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2012-12-10 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers December 10, 2012 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 December 10, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Call to Order Closed Session Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH CITY ATTORNEY Potential Litigation Relating to 2012 Audit of Software End-User License Agreement with SAP Public Services, Inc. Government Code Section 54956.9(b)-Significant Exposure to Litigation- 1 Case Special Orders of the Day 2. Proclamation Honoring John Tuomy City Manager Comments Oral Communications Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Consent Calendar Items will be voted on in one motion unless removed from the calendar by two Council Members. 3. Finance Committee Recommendation to Approve the Residential CustomerConnect Pilot Program, Approve a Contract with Elster Solutions LLC for up to $450,455, and Adopt a Resolution Approving Pilot-Scale Time-of-Use Electric Rate for Residential Customers 4. Finance Committee Recommendation to Adopt a Resolution Approving the Cap-and-Trade Revenue Utilization Policy for the Use of Revenues from the Sale of Allocated Allowances in California’s Greenhouse Gas Cap-and-Trade Auctions 2 December 10, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 5. Adoption of a Resolution Declaring Weeds to be a Public Nuisance and Setting January 14, 2013 for a Public Hearing for Objections to Proposed Weed Abatement 6. Approval of a Wastewater Treatment Enterprise Fund Contract to Join the Bay Area Biosolids to Energy Coalition in the Total Amount of $151,553 for Membership in a Regional Coalition Exploring Biosolids to Energy Projects that Benefit the Regional Water Quality Control Plant 7. Resolution Authorizing the Making of a Prepayment Under the City's Water Supply Agreement with the City and County of San Francisco and Authorizing the City's Participation in a Bond Issuance by the Bay Area Water Supply and Conservation Agency to Finance the Prepayment 8. Approval of the Renewal of a Public-Private Partnership Agreement Between the City of Palo Alto and TheatreWorks for the use of the Lucie Stern Community Theatre 9. Approval of the Renewal of a Public-Private Partnership Agreement Between the City of Palo Alto and the Palo Alto Players for the use of the Lucie Stern Community Theatre 10. Approval of the Renewal of a Public-Private Partnership Agreement between the City of Palo Alto and the West Bay Opera for the use of the Lucie Stern Community Theatre 11. Approval of an Agreement with the Santa Clara Valley Water District for the Installation and Maintenance of Two Trash Booms at Creek Locations in Palo Alto 12. Adoption of Resolution of Intent to Set the Employer's Contribution Under the Public Employee's Medical and Hospital Care Act with Respect to Members of the Palo Alto Police Officers' Association and Rescinding Resolution No. 8896 13. Submittal of Mitchell Park Library and Community Center Bi-Monthly Construction Contract Report 3 December 10, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 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. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 14. Public Hearing: Adoption of an Ordinance Establishing Underground Utility District No. 47 (Middlefield Road/Addison Avenue/Cowper Street/Homer Avenue) by Amending Section 12.16.02 of the Palo Alto Municipal Code 15. Public Hearing: Adoption of an Ordinance Rezoning a 0.6-acre Site from Single Family Residential (R-1) to Service Commercial (CS), Adoption of a Resolution Amending the Comprehensive Plan Land Use Designation from Single Family Residential to Service Commercial, and Approval of the Negative Declaration for the Properties located at 423- 451 Page Mill Road. 16. Approval of a Record of Land Use Action for a Preliminary Parcel Map with Exceptions to Subdivide an oversized Single Family Residential lot into two lots, resulting in parcels having a width of 55.845 feet where he R-1 Zone standard minimum width is 60 feet; and Approval of a Negative Declaration located at 827 Chimalus Drive 17. Public Hearing: Consider Extending up to December 28, 2013 a Moratorium on the Use of Certain Parking Exemptions contained in Section 18.52.060(c) of the Zoning Ordinance Related to the Downtown and California Avenue Parking Assessment Areas; and Adopt a Resolution Providing Exceptions to the Moratorium for "Pipeline Projects" at 135 Hamilton Avenue and 636 Waverley Street Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 4 December 10, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 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. 5 December 10, 2012 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Supplemental Information Standing Committee Meetings Sp. City Council Closed Session Policy & Services Committee Meeting Regional Housing Mandate Committee Meeting Schedule of Meetings Tentative Agenda Informational Report Annual Status Report Developer’s Fees Early Memo Fiscal Year 2012 Year-End Capital Improvement Program Projects Status Report Public Letters to Council Set 1 Set 2 Set 3 CITY OF PALO ALTO PROCLAMATION Honoring Former Palo Alto School Board Member John Tuomy WHEREAS, John Tuomy was born in Spokane, Washington on August 1, 1946 and moved with his family to Palo Alto in 1949; and WHEREAS, John Tuomy attended Garland Elementary, Jordan Junior High, and Palo Alto High School; and WHEREAS, John Tuomy earned his bachelor’s degree from San Jose State University, and obtained his teaching credential in the early 1970’s; and WHEREAS, John Tuomy was hired by the Palo Alto Unified School District as a fourth-grade teacher at Palo Verde and later taught in the district’s gifted program and eventually became the district’s computer coordinator; and WHEREAS, John Tuomy lead a successful grassroots campaign to keep Gunn High School open in the late 1980’s; and WHEREAS, in 1995, John co-chaired the successful $143 million bond measure campaign “Building for Excellence; and WHEREAS, John Tuomy was elected to the Palo Alto Unified School District Board in 1995 and served on the board for 8 years. NOW, THEREFORE, I, Yiaway Yeh, Mayor of the City of Palo Alto, on behalf of the City Council do hereby gratefully records its deepest and abiding appreciation and the appreciation of the community to John Tuomy and his family for his contributions made throughout his wonderful life to Palo Alto. Presented: December 10, 2012 ______________________________ Yiaway Yeh Mayor City of Palo Alto (ID # 3330) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Residential CustomerConnect and Time-of-Use Rate Pilot Title: Finance Committee Recommendation to Approve the Residential CustomerConnect Pilot Program, Approve a Contract with Elster Solutions LLC for up to $450,455, and Adopt a Resolution Approving Pilot-Scale Time- of-Use Electric Rate for Residential Customers From: City Manager Lead Department: Utilities Recommendation Staff, the Utilities Advisory Commission (UAC), and the Finance Committee recommend that the City Council: 1. Approve the residential customer engagement (CustomerConnect) pilot program; 2. Approve a contract with Elster Solutions LLC for an estimated cost of $409,455, with the authorization of additional related, but unforeseen, work which may develop during the project, for an amount of $41,000, equal to ten percent of the contract amount, for a not-to-exceed total amount of $450,455; and 3. Adopt the attached resolution approving pilot time-of-use electric rates for residential customers. Executive Summary The proposed residential CustomerConnect pilot program is designed to evaluate how customers change their energy and water consumption when they are provided with advanced meters and equipment to view their energy and water use. The pilot program will be available to 300 residential customers who agree to have advanced electric, natural gas and water meters installed for free at their homes. Participants will also be provided tools to access, display and interpret their utility usage information. The pilot will include a time-of-use (TOU) electric pilot rate for up to 150 residential electric utility customers, particularly those with electric vehicles, who can shift electric usage to non-peak night hours to reduce the cost of energy supplies and the environmental impact of on-peak electric usage. City of Palo Alto Page 2 To participate in the CustomerConnect pilot, customers must provide the City of Palo Alto Utilities (CPAU) feedback on their experiences in participating in the pilot program with the objective of assisting CPAU in evaluating the merits and shortcomings of such programs and associated technologies. While 200 of the participants will be self-selected volunteers, 100 will be invited by CPAU to participate. If approved by Council, the CustomerConnect pilot will start in the spring of 2013 and end by December 2015. The cost of the three-year pilot program is estimated to be about $550,000, which is available in the capital project budget for implementing the smart meter roadmap. Both the UAC and the Finance Committee unanimously recommended that the Council approve the pilot program and adopt the proposed TOU rates. Finance Committee Review and Recommendation At its November 14, 2012 meeting, the Finance Committee reviewed the proposed program (Staff Report #3209 – Attachment C to this report). In response to a question about the proposed TOU rate structure, staff indicated that the rate was cost-based and developed for the consumption profile of an average single family home. Staff also mentioned that if customers shift their loads to off-peak hours, especially their Electric Vehicle charging, they could expect a 10-15% reduction on their incremental electric bill. UAC Commissioner Melton explained how staff’s proposal for the pilot program evolved and incorporated input from the UAC. The Finance Committee unanimously (by a vote of 4-0) recommended Council approve the proposed CustomerConnect pilot program, the contract with Elster, and the proposed TOU pilot rates. The Finance Committee minutes are provided in Attachment D. Resource Impact The TOU and CustomerConnect pilots were contemplated in the smart grid work plan, a capital improvement project with a budget of $750,000. The Elster contract is expected to cost approximately $409,455. Staff is also requesting $41,000 (10%) for unforeseen project related work for a total not to exceed amount of $450,455. An additional $100,000 is expected to be required for information services, minimal modification to the billing system, program evaluation assistance and other related consulting services. Therefore, the total cost is expected to be $550,455 plus the $41,000 for contingencies for the Elster contract. Staff effort will be more significant in the first year of the pilot, amounting to between 2 and 2.5 FTE, but will ramp down in subsequent years to closer to 1 FTE. Staff from various groups are involved, and the focus of the work will migrate from Resource Management and Engineering, to Operations, to Customer Support Services, SAP Project Management and IT depending on City of Palo Alto Page 3 the stage of project development. Some of the efforts, such as communications, will be ongoing. It is expected this level of multi-divisional/multi-departmental staff effort can be garnered from existing staff resources. However, the staff time required to implement these pilots may result in a 6- to 12-month delay of certain capital projects (electric distribution system upgrade, large commercial customer metering, and gas and water meter replacement plans), which should not impact service reliability as well as cause delays in certain internal support services. A limited amount of staff overtime may also be needed for this project. The pilot project team includes staff from Utilities (Operations, Engineering, Marketing, Customer Service, and Resource Management), and SAP Project Management office. All costs for the proposed pilots were included in the FY 2012 budget and do not require an adjustment to the budget or rates. Full implementation of the EV TOU rate (i.e. beyond the pilot program) may require additional metering and billing system upgrades. These costs will be assessed and included in staff’s recommendation to Council at the conclusion of the TOU pilot program by December 2014. Policy Implications The approval of this contract is consistent with existing City policies, including the Council approved Utilities Strategic Plan Strategy Objectives of offering programs to meet the needs of the customers and community, and promoting the efficient use of resources. Offering customers a time-of-use electric rate also meets City’s Electric Vehicle Infrastructure Policy. Environmental Review This project does not require review under the California Environmental Quality Act (CEQA). Attachments: Attachment A: Resolution Adopting Pilot TOU Rates (PDF) Attachment B: Agreement with Elster Solutions LLC (PDF) Attachment C: Final Staff Report ID 3209_Residential CustomerConnect and TOU Rate Pilots - to Finance 11-14-12 (w/out attachments) (PDF) Attachment D: Excerpted Draft Minutes of the Finance Committee Meeting of November 14, 2012 (PDF) *NOT YET APPROVED* 120822 dm 00710042 Resolution No. _________ Resolution of the Council of the City of Palo Alto Adopting Utility Rate Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment) The Council of the City of Palo Alto RESOLVES: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment), is added as attached and incorporated. Utility Rate Schedule E-1 TOU shall become effective as of January 1, 2013 and shall expire on December 31, 2014. SECTION 2. The Council grants the City Manager or his designee the authority to implement Utility Rate Schedule E-1 TOU as part of a voluntary participation pilot program involving up to one hundred (100) of the City’s Electric Utility customers who own electric vehicles and up to fifty (50) Electric Utility customers who do not own electric vehicles. Electric service provided under the Utility Rate Schedule will be offered at the sole option of the City based upon guidelines published by the City Manager or his designee. SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, California Public Resources Code section 21080, subdivision (b)(8). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT BETWEEN CITY OF PALO ALTO AND ELSTER SOLUTIONS, LLC December_, 2012 1 FULLY MANAGED SERVICES AGREEMENT This EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT (this "Agreement") is entered into this day of , 2012 (the "Effective Date") by and between Elster Solutions, LLC, a Delaware limited liability company, with offices located at 208 S. Rogers Lane, Raleigh, NC 27610, USA ("Elster") and the City of Palo Alto, a California chartered municipal corporation, acting by its Department of Utilities, with a principal place of business located at 250 Hamilton Avenue, Palo Alto, CA 94301, USA (the "City"). Elster and the City are referred to, collectively, as the "Parties" and, individually, as the "Party". RECITALS: WHEREAS, the City wishes to evaluate advanced utility meters and associated residential customer engagement software tools with the objective of gauging customer interest and satisfaction utilizing these technologies to manage their utility services, to quantifY changes to customer electricity, natural gas and water consumption, and to enhance City's utilities services to customers; WHEREAS, Elster is in the business of providing advanced meter and networking equipment and fully managed services solutions for electricity, natural gas and water utilities and customers; WHEREAS, Elster's subcontractor, Utilismart Corporation ("UC") of Ontario, Canada, provides 'cloud- based' software services which saves customer utility usage and associated information on its computer servers and provides utility customer analytical and engagement tools; WHEREAS, Elster as the prime contractor, and UC as a subcontractor to Elster, responded to the City's Request for Proposal solicitation # 145169, and was selected by the City to provide services to meet City's requirements as outlined in this Agreement; AGREEMENT: In consideration of the Recitals above and the covenants, terms and conditions below, the Parties agree: 1. SCOPE. Elster agrees to sell to the City and the City agrees to purchase from Elster the Equipment and Fully Managed Services, hereinafter referred to as "Managed Services", as detailed in Exhibit B, Statement of Work, attached hereto and incorporated herein by reference (the "Statement of Work"), subject to the terms and conditions of this Agreement and the Exhibits attached hereto. For purposes of this Agreement, Managed Services are defined as access to a fully managed and maintained cloud-based EnergyAxis Management System through secure web portals. For purposes of Equipment licensing and maintenance, Exhibit D contains terms and conditions associated with software license for the Equipment provided and Exhibit E provides the terms and conditions associated with the hand-held unit's maintenance. 2. UNDERSTANDING. This Agreement represents the complete understandings, obligations and responsibilities of the Parties, and binds the Parties to the terms and conditions herein. If the City elects to issue a separate purchase order for the Managed Services described herein, the purchase order shall expressly reference this Agreement, and the terms and conditions of this Agreement and its Exhibits shall prevail in the event of a conflict in interpretation. 2 3. TERMS AND CONDITIONS. Any Advanced Metering Infrastructure ("AMI") metering hardware (the "Metering Equipment") or other services not delineated as "Managed Services" or provided as part of this Agreement shall be sold by Elster and delivered pursuant to Exhibit A, Elster Solutions, LLC General Terms and Conditions of Sale, attached hereto and incorporated herein by reference (the "Elster General Terms"). 4. FEES AND PAYMENT SCHEDULE. In consideration of the Managed Services defined herein, the City shall pay Elster the amounts described in Exhibit C, Rates and Fees (the "Rates and Fees"), which shall apply to the Statement of Work: a) Payment by the City for Elster's deliverables shall be made in accordance with the following payment schedule: i) Managed Services. The setup fee described in Exhibit C will be billed upon contract signing. The Managed Services fee is an annual fee billed not later than thirty (30) days prior to the end of the then current calendar year, with payment due by January 1 of the following calendar year. Annual Fees for the initial year of Service will be prorated based on the number of days remaining in 1he calendar year calculated from the date the City completes system training ("Prorated Annual Fee"). ii)Metering equipment and any other deployment services. The City will be invoiced in accordance with the provisions of Exhibit C. iii) Additional Training, Consultation. If additional training or consulting is requested by the City, such additional training or consulting will be billed upon completion of the additional training or consulting. iv) Travel and living expenses Expenses for Elster's personnel for on-site work shall be billed monthly at its cost plus ten percent (10%) upon completion of the travel. Any such expenses shall be approved in advance by 1he City before they may be incurred. b) Payment terms are net cash, payable without offset, in United States Dollars, due thirty (30) days from date of invoice by wire transfer to the account designated by Elster. The wire transfer information is, as follows: Electronic Payments (ACH and Fed Wire Payments) to: ABA Transit Number: Bank Name: Bank Address: Company Name: Bank Account Number: Account Type: SWIFT Code: 021001033 Deutsche Bank Trust Company Americas 60 Wall Street New York, NY 10005 Elster Solutions, LLC 00451610 Checking BKTRUS33 5. COMPLETE AGREEMENT. This Agreement, together wi1h the Exhibits attached hereto, constitute the entire agreement between the Parties and supersede and cancel any and all prior agreements, written or oral, between the Parties relating to the subject matter hereof. This Agreement may not be amended unless it is in writing and signed by the Parties. In the event of any inconsistencies among this Agreement and its Exhibits, this Agreement shall control with respect to any issues relating to the Managed Services and the Elster General Terms shall control with respect to the supply of any Metering Equipment or services outside the scope of the Managed Services. 