old and historically been part of the property. Transplanting olives is usually very 29 successful when done correctly by a good firm. So I don’t have any doubt that the olives would 30 be successfully relocated on the property there. They do need to be relocated to facilitate some 31 of the development there. The exact locations will not conflict with any of the other surrounding 32 mature vegetation. They are being put in good open places for their final home. 33 34 Commissioner Fineberg: Okay. Are they the trees that would basically be the ones that are 35 nearest to where the garage is? Sort of in the middle of the field closest to Los Trancos Creek 36 and they will be right next to the garage wall. 37 38 Mr. Conroe: The olives trees are located near the house on the Los Trancos Creek side so not on 39 the Buckeye Creek. Just as a matter of note or for the record, Sheet L-1 lists the existing tree 40 survey showing the condition, size, type, and tree protection measures, and action taken for 54 41 trees onsite. That also shows the location of all those trees. This is also consistent with the 42 Arborist Report, which was made part of the record. The arborist studied all 54 trees and issued 43 a report including addressing issues like transplantation. 44 45 Commissioner Fineberg: Okay, thank you. Sheet L-1 is smaller than the page in front of it so I 46 missed it. Forgive me and thank you for pointing that out. The reason I am asking about those 47 four trees and you are right it is not the garage wall I misspoke with that. It is the house wall 48 closest to the creek. They appear to be very close to where the edge of the house is so I was 49 11 wondering if those were not to be transplanted would they be able to survive given a structure so 1 close. So just to confirm, the ones that are going to be naturally west of the home will be 2 transplanted. 3 4 Mr. Conroe: Yes, reading off of Sheet L-1 there are trees 8, 10, 11, and 12. Those four are the 5 mature olives that are being relocated and they are in that area that is sort of to the west of the 6 house in the direction of Los Trancos Creek. 7 8 Commissioner Fineberg: Okay, great. Thank you. I have some questions about cut and fill and 9 whether the current plan is consistent with our Comprehensive Plan, which says that cut is to be 10 used when necessary and fill is discouraged if I can roughly paraphrase it. Did I get that 11 backwards? I think I said that correctly. Yes, I got a confirmation from Staff. We are doing five 12 cubic yards of cut and 625 yards of fill. Staff is saying that that is minimal and I having trouble 13 picturing how changing the grade, digging a basement, and 625 yards of fill is minimal. So 14 maybe if Staff could help me understand the scale of that. 15 16 Ms. Lee: The applicant has actually provided cross-sections that are located in your plans that 17 sort of give a good reference on how the project would appear. Then it also indicates from the 18 grading plan the general nature of the property being quite flat. It is not a very hilly site. I don’t 19 know if the applicant has any additional information to provide. 20 21 Commissioner Fineberg: Did you say it is on a hilly site? 22 23 Ms. Lee: No it is not. It is in a valley so it one of the flatter portions of open space. 24 25 Mr. Conroe: If I can offer kind of what the civil engineer was thinking when they came up with 26 this plan. They basically took as a starting point the garage and took that elevation, which 27 doesn’t require much cut and fill. We provided at the request of Staff an email today that broke 28 out the cut and fill for the garage, the home, and the driveway as well as the pool. Actually, I 29 would like to amend it and also add the basement. In that you will see, or I will just read off, of 30 the 625 cubic yards the home represents 550 of it, the garage 22 yards, as well as five yards of 31 cut. So you are basically cutting the garage a bit and adding a little bit of fill to even off the site. 32 Then the main fill is around the home. The driveway is 53 cubic yards and that is a total of 625 33 of fill as well as five of cut. What is noted on C-1, and I tried to get a hold of the civil engineer 34 to ask him why and if this is conventional, but they did not include it but it is noted on the plan 35 and has been for some time the cut for the pool is 195 cubic yards. They didn’t list that in their 36 cut so that is an additional cut. The basement is 110 yards, which also is not listed in their cut. 37 So the pool and the basement would provide a little over 300 cubic yards of the 620 required or 38 about half the soil required comes from onsite, and about 300 cubic yards would have to be 39 imported. 40 41 Chair Garber: Perhaps if I may offer another comparison. In the Town of Woodside if you 42 move more than 1,500 cubic yards is the threshold by which the planning commission there 43 wants to see where that earth has gone, and it excludes any earth that is moved that is within the 44 house footprint itself. Follow up from Commissioner Martinez. Actually, you are next in line so 45 if Commissioner Fineberg is done with that question? 46 47 Commissioner Fineberg: Thank you, appreciate your answers. 48 49 12 Chair Garber: Commissioner Martinez. 1 2 Commissioner Martinez: Okay, thank you. On drawing C-1, one of the civil drawings, on the 3 very left hand corner it lists 625 yards of fill and 620 yards of import. So that is 1,200 yards of 4 new material coming in. What is the import for? 5 6 Mr. Conroe: What is stated on the plan is there would be five yards of cut and 625 of fill 7 therefore yielding 620 the net import amount. What I am suggesting is given the pool excavation 8 and the basement excavation being about 305 cubic yards added to the five cubic yards you 9 would take the 625 fill, subtract the 310, and it would require 315 cubic yards of net import if 10 you were able to use the soil that you excavated from the basement and pool for clean fill. 11 12 Commissioner Martinez: I get it. Thank you. You show on your site plan a two-lane entry 13 drive, 18 feet wide. Is that a Fire Department requirement or is that the width you decided you 14 needed for the entryway? 15 16 Mr. Conroe: If Staff could help me, we did meet the Fire Department out there and they did tell 17 me their required width but I don’t recall it. Staff can clarify. It was just basically a width to 18 allow two cars, if someone is coming and someone is going, to pass each other on the driveway. 19 That is what drove it. That was really the thought. 20 21 Commissioner Martinez: So it is possible to reduce that some to lower the impact? 22 23 Mr. Conroe: Sure. 24 25 Commissioner Martinez: Okay. 26 27 Chair Garber: A caution there however, Commissioner Martinez. I do believe actually the Fire 28 Department is going to require 18 feet but if it can be reduced then so be it. 29 30 Commissioner Martinez: Okay, that is what I thought I just wanted to clarify that. 31 32 Mr. Conroe: Sorry, Commissioner Martinez, just as a footnote this driveway has been there for a 33 long, long time. So we are not widening what is there. 34 35 Commissioner Martinez: How did you get across the creek before? 36 37 Mr. Conroe: We drove across it. 38 39 Commissioner Martinez: Just drove through the creek? 40 41 Mr. Conroe: Yes, it is very shallow. It is two or three inches deep and sometimes it is not 42 flowing. We did not have that many trips. 43 44 Commissioner Martinez: Okay. It is a little bit unclear. The drawings sort of don’t really show 45 this but is the basement in or out of the project? 46 47 13 Mr. Conroe: It is in the project. It is about two-thirds of the ground floor building pad. The 1 ground floor is between 3,200 and 3,300 square feet and the basement is between 2,600 and 2 2,700 square feet under the first floor. 3 4 Commissioner Martinez: Okay. The civil drawings show a pad at 513 so there really isn’t a pad 5 there that is just sort of an imaginary line of …. 6 7 Mr. Conroe: The finished floor elevation, yes. 8 9 Commissioner Martinez: Okay. Did your engineering look at cutting that pad rather than raising 10 it five or six feet since as Commissioner Fineberg said cut is preferable to fill? 11 12 Mr. Conroe: Not a lot of focus was on this earlier so not a lot of discussion occurred between us 13 and the civil. The civil engineer sort of just independently just picked what they thought was 14 best probably thinking that given that this is next to Los Trancos Creek it is not a bad idea to 15 raise the pad a little. We are open to achieving a better balance between cut and fill if the 16 Commission sees it as an appropriate condition of approval. 17 18 Commissioner Martinez: Not only that I think the [plinth] that is created by this fill looks kind 19 of odd in the natural landscape. The house is plenty high and then we add another five feet just 20 sort of at this point it just seems like it exacerbates the problem of really trying to blend in more 21 with the landscape. 22 23 One last question for now. You own the adjoining property to the south as well? 24 25 Mr. Conroe: Our greater family owns that property also to the south. 26 27 Commissioner Martinez: Are there development plans kind of in the works for that? 28 29 Mr. Conroe: Twenty years ago we got a home approved on it and never built it so those are 30 lapsed. 31 32 Commissioner Martinez: Okay, thank you. 33 34 Chair Garber: Thank you. Commissioner Keller and then Garber. 35 36 Commissioner Keller: So the first question is I noticed applicant cited the square footage of the 37 house as being 7,276 square feet and Staff in their revised Attachment F shows the FAR being 38 8,904 square feet. I am wondering if somebody can explain that discrepancy to me. Thank you. 39 40 Ms. Lee: If I may, basically what it is is FAR is calculated slightly differently because in the 41 Open Space District they need to count twice for higher ceilings. So anything above 17 feet high 42 is counted twice. So we had to basically take out the deck areas and then we had to count the 43 breezeway space. So the numbers are kind of calculated differently. Some of the numbers show 44 the proposed square footage of the house itself, which includes the basement or includes just 45 livable space, but in terms of FAR we calculated per code requirements, which have very 46 specific definitions. 47 48 14 Commissioner Keller: I assume per code requirements does not include the basement because 1 the basement is less than ten percent grade under any, right? 2 3 Ms. Lee: Yes. 4 5 Commissioner Keller: Thank you. Okay. The next question I have is Buckeye Creek, which is 6 labeled as drainage ditch on the drawings, is Buckeye Creek before the handover from the Santa 7 Clara Valley Water District to the City of Palo Alto for the – before that transfer from Santa 8 Clara Valley Water District to the City of Palo Alto for enforcing stream rules, I am wondering 9 would they have applied the Buckeye Creek for the Santa Clara Valley Water District or is it 10 because it is too shallow or too short or whatever, it drains too few properties not covered by that 11 ordinance. 12 13 Ms. Lee: It is a recognized creek and because it is a recognized creek if Santa Clara Valley 14 Water District was reviewing the project they would have reviewed that as well. 15 16 Commissioner Keller: And, what requirements would they have placed under the old ordinance 17 on the development because of that creek? 18 19 Ms. Lee: Santa Clara Valley Water District never actually codified he requirements. The only 20 thing in their ordinance was saying that a permit shall be obtained from them. Staff’s 21 understanding is that Staff’s ordinance was developed in consultation with the Water District and 22 reflects a lot of the requirements they would have probably required. 23 24 Commissioner Keller: Okay. Since there was a mention in the Staff Report the applicant did 25 work to satisfy the City of Palo Alto’s equivalent replacement for the Santa Clara Valley Water 26 District’s ordinance, although there are some differences, to what extent do those ordinances 27 apply to Buckeye Creek and what requirements were placed on the development proposed as a 28 result of it being adjacent to Buckeye Creek? 29 30 Ms. Lee: From what Staff has gathered there are no Santa Clara Valley Water District 31 requirements that are actually codified that they would have to comply with. Because the City’s 32 ordinance was adopted in 2007 it kind of falls into that in between space. So there isn’t actually 33 anything they are required to comply with. The applicant has worked with the City to make sure 34 that it met the City’s requirements even though it doesn’t really have to. 35 36 Commissioner Keller: So I am confused. Let’s just not worry about whether it was required to 37 or not required to. What I am wondering is with respect to the City of Palo Alto’s current 38 ordinance, which I understand the applicant is trying to meet, if it were required to meet that 39 ordinance what are the requirements for the Buckeye Creek adjacency issue? 40 41 Ms. Lee: That information is part of responses to Commission’s requests. There is a table that 42 shows how the project complies with the Stream Corridor Protection Ordinance. It states 43 basically that the main requirement for this one is that structures not be placed within a sensitive 44 area. So all activity happens and building occurs more than 50 feet away from either Los 45 Trancos or Buckeye Creek. 46 47 15 Commissioner Keller: The drawings do clearly show where the top of bank is for Los Trancos 1 but I can’t figure out in the drawings where the top of bank is for Buckeye Creek. Is there a 2 recognized top of bank or am I not seeing it? 3 4 Ms. Lee: Because of the size of Buckeye Creek and the scale of the drawing it probably would 5 have been impossible to accurately show that. So what the applicant has done is provide cross-6 sections. You see that in your plan set with the culvert drawing that kind of indicates. I think the 7 Staff Report references that it is probably four to seven feet wide at the most. It is not very wide 8 from top of bank to top of bank for Buckeye Creek. 9 10 Commissioner Keller: But what I am wondering is just as there is a drawing for 25 feet away 11 from Los Trancos Creek and 50 feet away from Los Trancos Creek there are no comparable 12 drawings for the adjacency to Buckeye Creek unless I am missing it. I am looking at A-0, which 13 seems to have these drawings. I see Buckeye Creek sort of as a dotted line there and I don’t see 14 where the 50-foot border is for that. 15 16 Ms. Lee: If you look on Sheet L-1, item 1 shows the Buckeye Creek typical cross-section. 17 18 Commissioner Keller: Yes, I understand that. I am trying to figure out where 50 feet away from 19 what would be the edge of that. So if you look for example at Buckeye Creek, 3-L-1 is the 20 drawing you are talking about. If you see where it says N driveway grade there is a little line 21 there, actually not there. It is AL-1. There is a thing where it says TOB on the edge, right? It 22 says varies three to four feet. I would expect that there would be a line, just as there are lines 23 indicating the riparian corridor for Los Trancos Creek that there would be a similar line 24 indicating the distance away from Buckeye Creek and I don’t see one. 25 26 Mr. Conroe: May I insert a thought, Commissioner Keller? 27 28 Commissioner Keller: Sure. 29 30 Mr. Conroe: There are two thoughts. One is there is a 30 foot setback against all property lines. 31 That line is shown on the plan and the garage. That is shown on A-0. Actually A-1/A-0. 32 33 Commissioner Keller: Yes. 34 35 Mr. Conroe: I am sorry that the plans are so small. I can bring a bigger set up if you like. Then 36 if you scaled off the balance there is about, Staff said about 20 feet, a minimum of 20 feet from 37 the property line to top of bank of Buckeye Creek. So if you add those two you get 38 approximately 50 feet. If it is a good idea I can bring my plan up and show you. 39 40 Commissioner Keller: Well, I can see that there is – Commissioner Lippert indicates that it is 41 easier to see on L-1. I am wondering from here to here. So what I am wondering is if you take 42 the distance from the – if you look on L-1 there is a thing where it says five feet, six inches, type 43 one fence limit of work. Near to the left of that there is an indent to the creek and first of all we 44 don’t know the distance between where the creek sort of bends in towards the garage, the 45 distance from that to the garage, and we don’t know the distance from that creek to where the fill 46 is because there is a degree of fill in that region. I am not sure of the extent to where the fill ends 47 over there and whether that is within the 50 feet zone. So I am little confused about that and 48 there no measure. I don’t know where the measure is of the extent of the fill in that area. If the 49 16 fill in that area is defined by the speckled gray, sort of dotted area, if that indicates the extent of 1 the fill that looks like it is closer to my untrained eyes of 50 feet from the creek. From that point 2 to this. It looks like the garage is 50 feet from the creek but the fill may not be less than 50 feet 3 from the creek. In any event if the garage is 50 feet it could be less than 50 feet or it could be 4 more. So I am wondering about that. 5 6 Mr. Conroe: There is no fill in the garage itself. Actually the cut is happening on that corner of 7 the garage on the east side of the garage or the side that is on the Buckeye Creek side there is no 8 proposed fill on that between Buckeye Creek and the garage to put in the garage. As currently 9 proposed there is cut. If we lowered it more there would be more cut but no fill. 10 11 Commissioner Keller: So there is no fill to the logical east of the garage. 12 13 Mr. Conroe: That is correct. 14 15 Commissioner Keller: Are you saying that the garage is at least 50 feet from the edge of the 16 creek? 17 18 Mr. Conroe: Scaling it off it appears to be approximately 50 feet. 19 20 Ms. Lee: If I may, Staff would also like to clarify that per actually today’s ordinance, the Stream 21 Corridor Protection Ordinance, the requirement is for them to be at 20 feet landward from top of 22 bank. The 50 feet is just what is currently existing for Los Trancos Creek. 23 24 Commissioner Keller: Are there restrictions about building within 50 feet of the creek or is it 25 building within 20 feet? 26 27 Ms. Lee: Per today’s ordinance it would be buildings within 20 feet landward from top of bank 28 or to a point measured at a ratio of 2:1. In this case because of the terrain 20 feet would be the 29 farther distance. So 20 feet would apply. 30 31 Commissioner Keller: That means that when the fence appears to be 25 feet at least from the 32 creek that would handle that problem, right? 33 34 Ms. Lee: Yes. 35 36 Commissioner Keller: Okay, thank you. So shall we go around again? I think I had enough for 37 now. Thank you. 38 39 Chair Garber: Thank you. Garber and then we will go down the line again. 40 41 Just a quick note although we have talked about it some, the cut and fill best practice would 42 suggest that your cut equal your fill. Ideally you are not taking material on or off your site but 43 given that this is a stream valley there may be other reasons why fill is being taken off or being 44 suggested to be taken off. It may not be stable. It may be expansive, I really don’t know. I was 45 just curious if the civil engineer, who I know is very familiar with this area and has done other 46 work there and has a lot of expertise, but I am just curious if they had offered any reasons as to 47 why that is the recommendation here. 48 49 17 Mr. Conroe: Every few years there is greater flow in Buckeye Creek than can be handled so you 1 get spillover. So I think that was one issue that we wanted to address both with this stone wall 2 on that side as well as raising the pad some. We discussed this with the City of Palo Alto 3 engineer also. 4 5 Chair Garber: In historic projects where new work has to be done, and I am talking 6 architecturally as opposed to landscape, there is often as part of the requirements from the state 7 the need to distinguish the new work from the old. Is that part of the reasoning behind having 8 your landscape architect recommending the berm to differentiate between what is natural and 9 what is not? Is that part of the motivation there? 10 11 Mr. Conroe: Yes. Again, we wanted to be hyper sensitive to setback to Los Trancos Creek 12 thinking this was going to be important. We just thought this line of demarcation would be 13 helpful to have actually a physical line as a physical marker. 14 15 Chair Garber: But there is no requirement for that. 16 17 Mr. Conroe: No. Like I mentioned previously if there is an issue with it we could remove it. 18 19 Chair Garber: Thank you. For the Staff in the Open Space Development Criteria, item number 20 three, site and structure design would take into consideration impacts on privacy and views of 21 neighboring properties. The last sentence there says, additionally the dense perimeter screening 22 would reduce visibility of development from offsite to less than significant impact. Doesn’t the 23 screening that exists now reduce or eliminate the opportunity to see through that or that comment 24 in response to some work that the applicant is proposing? 25 26 Ms. Lee: It is actually Staff’s assessment is that the existing screening but the applicant has also 27 offered to increase screening if that would meet some concerns. 28 29 Chair Garber: On item number five in the same section Open Space Development Criteria, 30 which states, built forms and landscape forms should mimic the natural topography. Building 31 lines should follow the lines of the terrain and trees and bushes should appear natural from a 32 distance. Then the response here is landscape plan calls for maintaining the majority of existing 33 natural landscaping and trees. The house will be built at existing grade, which is flat. However, 34 that comment doesn’t address the mass of the house itself. Is there a reason for that? Or would 35 it be common for an evaluation to include the mass and volume of the house? 36 37 Ms. Lee: That is typically a significant concern for houses on the hilltop. So in this case 38 because the house is in a valley it won’t be visible to most of the surrounding properties. 39 40 Chair Garber: That was my suspicion but I am pleased to hear that, thank you. finally, I know 41 that you have, perhaps for the applicant or Staff, met with Fire on item number 12, access roads 42 shall be rural rather than urban character. I am assuming that the Fire Department is okay with 43 gravel versus an asphalt or a concrete or other fixed surface for the drive. 44 45 Ms. Lee: The Fire Department has issued a recommendation for approval for the project as 46 proposed. 47 48 18 Chair Garber: Thank you. That’s it for the moment. Commissioner Tuma, do you have any 1 other questions? 2 3 Vice-Chair Tuma: Not at this time. 4 5 Chair Garber: Commissioner Lippert and then Fineberg. 6 7 Commissioner Lippert: I am interested in understanding the rationale for the double fencing 8 along the driveway. I can understand having a fence facing Los Trancos Road to discourage 9 visitors but you are in a pretty rural, open space, why have a fence on the other side of the 10 driveway? 11 12 Mr. Conroe: This is what you get when you try to do things at the last second. When we got rid 13 of the fence we left that fence thinking it would provide some level of security. In thinking 14 about it a little bit more now if we had a gate there to basically control cars coming on and off 15 the site I think we could probably get rid of a lot of even the fence that we left along the 16 driveway and just have a gate. 17 18 Commissioner Lippert: That was part of the reason why it triggered. My sense is that you have 19 so many gaps in the fence what is really the purpose of the fence? I can understand it is not nice 20 to come home at night and find a deer running across your driveway while you are coming up the 21 drive. That would be one aspect. But there are ways of discouraging deer from crossing the 22 driveway. 23 24 Mr. Conroe: In terms of cars accessing the property drops off pretty quickly so it would be kind 25 of hard probably for a car to drive onto the property except on the driveway. So we want to at 26 least control that point. We felt the fence was unobtrusive and typical in the area so we left it 27 just in the area surrounding the driveway. 28 29 Commissioner Lippert: Would you be open to another kind of barrier there that is less 30 obtrusive? 31 32 Mr. Conroe: Sure. 33 34 Commissioner Lippert: Okay. Then just following up on Commissioner Martinez and Chair 35 Garber’s line of questioning regarding the contours and cut and fill. You have a pretty formal 36 house here, Italianate almost. Wouldn’t it make more sense to allow the ground plane to 37 basically be natural and to in some ways because you have such a firm base on that building with 38 the stone at almost one end have it almost be a nominal base and then it get bigger, and bigger, 39 and bigger as the grade falls away. In fact, if you were to look at your basement plan and you 40 were to massage some of the spaces a little bit you could almost have the exercise room, or 41 recreation room where the five-foot drop might be and you could put some windows in there and 42 get some light into the basement. Have you thought about that? 43 44 Mr. Conroe: Given the number of issues we addressed we didn’t think of that but it is not a bad 45 idea and we would be open to considering it. As we said earlier too with balancing out the cut 46 and fill I think you want the house pad up a foot from surrounding grade just to provide a little 47 bit of a positive flow away from the house for water. Aside from that we are open to either 48 having the stone wall graduated as you suggest and/or balancing cut and fill more. 49 19 1 Commissioner Lippert: Please don’t get me wrong. It is not to be a criticism of the architecture. 2 3 Mr. Conroe: I don’t take it personally. 4 5 Commissioner Lippert: Okay. I am just thinking of ways that the siting and the formality of the 6 house can work a little bit better perhaps. Thank you. 7 8 Chair Garber: Commissioner Fineberg and then Martinez. 9 10 Commissioner Fineberg: I want to go back a moment to the question about how to determine the 11 significance of the impact along particularly Buckeye Creek and also make sure that we have the 12 correct information on similar issues for Los Trancos Creek. Assuming that there are 13 professional sub-specialists who do understand all the subtle nuances of environmental review 14 for riparian corridors for fish, understanding I certainly don’t and there are so many specialties 15 that Staff can’t possibly understand all of them. Does it make sense to have a sub-specialist for 16 the environmental review to cover that portion of it to make sure that we are compliant with 17 requirements if for instance there is significant impact on Buckeye Creek and we approve it are 18 there potential liabilities for the City? I would much rather we catch it and get it right rather than 19 create any issues. So if Staff could comment and then the attorney, please. 20 21 Chair Garber: If I may, if I heard Staff correctly a biology report has been requested and has 22 been submitted as part of the application. I am not seeing that as part of our materials but 23 perhaps if you have that with you. That would have had to have been made by a certified state 24 specialist. 25 26 Mr. Williams: Right. That is what we would have based our review on and that should have 27 been done by someone qualified to look at these kinds of issues. So it was done by WRA 28 Environmental Consultants. 29 30 Mr. Conroe: Also known as Wetlands Resource Associates out of Marin. I think they are a 31 pretty well respected firm. They did consider that. One quick note, Los Trancos Creek is dry 32 about seven months a year so that is something to consider. Buckeye flows most of the year if 33 not all the year but probably the equivalent of a six-inch pipe could handle the flow in Buckeye 34 Creek for all but a few days a year. There is about a five-foot drop off going from Buckeye 35 Creek entering Los Trancos Creek. 36 37 Chair Garber: The source of water for Buckeye Creek is? 38 39 Mr. Conroe: It is upstream and it is the Arillaga property. I think it is the lake on his property. 40 We have never seen any fish but again we are not experts in looking for fish. 41 42 Commissioner Fineberg: Just to balance that the fish need the water in the creek and need the 43 appropriate habitat at the time they need it. They have evolved over thousands of years when the 44 creek is dry they are not there any more, they have gone off downhill. So it is absolutely critical 45 that during the season when they need it, which is when it runs, that it be there for them. As an 46 endangered species we have certain obligations to protect that habitat. So I just want to make 47 sure that we are covered there. 48 49 20 Mr. Williams: If I can just comment that this biologist did clearly look at a wide range of 1 different species and that but that is why we also require and the state law requires Fish and 2 Game to be involved because there are issues of statewide concern. They have not identified the 3 steelhead in here it doesn’t look like. So I don’t know if they got a copy of this as well, Fish and 4 Game? If they didn’t and they need it then they would request that or they would just use their 5 own biologist to address that and provide us with that information. 6 7 So if they come back and say there needs to be additional work done regarding the fish then we 8 would have to have that commissioned or if they come back and just say here is a mitigation 9 measure if you add it then that will be sufficient, then that is something that we would add in 10 which case we would have to recirculate the Mitigated Negative Declaration. If they come back 11 and say the steelhead are not present or it won’t significantly impact them given what is 12 happening then basically that’s a clean bill of health and the Mitigated Negative Declaration 13 stands as it is. So those are kind of the options that Fish and Game could come back to us with. 14 As mentioned before, the Commission really can either defer final action on this until that 15 information is before you or you could go ahead and essentially pass this through and if 16 something changes due to Fish and Game’s response we could come back to you, otherwise it 17 would move onto the Council or come back on Consent. There are a variety of ways to handle 18 that. 19 20 Commissioner Fineberg: If we were to pass it with some kind of either conditional approval or 21 there was a second scenario I am sorry I forget that you had hypothesized, are we going to create 22 any entitlements or will it then go to the ARB where there is some entitlement locked down? 23 Are there any risks of pursuing the path rather than holding? 24 25 Ms. Lee: This project wouldn’t go to the ARB because it is just one single-family residence. 26 This project could not go before City Council until the circulation period was over and we have 27 received all our comments. We wouldn’t forward this document unless we were certain that it 28 was something that was supportable. 29 30 Mr. Williams: I just want to add that Mr. Dockter informed me that Foothills Park drains into 31 Buckeye Creek. That is the source. 32 33 Mr. Conroe: Just a reminder, we are a minimum of 25 feet in all directions setback from top of 34 bank of Buckeye Creek. In no case are we disturbing anything within 25 feet of top of bank of 35 Buckeye. So I think the issue really is the driveway crossing and whether we bridge it or culvert 36 it and that I assume will be the discussion we will be having with Fish and Game with them 37 advising us what to do there. If they want us to bridge it we will bridge it so we won’t be 38 disturbing. 39 40 Chair Garber: Commissioners, I know that several of you have more questions but our member 41 of the public that would like to speak has been waiting for awhile. If I may let’s open our public 42 hearing and hear from our one speaker who will be Dave Polkinhorne, because you are our only 43 speaker you will have five minutes as opposed to our usual three. 44 45 Mr. Dave Polkinhorne, Portola Valley: Thank you. I live on Valley Oak, which is directly 46 opposite this project on the other side of Los Trancos Creek. I have run the design committee up 47 there for many years so I am familiar with some of this process. 48 49 21 My issues are not to comment on the architecture or the design of the house. That is for the 1 owner of the property to assess. I just wanted to talk about really two issues that concern me. 2 Primarily the first one is views. Everything that seems to be considered so far seems to be 3 considered from the Los Trancos side but not from the Valley Oaks side. The three photos that 4 are up on that wall unfortunately do not depict what is there now after some very aggressive fire 5 control work that was done along Valley Oak. So there is a lot more visibility now through that 6 vegetation to this site. Now I note Mr. Conroe has offered to plant along that area of the 7 property and I appreciate that, thank you. We have actually worked with him before when this 8 lot was originally cleared. So I would just like to make sure that those recommendations are held 9 up to further minimize the egress of what will be light and noise from this site into the Valley 10 Oak region. The light concerns me a lot because right now it is completely dark there at night. 11 There is no ambient light. There is no anything to be seen. I note in the discussion about 12 exterior lights not facing the creek, which would therefore face into Valley Oak. I would really 13 like to request that the committee take that seriously and minimizes external light, sort of up 14 lighting of trees, the house itself, because that will have a very significant impact on the rest of 15 us along Valley Oak. 16 17 I do also have a concern about the height. The story polls I believe are at 30-feet, which is the 18 average. If you look at the plans it shows the chimneys rising to nearly 35-feet. So I would just 19 like that considered. Right now there is a non-interrupted view corridor from Valley Oak and the 20 first thing you can see is a house way up on Los Trancos, a long, long way away. So I would 21 like to try and ensure that the external profile of the house including the chimneys is not visible 22 above the tree line on Valley Oak. 23 24 Now to the end we are also working with the landscape committee in Portola Valley Ranch to 25 mitigate some of the fire control work that was done with additional planting along what would 26 be the west side to us at Valley Oak to further screen that. 27 28 So really it is that height issue and light emanating from the property that is of concern to me, 29 number one. 30 31 Secondly, the comment you made about the pool. If there is no fence certainly in the Ranch we 32 have two pools and the requirement therefore means that the lights for the pool are on all night as 33 a way to ensure that someone knows it is there, someone doesn’t stagger into the pool in the 34 middle of the night. I sincerely hope we can find a way to not have the pool light on all night for 35 the same reason. There are several ways that it can be done. 36 37 Those are most of my concerns. I have some concerns about noise. Obviously construction is 38 going to create noise. I am a little concerned to see that you permit construction six days a week. 39 So I am going to have to live with this for what 18 months, I guess is how long this is going to 40 run. Is there a plan to work Saturdays during this project or not? 41 42 Mr. Conroe: [answered question off mike] 43 44 Mr. Polkinhorne: That would be very much appreciated. Obviously there is going to be some 45 noise. Then the second thing is about ambient noise once the project is inhabited. There are 46 things I would like considered there would be mitigation for things such as pool equipment or air 47 conditioning equipment. We do a lot of stuff in the Ranch around putting noise mitigation 48 devices around those and having very stringent noise levels associated with that kind of 49 22 equipment. So again that would continue to maintain the very rural and quiet nature of that area. 1 So those would be the main comments that I would want to raise. Thank you. 2 3 Chair Garber: Thank you very much and welcome to Palo Alto. We were at Commissioner 4 Martinez and then Keller. 5 6 Commissioner Martinez: I want to talk about the house a little more. 7 8 Chair Garber: Are these questions or are these comments? We are in questions still at the 9 moment. 10 11 Commissioner Martinez: Okay, then I will wait. 12 13 Chair Garber: Okay. Commissioner Keller. 14 15 Commissioner Keller: Thank you. I have questions still. The first question is for Staff and is a 16 follow up to an earlier question from Commissioner Fineberg. The application was originally 17 started in the process of 2004 and continues now, deemed complete late in 2009. I am 18 wondering how long the application process is allowed to continue before it is considered stale. 19 20 Ms. Lee: Practice is that if somebody doesn’t respond or submit anything in a year then Staff 21 usually submits a letter asking them to withdraw the application. If we don’t hear back from 22 them within a month then the application is considered dead. In this case the applicant has been 23 working with Staff over the past six years so in that sense the project has been moving along, 24 albeit very slowly. 25 26 Commissioner Keller: Okay, thank you. The next question is two questions for the applicant if I 27 may. So the first question is you have considered the idea of a bridge over Buckeye Creek in 28 comparison to doing a culvert. If you were to do a bridge how much of the area would be 29 involved? How high would you have to go over? What would be your approach? 30 31 Mr. Conroe: We have not designed the bridge because we went with the culvert idea based on 32 everybody’s feedback a couple of years ago. At that point Buckeye Creek is maybe four feet 33 wide and it sinks down. So if you wanted to maximize the standoff you would design something 34 that is maybe 15 feet spanning so you would have piers or some sort of structural system to span 35 the 15 feet going over. It wouldn’t have to rise up very much because it dips at that point. So it 36 might rise up a foot. 37 38 Commissioner Keller: Okay, thank you. My final question is it seems that palm trees from my – 39 first of all I don’t know where they go on the drawing. I haven’t seen where they go on the 40 drawing unless I missed them. 41 42 Mr. Conroe: There are two that flank right by the house. 43 44 Commissioner Keller: Can you tell me which drawing shows them? 45 46 Chair Garber: Perhaps if you used your fountain as the center of your dial. Are they the ones 47 that are at seven o’clock and nine o’clock? 48 49 23 Mr. Conroe: It at the end of the driveway before it fans out to the bulb or the turnaround. You 1 will see them on the left and right. 2 3 Commissioner Keller: Those little what look like pinwheel kinds of things? 4 5 Mr. Conroe: Yes, those are two palm trees. 6 7 Commissioner Keller: Thank you. So I am wondering, I don’t think palm trees are usually fit 8 well into the open space area. So why did you pick palm trees and how open would you of 9 picking something that would fit more into open space than palm trees? 10 11 Mr. Conroe: Stanford, and yes. They are picked because we went to Stanford and we like palm 12 trees. Yes, if push came to shove consider not only substituting different types of palms but I 13 guess removing them and considering something else that would be kind of an entry marker to 14 the home. 15 16 Commissioner Keller: Thank you. 17 18 Chair Garber: I am next. Correct me if I am wrong, but if I am recalling correctly the way that 19 the code calculates FAR it is designed to penalize more height by giving the applicant less area. 20 is that correct? I am seeing an affirmative nod. 21 22 Regarding number nine of the Open Space Development Criteria, buildings should use natural 23 materials and earth tone or subdued colors. This is really for the applicant. Mr. Conroe, I have a 24 question for you. Your elevations show the areas of the stone or suggest where the are areas of 25 the stone that you are using, and it is shown on the material board to be the base as well the 26 voussoir lintels over some of the windows and presumably around the doorway, however the 27 elevation shows them as sort of a darker brown color. The material you actually have on the 28 board is more actually whitish. Is there intent one way or another for that stone to actually be? 29 30 Mr. Conroe: Yes, we did the material board four years ago and we did the elevation this week. 31 So if I could have gotten a darker stone from the architect that would be more roughhewn that is 32 what would have been on the materials board. 33 34 Chair Garber: Roughhewn and possibly darker than the more whitish one that is currently on the 35 board. 36 37 Mr. Conroe: That is correct. 38 39 Chair Garber: So closer to the rendering and not like the material that we are seeing there, okay. 40 Second question, the City has a variety of codes that dictate that there is no light, that you are not 41 seeing the filament of lights from beyond property lines, etc. I am assuming that you would have 42 no problems with the issues that your neighbor across the way has already voiced. 43 44 Mr. Conroe: That is correct. 45 46 Chair Garber: Thank you. Commissioners, if I can let’s close the questions here. we will keep 47 the public hearing open. Let’s go to discussion. We will start a new list and Commissioner 48 Martinez you had your light on. 49 24 1 Before you go however, a note for our more architecturally minded Commissioners, be those the 2 actual architects or not. Let us remind ourselves that although the project doesn’t go to ARB our 3 review is not necessarily about building details etc., but need to be tied to our findings and the 4 Open Space Criteria in some way. So if you do start talking about things that relate to the 5 building specifically let’s be sure to tie them back into what the policies are that we are trying to 6 get after here. So with that caveat Commissioner Martinez. 7 8 Commissioner Martinez: Well that took the steam out of my questions. 9 10 Chair Garber: If you have good ideas I am sure the applicant would be happy to hear them. 11 12 Commissioner Martinez: I wanted to commend the applicant for really working hard to address 13 the very sensitive environmental issues. Yet, at the same time we look at the house and it is sort 14 of a style of a Tuscany/English Manor. If I remember my history right the English Manor 15 philosophy was man over nature, which seems to be contrary to how hard you worked to address 16 the open space environmental concerns. 17 18 I also wanted to say that I take some issue with sort of Staff’s finding, if I can read it. Built form 19 and landscape forms should mimic the natural topography. They are citing I think it is N-7 20 Policy. . I fail to see where the built form mimics the natural landscape. So I would like to 21 suggest, I don’t know how to do this without talking about architecture, and since the plans are in 22 somewhat of a early design phase that the applicant try to look at using more organic means to 23 relate the new house to the environment, not just in the color but in the use of materials, maybe 24 looking at some of the form to really try to get it to relate more to its surroundings. I think even 25 though the house is in a meadow not on the side of a hill the siting of the house actually divides 26 that meadow in half or in a third and two-thirds. I think that is a significant change that we 27 should be concerned about. That it isn’t a built form fitting within the natural environment. It is 28 a built form that really is in contradiction to the natural environment. It is very high, built higher 29 by the fill that has been chosen. I am happy that you would consider lowering the height of the 30 house. Really, since it is in its somewhat infancy look at really expressing the building in a more 31 sympathetic way to the beautiful environment where it will sit. Thank you. 32 33 Chair Garber: Commissioner Lippert, you had your light on. 34 35 Commissioner Lippert: Well, I am not inclined to meddle in your architecture. I feel very 36 similarly to Commissioner Martinez though in terms of what you have accomplished in terms of 37 the architectural style. I don’t think it is terribly compatible with the site. What people choose to 38 wear in their homes, on their own property, I think is really up to them. In some ways it is a 39 fundamental right. It doesn’t make it any more or less appropriate in this case. 40 41 What I think is important however, is how the house meets the site, is probably the most 42 significant thing that I can think of. What I am thinking of is when you look at Palladian villas 43 or even I would say traditional English architecture even though they are very formal types of 44 buildings the way they hit the ground plane particularly in landscape and open spaces are 45 particularly important to the success of how those buildings work. I think that in some ways 46 with your cut and fill here has totally been missed. 47 48 25 Your palette of materials I think is okay. I don’t think it is a particularly strong palette. I think 1 that there are other materials, as you said it is dated, that can be considered and looked at, and 2 color schemes that could also help enhance this project and either distinguish it or make it 3 compatible with the siting of the project. 4 5 Where I do have a couple of comments is in your natural plantings. Number one I think that 6 your neighbor’s suggestion of additional screening is a good one, but I would be inclined to 7 review it with the City Arborist as to the appropriateness of the species and how well it is going 8 to work and work into the open space. I would much rather seen an open, natural environment if 9 the planting were forced and they were not appropriate to what you are trying to do here. 10 11 In addition to that I appreciate the approach that you have taken with the fencing here. I think 12 this kind of fencing is pretty much going to disappear. 13 14 Chair Garber: What are you holding up there? 15 16 Commissioner Lippert: It is the type one fencing. It looks like a rail fence. Type two. With the 17 welded wire fabric is going to pretty much going to go away and it is going to be almost virtually 18 invisible. I question the need for fencing. You are in an open space area. Most of the people 19 going through that area are highly visible. You have a lot of cyclists through there. I actually 20 question whether it is necessary all the way around the property. I question whether it is needed 21 on both sides of the driveway, and perhaps there are other ways of screening or obscuring the 22 house and the driveway from Los Trancos Road and your neighbors. I would encourage you to 23 try something that is a little bit more natural. 24 25 I can understand fencing where you have put in your gardens because the deer absolutely love 26 them and that is where you want to control or be able to put up fencing to discourage deer from 27 eating your nettles. 28 29 So those are my comments. I have one last comment however, and this is really by way of a 30 lesson on architecture. Your windows while I think are quite nice you may want to take a look at 31 some books by Chris Alexander, Building in Timeless Styles. Particularly when you are looking 32 out a large window particularly at open space you actually want to go with smaller panes. Part 33 of that is that it actually frames and puts everything into context. It is when you are in a very 34 confined space when picture windows begin to work like Eichler type homes. They have big 35 windows because the area in yards is very confined. So you are trying to create that connection 36 between inside and outside. So I would just take a look at a couple of architectural books by I 37 think Chris Alexander is a very good example and he can bring you up to speed very quickly on 38 some things that could enhance what you are trying to accomplish architecturally. 39 40 Chair Garber: Commissioner Keller and then Fineberg. 41 42 Commissioner Keller: Yes, first of all, while I am talking can somebody hand me back the 43 diagram that indicated the fencing? Thank you. So what it is interesting is that it looks like the 44 fence around the property is type one fence, which has a blue fence, is the type one fence 45 actually is the one that doesn’t look like that. That is type two fence. The one with the stone 46 base. So around the property will be all the fence with the stone base and along the driveway we 47 are talking about that one being the open fence that looks like the picture that Commissioner 48 Lippert showed, which is the sort of rail fence if you will. Then you are talking about possibly 49 26 not even needing that and just having something near the driveway because nobody is going to 1 go there anyway. So some gate at the driveway. So I am not sure if Commissioner Lippert’s 2 comments still hold when around the property is the stone fence. I will leave that for 3 Commissioner Lippert to refer to. 4 5 I agree with the idea of lowering it and having less fill, more cut. I agree with the comments that 6 say that the plantings should be discussed with the City Planning Arborist. 7 8 I understand that the motif behind this building sort of reminds me a lot of buildings on the 9 Stanford campus, having spent many years in that place. It is somewhat reminiscent of that, 10 however, even with that as a motif I am troubled by the idea of the palm trees. It seems that even 11 the changed palm trees grow to 40 feet high or more. So that is a significant thing that looks like 12 it doesn’t really fit in with the open space. So I would encourage finding some tree that is a 13 defining end of driveway tree that is more in keeping with the open space motif. 14 15 I think that if Fish and Game come back and say that they want some sort of bridge over in order 16 to deal with the riparian corridor of Buckeye Creek I would be interested in at least having that 17 come and show it to us so we can see what it looks like. To the extent that the grading changed I 18 would also like to see that come back and just see how it fit onto the property with the grade 19 lowered several feet. With those changes I feel reasonably comfortable. 20 21 Chair Garber: Commissioner Fineberg and then Tuma. 22 23 Commissioner Fineberg: Can’t resist approaching this from the architectural perspective, along 24 with my fellow Commissioners. I had a light bulb moment when you said the palm trees were to 25 be reminiscent of Stanford campus, and I realized as Commissioner Keller has just said the 26 buildings are absolutely reminiscent of the Stanford quad. The buildings on Stanford’s quad 27 were designed and landscaped with formal gardens, with rectilinear plots, with interior quads, 28 long straight approaches, and that isn’t what is present on this site. You have sort of funky 29 triangle, a curving driveway, so there is some dissonance for me. Also, and I am not suggesting 30 you totally redesign the house but you have a rectangle with two long sides, with the long sides 31 going across the narrow distance of the triangle. So to me the house kind of reaches a wall. 32 When you come down the driveway, except for the side yard setback there is no left side, there is 33 no right side of open space of view shed. The house is a wall down the meadow. If you were to 34 redesign it, not suggesting you should, wondering about rotating the house so that the length of it 35 goes with the length of the parcel. There may be reasons not to do that. That was just something 36 I had been thinking about. Then as you would approach the house you would see past it 37 continuing into the meadow. So that was one thought. 38 39 I am still kind of hung on how to progress with this without the knowledge of whether we can 40 recommend for approval on a Mitigated Negative Declaration knowing that there might be 41 significant impacts that we don’t have feedback on, and that is my primary issue. 42 43 I have noted some of the things that during the discussion that we might want as conditions. I 44 would concur that there be conditions that there not be construction on Saturday. That during 45 construction there be sensitivity to the neighbors for construction noise. That there appropriate 46 mitigations for equipment noise, pool pumps and such as that, after the project is built out. That 47 there be more balance of cut and fill. I am not going to say this in the right construction or 48 engineering words but that there not be a six-foot rise in the house so it is levitating off the plane 49 27 of the meadow. That there not be palm trees used, or if they are that they are really short ones. I 1 think one of the neighbors proposed a 30-foot max, maybe even 20 feet if that is possible. I 2 agree with several of my colleagues that the current design for the fences is now kind of I would 3 say not fully constructed plan right now because there have been some last minute changes. I 4 understand that the implications of some of those changes, the unintended consequences, may 5 not have been thought through. So that there be something that that fence plan be more fully 6 planned. There be a condition that the lights not be visible as much as possible to the residents 7 on Valley Oak as well as on Los Trancos including the pool being dark at night or at least not 8 shining up, if that is feasible. That there be discussions with the City Arborist about planting 9 screens along both Los Trancos and Valley Oak Road. That there be considerations of lowering 10 the height of the house. I don’t know whether that last piece of lowering the height is feasible or 11 advisable but it sounds like there were several suggestions it would benefit the project so I am 12 willing to do for consideration. That’s it for now. 13 14 Chair Garber: Commissioner Tuma and then Garber. 15 16 Vice-Chair Tuma: So I find myself in agreement with a lot of the comments that have been 17 made thus far. I will put my spin on a couple of them. I do like the idea of trying to use the 18 natural grade a little bit more. Having been out to the site this morning one thing that maybe 19 could be considered is some terracing. For example, if you had the garage at one grade and it is 20 like terraced down you could actually make the entire place a little bit more interesting and break 21 things up a bit. 22 23 I almost think regardless of what Fish and Game come back with a bridge could be quite 24 interesting here to sort of celebrate the existence of the creek, and could be a feature that could 25 enhance the overall project. I think regardless of what Fish and Game come back with there still 26 may be some people that are not entirely comfortable with the culvert being put in there. So I 27 think there may be some benefits to the project and ways to address some concerns. 28 29 Screening on both sides, Los Trancos and for the Portola Valley neighbors, is great. I think if 30 you do use a little bit more of the natural grade a couple of the chimneys that were mentioned 31 will come down a little bit because you are not raising them up as much. So maybe that brings 32 that down as well. 33 34 I don’t have heartburn about fencing the area that you are talking about but I would think twice 35 about just using the type two instead of the wall. If there is a real reason to use the type one with 36 the first three feet of stone so be it, but the other is quite handsome and it sort of blends in with 37 things quite nicely. 38 39 I actually think palm trees are quite nice but if that is something that is changed out it comes to 40 mind, I don’t know what they are called but I call them these tall skinny Italian pine trees that are 41 quite interesting and could be used as kind of a way to sort of announce an entryway. The very 42 Italian would sort of fit in with the architecture. 43 44 The other comment that I want to make is I am incredibly impressed with not only the work that 45 went into this application but also the way that the applicant has comported himself this evening 46 both in response to suggestions, comments made by the Commission and neighbors. I am 47 confident that we are going to get a project that works for everybody. 48 49 28 I have a question at this point for the applicant. Would you prefer sort of some time for us to 1 maybe continue this and maybe go away for a time and think about the comments and come back 2 with some revisions, or are would you be more interested in kind of a conditioned approval? I 3 would be interested in your thoughts on that. 4 5 Mr. Conroe: Our preference would be to condition an approval and have some of these items 6 either to Staff’s satisfaction or to come back on certain items for your additional review, but limit 7 it to those items, which are on the table. 8 9 Vice-Chair Tuma: Thank you. 10 11 Chair Garber: Good comments all around and I will add my support to several. The screening 12 that the applicant has offered to do and that the various Commissioners have suggested I will add 13 my support to. 14 15 I share some of the questions that have been raised regarding the fencing and its purpose. 16 Although I don’t see it as conflicting with the Open Space requirements as it is. Palm trees, I 17 don’t mind them. They are buried inside the site. They are at almost the lowest point of the site. 18 I don’t think anyone is going to see them other than the main house, assuming that they are 19 essentially the same size as the house. The bridge versus the culver I think is really a call for 20 Fish and Game. It matters very little to me. A bridge obviously is more expressive but that is a 21 choice for the applicant to make. Grading change, cut and fill, etc. I think short of there being a 22 strong civil engineering reason to raise to the degree that it has I would support trying to get the 23 house lower. I support a number of Commissioner Martinez’s comments regarding getting the 24 house to be a little more horizontal in nature but frankly I don’t see the way that the house is 25 currently designed and its massing especially existing in a valley floor as being inappropriate 26 given the Open Space Criteria. I would have a significantly different feeling about it if it were 27 on the top or on the side of a hill. I would support mitigations regarding noise both during 28 construction with limiting construction to weekdays and not on Saturdays. I would also ask that 29 the applicant work with Staff to find ways to mitigate the operational noise on an ongoing basis 30 especially if that means burying things like pool equipment or putting the pool equipment in the 31 basement of your main house or something of that sort. Those are all ways that I can imagine 32 those things being mitigated. Then I would also support lighting and if there are other things that 33 the applicant can also work with Staff to see if there are ways that are in addition to what the 34 requirements are by code to meet the concerns of the neighbors especially across Los Trancos 35 Creek that would be only a good thing. Finally, I would be interested in perhaps Staff’s take on 36 their suggestions for how we can deal with the issue of the learnings that we may get from Fish 37 and Game and how we can incorporate that into our action this evening. 38 39 I have a final light from Commissioner Tanaka. 40 41 Commissioner Tanaka: Thank you. So thank you to the applicant for presenting and Staff for all 42 your hard work. I think the comments tonight were actually very enlightening as were the 43 questions. To save time my comments were largely aligned with Vice-Chair Tuma as well as 44 Chair Garber, except I think that a bridge actually would make a lot of sense here and perhaps 45 prevent the need with whatever Fish and Game says whether it had to be there or not, needing to 46 come back here and spending more Commission time on this. So I am more for the bridge. 47 48 29 I also like Commissioner Lippert’s comment having a window on the basement and perhaps even 1 a walkup basement. So I think following the terrain actually makes a lot of sense and could 2 actually help the property as well. That is all I had. Thank you. 3 4 Chair Garber: Commissioner Lippert, a motion perhaps? 5 6 MOTION 7 8 Commissioner Lippert: Yes. I will make a motion. I will move that the Planning and 9 Transportation Commission recommend that the City Council adopt the Mitigated Negative 10 Declaration and approve the Site and Design Review application for the new home in the Open 11 Space with the following items to return to us on Consent. Number one, cut and fill to be a more 12 natural slope to the degree that the fill removed from the site is minimized. The house should 13 appear more naturally grounded. The fire sprinkler system should be fed through the domestic 14 water service or the pool if it is permitted to be used, or there be no above grade water tanks 15 without additional review. Again, that would need to come back to use to take a look at. 16 Additional screen tree plantings along the Portola Valley side of the property to be screened from 17 the neighbors, and that to be reviewed by the Planning Arborist for appropriateness of those 18 plantings. That a bridge over Buckeye Creek be preferred to a culvert. So we would want to see 19 what that bridge looks like. Reduction or redefine the fencing and screening around the 20 property. So we would really want to see what that is going to look like and whether you are 21 going to be reducing that fencing or using another method. It could be plantings or some other 22 method. Limiting construction to weekdays. Noise mitigation for air conditioning equipment 23 and the pool equipment. An alternative to the proposed palms. Lastly, when that does return to 24 us on Consent we would like to see whether there are any comments from Fish and Game or any 25 other agencies after the close of the comment period. If the impacts are potentially significant 26 how they will be mitigated. 27 28 SECOND 29 30 Commissioner Keller: Second. 31 32 Chair Garber: Seconded by Commissioner Keller. Would the maker like to speak to their 33 motion? 34 35 Commissioner Lippert: I think we have all done a really great job here. I appreciate my fellow 36 Commissioners as well as the applicant taking our comments to heart. I think it will be a really 37 great project. Thank you. 38 39 Chair Garber: And the seconder? 40 41 Commissioner Keller: I agree, and I just want to clarify one thing that Commissioner Lippert 42 said. Commissioner Lippert said that you prefer a bridge over Buckeye Creek. is that a 43 condition that it be a bridge? 44 45 Commissioner Lippert: I prefer a bridge and if in fact there is going to be a bridge I would like 46 to see what that bridge looks like when it returns to us on Consent. 47 48 30 Commissioner Keller: Okay, so I am assuming then what you mean is that either there be a 1 bridge and they show it to us on Consent or they give reason why they are not using a bridge. 2 3 Commissioner Lippert: Well, if they don’t show a bridge maybe that would be a reason to pull it 4 off of Consent but I don’t see that as necessarily a reason not to approve the project. 5 6 Commissioner Keller: Okay, thank you. I think that the site kind of constraining. I guess it is a 7 long time in coming. It has been five or six years since the project started its process. it would 8 have been approved under the rules then in force and so considering that it is the City’s process 9 for approving a project that is continuously being modified and worked on in the interim I think 10 that it is fair to approve this project subject to the conditions that Commissioner Lippert ably 11 mentioned. It worthwhile noting that because of various limitations such as the percent of 12 pervious cover and things like that and the FAR issues that this project would not be approved if 13 it were submitted today under the current rules as it were enacted in 2009. We go by the rules in 14 effect at the time of project submission so that is fair. Thank you. 15 16 Chair Garber: Discussion? Commissioner Fineberg. 17 18 Commissioner Fineberg: I am not sure that last statement of it not being approved is accurate 19 because isn’t this parcel subject to the 1973 accords so it gets 1,500 feet, which is 3.5 percent of 20 ten acres? So isn’t this within the acceptable FAR? 21 22 Mr. Williams: It is not part of that agreement. 23 24 Commissioner Fineberg: I’m sorry I thought I saw that in the Staff Report. 25 26 Chair Garber: The Staff Report addresses that condition but I am not recalling how it addresses 27 it, but it is someplace in the Staff Report is it not? 28 29 Ms. Lee: I think the 3.5 percent applies because this parcel is a legal nonconforming parcel. I 30 think it is located close to the parcels that Commissioner Fineberg referenced but it is located 31 outside of those. 32 33 Commissioner Fineberg: Okay, maybe we can find that later. Friendly amendment for the 34 maker. As one of the conditions of approval unless I missed it I don’t believe I heard you saying 35 anything about lights. I am open to wordsmithing if you have a better suggestion but would you 36 consider something that all lighting plans comply with requirements in the Open Space District 37 with a sensitivity to the neighbors both on the Palo Alto and the Los Altos, so both on Los 38 Trancos and Valley Oak? 39 40 Commissioner Lippert: I don’t have a problem with that. That is what our ordinance says that 41 they have to keep the light contained on the property I believe. 42 43 Commissioner Keller: I think that is fine but I think you mean Portola Valley not Los Altos. 44 45 Commissioner Fineberg: Correct. I am sorry. Thank you for that. I have a question related to 46 the specific wording of your motion. What happens if Fish and Game comes back and says that 47 there are significant impacts and they can be mitigated and here is how? Then are we 48 automatically pulling it off the Consent to review the changes that need to be made in order to do 49 31 the mitigations? What happens if they can’t be mitigated and they are significant? Does Staff 1 then have to do an EIR and it can’t move forward on a Negative Declaration. 2 3 Chair Garber: Planning Director. 4 5 Mr. Williams: The answer to your second question is yes. If they are significant and cannot be 6 mitigated then an EIR would be required. If there is additional mitigation that is required 7 through Fish and Game then we will need to modify the Mitigated Negative Declaration and 8 recirculate it. There is not a reason why it still can’t come back to you after that circulation 9 period on Consent. Then if you feel like the change is significant enough you can pull it off of 10 Consent and discuss it, but the change could be relatively minor or just a construction condition 11 or something like that so it doesn’t need to. 12 13 Now, the only caveat I would have is, I don’t know why there would be, but if there were 14 something that really significantly changed the design like you can’t cross the creek there you 15 have to move someplace else or something then we would be in a different situation. We should 16 come back to you not on Consent and show those changes. What I would anticipate is that there 17 would either be no additional mitigation measures and just a determination by Fish and Game 18 that there isn’t a significant impact or there would be some additional mitigation measure which 19 could be a bridge or could be some other means of revegetating or restoring around the disturbed 20 area or something like that and if that is the case we are into the recirculation and can come back 21 to you and put that all on Consent and you can determine if you feel it is necessary to pull it and 22 discuss it. 23 24 Commissioner Lippert: Part of the reason why I left it open with regard to the bridge is that it 25 could very well be that Fish and Game might prefer a culvert for instance. It is a little more 26 protected. It is a little more substantial. 27 28 Commissioner Fineberg: One more friendly amendment if I could since there is some 29 uncertainty. Would you accept a motion that if there are significant impacts that either have to 30 be mitigated by changing the project or by continuing with a new EIR that in effect we are 31 withdrawing our approval and it come back to us on a Consent Calendar? 32 33 Commissioner Lippert: Well, what I said in the motion was that if Fish and Game or other 34 agencies came back with potentially significant impacts that they be mitigated, and those would 35 need to be presented to us as part of these items that we would be reviewing on Consent. The 36 thought is that if you saw something in there that you felt was mitigated and it wasn’t appropriate 37 you would be able to pull that from Consent and we would discuss it. We would decide whether 38 we wanted to move forward with that or not. The whole idea though is that we would get a 39 second chance, rather than continuing this item, basically what we are seeing today we are 40 approving. There are some things that we all have concerns with and those would be addressed. 41 They would come back on Consent and then we would make that determination as to whether 42 Vice-Chair Tuma likes the bridge or the cypress trees. 43 44 Commissioner Fineberg: So here is where I still have some concern. I absolutely agree with the 45 intent of what you are saying that if we like what we have now except for these areas that we 46 have identified that we allow it to move forward. But not knowing what changes might happen 47 let’s say for instance Fish and Game says, as Director Williams said, they can’t cross the creek 48 32 they have to move the whole house, are we tying our hands and saying we are only allowed to 1 review the bridge or does the whole thing come back to us if it comes off Consent? 2 3 Chair Garber: Can you give us a hand, Staff? 4 5 Mr. Williams: Yes, if that is the case then the whole thing needs to come back. you would pull 6 it off to review the project if it changed the whole layout substantially. 7 8 Commissioner Fineberg: Okay, that answers my concern. Thank you. 9 10 Chair Garber: Commissioner Tuma. 11 12 Vice-Chair Tuma: I am going to be supporting the motion, just a couple of comments that I 13 wanted to make. While I agree with Commissioner Keller’s conclusion that this project exactly 14 as proposed wouldn’t meet the 2009 standards it is actually not entirely that far off in many of its 15 components. There would be some relatively simple things I think that could be done to bring it 16 into compliance. So I agree, it doesn’t meet it, but it is not that far off. 17 18 The other thing that I would point out is something we have not discussed is there is a Build It 19 Green checklist, or preliminary point number in here, which is 150 points as what they are going 20 for, which is a very interesting number in light of our discussions the other night. It is 21 commendable and it is something that shouldn’t go unnoticed about this project. There has been 22 an awful lot of thought. I think what we are doing here tonight is sort of maybe rounding out 23 some of the edges and trying to tweak things a bit but there is quite a bit to be lauded even from 24 an environmental perspective about the way that this project has been put together. So I want to 25 make sure that that doesn’t get lost because what we have tended to focus on tonight are the little 26 things that need to get changed. I think it is a great project in many ways and one that I think as 27 a community we would be proud of. 28 29 Chair Garber: I am seeing lights from Fineberg. Commissioner Fineberg did you want to speak 30 again? Commissioner Keller did you want to speak again? 31 32 Commissioner Keller: Yes, just for the record, it is 1,200 square feet more than the current code 33 allows for the 2009. Since it is sort of grandfathered in that is okay. The Build It Green 34 checklist is filled in by hand and I would recommend that you actually take the spreadsheet and 35 put numbers in it and have it calculate all the stuff out when it goes to Council. I didn’t want to 36 sit there and add up the numbers, I trusted that it was done right, but why not let Excel do that or 37 your favorite spreadsheet calculator. 38 39 I am assuming that the interpretation of the motion is that if there are additional mitigations that 40 are needed that those mitigations come back to us for review on Consent. If the project requires 41 additional major changes because they are not easily mitigable through a Mitigated Negative 42 Declaration then essentially our approval is withdrawn because the Mitigated Negative 43 Declaration can’t be taken. If the driveway can’t cross the creek I guess the project is up the 44 creek. 45 46 Chair Garber: Thank you, Commissioner Keller. Let me remind the maker that Commissioner 47 Fineberg had actually asked for a friendly amendment regarding lighting. 48 49 33 Commissioner Lippert: Yes, I didn’t have a problem with it because it was consistent with the 1 code. 2 3 Chair Garber: Okay and you accepted it. Okay, thank you. Anything else Commissioner 4 Keller? I will be supporting the motion as well. I thank Commissioner Tuma for his reminder of 5 the Green Point Rated checklist, which I did review. I may quibble over a point or two on it but 6 basically I too was impressed by the number. Commissioner Tanaka, you had a final comment? 7 8 Commissioner Tanaka: I actually had a question for the maker of the motion about the palm 9 trees. Was that a suggestion or a requirement that they don’t have palm trees? 10 11 Commissioner Lippert: Well, my motion just states that there should be an alternative to the 12 palm tree. If they came back as the items that we have asked for and they picked a palm tree I 13 guess that would be a reason to pull it off of Consent unless we found that the choice of palm 14 tree was appropriate, but that is up to them. 15 16 Commissioner Tanaka: That is fine. Thank you. 17 18 Chair Garber: With that I am seeing no more lights. Let’s vote on the motion as it has been 19 stated. Just before we do let me just ask Staff if they have clarity on the various conditions that 20 have been made and if there are any other questions that they have. 21 22 Ms. Lee: I believe we have the points, thank you. 23 24 Chair Garber: Commissioner Lippert. 25 26 Commissioner Lippert: We don’t have any specific rules with regard to pulling items off of 27 Consent. My understanding is if any one Commissioner chooses to have it pulled off of Consent 28 it could be. 29 30 MOTION PASSED (7-0-0-0) 31 32 Chair Garber: That is correct. With that let us vote. All those in favor of the motion say aye. 33 (ayes) All those opposed? The motion passes unanimously with Commissioners Martinez, 34 Tanaka, Fineberg, Garber, Tuma, Keller, and Lippert voting yea. 35 36 Thank you very much. We will close the public hearing and this item. 37 38 We have a few little pieces of business to take care of. We have the approval of minutes from 39 Wednesday, February 24. Do I hear a motion to approve them? 40 41 APPROVAL OF MINUTES: Meeting of February 24, 2010. 42 43 MOTION 44 45 Vice-Chair Tuma: So moved. 46 47 Chair Garber: A second, please? 48 49 34 SECOND 1 2 Commissioner Martinez: Second. 3 4 MOTION PASSED (7-0-0-0) 5 6 Chair Garber: Commissioner Martinez seconds. All those in favor say aye. (ayes) All those 7 opposed? The motion passes unanimously. 8 174.0' 110.0' 126.8' 224.7' 167.3' 179.3' 417.5' 177.0' 79.6' 118.0'143.4' 275.7' 48.1' 795.7' 45.9' 31.1' 174.0' 110.0' 126.8' 224.7' 167.3' 179.3' 13.8' 47.6' 209.1' 345.4' 13.8' 345.4' 47.6' 243.2'608.1' 54.4' 795.7' 209.1' 1 243.2'608.1' 423.6' 178.7' 39.1' 446.9' 2.6' 446.9' 39.1' 200.0' 1290.7' 10.0'4.5' 207.9' 208.1' 47.4' 17.7' 4.5' 207.9' 208.1' 48.5' 143.4'118.0' 79.6' 177.0' 417.5' 502.1' 48.5' 275.7' 48.1' 72.0' 31.1' 45.9' 178.7' 620 610 856 805 L O S T R A N C O S R O A D This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 0'174' 805 Los Trancos Rd. Location Map CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2010 City of Palo Alto elee2, 2010-02-08 14:01:54 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Letter of Application Request for Extension of Existing Approvals Site & Design Review 805 Los Trancos Road Palo Alto, CA (Updated April 29, 2013) This application is requesting a one year extension to the existing approvals for Site and Design Review obtained on June 22, 2010 for the construction of a new single family residence on approximately 3.55 acres within the Open Space Zoning District. It is noteworthy that the June 2010 application was approved unanimously by both the Planning Commission and City Council with no controversy. The request for this time extension is required for our family to complete construction documents, obtain a construction loan and pull building permits; we hope to start construction later this year. What follows is the original text from the June 22, 2010 Site and Design Review approval (which provides additional information on what was approved in June 2010): The application proposes 5407 square feet of impervious coverage (which meets the 3.5% impervious coverage requirement), which includes a footprint for the home of 3262 square feet, decks of 443 square feet, a breezeway and garage of 1472 square feet, and a deck around the pool of 230 square feet. The proposed home has 7276 square feet of habitable area (some of which is above the attached garage), not including a basement of 2691 square feet. The site is located on Los Trancos Road approximately ½ mile from Alpine Road. The site is approximately 1400 feet long and ranges from 50‐300 feet deep and is bordered by Los Trancos Road on one side and Los Trancos Creek on the other side. The site is accessed by an existing driveway off of Los Trancos Road. The site is generally flat with a slight (approximate 3%) slope towards Los Trancos Creek. All of the site improvements are proposed in the widest area of the site, which is currently an open, flat grass area, and which provides the greatest setback from Los Trancos Creek and Los Trancos Road. A majority of the site will be left in its current, native condition. The driveway will consist of a permeable surface consisting of decomposed granite and the area in front of the garage and a small pad off the back door will consist of permeable pavers. One of the primary objectives in designing the home on the site was to maintain a significant buffer between Los Trancos Creek and the proposed home thereby providing for a riparian corridor for native flora and fauna. This objective was achieved by: (1) maximizing the distance of the home from Los Trancos Creek top of bank (all improvements are set back a minimum of 70’ from top of bank with most of the improvements being over 100’ from top of bank), (2) limiting all site work so as to be a minimum of 50’ from top of bank, (3) contributing to a minimum 120’ wide “riparian corridor” centered along Los Trancos Creek to accommodate native fauna and flora (which includes the riparian setbacks along the other side of Los Trancos Creek), (4) planting only native plants and trees in the 50’ top of bank setback area, and (5) providing a gentle, natural form earth berm (2‐3’ in height) along the 50’ setback from top of bank to be planted with native riparian plantings. Furthermore, a new fence will be installed to indicate the limit of work on the site, resulting in leaving a majority of the site undisturbed in its native state. The home design is Mediterranean style using an earth tone palette and natural building materials. The improvements consist of a two story home (with partial basement) with a breezeway which connects the home to the garage, a swimming pool and landscaping around the home. The home height is consistent with zoning code with the midpoint of the pitched roof at a height of 25’ from finished grade. Required parking will be provided in the four car garage. The pool may equipped, if recommended by the fire department, to serve as an emergency water supply in the event of a fire. Utilities are provided to the site as follows: Sewer service is currently provided to the site by the West Bay Sanitary District; Water will be provided by the California Water Service Company; and Gas and electric service will be provided by PG&E. A new fire hydrant will either be provided just off of Los Trancos Road (near the driveway) or on the site at a location determined by the Palo Alto Fire Department and Cal Water. While the property has a number of trees located on it, the location of all improvements was selected to minimize the impact to the trees and as such does not impact any mature oak trees. As noted in the arborist report, there are four olive trees and one small (6” diameter) oak that will be preserved (and relocated) on site as part of the new home construction; additionally, there is one small (14” dia.) oak that is close to the new home pad and therefore the specified tree protection measures will be implemented. Due to the relatively flat nature of the property, the only grading required will be to build up the building pads. Site drainage will be handled via grass swale areas to allow for filtration of storm water. As part of the driveway construction, a small (5’ wide by 2’ high) culvert will be installed in order to allow for the small perennial unnamed tributary to Los Trancos Creek (which runs intermittently during the year and which is approximately 3’ wide and up to 6” deep) to flow undisturbed. What follows is how the site’s design complies with the following objectives (18.82.060 PAMC): 1. To ensure construction and operation of the use in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites: The subject property is one of the last home sites in this area of the OS District. As such, all of the adjoining land (with the exception of one adjacent site) has been built out for residential uses. Hence, this site’s residential use is consistent with all the neighboring uses. 2. To ensure desirability of investment, or the conduct of business, research, or educational activities or other authorized occupations, in the same or adjacent areas: As noted above, all the adjacent uses are residential and as such there are no commercial uses in the area. 3. To ensure that sound principles of environmental design and ecological balance shall be observed: A majority of the site is being left in its native, undisturbed state. Additionally, a “riparian corridor” is being established along Los Trancos Creek which will further encourage native fauna and flora. There is very little impact to the existing trees on the site. The home design is situated on a flat area of the property in what is now an open meadow and which is screened from Los Trancos Road to the greatest degree possible. Finally, earth tone colors and natural building materials are being used in the home’s design. 4. To ensure that the use will be in accord with the Palo Alto Comprehensive Plan: The Comprehensive Plan Open Space Development Criteria are listed below followed by analyses of the project’s compliance with them: a. The development should not be visually intrusive from public roadways and public parklands. As much as possible, development should be sited so it is hidden from view. The proposed home site has fairly dense vegetation along the perimeter of the property so as to screen it in most directions. The site is situated approximately ten feet below Los Trancos Road with varying levels of vegetation and trees obscuring view of the home improvements, which are 100 to 200 feet from Los Trancos Road. The home site chosen affords the greatest amount of screening from Los Trancos Road as compared to any other location on the property. Furthermore, additional tree planting is proposed to provide additional screening of the site improvements from Los Trancos Road. The visual impact of the home will also be minimized by the use of earth tone colors and natural building materials. b. Development should be located away from hilltops and designed to not extend above the nearest ridgeline. The proposed home is in a narrow valley floor and as such is not near any hilltops. c. Site and structure design should take into consideration impacts on privacy and views of neighboring properties. Due to the site’s significant vegetation that surround the project site, the proposed home improvements are mostly not visible to any neighboring properties nor is their privacy impacted. d. Development should be clustered, or closely grouped, in relation to the area surrounding it to make it less conspicuous, minimize access roads, and reduce fragmentation of natural habitats. The site improvements are clustered together and a majority of the site is left undisturbed in its natural state. The driveway will consist of permeable materials and takes the most direct approach to the home to minimize driving areas. e. Built forms and landscape forms should mimic the natural topography. Building lines should follow the lines of the terrain, and trees and bushes should appear natural from a distance. The home improvements are built at the existing grade. Formal landscaping is limited to the immediate area of the home. The landscape plan provides for additional tree plantings to increase the natural screening already provided. f. Existing trees with a circumference of 37.5 inches, measured 4.5 feet above the ground level, should be preserved and integrated into the site design. Existing vegetation should be retained as much as possible. No healthy trees are to be removed from the site. The arborist report recommends removing one dead olive tree. Four olive trees are to be preserved and relocated on the site. g. Cut is encouraged when it is necessary for geotechnical stability and to enable the development to blend into the natural topography. Fill is generally discouraged and should never be distributed within the driplines of existing trees. Locate development to minimize the need for grading. The improvements are located in an existing meadow which is relatively flat and therefore there is very little need for either cut or fill. The only fill required relates to the building pads. Fill will not be placed in the dripline of any existing tree. h. To reduce the need for cut and fill and to reduce potential runoff, large, flat expanses of impervious surfaces should be avoided. Aside from the building improvements, there are very few impervious surfaces that are being proposed. Furthermore, the proposed impervious surfaces are within the 3.5% allowed. i. Buildings should use natural materials and earthtone or subdued colors. Natural buildings materials in earthtones are proposed. All proposed building materials are natural, in earth tone colors that will blend with the surroundings. j. Landscaping should be native species that require little or no irrigation. Immediately adjacent to structures, fire retardant plants should be used as a fire prevention technique. An extensive native planting list has been proposed with limited onsite irrigation. Fire retardant plants will be used near all structures. k. Exterior lighting should be low‐intensity and shielded from view so it is not directly visible from off‐site. The proposed hardscape and landscape plans submitted indicate that these policies will be observed. Landscape lighting will be directed as to be shielded from view off site. Given that the site is located in a narrow valley and surrounded by trees, it is unlikely that exterior lighting will be visible off‐site. l. Access roads should be rural rather than urban character. (Standard curb, gutter, and concrete sidewalk are usually inconsistent with the foothills environment). The driveway will consist of decomposed granite and there will not be any standard curb, gutter or sidewalks. m. For development in unincorporated areas, ground coverage should be in general conformance with Palo Alto’s Open Space District regulations. The property is within the City limits and meets the OS (Open Space) District zoning regulations. 805 Los Trancos Road Page 1 ATTACHMENT G OPEN SPACE DEVELOPMENT CRITERIA 805 Los Trancos Road Section 18.28.070(o) of the Palo Alto Municipal Code (PAMC) requires that the Open Space Development Criteria be used by the Planning and Transportation Commission and City Council to evaluate the proposed project. These criteria are set forth below, followed by analyses of the project’s compliance with them: 1. The development should not be visually intrusive from public roadways and public parklands. As much as possible, development should be sited so it is hidden from view. The proposed construction would not be visible from any identified view sheds (map L-4 of the Palo Alto Comprehensive Plan). The project is located directly adjacent to Los Trancos Road, and is screened from Los Trancos Road by a dense canopy of existing trees and shrubs. Visibility from Los Trancos Road should be minimal. It is not expected that this project would be visible from any public parklands. 2. Development should be located away from hilltops and designed to not extend above the nearest ridge line. The proposed house would be located in a valley floor and not located near any ridges. 3. Site and structure design should take into consideration impacts on privacy and views of neighboring properties. Given the proposed house location at the bottom of a narrow valley, the privacy impacts from this development on neighboring residences would be minimal. Additionally, the dense perimeter screening would reduce visibility of the development from off-site to a less than significant impact. 4. Development should be clustered, or closely grouped, in relation to the area surrounding it to make it less conspicuous, minimize access roads, and reduce fragmentation of natural habitats. The proposed site improvements would all located at one end of the existing flat meadow area to both keep development at one part of the property and to maximize the distance of development from Los Trancos Road. 5. Built forms and landscape forms should mimic the natural topography. Building lines should follow the lines of the terrain, and trees and bushes should appear natural from a distance. The landscape plan calls for maintaining the majority of existing natural landscaping and trees. The house would be built at existing grade, which is flat. 6. Existing trees with a circumference of 37.5 inches, measured 4.5 feet above the ground level, should be preserved and integrated into the site design. Existing vegetation should be retained as much as possible. The majority of the trees on-site would be preserved. The project includes the removal of three dead trees (a bay, willow, and olive tree) and remove one black walnut, two bays, and one olive tree due to location of proposed driveway location or poor condition, and re-locate eight other trees that are in or near proposed driveway or are in potential fill area. Tree #21, a coast live oak (58.5” in diameter), as listed in the Tree Survey & Appraisals prepared for the project, fell during 805 Los Trancos Road Page 2 the December 21, 2009 wind and rain storm. The fallen tree has been removed from the site. The applicant will be required to work with City staff, including the City Arborist, to ensure that existing trees and landscaping are maintained and that new landscaping will be consistent with the existing and the project will be conditioned to protect existing trees that are proposed to be preserved. 7. Cut is encouraged when it is necessary for geotechnical stability and to enable the development to blend into the natural topography. Fill is generally discouraged and should never be distributed within the driplines of existing trees. Locate development to minimize the need for grading. The project is located on a relatively flat meadow (with approximately 3% slope from Los Trancos Road towards Los Trancos Creek). Thus, very little cut (5 cubic yards) or fill (625 cubic yards) would be required. No fill is proposed within the dripline of any trees. 8. To reduce the need for cut and fill and to reduce potential runoff, large, flat expanses of impervious surfaces should be avoided. There are no large expansive areas of impervious surface proposed with this project. Impervious surfaces would be mainly used for the building’s concrete foundation. Permeable surfaces are proposed for the driveway. 9. Buildings should use natural materials and earth tone or subdued colors. Natural building materials in earth tones are proposed. All proposed building materials are natural with earth tone colors that would blend with the surroundings. Conditions of approval will require non-reflective roofing and window surfaces. 10. Landscaping should be native species that require little or no irrigation. Immediately adjacent to structures, fire retardant plants should be used as a fire prevention technique. The proposed landscaping incorporates a large number of native species plantings which would minimize the need for irrigation. The conditions of approval will ensure the use of fire retardant plants in the final landscape design. 11. Exterior lighting should be low-intensity and shielded from view so it is not directly visible from off-site. Conditions of approval will require that lights be low-intensity and shielded from view to ensure that off-site lighting impacts are minimized. 12. Access roads should be of a rural rather than urban character. (Standard curb, gutter, and concrete sidewalk are usually inconsistent with the foothills environment.) The proposed driveway consists of decomposed granite and no curb, sidewalk or gutters. 