3 6. CONFIDENTIALITY a) Notwithstanding any other provIsIon of this Agreement and the Exhibits, the Parties acknowledge that the California Constitution and the California Government Code pertain to writings of the City prepared and/or stored in the ordinary course and scope of the City's business, which mayor may not be required to be disclosed by the City to the genetal public. To the extent consistent with applicable laws, each party (the "Receiving Party") shall maintain in strict confidence any and all proprietary and confidential information about the business, operations or customers of the other party or any of their affiliates which it acquires in any form from the other party (the "Disclosing Party"), including without limitation the terms of this Agreement, or any other information disclosed by the Disclosing Party and identified by Disclosing Party as confidential ("Confidential Information"). The Receiving Party will not disclose such Confidential Information with any third parties without the Disclosing Party's prior written consent. The Receiving Party further agrees to use its best efforts and to take all reasonable precautions to maintain strict confidentiality with respect to the Confidential Information and to prevent disclosure thereof to persons other than its employees, accountants, affiliates, attorneys, bankers, consultants, insurance advisors and carriers, and agents who need access to such information to carry out a party's obligations under this Agreement, and the Receiving Party shall be liable for the compliance by such third parties with the confidentiality obligations hereof. b) The Receiving Party shall not use, or permit the use of, the Confidential Information for any purpose other than performing this Agreement and exercising the rights granted under this Agreement. The Receiving Party acknowledges that the rights of the Disclosing Party in the Confidential Information are unique, and accordingly the Disclosing Party shall, in addition to such other remedies as may be available to it at law or in equity, have the right to enforce its rights hereunder by an action for injunctive relief and specific performance to the full extent permitted by law. Upon termination of this Agreement and the written request of the Disclosing Party, the Receiving Party shall return or destroy all copies of all Confidential Information to the Disclosing Party. Notwithstanding the foregoing, to the extent it would be unreasonably costly or cumbersome, neither party shall be required to delete intangible copies of Confidential Information that is made as part of such party's routine systems back-up procedures. c) The Parties have entered into a non-disclosure agreement, attached and incorporated by reference as Exhibit H. 7. PROVISION OF SERVICES. a) Term of Managed Services Agreement. Elster shall provide Managed Services to the City in accordance with the terms of this Agreement for a period of thirty-six (36) months from the Effective Date of this Agreement (the "Term"). The Parties may extend the Term on an annual basis (the "Extension Term") by the City giving not less than thirty (30) days' advance written notice and by completion of a contract amendment; provided, however, any such contract amendment for a one-year Extension Term shall not be entered into by the Parties in excess of three (3) consecutive one-year terms. The Extension Term(s) shall be approved by the Council of the City of Palo Alto, unless the Council delegates to the City Manager the authority to execute the contract amendments for the second and third one-year Extension Terms not exceeding a total of three (3) years in duration. This Agreement may not be extended beyond three Extension Terms after the expiration of the three-year Term. b) Completion of Managed Services. At the end of the Term and if the City does not extend the Term, the Managed Services provided by Elster shall cease, and the City's access to the Cloud Base Software Services will expire or otherwise be deemed terminated. Prior to the 4 end of the Term, the City will be contacted by Elster's Sales Team to discuss next steps. If the City elects to renew the contract for Managed Services, Elster will continue to support the existing configuration during contract negotiations per existing rates. The Parties will endeavor to engage in contract negotiations for a period that does not exceed six (6) months. c) Third Parties. Elster at its discretion may utilize third parties, to furnish some or all of the Managed Services; provided, however, Elster shall notify the City of such third party not less than thirty (30) days before that third party commences provision of services. Those third parties shall be considered subcontractors of Elster and may be required to execute the type of non-disclosure agreements referred to in Section 6(c) above and shall meet the relevant terms and conditions ofthis Agreement. d) Responsibility for Data and AMI System Operation. The Parties understand that the Managed Services provided under this Agreement are for use by the City for business purposes. The Parties also understand that Elster, as part of its technical support for the AMI System, may periodically "re-boot" the AMI System, perform data or system backups, and provide other scheduled maintenance services. Elster shall provide the City with not less than ten (10) days' advance notice before commencing such backup actions. e) Access to the AMI System. Access to the AMI System shall be made available via web portal by assigned password and specifically limited to the City's employees. Access by any other personnel is prohibited except by express written consent by Elster, which consent shall not be unreasonably withheld. f) Technical Support. During the Term, Elster will provide technical support at the desired level, as set forth and purchased in accordance with Exhibit C. g) Access to the City's AMI Metering Hardware. For technical support for the AMI System analysis, the City will provide Elster with reasonable access to all of the City's network devices (including, without limitation, gatekeepers, meters, and water/gas modules) in the AMI System. Should it be necessary for Elster to directly access these devices for support purposes, the City will provide Elster with the required addresses and unrestricted passwords of the gatekeepers for such access, provided Elster acknowledges and understands that it is obligated to maintain the confidentiality of such information at all times during the Term. Elster shall notify the City prior to Elster's accessing the AMI system not less than 24 hours before commencing access. Elster and/or Elster's subcontractors shall treat any City metering and other customer information it acquires access to in providing the assistance contemplated by this Section as the proprietary and confidential information of the City, and shall comply with the terms of Section 6 of this agreement. Elster and/or Elster's subcontractor shall comply with the Software as a Service Security and Privacy Terms and Conditions, as set forth in Exhibit G. h) Training. Training with respect to the web portals in order to access the AMI System will be provided to the City as set forth in Exhibit B. i) The City ResponsibiJities and Deliverables. The City shall be responsible for providing the deliverables set forth in Section 6, Exhibit B. j) Elster's insurance obligation. During the term ofthis Agreement, Elster at its own cost and expense, shall obtain and maintain in full force and effect during the term the insurance coverage described in Exhibit F. Elster shall obtain a policy endorsement naming the City as an additional insured under any commercial general liability policy. 5 8. REQUESTING CHANGES. All changes requested by either Party to the Statement of Work or the Term shall be made, in writing, between the City's Project Manager and Elster's Project Manager. Should the City request changes to the Term, the Parties' Project Managers will manage and schedule the impacts of those changes, including agreement on cost and scheduling impacts, if any. Prices for changes to Statement of Work will be furnished by Elster at the then current Time and Materials rates. 9. DELAYS. Elster is not responsible for Project delays directly caused by the City or any of its affiliates or contractors. Billing for Managed Services shall commence upon completion of the kick off meeting as described in Exhibit B. 10. PROPRIETARY RIGHTS. a) Proprietary Rights of the City. i. As between Elster and the City, all of the Data (defined as information provided by the City to Elster), including, without limitation all worldwide patents, copyrights, trademarks, trade secrets and other intellectual property rights therein (collectively, "Intellectual Property Rights"), is, and shall at all times remain, the sole and exclusive property ofthe City. ii. The City agrees that it shall have sole responsibility and liability for: (a) acquiring any and all authorization(s) necessary for the use of the Data as contemplated by this Agreement; (b) the completeness and accuracy of all Data and other materials provided to Elster by the City pursuant to this Agreement; and (c) ensuring that the Data does not infringe or violate any Intellectual Property Rights or other rights of any third party. iii. The City hereby grants to Elster a non-exclusive, royalty-free, worldwide right and license to use, reproduce, distribute, modify, create derivative works of, transmit, publicly perform and display the Data for the purpose of providing the Managed Services hereunder. b) Proprietary Rights of Elster. 1. The City acknowledges and agrees that Elster shall own all rights, title and interest in and to any materials, including Intellectual Property Rights, developed by or on behalf of the City in connection with this Agreement. ii. The City further acknowledges and agrees that Elster or its licensors shall retain ownership of all servers and other hardware and software used by Elster in connection with the provision of Managed Services under this Agreement. iii. The City acknowledges that it shall not, by reason of this Agreement, obtain any rights in the trademarks, service marks or trade names of Elster. The City shall not take any action that might adversely affect the validity or enforceability of the trademarks andlor service marks of Elster. 11. LIMITED WARRANTIES AND DISCLAIMER OF WARRANTIES FOR MANAGED SERVICES. a) Limited Warranties and Exclusive Remedies. Elster warrants and represents to the City that the Managed Services will be provided in a workmanlike manner. 6 b) Disclaimer of Warranties. i. OTHER THAN THE EXPRESS LIMITED WARRANTY PROVIDED IN SECTION lO(a) ABOVE, THE MANAGED SERVICES PROVIDED HEREUNDER ARE PROVIDED "AS IS" AND ELSTER MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE, INCLUDING WITIIOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE (EVEN IF ELSTER HAS BEEN ADVISED OF THE PURPOSE), UNINTERRUPTED SERVICE, ERROR-FREE SERVICE, NON-INFRINGEMENT, AND WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE. Elster shall not be liable for errors in transmission or for failure to establish connections, including errors or delays caused by network outages or Internet interruptions. Elster cannot and does not guarantee the privacy, security, authenticity and non-corruption of any infonnation transmitted through, or stored in any system connected to, the Internet. ii. Elster specifically disclaims any warranty as to the accuracy of the Data, it being customer's sole and exclusive duty and responsibility to assure that all Data is accurate. 12. A PARTY'S INDEMNIFICATION OBLIGATION. Each Party shall indemnify, defend and hold the other Party, its employees, officers, directors, elected officials, representatives, agents, attorneys and insurers harmless from and against any claims, actions, losses, liabilities, damages and expenses (including attorney's fees and court costs) threatened, made, assessed or awarded against the other Party by any third party arising out of or in connection with (i) the Party's breach of this Agreement or any warranty set forth herein; (U) any injury to persons or property caused by the Party or arising in connection with any Party's applicable ownership, control or use rights of or in the Managed Services or any products or services otherwise distributed by any Party in association with the Managed Services; (iii) any service provided or perfonned or agreed to be perfonned by the Party or any product sold by the Party; or (iv) any ownership, control or use of the Software by any Party, and its agents, employees and officers. 13. LIMITATIONS OF LIABILITY. THE AGGREGATE LIABILITY OF ELSTER FOR DAMAGES ARISING OUT OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO MISTAKES, OMISSIONS, INTERRUPTIONS, DELAYS OR ERRORS OR OTHER DEFECTS, REPRESENTATIONS OR USE OF MANAGED SERVICES OR ARISING OUT OF THE FAILURE TO FURNISH THE MANAGED SERVICES, WHETHER CAUSED BY ACTS OF COMMISSION OR OMISSION SHALL IN NO CASE EXCEED THE COMPENSATION PAID BY THE CITY, WHICH GIVES RISE TO THE CLAIM. UNDER NO CIRCUMSTANCES SHALL ELSTER BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THE MANAGED SERVICES, WHETHER LIABILITY IS BASED ON BREACH OF CONTRACT, BREACH OF WARRANTY (EXPRESS OR IMPLIED) OR OTHERWISE, AND WHETHER ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, AND IRRESPECTIVE OF WHETHER THE P ARTIES HAVE ADVISED OR BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IN NO EVENT SHALL ELSTER BE LIABLE FOR LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS, OR COSTS OR DAMAGES INCURRED AS A RESULT OF LOST DATA OR EQUIPMENT, THE COSTS OF RECOVERING OR SECURING REPLACEMENTS FOR SUCH ITEMS, OR CLAIMS BY THIRD PARTIES. 7 14. ASSIGNMENT. A Party may not assign its rights or obligations under this Agreement to any third party without the prior written consent of the other Party. In the event that Elster is involved in a Change of Control (defined below), such an event shall be considered an assignment of this Agreement subject to the written consent of the City, which consent shall be not unreasonably withheld. "Change of Control" means a stock sale, reorganization, merger, consolidation or other form of corporate transaction or series of transactions, in each case, with respect to which persons who were the shareholders of Elster immediately prior to such stock sale, reorganization, merger or consolidation or other transaction do not, immediately thereafter, own more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the sold, reorganized, merged or consolidated company's then outstanding voting securities, in substantially the same proportions as their ownership immediately prior to such stock sale, reorganization, merger, consolidation or other transaction. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns. 15 . WAIVER. The terms, covenants and conditions of this Agreement may be waived only by a written instrument executed by the party waiving compliance. The failure of any party at any time or times to require performance of any provision of the Agreement shall in no manner affect the right at a later date to enforce the same or to enforce any future compliance with or performance of any of the provisions hereof. No waiver by any party of any condition or other breach of any provision, term or covenant in this Agreement whether by conduct or otherwise, in anyone or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or the breach of any other provision, term or covenant of this Agreement. 16. ENFORCEMENT. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future law effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof, and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. 17. EXECUTION. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. For the purposes of this Agreement, a facsimile signature shall be deemed an original. 18. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the state of California, without regard to conflicts of law principles. 19. INTEGRATION; CONTRACT AMENDMENTS. This Agreement, together with the Exhibits, Appendices, Pricing, Schedules, Attachments and Addenda listed below, collectively the "Contract Documents" with English as the prevailing language, represents the complete understanding and agreement between the Parties, and supersedes and cancels any and all prior agreements, written or oral, relating to the subject matter hereof. The Contract Documents may not be amended except by written modification signed by both Parties. Any conflicts among the Contract Documents shall be resolved by giving precedence to the terms in the documents in the following order: Fully Managed Services Agreement Exhibit A -General Terms and Conditions of Sale provides the standard Elster terms for the sale of goods and provision of services. Exhibit B -Statement of Work 8 Exhibit C -Rates and Fee Exhibit D -Route and Inspector Manager Software License Agreement (RMLA) Exhibit E -Handheld Unit Maintenance Agreement (HMA) Exhibit F -Insurance Requirements Exhibit G --City of Palo Alto Software as a Service Security And Privacy Terms and Conditions Exhibit H --Confidentiality and Non-Disclosure Agreement between the City of Palo Alto and Elster Solutions, LLC dated 9/05/2012 IN WITNESS WHEREOF, THE PARTIES HAVE BY THEIR DULY AUTHORIZED REPRESENTATIVES EXECUTED TIDS AGREEMENT AS OF THE EFFECTIVE DATE. CITY OF PALO ALTO By: ________________________ __ Printed Name: ---------------- Title: ---------------------- Date: ______________________ _ Approved as to form: Senior Asst. City Attorney Approved: Director of Utilities 9 By: --~~~-,~----.---------- Title: .\)~ CO"-~ rAJ R(\f~ Date: ___ \{-=+I ___ 7)-+{..:-It..-_____ _ 1 General EXHIBIT A ELSTER SOLUTIONS, LLC GENERAL TERMS AND CONDITIONS OF SALE These terms and conditions may not be changed or superseded by any different or additional terms and conditions proposed by the City in a purchase order or other document, unless expressly agreed to in writing by Elster. Notwithstanding the foregoing, any software licenses purchased by the City shall be governed exclusively by the terms and conditions of the applicable software license agreement or systems license agreement (including, if applicable, a shrink-wrap or click-wrap software license agreement) in effect between the parties. 2 Prices Unless otherwise specified in writing, all proposals or quotations from Elster expire thirty (30) days from the date thereof. Unless otherwise specified by Elster, the price does not include any federal, state or local property, license, privilege, sales, use, excise, gross receipts, or other like taxes which may now or hereafter be applicable. The City will assume the payment of all taxes, duties, fees and other charges assessed by any taxing authority in the City'S country or country of ultimate destination with respect to the goods order. The City agrees to payor reimburse any such taxes, duties, fees or other charges which Elster or its suppliers are required to payor collect. If the City is exempt from the payment of any tax or holds a direct payment permit, the City shall, upon order placement, provide Elster a copy, acceptable to the relevant governmental authorities of any such certificate or permit. Upon delivery by the City of an exemption certificate or other claim for tax exemption, The City will, and hereby does, indemnify and hold harmless Elster from any sales, use, value-added or similar tax, charge, excise or fee (including interest, penalties, attorneys' fees and related dispute resolution charges) assessed against or incurred by Elster in reliance on the City's exemption claim. Unless otherwise stated herein, prices for Services are based on Services provided during Elster's normal business hours (8 a.m. to 5 p.m. U.S. Eastern Time, Monday through Friday, excluding Elster holidays). Overtime and Saturday hours will be billed at one and one-half (1 1/2) times the hourly rate; and Sunday hours will be billed at two (2) times the hourly rate; hours during Elster holidays will be billed at three (3) times the hourly rate. If a Services rate sheet is attached hereto, the applicable Services rates shall be those set forth in the rate sheet. Rates are firm for one year from date of the contract. Thereafter, Elster can change the rates upon reasonable notice to the City. 3 Changes Any changes requested by customer affecting the project scope, schedule, or other aspects of the work must be accepted by Elster, and impacted provisions of the contract, including but not limited to price, schedule, license fees, warranties, etc., mutually agreed to in writing prior to implementation of any change. Customer requested changes in the scope will be priced per the unit pricing stated in the pricing exhibit(s) attached to and incorporated as part of the agreement between the parties, or otherwise as quoted by Elster on a case-by-case basis. Any changes to the system or hardware initiated by customer before or after delivery may necessitate upgrades to third party licenses. Any additional third party license fees will be the responsibility of customer unless such costs are specifically noted as included in the scope of work pricing. Elster may, at its expense, make changes in the goods and services as it deems necessary and in its sole discretion to conform the goods and services to the applicable specifications. If the customer objects to any such changes, Elster shall be relieved of its obligation to conform to the applicable specifications to the 10 extent that conformance may be affected by such objection. In addition, during the provisioning of goods and services hereunder, Elster may pass along to the City certain incidental costs incurred by Elster in the provisioning of such goods and services that directly relate to the provisioning thereof, such as mounting brackets, washers, gaskets and the like, with such costs not to exceed $10,000. 4 Delivery All goods manufactured, assembled or warehoused in the continental United States and delivered within the United States ("U.S.") are delivered FOB Elster factory. Goods delivered outside of the U.S. will be delivered Ex Works Elster factory, and the City shall arrange for export clearance. The City shall be responsible for any and all demurrage or detention charges. If the City requests and Elster agrees in writing that goods shall be delivered FOB point of destination, Elster will deliver such goods FOB point of destination as selected by the City with all freight costs prepaid by Elster. In order for Elster to cover the administrative, insurance, and logistic expenses involved with FOB point of destination deliveries, Elster will add to the City's invoice as a separate line item, an amount equal to two percent (2%) of the purchase price of the goods being delivered. If the scheduled delivery of goods is delayed by the City or by Force Majeure, Elster may move the goods to storage for the account of and at the risk of the City whereupon it shall be deemed to be delivered. Shipping and delivery dates are contingent upon the City's timely approvals and delivery by the City of any documentation required for Elster's performance hereunder. Claims for shortages or other errors in delivery must be made in writing to Elster within ten (10) days of delivery. Goods may not be returned except with the prior written consent of and subject to terms specified by Elster. Claims for damage after delivery shall be made directly by the City with the common carrier. 5 Inspection and Acceptance The City shall have up to forty-five (45) days after delivery of the goods to the specified delivery point or after provisioning of Services, to inspect and reject or accept the goods or Services. In the event that the City does not reject the goods or Services in writing citing any applicable non-conformity to a purchase order, order release or specification during such fort-five (45) day acceptance period, the applicable goods or Services shall be deemed accepted. 6 Title and Risk of Loss Title to the goods shall pass to the City upon the City's receipt of the goods as determined by the City's choice of delivery per section 4 "Delivery" above. Notwithstanding any agreement between the City and Elster with respect to delivery terms or payment of transportation charges, Elster's standard term for risk of loss or damage shall pass to the City upon delivery to the FOB Elster factory point of shipment, for United States delivery, or Ex Works Elster factory as defined in INC01ERMS 2010, for goods delivered outside the United States. Notwithstanding the foregoing, title to any software delivered to the City shall remain in Elster, and the City shall receive only a license to use such software pursuant to the terms of the applicable software license agreement or system license agreement between the parties. 7 Delays Goods and Services provided by Elster are planned and priced based on project requirements, and are extremely sensitive to proper utilization of assets and committed resources. Schedule delays that prevent Elster or its subcontractors from working at the planned pace represent a risk to meeting overall project objectives. Elster will work closely with the City in an effort to :tninirn.ize the potential for delays through careful planning and documentation of key interdependencies. If however, the delivery of goods or the performance of Services are delayed as a result of acts or omissions by the City or its representatives (and not by Elster or by reasons of force majeure), for unreasonable periods, Elster may, at its discretion, deem such 11 delay a suspension of the General Agreement by the City, and as a result not be bound by the pricing set forth in the Pricing Schedule, and may at its discretion, require the City to renegotiate the prices. 8 Warranties and Remedies 8.1 Goods Warranty Elster warrants that goods shall be delivered free of defects in material and workmanship. The warranty remedy period for goods shall end twelve (12) months after installation or eighteen (18) months after date of shipment, whichever fttst occurs. 8.2 Goods Remedy If a nonconformity to the foregoing warranty is discovered in the goods during the applicable warranty remedy period under normal and proper use, and provided the goods have been properly stored, installed, operated and maintained (the City to provide proper records), and written notice of such nonconformity is provided to Elster promptly after such discovery and within the applicable warranty remedy period, Elster shall, at its option, either (i) repair or replace the nonconforming portion of the goods, or (li) refund the portion of the price applicable to the nonconforming portion of goods. 8.3 Services Warranty Elster warrants that services shall be performed in a good and workmanlike manner. The warranty remedy period for services shall end ninety (90) days after the date of completion of services. 8.4 Services Remedy If a nonconformity to the foregoing warranty is discovered in the services during the applicable warranty remedy period, and written notice of such nonconformity is provided to Elster promptly after such discovery and within the applicable warranty remedy period, Elster shall, at its option, either (i) re-perform the nonconforming services or (li) refund the portion of the price applicable to the nonconforming portion of the services. 8.5 Third Party Goods Warranty Goods supplied by Elster but manufactured by others are warranted only to the extent of the manufacturer's warranty. The third party In Home Display is warranted for a period of one year from the date of shipment. 8.6 Third Party Goods Remedy Remedies, if any, are provided by the manufacturer 8.7 Additional Warranties Notwithstanding the foregoing, certain warranties may be provided under the System License Agreement, the System Maintenance Agreement and the Equipment Maintenance Agreement, but any such warranties are subject to the terms thereof and do not apply to the goods and services warranted in this Section 8. 8.6 Warranty Returns For warranty returns of Elster metering hardware, the City will pay freight to Elster factory in Raleigh, NC. Elster will provide all freight charges for return of repaired or replaced items from its factory. After expiration of the warranty period, the City is responsible for payment of any support or maintenance agreements for computer hardware and/ or third party software used in the system. 8.7 Exceptions In no event shall Elster be responsible for gam:mg access to the goods, disassembly, reassembly or transportation of the goods or parts from or to the place of installation, all of which shall be at the City's risk 12 and expense. Elster shall have no obligation hereunder with respect to any goods which (i) have been improperly repaired or altered; (n) have been subjected to misuse, negligence or accident; (iii) have been used in a manner contrary to Elster's instructions; or (iv) are comprised of materials provided by or a design specified by the City. The foregoing warranties are exclusive and in lieu of all other warranties of quality and performance, whether written, oral or implied, and all other warranties including any implied warranties of merchantability or fitness for a particular purpose, non-infringement or usage of trade are hereby disclaimed. The remedies stated herein constitute the City'S exclusive remedies and Elster's entire liability for any breach of warranty. Notwithstanding the foregoing, goods supplied by Elster but manufactured by others are warranted only to the extent of the manufacturer's warranty, and only the remedies, if any, provided by the manufacturer will be allowed. Without limiting the generality of the foregoing, while Elster may incorporate a third party AMR/ AMI communication module into the goods, Elster disclaims any and all warranties, express or implied, regarding the module and the operation of the combined module/meter, including the implied warranties of merchantability and fitness for a particular purpose, any warranties arising from the course of dealing or trade usage, and compliance of the module and the combined module/meter with the ANSI or FCC requirements. While Elster may act as a broker for the module manufacturer and may assist the City in obtaining the benefits of the module manufacturer's warranties, any express or implied warranty regarding the module or the operation of the combined module/meter, to the extent any such warranty may exist, is provided solely by the module's manufacturer. 9 Limitation of Liability In no event shall Elster be liable for special, indirect, incidental or consequential damages. Elster's liability for any claim shall in no case exceed the purchase price allocable to the goods or services or part thereof which gives rise to the claim. In no event shall Elster be liable for any damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising from any improper installation or improper use of any goods by the City, its customers, end users or anyone other than Elster, or arising from any failure by the City to follow their own safety procedures in connection with the installation or use of the goods. All causes of action against Elster arising out of or relating to this Agreement or the performance or breach hereof shall expire unless brought within one year of the installation of the product to which such claim relates. 10 Force Majeure Neither party shall be liable for loss, damage, or delay nor be in default for failure to perform (other than payment obligations) due to causes beyond its reasonable control, including but not limited to acts of God, acts of war or terrorism, fite, flood, strike, labor disputes, acts or omissions of any governmental authority or of the other party, compliance with government regulations, embargos, fuel or energy shortage, delays in transportation, inability to obtain necessary labor, materials, or services from usual sources, or from defects or delays in performance of a party's suppliers or subcontractors due to such causes. In the event of a delay by either party due to the foregoing, the date of delivery or time for completion shall be extended by a period of time reasonably necessary to overcome the delay. 11 Termination Any order, contract or agreement may be terminated by the City by written notice and payment of reasonable and proper termination charges, including but not limited to all costs associated with the order or contract incurred up to the date of the notice of termination (including, without limitation, demobilization costs, sub- supplier and subcontractor termination charges, and standard restocking fees), Payments shall be made within 30 calendar days from receipt of invoice and acceptance of the goods in accordance with these General Terms and Conditions of Sale. No termination by the City for default shall be effective unless, within thirty (30) days after receipt by Elster of the City's written notice specifying such default, Elster has failed to initiate and pursue with due diligence correction of such specified default. 13 Elster may terminate any order, contract or agreement and any license granted thereunder at any time and for any reason, including nonpayment or other material breach by the City that is not cured within thirty (30) days following written notice thereof. 12 Export Control The City represents and warrants that the goods and services provided hereunder and the "direct products" thereof are intended for civil use only and will not be used, directly or indirectly, for the production of chemical or biological weapons or of precursor chemicals for such weapons, or for any direct or indirect nuclear end use. the City agrees not to disclose, use, export or re-export, directly or indirectly, any information provided by Elster or the "direct product" thereof as deftned in the Export Control Regulations of the United States Department of Commerce, except in compliance with such Regulations. If applicable, Elster shall me for a U.S. export license, but only after appropriate documentation for the license application has been provided by the City. The City shall furnish such documentation within a reasonable time after order acceptance. Any delay in obtaining such license shall suspend performance of this Agreement by Elster. If an export license is not granted or, if once granted, is thereafter revoked or modifted by the appropriate authorities, this Agreement may be canceled by Elster without liability for damages of any kind resulting from such cancellation. At Elster's request, the City shall provide to Elster a Letter of Assurance and End-User Statement in a form reasonably satisfactory to Elster. 13 Resale If the City resells any of the goods (other than software, which is non-transferable), the sale terms shall limit Elster's liability to the buyer to the same extent that Elster's liability to the City is limited hereunder. In addition, when reselling any of the goods, Client shall maintain strict compliance with the Export Administration Act of 1979, as amended, or any other United States laws and regulations as shall from time to time govern the sale, license and delivery of technology or goods abroad by persons subject to United States law. Resale of goods does not transfer unique LAN identification or software embedded in or related to meters. The buyer of resold goods must contact Elster directly for such components. 14 EXHIBITB STATEMENT OF WORK lbis Statement of Work (SOW) defines the work to be completed by Elster and the City of Palo Alto Utilities (CPAU) for the successful implementation of Elster's EnergyAxis Managed Services. It includes the scope of work to be completed, the timelines for the overall project, provides visibility into the interdependencies required to achieve the desired outcome, and will assist all parties in understanding and executing their respective roles, responsibilities and tasks. 1 Scope of Work lbis AMI project may include: • REX2 meters • EA_ Gatekeepers • EA_ Water Modules • EA_ Gas Modules • Energy Axis Managed Service • Handheld Equipment • Associated Software for Handheld • In-home displays • Services (i.e. project services and integration) as described herein. EnergyAxis Managed Service is provisioned in our datacenter and accessible to CPAU and its customers via the Utility Energy Portal (UEP) and Consumer Energy Manager (CEM) provided by Elster's subcontractor, UC. All other hardware will be deployed within CPAU territory as identified during the RFP process. All software, hardware and services not included in the above list are outside the scope of this SOW and are the responsibility of CPAU to provide if necessary. Elster is willing to provide additional products and services via a Change Order. 2 Project Organization A utility's AMI project involves much more than deploying the EnergyAxis solution. To take advantage of the benefits that EnergyAxis offers, other utility systems and work flows are often impacted and these impacts need to be managed by CPAU. A successful project requires customer participation throughout the project. Elster will rely on CPAU to provide overall guidance. 2.1 Customer Responsibilities Prior to the start of the project, CPAU will designate a person ("CPAU Project Manager") to whom all communications from Elster will be addressed, and who will have the authority to act on CPAU's behalf in all matters regarding this SOW. CPAU's Project Manager will serve as the interface between Elster's project team and all of CPAU's departments and other contractors participating in the AMI project; • Attend status meetings • Obtain and provide applicable information, data, consents, decisions and approvals as required by Elster to complete our responsibilities, within three business days of Elster's request (or in a timeframe agreed to) • Help resolve projectissues, and escalate issues within CPAU organization, as necessary 15 • Work with Elster to complete meter and programming forms in timely manner to facilitate hardware ordering process • Support the Project Change Order Procedure in a timely manner. 2.2 Elster Responsibilities Elster Project Manager will serve as the interface between Elster's project team (including those of our subcontractors) and CPAU's Project Manager; • Review the SOW, and any associated documents, with CPAU Project Manager • Facilitate the project kickoff and planning meeting • Establish and maintain communications through CPAU Project Manager, as defmed in the section entitled "Project Procedures" below • Review and administer the Project Change Order Procedure with CPAU's Project Manager, as defined in the section "Project Procedures below; . • Coordinate and manage the project activities of Elster's assigned personnel • Provide status reports and facilitate status meetings as agreed. The roles of the Elster team are described below. Elster's work is performed both on-site and remotely. Typically, Elster personnel will be on-site for the project planning/kickoff meeting and as mutually agreed to with CPAU. All other travel to the site requested by CPAU is outside the scope of this SOW. Elster Project Manager (P11) serves as the lead project manager for the AMI project and is the main contact for CPAU. They oversee Elster's responsibilities and deliverables for the CPAU Project. The Elster Project Manager assembles project teams, assigns individual responsibilities, develops project schedules, provides status reports, determines and acquires the appropriate resources necessary to resolve any issues for CPAU project team. Customized data requests will require an additional fee. Elster Project Engineer provides configuration of EnergyAxis network devices. Elster Network Planner determines the required number and location of Gatekeepers and Repeaters. Elster Trainer provides web portal training. Elster Field Services Engineer provides training and support for field installation and maintenance. 3 Stages of Deployment Common activities that may be included in CPAU's deployment are listed below. Specific activities, the timing of the activities and the responsibility for the activities will vary. 1) Initial Engagement: Ramp up to initial deployment a) Contract Signing b) Project Planning c) Finalization of Network Design d) Discussion of Managed Services Setup Form U1010 e) Coordination with Subcontractors f) Ordering of Hardware g) Discuss Scope of Integration Efforts (if applicable) 2) Early Deployment a) Initial Deployment of Meters and Gatekeepers 16 b) WAN Configuration c) UEP and CEM Configuration d) Training e) Managed Services Becomes Effective 3) Continued Deployment a) More meters deployed b) More Gatekeepers deployed c) Additional meters added to the Managed Service 3.1 Elster's Project Deployment After the Managed Services are in effect, CPAU will use the Elster Managed Services Support team for technical support and issue resolution. The support team will escalate issues as necessary within the organization. Please refer to the Agreement for details. Elster's pricing includes active management of the project by an Elster Project Manager for up to 12 months from the date of project kick-off. The Project Manager and their team are highly involved in coordinating efforts for task completion and mitigation during this time. Upon completion of all defmed activities and deliverables in this scope of work, Elster shall have met all Project Services obligations within the scope for this Statement of Work and Project Services shall be released. If CPAU desires to have the project actively managed after the 12-month period, this can be provided via a Change Order. Please refer to the professional service rate schedule in Exhibit C of the Agreement. 4 Project Procedures Project procedures describe communications, interface requirements, and means to control the activities between CPA U and the Elster project team. The procedures described in this section will be coordinated with the overall program management procedures implemented by for CPAU and used as agreed to during the project planning stage. 4.1 Project Communications Procedures The Project Workbook (Contact List & Communication Matrix) denotes the key project contacts and distribution of electronic mail and/or other communications for key functional areas of the project. The Elster Project Manager must approve all formal transmittals. CPAU and the other parties are requested to implement a similar transmittal policy to assure that documents are properly tracked and recorded. Elster transmittals will be dated with an agreed upon versioning control nomenclature (e.g. 050311 v 1.0J. 4.2 Project Scheduling Project schedules are developed and used by the Elster Project Manager and team to plan and control execution of the Elster project scope of work. The Elster Project Manager is responsible for monitoring progress on the project schedule, including major milestones associated with contract deliverables. The project schedule is determined during the Project Planning meeting. Most dates, including installation, WAN deployment and integration delivery dates, are determined by the utility requirements and resource availability. Therefore, the entire scope of a utility's project must be considered when developing the project schedule. CPAU Project Manager is responsible for providing sufficient input regarding CPAU overall program. 17 4.3 Project Control & Risk :Mitigation Elster and CPAU will use project control procedures, identified during the planning stage, to ensure that project schedules and objectives are accomplished in a timely and effective manner. The control function involves working with the project staff to determine the progress being made, and what problems, if any, are being encountered in the execution of the work Based on regular reviews, corrective actions will be taken to prevent or resolve problems. If a project review indicates that progress is not in accordance with plan, corrective actions are required to return the project to schedule. These reviews help.to focus on the most effective course of corrective action, i.e., the course of action that avoids delays in the overall project schedule and provides critical path mitigation. 4.4 Progress Reports Progress reports will be created and transmitted by Elster to CPAU based on a mutually agreed schedule. These reports include a narrative addressing key issues associated with the contract. A typical progress report narrative includes the following as applicable: a) Last month progress b) Project action items c) Problem areas Open action items & status d) e) f) g) List of deliverable documents and equipment Scheduled activities for next month Open contractual issues 4.5 Change Order Procedures All requested contractual changes shall be in writing between CPAU Project Manager and the Elster Project Manager. When the change impacts project scope or project schedule, CPAU Project Manager and Elster Project Manager will manage the changes to mitigate possible negative impact on the schedule while providing the sought after benefits of the change. The new scope and impact on cost and schedule, if any, will be agreed to and documented via a Change Order. Changes to the scope requirements will be priced based on work involved. 