1 Planning and Transportation Commission 1 Verbatim Minutes 2 June 12, 2013 3 4 DRAFT EXCERPT 5 6 805 Los Trancos Road: Extension of Council Approval of a Site and Design Review Application for a 7 new house at 805 Los Trancos Road 8 9 Chair Martinez: Let us first vote on the item, the one item remaining on the Consent Calendar and that’s 10 the one year extension of site and design on 805 Los Trancos Road. We need a Motion and a second. 11 12 MOTION 13 14 Commissioner Keller: So moved. 15 16 SECOND, VOTE 17 18 Chair Martinez: Ok, Motion to grant the one year, recommended one year extension of the site and 19 design approval has been, Motion has been made by Commissioner Keller and seconded by Vice-Chair 20 Michael. Any discussion on the item? I guess we can’t, so those in favor of the Motion signal and say 21 aye (Aye). The Motion passes 6-0 with Commissioner Panelli absent tonight. 22 23 MOTION PASSED (6-0, Commissioner Panelli absent) 24 25 Commission Action: Commission approved staff recommendation for Extension of Council Approval of 26 a Site and Design Review Application for a new house at 805 Los Trancos Road, Motion by Commissioner 27 Keller, second by Vice-chair Michael 6-1, Commissioner Panelli absent) 28 174.0' 110.0' 126.8' 224.7' 167.3' 179.3' 417.5' 177.0' 79.6' 118.0'143.4' 275.7' 48.1' 795.7' 45.9' 31.1' 174.0' 110.0' 126.8' 224.7' 167.3' 179.3' 13.8' 47.6' 209.1' 345.4' 13.8' 345.4' 47.6' 243.2'608.1' 54.4' 795.7' 209.1' 1 243.2'608.1' 423.6' 178.7' 39.1' 446.9' 2.6' 446.9' 39.1' 200.0' 1290.7' 10.0'4.5' 207.9' 208.1' 47.4' 17.7' 4.5' 207.9' 208.1' 48.5' 143.4'118.0' 79.6' 177.0' 417.5' 502.1' 48.5' 275.7' 48.1' 72.0' 31.1' 45.9' 178.7' 620 610 856 805 L O S T R A N C O S R O A D This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 0'174' 805 Los Trancos Rd. Location Map CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2010 City of Palo Alto elee2, 2010-02-08 14:01:54 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) City of Palo Alto (ID # 3756) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: Comprehensive Plan Amendment Contract Amendment #1 Title: Approval of Amendment Number 1 to Contract in the amount of $290,019 with The Planning Center | DCE to Provide Additional Services Associated with the Comprehensive Plan Amendment Project for a Total Not to Exceed Amount of $1,140,000 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve Amendment Number 1 to Contract #C08125506 in the amount of $290,019 with The Planning Center | DCE to provide additional services associated with the Comprehensive Plan Amendment Project for a total revised contract-not-to exceed amount of $1,140,000. Background On April 7, 2008, the City Council awarded a contract to Design Community & Environment Inc. (DCE) for services related to the amendment of the 1998-2010 City of Palo Alto Comprehensive Plan (CMR 193:08). Council approved a total budget of $849,981 for this project. The 1998-2010 City of Palo Alto Comprehensive Plan (Comp Plan) amendment was initiated by the City Council in 2006 to focus on preservation of commercial land uses, preservation of retail and community services to support new residential growth, incorporate sustainability concepts, update the housing element and prepare concept area plans for East Meadow Circle and California Avenue/Fry’s areas. Between 2008 and 2010, City staff reviewed the existing Comp Plan elements with the Planning and Transportation Commission (PTC), prepared background reports on baseline growth topics, and developed preliminary information regarding the two concept area plans. City of Palo Alto Page 2 In 2010, the PTC and City Council held a joint study session to address the Comp Plan amendment work plan, including the recommended approach to the Housing Element update. In addition, the Council provided direction regarding updated growth projections, updates to the Comp Plan structure, vision, goals, policies and program statements, and additional work regarding review of the South El Camino Real Design Guidelines and LEED for neighborhood Development (LEED-ND). In 2010, the PTC completed the initial review of the Comp Plan vision statements, goals, policies and programs for each Comp Plan element. This phase, known as Phase 1, was focused on text edits and minor wording adjustments. In addition to the minor changes, more substantial changes and revisions to the Comp Plan were identified during Phase 1 review. These changes would be considered and discussed during the second phase of PTC review, also known as Phase 2. Prior to the start of Phase 2 review, the PTC determined that the process of review and discussion of the more substantial changes required more direct input from PTC members. In order to address this need, the PTC formed subcommittees consisting of two to three commissioners and City staff from the Planning Division as well as staff from other City departments. The subcommittee would review each element and prepare edits and revisions based on the comments received from the Phase 1 review and other changes identified by the subcommittee to improve the vision statements, goal structure, policy and program statements and other changes to implement the work plan as directed by Council. The work from each subcommittee would be presented to appropriate community stakeholders for comment and refinement. Drafts of each revision element would then be presented to the full PTC for a recommendation to include the draft in the Comp Plan amendment. In addition, the PTC recommended the extension of the Comprehensive Plan Amendment’s horizon year from 2020 to 2025 last August of 2012. The Comprehensive Plan Amendment process was initially extended by City Council in 2009 due to budget constraints. Several other factors discussed below delayed completion of the Amendment which is now expected to be completed by the Summer of 2014. Extending the existing Comprehensive Plan’s horizon year to 2025 may require additional studies and associated cost in the short term, but these costs can be offset by the additional time the extension would allow before the City is required to begin its next update of the Comprehensive Plan. Extending the horizon year from 2020 to 2025 has minimal or no impact on the revised Goals, Policies and Programs work completed to date. The work of each PTC subcommittee has been supported by DCE, the City’s consultant for the Comp Plan Amendment. Work performed by DCE included preliminary reviews of each existing City of Palo Alto Page 3 Comp Plan element, suggestions for revisions to modernize and improve the elements based upon current general plan/comprehensive plan standards, and recommendation for the addition of sustainability policies and program concepts that would be appropriate for each element. Additional work completed under the existing scope includes: ● Comp Plan Amendment project initiation; ● Review of existing and potential future conditions that would affect the Comp Plan Amendment, and ● Completion of the East Meadow Circle/Fabian Way Concept Plan; Substantial progress has been made on the following previously scoped work: ● Preparation of background information for existing Comp Plan elements; ● In consultation with City staff, preparation of updates to goals, policies and programs in existing elements, and ● Addition of sustainability related goals, policies and programs throughout the Comp Plan. Work has not substantially commenced on the following previously scoped items: ● Preparation of the Draft Environmental Impact Report; ● Preparation of the final draft of the Comp Plan Amendment; ● Preparation of the Final Environmental Impact Report; Discussion DCE’s original contract scope of work indicated that the Comp Plan Amendment project would be completed by the end of 2010. The City Council’s adoption of the 2010 budget extended the Comprehensive Plan Amendment work schedule and decreased the annual Comprehensive Plan Amendment budget by $75,000 for fiscal years 2010 and 2011. The extension of the work schedule projected the Comp Plan Amendment to be completed by 2012. Completion of the project has also been delayed due to the following factors that are not attributed to performance of DCE or its staff assigned to the project: City of Palo Alto Page 4 1. PTC subcommittee review process- The process of PTC subcommittee review of each element of the Comp Plan has extended the project timeline. This extension is due to more thorough participation by key City staff and City department representatives working with the PTC subcommittee to review each element. In addition, the PTC has requested comments from community stakeholders groups and appropriate boards and commissions. The result of this extended participation is a more thoroughly review Comp Plan Amendment that includes contributions from a wider audience than what was originally envisioned. 2. Preparation of a new traffic model- The original completion date of 2010 assumed the use of the City’s existing traffic model originally created in 1995 and updated in 2002 and 2008. It was most recently adjusted for the Stanford University Facilities Renewal and Replacement Project. As the timeline for the Comp Plan Amendment was extended, the City could not continue to justify the use of the existing model for long-term forecasting and planning studies. As a result, a new traffic model was commissioned. The new model was built using the Valley Transportation Authority’s Transportation- Land Use model updated with recent land use activities and known demand from specific plan area changes such as California Avenue/Fry’s, East Meadow Circle, and the Stanford University Medical Center. The new model also accounts for current and future forecast assumptions from neighboring agencies including Menlo Park, East Palo Alto, and Mountain View. The new model includes Base Year 2012, Near-Term 2025, and Future Year 2035 traffic assumptions. DCE’s revised scope of work includes preparation of a new traffic model. 3. Preparation of the California Avenue Concept Area Plan- The preparation of the California Avenue Concept Area Plan (Concept Plan) has been delayed due to a number of factors. The California Avenue Streetscape Project and the prior removal of public trees along California Avenue and the resulting lawsuit temporarily delayed the Concept Plan until those projects and issues were resolved. In addition, the submittal of the 395 Page Mill Road Planned Community project and proposal for a public safety building as a community benefit shifted focus away from the Concept Plan until a more definite 395 Page Mill Road project was prepared and submitted to the City. 4. Other projects and studies- The timeline to complete the Comp Plan Amendment has also been extended due to concurrent analysis of other significant Planning efforts. In 2010, the City Council initiated the Rail Corridor Study and task force to generate a community vision for land use, transportation, and urban design opportunities along the Caltrain corridor, particularly in response to improvements to fixed rail services along the tracks through Palo Alto. The proposed Arts & Innovation District project at 27 University Avenue would establish new land uses and zoning at the site and would affect City of Palo Alto Page 5 land use throughout the downtown area. The outcome of these studies and projects would appropriately inform the Comp Plan Amendment. New Consultant Tasks The applicant has submitted a revised scope of work and timeline that represents the tasks and activities to be performed in order to complete the Comp Plan Amendment. The contract modification scope of work is included in Attachment A. These tasks include: 1 Additional work on the California Avenue Concept Plan; 2 Comprehensive Plan Amendment Formatting; 3 Creation of the Comp Plan Amendment Implementation Matrix; 4 Preparation of the Citywide Travel Demand Forecasting Model; 5 Preparation of a Future Year Traffic demand Scenario for the Comp plan Amendment EIR; 6 Preparation of 2020 Greenhouse Gas Modeling; 7 Administration and maintenance of the Comp Plan Amendment website, www.paloaltocompplan.org The scope also includes costs associated with the extended timeline and for recouping costs for previously approved work that were “borrowed” from the existing budget. The amount requested by the consultant is $274,092. Staff requests an additional $15,927 in contingency funds for a total contract amendment of $290,019. Resource Impact The attached Amendment Number 1, Exhibit A, requests an addition of $290,019 to the contract titled Comprehensive Plan Amendment Services. There is sufficient budget in the proposed Fiscal Year 2014 Operating Budget to fund the additional work under this contract. As described above, Amendment Number 1 will provide the additional work needed to finish the project by the expected completion date. The total cost of the project after Amendments 1 is summarized in the following table: Exhibit Summary Breakdown Total Cost City of Palo Alto Page 6 Exhibit A (Amendment 1 Net Total) $274,092 Contingency $15,927 Original Contract Total w/ Contingency (CMR:193:08) $849,981 Revised Contract Grand Total $1,140,000 Staff is currently working with DCE and the PTC to guide the project through to a reasonable completion date based on adjustments made to the schedule due to factors described above. The following table illustrates the proposed schedule to adoption of the Comp Plan Amendment. Comprehensive Plan Update Timeline Budget Request, City Council June 24, 2013 Issuance of Notice of Preparation (NOP) Summer 2013 EIR Scoping Session, PTC Summer 2013 Review of California Avenue Area Concept Plan Alternatives, City Council Summer 2013 California Avenue Area Concept Plan, publish Fall 2013 Draft EIR Published Early 2014 Draft EIR Comment Period Early 2014 PTC Hearings, Draft EIR Early 2014 – Spring 2014 Final EIR Published Spring 2014 City Council Review, Final EIR Summer 2014 City of Palo Alto Page 7 City Council Review, Comp Plan Amendment Summer 2014 Policy Implications Amendment Number 1 does not represent a change to existing policies. Environmental Review An Environmental Impact Report (EIR) is expected to be produced for public review and comment in Q4 2013. The EIR will include a traffic analysis based on a new Palo Alto traffic model built upon the 2035 Santa Clara County VTA model. The PTC will conduct EIR hearings for the EIR in late Q4, 2013. Attachments: Attachment A: Comprehensive Plan Amendment - Scope Adjustments (PDF) MEMORANDUM DATE May 7, 2013 TO Steven Turner and Roland Rivera City of Palo Alto FROM Joanna Jansen RE Requested Comprehensive Plan Scope and Fee Modifications, May 2013 As you requested, this memorandum is intended to list all of the potential changes to the Comprehensive Plan scope and associated budget for the City’s consideration. These changes affect the scopes of both The Planning Center | DC&E and Hexagon Transportation Consultants. In addition, this memorandum serves to document the change from a horizon year of 2020 to one of 2025, for both the Comprehensive Plan and the associated EIR. We do not expect to incur additional costs associated with this change, with the exception of the additional required analysis of GHG emissions in 2020, as described in item VI. I. ADDITIONAL WORK ON CALIFORNIA AVENUE CONCEPT PLAN Since we prepared the California Avenue Preferred Alternative and accompanying Comp Plan text in spring 2011, the City has received an application for the 395 Page Mill project, which includes two key sites within the Concept Plan area. At the City’s request, we have completed or will complete the following out‐of‐scope tasks: Review of 395 Page Mill application for consistency with the current draft of the Cal Ave Concept Plan and preparation of brief email memo summarizing our conclusions. (Completed) Revise Concept Plan graphics and draft Comp Plan text to reflect 395 Page Mill project components. City staff will provide direction on specific revisions based on PTC and Council comments. Facilitate a community workshop to bring the community up to speed on the progress on the Concept Plan since our last workshop in February 2010 and PAGE 2 explain the next steps for Council approval of the Concept Plan and incorporation of the Concept Plan into the Comp Plan. (Completed) Attend and facilitate a PTC meeting to update commissioners on the status of the Cal Ave area Concept Plan and summarize public comments heard at the November 8, 2012 Community Update meeting. Assemble a Work Book for PTC review, drawing largely from existing materials as needed to support PTC review of the Draft Concept Plan Prepare for and lead a walking tour of the Cal Ave Area to orient new commissioners to the study area and issues of concern. Peer review the Draft Cal Ave Concept Plan and policies prepared by City staff. Attend a PTC meeting to present the preferred alternative for the Draft Cal Ave Area Concept Plan Attend A City Council Meeting to request approval of the Draft Cal Ave Area Concept Plan Task A of our scope of work includes attendance at 17 PTC meetings. As of April 30, 2013, we have attended 14 PTC meetings, including the above‐referenced November 8, 2012 Neighborhood Update meeting which was substituted for one of the PTC meetings in the scope. We will also deduct attendance at the May 8, 2013 PTC meeting on the California Avenue Area Concept Plan from the allotment of 17 PTC meetings in Task A of our scope. The following additional meetings are included in this contract modification: Walking tour of the Concept Plan Area with PTC PTC Meeting on Draft Concept Plan City Council Meeting to Approve Concept Plan With the above deductions and additions to our scope of work, there will be a total of two PTC meetings remaining from the original scope of work and we will, as needed and at the discretion of City staff, be able to attend two meetings not yet called out either in our original scope of work or this contract modification. The cost for this item is: $31,085. PAGE 3 II. COMPREHENSIVE PLAN FORMATTING The Planning Center | DC&E will format the Comprehensive Plan in a format that generally resembles the current Comprehensive Plan. However, it will be created in Microsoft Word to ensure that City staff are able to update the Comprehensive Plan as changes are made over the years. The Planning Center | DC&E will prepare one full element with the proposed format and submit it for staff review and approval. This estimate is based on the following assumptions: The Planning Center | DC&E will primarily use photographs provided by the City, supplementing with photos that we have in‐house. These will be of sufficiently high resolution for use in a printed document (minimum 200 dpi) and will include full caption information where necessary and appropriate for the document. The Planning Center | DC&E will provide one screencheck draft of the formatted Final Comprehensive Plan. Upon receipt of one consolidated set of internally consistent comments, we will prepare a final version of the formatted Final Comprehensive Plan. The document will be created in Microsoft Word to ensure that it can be modified by staff in the future. The Microsoft Word document will be a one‐column format. The dividers, covers, and other non‐text pages are an exception to this and will be created in InDesign or another graphics program. The final version will be provided to the City in electronic format (native Word format and PDFs). Please note that we expect to provide the majority of the maps associated with each Element, based on GIS data provided by the City, which we will be preparing under our scope for the EIR. We expect the City to prepare the following maps: Aerial Photo Sphere of Influence & Urban Service Area Stanford University Lands Community Design Features City Structure ‐ Neighborhoods ‐ Centers ‐ Districts Commercial Growth Monitoring Areas from Citywide Study PAGE 4 Cultural Resources Archaeological Resource Areas Key Intersections & Commercial Monitoring Areas Watershed & Groundwater Recharge Areas Ground Shaking Potential The cost for this item is: $12,913. III. IMPLEMENTATION MATRIX In addition to the programs that we will work with staff to include in every element of the Comprehensive Plan, The Planning Center | DC&E will prepare an implementation matrix. We recommend that the matrix be prepared separately from the Comprehensive Plan and that it be prepared during the public review process when the programs are nearly complete. A separate implementation matrix allows and encourages the City to make it a living document that is updated as programs are completed, as City priorities shift, and as funding conditions change. The implementation matrix will outline major projects that should be completed in the five years after the plan is adopted, along with the department responsible for implementation, estimated cost, suggested timing, and potential funding sources. These items will also serve as a framework for City evaluation of its progress in implementing the Comprehensive Plan. We understand that there is a significant need for input from City staff in a wide range of departments on this document. So, this scope assumes that we will prepare a first draft representing our best information about department, cost, timing, and funding, and that City staff will complete it from there. The cost for this item is: $9,496. IV. CITYWIDE TRAVEL DEMAND FORECASTING MODEL As described in Attachment A, Hexagon will prepare a Citywide travel demand model. This task includes a limited labor budget for The Planning Center | DC&E to participate in the model development as this relates to the preparation of the EIR. This is because it was previously assumed that the City would provide us with completed model outputs PAGE 5 and that we would not need to interact with City staff or the transportation consultant regarding model outputs. This limited number of hours assumes that Hexagon will otherwise be supervised directly by City staff with respect to model preparation. We will work with Hexagon on the preparation of their portion of the Comprehensive Plan EIR, which is included in our original scope of work. (Authorized under February 2012 NTP and completed) The cost for this item is: $58,523, including $49,500 for Hexagon and $9,023 for The Planning Center | DC&E, assuming a reduced subconsultant administration fee of 5 percent for this task only. V. FUTURE YEAR SCENARIO TRAFFIC MODELING FOR COMP PLAN AMENDMENT EIR Hexagon would complete the following work: A. Revalidate 2010 Base Year Hexagon will revalidate the 2010 base year using revised 2010 land use data provided by City staff. B. Convert Job Categories Hexagon will convert the job categories used in MTC’s Sustainable Communities Strategy (SCS), which are based on categories used in the North American Industrial Classification System (NAICS) into job categories used in the VTA model, which are based on the Standard Industrial Classification (SIC). The methodology for this conversion is based on conversations with ABAG/MTC demographers and has been tested to confirm it results in defensible and reasonably foreseeable numbers and types of jobs in Palo Alto in the future. PAGE 6 C. Develop Future Year Baseline (Existing Comprehensive Plan) Model Input Assumptions In order to develop future baseline travel forecasts, the year 2010 model input files will be updated to the years 2020, 2025 and 2035. City staff will develop the future year land use projections (Existing Comprehensive Plan) for the Palo Alto zones for the baseline alternative. The land use files will include approved and proposed development. Transportation improvements (highway and transit) within the City of Palo Alto to be included in the future year baseline network will be provided by City staff. Hexagon will be responsible for incorporating the future year Palo Alto land uses and transportation improvements into the CUBE/VOYAGER modeling software. In addition, Hexagon will update the land use files and networks outside the City of Palo Alto, as well as other model input files and variables. The end product of this task will be a complete set of updated model input files to run the future year baseline forecast for the City of Palo Alto. D. Develop Future Year Baseline Travel Forecast Hexagon will run the City’s travel forecasting model and develop the year 2020, 2025 and 2035 baseline (Existing Comprehensive Plan) travel forecast for Palo Alto. Relevant performance statistics of the future year baseline model run will be summarized and analyzed. The transportation impacts of the alternative will be evaluated using a set performance measures that could include: Daily travel patterns by mode (drive alone, carpool, transit, non‐motorized) for trips between Palo Alto and other areas of the region. AM and PM peak period traffic assignment volumes on Palo Alto’s street network by level of service. Daily transit trips and boardings by mode (express bus, local bus, shuttle bus, Caltrain) Vehicle miles traveled (VMT) and vehicle hours traveled (VHT) and speed on Palo Alto roadways stratified by levels of service. Year 2020, 2025 and 2035 (adjusted) turning movements and levels of service at 25 study intersections. PAGE 7 This task includes collecting new AM and PM peak‐hour intersection turning movement counts at 25 intersections. The results of the future year baseline forecast will be summarized in a technical memorandum. E. Testing of Alternatives Hexagon will provide a trip generation comparison for up to three Comprehensive Plan land use alternatives. No other analysis or testing of alternatives will occur. The cost for this item is: $ 68,004, including $ 57,060 for Hexagon and $10,944 for The Planning Center | DC&E. Subconsultant management fee would be the standard 10% for this task. VI. 2020 GHG MODELING For the purposes of the EIR on the Comp Plan Amendment, we recommend that the City analyze GHG emissions in the year 2020. This future year scenario is specifically called for in the BAAQMD CEQA Guidelines (available here – see section 9.2 for how to do plan‐level GHG analysis: http://www.baaqmd.gov/~/media/Files/Planning%20and%20Research/CEQA/BAAQMD %20CEQA%20Guidelines_May%202011_5_3_11.ashx ). It is important to note that these guidelines are currently suspended due to litigation. However, they remain the best available guidance and many jurisdictions are electing to follow them because they are supported by substantial evidence. The lawsuit may not be resolved until summer 2013 at the earliest. The guidelines state: BAAQMD recommends preparing a community‐wide GHG emission projection to identify the expected levels of GHG emissions for: 1) 2020 (i.e., the AB 32 benchmark year), and 2) the projected year of the plan build out. Two projections should be prepared for each year: A projection reflecting existing conditions (e.g., business‐as‐usual), and A projection that accounts for proposed policies, programs, and plans included within the general plan that would reduce GHG emissions from build‐out of the plan. PAGE 8 The steps required for this task will be: City staff creates a 2020 buildout scenario; Hexagon does a traffic model run of the 2020 buildout scenario to calculate VMT (included in Task V.C, above); and The Planning Center | DC&E models the VMT and other inputs from the 2020 scenario to calculate resulting GHG emissions. We will then fold these results into the GHG section of the Comp Plan Amendment EIR. It should be noted that the Comp Plan Amendment EIR is also required to address GHG emissions for the horizon year of the amendment, so the GHG section will address emissions in both 2020 (required by BAAQMD) and 2025 (horizon year for the Amendment). An analysis of horizon year GHG is already included in our scope and so does not create additional costs. The cost for this item is: $9,277. VII. WEEKLY TELECONFERENCES Our scope and fee did not anticipate the extended timeframe for completion or the associated number of hours necessary for consultation with City staff. We believe this consultation is important, but would like to call it out as an additional task to reflect the staff time involved. One or two representatives of The Planning Center | DC&E will participate in a call of approximately half an hour on a weekly basis through project completion, now anticipated in July 2014. The cost for this item is: $ 18,972. VIII. SIX PERCENT BILLING RATE INCREASE As called out in our contract, our billing rates increased by 6 percent in July 2011. This item reflects an increase in labor costs for work completed following July 2011. We had $205,029 remaining in our labor budget as of July 2011, so we have applied six percent to that number. The cost for this item is: $12,302. PAGE 9 IX. COSTS ASSOCIATED WITH EXTENDED TIMELINE When we identified the additional costs associated with extending the project timeline (see July 8, 2009 spreadsheet), we assumed that those costs could be covered by shifting some scope to City staff and reducing our level of effort on the Community Outreach task. To partially defray the costs of extending the length of the contract, city staff agreed to do the following: a. Prepare the NOP. b. Hold the scoping meeting. c. Provide assistance with population projections. d. Prepare the Findings and Resolutions. e. Prepare the Mitigation Monitoring and Reporting Program, if needed, based on impacts identified by The Planning Center | DC&E. City staff completed item c; however, items a, b, d, and e are now to be returned to our scope of work. Additionally, at the time the additional costs associated with the extended timeline were identified, the extension was anticipated to last through March of 2012. The current schedule will now last through July 2014. To cover the additional costs associated with resource planning and invoicing over the extended period, and to account for the return of items a, b, d, and e to our scope of work we request $44,283, plus expenses. The cost for this item is: $44,283, plus expenses. X. WEBSITE REORGANIZATION At the request of City staff, we have updated and refreshed the Comp Plan Amendment website on two occasions. This task involved changing the logo, color scheme, and layout of the pages to match the City's updated website; archiving old documents and blog posts, replacing the calendar feature with a list of milestones (TBD), modifying the menu bar, and developing new pages for the presentation of draft materials to the public. (Completed) The cost for this item is: $9,237. PAGE 10 XI. CONCLUSION Please feel free to contact me with any questions about these potential changes. We can also discuss modifications to the tasks. As you know, they can be ‘mixed and matched’ with one another, with the exception of Items VIII, IX, and X. Item VII is required in order to continue our biweekly conference calls to coordinate project efforts, Item IX is stipulated in our contract, and Item X is the result of the extended timeframe associated with the project. The grand total of these changes is $274,092. AJ\IIENDMENT NO.1 TO CONTRACT NO. C08125506 BETWEEN THE CITY OF PALO ALTO AND DESIGN COMMUNITY & ENVIRONMENT, INC. This Amendment No.1 to Contract No. C08125506 ("Contract") is entered into on June ,2013, by and between the CITY OF PALO ALTO, a California chartered municipal corporation("CITY"), and DESIGN COMMUNITY & ENVIRONMENT, INC., a California corporation, located 1625 Shattuck Avenue. Suite 300, Berkeley, CA. 94709, Telephone (510)848-3815 (CONSULTANT"). RECITALS: WHEREAS, City retained Consultant to assist in updating the Comprehensive Plan and conduct an EIR for the Comprehensive Plan; WHEREAS, the City, due to an administrative oversight allowed the contract to lapse, intends to reactivate the contract from the expiration date of December 31, 2012 and extend the contract term to June 30, 2014; WHEREAS, the City also desires to increase the compensation from a total not to exceed of $849,981.00, by $290,019.00, to a new total not to exceed of $1,140,000.00 and to increase the scope of services to include the addition of California Avenue Concept Plan; Comprehensive Plan Amendment Formatting; Creation of the Comp Plan Amendment Implementation Matrix; Preparation of the Citywide Travel Demand Forecasting Model; Preparation of a Future Year Traffic demand Scenario for the Comp plan Amendment EIR; Preparation of2020 Greenhouse Gas Modeling; Administration and maintenance of the Comp Plan Amendment and to provide for a rate increase as specified in EXHIBIT "AI" Additional Scope of Work. WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the partIes agree: SECTION 1. Section 2 is hereby amended to read as follows: "SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2014 unless tenninated earlier pursuant to Section 19 of this agreement" SECTION 2. Section 4 is hereby amended to read as follows: "SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibits "A" and "AI", including both payment for professional services and reimbursable expenses, shall not exceed One Million One Revision July 25, 2012 Hundred Twenty Four Thousand Seventy Three Dollars ($1,124,073.00). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed One Million One Hundred Forty Thousand Dollars ($1,140,000.00). The applicable rates and schedule of payment are set out in Exhibit "C-l", entitled "HOURL Y RATE SCHEDULE," which is attached to and made a part of this Agreement." SECTION 3. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment( s) to this Amendment, which are incorporated in full by this reference: a. Exhibit "AI" entitled "ADDITONAL SCOPE OF SERVICES". b. Exhibit "C" entitled "COMPENSATION". c. Exhibit "C2" entitled "ADDITIONAL SCOPE COST" SECTION 4. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO City Manager DESIGN COMMUNITY & ENVIRONMENT, INC. BY.~ APPROVED AS TO FORM: Name: St-ev:-.e NOctLk Title: &i (\ wpaJ Senior Asst. City Attorney Attachments: EXHIBIT "AI": EXHIBIT "C": EXHIBIT "C2" ADDITIONAL SCOPE OF SERVICES COMPENSATION ADDITIONAL SCOPE COST 2 Revision July 25, 2012 EXHIBIT "A1" ADDITIONAL SCOPE OF WORK I. ADDITIONAL WORK ON CALfFORNIA AVENUE CONCEPT PLAN CONSULTANT prepared the California Avenue Preferred Alternative and accompanying Comp Plan text in spring 2011, CITY has received an application for the 395 Page Mill project., which includes two key sites within the Concept Plan area. At the CITY's request., CONSULTANT shall have completed or shall complete the following out-of-scope tasks: • Review of 395 Page Mill application for consistency with the current draft of the Cal Ave Concept Plan and preparation of brief email memo summarizing CONSULTANT'S conclusions. • Revise Concept Plan graphics and draft Comp Plan text to reflect 395 Page Mill project components. CITY staff shall provide direction on specific revisions based on PTC and Council comments. • Facilitate a community workshop to bring the community up to speed on the progress on the Concept Plan since CONSULTANT'S last workshop in February 2010 and explain the next steps for Council approval of the Concept Plan and incorporation of the Concept Plan into the Comp Plan. • Attend and facilitate a PTC meeting to update commissioners on the status of the Cal Ave area Concept Plan and summarize public comments heard at the November 8, 2012 Community Update meeting. • Assemble a Work Book for PTC review, drawing largely from existing materials as needed to support PTC review of the Draft Concept Plan • Prepare for and lead a walking tour of the Cal Ave Area to orient new commissioners to the study area and issues of concern. • Peer review the Draft Cal Ave Concept Plan and policies prepared by CITY staff. • Attend a PTC meeting to present the preferred alternative for the Draft Cal Ave Area Concept Plan • Attend A CITY Council Meeting to request approval of the Draft Cal A ve Area Concept Plan Task A of CONSULTANT'S scope of work includes attendance at 17 PTC meetings. As of April 30, 2013, CONSULTANT has attended 14 PTC meetings, including the above-referenced November 8, 2012 Neighborhood Update meeting which was substituted for one of the PTC meetings in the scope. CONSULTANT shall also deduct attendance at the May 8, 2013 PTC meeting on the California Avenue Area Concept Plan from the allotment of 17 PTC meetings in Task A of CONSULTANT'S scope. The following additional meetings are included in this contract modification: • Walking tour of the Concept Plan Area with PTC • PTC Meeting on Draft Concept Plan • CITY Council Meeting to Approve Concept Plan With the above deductions and additions to CONSULTANT'S scope of work, there shall be a total of two PTC meetings remaining from the original scope of work and CONSULTANT shall, as needed and at the discretion of CITY staff, be able to attend two meetings not yet called out either in CONSULTANT'S original scope of work or this contract modification. II. COMPREHENSIVE PLAN FORMATTING The CONSULTANT shall format the Comprehensive Plan in a format that generally resembles the current Comprehensive Plan. However, it shall be created in Microsoft Word to ensure that CITY staff is able to update the Comprehensive Plan as changes are made over the years. The CONSULTANT shall prepare one full element with the proposed format and submit it for staff review and approval. This estimate is based on the following assumptions: CONSULTANT shall primarily use photographs provided by the CITY, supplementing with photos that CONSULTANT has in-house. These shall be of sufficiently high resolution for use in a printed document (minimum 200 dpi) and shall include full caption information where necessary and appropriate for the document. CONSULTANT shall provide one screencheck draft of the formatted Final Comprehensive Plan. Upon receipt of one consolidated set of internally consistent comments, CONSULTANT shall prepare a final version of the formatted Final Comprehensive Plan. The document shall be created in Microsoft Word to ensure that it can be modified by staff in the future. The Microsoft Word document shaJl be a one-column format. The dividers, covers, and other non-text pages are an exception to this and shall be created in InDesign or another graphics program. The final version shaJl be provided to the CITY in electronic format (native Word format and PDFs). CONSULTANT shall expect to provide the majority of the maps associated with each Element, based on GIS data provided by the CITY, which CONSULTANT shall be preparing under CONSULTANT'S scope for the EIR. CONSULTANT shall expect the CITY to prepare the following maps: Aerial Photo Sphere ofInfluence & Urban Service Area Stanford University Lands Community Design Features CITY Structure -Neighborhoods -Centers -Districts Commercial Growth Monitoring Areas from citywide Study Cultural Resources Archaeological Resource Areas Key Intersections & Commercial Monitoring Areas Watershed & Groundwater Recharge Areas Ground Shaking Potential m. IMPLEMENTATION MA TRlX In addition to the programs that CONSULTANT shall work with staff to include in every element of the Comprehensive Plan, CONSULTANT shall prepare an implementation matrix. CONSULTANT shall recommend that the matrix be prepared separately from the Comprehensive Plan and that it be prepared during the public review process when the programs are nearly complete. A separate implementation matrix allows and ~ncourages the CITY to make it a living document that is updated as programs are completed, as CITY priorities shift, and as funding conditions change. The implementation matrix shall outline major projects that should be completed in the five years after the plan is adopted, along with the department responsible for implementation, estimated cost, suggested timing, and potential funding sources. These items shall also serve as a framework for CITY evaluation of its progress in implementing the Comprehensive Plan. CONSULTANT shall understand that there is a significant need for input from CITY staff in a wide range of departments on this document. So, this scope assumes that CONSULTANT shall prepare a first draft representing CONSULTANT'S best information about department, cost, timing, and funding, and that CITY staff shall complete it from there. IV. CiTYWIDE TRAVEL DEMAND FORECASTING MODEL As described in Attachment A, Hexagon Consultants (Hexagon) shall prepare a citywide travel demand model. This task includes a limited labor budget for CONSULTANT to participate in the model development as this relates to the preparation of the EIR. This is because it was previously assumed that the CITY would provide CONSULTANT with completed model outputs and that CONSULTANT would not need to interact with CITY staff or the transportation consultant regarding model outputs. This limited number of hours assumes that Hexagon shall otherwise be supervised directly by CITY staff with respect to model preparation. CONSULTANT shall work with Hexagon on the preparation of their portion of the Comprehensive Plan EIR, which is included in CONSULTANT'S original scope of work. V. FuTURE YEAR SCENARIO TRAFFIC MODELING FOR COMP PLAN AMENDMENT Em Hexagon would complete the following work: Revalidate 2010 Base Year Hexagon shall revalidate the 2010 base year using revised 2010 land use data provided by CITY staff. Convert Job Categories Hexagon shall convert the job categories used in MTC's Sustainable Communities Strategy (SCS), which are based on categories used in the North American Industrial Classification System (NATCS) into job categories used in the VT A model, which are based on the Standard Industrial Classification (SIC). The methodology for this conversion is based on conversations with ABAG/MTC demographers and has been tested to confirm it results in defensible and reasonably foreseeable numbers and types of jobs in Palo Alto in the future. Develop Future Year Baseline (Existing Comprehensive Plan) Model Input Assumptions In order to develop future baseline travel forecasts, the year 20 I 0 model input files shall be updated to the years 2020, 2025 and 2035. CITY staff shall develop the future year land use projections (Existing Comprehensive Plan) for the Palo Alto zones for the baseline alternative. The land use files shall include approved and proposed development. Transportation improvements (highway and transit) within the City of Palo Alto to be included in the future year baseline network shall be provided by CITY staff. Hexagon shall be responsible for incorporating the future year Palo Alto land uses and transportation improvements into the CUBENOY AGER modeling software. In addition, Hexagon shall update the land use files and networks outside the CITY of Palo Alto, as well as other model input files and variables. The end product of this task shall be a complete set of updated model input files to run the future year baseline forecast for the City of Palo Alto. Develop Future Year Baseline Travel Forecast Hexagon shall run the CITY's travel forecasting model and develop the year 2020, 2025 and 2035 baseline (Existing Comprehensive Plan) travel forecast for Palo Alto. Relevant perfonnance statistics of the future year baseline model run shall be summarized and analyzed. The transportation impacts of the alternative shall be evaluated using a set perfonnance measures that could include: • Daily travel patterns by mode (drive alone, carpool, transit,. non-motorized) for trips between Palo Alto and other areas of the region. • AM and PM peak period traffic assignment volumes on Palo Alto's street network by level of service. • Daily transit trips and boardings by mode (express bus, local bus, shuttle bus, Caltrain) • Vehicle miles traveled (VMT) and vehicle hours traveled (VHT) and speed on Palo Alto roadways stratified by levels of service. • Vear 2020, 2025 and 2035 (adjusted) turning movements and levels of service at 25 study intersections. This task includes collecting new AM and PM peak-hour intersection turning movement counts at 25 intersections. The results of the future year baseline forecast shall be summarized in a technical memorandum. Testing of Alternatives Hexagon shall provide a trip generation comparison for up to three Comprehensive Plan land use alternatives. No other analysis or testing of alternatives shall occur. VI. 2020 GHG MODELING For the purposes of the EIR on the Comp Plan Amendment, CONSULTANT shall recommend that the CITY analyze GHG emissions in the year 2020. This future year scenario is specifically called for in the BAAQMD CEQA Guidelines (available here -see section 9.2 for how to do plan-level GHG analysis: http://www.baaqmd.gov/-/mediaiFileslPlanning%20and%20Research/CEQAlBAAQMD%20CEQA%20Gui delines_May%202011_5_3_11.ashx ). It is important to note that these guidelines are currently suspended due to litigation. However, they remain the best available guidance and many jurisdictions are electing to follow them because they are supported by substantial evidence. The lawsuit may not be resolved until summer 2013 at the earliest. The guidelines state: BAAQMD recommends preparing a community-wide GHG emission projection to identify the expected levels ofGHG emissions for: 1) 2020 (i.e., the AB 32 benchmark year), and 2) the projected year of the plan build out. Two projections should be prepared for each year: • A projection reflecting existing conditions (e.g., business-as-usual), and • A projection that accounts for proposed policies, programs, and plans included within the general plan that would reduce GHG emissions from build-out of the plan. The steps required for this task shall be: CITY staff creates a 2020 buildout scenario; Hexagon does a traffic model run of the 2020 buildout scenario to calculate VMT (included in Task V.C, above); and CONSULTANT models the VMT and other inputs from the 2020 scenario to calculate resulting GHG emissions. CONSULTANT shall then fold these results into the GHG section of the Comp Plan Amendment EIR. It should be noted that the Comp Plan Amendment EIR is also required to address GHG emissions for the horizon year of the amendment., so the GHG section shall address emissions in both 2020 (required by BAAQMD) and 2025 (horizon year for the Amendment). An analysis of horizon year GHG is already included in CONSULTANT'S scope and so does not create additional costs. VII_ WEEKLY TELECONFERENCES CONSULTANT'S original scope and fee did not anticipate the extended timeframe for completion or the associated number of hours necessary for consultation with CITY staff. CONSULTANT believes this consultation is important, but shall call it out as an additional task to reflect the staff time involved. One or two representatives of CONSULTANT'S shall participate in a call of approximately half an hour on a weekly basis through project completion, now anticipated in July 2014. VIII. SIX PERCENT BILLING RATE INCREASE As called out in CONSULTANT'S contract, CONSULTANT'S billing rates increased by 6 percent in July 201 J. This item reflects an increase in labor costs for work completed following July 201 L CONSULTANT had $205,029 remaining in CONSULTANT'S labor budget as of July 2011. CONSULTANT has applied six percent to that number. IX. COSTS ASSOCIATED WITH EXTENDED TIMELINE When CONSULTANT identified the additional costs associated with extending the project timeline (see July 8, 2009 spreadsheet), CONSULTANT assumed that those costs could be covered by shifting some scope to CITY staff and reducing CONSULTANT'S level of effort on the Community Outreach task. To partially defray the costs of extending the length of the contract, qTY staff agrees to do the following: a. Prepare the NOP. b. Hold the scoping meeting. c. Provide assistance with population projections. d. Prepare the Findings and Resolutions. e. Prepare the Mitigation Monitoring and Reporting Program, if needed, based on impacts identified by The CONSULTANT. CITY staff completed item c; however, items a, b, d, and e are now to be returned to CONSULTANT'S scope of work. Additionally, at the time the additional costs associated with the extended timeline were identified, the extension was anticipated to last through March of 2012. The current schedule shall now last through July 2014. CITY shall cover the additional costs associated with resource planning and invoicing over the extended period, and to account for the return of items a., b, d, and e to CONSULTANT'S scope of work. X. WEBSITE REORGANIZA TION CONSULTANT shall have updated and refreshed the Comp Plan Amendment website on two occasions. This task involved changing the logo, color scheme, and layout of the pages to match the CITY's updated website; archiving old documents and blog posts, replacing the calendar feature with a list of milestones (TBD), modifying the menu bar, and developing new pages for the presentation of draft materials to the public. EXHIBIT "C" COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C- 1. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "A" and "AI" ("Services") and reimbursable expenses shall not exceed $1,124,073.00. CONSULTANT agrees to complete all Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $1,140,000.00. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in- house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $0.00 shall be approved in advance by the CITY's project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY's project manager's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULT ANT's proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1 . The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY's Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. TASK EXIDBIT "C2" ADDITIONAL SCOPE COST Additional work on California A venue Concept Plan Comprehensive Plan Formatting Implementation matrix Citywide Travel Demand Forecasting Model Future Year Scenario Traffic Modeling for Comp Plan Amendment ErR 2020 GHG Modeling Weekly Teleconferences Six Percent Billing Rate Increase Cost Associated with an Extended Timeline Website Reorganization TOTAL NOT TO EXCEED COST $ 31,085.00 $ 12,913.00 $ 9,496.00 $ 58,523.00· $ 68,OO4.00*'" $ 9,277.00 $ 18,972.00 $ 12,302.00 $ 44,283.00 $ 9,237.00 $ 274,092.00 ·rncludes $49,500.00 for Hexagon Consultants, $9,023.00 for CONSULTANT (5% Admin. Fee) ··Includes $57,060.00 for Hexagon Consultants, $10,944.00 for CONSULTANT (10% Management Fee) City of Palo Alto (ID # 3802) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: PAUSD Field Brokering and Maintenance Agreement Title: Approval of an Agreement Between the City of Palo Alto and the Palo Alto Unified School District of Santa Clara County Concerning the Public Use, Brokering, and Maintenance of District-Owned Athletic Fields, Tennis Courts and Basketball Courts Jointly Used by School Students and the General Public From: City Manager Lead Department: Community Services Recommendation Staff recommends the Council approve, and authorize the City Manager to sign the agreement (Attachment A) with the Palo Alto Unified School District (PAUSD) for the period January 1, 2013 through December 31, 2013. The referenced agreement is for athletic field and tennis court maintenance, community use of the school district’s elementary and middle school fields as well as tennis and basketball courts at middle and high schools, which will continue to be brokered by the City for recreational and athletic use. Background In 1993, the City and PAUSD met to discuss maintenance needs of school district athletic fields in light of school district budget constraints and existing public use of school district fields. A partnership was formed and commenced in 1995 for the City to maintain select PAUSD athletic fields for both school and community use with an equal cost share. In addition, the partnership also included an equal cost share for capital improvements to athletic fields. The agreement has since been revised several times with the most recent change being implemented in January 25, 2010 for a three-year term, set to end on December 31, 2012 (CMR:123:10). The most recent agreement removed cost sharing for capital improvements and the cost is now fully incurred by PAUSD. Staff requested an extension of the term of the contract for 6 months to allow negotiations with the School District. The agreement will continue to encompass athletic fields at 13 elementary schools and three middle schools, and tennis courts at five district high schools. City of Palo Alto Page 2 In addition to the field maintenance part of the agreement, there is also the public community use and brokering of PAUSD athletic fields and courts outside of school activity hours. Community use of school district athletic fields and courts is administered by the City through a field brokering process, and revenue is shared between both parties. Discussion Staff has worked cooperatively with PAUSD staff to negotiate a new agreement. The agreement provides for the continued maintenance of school district field at all of PAUSD elementary schools, as well as the fields at Jane L. Stanford (JLS) and Jordan Middle Schools. The fields at Terman Middle School are dedicated park land and are maintained in a manner similar to other City parks’ maintenance. The maintenance of turf areas includes mowing, edging, de-thatching, reseeding, aeration, maintenance of irrigation heads, and valves and controllers. The agreement provides for the maintenance of tennis courts and basketball courts at Jordan, Terman, and JLS Middle Schools and at Gunn and Palo Alto High Schools. This work includes periodic sweeping of the court surfaces and washing during the summer months. The terms of sharing expenses for field and court maintenance continues to be split evenly between PAUSD and the City (50%/ 50%). The City will continue to broker the fields, tennis courts and basketball courts in accordance with the Council-approved Field Use Policy. This policy is intended to ensure that the public, both youth and adults, has fair access to all PAUSD and City-owned fields and athletic facilities. The criteria incorporated into the Field Use Policy helps ensure that Palo Alto children and non-profit sports clubs have top priority to field space for practice and competition. The terms of the fee sharing between the City and PAUSD continue to be 60% City/ 40% District. The City places a high priority on the maintenance of school playing fields and courts for physical fitness, recreation, and safety. This agreement will continue the commitment to high quality turf and court surfaces. The term for this agreement has been limited to a one-year period to ensure that it aligns with the expected completion date for negotiations regarding the Cubberley Community Center agreement between the City and PAUSD, which is expected to occur by December 31, 2013. City of Palo Alto Page 3 Policy Implications This agreement is consistent with City and PAUSD policies. The cooperative use of PAUSD fields and courts furthers Policy C-4 of the Community Services element of the City’s Comprehensive Plan: “Maintains a close, collaborative relationship with the PAUSD to maximize the use of school services and facilities for public benefit, particularly for young people, families, and seniors.” Resource Impact This recommendation has been budgeted as a continuing program in the 2014 Fiscal Year budget. There will be no additional General Fund or Capital Fund financial impact as a result of this agreement. Environmental Review This recommendation is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to section 15301 (existing facilities) of the CEQA guidelines. Therefore, no environmental assessment is required. Attachments: Attachment A - PAUSD Brokering and Maintenance Agreement (PDF) 130613 dm 00710215 1 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO UNIFIED SCHOOL DISTRICT OF SANTA CLARA COUNTY CONCERNING THE PUBLIC USE, BROKERING AND MAINTENANCE OF DISTRICT-OWNED ATHLETIC FIELDS, TENNIS COURTS AND BASKETBALL COURTS JOINTLY USED BY SCHOOL STUDENTS AND THE GENERAL PUBLIC This AGREEMENT CONCERNING FIELD AND COURT USE, BROKERING AND MAINTENANCE (the “Agreement”) is entered into as of _January 1, 2013 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (the “CITY”) and the PALO ALTO UNIFIED SCHOOL DISTRICT OF SANTA CLARA COUNTY, a unified school district organized and existing under the Laws of the State of California (the “DISTRICT”) (individually, a “Party” and, collectively, the “Parties”), in reference to the following facts and circumstances: RECITALS: A. Section 10900 et seq. of the California Education Code authorizes public authorities (e.g., cities and school districts) to organize, promote and conduct programs of community recreation, establish systems of playgrounds and recreation, and acquire, construct, improve, maintain and operate recreation centers within or without the territorial limits of such public authorities. B. Section 10905 of the California Education Code authorizes public authorities to enter into agreements with each other for the maintenance of recreation centers. C. Section 10910 of the California Education Code provides that the governing body of any school district may use or grant the use of any grounds of the school district to any other public authority for the organizing, promoting and conducting of community recreation whenever such use will not interfere with the use of those facilities for any other purpose of the public school system. D. The Parties have jointly kept open for school student and general public use in Palo Alto the athletic fields, basketball courts and tennis courts at the elementary and middle schools and the tennis courts at Palo Alto and Gunn High Schools, and they desire to continue arrangements for their common use. E. The Parties are interested in continuing a long-term, joint funding arrangement under which the CITY will undertake the maintenance of the athletic field areas of the thirteen elementary schools and the two middle schools, basketball and tennis court areas and the two high school tennis courts, and the eight shared-use exterior basketball court areas and the two tennis courts at Terman Park (see Attachment A) to enhance their usability by school students and the general public, and the DISTRICT will make such areas available to the general public at 130613 dm 00710215 2 reasonable times (before 8:00 a.m. or after 4:00 p.m. Monday – Friday on school days) when such areas are not being used exclusively for school purposes. AGREEMENT: NOW, THEREFORE, in consideration of the Recitals A through E, inclusive, which are made a substantive part of this Agreement, and the Provisions of this Agreement, the Parties agree: SECTION 1. DEFINITIONS The terms used in this Agreement will have the meanings set forth below, unless the context clearly indicates otherwise. “Board of Education” means the Board of Education of the DISTRICT. “Business Manager” means the Chief Business Official of the DISTRICT, including any authorized representative. “Capital Improvement” means any Improvement which has a standalone cost exceeding $25,000, or which has a useful life of, or whose useful life can be extended, at least five to seven years, or which has a useful life of at least five to seven years after it is capable of providing a new functional use. “City Manager” means the city manager of the CITY, including any authorized representative. “Council” means the city council of the CITY. “Court” (collectively, the “Courts”) means any one of the tennis or basketball court areas depicted in the description of “Facilities” and Attachment A. “Director” means the Director of Community Services of the CITY, including any authorized representative. “Facilities” mean the Courts and Fields, the dimensions of which for reference purposes are outlined below: // // 130613 dm 00710215 3 School Site Fields Courts Basketball Exhibit Addison 1.58 acres 0 A Barron Park 2.34 acres 0 B Briones 1.25 acres 0 C Duveneck 1.80 acres 0 D El Carmelo 1.81 acres 0 E Escondido 2.44 acres 0 F Fairmeadow 2.06 acres 0 G Greendell 1.79 acres 0 H Gunn High School 0 acres 7 I Hoover 1.60 acres 0 J J.L. Stanford Middle 10.45 acres 6 6 K Jordan Middle 6.68 acres 5 6 L Nixon 3 71 acres 0 M Ohlone 1.53 acres 0 N Palo Alto High School 0 acres 7 O Palo Verde .62 acres 0 P Walter Hays 2.71 acres 0 Q Terman Park 4.00 acres 2 5 R* “Field” (collectively, the “Fields”) means any one of the athletic field areas referred to in the description of “Facilities” and Attachment A. “Improvement” means any physical addition, alteration, or betterment to the Facilities. “Law” (collectively, the “Laws”) means any code, statute, constitution, ordinance, resolution, regulation, rule, judicial decision, administrative order, or other requirement of any municipal, county, state, federal, or other governmental agency or authority having jurisdiction over the parties or the Schools, in effect at the time of execution of the Agreement or at any time during the term hereof, including, without limitation, any regulation or order of an official entity or body. “Maintenance” means the care and servicing on an ongoing and repeating schedule by personnel for the purpose of maintaining facilities in proper condition, proper working order, sound upkeep, a safe condition, in good repair, by providing for systematic inspection, detection, and correction of incipient failures either before they occur or before they develop into major defects. It includes the inspection, replenishment, preservation, adjustments, and replacement of unserviceable parts and components, including, but not limited to, poles, backboards, netting, hoops, striping, specialty surfaces, irrigation heads and controllers where applicable at the specific site. “Preventive maintenance” means any and all maintenance activities that could reasonably be predictive. The CITY specifically and intentionally excludes the replacement of 130613 dm 00710215 4 entire systems or facilities that would constitute an “infrastructure” investment (capital investments for facilities or structures with a life cycle beyond five years). “Provision” (collectively, the “Provisions”) means any agreement, clause, condition, covenant, qualification, recital, restriction, reservation, term, or other stipulation in this Agreement that defines or otherwise controls, establishes, or limits the performance required or permitted by any party to this Agreement. All Provisions, whether covenants or conditions, which are applicable to the DISTRICT, will be deemed to be both covenants and conditions. “School” (collectively, the “Schools”) means any one of the following elementary, middle or high schools: Addison, Barron Park, Briones, Duveneck, El Carmelo, Escondido, Fairmeadow, Greendell, Gunn, Hoover, J.L. Stanford, Jordan, Nixon, Ohlone, Palo Alto High, Palo Verde, Walter Hays and Terman Park. “Superintendent” means the Superintendent of schools for the DISTRICT, including any authorized representative. SECTION 2. TERM AND TERMINATION 2.1 The term of this Agreement will be for approximately one (1) year commencing at 6:00 a.m. on January 1, 2013, and expiring at 12:00 a.m. midnight on December 31, 2013, subject to the earlier termination of this Agreement by any Party hereto upon ninety (90) days’ advance written notice. The preceding sentence notwithstanding, this Agreement is subject to the fiscal provisions of the Charter of the CITY and other Laws of the CITY and the DISTRICT, and this Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated by the Council or Board of Education for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are not appropriated by the Council or Board of Education for a portion of the fiscal year and funds for this Agreement are no longer available. The CITY or the DISTRICT will use reasonable efforts to give the other Party reasonable notice of termination in the event that funds will not be appropriated. No provision is made for the automatic extension or renewal of the term. 2.2 If the DISTRICT fails to install or construct any Improvement, which is deemed by the Parties to be mutually reasonably necessary for the CITY to adequately perform its maintenance obligations under this Agreement, the CITY may terminate this Agreement upon ninety (90) days’ advance written notice to the DISTRICT. For the purposes hereof, the Director may give notice to the Business Manager. SECTION 3. PERFORMANCE OF MAINTENANCE BY THE CITY 3.1 To the extent the authorized representatives of the Parties have not conferred at the commencement date of this Agreement, the authorized representatives of the Parties will meet with each other at a mutually acceptable location to identify the Facilities and discuss and coordinate the times and manner in which the orderly transition of the maintenance obligations will be put into effect. The authorized representatives shall meet regularly to review 130613 dm 00710215 5 the maintenance schedule for the Facilities. They will meet not less than once a year to discuss the use and maintenance of the Facilities. 3.2 Commencing on or about January 1, 2013, or thereafter, as practicable, the CITY will mow, trim, fertilize, and irrigate, and perform other maintenance work of a general nature at the Fields and Courts at the frequencies and times in accordance with the CITY’s Field Maintenance standards (Attachment G), adopted by the CITY for its own district and neighborhood parks and public recreation areas. The obligation of the CITY to perform Field Maintenance work is conditioned upon the functional condition and operation of the infrastructure of the Fields, including, without limitation, the underground water irrigation system, at the time such Maintenance is to commence. Any or all services required to maintain and renovate the Fields and irrigation systems may be performed by contractors hired and managed by the CITY. 3.3 In performing its Maintenance obligations the CITY will use its best efforts to prevent interference with the DISTRICT’s use of the Facilities during regular school hours. The CITY shall publish a Maintenance schedule six months in advance of any planned Maintenance activity and make that schedule known to the Business Manager for dissemination to the Schools involved. This schedule will be adhered to by the Schools and no school activities will be planned which would interfere with these Maintenance activities. All Maintenance activities will be performed between the hours of 6:00 a.m. and 4:00 p.m. on any day. The CITY will coordinate its scheduled Maintenance activities with the DISTRICT’s academic calendar for each of the Schools. The Business Manager and the Director will coordinate on the behalf of the parties. Standard or routine Maintenance work will be scheduled so as to be for a maximum of one day at a time; other Maintenance work will be coordinated between the Parties. 3.4 In the event of an emergency, including, without limitation, earthquakes, fires, flooding, or other events of force majeure, the CITY may perform non-scheduled Maintenance at any of the Facilities without prior notification to the DISTRICT. The CITY will give notice of any action it has taken in the event of an emergency within a reasonable time. In such event, the CITY will use its best efforts to provide the access to the affected Facilities for the DISTRICT. In the event of an emergency or off-hour maintenance issue the CITY’s staff will respond and take appropriate actions to make repairs or make safe any and all items until proper repairs can be made. In the event that CITY’s staff is unavailable or fails to respond, the DISTRICT’s staff will make temporary repairs or make safe all items until such time as the CITY can make final repairs. The CITY agrees that the DISTRICT’s staff time and materials will be reimbursed by the CITY. 3.5 With the exception of safety concerns, any concern of the DISTRICT about the general maintenance or use of the Facilities will be communicated to the Director by the Business Manager. 3.6 In undertaking the necessary turf and grounds Maintenance renovations, if scheduled six (6) months in advance, the CITY may curtail and preempt the DISTRICT’s use of up to one-half of any Field (or if mutually agreed upon, a full field) up to four (4) times during the 130613 dm 00710215 6 academic year for any single period not exceeding eight (8) consecutive weeks in duration for fields and four (4) consecutive weeks in duration for courts or as mutually agreed upon by the District and City. SECTION 4. PERFORMANCE OF MAINTENANCE BY THE DISTRICT 4.1 Any areas of the Facilities and all other areas of the Schools, including, without limitation, the turf, grounds, landscaped areas, buildings, parking lots, fences, sidewalks, and trees, not expressly identified in the exhibits or in this Agreement as areas to be maintained by the CITY will be maintained or cause to be maintained by the DISTRICT, at its sole cost and expense, in accordance with the DISTRICT’s standards. 4.2 Notwithstanding any Provision to the contrary, the DISTRICT, at its sole cost and expense, will provide or cause to be provided special preparation and maintenance services with respect to any of the Facilities to be used in connection with special events or other similar functions staged by the DISTRICT, including, without limitation, graduation ceremonies, athletic events, tennis tournaments, and other inter-scholastic activities. 4.3 The DISTRICT, at its sole cost and expense, will continuously provide services in connection with the removal of garbage, refuse, debris, rubbish, litter and other solid waste which have accumulated at the Facilities. The CITY shall be responsible for the removal of garbage, refuse, debris, rubbish, litter and other solid waste on the brokered facilities during the CITY’s time of use or events. 4.4 At all times during the term of this Agreement, the DISTRICT will timely notify the CITY of any condition of the Facilities and all other areas of the Schools, of which it has actual or constructive knowledge, which may constitute or present a danger or threat to person or property. The tender of such timely notice shall not compromise any Provision of indemnification set forth in Section 11. SECTION 5. PAYMENT OF COSTS OF MAINTENANCE 5.1 The allocable annual costs of Maintenance and water (plus equipment costs and salary and benefits costs, as appropriate) for the Facilities are estimated by the CITY to be the following: Year Maintenance 2013 $650,000 Costs shall be shared in the ratio of 50:50 between the CITY and the DISTRICT. 5.2 In lieu of billing and payment procedures to be adopted by the Parties under this Agreement, the Parties agree that the CITY will credit fifty percent (50%) of its actual costs 130613 dm 00710215 7 incurred in performing its Maintenance obligations under this Agreement against any and all monthly lease payments due and payable by the CITY under its lease agreement with the DISTRICT, entitled “Lease and Covenant Not to Develop”. SECTION 6. INSTALLATION OR CONSTRUCTION OF IMPROVENENTS 6.1 In nonemergency situations, the CITY will not install or construct, or cause to be installed or constructed, any Improvement at any of the Facilities without the express written approval of the Superintendent. To the extent an Improvement which is deemed by the CITY to be reasonably necessary to adequately perform its Maintenance obligations hereunder cannot be installed or constructed or cause to be installed or constructed by the DISTRICT, the CITY may undertake such installation or construction at the written request of the DISTRICT. Any Improvement installed or constructed by the CITY will be deemed the property of the DISTRICT. 6.2 The installation or construction of an Improvement in the event of an emergency may be conducted by the CITY in accordance with Section 3.4. SECTION 7. USAGE OF FACILITIES 7.1 In attempting to maximize the use of the Facilities by school students and the general public, the Director and the Business Manager may jointly adopt and promulgate and amend written rules and regulations governing the use of the Facilities. 7.2 The DISTRICT will have use priority of the elementary and middle school fields and tennis courts between the hours of 8:00 a.m. and 4:00 p.m. on scheduled school days. Use priority will be extended to interscholastic activities occurring at the Facilities until the completion of those scheduled activities, even if such activities are completed after 4:00 p.m. This priority will apply Mondays through Fridays of each week from September to mid-June of each academic year and Saturdays for the duration of any regularly scheduled inter-scholastic competition, provided, however, no priority will be extended to practice sessions for such competition. 7.3 The CITY will have use priority of the elementary and middle school fields, basketball courts and tennis courts after 4:00 p.m. on scheduled school days and at all other times, including weekends, holidays and summer vacation periods. Exceptions to this use priority schedule may be agreed upon, in writing, by the Director and the Business Manager. The CITY will cooperate with the DISTRICT in any manner which will afford the DISTRICT an adequate opportunity to use the Schools for its activities, programs and other needs. During the month of December the CITY shall give the DISTRICT a copy of the CITY’s maintenance schedule for the proceeding summer. The DISTRICT will then ensure that there are no activities, rental or otherwise for the entire summer session. 7.4 The CITY will administer public use reservations of the elementary and middle school fields, basketball courts and tennis courts in accordance with the CITY’s Field Use Policy, which will be provided to the DISTRICT. The CITY will be solely responsible for determining the 130613 dm 00710215 8 parameters of the use priority system, as well as rental or user fees to be charged to members of the general public, including individuals and organized groups, for the use of the Facilities during such times as the CITY may exercise use priority over the elementary and middle school playing fields and tennis courts. Such fees will conform to the Laws governing school grounds and those which are applicable to the CITY’s property. All fees for the use of the Facilities covered by this Agreement collected by the CITY will be equally shared, and will be accounted for in a manner as may be mutually acceptable to the parties. 7.5 Any person who leases a School building of the DISTRICT will be entitled, upon submission of a written request to the CITY, to use the Facilities in order to meet any special recreational needs. Any such request may be granted by the Director provided reasonable prior written notice of such need is given and the Director reasonably determines that such use will not unreasonably interfere with scheduled public recreational activities. The DISTRICT will not use or cause to be used at any of its facility any “jump house” or similar item on any turf area. 7.6 The City Manager shall be the representative of the CITY for all purposes under this Agreement. The Division Manager, Recreation, of the CITY’S Community Services Department is designated as the Project Manager for the City Manager, and shall supervise the progress and implementation of Facility brokering, and shall be assisted by the designee, the Program Supervisor. The Business Manager of the DISTRICT schools shall be the representative of the DISTRICT for all purposes under this Agreement, shall be designated as the Project Director, and shall have overall responsibility for the progress and implementation of this Agreement for the DISTRICT. 7.7 The CITY shall provide the following services under this Agreement: 7.7.1 Schedule, reserve and license the DISTRICT’S Facilities located at the Schools listed in Attachment A to individuals or groups for use by adult and youth athletic groups at such times and dates when school is not in session and school activities are not taking place (“Public Use”). The CITY shall be solely responsible for the coordination and scheduling of requests for the reservation and use of the Facilities for Public Use, subject to the DISTRICT’S prior approval, during the term of this Agreement. 7.7.2 Bill and collect all user fees for each Facility in accordance with the fee schedule, attached hereto as Attachment B. The Parties agree the user groups will be assessed fees as may be established by the CITY. Such fees will conform to the Laws governing school grounds and those applicable to the CITY’s property. The CITY shall retain sixty percent (60%) of the fees generated by this surcharge to defray the cost of coordinating youth group use of the Fields. 7.7.3 Issue a completed Field Use Application and Permit Form to each user, in the form of Attachment F, prior to such use of the Facility. 7.7.4 Monitor and enforce the use of the Facilities to determine whether such uses comply with conditions of the permits. If such use of a Facility does not comply with the 130613 dm 00710215 9 conditions of the particular permit or other applicable Laws, the CITY shall terminate the further use of the Facility by the user. 7.7.5 Upon request, provide the DISTRICT with one (1) copy of every permit issued for the use of the Facilities. 7.7.6 Provide the DISTRICT on or before October 1 (for the period July 1 to December 31 of the preceding calendar year and January 1 to June 30 of the current calendar year) with a financial report that accounts for the fees that the CITY has collected from the Athletic Field use under this Agreement during the preceding time period. 7.7.7 Notify the Facilities’ permit holders of the DISTRICT’S intended Facilities maintenance and improvement projects and of any Facilities closures that may become necessary to effect the construction of the projects. 7.8 The DISTRICT shall provide the following services under this Agreement: 7.8.1 Make the Facilities available to the CITY as set forth above for the purposes of scheduling, reservations and usage to private individuals or groups for public use. 7.8.2 All fees that the DISTRICT will receive under this Agreement will be used at the discretion of the DISTRICT. 7.9 The CITY shall not be responsible or liable for any Maintenance, repairs, or improvements of the Fields which are required to be performed, conducted, or constructed by the DISTRICT, and the DISTRICT shall not be responsible or liable for any Maintenance, repairs, or improvements of the Fields which are required to be performed, conducted or constructed by CITY. City shall be responsible for all repairs due to wear and tear during City activities. SECTION 8. LAWS TO BE OBSERVED 8.1 The Parties shall cooperate in procuring all permits and licenses, paying all charges and fees, and giving all notices which may be necessary and incidental to the due and lawful prosecution of the services to be performed under this Agreement. SECTION 9. FEES 9.1 In consideration of its use of the Facilities under this Agreement, the CITY will pay the DISTRICT forty percent (40%) of all fees that the CITY collects from the Facilities’ permit holders. The CITY shall make payments related to the Facilities usage to the DISTRICT on February 1 (for the period July 1 to December 31 of the preceding calendar year) of each year during the term of this Agreement. This obligation shall survive the expiration of this Agreement. 130613 dm 00710215 10 SECTION 10. ASSIGNMENT; SUBCONTRACTORS; EMPLOYEES 10.1 The Parties shall give their personal attention to the faithful performance of this Agreement and shall not assign, transfer, convey, or otherwise dispose of this Agreement or any right, title or interest in or to the same or any part thereof without the prior written consent of the other Party, and then only subject to such terms and conditions as the other Party may require. The consent to one assignment shall not be deemed to be consent to any subsequent assignment. Any assignment without such approval shall be void and, at the option of the other Party, shall terminate this Agreement and any license or privilege granted herein. This Agreement and any interest herein shall not be assignable by operation of law without the prior written consent of the other Party. 10.2 The DISTRICT shall be responsible for employing or engaging all persons necessary to perform the services of the DISTRICT hereunder. The CITY shall be responsible for employing or engaging all persons necessary to perform the services of the CITY hereunder. SECTION 11. INDEMNITY 11.1 The CITY shall protect, indemnify, defend, and hold harmless the DISTRICT, its employees, agents, and Board members from and against any demands, claims, liability or expense on account of suits, verdicts, judgments, costs or claims of any nature or kind arising out of, or in any way connected with, the CITY’s performance or nonperformance under this Agreement, including the CITY’s operations on, possession, use, management, alteration or control of the DISTRICT’s property under this Agreement except for any claims or liability, or portions thereof, arising from the concurrent or sole negligence or intentional malfeasance of the DISTRICT, its directors, officers, employees or agents. 11.2 The DISTRICT shall protect, indemnify, defend and hold harmless the CITY from and against any demands, claims, liability or expenses on account of suits, verdicts, judgments, costs or claims of any nature or kind arising out of, or in any way connected with, the DISTRICT’s performance or nonperformance under this Agreement, including the DISTRICT’s operations, possession, use, management, maintenance, improvement, renovation, repair, alteration or control of the DISTRICT’s property, including the Facilities, under this Agreement, except for any claims or liability, or portions thereof, arising from the concurrent or sole negligence or intentional malfeasance of the CITY, its directors, officers, employees or agents. SECTION 12. INSURANCE 12.1 The DISTRICT, at its sole cost and expense, will obtain and maintain, in full force and effect, during the term of this Agreement, commercial general liability insurance coverage described in Attachment C, in the amount of one million dollars ($1,000,000), insuring the Parties, and their officers, employees, and agents, and each of them, with respect to the DISTRICT’s participation and the services performed by the DISTRICT under this Agreement. Concurrently with the execution of this Agreement, a certificate of insurance will be filed with the CITY’s risk manager, and will contain the endorsements which state that the DISTRICT will 130613 dm 00710215 11 insure the Parties, and each of them, for any claims or liability arising from the DISTRICT’s participation and services performed hereunder, and will not be canceled by the insurer except after the filing with the CITY’s City Clerk thirty (30) days prior written notice of cancellation or alteration, and that the CITY is named as an additional insured under such policies required above or concerning the DISTRICT’s performance or lack of performance under this Agreement. 12.2 Certificates of the DISTRICT’s insurance, required by Section 12.1 hereof, shall be filed with the CITY, to the attention of the CITY’s Risk Manager, concurrently with the execution of this Agreement. The certificates shall be subject to the approval of the CITY’s Risk Manager and shall contain endorsements stating that said insurance will cover the DISTRICT and the CITY for any claims or liability arising from the DISTRICT’s participation, activities, and services performed under the Provisions. Current certificates of such insurance shall be kept on file at all times during the term of this Agreement with the City Clerk. 12.3 The CITY, at its sole cost and expense, will self-insure for general liability insurance coverage described in Attachment D, in the amount of one million dollars ($1,000,000), insuring the Parties, and their officers, employees, and agents, and each of them, with respect to the CITY’s participation and the services performed by the CITY under this Agreement. A letter regarding self-insurance or a certificate of insurance will be filed with the DISTRICT’s risk manager, and will contain the endorsements which state that the CITY will insure the Parties, and each of them, for any claims or liability arising from the CITY’s participation and services performed hereunder, and will not be canceled by the insurer except after the filing with the Superintendent thirty (30) days prior written notice of cancellation or alteration, and that the DISTRICT is named as an additional insured under the CITY’s self- insurance program. 12.4 The CITY shall provide the DISTRICT with written proof of the CITY’s self- insurance program, required by Section 12.3 hereof, concurrently with the execution of this Agreement. Proof of the self-insurance program shall be subject to approval by the DISTRICT’s Risk Manager and shall contain language stating that said insurance will cover the CITY and the DISTRICT for any claims or liability arising from the CITY’s participation, activities and services performed under the Provisions and will not be cancelled or altered by the CITY except after thirty (30) days’ prior written notice to the DISTRICT of such cancellation or alterations. The language shall also state that the DISTRICT is named as an additional insured under the CITY’s self-insurance program under Section 13.3 of this Agreement. SECTION 13. WAIVERS 13.1 The waiver by either party of any breach or violation of any terms, covenant, or condition of this Agreement or of any provision, ordinance, or law shall not be deemed to be a waiver of any other term, covenant, ordinance, or law or of any subsequent breach or violation of the same or of any other terms, covenant, condition, ordinance, or law. 130613 dm 00710215 12 SECTION 14. NOTICES 14.1 All notices, demands, requests, consents, approvals, or other communications required to be given will be in writing and may be delivered personally, or sent by the United States mail, postage prepaid by certified mail, or by private express delivery service, or by facsimile transmission, to the addresses set forth below or to any other address as may be noticed by a party: To CITY: Office of the City Clerk City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Copy to: Director of Community Services 1305 Middlefield Road Palo Alto, CA 94301 To DISTRICT: Superintendent Palo Alto Unified School District 25 Churchill Avenue Palo Alto, CA 94306 SECTION 15. MISCELLANEOUS PROVISIONS 15.1 Time is of the essence. For the purposes of this Agreement, all times of the day are determined according to Pacific Time. 15.2 No party will be deemed in default on account of any delay or failure to perform its obligations under this Agreement, where the delay or failure is the direct result of an event of force majeure. For the purposes of this Agreement, the term “force majeure” will mean an event which is not within the reasonable control of a party claiming the existence of such event. 15.3 No Party will discriminate in the employment of persons engaged in the performance of this Agreement on account of race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of that person. The DISTRICT agrees to comply with the requirements of Chapter 2.30 of the Palo Alto Municipal Code pertaining to nondiscrimination in employment, including the completion and submission to the CITY of the Certification of Nondiscrimination, as described in Attachment E. 15.4 Any disputes regarding this Agreement will be resolved according to the Laws of the State of California. Any legal proceeding will be instituted in the courts of the State of California and County of Santa Clara, irrespective of any claim of diversity of citizenship or other possible jurisdictional conditions. 130613 dm 00710215 13 15.5 The prevailing party in any action brought to enforce the provisions of this Agreement or arising out of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with such an action from the other Party. 15.6 All attachments referred to in this Agreement and any addenda, appendices, exhibits, and schedules 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 part of this Agreement. 15.7 This Agreement constitutes the entire agreement between the Parties concerning its subject matter, and there are no other oral or written agreements between the parties not incorporated in this Agreement. 15.8 This Agreement will not be construed as nor deemed to be an agreement for the benefit of any third party or parties, and no third party or parties will have any right of action herein for any cause whatever. The terms, covenants, and conditions of this Agreement shall apply to, and shall bind, the heirs, successors, executors, administrators, assigns and subcontractors of each Party. 15.9 This Agreement may be amended only by a written instrument signed by both parties. The City Manager is duly authorized to negotiate and execute any amendment to this Agreement. 15.10 Any agreement, covenant, condition, clause, qualification, term, or other stipulation in this Agreement will define or otherwise control, establish, or limit the performance required of or permitted by any party. All provisions of this Agreement, whether covenants or conditions, will be deemed both covenants and conditions. // // // // // 130613 dm 00710215 14 15.11 This Agreement confers no legal or equitable rights until it is approved by the DISTRICTs Board of Trustees at a lawfully conducted public meeting. IN WITNESS WHEREOF, the Parties hereto by their duly authorized representatives have duly executed this Agreement as of the Effective Date. CITY OF PALO ALTO PALO ALTO UNIFIED SCHOOL DISTRICT _________________________________ ____________________________ Assistant City Manager President, Board of Education APPROVED AS TO FORM: APPROVED: _________________________________ ____________________________ Senior Asst. City Attorney Chief Business Official APPROVED: _________________________________ Director of Community Services _________________________________ Director of Administrative Services Attachments: ATTACHMENT A: List of District’s Athletic Fields, Basketball Courts and Tennis Courts ATTACHMENT B: Fee Schedule and Program ATTACHMENT C: District’s Insurance Coverage ATTACHMENT D: City’s Insurance Coverage ATTACHMENT E: Certificate of Non-discrimination ATTACHMENT F: Field Use Application and Permit Form ATTACHMENT G: City Maintenance Standards 130613 dm 00710215 15 ATTACHMENT A List of District’s Athletic Fields, Basketball Courts and Tennis Courts Athletic Fields Maintenance areas at each individual site (outlined in red) will be maintained in accordance with the City’s Field Maintenance standards below and in Attachment G. Areas with additional maintenance needs will be specified underneath each site. • Hazards must be reported immediately, unless they are rectified at the time of discovery. • Monthly turf edging is required. Weed control will be instituted, utilizing string trimmers and garden hoes. No herbicides are allowed. Weeds along fence lines, pathways, play equipment and ball diamonds must be controlled monthly. • Turf areas shall remain free of pot holes, bumpy or rough playing surfaces and low areas, where water might accumulate. Soil must be added in order to level these areas as often as needed. • Aeration to a depth of four (4) inches, utilizing solid tines, must be conducted three times annually. • School sites must be fertilized three times annually at a rate of 300 lbs. of fertilizer per acre, utilizing Turf supreme 16-6-8 fertilizer. All hard surfaces must be cleaned after a fertilizer application is completed and before the person(s) leave(s) the site. • Gas blowers are acceptable and are to be used to clean hardscape areas on an as-needed basis. Leaves and grass clippings must be removed upon accumulation on the turf as required by the CITY. • Routine tree maintenance will be maintained by the DISTRICT’s staff or its designated contractor. The CITY’s staff will only prune trees in the event that a tree limb poses a maintenance obstacle or a safety hazard. They (what does “they” refer to?)must also be raised if they interfere with the efficiency of the sprinkler system. 130613 dm 00710215 16 Addison School - 650 Addison Avenue, Palo Alto, CA 94301 The maintenance of the backstop and goal posts located on the turf are not the responsibility of the CITY. 130613 dm 00710215 17 Barron Park School - 800 Barron Avenue, Palo Alto, CA 94306 130613 dm 00710215 18 Briones School - 4100 Orme Street, Palo Alto, CA 94306 Southwest fence is part of maintenance area. Pruning is required twice annually. 130613 dm 00710215 19 Duveneck School - 705 Alester Street, Palo Alto, CA 94303 130613 dm 00710215 20 El Carmelo School - 3024 Bryant Street, Palo Alto, CA 94306 130613 dm 00710215 21 Escondido School - 890 Escondido, Stanford, CA 94305 Northeast fence is included in the maintenance area. Pruning is required twice annually. The maintenance of the benches tables, paved walkways and shade coverings are not the CITY’s responsibility. 130613 dm 00710215 22 Fairmeadow School - 500 East Meadow Drive, Palo Alto, CA 94306 130613 dm 00710215 23 Greendell School - 4120 Middlefield Road, Palo Alto, CA 94303 Southwest fence is part of maintenance area. Pruning is required twice annually. 130613 dm 00710215 24 Walter Hays School - 1525 Middlefield Road, Palo Alto, CA 94301 The maintenance of the long jump pit is not the CITY’s responsibility. 130613 dm 00710215 25 Hoover School – 445 East Charleston, Palo Alto, CA 94303 130613 dm 00710215 26 J.L. Stanford Middle School - 480 East Meadow Drive, Palo Alto, CA 94306 Tennis Courts (Cleaning service as part of Open Space, Parks & Golf Landscape Maintenance Contract) Six tennis courts The maintenance of the backstops and bleachers are not part of the CITY’s responsibility. 130613 dm 00710215 27 Jordan Middle School - 750 North California, Palo Alto, CA 94303 South-east fence is part of maintenance area. Pruning is required twice annually. Basketball and tennis Court (Cleaning service as part of Open Space, Parks & Golf Landscape Maintenance Contract) Jordan Middle School – 750 North California Avenue, Palo Alto, CA 94303 Six tennis courts The maintenance of the backstops and bleachers are not part of the CITY’s responsibility. 130613 dm 00710215 28 Nixon School - 1711 Stanford Avenue, Stanford, CA 94305 North fence is part of maintenance area. Pruning is required twice annually. The maintenance of the backstops is not part of the CITY’s responsibility. 