4.6 Project Review Meetings CPAU is required to participate in project review meetings that cover: status and schedule reviews, coordination of CPAU and Elster's scope activities, exchange of technical information, and design reviews of future work to be performed by the project team. These meetings will include CPAU and Elster personnel as required to address the key issues. To the extent possible, meetings will be conducted via conference calls or video conferencing. The Elster and CPAU project managers will mutually agree upon the frequency of these project meetings. The Elster and CPAU project managers will also mutually agree to the timing, frequency, and location of any face-to-face meetings. 4.7 Transmittal Reviews CPAU and Elster will review all submitted transmittals within five (5) business days of submittal. After documents are reviewed, any comments will be formally transmitted by the receiving party to the other party's Project Manager. If no discrepancies are indicated, the document is assumed to be correct and approved. If errors, omissions, or format discrepancies exist, comments indicating the nature of these will be transmitted by the receiving party to other team's Project Manager. 18 5 Deliverables Bill of Material Hardware Solutions: Style Number Q Il. AMI Electric Meter -Form 2S with disconnect and ZigBee. Form 12S (style number ZF5WKABOOOO) maybe substitute for form 2S. Refer to Exhibit C for the adder. ZFCWMABOOOO 300 2. EA Water modules -pit mount in-line connector EW202200000 300 • 3. Water module -pit cover lid mounting kit EW200004000 300 4. Water module -splice kit 40301K001 300 EG214000000 American EG254000000 American 5B EG224000000 Sensus 5. EA Gas modules -American or Sensus meters EG244000000 Sensus 415 300 6. Gas module mounting kit for American and Sensus EG210001000 American meters EG220001000 Sensus 300 7. EA_ Gatekeepers -A3TL type single-phase or polyphase form ZDxxOOW1082 25 8. HAN hardware -ZigBee In-Home Display IHD 50 19 i, ... '.:; ...••.......•• c.. ...... ..,.' < ............... ·.·.\:·.':;~;.·~f.·;;;;;:!L;:::;i! .. \i~i?··c);;::;\.:;t:f;r,i:;,;::i!rtC,;r: •.. ·;;·.·~?,;t;!i;··::···,j;; :"~'J.%?"::~'~(;:C,. Software Solutions: One-time set up: 1. Set up for 900 meter endpoints (or 300 homes) N/A 900 meters .. 2. Utility-branded utility portal-set up N/A 1 lot 3. Utility-branded consumer energy portal -set up N/A 1 lot 4. HAN -Set up N/A 1 lot Monthly hosting: 5. AMI Monthly hosting N/A 36 months 6. Utility-branded utility portal -monthly hosting N/A 36 months 7. Utility-branded consumer energy portal -monthly hosting N/A 36 months 8. HAN -Monthly support for up to 50 units of In-Home- Display only N/A 36 months 9. Mobile App -Monthly support N/A 36 months ..< .•.• '..; ...•. . ....• ' ......i .,·.·····i.. •.. )' >' ..•. J;'. ;;·~·/· •.• ?\y·;:·':l(;<'(; .. >;:\';./;;,.::;;.; Equipment Installation Tools: Style Number Qua 1. EA_lnstalier handheld (field tool for water/gas module installation) 7S1500GOOl 2 units 2. EA Inspector handheld upgrade for dual functionality 7S1505GOOl 2 units 3. EA Handheld GPS option lB11920HOl 2 units 4. License for Route Manager and EA_lnspector 7S1560GOOl Manager 7S1565GOOl 1 lot 5. Equ !lance -Annual fee N/A 3 years .. ./'~,";;,:;; .. :.( •...... ... ••. ",.l, .:.:?<\;;,) .. );>./....,.:.;: .••••.....•. ;; .... , .• ,': •...•.. ' ..•.• r .. ··· .,;.~'>;.;, ......• <:, ...•.. :',.y,.' Pilot Program Management Support: 1. Elster's Professional Services as defined in this SOW covering the 12 month period from the kick-off meeting N/A I 1 lot 2. Estimated travel and living. N/A 1 lot Elster Managed Services includes the license to use EnergyAxis via the UEP and CEM as defmed in this Agreement. Elster provides Support Services as defined in this Agreement. 6 Project Service Deliverables and Responsibilities This section is intended to provide clarity on the tasks required and the interdependencies among all parties. The responsible party for each task is indicated in the section entitled "Responsibility Matrix." 6.1 Project Planning Meeting Elster will provide up to two (2) days on-site by Elster Project Manager to assist in refining the scope of work. Topics include: 1. Project Management Activities deliverables/ scope, ordering, invoicing, meetings, reports and communications 2. VPN requirements 20 3. Subcontractor discussions 4. Network planning 5. IT integration planning 6. Field Installation 7. Meter Conftgurations 8. Managed Services Setup Form U1010 9. Training 10. Project Schedule CPAU will have the appropriate personnel participate to support the project planning effort. This includes participation by CPAU project manager, Metering and Field Customer Services, Meter Reading, Billing, Customer Service, Technology Services and IT personnel. Elster Deliverables a) Final project schedule identifying deliverables and milestones that must take place to meet the requirements of the contract. Each party's responsibilities will be clearly identified on the schedule and the parties will agree to it pursuant to the Documentation Review section of this SOW. Upon approval by the parties, this project schedule will be deemed by the parties as incorporated in this SOW. b) Project communications plan describing the meetings, documentation, points of contacts and all other project communications. 6.2 Network Planning As part of the Network Planning effort, Elster will discuss typical Gatekeeper and EA_Repeater planning guidelines. Considering that CPAU will deploy only a subset of meters throughout the City's limit, CPAU shall provide a list of participations before the network planning effort can proceed. CPAU shall provide Elster with suitable electrical distribution and geographical maps of the installation locations that can be used to show meter/ device coordinates, allowing approximate communications distances between points to be determined and meter and other device locations in lat/lon format or other format which can be goo-coded. CPAU is responsible for finalizing the Gatekeeper and EA_Repeater locations and conducting site surveys of the proposed locations if necessary upon receipt of recommendations on proposed locations from Elster. During planning for the remaining deployment, Elster will provide one additional network design to include the remaining meters and to relocate or install additional EA_Gatekeepers if necessary. CPAU Deliverable a) Address locations or GPS coordinates for participants b) List of available locations for the installation of the EA_ Gatekeepers and/or EA_Repeaters. Elster Deliverable a) File with proposed Gatekeeper and EA_Repeater locations for initial deployment b) File with proposed Gatekeeper and EA_Repeater locations for remaining deployment 6.3 Elster Managed Service Setup Elster Deliverables 21 a) Provision Meters and Gatekeepers in Managed system b) Configure EnergyAxis UEP and set up requited accounts for utility c) Configure EnergyAxis CEM for utility . d) Train utility users on UEP /CEM web views and functionality 6.4 Optional Billing Setup Elster can work with CPAU to develop a customized file format for direct import into CPAU's billing system. This can be provided via a change order. CPAU Deliverable a) Provide a requited file format by CPAU's billing system. Elster Deliverable a) Provide a file format that complies with the input file format specified by CPA U's billing system. 6.5 Gas and Water Metering 6.5.1 Handheld Equipment The handheld equipment is requited for installation of gas and water modules. 6.5.2 Handheld Associated Software EA_Inspector -resides on the handheld and supports troubleshooting and other functionality at the meter/module site. EA_InstallerPlus resides on the handheld and communicates with Route Manager to facilitate gas and water module installation. Route Manager resides on a desktop PC EA_Inspector Manager -resides on a desktop PC 6.5.3 Route Manager Integration Elster's Route Manager Software is reguited to complete installation and configuration of EA_Gas Module and the EA_ Water modules, create marriage files, and for ongoing route maintenance and adding modules. Integration is requited between the customer CIS and Route Manager. CPAU Deliverable a) Customer and meter data from CIS for importing to Route Manager software in Elster defmed format. Optionally, Elster can provide the format conversion for CPAU for an additional fee. Elster Deliyerable a) Planning call (up to 2 hours) with CPAU Project Manager, CPAU IT representative, Installation partner, gas/water department operations to discuss installation of Route Manager. 22 b) Installation of software. c) Planning call (up to 2 hours) to discuss module programming elements. d) Training on Route Manager and EA_Gas Module and EA_ Water Module installation and programming (2-3 days). 6.6 Installation of Field Devices CPAU is responsible for installation of all field devices including but not limited to, meters, EA_Gatekeepers, EA_Repeaters, EA_ Water Modules, EA_Gas Modules. 6.7 WAN Communications CPAU is responsible for installation and operation of all WAN communications between the Gatekeepers (and direct-connected meter/device locations) and Elster's datacenter. Sufficient incoming communication channels shall be installed to ensure adequate throughput in sending data over those communication lines and sufficient capacity to support unsolicited call-ins by Gatekeepers for outages and alarms, for future system expansion and other functionality as desired by CPAU. CPAU shall provide the IP addresses of each Gatekeeper to Elster Managed Services to establish communication with the datacenter. 6.8 Provisioning of EnergyAxis Meters/Devices in the Managed System To enable Elster to setup meter/devices in the managed service environment, CPAU is required to perform several tasks including: • Gather technical information o Provide contacts details for utility's primary technical contact o Provide sufficient information to Elster Managed Services (to be provided in the planning stage). • Activate WAN communications to each Gatekeeper and provide access to Elster Support personnel. • Provide all configuration details of WAN, including IP address of each Gatekeeper, to Elster Managed Services • Collaborate with Elster Managed Services to test message flow between each Gatekeeper and the managed system. • Collaborate with Elster Managed Services to troubleshoot any communication issues between each Gatekeeper and the managed system. In addition, CPAU will complete the U1010 form which captures data such as: For Each Gatekeeper: • Elster serial number for Gatekeeper • Installation date • Billing password • Unrestricted password • IP address • Latitude (decimal format) 23 • Longitude (decimal format) For Each Meter: • Customer serial number • Installation date • Account number • Account name • Street number • Street name • Unit number • Latitude (decimal format) • Longitude (decimal format) 6.9 IT Infrastructure Elster Managed Services shall operate and maintain the following IT infrastructure: • Facilities suitable for all required server hardware, including proper environmental conditioning, power back up and surge protection. • Physical installation of server hardware and operating system. • Backup and other required support processes • Maintenance of servers and operating systems 6.10 Training Training on the UEP and CEM will be conducted via webinar. Elster will also provide training on the use of the handheld equipment and the associated software. CPAU Deliverable A small number of meters and Gatekeepers configured on the Managed System Elster Deliverable a) Elster will provide V2 day of remote training via webinar on the usage of the UEP and CEM portals. b) Training on meter/device additions and removals c) Handheld and Supporting software training 24 6.11 Data Redundancy and Security Elster provides the EnergyAxis Managed Service from two data centers. The data centers provide full redundancy, including power supply, ftre suppression systems, cooling, and high reliability. The data centers are secure environments with controlled and monitored access and multiple levels of physical network security. A dedicated connection between the two data centers enables data replication in different physical locations. 7 Responsibility Matrix To facilitate understanding of the roles of each party, the matrix below includes Elster's subcontractors. Elster remains responsible for its work and that of its subcontractors. "P" indicates primary responsibility; "S" indicates supporting responsibility ,:} . ",," , , .:," .....•.. <: ' .. ', ....... 1 Project Planning Meeting P S S 2 Network Planning P S 3 Managed Service Setup S P S 4 Route Manager Integration S P Installation of Field Devices 5 Meters/ EA_Modules P 6 Gatekeepers P 7 WAN fteld devices (if necessary) P 8 WAN Communications P 9 Provisioning Meters/Modules in System S P 10 IT Infrastructure P Training 11 Training on web portals S P S 12 Training in installation handheld P S 13 Documentation P 25 8 Appendices User Training on the UEP and CEM curriculum Module Name Audience Topics Mode I System Overview Utility staff • Utility Energy Portal (UEP) Presentation responsible for • Consumer Energy Manager (CEM) metering and • EnergyAxis Management System billing. (EA_MS) and other hosted applications • Role of Elster Managed Services for application, network, server, database and security administration • How to access the support team at Elster Managed Service Utility Energy Utility staff • Log onto UEP Presentation Portal (UEP)-responsible for • Navigate through the Dashboard, & Exercises Navigation metering and Meter Map, Data Export, Meter Load billing. Status and Data Statistics applications UEP-Data Utility staff • Select type of flat me to export to Presentation Export responsible for your billing system & Exercises billing • Select quality flags of data validation prior to export • Review flat me after export UEP -Meter Utility staff • Set criteria for Meter Search Presentation Map responsible for • View meter info & Exercises metering • Analyze communication problems with communication path, distance calculator and map/satellite tools • Execute On-Demand Read • Execute Disconnect/Reconnect command • View log of remote request messages UEP-Meter Utility staff • Navigate and Interpret the message Presentation Load Status responsible for log for each Meter & Exercises metering • Navigate and Interpret the message log for each Gatekeeper UEP-Data Utility staff • Navigate between Billing Cycle and Presentation Statistics responsible for Gatekeeper views. & Exercises metering • Reading and Interpreting Data Statistics • Reading and Interpreting data gaps, estimates and flags within interval and register reads. 26 Module Name Audience Topics Mode Consumer Utility staff • Log onto CEM Presentation Energy Manager responsible for • Navigate through the Account & Exercises ! (CEM) metering and Management, Consumption Report, billing Cost Report and Energy Saving applications CEM -Account Utility staff • Configure appliance profile Presentation Management responsible for • Configure retailer profile & Exercises billing CEM-Utility staff • Navigate bar graph from multi-Presentation I C ' ! onsumptton responsible for month to intraday views & Exercises i Report billing • Navigate chart CEM-Cost Utility staff • Navigate cost comparison graph Presentation Report responsible for from multi-month to intraday views & Exercises billing • Navigate cost report for any data range CEM -Energy Utility staff • Navigate, Configure and Interpret Presentation Savings responsible for the Load Shifting tool & Exercises billing • Read and Interpret the Conservation tool 27 EXHIBIT C RATES AND FEES Hardware Solutions: Style Number 1. AMI Electric Meter -Form 25 with disconnect and ZigBee. Please see pricing note #1 for form 125 meter ZFCWMABOOOO 2. EA_Water modules -pit mount in-line connector EW202200000 3. Water module -pit cover lid mounting kit EW200004000 4. Water module -splice kit 40301KOOl EG214000000 American EG254000000 American 58 5. EA_Gas modules -American or Sensus Meter. Please see EG224000oo0 Sensus pricing note #5 EG244000000 Sensus 415 6. Gas module mounting kit for American or Sensus EG210001000 American meters. Please see pricing note #5 EG220001000 Sensus 7. EA_Gatekeepers -A3TL type single-phase or polyphase form ZDxxOOW1082 8. HAN hardware -ZigBee In-Home Display IHD ,,,": ':'.,,' ::.: . , {J J' .. ' .. ::.'. 'i.< ~:'.<";': ' ...... J,.' ..... ,; ..... , .' "'." :: ... '.' .• : •.•. ; ... ,., .•. ::. ..• , • :." .,J , .. :. ',.," • ' ':.:., ,J.: "' .. :,. 'c' Software Solutions: One-time set up fee: 1. Set up fee for 900 meter endpoints (or 300 homes) N/A 2. Utility-branded utility portal -set up fee N/A 3. Utility-branded consumer energy portal -set up fee N/A 4. HAN -Set up fee N/A Monthly hosting fee: 5. AMI Monthly hosting fee N/A 6. Utility-branded utility portal -monthly hosting fee N/A 7. Utility-branded consumer energy portal-monthly hosting fee N/A 8. HAN -Monthly support fee for In-Home-Display only. Please see pricing note #2 N/A 9. Mobile App -Monthly support fee N/A Quantity Extended Price 300 300 300 300 $ 122,570 300 300 25 I 50 .,.,',; :' " .: ~' ". :: 900 meters 110t $ 4,040 110t 1 lot 36 months 36 months 36 months $ 94,860 36 months 36 months ::,rr"( "'" ; ,';', <;A> ' >:":: :;,',:.:,;, .'. '<.:i ::':Y,' J:: ';"';,/:{ ... \. .",' : ... , ...... ; ;".:" ;" :,'. ,:'. ' ""(> ,;:,.. .. ,.;: Equipment Installation Tools: 1. EA_lnstalier handheld (field tool for water/gas module installation) 7S15OOGOOl 2 units 2. EA Inspector handheld upgrade for dual functionality 7S1505GOOl 2 units 3. EA Handheld GPS option lB11920HOl 2 units $ 24,830 7S1560GOOl 4. License for Route Manager and EA-,nspector Manager 7S1565GOOl 1 lot 5. Equipment maintenance -Annual fee N/A 3 years 28 Total Project Cost $ Estimated Sales Tax 8.375% $ Contingency Planning 5.00% $ Total Project + Contingency $ Pricing Notes: 1. REX2 form 12S (style number ZF5WKABOOOO) maybe substitute for form 2S. The adder for each form 12S meter is $25 net each. 2. HAI\I Pricing notes: a. HAN hosting fee is applicable for up to 50 in-home-displays. Additional fee applies for thermostats and load control devices. b. HAN hosting fee includes decommissioning and re-commissioning for up to 200 times annually. If exceeding 200 times annually, additional fee applies; furthermore, Elster recommends that CPAU will need to deploy the Demand Response Server, which is not in the scope ofthis SOW. 3. Elster's Professional Services include the following: a. Twelve (12) month duration from the kick-off meeting to assist with project management and planning during the deployment of electric meters, EA_Water and EA_Gas modules. b. On-site kick-off meeting c. AMI network design and planning d. On-site training on the operation of the installation tools -up to 3 days e. On-site supervision and consultation on the installation ofthe gatekeepers, electric meters, EA_Water and EA_Gas modules -up to 15 days f. Should CPAU complete the deployment of electric/gas/water meters at 300 homes before 12 months from the kick-off meeting and elect to end the support of Elster's Professional Services early, a credit of $5,000 per month of early ending of Professional service will be provided by Elster. This credit will be up to $30,000, in the event the services end 6 months after kick-off meeting. At such time, Elster's Professional Services will conclude. 29 378,200 12,345 18,910 409,455 4. Travel and living are invoiced at cost plus 10% 5. Pricing for EA_Gas Modules does not include any Riotronics device or special adapters. Elster assumes CPAU will provide all necessary Riotronics devices and/or special adapters required for successful implementation. a. When the Riotronics device is in used, EA_gas module for stand-alone application will be required. Style number of stand-alone EA.JSas module is EG103100000. The adder for each stand-alone gas module is $4 net each. b. The mounting kit options for the stand-alone EA_gas module are (1) wall mounting kit -style number EG100002100; th.e adder for each wall mounting kit is $10.30 net each or (2) pipe mounting kit -style number EG 100003100; the adder for each pipe mounting kit is $19.40 net each. Summary Projected Payment Plan 1 Hardware $122,570 Invoiced Upon Shipment Set-up Fee $ 4,040 2 Invoiced Upon Contract Signing per paragraph 4(a)(i) of the Agreement Managed Service Fees (Hosting Fees) Total $ 94,860 3 Invoiced annually per paragraph 4(a) (i) of the $31,620 per year Agreement 4 Estimated Travel & Living $12,500 Invoiced per paragraph 4(a)(iv} Equipment Installation Tools Total $ 24,830 5 Software invoiced upon installation $4,800 Handheld invoiced Upon Shipment $7,330 each Annual Maintenance Fee invoiced per Exhibit E $895 each per year Project Services Total $119,400 Invoiced Monthly as Estimated Herein January, 2013 $ 26,400 February, 2013 $ 18,120 6 March,2013 $15,240 April,2013 $ 8,640 May, 2013 $ 8,640 30 June, 2013 $ 12,320 July, 2013 $ 5,000 August, 2013 $ 5,000 September, 2013 $ 5,000 October, 2013 $ 5,000 November, 2013 $ 5,000 December, 2013 $ 5,000 31 lTD:······ Elster Solutions, LLC 208 S Rogers Lane Raleigh, NC 27610 Work requested by customer: System Maintenance Agreement Professional Services Request Form 1\'fTNi:.: ';,.}. Systems Support Manager Fax: (919) 250 5439 (Attach additional page(s) if more space is required) Rates: The rates quoted below apply to work initiated in calendar year 2012 and completed within one (1) year. Rates are for labor only and DO NOT include travel and living expenses. '.profes.s,i6i1ais.en?<:er,ole·s .'. '" ··,<~()iJr,lf;ia~~";~',~~rVi¢~,j:j~sb?J>#op;;; ".':;: or,> . 