130613 dm 00710215 29 Ohlone School - 950 Amarillo Avenue, Palo Alto, CA 94303 130613 dm 00710215 30 Palo Verde School - 3450 Louis Road, Palo Alto, CA 94306 130613 dm 00710215 31 Terman Middle School - 655 Arastradero Road, Palo Alto, CA 94306 Terman softball field and soccer fields 1 & 2 are in the maintenance area of this agreement. Basketball and tennis Court (Cleaning service as part of Open Space, Parks & Golf Landscape Maintenance Contract) Five basketball courts Two tennis courts Fencing around tennis courts, drinking fountain and park signage is under responsibility of the CITY. 130613 dm 00710215 32 Tennis Courts (Cleaning service as part of Open Space, Parks & Golf Landscape Maintenance Contract) Gunn High School – 780 Arastradero Road, Palo Alto, CA 94306 Six tennis courts Palo Alto High School – 50 Embarcadero Road, Palo Alto, CA 94301 Seven tennis courts 130613 dm 00710215 33 ATTACHMENT B Fee Schedule and Program Athletic Field Rentals 2013-2014**) Baseball Fields $7.50 - 75.00/hr.* Soccer Fields $7.50 - 75.00/hr.* Softball Fields $7.50 - 75.00/hr.* Lights $20.00/use Tennis Court Rentals Tennis Tournament Court Use Fee $3.00/hr./court Non-Profit $5.00/hr./court Resident $7.00/hr./court Nonresident * Athletic fields’ fees will be reduced by 50% for nonprofit users. Proof of nonprofit status will be required for fee reduction. However, there shall be no fee reduction if any fee or donation is required by the nonprofit organization permit holder in connection with the use of the permitted field or tennis court. ** Rates are subject to increase as long as they fall within the Municipal Fee Schedule Range. Facilities covered by these fees include: City Sites/Parks Palo Alto Unified School District Sites Terman Park All Elementary Schools -Open or Closed Jordan Middle School J.L. Stanford Middle School Palo Alto High School Tennis Courts Gunn High School Tennis Courts 130613 dm 00710215 34 ATTACHMENT C District’s Insurance Coverage See Sections 12.1 and 12.2 of the Agreement. 130613 dm 00710215 35 ATTACHMENT D City’s Insurance Coverage See Sections 12.3 and 12.4 of the Agreement. 130613 dm 00710215 36 ATTACHMENT E Certificate of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below certify that they do not discriminate in employment of any person because of race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person; that they are in compliance with all Federal, State and local directives and executive orders regarding nondiscrimination in employment. 1. If the Person is an INDIVIDUAL, sign here: Date:______________ _____________________________________________ Proposer’s Signature _____________________________________________ Proposer’s typed name and title 2. If the Person is a PARTNERSHIP or a JOINT VENTURE, at least (2) Partners or each of the Joint Venturers shall sign here: ________________________________________________ Partnership or Joint Venture Name (type or print) Date:______________ _____________________________________________ Member of the Partnership or Joint Venture signature Date:______________ _____________________________________________ Member of the Partnership or Joint Venture signature 3. If the Person is a CORPORATION or OTHER ENTITY, the duly authorized officer(s) or member(s) shall sign as follows: The undersigned certify that they are respectively: ______________________________________ and _______________________________ Title Title / / / / / / 130613 dm 00710215 37 Of the corporation or other entity named below; that they are designated to sign the Proposal Cost Form or other document to which this certificate is attached by resolution (attach a certified copy, with corporate seal, if applicable, notarized as to its authenticity or Secretary’s certificate of authorization) for and on behalf of the below named CORPORATION or OTHER ENTITY, and that they are authorized to execute same for and on behalf of said CORPORATION or OTHER ENTITY. ________________________________________________________________ Corporation or Other Entity Name (type or print) By:______________________________________ Date: _________________ Title:__________________________________________ 130613 dm 00710215 38 ATTACHMENT F Field Use Application and Permit Form 130613 dm 00710215 39 130613 dm 00710215 40 ATTACHMENT G City Maintenance Standards City of Palo Alto Field maintenance standards PAUSD General Maintenance • Hazards must be reported immediately, unless they are rectified at the time of discovery. • Daily litter removal and emptying trash cans around the turf areas. • Monthly turf edging is required. Weed control will be instituted, utilizing string trimmers and garden hoes. No herbicides are allowed. Weeds along fence lines, pathways, play equipment and ball diamonds must be controlled monthly. • Gopher control must be completed before 7:30 AM whenever gopher activity is present in or adjacent to turf areas. Traps cannot be left unattended and must also be removed by 7:30 AM. • Gas blowers are acceptable and are to be used to clean hardscape areas on an as-needed basis. Leaves and grass clippings are to be removed upon accumulation on the turf as required by the CITY. • The turf must be mowed in accordance with the schedule developed by the CITY for the DISTRICT (see Mowing Schedule below). The turf areas must be mowed in a timely manner as to not interfere with the use of the lawn area by the students and to minimize the amount of noise, as practicable. • Aeration to a depth of four (4) inches, utilizing solid tines, must be conduct three times annually (May, August – prior to the start of the new school year, and again in November). This process must be scheduled at times, when it will not interfere with school activities. • School sites must be fertilized three times annually at a rate 300 lbs. of fertilizer per acre, utilizing Turf supreme 16-6-8 fertilizer. All hard surfaces must be cleaned after a fertilizer application is completed and before the person(s) leave(s) the site. • School sites will be over-seeded and mulched during the December Holiday period on an as- needed basis, access permitting. A blue/rye blend of 20/80 must be applied at a rate of 5 lbs. per 1,000 sq. ft. of area. The Elementary School sites shall be also seeded/mulched during the summer months between the middle of June and the end of August on an as-needed basis, access permitting. Hybrid Bermuda seed for sport fields shall be used during this application at a rate of 1 lb. per 1,000 sq. ft. of area. Low spots and pot holes will be filled prior to commencement of this procedure. 130613 dm 00710215 41 • Routine tree maintenance will be maintained by the DISTRICT’s staff or its designated contractor. The CITY’s staff will only prune trees in the event that a tree limb poses a maintenance obstacle or a safety hazard. The tree limbs must also be raised if they interfere with the efficiency of the sprinkler system. • Pruning is required two times annually for landscape along fences or growing through fencing onto the turf areas. This will include fencing that contains ivy. • Turf areas shall remain free of pot holes, bumpy or rough playing surfaces and low areas, where water might accumulate. Soil must be added in order to level these areas as often as needed. Mowing Schedule: Monday: Escondido, Nixon, Barron Park, Briones, Terman Tuesday: Palo Verde, El Carmelo, Greendell, Ohlone. Wednesday: Duveneck, Addison, Walter Hays, Jordan. Thursday: Fairmeadow, Hoover, J.L. Stanford. City of Palo Alto (ID # 3914) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: Fiber-to-the-Premise Network Work Plan Title: Technology and Connected City Committee Recommendation to Develop Work Plan to Evaluate the Feasibility of Building a Citywide Fiber -to- the-Premise Network in Palo Alto and Request the City Manager to Appoint a Community Advisory Committee to Assist Evaluation From: City Manager Lead Department: City Manager Recommendation Staff recommends that the City Council approve the Technology and Connected City Committee recommendations to: 1) develop a work plan to evaluate the feasibility of building a citywide high-speed broadband fiber-to-the-premise network in Palo Alto, and 2) request the City Manager appoint a Community Advisory Committee to assist in the evaluation. Background The Technology and Connected City Committee held its first meeting on May 14, 2013. Staff provided an overview of the history of the fiber network in Palo Alto. Attachment A provides the staff speaker notes from the presentation. Attachment B provides the draft minutes from the Committee meeting. The Committee also discussed development of a work plan to evaluate the feasibility of building out a citywide fiber-to-the-premise network in Palo Alto, and the creation of a Citizen Advisory Committee to assist in the evaluation. Staff also provided an update on the City’s upcoming technology initiatives. Since the Committee meeting, Vice Mayor Nancy Shepherd, Council Member Liz Kniss and Jim Fleming from City of Palo Alto Utilities attended the Fiber-to-the-Home Conference (“From Gigabit Envy to Gigabit Deployed” A Community Toolkit for Building Ultra High-Speed Networks), in Kansas City, Missouri on May 29 and 30, 2013. Attachment C provides a whitepaper from the Fiber-to-the-Home Council about how to become a “fiber-friendly” community, and the Conference summary notes. City of Palo Alto Page 2 Discussion The Committee recommended that staff develop a work plan to evaluate the feasibility of building a citywide high-speed broadband fiber-to-the-premise (FTTP) network in Palo Alto, and create a Citizen Advisory Committee to assist in the evaluation. Work Plan to Evaluate Feasibility of City-wide FTTP Network Despite the fact that staff has not received explicit direction recently from the Council as a whole on fiber, staff has spent a significant amount of time on exploratory research and outreach since the late 1990s to develop a plan to build a citywide FTTP network. Previous initiatives are summarized below. In addition, the discussion at the Council Annual Retreat in February 2013, the designation of fiber as a priority, and the establishment of the Technology and Connected City Committee indicates that staff should focus work on the feasibility of a citywide FTTP network. In 1999, the City issued a Request for Proposal (RFP) for the “High-Speed Universal Telecommunications Project.” No viable bids were received. From 2000 to 2005, a Fiber-to-the-Home (FTTH) trial was conducted at sixty-six (66) homes in the Community Center neighborhood. The trial proved technical feasibility. From 2002 to 2004, staff and a consulting firm developed a FTTH business plan. The plan demonstrated that a FTTH utility could be “economically viable” over a 20-year construction bond period, assuming the Electric Fund would issue the revenue bonds. However, upon further legal analysis by the City Attorney, the Electric Utility could not continue to fund the FTTH project. If bonds were issued to build a citywide FTTH network, they could not be backed by revenues from City of Palo Alto Utilities (CPAU). In 2006, an RFP was issued for the “Ultra High-Speed Broadband System Project”, which resulted in unsuccessful negotiations with a consortium of firms to build a citywide FTTP network. Negotiations ended in early 2009. In 2011, staff and a consulting firm developed a two phase “conceptual plan” which proposed using the Fiber Optics Fund reserve to construct broadband telecommunications hub sites at the City’s nine (9) electric substations (Phase 1), and expanding network access from these hub sites to eighty-eight (88) neighborhood access points or “nodes” (Phase 2). The plan was proposed to establish an economic incentive for a private FTTP firm to construct the “last mile” of the network to serve residential and commercial premises. In 2012, staff and two consultants evaluated a “user-financed” FTTP business model, which relied on homeowners to pay on a voluntary basis for some or all of the cost to build out the existing dark fiber network into residential neighborhoods. Based on the findings of a community survey and a financial analysis, it was determined that a fully user-financed citywide FTTP system is not possible to achieve. An opt-in FTTP network could be built using a combination of upfront user fees and City financing; however, City of Palo Alto Page 3 there is a low probability of the debt being repaid by operating revenues. Ongoing subsidies would be required, very likely in excess of surpluses in the Fiber Optics Fund reserve from licensing dark fiber for commercial purposes. In June 2012, Utilities staff recommended to the Utilities Advisory Commission (UAC) to conduct a feasibility study to use the Fiber Optics Fund reserve to finance the construction and operation of a wireless network to leverage and augment the City’s dark fiber network. Citizen Advisory Committee The Committee also recommended that the City Manager appoint a community advisory Committee to utilize community talent to assist in an advisory capacity to develop the work plan, and restart the community dialog. In 2007 and 2008 a three member citizens’ committee was also appointed to participate in an advisory capacity as the City considered a citywide ultra- high-speed broadband system project. Former Mayor Kishimoto appointed the first two citizens (Bob Harrington and Andy Poggio) in 2007. The third advisor (Bern Beecham, former Council Member) was designated in 2008, by former Mayor Klein. To establish the Citizen Advisory Committee, the City Manager will publicize the formation of the advisory committee, develop a selection process and criteria, and appoint the members, considering such factors as size of the committee, expertise/qualifications of the members, perspective and expectations of outcomes for the committee's work. To date, six members of the community have expressed interest in serving on an Advisory Committee. Timeline, Resource Impact, Policy Implications, Environmental Review The Technology and Connected City Committee will reconvene in early August to review and consider a work plan to evaluate the feasibility of building a citywide FTTP network in Palo Alto. It is anticipated that the Council will consider the Committee’s recommendations on the work plan in September 2013. Resource Impact If the work plan is approved by The Technology and Connected City Committee, significant staff and consulting resources will be required. Staff would plan to return to Council if needed with a Budget Amendment Ordinance to allocate appropriate staff time and to pay for any necessary consulting assistance. Policy Implications This work plan is consistent with the City Council’s 2013 Council Priority, Technology and the Connected City. City of Palo Alto Page 4 Environmental Review The actions requested in this report do not constitute a project for the purposes of the California Environmental Quality Act. If the City proceeds with expanding the fiber network and installs associated equipment to build out a citywide FTTP network, as required by the California Environmental Quality Act, an environmental assessment will be prepared for the overall FTTP infrastructure project. Attachments: : Attachment A. 5-14-2013 Fiber Presentation(PDF) : Attachment B. 5-14-2013 Meeting Minutes (DOC) : Attachment C. Fiber to the Home Council Conference (PDF) 1 Technology and the Connected City May 14, 2013 Speaker Notes Prepared by Jim Fleming (Management Specialist, City of Palo Alto Utilities) History of Fiber in Palo Alto Reasons for Building Fiber System: The fiber backbone was first conceived in the mid‐1990s when the City developed a telecom strategy that included building a fiber ring “capable of supporting multiple developers and/or service providers with significant growth potential.” In the mid‐1990s, most investor‐owned and public utilities invested in fiber optics to improve command and control of their utility infrastructure. Many of these fiber networks typically had excess capacity that could be licensed or leased to third parties. The original target market for the City’s commercial dark fiber service was Competitive Local Exchange Carriers (CLECs) that emerged after the passage of the 1996 Telecom Act. The Telecom Act mandated that competition policy replace monopoly regulation. As a result, many CLECs were seeking opportunities to use available dark fiber to deliver various high‐bandwidth telecom services. o A simple definition of “dark fiber” is unused fiber through which no light is transmitted and does not carry a signal. By the late 1990s many CLECs left the market either through mergers with other CLECs or bankruptcy. The so‐called “dot com bust” also occurred at roughly the same time. As a result, the anticipated demand for dark fiber in the original target market proved to be somewhat limited. Nonetheless, it was evident that a fiber backbone system would be a valuable asset with the capacity to support the City’s internal communications requirements, IT systems, and command and control of communications systems for critical City infrastructure such as utility substations and traffic signals, in addition to providing dark fiber service connections to a variety of potential commercial users. System Financing The fiber system was financed internally by the Electric Enterprise Fund through a 20‐year, $2 million loan at 0% interest. The funds were used to construct the system and cover operating expenses. In FY 2008, the fiber optics business completed the loan repayment to the Electric Enterprise Fund and a separate Fiber Optics Enterprise Fund was established capable of maintaining its own capital and operating budgets and financial operating reserve. In FY 2009, a Fiber Optics Enterprise Fund Rate Stabilization Reserve (RSR) was established. Attachment A. History of Fiber in Palo Alto Staff Presentation Notes 2 System Description The first phase of the system was constructed in 1996‐97, consisting of 33 route miles. In 1998, the backbone was expanded to 41 route miles passing the majority of the business parks (e.g. Stanford Research Park) and other commercial properties in town. Definition of dark fiber: Unused fiber through which no light is transmitted and does not carry a signal. It is up to the end‐user to install, configure and maintain the electronic equipment to “light up” or provision the licensed fiber strands. In contrast, traditional telecommunication service providers only make available certain products within their service options which are typically described as “managed services.” These services may or may not adequately meet the high bandwidth requirements of the specific applications used by the customer. City Use of the System The City is highly dependent on the fiber system for communications. The system provides dark fiber service connections for the following City accounts: IT Infrastructure Services, Utilities Substations, Utilities Engineering, Public Works, the Water Quality Control Plant and Community Services (Art Center). Commercial Dark Fiber Service The City’s basic business model for commercial dark fiber service is to license dark fiber connectivity to companies that require large amounts of bandwidth and have the internal resources to install, configure and maintain the electronic equipment required to “light up” and provision the fiber strands. By connecting to the City’s system, the customer can: 1. Gain access to their Internet Service Provider (ISP) of choice; 2. Interconnect communications systems or computer networks across multiple locations in Palo Alto, and also 3. Connect directly to their local and/or long distance carrier of choice with a full range of communications services. Many of the City’s commercial dark fiber customers gain access to the Internet through the Palo Alto Internet Exchange (PAIX, now owned by Equnix). PAIX is a carrier‐neutral collocation facility that hosts over 70 ISPs at their facility located in downtown Palo Alto. Customer Base The City currently licenses dark fiber connections to approximately 80 commercial customers with approximately 200 separate service connections. The different categories of commercial dark fiber customers include firms involved in a variety of technologies, web‐hosting, social media, finance, medical, pharmaceuticals and R&D. Another small but significant category of commercial customers in terms of total revenues are telecom service “resellers.” Resellers are telecom companies that license Attachment A. History of Fiber in Palo Alto Staff Presentation Notes 3 large amounts of dark fiber capacity to deliver a variety of broadband, telephony and video services.1 The backbone system is extended based on demand. Recent extensions include the E. Meadow Circle area and a project that is currently underway to provide dark fiber service connections to 18 Palo Alto Unified School District facilities. What is the value of commercial dark fiber? The fiber system provides access to affordable dark fiber for a variety of businesses. This infrastructure enhances the City’s economic development in terms of business attraction and business retention. The key benefits to the end‐user includes: 1. Access to bandwidth based on the needs of the business; 2. Optimum return on investment in the electronic gear required to provision or “light” the fiber; 3. More efficient network management. The end‐user maintains complete control of protocol, platform and network scalability. Dark fiber also provides an essential community asset able to support multiple telecom‐ related uses for both wireline and wireless communications including Wi‐Fi, commercial services and fiber‐to‐the‐premise. Fiber Optic Fund Reserve As of the end of fiscal year 2013, the licensing of dark fiber service connections will account for a fiber fund reserve of $14.5 million, in addition to a separate $1.0 million Emergency Plant Replacement fund. According to the proposed Fiscal Year 2014 Budget, the fiber reserve is projected to increase by $2.3 million. Describe Map of Fiber Optic Backbone (see map attached) Fiber‐to‐the‐Home In 1999, the City issued a Request for Proposals (RFP) for the High‐Speed Universal Telecommunications Project. No viable bids were submitted so the City embarked on the Fiber‐ to‐the‐Home (FTTH) Trial. FTTH Trial In 2000, the City Council approved a FTTH trial to determine the feasibility of providing citywide FTTH access. The trial included 66 residences in the Community Center neighborhood. The purpose of the trial was to test the concept of fiber‐to‐the‐home. The Council authorized $680,000 for the trial. The FTTH trial was successful in terms of proving technical feasibility and lasted until 2005. The trial was not an economic trial; however, when the initial investment and overhead expenditures were included in the calculation, it was not profitable for the City. Business Plan 1 Percentage of annual dark fiber license revenues by customer category: City service connections (27%); Resellers (42%), other commercial customers (31%). Attachment A. History of Fiber in Palo Alto Staff Presentation Notes 4 In 2002, while the FTTH Trial was underway, the Council approved retaining a telecommunications consultant to develop a FTTH business case. The development of the business case included a survey of residents to determine potential market interest in the project. The survey demonstrated interest in the community for a fully built‐out FTTH system that would provide an alternative to the incumbent broadband providers. In 2004, the same consultant completed a FTTH business plan. The plan demonstrated that a FTTH utility could be “economically viable” over a 20‐year construction bond period, assuming the Electric Fund would issue revenue bonds. However, further legal analysis by the City Attorney concluded that the Electric Utility could not continue to fund the FTTH Project. If bonds were issued to build a citywide FTTH network they could not be backed by revenues from the other utilities. Citywide Ultra‐High Speed Broadband System Project In a 2005 Colleagues Memorandum, the Council recommended a revised approach for FTTH and recommended directing staff to issue an RFP for the construction and operation of a minimum symmetrical 100 Megabit per second (Mbps) citywide infrastructure providing access to service to all residential and commercial residents and open to all providers. The first step was for staff to provide Council with a discussion of legal and financial issues regarding the issuance of an RFP. At the Council’s direction in 2006, a Citywide Ultra‐High Speed Broadband System RFP was issued. The RFP identified several goals for last‐mile broadband network deployment. These goals included: 1. An “open system” that would promote competition among multiple service providers; 2. The capability of providing each customer with a minimum bandwidth of 100 Mbps symmetrical service; 3. The provision of “triple‐play” data, video and telephony services; 4. The construction and operation of a citywide network at minimal financial investment and risk to the City; 5. Eventual City ownership of the network. As a result of an RFP process in 2007, the Council directed staff to proceed with the development of an “Ultra High‐Speed Broadband System Business Plan” with the 180 Connect “Consortium.” The consortium included 180 Connect (a design, engineering and construction firm), PacketFront (a network hardware and software company) and the Royal Bank of Canada Capital Markets which expressed interest in financing the network’s construction. In May of 2008, Axia NetMedia Corp. (a firm based in Calgary, Canada) confirmed its interest in joining the Consortium and entered the discussion for the purpose of not only providing the necessary capital to build the network, but also to apply its technical and management expertise to operate the network, effectively replacing RBC . Attachment A. History of Fiber in Palo Alto Staff Presentation Notes 5 The Consortium proposed the formation and funding of a privately‐held “Special Purpose Entity” (SPE) as the vehicle for achieving the City’s goal of deploying a “last mile” FTTP network using an “open access” operating model. The SPE likely would have been a wholly‐ owned subsidiary of Axia NetMedia. After months of negotiations between the City and the Consortium, Axia NetMedia sent a letter to the City in March of 2009 stating that the City had effectively rejected their proposal. The City was willing to leverage its existing dark fiber assets in a public‐private partnership with the Consortium, but it was unwilling to raise the amount of capital that the Consortium wanted from the City to participate. Additionally, with the economic downturn starting in late 2008, the private parties’ ability to obtain their own financing for the project was severely impacted and Axia NetMedia withdrew from participation in the project. In April 2009, Staff recommended to the Council termination of the RFP process for the Ultra High‐Speed Broadband System Project due to the lack of financial resources of the Consortium. In April 2009, Staff recommended that the Council direct staff to pursue American Reinvestment and Recovery Act (ARRA) federal economic stimulus funds available under the Department of Commerce, National Telecommunications Information Administration’s (NTIA) Broadband Technology Opportunities Program (BTOP). The Council directed staff to pursue economic stimulus funds for the Broadband System Project that included a last mile network. When the NTIA announced the first round of funding in July 2009, the City decided not to submit a grant application under the Program, because it was virtually precluded from submitting a viable application based on the “key purposes” for a grant which primarily focused on bringing broadband to unserved and underserved communities. When the second and final funding round was announced in early 2010, the same criteria or “key purposes” related to underserved and unserved communities were still in place. February 11, 2010: Google announced its Fiber for Communities Request for Information (RFI). The Council authorized submittal of a response to the RFI. Approximately 1,100 other communities responded to the RFI. June 2011: In June 2011, Staff presented to the Utilities Advisory Commission the findings and recommendations from two consulting firms retained to evaluate opportunities to expand the fiber network: The firms were Columbia Telecommunications Corporation (CTC) and Tellus Venture Associates (TVA). The CTC report was a response to the Council’s directive to explore the use of the Fiber Optics Fund reserve to independently proceed with a phased build‐out of the existing fiber Attachment A. History of Fiber in Palo Alto Staff Presentation Notes 6 optic backbone network, which would be the basis for establishing an incentive for a third‐ party FTTP system operator to build‐out the “last mile” network. The CTC report described a two phase “conceptual plan” that proposed constructing broadband telecommunications hub sites at the nine (9) electric substations ($1.0 million) and expanding the network access from the hub sites at the substations to eighty‐eight (88) neighborhood access points or “nodes” as a potential platform for “last‐mile” FTTP. These nodes could also support other uses related to wireless communications, including communications infrastructure for future Smart Grid applications ($5.0 million). The other report from Tellus Venture Associates provided market research which evaluated the current coverage, marketing and market potential of the fiber optic backbone network for the existing commercial dark fiber business. The report also included an assessment of the residential market for FTTP, which concluded there was no compelling business case for providing fiber service directly to residences since Palo Alto is already served by two dominant incumbent providers that enjoy decisive competitive advantages resulting from economies of scale. June 2012 In June 2012, staff submitted its findings and recommendations to the UAC regarding an analysis of an alternative model for citywide Fiber‐to‐the‐Premise (FTTP) which relies on homeowners paying on a voluntary basis for some or all of the cost to build‐out the existing dark fiber network into residential neighborhoods. The name of this model is “user‐ financed” FTTP. The staff report presented the results of a customer survey and a financial analysis report. The customer survey concluded that although there is interest in the community in FTTP services from the City, interest in the user‐financed model is very low. Based on the findings from the survey, the financial analysis concluded that a fully user‐ financed citywide FTTP system is not possible to achieve. An opt‐in FTTP system can be built using a combination of upfront user fees and City financing; however, there is very little probability of the debt incurred being repaid through operations. Ongoing subsidies would be required, very likely in excess of surpluses in the Fiber Optics Fund reserve currently generated by licensing dark fiber. Based on the findings from the survey and the consultant’s financial analysis, Staff made three (3) recommendations to the UAC: 1. Commercial Dark Fiber Service: To continue the current business model for licensing dark fiber service connections to commercial customers. 2. Citywide Ultra High‐Speed Broadband System Project: Discontinue efforts to evaluate and implement phased initiatives to build out the dark fiber network for residential Fiber‐to‐the‐Premise (FTTP) using the fiber fund reserve. Attachment A. History of Fiber in Palo Alto Staff Presentation Notes 7 3. Municipal Wireless Network: Initiate an evaluation to determine if the City should use the fiber fund reserve to finance the construction and operation of a wireless network which leverages and augments the City’s dark fiber network. The UAC voted 4‐3 to accept staff’s recommendations. Attachment A. History of Fiber in Palo Alto Staff Presentation Notes Attachment A. History of Fiber in Palo Alto Staff Presentation Notes TECHNOLOGY AND THE CONNECTED CITY WORKING MINUTES Page 1 of 9 Special Meeting May 14, 2013 Roll Call Chairperson Kniss called the meeting to order at 3:09 P.M. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Klein, Kniss (Chair), Scharff, Shepherd Absent: Oral Communications None Agenda Items 1. History of Fiber in Palo Alto James Keene, City Manager, indicated Agenda Items were meant to be a survey of technology initiatives in the City. Council Member Klein referenced an article contained in an email from the National League of Cities regarding technology. James Fleming, Management Specialist Utilities, reported the fiber backbone was first conceived in the mid-1990s when the City developed a telecom strategy that included building a fiber ring capable of supporting multiple developers and/or service providers with significant growth potential. In the mid-1990s, most investor-owned and public utilities invested in fiber optics to improve command and control of utility infrastructure. Many fiber networks typically had excess capacity that could be licensed or leased to third parties. The original target market for the City's commercial fiber service was competitive local exchange carriers (CLEC). CLECs emerged after the passage of the 1996 Telecom Act, which mandated a competition policy rather than monopoly regulation. Dark fiber was unused fiber optics through which no light was transmitted and which did not carry a signal. By Attachment B. 5-14-2013 Meeting Minutes WORKING MINUTES Page 2 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 the late-1990s, many CLECs left the market either through mergers or bankruptcy. A fiber backbone would be a valuable asset with the capacity to support the City's internal communication requirements, information technology (IT) systems, and command and control of systems for critical City infrastructure. The network could provide dark fiber service connections to a variety of potential users. The system was financed internally by the Electric Enterprise Fund through a 20-year $2 million loan at 0% interest. In 2008 the fiber optics business completed the loan repayment to the Electric Enterprise Fund, and a separate Fiber Optic Enterprise Fund was established. The first phase of the system was constructed in 1996 and 1997 and consisted of 33 route miles. In 1998, the backbone was expanded to 41 route miles which passed the majority of business parks and commercial property in the City. The end user was responsible for installing, configuring and maintaining electronic equipment to provision the licensed fiber strands. The City was highly dependent on the fiber system for communications. The City's basic business model was to license dark fiber connectivity to companies that required large amounts of bandwidth and had the internal resources to install, configure and maintain the electronic equipment required to provision the fiber strands. The City licensed dark fiber connections to approximately 80 commercial customers with approximately 200 separate connections. The backbone system was extended based on demand, with recent extensions to the East Meadow Circle area and 18 Palo Alto Unified School District (PAUSD) facilities. The Fiber Optic Reserve Fund was expected to have a balance of $14.5 million at the end of Fiscal Year (FY) 2013, and projected to increase by $2.3 million in FY 2014. Chair Kniss asked if some commercial customers resold fiber service. Mr. Fleming indicated four or five customers were resellers. Chair Kniss inquired about the number of residential customers. Mr. Fleming replied three. Chair Kniss asked if any apartment buildings were fiber customers. Mr. Fleming answered no. Chair Kniss suggested owners of apartment buildings might not be aware of the fiber network. Vice Mayor Shepherd inquired about the policy for connecting residential customers. WORKING MINUTES Page 3 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 Mr. Fleming explained that the residential customers demonstrated a business use of some sort. The connection fee was sufficiently high that the average household could not afford it, particularly if the residence was located a distance away from the backbone. Mayor Scharff asked if Staff considered a means to provide fiber to apartment building owners. Mr. Fleming reported Staff had not approached residential, multiple dwelling units. Apartment building owners would need to determine whether they wished to provide an open access system or wished to directly provide services. Mayor Scharff asked how the three residential users utilized their fiber connections. Mr. Fleming assumed the fiber connection was used for internet service. Mayor Scharff inquired about the internet service provider (ISP) for fiber. Mr. Fleming indicated fiber users most likely connected through Palo Alto Internet Exchange (PAIX), which provided a choice of ISPs. Chair Kniss stated many residents were not aware of PAIX. Council Member Klein inquired about connection charges for a residential customer. Mr. Fleming explained the charge depended on the distance from the backbone. Council Member Klein inquired about monthly charges for residential connections. Mr. Fleming believed they were in the range of a few hundred dollars, perhaps more. Council Member Klein requested the amount of the connection charge for a residential user. Mr. Fleming reported the minimum connection charge was $615. In 2000 the Council approved a fiber to the home trial to determine the feasibility of providing City-wide fiber for home access. The trial program indicated technical feasibility; a 2004 business plan indicated a fiber to the home WORKING MINUTES Page 4 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 utility could be economically viable. Further legal analysis determined that the Electric Utility could not fund the fiber to the home project. In 2005 a colleague's memo recommended a revised approach to fiber to the home, and Staff provided a discussion of legal and financial issues. In 2007, the Council directed Staff to proceed with development of an ultra-high speed broadband system business plan with a consortium of investors. Negotiations between the consortium and the City broke down in 2008. In 2009, Staff recommended the City apply for grant funds available from the Federal Government; however, Staff determined the City was not eligible for funds under program requirements. The City retained two consultants to evaluate opportunities to expand the fiber network. Their report, presented in 2011, indicated there was no compelling business case to provide fiber service directly to residences, because Palo Alto was served by two dominant providers. In June 2012, Staff presented an alternative model for City-wide fiber to the premise, whereby homeowners would pay for some or all costs to build out the existing dark fiber network into residential neighborhoods. The customer survey concluded that the community was interested in fiber to the premise services, but interest in the user-financed model was low. Financial analysis of the model determined user-financed fiber to the premise system could not be achieved. Subsequently, Staff recommended the Utilities Advisory Commission (UAC) : 1) continue the current business model for licensing dark fiber service; 2) discontinue efforts to implement dark fiber network for residential fiber to the premise; and 3) initiate an evaluation to determine if the City should use the Fiber Fund Reserve to finance the construction and operation of a wireless system which leveraged and augmented the dark fiber network. The UAC voted 4-3 to accept those recommendations. James Cook, UAC Chairman, reported the UAC was concerned about flaws in the study and the lack of direction from the Council and community. The split vote was an indication of the UAC's concerns. Asher Waldfogel, UAC Commissioner, indicated the UAC felt the study did not include all the latest thinking. Dramatic changes in technology and equipment in the last few years could make fiber to the premises feasible. Mr. Cook felt the UAC was frustrated in that the City had this infrastructure and Reserve Fund but no information as to how to use it to move forward. Chair Kniss felt Palo Alto should have the ability to connect to its citizens. Jonathan Reichental, Chief Information Officer, believed the future of America was a connected country through broadband access. WORKING MINUTES Page 5 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 Chair Kniss stated the City's goal was connectivity. Vice Mayor Shepherd requested an explanation of the term "last mile." Mr. Fleming reported the last mile was the distance from an access point to an individual premise. Vice Mayor Shepherd inquired about splice points. Mr. Fleming indicated they were network connections. Vice Mayor Shepherd understood that homeowners could not tap into fiber optic cable; they had to connect via an access point. Mr. Fleming added that homeowners needed electronic equipment to utilize fiber. Vice Mayor Shepherd asked if undergrounded utilities contained fiber. Mr. Fleming reported fiber was underground and aerial at different points in the system. Vice Mayor Shepherd inquired whether fiber was included in undergrounded utilities. Mr. Fleming felt few if any residential neighborhoods contained usable conduit. Vice Mayor Shepherd asked why the conduit was not usable. Mr. Fleming suggested it could be full or old. Tomm Marshall, Assistant Director of Utilities, reported fiber rings for commercial services were in place. Spare conduit in most undergrounding areas could be used for fiber; however, that could require reconfiguration of existing conduit systems. Mr. Keene inquired about the amount of fiber located underground versus above ground if the City became fully connected. Mr. Marshall indicated most residential neighborhoods were still overhead; therefore, the majority of fiber would be located overhead. WORKING MINUTES Page 6 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 Chair Kniss added Chattanooga, Tennessee's fiber was all overhead. Apparently either method worked well, Mr. Marshall believed undergrounding was not the issue for providing fiber service. Fiber service was not set up for residential customers. Vice Mayor Shepherd requested a copy of Staff's presentation. 2. Present Status of the Field i. Changes Since Palo Alto’s Last Effort ii. Google’s Impact Chair Kniss indicated this Agenda item was covered in the previous discussion. 3. Preliminary Development of Work Plan and Schedule James Keene, City Manager, reported Staff was conducting exploratory research and outreach. By the next meeting, Staff could provide an outline related to a schedule; however, the specific functions of a work plan would be informed by directives to Staff. 4. Initial Steps i. Kansas City Conference ii. Networking Chair Kniss announced she, Vice Mayor Shepherd and Mr. Fleming would attend the fiber conference in Kansas City at the end of May. Mr. Fleming noted the conference was sponsored by the Fiber to the Home Council. Chair Kniss added the conference would be held May 28, 29 and 30, 2013. 5. Creation of a Citizen Advisory Committee Chair Kniss suggested the City Manager appoint and work with a Citizen Advisory Committee. James Keene, City Manager, felt the Council wanted to implement a citizen committee in order to utilize community talent and restart community dialog. WORKING MINUTES Page 7 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 MOTION: Mayor Scharff moved, seconded by Chair Kniss to request the City Manager form a Citizen Committee. MOTION PASSED: 4-0 Chair Kniss believed it was unusual for a city to have dark fiber in place and to make money on it. Council Member Klein recalled that one of the issues in negotiating with the consortium in 2006 was risk and financial requirements. The City's financial leverage changed since those discussions. Chair Kniss asked how Staff knew fiber rates for commercial customers were competitive, and if the City was one of the first cities to have dark fiber. Mr. Fleming reported several cities in California had dark fiber, because utilities needed fiber for command and control of infrastructure. Some cities were aggressive about licensing dark fiber, but none of the cities provided fiber to the residential market. Chair Kniss requested Staff provide information regarding actions taken by cities similar to Palo Alto. Mr. Fleming indicated some cities leveraged dark fiber to build Wi-Fi systems. Mayor Scharff inquired about the program San Leandro Lit. Mr. Fleming explained Lit San Leandro was a partnership between a software development company and the City of San Leandro. The city allowed OSI Soft to use existing conduit to run fiber in commercial areas. The private company was driving the partnership, but the city was benefitting through use of the fiber. 6. Rollout of Palo Alto 311 Heard after item 7 Jonathan Reichental, Chief Information Officer, reported the phone number 311 was aligned with government services. With Palo Alto 311, the public could contact City services through email, calls, text, and Facebook, and the City could provide information to the public. Services through Palo Alto 311 would relate to the Public Works Department beginning June 1, 2013. The community would know when City Staff was dispatched and when the WORKING MINUTES Page 8 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 problem was resolved. Location coordinates would be placed on photos submitted for service through a smart phone. James Keene, City Manager, added that Staff could track and combine multiple calls for the same issue such that Staff would respond only once. Mr. Reichental indicated additional services would be added over time. In alignment with the City's open data and government transparency policy, data collected from Palo Alto 311 would be published in the open data platform. Vice Mayor Shepherd inquired whether phone numbers would be included in the public data. Mr. Reichental noted some items of information were protected. Mayor Scharff inquired whether a picture taken through the 311 application would automatically be sent to the City with a service request. Mr. Reichental replied yes. Mayor Scharff reported the 311 application had a calendar, a library catalog, and could download e-books. He inquired about users providing feedback. Mr. Reichental indicated the application itself could provide feedback. That information would go to a team working on improvements. Council Member Klein asked if neighboring cities were using similar applications. Mr. Reichental stated Mountain View utilized a 311 application. Council Member Klein inquired about the length of time Mountain View had used an application. Mr. Reichental indicated more than 1 1/2 years. Council Member Klein inquired about plans to notify residents about Palo Alto 311. Mr. Reichental stated the application would be launched the same day as the Hackathon with a press release and a number of marketing promotions. WORKING MINUTES Page 9 of 9 Technology and the Connected City Special Meeting Working Minutes 5/14/13 7. Hackathon on June 1, 2013 Heard prior to item 6 Jonathan Reichental, Chief Information Officer, reported the national day of civic hacking would occur June 1 and 2, 2013. The event was designed to connect government and community to address community needs. Key aspects were commitment to the principles of transparency, participation and collaboration, government interest in open data, partnership with the community to address community needs, and continued and increased emphasis on the promotion of science, technology, engineering, art and math (STEAM). Palo Alto's event was a festival for the entire family and community with activities geared toward STEAM. Chair Kniss asked how participants could register for the Hackathon. Mr. Reichental noted the event was free with no registration required. Lytton Plaza would be the epicenter beginning at 11:00 A.M. Three goals for the event were: 1) align with White House and federal agencies; 2) fun event for community; and 3) join civic solvers with civic problems. Staff advertised in local newspapers and engaged social media. In addition, private supporters were utilizing their networks to spread the word. 8. Upcoming City Technology Initiatives Jonathan Reichental, Chief Information Officer would present the three-year Information Technology strategy to the Council on May 20, 2013. Future Meetings and Agendas James Keene, City Manager, requested parties interested in serving on the advisory committee contact him or Sheila Tucker. Chair Kniss encouraged public attendance at the May 20, 2013 Council meeting. The next meeting would be scheduled for mid- to late-summer. Mayor Scharff suggested Staff prepare name tags and places for liaisons. ADJOURNMENT: Meeting adjourned at 4:38 P.M. Conference Summary Notes 1 Fiber‐to‐the‐Home Council Conference “From Gigabit Envy to Gigabit Deployed” (A Community Toolkit for Building Ultra High‐Speed Networks) Location: Kansas City, Missouri May 29 & 30, 2013 Conference attendees from the City of Palo Alto: Vice Mayor Nancy Shepherd, Council Member Liz Kniss and Jim Fleming (staff, City of Palo Alto Utilities). Conference summary prepared by Jim Fleming. Summary of conference workshops and other materials distributed: FTTH Council Recommendations for “Becoming a Fiber‐Friendly Community” (Regulatory and infrastructure actions that can drive deployments). See attached summary of recommendations and FTTH Council whitepaper. Workshop #1: Why do we need so much bandwidth? Companies like Netflix, Amazon and Wal‐Mart are offering feature‐length movies for download. More people are looking to upload their own home movies into emails or web pages. Consumer electronics companies are coming out with devices that connect televisions to the Internet. High‐definition video is fast becoming the state‐ of‐the‐art, and one high definition movie takes up as much bandwidth as 35,000 web pages. “Cloud computing” applications are now available for word processing, emailing, automated remote file backup, and a host of business and personal services. All of these applications – and many others we haven’t even dreamed of yet – are going to require much greater bandwidth than what is generally available today, even from “broadband” providers. The explosion in online video is driving today's increases in bandwidth demand. Consumer video traffic is driving bandwidth requirements. There are a wide range of online applications now in development that are likely to add to bandwidth demands in the near future (e.g. telemedicine, the emergence of sensor applications). Other services, such as distance learning and remote energy management through fiber‐enabled "smart grid” systems, are also expected to expand considerably over the next several years, adding to bandwidth demands. Workshop #2: Emerging Private Network Applications David Eckell from Corning Cable Systems: Conference Summary Notes 2 76% of bandwidth stays within the building. Public Cloud vs. Private Cloud Multimode fiber is the most economical path to 4G and 100 gigabit inside the enterprise. Michael Fisher from Zhone Technologies: Zhone is the top FTTx supplier. “Don’t confuse bandwidth with Ethernet ports.” Keynote Address Milo Medin (Vice President, Access Services, Google Fiber) Summary of article written by Marguerite Reardon from CNET regarding Medin’s address (Google exec sees Google Fiber as a ‘moneymaker’, May 30, 2013) http://newsle.com/article/0/77167090/ Google is in it to win it when it comes to building fiber broadband networks. Despite speculation to the contrary, Google sees its Google Fiber broadband business as a moneymaker, and not just an overpriced test network. The network in Kansas City, which delivers 1Gbps in downloads and uploads to users and also comes with a bundled TV service that operates entirely over Google's fiber network, was first seen as an experimental network to test new services and advertising models. "We thought a handful of cities would say they were interested," Medin said. "Then we saw that 1,100 communities replied. No one at the time thought there was a real business here. But that changed when we saw the interest." Google offers only two tiers of service for its residential broadband service: a 1Gbps service for $70 a month and a 5Mbps service that is free with a $300 fiber installation fee that can be paid for over two years. While the 1Gbps service is slightly higher than the $40 to $50 most consumers pay each month for broadband, it's still a better value. Medin offered some insight into how Google will eventually be able to make money from this deployment and other fiber cities in the future. The key is keeping costs of deploying the network as low as possible. Contrary to what other infrastructure providers have done in the past, Google has not asked for any funds from the government to subsidize the cost of its network nor has it sought out attractive tax breaks. Specifically, Google asked the city of Kansas City to dedicate construction inspectors to the Google Fiber project so that the inspections the city requires on a regular basis could be done quickly, which saves Google time and money during the construction phase. It also asked to co‐locate the fiber with any city owned conduit, so that it didn't have to tear up streets unnecessarily. And the company worked with utilities to make sure that new poles that go up offer space for new fiber connections to be strung. TV is a key component: Building the network has not been without its challenges. The biggest headache thus far in deploying Google Fiber has been offering its TV service. While Conference Summary Notes 3 Google decided not to offer telephone service as part of a triple play because it was too costly and added little value to the package, Medin said a TV service was a must in attracting residential customers. But offering this service has also created the most challenges for the company and has also cost it the most money. Google Fiber expansion: Google has been so pleased with the Kansas City deployment that it's looking to expand. Google said it would soon offer its service in metro areas in Missouri and Kansas outside of Kansas City. And the company has also announced two more Google Fiber cities. It's building a network in Austin, Texas, and it has taken over the fiber network in Provo, Utah. In response to a question from an audience member (note: question from Council Member Liz Kniss) about why Google has not built a network in its home state of California, Medin was blunt. He said that Google would love to bring fiber and 1Gbps broadband speeds to its employees and other Californians. But he said that in general California has many challenges that would make it too costly to build a fiber network there. He said he hopes that over time, the rules will change and California will become a more hospitable place for fiber networks. "I have to tell you that it's really easy to build a network in Kansas City," he said, "It's easy in Missouri; it's easy in Kansas, and it's easy in Texas. Actions have consequences. I would love to find a way to make it work in California." Other comments: A FTTH network needs to have scale for transport services in order to make an “open access” network model work. In general, open access doesn’t work in the U.S. Works in Europe for a variety of reasons. With an open access network presumably there are several ISPs available to the customer, but there isn’t a “coherent offer” that’s attractive to the customer. Makes customer acquisition difficult. In a retail FTTH model, the operator cannot “shortchange” customer service and marketing. Workshop #3 (How we did it and what it has meant: Lessons from service provider leaders): Review of FTTH projects by Gigabit Squared, LUS Fiber in Lafayette, Louisiana and two rural telephone cooperatives. Gigabit Squared offers broadband facilities services to help communities and broadband providers to implement sustainable digital service strategies and business models. Provide operators and communities with the expertise required to discover, transform and build digital broadband capacity for civic transformation and competitiveness. Projects in Chicago and Seattle. LUS Fiber is a municipally owned subsidiary of Lafayette Utilities System providing cable TV, broadband Internet and telephone services services to the citizens of Lafayette, Louisiana. It is notable for being the first municipally owned company providing Fiber‐to‐the‐Home services in the state of Louisiana, and one of the first municipally owned FTTH companies in the country. Rural telephone cooperatives are building FTTH, because their landline telephone business is eroding and they need to diversify services. Conference Summary Notes 4 Workshop #4: Creating the business plan Moderator: Christopher Mitchell, Director, Telecommunications as Commons Initiative, Institute for Local Self‐Reliance. John George, Director, OFS Systems and Application Engineering: Average cost to pass home: $700 (but dependent on housing density) Average cost to connect home: $500‐$600 (more if an underground lateral extension is required). Streamline rights‐of‐way process, pole attachments, permitting and make‐ready. Locate and leverage conduit/duct for fiber installation. o Waive ROW fees and permitting fees. Providing video content is an issue (retransmission consent agreements with broadcast stations and high cost of cable TV programming are big issues for small operators). Consider “over‐the‐top” instead of usual model of providing channel line‐up with broadcast, cable and video‐on‐demand. Christopher Mitchell commented that it’s too early to tell if the “broadband‐only” service model works, but should look toward City of Longmont, Colorado project as a potential model. FTTH network operating expense is ~20% lower than other technologies. Optimize network design (each community has different benchmarks). How to determine how much a network would cost: o Perform a preliminary assessment o Housing density o Ratio of underground to aerial construction Note: Christopher Mitchell commented that correct forecasting and modeling of “take rates” is essential for both residential and business customers. Don’t need as many techs to operate an all‐fiber plant. Reduces OPEX, because operator doesn’t need as many techs. Trouble calls on fiber near 0. Workshop #5 (Regulatory Considerations in the Business Model) Jim Baller (President, The Baller Law Group) Conference Summary Notes 5 For any broadband project it is important for the operator to understand its obligations under the Universal Service Fund.1 FCC refused to ban exclusive wiring and marketing agreements for Multiple Dwelling Units (MDUs). FCC rules on a case‐by‐case basis on exclusive programming contracts…this was a change. Litigation will be coming soon on the “level playing field” issue. There are regulatory incentives for the expansion of broadband (e.g. the federal E‐ rate Program for schools and libraries). Brand X Decision: National Cable & Telecommunications Association et al. v. Brand X Internet Services et al., 545 U.S. 967 (2005), is a United States Supreme Court case in which the Court declared in a 6‐3 decision that a cable Internet provider is an "information service," and not a "telecommunications service" and as such competing internet service providers, like Brand X, were denied access to the cable and phone wires to provide home users with competing Internet services. Workshop #7: Issuing an RFP. Scott Bowles, President of Spectrum Engineering Corp. RFP processes are usually subject to state sunshine laws. Does not recommend a public process for establishing tariffs due to competitive interest. 1Universal Service Fund was created by the United States Federal Communications Commission (FCC) in 1997 to meet Congressional universal service goals as mandated by the Telecommunications Act of 1996. The 1996 Act states that all providers of telecommunications services should contribute to federal universal service in some equitable and nondiscriminatory manner; there should be specific, predictable, and sufficient Federal and State mechanisms to preserve and advance universal service; all schools, classrooms, health care providers, and libraries should, generally, have access to advanced telecommunications services; and finally, that the Federal-State Joint Board and the FCC should determine those other principles that, consistent with the 1996 Act, are necessary to protect the public interest. As of the third quarter of 2012, the USF fee, which changes quarterly, equals 15.7 percent of a telecom company's interstate end-user revenues. On October 27, 2011, the FCC approved a six-year transfer process that would transition money from the Universal Service Fund High-Cost Program to a new $4.5 billion a year Connect America Fund for broadband Internet expansion, effectively putting an end to the USF High-Cost Fund by 2018. Conference Summary Notes 6 While writing RFP establish funding sources and mechanisms. Publish an RFI first. Facilitates getting “free knowledge” from responding vendors. There’s less freedom if an RFP is done first. RFP needs a quality‐based selection process. Establish a scoring method. Build in economic development criteria in RFP. Key elements of an RFP: o Detailed network background with overview about what it would include. Examples: retail broadband services with a guaranteed sustained 1 Gbps dedicated symmetrical transmission to support voice, data and video services. o Type of FTTP architecture o Homes passed. o Rollout strategy (example: build on a “demand driven basis”). o Define end‐users: residential, small and medium enterprises, etc. o Describe existing assets: fiber, conduit, rights‐of‐way, pole attachment rights, space and power. Define who owns and controls and has access. o Existing contracts for services and assistance in identifying and generating institutional and enterprise demand. o Retail marketing assistance. o Expedited permitting and inspections. o Relationships with vendors. o Description of services sought. Example: seeking a vendor to design, build, install, own operate and manage a complete turnkey high‐speed communications network within the service area. Conference Summary Notes 7 o Description of services sought: RFP does not propose a specific technology, but expect that most potential vendors will propose Fiber‐to‐the‐home Active Ethernet, GPON and/or WDM/PON technologies to provide gigabit service to households, businesses and institutions in service area. o Vendor will be recommended to develop and provide retail services. o Scope of Work: Network requirements, other services of the network, public safety services, retail/local services on the network, community services on the network. o Vendor responses and evaluation: technology proposed, service offerings, rollout strategy, roles and responsibilities, financial projects. o Breakdown of project tasks and components. Breakdown of biddable components. o Project schedule. o Vendor qualifications. o Administrative issues. o Proposal format and certification. o Project calendar. o Proposal due date and submission. o Process and criteria for evaluation of proposals o Clarification of proposals. o Negotiation and execution of contracts. o Use of subcontractors. o Other: applicable statutes, errors and omissions, ownership and confidentiality. Conference Summary Notes 8 City of Palo Alto (ID # 3911) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: Draft Letter on PCJPB Member Configuration Title: Review and Approval of a Draft Letter to Valley Transportation Authority Board Chair Pirzynski on Peninsula Corridor Joint Powers Board Representation From: City Manager Lead Department: Planning and Community Environment Recommendation The Palo Alto City Council Rail Committee and staff recommend that the City Council approve the attached draft letter to Valley Transportation Authority (VTA) Board Chair Pirzynski on Peninsula Corridor Joint Powers Board (PCJPC) representation. Background The PCJPB is the owner and operator of Caltrain. At the present time, the PCJPB is comprised of nine representatives with three representatives coming from each of the three counties that fund Caltrain. The three counties that fund Caltrain are San Francisco, San Mateo, and Santa Clara. Each county has its own method for appointing their representatives. In Santa Clara County all three representatives are appointed by the VTA. Executive Summary The City Council Rail Committee has long been interested in the PCJPB representation structure being updated to more accurately reflect ridership levels. Specifically, the Committee is concerned that there is no Palo Alto representation on the PCJPB, despite Palo Alto having the highest ridership in Santa Clara County and the second busiest station on the entire Caltrain line. Therefore, as an interim step prior to structural PCJPB representation changes, the City Council Rail Committee approved the attached draft letter (Attachment A) for City City of Palo Alto Page 2 Council review and approval by a 3-0 vote on April 25, 2013 (Kniss absent). The draft letter asks the VTA to designate one of its three seats on the PCJPB to come from a VTA Group 2 city. “Group 2” encompasses the cities of Los Altos, Los Altos Hills, Mountain View, and Palo Alto. The Palo Alto and Mountain View stations are the first and second busiest stations in the county, so representation with a single seat on the board would be an appropriate step toward fair representation. At the time the letter was approved the Rail Committee also directed staff to inform the City Managers and Mayors of the other “Group 2” cities that this draft letter would be going to the Palo Alto City Council for review and approval, which staff has done. At the time this report was drafted staff has not heard back from those cities. Attachments: A - Draft VTA / PCJPB Representation Letter_6-24-2013 (PDF) DRAFT June 24, 2013 Chairperson Joe Pirzynski Valley Transportation Authority 3331 North First Street Building B - 1st Floor San Jose, CA 95134-1927 Re: VTA Group 2 Representation on the Peninsula Corridor Joint Powers Board Dear Chairperson Pirzynski: The City of Palo Alto is writing to express our interest in updating the representation structure of the Peninsula Corridor Joint Powers Board (PCJPB). As you know, the PCJPB is the owner and operator of Caltrain, and consists of representatives from San Francisco, San Mateo and Santa Clara counties. The City of Palo Alto has long been interested in the PCJPB representation structure being updated to more accurately reflect ridership levels. Specifically, the City is concerned that there is no Palo Alto representation on the PCJPB, despite having the highest ridership in Santa Clara County and the second busiest station on the entire Caltrain line. In fact, there is no representation for Santa Clara County north of San Jose despite over 75% of Santa Clara County boardings being north of San Jose. Last fall, Caltrain created the Caltrain Local Policy Maker Group (LPMG), comprised of representatives from each city on the Caltrain line. This advisory group is a positive development that Palo Alto supports, but it does not give Palo Alto the opportunity to be directly involved with PCJPB policymaking. Therefore, as an interim step prior to structural PCJPB representation changes, the City of Palo Alto is asking the VTA to act to designate one of its three seats on the PCJPB to come from a VTA Group 2 city. “Group 2” encompasses the cities of Los Altos, Los Altos Hills, Mountain View, and Palo Alto. The Palo Alto and Mountain View stations are the first and second busiest stations in the county, so representation with a single seat on the board would be an appropriate step toward fair representation. Thank you for your time and we look forward to your response. Sincerely, Greg Scharff Mayor, City of Palo Alto c: Palo Alto City Council Palo Alto City Manager California Governor Jerry Brown California Senator Jerry Hill California Assemblymember Rich Gordon Peninsula City Mayors Peninsula Cities Consortium Peninsula Corridor Joint Powers Board Metropolitan Transportation Commission California High Speed Rail Authority Bay Area Council Local Media City of Palo Alto (ID # 3910) City Council Staff Report Report Type: Consent Calendar Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: Rail Guiding Principles Update Title: Review and Approval of the Proposed Revisions to the Palo Alto City Council Rail Committee Guiding Principles From: City Manager Lead Department: Planning and Community Environment Recommendation The Palo Alto City Council Rail Committee and staff recommend that the City Council approve the proposed revisions to the Rail Committee Guiding Principles. Executive Summary The Palo Alto City Council Rail Committee is comprised of four City Council members with the responsibility to advise the City Council on rail related transit matters. The Guiding Principles document is used by the Rail Committee to guide decision making and help make recommendations to the City Council. On October 11, 2012, the Rail Committee directed staff to propose updates to the Rail Committee Guiding Principles to reflect changes to California High-Speed Rail (HSR) and Caltrain Modernization that occurred subsequent to when the City Council last revised the Rail Committee Guiding Principles in December 2011. The Rail Committee, in subsequent meetings, refined those updates and sent them to the City Council for approval on January 22, 2013. However, at that meeting, alternative language for Guiding Principle 16 was proposed. After a brief discussion, the Council voted to send the Guiding Principles back to the Rail Committee for further deliberation. At the March 28, 2013 Rail Committee meeting both the alternative language for Guiding Principle 16 and other minor revisions were discussed and approved with a 4-0 vote. Therefore, three documents are now attached for City Council review and approval: 1. The most recently adopted version of the Rail Committee Guiding Principles City of Palo Alto Page 2 approved by the City Council on December 19, 2011 (Attachment A) 2. A redlined version of the most recently adopted version of the Rail Committee Guiding Principles reflecting proposed revisions and alternatives (Attachment B) 3. A clean version of the Rail Committee Guiding Principles reflecting proposed revisions and alternatives (Attachment C) Attachments: Attachment A - Rail Committee Guiding Principles_12-19-2011 (PDF) Attachment B - REDLINED DRAFT - Rail Committee Guiding Principles_3-28-2013 (PDF) Attachment C - CLEAN DRAFT - Rail Committee Guiding Principles_3-28-2013 (PDF) 1 PALO ALTO CITY COUNCIL RAIL COMMITTEE GUIDING PRINCIPLES Role and Authority of the Rail Committee The Committee shall advise the City Council on high speed rail (HSR), Caltrain and related rail transit matters and provide the community with appropriate forums for the discussion of such issues. The Committee shall keep the full Council informed on a regular basis. The Committee shall have the authority to act on behalf of the City on HSR, Caltrain and related rail transit matters when there is not sufficient time to refer a particular issue to the full City Council before action is needed. However, the Committee shall forward their recommendations to the Council for final action if the Committee determines that it is feasible to do within the time available. Such actions by the Committee shall include, but not be limited to, advocacy to the state legislature, the HSR Authority, Caltrain Joint Powers Board, Congress and other pertinent governmental agencies. Such actions by the Committee shall be consistent with the following policies of the City: Background In November 2008 California voters approved Prop 1A, a nearly ten billion dollar bond measure, the primary purpose of which is to develop HSR service from Los Angeles to San Francisco. The High Speed Rail Authority (the Authority) has decided that the route HSR will take from San Jose to San Francisco is along the Caltrain right of way (ROW), including the portion of the ROW that runs through Palo Alto. However, the Environmental Impact Report used by the Authority in making this decision has been de‐certified per court order. Many issues, such as the vertical alignment of the HSR, remain undecided. Recognizing that HSR could have significant impacts on Palo Alto, the City Council on May 18, 2009 created an ad hoc High Speed Rail Subcommittee of four Council Members, (since changed to a standing committee and renamed the Rail Committee). The Council also adopted a set of Guiding Principles which allowed the Committee to take a variety of actions in the name of the City without action of the full Council. Subsequently, the Committee‐‐‐ indeed the entire community‐‐‐ has learned a great deal about HSR and many HSR related actions have taken place. The Authority has selected the central valley as their first construction segment which allows for more a more deliberative and collaborative consideration of alternatives on the peninsula. Additionally, an alternative for a limited “blended” rail system along the Caltrain corridor has 2 been proposed along with a corresponding limited EIR. This proposal limits the scale of rail on the peninsula. The Authority in November 2011 issued its revised Business Plan showing that the cost of HSR would be $98 billion dollars. In the revised Business Plan the Authority used the same ridership forecast model as it had in the past and did not address numerous flaws identified by many experts who found the Authority’s projections to be unfounded and unreliable. Guiding Principles The City Council therefore, adopts the following Principles to guide its decision making framework and the actions of the Committee: The City of Palo Alto believes that the High Speed Rail (HSR) Project should be terminated for the following reasons: 1. The current project fundamentally contradicts the measure presented to the voters under Prop. 1A in 2008. 2. The Business Plan is fatally flawed and not credible. In November 2008, the voters passed a bond measure for a HSR project based on: • Grossly understated construction costs, • Understated fares and overstated ridership, • Operating without a government subsidy, and • A Funding Plan legally required to identify funding sources and achieve environmental review prior to construction of an Initial Operating Segment (IOS). Since the revised HSR Business and Funding Plans do not meet the projected ridership, fare, job creation, and other significant requirements, the City believes that the voters were not given accurate information during the 2008 election to make an informed decision on a HSR project for the State of California. If the State should move forward with the HSR project, the following Guiding Principles shall apply to the City’s positions on HSR: 1. The City is opposed to an elevated alignment of HSR/Caltrain in Palo Alto. 2. The City’s preferred vertical alignment of fixed rail in Palo Alto is below grade. 3. All neighborhoods in Palo Alto affected by HSR/Caltrain should be treated with equal consideration with respect to vertical alignment impacts. 3 4. The City believes that the pending program EIR for the Central Valley to San Francisco portion of HSR is fatally flawed and that the HSR Authority should reopen and reconsider its decision to use the Pacheco Pass route. 5. The City supports the findings of the Legislative Analyst’s Office, State Auditor and the HSR Peer Review Committee which question the viability and accuracy of the Authority’s Business Plan on such matters as the ridership projections, identification of sufficient and reliable funding sources, project management, and operations of HSR. 6. The City favors legislation which would enable effective implementation of the HSR Peer Review Committee authorized by AB 3034. 7. Palo Alto supports transit and urban design solutions that will be compatible with our economic development strategies, transportation goals, and vision of the transit corridor within our boundaries; HSR/Caltrain needs to complement the goals and strategies of our Comprehensive Plan. 8. Palo Alto supports the use of the Context Sensitive Solutions related to HSR and Caltrain that is effectively funded and implemented by the Authority. 9. The High Speed Rail Authority should provide sufficient funding to affected Cities to allow them to hire experts to study reports requiring feedback and sufficient outreach to the community to capture their concerns and suggestions. 10. Proposed changes to the Caltrain corridor by either the Authority or Caltrain should provide realistic renderings of the various alternatives and also provide simulations that would help to provide an understanding of the sound and vibrations. 11. Palo Alto strongly supports Caltrain and the commuter rail service at the present or improved levels of service. 12. Palo Alto also supports the modernization of Caltrain, and/or as the lead agent for a phased alignment with but independent of HSR. 13. Palo Alto will work cooperatively with neighboring communities with respect to HSR and Caltrain issues of mutual concern through vehicles such as the Peninsula Cities Consortium. 14. Palo Alto expects all current rail crossings to remain active. In the event that the modernization of Caltrain and/or HSR increases train service from current 2011 levels, Palo Alto will consider grade separation solutions for the Alma, Churchill, East Meadow, 4 and East Charleston crossings that are effectively funded and implemented by the lead agency 15. The Guiding Principles of the Committee incorporates by reference Council adopted written comments to the Authority, the Caltrain Joint Powers Board, and other relevant agencies. In case of any conflict in policies the most recent language prevails. Updated: December 19, 2011 (previously updated October 12, 2011 and May 17, 2010) PALO ALTO CITY COUNCIL RAIL COMMITTEE GUIDING PRINCIPLES Background (not shown in redline format, as Background section was completely revised) In November 2008 California voters approved Proposition 1A, a $9.95 billion bond measure, for High Speed Rail (HSR) service from Los Angeles to San Francisco. The San Jose to San Francisco segment of the selected route will take HSR rail service through Palo Alto. This segment is now proposed to be a “blended system”, primarily relying on existing Caltrain right-of-way and track. Caltrain is proposing to modernize this segment, including electrification of the trains, partially utilizing HSR funds. However, the costs and environmental impacts of this “blended system” continue to evolve, and have not yet been fully defined, studied or mitigated. The most recent HSR business plan sets the initial cost of the overall HSR system at approximately $68 billion. While this cost reflects a reduction compared to recent cost estimates, it still significantly exceeds the $33 billion cost estimate advertised in Proposition 1A. In this revised business plan, the California High Speed Rail Authority (CHSRA) also continues to use the debatable and highly optimistic ridership forecast models, and does not address numerous inconsistencies that had been noted by experts in previous business plans. This analysis, therefore, creates an unreliable framework for accurate fiscal and environmental review of the HSR system. Moving forward, the initial construction segment (ICS) for HSR will be in the Central Valley. In July 2012, legislation was enacted that allocated approximately $8 billion of state and federal money for construction of the ICS, and for investments in Northern and Southern California commuter rail systems in anticipation of the future operation of HSR trains on these tracks as part of a Blended System. However, at least $55 billion of unidentified funding remains necessary for completion of the Los Angeles to San Francisco system. Therefore, important funding and environmental issues remain undecided, and must be critically examined prior to final decisions being made. An ongoing, detailed analysis is even more critical for the complex, blended San Jose to San Francisco segment. Guiding Principles The City Council adopts the following Principles to guide its decision making framework and the actions of the Committee: The City of Palo Alto believes that the HSR project should be terminated for the following reasons: Deleted: therefore, 1. The current project fundamentally contradicts the measure presented to the voters under Prop. 1A in 2008. The voters approved the measure based on grossly underestimated construction costs, overstated ridership numbers and underestimated fares. The voters also required that HSR could operate without a subsidy and that funding sources would be identified and environmental review would be complete prior to construction of an Initial Operating Segment. 2. Given that the revised HSR Business and Funding Plans do not meet the projected ridership, fare, job creation, and other significant requirements, the City believes that the voters were not given the accurate information during the 2008 election necessary to make an informed decision on a HSR project for the State of California. The City realizes, however, that there is momentum at the Federal and State level to make HSR a reality, despite the conflicts with Prop 1A. There are many evolving aspects of HSR, however, that have not yet been studied or decided. Therefore, if the State should move forward with the HSR project, the following Guiding Principles shall apply to the City’s positions on HSR: 1. The City supports a non-elevated alignment of HSR/Caltrain in Palo Alto. 2. The City’s preferred vertical alignment of fixed rail in Palo Alto is below grade. 3. When examining the potential impacts of vertical rail alignments equal attention shall be given to all Palo Alto neighborhoods. Adopted mitigation measures should be proportionate to the impacts identified in the studies. 4. The City believes that the Program Environmental Impact Report (EIR) for the Central Valley to San Francisco portion of HSR is fatally flawed and that the CHSRA should reopen and reconsider its decision to use the Pacheco Pass route. 5. The City supports the findings of the Legislative Analyst’s Office, State Auditor, and the HSR Peer Review Committee regarding the viability and accuracy of the CHSRA’s Business Plan on such matters as the ridership projections, the identification of sufficient and reliable funding sources, project management, and operation of HSR. 6. The City favors legislation which would enable implementation of the HSR Peer Review Committee authorized by AB 3034. 7. Palo Alto supports transit and urban design solutions that will be compatible with our economic development strategies, transportation goals, and rail corridor vision. Deleted: expected Deleted: t Deleted: component and many Deleted: <#>All neighborhoods in Palo Alto affected by HSR/Caltrain should be treated with equal consideration with respect to vertical alignment impacts.¶ Deleted: which question Deleted: effective Deleted: of the transit corridor within our boundaries HSR/Caltrain needs to complement the goals and strategies of the City’s Comprehensive Plan. 8. Palo Alto supports the use of the Context Sensitive Solutions process for HSR and Caltrain that is funded and implemented by the CHSRA. 9. The CHSRA should provide sufficient funding to affected cities to allow them to hire experts to study reports requiring feedback and sufficient outreach to the community to capture their concerns and suggestions. 10. Proposed changes to the Caltrain corridor by either the CHSRA or PCJPB should provide both realistic renderings of the various alternatives and simulations that would help provide an understanding of the system’s sound and vibration impacts. 11. Palo Alto strongly supports Caltrain and the commuter rail service at the present or improved levels of service. 12. Palo Alto supports the modernization of Caltrain. However, whether the City supports electrification cannot be determined until all potential impacts are identified, studied and suitable mitigation measures are implemented. 13. Palo Alto supports Caltrain as the lead agency for all system improvements in the Caltrain corridor. 14. Palo Alto will work cooperatively with neighboring communities with respect to HSR and Caltrain issues of mutual concern through agencies such as the Peninsula Cities Consortium. 15. Palo Alto expects all current rail crossings to remain open to automobiles, bicycles and pedestrians. In the event that the modernization of Caltrain and/or HSR increases train service from current 2012 levels, Palo Alto will consider grade separation solutions for the Alma, Churchill, East Meadow, and East Charleston crossings. These improvements must be funded by Caltrain, HSR and/or other external funding sources. 16. A detailed and transparent environmental analysis of all proposed improvements must be completed. Therefore, the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) shall not be modified in any way that (1) exempts the HSR or Caltrain Modernization projects, either in whole or in part; or (2) reduces the obligation of the HSR or Caltrain Modernization project sponsors to conduct a full environmental review process that allows for a detailed analysis of all potential impacts and mitigation measures at a level that is not less than the level currently required by law. Deleted: effectively Deleted: but Deleted: or not that includes Deleted: is still Deleted: un Deleted: vehicles Deleted: active Deleted: that are Deleted: effectively Deleted: Deleted: and implemented by the lead agency Deleted: <#>¶ <#>--------------------------------------------------------------- -----------------------------------------------------------¶ <#>Under no circumstances should HSR or Caltrain be exempted in any way from theA detailed and transparent environmental analysis of all proposed improvements must be completed. Therefore, the California Environmental Quality Act (CEQA) andor the National Environmental Policy Act (NEPA), including any amendments.) shall not be modified in any way that affects the HSR or Caltrain Corridor environmental review process as currently required by law.¶ OR¶ ¶ Formatted: Normal, Adjust space betweenLatin and Asian text, Adjust space between Asian text and numbers Formatted: Font: 12 pt Formatted: Font: 12 pt Deleted: ¶ 17. The overall environmental review should be comprised of two separate Environmental Impact Reports. The first EIR should be for the Caltrain Modernization Project. The second EIR should address any subsequent improvements proposed or necessary for HSR operation in the corridor. 18. Palo Alto strongly supports revisions to the Peninsula Corridor Joint Powers Board (PCJPB) governance structure that more accurately reflect the distribution of Caltrain ridership. Additionally, such revisions should be made at or prior to a ballot measure seeking a dedicated funding source for Caltrain operations, should one occur. 19. The Guiding Principles of the Committee incorporates by reference Council adopted written comments to the CHSRA, PCJPB, and other relevant agencies. In case of any conflict in policies the most recent language prevails. Previously updated: December 19, 2011; October 12, 2011; and May 17, 2010 Deleted: --------------------------------------------------- ------------------------------------------------------------------¶ Deleted: the PCJPB should consider making Deleted: in congruence Deleted: consistent with Deleted: Updated: January 22, 2013 Formatted: Indent: Left: 0", Hanging: 1", Tab stops: Not at 4.3" Deleted: December 19, 2011 Deleted: ( Deleted: p Deleted: Deleted: , Deleted: Deleted: Deleted: ) Deleted: ¶ ¶ ¶ ¶ ¶ ¶ ¶ PALO ALTO CITY COUNCIL RAIL COMMITTEE GUIDING PRINCIPLES Background (not shown in redline format, as Background section was completely revised) In November 2008 California voters approved Proposition 1A, a $9.95 billion bond measure, for High Speed Rail (HSR) service from Los Angeles to San Francisco. The San Jose to San Francisco segment of the selected route will take HSR rail service through Palo Alto. This segment is now proposed to be a “blended system”, primarily relying on existing Caltrain right-of-way and track. Caltrain is proposing to modernize this segment, including electrification of the trains, partially utilizing HSR funds. However, the costs and environmental impacts of this “blended system” continue to evolve, and have not yet been fully defined, studied or mitigated. The most recent HSR business plan sets the initial cost of the overall HSR system at approximately $68 billion. While this cost reflects a reduction compared to recent cost estimates, it still significantly exceeds the $33 billion cost estimate advertised in Proposition 1A. In this revised business plan, the California High Speed Rail Authority (CHSRA) also continues to use the debatable and highly optimistic ridership forecast models, and does not address numerous inconsistencies that had been noted by experts in previous business plans. This analysis, therefore, creates an unreliable framework for accurate fiscal and environmental review of the HSR system. Moving forward, the initial construction segment (ICS) for HSR will be in the Central Valley. In July 2012, legislation was enacted that allocated approximately $8 billion of state and federal money for construction of the ICS, and for investments in Northern and Southern California commuter rail systems in anticipation of the future operation of HSR trains on these tracks as part of a Blended System. However, at least $55 billion of unidentified funding remains necessary for completion of the Los Angeles to San Francisco system. Therefore, important funding and environmental issues remain undecided, and must be critically examined prior to final decisions being made. An ongoing, detailed analysis is even more critical for the complex, blended San Jose to San Francisco segment. Guiding Principles The City Council adopts the following Principles to guide its decision making framework and the actions of the Committee: The City of Palo Alto believes that the HSR project should be terminated for the following reasons: 1. The current project fundamentally contradicts the measure presented to the voters under Prop. 1A in 2008. The voters approved the measure based on grossly underestimated construction costs, overstated ridership numbers and underestimated fares. The voters also required that HSR could operate without a subsidy and that funding sources would be identified and environmental review would be complete prior to construction of an Initial Operating Segment. 2. Given that the revised HSR Business and Funding Plans do not meet the projected ridership, fare, job creation, and other significant requirements, the City believes that the voters were not given the accurate information during the 2008 election necessary to make an informed decision on a HSR project for the State of California. The City realizes, however, that there is momentum at the Federal and State level to make HSR a reality, despite the conflicts with Prop 1A. There are many evolving aspects of HSR, however, that have not yet been studied or decided. Therefore, if the State should move forward with the HSR project, the following Guiding Principles shall apply to the City’s positions on HSR: 1. The City supports a non-elevated alignment of HSR/Caltrain in Palo Alto. 2. The City’s preferred vertical alignment of fixed rail in Palo Alto is below grade. 3. When examining the potential impacts of vertical rail alignments equal attention shall be given to all Palo Alto neighborhoods. Adopted mitigation measures should be proportionate to the impacts identified in the studies. 4. The City believes that the Program Environmental Impact Report (EIR) for the Central Valley to San Francisco portion of HSR is fatally flawed and that the CHSRA should reopen and reconsider its decision to use the Pacheco Pass route. 5. The City supports the findings of the Legislative Analyst’s Office, State Auditor, and the HSR Peer Review Committee regarding the viability and accuracy of the CHSRA’s Business Plan on such matters as the ridership projections, the identification of sufficient and reliable funding sources, project management, and operation of HSR. 6. The City favors legislation which would enable implementation of the HSR Peer Review Committee authorized by AB 3034. 7. Palo Alto supports transit and urban design solutions that will be compatible with our economic development strategies, transportation goals, and rail corridor vision. HSR/Caltrain needs to complement the goals and strategies of the City’s Comprehensive Plan. 8. Palo Alto supports the use of the Context Sensitive Solutions process for HSR and Caltrain that is funded and implemented by the CHSRA. 9. The CHSRA should provide sufficient funding to affected cities to allow them to hire experts to study reports requiring feedback and sufficient outreach to the community to capture their concerns and suggestions. 10. Proposed changes to the Caltrain corridor by either the CHSRA or PCJPB should provide both realistic renderings of the various alternatives and simulations that would help provide an understanding of the system’s sound and vibration impacts. 11. Palo Alto strongly supports Caltrain and the commuter rail service at the present or improved levels of service. 12. Palo Alto supports the modernization of Caltrain. However, whether the City supports electrification cannot be determined until all potential impacts are identified, studied and suitable mitigation measures are implemented. 13. Palo Alto supports Caltrain as the lead agency for all system improvements in the Caltrain corridor. 14. Palo Alto will work cooperatively with neighboring communities with respect to HSR and Caltrain issues of mutual concern through agencies such as the Peninsula Cities Consortium. 15. Palo Alto expects all current rail crossings to remain open to automobiles, bicycles and pedestrians. In the event that the modernization of Caltrain and/or HSR increases train service from current 2012 levels, Palo Alto will consider grade separation solutions for the Alma, Churchill, East Meadow, and East Charleston crossings. These improvements must be funded by Caltrain, HSR and/or other external funding sources. 16. A detailed and transparent environmental analysis of all proposed improvements must be completed. Therefore, the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) shall not be modified in any way that (1) exempts the HSR or Caltrain Modernization projects, either in whole or in part; or (2) reduces the obligation of the HSR or Caltrain Modernization project sponsors to conduct a full environmental review process that allows for a detailed analysis of all potential impacts and mitigation measures at a level that is not less than the level currently required by law. 17. The overall environmental review should be comprised of two separate Environmental Impact Reports. The first EIR should be for the Caltrain Modernization Project. The second EIR should address any subsequent improvements proposed or necessary for HSR operation in the corridor. 18. Palo Alto strongly supports revisions to the Peninsula Corridor Joint Powers Board (PCJPB) governance structure that more accurately reflect the distribution of Caltrain ridership. Additionally, such revisions should be made at or prior to a ballot measure seeking a dedicated funding source for Caltrain operations, should one occur. 19. The Guiding Principles of the Committee incorporates by reference Council adopted written comments to the CHSRA, PCJPB, and other relevant agencies. In case of any conflict in policies the most recent language prevails. Previously updated: December 19, 2011; October 12, 2011; and May 17, 2010 City of Palo Alto (ID # 3866) City Council Staff Report Report Type: Action Items Meeting Date: 6/17/2013 City of Palo Alto Page 1 Summary Title: Management and Professional Compensation Plan Title: Recommendation from Finance Committee to Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Adopt a Resolution Amending the City of Palo Alto Merit System Rules and Regulations From: City Manager Lead Department: Human Resources Recommendation The Finance Committee recommends that the Council implement the Management and Professional Compensation Study by adopting the attached Resolutions amending the 2013 Management and Professional Compensation Plan and amending the City of Palo Alto Merit System Rules and Regulations. Draft Motion: I move that Council adopt the attached Resolutions amending the 2013 Management and Professional Compensation Plan and amending the City of Palo Alto Merit System Rules and Regulations. Background On May 23, 2013 as directed by City Council, the Finance Committee discussed the amendment to the 2013 Management and Professional Compensation Plan. In the full report to the Committee (Please see Attachment H, May 6, 2013 Report to Council, ID # 3841), staff responded to the questions asked by Council at the May 6, 2013 Council meeting (Attachment F). City Manager Keene reported that the City had a long overdue obligation to the City’s Management and Professional employees to complete a total compensation study and adjust classification salary ranges based upon market data. City of Palo Alto Page 2 Subject to financial considerations, staff recommends that it be the City’s goal to compensate Management and Professional employees according to each job’s level of expertise, scope of work performed, and managerial accountability as reflected by the market. The City benchmarks 14 cities that reflect Palo Alto’s geographic labor market, comparable size and scope of services, including those that have one or more utilities. The majority of these agencies compete with Palo Alto for talent. The findings determined that Palo Alto’s benefit package value – at the time of the survey in 2010-12 - was about ten (10) percent greater than that of the benchmark comparators as a whole. Since the study, there have been changes in employee contribution to medical and pension cost that have reduced Palo Alto’s benefit package. At the same time, many of Palo Alto management and professional salaries are lower than the comparator market. Since the methodology for comparing salary ranges for positions was based on total compensation (salaries plus benefits, including retiree medical) the number of positions with potential increases was reduced due to the value of the City’s benefits. Some job classifications, as a result of the study, have a midpoint that is over the market median, some are at the market median, and others are under market median compared to the benchmark agencies. Discussion The last previous market study for Management and Professional classifications was conducted over ten years ago. The current study, conducted by Koff & Associates, shows some classifications are under or over the market median and require range adjustments. Staff also recommends internal alignment adjustments to the analyst and senior analyst classifications, to bring related jobs in different departments under the same salary range. This is based on organizational equity and is supported by department head recommendations. In the proposed Management and Professional salary schedule, Attachment D, staff recommends increasing the salary range of 43 classifications and decreasing the salary range of 53 classifications. Staff has proposed to Council to “Y-rate” the salaries of employees whose salary is above the maximum. Y rating means their pay will not be reduced, but these employees will not be eligible for salary increases until their salary is within the approved salary range. Once adopted by Council, the next implementation step will be to determine the individual placement for each manager or professional within the salary ranges. The actual pay for each manager or professional will be based on experience, performance, and merit as recommended by each department head. Final authorization will be granted by the City Manager (or other CAO for employees within their department) in consultation with the Chief People Officer. City of Palo Alto Page 3 City Manager Keene informed Council that another compensation study would be completed by the end of FY 2014 using the same classifications and same benchmarks to obtain updated comparison data. When the current data was completed in FY 2012, the Management and Professional group employees were paying two percent (2%) of the CalPERS retirement contribution. They are now paying the full eight percent (8%) contribution. A new market study will show the City’s total compensation position relative to the market to ensure that Palo Alto’s total compensation remains competitive with neighboring cities. City Manager Keene reiterated that the City’s goal is to provide compensation that attracts and retains skilled and engaged staff who can work for a City offering interesting and leading edge work in a dynamic community. The Finance Committee unanimously voted to recommend to the full Council the attached amendment to the 2013 Management and Professional Compensation Plan. The Finance Committee requested that staff update the market comparison within 18 months based on total compensation, and that staff consider and analyze how the City could incorporate total compensation into the salary structure for the entire organization. Resource Impact $310,000 has been allocated in the General Fund and has been carried over since FY 2007 to implement market salary adjustments resulting from the Management and Professional Compensation Study. $310,000 equates to 1.26% of the City’s General Fund total compensation cost for Management and Professional positions. Little of that funding will be expended in FY 2013 since it is the end of the year. A similar amount is included in the FY 2014 Budget. In addition, approximately $122,000 or 1.08% of total compensation has been allocated in the FY 2014 Budget for salary adjustments within the non-Utilities Department Enterprise Funds such as waste water treatment, refuse fund storm drain, IT, etc. Attachments: ATTACHMENT A-Reso Amending Merit System Rules-Regulations Mgmt (PDF) ATTACHMENT B-Reso Amending Comp Plan for Mgmt Professional (PDF) ATTACHMENT C-Management Professional & Confidential Comp Plan (PDF) ATTACHMENT D-2013 Mgmt & Prof Salary Schedule (PDF) ATTACHMENT E-Excerpt Finance Committee Minutes 05-23-2013 (PDF) ATTACHMENT F-Finance Committee Staff Report FC#4 05-23-13 (PDF) ATTACHMENT G-Excerpt From the May 6, 2013 Council Minutes (PDF) ATTACHMENT H-May 6, 2013 CMR ID#3600 (PDF) ATTACHMENT A * NOT YET APPROVED * 130501 sh 0140089 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending Section 1701 of the Merit System Rules and Regulations to Incorporate the 2011‐ 2013 Compensation Plan for Management and Professional Personnel and Council Appointees The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Section 1701 of the Merit System Rules and Regulations is hereby amended to read as follows: “1701. Compensation Plan for Management and Professional Personnel and Council Appointees incorporated by reference. The currently applicable Compensation Plan entitled “City of Palo Alto Compensation Plan‐‐Management and Professional Personnel and Council Appointees,” is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said Compensation Plan shall apply to all Management and Professional employees and Council Appointees, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter will prevail over such other provisions as to employees in classifications covered by said Compensation Plan.” SECTION 2. The changes to the Merit System Rules and Regulations provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit, or proceeding pending or any judgment rendered prior to the effective date of this resolution. // // // // // // ATTACHMENT A * NOT YET APPROVED * 110322 sh 8261553 2 SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ City Attorney City Manager _____________________________ Chief People Officer _____________________________ Director of Administrative Services ATTACHMENT B *NOT YET APPROVED* 130501 sh 0140088 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending the 2011‐ 2013 Compensation Plan for Management and Professional Personnel Adopted by Resolution No. 9282 to Implement the 2013 Salary Study, Extend the Term and Make Other Changes Required by Law The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2011‐2013 Compensation Plan for Management and Professional Personnel, adopted by Resolution No. 9282 is hereby amended to implement the 2013 Salary Study, extend the term and make other changes required by law, as set forth in Exhibit “A”, attached hereto and incorporated herein by reference, effective with the pay period including May 18, 2013. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer ATTACHMENT B *NOT YET APPROVED* 130501 sh 0140088 2 ATTACHMENT C CITY OF PALO ALTO COMPENSATION PLAN Management and Professional Personnel And Council Appointees Compensation plan effective July 1, 2012 through June 30, 2014, except where specifically noted. 1 COMPENSATION PLAN FOR THE CITY OF PALO ALTO Management and Professional Personnel As used in this Plan, the term “Management and Professional” refers to all employees, including Confidential employees, previously classified as “Management and Confidential” by the City. This group will hereafter be identified as “Management and Professional” personnel. SECTION I. COMPENSATION This section applies to all management and professional employees and does not include Council Members or Council-appointed officers. Each Council-appointed officer shall be the responsible decision-maker under this Plan for those employees in departments under his/her control. A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY The City's policy for management and professional compensation is to establish and maintain a general structure based on marketplace norms and internal job alignment with broad compensation grades and ranges. Structures and ranges will be reviewed and updated as necessary based on marketplace survey data, internal relationships, and City financial conditions. Individual compensation adjustments will be considered by the Council-appointed officer based on (1) performance factors including achievement of predetermined objectives; (2) pay structure adjustments; and (3) City financial conditions. B. BASIC PLAN ELEMENTS 1. Structure. The compensation plan includes separate multi-grade structures for both management and professional employees. Each grade will have a salary range with a mid-point which is 20% above the minimum, and 20% below the maximum of the range.. All management and professional positions will be assigned an appropriate pay grade based on salary survey data and internal relationships. Actual salary within the range is determined by experience and performance. Competitive marketplace studies will be conducted as needed by surveying a maximum of 14 organizations similar to Palo Alto in number of employees, funding mechanisms, population and services provided. These studies will focus on total compensation for management positions such as first line supervisors, administrative, confidential, professional and top management. Periodically, studies will include position-by-position comparisons using market research and internal equity data. The results of these studies may indicate that the entire pay grade structure be adjusted, that individual positions be reassigned to different pay grades, or that no change takes place. Such adjustments will only affect the salary administration framework. No individual salaries will be automatically changed because of structural adjustments. A department director may request that HR reevaluate a job or jobs in his or her department based on significant and permanent changes in job content. In doing so the director will supply 2 needed information and will provide a position description questionnaire as requested. The Chief People Officer will respond to such requests within his or her discretion. 2. Compensation Adjustment Authorization. In consultation with feedback received from the Management and Professional Compensation Committee, the City Manager may propose as part of the budget process for Council approval of a compensation adjustment based on (1) competitive market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a recommendation received from the Chief People Officer. For fiscal year 2013 the compensation adjustment to mid-point shall be three percent (3%) effective the pay period including October 6, 2012 In years when there is an adjustment to mid-point, this adjustment will be available for those management/professional employees who have received an overall rating of "meets" or "exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year. Nothing herein shall preclude an employee's manager from awarding a mid-point adjustment increase to an employee on a performance plan at a later date should employee's performance improve. a) Base Compensation. Compensation for management and professional employees includes bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi-weekly base salary must fall within pay grade limits of no less than 20% below the mid-point and no more than 20% above the mid-point. Base salary increases are earned in accordance with administrative guidelines based upon growth within the position and performance, which must meet or exceed position standards, the salary structure and the City’s ability to pay. b) Performance Planning and Appraisal. Performance appraisals will be conducted at the end of each fiscal year during the months of July through September 30 each year prior to determining individual employee fixed compensation. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives shall be monitored periodically. The performance appraisals should be implemented in a manner that will achieve the following objectives: Define the employee’s job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee’s role and responsibilities; Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; Facilitate two-way communication and understanding between the employee and his or her supervisor; Counsel and encourage employees to work toward a learning development plan and realize their full potential; Establish future work plan objectives. 3 Work plans should include job related projects or special goals related to regular job duties when applicable. At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department heads and to the Chief People Officer or appropriate Council appointed officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. This process should be completed by September 30. C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION 1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non-Council-appointed management and professional employees in an amount not to exceed the aggregate of approved management and professional positions in the Table of Organization for the applicable fiscal year. 2. Individual management and professional compensation authorized by a Council-appointed officer under the Management and Professional Compensation Plan may not be less than 20% below nor more than 20% above the mid-point for the individual position grades authorized in Salary Schedule attached. 3. The Council-appointed officers are authorized to establish such administrative rules as are necessary to implement the Management and Professional Salary Plan subject to the limitations of the approved compensation adjustment authorization and the approved grade and mid-point structure. 4. Notwithstanding any other provision of this Compensation Plan, in the event a downward adjustment of a position grade assignment indicates a reduction in the established salary of an individual employee, the Council-appointed officer may, if circumstances warrant, continue the salary for such employee in an amount in excess of the revised grade limit for a reasonable period of time. Such interim salary rates shall be defined as "Y-rates." SECTION II. SPECIAL COMPENSATION This section applies to all eligible regular management and professional positions including Council Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be in conformance with the Merit Rules and Regulations and Administrative Directives issued by the City Manager for the purposes of clarification and interpretation. A. OVERTIME Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. B. IN LIEU HOLIDAY PAY 4 Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non-workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. C. WORKING OUT OF CLASSIFICATION PAY Where management and professional employees, on a temporary basis, are assigned to perform all significant duties of a higher classification, the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working out of class pay is normally not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties to be performed and an end date. D. STAND-BY PAY Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on a case by case basis, in extreme circumstances involving unavailability of non-management staff. Compensation is as follows: Monday through Friday $40 per day Saturday, Sunday, Holidays $58 per day E. CALL OUT PAY Effective pay period beginning February 26, 2011, Exempt management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City premises, (2) is called back to the work location outside of regularly scheduled working hours, and (3) the Call Back is for an emergency arising out of situations involving real or potential loss of service, property or personal danger. Employees called back will be expected to respond directly to the location of the problem. Compensation is per Call Out as reported on timecard and will be paid as follows: Monday through Friday: $140 per day Saturday and Sunday: $200 per day F. NIGHT SHIFT PREMIUM Night shift differential shall be paid at the rate of five percent (5%) to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE PERSONNEL 5 Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in conformance with department policy. H. GROUP INSURANCE 1. Effective Date of Coverage for New Employees For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. 2. Active Employee Health Plan a) Based on an employee’s family status, the City shall pay up to the monthly medical premium for the second most expensive plan among the existing array of plans available during the term of this compensation plan on behalf of eligible employees (including Council Appointed Officers and Council Members) and dependents, except as provided in section b, below. Eligible dependents, under current law, include spouses, children under the age of 26 and never married (natural, adopted, or stepchildren), economically dependent children, and domestic partners registered with the Secretary of State. If PERS changes the plans it offers, the City will continue to provide an equivalent benefit at an equivalent cost. b) Effective in the pay period including October 6, 2012, participating employees will contribute 10% of the premium cost for the employee-selected plan, and the City shall contribute 90%, with a maximum City contribution of 90% of the second highest plan. . c) City medical premium contributions will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. d) Coverage for Domestic Partners: 1) Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State. 2) Domestic Partnership Not Registered with the California Secretary of State: Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department, will be eligible for reimbursement of the actual monthly premium cost of an individual health plan, not to exceed the maximum monthly City employer contribution for one-party coverage under the CalPERS Health Benefits Program (or PORAC if a safety department employee) for an employee covered under this agreement. Evidence of premium payment will be required with request for reimbursement. e) PERS Choice Reimbursement Plan 6 Will be eliminated effective January 1, 2013. Management and Professional personnel enrolled in the PERS Choice medical plan may submit a request for payment, as specified below, for non-covered medical expenses, incurred during the period of January 1, through December 31, of the plan year, that exceed $2,500. The maximum annual reimbursement amount provided under this program is: $700 for employees enrolled in the Employee-Only category; $900 for employees enrolled in the Employee and One Dependent category, and $1,100 for employees enrolled in the Family category. Any amounts reimbursed to an individual under this program would be included in the employee’s gross income and is not PERSable. This program shall only reimburse employees for medical expenses that are not reimbursed through any other means and meet the definition in Section 213(d) of the Internal Revenue Code. (Examples of eligible expenses include medical plan deductibles and co-payments, prescription drugs, dental care, hearing care, and vision care.) However, in order to have any expenses reimbursed under this program, the employee must have allocated 100% ($2,500.00) of their 2010 calendar Excess Benefit funds into the Medical FSA option during the election that occurred in December 2009. In addition, all such reimbursements from the Excess Benefit Program must have been solely for medical expenses, as defined by Section 213(d) of the Internal Revenue Code. If the employee has designated his/her Excess Medical funds for any other qualifying expenses (i.e. dependent care, Professional Development, Deferred Compensation contributions), the employee would not be eligible for reimbursement under this program. Employees may submit a final claim for the 2012 plan year’s expenses during January. Any amounts remaining from the PERS Choice reimbursement plan after the claims for the plan year had been processed shall be forfeited. 3. Alternative Medical Benefit Program If a regular employee and/or the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees electing alternative coverage and no City coverage will receive cash payments in the amount of 90% of the average monthly premium for one party, which is $284.00. 4. Retiree Health Plan a) Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public 7 Employees” Medical and Hospital Care Act. The City’s monthly employer contribution for each employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the amount necessary to pay for the cost of his or her enrollment in a health benefits plan up to the monthly premium for the second most expensive plan offered to management and professional personnel during the contract term (among the existing array of plans.) The City’s contribution for an employee hired before January 1, 2004 who retires on or after March 30, 2011 shall be the same contribution amount it makes from time to time for active City employees. b) Post – 1/1/04 Hires For those Management and professional employees hired after January 1, 2004, the PERS law vesting schedule set forth in Government Code section 22893 will apply. Under that law, an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five (5) of those years were performed at the City of Palo Alto. After ten (10) years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at 20 years’ service credit, the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section 22893 based on a weighted average of available health plan premiums. 5. Dental Plan a) The City shall pay covered plan charges on behalf of all eligible employees and dependents. (Domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department are considered dependents under the plan.) Benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) The City’s Dental Plan provides the following: Maximum Benefits per Calendar Year- $2,000 per person Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) Major Dental Services 50% UCR* Orthodontics 50% UCR* Basic Benefits (All other covered services) First Calendar Year of Eligibility 70% UCR* Subsequent Calendar Years 70%-100% *Usual, Customary, and Reasonable Composite (tooth covered) fillings for posterior teeth For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 8 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not utilize the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year. If a dental plan member ever loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan would include: Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan. 6. Basic Life Insurance The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no-cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,000). 7. Supplemental Life And AD&D Insurance An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one- or two-times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amount of AD&D coverage available is up to $325,000. 8. Long Term Disability Insurance a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium for the first $6,000 of base monthly salary. For employees whose base monthly salary exceeds $6,000, the employee shall pay the cost of the required premium based upon their monthly salary between $6,000 and $15,000. b) For employees whose base monthly salary exceeds $6,000 and who have no eligible dependents covered under the City’s medical, dental or vision plans, the City will pay up to $17.50 per month towards the employee’s cost for LTD coverage. 9. Vision Care a) The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan provides an exam every 12 months; lenses every 24 months; frames every 24 months, all subject to a $20 co- 9 payment as defined in the Vision Services Benefits Plan A schedule. Benefits for regular part-time employees will be prorated as follows: Employees hired after January 1, 2004, who will work less than full time, will receive prorated premium costs for vision benefits in accordance with his/her percentage of a full-time work schedule. Vision benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) Effective July 1, 1996, dependents include eligible domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department. I. EMPLOYEE ASSISTANCE PLAN The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line 24 hours a day, seven days a week. Guidance is also available online. J. SAFETY DIFFERENTIALS 1. Police Department - Personnel Development Program Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn police personnel: P.O.S.T. Intermediate Certificate: five percent (5%) above base salary P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary 2. Fire Department - EMT Differential Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn Fire personnel: EMT Differential: three percent (3%) above base salary K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM Management and professional employees are eligible for Sections 1, 2, 3, and 4 of the Management Benefit Program. City Council Members are eligible for Section 3 only. 10 1. Professional Development - Reimbursement The purpose of this program is to provide employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self- improvement activities may be granted each management and professional employee up to a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: a) Civic and professional association memberships b) Conference participation and travel expenses, which must occur within the compensation plan period. c) Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City’s mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City’s travel expense report from the Policy & Procedures Manual Section 1-02 ASD. d) Professional and trade journal subscriptions not to exceed 12 months. e) Approval will be at discretion of department head and signature is required on reimbursement form. Amounts under this professional development program will be pro-rated in the first year of employment or promotion into a position covered by this Compensation Plan 2. Physical Examinations All management and professional employees are eligible to receive an annual physical examination as follows: a) Use the periodic health exam benefit as provided under the PERS Health Plan option you have selected. Each of the PERS Health Plans provides for a periodic physical examination. The examination must be performed by your primary care physician— unless he/she refers you to another physician. b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The guidelines are a suggested minimum based on research studies concerning preventative care. The judgment of your physician is the final determinant for your care. 11 c) Any additional necessary asymptomatic tests that are required by your physician that are not covered by your health plan, will be reimbursed by the City. Any symptomatic tests will be covered under your PERS Health Plan. The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet site. This benefit will not be pro-rated. 3. Excess Benefit This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code, with exception of Gym or Health Club Membership. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options: a) Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments as well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold medicines. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. b) Dependent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of annual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. 1) The annual amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 2) The expenses must be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3) The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 4) If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals (other than a resident of the facility). 12 5) Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP will be reduced by any amount reimbursed under the Excess Benefit Plan. c) Non-taxable Professional Development Spending Account. Provides reimbursement for Non-Taxable professional development expenses (e.g.,job-related training and education, seminars, training manuals, etc.) to the extent they are not paid or reimbursed under any other plan of the City. d) Gym or Health Club memberships. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement of this expense is taxable to the employee. e) Deferred Compensation. Provides a one-time contribution to the employee’s City- sponsored 457 Deferred Compensation plan with either ICMA-RC or the Hartford. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a “use –it-or-lose-it” basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Specified amounts under this benefit will be applied on a pro-rata basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. L. LEAVES 1. Sick Leave a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a 40-hour duty schedule. Those assigned work schedules which are greater or lesser than 40 hours will accrue sick leave at the ratio of their work schedule to 40 hours. b) Employees may use up to 20 hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. 13 d) Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have 15 or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent (2½%) of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. e) Up to nine (9) days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f) Management and Professional employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. g) In accordance with the City Merit Rules and Regulations, a new employee may, if necessary, use up to 48 hours or shift equivalent of sick leave at any time during the first six (6) months of employment. 2. Management Annual Leave a) Exempt Employees Regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half (½) shift off for each 8 hours charged. In 2012, the City will be transitioning this benefit from a fiscal to calendar year basis for administrative purposes. Therefore, on July 1, 2012, employees will be credited with 40 hours of annual leave for the period of July 1 to December 31, 2012. Beginning in 2013 and each calendar year thereafter, employees will be credited with 80 hours of management annual leave. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the year will be paid in cash unless a different option as indicated above is elected by the employee. b) Non-Exempt Employees 14 Based on an audit recommendation to eliminate payment of overtime as well as management leave for non-exempt employees in the management group, the City is transitioning away from providing management leave to non-exempt employees. As part of the transition, and in order to minimize impacts to current employees, the City will phase-out elimination of the 80 hours of management leave for all current non-exempt Management and Professional employees (those eligible to earn overtime). Continuing through Fiscal year 2013-2014, there will be no change to management leave benefits for current employees; these employees will maintain their 80 hours of management leave and also receive pay for any overtime hours worked. Beginning on July 1, 2014 all employees in non-exempt positions will receive overtime pay for hours actually worked, but will no longer receive management leave. Employees hired into non-exempt management positions on or after February 26, 2011 will receive overtime only and will not be eligible for management leave. 3. Vacation Vacation will be accrued when an employee is in pay status and will be credited on a bi- weekly basis. Total vacation accrual at any one time may not exceed three (3) times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a) Less than nine (9) years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year; provided that: i. The City Manager is authorized to adjust department head annual vacation accrual to provide for a maximum of 160 hours for those hired between July 1, 1996 and June 30, 2001; and ii. The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; 160 hours vacation per year. c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; 180 hours vacation leave per year. d) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 15 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section. Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation year, employees will make their election for vacation hours to cash out no later than November 1, 2012. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designates on the election form. Employees who do not elect a cash-out amount by November 1 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre-designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash-out the elected amount in a paycheck issued on or after the payroll date including November 1. 4. Bereavement Leave of absence with pay of three (3) days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family, which is defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control. M. RETIREMENT PENSION 1. Effective pay period inclusive of 1/6/07, the City’s Public Employees’ Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non-safety members (from 2% @55). For miscellaneous employees hired on or after July 17, 2010, the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60). 16 For Safety members, the City currently offers the CalPERS "3% at 50" full formula (Section 21362.2) benefit. Local Fire Safety members newly hired after 6/08/12 will be placed in the 3%@55 formula. As soon as administratively possible, the City intends to modify the Local Police Safety formula for new hires to 3%@55 formula. New employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute. 2. Employee PERS Share. The City previously paid 6% of the employee’s CalPERS share for employees under the 2.7%@55, 5% for employees under the 2%@60 formula, and the full employee share for those with public safety formulas. a) Beginning with the pay period including October 6, 2012, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. b) Beginning with the pay period including October 6, 2012, employees subject to the 2%@60 retirement formula shall pay the full seven percent (7%) employee contribution. c) Beginning with the pay period including October 6, 2012, Public Safety employees will pay the full nine percent (9%) PERS employee contribution. d) Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 3. Final Compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit, except as may otherwise be required by PEPRA. 4. Employee PERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. 5. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. N. COMMUTE INCENTIVES and PARKING 1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The City will provide a Civic Center Garage parking permit. Employees hired after June 30, 17 1994 may initially receive a parking permit for another downtown lot, subject to the availability of space at the Civic Center Garage. 2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one of the following commute incentives for those using an eligible commute alternative on 60% or more of their scheduled work days per month: a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the current IRS limit, as may be amended from time to time, (currently $125/month) are available through the Commuter Check Direct (CCD) website for employees using Bay Area public transportation or riding in a registered vanpool at least 60% of their scheduled work days. Administration of the Commuter Check benefit shall be subject to the rules and regulations of the third- party administrator. b) Bicycle. The City will provide employees with a tax-free incentive of $20 per month to eligible employees who ride a bicycle to work. c) Carpool. The City will provide with a taxable incentive of $30 per month to each eligible employee in a carpool with two or more licensed drivers. d) Walk. The City will provide employees with a taxable incentive of $20 per month to eligible employees who walk to work. O. AT-WILL STATUS Certain Management and Professional Positions are designated as having “at-will” employment status. “At-will” positions are intended to be of a limited duration and employees hired to fill these positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. 1. At-will Management & Professional positions. Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were hired as at-will employees whose terms of employment are specified by an employment contract that includes a severance package. Effective on the date of adoption of this plan, new employees hired or promoted to department head, assistant department director, and all other positions listed on Attachment B shall be at-will employees. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and 18 management leave as are generally provided to management employees and described in this compensation plan, as amended from time to time. At-will employees who are terminated or asked to resign shall, upon execution of a release of all claims against the City, be eligible for a severance payment equivalent to four (4) weeks of salary and benefits, increasing after completion of the first full year of service by one (1) week for every completed year of service, up to a maximum of 12 weeks. For example, an at-will employee who has completed six (6) years of service would be eligible to receive ten (10) weeks of severance (4 weeks plus 1 week for each year of service). No severance shall be paid if the employee is terminated for serious misconduct involving abuse of his or her office or position, including but not limited to waste, fraud, violation of the law under color of authority, misappropriation of public resources, violence, harassment or discrimination. If the employee is later convicted of a crime involving such abuse of his or her position the employee shall fully reimburse the City as set forth in Government Code section 53243.3. 2. Provisional employees. The City has created a program for Provisional employment when funding is available. The program’s purpose is to create limited duration senior management level work for the City Manager’s Office or as designated by the City Manager. A Provisional Employee will be an “at will” employee whose term of employment shall be no more than two (2) years. A Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional Employee will receive limited benefits as specified in an Employment Agreement. Sections I and II of this Compensation Plan shall not apply to Provisional Employees, except as specified by the City Manager. 3. Management fellows. The City has created a program for Management Fellows when funding is available. The program’s purpose is to create limited duration entry level positions for graduate students. A management fellow will be an “at will” employee whose term of employment shall be no more than one (1) year. A Management Fellow shall be PERS exempt, but may receive limited vacation, limited sick leave, limited health care benefits and other limited benefits, as determined by the City Manager. Sections I and II of this Plan shall not apply to Management Fellows, except as specified by the City Manager. P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional expenses of these offices. Q. REIMBURSEMENT FOR RELOCATION EXPENSE Policy Statement The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new management and professional employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits” or portions thereof, 19 may be extended for exceptional circumstances and only the approval of the City Manager or designee, or for Council-appointed officers, the City Council. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy. R. MEAL ALLOWANCE Management and professional employees assigned to attend night meetings are eligible to receive reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually taken and submitted for reimbursement. S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit System Rules and Regulations, any Management and Professional employee who is supervised by a Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance pursuant to Step One (informal discussion), summarize the grievance regarding the Council Appointed Officer in writing and submit it to the Director of Human Resources for review and resolution using the methods he/she considers appropriate. T. MERIT RULES The City will include members of the Management/Professional Compensation Committee in discussions regarding revision of the Merit Rules and Regulations. 20 Attachment B At-Will Positions Management and Professional Unit The intent of this provision under the Management/Professional Compensation Plan is to designate classifications at the department head, assistant director, deputy director, and division manager levels as at-will. The applicable Council Appointed Officer may designate newly created positions at those levels not included on this list as at-will. Existing classifications that shall be at-will include but are not limited to: Department Heads- All departments Assistant Directors- All departments Deputy Directors- All departments Division Managers Administrative Services Director, Administrative Services/Chief Financial Officer Director, Office of Management & Budget Assistant Director, Administrative Services Chief Budget Officer Manager, Accounting Manager, Purchasing & Contract Administration Manager, Real Property City Attorney Senior Assistant City Attorney Assistant City Attorney Sr. Deputy City Attorney Deputy City Attorney City Auditor Deputy City Auditor Sr. Performance Auditor City Clerk Assistant City Clerk Deputy City Clerk City Manager Assistant City Manager/Chief Operating Officer Deputy City Manager Assistant to City Manager Chief Communications Officer Communications Manager Manager, Economic Development 21 Community Services Director, Community Services Assistant Director, Community Services Manager, Recreation & Golf Manager, Open Space & Parks Human Resources Director of Human Resources/Chief People Officer Assistant Director, Human Resources Human Resources Manager IT Director, IT/Chief Information Officer Information Technology Governance Manager Information Technology Manager Library Director, Libraries Assistant Director, Library Services Division Head, Collection & Technical Services Manager, Library Services Planning & Community Environment Director, Planning & Community Environment Assistant Director, Planning & Community Environment Division Manager, Advance Planning Division Manager, Chief Building Official Division Manager, Chief Planning Official Division Manager, Chief Transportation Official Division Manager, Development Services Director Public Safety Chief of Police/Director of Public Safety Fire Chief /Assistant Public Safety Director Assistant Police Chief Emergency Services Director Deputy Director – Technical Services Division (police department) Deputy Fire Chief Public Works Director, Public Works/City Engineer Assistant Director, Public Works – Environmental Services Assistant Director, Public Works – Public Services Assistant Director, Public Works – Engineering Airport Manager 22 Water Quality Control Plant Manager Utilities Director, Utilities Assistant Director Utilities Engineering* Assistant Director Utilities Operations* Assistant Director Utilities Customer Support Services* Assistant Director Utilities/Resources Management* Communications Manager* Engineering Manager – Electric* Engineering Manager –WGW* Manager Customer Service & Meter Reading* Manager Electric Operations* Manager Utilities Mkt Services* Manager Utilities Operations WGW* Utilities Compliance Manager* *Management positions up to and including Assistant Director in Utilities are represented by UMPAPA and currently under negotiations ATTACHMENT D Mid Point 190 Accountant $6,647.77 $79,773.36 $3,068.21 $38.35 NON-EXEMPT 76 Administrative Assistant $5,732.35 $68,788.32 $2,645.70 $33.07 EXEMPT 115 Assistant Building Official $9,738.99 $116,867.88 $4,494.92 $56.19 EXEMPT 132 Assistant Chief of Police $15,247.85 $182,974.50 $7,037.48 $87.97 EXEMPT 108 Assistant City Attorney $12,923.17 $155,078.36 $5,964.55 $74.56 EXEMPT 109 Assistant City Clerk $7,521.34 $90,256.24 $3,471.39 $43.39 EXEMPT 107 Assistant City Manager/Chief Operating Officer $15,838.46 $190,061.93 $7,310.07 $91.38 EXEMPT 73 Assistant Director Administrative Services $13,030.91 $156,371.22 $6,014.28 $75.18 EXEMPT 126 Assistant Director Community Services $12,475.36 $149,704.32 $5,757.86 $71.97 EXEMPT 1007 Assistant Director Human Resources $12,057.58 $144,691.21 $5,565.05 $69.56 EXEMPT 2001 Assistant Director Library Services $11,932.46 $143,189.76 $5,507.30 $68.84 EXEMPT 10 Assistant Director Planning & Community Environment $12,779.00 $153,348.29 $5,898.01 $73.73 EXEMPT 143 Assistant Director Public Works $12,631.71 $151,580.85 $5,830.03 $72.88 EXEMPT 111 Assistant Fire Chief $11,931.39 $143,176.63 $5,506.79 $68.84 EXEMPT 168 Assistant Manager Fleet $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 102 Assistant Manager Water Quality Control Plant $10,211.65 $122,539.98 $4,713.08 $58.91 EXEMPT 30 Assistant to the City Manager $9,868.65 $118,424.00 $4,554.77 $56.93 EXEMPT 118 Chief Building Offical $9,393.12 $112,717.67 $4,335.30 $54.19 EXEMPT 2008 Chief Communications Officer $12,711.76 $152,541.46 $5,866.98 $73.34 EXEMPT 112 Chief Planning Offical $10,834.28 $130,011.61 $5,000.45 $62.51 EXEMPT TBD Chief Sustainability Officer $10,834.28 $130,011.61 $5,000.45 $62.51 EXEMPT 82 Chief Transportation Offical $10,834.28 $130,011.61 $5,000.45 $62.51 EXEMPT 96 Claims Investigator $6,984.31 $83,811.89 $3,223.53 $40.29 NON-EXEMPT 24 Communication Specialist $7,562.67 $90,752.06 $3,490.46 $43.63 EXEMPT 89 Contracts Administrator $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 186 Coordinator Library Circulation $6,659.29 $79,911.48 $3,073.52 $38.42 NON-EXEMPT 191 Deputy Chief/Fire Marshall $12,875.82 $154,509.89 $5,942.69 $74.29 EXEMPT 9 Deputy City Attorney $9,164.02 $109,968.46 $4,229.56 $52.87 EXEMPT 99 Deputy City Auditor $10,724.77 $128,697.51 $4,949.90 $61.87 EXEMPT 71 Deputy City Clerk $6,022.55 $72,270.73 $2,779.64 $34.75 EXEMPT 55 Deputy City Manager $13,198.72 $158,384.94 $6,091.73 $76.15 EXEMPT 195 Deputy Director Technical Services Div $12,838.58 $154,063.26 $5,925.51 $74.07 EXEMPT Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly SalaryClass No. /Job Code Title Approx Annual Approx Biwkly 6/5/2013 2013 Mgmt & Prof Salary Schedule June 2013 Final Page 1 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly SalaryClass No. /Job Code Title Approx Annual Approx Biwkly 20 Deputy Fire Chief $13,335.16 $160,022.20 $6,154.70 $76.93 EXEMPT 81 Director Administrative Services/Chief Financial Officer $15,181.62 $182,179.80 $7,006.92 $87.59 EXEMPT 72 Director Community Services $15,297.99 $183,576.27 $7,060.63 $88.26 EXEMPT 1012 Director Development Services $12,500.00 $150,000.29 $5,769.24 $72.12 EXEMPT 133 Director Human Resources/Chief People Officer $14,469.09 $173,629.45 $6,678.06 $83.48 EXEMPT 128 Director Information Technology/Chief Information Officer $15,810.50 $189,726.36 $7,297.17 $91.21 EXEMPT 131 Director Libraries $14,318.95 $171,827.71 $6,608.76 $82.61 EXEMPT 2005 Director Office of Emergency Services $11,232.95 $134,795.69 $5,184.45 $64.81 EXEMPT 49 Director Office of Management and Budget $13,030.91 $156,371.22 $6,014.28 $75.18 EXEMPT 134 Director Planning & Community Environment $15,334.80 $184,017.94 $7,077.61 $88.47 EXEMPT 135 Director Public Works/City Engineer $15,530.43 $186,365.47 $7,167.90 $89.60 EXEMPT 121 Director Utilities $19,906.07 $238,873.25 $9,187.43 $114.84 EXEMPT 2002 Division Head Library Services $9,370.93 $112,451.33 $4,325.05 $54.06 EXEMPT 123 Division Manager Cubberly Center & Human Services $10,072.37 $120,868.68 $4,648.80 $58.11 EXEMPT 172 Division Manager Open Space & Golf $10,072.37 $120,868.68 $4,648.80 $58.11 EXEMPT 1005 Executive Assistant to the City Manager $6,485.63 $77,827.67 $2,993.37 $37.42 EXEMPT 139 Fire Chief $15,444.86 $185,338.71 $7,128.41 $89.11 EXEMPT 163 Hearing Officer $9,164.02 $109,968.46 $4,229.56 $52.87 EXEMPT 101 Human Resources Representative $5,875.66 $70,508.03 $2,711.85 $33.90 EXEMPT 90 Landscape Architect/Park Planner $8,722.45 $104,669.56 $4,025.75 $50.32 EXEMPT 69 Legal Services Administrator $8,099.66 $97,196.10 $3,738.31 $46.73 EXEMPT 171 Management Analyst $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 79 Manager Accounting $10,250.25 $123,003.24 $4,730.89 $59.14 EXEMPT 2007 Manager Airport $11,235.09 $134,821.33 $5,185.44 $64.82 EXEMPT 38 Manager Communications $8,509.70 $102,116.65 $3,927.56 $49.09 EXEMPT 154 Manager Community Services $7,521.34 $90,256.24 $3,471.39 $43.39 EXEMPT 169 Manager Community Services Sr Program $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 1013 Manager Development Center $8,940.51 $107,286.30 $4,126.40 $51.58 EXEMPT 63 Manager Economic Development $10,834.28 $130,011.61 $5,000.45 $62.51 EXEMPT 44 Manager Employee Benefits $9,258.74 $111,104.91 $4,273.27 $53.42 EXEMPT 45 Manager Employee Relations & Training $10,249.60 $122,995.23 $4,730.59 $59.13 EXEMPT 93 Manager Environmental Control Program $9,393.12 $112,717.67 $4,335.30 $54.19 EXEMPT 6/5/2013 2013 Mgmt & Prof Salary Schedule June 2013 Final Page 2 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly SalaryClass No. /Job Code Title Approx Annual Approx Biwkly 127 Manager Fleet $9,493.31 $113,919.91 $4,381.53 $54.77 EXEMPT 32 Manager Information Technology $10,479.00 $125,748.24 $4,836.47 $60.46 EXEMPT 2006 Manager Information Technology Security $9,501.54 $114,018.70 $4,385.33 $54.82 EXEMPT 57 Manager Investments Debts & Projects $10,249.60 $122,995.23 $4,730.59 $59.13 EXEMPT 158 Manager Laboratory Services $8,940.51 $107,286.30 $4,126.40 $51.58 EXEMPT 78 Manager Library Services $7,521.34 $90,256.24 $3,471.39 $43.39 EXEMPT 92 Manager Maintenance Operations $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 51 Manager Planning $9,393.12 $112,717.67 $4,335.30 $54.19 EXEMPT 95 Manager Purchasing & Contract Administration $10,250.25 $123,003.24 $4,730.89 $59.14 EXEMPT 103 Manager Real Property $10,250.25 $123,003.24 $4,730.89 $59.14 EXEMPT TBD Manager Revenue Collections $9,627.95 $115,535.62 $4,443.68 $55.55 EXEMPT 198 Manager Risk & Benefits $10,249.60 $122,995.23 $4,730.59 $59.13 EXEMPT 160 Manager Solid Waste $10,368.25 $124,419.22 $4,785.35 $59.82 EXEMPT 178 Manager Water Quality Control Plant $11,537.84 $138,454.34 $5,325.17 $66.56 EXEMPT 39 Manager Watershed Protection $10,368.00 $124,416.24 $4,785.24 $59.82 EXEMPT 1008 Office of Emergency Services Coordinator $8,509.70 $102,116.65 $3,927.56 $49.09 EXEMPT 100 Performance Auditor $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 148 Police Chief-Adv $17,174.35 $206,092.61 $7,926.64 $99.08 EXEMPT 2003 Principal Management Analyst $10,167.00 $122,004.23 $4,692.47 $58.66 EXEMPT 77 Project Manager $6,485.63 $77,827.67 $2,993.37 $37.42 EXEMPT 2009 Project Manager Trees $7,955.44 $95,465.30 $3,671.74 $45.90 NON-EXEMPT 166 Public Safety Manager I $7,289.69 $87,476.50 $3,364.48 $42.06 EXEMPT TBD Public Safety Manager II $8,099.66 $97,196.11 $3,738.31 $46.73 EXEMPT 74 Safety Officer $7,562.67 $90,752.06 $3,490.46 $43.63 EXEMPT 117 Senior Accountant $8,099.66 $97,196.10 $3,738.31 $46.73 EXEMPT 152 Senior Assistant City Attorney $14,215.49 $170,586.19 $6,561.01 $82.01 EXEMPT 11 Senior Deputy City Attorney $10,115.36 $121,384.61 $4,668.64 $58.36 EXEMPT 187 Senior Engineer $10,368.25 $124,419.22 $4,785.35 $59.82 EXEMPT 106 Senior Executive Assistant $9,258.74 $111,104.91 $4,273.27 $53.42 EXEMPT 157 Senior Human Resources Administrator $7,902.11 $94,825.46 $3,647.13 $45.59 EXEMPT 14 Senior Management Analyst $9,250.00 $111,000.21 $4,269.24 $53.37 EXEMPT 130 Senior Performance Auditor $8,722.45 $104,669.56 $4,025.75 $50.32 EXEMPT 53 Senior Project Manager $10,893.14 $130,717.94 $5,027.61 $62.85 EXEMPT 33 Senior Technologist $9,501.54 $114,018.53 $4,385.33 $54.82 EXEMPT 70 Staff Assistant to the City Manager $7,002.07 $84,024.89 $3,231.73 $40.40 EXEMPT 155 Superintendent Animal Services $8,302.15 $99,626.00 $3,831.77 $47.90 EXEMPT 83 Superintendent Community Services $9,164.02 $109,968.46 $4,229.56 $52.87 EXEMPT 161 Supervisor Facilities Management $7,709.37 $92,512.64 $3,558.18 $44.48 EXEMPT 113 Supervisor Inspection and Surveying $8,302.15 $99,626.00 $3,831.77 $47.90 EXEMPT 174 Supervisor Public Works $6,984.31 $83,811.89 $3,223.53 $40.29 NON-EXEMPT 62 Supervisor Recycling Program $6,659.29 $79,911.48 $3,073.52 $38.42 EXEMPT 6/5/2013 2013 Mgmt & Prof Salary Schedule June 2013 Final Page 3 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly SalaryClass No. /Job Code Title Approx Annual Approx Biwkly 146 Supervisor Warehouse $6,984.31 $83,811.89 $3,223.53 $40.29 EXEMPT 181 Supervisor Water Quality Control Operations $8,509.70 $102,116.65 $3,927.56 $49.09 EXEMPT 86 Urban Forester $8,302.15 $99,626.00 $3,831.77 $47.90 EXEMPT 184 Veterinarian $8,099.66 $97,196.10 $3,738.31 $46.73 EXEMPT Confidential Classifications Class No. /Job Code Title Control Point Approx Annual Approx Biwkly Hourly FLSA Status 905 Human Resource Assistant-Confidential $5,066.56 $60,798.85 $2,338.42 $29.23 NON-EXEMPT 903 Legal Secretary-Confidential $5,193.23 $62,318.82 $2,396.88 $29.96 NON-EXEMPT 67 Secretary to City Attorney $6,173.11 $74,077.50 $2,849.13 $35.61 NON-EXEMPT 1004 Senior Legal Secretary - Confidential $5,732.35 $68,788.32 $2,645.70 $33.07 NON-EXEMPT 6/5/2013 2013 Mgmt & Prof Salary Schedule June 2013 Final Page 4 of 4 ATTACHMENT E MINUTES Excerpt from Finance Committee meeting on 05/23/13 4. Request Finance Committee Recommendation to Council to Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Resolution Amending the Merit Rules. James Keene, City Manager, reported the City had a long overdue obligation to readjust the salary schedule based upon accurate data to align with the market. Staff requested the Council amend a portion of the annual Management and Professional Compensation Plan and the Merit Rules to adopt the new salary schedule. If the Finance Committee (Committee) wished to fund the 2 percent increase, the increase would have to be presented to the Council separately as an amendment to the Compensation Plan. Katie Kaneko, Koff and Associates, explained that the first decision before beginning a compensation study concerned comparator agencies. She reviewed agencies the City used in the past as a comparator group, and scouted the state for municipalities that provided services similar to Palo Alto. She considered the size of the city, the population served, the Full Time Equivalents (FTE), and cost of living issues. Usually 10-12 comparators provided a sufficient sample of the labor market. Because the Bay area was a unique labor market and one of the most competitive in compensation, she attempted to use as many municipalities as possible in the Bay area labor market. The City was unique in that it operated its own utilities; therefore, she considered municipalities that also provided utility services, particularly electric service. The 14 recommended agencies were presented to the Council before the study process began. Next, she determined the benchmark classifications, and surveyed 82 classifications. The classifications were intended to represent the levels within each job family in order to provide a strong foundation of the amount the labor market paid for comparable work. The top monthly salary data included the cost to the employer for an array of benefits, costs the employer paid on behalf of the employee, and the cost of enhancements to each of the agencies. She utilized the average actuarial costs of benefits as provided by the California Public Employees' Retirement System (CalPERS). The best method to determine retiree health costs for current employees was to take the normal cost divided by the amount of payroll. In surveying the 82 classifications, she reviewed class descriptions, typical duties, minimum qualifications, experience, education, certifications, and licensing so that matching classifications were at least 70 percent similar to work being performed within Palo Alto classifications. The matches for the top monthly salary data were shared with all directors and employees to obtain feedback. In some cases, matches were changed if employee concerns were appropriate. In other cases, matches were not changed. Next she compiled a recommendation for adjustments to the salary range, and provided the City with three data spreadsheets. One summarized the top monthly salary data; a second summarized the benefits detail; and a third summarized total compensation. She found that the benefits offered by the City of Palo Alto brought it closer to market competitiveness. Considering base salaries only, Palo Alto was below market. Recommendations for future salary increases were based on total compensation. The percentage difference between the comparator group and the City's salary was applied to the current salary to create a range structure. She placed each classification within that range structure based on the closest range that the classification would fit into. The control point, representing the market, became the midpoint. Ranges were 20 percent above and below the midpoint. Mr. Keene noted the data from the study was also applicable to the analysis taking place for utilities managers and the police management association in relation to the market. However, the Committee was not acting on adjustments to their compensation. With respect to salary only, Palo Alto fell below the median market in general. With respect to salary plus benefits but not including retiree medical care, Palo Alto's position improved. When retiree medical benefits were added, Palo Alto improved even more. That seemed to be a distinguishing characteristic in comparison to the market. Classifications of some positions were going down in relation to the market. Not a large number of classifications moved up or significantly out of the market. Kathryn Shen, Chief People Officer, indicated recommendations for some classifications would have no change, the range for many classifications would be lowered, and the range for some classifications would be raised. The purpose of the study was not to provide raises to employees. Council Member Berman inquired about the reasons for so many classifications being out of sync with the market. Mr. Keene explained this was not unusual, because agencies did not perform full benchmark studies each year. Early in 2009 Staff made reductions that were not being made in some of the comparator cities, or froze cost of living adjustments. In addition, adjustments were made based on specific recruitment issues. Ms. Shen added the City's prior overall salary study occurred at least ten years ago. Ms. Kaneko recommended that some sort of market survey be conducted every five years. Council Member Berman inquired whether an increased salary range would result in a higher caliber of applicants, and whether higher salaries would be given to the person or the position. Ms. Shen reported the salary ranges were not person specific. The City needed to meet the median of the market in order to recruit skilled employees. Anecdotal evidence suggested higher salaries were necessary for hard-to-fill jobs. Council Member Berman clarified that he was interested in whether some employees would receive increased salaries for which they might not be qualified. Ms. Shen stated any increases for the individual employee in those ranges would be based on merit. Council Member Berman asked if employee salaries below the midpoint would increase 10 percent if the salary range increased 10 percent. Mr. Keene indicated a performance validation would apply in that situation. Council Member Berman inquired whether employees would receive an automatic raise. Ms. Shen answered no. Mr. Keene explained the City could have hired higher in the range in the past in order to fill positions. Salaries for new hires were partially based on the prior salary earned by the new hire. By improving the salary ranges, the City could hire the same person but lower in the range. Council Member Berman referenced page 5 of the May 6, 2013 report regarding adjustment of individual employees' salaries at or below the midpoint of the current range to the same relative place at or below midpoint of the new range provided the employees are meeting or exceeding performance expectations. This statement seemed to address only a too low range when the employee was at or below the midpoint. He asked if an employee's salary would be increased if he was above midpoint and the range was low. Mr. Keene responded yes. Ms. Shen indicated employees would most likely move to the same relative place. Staff would review individual circumstances when making decisions. Council Member Berman believed not many employees were above midpoint in general. Mr. Keene explained that if the value of a job was out of place with the market and an employee had a certain experience level in the market, then the employee would move to the same place on that line going forward. The one difference was that some employees were above the midpoint, and their salaries were adjusted. In that situation, the employee received the salary increase early and would not receive a commensurate move forward. Council Member Berman asked if an employee, who was 15 percent over the midpoint in the new salary range, would move back to 10 percent over the new midpoint over time. Ms. Shen reported the range was a reflection of where a job was in the market. She did not want to take money away from Staff in implementing the study. She met with departments and small groups of management and professional Staff to assure them that they would not lose salary, and that salary increases would remain available as the market increased and the ranges moved. For example, if the Proposed Budget was adopted and a 2 percent increase implemented, then the whole salary range would move. An employee at the top of the range would still receive the 2 percent increase because the range moved. Council Member Berman assumed there was a reason for an employee to be 10 percent above midpoint in an inflated range. Mr. Keene stated no employee's salary would be decreased. Council Member Berman inquired whether there would be an attempt over time to move salaries back to midpoint. Mr. Keene replied yes, on a case-by-case basis. Merit adjustments would vary based on performance. Ms. Shen expected a long service employee would be towards the top of the range. By implementing the compensation plan, employees would not be held just to the control point, which was really only the halfway point. Opening up the whole range would acknowledge the City's wish for employees to spend their careers at Palo Alto. Council Member Schmid inquired whether the final salary range was set as a market median taking the percentage difference from salaries. Ms. Kaneko used the total compensation market median as the percentage difference between the City of Palo Alto salary and the market median total compensation, and the percentage was then applied to current salary ranges to adjust the salary ranges for a final recommendation. Council Member Schmid asked if benefits only were used for the adjustment, not for setting the range. Ms. Kaneko responded yes. Council Member Schmid inquired about the CalPERS average costs. Ms. Kaneko explained that CalPERS determined average costs for each of the specific benefits throughout the State of California. She applied that percentage to the City of Palo Alto's benefits as well as to all the comparators, so that the same formula percentages were used. Council Member Schmid asked if the CalPERS average costs were taken in 2010-2011. Ms. Kaneko answered yes. Council Member Schmid noted CalPERS was increasing costs drastically due to past mistakes, and inquired whether the City was missing some of the real valuations due to CalPERS' mistakes. Ms. Kaneko stated any compensation study was a snapshot in time to reflect the state of each comparator agency. After using the 2010-2011 numbers, the CalPERS average costs were adjusted. Council Member Schmid asked how the City could determine the true value of costs. Mr. Keene indicated the study had at least three parts: 1) aligning jobs vertically within the organization; 2) choosing the benchmark cities and the positions to benchmark; and 3) collecting the actual salary data. Another salary study would be performed in a year using the same classifications and same benchmarks to obtain updated comparison data. Council Member Schmid inquired whether it would be another salary benefit comparison. Mr. Keene replied yes. When the comparison was made previously, the Management Professional Group employee paid 2 percent; the employee now paid 8 percent. Council Member Schmid noted Palo Alto invested heavily in future compensation; however, recruitment involved salaries. He suggested Staff study ways to market benefits more effectively or to shift compensation into salaries rather than benefits. Ms. Shen reported the high cost of living and high cost of housing made recruiting difficult unless the cash salary was high enough to justify the expense. Staff needed to have a good marketing message concerning long-term benefits, and to review the mix of benefits. Salary was becoming more important for the younger generation of workers. Mr. Keene reported CalPERS and bargaining groups imposed restrictions on the City's flexibility regarding compensation. Staff wanted to tailor compensation packages to individual employees as part of recruitment; however, they were restricted from doing that. Council Member Schmid believed the City's benefit package was attractive to employees later in their careers, and suggested recruitment should be oriented to attracting younger people. Mr. Keene added that a long-term employee could move to another agency that paid a higher salary; yet, the City was still obligated for the portion of the employee's retirement resulting from working at Palo Alto. Council Member Schmid asked what happened to the retiree health benefits. Mr. Keene indicated health benefits could vary depending on where the employee went. A long-term employee could increase his pension benefit, and yet Palo Alto retained the bulk of the responsibility for paying the employee benefit even at a higher cost. Lalo Perez, Director of Administrative Services, reported an employee had to retire from the City and be 50 years of age or disabled to eliminate the City's obligation for an employee who moved to another agency. Chair Burt indicated state reforms led to the same medical benefits for employees, but not the same pension benefits. In fact, pension benefits within the workforce were radically different. Under this program, employees would be adjusted according to salary, not total compensation. He asked if the City had the ability to set the new salary ranges based not entirely on salary but on total compensation within the organization. Ms. Shen explained that using an individual's total compensation would result in a salary schedule with individual ranges for each employee. Chair Burt recalled that Staff calculated the total compensation for various employee levels, and asked if anything prevented the use of set points based on total compensation. Mr. Keene stated the study compared an average position in Palo Alto with an average position in the marketplace. Council Member Burt's point was that Staff would establish the benchmark in the same way, but where an employee would be placed within the range or the size of the range might be different. He believed the City might have to pay a higher salary to a number of employees, because the total benefit was less. Chair Burt understood Mr. Keene's point to be that total compensation was only half the equation. Mr. Keene indicated over time total compensation would change. He guessed that most of the study data compared 2.7 percent at 55 years of age to 2 percent at 60 years of age. Chair Burt noted that since the 2010-2011 study, employees began paying the entire CalPERS contribution. The City would have an easier time hiring if it offered more salary and less benefits. The problem was hiring new employees within a salary structure equivalent to carryover employees who had higher pensions. New employees were stuck under a salary structure that reflected salary rather than total compensation. If the salary structure was based on total compensation, some time would be needed to realize the benefits of the cost savings from new employees being in a lower salary structure. Without the cost savings, offering a higher salary would be difficult even though new hires would receive less pension benefit. Ms. Shen felt there were creative ways to attract younger professionals and employees to the City. Companies were having the same sort of issues with recruiting. Chair Burt believed updating the study would reveal greater disparity. If the City's total compensation on average was roughly equivalent to benchmark cities' total compensation, then employees covered by the old pension structure would be above the benchmark cities on average, and the new employees covered by the lower pension structure would be below the benchmark cities. The salary ranges should be based on total compensation or a hybrid. The study benchmarked Palo Alto against other cities based on total compensation, but within Palo Alto the benchmark was based on salary. Mr. Keene indicated his point was the internal issue. Chair Burt suggested the salary structure should include some merit review for salary adjustments. Mr. Perez reported the CalPERS system contained an adjustment within the employee's contribution, even if employees made the same salary. Chair Burt did not assume that the City could reach full equity for existing employees using a system based on total compensation. MINUTES Mr. Keene understood Council Member Burt's point to be internal equity, rather than the City's position in relation to the market. In 2010-2011 there was more flux in the marketplace than there would be in 2014 when benefits would be more equitable for all cities. In 2014 it would be easier for the Council to discuss specific guidelines regarding recruiting or incentivizing employees whose total compensation was less of a package. Chair Burt was interested in receiving information for the next adjustment that attempted to consider total compensation and the differences among employees, and to provide parity for a given position based on total compensation. Mr. Keene felt that aligned with Council policy positions concerning generational equity within the workforce. Chair Burt asked if colleagues were interested in that issue. Ms. Shen reminded the Committee that the City had to remain competitive with neighboring cities. Chair Burt reported the City would be more competitive because new employees would receive higher salaries. Mr. Keene noted higher salaries meant higher costs during the transition period. Over time, costs would not be higher. Chair Burt did not assume use of total compensation would result in an increase of total expenditure. There would be an adjustment period. Mr. Keene agreed additional information would be good. The City would have to remain competitive for a while with legacy employees. Chair Burt noted total compensation for employees would be competitive. He inquired whether total compensation included the prorated share of the unfunded liability. Ms. Kaneko explained that total compensation was the normal cost for current employees. Chair Burt requested an explanation of normal cost. Ms. Kaneko stated it was the amount the City contributed currently. Chair Burt asked if the normal cost included employees' proportionate share of unfunded liability. Ms. Kaneko replied no. Chair Burt explained that an existing employee's compensation was comprised of the normal cost plus his share of the unfunded liability. The liability was unfunded because the employee would receive pension benefits exceeding the amount contributed by the employee and the City in the past. Mr. Keene stated the unfunded liability would vary from one city to the next. Chair Burt indicated the City's total compensation was proportionately higher for benefits. If the unfunded liability was contained within benefits, then Palo Alto had a higher proportion of unfunded liability than another city with lower benefits and higher salary. Ms. Kaneko reported the study captured the actual costs related to current employees for that future benefit. They could separate any unfunded liability related to past workforce. Chair Burt inquired whether the study separated the unfunded liability. Ms. Kaneko captured the normal costs related to the current workforce. Chair Burt noted Palo Alto was comparable to other benchmark cities when benefits were included. For salary alone, Palo Alto was below the benchmark. That meant Palo Alto's amount of unfunded liability per employee was higher than other benchmark cities. Mr. Keene stated the retiree medical was a larger component than the pension. Many other factors would affect each jurisdiction's calculations of unfunded liability. Chair Burt explained that the $30-$40 million amount set aside for unfunded liability would accrue to both retirees and current employees, because Palo Alto funded more of the unfunded liability than most other cities. Mr. Keene suggested the issue was part of a larger compensation, placement, and equity conversation. Chair Burt requested additional information on those issues for future policy decisions. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Burt that the Finance Committee Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Adopt a Resolution Amending the Merit Rules. Vice Mayor Shepherd did not disagree with comments. The primary consideration was disposable income. She wanted good people to work for the City; therefore, the Council should review benefits. She was uncertain whether employees could live off future benefits. Chair Burt explained that these adjustments would provide employees with more disposable income. Those coming into the workforce would have more salary as a result of the adjustments made in pension. Vice Mayor Shepherd understood that point, and wanted to take care of workers today and tomorrow. INCORPORATED INTO THE MOTION WITH CONSENT FROM THE MAKER AND SECONDER for Staff to return in 2014 with information on how the City might incorporate total compensation into the salary structure across the organization as a whole. Council Member Berman supported the Motion. He agreed with bringing salaries up to market level, because the City was having difficulty filling positions. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to update the comparisons within 18 months. Vice Mayor Shepherd felt the language was redundant, but would accept it. Chair Burt wanted to provide clarity and direction to Staff. Mr. Keene reported Staff would perform another benchmark of the salary structure and comparison with the market within 18 months. Council Member Schmid asked if the study would include salary and benefits. Ms. Shen indicated the study would include total compensation. MOTION PASSED: 4-0 Mr. Keene understood the Committee recommended that Staff make an adjustment based on data for the City and comparable organizations from 2010-2011. The study placed the City's pay plan for employees at the median of the market. The City aspired to excellence, not the middle of the market. While working for the City was not easy, it was rewarding. The City offered interesting work in a great community and the chance to be on the leading edge of many issues. Staff expected to hire and retain top people for the City. FUTURE MEETINGS AND AGENDAS Lalo Perez, Director of Administrative Services, announced the June 4, 2013 meeting was cancelled. The one Agenda Item, third quarter financial reports, was moved to the June 18, 2013 meeting. Staff was considering a formal adjustment to revenues in order to align actual amounts with the Adopted Budget. Staff would present a draft report of the Cost of Service Study to the Committee. ADJOURNMENT: The meeting was adjourned at 9:13 P.M. City of Palo Alto (ID # 3841) Finance Committee Staff Report Report Type: Meeting Date: 5/23/2013 City of Palo Alto Page 1 Summary Title: Resolution Amending the 2013 Management and Professional Compensation Plan Title: Request Finance Committee Recommendation to Council to Adopt a Resolution Amending the 2013 Management and Professional Compensation Plan and Resolution Amending the Merit Rules From: City Manager Lead Department: Human Resources Recommendation Staff recommends that the Finance Committee review the attached management compensation study follow-up report and recommend that Council; (1) adopt a resolution amending the FY 2013 Management and Professional Compensation Plan to implement the study, and (2) adopt a resolution making conforming amendments to the Merit Rules. Background On May 6, 2013 the City Council discussed the proposed amendment to the FY 2013 Management Compensation Plan (Attachment A). The City Council referred the amendment to the Finance Committee for further discussion. The Management and Professional group includes 204 Full Time Equivalent (FTE) employees, or about 20% of the City’s total workforce. There are 117 classifications in this group, of which 74% manage people (directors, managers, supervisors, and supervising classifications like Principal Analyst and Senior Engineers). As noted in the FY 2014 Proposed Operating Budget, the average salary for employees in this group is $114,884; the average total compensation is $174,226. By comparison, the average salary for employees in the Utility Manager group is $128,352; the average total compensation is $194,450. The average salary for employees in the Fire Chief Association is $146,207; the average total compensation is $236,252. The average salary for employees in the Firefighters group is $99,585; the average total compensation is $192,083. The average salary for employees in the Police Management Association is $168,028; the average total compensation is $282,042. The average salary for employees in the City of Palo Alto Page 2 Police Officers Association is $108,953; the average total compensation is $204,606. The average salary for employees in the SEIU group is $72,814; the average total compensation is $123,137. When total compensation is compared, the average Management and Professional compensation is lower than all groups except SEIU. (See Budget Table Attachment B) In 2007, the City commissioned Fox Lawson and Associates to begin a study of the Management and Professional classifications. Lawson completed the first portion of the study which included the job classification benchmarking i.e., how positions are classified and described at the City. Lawson led staff focus group sessions and determined which classifications would be used to benchmark against the market. They also collected position description questionnaires and used that data to recommend revised job descriptions. The City implemented this first part of the study in January, 2009. In 2009, the City hired a new consultant, Koff & Associates, to conduct a market salary survey, including defining Palo Alto’s comparable cities and recommending placement of positions in relation to the market. Employees were given the opportunity to review the data Koff collected for the benchmark positions and appeal for review of the City’s determination of matching positions. Koff gathered salary data between 2010-2011. At the City’s request, Koff revised initial market recommendations that were based on salary only to include “total compensation,” including benefits such as pension, active employee and retiree healthcare for each of the benchmarked positions. The total compensation definition of salary and benefit information collected for each of the 82 benchmarked classifications is identified in Attachment C. At the time of the Koff study however, Palo Alto employees were paying a small portion of their PERS contribution. Currently, the Management and Professional group pays its entire employee PERS contribution, 7%, 8% or 9% depending on year of hire. The final total compensation study compared 82 classifications within the Management and Professional group to the salary and benefits of comparable positions in the 14 benchmark cities. The benchmark cities are Alameda, Anaheim, Berkeley, Burbank, Fremont, Hayward, Long Beach, Mountain View, Redwood City, Roseville, San Jose, San Mateo, Santa Clara and Sunnyvale. The recommended salary placements are based on that data, supplemented with internal equity alignment between positions within the City. The staff recommendation currently before the Council seeks to implement this market placement phase of the study by amending the Management and Professional Compensation Plan with the proposed salary schedule. Attachment D lists each classification in the group in order of the proposed percentage change in salary. Council should be aware that there is a third component of the City’s total compensation study: individual placement within the salary ranges adopted by Council. This phase of the compensation study will be administered by the City Manager (or other CAO for employees within their units), in consultation with the Chief People Officer and department heads, using an updated performance evaluation program. City of Palo Alto Page 3 This supplemental staff report will address questions raised by Council at the May 6 session. 1. How were the 14 cities chosen as comparators? The agencies were chosen to represent Palo Alto’s geographic labor market, communities with comparable size and scope of services, and included cities containing one or more utilities. Although Utilities managers have separated from the Management group and now bargain separately, there are two reasons why cities with utilities remain important comparators. First, many city employees in the Management group support Palo Alto Utilities, including the City Managers’ Office, Office of Management and Budget, Purchasing, Human Resources, Information Technology, the City Attorney’s Office, the Clerk’s Office, and the Auditor’s Office. Second, because many Management employees in departments other than Utilities perform comparable functions (such as engineers, project managers and management analysts), internal organizational alignment and equity are important factors that must be considered. 2. Why does the study include Southern California large cities like Anaheim, Burbank and Long Beach? These cities operate more than one utility in a “one director” organization model like Palo Alto. In contrast, some cities that operate more than one utility have separate directors for each utility and individual departments. Keep in mind that the Palo Alto positions have been placed at the median of the 14 benchmark cities. 3. Why are utility cities needed as comparable data for any position other than Utility Director? See Answer #1, above. 4. Are City salaries higher than private sector? According to the Bureau of Labor Statistics, the average wage for private sector management occupations in the Bay Area is $142,570, 24% higher than the average wage for the City of Palo Alto Management and Professional group. This data is from the Bureau of Labor Statistics report “Private Industries Annual Mean Wage, May 2012.” 5. How many employees are hired from the private sector and how many leave Palo Alto to work in the private sector? In FY 2013 to date, 10% of filled jobs in the management and professional group have been recruited from private employers (3 out of 29). It is more difficult to draw conclusions City of Palo Alto Page 4 about employees exiting the City, because circumstances vary (some leave the workforce for family reasons, some move away from California, and others choose not to reveal their next employer). In FY 2013 to date Human Resources has been conducting exit interviews, which reveal there were five voluntary exits and seven retirements; all voluntary exits continue to work in California in public sector positions. This suggests that Palo Alto needs to be mindful of remaining competitive with other area cities. 6. Why is the salary range changing? The overall structure is not changing; although the width of the range decreased in 2012 from 25% below Control Point to 20% below Control Point. The current salary structure provides for ability to hire a new employee 20% below control point (will now be defined as midpoint) and up to 20% above mid-point based on City Manager approval. Some classification ranges are moving up or down based on market findings and internal factors justifying alignments. 7. What relation does the $310,000 have to the City total compensation? $310,000 has been allocated in the General Fund and carried over since FY 2007 to implement market salary adjustments as a result of this compensation study. The study completion has been delayed due to consultant changes, employee review and appeals, methodology change to total compensation comparison, and Human Resources staffing turnover. $310,000 equates to 1.26% of the City’s General Fund total compensation cost for Management and Professional positions. In addition, approximately $122, 000 or 1.08% of non-utility enterprise compensation will be allocated for salary adjustments within non-Utilities Department Enterprise Funds. 8. How many classifications will move up or down when this study is implemented? The ranges for 43 classifications will move up (38 due to being under market, five due to internal equity factors justifying alignments). Most of the range movement is small in magnitude, 5% or under. The ranges for 53 classifications are over market and will move down, again most of them at a magnitude of 5% or less. See Attachment C. The remainder of classifications had no change. Further analysis is shown below: City of Palo Alto Page 5 Magnitude of salary range movement higher Number of classifications 20% + 1 15-20% 2 10-15% 5 5-10% 10 0-5% 25 Magnitude of salary range movement lower Number of classifications 20% + 1 15-20% 2 10-15% 12 5-10% 15 0-5% 24 Salary Range Adjustment 9. How many employees will be Y-rated? If an individual employee earns a salary that is above the top of the new approved range, that employee is said to be “Y-rated.” A Y-rated employee is not eligible for a salary increase until such time the top of the range increases. Only one employee will be Y-rated if the proposed salary ranges are approved. 