'L" • . i\,i . '\ ;'.:':' '.' .; Program Manager $220 Project Management Office for large scale and turn key projects, including projects involving multiple vendors Project Manager $180 Business Process Specialist $250 Integration Developer $180 IT architect $170 Field Service Engineer $170 Database Administrator $170 Support Engineer $160 Logistics Coordinator $145 Assemble the project team, develop and execute the project schedule, report weekly status, and acquire the appropriate resources necessary to resolve issues Technical expertise for business process analysis re-engineering and integration scoping for Enterprise AMI integration Develop software to integrate Enterprise business applications Technical expertise to ensure that the network elements, metering end points and hardware interfaces of the AMI system deployed function as intended to meet the specified AMI system requirements and configuration of network to meet Licensee's Enterprise IT Requirements Field installation coordination and field trouble shooting Assistance with database management, optimization and migration Assistance with maintenance services outside the scope Coordination of equipment and material delivery logistics Test Engineer $140 Definition and execution of system acceptance test of Licensor approved system configuration Unless otherwise stated herein, Service prices are based on normal business hours (8 a,m, to 5 p,m, Monday through Friday), "Time" is on-the-job plus travel time to and from the job site from the regularly assigned office location. "Time" starts and ends at the person's regularly assigned office location unless otherwise agreed upon prior to the start of work. Overtime, Saturday hours will be billed at one and one half (1 '/2) times the hourly rate; Sunday will be billed at two (2) times the hourly rate and holiday hours recognized by Licensor will be billed at three (3) times the hourly rate. Minimum billable time per person will be four (4) hours. , SendI~y()i¢esTo: : -.' ~ Company: Address: City, State ZIP: Printed Name ATTN: Telephone No.: Signature Date ••.. *J,iterthne TracI#gSyst~mraskName" All services and products delivered under this request are governed exclusively by Elster Solutions, LLC General Terms and Conditions. 32 i /.1 ExhibitD Route and Inspector Manager Software License This Route and Inspector Manager License Agreement (RMLA or Agreement) is made part of EQUIPMENT AND FUllY MANAGED SERVICES AGREEMENT ('Agreement') between Elster and the City (also referred to as is between Elster Solutions, LLC, ("Elster"), and City of Palo Alto Utilities ("Licensee" or "CPAU"). In consideration of their mutual promises, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1 TERM The term of this RMLA is one (1) year beginning on the Effective Date with automatic renewals for successive one (1) year periods unless terminated earlier by either Party in accordance with the provisions set forth herein 2 LICENSE GRANT Licensor hereby grants to Licensee a nonexclusive, nontransferable license for Route and Inspector Manager License, subject to the terms and conditions set forth in this RMLA, to Use the Software. If the Licensee's role is that of Utility providing electricity, water and gas to the general public, the software license granted herein authorizes use of the Software for reading devices owned by the Utility, provided such devices are within the Utility's existing network. The software license does not support a Utility's current or planned expansion to other utilities. Trademarks, trade names or logos included or embedded in the Software and Third Party Software shall remain with the Software and Third Party Software and may not be removed or altered by Licensee. 3 OWNERSHIP AND INTELEECTUAL PROPERTY RIGHTS Licensee hereby acknowledges and agrees that the Software, and all patents, copyrights, trade secrets and trademarks related thereto are the exclusive property and Confidential Information of Licensor or its affiliates and their Third Party Software licensors and that Licensor or its affiliates and their respective Third Party Software licensors, as applicable, own all rights, title and interest, including, without limitation, all worldwide patent, copyright, trade secret and trademark rights and all goodwill associated therewith, in and to the Software and Third Party Software. Except for the license granted by Licensor to Licensee pursuant to Section 3 of this RMLA, Licensee shall acquire no right, title or interest of any kind or nature whatsoever in or to the Software or any Third Party Software or any patent, copyright, trade secret or trademark .of Licensor, Licensor's affiliates or Licensor's licensors. The Software is protected under United States and international copyright, trade secret and other intellectual property laws. Without limiting the generality of the foregoing, the parties 33 acknowledge and agree that the source code, binary code and all visual, printed and other outputs of the Software are trade secrets of Licensor and its affiliates and licensors. Except as otherwise expressly permitted under this RMLA, Licensee may not copy, translate, modify, display, patch, alter or otherwise change or make derivative works of the Software, Third Party Software, the applicable Documentation or any individual part thereof. Licensee shall not alter or remove any copyright notice or any propriety legend contained in or located on any part of the Software, Third Party Software, or the applicable Documentation and shall reproduce and maintain all such copyright notices or proprietary legends in and on any copy of the Software, Third Party Software, or Documentation that Licensee makes as permitted by this Agreement. 4. RESTRICTIONS ON USE, TRANSFER AND PROVISION OF SERVICES Licensee shall not derive or attempt to derive the source code or structure of all or any portion of the Software or Third Party Software by reverse engineering (except as required by law for interoperability), disassembly, decompilation or any other means. Licensee shall not give, sell, rent, lease, pledge, encumber, hypothecate, timeshare, provide subscription services for, sublicense, disclose, publish, assign, market, transfer or distribute any portion of the Software, Third Party Software or the applicable Documentation or other rights to any third party, including but not limited to Licensee's subsidiaries and affiliates. Licensee shall not publish the results of any benchmark tests run on the Software or Third Party Software and shall treat such results as Confidential Information of Licensor. 5. CONFIDENTIALITY The parties shall comply with the Confidentiality provisions of the General Agreement with respect to treatment of Confidential Information. Notwithstanding the foregoing, Licensor shall be entitled to disclose to a third party licensor of any Third Party Software (a) the fact of this RMLA (including the identity of Licensee) and (b) audit results with respect to Licensee's compliance with the Third Party Software terms of this Agreement. The provisions of this Article shall survive any termination of this RMLA or of any license granted hereunder. 6. DELIVERY Licensor shall deliver the number of copies of the Software as specified in the price sheet. 7. LICENSE FEES AND PAYMENT Licensee shall pay Licensor the System License Fees set forth in Exhibit C upon execution of this Agreement and completion ofEA_MS installation and training. Licensee shall pay Licensor interest on any late payments at the lesser of one and one-half percent (1.5%) per month or the maximum rate permitted by law. License fees do not include shipping charges, or any sales, use, withholding, excise or other taxes now or hereafter imposed on the production, storage, transportation, import, export, licensing or use of the products or services provided under this RMLA. Such expenses and taxes shall be paid by Licensee. Licensee shall indemnify Licensor for any such expenses or taxes which Licensor is required to pay. This RMLA defines the understandings, obligations and responsibilities of the parties, and will function in place of a separate purchase order for the same. 34 8. INFRINGEMENT REMEDY Licensor shall, at its expense, defend any suit which may be brought against Licensee by a third. party claiming that the Software infringes upon such third party's United States patent or copyright, and Licensor shall pay all judgments and costs recovered against Licensee in any such suit and shall reimburse Licensee for costs or expenses incurred by Licensee in the defense of any such suit, provided that Licensee gives Licensor prompt notice of such suit no later than ten (10) days after Licensee receives notice of such suit, or sooner if required by applicable law; reasonable assistance in the defense thereof; and full opportunity to control all aspects of the defense thereof, including settlement. In the event the Software is held to be infringing, and the use of the Software is enjoined, Licensor shall, at its option, procure for Licensee the right to continue using the Software; replace it with non-infringing software; modifY it so it becomes non-infringing; or remove the Software or the infringing portion thereof and refund the license fees applicable thereto. Licensor's obligations under this Section do not apply with respect to a claim of infringement if and to the extent such claim arises out of: (A) compliance with Licensee's specifications, (B) the use by Licensee or any of its customers of any third-party software or equipment that infringes any patent, copyright, trademark or trade secret of any third party, (C) any modification or alteration of the Software (other than by or on behalf of Licensor), (D) use of a version of the Software that has been superseded or (E) use of the Software after notice of the claimed infringement has been received by Licensee. The foregoing states the exclusive remedy of Licensee and the sole liability of Licensor for infringement. 9 LIMITATION OF LIABILITY The Licensor's total liability relating to this RMLA, the Software or to the license granted hereunder, shall not exceed the license fees paid by Licensee to Licensor under this RMLA. Licensor and its Licensors (including Licensors of Third Party Software) will not be liable in any event for loss or inaccuracy of data, loss of use of systems, cost of replacement software or systems, loss of profits, loss of revenue or any other indirect, special, incidental or consequential damages, whether or not foreseeable and even if Licensor has been advised of the possibility of such damages. In no event shall Licensor be liable for any damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising from any improper installation or improper use by Licensee, its customers, end users or anyone other than Licensor of the software or any goods supplied by Licensor, or arising from any failure by Licensee, its customers, end users or anyone other than Licensor to follow their own safety procedures in connection with the installation or use of the software or any other goods supplied by Licensor. 10. FORCE MAJEURE Neither party shall be liable for loss, damage, or delay nor be in default for failure to perform (other than payment obligations) due to causes beyond its reasonable control, including but not limited to acts of God, acts of war or terrorism, fire, flood, strike, labor disputes, acts or omissions of any governmental authority or of the other party, compliance with government regulations, embargos, fuel or energy shortage, delays in transportation, inability to obtain necessary labor, materials, or services from usual sources, or from defects or delays in performance of a party's suppliers or subcontractors due to such causes. In the event of a delay 35 by either party due to the foregoing, the date of delivery or time for completion shall be extended by a period of time reasonably necessary to overcome the delay. 11. AUDIT Licensor and its licensors shall have the right, upon notice to Licensee, to enter onto Licensee's premises to perform an audit to ensure that Licensee is in compliance with this RMLA. Licensee shall keep, and shall allow Licensor to access, accurate records of each computer on which the Software, portions of the Software, and/or any Third Party Software are installed, the locations of such computers, the number of Network Devices for which the Software is used and the number of Authorized Users Using the Software. Licensor shall have the right to disclose the results of any audits to its respective licensors. 12. ASSIGNMENT Neither this RMLA nor any interest under this agreement shall be assigned by Licensee without the prior written consent of Elster, except that either Party may assign this Agreement without prior consent in connection with a sale of controlling interest in the capital stock or other equity interest of such Party, a sale of all or substantially all of the assets of such Party, or pursuant to a merger or consolidation. Subject to the foregoing, this RMLA shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns. 13. TERMINATION Either Party may terminate this RMLA in accordance with the termination provisions in Exhibit A, General Terms and Conditions of Sale. Within ten (l0) days after the date of termination, Licensee will cease use of the Software and Third Party Software and return, or at Elster's direction, destroy all originals and copies, in whole or in part and in any form, of any Software or other Elster furnished documentation in the Licensees possession, and will certifY to the foregoing to Elster in writing 14. GOVERNMENT REGULATIONS The Software and Third Party Software is provided with RESTRICTED RIGHTS. Use, duplication, or disclosure of the Software, Third Party Software or Documentation by any department or agency of the federal government is subject to restriction as set forth in subparagraph (b)(3) of the Right in Technical Data and Computer Software clause at DFARS 252.227-7013 or subparagraphs (c)(I) and (2) of the Commercial Computer Software-Restricted Rights at 48 CFR 52.227-19, as applicable. For purposes thereof, "Contractor" is Elster Solutions, LLC, 208 S. Rogers Lane, Raleigh, NC 27610. Licensee shall not export or transmit the Software, Third Party Software, or any part thereof, directly or indirectly, to any restricted countries or in any manner that would violate the Export Administration Act of 1979, as amended, or any other United States laws and regulations as shall from time to time govern the license and delivery of technology abroad by persons subject to United States law. 15 NOTICES Any notice required or permitted hereunder shall be in writing and shall be deemed to have been delivered on the date evidenced by receipt obtained upon transmission by fax, upon delivery by 36 commercial delivery service, or upon delivery by certified or registered mail to a party's address or facsimile number shown below: If to Elster Elster Solutions, LLC 208 S Rogers Lane Raleigh, NC 27610 ATTN: Contracts Department Michelle Simmons csa@us.elster.com If to Customer City of Palo Alto Utilities 250 Hamilton Avenue, Palo Alto, CA 94301, USA Either Party may at any time change its respective address or point of contact by sending written notice of the change to the other Party. 16 MISCELLANEOUS This RMLA, including the Appendices attached hereto, contains the entire understanding of the parties with respect to the matters contained herein. This Agreement may not be modified except by writing, executed by authorized representatives of Licensor and Licensee. The headings and captions contained herein shall not be considered to be a part hereof for purposes of interpretation or application hereof, but are for convenience only. No action, regardless of form, arising out of the transactions under this RMLA may be brought by Licensee more than two (2) years after the cause of action has accrued. Either party's failure to exercise any right under this RMLA shall not constitute a waiver of any other terms or conditions of this RMLA with respect to any other or subsequent breach, nor a waiver by such party of its right at any time thereafter to require exact and strict compliance with the terms hereof. Third Party Software providers are third party beneficiaries to this RMLA with respect to provisions applicable to Third Party Software. Licensee will be bound by the terms and conditions of use of any Third Party Software provider. The provisions of Sections 2, 3, 4, 5, 8, 9, 11, 12, 14 and 15, shall survive the cancellation, termination or expiration of this Agreement. If any provision of this RMLA is held to be illegal, invalid or unenforceable in any respect, the remaining provisions of this RMLA shall remain in full force and effect to the maximum extent possible. This RMLA shall be governed by and construed in accordance with the laws of the State of California, without regard to the choice of law or conflicts of law rules of any jurisdiction. The parties agree that the Uniform Computer Information Transactions Act shall not apply to the terms or interpretation of this Agreement. The parties further agree that all causes of action against either party under this RNfLA shall be brought solely and exclusively in the State Courts of the State of California. Licensee acknowledges that this Agreement constitutes a legal agreement that obligates certain payments as noted herein. Should Licensee'sbusiness processes 37 require that one or more purchase orders be issued to provide for payments obligated by this RMLA, that these purchase orders will be issued to address these payment obligations. In no event shall Licensor be liable for, and Licensee shall indemnify and hold harmless Licensor, its affiliates and their respective officers, directors and employees from, any damages, losses, liabilities, costs and expenses (including reasonable attomeys' fees) arising from any improper installation or improper use by Licensee, its customers, end users or anyone other than Licensor of the Software or any goods supplied by Licensor, or arising from any failure by Licensee, its customers, end users or anyone other than Licensor to follow their own safety procedures in connection with the installation or use of the Software or any other goods supplied by Licensor. 38 ther Hardware & Services ExhibitD-l HARDWARE handheld (field tool for water/gas module installation) Subtotal-Other Hardware & Services SOFTWARE Price $5,500 o EA _Inspector and/or Route Manager Software consisting of: o EA_Inspector Manager installed on the customer computer system(s) o Route Manager installed on the customer computer system(s) Total $11,000 o The EA_Inspector application on the handheld device(s) used with the system o PI 900 software on the handheld device(s) used with the system Additional Fees for Handheld Software License Qty Price EA_Inspector handheld upgrade for dual functionality 2 1,500 EA _Handheld GPS Option 2 330 License for Route Manager and EA_Inspector Manager 1 4,800 39 Total $3,000 $660 $4,800 EXHIBITE HANDHELD UNIT MAINTENANCE AGREEMENT THIS HANDHELD UNIT MAINTENANCE AGREEMENT ("HMA"or agreement) is made part of the EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT (Agreement) between Elster and the City (also referred to as CPAU or Licensee). 1. PURPOSE This HMA defInes extended maintenance services available to the CPAU after expiration of the manufacturers' new product warranty, and is limited in application to Elster's EA Inspector and EA Installer handheld units ("Handheld Units" "Units" or "Handhelds''). By executing this HMA, the CPAU has elected to purchase extended maintenance services for the Handhelds listed in Attachment A for the fees defIned therein. 2. TERM The term of this HMA shall begin on the Effective Date of the Agreement and shall continue through December 31st of the then current calendar year (the "Initial Term"). Thereafter, this HMA shall automatically renew annually for successive one-year renewal terms (each a "Renewal Term'') unless the HMA is terminated by either Party upon written notice to the other party at least sixty (60) days prior to the end of the then current term. 3. HANDHELD UNIT INSPECTION / HMA PURCHASE CONDITIONS CPAU may purchase an HMA to cover rnaintenance services on Handhelds no longer covered by the manufacturer's new product warranty; reinstate a lapsed HMA to extend maintenance services of Handhelds previously covered by the HMA; or add Handhelds not under warranty to an existing HMA. In each case Elster must perform an eligibility inspection, and if necessary reconditioning of the Handheld Units, to qualify the Handhelds as eligible for extended maintenance services. CPAU is responsible for paying the eligibility inspection fee ("Inspection Fee''); the cost of reconditioning the Handheld Units if required; and the standard HMA maintenance fee for the then current term. HMA Inspection fees and reconditioning costs do not apply to Handhelds under the manufacturers new product warranty at the time the HMA is purchased., Thus, if the CPAU elects to purchases a HMA to cover Handhelds prior to expiration of the Handheld Unit warranty, only the standard HMA maintenance fee for the then current term will apply. 4. MAINTENANCE SERVICES PROVIDED Upon CPAU return of Handheld Units to Elster for service, Elster will inspect the Handhelds to determine the Units eligibility status under the manufacturers' new product warranty or an existing HMA. Handhelds covered under warranty or an existing HMA will be repaired if necessary without additional charge. Maintenance service for covered Units will include routine software updates and upgrades and repairs or replacement of parts or boards, in which case replacement parts or boards may be functionally equivalent, reconditioned or new. All parts and boards removed in the repair process shall become the property of Elster. CPAU will prepay shipping charges and insurance for Handhelds returned to Elster regardless if the Units are covered by the original manufacturers' warranty or an existing HMA. Elster will pay the cost of returning the Handhelds to CPAU, limited .to ground service only. To arrange Handheld Maintenance service under this HMA, contact Customer Service at 888.757.1918 for a return material authorization number and shipping instructions. 