10. Was total compensation used in the study or just salary? Comparisons were based on the total compensation of the City classification with median total compensation of the comparison cities, and the delta was then applied to the City salary. As an example, take a fictional Manager position that had a previous Control Point of $100,000 and a total compensation of $145,000. Suppose that the study found this position to be under market by 5% total compensation compared to the median of benchmark cities. That 5% would then be applied to the position’s Control Point (now Mid- Point) to get a new midpoint of $105,000. Ms. Katie Kaneko from Koff and Associates and staff will be presenting the information to the Finance Committee in discussion format at the Finance Committee meeting on May 23. Attachments: ATTACHMENT A May 6, 2013 CMR (PDF) ATTACHMENT B Budget Salary Table (PDF) ATTACHMENT C List of Benchmarked Total Compensation Data Collected (PDF) City of Palo Alto Page 6 ATTACHMENT D Salary Schedule With In Order Showing Increases & Decreases From Current (PDF) City of Palo Alto (ID # 3600) City Council Staff Report Report Type: Action Items Meeting Date: 5/6/2013 City of Palo Alto Page 1 Summary Title: 2013 Management and Professional Compensation Plan Title: Request Council Adopt Resolution Amending the 2013 Management and Professional Compensation Plan From: City Manager Lead Department: Human Resources Recommendation Staff recommends that the Council adopt the attached resolutions amending the 2011-2013 Compensation Plan for Management and Professional Personnel and Council Appointees to implement the 2013 Salary Study, extend the term and make other changes required by law, effective the pay period beginning May 18, 2013, and amending the Merit Rules to incorporate these changes. Motion I move that Council: (a) adopt a resolution amending the 2011-2013 Compensation Plan for Management and Professional Personnel and Council Appointees to implement the 2013 Salary Study, extend the term and make other changes required by law, effective the pay period beginning May 18, 2013, and (b) Adopt a resolution amending the Merit Rules to incorporate these changes. Executive Summary The City of Palo Alto seeks to attract and engage employees with the expertise and experience we need, who are passionate about their work for the City and feel valued for it. To attract and retain skilled staff, the City should adopt a total compensation plan that brings current salary City of Palo Alto Page 2 ranges and benefits to the market median of our benchmark cities. Staff has formulated a new salary structure for management and professional staff based on market research (the 2013 Salary Study). The proposed salary structure establishes a mid-point for each job classification. The minimum salary for any position in that classification is 20% below the mid-point and the maximum salary is 20% above the mid-point. The City Manager (or other CAO within their office) determines an individual employee’s actual salary within the range based on experience, performance, and merit. Beginning FY 2014, budgeting for Management and Professional positions will change. Currently, Management and Professional positions are budgeted at the mid-point of the range (formerly called the control point). Beginning this year, the budget will reflect the actual salaries of all employees. The proposed salary structure does not include police, fire or utility managers, as they are represented classifications, except that the following unrepresented classifications in the Management and Professional group are included in the new structure: Public Safety Director, Chief of Police, Assistant Chief of Police, Fire Chief, Assistant Fire Chief, Deputy Fire Chief, and Director of Utilities.) Background Staff proposes that Palo Alto implement the 2013 Salary Study in order to offer competitive pay and benefits at the median of the current market, as determined by 14 benchmark cities. Subject to financial considerations, staff proposes that it be the City’s goal to compensate Management and Professional employees according to the level of expertise, scope of work performed, and managerial accountability of each job, as reflected by the market. Additional goals include promoting internal equity across departments and providing that employees move up the salary range based on merit and performance. To implement these goals, the staff periodically reviews market compensation for management, and professional staff. Human Resource staff subscribes to the Bay Area Employer Research Service (ERS), which contains market data for a comprehensive list of jobs in the Bay Area. A more individualized study (the 2013 Salary Study), conducted by Koff & Associates (“Koff”), is the basis for staff’s request to update the Management and Professional Compensation Plan. The study is described as follows. Benchmarking positions. Koff collected data for 82 classifications out of 114 total classifications that make up the Management and Professional group. For each of the 82 “benchmarked” City of Palo Alto Page 3 classifications, Koff analyzed job descriptions to identify matches with similar classifications in comparator public agencies. Koff’s methodology required a 70% degree of similarity between Palo Alto and comparator city job descriptions for a job to be a benchmark “match.” The factors analyzed include education, experience and skills required; work scope and complexity; decision-making authority; responsibility for the work of others, programs and budget; problem solving and ingenuity; relationships inside and outside of the City; consequences of action and decisions; and working conditions. Benchmark Cities. Koff reviewed the cities that Palo Alto used in the past to determine the appropriate agencies for comparison, adding to the list those cities suggested by the Executive Leadership Team (ELT) and the Management Compensation Committee, which is a group of representatives from each City department. Koff considered the following factors in making the choices: Cities of a similar size, budget, and population as Palo Alto Cities surrounding Palo Alto that compete for labor within the geographic vicinity Scope of services provided, including police, fire, parks, arts and utilities. In order to find comparisons for the positions in Utilities, Koff added the following cities outside of the immediate geographic labor market area that have one or more utilities: Anaheim, Burbank, Long Beach, and Roseville. Thus, fourteen (14) cities are benchmarks, as presented below. Alameda Anaheim Berkeley Burbank Fremont Hayward Long Beach Mountain View Redwood City Roseville San Jose San Mateo Santa Clara Sunnyvale Benefits. Koff collected information about health and pension benefits for each comparator city utilizing a formula to determine an average value that comparable agencies pay for the health and pension benefits. Methodology. In collecting salary and benefit data, Koff conducted reviews of comparator city documentation, including classification descriptions, memoranda of understanding, pay practices, organization charts, and other documents, then conducted interviews with human resources, accounting, and/or finance personnel at each comparator agency to understand their organizational structure and classification matches. Koff collected data between 2009 and 2012. City of Palo Alto Page 4 Discussion Survey Results. Koff analyzed market salary and health (including retiree medical) and pension benefits for each classification surveyed to find the percentile difference between Palo Alto’s salary and benefits against the median total compensation (salary and benefits) of the comparator cities. (See Attachment C) Considering the Management and Professional group as a whole, Koff found that Palo Alto’s total compensation is generally at or above market median. Palo Alto’s benefit package value is greater (about 10%) than that of the comparator group taken as a whole. Since total compensation is the relevant comparison, the City of Palo Alto’s generally higher benefits offset somewhat lower salaries in some comparisons. More specifically, the 2013 Salary Study showed that many classifications have a total compensation mid-point that is at or near the market median. Some classifications job classifications have a mid-point that is over market compared to the benchmark cities. Other classifications have a mid-point that is under market. The largest cluster of under-market classifications are in Utilities. There are under-market positions though scattered throughout the Management and Professional group. Note that the utility managers (below the Department Director) are not included in the Management and Professional Salary Schedule, as they are currently represented by Utility Management Professional Association of Palo Alto (UMPAPA). Internal Salary Relationships. Internal relationships are another factor to consider when making salary decisions. Compensation of classifications within a job family should be reasonably related. Related jobs in different departments should be compensated in a manner that makes sense. The proposed new structure was established by slotting job classifications that were not benchmarked into the salary scale to maintain internal relationships with benchmarked jobs above and below. The City follows common professional guidelines for percentages applied to the difference between job levels: 10% to 15% difference from a trainee to experienced classification and from a lead or advanced journey-level position to the lower experienced level 15% to 25% from supervisor to the highest level supervised, depending upon the breadth and scope of supervision. Market adjustments granted to one class in a series normally include other classes in the series being adjusted to maintain internal equity. In addition, Department Directors were invited to review and consider the organizational value of each classification’s body of work. As a result, some key placements for salary City of Palo Alto Page 5 recommendations were updated to reflect departmental recommendations based on both market results and organizational value. New Ranges. Staff proposes to implement the new salary structure by adjusting the mid-point of all classifications in the Management and Professional group to bring the mid-point of the range to the market median, adjusted as described above. Individual Employee Salaries When Classification is Under Market. Staff proposes to adjust the mid-point of classifications found to be under market higher in the new Salary Schedule, to bring the mid-point of the range to market median. With Council approval, the City will adjust individual employees’ salaries by moving employees who are at or below the mid-point of the current range to the same relative place at or below mid-point of the new range, provided the employees are meeting or exceeding performance expectations. Individual Employee Salaries When Classification is Over Market. Staff proposes to adjust the mid-point of classifications found to be over market – but not individual employee salaries – lower in the new Salary Schedule to bring the mid-point of the range to the market median. Pay will not be reduced for employees in the downward-adjusted classifications; however these employees may find their salary is over the mid-point of the new range. In some cases, the current salary will exceed the maximum of the new range. Staff proposes to “Y-rate” the salaries of employees whose salary is above the maximum. “Y-rate” means the employee does not immediately lose income, but will not be eligible for merit increases and general increases until the incumbent’s salary is within its market salary range. Proposed Monthly Salary Schedule The compensation for management and professional employees will fall within a range of 20% below and 20% above the mid-point. The Department Director and the Chief People Officer will approve limited movement over mid-point. The City Manager (or other CAO) retains discretion to approve salaries over 10% above mid-point. The City will adjust management and professional salaries to align with the new salary ranges upon adoption of the new salary schedule. There are funds designated in the fiscal year 2013 General Fund budget to provide salary adjustments to market. The Public Works Enterprise Funds and Other Funds will have sufficient funds to cover the adjustments as a result of vacancy savings. In FY 2014 and future budgets, staff proposes to allocate funds that allow for base salary increases. The proposed FY 2014 budget includes a recommended 2% increase to all classifications in the Management and Professional Compensation Plan. Attached is Attachment City of Palo Alto Page 6 D, the proposed 2013 Management & Professional Compensation Plan with the attached Salary Schedule. Resource Impact The fiscal year 2013 budget includes $310,000 in the General Fund or this purpose to fund the recommended adjustments. The Public Works Enterprise Funds and Other Funds will have sufficient funds to cover the adjustments as a result of vacancy savings. Attachments: Attachment A RESO Amending Merit System Rules-Regulations Mgmt (PDF) Attachment B RESO Amending Comp Plan for Mgmt Professional (PDF) Attachment C Information Collected for Compensation Study (PDF) Attachment D Management Professional & Confidential Comp Plan (PDF) Attachment A * NOT YET APPROVED * 130501 sh 0140089 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending Section 1701 of the Merit System Rules and Regulations to Incorporate the 2011‐ 2013 Compensation Plan for Management and Professional Personnel and Council Appointees The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Section 1701 of the Merit System Rules and Regulations is hereby amended to read as follows: “1701. Compensation Plan for Management and Professional Personnel and Council Appointees incorporated by reference. The currently applicable Compensation Plan entitled “City of Palo Alto Compensation Plan‐‐Management and Professional Personnel and Council Appointees,” is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said Compensation Plan shall apply to all Management and Professional employees and Council Appointees, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter will prevail over such other provisions as to employees in classifications covered by said Compensation Plan.” SECTION 2. The changes to the Merit System Rules and Regulations provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit, or proceeding pending or any judgment rendered prior to the effective date of this resolution. // // // // // // Attachment A * NOT YET APPROVED * 110322 sh 8261553 2 SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ City Attorney City Manager _____________________________ Chief People Officer _____________________________ Director of Administrative Services Attachment B *NOT YET APPROVED* 130501 sh 0140088 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending the 2011‐ 2013 Compensation Plan for Management and Professional Personnel Adopted by Resolution No. 9282 to Implement the 2013 Salary Study, Extend the Term and Make Other Changes Required by Law The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2011‐2013 Compensation Plan for Management and Professional Personnel, adopted by Resolution No. 9282 is hereby amended to implement the 2013 Salary Study, extend the term and make other changes required by law, as set forth in Exhibit “A”, attached hereto and incorporated herein by reference, effective with the pay period including May 18, 2013. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer Attachment B *NOT YET APPROVED* 130501 sh 0140088 2 CITY OF PALO ALTO COMPENSATION PLAN Management and Professional Personnel And Council Appointees Effective: Pay period includingCompensation plan effective July 1, 2012 through June 30, 2013 2014, except where specifically noted. 2 1 COMPENSATION PLAN FOR THE CITY OF PALO ALTO Management and Professional Personnel As used in this Plan, the term “Management and Professional” refers to all employees, including Confidential employees, previously classified as “Management and Confidential” by the City. This group will hereafter be identified as “Management and Professional” personnel. SECTION I. COMPENSATION This section applies to all management and professional employees and does not include Council Members or Council-appointed officers. Each Council-appointed officer shall be the responsible decision-maker under this Plan for those employees in departments under his/her control. A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY The City's policy for management and professional compensation is to establish and maintain a general structure based on marketplace norms and internal job alignment with broad compensation grades and ranges. Structures and ranges will be reviewed and updated as necessary based on marketplace survey data, internal relationships, and City financial conditions. Individual compensation adjustments will be considered by the Council-appointed officer based on (1) performance factors including achievement of predetermined objectives; (2) pay structure adjustments; and (3) City financial conditions. B. BASIC PLAN ELEMENTS 1. 1. Structure. The compensation plan includes separate multi-grade structures for both management and professional employees. Each grade will have a salary range with a mid- point which is 20% above the minimum, and 20% below the maximum of the range.control pointmid-point which is used for budgetary purposes. All management and professional positions will be assigned an appropriate pay grade based on salary survey data and internal relationships. Actual salary within the range is determined by experience and performance. The normal working range where most actual salaries will fall will be within + 10% of the control pointmid-point. Competitive marketplace studies will be conducted as needed by surveying a maximum of 14 organizations similar to Palo Alto in number of employees, funding mechanisms, population and services provided. These studies will focus on total compensation for management positions such as first line supervisors, administrative, confidential, professional and top management. Periodically, studies will include position-by-position comparisons using market research and internal equity data. The results of these studies may indicate that the entire pay grade structure be adjusted, that individual positions be reassigned to different pay grades, or that no change takes place. Such adjustments will only affect the salary administration framework. No individual salaries will be automatically changed because of structural adjustments. Formatted: Indent: Left: 0.5" 2 A department director may request that HR reevaluate a job or jobs in his or her department based on significant and permanent changes in job content. In doing so the director will supply needed information and will provide a position description questionnaire as requested. The Chief People Officer will respond to such requests within his or her discretion. 2. 2. Compensation Adjustment Authorization. In consultation with feedback received from the Management and Professional Compensation Committee, the City Manager may propose as part of the budget process for Council approval of a compensation adjustment based on (1) competitive market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a recommendation received from the Chief People Officer. For fiscal year 2013 the compensation adjustment to control pointmid-point shall be three percent (3%) effective the pay period including October 6, 2012. In addition, certain below-market positions will be subject to equity adjustments at a future date based on Management Compensation Study results and subject to Council approval. In years when there is an adjustment to control mid-point, this adjustment will be available for those management/professional employees who have received an overall rating of "meets" or "exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year. Nothing herein shall preclude an employee's manager from awarding a control pointmid-point adjustment increase to an employee on a performance plan at a later date should employee's performance improve. 3.1.Base Compensation. Compensation for management and professional employees includes bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi-weekly base salary must fall within pay grade limits of no less than 20% below the control pointmid-point and no more than 20% above the control pointmid-point. Base salary increases are earned in accordance with administrative guidelines based upon growth within the position and performance, which must meet or exceed position standards, the salary structure and the City’s ability to pay. 4.2.Performance Planning and Appraisal. Performance appraisals will be conducted at the end of each fiscal year during the months of July through September 30 each year prior to determining individual employee fixed compensation. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives shall be monitored periodically. The performance appraisals should be implemented in a manner that will achieve the following objectives: Define the employee’s job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee’s role and responsibilities; Formatted: Indent: Left: 0.25", No bullets ornumbering 3 Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; Facilitate two-way communication and understanding between the employee and his or her supervisor; Counsel and encourage employees to work toward a learning development plan and realize their full potential; Establish future work plan objectives. Work plans should include job related projects or special goals related to regular job duties when applicable. At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department heads and to the Chief People Officer or appropriate Council appointed officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. This process should be completed by September 30. C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION 1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non-Council-appointed management and professional employees in an amount not to exceed the aggregate of approved management and professional positions budgeted at the control points in the Table of Organization for the applicable fiscal year. 2. Individual management and professional compensation authorized by a Council-appointed officer under the Management and Professional Compensation Plan may not be less than 20% below nor more than 20% above the control pointmid-point for the individual position grades authorized in Table I of this plan.Salary Schedule attached. 3. The Council-appointed officers are authorized to establish such administrative rules as are necessary to implement the Management and Professional Salary Plan subject to the limitations of the approved compensation adjustment authorization and the approved grade and control pointmid-point structure. 4. Notwithstanding any other provision of this Compensation Plan, In in the event a downward adjustment of a position grade assignment indicates a reduction in the established salary of an individual employee, the Council-appointed officer may, if circumstances warrant, continue the salary for such employee in an amount in excess of the revised grade limit for a reasonable period of time. Such interim salary rates shall be defined as "Y-rates." SECTION II. SPECIAL COMPENSATION This section applies to all eligible regular management and professional positions including Council Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be in conformance with the Merit Rules and Regulations and Administrative Directives issued by the City Manager for the purposes of clarification and interpretation. 4 A. OVERTIME Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. B. IN LIEU HOLIDAY PAY Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non-workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. C. WORKING OUT OF CLASSIFICATION PAY Where management and professional employees, on a temporary basis, are assigned to perform all significant duties of a higher classification, the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working out of class pay is normally not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties to be performed and an end date. D. STAND-BY PAY Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on a case by case basis, in extreme circumstances involving unavailability of non-management staff. Compensation is as follows: Monday through Friday $40 per day Saturday, Sunday, Holidays $58 per day E. CALL OUT PAY Effective pay period beginning February 26, 2011, Exempt management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City premises, (2) is called back to the work location outside of regularly scheduled working hours, and (3) the Call Back is for an emergency arising out of situations involving real or potential loss of service, property or personal danger. Employees called back will be expected to respond directly to the location of the problem. Compensation is per Call Out as reported on timecard and will be paid as follows: Monday through Friday: $140 per day Saturday and Sunday: $200 per day F. NIGHT SHIFT PREMIUM 5 Night shift differential shall be paid at the rate of five percent (5%) to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE PERSONNEL Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in conformance with department policy. H. GROUP INSURANCE 1. Effective Date of Coverage for New Employees For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. 2. Active Employee Health Plan a) Based on an employee’s family status, the City shall pay up to the monthly medical premium for the second most expensive plan among the existing array of plans available during the term of this compensation plan on behalf of eligible employees (including Council Appointed Officers and Council Members) and dependents, except as provided in section b, below. Eligible dependents, under current law, include spouses, children under the age of 26 and never married (natural, adopted, or stepchildren), economically dependent children, and domestic partners registered with the Secretary of State. If PERS changes the plans it offers, the City will continue to provide an equivalent benefit at an equivalent cost. b) Effective in the pay period including October 6, 2012, participating employees will contribute 10% of the premium cost for the employee-selected plan, and the City shall contribute 90%, with a maximum City contribution of 90% of the second highest plan. . c) City medical premium contributions will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. d) Coverage for Domestic Partners: 1) Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State. 2) Domestic Partnership Not Registered with the California Secretary of State: Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department, will be eligible for reimbursement of the actual monthly premium cost of an 6 individual health plan, not to exceed the maximum monthly City employer contribution for one-party coverage under the CalPERS Health Benefits Program (or PORAC if a safety department employee) for an employee covered under this agreement. Evidence of premium payment will be required with request for reimbursement. e) PERS Choice Reimbursement Plan Will be eliminated effective January 1, 2013. Management and Professional personnel enrolled in the PERS Choice medical plan may submit a request for payment, as specified below, for non-covered medical expenses, incurred during the period of January 1, through December 31, of the plan year, that exceed $2,500. The maximum annual reimbursement amount provided under this program is: $700 for employees enrolled in the Employee-Only category; $900 for employees enrolled in the Employee and One Dependent category, and $1,100 for employees enrolled in the Family category. Any amounts reimbursed to an individual under this program would be included in the employee’s gross income and is not PERSable. This program shall only reimburse employees for medical expenses that are not reimbursed through any other means and meet the definition in Section 213(d) of the Internal Revenue Code. (Examples of eligible expenses include medical plan deductibles and co-payments, prescription drugs, dental care, hearing care, and vision care.) However, in order to have any expenses reimbursed under this program, the employee must have allocated 100% ($2,500.00) of their 2010 calendar Excess Benefit funds into the Medical FSA option during the election that occurred in December 2009. In addition, all such reimbursements from the Excess Benefit Program must have been solely for medical expenses, as defined by Section 213(d) of the Internal Revenue Code. If the employee has designated his/her Excess Medical funds for any other qualifying expenses (i.e. dependent care, Professional Development, Deferred Compensation contributions), the employee would not be eligible for reimbursement under this program. Employees may submit a final claim for the 2012 plan year’s expenses during January. Any amounts remaining from the PERS Choice reimbursement plan after the claims for the plan year had been processed shall be forfeited. 3. Alternative Medical Benefit Program If a regular employee and/or the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees electing alternative coverage and no City coverage will receive cash 7 payments in the amount of 90% of the average monthly premium for one party, which is $284.00. 4. Retiree Health Plan a) Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees” Medical and Hospital Care Act. The City’s monthly employer contribution for each employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the amount necessary to pay for the cost of his or her enrollment in a health benefits plan up to the monthly premium for the second most expensive plan offered to management and professional personnel during the contract term (among the existing array of plans.) The City’s contribution for an employee hired before January 1, 2004 who retires on or after March 30, 2011 shall be the same contribution amount it makes from time to time for active City employees. b) Post – 1/1/04 Hires For those Management and professional employees hired after January 1, 2004, the PERS law vesting schedule set forth in Government Code section 22893 will apply. Under that law, an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five (5) of those years were performed at the City of Palo Alto. After ten (10) years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at 20 years’ service credit, the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section 22893 based on a weighted average of available health plan premiums. 5. Dental Plan a) The City shall pay covered plan charges on behalf of all eligible employees and dependents. (Domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department are considered dependents under the plan.) Benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) The City’s Dental Plan provides the following: Maximum Benefits per Calendar Year- $2,000 per person Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) Major Dental Services 50% UCR* 8 Orthodontics 50% UCR* Basic Benefits (All other covered services) First Calendar Year of Eligibility 70% UCR* Subsequent Calendar Years 70%-100% *Usual, Customary, and Reasonable Composite (tooth covered) fillings for posterior teeth For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not utilize the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year. If a dental plan member ever loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan would include: Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan. 6. Basic Life Insurance The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no-cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,000). 7. Supplemental Life And AD&D Insurance An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one- or two-times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amount of AD&D coverage available is up to $325,000. 8. Long Term Disability Insurance a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium for the first $6,000 of base monthly salary. For employees whose base monthly salary exceeds $6,000, the employee shall pay the cost of the required premium based upon their monthly salary between $6,000 and $15,000. 9 b) For employees whose base monthly salary exceeds $6,000 and who have no eligible dependents covered under the City’s medical, dental or vision plans, the City will pay up to $17.50 per month towards the employee’s cost for LTD coverage. 9. Vision Care a) The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan provides an exam every 12 months; lenses every 24 months; frames every 24 months, all subject to a $20 co- payment as defined in the Vision Services Benefits Plan A schedule. Benefits for regular part-time employees will be prorated as follows: Employees hired after January 1, 2004, who will work less than full time, will receive prorated premium costs for vision benefits in accordance with his/her percentage of a full-time work schedule. Vision benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) Effective July 1, 1996, dependents include eligible domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department. I. EMPLOYEE ASSISTANCE PLAN The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line 24 hours a day, seven days a week. Guidance is also available online. J. SAFETY DIFFERENTIALS 1. Police Department - Personnel Development Program Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn police personnel: P.O.S.T. Intermediate Certificate: five percent (5%) above base salary P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary 2. Fire Department - EMT Differential 10 Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn Fire personnel: EMT Differential: three percent (3%) above base salary K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM Management and professional employees are eligible for Sections 1, 2, 3, and 4 of the Management Benefit Program. City Council Members are eligible for Section 3 only. 1. Professional Development - Reimbursement The purpose of this program is to provide employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self- improvement activities may be granted each management and professional employee up to a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: a) Civic and professional association memberships b) Conference participation and travel expenses, which must occur within the compensation plan period. c) Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City’s mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City’s travel expense report from the Policy & Procedures Manual Section 1-02 ASD. d) Professional and trade journal subscriptions not to exceed 12 months. e) Approval will be at discretion of department head and signature is required on reimbursement form. Amounts under this professional development program will be pro-rated in the first year of employment or promotion into a position covered by this Compensation Plan 2. Physical Examinations 11 All management and professional employees are eligible to receive an annual physical examination as follows: a) Use the periodic health exam benefit as provided under the PERS Health Plan option you have selected. Each of the PERS Health Plans provides for a periodic physical examination. The examination must be performed by your primary care physician— unless he/she refers you to another physician. b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The guidelines are a suggested minimum based on research studies concerning preventative care. The judgment of your physician is the final determinant for your care. c) Any additional necessary asymptomatic tests that are required by your physician that are not covered by your health plan, will be reimbursed by the City. Any symptomatic tests will be covered under your PERS Health Plan. The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet site. This benefit will not be pro-rated. 3. Excess Benefit This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code, with exception of Gym or Health Club Membership. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options: a) Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments as well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold medicines. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. b) Dependent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of annual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. 1) The annual amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 12 2) The expenses must be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3) The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 4) If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals (other than a resident of the facility). 5) Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP will be reduced by any amount reimbursed under the Excess Benefit Plan. c) Non-taxable Professional Development Spending Account. Provides reimbursement for Non-Taxable professional development expenses (e.g.,job-related training and education, seminars, training manuals, etc.) to the extent they are not paid or reimbursed under any other plan of the City. d) Gym or Health Club memberships. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement of this expense is taxable to the employee. e) Deferred Compensation. Provides a one-time contribution to the employee’s City- sponsored 457 Deferred Compensation plan with either ICMA-RC or the Hartford. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a “use –it-or-lose-it” basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Specified amounts under this benefit will be applied on a pro-rata basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. L. LEAVES 1. Sick Leave a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a 40-hour duty 13 schedule. Those assigned work schedules which are greater or lesser than 40 hours will accrue sick leave at the ratio of their work schedule to 40 hours. b) Employees may use up to 20 hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. d) Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have 15 or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent (2½%) of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. e) Up to nine (9) days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f) Management and Professional employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. g) In accordance with the City Merit Rules and Regulations, a new employee may, if necessary, use up to 48 hours or shift equivalent of sick leave at any time during the first six (6) months of employment. 2. Management Annual Leave a) Exempt Employees Regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half (½) shift off for each 8 hours charged. In 2012, the City will be transitioning this benefit from a fiscal to calendar year basis for administrative purposes. Therefore, on July 1, 2012, employees will be credited with 40 hours of annual leave for the period of July 1 to December 31, 2012. 14 Beginning in 2013 and each calendar year thereafter, employees will be credited with 80 hours of management annual leave. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the year will be paid in cash unless a different option as indicated above is elected by the employee. b) Non-Exempt Employees Based on an audit recommendation to eliminate payment of overtime as well as management leave for non-exempt employees in the management group, the City is transitioning away from providing management leave to non-exempt employees. As part of the transition, and in order to minimize impacts to current employees, the City will phase-out elimination of the 80 hours of management leave for all current non-exempt Management and Professional employees (those eligible to earn overtime). Continuing through Fiscal year 2013-2014, there will be no change to management leave benefits for current employees; these employees will maintain their 80 hours of management leave and also receive pay for any overtime hours worked. Beginning on July 1, 2014 all employees in non-exempt positions will receive overtime pay for hours actually worked, but will no longer receive management leave. Employees hired into non-exempt management positions on or after February 26, 2011 will receive overtime only and will not be eligible for management leave. 3. Vacation Vacation will be accrued when an employee is in pay status and will be credited on a bi- weekly basis. Total vacation accrual at any one time may not exceed three (3) times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a) Less than nine (9) years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year; provided that: i. The City Manager is authorized to adjust department head annual vacation accrual to provide for a maximum of 160 hours for those hired between July 1, 1996 and June 30, 2001; and ii. The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. 15 b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; 160 hours vacation per year. c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; 180 hours vacation leave per year. d) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section. Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation year, employees will make their election for vacation hours to cash out no later than November 1, 2012. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designates on the election form. Employees who do not elect a cash-out amount by November 1 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre-designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash-out the elected amount in a paycheck issued on or after the payroll date including November 1. 4. Bereavement Leave of absence with pay of three (3) days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family, which is defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall Formatted: No underline 16 not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control. M. RETIREMENT PENSION 1. Effective pay period inclusive of 1/6/07, the City’s Public Employees’ Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non-safety members (from 2% @55). For miscellaneous employees hired on or after July 17, 2010, the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60). For Safety members, the City currently offers the CalPERS "3% at 50" full formula (Section 21362.2) benefit. Local Fire Safety members newly hired after 6/08/12 will be placed in the 3%@55 formula. As soon as administratively possible, the City intends to modify the Local Police Safety formula for new hires to 3%@55 formula. New employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute. 2. Employee PERS Share. The City currently payspreviously paid 6% of the employee’s CalPERS share for employees under the 2.7%@55, 5% for employees under the 2%@60 formula, and the full employee share for those with public safety formulas. a) Beginning with the pay period including October 6, 2012, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. b) Beginning with the pay period including October 6, 2012, employees subject to the 2%@60 retirement formula shall pay the full seven percent (7%) employee contribution. c) Beginning with the pay period including October 6, 2012, Public Safety employees will pay the full nine percent (9%) PERS employee contribution. c)d) Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 3. Final Compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit, except as may otherwise be required by PEPRA. Formatted: List Paragraph, Left, No bullets ornumbering 17 4. Employee PERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. 4.5.Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. N. COMMUTE INCENTIVES and PARKING 1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The City will provide a Civic Center Garage parking permit. Employees hired after June 30, 1994 may initially receive a parking permit for another downtown lot, subject to the availability of space at the Civic Center Garage. 2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one of the following commute incentives for those using an eligible commute alternative on 60% or more of their scheduled work days per month: a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the current IRS limit, as may be amended from time to time, (currently $125/month) are available through the Commuter Check Direct (CCD) website for employees using Bay Area public transportation or riding in a registered vanpool at least 60% of their scheduled work days. Administration of the Commuter Check benefit shall be subject to the rules and regulations of the third- party administrator. b) Bicycle. The City will provide employees with a tax-free incentive of $20 per month to eligible employees who ride a bicycle to work. c) Carpool. The City will provide with a taxable incentive of $30 per month to each eligible employee in a carpool with two or more licensed drivers. d) Walk. The City will provide employees with a taxable incentive of $20 per month to eligible employees who walk to work. O. AT-WILL STATUS Certain Management and Professional Positions are designated as having “at-will” employment status. “At-will” positions are intended to be of a limited duration and employees hired to fill these positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. 18 1. At-will Management & Professional positions. Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were hired as at-will employees whose terms of employment are specified by an employment contract that includes a severance package. Effective on the date of adoption of this plan, new employees hired or promoted to department head, assistant department director, and all other positions listed on Attachment B shall be at-will employees. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and management leave as are generally provided to management employees and described in this compensation plan, as amended from time to time. At-will employees who are terminated or asked to resign shall, upon execution of a release of all claims against the City, be eligible for a severance payment equivalent to four (4) weeks of salary and benefits, increasing after completion of the first full year of service by one (1) week for every completed year of service, up to a maximum of 12 weeks. For example, an at-will employee who has completed six (6) years of service would be eligible to receive ten (10) weeks of severance (4 weeks plus 1 week for each year of service). No severance shall be paid if the employee is terminated for serious misconduct involving abuse of his or her office or position, including but not limited to waste, fraud, violation of the law under color of authority, misappropriation of public resources, violence, harassment or discrimination. If the employee is later convicted of a crime involving such abuse of his or her position the employee shall fully reimburse the City as set forth in Government Code section 53243.3. 2. Provisional employees. The City has created a program for Provisional employment when funding is available. The program’s purpose is to create limited duration senior management level work for the City Manager’s Office or as designated by the City Manager. A Provisional Employee will be an “at will” employee whose term of employment shall be no more than two (2) years. A Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional Employee will receive limited benefits as specified in an Employment Agreement. Sections I and II of this Compensation Plan shall not apply to Provisional Employees, except as specified by the City Manager. 3. Management fellows. The City has created a program for Management Fellows when funding is available. The program’s purpose is to create limited duration entry level positions for graduate students. A management fellow will be an “at will” employee whose term of employment shall be no more than one (1) year. A Management Fellow shall be PERS exempt, but may receive limited vacation, limited sick leave, limited health care benefits and other limited benefits, as determined by the City Manager. Sections I and II of this Plan shall not apply to Management Fellows, except as specified by the City Manager. P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR 19 The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional expenses of these offices. Q. REIMBURSEMENT FOR RELOCATION EXPENSE Policy Statement The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new management and professional employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits” or portions thereof, may be extended for exceptional circumstances and only the approval of the City Manager or designee, or for Council-appointed officers, the City Council. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy. R. MEAL ALLOWANCE Management and professional employees assigned to attend night meetings are eligible to receive reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually taken and submitted for reimbursement. S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit System Rules and Regulations, any Management and Professional employee who is supervised by a Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance pursuant to Step One (informal discussion), summarize the grievance regarding the Council Appointed Officer in writing and submit it to the Director of Human Resources for review and resolution using the methods he/she considers appropriate. T. MERIT RULES The City will include members of the Management/Professional Compensation Committee in discussions regarding revision of the Merit Rules and Regulations. 20 Attachment B At-Will Positions Management and Professional Unit The intent of this provision under the Management/Professional Compensation Plan is to designate classifications at the department head, assistant director, deputy director, and division manager levels as at-will. The applicable Council Appointed Officer may designate newly created positions at those levels not included on this list as at-will. Existing classifications that shall be at-will include but are not limited to: Department Heads- All departments Assistant Directors- All departments Deputy Directors- All departments Division Managers Administrative Services Director, Administrative Services/Chief Financial Officer Director, Office of Management & Budget Assistant Director, Administrative Services Chief Budget Officer Manager, Accounting Manager, Purchasing & Contract Administration Manager, Real Property City Attorney Senior Assistant City Attorney Assistant City Attorney Sr. Deputy City Attorney Deputy City Attorney City Auditor Deputy City Auditor Sr. Performance Auditor City Clerk Assistant City Clerk Deputy City Clerk City Manager Assistant City Manager/Chief Operating Officer Deputy City Manager Assistant to City Manager Chief Communications Officer Communications Manager Manager, Economic Development 21 Community Services Director, Community Services Assistant Director, Community Services Manager, Recreation & Golf Manager, Open Space & Parks Human Resources Director of Human Resources/Chief People Officer Assistant Director, Human Resources Human Resources Manager IT Director, IT/Chief Information Officer Information Technology Governance Manager Information Technology Manager Library Director, Libraries Assistant Director, Library Services Division Head, Collection & Technical Services Manager, Library Services Planning & Community Environment Director, Planning & Community Environment Assistant Director, Planning & Community Environment Division Manager, Advance Planning Division Manager, Chief Building Official Division Manager, Chief Planning Official Division Manager, Chief Transportation Official Division Manager, Development Services Director Public Safety Chief of Police/Director of Public Safety Fire Chief /Assistant Public Safety Director Assistant Police Chief Emergency Services Director Deputy Director – Technical Services Division (police department) Deputy Fire Chief Public Works Director, Public Works/City Engineer Assistant Director, Public Works – Environmental Services Assistant Director, Public Works – Public Services Assistant Director, Public Works – Engineering Airport Manager 22 Water Quality Control Plant Manager Utilities Director, Utilities Assistant Director Utilities Engineering* Assistant Director Utilities Operations* Assistant Director Utilities Customer Support Services* Assistant Director Utilities/Resources Management* Communications Manager* Engineering Manager – Electric* Engineering Manager –WGW* Manager Customer Service & Meter Reading* Manager Electric Operations* Manager Utilities Mkt Services* Manager Utilities Operations WGW* Utilities Compliance Manager* *Management positions up to and including Assistant Director in Utilities are represented by UMPAPA and currently under negotiations Attachment C Information Collected for Compensation Study Koff collected the total compensation information including active and retiree health and pension benefits for each of the benchmarked classifications. The City uses Total Compensation as the comparison factor for measuring competitiveness and setting the salary structure. 1. Monthly Base Salary. The top of the salary range and the mid‐point. 2. Retirement. The amount of the employee’s State retirement (PERS) contribution, the amount of Social Security contribution, and any alternative retirement plan where the employee’s contribution is made by the agency on behalf of the employee (Employer Paid Member Contribution). 3. Retiree Health. In order to be able to compare to other agencies, the normal cost, which is the cost for active employees for the current year, was used 4. Active Health and Insurances. This is the maximum amount paid by the agency for employees and dependents for a cafeteria or flexible benefit plan and/or health, dental, vision, life, long‐term disability, and employee assistance insurance. 5. Administrative and Personal Leave. The number of days available to management to reward for extraordinary effort in lieu of overtime. Personal leave may be available to other groups of employees to augment vacation or other time off. 6. Automobile. This category includes either the provision of an auto allowance or the provision of an auto for personal use. If a car is provided to any classification for commuting and other personal use, the average monthly rate is estimated at $450. For Palo Alto this benefit was primarily limited to executive staff. 7. Deferred Compensation. Deferred compensation provided to all members of a classification with or without the requirement for a matching or minimum contribution. Palo Alto does not match contributions by employees. 8. Other. All other benefits, including sick leave, tuition reimbursement, and mileage, many of which are usage‐based and cannot be quantified individual employee basis. In addition to the above list of benefits, information was gathered on cost‐cutting strategies implemented by agencies to reduce employment budgets, and on performance incentive programs or other performance‐based compensation programs for management classifications. Attachment D CITY OF PALO ALTO COMPENSATION PLAN Management and Professional Personnel And Council Appointees Compensation plan effective July 1, 2012 through June 30, 2014, except where specifically noted. 1 COMPENSATION PLAN FOR THE CITY OF PALO ALTO Management and Professional Personnel As used in this Plan, the term “Management and Professional” refers to all employees, including Confidential employees, previously classified as “Management and Confidential” by the City. This group will hereafter be identified as “Management and Professional” personnel. SECTION I. COMPENSATION This section applies to all management and professional employees and does not include Council Members or Council-appointed officers. Each Council-appointed officer shall be the responsible decision-maker under this Plan for those employees in departments under his/her control. A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY The City's policy for management and professional compensation is to establish and maintain a general structure based on marketplace norms and internal job alignment with broad compensation grades and ranges. Structures and ranges will be reviewed and updated as necessary based on marketplace survey data, internal relationships, and City financial conditions. Individual compensation adjustments will be considered by the Council-appointed officer based on (1) performance factors including achievement of predetermined objectives; (2) pay structure adjustments; and (3) City financial conditions. B. BASIC PLAN ELEMENTS 1. Structure. The compensation plan includes separate multi-grade structures for both management and professional employees. Each grade will have a salary range with a mid-point which is 20% above the minimum, and 20% below the maximum of the range.. All management and professional positions will be assigned an appropriate pay grade based on salary survey data and internal relationships. Actual salary within the range is determined by experience and performance. Competitive marketplace studies will be conducted as needed by surveying a maximum of 14 organizations similar to Palo Alto in number of employees, funding mechanisms, population and services provided. These studies will focus on total compensation for management positions such as first line supervisors, administrative, confidential, professional and top management. Periodically, studies will include position-by-position comparisons using market research and internal equity data. The results of these studies may indicate that the entire pay grade structure be adjusted, that individual positions be reassigned to different pay grades, or that no change takes place. Such adjustments will only affect the salary administration framework. No individual salaries will be automatically changed because of structural adjustments. A department director may request that HR reevaluate a job or jobs in his or her department based on significant and permanent changes in job content. In doing so the director will supply 2 needed information and will provide a position description questionnaire as requested. The Chief People Officer will respond to such requests within his or her discretion. 2. Compensation Adjustment Authorization. In consultation with feedback received from the Management and Professional Compensation Committee, the City Manager may propose as part of the budget process for Council approval of a compensation adjustment based on (1) competitive market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a recommendation received from the Chief People Officer. For fiscal year 2013 the compensation adjustment to mid-point shall be three percent (3%) effective the pay period including October 6, 2012 In years when there is an adjustment to mid-point, this adjustment will be available for those management/professional employees who have received an overall rating of "meets" or "exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year. Nothing herein shall preclude an employee's manager from awarding a mid-point adjustment increase to an employee on a performance plan at a later date should employee's performance improve. a) Base Compensation. Compensation for management and professional employees includes bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi-weekly base salary must fall within pay grade limits of no less than 20% below the mid-point and no more than 20% above the mid-point. Base salary increases are earned in accordance with administrative guidelines based upon growth within the position and performance, which must meet or exceed position standards, the salary structure and the City’s ability to pay. b) Performance Planning and Appraisal. Performance appraisals will be conducted at the end of each fiscal year during the months of July through September 30 each year prior to determining individual employee fixed compensation. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives shall be monitored periodically. The performance appraisals should be implemented in a manner that will achieve the following objectives: Define the employee’s job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee’s role and responsibilities; Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; Facilitate two-way communication and understanding between the employee and his or her supervisor; Counsel and encourage employees to work toward a learning development plan and realize their full potential; Establish future work plan objectives. 3 Work plans should include job related projects or special goals related to regular job duties when applicable. At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department heads and to the Chief People Officer or appropriate Council appointed officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. This process should be completed by September 30. C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION 1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non-Council-appointed management and professional employees in an amount not to exceed the aggregate of approved management and professional positions in the Table of Organization for the applicable fiscal year. 2. Individual management and professional compensation authorized by a Council-appointed officer under the Management and Professional Compensation Plan may not be less than 20% below nor more than 20% above the mid-point for the individual position grades authorized in Salary Schedule attached. 3. The Council-appointed officers are authorized to establish such administrative rules as are necessary to implement the Management and Professional Salary Plan subject to the limitations of the approved compensation adjustment authorization and the approved grade and mid-point structure. 4. Notwithstanding any other provision of this Compensation Plan, in the event a downward adjustment of a position grade assignment indicates a reduction in the established salary of an individual employee, the Council-appointed officer may, if circumstances warrant, continue the salary for such employee in an amount in excess of the revised grade limit for a reasonable period of time. Such interim salary rates shall be defined as "Y-rates." SECTION II. SPECIAL COMPENSATION This section applies to all eligible regular management and professional positions including Council Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be in conformance with the Merit Rules and Regulations and Administrative Directives issued by the City Manager for the purposes of clarification and interpretation. A. OVERTIME Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. B. IN LIEU HOLIDAY PAY 4 Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non-workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. C. WORKING OUT OF CLASSIFICATION PAY Where management and professional employees, on a temporary basis, are assigned to perform all significant duties of a higher classification, the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working out of class pay is normally not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties to be performed and an end date. D. STAND-BY PAY Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on a case by case basis, in extreme circumstances involving unavailability of non-management staff. Compensation is as follows: Monday through Friday $40 per day Saturday, Sunday, Holidays $58 per day E. CALL OUT PAY Effective pay period beginning February 26, 2011, Exempt management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City premises, (2) is called back to the work location outside of regularly scheduled working hours, and (3) the Call Back is for an emergency arising out of situations involving real or potential loss of service, property or personal danger. Employees called back will be expected to respond directly to the location of the problem. Compensation is per Call Out as reported on timecard and will be paid as follows: Monday through Friday: $140 per day Saturday and Sunday: $200 per day F. NIGHT SHIFT PREMIUM Night shift differential shall be paid at the rate of five percent (5%) to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE PERSONNEL 5 Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in conformance with department policy. H. GROUP INSURANCE 1. Effective Date of Coverage for New Employees For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. 2. Active Employee Health Plan a) Based on an employee’s family status, the City shall pay up to the monthly medical premium for the second most expensive plan among the existing array of plans available during the term of this compensation plan on behalf of eligible employees (including Council Appointed Officers and Council Members) and dependents, except as provided in section b, below. Eligible dependents, under current law, include spouses, children under the age of 26 and never married (natural, adopted, or stepchildren), economically dependent children, and domestic partners registered with the Secretary of State. If PERS changes the plans it offers, the City will continue to provide an equivalent benefit at an equivalent cost. b) Effective in the pay period including October 6, 2012, participating employees will contribute 10% of the premium cost for the employee-selected plan, and the City shall contribute 90%, with a maximum City contribution of 90% of the second highest plan. . c) City medical premium contributions will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. d) Coverage for Domestic Partners: 1) Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State. 2) Domestic Partnership Not Registered with the California Secretary of State: Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department, will be eligible for reimbursement of the actual monthly premium cost of an individual health plan, not to exceed the maximum monthly City employer contribution for one-party coverage under the CalPERS Health Benefits Program (or PORAC if a safety department employee) for an employee covered under this agreement. Evidence of premium payment will be required with request for reimbursement. e) PERS Choice Reimbursement Plan 6 Will be eliminated effective January 1, 2013. Management and Professional personnel enrolled in the PERS Choice medical plan may submit a request for payment, as specified below, for non-covered medical expenses, incurred during the period of January 1, through December 31, of the plan year, that exceed $2,500. The maximum annual reimbursement amount provided under this program is: $700 for employees enrolled in the Employee-Only category; $900 for employees enrolled in the Employee and One Dependent category, and $1,100 for employees enrolled in the Family category. Any amounts reimbursed to an individual under this program would be included in the employee’s gross income and is not PERSable. This program shall only reimburse employees for medical expenses that are not reimbursed through any other means and meet the definition in Section 213(d) of the Internal Revenue Code. (Examples of eligible expenses include medical plan deductibles and co-payments, prescription drugs, dental care, hearing care, and vision care.) However, in order to have any expenses reimbursed under this program, the employee must have allocated 100% ($2,500.00) of their 2010 calendar Excess Benefit funds into the Medical FSA option during the election that occurred in December 2009. In addition, all such reimbursements from the Excess Benefit Program must have been solely for medical expenses, as defined by Section 213(d) of the Internal Revenue Code. If the employee has designated his/her Excess Medical funds for any other qualifying expenses (i.e. dependent care, Professional Development, Deferred Compensation contributions), the employee would not be eligible for reimbursement under this program. Employees may submit a final claim for the 2012 plan year’s expenses during January. Any amounts remaining from the PERS Choice reimbursement plan after the claims for the plan year had been processed shall be forfeited. 3. Alternative Medical Benefit Program If a regular employee and/or the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees electing alternative coverage and no City coverage will receive cash payments in the amount of 90% of the average monthly premium for one party, which is $284.00. 4. Retiree Health Plan a) Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public 7 Employees” Medical and Hospital Care Act. The City’s monthly employer contribution for each employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the amount necessary to pay for the cost of his or her enrollment in a health benefits plan up to the monthly premium for the second most expensive plan offered to management and professional personnel during the contract term (among the existing array of plans.) The City’s contribution for an employee hired before January 1, 2004 who retires on or after March 30, 2011 shall be the same contribution amount it makes from time to time for active City employees. b) Post – 1/1/04 Hires For those Management and professional employees hired after January 1, 2004, the PERS law vesting schedule set forth in Government Code section 22893 will apply. Under that law, an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five (5) of those years were performed at the City of Palo Alto. After ten (10) years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at 20 years’ service credit, the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section 22893 based on a weighted average of available health plan premiums. 5. Dental Plan a) The City shall pay covered plan charges on behalf of all eligible employees and dependents. (Domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department are considered dependents under the plan.) Benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) The City’s Dental Plan provides the following: Maximum Benefits per Calendar Year- $2,000 per person Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) Major Dental Services 50% UCR* Orthodontics 50% UCR* Basic Benefits (All other covered services) First Calendar Year of Eligibility 70% UCR* Subsequent Calendar Years 70%-100% *Usual, Customary, and Reasonable Composite (tooth covered) fillings for posterior teeth For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 8 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not utilize the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year. If a dental plan member ever loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan would include: Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan. 6. Basic Life Insurance The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no-cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,000). 7. Supplemental Life And AD&D Insurance An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one- or two-times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amount of AD&D coverage available is up to $325,000. 8. Long Term Disability Insurance a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium for the first $6,000 of base monthly salary. For employees whose base monthly salary exceeds $6,000, the employee shall pay the cost of the required premium based upon their monthly salary between $6,000 and $15,000. b) For employees whose base monthly salary exceeds $6,000 and who have no eligible dependents covered under the City’s medical, dental or vision plans, the City will pay up to $17.50 per month towards the employee’s cost for LTD coverage. 9. Vision Care a) The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan provides an exam every 12 months; lenses every 24 months; frames every 24 months, all subject to a $20 co- 9 payment as defined in the Vision Services Benefits Plan A schedule. Benefits for regular part-time employees will be prorated as follows: Employees hired after January 1, 2004, who will work less than full time, will receive prorated premium costs for vision benefits in accordance with his/her percentage of a full-time work schedule. Vision benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) Effective July 1, 1996, dependents include eligible domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department. I. EMPLOYEE ASSISTANCE PLAN The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line 24 hours a day, seven days a week. Guidance is also available online. J. SAFETY DIFFERENTIALS 1. Police Department - Personnel Development Program Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn police personnel: P.O.S.T. Intermediate Certificate: five percent (5%) above base salary P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary 2. Fire Department - EMT Differential Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn Fire personnel: EMT Differential: three percent (3%) above base salary K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM Management and professional employees are eligible for Sections 1, 2, 3, and 4 of the Management Benefit Program. City Council Members are eligible for Section 3 only. 10 1. Professional Development - Reimbursement The purpose of this program is to provide employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self- improvement activities may be granted each management and professional employee up to a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: a) Civic and professional association memberships b) Conference participation and travel expenses, which must occur within the compensation plan period. c) Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City’s mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City’s travel expense report from the Policy & Procedures Manual Section 1-02 ASD. d) Professional and trade journal subscriptions not to exceed 12 months. e) Approval will be at discretion of department head and signature is required on reimbursement form. Amounts under this professional development program will be pro-rated in the first year of employment or promotion into a position covered by this Compensation Plan 2. Physical Examinations All management and professional employees are eligible to receive an annual physical examination as follows: a) Use the periodic health exam benefit as provided under the PERS Health Plan option you have selected. Each of the PERS Health Plans provides for a periodic physical examination. The examination must be performed by your primary care physician— unless he/she refers you to another physician. b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The guidelines are a suggested minimum based on research studies concerning preventative care. The judgment of your physician is the final determinant for your care. 11 c) Any additional necessary asymptomatic tests that are required by your physician that are not covered by your health plan, will be reimbursed by the City. Any symptomatic tests will be covered under your PERS Health Plan. The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet site. This benefit will not be pro-rated. 3. Excess Benefit This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code, with exception of Gym or Health Club Membership. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options: a) Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments as well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold medicines. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. b) Dependent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of annual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. 1) The annual amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 2) The expenses must be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3) The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 4) If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals (other than a resident of the facility). 12 5) Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP will be reduced by any amount reimbursed under the Excess Benefit Plan. c) Non-taxable Professional Development Spending Account. Provides reimbursement for Non-Taxable professional development expenses (e.g.,job-related training and education, seminars, training manuals, etc.) to the extent they are not paid or reimbursed under any other plan of the City. d) Gym or Health Club memberships. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement of this expense is taxable to the employee. e) Deferred Compensation. Provides a one-time contribution to the employee’s City- sponsored 457 Deferred Compensation plan with either ICMA-RC or the Hartford. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a “use –it-or-lose-it” basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Specified amounts under this benefit will be applied on a pro-rata basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. L. LEAVES 1. Sick Leave a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a 40-hour duty schedule. Those assigned work schedules which are greater or lesser than 40 hours will accrue sick leave at the ratio of their work schedule to 40 hours. b) Employees may use up to 20 hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. 13 d) Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have 15 or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent (2½%) of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. e) Up to nine (9) days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f) Management and Professional employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. g) In accordance with the City Merit Rules and Regulations, a new employee may, if necessary, use up to 48 hours or shift equivalent of sick leave at any time during the first six (6) months of employment. 2. Management Annual Leave a) Exempt Employees Regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half (½) shift off for each 8 hours charged. In 2012, the City will be transitioning this benefit from a fiscal to calendar year basis for administrative purposes. Therefore, on July 1, 2012, employees will be credited with 40 hours of annual leave for the period of July 1 to December 31, 2012. Beginning in 2013 and each calendar year thereafter, employees will be credited with 80 hours of management annual leave. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the year will be paid in cash unless a different option as indicated above is elected by the employee. b) Non-Exempt Employees 14 Based on an audit recommendation to eliminate payment of overtime as well as management leave for non-exempt employees in the management group, the City is transitioning away from providing management leave to non-exempt employees. As part of the transition, and in order to minimize impacts to current employees, the City will phase-out elimination of the 80 hours of management leave for all current non-exempt Management and Professional employees (those eligible to earn overtime). Continuing through Fiscal year 2013-2014, there will be no change to management leave benefits for current employees; these employees will maintain their 80 hours of management leave and also receive pay for any overtime hours worked. Beginning on July 1, 2014 all employees in non-exempt positions will receive overtime pay for hours actually worked, but will no longer receive management leave. Employees hired into non-exempt management positions on or after February 26, 2011 will receive overtime only and will not be eligible for management leave. 3. Vacation Vacation will be accrued when an employee is in pay status and will be credited on a bi- weekly basis. Total vacation accrual at any one time may not exceed three (3) times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a) Less than nine (9) years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year; provided that: i. The City Manager is authorized to adjust department head annual vacation accrual to provide for a maximum of 160 hours for those hired between July 1, 1996 and June 30, 2001; and ii. The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; 160 hours vacation per year. c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; 180 hours vacation leave per year. d) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 15 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section. Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation year, employees will make their election for vacation hours to cash out no later than November 1, 2012. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designates on the election form. Employees who do not elect a cash-out amount by November 1 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre-designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash-out the elected amount in a paycheck issued on or after the payroll date including November 1. 4. Bereavement Leave of absence with pay of three (3) days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family, which is defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control. M. RETIREMENT PENSION 1. Effective pay period inclusive of 1/6/07, the City’s Public Employees’ Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non-safety members (from 2% @55). For miscellaneous employees hired on or after July 17, 2010, the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60). 16 For Safety members, the City currently offers the CalPERS "3% at 50" full formula (Section 21362.2) benefit. Local Fire Safety members newly hired after 6/08/12 will be placed in the 3%@55 formula. As soon as administratively possible, the City intends to modify the Local Police Safety formula for new hires to 3%@55 formula. New employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute. 2. Employee PERS Share. The City previously paid 6% of the employee’s CalPERS share for employees under the 2.7%@55, 5% for employees under the 2%@60 formula, and the full employee share for those with public safety formulas. a) Beginning with the pay period including October 6, 2012, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. b) Beginning with the pay period including October 6, 2012, employees subject to the 2%@60 retirement formula shall pay the full seven percent (7%) employee contribution. c) Beginning with the pay period including October 6, 2012, Public Safety employees will pay the full nine percent (9%) PERS employee contribution. d) Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 3. Final Compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit, except as may otherwise be required by PEPRA. 4. Employee PERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. 5. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. N. COMMUTE INCENTIVES and PARKING 1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The City will provide a Civic Center Garage parking permit. Employees hired after June 30, 17 1994 may initially receive a parking permit for another downtown lot, subject to the availability of space at the Civic Center Garage. 2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one of the following commute incentives for those using an eligible commute alternative on 60% or more of their scheduled work days per month: a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the current IRS limit, as may be amended from time to time, (currently $125/month) are available through the Commuter Check Direct (CCD) website for employees using Bay Area public transportation or riding in a registered vanpool at least 60% of their scheduled work days. Administration of the Commuter Check benefit shall be subject to the rules and regulations of the third- party administrator. b) Bicycle. The City will provide employees with a tax-free incentive of $20 per month to eligible employees who ride a bicycle to work. c) Carpool. The City will provide with a taxable incentive of $30 per month to each eligible employee in a carpool with two or more licensed drivers. d) Walk. The City will provide employees with a taxable incentive of $20 per month to eligible employees who walk to work. O. AT-WILL STATUS Certain Management and Professional Positions are designated as having “at-will” employment status. “At-will” positions are intended to be of a limited duration and employees hired to fill these positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. 1. At-will Management & Professional positions. Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were hired as at-will employees whose terms of employment are specified by an employment contract that includes a severance package. Effective on the date of adoption of this plan, new employees hired or promoted to department head, assistant department director, and all other positions listed on Attachment B shall be at-will employees. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and 18 management leave as are generally provided to management employees and described in this compensation plan, as amended from time to time. At-will employees who are terminated or asked to resign shall, upon execution of a release of all claims against the City, be eligible for a severance payment equivalent to four (4) weeks of salary and benefits, increasing after completion of the first full year of service by one (1) week for every completed year of service, up to a maximum of 12 weeks. For example, an at-will employee who has completed six (6) years of service would be eligible to receive ten (10) weeks of severance (4 weeks plus 1 week for each year of service). No severance shall be paid if the employee is terminated for serious misconduct involving abuse of his or her office or position, including but not limited to waste, fraud, violation of the law under color of authority, misappropriation of public resources, violence, harassment or discrimination. If the employee is later convicted of a crime involving such abuse of his or her position the employee shall fully reimburse the City as set forth in Government Code section 53243.3. 2. Provisional employees. The City has created a program for Provisional employment when funding is available. The program’s purpose is to create limited duration senior management level work for the City Manager’s Office or as designated by the City Manager. A Provisional Employee will be an “at will” employee whose term of employment shall be no more than two (2) years. A Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional Employee will receive limited benefits as specified in an Employment Agreement. Sections I and II of this Compensation Plan shall not apply to Provisional Employees, except as specified by the City Manager. 3. Management fellows. The City has created a program for Management Fellows when funding is available. The program’s purpose is to create limited duration entry level positions for graduate students. A management fellow will be an “at will” employee whose term of employment shall be no more than one (1) year. A Management Fellow shall be PERS exempt, but may receive limited vacation, limited sick leave, limited health care benefits and other limited benefits, as determined by the City Manager. Sections I and II of this Plan shall not apply to Management Fellows, except as specified by the City Manager. P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional expenses of these offices. Q. REIMBURSEMENT FOR RELOCATION EXPENSE Policy Statement The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new management and professional employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits” or portions thereof, 19 may be extended for exceptional circumstances and only the approval of the City Manager or designee, or for Council-appointed officers, the City Council. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy. R. MEAL ALLOWANCE Management and professional employees assigned to attend night meetings are eligible to receive reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually taken and submitted for reimbursement. S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit System Rules and Regulations, any Management and Professional employee who is supervised by a Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance pursuant to Step One (informal discussion), summarize the grievance regarding the Council Appointed Officer in writing and submit it to the Director of Human Resources for review and resolution using the methods he/she considers appropriate. T. MERIT RULES The City will include members of the Management/Professional Compensation Committee in discussions regarding revision of the Merit Rules and Regulations. 20 Attachment B At-Will Positions Management and Professional Unit The intent of this provision under the Management/Professional Compensation Plan is to designate classifications at the department head, assistant director, deputy director, and division manager levels as at-will. The applicable Council Appointed Officer may designate newly created positions at those levels not included on this list as at-will. Existing classifications that shall be at-will include but are not limited to: Department Heads- All departments Assistant Directors- All departments Deputy Directors- All departments Division Managers Administrative Services Director, Administrative Services/Chief Financial Officer Director, Office of Management & Budget Assistant Director, Administrative Services Chief Budget Officer Manager, Accounting Manager, Purchasing & Contract Administration Manager, Real Property City Attorney Senior Assistant City Attorney Assistant City Attorney Sr. Deputy City Attorney Deputy City Attorney City Auditor Deputy City Auditor Sr. Performance Auditor City Clerk Assistant City Clerk Deputy City Clerk City Manager Assistant City Manager/Chief Operating Officer Deputy City Manager Assistant to City Manager Chief Communications Officer Communications Manager Manager, Economic Development 21 Community Services Director, Community Services Assistant Director, Community Services Manager, Recreation & Golf Manager, Open Space & Parks Human Resources Director of Human Resources/Chief People Officer Assistant Director, Human Resources Human Resources Manager IT Director, IT/Chief Information Officer Information Technology Governance Manager Information Technology Manager Library Director, Libraries Assistant Director, Library Services Division Head, Collection & Technical Services Manager, Library Services Planning & Community Environment Director, Planning & Community Environment Assistant Director, Planning & Community Environment Division Manager, Advance Planning Division Manager, Chief Building Official Division Manager, Chief Planning Official Division Manager, Chief Transportation Official Division Manager, Development Services Director Public Safety Chief of Police/Director of Public Safety Fire Chief /Assistant Public Safety Director Assistant Police Chief Emergency Services Director Deputy Director – Technical Services Division (police department) Deputy Fire Chief Public Works Director, Public Works/City Engineer Assistant Director, Public Works – Environmental Services Assistant Director, Public Works – Public Services Assistant Director, Public Works – Engineering Airport Manager 22 Water Quality Control Plant Manager Utilities Director, Utilities Assistant Director Utilities Engineering* Assistant Director Utilities Operations* Assistant Director Utilities Customer Support Services* Assistant Director Utilities/Resources Management* Communications Manager* Engineering Manager – Electric* Engineering Manager –WGW* Manager Customer Service & Meter Reading* Manager Electric Operations* Manager Utilities Mkt Services* Manager Utilities Operations WGW* Utilities Compliance Manager* *Management positions up to and including Assistant Director in Utilities are represented by UMPAPA and currently under negotiations Mid Point 190 Accountant $6,647.77 $79,768.00 $3,068.00 $38.35 NON-EXEMPT 76 Administrative Assistant $5,732.35 $68,785.60 $2,645.60 $33.07 EXEMPT 115 Assistant Building Official $9,738.99 $116,875.20 $4,495.20 $56.19 EXEMPT 132 Assistant Chief of Police $15,247.85 $182,977.60 $7,037.60 $87.97 EXEMPT 108 Assistant City Attorney $12,923.17 $155,084.80 $5,964.80 $74.56 EXEMPT 109 Assistant City Clerk $7,521.34 $90,251.20 $3,471.20 $43.39 EXEMPT 107 Assistant City Manager/Chief Operating Officer $15,838.46 $190,070.40 $7,310.40 $91.38 EXEMPT 73 Assistant Director Administrative Services $13,030.91 $156,374.40 $6,014.40 $75.18 EXEMPT 126 Assistant Director Community Services $12,475.36 $149,697.60 $5,757.60 $71.97 EXEMPT 1007 Assistant Director Human Resources $12,057.58 $144,684.80 $5,564.80 $69.56 EXEMPT 2001 Assistant Director Library Services $11,932.46 $143,187.20 $5,507.20 $68.84 EXEMPT 10 Assistant Director Planning & Community Environment $12,779.00 $153,337.60 $5,897.60 $73.72 EXEMPT 143 Assistant Director Public Works $12,631.71 $151,590.40 $5,830.40 $72.88 EXEMPT 111 Assistant Fire Chief $11,931.39 $143,187.20 $5,507.20 $68.84 EXEMPT 168 Assistant Manager Fleet $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 102 Assistant Manager Water Quality Control Plant $10,211.65 $122,532.80 $4,712.80 $58.91 EXEMPT 30 Assistant to the City Manager $9,868.65 $118,414.40 $4,554.40 $56.93 EXEMPT 118 Chief Building Offical $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 2008 Chief Communications Officer $12,711.76 $152,547.20 $5,867.20 $73.34 EXEMPT 112 Chief Planning Offical $10,834.28 $130,020.80 $5,000.80 $62.51 EXEMPT TBD Chief Sustainability Officer $9,393.12 $112,715.20 $4,335.20 $54.19 EXEMPT 82 Chief Transportation Offical $10,834.28 $130,020.80 $5,000.80 $62.51 EXEMPT 96 Claims Investigator $6,984.31 $83,803.20 $3,223.20 $40.29 NON-EXEMPT 24 Communication Specialist $7,562.67 $90,750.40 $3,490.40 $43.63 EXEMPT 89 Contracts Administrator $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 186 Coordinator Library Circulation $6,659.29 $79,913.60 $3,073.60 $38.42 NON-EXEMPT 191 Deputy Chief/Fire Marshall $12,875.82 $154,523.20 $5,943.20 $74.29 EXEMPT 9 Deputy City Attorney $9,164.02 $109,969.60 $4,229.60 $52.87 EXEMPT 99 Deputy City Auditor $10,724.77 $128,689.60 $4,949.60 $61.87 EXEMPT 71 Deputy City Clerk $6,022.55 $72,280.00 $2,780.00 $34.75 EXEMPT 55 Deputy City Manager $13,198.72 $158,392.00 $6,092.00 $76.15 EXEMPT 195 Deputy Director Technical Services Div $12,838.58 $154,065.60 $5,925.60 $74.07 EXEMPT 20 Deputy Fire Chief $13,335.16 $160,014.40 $6,154.40 $76.93 EXEMPT Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 1 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 81 Director Administrative Services/Chief Financial Officer $15,181.62 $182,187.20 $7,007.20 $87.59 EXEMPT 72 Director Community Services $15,297.99 $183,580.80 $7,060.80 $88.26 EXEMPT 1012 Director Development Services $12,500.00 $150,009.60 $5,769.60 $72.12 EXEMPT 133 Director Human Resource/Chief People Officer $14,469.09 $173,638.40 $6,678.40 $83.48 EXEMPT 128 Director Information Technology/Chief Information Officer $15,810.50 $189,716.80 $7,296.80 $91.21 EXEMPT 131 Director Libraries $14,318.95 $171,828.80 $6,608.80 $82.61 EXEMPT 2005 Director Office of Emergency Services $11,232.95 $134,804.80 $5,184.80 $64.81 EXEMPT 49 Director Office of Management and Budget $13,030.91 $156,374.40 $6,014.40 $75.18 EXEMPT 134 Director Planning & Community Environment $15,334.80 $184,017.60 $7,077.60 $88.47 EXEMPT 135 Director Public Works/City Engineer $15,530.43 $186,368.00 $7,168.00 $89.60 EXEMPT 121 Director Utilities $19,906.07 $238,867.20 $9,187.20 $114.84 EXEMPT 2002 Division Head Library Services $9,370.93 $112,444.80 $4,324.80 $54.06 EXEMPT 123 Division Manager Cubberly Center & Human Services $10,072.37 $120,868.80 $4,648.80 $58.11 EXEMPT 172 Division Manager Open Space & Golf $10,072.37 $120,868.80 $4,648.80 $58.11 EXEMPT 1005 Executive Assistant to the City Manager $6,485.63 $77,833.60 $2,993.60 $37.42 EXEMPT 139 Fire Chief $15,444.86 $185,328.00 $7,128.00 $89.10 EXEMPT 163 Hearing Officer $9,164.02 $109,969.60 $4,229.60 $52.87 EXEMPT 101 Human Resources Representative $5,875.66 $70,512.00 $2,712.00 $33.90 EXEMPT 90 Landscape Architect Park Planner $8,722.45 $104,665.60 $4,025.60 $50.32 EXEMPT 69 Legal Services Administrator $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 171 Management Analyst $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 79 Manager Accounting $10,250.25 $123,011.20 $4,731.20 $59.14 EXEMPT 2007 Manager Airport $11,235.09 $134,825.60 $5,185.60 $64.82 EXEMPT 38 Manager Communications $8,509.70 $102,107.20 $3,927.20 $49.09 EXEMPT 154 Manager Community Services $7,521.34 $90,251.20 $3,471.20 $43.39 EXEMPT 169 Manager Community Services Sr Program $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 1013 Manager Development Center $8,940.51 $107,286.40 $4,126.40 $51.58 EXEMPT 63 Manager Economic Development $10,834.28 $130,020.80 $5,000.80 $62.51 EXEMPT 44 Manager Employee Benefits $9,258.74 $111,113.60 $4,273.60 $53.42 EXEMPT 45 Manager Employee Relations & Training $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 93 Manager Environmental Control Program $9,393.12 $112,715.20 $4,335.20 $54.19 EXEMPT 127 Manager Fleet $9,493.31 $113,921.60 $4,381.60 $54.77 EXEMPT 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 2 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 32 Manager Information Technology $10,479.00 $125,756.80 $4,836.80 $60.46 EXEMPT 2006 Manager Information Technology Security $9,501.54 $114,025.60 $4,385.60 $54.82 EXEMPT 57 Manager Investments Debts & Projects $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 158 Manager Laboratory Services $8,940.51 $107,286.40 $4,126.40 $51.58 EXEMPT 78 Manager Library Services $7,521.34 $90,251.20 $3,471.20 $43.39 EXEMPT 92 Manager Maintenance Operations $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 51 Manager Planning $9,393.12 $112,715.20 $4,335.20 $54.19 EXEMPT 95 Manager Purchasing & Contract Administration $10,250.25 $123,011.20 $4,731.20 $59.14 EXEMPT 103 Manager Real Property $10,250.25 $123,011.20 $4,731.20 $59.14 EXEMPT TBD Manager Revenue Collections $9,627.95 $115,544.00 $4,444.00 $55.55 EXEMPT 198 Manager Risk & Benefits $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 160 Manager Solid Waste $10,368.25 $124,425.60 $4,785.60 $59.82 EXEMPT 86 Manager Urban Forestry $8,302.15 $99,632.00 $3,832.00 $47.90 EXEMPT 178 Manager Water Quality Control Plant $11,537.84 $138,444.80 $5,324.80 $66.56 EXEMPT 39 Manager Watershed Protection $10,368.00 $124,425.60 $4,785.60 $59.82 EXEMPT 1008 Office of Emergency Services Coordinator $8,509.70 $102,107.20 $3,927.20 $49.09 EXEMPT 100 Performance Auditor $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 148 Police Chief-Adv $17,174.35 $206,086.40 $7,926.40 $99.08 EXEMPT 2003 Principal Management Analyst $10,167.00 $122,012.80 $4,692.80 $58.66 EXEMPT 77 Project Manager $6,485.63 $77,833.60 $2,993.60 $37.42 EXEMPT 2009 Project Manager Trees $7,955.44 $95,472.00 $3,672.00 $45.90 NON-EXEMPT 166 Public Safety Manager I $7,289.69 $87,484.80 $3,364.80 $42.06 EXEMPT TBD Public Safety Manager II $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 74 Safety Officer $7,562.67 $90,750.40 $3,490.40 $43.63 EXEMPT 117 Senior Accountant $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 152 Senior Assistant City Attorney $14,215.49 $170,580.80 $6,560.80 $82.01 EXEMPT 11 Senior Deputy City Attorney $10,115.36 $121,388.80 $4,668.80 $58.36 EXEMPT 187 Senior Engineer $10,368.25 $124,425.60 $4,785.60 $59.82 EXEMPT 106 Senior Executive Assistant $9,258.74 $111,113.60 $4,273.60 $53.42 EXEMPT 157 Senior Human Resources Administrator $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 14 Senior Management Analyst $9,250.00 $111,009.60 $4,269.60 $53.37 EXEMPT 130 Senior Performance Auditor $8,722.45 $104,665.60 $4,025.60 $50.32 EXEMPT 53 Senior Project Manager $10,893.14 $130,728.00 $5,028.00 $62.85 EXEMPT 33 Senior Technologist $9,501.54 $114,025.60 $4,385.60 $54.82 EXEMPT 70 Staff Assistant to the City Manager $7,002.07 $84,032.00 $3,232.00 $40.40 EXEMPT 155 Superintendent Animal Services $8,302.15 $99,632.00 $3,832.00 $47.90 EXEMPT 83 Superintendent Community Services $9,164.02 $109,969.60 $4,229.60 $52.87 EXEMPT 161 Supervisor Facilities Management $7,709.37 $92,518.40 $3,558.40 $44.48 EXEMPT 113 Supervisor Inspection and Surveying $8,302.15 $99,632.00 $3,832.00 $47.90 EXEMPT 174 Supervisor Public Works $6,984.31 $83,803.20 $3,223.20 $40.29 NON-EXEMPT 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 3 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 62 Supervisor Recycling Program $6,659.29 $79,913.60 $3,073.60 $38.42 EXEMPT 181 Supervisor Water Quality Control Operations $8,509.70 $102,107.20 $3,927.20 $49.09 EXEMPT 184 Veterinarian $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 146 Warehouse Supervisor $6,984.31 $83,803.20 $3,223.20 $40.29 EXEMPT Confidential Classifications Class No. /Job Code Title Control Point Approx Annual Approx Biwkly Hourly FLSA Status 905 Human Resource Assistant-Confidential $5,066.56 $60,798.40 $2,338.40 $29.23 NON-EXEMPT 903 Legal Secretary-Confidential $5,193.23 $62,316.80 $2,396.80 $29.96 NON-EXEMPT 67 Secretary to City Attorney $6,173.11 $74,068.80 $2,848.80 $35.61 NON-EXEMPT 1004 Senior Legal Secretary - Confidential $5,732.35 $68,785.60 $2,645.60 $33.07 NON-EXEMPT 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 4 of 4 ATTACHMENT C Benchmarking Benefit Data Collection The following information was collected for each of the benchmarked classifications: 1. Monthly Base Salary: The top of the salary range and/or control point. All figures are presented on a monthly basis. 