40 5. FEES AND HMA RENEWAL The annual fee for Handheld Unit maintenance services ("Maintenance Fee") is Eight Hundred Ninety-Five Dollars and 00/100 ($895.00) per Unit. The Maintenance Fee for the Initial Term shall be prorated from the Effective Date of the Agreement for the number of days remaining in the calendar year and invoiced accordingly. The Inspection Fee for Handhelds previously purchased and no longer covered by the manufacturers' new product warranty or an existing HMA, is Eight Hundred Ninety-Five Dollars and 00/100 ($895.00) per Unit. Inspection Fees are not prorated or refundable, and do not apply to new Handheld Units or Units still under the original manufacturers' warranty when such Units are added to an existing or new HMA. Maintenance Fee calculations are based on a calendar year and annual HMA Renewal Term fees are invoiced in October of each year for the following annual term. Onsite support services and/or any other additional services provided by Elster are billed at the end of the month in which the services are provided. For Inspection Fees, onsite support and other Services, all invoice payments are due net thirty (30) days from the date of invoice and CPAU will be assessed a late payment charge on any amount unpaid after the due date, computed at a rate equal to the lesser of one and one-half percent (1.5%) per month or the maximum amount permitted by law on the unpaid balance for each month such balance remains unpaid. The late payment charge shall be in addition to any other remedies Elster may have at law or in equity. All HMA Fees will be invoiced and paid in US dollars. Software license fees corresponding to Handheld Unit (EA Inspector / EA Installer) software are included as part of the System License Agreement fee, thus no additional license fees apply to handhelds covered by an HMA. Maintenance Fees and Inspection Fees are subject to annual adjustment following the Initial Term. Elster at its discretion shall have the right to increase HMA Fees at the time of annual renewal by the greater of three percent (3%) or the percent increase in the most recent, annualized Consumer Price Index for Urban Customers (CPI-V) posted by the Bureau of Labor Statistics of the US Department of Labor. 6. HANDHELD UNIT ADDITIONS/DELETIONS The CPAU may at any time request the addition or removal of CPAU owned Handheld Units under an HMA. All requests are conditional on meeting the requirements of Sections 3 and 5 herein, and must be directed to Elster in writing along with the serial numbers of the Units to be added or removed. Maintenance Fees previously paid for Handheld Units removed will not be prorated or adjusted for the length of coverage, and except as noted in Section 10, refunds will not be made. 7. HANDHELD UNIT MAINTENANCE WARRANTY Elster warrants that all Handheld Unit maintenance services will be performed in a good and workmanlike manner. Replacement parts and boards are warranted for ninety (90) days from the date of repair or the balance of the HMA Term, whichever is longer. No other warranties of any kind, expressed or implied, including warranties of merchantability or guarantee of fitness for a particular use, are offered with respect to services performed or parts furnished by Elster. This warranty excludes defects, malfunctions, performance failures or damages to any Units resulting from use in an other than normal and customary manner, misuse, accident, neglect improper alterations, or unauthorized disassembly by anyone other than Elster or its authorized representative. 8. LIMITATION OF LIABILITY The maximum liability of Elster with regard to Handhelds covered by this HMA is limited to repair of the Units or refund of the corresponding Maintenance Fee paid during the term when such Units are determined by Elster to be beyond repair. In no event shall Elster be liable for damages in excess of the original Maintenance Fee paid for the then current term, or for any loss of use, lost time or inconvenience, commercial loss, lost profits or savings, or any other incidental, special or consequential damages arising out of this HMA or of the use or inability to use such Units, to the full extent such may be disclaimed by law. 41 9. TERMINATION Either Party may terminate this Agreement in accordance with the termination provisions detailed in Exhibit A, General Terms and Conditions of Sale. Notwithstanding the foregoing, if Elster determines it can no longer maintain or support certain Handheld Units, Elster shall have the right to terminate maintenance services of such Units, remove the Units from the HMA, and refund the CPAU the pro-rated Maintenance Fee less any cost of repairs performed during the then current term. 10. GOVERNING LAW The HMA shall be governed by and construed in accordance with the laws of the State of California, without regard to the choice of law or conflicts of law rules of any jurisdiction. The parties agree that all causes of action against either party under this Agreement shall be brought solely and exclusively in the State Courts of the State of California, or the U.S. District Court for California. 11 SEVERABILITY If any provision of this Agreement is held to be illegal, invalid or unenforceable in any respect, the remaining provisions of this Agreement shall remain in full force and effect to the maximum extent possible. 12 COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. For purposes of this Agreement, a facsimile or email transmitted PDF signature shall be deemed an original. 13 SURVIVAL The provisions of Sections 7, 8, 9 and 12 shall survive the cancellation, expiration or termination of this HMA. 14 NOTICES Any notice required or permitted hereunder shall be in writing and shall be deemed to have been delivered on the date evidenced by receipt obtained upon transmission by fax, upon delivery by commercial delivery service, or upon delivery by certified or registered mail to a party's address or facsimile number shown below: Either Party may at any time change its respective address or point of contact by sending written notice of the change to the other Party. If to Elster Elster Solutions, ILC 208 S Rogers Lane Raleigh, NC 27610 ATTN: Contracts Department Michelle Simmons csa@us.elster.com 15 ASSIGNMENT If to Customer City of Palo Alto Utilities 250 Hamilton Avenue, Palo Alto, CA 94301, USA This HMA is not transferable to any other party without prior written authorization from Elster. 42 43 ATTACHMENT A EA INSPECTOR AND EA INSTALLER HANDHELD UNITS UNDER AGREEMENT Customer name ----------------------------------------------------------------Address ------------~--------------------------------------------------City, State ZIP ----------------------------------------------------------------Contact name Telephone No. ---------------------------------------------------------------- EA_Inspector (FW900 and/or FW950) Annual Fee per Unit ------~--~--------------~--------------------------------7S1500G002 Serial Number(s) (Beginning with "UM"): 1. 895.00 2. 895.00 3. 895.00 (Add lines as necessary) EA Installer (FW900 and/or FW950) EA Installer -7S1500G001 Serial Number(s) (Beginning with "UM''): 1. 895.00 2. 895.00 3. 895.00 (Add lines as necessary) Total HMA Fees: By submission of this order, the customer hereby requests annual Equipment Maintenance for the units listed above. Signature --------------------------------------------------------------Printed name ------------------------------------------------------------~ Title --------------------------------------------------------------Date --------------------------------------------------------------Note 1: The EA_Inspector may have the optional PI 900 application installed. In these "dual load" cases, a single EA_Inspector HMA fee is charged. Please return this completed and signed form to: Elster Solutions, LLC Attn: Contracts Department Michelle Simmons 208 S. Rogers Lane Raleigh, NC 27610 csa@us.elster.com 44 REQUIRED YES YES YES YES YES EXHIBITF INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000 LIABILITY COMBINED. BODILY INJURY $1,000,000 $1,000,000 -$1,000,000 $1,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LlABILlTY,INCLUDING ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S} OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO 45 "ADDITIONAL INSUREDS" A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT. AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303. 46 EXHIBITG SOFTWARE AS A SERVICE SECURITY AND PRIVACY TERMS AND CONDITIONS This Exhibit shall be made a part 0/ the EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT between Elster and the City 0/ Palo Alto In order to assure the privacy and security of the personal information of the City's customers and people who do business with the City, including, without limitation, vendors, utility customers; library patrons and other individuals and businesses, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the "Consultant") and its subcontractors, if any, including, without limitation, any Information Technology ("IT") infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit 8, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City's customers. -rhe Consultant shall fulfill the data and information security requirements (the "Requirements") set forth in Part A below. A "secure IT environment" includes: (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Consultant's operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. "IT infrastructure" refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. In the event that, after the Effective Date, the Consultant reasonably determines that it cannot fulfill the Requirements, the Consultant shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the "Alternate Requirements" as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the "ISM"). Part A. Requirements: The Consultant shall at all times during the term of any contract between the City and the Consultant: (a) Appoint or designate an employee, preferably an executive officer, as the security liaison to the City with respect to the Services to be performed under this Agreement. (b) Provide a full and complete response to the City's Supplier Security and Privacy 47 Assessment Questionnaire (the ((Questionnaire") to the ISM, and also report any major non-conformance to the Requirements,as and when requested. The response shall include a detailed implementation plan of required countermeasures, which the City requires the Consultant to adopt as countermeasures in the performance of the Services. In addition, as of the annual anniversary date of this Agreement the Consultantshall reportto the City, in writing, any major changes to the IT infrastructure. (c) Within three (3) months afterthe Effective Date, consultant and its Subcontractor will use their best efforts to adopt and implement information security and privacy policies that are documented, accessible to the City, and as necessary, conform to ISO 27001/2 -- Information Security Management Systems (ISMS) Standards. See the following: http:Uwww.iso.org!iso/home!store!cataloguetc!cataloguedetail.htm?csnumber=421 03 http:Uwww.iso.org!iso!isocatalogue!cataloguetc!cataloguedetail.htm?csnumber=5 0297 (d) Conduct routine data and information security compliance training of its personnel that is appropriate to their role. (e) Within three (3) months after the Effective Date, the Contractor and/or its Subcontractor as applicable, will develop and maintain detailed documentation ofthe IT infrastructure, including software versions and patch levels. (f) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees' personal identity and employment status, and (2) would enable the immediate denial of access to the City's confidential data and information by any of its employees who no longer would require access to that information or who are terminated. (g) Provide a list of IT infrastructure components in order to verify whether the Consultant . has met or has failed to meet any objective terms and conditions this]. (h) Implement access accountability (identification and authentication) architecture and . . . . . support role-base access control (({RBAC') and segregation of duties (({SoD") mechanisms for all personnel, systems and software used to provide the Services. ({RBAC" refers to a computer systems security approach to restricting access only to authorized users. ({SoDII is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors. (i) Assist the City in undertaking annually an assessment to assure that: (1) all elements of the Services' environment design and deployment are known to the City, and (2) has implemented measures in accordance with industry best practices applicable to secure coding and secure IT architecture. 0) Provide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity and availability of the City's information. (k) Within three (3) months after the Effective Date, the Contractor and/or its Subcontractor as applicable will deploy and maintain IT system upgrades, patches and configurations conformingto current patch and/or release levels by not later than one (1) week after its date of release. Emergency security patches must be installed within 48 24 hours after its date of release. (I) Provide for the timely detection of, response to, and the reporting of security incidents, including on-going incident monitoringwith logging. (m) Notify the City within one (1) hour of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information. (n) Inform the City that any third party service provider(s) meet(s) all of the Requirements. (0) Within three (3) months after the Effective Date, the Contractor and/or its Subcontractor as applicable will perform security self-audits on a regular basis and not less frequently than on a quarterly basis, and provide the required summary reports of those self-audits to the ISM on the annual anniversary date or any other date agreed to by the Parties. (p) Accommodate, as practicable, and upon reasonable prior notice by the City, the City's performance of random site security audits at the Consultant's site(s), including the site(s) of a third party service provider(sL as applicable. The scope ofthese audits will extend to the Consultant's and its third party service provider(s)' awareness of security policies and practices, systems configurations, access authentication and authorization, and incident detection and response. (q) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, the Confidential Information will be accessible only by the Consultant and any authorized third party service provider's personnel. (r) Perform regular, reliable secured backups of all data needed to maximize availability of the Services. (s) Maintain meter data relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination ofthis Agreement, all meter data relating to the performance ofthe Services shall be provided to the ISM. (t) Maintain the Confidential Information in accordance with applicable federal, state and local data and information privacy laws, rules and regulations. (u) Encrypt the Confidential Information before delivering the same by electronic mail to the City and or any authorized recipient. (v) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City's IT environment, including, without limitation, IT infrastructure communications. Notwithstanding the forgoing, in the event that any confidential information regarding Consultant security is compromised by the City it will immediately notify Consultant and the Consultant reserves its right to hold the City liable for any damages arising from the same. Part B. Alternate Requirements [TBA1: 49 EXHIBITH NON-DISCLOSURE AGREEMENT BETWEEN CITY OF PALO ALTO AND ELSTER SOLUTIONS, LLC (ATTACHED) 50 City of Palo Alto (ID # 3209) Finance Committee Staff Report Report Type: Action ItemsMeeting Date: 11/14/2012 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Residential Customer Connect and TOU Rate Pilots Title: Utilities Advisory Commission Recommendation to Approve the Residential Customer Connect Pilot Program, Approve a Contract with Elster Solution LLC for up to $450,455, and Adopt a Resolution Approving Pilot Scale Time-of-Use Electric Rates for Residential Customers From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee recommend that the City Council: 1. Approve the residential customer engagement (CustomerConnect) pilot program; 2. Approve a contract with Elster Solutions LLC for an estimated cost of $409,455, with the authorization of additional related, but unforeseen, work which may develop during the project, for an amount of $41,000, equal to ten percent of the contract amount, for a not to exceed total amount of $450,455; and 3. Adopt the attached resolution approving pilot time-of-use electric rates for residential customers. Executive Summary The proposed Residential CustomerConnect pilot program is designed to evaluate changes in energy and water use for customers provided with advanced meters and equipment to view their energy and water consumption. The pilot program will be available to 300 residential customers who agree to have advanced electric, natural gas and water meters installed for free at their homes. Pilot participants will also be provided tools to access, display and interpret their utility usage information. The pilot will include a time-of-use (TOU) electric pilot rate for up to 150 residential electric utility customers, particularly those with electric vehicles, who can City of Palo Alto Page 2 shift electric usage to non-peak night hours to reduce the cost of energy supplies and the environmental impact of on-peak electric usage. To participate in the CustomerConnect pilot, customers must provide the City of Palo Alto Utilities (CPAU) feedback on their experiences in participating in the pilot program with the objective of assisting CPAU in evaluating the merits and shortcomings of such programs and associated technologies. While 200 of the participants will be self-selected volunteers, 100 will be invited by CPAU to participate. If approved by Council, the CustomerConnect pilot is expected to start in the spring of 2013 and end by December 2015. The cost of the three-year pilot program is estimated to be about $550,000, which is available in the capital project budget for implementing the smart meter roadmap. Background Application of Smart Grid Technologies in Palo Alto CPAU began investigating the applicability of smart grid technologies in Palo Alto in 2009. In March 2010 a consultant was engaged to determine smart grid applications applicable to CPAU’s electric, gas and water utility services and to undertake a benefit-cost assessment for implementation. In April 2011, the UAC received a summary of the consultant’s report, “Assessment of Smart Grid Application for Palo Alto.” The consultant identified smart grid applications that are relevant to Palo Alto but found that the benefits of such applications in Palo Alto did not justify the estimated $15 million capital investment. However, the consultant predicted the cost of implementation would decline as the value of the technology became more apparent in the coming years. Based on the findings, the consultant recommended that, rather than investing in a full-scale smart grid, CPAU should implement small-scale pilot projects over the next several years. This strategy allows CPAU to determine customer interest and to develop a better understanding of the value proposition for implementing such a system in Palo Alto at a future date when the costs may decrease and the technology has matured. Based on the consultant’s recommendations, staff developed a smart grid road map with nine projects (Staff Report #24431). The CustomerConnect and time-of-use (TOU) rate pilot programs are two of those projects. The results of the TOU and CustomerConnect pilots (together with results from the planned commercial customer engagement pilot and the ongoing Commercial Customer Peak Demand Response program) will provide Palo Alto-specific information that will be used to update the 2011 smart grid implementation cost-benefit assessment. 1 http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30212 City of Palo Alto Page 3 Discussion The proposed CustomerConnect pilot program will be available to 300 residential customers who agree to participate in the program. In order to reduce any self-selection bias, 200 of the participants will be volunteers and the remaining 100 will be invited by CPAU to participate. The proposed pilot program will utilize advanced communicating electric, natural gas and water meters and associated infrastructure to provide web-based utility usage information and analytical tools to the participants and the utility. The TOU rate pilot, which is part of the CustomerConnect pilot, is designed to encourage up to 150 residential electric utility customers, particularly those with electric vehicles (EVs), to shift electric usage to non-peak night hours. All of the TOU pilot participants will be included in the CustomerConnect pilot. The details of the proposed program are discussed in the following sections: A. CustomerConnect Pilot Overview B. TOU Pilot Overview C. Evaluation plan of the pilot program and incorporating customer input D. Customer eligibility criteria to participate in the pilot E. Customer Communication Plan F. Post-Pilot Plan A. CustomerConnect Pilot Overview Objectives The objectives of the proposed CustomerConnect pilot program are to: 1. Gauge residential customer interest, experience and satisfaction using advanced meters and associated engagement tools; 2. Quantify the change in residential customer energy use through efficiency and conservation measures as a result of the customer engagement tools; 3. Evaluate the impact of the programs on utility costs and revenues; 4. Quantify residential customer bill impact; and 5. Gain insight into the costs and benefits of implementing full-scale smart meter-based residential customer services. City of Palo Alto Page 4 CustomerConnect and TOU rate Pilot Coordination In the CustomerConnect pilot, 300 residential customers who agree to participate in the pilot will be provided advanced electric, natural gas, and water meters, and customer engagement tool(s), including easy-to-understand relevant, and timely energy and water usage information and analytical tools. Of the 300 pilot participants, up to 150 will also participate in the TOU rate pilot. The coordination and timeline of the CustomerConnect and TOU rate pilots is shown in the Figure 1. Beginning in January 2013, before the smart meters are available, TOU meters will be installed for the first 20 EV owners participating in the TOU rate pilot. In April 2013, all 300 CustomerConnect participants will receive smart meters (including the first 20 EV owners) and 30 additional EV owners and up to 50 non-EV owners will be placed on the TOU rate. An additional 50 EV owners (the “control” group) will not be put on the TOU rate until November 2013. All 300 participants will receive customer engagement tools to help interpret the data provided from the smart meters. Figure 1: TOU and CustomerConnect Pilot Program Timeline City of Palo Alto Page 5 CustomerConnect Pilot Equipment and Services Contract Through a competitive bid process2, the City selected a proposal that is a joint effort between Elster Solution LLC (Elster), an advanced utility meter and meter network equipment provider, and UtiliSmart Corporation (UC), an IT hosting and cloud computing provider with utility and customer information tools. The agreement with Elster (and UC as a subcontractor to Elster) includes the following tasks: 1. Provide advanced communicating electric meters and communicating radios to retrofit the City’s natural gas and water meters to serve 300 customers; 2. Install a ‘meshed radio network’ using Elster’s ‘Energy Axis Gatekeeper’ devices to set- up a radio network that will enable customers throughout the City to participate in the pilot program; 3. Utilize the City’s existing service arrangement with Verizon Wireless to provide wireless connections to approximately 30 Gatekeeper devices to transmit customer usage data and store it in the EnergyAxis AMI platform in the internet cloud; 4. Provide customer engagement tools for participating customers to analyze their usage patterns on a granular and timely basis with information made available through web and smart phone applications for all three utility services; 5. Provide 50 in-home-display (IHD) devices that pilot participants may borrow for three months at a time to view their home’s instantaneous electrical usage; 6. Support City staff with meter installation and customer communication and help trouble shoot issues encountered by customers using software tools; 7. Provide equipment service, warranties and service level agreements; 8. Provide program management support; and 9. Enhance customer engagement tools on a semi-annual basis. The cost of the contract is estimated to be $409,455 over a three-year term. The agreement has an option to extend the term on an annual basis after the initial three-year term (Attachment H). Staff is requesting an additional $41,000 (10%) contract amount authorization in the event staff seeks additional unforeseen project related work from Elster. Installation of the advanced meters and associated equipment is expected to occur in the spring of 2013, if Council approves the agreement. 2 A request for proposal was issued in May 2012 and four proposals were received in June 2012. Among the four proposals, two proposals from Stanford University and Bidgely were rejected as unresponsive. Upon review of the two responsive proposals from Itron, Inc. and Elster Solutions, LLC, Elster’s proposal was considered best suited to meet the pilot program objectives. City of Palo Alto Page 6 CustomerConnect Pilot Related Ancillary Service Contracts In addition to the vendor contract described above, CPAU will utilize the City’s existing service agreements with Verizon for wireless services. The cost of such services is projected to be less than $5,000 per year. CPAU also plans to contract for services to obtain EV energy usage patterns, analyze pilot program data and update internal guidelines and policies related to safeguarding customer information. A Customer Information Privacy and Security Guideline to ensure cloud-based service providers adhere to industry best practices to protect customer data was developed in collaboration with the City Information Technology Department and is being incorporated into the Elster Contract. These additional tasks are expected to cost a total of approximately $100,000 and will be undertaken under existing authorizations. Results of the 2010 Smart Grid Customer Survey and Design of the CustomerConnect Pilot In the fall of 2010, in conjunction with other California municipal electric utilities, CPAU commissioned a survey on a variety of topics including customer perceptions and concerns about implementing smart grid related technologies and systems. The major smart grid related findings of this survey were as follows: CPAU enjoys a high degree of credibility with its residential and commercial customers; Customers approached smart grid technologies cautiously and appeared to be aware of missteps by PG&E; Among the 250 residential customers: o 71% were aware of smart meters; o 67% identified smart meter concept a good idea, 22% thought it was not a good idea and 12% were not sure; o 73% of customers believed smart meters would help them manage usage more efficiently; and o 65% were willing to participate in a CPAU smart grid pilot program. Residential customer concerns related to smart meters were as follows: o 27% expressed concern about impact on cost/rates; o 21% were concerned about meter accuracy and reliability; o 18% did not have any concerns; o 15% were concerned about privacy and usage information control; o 7% had concerns about how and where these advanced meters will be installed; o 2% did not want this technology; and o 16% expressed a variety of other concerns or wanted more information. City of Palo Alto Page 7 Staff has incorporated this input from customers when designing the pilot by: Updating the utility customer information security and privacy guidelines and controls, with heightened due diligence from the City’s Information Security Manager; Contracting for services from reputable vendors who have implemented comprehensive approaches to information security that assures confidentiality, integrity, availability and auditability of their IT infrastructure; Verifying that the wireless radios in customer and network meters meet regulatory standards regarding the health and safety of CPAU customers; Testing meters for accuracy of utility consumption measurement; Designing the pilot evaluation plan to seek participant input and learn from actual customer experience; and Deciding not to make large-scale investment in smart grid and advanced metering technology unless it is clear that such investments will provide a positive monetary return and service enhancements to utility customers. These pilot programs and their evaluation will provide CPAU and the community knowledge and experience to make informed decisions regarding smart grid technologies investments. B. TOU Rate Pilot Overview The proposed residential TOU rate pilot is designed to encourage up to 150 residential customers, particularly those with electric vehicles (EVs), to shift electric usage to non-peak night hours. The TOU pilot electric rates are lower for night time electric consumption since they reflect CPAU’s costs to buy energy, which is less expensive during the off-peak hours. Shifting usage to off-peak periods reduces CPAU’s cost, minimizes the adverse impact on the environment and reduces the impact of EVs on residential distribution transformers and the electric distribution system. If 100 typical residential customers with EVs participate in the TOU pilot and shift their electric loads (EV charging and other household electric usage) to less costly periods, the customers could collectively save approximately $3,800 per year, and the City would realize an equivalent amount of savings from the purchase of lower priced energy. TOU Pilot Objectives All TOU pilot participants are also enrolled in the CustomerConnect pilot program. There are, however, additional objectives for the residential TOU pilot program including: 1. To gauge customer interest and customer satisfaction with the TOU rates; 2. To quantify the TOU rate benefit to customers and the utility; City of Palo Alto Page 8 3. To evaluate the impact of a TOU rate on customers’ electric consumption patterns, both for EV charging and other household uses, and, thus, to evaluate the impact of the program on utility costs and revenues; and 4. To investigate ways to incorporate modern smart grid technologies to provide relevant and timely electric usage/billing information to customers in a manner that will assist customers to optimally use electricity at their homes, including shifting loads to late night periods. TOU Pilot Phases (Total of 150 customers) Phase 1: Because advanced Elster meters will not be delivered and installed until April 2013 at the earliest, the first phase of the TOU pilot, beginning in January 2013, will be limited to 20 residential customers who will be provided with TOU meters. Monthly consumption data will be collected for three time periods per day offering some insight into customers’ usage patterns. To be eligible to participate in the first phase of the TOU pilot, residential customers must also be EV owners. Phase 1 will be used to work through any metering and billing issues. Phase 2: In the spring of 2013, the TOU pilot will enter Phase 2, and the pilot will be expanded to include additional customers. All customers will have Elster advanced meters. Advance meters provide greater granularity by allowing utilities to collect, and customers to view, hourly electricity usage information every day. Such detailed information will reveal peak usage shifting patterns that may occur under a TOU rate. In Phase 2, the 20 EV customers from Phase 1 will have their TOU meters exchanged for advanced meters and continue to be on the TOU rate. In addition to the 20 EV Phase 1 customers, 30 EV owners and 50 non-EV owners will have advanced meters installed and be put on the TOU rate. This group, 50 EV owners and 50 non-EV owners, will be the “Treatment Group.” At the same time (April 2013), 50 additional EV owners will have advanced meters installed, but they will remain on the standard E-1 residential electric rate. These customers will be the “Control Group.” Phase 2 will be used to compare customer behavior on the TOU rate versus the standard E-1 rate. Phase 3: In November 2013, Phase 3 will be implemented in which the 50 customers in the Control Group in Phase 2 will be placed on the TOU rate. At this point, all 150 TOU pilot participating customers will be on the TOU rate. The TOU Pilot program will end in December 2014. If fewer than 150 customers sign-up for TOU rates, customers in Phases 2 and 3 will be City of Palo Alto Page 9 reduced and the number of participants in the CustomerConnect pilot program will increase accordingly up to a total of 300 in the program. The three TOU pilot phases are summarized in Table 1 below. Table 1: TOU Pilot Phase Summary Phase 1 Phase 2 Phase 3 Timing January to April 2013 May to November 2013 November 2013 to December 2014 Customers 20 EV owners Treatment Group – 100 customers: 20 EV owners (from Phase 1) with TOU meters converted to advanced meters; 30 additional EV owners; and 50 non-EV owners Control Group – 50 customers: 50 EV owners All 150 participants from Phase 2 Meter type TOU meter Advanced meter Advanced meter Advanced meter Electric rate TOU rate TOU rate E-1 rate TOU rate Goal Work through any issues with metering and billing Establish a control group to test the impact of TOU rates versus standard E-1 rate on customer behavior Expand TOU rate to all 150 TOU pilot customers and evaluate changes in customer behavior when subject to the TOU versus the E-1 rate Proposed TOU Rate Table 2 summarizes the current E-1 residential rate and the proposed TOU pilot rate, E-1 TOU. The proposed E-1 TOU rate is structured as an adjustment to the existing tiered E-1 rates, rather than a simpler (un-tiered) TOU rate with rates for each time period. Analysis showed that a standalone voluntary TOU rate would provide excessive benefits to high consumption customers and no benefit to customers with low consumption. The proposed rate adjustment enables all customers to receive a benefit equivalent to the cost savings generated for the utility. The rate enables the customer to receive a discount for off-peak energy usage, but the customer would pay a premium for energy during the peak hours. The discount or premium is applied to usage in the peak, mid-peak or off-peak periods and subtracted or added to the customer’s bill calculated using the E-1 rate schedule. An illustration of this calculation, a City of Palo Alto Page 10 sample customer bill format, and the proposed rate schedule is provided in Attachments D, E, and B, respectively. For an average customer driving an EV 10,000 miles/year, electric bill savings with the proposed TOU rate are about $36/year, a 10% to 15% discount from the bill on the standard E-1 rate3. A customer with a continuous operation, single-speed pool pump would save a similar amount on the TOU rate by running the pump solely at night. Table 2: Summary of Existing E-1 Rate and Proposed E-1 EV TOU Rate* E-1 Rate (Existing base rate) Rate: Tier 1: 9.5 ¢/kWh Tier 2: 13.0 ¢/kWh Tier 3: 17.4 ¢/kWh Tiers: Tier 1: 10 kWh/day Tier 2: Next 10 kWh/day Tier 3: All additional consumption Proposed E-1 TOU (Rate adjustment from E-1 Rate) Summer (Jun-Sep) Peak (premium): +5.8 ¢/kWh Mid-peak (premium): +0 ¢/kWh Off-peak (discount): -1.9 ¢/kWh Winter (Oct-May) Mid-peak (premium): +0.4 ¢/kWh Off-peak (discount): -1.3 ¢/kWh Summer Peak: noon-6 pm, weekdays Off-peak: 11 pm - 6 am every night, year round Mid-peak: All other hours (*) Rounded to nearest tenth of a cent per kWh. Metering Requirements for TOU Pilot Participants TOU and advanced meters will be installed at customer premises at no cost to the customer. The pilot participants’ entire electric usage will be billed under the TOU rate. Staff evaluated the option of providing a second TOU meter for EV charging only. This option would require electric panel reconfiguration, a cost borne by the participant. A potential benefit of the 3 This assumes 7% of the monthly consumption in the summer occurs in the peak hours specified in the table. Consumers who consume a larger percentage of their energy during on-peak periods may not benefit as much, and in some cases the rate may even result in higher bill. Note that the peak period accounts for almost 18% of the summer hours, while the mid- and off-peak hours account for 53% and 29% of the summer hours, respectively. City of Palo Alto Page 11 second meter option is that under the AB32 Low Carbon Fuel Standard regulation4, the utility may be able to claim free emission allowances credit for electricity consumed by EVs. However, data from other utilities reflect this is not a popular option with customers; therefore, staff is not recommending offering a second meter at this time. If a substantial number of customers request a second meter, or if it becomes attractive for CPAU to claim EV-related emission allowance credits, this decision will be revisited. C. Evaluation Plan for the Pilot Programs and Incorporating Customer Input Program evaluation will include both an impact and process evaluation components. The impact evaluation will include impacts to the customers’ bills and to CPAU’s net revenue. The process evaluation will focus on the customers’ experience based on feedback regarding the program attributes, as well as CPAU’s operational experience implementing the pilots. Customer feedback will be sought on such areas as: usefulness of the software tools to analyze utility usage patterns, overall experience and any change in behavior and its impact on utility bills, pilot program design, responsiveness of customer service staff in addressing their specific questions and issues, and ease of participation and ability to save on the program. Customer concerns related to technology, costs, privacy and security of their usage data, impact of radio waves on health and other aspects will be solicited and analyzed. For the 150 CustomerConnect pilot participants who are not included in the TOU pilot, 50 will be self-selected and 100 will be randomly selected. This will eliminate ‘self-selection bias’ and allow CPAU to obtain valid results that could reasonably be extrapolated to residential customers who receive all three utility services from CPAU directly (primarily single-family homes). For the 150 TOU pilot participants, CPAU will conduct an evaluation study comparing customers’ electric consumption patterns on a standard rate versus a TOU rate to determine the impact of TOU rates on customers’ bills, as well as utility costs and revenues. In order to compare customer usage patterns under a standard rate versus a TOU rate, customers who sign up to participate in the TOU pilot program must agree to be selected, in a random draw, to be part of the Treatment or the Control Group. Customers selected to participate in the Control Group will receive advanced meters, but will not be offered the TOU rates until November 2013 (about 6 months after receiving advanced meters). This will allow CPAU to have six months of “pre-TOU rate” hourly usage data for the Control Group. The before and after consumption data for the Treatment and Control Groups will be used to determine the impact of the TOU rate. 4 Under the AB32 Low Carbon Fuel Standard regulation, electric utilities will be able to claim free emission allowances for electricity consumed by EVs, but there are specific metering requirements to measure consumption and associated reporting requirements to claim allowance credits after 2015. City of Palo Alto Page 12 The results of the impact and process evaluations will be used to recommend changes to the TOU program, if any, and will form the basis for long term implementation plans to deploy advanced utility technologies. Modifications to the TOU rates as well as other program design elements may occur based on the results of the program evaluation. D. Customer Eligibility Requirements For both pilots, the eligibility requirements are: 1. Participants must receive all three utilities services directly from CPAU; 2. Participants must complete the registration form; 3. Participants must be willing to utilize the engagement tools provided by the CustomerConnect pilot, and provide feedback to CPAU; and 4. Participants may not receive service through CPAU’s Automated Meter Reading (AMR) infrastructure Eligibility for participation in the TOU pilot program will be based on guidelines developed by CPAU. The proposed resolution (Attachment A) grants the City Manager or his designee the authority to establish the eligibility guidelines. This authority will provide flexibility in designing the program and making small adjustments during implementation, where necessary, to the pilot program. Staff will also retain the right to decline interested participants if unanticipated operational hurdles are encountered in enrolling them in the pilot. The following are the additional proposed eligibility requirements to participate in the residential TOU pilot program: 1. Participants must be single-phase residential customers currently served under the E-1 rate schedule; 2. Participant may not have a solar photovoltaic (PV) system in the home; and 3. TOU participants must also participate in the CustomerConnect pilot. Residential customers with PV systems are not eligible for the TOU pilot due to billing system constraints. However, those customers may be included in the future and may participate in the CustomerConnect pilot. City of Palo Alto Page 13 To apply, customers will be required to submit a registration form (draft provided in Attachment C). CPAU will make best efforts to enroll all customers who seek participation, but retains the right to decide who will be accepted in the program and when they can enroll on the TOU rate if applicable. Protocols are under development for customers who move or decide to drop out of the pilots. In addition, customers interested in the TOU pilot will be provided with a sample bill calculation (similar to that in Attachment D) and answers to frequently asked questions (Attachment E). A sample bill format will be developed as well. These documents and additional resources such as rate comparison calculators will be available on the City’s website (www.cityofpaloalto.org/electricvehicle). E. Customer Communication Plan A communication plan has been developed to ensure information is timely and thorough and to maximize customer participation and value creation. The communication plan identifies program steps from initial communications, to customer sign-up and on-going feedback channels and, finally, to program evaluation. In order to eliminate the “self-selection” bias, CPAU will inform 100 customers they have been randomly selected to participate in the pilot and will request that they complete the enrollment form to confirm their willingness to participate. Based on the 2010 customer survey, staff is generally aware of the large scale enthusiasm of customers to participate in such a pilot and the concerns the customers have about the technology and costs. Communication channels through social media and other avenues will be established with participants to seek their input and feedback on their experience participating in the pilot. F. Post-Pilot Plan Before the TOU rate program is offered to all customers, staff will evaluate the meter reading and software and billing system requirements in light of the estimated number of interested customers. The development of the full scale TOU program will include an assessment of the needs and costs associated