2. Employee Retirement – This includes several figures, 1) the amount of the employee’s State retirement (PERS) contribution that is contributed by each agency, 2) the amount of the agency’s Social Security contribution, and 3) any alternative retirement plan, either private or public where the employee’s contribution is made by the agency on behalf of the employee. In addition to the amount of the employer paid member contribution of PERS, we collected information on enhanced PERS benefits. With the help of contract experts at CalPERS, we were able to determine an average value that agencies have to pay for each of the implemented contract provisions, including: Formulas (base formulas are 2% at age 55 or 2% at age 60): 2.5% at age 55 (Section 21354.4): this formula provides to local miscellaneous members 2.5% of pay at age 55 for each year of eligible service credited with that employer; average value = 3.8% 2.7% at age 55 (Section 21354.5): this formula provides to local miscellaneous members 2.7% of pay at age 55 for each year of eligible service credited with that employer; average value = 6.75% 3% at age 60 (Section 21354.3): this formula provides to local miscellaneous members 3% of pay at age 60 for each year of eligible service credited with that employer; average value = 9.05%. 3% at age 50 (Section 21362.2): this formula provides to local safety members 3% of pay at age 50 for each year of service credited with that employer; average value = 13.65%. 3% at age 55 (Section 21363.1): this formula provides to local safety members 3% of pay at age 55 for each year of service credited with that employer; average value = 6.85%. Additional Optional Enhanced Benefit Provisions One‐Year Final Compensation (Section 20042): the period determining the average monthly pay rate when calculating retirement benefits; base period is thirty‐six (36) highest paid consecutive months; one‐year final compensation is based on twelve (12) months highest paid consecutive months; average value = 1.2%. Employer Paid Member Contribution (Section 20636(c)(4)): the reporting of the value of the employer paid member contribution to CalPERS as special compensation; average value = employer paid member contribution * employer paid member contribution. Employer Paid Member Contribution Converted to Payrate During Final Compensation Period (Section 20692): Increase in payrate of the members by the amount of the employer paid member contributions; average value = 1.8%. 3. Retiree Health –This is the average cost, per employee, to fund the future benefit of health coverage at retirement. Calculation: Normal Cost / Covered Payroll. 4. Insurance – This is the maximum amount paid by the agency for employees and dependents for a cafeteria or flexible benefit plan and/or health, dental, vision, life, long‐term disability, and employee assistance insurance. 5. Administrative/Personal Leave – Administrative leave is normally the number of days available to management to reward for extraordinary effort (in lieu of overtime). Personal leave may be available to other groups of employees to augment vacation or other time off. 6. Automobile – This category includes either the provision of an auto allowance or the provision of an auto for personal use, if applicable. If a car is provided to any classification for commuting and other personal use, the average monthly rate is estimated at $450. 7. Deferred Compensation – We captured deferred compensation provided to all members of a classification with or without the requirement for an employee to provide a matching or minimum contribution. 8. Other – This category includes any additional benefits available to all in the class. Please note that all of the above benefit elements may be negotiated benefits provided to all members of each comparator class. As such, they represent an on‐going cost for which an agency must budget. Other benefit costs, such as sick leave, tuition reimbursement, and reimbursable mileage are usage‐ based and cannot be quantified on an individual employee basis. Class No. /Job Code Title Grade Code Current Control Point (Approx Annual) New Mid-Point (Approx Annual) Percent Change from Current Control Point to New Mid-Point 163 Hearing Officer 43 29 90,752.06 109,968.46 21.17% 195 Deputy Director Technical Services 28 Division 132,807.33 154,063.26 16.00% 100 Performance Auditor 47 23 82,032.45 94,825.46 15.59% 50 14 Adm Pln & Comm Envrn Senior 40 TBD 97,886.26 111,000.21 13.40% 148 Police Chief‐Adv 15 TBD 183,925.08 206,092.61 12.05% 121 Dir Director Utilities 9 Director 213,297.39 238,873.25 11.99% 108 Asst City Atty Assistant City Attorney 26 Assistant Director 139,513.13 155,078.36 11.16% 2001 Assistant Director, Library Services 29 Assistant Director 129,293.88 143,189.76 10.75% 132 Assistant Police Chief ‐ Adv 19 Assistant Director 166,464.48 182,974.50 9.92% 2003 Principal Financial Management Analyst 35 TBD 111,104.91 122,004.23 9.81% 73 Asst Assistant Director Adm Svcs Administrative Services 25 Assistant Director 143,176.63 156,371.22 9.22% 131 Dir Director Libraries 21 Director 158,323.32 171,827.71 8.53% 134 Dir Plan/Comm Envir Director Planning & Community Environment 18 Director 170,599.27 184,017.94 7.87% 99 Deputy City Auditor 32 Division Manager 119,845.90 128,697.51 7.39% 2002 Division Head, Library Services 37 Division Manager 105,577.51 112,451.33 6.51% 128 Dir I Director Information Technology/Chief Information Officer 16 Director 179,454.84 189,726.36 5.72% 171 Management Analyst 65 TBD 90,066.45 94,825.46 5.28% 152 Sr Asst City Atty Senior Assistant City Attorney 20 Assistant Director 162,243.91 170,586.19 5.14% 102 Asst Mgr WQCP Assistant Manager Water Quality Control Plant 33 Division Manager 116,867.88 122,539.98 4.85% 1012 Director Development Services Director 25 Director 143,178.24 150,000.29 4.76% Attachment D Salary Schedule City of PaloAlto Management and Professional Compensation NOTE: Positive percentage changes reflect increase in current control point salary, while (negative) percentage changes denote decrease in current control point.Page 1 of 5 Class No. /Job Code Title Grade Code Current Control Point (Approx Annual) New Mid-Point (Approx Annual) Percent Change from Current Control Point to New Mid-Point Attachment D Salary Schedule City of PaloAlto Management and Professional Compensation 113 Supv Insp/Surv Pw Supervisor Inspection and Surveying 41 25 95,465.30 99,626.00 4.36% 130 Senior Performance Auditor 39 27 100,392.86 104,669.56 4.26% 93 Mgr Env Manager Environmental Control Prog Program 36 30 108,383.97 112,717.67 4.00% 135 Dir Pw/City Engr Director Public Works/City Engineer 16 Director 179,447.42 186,365.47 3.85% 139 Fire Chief 16 Director 179,447.42 185,338.71 3.28% 79 Mgr Manager Accounting 32 Division Manager 119,845.90 123,003.24 2.63% 95 Mgr Pur & Cntr Admin Manager Purchasing & Contract Administration 32 Division Manager 119,845.90 123,003.24 2.63% 72 Dir Comm Svcs Director Community Services 16 Director 179,447.42 183,576.27 2.30% 146 Supervisor Warehouse Supv 50 18 82,032.64 83,811.89 2.17% 109 Asst Assistant City Clerk 44 21 88,459.65 90,256.24 2.03% TBD Public Safety Manager II 24 95,465.30 97,196.11 1.81% 155 Supt Superintendent Animal Services 40 25 97,886.26 99,626.00 1.78% 133 Dir Director Human Resources/Chief People Officer 18 Director 170,599.27 173,629.45 1.78% 9 Deputy City Attorney 36 29 108,383.97 109,968.46 1.46% 11 Sr. Senior Deputy City Attorney 32 33 119,845.90 121,384.61 1.28% 39 Manager Watershed Protection Manager 62 30 122,959.38 124,416.24 1.18% 160 Mgr Manager Solid Waste 31 34 122,995.23 124,419.22 1.16% 187 Sr Senior Engineer 31 34 122,995.23 124,419.22 1.16% 53 Sr Senior Project Manager 29 36 129,293.88 130,717.94 1.10% 20 Deputy Fire Chief 21 Assistant Director 158,323.32 160,022.20 1.07% 143 Asst Dir Public Works 23 150,525.02 151,580.85 0.70% 49 Director, Office of Management and Budget 88 Assistant Director 156,032.64 156,371.22 0.22% 103 Mgr Manager Real Property 31 Division Manager 122,995.23 123,003.24 0.01% 126 Assistant Director Community Services 90 Assistant Director 149,704.32 149,704.32 0.00% 111 Assistant Fire Chief 25 TBD 143,176.63 143,176.63 0.00% 115 Asst Assistant Build Building Official 33 TBD 116,867.88 116,867.88 0.00% 24 Communication Specialist 43 TBD 90,752.06 90,752.06 0.00% NOTE: Positive percentage changes reflect increase in current control point salary, while (negative) percentage changes denote decrease in current control point.Page 2 of 5 Class No. /Job Code Title Grade Code Current Control Point (Approx Annual) New Mid-Point (Approx Annual) Percent Change from Current Control Point to New Mid-Point Attachment D Salary Schedule City of PaloAlto Management and Professional Compensation 186 Coord Lib Circ Coordinator Library Circulation 48 TBD 79,911.48 79,911.48 0.00% 191 Deputy Chief/Fire Marshall 22 TBD 154,509.89 154,509.89 0.00% 44 Mgr Emp Manager Employee Benefits 35 TBD 111,104.91 111,104.91 0.00% 45 Mgr Manager Employee Relations & Training 31 Division Manager 122,995.23 122,995.23 0.00% 57 Mgr Inv Debt & Proj Manager Investments Debts & Projects 31 TBD 122,995.23 122,995.23 0.00% 198 Mgr Manager Risk & Benefits 31 TBD 122,995.23 122,995.23 0.00% 2009 Project Mgr Manager Trees 41 TBD 95,465.30 95,465.49 0.00% 74 Safety Officer 43 TBD 90,752.06 90,752.24 0.00% 33 Sr. Senior Technologist 34 27 114,018.53 114,018.75 0.00% 106 Sr. Senior Executive Assistant 35 TBD 111,104.91 111,104.91 0.00% 70 Staff Asst To Cm Assistant to the City Manager 46 TBD 84,024.89 84,024.89 0.00% 62 Supv Supervisor Recycling Prog Program 48 TBD 79,911.48 79,911.48 0.00% 2007 Manager Airport Manager 91 Division Manager 134,822.88 134,821.33 0.00% 2008 Chief Communications Officer 92 Assistant Director 152,547.12 152,541.46 0.00% 127 Manager Fleet Manager 34 Division Manager 114,018.53 113,919.91 (0.09%) 14 Senior Management Analyst 35 TBD 111,104.91 111,000.21 (0.09%) 96 Claims Investigator 46 18 84,024.89 83,811.89 (0.25%) 32 Mgr, IT Manager, Information Technology 30 Division Manager 126,251.59 125,748.24 (0.40%) 78 Manager Library Services Manager 43 21 90,752.06 90,256.24 (0.55%) 169 Comm Manager Community Services Senior Sr Program Manager 43 23 95,465.46 94,825.46 (0.67%) 168 Asst Assistant Manager Fleet Mgr 41 23 95,465.30 94,825.46 (0.67%) 69 Legal Services Administrator 40 24 97,886.26 97,196.10 (0.71%) 1008 OES Office of Emergency Services Coordinator 38 26 102,920.85 102,116.65 (0.78%) 90 Landscape Architect/Park Planner 37 27 105,577.51 104,669.56 (0.86%) 30 Asst Assistant To The City Mgr Manager 32 119,845.90 118,424.00 (1.19%) NOTE: Positive percentage changes reflect increase in current control point salary, while (negative) percentage changes denote decrease in current control point.Page 3 of 5 Class No. /Job Code Title Grade Code Current Control Point (Approx Annual) New Mid-Point (Approx Annual) Percent Change from Current Control Point to New Mid-Point Attachment D Salary Schedule City of PaloAlto Management and Professional Compensation 63 Mgr Manager Economic Development and Redevelopment 28 Division Manager 132,807.33 130,011.61 (2.11%) 71 Deputy City Clerk 51 12 74,105.62 72,270.73 (2.48%) 190 Accountant 47 16 82,032.45 79,773.36 (2.75%) 1009 171 Administrator, Refuse Management Analyst 40 TBD 97,886.26 94,825.46 (3.13%) 157 Senior Human Resources Administrator 40 23 97,886.26 94,825.46 (3.13%) 154 Manager Community Services Manager 40 21 93,215.94 90,256.24 (3.18%) 117 Sr Senior Accountant 39 24 100,392.86 97,196.10 (3.18%) 181 Supv Wqc Oper Supervisor Water Quality Control Operations 37 26 105,577.51 102,116.65 (3.28%) 1013 Manager Development Center Manager 35 28 111,104.04 107,286.30 (3.44%) 83 Superintendent Community Services Superintendent 40 29 114,018.70 109,968.46 (3.55%) 1007 Assistant Director Human Resources 23 Assistant Director 150,525.02 144,691.21 (3.88%) 112 Chief Plg Planning Official 27 Division Manager 136,106.71 130,011.61 (4.48%) 82 Chief Transp Off Transportation Offical 27 Division Manager 136,106.71 130,011.61 (4.48%) 2005 Director Office of Emergency Services Director 61 Division Manager 141,942.24 134,795.69 (5.04%) 1001 10 Assistant Director Planning & Comm Env Community Environment 20 Assistant Director 162,243.91 153,348.29 (5.48%) 161 Supv Facil Mgt Supervisor Facilities Management 40 22 97,886.26 92,512.64 (5.49%) 89 Contracts Administrator 39 23 100,392.86 94,825.46 (5.55%) 55 Deputy City Mgr Spec Proj Manager 18 Assistant Director 170,599.27 158,384.94 (7.16%) 107 Asst Assistant City Mgr Manager/Chief Operating Officer 14 Director 205,413.31 190,061.93 (7.47%) 178 Mgr Wqc Manager Water Quality Control Plant 23 Division Manager 150,525.02 138,454.34 (8.02%) 38 Manager Communications Manager 35 26 111,104.91 102,116.65 (8.09%) 158 Mgr Manager Lab Services 33 28 116,867.88 107,286.30 (8.20%) 51 Mgr Manager Planning 31 30 122,995.23 112,717.67 (8.36%) NOTE: Positive percentage changes reflect increase in current control point salary, while (negative) percentage changes denote decrease in current control point.Page 4 of 5 Class No. /Job Code Title Grade Code Current Control Point (Approx Annual) New Mid-Point (Approx Annual) Percent Change from Current Control Point to New Mid-Point Attachment D Salary Schedule City of PaloAlto Management and Professional Compensation 166 Supv Police Service Public Safety Manager I 41 20 95,465.30 87,476.50 (8.37%) 123 Cub Ctr & Hum Svc Div Mgr Division Manager Cubberly Center & Human Services 28 Division Manager 132,807.33 120,868.68 (8.99%) 81 Dir Adm Svcs Director Administrative Services/Chief Financial Officer 15A Director 200,472.03 182,179.80 (9.12%) 172 Open Spc & Parks Div Mgr Division Manager Open Space & Parks 78 Division Manager 133,257.24 120,868.68 (9.30%) 101 Human Resources Rep Representative 49 11 77,940.55 70,508.03 (9.54%) 91 171 HR Business Management Analyst 37 TBD 105,577.51 94,825.46 (10.18%) 86 Urban Forester 35 25 111,104.91 99,626.00 (10.33%) 2006 Mgr, IT Manager Information Technology Security 89 27 127,901.28 114,018.70 (10.85%) 905 Human Rsrce Asst Cnf Resource Assistant‐Confidential 82 5 68,899.58 60,798.85 (11.76%) 76 Admin Administrative Assistant 70 10 78,176.13 68,788.32 (12.01%) 1004 Senior Legal Secretary ‐ Confidential 85 10 78,176.13 68,788.32 (12.01%) 903 Legal Sec‐Conf Secretary‐ Confidential 80 6 71,084.83 62,318.82 (12.33%) 1006 Division Manager, Recreations & Golf 26 Division Manager 139,513.13 120,868.68 (13.36%) 67 Secretary to City Attorney 67 13 86,295.91 74,077.50 (14.16%) 1005 Executive Assistant to the City Manager 43 15 90,752.06 77,827.67 (14.24%) 174 Supv Supervisor Public Works 40 18 97,886.26 83,811.89 (14.38%) 92 Mgr Maint Oper Manager Maintenance Operations 35 23 111,104.91 94,825.46 (14.65%) 184 Veterinarian 33 24 116,867.88 97,196.10 (16.83%) 77 Project Mgr Manager Facilities 41 15 95,465.30 77,827.67 (18.48%) 118 Chief Bld Building Official 26 30 139,513.13 112,717.67 (19.21%) TBD Chief Sustainability Officer 30 130,011.61 N/A TBD Manager Revenue Collections Division Manager 115,535.62 N/A NOTE: Positive percentage changes reflect increase in current control point salary, while (negative) percentage changes denote decrease in current control point.Page 5 of 5 ATTACHMENT G CITY OF PALO ALTO CITY COUNCIL DRAFT EXCERPT MINUTES Page 1 of 8 Special Meeting May 6, 2013 Adoption of a Resolution Amending the 2013 Management and Professional Compensation Plan and Adoption of a Resolution Amending the Merit Rules James Keene, City Manager, reported each year the Council adopted a compensation plan for Management and Professional Employees. Management and Professional Employees were unrepresented by any bargaining unit or association. The recommendation was to modify a portion of the Management and Professional Compensation Plan. The City committed to Management and Professional Employees to set aside a fund of approximately $310,000 in order to benchmark and compare the salary schedule with benchmark agencies around the region. Contrary to inaccurate reports, the recommendation was not to approve a 2 percent raise for Management and Professional Employees. The item acknowledged that the Fiscal Year (FY) 2014 Proposed Budget included a recommendation for a 2 percent adjustment for the group. Salaries would change for some employees. Staff recommended that the $310,000 amount appropriated annually for the past five years be initiated. The salary structure was designed to allow Staff to recruit and retain capable Staff. Kathryn Shen, Director of Human Resources, stated the Management and Professional Compensation Plan covered approximately 200 Full Time Equivalent (FTE) employees. The goal was to attract and engage employees with the right skill set and experience. Staff recommended adoption of the amendments in order to bring current salary ranges to the median of the market. Management and Professional Employees had not received a true salary increase since 2008. They did receive a 3 percent salary increase in October 2012; however, their California Public Employees' Retirement System (CalPERS) contribution increased from 2 percent to 7-8 percent. Other goals of the amendments were to create internal equity among departments and between job levels, and to provide a mechanism for employees to promote through job ranges. An independent consultant conducted a total compensation survey. Data was collected between 2010 and 2012. Fourteen comparable cities were chosen based on location, size, and services. Southern California cities were added, because they represented more utilities. The data benchmarked 82 of 114 jobs in the City. Palo Alto job descriptions were compared with jobs descriptions from the benchmark agencies. A job with a 70 percent overlap in duties was DRAFT EXCERPT MINUTES Page 2 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 considered a match. Jobs could be benchmarked if they matched jobs in a minimum of four cities. In 2013, Staff gathered additional information to update jobs that did not exist in 2010-2012. For jobs not benchmarked, Staff slotted the jobs based on reporting. A minimum salary for positions in the range was 20 percent below midpoint; the maximum was 20 percent above midpoint. Management determined the individual employee's actual salary within the range. Most job classifications met the market salary; however, some were above market and some were below market. When a job classification was below market range, Staff proposed raising the midpoint of the salary range to reach the midpoint of the market range. With Council approval, Staff would adjust the individual employee's salary by moving the employee who was at or below median in the current range to the same relative place in the new range, provided employees met or exceeded expectations. If a classification was above market range, then Staff proposed lowering the midpoint of the range so that the midpoint met the current market median. Pay for individual employees would not be reduced; however, employees would be above the midpoint. Employees above the 20th percentile of the range would not be eligible for increases unless the salary range increased over time. In the FY 2014 Proposed Budget, Staff proposed budgeting actual salaries and labeling the middle of the range as the midpoint. Mr. Keene added that the existing spread in salary ranges was 25 percent below and 20 percent above midpoint. With the amendments, the range would be reduced from 45 points to 40 points. At the Council's directive, the comparisons were based on total compensation, not salary alone. The types of employees affected by the changes were civil engineers, planners, attorneys, financial analysts, and administrative assistants. Robert Moss stated employee compensation packages consisted of job security, pay, and benefits. The Council should consider the costs to the City when an employee retired. Stephanie Munoz felt employees' compensation should be compared to compensation of private industry, not other cities. The City should reconsider retirement benefits, but not reduce health benefits. Herb Borock believed the Agenda Item should be continued in order to obtain more information regarding a management and professional committee and a full copy of the study. The City Manager mentioned $310,000 over five years, but he did not recall any such amounts in the compensation plan or budget. Unlike previous plans, the Staff report did not indicate each job classification that changed. DRAFT EXCERPT MINUTES Page 3 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 Mayor Scharff noted Burbank, Long Beach, Anaheim, and Roseville were included in order to provide comparisons for utility positions; however, the plan applied to the Utilities director only. Ms. Shen stated comparing Palo Alto to cities that provided a full range of services including utilities was applicable to other members of the group. Mr. Keene explained that the study compared positions to the market and to other positions within the City. Inclusion of this data allowed the measurement of differences in the marketplace. Mayor Scharff suggested that the larger the city, the more the professional group was paid. He inquired whether a City Manager's salary was based on the number of employees of the city. Mr. Keene felt a chief executive's salary could be lower in larger cities, because the political exposure was more significant. Generally City Manager salaries varied across a range. Mayor Scharff assumed there were large variances between Sacramento and Southern California, for example. He asked if cities with large populations skewed the data and, if the study compensated for that. Ms. Shen agreed the Southern California cities were larger than Palo Alto. Those cities were used because they had the same labor market and similar services including utilities. Even though Utilities were part of a separate union, many Staff in other departments supported utilities. It was a good decision to benchmark against cities providing utilities. Mayor Scharff asked if Staff who supported Utilities had special skills, and thus would earn a higher salary. Mr. Keene believed the issues were marketplace pricing and work complexity. Even though the number of Palo Alto employees was less than other cities, the complexity of the environment could have more in common with larger cities. In addition, the cost of living was higher in the Bay area than in Southern California. Recruiting and retaining employees was not easy in the current economy and in the region. Staff needed flexibility to hire the type of employee demanded by the City. Mayor Scharff questioned the inclusion of some of the cities as benchmarks. Council Member Klein asked why the amendments were not presented to the Finance Committee. DRAFT EXCERPT MINUTES Page 4 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 Mr. Keene did not think about presenting them to the Finance Committee. Staff felt the recommendations were straightforward. Council Member Klein stated the oral report was more informative than the Staff report. If he assumed the average total compensation was $150,000 each for 200 employees, then the overall total compensation amount was $30 million. Thus the $315,000 amount was a 1 percent increase. He wanted that type of information, and a list of affected positions along with the amount. Ms. Shen reported 38 different positions were under market and would be adjusted. Mr. Keene could provide a list of positions that would be adjusted. Council Member Klein disagreed with comments that security was a factor in compensation, given the number of local, state, and federal employees who lost their jobs. Mr. Keene recalled an earlier amendment imposed at-will status on a number of employees within the group. Council Member Klein recommended Staff not use the concept of employee stock options. The number of employees with stock options was so small that it was irrelevant. Mr. Keene pointed out that a range of other comparisons were not reported. Council Member Klein at first was concerned that jobs were not compared to the private sector, and then he realized the difficulty in doing that. PG&E was not a relevant comparison because it paid more for utility positions. The Staff report should include that type of information. Council Member Schmid inquired about the percentage of employees recruited from the private sector and the percentage of employees who left the City for the private sector. Ms. Shen did not have that statistic. Staff recruited primarily from other cities or public agencies. She estimated 10 percent of employees were hired from the private sector. Mr. Keene indicated the City was not deluged with applications from the private sector, particularly in the Management and Professional group. DRAFT EXCERPT MINUTES Page 5 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 Experience working in the public sector was added value for an employee. Being competitive with other cities helped to prevent employees from moving to other cities. Council Member Schmid noted discussion regarding the difference between salaries and total compensation. He inquired whether salary ranges and the $300,000 amount would be utilized for salaries. Ms. Shen responded yes. Council Member Schmid asked if the data in the last few pages of the study concerned salaries. Ms. Shen indicated the study methodology was based on total compensation. The cost study reviewed the difference between Palo Alto total compensation and the benchmark cities' total compensation, and applied the differential percentage to the Palo Alto salary. Council Member Schmid suggested the report include a few samples. Palo Alto paid 10 percent more for benefits. He was surprised to learn that Palo Alto was different from the comparable cities. Ms. Shen reported Palo Alto was different with respect to retiree medical benefits, in that it covered spouse and dependents. That difference was a recruiting advantage. Mr. Keene stated Staff attempted to reduce those costs; however, CalPERS rules placed constraints on those reductions. Council Member Schmid believed CalPERS regulations prevented the City from becoming more like other cities. Mr. Keene agreed that was partly true. Staff was working to shift healthcare costs. Council Member Schmid noted benefit costs were increasing twice as fast as salary costs, and inquired about a plan to address that issue. Ms. Shen reported Staff met with the Council to discuss pensions and benefits costs. Staff would meet with employees to review options for controlling costs. Staff needed flexibility to attract employees looking for higher salaries or volunteer opportunities. Younger employees were not concerned about pension benefits. DRAFT EXCERPT MINUTES Page 6 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 Council Member Schmid asked if Palo Alto's retirement age was earlier than comparable cities. Ms. Shen indicated Palo Alto's retirement age was similar to other cities under CalPERS. Council Member Schmid stated Palo Alto was 10 percent different from other cities. Mr. Keene explained the difference was retiree medical costs. Generally, Palo Alto was similar to other cities with respect to the pension retirement age, except for newer employees. Ms. Shen noted the cost study was prepared prior to requiring employees to contribute more to CalPERS. If the study was performed in 2013, then the percentage would be smaller. MOTION: Council Member Schmid moved, seconded by Council Member Holman to refer this item to the Finance Committee. Council Member Schmid felt a detailed discussion and concrete examples would be helpful. Council Member Holman believed the information merited a vetting by the Finance Committee. Council Member Price inquired whether deferring action would defer implementation of the plan changes. Ms. Shen replied yes. Council Member Price asked if salary increases for Management and Professional Employees would also be delayed. Ms. Shen answered yes. Council Member Price felt the work and the study were defensible. For this particular cycle, referring the plan to the Finance Committee was not appropriate. Comparison to cities with utilities was a factor in considering compensation for Council-appointed officials. She concurred with comments regarding the importance of comparing Palo Alto to cities that provided utilities. She would not support the Motion. DRAFT EXCERPT MINUTES Page 7 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER for the Finance Committee to refer this item back to the City Council no later than the meeting on Monday, June 10, 2013. Mr. Keene believed the intention was for the Finance Committee to return with a potential recommendation in a timely manner. Council Member Burt noted the schedule of Budget hearings for the Finance Committee, and inquired whether this issue could be placed on the Finance Committee Agenda in May 2013. Lalo Perez, Director Administrative Services/Chief Financial Officer, believed the positive financial outlook would allow the Finance Committee to discuss the compensation plan in May. Council Member Berman supported the Motion. He assumed the Finance Committee would receive more quantitative information. He asked if employees above midpoint would be Y-rated. Ms. Shen explained employees would not be Y-rated unless they were at the 120th percentile. Council Member Berman inquired whether employees above the midpoint would remain above the midpoint when raises were implemented. Ms. Shen reported Human Resources would issue guidelines to hiring managers regarding moving people through the range. Merit increases would be allocated based on performance. If someone was an excellent performer, he could receive a greater increase, particularly if he was lower in the range. If an employee was higher in the range, he could receive a lower increase. In the span of a career, an employee would expect to begin lower in the range and move up over time. Long-tenured employees would be above the midpoint of the range. Mr. Keene envisioned more in-depth Staff work regarding criteria to manage salary increases. The first item was to set the salary schedule in relation to competition. Staff would provide recommendations regarding placement of employees within ranges. Vice Mayor Shepherd believed the study was supposed to determine a salary range and provide flexibility to reward good work. The City wanted a stream of knowledgeable workers who could replace retired workers. She wanted to see the amendments made in order to address other issues. She asked when the Council would discuss employee transit management. DRAFT EXCERPT MINUTES Page 8 of 8 City Council Meeting Draft Excerpt Minutes: 5/6/13 Mr. Keene intended to have that conversation at another time. Staff discussed collecting information related to private sector jobs, but obtaining information was difficult and complicated. MOTION PASSED: 7-1 Kniss absent, Price no City of Palo Alto (ID # 3600) City Council Staff Report Report Type: Action Items Meeting Date: 5/6/2013 City of Palo Alto Page 1 Summary Title: 2013 Management and Professional Compensation Plan Title: Request Council Adopt Resolution Amending the 2013 Management and Professional Compensation Plan From: City Manager Lead Department: Human Resources Recommendation Staff recommends that the Council adopt the attached resolutions amending the 2011-2013 Compensation Plan for Management and Professional Personnel and Council Appointees to implement the 2013 Salary Study, extend the term and make other changes required by law, effective the pay period beginning May 18, 2013, and amending the Merit Rules to incorporate these changes. Motion I move that Council: (a) adopt a resolution amending the 2011-2013 Compensation Plan for Management and Professional Personnel and Council Appointees to implement the 2013 Salary Study, extend the term and make other changes required by law, effective the pay period beginning May 18, 2013, and (b) Adopt a resolution amending the Merit Rules to incorporate these changes. Executive Summary The City of Palo Alto seeks to attract and engage employees with the expertise and experience we need, who are passionate about their work for the City and feel valued for it. To attract and retain skilled staff, the City should adopt a total compensation plan that brings current salary City of Palo Alto Page 2 ranges and benefits to the market median of our benchmark cities. Staff has formulated a new salary structure for management and professional staff based on market research (the 2013 Salary Study). The proposed salary structure establishes a mid-point for each job classification. The minimum salary for any position in that classification is 20% below the mid-point and the maximum salary is 20% above the mid-point. The City Manager (or other CAO within their office) determines an individual employee’s actual salary within the range based on experience, performance, and merit. Beginning FY 2014, budgeting for Management and Professional positions will change. Currently, Management and Professional positions are budgeted at the mid-point of the range (formerly called the control point). Beginning this year, the budget will reflect the actual salaries of all employees. The proposed salary structure does not include police, fire or utility managers, as they are represented classifications, except that the following unrepresented classifications in the Management and Professional group are included in the new structure: Public Safety Director, Chief of Police, Assistant Chief of Police, Fire Chief, Assistant Fire Chief, Deputy Fire Chief, and Director of Utilities.) Background Staff proposes that Palo Alto implement the 2013 Salary Study in order to offer competitive pay and benefits at the median of the current market, as determined by 14 benchmark cities. Subject to financial considerations, staff proposes that it be the City’s goal to compensate Management and Professional employees according to the level of expertise, scope of work performed, and managerial accountability of each job, as reflected by the market. Additional goals include promoting internal equity across departments and providing that employees move up the salary range based on merit and performance. To implement these goals, the staff periodically reviews market compensation for management, and professional staff. Human Resource staff subscribes to the Bay Area Employer Research Service (ERS), which contains market data for a comprehensive list of jobs in the Bay Area. A more individualized study (the 2013 Salary Study), conducted by Koff & Associates (“Koff”), is the basis for staff’s request to update the Management and Professional Compensation Plan. The study is described as follows. Benchmarking positions. Koff collected data for 82 classifications out of 114 total classifications that make up the Management and Professional group. For each of the 82 “benchmarked” City of Palo Alto Page 3 classifications, Koff analyzed job descriptions to identify matches with similar classifications in comparator public agencies. Koff’s methodology required a 70% degree of similarity between Palo Alto and comparator city job descriptions for a job to be a benchmark “match.” The factors analyzed include education, experience and skills required; work scope and complexity; decision-making authority; responsibility for the work of others, programs and budget; problem solving and ingenuity; relationships inside and outside of the City; consequences of action and decisions; and working conditions. Benchmark Cities. Koff reviewed the cities that Palo Alto used in the past to determine the appropriate agencies for comparison, adding to the list those cities suggested by the Executive Leadership Team (ELT) and the Management Compensation Committee, which is a group of representatives from each City department. Koff considered the following factors in making the choices: Cities of a similar size, budget, and population as Palo Alto Cities surrounding Palo Alto that compete for labor within the geographic vicinity Scope of services provided, including police, fire, parks, arts and utilities. In order to find comparisons for the positions in Utilities, Koff added the following cities outside of the immediate geographic labor market area that have one or more utilities: Anaheim, Burbank, Long Beach, and Roseville. Thus, fourteen (14) cities are benchmarks, as presented below. Alameda Anaheim Berkeley Burbank Fremont Hayward Long Beach Mountain View Redwood City Roseville San Jose San Mateo Santa Clara Sunnyvale Benefits. Koff collected information about health and pension benefits for each comparator city utilizing a formula to determine an average value that comparable agencies pay for the health and pension benefits. Methodology. In collecting salary and benefit data, Koff conducted reviews of comparator city documentation, including classification descriptions, memoranda of understanding, pay practices, organization charts, and other documents, then conducted interviews with human resources, accounting, and/or finance personnel at each comparator agency to understand their organizational structure and classification matches. Koff collected data between 2009 and 2012. City of Palo Alto Page 4 Discussion Survey Results. Koff analyzed market salary and health (including retiree medical) and pension benefits for each classification surveyed to find the percentile difference between Palo Alto’s salary and benefits against the median total compensation (salary and benefits) of the comparator cities. (See Attachment C) Considering the Management and Professional group as a whole, Koff found that Palo Alto’s total compensation is generally at or above market median. Palo Alto’s benefit package value is greater (about 10%) than that of the comparator group taken as a whole. Since total compensation is the relevant comparison, the City of Palo Alto’s generally higher benefits offset somewhat lower salaries in some comparisons. More specifically, the 2013 Salary Study showed that many classifications have a total compensation mid-point that is at or near the market median. Some classifications job classifications have a mid-point that is over market compared to the benchmark cities. Other classifications have a mid-point that is under market. The largest cluster of under-market classifications are in Utilities. There are under-market positions though scattered throughout the Management and Professional group. Note that the utility managers (below the Department Director) are not included in the Management and Professional Salary Schedule, as they are currently represented by Utility Management Professional Association of Palo Alto (UMPAPA). Internal Salary Relationships. Internal relationships are another factor to consider when making salary decisions. Compensation of classifications within a job family should be reasonably related. Related jobs in different departments should be compensated in a manner that makes sense. The proposed new structure was established by slotting job classifications that were not benchmarked into the salary scale to maintain internal relationships with benchmarked jobs above and below. The City follows common professional guidelines for percentages applied to the difference between job levels: 10% to 15% difference from a trainee to experienced classification and from a lead or advanced journey-level position to the lower experienced level 15% to 25% from supervisor to the highest level supervised, depending upon the breadth and scope of supervision. Market adjustments granted to one class in a series normally include other classes in the series being adjusted to maintain internal equity. In addition, Department Directors were invited to review and consider the organizational value of each classification’s body of work. As a result, some key placements for salary City of Palo Alto Page 5 recommendations were updated to reflect departmental recommendations based on both market results and organizational value. New Ranges. Staff proposes to implement the new salary structure by adjusting the mid-point of all classifications in the Management and Professional group to bring the mid-point of the range to the market median, adjusted as described above. Individual Employee Salaries When Classification is Under Market. Staff proposes to adjust the mid-point of classifications found to be under market higher in the new Salary Schedule, to bring the mid-point of the range to market median. With Council approval, the City will adjust individual employees’ salaries by moving employees who are at or below the mid-point of the current range to the same relative place at or below mid-point of the new range, provided the employees are meeting or exceeding performance expectations. Individual Employee Salaries When Classification is Over Market. Staff proposes to adjust the mid-point of classifications found to be over market – but not individual employee salaries – lower in the new Salary Schedule to bring the mid-point of the range to the market median. Pay will not be reduced for employees in the downward-adjusted classifications; however these employees may find their salary is over the mid-point of the new range. In some cases, the current salary will exceed the maximum of the new range. Staff proposes to “Y-rate” the salaries of employees whose salary is above the maximum. “Y-rate” means the employee does not immediately lose income, but will not be eligible for merit increases and general increases until the incumbent’s salary is within its market salary range. Proposed Monthly Salary Schedule The compensation for management and professional employees will fall within a range of 20% below and 20% above the mid-point. The Department Director and the Chief People Officer will approve limited movement over mid-point. The City Manager (or other CAO) retains discretion to approve salaries over 10% above mid-point. The City will adjust management and professional salaries to align with the new salary ranges upon adoption of the new salary schedule. There are funds designated in the fiscal year 2013 General Fund budget to provide salary adjustments to market. The Public Works Enterprise Funds and Other Funds will have sufficient funds to cover the adjustments as a result of vacancy savings. In FY 2014 and future budgets, staff proposes to allocate funds that allow for base salary increases. The proposed FY 2014 budget includes a recommended 2% increase to all classifications in the Management and Professional Compensation Plan. Attached is Attachment City of Palo Alto Page 6 D, the proposed 2013 Management & Professional Compensation Plan with the attached Salary Schedule. Resource Impact The fiscal year 2013 budget includes $310,000 in the General Fund or this purpose to fund the recommended adjustments. The Public Works Enterprise Funds and Other Funds will have sufficient funds to cover the adjustments as a result of vacancy savings. Attachments: Attachment A RESO Amending Merit System Rules-Regulations Mgmt (PDF) Attachment B RESO Amending Comp Plan for Mgmt Professional (PDF) Attachment C Information Collected for Compensation Study (PDF) Attachment D Management Professional & Confidential Comp Plan (PDF) Attachment A * NOT YET APPROVED * 130501 sh 0140089 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending Section 1701 of the Merit System Rules and Regulations to Incorporate the 2011‐ 2013 Compensation Plan for Management and Professional Personnel and Council Appointees The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Section 1701 of the Merit System Rules and Regulations is hereby amended to read as follows: “1701. Compensation Plan for Management and Professional Personnel and Council Appointees incorporated by reference. The currently applicable Compensation Plan entitled “City of Palo Alto Compensation Plan‐‐Management and Professional Personnel and Council Appointees,” is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said Compensation Plan shall apply to all Management and Professional employees and Council Appointees, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter will prevail over such other provisions as to employees in classifications covered by said Compensation Plan.” SECTION 2. The changes to the Merit System Rules and Regulations provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit, or proceeding pending or any judgment rendered prior to the effective date of this resolution. // // // // // // Attachment A * NOT YET APPROVED * 110322 sh 8261553 2 SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ City Attorney City Manager _____________________________ Chief People Officer _____________________________ Director of Administrative Services Attachment B *NOT YET APPROVED* 130501 sh 0140088 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending the 2011‐ 2013 Compensation Plan for Management and Professional Personnel Adopted by Resolution No. 9282 to Implement the 2013 Salary Study, Extend the Term and Make Other Changes Required by Law The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2011‐2013 Compensation Plan for Management and Professional Personnel, adopted by Resolution No. 9282 is hereby amended to implement the 2013 Salary Study, extend the term and make other changes required by law, as set forth in Exhibit “A”, attached hereto and incorporated herein by reference, effective with the pay period including May 18, 2013. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Chief People Officer Attachment B *NOT YET APPROVED* 130501 sh 0140088 2 CITY OF PALO ALTO COMPENSATION PLAN Management and Professional Personnel And Council Appointees Effective: Pay period includingCompensation plan effective July 1, 2012 through June 30, 2013 2014, except where specifically noted. 2 1 COMPENSATION PLAN FOR THE CITY OF PALO ALTO Management and Professional Personnel As used in this Plan, the term “Management and Professional” refers to all employees, including Confidential employees, previously classified as “Management and Confidential” by the City. This group will hereafter be identified as “Management and Professional” personnel. SECTION I. COMPENSATION This section applies to all management and professional employees and does not include Council Members or Council-appointed officers. Each Council-appointed officer shall be the responsible decision-maker under this Plan for those employees in departments under his/her control. A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY The City's policy for management and professional compensation is to establish and maintain a general structure based on marketplace norms and internal job alignment with broad compensation grades and ranges. Structures and ranges will be reviewed and updated as necessary based on marketplace survey data, internal relationships, and City financial conditions. Individual compensation adjustments will be considered by the Council-appointed officer based on (1) performance factors including achievement of predetermined objectives; (2) pay structure adjustments; and (3) City financial conditions. B. BASIC PLAN ELEMENTS 1. 1. Structure. The compensation plan includes separate multi-grade structures for both management and professional employees. Each grade will have a salary range with a mid- point which is 20% above the minimum, and 20% below the maximum of the range.control pointmid-point which is used for budgetary purposes. All management and professional positions will be assigned an appropriate pay grade based on salary survey data and internal relationships. Actual salary within the range is determined by experience and performance. The normal working range where most actual salaries will fall will be within + 10% of the control pointmid-point. Competitive marketplace studies will be conducted as needed by surveying a maximum of 14 organizations similar to Palo Alto in number of employees, funding mechanisms, population and services provided. These studies will focus on total compensation for management positions such as first line supervisors, administrative, confidential, professional and top management. Periodically, studies will include position-by-position comparisons using market research and internal equity data. The results of these studies may indicate that the entire pay grade structure be adjusted, that individual positions be reassigned to different pay grades, or that no change takes place. Such adjustments will only affect the salary administration framework. No individual salaries will be automatically changed because of structural adjustments. Formatted: Indent: Left: 0.5" 2 A department director may request that HR reevaluate a job or jobs in his or her department based on significant and permanent changes in job content. In doing so the director will supply needed information and will provide a position description questionnaire as requested. The Chief People Officer will respond to such requests within his or her discretion. 2. 2. Compensation Adjustment Authorization. In consultation with feedback received from the Management and Professional Compensation Committee, the City Manager may propose as part of the budget process for Council approval of a compensation adjustment based on (1) competitive market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a recommendation received from the Chief People Officer. For fiscal year 2013 the compensation adjustment to control pointmid-point shall be three percent (3%) effective the pay period including October 6, 2012. In addition, certain below-market positions will be subject to equity adjustments at a future date based on Management Compensation Study results and subject to Council approval. In years when there is an adjustment to control mid-point, this adjustment will be available for those management/professional employees who have received an overall rating of "meets" or "exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year. Nothing herein shall preclude an employee's manager from awarding a control pointmid-point adjustment increase to an employee on a performance plan at a later date should employee's performance improve. 3.1.Base Compensation. Compensation for management and professional employees includes bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi-weekly base salary must fall within pay grade limits of no less than 20% below the control pointmid-point and no more than 20% above the control pointmid-point. Base salary increases are earned in accordance with administrative guidelines based upon growth within the position and performance, which must meet or exceed position standards, the salary structure and the City’s ability to pay. 4.2.Performance Planning and Appraisal. Performance appraisals will be conducted at the end of each fiscal year during the months of July through September 30 each year prior to determining individual employee fixed compensation. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives shall be monitored periodically. The performance appraisals should be implemented in a manner that will achieve the following objectives: Define the employee’s job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee’s role and responsibilities; Formatted: Indent: Left: 0.25", No bullets ornumbering 3 Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; Facilitate two-way communication and understanding between the employee and his or her supervisor; Counsel and encourage employees to work toward a learning development plan and realize their full potential; Establish future work plan objectives. Work plans should include job related projects or special goals related to regular job duties when applicable. At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department heads and to the Chief People Officer or appropriate Council appointed officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. This process should be completed by September 30. C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION 1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non-Council-appointed management and professional employees in an amount not to exceed the aggregate of approved management and professional positions budgeted at the control points in the Table of Organization for the applicable fiscal year. 2. Individual management and professional compensation authorized by a Council-appointed officer under the Management and Professional Compensation Plan may not be less than 20% below nor more than 20% above the control pointmid-point for the individual position grades authorized in Table I of this plan.Salary Schedule attached. 3. The Council-appointed officers are authorized to establish such administrative rules as are necessary to implement the Management and Professional Salary Plan subject to the limitations of the approved compensation adjustment authorization and the approved grade and control pointmid-point structure. 4. Notwithstanding any other provision of this Compensation Plan, In in the event a downward adjustment of a position grade assignment indicates a reduction in the established salary of an individual employee, the Council-appointed officer may, if circumstances warrant, continue the salary for such employee in an amount in excess of the revised grade limit for a reasonable period of time. Such interim salary rates shall be defined as "Y-rates." SECTION II. SPECIAL COMPENSATION This section applies to all eligible regular management and professional positions including Council Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be in conformance with the Merit Rules and Regulations and Administrative Directives issued by the City Manager for the purposes of clarification and interpretation. 4 A. OVERTIME Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. B. IN LIEU HOLIDAY PAY Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non-workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. C. WORKING OUT OF CLASSIFICATION PAY Where management and professional employees, on a temporary basis, are assigned to perform all significant duties of a higher classification, the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working out of class pay is normally not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties to be performed and an end date. D. STAND-BY PAY Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on a case by case basis, in extreme circumstances involving unavailability of non-management staff. Compensation is as follows: Monday through Friday $40 per day Saturday, Sunday, Holidays $58 per day E. CALL OUT PAY Effective pay period beginning February 26, 2011, Exempt management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City premises, (2) is called back to the work location outside of regularly scheduled working hours, and (3) the Call Back is for an emergency arising out of situations involving real or potential loss of service, property or personal danger. Employees called back will be expected to respond directly to the location of the problem. Compensation is per Call Out as reported on timecard and will be paid as follows: Monday through Friday: $140 per day Saturday and Sunday: $200 per day F. NIGHT SHIFT PREMIUM 5 Night shift differential shall be paid at the rate of five percent (5%) to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE PERSONNEL Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in conformance with department policy. H. GROUP INSURANCE 1. Effective Date of Coverage for New Employees For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. 2. Active Employee Health Plan a) Based on an employee’s family status, the City shall pay up to the monthly medical premium for the second most expensive plan among the existing array of plans available during the term of this compensation plan on behalf of eligible employees (including Council Appointed Officers and Council Members) and dependents, except as provided in section b, below. Eligible dependents, under current law, include spouses, children under the age of 26 and never married (natural, adopted, or stepchildren), economically dependent children, and domestic partners registered with the Secretary of State. If PERS changes the plans it offers, the City will continue to provide an equivalent benefit at an equivalent cost. b) Effective in the pay period including October 6, 2012, participating employees will contribute 10% of the premium cost for the employee-selected plan, and the City shall contribute 90%, with a maximum City contribution of 90% of the second highest plan. . c) City medical premium contributions will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. d) Coverage for Domestic Partners: 1) Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State. 2) Domestic Partnership Not Registered with the California Secretary of State: Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department, will be eligible for reimbursement of the actual monthly premium cost of an 6 individual health plan, not to exceed the maximum monthly City employer contribution for one-party coverage under the CalPERS Health Benefits Program (or PORAC if a safety department employee) for an employee covered under this agreement. Evidence of premium payment will be required with request for reimbursement. e) PERS Choice Reimbursement Plan Will be eliminated effective January 1, 2013. Management and Professional personnel enrolled in the PERS Choice medical plan may submit a request for payment, as specified below, for non-covered medical expenses, incurred during the period of January 1, through December 31, of the plan year, that exceed $2,500. The maximum annual reimbursement amount provided under this program is: $700 for employees enrolled in the Employee-Only category; $900 for employees enrolled in the Employee and One Dependent category, and $1,100 for employees enrolled in the Family category. Any amounts reimbursed to an individual under this program would be included in the employee’s gross income and is not PERSable. This program shall only reimburse employees for medical expenses that are not reimbursed through any other means and meet the definition in Section 213(d) of the Internal Revenue Code. (Examples of eligible expenses include medical plan deductibles and co-payments, prescription drugs, dental care, hearing care, and vision care.) However, in order to have any expenses reimbursed under this program, the employee must have allocated 100% ($2,500.00) of their 2010 calendar Excess Benefit funds into the Medical FSA option during the election that occurred in December 2009. In addition, all such reimbursements from the Excess Benefit Program must have been solely for medical expenses, as defined by Section 213(d) of the Internal Revenue Code. If the employee has designated his/her Excess Medical funds for any other qualifying expenses (i.e. dependent care, Professional Development, Deferred Compensation contributions), the employee would not be eligible for reimbursement under this program. Employees may submit a final claim for the 2012 plan year’s expenses during January. Any amounts remaining from the PERS Choice reimbursement plan after the claims for the plan year had been processed shall be forfeited. 3. Alternative Medical Benefit Program If a regular employee and/or the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees electing alternative coverage and no City coverage will receive cash 7 payments in the amount of 90% of the average monthly premium for one party, which is $284.00. 4. Retiree Health Plan a) Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees” Medical and Hospital Care Act. The City’s monthly employer contribution for each employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the amount necessary to pay for the cost of his or her enrollment in a health benefits plan up to the monthly premium for the second most expensive plan offered to management and professional personnel during the contract term (among the existing array of plans.) The City’s contribution for an employee hired before January 1, 2004 who retires on or after March 30, 2011 shall be the same contribution amount it makes from time to time for active City employees. b) Post – 1/1/04 Hires For those Management and professional employees hired after January 1, 2004, the PERS law vesting schedule set forth in Government Code section 22893 will apply. Under that law, an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five (5) of those years were performed at the City of Palo Alto. After ten (10) years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at 20 years’ service credit, the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section 22893 based on a weighted average of available health plan premiums. 5. Dental Plan a) The City shall pay covered plan charges on behalf of all eligible employees and dependents. (Domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department are considered dependents under the plan.) Benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) The City’s Dental Plan provides the following: Maximum Benefits per Calendar Year- $2,000 per person Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) Major Dental Services 50% UCR* 8 Orthodontics 50% UCR* Basic Benefits (All other covered services) First Calendar Year of Eligibility 70% UCR* Subsequent Calendar Years 70%-100% *Usual, Customary, and Reasonable Composite (tooth covered) fillings for posterior teeth For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not utilize the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year. If a dental plan member ever loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan would include: Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan. 6. Basic Life Insurance The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no-cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,000). 7. Supplemental Life And AD&D Insurance An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one- or two-times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amount of AD&D coverage available is up to $325,000. 8. Long Term Disability Insurance a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium for the first $6,000 of base monthly salary. For employees whose base monthly salary exceeds $6,000, the employee shall pay the cost of the required premium based upon their monthly salary between $6,000 and $15,000. 9 b) For employees whose base monthly salary exceeds $6,000 and who have no eligible dependents covered under the City’s medical, dental or vision plans, the City will pay up to $17.50 per month towards the employee’s cost for LTD coverage. 9. Vision Care a) The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan provides an exam every 12 months; lenses every 24 months; frames every 24 months, all subject to a $20 co- payment as defined in the Vision Services Benefits Plan A schedule. Benefits for regular part-time employees will be prorated as follows: Employees hired after January 1, 2004, who will work less than full time, will receive prorated premium costs for vision benefits in accordance with his/her percentage of a full-time work schedule. Vision benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) Effective July 1, 1996, dependents include eligible domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department. I. EMPLOYEE ASSISTANCE PLAN The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line 24 hours a day, seven days a week. Guidance is also available online. J. SAFETY DIFFERENTIALS 1. Police Department - Personnel Development Program Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn police personnel: P.O.S.T. Intermediate Certificate: five percent (5%) above base salary P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary 2. Fire Department - EMT Differential 10 Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn Fire personnel: EMT Differential: three percent (3%) above base salary K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM Management and professional employees are eligible for Sections 1, 2, 3, and 4 of the Management Benefit Program. City Council Members are eligible for Section 3 only. 1. Professional Development - Reimbursement The purpose of this program is to provide employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self- improvement activities may be granted each management and professional employee up to a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: a) Civic and professional association memberships b) Conference participation and travel expenses, which must occur within the compensation plan period. c) Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City’s mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City’s travel expense report from the Policy & Procedures Manual Section 1-02 ASD. d) Professional and trade journal subscriptions not to exceed 12 months. e) Approval will be at discretion of department head and signature is required on reimbursement form. Amounts under this professional development program will be pro-rated in the first year of employment or promotion into a position covered by this Compensation Plan 2. Physical Examinations 11 All management and professional employees are eligible to receive an annual physical examination as follows: a) Use the periodic health exam benefit as provided under the PERS Health Plan option you have selected. Each of the PERS Health Plans provides for a periodic physical examination. The examination must be performed by your primary care physician— unless he/she refers you to another physician. b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The guidelines are a suggested minimum based on research studies concerning preventative care. The judgment of your physician is the final determinant for your care. c) Any additional necessary asymptomatic tests that are required by your physician that are not covered by your health plan, will be reimbursed by the City. Any symptomatic tests will be covered under your PERS Health Plan. The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet site. This benefit will not be pro-rated. 3. Excess Benefit This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code, with exception of Gym or Health Club Membership. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options: a) Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments as well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold medicines. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. b) Dependent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of annual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. 1) The annual amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 12 2) The expenses must be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3) The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 4) If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals (other than a resident of the facility). 5) Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP will be reduced by any amount reimbursed under the Excess Benefit Plan. c) Non-taxable Professional Development Spending Account. Provides reimbursement for Non-Taxable professional development expenses (e.g.,job-related training and education, seminars, training manuals, etc.) to the extent they are not paid or reimbursed under any other plan of the City. d) Gym or Health Club memberships. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement of this expense is taxable to the employee. e) Deferred Compensation. Provides a one-time contribution to the employee’s City- sponsored 457 Deferred Compensation plan with either ICMA-RC or the Hartford. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a “use –it-or-lose-it” basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Specified amounts under this benefit will be applied on a pro-rata basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. L. LEAVES 1. Sick Leave a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a 40-hour duty 13 schedule. Those assigned work schedules which are greater or lesser than 40 hours will accrue sick leave at the ratio of their work schedule to 40 hours. b) Employees may use up to 20 hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. d) Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have 15 or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent (2½%) of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. e) Up to nine (9) days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f) Management and Professional employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. g) In accordance with the City Merit Rules and Regulations, a new employee may, if necessary, use up to 48 hours or shift equivalent of sick leave at any time during the first six (6) months of employment. 2. Management Annual Leave a) Exempt Employees Regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half (½) shift off for each 8 hours charged. In 2012, the City will be transitioning this benefit from a fiscal to calendar year basis for administrative purposes. Therefore, on July 1, 2012, employees will be credited with 40 hours of annual leave for the period of July 1 to December 31, 2012. 14 Beginning in 2013 and each calendar year thereafter, employees will be credited with 80 hours of management annual leave. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the year will be paid in cash unless a different option as indicated above is elected by the employee. b) Non-Exempt Employees Based on an audit recommendation to eliminate payment of overtime as well as management leave for non-exempt employees in the management group, the City is transitioning away from providing management leave to non-exempt employees. As part of the transition, and in order to minimize impacts to current employees, the City will phase-out elimination of the 80 hours of management leave for all current non-exempt Management and Professional employees (those eligible to earn overtime). Continuing through Fiscal year 2013-2014, there will be no change to management leave benefits for current employees; these employees will maintain their 80 hours of management leave and also receive pay for any overtime hours worked. Beginning on July 1, 2014 all employees in non-exempt positions will receive overtime pay for hours actually worked, but will no longer receive management leave. Employees hired into non-exempt management positions on or after February 26, 2011 will receive overtime only and will not be eligible for management leave. 3. Vacation Vacation will be accrued when an employee is in pay status and will be credited on a bi- weekly basis. Total vacation accrual at any one time may not exceed three (3) times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a) Less than nine (9) years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year; provided that: i. The City Manager is authorized to adjust department head annual vacation accrual to provide for a maximum of 160 hours for those hired between July 1, 1996 and June 30, 2001; and ii. The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. 15 b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; 160 hours vacation per year. c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; 180 hours vacation leave per year. d) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section. Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation year, employees will make their election for vacation hours to cash out no later than November 1, 2012. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designates on the election form. Employees who do not elect a cash-out amount by November 1 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre-designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash-out the elected amount in a paycheck issued on or after the payroll date including November 1. 4. Bereavement Leave of absence with pay of three (3) days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family, which is defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall Formatted: No underline 16 not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control. M. RETIREMENT PENSION 1. Effective pay period inclusive of 1/6/07, the City’s Public Employees’ Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non-safety members (from 2% @55). For miscellaneous employees hired on or after July 17, 2010, the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60). For Safety members, the City currently offers the CalPERS "3% at 50" full formula (Section 21362.2) benefit. Local Fire Safety members newly hired after 6/08/12 will be placed in the 3%@55 formula. As soon as administratively possible, the City intends to modify the Local Police Safety formula for new hires to 3%@55 formula. New employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute. 2. Employee PERS Share. The City currently payspreviously paid 6% of the employee’s CalPERS share for employees under the 2.7%@55, 5% for employees under the 2%@60 formula, and the full employee share for those with public safety formulas. a) Beginning with the pay period including October 6, 2012, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. b) Beginning with the pay period including October 6, 2012, employees subject to the 2%@60 retirement formula shall pay the full seven percent (7%) employee contribution. c) Beginning with the pay period including October 6, 2012, Public Safety employees will pay the full nine percent (9%) PERS employee contribution. c)d) Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 3. Final Compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit, except as may otherwise be required by PEPRA. Formatted: List Paragraph, Left, No bullets ornumbering 17 4. Employee PERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. 4.5.Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. N. COMMUTE INCENTIVES and PARKING 1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The City will provide a Civic Center Garage parking permit. Employees hired after June 30, 1994 may initially receive a parking permit for another downtown lot, subject to the availability of space at the Civic Center Garage. 2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one of the following commute incentives for those using an eligible commute alternative on 60% or more of their scheduled work days per month: a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the current IRS limit, as may be amended from time to time, (currently $125/month) are available through the Commuter Check Direct (CCD) website for employees using Bay Area public transportation or riding in a registered vanpool at least 60% of their scheduled work days. Administration of the Commuter Check benefit shall be subject to the rules and regulations of the third- party administrator. b) Bicycle. The City will provide employees with a tax-free incentive of $20 per month to eligible employees who ride a bicycle to work. c) Carpool. The City will provide with a taxable incentive of $30 per month to each eligible employee in a carpool with two or more licensed drivers. d) Walk. The City will provide employees with a taxable incentive of $20 per month to eligible employees who walk to work. O. AT-WILL STATUS Certain Management and Professional Positions are designated as having “at-will” employment status. “At-will” positions are intended to be of a limited duration and employees hired to fill these positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. 18 1. At-will Management & Professional positions. Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were hired as at-will employees whose terms of employment are specified by an employment contract that includes a severance package. Effective on the date of adoption of this plan, new employees hired or promoted to department head, assistant department director, and all other positions listed on Attachment B shall be at-will employees. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and management leave as are generally provided to management employees and described in this compensation plan, as amended from time to time. At-will employees who are terminated or asked to resign shall, upon execution of a release of all claims against the City, be eligible for a severance payment equivalent to four (4) weeks of salary and benefits, increasing after completion of the first full year of service by one (1) week for every completed year of service, up to a maximum of 12 weeks. For example, an at-will employee who has completed six (6) years of service would be eligible to receive ten (10) weeks of severance (4 weeks plus 1 week for each year of service). No severance shall be paid if the employee is terminated for serious misconduct involving abuse of his or her office or position, including but not limited to waste, fraud, violation of the law under color of authority, misappropriation of public resources, violence, harassment or discrimination. If the employee is later convicted of a crime involving such abuse of his or her position the employee shall fully reimburse the City as set forth in Government Code section 53243.3. 2. Provisional employees. The City has created a program for Provisional employment when funding is available. The program’s purpose is to create limited duration senior management level work for the City Manager’s Office or as designated by the City Manager. A Provisional Employee will be an “at will” employee whose term of employment shall be no more than two (2) years. A Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional Employee will receive limited benefits as specified in an Employment Agreement. Sections I and II of this Compensation Plan shall not apply to Provisional Employees, except as specified by the City Manager. 3. Management fellows. The City has created a program for Management Fellows when funding is available. The program’s purpose is to create limited duration entry level positions for graduate students. A management fellow will be an “at will” employee whose term of employment shall be no more than one (1) year. A Management Fellow shall be PERS exempt, but may receive limited vacation, limited sick leave, limited health care benefits and other limited benefits, as determined by the City Manager. Sections I and II of this Plan shall not apply to Management Fellows, except as specified by the City Manager. P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR 19 The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional expenses of these offices. Q. REIMBURSEMENT FOR RELOCATION EXPENSE Policy Statement The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new management and professional employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits” or portions thereof, may be extended for exceptional circumstances and only the approval of the City Manager or designee, or for Council-appointed officers, the City Council. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy. R. MEAL ALLOWANCE Management and professional employees assigned to attend night meetings are eligible to receive reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually taken and submitted for reimbursement. S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit System Rules and Regulations, any Management and Professional employee who is supervised by a Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance pursuant to Step One (informal discussion), summarize the grievance regarding the Council Appointed Officer in writing and submit it to the Director of Human Resources for review and resolution using the methods he/she considers appropriate. T. MERIT RULES The City will include members of the Management/Professional Compensation Committee in discussions regarding revision of the Merit Rules and Regulations. 20 Attachment B At-Will Positions Management and Professional Unit The intent of this provision under the Management/Professional Compensation Plan is to designate classifications at the department head, assistant director, deputy director, and division manager levels as at-will. The applicable Council Appointed Officer may designate newly created positions at those levels not included on this list as at-will. Existing classifications that shall be at-will include but are not limited to: Department Heads- All departments Assistant Directors- All departments Deputy Directors- All departments Division Managers Administrative Services Director, Administrative Services/Chief Financial Officer Director, Office of Management & Budget Assistant Director, Administrative Services Chief Budget Officer Manager, Accounting Manager, Purchasing & Contract Administration Manager, Real Property City Attorney Senior Assistant City Attorney Assistant City Attorney Sr. Deputy City Attorney Deputy City Attorney City Auditor Deputy City Auditor Sr. Performance Auditor City Clerk Assistant City Clerk Deputy City Clerk City Manager Assistant City Manager/Chief Operating Officer Deputy City Manager Assistant to City Manager Chief Communications Officer Communications Manager Manager, Economic Development 21 Community Services Director, Community Services Assistant Director, Community Services Manager, Recreation & Golf Manager, Open Space & Parks Human Resources Director of Human Resources/Chief People Officer Assistant Director, Human Resources Human Resources Manager IT Director, IT/Chief Information Officer Information Technology Governance Manager Information Technology Manager Library Director, Libraries Assistant Director, Library Services Division Head, Collection & Technical Services Manager, Library Services Planning & Community Environment Director, Planning & Community Environment Assistant Director, Planning & Community Environment Division Manager, Advance Planning Division Manager, Chief Building Official Division Manager, Chief Planning Official Division Manager, Chief Transportation Official Division Manager, Development Services Director Public Safety Chief of Police/Director of Public Safety Fire Chief /Assistant Public Safety Director Assistant Police Chief Emergency Services Director Deputy Director – Technical Services Division (police department) Deputy Fire Chief Public Works Director, Public Works/City Engineer Assistant Director, Public Works – Environmental Services Assistant Director, Public Works – Public Services Assistant Director, Public Works – Engineering Airport Manager 22 Water Quality Control Plant Manager Utilities Director, Utilities Assistant Director Utilities Engineering* Assistant Director Utilities Operations* Assistant Director Utilities Customer Support Services* Assistant Director Utilities/Resources Management* Communications Manager* Engineering Manager – Electric* Engineering Manager –WGW* Manager Customer Service & Meter Reading* Manager Electric Operations* Manager Utilities Mkt Services* Manager Utilities Operations WGW* Utilities Compliance Manager* *Management positions up to and including Assistant Director in Utilities are represented by UMPAPA and currently under negotiations Attachment C Information Collected for Compensation Study Koff collected the total compensation information including active and retiree health and pension benefits for each of the benchmarked classifications. The City uses Total Compensation as the comparison factor for measuring competitiveness and setting the salary structure. 1. Monthly Base Salary. The top of the salary range and the mid‐point. 2. Retirement. The amount of the employee’s State retirement (PERS) contribution, the amount of Social Security contribution, and any alternative retirement plan where the employee’s contribution is made by the agency on behalf of the employee (Employer Paid Member Contribution). 3. Retiree Health. In order to be able to compare to other agencies, the normal cost, which is the cost for active employees for the current year, was used 4. Active Health and Insurances. This is the maximum amount paid by the agency for employees and dependents for a cafeteria or flexible benefit plan and/or health, dental, vision, life, long‐term disability, and employee assistance insurance. 5. Administrative and Personal Leave. The number of days available to management to reward for extraordinary effort in lieu of overtime. Personal leave may be available to other groups of employees to augment vacation or other time off. 6. Automobile. This category includes either the provision of an auto allowance or the provision of an auto for personal use. If a car is provided to any classification for commuting and other personal use, the average monthly rate is estimated at $450. For Palo Alto this benefit was primarily limited to executive staff. 7. Deferred Compensation. Deferred compensation provided to all members of a classification with or without the requirement for a matching or minimum contribution. Palo Alto does not match contributions by employees. 8. Other. All other benefits, including sick leave, tuition reimbursement, and mileage, many of which are usage‐based and cannot be quantified individual employee basis. In addition to the above list of benefits, information was gathered on cost‐cutting strategies implemented by agencies to reduce employment budgets, and on performance incentive programs or other performance‐based compensation programs for management classifications. Attachment D CITY OF PALO ALTO COMPENSATION PLAN Management and Professional Personnel And Council Appointees Compensation plan effective July 1, 2012 through June 30, 2014, except where specifically noted. 1 COMPENSATION PLAN FOR THE CITY OF PALO ALTO Management and Professional Personnel As used in this Plan, the term “Management and Professional” refers to all employees, including Confidential employees, previously classified as “Management and Confidential” by the City. This group will hereafter be identified as “Management and Professional” personnel. SECTION I. COMPENSATION This section applies to all management and professional employees and does not include Council Members or Council-appointed officers. Each Council-appointed officer shall be the responsible decision-maker under this Plan for those employees in departments under his/her control. A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY The City's policy for management and professional compensation is to establish and maintain a general structure based on marketplace norms and internal job alignment with broad compensation grades and ranges. Structures and ranges will be reviewed and updated as necessary based on marketplace survey data, internal relationships, and City financial conditions. Individual compensation adjustments will be considered by the Council-appointed officer based on (1) performance factors including achievement of predetermined objectives; (2) pay structure adjustments; and (3) City financial conditions. B. BASIC PLAN ELEMENTS 1. Structure. The compensation plan includes separate multi-grade structures for both management and professional employees. Each grade will have a salary range with a mid-point which is 20% above the minimum, and 20% below the maximum of the range.. All management and professional positions will be assigned an appropriate pay grade based on salary survey data and internal relationships. Actual salary within the range is determined by experience and performance. Competitive marketplace studies will be conducted as needed by surveying a maximum of 14 organizations similar to Palo Alto in number of employees, funding mechanisms, population and services provided. These studies will focus on total compensation for management positions such as first line supervisors, administrative, confidential, professional and top management. Periodically, studies will include position-by-position comparisons using market research and internal equity data. The results of these studies may indicate that the entire pay grade structure be adjusted, that individual positions be reassigned to different pay grades, or that no change takes place. Such adjustments will only affect the salary administration framework. No individual salaries will be automatically changed because of structural adjustments. A department director may request that HR reevaluate a job or jobs in his or her department based on significant and permanent changes in job content. In doing so the director will supply 2 needed information and will provide a position description questionnaire as requested. The Chief People Officer will respond to such requests within his or her discretion. 2. Compensation Adjustment Authorization. In consultation with feedback received from the Management and Professional Compensation Committee, the City Manager may propose as part of the budget process for Council approval of a compensation adjustment based on (1) competitive market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a recommendation received from the Chief People Officer. For fiscal year 2013 the compensation adjustment to mid-point shall be three percent (3%) effective the pay period including October 6, 2012 In years when there is an adjustment to mid-point, this adjustment will be available for those management/professional employees who have received an overall rating of "meets" or "exceeds" expectations on their annual review and who have not been on a performance improvement plan during the preceding fiscal year. Nothing herein shall preclude an employee's manager from awarding a mid-point adjustment increase to an employee on a performance plan at a later date should employee's performance improve. a) Base Compensation. Compensation for management and professional employees includes bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi-weekly base salary must fall within pay grade limits of no less than 20% below the mid-point and no more than 20% above the mid-point. Base salary increases are earned in accordance with administrative guidelines based upon growth within the position and performance, which must meet or exceed position standards, the salary structure and the City’s ability to pay. b) Performance Planning and Appraisal. Performance appraisals will be conducted at the end of each fiscal year during the months of July through September 30 each year prior to determining individual employee fixed compensation. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives shall be monitored periodically. The performance appraisals should be implemented in a manner that will achieve the following objectives: Define the employee’s job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee’s role and responsibilities; Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; Facilitate two-way communication and understanding between the employee and his or her supervisor; Counsel and encourage employees to work toward a learning development plan and realize their full potential; Establish future work plan objectives. 3 Work plans should include job related projects or special goals related to regular job duties when applicable. At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department heads and to the Chief People Officer or appropriate Council appointed officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. This process should be completed by September 30. C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION 1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non-Council-appointed management and professional employees in an amount not to exceed the aggregate of approved management and professional positions in the Table of Organization for the applicable fiscal year. 2. Individual management and professional compensation authorized by a Council-appointed officer under the Management and Professional Compensation Plan may not be less than 20% below nor more than 20% above the mid-point for the individual position grades authorized in Salary Schedule attached. 3. The Council-appointed officers are authorized to establish such administrative rules as are necessary to implement the Management and Professional Salary Plan subject to the limitations of the approved compensation adjustment authorization and the approved grade and mid-point structure. 4. Notwithstanding any other provision of this Compensation Plan, in the event a downward adjustment of a position grade assignment indicates a reduction in the established salary of an individual employee, the Council-appointed officer may, if circumstances warrant, continue the salary for such employee in an amount in excess of the revised grade limit for a reasonable period of time. Such interim salary rates shall be defined as "Y-rates." SECTION II. SPECIAL COMPENSATION This section applies to all eligible regular management and professional positions including Council Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be in conformance with the Merit Rules and Regulations and Administrative Directives issued by the City Manager for the purposes of clarification and interpretation. A. OVERTIME Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. B. IN LIEU HOLIDAY PAY 4 Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non-workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. C. WORKING OUT OF CLASSIFICATION PAY Where management and professional employees, on a temporary basis, are assigned to perform all significant duties of a higher classification, the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working out of class pay is normally not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties to be performed and an end date. D. STAND-BY PAY Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on a case by case basis, in extreme circumstances involving unavailability of non-management staff. Compensation is as follows: Monday through Friday $40 per day Saturday, Sunday, Holidays $58 per day E. CALL OUT PAY Effective pay period beginning February 26, 2011, Exempt management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City premises, (2) is called back to the work location outside of regularly scheduled working hours, and (3) the Call Back is for an emergency arising out of situations involving real or potential loss of service, property or personal danger. Employees called back will be expected to respond directly to the location of the problem. Compensation is per Call Out as reported on timecard and will be paid as follows: Monday through Friday: $140 per day Saturday and Sunday: $200 per day F. NIGHT SHIFT PREMIUM Night shift differential shall be paid at the rate of five percent (5%) to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE PERSONNEL 5 Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in conformance with department policy. H. GROUP INSURANCE 1. Effective Date of Coverage for New Employees For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. 2. Active Employee Health Plan a) Based on an employee’s family status, the City shall pay up to the monthly medical premium for the second most expensive plan among the existing array of plans available during the term of this compensation plan on behalf of eligible employees (including Council Appointed Officers and Council Members) and dependents, except as provided in section b, below. Eligible dependents, under current law, include spouses, children under the age of 26 and never married (natural, adopted, or stepchildren), economically dependent children, and domestic partners registered with the Secretary of State. If PERS changes the plans it offers, the City will continue to provide an equivalent benefit at an equivalent cost. b) Effective in the pay period including October 6, 2012, participating employees will contribute 10% of the premium cost for the employee-selected plan, and the City shall contribute 90%, with a maximum City contribution of 90% of the second highest plan. . c) City medical premium contributions will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. d) Coverage for Domestic Partners: 1) Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State. 2) Domestic Partnership Not Registered with the California Secretary of State: Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department, will be eligible for reimbursement of the actual monthly premium cost of an individual health plan, not to exceed the maximum monthly City employer contribution for one-party coverage under the CalPERS Health Benefits Program (or PORAC if a safety department employee) for an employee covered under this agreement. Evidence of premium payment will be required with request for reimbursement. e) PERS Choice Reimbursement Plan 6 Will be eliminated effective January 1, 2013. Management and Professional personnel enrolled in the PERS Choice medical plan may submit a request for payment, as specified below, for non-covered medical expenses, incurred during the period of January 1, through December 31, of the plan year, that exceed $2,500. The maximum annual reimbursement amount provided under this program is: $700 for employees enrolled in the Employee-Only category; $900 for employees enrolled in the Employee and One Dependent category, and $1,100 for employees enrolled in the Family category. Any amounts reimbursed to an individual under this program would be included in the employee’s gross income and is not PERSable. This program shall only reimburse employees for medical expenses that are not reimbursed through any other means and meet the definition in Section 213(d) of the Internal Revenue Code. (Examples of eligible expenses include medical plan deductibles and co-payments, prescription drugs, dental care, hearing care, and vision care.) However, in order to have any expenses reimbursed under this program, the employee must have allocated 100% ($2,500.00) of their 2010 calendar Excess Benefit funds into the Medical FSA option during the election that occurred in December 2009. In addition, all such reimbursements from the Excess Benefit Program must have been solely for medical expenses, as defined by Section 213(d) of the Internal Revenue Code. If the employee has designated his/her Excess Medical funds for any other qualifying expenses (i.e. dependent care, Professional Development, Deferred Compensation contributions), the employee would not be eligible for reimbursement under this program. Employees may submit a final claim for the 2012 plan year’s expenses during January. Any amounts remaining from the PERS Choice reimbursement plan after the claims for the plan year had been processed shall be forfeited. 3. Alternative Medical Benefit Program If a regular employee and/or the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees electing alternative coverage and no City coverage will receive cash payments in the amount of 90% of the average monthly premium for one party, which is $284.00. 4. Retiree Health Plan a) Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public 7 Employees” Medical and Hospital Care Act. The City’s monthly employer contribution for each employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the amount necessary to pay for the cost of his or her enrollment in a health benefits plan up to the monthly premium for the second most expensive plan offered to management and professional personnel during the contract term (among the existing array of plans.) The City’s contribution for an employee hired before January 1, 2004 who retires on or after March 30, 2011 shall be the same contribution amount it makes from time to time for active City employees. b) Post – 1/1/04 Hires For those Management and professional employees hired after January 1, 2004, the PERS law vesting schedule set forth in Government Code section 22893 will apply. Under that law, an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five (5) of those years were performed at the City of Palo Alto. After ten (10) years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at 20 years’ service credit, the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section 22893 based on a weighted average of available health plan premiums. 5. Dental Plan a) The City shall pay covered plan charges on behalf of all eligible employees and dependents. (Domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department are considered dependents under the plan.) Benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) The City’s Dental Plan provides the following: Maximum Benefits per Calendar Year- $2,000 per person Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) Major Dental Services 50% UCR* Orthodontics 50% UCR* Basic Benefits (All other covered services) First Calendar Year of Eligibility 70% UCR* Subsequent Calendar Years 70%-100% *Usual, Customary, and Reasonable Composite (tooth covered) fillings for posterior teeth For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 8 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not utilize the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year. If a dental plan member ever loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan would include: Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan. 6. Basic Life Insurance The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no-cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,000). 7. Supplemental Life And AD&D Insurance An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one- or two-times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amount of AD&D coverage available is up to $325,000. 8. Long Term Disability Insurance a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium for the first $6,000 of base monthly salary. For employees whose base monthly salary exceeds $6,000, the employee shall pay the cost of the required premium based upon their monthly salary between $6,000 and $15,000. b) For employees whose base monthly salary exceeds $6,000 and who have no eligible dependents covered under the City’s medical, dental or vision plans, the City will pay up to $17.50 per month towards the employee’s cost for LTD coverage. 9. Vision Care a) The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan provides an exam every 12 months; lenses every 24 months; frames every 24 months, all subject to a $20 co- 9 payment as defined in the Vision Services Benefits Plan A schedule. Benefits for regular part-time employees will be prorated as follows: Employees hired after January 1, 2004, who will work less than full time, will receive prorated premium costs for vision benefits in accordance with his/her percentage of a full-time work schedule. Vision benefits for regular part-time employees hired or assigned to a part-time schedule will be prorated in accordance with his/her percentage of a full- time work schedule. b) Effective July 1, 1996, dependents include eligible domestic partners who are either registered with the Secretary of State or who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department. I. EMPLOYEE ASSISTANCE PLAN The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line 24 hours a day, seven days a week. Guidance is also available online. J. SAFETY DIFFERENTIALS 1. Police Department - Personnel Development Program Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn police personnel: P.O.S.T. Intermediate Certificate: five percent (5%) above base salary P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary 2. Fire Department - EMT Differential Pursuant to administrative rules governing eligibility and qualification, the following may be granted to sworn Fire personnel: EMT Differential: three percent (3%) above base salary K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM Management and professional employees are eligible for Sections 1, 2, 3, and 4 of the Management Benefit Program. City Council Members are eligible for Section 3 only. 10 1. Professional Development - Reimbursement The purpose of this program is to provide employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self- improvement activities may be granted each management and professional employee up to a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: a) Civic and professional association memberships b) Conference participation and travel expenses, which must occur within the compensation plan period. c) Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City’s mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City’s travel expense report from the Policy & Procedures Manual Section 1-02 ASD. d) Professional and trade journal subscriptions not to exceed 12 months. e) Approval will be at discretion of department head and signature is required on reimbursement form. Amounts under this professional development program will be pro-rated in the first year of employment or promotion into a position covered by this Compensation Plan 2. Physical Examinations All management and professional employees are eligible to receive an annual physical examination as follows: a) Use the periodic health exam benefit as provided under the PERS Health Plan option you have selected. Each of the PERS Health Plans provides for a periodic physical examination. The examination must be performed by your primary care physician— unless he/she refers you to another physician. b) The types of tests and the frequency of the tests cannot exceed AMA guidelines. The guidelines are a suggested minimum based on research studies concerning preventative care. The judgment of your physician is the final determinant for your care. 11 c) Any additional necessary asymptomatic tests that are required by your physician that are not covered by your health plan, will be reimbursed by the City. Any symptomatic tests will be covered under your PERS Health Plan. The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet site. This benefit will not be pro-rated. 3. Excess Benefit This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code, with exception of Gym or Health Club Membership. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options: a) Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments as well as over-the-counter drugs, including: antacids, allergy medicines, pain relievers and cold medicines. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. b) Dependent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of annual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. 1) The annual amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 2) The expenses must be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3) The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 4) If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals (other than a resident of the facility). 12 5) Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP will be reduced by any amount reimbursed under the Excess Benefit Plan. c) Non-taxable Professional Development Spending Account. Provides reimbursement for Non-Taxable professional development expenses (e.g.,job-related training and education, seminars, training manuals, etc.) to the extent they are not paid or reimbursed under any other plan of the City. d) Gym or Health Club memberships. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement of this expense is taxable to the employee. e) Deferred Compensation. Provides a one-time contribution to the employee’s City- sponsored 457 Deferred Compensation plan with either ICMA-RC or the Hartford. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a “use –it-or-lose-it” basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Specified amounts under this benefit will be applied on a pro-rata basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. L. LEAVES 1. Sick Leave a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a 40-hour duty schedule. Those assigned work schedules which are greater or lesser than 40 hours will accrue sick leave at the ratio of their work schedule to 40 hours. b) Employees may use up to 20 hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. 13 d) Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have 15 or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent (2½%) of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. e) Up to nine (9) days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f) Management and Professional employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. g) In accordance with the City Merit Rules and Regulations, a new employee may, if necessary, use up to 48 hours or shift equivalent of sick leave at any time during the first six (6) months of employment. 2. Management Annual Leave a) Exempt Employees Regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half (½) shift off for each 8 hours charged. In 2012, the City will be transitioning this benefit from a fiscal to calendar year basis for administrative purposes. Therefore, on July 1, 2012, employees will be credited with 40 hours of annual leave for the period of July 1 to December 31, 2012. Beginning in 2013 and each calendar year thereafter, employees will be credited with 80 hours of management annual leave. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the year will be paid in cash unless a different option as indicated above is elected by the employee. b) Non-Exempt Employees 14 Based on an audit recommendation to eliminate payment of overtime as well as management leave for non-exempt employees in the management group, the City is transitioning away from providing management leave to non-exempt employees. As part of the transition, and in order to minimize impacts to current employees, the City will phase-out elimination of the 80 hours of management leave for all current non-exempt Management and Professional employees (those eligible to earn overtime). Continuing through Fiscal year 2013-2014, there will be no change to management leave benefits for current employees; these employees will maintain their 80 hours of management leave and also receive pay for any overtime hours worked. Beginning on July 1, 2014 all employees in non-exempt positions will receive overtime pay for hours actually worked, but will no longer receive management leave. Employees hired into non-exempt management positions on or after February 26, 2011 will receive overtime only and will not be eligible for management leave. 3. Vacation Vacation will be accrued when an employee is in pay status and will be credited on a bi- weekly basis. Total vacation accrual at any one time may not exceed three (3) times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a) Less than nine (9) years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year; provided that: i. The City Manager is authorized to adjust department head annual vacation accrual to provide for a maximum of 160 hours for those hired between July 1, 1996 and June 30, 2001; and ii. The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; 160 hours vacation per year. c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; 180 hours vacation leave per year. d) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 15 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section. Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation year, employees will make their election for vacation hours to cash out no later than November 1, 2012. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designates on the election form. Employees who do not elect a cash-out amount by November 1 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre-designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash-out the elected amount in a paycheck issued on or after the payroll date including November 1. 4. Bereavement Leave of absence with pay of three (3) days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family, which is defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control. M. RETIREMENT PENSION 1. Effective pay period inclusive of 1/6/07, the City’s Public Employees’ Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non-safety members (from 2% @55). For miscellaneous employees hired on or after July 17, 2010, the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60). 16 For Safety members, the City currently offers the CalPERS "3% at 50" full formula (Section 21362.2) benefit. Local Fire Safety members newly hired after 6/08/12 will be placed in the 3%@55 formula. As soon as administratively possible, the City intends to modify the Local Police Safety formula for new hires to 3%@55 formula. New employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute. 2. Employee PERS Share. The City previously paid 6% of the employee’s CalPERS share for employees under the 2.7%@55, 5% for employees under the 2%@60 formula, and the full employee share for those with public safety formulas. a) Beginning with the pay period including October 6, 2012, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. b) Beginning with the pay period including October 6, 2012, employees subject to the 2%@60 retirement formula shall pay the full seven percent (7%) employee contribution. c) Beginning with the pay period including October 6, 2012, Public Safety employees will pay the full nine percent (9%) PERS employee contribution. d) Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 3. Final Compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit, except as may otherwise be required by PEPRA. 4. Employee PERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. 5. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. N. COMMUTE INCENTIVES and PARKING 1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The City will provide a Civic Center Garage parking permit. Employees hired after June 30, 17 1994 may initially receive a parking permit for another downtown lot, subject to the availability of space at the Civic Center Garage. 2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one of the following commute incentives for those using an eligible commute alternative on 60% or more of their scheduled work days per month: a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the current IRS limit, as may be amended from time to time, (currently $125/month) are available through the Commuter Check Direct (CCD) website for employees using Bay Area public transportation or riding in a registered vanpool at least 60% of their scheduled work days. Administration of the Commuter Check benefit shall be subject to the rules and regulations of the third- party administrator. b) Bicycle. The City will provide employees with a tax-free incentive of $20 per month to eligible employees who ride a bicycle to work. c) Carpool. The City will provide with a taxable incentive of $30 per month to each eligible employee in a carpool with two or more licensed drivers. d) Walk. The City will provide employees with a taxable incentive of $20 per month to eligible employees who walk to work. O. AT-WILL STATUS Certain Management and Professional Positions are designated as having “at-will” employment status. “At-will” positions are intended to be of a limited duration and employees hired to fill these positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. 1. At-will Management & Professional positions. Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were hired as at-will employees whose terms of employment are specified by an employment contract that includes a severance package. Effective on the date of adoption of this plan, new employees hired or promoted to department head, assistant department director, and all other positions listed on Attachment B shall be at-will employees. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and 18 management leave as are generally provided to management employees and described in this compensation plan, as amended from time to time. At-will employees who are terminated or asked to resign shall, upon execution of a release of all claims against the City, be eligible for a severance payment equivalent to four (4) weeks of salary and benefits, increasing after completion of the first full year of service by one (1) week for every completed year of service, up to a maximum of 12 weeks. For example, an at-will employee who has completed six (6) years of service would be eligible to receive ten (10) weeks of severance (4 weeks plus 1 week for each year of service). No severance shall be paid if the employee is terminated for serious misconduct involving abuse of his or her office or position, including but not limited to waste, fraud, violation of the law under color of authority, misappropriation of public resources, violence, harassment or discrimination. If the employee is later convicted of a crime involving such abuse of his or her position the employee shall fully reimburse the City as set forth in Government Code section 53243.3. 2. Provisional employees. The City has created a program for Provisional employment when funding is available. The program’s purpose is to create limited duration senior management level work for the City Manager’s Office or as designated by the City Manager. A Provisional Employee will be an “at will” employee whose term of employment shall be no more than two (2) years. A Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional Employee will receive limited benefits as specified in an Employment Agreement. Sections I and II of this Compensation Plan shall not apply to Provisional Employees, except as specified by the City Manager. 3. Management fellows. The City has created a program for Management Fellows when funding is available. The program’s purpose is to create limited duration entry level positions for graduate students. A management fellow will be an “at will” employee whose term of employment shall be no more than one (1) year. A Management Fellow shall be PERS exempt, but may receive limited vacation, limited sick leave, limited health care benefits and other limited benefits, as determined by the City Manager. Sections I and II of this Plan shall not apply to Management Fellows, except as specified by the City Manager. P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional expenses of these offices. Q. REIMBURSEMENT FOR RELOCATION EXPENSE Policy Statement The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new management and professional employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits” or portions thereof, 19 may be extended for exceptional circumstances and only the approval of the City Manager or designee, or for Council-appointed officers, the City Council. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy. R. MEAL ALLOWANCE Management and professional employees assigned to attend night meetings are eligible to receive reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually taken and submitted for reimbursement. S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit System Rules and Regulations, any Management and Professional employee who is supervised by a Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance pursuant to Step One (informal discussion), summarize the grievance regarding the Council Appointed Officer in writing and submit it to the Director of Human Resources for review and resolution using the methods he/she considers appropriate. T. MERIT RULES The City will include members of the Management/Professional Compensation Committee in discussions regarding revision of the Merit Rules and Regulations. 20 Attachment B At-Will Positions Management and Professional Unit The intent of this provision under the Management/Professional Compensation Plan is to designate classifications at the department head, assistant director, deputy director, and division manager levels as at-will. The applicable Council Appointed Officer may designate newly created positions at those levels not included on this list as at-will. Existing classifications that shall be at-will include but are not limited to: Department Heads- All departments Assistant Directors- All departments Deputy Directors- All departments Division Managers Administrative Services Director, Administrative Services/Chief Financial Officer Director, Office of Management & Budget Assistant Director, Administrative Services Chief Budget Officer Manager, Accounting Manager, Purchasing & Contract Administration Manager, Real Property City Attorney Senior Assistant City Attorney Assistant City Attorney Sr. Deputy City Attorney Deputy City Attorney City Auditor Deputy City Auditor Sr. Performance Auditor City Clerk Assistant City Clerk Deputy City Clerk City Manager Assistant City Manager/Chief Operating Officer Deputy City Manager Assistant to City Manager Chief Communications Officer Communications Manager Manager, Economic Development 21 Community Services Director, Community Services Assistant Director, Community Services Manager, Recreation & Golf Manager, Open Space & Parks Human Resources Director of Human Resources/Chief People Officer Assistant Director, Human Resources Human Resources Manager IT Director, IT/Chief Information Officer Information Technology Governance Manager Information Technology Manager Library Director, Libraries Assistant Director, Library Services Division Head, Collection & Technical Services Manager, Library Services Planning & Community Environment Director, Planning & Community Environment Assistant Director, Planning & Community Environment Division Manager, Advance Planning Division Manager, Chief Building Official Division Manager, Chief Planning Official Division Manager, Chief Transportation Official Division Manager, Development Services Director Public Safety Chief of Police/Director of Public Safety Fire Chief /Assistant Public Safety Director Assistant Police Chief Emergency Services Director Deputy Director – Technical Services Division (police department) Deputy Fire Chief Public Works Director, Public Works/City Engineer Assistant Director, Public Works – Environmental Services Assistant Director, Public Works – Public Services Assistant Director, Public Works – Engineering Airport Manager 22 Water Quality Control Plant Manager Utilities Director, Utilities Assistant Director Utilities Engineering* Assistant Director Utilities Operations* Assistant Director Utilities Customer Support Services* Assistant Director Utilities/Resources Management* Communications Manager* Engineering Manager – Electric* Engineering Manager –WGW* Manager Customer Service & Meter Reading* Manager Electric Operations* Manager Utilities Mkt Services* Manager Utilities Operations WGW* Utilities Compliance Manager* *Management positions up to and including Assistant Director in Utilities are represented by UMPAPA and currently under negotiations Mid Point 190 Accountant $6,647.77 $79,768.00 $3,068.00 $38.35 NON-EXEMPT 76 Administrative Assistant $5,732.35 $68,785.60 $2,645.60 $33.07 EXEMPT 115 Assistant Building Official $9,738.99 $116,875.20 $4,495.20 $56.19 EXEMPT 132 Assistant Chief of Police $15,247.85 $182,977.60 $7,037.60 $87.97 EXEMPT 108 Assistant City Attorney $12,923.17 $155,084.80 $5,964.80 $74.56 EXEMPT 109 Assistant City Clerk $7,521.34 $90,251.20 $3,471.20 $43.39 EXEMPT 107 Assistant City Manager/Chief Operating Officer $15,838.46 $190,070.40 $7,310.40 $91.38 EXEMPT 73 Assistant Director Administrative Services $13,030.91 $156,374.40 $6,014.40 $75.18 EXEMPT 126 Assistant Director Community Services $12,475.36 $149,697.60 $5,757.60 $71.97 EXEMPT 1007 Assistant Director Human Resources $12,057.58 $144,684.80 $5,564.80 $69.56 EXEMPT 2001 Assistant Director Library Services $11,932.46 $143,187.20 $5,507.20 $68.84 EXEMPT 10 Assistant Director Planning & Community Environment $12,779.00 $153,337.60 $5,897.60 $73.72 EXEMPT 143 Assistant Director Public Works $12,631.71 $151,590.40 $5,830.40 $72.88 EXEMPT 111 Assistant Fire Chief $11,931.39 $143,187.20 $5,507.20 $68.84 EXEMPT 168 Assistant Manager Fleet $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 102 Assistant Manager Water Quality Control Plant $10,211.65 $122,532.80 $4,712.80 $58.91 EXEMPT 30 Assistant to the City Manager $9,868.65 $118,414.40 $4,554.40 $56.93 EXEMPT 118 Chief Building Offical $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 2008 Chief Communications Officer $12,711.76 $152,547.20 $5,867.20 $73.34 EXEMPT 112 Chief Planning Offical $10,834.28 $130,020.80 $5,000.80 $62.51 EXEMPT TBD Chief Sustainability Officer $9,393.12 $112,715.20 $4,335.20 $54.19 EXEMPT 82 Chief Transportation Offical $10,834.28 $130,020.80 $5,000.80 $62.51 EXEMPT 96 Claims Investigator $6,984.31 $83,803.20 $3,223.20 $40.29 NON-EXEMPT 24 Communication Specialist $7,562.67 $90,750.40 $3,490.40 $43.63 EXEMPT 89 Contracts Administrator $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 186 Coordinator Library Circulation $6,659.29 $79,913.60 $3,073.60 $38.42 NON-EXEMPT 191 Deputy Chief/Fire Marshall $12,875.82 $154,523.20 $5,943.20 $74.29 EXEMPT 9 Deputy City Attorney $9,164.02 $109,969.60 $4,229.60 $52.87 EXEMPT 99 Deputy City Auditor $10,724.77 $128,689.60 $4,949.60 $61.87 EXEMPT 71 Deputy City Clerk $6,022.55 $72,280.00 $2,780.00 $34.75 EXEMPT 55 Deputy City Manager $13,198.72 $158,392.00 $6,092.00 $76.15 EXEMPT 195 Deputy Director Technical Services Div $12,838.58 $154,065.60 $5,925.60 $74.07 EXEMPT 20 Deputy Fire Chief $13,335.16 $160,014.40 $6,154.40 $76.93 EXEMPT Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 1 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 81 Director Administrative Services/Chief Financial Officer $15,181.62 $182,187.20 $7,007.20 $87.59 EXEMPT 72 Director Community Services $15,297.99 $183,580.80 $7,060.80 $88.26 EXEMPT 1012 Director Development Services $12,500.00 $150,009.60 $5,769.60 $72.12 EXEMPT 133 Director Human Resource/Chief People Officer $14,469.09 $173,638.40 $6,678.40 $83.48 EXEMPT 128 Director Information Technology/Chief Information Officer $15,810.50 $189,716.80 $7,296.80 $91.21 EXEMPT 131 Director Libraries $14,318.95 $171,828.80 $6,608.80 $82.61 EXEMPT 2005 Director Office of Emergency Services $11,232.95 $134,804.80 $5,184.80 $64.81 EXEMPT 49 Director Office of Management and Budget $13,030.91 $156,374.40 $6,014.40 $75.18 EXEMPT 134 Director Planning & Community Environment $15,334.80 $184,017.60 $7,077.60 $88.47 EXEMPT 135 Director Public Works/City Engineer $15,530.43 $186,368.00 $7,168.00 $89.60 EXEMPT 121 Director Utilities $19,906.07 $238,867.20 $9,187.20 $114.84 EXEMPT 2002 Division Head Library Services $9,370.93 $112,444.80 $4,324.80 $54.06 EXEMPT 123 Division Manager Cubberly Center & Human Services $10,072.37 $120,868.80 $4,648.80 $58.11 EXEMPT 172 Division Manager Open Space & Golf $10,072.37 $120,868.80 $4,648.80 $58.11 EXEMPT 1005 Executive Assistant to the City Manager $6,485.63 $77,833.60 $2,993.60 $37.42 EXEMPT 139 Fire Chief $15,444.86 $185,328.00 $7,128.00 $89.10 EXEMPT 163 Hearing Officer $9,164.02 $109,969.60 $4,229.60 $52.87 EXEMPT 101 Human Resources Representative $5,875.66 $70,512.00 $2,712.00 $33.90 EXEMPT 90 Landscape Architect Park Planner $8,722.45 $104,665.60 $4,025.60 $50.32 EXEMPT 69 Legal Services Administrator $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 171 Management Analyst $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 79 Manager Accounting $10,250.25 $123,011.20 $4,731.20 $59.14 EXEMPT 2007 Manager Airport $11,235.09 $134,825.60 $5,185.60 $64.82 EXEMPT 38 Manager Communications $8,509.70 $102,107.20 $3,927.20 $49.09 EXEMPT 154 Manager Community Services $7,521.34 $90,251.20 $3,471.20 $43.39 EXEMPT 169 Manager Community Services Sr Program $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 1013 Manager Development Center $8,940.51 $107,286.40 $4,126.40 $51.58 EXEMPT 63 Manager Economic Development $10,834.28 $130,020.80 $5,000.80 $62.51 EXEMPT 44 Manager Employee Benefits $9,258.74 $111,113.60 $4,273.60 $53.42 EXEMPT 45 Manager Employee Relations & Training $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 93 Manager Environmental Control Program $9,393.12 $112,715.20 $4,335.20 $54.19 EXEMPT 127 Manager Fleet $9,493.31 $113,921.60 $4,381.60 $54.77 EXEMPT 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 2 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 32 Manager Information Technology $10,479.00 $125,756.80 $4,836.80 $60.46 EXEMPT 2006 Manager Information Technology Security $9,501.54 $114,025.60 $4,385.60 $54.82 EXEMPT 57 Manager Investments Debts & Projects $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 158 Manager Laboratory Services $8,940.51 $107,286.40 $4,126.40 $51.58 EXEMPT 78 Manager Library Services $7,521.34 $90,251.20 $3,471.20 $43.39 EXEMPT 92 Manager Maintenance Operations $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 51 Manager Planning $9,393.12 $112,715.20 $4,335.20 $54.19 EXEMPT 95 Manager Purchasing & Contract Administration $10,250.25 $123,011.20 $4,731.20 $59.14 EXEMPT 103 Manager Real Property $10,250.25 $123,011.20 $4,731.20 $59.14 EXEMPT TBD Manager Revenue Collections $9,627.95 $115,544.00 $4,444.00 $55.55 EXEMPT 198 Manager Risk & Benefits $10,249.60 $122,990.40 $4,730.40 $59.13 EXEMPT 160 Manager Solid Waste $10,368.25 $124,425.60 $4,785.60 $59.82 EXEMPT 86 Manager Urban Forestry $8,302.15 $99,632.00 $3,832.00 $47.90 EXEMPT 178 Manager Water Quality Control Plant $11,537.84 $138,444.80 $5,324.80 $66.56 EXEMPT 39 Manager Watershed Protection $10,368.00 $124,425.60 $4,785.60 $59.82 EXEMPT 1008 Office of Emergency Services Coordinator $8,509.70 $102,107.20 $3,927.20 $49.09 EXEMPT 100 Performance Auditor $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 148 Police Chief-Adv $17,174.35 $206,086.40 $7,926.40 $99.08 EXEMPT 2003 Principal Management Analyst $10,167.00 $122,012.80 $4,692.80 $58.66 EXEMPT 77 Project Manager $6,485.63 $77,833.60 $2,993.60 $37.42 EXEMPT 2009 Project Manager Trees $7,955.44 $95,472.00 $3,672.00 $45.90 NON-EXEMPT 166 Public Safety Manager I $7,289.69 $87,484.80 $3,364.80 $42.06 EXEMPT TBD Public Safety Manager II $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 74 Safety Officer $7,562.67 $90,750.40 $3,490.40 $43.63 EXEMPT 117 Senior Accountant $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 152 Senior Assistant City Attorney $14,215.49 $170,580.80 $6,560.80 $82.01 EXEMPT 11 Senior Deputy City Attorney $10,115.36 $121,388.80 $4,668.80 $58.36 EXEMPT 187 Senior Engineer $10,368.25 $124,425.60 $4,785.60 $59.82 EXEMPT 106 Senior Executive Assistant $9,258.74 $111,113.60 $4,273.60 $53.42 EXEMPT 157 Senior Human Resources Administrator $7,902.11 $94,827.20 $3,647.20 $45.59 EXEMPT 14 Senior Management Analyst $9,250.00 $111,009.60 $4,269.60 $53.37 EXEMPT 130 Senior Performance Auditor $8,722.45 $104,665.60 $4,025.60 $50.32 EXEMPT 53 Senior Project Manager $10,893.14 $130,728.00 $5,028.00 $62.85 EXEMPT 33 Senior Technologist $9,501.54 $114,025.60 $4,385.60 $54.82 EXEMPT 70 Staff Assistant to the City Manager $7,002.07 $84,032.00 $3,232.00 $40.40 EXEMPT 155 Superintendent Animal Services $8,302.15 $99,632.00 $3,832.00 $47.90 EXEMPT 83 Superintendent Community Services $9,164.02 $109,969.60 $4,229.60 $52.87 EXEMPT 161 Supervisor Facilities Management $7,709.37 $92,518.40 $3,558.40 $44.48 EXEMPT 113 Supervisor Inspection and Surveying $8,302.15 $99,632.00 $3,832.00 $47.90 EXEMPT 174 Supervisor Public Works $6,984.31 $83,803.20 $3,223.20 $40.29 NON-EXEMPT 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 3 of 4 Mid Point Hourly FLSA Status City of PaloAlto Management and Professional Compensation Effective May 18, 2013 Monthly Salary RangeClass No. /Job Code Title Approx Annual Approx Biwkly 62 Supervisor Recycling Program $6,659.29 $79,913.60 $3,073.60 $38.42 EXEMPT 181 Supervisor Water Quality Control Operations $8,509.70 $102,107.20 $3,927.20 $49.09 EXEMPT 184 Veterinarian $8,099.66 $97,198.40 $3,738.40 $46.73 EXEMPT 146 Warehouse Supervisor $6,984.31 $83,803.20 $3,223.20 $40.29 EXEMPT Confidential Classifications Class No. /Job Code Title Control Point Approx Annual Approx Biwkly Hourly FLSA Status 905 Human Resource Assistant-Confidential $5,066.56 $60,798.40 $2,338.40 $29.23 NON-EXEMPT 903 Legal Secretary-Confidential $5,193.23 $62,316.80 $2,396.80 $29.96 NON-EXEMPT 67 Secretary to City Attorney $6,173.11 $74,068.80 $2,848.80 $35.61 NON-EXEMPT 1004 Senior Legal Secretary - Confidential $5,732.35 $68,785.60 $2,645.60 $33.07 NON-EXEMPT 5/3/2013 Management Professional & Confidential Salary Schedule Final Page 4 of 4 City of Palo Alto (ID # 3939) City Council Staff Report Report Type: Action Items Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: UMPAPA adoption of resolution Title: Adoption of a Resolution Implementing Terms for Utilities Managers and Professionals Association of Palo Alto Pursuant to California Government Code Section 3505 From: City Manager Lead Department: Human Resources Recommendation Staff recommends that Council hold a public hearing and adopt the attached resolution implementing the changes described in the City’s Last, Best, and Final Offer to employees in the Utilities Managers and Professionals Association of Palo Alto (UMPAPA). Motion Council adopt the attached resolution implementing the changes described in the City’s Last, Best, and Final Offer to employees in the Utilities Managers and Professionals Association of Palo Alto (UMPAPA) Background UMPAPA petitioned to form a bargaining unit in November 2009, and following proceedings before the State Mediation and Conciliation Service, the City certified UMPAPA as a bargaining unit in 2011. This unit consists of 43 managers and administrative staff earning an average salary of $128,352 with an average total compensation of $194,450. The City and UMPAPA started meeting and conferring in good faith in July 2011. On April 30, 2013, UMPAPA declared impasse and requested that the City hold a public hearing to implement its Last, Best and Final offer. City of Palo Alto Page 2 The Meyers Milias Brown Act (“MMBA”) requires the City to bargain in good faith, and prohibits it from changing terms and conditions of employment for represented employees without completing good faith negotiations and legally mandated impasse procedures. Following the completion of any applicable impasse procedures, the City may implement changes consistent with its Last, Best, and Final offer to the Association. Implementation does not establish a Memorandum of Agreement (MOA). Following implementation, the parties are still required to negotiate matters within the scope of representation. In other words, even after implementation, either party may request that negotiations resume at any time if there is some indication that the impasse may be broken. At a minimum, the parties must meet and confer prior to adoption of the budget the next fiscal year, FY 2015 in this instance. Thus, the parties will likely resume negotiations in early calendar year 2014. In addition, because the parties’ duty to bargain continues even after implementation, the City may not implement any terms that amount to a waiver of UMPAPA’s right to request bargaining. For example, language contained in the “Management Rights” and work stoppage provisions of the City’s Last, Best, and Final Offer will not operate as a waiver of UMPAPA’s rights, and will not grant the City any greater rights than it possesses under state law. New state law effective January 1, 2012 allows a union to request fact-finding as an impasse procedure within 30 days of the declaration of impasse. If fact-finding is requested, the City must complete that process prior to implementing terms. Here, UMPAPA declined fact-finding and the time period has run. Therefore, section 3505.7 allows the City to implement terms after holding a public hearing. Discussion The parties have been bargaining for an initial MOA for two years and have held 29 formal meetings. During these negotiations the City has focused on negotiating three key concessions consistent with those established with other Management employee groups including the Management and Professional unit, and the Fire Chiefs’ Association: (1) an employee cost share for medical premiums of 10% for active employees, (2) paying the full CalPERS employee retirement contribution and (3) decreasing the professional development benefit from $1500 to $500. SEIU and IAFF have also agreed to contracts with two of these three concessions not including this specific professional development change. In Dec. 17, 2012, the parties appeared to reach a tentative agreement on all issues, including the concessions outlined above. However, the agreement dissolved after the City proposed several minor clarifications throughout the contract and UMPAPA raised new concerns over the “Management Rights” provision. In particular, UMPAPA objected to language asserting the City’s unilateral rights to: promulgate work rules; determine work schedules; determine job classifications and the allocation of positions; and determine the methods, means and personnel by which services are provided, including the right to contract out. Although the City City of Palo Alto Page 3 attempted to address UMPAPA’s concerns, it became clear that the parties would not be able to reach a final agreement. On April 30, 2013, UMPAPA declared impasse. Prior to UMPAPA’s declaration of impasse, the parties were able to draft and sign tentative agreements on most subjects, and the City’s Last, Best and Final Offer achieves many of the City’s goals in negotiations, with the exception of the City’s right to manage. Therefore staff recommends implementing the City’s Last, Best, and Final Offer, which is included with the attached resolution. The following provides a summary of the key terms for this unit, all of which were tentatively agreed to by both parties prior to UMPAPA’s declaration of impasse: Pension UMPAPA employees to pay full employee CalPERS retirement contribution, eight percent (8%) or seven (7%) depending on retirement formula employee is enrolled in (employees currently paying two percent of the employee contribution and the City is paying the difference); and Salary Three percent (3%) salary increase for all classifications, similar to Management and Professional unit to offset the increased employee contribution to pension, effective within three pay periods following adoption of attached resolution; Additional salary increases to bring below-market classifications to market based on the Koff and Associates 2012 Management and Professional Total Compensation Study, in two phases: the first phase is effective within three pay periods following adoption of attached resolution; and the second phase effective in the pay period including December 1, 2013. Medical Cost sharing increase and other health-related benefit changes Employee health plan contribution increase to ten percent (10 %) medical contribution similar to other employee units, City to pay up to 90% of second highest CalPERS plan; All part-time UMPAPA employees will begin to pay pro-rated contributions for benefits Reduce alternative medical waiver cash out to $284 per month flat rate; and Future retirees will pay the same contribution as actives, as it changes from time to time At-will status New Division Managers and Assistant Department Directors will be hired under “At-will” status with ability to separate or be asked to resign at any time with or without cause. City of Palo Alto Page 4 Upon involuntary separation, UMPAPA employees will be eligible for severance up to 90 days. Other employees in this bargaining group not considered “At-will” shall be subject to twelve (12) month probation (at-will employees do not have a probation period). Professional Development Similar to Management and Professional unit, reduce amount per employee per year from $1500 to $500 per fiscal year, with remaining $1,000 per person to be allocated to Utilities department for training and development as determined appropriate by department head. New staffing changes Effective July 1, 2013, changes in staffing to two positions were proposed by the Utilities Department in FY14 budget process. One reclassification was requested changing a Senior Resource Planner to Manager, Utilities Credit and Collection. The other reclassification requested was to change an Inspector, Field Services to Supervisor, Inspection Services. These requests were approved by Council in budget adopted June 13, 2013, and the newly created positions are now listed in attached salary schedule. Resource Impact: The cost for adoption of this resolution is outlined as follows: 3% increase $164,887 Targeted salary increases $452,290 Annualized Subtotal $617,177 Variable Benefits – pension, Medicare, life insurance - (28.5%) $175,895 Total Adjustments Cost $793,073 Savings – PERS, medical ($344,641) Annualized Net cost $448,432 *This grand total does not include the savings from NOT retroactively implementing the agreement City of Palo Alto Page 5 Attachments: ATTACHMENT A - Reso UMPAPA Imposing Last Best Final Offer (PDF) ATTACHMENT B - UMPAPA and Salary Schedule 2013 (PDF) NOT YET APPROVED 130613 sh 0160031 Resolution No. ____ Resolution of the Council of the City of Palo Alto Imposing the City’s Last, Best, and Final Offer to Utility Management Professional Association Pursuant to Government Code Section 3505.7 R E C I T A L S A. The Utility Management Professional Association (hereinafter “Union”) filed to form a bargaining unit pursuant to the City’s Merit Rules, which was ruled by an arbitrator to be a unit with the broadest feasible grouping based upon the internal Utilities community of interest; and B. Union was certified by the City of Palo Alto (hereinafter “City”) on April 13, 2011; and C. Since July 2011, the City and Union have met and engaged in extensive negotiations over the terms of their first Memorandum of Agreement, meeting approximately twenty-nine (29) times in an effort to agree on the terms of an initial Memorandum of Agreement; and D. On April 30, 2013, the Union declared Impasse; and E. The Union did not request Factfinding pursuant to PERB regulations; and, F. Notwithstanding all of the efforts described above the Parties remain at an impasse after the 30-day time period has been exhausted; and G. In such circumstances Government Code section 3505.7 authorizes the City to unilaterally implement its last, best, and final offer; and H. On June 13, 2013 the City gave the Union written notification that the City Council would consider a resolution to unilaterally implement the terms of the City’s last, best and final offer at the City Council meeting on June 17, 2013. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Implementation of Last, Best, and Final Offer. The implementation of the City’s Last, Best, and Final Offer, attached hereto and incorporated herein, is approved. The City Manager is authorized to implement the terms of the Last, Best and Final Offer effective immediately upon adoption of this resolution. NOT YET APPROVED 130613 sh 0160031 SECTION 2. Summary of Terms. This section provides a summary of the terms and conditions of employment of members of the Utility Management Professional Association bargaining unit. A more complete description of the terms and conditions of employment for members of the Utility Management Professional Association bargaining unit is contained in the attached Last, Best, and Final Offer. Compensation. The City Manager will determine each employee’s actual salary relative to the control point for a classification. The City Manager has sole discretion to adjust salaries within control point range. Increases within the control point range shall only be awarded to employees who achieved an overall rating of “meets” or “exceeds” expectations on their respective most recent annual performance evaluation who have not been subject to a performance improvement plan or disciplinary action during that evaluation period. Effective the pay period including on the first day of the first pay period following adoption of this resolution, or as soon as administratively possible, control points for all classifications in the Association bargaining unit shall increase three percent. Such increases are in addition to the selective control point adjustments that will take effect on the same date, as reflected on Exhibit A to the City’s Last, Best, and Final Offer. Except for employees hired or promoted into the bargaining unit less than one hundred twenty (120) days before this resolution is implemented, each employee’s base salary will increase to the control point, provided that if an employee is being compensated above control point at the time a control point increase takes effect, the City Manager has the sole discretion to determine whether the employee’s pre-existing above-control point salary level shall be increased. Effective December 1, 2013 the salary control points set forth in Exhibit B to the City’s Last, Best, and Final Offer attached hereto and incorporated herein, for the classifications covered by this agreement will take effect. Also effective December 1, 2013 employees in the bargaining unit before August 3, 2013 will receive a percentage adjustment in base salary equal to the percentage increase, if any, in the control point on that date as set forth in Exhibit B to the City’s Last, Best, and Final Offer; provided that if an employee is being compensated above control point at the time a control point increase takes effect, the City Manager has the sole discretion to determine whether the employee’s pre-existing above- control point salary level shall be increased. Performance Appraisal. Performance appraisals will be conducted in accordance with the terms contained in the City’s Last, Best, and Final Offer. NOT YET APPROVED 130613 sh 0160031 Overtime and in-lieu holiday pay. Compensation for overtime work, and scheduled work on paid holidays for certain designated non-exempt employees shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. Working out of classification pay. If employees are assigned on a temporary basis to perform all significant duties of a higher classification the City Manager may authorize payment within the range of the higher classification for the specified time frame. Call Out Pay. Exempt utility management and professional classifications will be compensated for Call Out as outlined in the City’s Last, Best, and Final Offer, with Management approval (and will not be eligible for overtime pay). Night Shift Premium. Night shift differential shall be paid at the rate of 5% to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. Professional Development. Reimbursement for authorized self-improvement activities may be granted each unit employee up to a maximum of five hundred dollars ($500) per fiscal year. In addition, a departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. Active Employee Health Plan. a) Effective on the first of the calendar month falling sixty (60) days after adoption of this resolution, City health premium contributions (medical, dental and vision) will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. Until that time, part-time NOT YET APPROVED 130613 sh 0160031 employees will remain subject to the practice in effect at adoption of this resolution. Active employees participating in City sponsored health plans will contribute ten percent (10%) of the premium cost for the employee-selected plan, and the City shall contribute ninety percent (90%) with maximum City contribution of ninety percent (90%) of the second highest plan. If a regular employee and/or the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees waiving City coverage may receive a stipend of $284 per month. Retiree Health Plan 1. Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees’ Medical and Hospital Care Act. The City’s contribution for an employee hired before January 1, 2004 and whose retirement date is on or after May 1, 2011 shall be the same contribution amount it makes from time to time for active City employees. 2. Post – 1/1/04 Hires Government Code section 22893 applies to those Unit members hired after January 1, 2004, and provides that, upon retirement from the City an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five of those years were performed at the City of Palo Alto. After ten years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at twenty (20) years’ service credit; the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of the contribution for their dependent coverage. The City of Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the minimum contribution set by PERS under section Government Code section 22893. Dental Plan and Vision Care. The City shall pay covered dental plan charges on behalf of all eligible employees and dependents. The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). NOT YET APPROVED 130613 sh 0160031 Additional Insurance Coverage. The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, supplemental life and AD&D insurance, and long term disability insurance, as provided in the City’s Last, Best, and Final Offer. Employee Assistance Plan The City shall provide employees access to an Employee Assistance Plan (EAP). Excess Benefit. The City shall provide an “Excess Benefit” in an amount not to exceed $2,500 per employee per calendar year, through a plan designed to meet the requirements of Section 125 of the Internal Revenue Code. Pension Benefits Effective the pay period including on the first day of the first pay period following adoption of this resolution, or as soon as administratively possible, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. Effective the pay period including on the first day of the first pay period following adoption of this resolution, or as soon as administratively possible, employees under the 2%@60 retirement formula will pay the full seven percent (7%) employee contribution. Employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute including but not limited to the following provisions: 1. Retirement formula. Effective for employees hired on or after January 1, 2013, the PEPRA requires the City to provide new employees, as defined in that law, the CalPERS retirement formula two percent of final salary at age 62 (2%@62). 2. Employee contributions. Employees under the 2%@62 formula shall pay at least 50 percent of the total normal cost or the same contribution rate as “similarly situated” employees, whichever is higher. 3. Final compensation. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable NOT YET APPROVED 130613 sh 0160031 compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. Sick Leave. Sick leave shall be accrued at the rate of 3.7 hours per bi weekly pay period for those employees working a forty hour duty schedule, provided the employee has been in a pay status for 50 percent or more of a bi weekly pay period. Management Annual Leave. At the beginning of each calendar year designated exempt employees will be credited with 80 hours of management annual leave. Vacation. Vacation will be accrued when an employee is in pay status and will be credited on a bi-weekly basis. Total vacation accrual at any one time may not exceed three times the annual rate of accrual. Employees are eligible to cash out vacation accrual balances in excess of 80 hours pursuant to the provisions contained in the City’s Last, Best, and Final Offer. Bereavement. Leave of absence with pay of three days may be granted an employee by the head of his/her department in the event of death in the employee’s immediate family. Probation. Employees who are not At-Will shall serve an initial probationary period of twelve (12) months. During the probationary period the employee serves at the will of the City and may be terminated for no reason or for any lawful reason, and such termination is not subject to appeal. At Will Status. Certain unit positions are designated as having “at-will” employment status. Employees who hold at-will positions shall have no constitutionally protected property or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right or expectation to continued employment or pre-or post-disciplinary due process and work at the will and NOT YET APPROVED 130613 sh 0160031 pleasure of the hiring authority. Work for an at-will employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. Effective on the date of adoption of this MOA, new employees hired or promoted to the following classifications shall be at-will employees: Assistant director, engineering manager, communications manager, manager electric operations, manager customer service & meter reading, manager utilities marketing services, manager utilities operations WGW, utilities compliance manager. At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health insurance, CalPERS contribution to the extent paid by City, etc.) and vacation, sick leave, and management leave as are generally provided to unit employees. Reimbursement. The City may provide a basic relocation benefits package for new employees, upon approval of the City Manager or designated subordinate, and in accordance with the City’s Relocation Expense Policy. Meal Allowance Employees assigned to attend night meetings or who travel for business purposes are eligible to receive reimbursement as described by City Policy. Reduction in Workforce The City will make every effort to provide written notice of its intent to lay off employees in this unit and will meet with Association upon request to discuss alternatives to layoff. SECTION 3. Nothing in this Resolution shall be construed as depriving the Union of its right to meet and confer on matters within the scope of representation, whether or not such matters are included in this Resolution, prior to adoption of the City budget or as otherwise required by law. SECTION 4. If any provision or any part of a provision of this Resolution shall be finally determined to be invalid, illegal, or otherwise unenforceable, such determination shall not impair or otherwise affect the validity, legality, or enforceability of the remaining provision or parts of the provision this Resolution, which shall remain in full force and effect as if the unenforceable provision or part were deleted. NOT YET APPROVED 130613 sh 0160031 SECTION 5. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: Deputy City Attorney City Manager ______________________________ Chief People Officer TENTATIVE City of Palo Alto and Utility Management Professional Association of Palo Alto (UMPAPA) Memorandum of Agreement [Date of Council Adoption], 20l3-December 31, 2014 PREAMBLE This memorandum of Agreement between the City of Palo Alto, hereinafter referred to as the "City", and the Utilities Management and Professional Association of Palo Alto, hereinafter referred to as the "Association", has been prepared and entered into in accordance with Title I, Division 4, Chapter 10, Sections 3500-3510 of the California government Code and Chapter 12 of the City of Palo Alto Merit System Rules and Regulations. ARTICLE I -RECOGNITION The City recognizes the Association as the exclusive representative of employees occupying positions in the bargaining unit certified by the City in accordance with the decision of Arbitrator Kagel dated April 13,2011. ARTICLE II -NO DISCRIMINATION The Association and the City hereby agree that there shall be no discrimination because of race, color, age, handicap,· sex, national origin, sexual or gender orientation, political or religious affiliation under this Agreement. There shall be no discrimination in employment conditions or treatment of employees on the basis of membership or non-membership in the Association, or participation in the lawful activities of the Association. ARTICLE III -PAYROLL DUES DEDUCTION The City shall deduct Association member dues, and any other mutually agreed upon payroll deduction from the bi-weekly pay of bargaining unit employees. The dues deduction must be authorized in writing by the employee on an authorization fonn acceptable to the City and to the Association. City shall remit the deducted dues to the Association as soon as possible after deduction. ARTICLE IV -WORK STOPPAGE AND LOCKOUTS The Association, its representatives or members shall not engage in or cause, instigate, encourage, sanction or condone a work stoppage or sympathy work stoppage, withholding of services, leave of absence abuse or work slowdown of any kind against the City of Palo Alto or its citizens by its members during the tenn of this MOA. No Association member shall refuse to cross any picket line in the conduct of the Utility business, nor shall the Association, its representatives or members discriminate in any way towards anyone who refuses to participate in a work stoppage or any of the job actions cited above. The City agrees that it ""ill not lock out Association members. ARTICLE V -CITY RIGHT TO MANAGE The City retains and reserves, without limitation, all powers, rights, authority, duties, and responsibilities to manage the City including, but not limited to; 2 1. Management and administrative control of the City, its operations, and its properties and facilities; 2. Evaluate, hire, promote, transfer, demote, discipline, and discharge employees; ~,-_Promulgate, enforce aiidperiOdicaiJ.y revise or rescind reasonable work rules, operationaJi and,,<iministr,,~i\'epoHcies, qualitative an~qullntitative standa:rds,and procedure,; 4. Assign and distribute work; . 5. betermine the methods~meaiis, and personnel by which services are caITiedout including \he right to sooeoll:l:Faet Of eefttfaet em, eofttfttet ill, transfer duties between Cit~ employees whether or not they are in the bargaiI$lg unit. and to subcontract or contract out. subject to the Provisions of Article XIILsection 4 ofthisMOA; 6. Establish and revise reasonable standards of attendance, conduct, and performance and to enforce such standards; 7. Determine and implement technology and equipment used in the performance of work, and to determine work locations; 8. DetennineJob classi.ficatlons and the allocation of positions to thOse dassifications~ 2._ Determil1e work schedul,)s including, but notIiInited to, the hours (jf work and rest~ 10. Determine payroll practices, II. All rights conferred upon and vested in it by the law and the Constitutions of the State of California and the United States, and fI2.Any-ofuei-iight traditionally and historicaliyexercised by the City with_ reSJle£tto; ~Il1Ploye~sJindoperations within thes£ope of the bargaining unit~ Nothing in this Agreement is to be interpreted as constituting a waiver of the City's rights and responsibilities to manage the City and create and maintain programs and services that reflect its public's wishes. The intent of this MOA is to establish wages, working hours, and conditions of employment with the Association. ARTICLE VI -COMPENSATION Section 1 -Compensation. a) Classifications allocated to salary control points. The classifications in the Utilities Department that are covered by this MOA and the salary control points for those classifications are listed on Exhibit A, which is attached hereto and incorporated herein. The City Manager will determine each employee's actual salary relative to the control point for a classification based on a variety of factors including but not limited to adaptive performance, achievement of pre-determined objectives, experience, City financial conditions, etc. b) City Manager Sole Discretion. The City Manager has sole discretion to adjust salaries within control point range. The City :tvtanager may increase or decrease an employee's salary if, in the City Manager's sole judgment, such adjustments are warranted based on factors such as those described in subsection A above, provided that the salary rate resulting from such adjustment may not exceed one hundred twenty percent (120%) or fall below eighty percent (80%) of the salary control point for the classification. Increases within the control point 3 range shall only be awarded to employees who achieved an overall rating of "meets" or "exceeds" expectations on their respective most recent annual performance evaluation who have not been subject to a performance improvement plan or disciplinary action during that evaluation period. c) Initial Control Point Increases. Effective liBe!'lay !'leflea iBeltldiHg eD the first day of the first pay period following adoption of this MOA, or as soon as administratively possible, control points for all classifications in the Association bargaining unit shall increase three percent, as shown on Exhibit A. In no event will such increase take effect later than the beginning of the third full pay period following adoption of this MOU by the City CoUJ'J.cil. Such increases are in addition to the selective control point adjustments that will take effect on the same date, as reflected on Exhibit A. Except for employees hired or promoted into the b8.rgainfn~ ~~ _less than one hundred twenty (120) days before this subsection c)ls implemented, each employee's base salary will increase to the control point, provided that if an employee is being compensated above eontrol point at the time a control point increase takes effect, the City Manager has the sole discretion to determine whether the employee's pre-existing above-control point salary level shall be increased, based on the factors such as those set forth in subsections A and B above. d) Additional Targeted Control Point Adjustments. Effective December 1, 2013 the salary control points set forth in Exhibit B, attached hereto and incorporated herein, for the classifications covered by this agreement will take effect. Also effective December I, 2013 employees in the bargaining unit before August 3, 2013 will receive a percentage adjustment in base salary equal to the percentage increase, if any, in the control point on that date as set forth in Exhibit B; provided that if an employee is being compensated above control point at the time a control point increase takes effect, the City Manager has the sole discretion to determine whether the employee's pre-existing above-control point salary level shall be increased, based on the factors such as those set forth in subsections A and B above. Section 2 -Performance Appraisal, Performance appraisals will be conducted each fiseal year between July 1 and September 30, inclusive. This process includes both review of previous performance plan and preparation of the performance plan for the next planning period (usually the fiscal year). Performance plans are jointly prepared by the employee and supervisor with the concurrence of the department head or Council-appointed officer. The performance plans shall contain measurable objectives which place special emphasis on position description duties or specific assignments. Progress toward meeting objectives shall be monitored periodically. The performance appraisals should be implemented in manner that will achieve the following objectives. 1. Define the employee's job duties and expected level of performance for the next review period to ensure that both the employee and supervisor have a clear understanding of the employee's role and responsibilities; 2. Evaluate and document past performance to serve as a basis for establishing and obtaining future performance standards/objectives; 4 3. Facilitate two-way communication and understanding between the employee and his or her supervisor, counsel and encourage employees to work toward a learning development plan and realize their full potential; and 4. Establish future work plan objectives. Work plans should include job related projects or special goals related to regular job duties when applicable, At the conclusion of the fiscal year (or review period), supervisors shall make a final determination of the overall performance rating. Recommendations shall be forwarded to department heads and to the Chief People Officer who will then determine individual fixed adjustments according to the provisions of the compensation plan. Section 3 -Overtime and in-lieu holiday pay. Compensation for overtime work, and scheduled work on paid holidays for certain designated non-exempt employees shall be in conformance with the Merit Rules and Regulations and Policies and Procedures. Overtime eligible employees shall be paid at the rate of time and one-half times the employees' basic hourly salary unless called out for an emergency arising out of situations involving real or potential loss of service, property or personal danger, in which case additional pay will be at the rate of two times the employees' basic hourly salary. Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours they would have normally worked on that day. If the holiday falls on a non-workday for an exempt employee, the employee may, with supervisory approval, take another day off within the pay period or the following pay period. Section 4. -Working out of classification pay, If employees are assigned on a temporary basis to perform all significant duties of a higher classification the City Manager may authorize payment within the range of the higher classification for the specified time frame. Working out of class pay is normally not to exceed ten percent (10%) more than the employee's current salary and shall be documented on a Personnel Action Form, with a description of the additional duties to be performed and an end date. Section 5 -CallOut Pay. Exempt utility management and professional classifications will be compensated for Call Out as outlined below with Management approval (and will not be eligible for overtime pay). Callout applies when: L An employee previously left City premises, 2. Is called back to the work location outside of regularly scheduled working hours, and 3. The Call Back is for an emergency arising out of situations involving real or potential loss of service, property or personal danger. Employees called back will be expected to respond to the location of the problem. Compensation is per CallOut as reported on timecard and will paid as follows; Monday through Friday Saturday, Sunday, Holidays 5 $140 per day $200 per day Section 6 -Night Shift Premium. Night shift differential shall be paid at the rate of 5% to regular full-time employees who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m. Section 7 -Professional Development. This program provides employees with resources to improve and supplement their job and professional skills. Reimbursement for authorized self improvement activities may be granted each unit employee up to a maximum of five hundred dollars ($500) per fiscal year. In addition, a departmental training fund of one thousand dollars per employee ($1,000) will be established for subject matter, leadership or other training that the Department Director identifies as a need for employees within that Department. The following items are eligible for reimbursement: 1. Civic and professional association memberships 2. Conference participation and travel expenses, which must occur within the fiscal year in which the funds are encumbered 3. Educational programs, books and videos, and tuition reimbursement designed to maintain or improve the employee's skills in performing his or her job or future job opportunities, should support the City's mission or be necessary to meet the educational requirements for qualification for employment. Permissible educational expenses are refresher courses, courses dealing with current developments, academic or vocational courses, as well as the travel expenses associated with the courses as defined by the City's travel expense report from the Policy & Procedures Manual Section 1-02 ASD 4. Professional and trade journal subscriptions not to exceed 12 months. Approval will be at the discretion of the department head and signature is required on the reimbursement form. Amounts under this professional development program will be pro-rated in the first year of employment or promotion into a position covered by this MOA. ARTICLE VII -HEALTH BENEFITS Section 1 -Group Insurance. a) Effective Date of Coverage. For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. Effective on the first of the calendar month falling sixty (60) days after adoption of this MOA, City health premium contributions (medical, dental and vision) will be prorated for part-time employees based on the number of hours per week the part-time employee is assigned to work. Until that time, part-time employees will remain subject to the practice in effect at adoption of this MOA. 6 b) Active Employee Health Plan. 1. Based on an employee's family status and choice of City sponsored health plan, the City shall contribute toward the monthly medical premium on. behalf of eligible employees and eligible dependents, as provided in subsection b )2. below. Eligible dependents include spouses, children under age 26 and never married (natural, adopted, or stepchildren), and domestic partners registered with the Secretary of State. 2. Beginning on the same date that wage adjustments pursuant to Article VI, Compensation, section 1 subsection c of this MOA take effect participating employees will contribute ten percent (10%) of the premium cost for the employee-selected plan, and the City shall contribute ninety percent (90%) with maximum City contribution of ninety percent (90%) of the second highest plan. c) Coverage for Domestic Partners. 1. Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State. 2. Domestic Partner Not Registered with the California Secretary of State:; Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership, and are registered with the Human Resources Department, will be eligible for reimbursement of the actual monthly premium cost of an individual health plan, not to exceed the maximum monthly city employer contribution for one-party coverage under the CalPERS Health Benefits Program for an employee covered under this agreement. Evidence of premium payment will be required with request for reimbursement. d) Alternative Medical Benefit Program If a regular employee andlor the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or assoeiation plan and waives his/her right to thc City of Palo Alto's medical insurance coverage for same individuals. Employees waiving City coverage may receive a stipcnd of $284 per month. e) Retiree Health Plan I. Employees Hired Prior to January 1, 2004 Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees' Medical and Hospital Care Act. The City's contribution for an employee hired before January 1, 2004 and whose retirement date is on or after May 1, 2011 7 shall be the same contribution amount it makes from time to time for active City employees. 2. Post -1/1/04 Hires Government Code section 22893 applies to those Unit members hired after January I, 2004, and provides that, upon retirement from the City an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five of those years were performed at the City of Palo Alto. After ten years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at twenty (20) years' service credit; the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of the contribution for their dependent coverage. The City of Palo Alto's health premium contribution for eligible post -1/1/04 hires shall be the minimum contribution set by PERS under section Government Code section 22893. f) Dental Plan 1. The City shall pay covered plan charges on behalf of all eligible employees and dependents. Dependents include eligible domestic partners as defined in Section I subsection c of this Article VII, Health Benefits. 2. The City's Dental Plan provides the following: a. Maximum Benefits per Calendar Year-$2,000 per person b. Lifetime Maximum for Orthodontics-The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum) c. Major Dental Services 50% UCR· d. Orthodontics 50% UCR· e. Basic Benefits (All other covered services) i) First Calendar Year of Eligibility 70% UCR· "ii) Subsequent Calendar Years 70%-100% iii) ·Usual, Customary, and Reasonable iv) For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October"l, 2005, if the member does not use the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year. 8 g) Vision Care v) If a dental plan member loses coverage under tbe plan, tbe applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if tbe dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan include: • Employee goes on an unpaid leave of absence and elects not to pay tbe required dental premiums for hisfher family's coverage during tbe leave. • Employee elects to drop one or more covered dependents from tbe plan during an open enrollment period so tbat tbey might be covered on a spouse's non-City of Palo Alto dental plan. 1. The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan "vill provide an exam every 12 months; lenses every 24 montbs; frames every 24 months, all subject to a twenty dollar ($20) co-payment as defined in tbe Vision Services Benefits Plan A schedule. 2. Dependents include eligible domestic partners as defined in Section 1, Subsection c of this Article VII, Health Benefits. h) Basic Life Insurance The City shall provide a basic group term life insurance witb Accidental Deatb and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to tbe next highest $1,000) at no-cost to tbe employee. AD&D pays an additional amount equal to tbe employee's annual basic pay (rounded to the next highest $1,000). i) Supplemental Life And AD&D Insurance An employee may, at hisfher cost, purchase additional life insurance and additional AD&D coverage equal to one-or two-times his or her annual salary. The maximum amount of life insurance available to tbe employee is up to $325,000 and tbe maximum amount of AD&D coverage available is up to $325,000. j) Long Term Disability Insurance The City shall provide long term disability (LTD) insurance witb a benefit of 2/3 montbly salary, up to a maximum benefit of ten tbousand dollars ($10,000) per month. The LTD plan will have a waiting period of sixty days, as provided by tbe applicable carrier agreement. The City shall pay tbe premium for the first six thousand dollars ($6,000) of base montbly salary. For employees whose base monthly salary exceeds six thousand 9 dollars ($6,000), the employee shall pay the cost of the required premium based upon their monthly salary between six thousand dollars ($6,000) and fifteen thousand dollars ($15,000). For employees whose base monthly salary exceeds six thousand dollars ($6,000) and who have no eligible dependents covered under the City's medical, dental or vision plans, the City will pay up to seventeen dollars fifty cents ($17.50) per month toward the employee's cost for LTD coverage. k) Physical Examinations All employees are eligible to receive an annual physical examination as follows: 1. Use the periodic health exam benefit as provided under the CalPERS Health Plan option you have selected. Each of the CalPERS Health Plans provides for a periodic physical examination. The examination must be performed by your primary care physician-unless he/she refers you to another physician. 2. The types oftests and the frequency of the tests cannot exceed AMA guidelines. The guidelines are a suggested minimum based on research studies concerning preventative care. The judgment of your physician is the final determinant for your care. 3. Any additional necessary asymptomatic tests that are required by your physician that are not covered by your health plan, will be reimbursed by the City. Any symptomatic tests will be covered under your CalPERS Health Plan. The Reimbursement for Periodic Physical Exam Form is available on the Human Resources Intranet site. This benefit will not be pro-rated. I) Employee Assistance Plan The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line twenty-four (24) hours a day, seven days a week. Guidance is also available online. Section 2 -Parties to Meet and Confer Regarding Health Benefits During Term of MOA. Association understands and agrees that City may, upon written notice to Association, reopen negotiations at any time during its term for the purpose of negotiating over the terms of a possible cafeteria plan for active employees and retirees pursuant to IRS Code Section 125 in lieu of the existing contribution funding system. In addition, during those negotiations, the parties may by mutual written agreement, agree to negotiate other related benefits including impacts on total compensation. Upon receipt of notice from City, Association and City agree to negotiate in good faith. \0 ARTICLE VIII -EXCESS BENEFIT Section 1 -IRS compliant plan. This benefit is designed to meet the requirements of Section 125 of the Internal Revenue Code. Every calendar year, each employee will be provided with $2,500 that they can designate among the following options: Section 2 -Medical Flexible Spending Account (Medical FSA). The Medical FSA provides reimbursement for excess medical/dental/vision, or expenses that are incurred by employees and their dependents which are not covered or reimbursed by any other source, including existing City-sponsored plans. This includes prescribed medications and copayments as well as over- the-counter drugs, including antacids, allergy medicines, pain relievers and cold medicines. However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g. toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g. Rogaine) are not acceptable. Section 3 -Deoendent Care Flexible Spending Account (Dependent Care FSA). Provides reimbursement for qualified dependent care expenses under the City's Dependent Care Assistance Program (DCAP), subject to the following limits: Dependent care expenses will be reimbursed only to the extent that the amount of such expenses reimbursed under this Management Benefit Program, when added to the amount (if any) of armual dependent care expenses that the participant has elected under the City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP. I. The armuai amount submitted for reimbursement cannot exceed the income of the lower-paid spouse. 2. The expenses muSt be employment-related expenses for the care of one or more dependents who are under 13 years of age and entitled to a dependent deduction under Internal Revenue Code section 151(e) or a dependent who is physically or mentally incapable of caring for himself or herself. 3. The payments cannot be made to a child under 19 years of age or to a person claimed as a dependent. 4. If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six individuals (other than a resident of the facility). 5. Dependent care expenses not submitted under this section are eligible under the City Dependent Care Assistance Plan (DCAP). However, the maximum amount reimbursed under DCAP VI":ill be reduced by any amount reimbursed under the Excess Benefit Plan. Section 4 -Non-taxable Professional Development Spending Account. Provides reimbursement for non-taxable professional development expenses (e.g. job-related training and education, II seminars, training manuals, etc.) to the extentthcy are not paid or reimbursed under any other plan of the City. Section 5 -Deferred Compensation. Provides a one-time contribution to the employee's City- sponsored 457 Deferred Compensation plan with either ICMA-RE or an altemative. Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or Professional Development options are done so on a "use -it-or-Iose-it" basis. This means that any amounts designated and not used by the end of the calendar year (or end of the extended 'grace period for the medical FSA) will be forfeited by the employee and returned to the plan. Section 6 -Gym Membership. Provides reimbursement for annual or monthly memberships, including personal trainers. Reimbursement for this expense is taxable to the employee. Specified amounts under this benefit will be applied on a pro-rata basis for employees who are part-time or who are in a management or professional pay status for less than the full fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire date) but will not be pro-rated upon separation of employment. ARTICLE IX -LEAVES Section I -Sick Leave. a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50 percent or more of abi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi-weekly pay period for those employees working a forty-hour duty schedule. Those assigned work schedules, which are greater or lesser than forty hours will accrue sick leave at the ratio of their work schedule to forty hours. b) Employees may use up to twenty hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management. . c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice. d) Employees that were hired before December I, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have fifteen or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609. 12 e) Up to nine days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner. f) Employees eligible, as specified above if hired before December I, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year. Section 2 -Management Annual Leave. At the beginning of each calendar year designated exempt employees will be credited with 80 hours of management annual leave. This leave is granted in recognition of the extra hours exempt employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the fiscal year; employees who have used more than the pro-rated share at the time they leave City service shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the calendar year will be paid in cash unless a different option as indicated above is elected by the employee. Section 3 -Vacation. Vacation will be accrued when an employee is in pay status and will be credited on a bi-weekly basis. Total vacation accrual at anyone time may not exceed three times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: a) Less than nine years. For employees completing less than nine years continuous service: 120 hours vacation leave per year; provided that: The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July I, 200 I, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer. b) Nine, but less than fourteen years. For employees completing nine, but not more than fourteen years continuous service; 160 hours vacation per year. c) Fourteen, but less than nineteen years. For employees completing fourteen, but not more than nineteen years continuous service; 180 hours vacation leave per year. d) Nineteen or more years. For employees completing nineteen or more years continuous service; 200 hours vacation leave per year. e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 hours of accrued vacation provided the employee has taken 80 vacation hours' in the previous 12 months and has followed the election procedures set forth in this section. 13 Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out. The election to cashoout vacation hours in each designated year will be irrevocable. This means that employees who elect to cash-out vacation hours must cash-out the number of accrued hours pre-designated on the election form. Employees who do not elect a cash-out amount by December 31 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year. Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payrolL Payroll will complete the cash-out upon request, provided the requested cash-out amount has accrued and is consistent with the amount the employee pre- designated. If the full amount of hours designated for cash-out is not available at the time of cash-out request, the maximum available will be paid. For employees who have not requested cash-out of the elected amount by November 1 of each year, Payroll will automatically cash-out the elected amount, or the maximum available amount, in a paycheck issued on or after the payroll date including November 1. Section 4 -Bereavement. Leave of absence with pay of three days may be granted an employee by the head of his/her department in the event of death in the employee's immediate family, which is defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter, daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-Iaw, grandfather, grandfather- in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall not be charged against the employee's accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her controL Section 5 -All Other Leaves. For all other leaves of absence refer to Chapters 5 and 8 of the City's Merit Rules and Regulations. ARTICLE X -WORKERS' COMPENSATION Section 1 -Emplovees unable to work due to occupational injU!)'. illness or disease. Employees unable to work due to occupational injury, illness or disease will be required to report to management to discuss his or her status and ability to return to work on restricted or unrestricted duty, subject to the limitations imposed by applicable law. This requirement is not meant to unreasonably restrict employee's activities while off work due to sueh incapacity as long as sueh activities are cleared by the treating physician, treating program or alternative treatment program and the employec is available for restricted or unrestricted duty as soon as medical clearance can be received. Section 2 -Temporary Disability. While temporarily disabled, employees shall be entitled to 14 use accrued sick leave for the first three (3) days following the date of injury and thereafter shall be paid full base salary for a period not to exceed fifty-seven (57) calendar days (including Saturdays, Sundays and Holidays), unless hospitalized, in which case employees shall be paid full base salary for a period not to exceed sixty (60) days from date of injury. For any temporary disability continuing beyond the time limits set forth above, employees shall be paid two-thirds (66.66%) of their full base salary at the time of injury for the duration of such temporary disability in conformance with State law. During the period of temporary disability, an employee's eligibility for health, dental, life, LTD, or other insured program will continue with City contributions at the same rate as for active employees and vacation and sick leave benefits shall continue to accrue. In case of temporary disability beyond the time limits set forth above, sick leave and vacation benefits shall not be accrued. ARTICLE XI -RETIREMENT PENSION a) Employees hired before July 17, 2010 1. Retirement formula. Effective pay period inclusive of 1/6/07, the City's Public Employees' Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non-safety members (from 2% @55). 2. Employee contributions. The City currently pays 6% of the employee's 8% CalPERS share. Beginning on the date that the control point adjustment specified in Article VI, Compensation, Section 1, subsection c) takes effect, employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution. 3. Final compensation. Final compensation for purposes of retirement shall be as set forth in the City's contract with CalPERS, including, when applicable, the Government Code Section 20692 Optional Benefit. b) Employees hired on or after July 17,2010. 1. Retirement formula. For miscellaneous employees hired on or after July 17,2010, or on or after January 1,2013 who are not subject to the pension formula in the Public Employees' Pension Reform Act (PEPRA), the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60). 2. Employee contributions. The City currently pays 5% of the 7% for employees under the 2%@60 retirement formula. Beginning on the date that the control point adjustment specified in Article VI, Section 1, subsection c) takes effect, employees under the 2%@60 retirement formula will pay the full seven percent (7%) employee contribution. 15 3. Final compensation. Final compensation for purposes of retirement shall be as set forth in the City's contract with CaiPERS, including, when applicable, the Government Code Section 20692 Optional Benefit or as required by law. c) New Employees hired on or after January 1, 2013 Employees hired on or after January 1, 2013 who are "new members" as defined by the California Public Employees' Pension Reform Act (PEPRA), will be subject to the terms of that statute including but not limited to the following provisions: 1. Retirement formula. Effective for employees hired on or after January 1, 2013, the PEPRA requires the City to provide new employees, as defined in that law, the CalPERS retirement formula two percent of final salary at age 62 (2%@62). 2. Employee contributions. Employees under the 2%@62 formula shall pay at least 50 pereent of the total normal cost or the same contribution rate as "similarly situated" employees, whichever is higher. 3. Final compensation. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of three highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security. d) The City shall further amend its contract with CaiPERS to provide miscellaneous members hired on or after August 1, 2013 with the CalPERS retirement formula of 2%@60 with a final compensation calculation, for pension determination purposes, based on the employee's three consecutive highest years of compensation earnable, as provided by Government Code Section 20037. The City may delay the adoption or implementation of the foregoing amendment to the extent it deems such delay necessary to accornmodate legal and administrative requirements. In such event, employees hired between and including August 1, 2013 and the day before the amendment's implementation date will be placed in the 2%@60 formula with the single highest year earnable compensation as described above. e) Employee CalPERS contributions tax deferred. Employee CaiPERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Intemal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations. ARTICLE XII -PROBATION AND AT WILL STATUS Section I Probation. Employees who are not At-Will shall serve an initial probationary period of twelve (12) months. During the probationary period the employee serves at the will of the City and may be terminated for no reason or for any lawful reason, and such termination is not subject to appeal. Section 2 At Will Status. Certain unit positions are designated as having "at-vvill" employment status. Employees who hold at-will positions shall have no constitutionally protected property 16 or other interest in their employment with the City. Notwithstanding any provision in the Merit System Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right or expectation to continued employment or pre-or post-disciplinary due process and work at the will and pleasure of the hiring authority. Work for an at-v.ill employee may be eliminated and/or the employee may be terminated, or asked to resign, at any time, with or without cause, upon notice to that employee, and the employee may resign at any time upon written notice to the hiring authority. Section 3 -At-will UMPAPA positions. Effective on the date of adoption of this MOA, new employees hired or promoted to the following classifications shall be at-'.ViIl employees: Assistant director, engineering manager, communications manager, manager electric operations, manager customer service & meter reading, manager utilities marketing services, manager utilities operations WGW, utilities compliance manager. At-'.Vill employees will be eligible for, and shall receive, all regular benefits (Le., health insurance, CalPERS contribution to the extent paid by City, etc.) and vacation, sick leave, and management leave as are generally provided to unit employees and described in this MOA, as amended from time to time. (Not Yet Agreed Upon) Section 4 -Severance. At-will employees who are terminated or asked to resign shall, upon execution of a release of all claims against the City, be eligible for a . severance payment equivalent to four (4) weeks of salary and benefits, increasing after completion of the first full year of service by one (I) week for every completed year of service, up to a maximum of 12 weeks. For example, an at-'.Vill employee who has completed six (6) years of service would be eligible to receive tcn (10) weeks of severance (4 weeks plus I week for each year of service after the first year). No severance shall be paid if the employee voluntarily quits or is terminated for serious misconduct involving abuse of his or her office or position, including but not limited to waste, fraud, violation of the law under color of authority, misappropriation of public resources, violence, harassment or discrimination. If the employee is later convicted of a crime involving such abuse of his or her position the employee shall fully reimburse the City as provided by state law. ARTICLE xm -MISCELLANEOUS Section 1 -Reimbursement for Relocation Expense. The City of Palo Alto, in rare instances, may, provide a Basic Relocation Benefits Package for new employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of "Optional Benefits", or portions thereof, may be extended for exceptional circumstances and only by approval of the City Manager or designee. The details of the Relocation Expense program are specified in the City's Relocation Expense policy. 17 SectionZ -Meal allowance. Employees assigned to attend night meetings or who travel for business purposes are eligible to receive reimbursement as described by City policy. This provision covers only receipted meals actually taken and submitted for reimbursement. Section 3 -Reduction in Workforce. The City will make every effort to provide "'TItten notice of its intent to layoff employees in this unit and will meet with Association upon request to discuss alternatives to layoff. Section 4 -Contracting Out. A. As provided in subsection Eo the City shall provide notice of any plarmed action(s) that would result in the layoff of one or more Association bargaining unit members and where ueither of the following apply: 1. The plarmed City action(s) is to eontract out work historically and exclusively perfonned by Association bargaining unit members; 2. The plarmed City action is to substantially increase the scope or amount of work historically but not exclusivelv perfonned by Association bargaining unit members (e.g. work shared with other City employees outside the Association bargaining unit or contractors). B. The City shall deliver written notice to the Association at least thirty (30) days before it implements any action(s) described iIu;ubsection A. Within seven (7) davs after it receives such notice, the Association may deliveLto the Citv's Chief People Officer a written request to meet and discuss the effects of the City action(s). After the City's receipt of sueh request. the parties will promptly meet ang undertake discussions. The discussions will conclude no later than the thirtieth (30th) day following the Union's receipt of the City's notice of the plarmed action(s), aulescribed above. Thereafter, the City may implement the action(s) without further discussion as originally planned or as modified as a result of such discussions. lfthe Association does not deliver timely notice of its desire to meet and discuss the effects of the action(s) identified in the City's notice, the City may proceed with the planned actiones). C. The City retains its right to detennipe. the methods, means, and personnel by wbich serviceS are carried out at its sole discretion in circumstances no covered by subsection A above. ARTICLE XIV -FULL UNDERSTANDING Sectionl -Full Understanding. The Memorandum of Agreement contains the full and entire understanding of the parties regarding the matters set forth herein. Section 2 -Severability. If, at the conclusion of any applicable appeals, any provision of this Memorandum of Agreement is ultimately held invalid and unenforceable by a decision of the 18 relevant Court or Administrative Agency of competent jurisdiction such holding shall apply only to the provision(s) of this Memorandum of Agreement specified in the decision. Such decision shall not invalidate any other portion of this Memorandum of Understanding, and the unaffected provisions shall remain in full force and effect. The Parties agree tJ1at within ten (10) days after the date of such decision, they shall meet and confer in an effort to negotiate a substitute for the invalidated provision(s). Section 3 -Good Faith. Ordinances, resolutions, rules and regulations enacted pursuant to this Memorandum of Agreement that regulate matters within the scope of representation shall, to the extent they are within the scope of representation, be administered in good faith. Section 4 -Mid-Contract Negotiations. Subjects within the scope ofrepresentation that are not covered by this Memorandum of Agreement remain subject to the duty to meet and confer in good faith on timely notice and request. Neither party is obligated to meet and confer over matters within the scope of representation covered by this Memorandum of Agreement, except for purposes of negotiating over the terms of a successor to this Memorandum of Agreement. Section 5 -Merit System. Merit System Rules and Regulations, during the term of this Memorandum of Agreement, Management may propose certain changes in the City Merit System Ru1es and Regulations. With regard to such changes which pertain to the representation unit, the parties agree to review, and upon request, meet and conrer regarding the changes. (TA) ARTICLE XVI DURATION This Memorandum of Agreement shall become effective once the Memorandum of Agreement is signed by the parties hereto and adopted by the City Council. This Memorandum of Agreement shall remain in effect through December 31, 2014. 19 Exhibit A Annualized Adjusted Control Points of Covered Utilities Classifications (Effective On Date of Implementation Pursuant To Article XI, Section 1, subsection c) Job Code Classifications Grade Codes Mid - Point (hourly rate) Annual Salary 1003 Assistant Director Utilities - Engineering 190 $84.05 $174,824.00 65 Assistant Director Utilities - Resource Management 190 $84.05 $174,824.00 6 Assistant Director Utilities - Operations 190 $84.05 $174,824.00 1002 Assistant Director Utilities - Customer Support 230 $75.82 $157,705.60 129 Engineering Manager, Electric 231 $73.98 $153,878.40 120 Engineering Manager, Water, Gas & Wastewater 231 $73.98 $153,878.40 48 Manager, Utilities Telecommunications (Vacant) 250 $66.83 $139,006.40 185 Manager, Electric Operations 270 $69.73 $145,038.40 25 Senior Resource Planner 271 $64.84 $134,867.20 156 Manager, Utilities Operations WGW 290 $68.04 $141,523.20 188 Senior Electric Engineer 291 $65.66 $136,572.80 1011 Utilities Compliance Manager 290 $68.04 $141,523.20 179 Manager, Customer Service and Meter Reading 300 $60.70 $126,256.00 150 Manager, Utilities Marketing Services 300 $60.70 $126,256.00 13 Senior Business Analyst 340 $54.82 $114,025.60 27 Supervising Electrical Project Engineer 341 $59.54 $123,843.20 14 Senior Management Analyst 350 $53.42 $111,113.60 28 Supervising Project Engineer 360 $55.88 $116,230.40 84 Division Manager/Manager of Communications 380 $53.32 $110,905.60 114 Utilities Supervisor 680 $62.98 $130,998.40 76 Administrative Assistant 700 $37.59 $78,187.20 187 Senior Engineer 710 $64.06 $133,265.60 TBD Manager, Utilities Credit & Collection 300 $60.70 $126,256.00 TBD Supervisor, Inspection Services TBD $45.89 $95,465.30 [*Includes three percent increase] City of Palo Alto to UMPAPA Exhibit B Annualized Adjusted Control Points of Covered Utilities Classifications Effective December 1, 2013 Classifications Grade Codes Mid – Point* (hourly rate) Annual Salary 1003 Assistant Director Utilities - Engineering 190 $88.07 $183,185.60 65 Assistant Director Utilities - Resource Management 190 $88.07 $183,185.60 6 Assistant Director Utilities - Operations 210 $88.07 $183,185.60 1002 Assistant Director Utilities - Customer Support 230 $79.27 $164,881.60 129 Engineering Manager, Electric 231 $75.59 $157,227.20 120 Engineering Manager, Water, Gas & Wastewater 231 $75.59 $157,227.20 48 Manager, Utilities Telecommunications (Vacant) 250 $66.83 $139,006.40 185 Manager, Electric Operations 270 $74.02 $153,961.60 25 Senior Resource Planner 271 $67.52 $140,441.60 156 Manager, Utilities Operations WGW 290 $73.92 $153,753.60 188 Senior Electrical Engineer 291 $69.16 $143,852.80 1011 Utilities Compliance Manager 290 $73.92 $153,753.60 179 Manager, Customer Service and Meter Reading 300 $60.70 $126,256.00 150 Manager, Utilities Marketing Services 300 $60.70 $126,256.00 13 Senior Business Analyst 340 $54.82 $114,025.60 27 Supervising Electrical Project Engineer 341 $64.27 $133,681.60 14 Senior Management Analyst 350 $53.42 $111,113.60 28 Supervising Project Engineer 360 $59.68 $124,134.40 84 Division Manager/Manager of Communications 380 $57.14 $118,851.20 114 Utilities Supervisor 680 $64.14 $133,411.20 76 Administrative Assistant 700 $37.59 $78,187.20 187 Senior Engineer 710 $64.06 $133,244.80 TBD Manager, Utilities Credit & Collection 300 $60.70 $126,256.00 TBD Supervisor, Inspection Services TBD $45.89 $95,465.30 [*Includes three percent increase] City of Palo Alto (ID # 3902) City Council Staff Report Report Type: Action Items Meeting Date: 6/17/2013 City of Palo Alto Page 1 Summary Title: PAPMA Letter Agreement Title: Adoption of a Resolution Approving Terms for Palo Alto Police Managers' Association From: City Manager Lead Department: Human Resources Recommendation Staff recommends City Council adoption of the attached resolution approving employee concessions and changes to benefit levels and pay for the Palo Alto Police Managers' Association (PAPMA). Motion (a) Approve and direct staff to sign the Letter of Agreement confirming that Palo Alto Police Managers' Association members pay the full CalPERS 9% member pension contribution and receive 3% salary offset as soon as administratively possible; (b) Approve tentative agreement eliminating the annual Professional Development contribution of $1,500 per member effective July 1, 2013; (c) Approve tentative agreement to modify the PAPMA salary ranges pursuant to the City's Compensation Market Study, decreasing Police Lieutenant pay range by 2.11% and increasing Police Captain pay range by 10.5%. Background City of Palo Alto Page 2 The Palo Alto Police Lieutenants and Captains separated from the unrepresented Management/Professional Unit and formed their own bargaining unit (PAPMA) in late 2009. The City began bargaining with PAPMA in early 2010 to create an initial Memorandum of Agreement and to negotiate concessions to pay and benefits consistent with other managers at the City. The parties did not reach agreement and the City declared impasse in May 2012. The City implemented six terms modifying benefits for PAPMA employees in July 2012. Since there is not a Memorandum of Agreement formalizing all pay, benefits and working conditions, these terms serve as the status quo until the parties bargain something different. The Meyers Millias Brown Act requires parties to return to bargaining prior to the next budget adoption once terms and conditions of employment have been implemented. Therefore the parties initiated bargaining in early May 2013 to develop a Memorandum of Agreement. Discussion The City and PAPMA held 3 bargaining sessions in May this year. The parties reached a tentative agreement on additional employee concessions and changes to pay consistent with recent changes made in the Management/Professional unit. The employees will pay the full CalPERS pension member contribution of 9%. In exchange, the employees will receive a 3% salary increase to offset the pension contribution. These changes will take place as soon as administratively possible. The employees in this unit currently receive $1,500 annually for Professional Development. PAPMA will give up this benefit as a concession in the package. The parties have also agreed to modify the Captain and Lieutenant pay ranges pursuant to the City's Compensation Market Study findings. This change will ameliorate long-standing salary compression issues within this unit, and is consistent with changes being proposed for the Management/Professional Unit. The study recommends to decrease the pay range for Police Lieutenant by 2.11% and increase the pay range for Police Captain by 10.5%. The movement of pay ranges will not affect (decrease or increase) the current pay of any PAPMA member. Pay increases may be recommended in the future by the Police Chief and approved by the City Manager. Increases would be based on written performance appraisals, measuring overall performance using criteria including level of expertise, scope of work performed and managerial accountability. Staff recommends that the City Council approve these changes now, pursuant to the City’s agreement with PAPMA, even though the parties have not reached a comprehensive City of Palo Alto Page 3 agreement on a complete Memorandum of Agreement. Negotiations continue with the intent to develop the PAPMA's MOA. However the parties believe the formalization of these pay and benefit changes at this time are an important step in moving towards consistency across bargaining units as well as following the City Council's prior direction on labor relations. Resource Impact The adoption of Resolution #__ will have expense savings and cost avoidances. Annual Savings Across the board increase of 3% ($35,286) Employees pay 9% PERS pension $105,858 Eliminate Professional Development $10,500 Total Annual Net Savings to City of Palo Alto $81,072 Policy Implications This recommendation is consistent with City Council direction to achieve structural changes in employee compensation for short-term and long-term savings. Environmental Review Implementation of terms is not a project subject to review under the California Environmental Quality Act (CEQA). Attachments: ATTACHMENT A - Resolution Approving Letter of Agreement (PDF) Exhibit A Letter of Agreement (PDF) Exhibit B Professional Development (PDF) Exhibit C Salary Schedule (PDF) 130611 dm 0160030 Resolution No. ________ Resolution of the Council of the City of Palo Alto to Approving a Letter of Agreement Between the City of Palo Alto and the Palo Alto Police Managers’ Association R E C I T A L S A. The Palo Alto Police Managers’ Association (PMA) is the exclusive bargaining representative for City of Palo Alto (City) employees in the classifications of Police Lieutenant and Police Captain; and B. The City and PMA have met and conferred in good faith in accordance with California Government Code section 3500, et seq.; and C. The City and PMA have reached agreement on certain economic proposals and wish to avoid unnecessary delay in implementing those agreements; The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Letter of Agreement attached hereto as Exhibit “A” shall be approved, confirming that PMA members pay the full CalPERS 9% member pension contribution and shall receive 3% salary offset as soon as administratively possible. SECTION 2. The tentative agreement attached hereto as Exhibit “B” shall be approved, eliminating the annual Professional Development contribution of $1,500 per member effective July 1, 2013. SECTION 3. The tentative agreement attached hereto as Exhibit “C” shall be approved, decreasing Police Lieutenant pay range by 2.11% and increasing Police Captain pay range by 10.5%, pursuant to the City's Compensation Market Study. // // // // // // 130611 dm 0160030 SECTION 4. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Deputy City Attorney City Manager _____________________________ Director of Human Resources _____________________________ Director of Administrative Services City of Palo Alto (ID # 3572) City Council ^ƚĂĨĨ Report Report Type: Action Items Meeting Date: 6/24/2013 June 24, 2013 Page 1 of 8 (ID # 3572) Title: Highway 101 Bridge Competition Subject: Highway 101 Bike and Pedestrian Bridge at Adobe Creek Project Update and Direction on Design Competition From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1) Consider the relative advantages of the invited design competition process and the conventional design process; and 2) Direct staff to initiate an invited design competition process with management assistance from the American Institute of Architects for the design of the Highway 101 at Adobe Creek pedestrian/bicycle bridge, and to return to Council in August 2013 with a detailed process and schedule for conducting the competition. Executive Summary This staff report provides a project update and a description of the process recommended by staff for conducting a bridge design competition. A design competition is expected to provide a wider range of bridge options that could lead to the construction of a “landmark” bridge for Palo Alto, but is also expected to cost somewhat more than the conventional process of selecting a single designer through a Request for Proposals (RFP) solicitation. Background In November 2011, Council approved the Feasibility Study for a pedestrian/bicycle bridge spanning Highway 101 at Adobe Creek. At that meeting, Council directed staff to investigate using a design competition for the project to solicit innovative design concepts that could result in a “landmark” bridge for Palo Alto. At that time, staff indicated that information on a potential design competition would be provided to Council once the preliminary design was refined to determine the locations of the bridge alignments and approach ramps. June 24, 2013 Page 2 of 8 (ID # 3572) In June 2012, the City Council appropriated funds for staff to move forward with: 1. Amending the existing contract with Alta Planning and Design (Alta) to study and identify an environmentally preferred bridge alignment suitable to the site. 2. Studying three alternative bridge alignments and connections to the San Francisco Bay and Adobe Creek Trail network, including preparation of an Environmental Impact Report (EIR) considering community, stakeholders, boards and commissions, Caltrans and Santa Clara Valley Water District input. This process is expected to be complete by Winter 2013. 3. Evaluating the feasibility for a trail connection along Adobe Creek from East Meadow to West Bayshore (the “Adobe Reach Trail”) with a goal of improving off-road bike/pedestrian access to the proposed bridge site. The conceptual cost estimate for the pedestrian/bike bridge project remains approximately $6 to $10 million based on the bridge width, length of approach ramps, type of structure, railings, and other amenities. This estimate does not account for increases in construction costs when construction begins in 2015, and staff will be monitoring inflation in construction costs as the bridge design proceeds. The total project funding is $9 million, including the $4 million grant award from Santa Clara County, the $4 million grant award from One Bay Area Grant (OBAG), and a local match from the Stanford University Medical Center (SUMC) – Sustainability Fund or other local funding source as approved in concept by Council as part of the OBAG grant application review on February 11, 2013. Given the wide range of bridge options and configurations, the possibility of a bridge design competition provides a venue to vet many designs simultaneously in the least amount of time and funding. Invitations would be sent out to reputable design firms and a jury would be selected and ultimately a jury chair would be selected. The community, boards, commissions and council review and approvals will be necessary in coordination with the environmental assessment and bridge alignment alternatives being studied. With the draft conceptual alignments and associated environmental analyses expected to be completed this summer/fall, a design competition could begin this summer. If the City Council directs staff to pursue a competition, staff recommends entering into a contract with the San Francisco Chapter of the American Institute of Architects (AIA), to manage the competition process starting this summer with an anticipated design selection early next year. Contingent on the environmental review, competition results and the necessary design approvals and permits, construction is anticipated to begin in 2015. Discussion Project Update June 24, 2013 Page 3 of 8 (ID # 3572) A project update and activities undertaken since the last Council report in June 2012 include: 1. City entered into an agreement with Caltrans to review bridge alignments and perform an environmental assessment according to both the National (NEPA) and California (CEQA) environmental standards. The initial work has been completed by the City, Alta and Caltrans to develop a combined NEPA/CEQA initial study outline, a draft visual impact assessment, preliminary foundation and paleontological identification reports. A natural environment study, an archeological survey, and historic resources evaluation reports are underway in coordination with Caltrans and federal requirements. 2. Alta and City staff (design team) held an environmental scoping meeting in September 2012, and developed alternative alignments and connections to the existing trail system with consideration of community feedback. 3. A preferred bridge alignment (Alignment A) and other alignments developed by the design team were presented at study sessions with the Parks and Recreation Commission, Planning and Transportation Commission and Architectural Review Board. The preferred alignment was selected by staff based on minimizing potential impacts and cost considerations. See Attachment A. 4. The City received a $4.0 million grant from Santa Clara County to fund construction of the bridge, subject to environmental review and community input. Santa Clara County has indicated that grant funds will be available to the City upon the completion of the design phase of the project. In authorizing staff to apply for the Santa Clara County grant, Council discussed allocating $1.0 million from the SUMC – Sustainability Fund to support the design phase of the project. Council has not taken a formal action with respect to the use of SUMC funds for the project. 5. City Council authorized staff in February to submit a grant proposal as part of the countywide competitive OBAG program, leveraging the $4.0 million by Santa Clara County to fully fund the construction of the project. The Santa Clara County Valley Transportation Authority Board of Directors approved the project on June 6, 2013 for $4.0 million in federal funding. 6. Staff continues to pursue additional funds through grants and public/private partnerships to supplement the project as necessary depending on the design selected. Options for Design Process Options in developing a bridge design include 1) selecting a winning design and an Architect and Engineering (A/E) firm through a design competition, or 2) selecting an A/E firm through a conventional Request for Proposal (RFP) process to develop a design. Both processes would have community, board, commission and Council selection of a design that meets the project schedule, budget, site constraints and goals/design criteria that will be established. Either process would result in an A/E design firm entering into a design services agreement with the City. The main difference between these options is the level of public outreach, the development and review of a wide variety of design concepts and how the design firm and winning design is selected. Attachment B contains a graphic representation of the possible steps for a bridge competition through an invited competition as compared to a conventional design selection using an RFP. June 24, 2013 Page 4 of 8 (ID # 3572) Invited Competition Design Process Should the Council direct staff to pursue a design competition, staff recommends to proceed with an invited design competition utilizing AIA to assist staff in managing the steps of the competition process noted below contracting through an Exemption from Competitive Solicitation procedure. See Attachment C for the scope, draft timeline and cost proposed for AIA to implement the competition. Step 1: Contract With AIA and Develop Design Criteria; July- September 2013 AIA’s expertise and approach in managing design competitions streamlines the process and AIA will establish a work plan to complete the process in approximately 10 months; AIA will draft design criteria addressing cost, site constraints, design type and vision; final development of the design criteria will be vetted through a community process (joint meeting or individual meetings with ARB and PTC). The AIA will recommend and recruit potential jurists. See jury and technical advisory committee information below. Step 2: Invitations to A/E Firms; October 2013 AIA will solicit proposals via an invitation from approximately twenty local, regional and national A/E design firms recognized within the design community as having the necessary expertise. The content of proposals will include the firm’s experience in bridge design and construction and provide insight into the design approach as it relates to the criteria established in Step 1. Step 3: Jury Selects 3-4 firms; November - December 2013 A jury will review all proposals and request several firms to be interviewed. The Jury will interview several firms and provide a short-listing of 3 to 4 top design firms invited to elaborate on their proposals. The City will contract with these firms in the amount of $10,000 to $20,000 each. These stipends will support the level of effort and design services necessary to develop bridge design concepts for further consideration by the jury. Step 4: Jury Reviews Designs & Determines Winners; January – February 2014 The jury’s short-listing of the 3 to 4 top design firms will result in receiving and reviewing 3 to 4 bridge design concepts. These firms will present architectural renderings, details and cost estimates that provide information on the vision of the project, how the project will be constructed and the cost of the project as it relates to the established design criteria. After the presentations, the jury will deliberate and recommend a preferred/winning concept and design firm. The designs will not be made public prior to and during the jury’s review of the proposals. This privacy will ensure the design teams have no knowledge of their competitor’s work. This provides for a fair competition and determination of a winter. An award ceremony and public display of the 3 to 4 bridge design concepts will complete the competition process. Step 5: Outreach & Design Review by PTC/ARB; March 2014 June 24, 2013 Page 5 of 8 (ID # 3572) The 3 to 4 Jury recommendations will then be forwarded to the community and to boards/commissions. The jury chair will summarize the jury findings and concepts would be reviewed and considered by PTC/ARB. The PTC/ARB will recommend a preferred design concept based on their review of the concepts and community input. Should the second, third or fourth place concept design, or any elements of them, be preferred by the community, boards and commissions, this recommendation will be conveyed to the City Council. The terms of the contracts with the design firms allows the City to combine elements of the designs from multiple firms if that was desired. Step 6: Council Award of Design Contract; April – May 2014 The winning design concept and design team may or may not be approved by the Council depending on cost and/or other factors as determined during the outreach, design review and contract negotiation process. Assuming the community, boards and commissions agree on a preferred design, Council could award the design contract to the desired firm at this step. As a requirement of the design competition, the design team must follow the City’s template design form with no material exceptions. Step 7: Design of Preferred Concept; Begins June 2014 The preferred concept design will be developed further in accordance with the environmental assessment/EIR conditions and other constraints as determined in the preliminary design phase of the project. The design documents will comply with the Santa Clara Valley Water District and Caltrans requirements and the City’s Site and Design Review process. This is the final step to complete the design and construction documents for the project. Jury and Technical Advisory Committee Selecting a jury will require AIA to contact recognized designers within the design community that would attract design firms to submit proposals. Typically, the jury may be comprised of local or regional architects recommended by AIA. Final selection of a jury may be considered by boards, commissions and/or Council should Council wish to include an additional step into the process. The jury’s role would be to review proposals, interview A/E firms, and to select 3 to 4 qualified firms to develop concepts in more detail. These concepts would be judged based on established design criteria and goals. At this stage, a winning design would be chosen. The jurors could also receive assistance from a technical advisory committee comprised of staff, local bridge engineers and architects to draft technical memos providing commentary on the viability, cost and constructability of the 3 to 4 designs short-listed. Timeline: - 12 months including jury selection, developing design criteria, interviewing, developing multiple design concepts Cost: approximately $150,000 Costs for local and national competitions may range on the low end of $50,000 to $100,000 including extensive outreach, jury and design stipends. Stipends of $10,000 to $20,000 each for three to four firms should be provided to design firms under contract with the City to develop the bridge concepts. Outreach, printing and incorporation of a technical advisory committee June 24, 2013 Page 6 of 8 (ID # 3572) will require an additional $50,000. Conventional RFP Selection Process Selecting a design developed by an A/E design team through an RFP provides a means in selecting a qualified designer to develop only a few design concepts through the traditional board, commission and community process. Upon issuing an RFP and selection of an A/E firm, the Council would award a design contract to a firm to develop 2 or 3 design concepts. These concepts would be vetted through the community, boards, and commissions with a preferred design recommended to City Council. The preferred concept would then go through the Site and Design Review process after the EIR is certified. Timeline: 10 to 12 months including development of the RFP scope, design criteria, interviewing, developing a few design concepts Cost: approximately $75,000 Developing two or three designs by one design firm may cost approximately $75,000 for community, board, commission and Council review or half of the competition cost. Pros and Cons of selecting a design through either a competition or an RFP process include: 1) Invited competition - designs from qualified and reputable A/E design firms Pro: opportunities to receive multiple concept designs may provide the most pleasing, compatible and cost effective design within the same time frame as the conventional design process. Con: process requires additional costs to run a competition and to pay stipends for the development of detailed designs. 2) Issue Requests for Proposals/ no competition Pro: process realizes moderately lower costs in development of two or three concepts presented to community, boards and commissions. Con: using one A/E firm explores fewer design concepts and may have potential for redesign should concepts not be acceptable to the community. Resource impact Funds sufficient to implement a design competition are included in the FY 2014 Highway 101 Pedestrian/Bicycle Overpass Capital Improvement Program project budget (PE-11011). In FY 2014 proposed budget, this capital project includes a total of $1,310,000 for the design phase of the project. Policy Implications June 24, 2013 Page 7 of 8 (ID # 3572) Authorization of either a design competition or an RFP process does not represent a change in existing City policies including the Comprehensive Plan. The competition process will require careful review, planning, and execution of the City’s purchasing policies, rules and procedures. Environmental Review The project is subject to the requirements of the CEQA and NEPA. Through discussions with Caltrans’ and City staff, a NEPA/CEQA outline (Attachment D) was developed as a means to combine both analyses into one environmental assessment for this project. This process will allow the City and Caltrans to document impacts to identify an environmentally preferred alternative. The EIR includes common and unique design features that will allow for flexibility in selecting a design. Bridge alignment alternatives will be included in the EIR. An addendum or supplemental document to the EIR may include the winning design if the alignment and/or design selected are moderately different from the alternatives studied. Next Steps Upon direction from Council to initiate a design competition, staff will work with AIA to provide an update in August to include a process to establish design criteria, the jury and other associated competition details. A tentative project schedule is noted below. Start Design Competition/Develop AIA Work Plan July 2013 Invitations to Qualified A/E Firms & Jury Selection October 2013 Outreach to boards/commissions/community October-February 2014 Complete Preliminary Design October 2013 Complete Environmental Review January 2014 Announce Winning Design February 2014 Potential Award of Contract to the Winning Design Team OR Potential Award to Consultant via an RFP May 2014 Begin Design June 2014 Site and Design Review/Addendum to EIR for Winning Design Fall 2014 Complete Design and Construction Documents June 2015 Permits/Advertisement/Award Summer 2015 Start Construction (1 ½ years construction time frame) Fall 2015 The design, construction document and permit review process is complex involving multiple agencies such as Caltrans and SCVWD, so the proposed schedule may change depending on comments received. Attachments: A - Three Alignments and Architectural Styles (PDF) June 24, 2013 Page 8 of 8 (ID # 3572) B - Highway 101 Bridge Design Competition vs RFP (PDF) C - AIA Proposal (PDF) D - Draft Environmental Impact Report/Environmental Assessment (DOCX) E - 11-28-2011 CCM Excerpt Item 4 Bridge (DOC) *W. Bayshore Road Greer R o a d Louis Ro a d Lo m a V e r de A v e Ross Roa d E M e a d o w D r i v e E. Bayshore Road F a b i a n W a y Palo Verde Elementary Ramos Park Baylands Nature Preserve S a n A n t o n i o R d Adob e C r e ek Sterling Canal (underground) SS aa nn AA nn ttt oo nn ii oo RR dd Adob e Cr eek to Shoreline at Mtn. View Park o u i s R o a d o a d EEEEEEEEEEEEEEEEE MMMMMMMMMMM eeeeeeeee aaaaaaa dddddd oooo wwww DD r ive Ramos PR Adobe Ba r r o n C r e e k Water District maintenance roads planned crossing (unfunded) Bay Trail Overcrossing ProjectOvercrossing P r ojec t 5555555 00000000000 fffffeeeeeeffeeeeeettttt E Meadow C i r c l e Map not to scale AAA E Bayshore Rd Highway 101 San Francisco Bay Trail W Bayshore Rd Palo Alto Baylands Nature Preserve A d o b e C r e e k Barron Creek Adobe Creek 6 0 k V Lin e Overhead Utility LineII I E Bayshore Rd San Francisco Bay Trail Highway 101 W Bayshore Rd Palo Alto Baylands Nature Preserve A d o b e C r e e k Barron Creek Adobe Creek Parcel Adobe Creek Undercrossing Trail 60 kV Line Overhead Utility Line LEGEND I Adobe Creek Overcrossing Alignments A Highway 101 Overcrossing at Adobe Creek Project Location Existing Class I Path (Bay Trail) Existing Class II Bike Lanes Planned Bicycle Boulevard (Class III) Planned Class I Path Potential Class I Path Planned Shared Bikeway (Class III) ocation NBay to Ridge Trail (adopted 2012)City of Palo Alto, CA Source: Base Data obtained from City of Palo Alto, MTC, Google Maps Date: 1/30/13 Highway 101 Overcrossing at Adobe Creek Alignment Alternative A I 010050 Feet BBB FF B RAMP OPTION 1B RAMP OPTION 1B RAMP OPTION 1 E Bayshore Rd Highway 101 W Bayshore Rd San Francisco Bay Trail Palo Alto Baylands Nature Preserve Barron Creek Adobe Creek A d o b e C r e e k E Bayshore Rd Highway 101 San Francisco Bay Trail W Bayshore Rd Palo Alto Baylands Nature Preserve A d o b e C r e e k Barron Creek Adobe Creek E Bayshore Rd San Francisco Bay Trail Highway 101 W Bayshore Rd Palo Alto Baylands Nature Preserve Barron Creek Adobe Creek A d o b e C r e e k Parcel Adobe Creek Undercrossing Trail 60 kV Line Overhead Utility Line LEGEND Adobe Creek Overcrossing Alignment B1 I t E Bayshore Rd San Francisco Bay Trail Highway 101 W Bayshore Rd Palo Alto Baylands Nature Preserve A d o b e C r e e k Barron Creek Adobe Creek Parcel Adobe Creek Undercrossing Trail 60 kV Line Overhead Utility Line LEGEND I Adobe Creek Overcrossing Alignment F City of Palo Alto, CA Source: Base Data obtained from City of Palo Alto, MTC, Google Maps Date: 1/30/13 Highway 101 Overcrossing at Adobe Creek Alignment Alternative B1 I 010050 Feet City of Palo Alto, CA Source: Base Data obtained from City of Palo Alto, MTC, Google Maps Date: 1/30/13 Highway 101 Overcrossing at Adobe Creek Alignment Alternative F I 010050 Feet 6 0 k V Li n e Overhead Utility LineII I 60 kV Lin e I I I Overhead Utility Line Contract with AIA and Develop Design Criteria Invitations To A/E Firms Jury Selects 3-4 Firms Outreach & Design Review By PTC/ARB Highway 101 at Adobe Creek Pedestrian/Bicycle Bridge Council Award Of Design Contract Jury Reviews Designs & Determines Winners Certify EIR City Contract With 3-4 Firms With Stipend Request for Proposal (RFP) Council Award of Design Contract 5/9/2013 11/7/2013 7/1/2013 10/1/2013 Outreach & Design Review By PTC/ARB Design of Preferred Concept Co n v e n t i o n a l Co m p e t i t i o n Design of Preferred Concept Certify EIR 6 Months 12 Months9 Months3 Months3 Months0 Months AIA San Francisco A Chapter of the American Institute of Architects Hallidie Building 130 Sutter Street, Suite 600 San Francisco, CA 94104 Facsimile 415.874.2642 Telephone 415.362.7397 www.aiasf.org 10 April 2013 TO: Elizabeth Ames, Brad Eggleston FR: Margie O’Driscoll, Exec. Director, American Institute of Architects, San Francisco RE: Adobe Creek/ Highway 101 Bicycle Pedestrian Bridge Summary: AIA San Francisco has been approached by the City of Palo Alto with interest in conducting a competition for the design of a new pedestrian bridge. It is our understanding that the City seeks to identify a “winner” of the competition by December, 2013, so the attached timelines reflect that objective. There are two possible types of competitions, an “invited” competition and an “open” competition. Given time constraints, AIA San Francisco would recommend an “invited” competition, however, we will describe two options below. Note that this memo is provided as a courtesy to the City of Palo Alto and this memo should not be construed as a formal proposal by AIA San Francisco. Both kinds of competitions require jurors who are recognized leaders in the field and significant outreach to achieve strong entries. AIA San Francisco has significant experience in managing awards and competitions, having conducted these processes over 100 times in the last decade. Invited Competition An invited competition of significant note was recently undertaken by the nonprofit, Fort Mason Center in San Francisco, funded by local philanthropist, Ann Hatch and the Tin Man Fund. To achieve the goal of developing design concepts to enliven and integrate the site, a select group of about 20 architects and designers were invited to submit their qualifications. These teams were both local and internationally based. During this Phase I, design drawings were not required or considered. The competition jury selected three finalists to go to Phase II. During Phase II, 3 teams of finalists were each awarded $20,000 to develop proposals for public presentation to the competition jury and the broader Fort Mason community. An exhibition of the finalists work was held at Fort Mason. The jury met a second time to choose a “winner.” Note that being selected as winner was not a guarantee of selection as the design team. Jury members for the Fort Mason jury included: a prominent local landscape architect, urban planner, architect/designer and the Superintendent of the Golden gate Recreation Area and also the Chair of the nonprofit Golden Gate National Parks Conservancy. Estimated timeline: 8 months Possible Timeline for Invited Competition: April‐ May Write and finalize competition brief June Develop list of 20 invited teams; include engineers, architects, others with demonstrated bridge building expertise July Send call for qualifications to 20 teams August Follow‐up with invited list to gauge interest September Phase I jury meets. Jury considers submissions and chooses 3‐4 firms to award stipend of $10,000‐$20,000 each October‐November Teams finalize entries, prepare for presentation December Conduct Phase II jury; announce winners; public display of winning entries AIA San Francisco can provide the following services: Write and finalize competition brief (with input and final approval from City) Develop list of 20 international teams with bridge building expertise Invite teams; follow up to gauge interest Recruit jurors and manage selection process of Phase I Follow up with selected teams Manage Phase II jury, awards announcement and display of winning entries at place TBD Estimated project budget: AIA SF management fee: $20,000 Juror stipends: $ 5,000 (5 at $1000/each) Jury travel/hotel: $ 2,000 (5 jurors/ 3 local, 2 out of town) Phase II stipends: $30,000‐ 80,000 (TBD‐ 3 teams at $10K or 4 teams at $20K each?) Misc: $3000 (jury dinner with civic leaders; development of written materials, press releases, etc..) Estimated total costs: $65,000‐$110,000 Open Competition An open competition is, as its name indicates, open to all. An open competition can yield an amazing design, but entrants are often those with more time than money. This kind of competition inspires students and sometimes professionals but it is a more time consuming jury process and may yield a “winner” with little or no actual design experience‐ which can add significant time delays in the implementation of the project. Open competitions are popular with highly visible sites (like the World Trade Center site in New York City) or with a competition that focuses on “educating the field” (like the PGE Architecture at Zero competition) or with a purely theoretical competition (a competition for ideas about what could happen in San Francisco if the 280 freeway was removed.) In an open competition, the majority of competition time is spent on marketing to try to develop a high level of submissions. AIA San Francisco works closely with numerous professional groups in the Bay Area and around the country to encourage entries. For this type of competition, given the tight timeline, one might expect 25‐40 entries. Most entries would be purely theoretical since most entrants would be unable to submit a proposal with an engineer as part of a “team.” One important way to encourage entries is to offer a cash award to winning entries. For example, for the Architecture at Zero competition for PGE, $25,000 in awards are distributed. Generally there are at least two awards, for a student and professional entry and others given at the discretion of the jury. Estimated timeline: 9 months (note this can be abbreviated but will result in fewer entries) Possible Timeline for an Open Competition April‐ May Write and finalize competition brief May‐ July Develop website and postcard to promote competition; AIASF provides City of Palo Alto with draft press release to announce competition; AIASF and City distribute press release to media lists, AIA and engineering organizations around the world AIASF finalizes jurors, transportation and hotels August‐ Oct* Continue to market competition, answer entrant questions November Prepare for announcement December Convene jury, announce winners Note that while the submission period of August‐ October accommodates this timeline, it is one of the worst periods to encourage student participation since it does not correspond to academic calendars. Estimated project budget/ Open Competition: AIA SF management fee: $50,000 Website/marketing $15,000 Juror stipends: $ 5,000 (5 at $1000/each) Jury travel/hotel: $ 2,000 (assumes 5 jurors/ 3 local, 2 out of town) Awards prizes to winners: $25,000 Misc: $ 3,000 (jury dinner with civic leaders; development of written materials, press releases, etc..) Estimated total : $100,000 Attachment D Highway 101 Pedestrian Overpass Environmental Impact Report/ Environmental Assessment Draft Annotated Outline Cover Sheet Title Sheet Summary Table of Contents . Chapter 1 – Proposed Project Introduction Purpose and Need Project Description Alternatives Permits and Approvals Needed Chapter 2 – Affected Environment, Environmental Consequences, and Avoidance, Minimization, and/or Mitigation Measures The discussion of each topic below will include the following subheadings: Regulatory Setting This section describes the relevant laws and regulations that guide the analysis. Affected Environment This section gives a concise description of the existing social, economic, and environmental setting for the area affected by all alternatives presented in the EIR/EA. Environmental Consequences This section presents the impacts of each build alternative (or action alternative) and the no-build alternative. Construction-related impacts and cumulative impacts will be discussed in each resource section. Avoidance, Minimization, and/or Mitigation Measures This section will be designed to satisfy both NEPA and CEQA requirements and will clearly differentiate between them. NEPA limits the use of “mitigation” and “mitigate”. These terms only refer to impacts that are adverse under NEPA. NEPA uses the framework of avoidance and/or minimization. For CEQA mitigation will be described as affecting impacts so that they are “significant” or “less than significant with mitigation incorporated.” Human Environment Land Use - Includes discussion of existing and future land use, consistency with State, Regional, and Local Plans and Programs Growth - Discusses in a qualitative manner the influence that the project could have on growth and development. Community Impacts – Discusses community character and cohesion and Environmental Justice Utilities/Emergency Services Includes discussion of existing utilities/emergency services and potential changes or impacts. Traffic and Transportation/Pedestrian and Bicycle Facilities – Includes a discussion of the project’s impacts on traffic and circulation, both during construction and after completion of the project operational impacts. This is a qualitative discussion. Modeling is not included. Visual/Aesthetics – Includes discussion of the project setting and its viewshed. Key points are as follows: Identify key views for visual assessment. Analyze existing visual resources and viewer response. Analyzes attributes such as line, form, color, texture, dominance, scale, diversity, and continuity. Visual quality is measured by vividness, intactness, and unity. Depict the visual appearance of project alternatives. Assess the visual impacts of project alternatives. Cultural Resources - Includes discussion of all “built environment” cultural resources (structures, bridges, railroads, water conveyance systems, etc.) and archaeological resources (both prehistoric and historic) that could potentially be impacted. Physical Environment Hydrology and Floodplain - Includes discussion of the potential risks of the project with regards to the floodplain, the potential impacts on natural and beneficial floodplain values and if necessary measures to minimize floodplain impacts and to preserve/restore any beneficial floodplain values impacted by the project. Water Quality and Storm Water Runoff - Includes discussion of the potential water quality concerns such as applicable storm water regulations, receiving water bodies and their beneficial uses, existing water quality, project-related discharges, including storm water, and potential water quality and storm water impacts. Geology/Soils/Seismic/Topography - Includes discussion of the potential geology, soils, and seismic concerns as they relate to public safety and project design. Hazardous Waste/Materials - Includes identification of potential sources of hazardous materials, waste and substances in, and adjacent to, the project area. Will describe results of a field inspection of the parcels in and adjacent to the project area to look for and document land use, disturbance, materials, or facilities that may indicate past or current releases or activities that may release or use hazardous materials. Biological Environment Plant Species – Includes description of the dominant plant species in the biological study area. Animal Species - Includes description of the dominant animal species in the biological study area. Threatened and Endangered Species – If necessary, this section includes discussion of threatened or endangered (T & E) species that are formally listed as endangered under the Federal Endangered Species Act (FESA) or California Endangered Species Act (CESA). Invasive Species - Includes description of potential of the project to promote or inhibit the spread of invasive species. Chapter 4 – Comments and Coordination - Includes discussion of the scoping process including meeting dates, attendees, issues raised and comments received. Section will also describe consultation and coordination with public agencies Chapter 5 – List of Preparers - Includes all individuals, including consultants, that prepared or helped to prepare the environmental document and supporting technical studies. Chapter 6 – Distribution List APPENDICES Appendix A. CEQA Checklist - includes a checklist that is consistent with Appendix G of the CEQA Guidelines on the Office of Planning and Research website. Appendix B. Section 4(f) Includes description of all archaeological and historic sites within the Section 106 area of potential effects (APE) and all parks, recreational facilities, and wildlife and waterfowl refuges within approximately one- half mile of any of the project alternatives to determine whether they are protected Section 4(f) resources. It is assumed that the project would result only in a de minimis finding, which would be documented in Appendix B. Appendix C. Glossary of Technical Terms Appendix D. Avoidance, Minimization and/or Mitigation Summary – This section will summarize avoidance, minimization, and/or mitigation measures or provide a mitigation monitoring report in the document. It will separate out measures required to mitigate significant impacts under CEQA versus measures taken to avoid or minimize other less than significant impacts. Appendix E. List of Acronyms List of Technical Studies CITY OF PALO ALTO CITY COUNCIL EXCERPT MINUTES Page 1 of 10 Special Meeting November 28, 2011 Transmittal of the Highway 101 Pedestrian/Bicycle Over/ Undercrossing Feasibility Study; Recommendation of Adobe Creek Overcrossing as Preferred Option to Further Study and Approval of Amendment with Santa Clara Valley Water District for Extended Use of Adobe Creek Undercrossing. Mike Sartor, Interim Director of Public Works, explained there was $100,000 included in the 2010 Capital budget for a Highway 101 Crossing Feasibility Study. The contract was awarded to Alto Planning and Design to perform the Study in April of 2010. There was an additional $250,000 included in the 2011 Capital Budget for a future environmental assessment and initial design work. Elizabeth Ames, Senior Engineer noted the Feasibility Study had been reviewed in the past year with the goal of identifying a year-round crossing between Matadero Road and San Antonio Road; a stretch of approximately a mile and a half. Staff had met with the Planning and Transportation Commission (P&TC), the Parks and Recreation Commission (PARC), and the community. The highest anticipated use was Adobe Creek which was the preferred alternative of an overcrossing; the cost was between $5 and $9 million. Alignment E – Adobe Creek Undercrossing (tube option) was a twelve foot wide; eight foot tall tube structure placed in the channel and was evaluated at a cost between $5 and $8 million. The less expensive option was Alignment E – Adobe Creek Undercrossing (stem wall option) which was a four foot tall, eight foot wide pathway but it did not meet the minimum height standard of eight feet. Alignment D – Adobe Creek Overcrossing (Standard) was a streamline crossing over Highway 101 tying into Adobe Creek on either side at a cost of between $5 and $7 million. Alignment D – Adobe Creek Overcrossing (Enhanced) was a structure twenty foot wide for a cost between $7 and $10 million. Staff had reviewed surrounding area overcrossings for a comparison. Deirdre Crommie, Vice Chair of the Parks and Recreation Commission expressed the support of the PARC for the Highway 101 overcrossing at Adobe Creek. The PARC favored Staff recommendation Alignment D because it provided linkages to the Bicycle and Pedestrian Path alongside Adobe EXCERPT MINUTES Page 2 of 10 City Council Meeting Excerpt Minutes: 11/28/11 Creek, an east and side linkage to the Baylands Trails. The PARC had concerns of the cost for the project but hoped to maximize the design to ensure a cost effective approach. She noted the widening of the Highway would diminish the natural lighting of the Benjamin Lefkowitz Bicycle and Pedestrian Undercrossing Tunnel and said an upgrade to add lighting should be considered. Sunny Dykwel, Commissioner on the Parks and Recreation Commission acknowledged the Adobe Creek project continued to be a priority for the PARC as it provided a continued year-round access to the Baylands. The bridge was a critical part of the proposed Bicycle, Pedestrian Transportation Plan (BPTP) and it would build on the network of trails linking the neighborhoods to each other as well as to the educational and recreational opportunities. Greg Tanaka, Commissioner on the Planning and Transportation Commission shared some points from the discussion regarding the overcrossing design options. The vote was a 3-2 because although it was clear there needed to be access to the Baylands they did not feel the cost was the most effective use for Palo Alto funds. If the cost could be defrayed or scaled back the overcrossing would be supported. John K. Abraham believed the City could save over $1 million from the Staff recommendation and proposed a design which would provide 70 to 90 percent access during most years and a large improvement over the current situation. The Benjamin Lefkowitz Bicycle and Pedestrian Undercrossing was presently open 50 percent of the time and only at a cost of $21,400 annually to maintain. The Matadero Creek crossing was nearly usable with only a single creek to be concerned with and could be made user friendly with less than $100,000 which was open far more than Adobe Creek. Cedric de La Beaujardiere, Chair of the Bicycle Advisory Committee expressed their support for the Adobe Creek Overcrossing as it supported a higher number of users. An undercrossing would be partially open at best with a high maintenance cost. Council Member Burt asked if the Bicycle Advisory Committee evaluated the alternative mentioned by Mr. Abraham having Matadero Creek and Adobe Creek as under freeway accesses and what the pros and cons would be. Mr. de La Beaujardiere said he did not believe the Committee reviewed the option for having both creeks open simultaneously but there was support to see what could be done to open the Matadero Creek crossing longer. The goal was to have a year-round crossing available and from the discussions EXCERPT MINUTES Page 3 of 10 City Council Meeting Excerpt Minutes: 11/28/11 with the Santa Clara Valley Water District it was not a feasible option to have a year-round undercrossing. Irvin Dawid encouraged people to bike over San Antonio Road and although it was a frightening endeavor it was the best alternative without traveling further down to Mountain View. Council Member Price said Staff recommendation Alignment D-Standard mentioned a ten foot travel way while the Alignment D-Enhanced design spoke of a 20 foot travel way. She asked if the forecasted pedestrian and bicycle use of 104 thousand was referring to trips and not individual uses. Ms. Ames stated there were 104 thousand trips in the vicinity between Matadero Creek and Adobe Creek. There were 70 thousand trips over Adobe Creek alone. Council Member Price asked what the time period was for the basis of the analysis. Ms. Ames explained the projections were based on the development and were intended to be long term. Casey Hildreth, Associate, Alta Planning and Design said the seamless travel model took into account land use as well as Class 1 trail availability. The 104 thousand was a ball park figure for the entire stretch of land that was analyzed with approximately 55 to 70 thousand trips being generated by the Adobe Creek location. The figure was an annual estimation with a wide variability based on the lower volume of daily activity which could rise with the future growth. Council Member Price asked if the ten foot travel way was sufficient in size based on the projected future trip numbers. Mr. Hildreth noted a ten foot pathway would be the minimum width capable of handling the current estimated volumes. Council Member Price asked if there was a way to anticipate the issue of year-round availability versus partially limited availability in terms of criteria for funding potential. Was there a reason for concern in a rating criteria system for potential grant applications that the designation of year-round. Jaime Rodriguez, Chief Transportation Official, said yes, the designation would be considered as a criteria measurement but Staff would pursue any available grant funding depending on the Council designation. EXCERPT MINUTES Page 4 of 10 City Council Meeting Excerpt Minutes: 11/28/11 Council Member Schmid supported the Highway 101 overcrossing and Staff’s preferred model seemed to have generated support from the various community groups and committees. He noted there were a large number of overcrossings being completed by other cities and he asked why Palo Alto was merely in the planning stages. Mr. Rodriguez felt the City was currently on the right track to pursue funding. In order to be competitive there was a lot of ground work that needed to be completed such as preliminary feasibility, feasibility study, and environmental assessments. The issue at hand was the funding available was for projects that were shovel ready not those in the planning stages. Council Member Schmid asked whether there was a strategic consideration in the cost that the City had proposed. Mr. Rodriguez stated yes, the more conservative the design the more competitive the funding was. Council Member Schmid noted the report reflected the Matadero Creek path was initially built to be a bike path. All of the necessary materials were in place and the creek water level was half of that of the Benjamin Lefkowitz Bicycle and Pedestrian Undercrossing. He encouraged pursuing Matadero Creek as an option. Council Member Scharff asked what the expected timeframe was to receive grant funding. Mr. Rodriguez estimated within the next five years there would be substantial amounts of funding for these types of large scale bicycle projects. Council Member Scharff asked if the Matadero Creek Undercrossing would occur in the next couple of years if Council did not move forward with the current project. Mr. Rodriguez said if the feasibility study and environmental assessment were advanced through the design phase the City would be in a strong position for funding. Council Member Scharff asked for the estimated cost for the Matadero Creek Undercrossing to be feasible. EXCERPT MINUTES Page 5 of 10 City Council Meeting Excerpt Minutes: 11/28/11 Ms. Ames said the cost was estimated at just over $1 million as was Adobe Creek seasonal project. Council Member Scharff felt the Mary Bridge in Sunnyvale was a beautiful example of a crossing but his understanding from Staff was that type of architecture was out of date. Mr. Rodriguez said if the City wished to pursue that level of design detail in order to be competitive there would need to be a larger local funding match participation. Council Member Scharff asked if there was a figure Staff had in mind of a 10 to 20 percent local match. Mr. Rodriguez said with a project of that magnitude there would be a minimum of a 20 percent match but a larger number in the range of 35 to 40 percent would be more beneficial. Council Member Scharff asked if the Alignment D-Enhanced design was similar to the City of Belmont’s Highway 101 Overcrossing. Mr. Sartor confirmed the Palo Alto Alignment D-Enhanced design was more elaborate and wider than the Belmont Overcrossing. Council Member Scharff said the Alignment D-Enhanced design was between the Mary Bridge and the Belmont Overcrossing. Mr. Sartor agreed with the assessment. Council Member Scharff asked if the less expensive option was similar to the Ralston Avenue Overcrossing in Belmont or the utilitarian bridge in Sunnyvale. Mr. Sartor said it would be closer to the Ralston Avenue Overcrossing. Council Member Scharff asked if Council approved Staff recommendation, what the next steps were. Ms. Ames said Staff would return to Council with a Consultant Contract Amendment to initiate the design and the environmental assessment. Staff would review the options and the design features for the lightings and railings before having the design reviewed by the various Boards and Commissions for final approval. EXCERPT MINUTES Page 6 of 10 City Council Meeting Excerpt Minutes: 11/28/11 Council Member Scharff said Staff was not asking Council to make any design aspect decisions tonight. Mr. Sartor said that was correct and he added part of the increased cost to the Alignment D-Enhanced design was the configuration and the width of the structure itself. Council Member Scharff clarified Council was to accept the feasibility study and direct Staff to proceed with going forward with the overcrossing at Adobe Creek at a cost of $250,000. Mr. Sartor said that was correct. Council Member Burt asked for clarification on the differences in the widths between the Alignment D-Enhanced design and the Ralston Avenue Bridge. Mr. Sartor said the Alignment D-Enhanced design was at a width of 20 feet and he did not believe the Ralston Avenue was as wide. The Alignment D- Enhanced design had room for landing areas for viewing opportunities while the Ralston Avenue did not. Council Member Burt asked how critical the 20 foot width was and if Staff could break-out the cost difference for that portion. Mr. Sartor stated the cost estimated for the Alignment D-Standard design, at a ten foot wide structure, was from $5 to $7 million. The Alignment D- Enhanced design had several raised areas for pedestrians and ranged from $7 to $10 million. Council Member Burt said only a portion of the cost was attributed to the width. Mr. Sartor said that was correct and a portion of the cost was attributed to the shape and alignment itself. Council Member Burt asked for a breakdown of the cost for the width which was the utilitarian and safety aspect of the bridge. Mr. Sartor said Staff did not have that level of detail at this phase. Council Member Burt understood if there was a Matadero Creek Underpass for bicycles there would be a cost of $1 million. He asked what percentage of the year it would be able to remain open. EXCERPT MINUTES Page 7 of 10 City Council Meeting Excerpt Minutes: 11/28/11 Ms. Ames stated Staff would need to review the creek flow chart to determine the specifics; however, she felt it would be a seasonal crossing open approximately six months per year. Council Member Burt asked why only six months would be available if the time had been extended for the Adobe Creek. Ms. Ames said Adobe Creek had been expanded but without completing an analysis of Matadero Creek she was uncertain of the potential expansion period. Council Member Burt asked how many months Adobe Creek had been expanded. Mr. Sartor confirmed Adobe Creek had been able to remain open an additional six weeks in 2011 because there had not been significant rain fall to date. Council Member Burt asked for confirmation the intention for Adobe Creek was to expand the window in late winter and early spring. Mr. Sartor agreed the goal was to open the pass sooner as weather permitted. Council Member Burt asked if the anticipated open season range was from eight to nine months. Mr. Sartor felt eight months was an appropriate estimate. Council Member Klein asked how Staff viewed the practicality of the Public/Private Partnership ventures and had any other crossing involved private monies. Mr. Rodriguez felt there were opportunities to develop Public/Private Partnerships. It could range from a private development that occurred to locating public elements for the projects. There were larger employers near the crossing area that had shown interest in investment possibilities. Council Member Klein asked if Staff had spoken with Google or other companies regarding funding assistance. Mr. Rodriguez stated no, until Council directed Staff they would not approach the matter. EXCERPT MINUTES Page 8 of 10 City Council Meeting Excerpt Minutes: 11/28/11 Council Member Klein asked whether there was private money in any of the other bridges. Ms. Ames said the Homer Tunnel had a contribution of $250,000 provided by the Palo Alto Medical Foundation. Mr. Sartor clarified the funds were a part of the Development Agreement so they should not be considered as a donation. Council Member Klein asked about the funding cycle for similar projects in other cities. Mr. Rodriguez said the timeframe was dependent on the individual project; although, he knew the Mary Avenue Bridge was approximately four years. Council Member Holman said the Staff report mentioned improvements to the Benjamin Lefkowitz Bicycle and Pedestrian Undercrossing but there was no mention for additional lighting to account for the widening of Highway 101. She asked if there was a cost estimate for adding lighting. Mr. Sartor was uncertain of the cost for additional lighting but the original lighting had been removed by the Utilities Department and was reinstalled as a preliminary step to the widening of Highway 101. He believed once the project was completed the lighting would be replaced as part of the new structure. Council Member Holman noted the Highway 101 overcrossing to the Baylands was going to be a landmark for identifying Palo Alto. She inquired as to whether Staff had given thought to holding a competition to create a design for the project. Mr. Sartor said if Council directed, Staff would explore that as an option during the design phase. Mr. Keene added a competition was an interesting idea and it could present architectural and functional values for the City. He mentioned a bridge created in Tuscan, Arizona where art and design were brought together to forge an award winning project. Council Member Holman felt opening up the design contest to broader than the known design pool may bring a stellar design at a reasonable cost. She agreed approaching Google may be worth while since a large portion of their staff would utilize the bridge. EXCERPT MINUTES Page 9 of 10 City Council Meeting Excerpt Minutes: 11/28/11 MOTION: Council Member Shepherd moved, seconded by Council Member Holman to accept Staff recommendations to: 1. Accept the Highway 101 Pedestrian/Bicycle Over/Undercrossing Feasibility Study; 2. Direct Staff to proceed with the recommended option of an overcrossing at Adobe Creek; and 3. Authorize the City Manager or designee to execute the attached amendment to the Lease (Joint Use) Agreement with the Santa Clara Valley Water District and the City to allow extended use of the current undercrossing and to execute further amendments with similar terms until the overcrossing is available. Council Member Shepherd appreciated the concept of a design competition, she felt it allowed people to rise to the occasion to take a municipality and transform it into something visionary. Palo Alto had a very high level of bicyclists and she felt this type of infrastructure improvement was greatly needed. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to investigate a bridge design competition. Council Member Holman asked at what juncture Staff would return to Council with the feasibilities for design. Mr. Sartor noted Staff needed to build the competition into the design contract with the architect and return to Council as part of the contract amendment for the environmental and design work. Council Member Holman stated her intent was not to invite a higher cost. She asked if there should be a dollar range included as part of the competition regulations. Council Member Price supported the Motion and offered to assist in the design award process since she was familiar with such arenas. Vice Mayor Yeh supported the design competition idea and thought it would be interesting to see how the outside designers saw Palo Alto. Mayor Espinosa was in support of the design competition and he was interested in a wider structure to support a major traffic overpass. He EXCERPT MINUTES Page 10 of 10 City Council Meeting Excerpt Minutes: 11/28/11 agreed there needed to be lighting added to the passes for the safety of the community. City of Palo Alto (ID # 3888) City Council Staff Report Report Type: Action Items Meeting Date: 6/24/2013 City of Palo Alto Page 1 Summary Title: HSR & Caltrain Update Title: Status Report on Current High Speed Rail and Caltrain Electrification Issues Submitted for Council Review and Comment From: City Manager Lead Department: Planning and Community Environment Background Proposition 1A was passed by the voters in November 2008, essentially starting the California High-Speed Rail (HSR) project as it is known today. The project continues to face many of the same obstacles it has in the past including a lack of identified funding sources and local and regional opposition to its design and implementation plans. However, in 2012 the state legislature and governor approved approximately $8B in funding for initial construction in the Central Valley and for the “Bookends.” It does appear as though initial construction on the system will occur. For the San Francisco to San Jose segment the California High Speed Rail Authority (CHSRA) is still proceeding with the implementation of a system that shares tracks with Caltrain, called a Blended System, but has not given a commitment that HSR will not expand beyond a Blended System in the future. Based on the uncertain future funding for the project, its continued litigation, and evolving design, it has been difficult for staff to predict what will happen with this project. It does appear, however, that construction on the project will begin in the next year. The CHSRA is currently going through an RFP process to identify a design/build contractor for the initial construction segment (ICS) in the Central Valley. Staff continues to implement Council’s position that the City of Palo Alto should oppose HSR because the current project fundamentally contradicts the measure presented to the voters under Proposition 1A in 2008. Below are updates on each of the major subject areas related to HSR and Caltrain. City of Palo Alto Page 2 Federal Legislative Update Federal support for HSR continues to stay varied as the Republican controlled House of Representatives pushes for decreased government spending against the Democratically controlled Senate and Presidency who have recently supported some level of transportation infrastructure investment. HSR specifically has become a target of this push because it represents one of the President’s key transportation initiatives. Working with the City’s federal lobbyist, Van Scoyoc Associates, staff has closely monitored legislative activity in Washington DC on this issue. Currently, the House has no funding in place for HSR, however, President Obama’s budget for FY 2014 includes several significant proposals for increased funding for rail programs, including HSR. For FY 2014, the President’s budget proposal would increase funding for all rail programs from $1.6 B (FY 2013) to $6.4 (FY 2014). Of this amount, $2.7 billion would be to return public rail assets to a state of good repair and to fund the implementation of positive train control (PTC) on Amtrak routes. Another $3.7 billion would be for high speed rail and installation of PTC on commuter rail routes. The President’s budget proposal also includes a request for $50 billion for immediate investment in transportation infrastructure. The Administration has proposed this stimulus in prior years, with Congress choosing not to act on it. Of that $50 billion, $2 billion would be to upgrade Amtrak assets and $3 billion would be for HSR. While anything can happen, it is important to note that neither the House nor Senate budget resolutions assume increased discretionary funding, making it very difficult for Congress to include these increases in the FY 2014 appropriations bills. The current rail authorization bill, the Passenger Rail Investment and Improvement Act of 2008, expires this year. As such, the President’s budget proposal discusses a five- year $40 billion authorization proposal that would fund current passenger rail service, the rail service improvement program, and rail research, development, and technology. All three activities would be funded from a proposed new rail account of a proposed transportation trust fund. No more details have been provided by the President’s Administration, however, the consolidated Transportation Trust Fund was proposed last year and Congress rejected it. The $6.4 billion requested in the President’s FY 2014 budget is a part of the proposed $40 B authorization. City of Palo Alto Page 3 State Legislative Update State legislative support for HSR continues to remain strong with the Democratic controlled Assembly, Senate, and Governorship. Working with the City’s state rail legislative advocate, the Professional Evaluation Group (PEG), staff has closely monitored legislative action on this issue. Staff and the PEG have been particularly concerned about the way California Environmental Quality Act (CEQA) reform will impact the project, however, it does not appear at this time that far-reaching CEQA exemptions will be granted to the CHSRA for the project as once thought. That said, a CEQA reform bill is currently being circulated, SB 731, which staff and PEG are watching closely. The difficulty with the bill is that there is no expectation that the draft that exists today will reflect what is ultimately voted on. Following conversations with PEG, it is their expectation that CEQA reform will not be taken up until August when legislators are back from their summer recess because they are currently focused on the budget. Based on the current environment in Sacramento it seems that CEQA reform will focus on changing the planning process for approving projects, and not on granting project specific exemptions, but that is subject to change. Finally, the City of Palo Alto was successful in working with Senator Jerry Hill on SB 1029 clean-up legislation. This clean-up legislation, SB 557, confirms in writing a number of assumptions that were made when SB 1029 (the HSR funding authorization bill) was approved in July 2012 but didn’t make it into the actual bill language. SB 557 clarifies that $600 million of the $1.1 billion approved for Blended System construction at the Bookends goes to Northern California and requires that the CHSRA get the approval of all nine signers of the 2012 Blended System MOU to expand beyond a Blended System in the future. Regional Update The City of Palo Alto continues to stay actively involved in the Peninsula Cities Consortium (PCC). The PCC continues to hold their meetings on the first Friday of every month unless otherwise scheduled and includes the six cities of Atherton, Belmont, Brisbane, Burlingame, Menlo Park, and Palo Alto. Recently, the PCC has been focused on monitoring the legislative environment in Sacramento and evaluating the impacts and implications of a Blended System for HSR and Caltrain. California High Speed Rail Authority Update 2013 has been a very active year for the CHSRA with most of their effort focused on handling their outstanding legal matters and taking the necessary steps to begin construction in the Central Valley on the Initial Construction Segment (ICS). In January, the CHSRA selected PGH Wong Engineering and Harris & Associates to provide City of Palo Alto Page 4 contractor management and oversight services for whoever is selected to build the initial approximately 30-mile stretch of tracks from Madera to Fresno. In February, Dan Richard was re-elected as CHSRA Board Chair for a six-month term and in March the CHSRA approved a MOU with the Peninsula Corridor Joint Powers Board (PCJP) that will result in a $705 M investment by the CHSRA in the $1.45 B Caltrain Electrification project, understanding this investment will help facilitate a future Blended System. In April, the CHSRA determined that Tutor Perini was the best value design/build contractor following a competitive bid process that determined the winner by using a formula based 30% on technical merit and 70% on cost. At the June 5th CHSRA Board meeting this selection was confirmed despite substantial public objection. The basis of this objection was that when the hiring process for a design/build contractor was originally established it specified that only the top three bids from a technical standpoint would be eligible for consideration under the 30% cost/70% technical formula established by the CHSRA for final grading. That said, current CHSRA CEO Jeff Morales changed the policy to allow consideration of the top five bids. The firm that won the contract, Tutor Perini, had the lowest technical score of the five firms at 68.5 (out of 100). Regarding CHSRA litigation, the CHSRA has settled a number of lawsuits levied against them with Central Valley stakeholders including the cases City of Chowchilla v. California High Speed Rail Authority, Timeless Investments, Inc. v. California, County of Madera v. California High Speed Rail Authority. On May 31st arguments were heard in the case John Tos; Aaron Fukuda and County of Kings v. California High Speed Rail Authority. The case involves claims alleging that the Funding Plan approved by the CHSRA in November 2011 was defective in failing to satisfy mandatory requirements set by Proposition 1A (the 2008 HSR bond measure). It also asserts that the current project does not meet mandatory requirements set by Prop. 1A and is therefore ineligible to receive bond funds. A ruling on the case is expected in the near future. Finally, in March the CHSRA initiated litigation in a validation action asking the Court to validate (i.e., conclusively determine the validity of) the authorization to issue all the remaining Prop. 1A bonds. There were nine responses to the summons including the Tos plaintiffs, Kings County Water District, Riverdale Public Utility District, Kern County, Union Pacific Railroad, and the Howard Jarvis Taxpayers Foundation. A hearing has been set for September 27th. The significance of this is that no bonds will be issued City of Palo Alto Page 5 until the validation case is fully resolved, however, in the meantime, the CHSRA may try to use ARRA funds to start construction. Caltrain Update The Peninsula Corridor Joint Powers Board (PCJPB), which oversees Caltrain, has been working on their plan to electrify the Caltrain corridor since the early 2000’s. Yet, for the first time in that approximately 10 year time horizon, funding has been identified for that plan with the passage of SB 1029. The complex task Caltrain now faces is how to implement stage one of the Blended System, an electrified Caltrain corridor including positive train control. The electrification of Caltrain under the current proposal will increase the number of peak hour trains per direction from five to six with any future increase beyond six trains per peak hour per direction coming from the CHSRA, as part of a Blended System. Caltrain is currently studying the impacts to the corridor associated with Caltrain Electrification and the proposed increased level of service. Additionally, Caltrain is studying how those impacts will be mitigated. The identification of impacts and mitigations will occur as part of an environmental review process. On January 31st the PCJPB issued a Notice of Preparation (NOP) that they will be doing an EIR for the Caltrain Electrification Project, pursuant to CEQA. As a part of this process, stakeholders were encouraged to provide input on the scope and content of the upcoming environmental review. On March 18th, in response to the NOP, Palo Alto submitted a letter that requested the PCJPB study at a minimum 19 specific potential impacts associated with the proposed project (Attachment A). Examples of the 19 potential impacts the City of Palo Alto requested the PCJPB study are impacts on local traffic and construction impacts. A summary of all comments received by the PCJPB can be obtained on the Caltrain website. It is anticipated that the PCJPB will release their Draft EIR in late 2013 or early 2014 and have a Final EIR ready for approval in mid to late 2014. In May, Caltrain released two draft documents for informational purposes and took comments on them until June 14th. It is anticipated they will be finalized around the end of June. These two documents are: Draft Service Plan & Operations Consideration Study City of Palo Alto Page 6 Draft Grade Crossing and Traffic Analysis Study These studies are preliminary planning documents that look at the possible impacts of operating a Blended System on the Peninsula. No schedule has been determined for either a modernized Caltrain or Blended System and decisions have not been made about any possible passing track or grade separation locations. The intent of these studies is to facilitate community dialogue. They do not have the same legal implications that an environmental impact report (EIR) does and do not study mitigation measures. Commenting on them was important because they are important planning documents but they are not legally binding in the way an EIR is. A more thorough review of the gate-downtime and traffic circulation impacts associated with Caltrain Electrification will be included in the Caltrain Electrification EIR. Below are the comments staff has already made on each of these documents: Draft Service Plan & Operations Consideration Study o Link: https://www.cityofpaloalto.org/civicax/filebank/documents/34730 Comments made in the attached City of Palo Alto Caltrain Electrification NOP letter should also apply to this report and the local impact concerns referenced in the letter should be addressed in future planning studies (Attachment A) Draft Grade Crossing and Traffic Analysis Study o Link: https://www.cityofpaloalto.org/civicax/filebank/documents/34731 Comments made in the attached City of Palo Alto Caltrain Electrification NOP letter should also apply to this report and the local impact concerns referenced in the letter should be addressed in future planning studies (Attachment A) The “base” draft traffic study used in this analysis utilizes ABAG 2035 growth projections. Those predictions, however, predict significant growth that may not end up being representative of actual population conditions in 2035. Therefore, in addition to what you have already provided, please also use an alternative scenario where the base traffic projections utilize Department of Finance population projections. For comparative purposes, a third scenario should also be used that assume no population growth. As a result of the complex conversations and decisions that have to be made regarding electrifying the corridor, Caltrain has continued to convene the Local Policy Maker City of Palo Alto Page 7 Group (LPMG), with representatives from the 17 cities and three counties located along the corridor. Additionally, a similar working group of city and county staff also meets monthly to provide input and direction related to this process. City staff has been actively engaged in these meetings. Litigation Update The City of Palo Alto is currently a petitioner in two lawsuits regarding HSR and filed an amicus brief in a third. In the latter two cases the City of Palo Alto has been represented by Stuart Flashman, an attorney specializing in environmental, land use, and elections law. Staff consulted with Flashman to provide the update below: Atherton I Litigation related to the first lawsuit, commonly known as Atherton I (Sacramento Superior Court No. 34-2008-80000022), is now in its third round. Palo Alto was not a petitioner but did file an amicus brief in the case. After that case was partially successful and a writ of mandate was issued, there were objections raised to the return on that writ, and those objections were addressed in a unified proceeding along with Atherton II. Atherton II Atherton II (Sacramento Superior Court No. 34-2010-80000679) is a joint lawsuit filed by the cities of Atherton, Menlo Park, and Palo Alto, with additional petitioners and plaintiffs. Atherton II gave the City a partial victory. The trial court ruled that the CHSRA did not sufficiently take into account the movement of rail right-of-way (ROW) eastward from its current location south of San Jose. This movement of ROW eastward was ruled to have impacts to Monterey Highway and adjacent properties significant enough that those impacts must be studied at the program level of environmental review. The court also ruled that the CHSRA did not sufficiently analyze the impacts to roadways along the Peninsula that will have lanes removed for construction of the HSR four-track Pacheco alignment. The City was unsuccessful in its arguments that the Altamont route was not sufficiently studied, that study of impacts from elevated sections along the Peninsula was improperly deferred, and that the CHSRA had not justified its continued use of its ridership model. All of these issues are currently being argued on appeal. On the ridership issue, the question was whether the CHSRA's decision to accept and continue to use its ridership model was supported by substantial evidence when numerous reviews of the model had found it questionable for forecasting purposes. The trial court found that the Authority was entitled to rely on the professional judgment of its modeling consultant. The court also pointed to some passages in the Institute for Transportation Studies (ITS) review of the model as support. City of Palo Alto Page 8 On appeal, the City is arguing that a consultant's professional opinion is not substantial evidence unless supported by factual evidence. The City is also arguing that the Court misinterpreted the ITS comments, and when viewed properly, they offer no support for the CHSRA's continued use of the ridership model. The case is now fully briefed. Oral argument will be heard in Sacramento on the morning of July 22nd. Atherton III Atherton III involves objections to the return and motion to discharge the writs from Atherton I and Atherton II. Atherton III does not have a separate case number because it is a consolidated proceeding continuing the trial court consideration of both Atherton I and Atherton II cases. Atherton III challenged the return of writ filed by the CHSRA and was heard in trail court on November 9, 2012. The challenge asserted that the CHSRA has still not properly addressed what it should have in the program level EIR. A major point of contention was that the CHSRA has since introduced the concept of a Blended System in implementation discussions, design, and funding plan but has refused to evaluate the alternative as an independent alternative. The CHSRA has instead evaluated the Blended System as a part of a larger implementation strategy. A second major point was that the PCJPB submitted a comment letter on the revised program level EIR and said it would not support a four-track alignment on the right of way it controls. Therefore, the City contended the CHSRA had not completed its necessary diligence by identifying where that four-track system could be constructed seeing as the PCJPB does not want the four-track system on their ROW which they own and control. Additionally, the City feels the CHSRA has failed to adequately evaluate the Altamont alternative alignment. Specifically, the City feels the CHSRA has not sufficiently evaluated using a Blended approach to the Altamont alignment. The CHSRA says it is not feasible, but opponents argued that it had not provided substantial evidence to support that determination. Atherton III has been fully resolved except for any issues on which Atherton I and II are reversed on appeal. The Court accepted the CHSRA's return on the writ, rejected all objections, and discharged the writ. None of the petitioners chose to appeal. Attachments: A - Palo Alto Caltrain Electrification NOP Letter_3-18-2013 (PDF)