with billing system related upgrades. While the goal is to seek Council’s approval for full implementation of residential TOU rates by January 2015, staff may, depending on the assessment, recommend an extension of the TOU pilot or postponement of the program and full implementation. Results of the CustomerConnect pilot will be provided to Council at the end of 2015. City of Palo Alto Page 14 Commission Review and Recommendation On July 11, 2012, the UAC considered a proposal for a pilot TOU rate program proposed to be open to 100 residential electric customers with Electric Vehicles (EVs). All commissioners were supportive of a TOU pilot program, but several commissioners stated that the number of customers allowed in the proposed pilot was too small. Commissioners also explored the possibility of making the TOU rate available to a broader group of customers, not just EV owners, with that availability being earlier than the December 2014 date proposed by staff. Ultimately, the UAC voted to recommend Council approve the TOU pilot with a modification to allow non-EV owners to participate as well. Based on this feedback from the UAC, staff presented for discussion a revised TOU rate pilot proposal and proposed that the TOU pilot be part of the larger Residential Customer Engagement (CustomerConnect) pilot at the September 5, 2012 meeting. At this meeting the Commissioners expressed unanimous support for both pilot programs. A number of Commissioners suggested staff consider collaborative opportunities with local universities and disseminate information gathered through these pilot programs to the industry and research communities. The minutes from the UAC’s September 5, 2012 meeting are provided as Attachment F. At the October 3, 2012 meeting the UAC unanimously recommended Council approve both pilot programs and associated resources. The draft minutes from the UAC’s October 3, 2012 meeting are provided as Attachment G. Resource Impact The TOU and CustomerConnect pilots were contemplated by the smart grid work plan, which has a budget of $750,000. The Elster/UtiliSmart contract is expected to cost approximately $409,455. Staff is also requesting $41,000 (10%) for unforeseen project related work for a total not to exceed amount of $450,455. An additional $100,000 is expected to be required for information services, minimal modification to the billing system, program evaluation assistance and other related consulting services. Therefore, the total cost is expected to be $550,455 plus the $41,000 for contingencies for the Elster contract. Staff effort will be more significant in the first year of the pilot, amounting to between 2 and 2.5 FTE, but will ramp down in subsequent years to closer to 1 FTE. Staff from various groups is involved, and the focus of the work will migrate from Resource Management and Engineering, to Operations, to Customer Support Services, SAP Project Management and IT depending on the stage of project development. Some of the efforts, such as communications, will be ongoing. It is expected this level of multi-divisional staff effort can be garnered from existing staff resources. However, the staff time required to implement these pilots may result in a 6- City of Palo Alto Page 15 to 12-month delay of certain non-critical capital projects (electric distribution system upgrade, large commercial customer metering, and gas and water meter replacement plans) as well as delays in certain internal support services. A limited amount of staff overtime may also be needed for this project. The pilot project team includes staff from Utilities (Operations, Engineering, Marketing, Customer Service, and Resource Management), IT and SAP Project Management. All costs for the proposed pilots were included in the FY 2012 budget and do not require an adjustment to the budget or rates. Full implementation of the EV TOU rate (i.e. beyond the pilot program) may require additional metering and billing system upgrades. These costs will be assessed and included in staff’s recommendation to Council at the conclusion of the TOU pilot program by December 2014. Policy Implications The approval of this contract is consistent with existing City policies, including the Council approved Utilities Strategic Plan Strategy Objectives of offering programs to meet the needs of the customers and community, and promoting the efficient use of resources. Offering customers time-of-use electric rate also meets City’s Electric Vehicle Infrastructure Policy. Environmental Review This project does not require review under the California Environmental Quality Act (CEQA). Attachments: Attachment A - Resolution Adopting Pilot TOU Rates (PDF) Attachment B - Rate Schedule E-1 TOU (PDF) Attachment C - Registration for Customer Connect and TOU Rate Pilot Programs (PDF) Attachment D -Bill Calculation Examples (PDF) Attachment E - EV related FAQ (PDF) Attachment F - Excerpted minutes of the UAC's 09-05-2012 meeting (PDF) Attachment G - Excerpted minutes of the UAC's 10-03-2012 meeting (PDF) Attachment H - Draft Agreement with Elster Solutions LLC (PDF) FINANCE COMMITTEE DRAFT EXCERPT Page 1 of 5 Special Meeting November 14, 2012 Item #3 - Utilities Advisory Commission Recommendation to Approve the Residential Customer Connect Pilot Program, Approve a Contract with Elster Solution LLC for up to $450,455, and Adopt a Resolution Approving Pilot Scale Time-of-Use Electric Rates for Residential Customers. Shiva Swaminathan, Senior Resource Planner discussed the background of the Smart Grid and how in the past they found that implementing Smart Grid in Palo Alto was not cost effective at that time. Due to that, Council recommended the implementation of pilot programs. There were nine projects, two of which were scheduled for discussion. In addition to the pilot there was a survey that was done among residential and commercial customers. They found that about 2/3’s of the residential customers viewed the technology favorably but had issues related to privacy, control, cost benefits, and supply. Staff wanted to overcome the concern that the customer’s had. The objective of the CustomerConnect Pilot was to allow the customer to view their water consumption and energy usage the day after their usage and for them to continually monitor the use of their own energy. Staff also wanted to learn to better serve the customer and to reduce the costs. Staff wanted to replace the electric meter and add radio’s to their gas and water meters to provide a web-based tool for customer’s to view their consumption. The pilot will be conducted with 300 residents, 150 of which they reserved for people that were interested in Time of Use (TOU). Staff wanted to try to run the TOU pilot phase for 2 years and CustomerConnect pilot for three years, and then come back to Council with the results. There were electric, gas, and water meters at the home where the data was collected. The data from the home meters tramist them through a local mesh-network to meters called gate- keepers. The gate-keeper meters will then transmit the consumption data through the regular cellular networks and store the data at a vendor maintained server in the ‘cloud.’ Customers then get to view their consumption in the cloud via internet the the next day. There will be two portals for viewing information, one for the City and one for the customer. The TOU pilot was beginning in connection to the CustomerConnect Pilot, with about 150 customers, which DRAFT EXCERPT Page 2 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 involved electric vehicles. There were between 200-250 electric vehicles in the City currently and Staff estimated about 100 users would benefit from the program. The electric vehicle factor provided the customer with a discount of 1.9 cents if they were to charge their car between 11:00 P.M. and 6:00 A.M, year around, but have to pay a premium of 5.8 cents/kWh from noon to 6pm during the 4 summer months. Vice Mayor Scharff was concerned that most people would plug in their electric vehicle before they went to bed and asked if there was a way to set a timer for people to begin charging their vehicles. Ms. Fong said there was a timer on the vehicles themselves. Mr. Swaminathan said there were two ways to set up the charger: one had to do with when they started charging, the other setting depended on the time a person wanted to leave their house to use their car in the morning. This was coordinated with the CustomerConnect Pilot and they expected to get results for this within a few years. After a few years they were planning to open the program to all customers. He said the pilot should begin in January, with Smart Meters installed by June, and then the pilot would end in 2014 and 2015. He said they had a contract set up with Elster for $409,455.00 for meters, location equipment, support services, and the customer portal. They spent some of the money on consulting services and the design of the pilot. Staff’s recommendation was to have Council approve the overall design of the CustomerConnect pilot, to approve the contract with Elster Solutions LLC, and to adopt the resolution for the pilot TOU rates. John Melton, Utilities Advisory Commissioner said this proposal cycled through the Utilities Advisory Commission (UAC) several times. He said the improvement was that Staff brought this to them as two separate meetings. The initial proposal was to have the TOU pilot only for electric vehicles, but at UAC suggestion staff have now included non-electric vehicle customers too. He remarked that it was going to take time to get good results. Council Member Burt asked whether combining of the TOU and the electric vehicle study meant there was a sub-set of the TOU people that were electric vehicle people. DRAFT EXCERPT Page 3 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 Mr. Melton said of the 300 people, 100 to 150 were electric vehicle people. Council Member Burt asked if the funding came from the energy efficiency or if it was separate. Mr. Swaminathan said the funding came from the Smart Grid CIP project funds. Council Member Burt confirmed that the funding was already budgeted in. Vice Mayor Scharff confirmed there was 5.8 cents added to the rates for any energy used during peak hours, depending on which tier a person belonged to; there were three tiers. Mr. Swaminathan clarified that the customer had a tiered rate. The bill was determined by multiplying 5.8 cents to the period of time used during summer peak hours, and then adding that amount to the base bill. Then, the final bill amount was determined by subtracting 1.9 cents times the amount of consumption during nigh time hours year around. Vice Mayor Scharff wanted to know if a person switched their electric vehicle off peak hours, was it going to cost them more; he wanted to know why people would enroll. Ms. Fong said it costs less than if a person was not on the TOU program. Vice Mayor Scharff said that did not seem to be the case. Ms. Fong said if a person was using more electricity it was going to cost a person more. Vice Mayor Scharff gave an example of varying only a person’s electric vehicle and wanted to know if this was going to cost a person more or less. Mr. Swaminathan said it depended because the average household used 600 kilowatts per hour (kWh) of energy per month. If a person drove the electric vehicle 10,000 miles per year, that calculated to about 200 kWh per month, which was an additional cost of 1/3. The savings was 10 to 15 percent. DRAFT EXCERPT Page 4 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 Ms. Fong said peak hour charges were higher under TOU rate and a person paid more if the usage was during peak hours because there were higher charges. Vice Mayor Scharff confirmed the average household bill was 650 kWh per month, which equated to $70.00 per month. He asked if that included single family and condominiums. Jane Ratchye, Assistant Director of Utilities said 650 kWh was high. She clarified the median was 340 kWh. Vice Mayor Scharff said it was not clear to him whether this equation was for people that had a place to charge their car. Mr. Swaminathan said the pilot was geared more toward single family homes and said that in order for a person to participate in this program they needed to receive all three services from the CustomConnect Program. Council Member Burt asked to whether the conservation saving from the customerconnect pilot was considered in the prior presentation on Energy Efficiency program goals. Mr. Swaminathan said any conservation gained through the pilot was going to be incorporated into the savings. Council Member Burt confirmed that these were additional load growth opportunities that may come into fruition. He asked, with regard to the projected growth in electric vehicles, was that load going to off-set gain in efficiency or was it working out to be an expanded load. Mr. Swaminathan said it was an expanded load and electric vehicles were projected to be 1-2% by 2020 and was smaller than the efficiency gains expected by 2020. Council Member Burt said, looking at the Carbon Neutral Portfolio, people were moving off petroleum gasoline and natural gas, and moving toward electricity. He wanted to start thinking about the future of natural gas and petroleum use in connection with their discussion that day. DRAFT EXCERPT Page 5 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 Vice Mayor Scharff remarked that this was a purely voluntary pilot. He wanted to know how Staff arrived at the calculation 5.8 cents, how it was all priced, and why they thought it was going to work. Mr. Swaminathan said the TOU customers will be self-selecting. The participants could monitor their bills and determine whether this was going to work for them or not. Staff was also able to monitor participant usage, consider the electric vehicle usage pattern, and determine whether or not it was beneficial for the resident or not. Vice Mayor Scharff was concerned that Staff was going to have a problem getting enough of a sample, due to the ratio of people that owned electric vehicles and the amount of people that wanted to participate in the study. He thought the 5.8 cents premium was not going to provide enough of a study sample. Mr. Swaminathan said City wanted the program to be cost based so that the program does not provide any cross subsidies. Vice Mayor Scharff confirmed that the 1.9 cents off-sets 5.8, so the program was cost-neutral. Mr. Swaminathan said for an average customer savings accrue as a result of shifting. MOTION: Vice Mayor Scharff moved, seconded Council Member Burt to recommend the City Council: 1) Approve the residential customer engagement (CustomerConnect) pilot program; 2) Approve a contract with Elster Solutions LLC for an estimated cost of $409,455, with the authorization of additional related, but unforeseen, work which may develop during the project, for an amount of $41,000, equal to ten percent of the contract amount, for a not to exceed total amount of $450,455; and 3) Adopt the resolution approving pilot time-of-use electric rates for residential customers. MOTION PASSED: 4-0 City of Palo Alto (ID # 3342) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Policy for Use of GHG Cap-and-Trade Revenue Title: Finance Committee Recommendation to Adopt a Resolution Approving the Cap-and-Trade Revenue Utilization Policy for the Use of Revenues from the Sale of Allocated Allowances in California’s Greenhouse Gas Cap-and- Trade Auctions From: City Manager Lead Department: Utilities Recommendation Staff, the Utilities Advisory Commission (UAC) and the Finance Committee recommend that the City Council adopt the attached resolution approving the Cap-and-Trade Revenue Utilization Policy, a policy for the use of revenues from the sale of allocated allowances in California’s greenhouse gas (GHG) cap-and-trade auctions. Executive Summary The California Air Resources Board’s (CARB’s) implementation of a cap-and-trade program, aimed at reducing California’s GHG emissions, started November 2012. As an electric distribution company, the City of Palo Alto Utilities (CPAU) has been allocated GHG emission allowances free of charge by CARB. These allocated allowances are estimated to have a market value of $3.5 to $5 million dollars in 2013 and are expected to increase in value through 2020. Under the terms of CARB’s cap-and-trade regulation, CPAU is required to sell these allowances in the auctions conducted by CARB and utilize the auction sale proceeds exclusively for the benefit of retail electric ratepayers and consistent with the goals of AB 32, California’s Global Warming Solutions Act. The UAC, at its October 3, 2012 meeting, and the Finance Committee, at its November 14, 2012 meeting, reviewed and unanimously voted to recommend staff’s proposal for a policy that is consistent with the regulation and minimizes any risk of future CARB action to rescind CPAU’s allowances or disallow funding of specific projects. The key points in the policy, which is provided in Attachment B, include: City of Palo Alto Page 2 Set up a separate account or reserve to track auction revenues. Abide by CARB’s regulations by using auction proceeds and allowance value obtained by an electrical distribution utility for the exclusive benefit of retail ratepayers, consistent with the goals of AB 32, and not use the allowances for the benefit of entities or persons other than such ratepayers. The policy lists the following allowable uses of the auction proceeds: o Purchases or investment in renewable resources (outside Palo Alto or locally) for the electric portfolio; o Investment in energy efficiency programs for the electric portfolio and retail customers; o Investment in other carbon reduction activities, including those required to achieve a carbon-neutral electric portfolio; and o Rebate to electric retail ratepayers. If eventually allowed by CARB, allocated allowances may be used to meet CPAU’s compliance obligations. Proposals for rebates to electric customers would be reviewed by Council during the annual budget adoption process. Additionally, staff will provide annual reports to the Council on allowance revenues and expenditures associated with complying with regulations and this policy. Committee Review and Recommendation The Finance Committee reviewed the proposed Cap-and-Trade Revenue Utilization Policy at its November 14, 2012 meeting. The staff report prepared for the Committee’s meeting (Staff Report 3198) is provided as Attachment C to this report. The Finance Committee voted unanimously (4-0) to recommend Council approve the proposed policy. The notes from the Finance Committee’s November 14, 2012 meeting are provided as Attachment E. Resource Impact The FY 2013 budget includes revenue of $2.6 million from expected allowance proceeds. However, the results from the first auction held on November 14 resulted in lower clearing prices for the allowances than had been predicted from the results of futures trading. Allowance revenue for FY 2013 is now expected to be less than $2 million. In the subsequent fiscal years within the five-year financial forecast, the allowance revenues are expected to range from $5.3 million in FY 2014 to $5.8 million in FY 2017. However, the revenue collected will depend on the actual market value of the allowances. There is no transaction cost associated with participating in the CARB allowance auction. Existing staffing and regulatory City of Palo Alto Page 3 resources at NCPA will be utilized to participate in the CARB auctions. As of September 2012 internal guidelines and controls have been put in place to manage CPAU’s participation in the CARB auctions. Policy Implications The proposed recommendation supports the Council-approved 2011 Utilities Strategic Plan’s environmental sustainability and customer service objective. Environmental Review Support of the recommendation to develop a plan to achieve a carbon neutral electric portfolio does not meet the California Environmental Quality Act’s definition of a “project” under Public Resources Code Section 21065. Attachments: Attachment A: Resolution on the Policy for Use of GHG Allowances (PDF) Attachment B: Exhibit A to Resolution (PDF) Attachment C: Staff Report ID 3198 Policy for use of GHG Cap-and-Trade Revenue to Finance Committee on November 14, 2012 (without attachments) (PDF) Attachment D: Excerpted Final UAC Minutes of October 3, 2012 (PDF) Attachment E: Excerpted Draft Finance Committee Minutes of November 14, 2012 (PDF) *NOT YET APPROVED* 120925 dm 6051774A Resolution No. _________ Resolution of the Council of the City of Palo Alto Adopting the Cap‐and‐Trade Revenue Utilization Policy for the Use of Revenues From the Sale of Allocated Allowances in California’s Greenhouse Gas Cap‐and‐Trade Auctions R E C I T A L S A. The Global Warming Solutions Act, also known as Assembly Bill 32 (AB 32), requires that California’s Greenhouse Gas (GHG) emissions in 2020 be at the same levels as that of year 1990, and authorized the California Air Resources Board (CARB) to develop regulations to reach this goal. B. CARB’s final regulations became effective January 1, 2012 and are contained in Title 17 of California Code of Regulations, Sections 95800 – 96023. C. The GHG emission cap‐and‐trade program is one of several tools designed by CARB to achieve the state’s GHG reduction goal and its implementation is due to start in November 2012. D. As an electric distribution company, the City of Palo Alto has been allocated GHG emission allowances (allowances) free of charge by CARB. E. These allocated allowances are estimated to have a market value of $3.5 to $5 million in calendar year 2013 and are expected to increase in value through 2020. F. Under the terms of CARB’s cap‐and‐trade regulation, the City is required to sell these allocated allowances in the auctions conducted by CARB and utilize the auction sale proceeds “exclusively for the benefit of retail electric ratepayers” and “consistent with the goals of AB 32”. (Title 17 CCR Section 95892(d)(3)). G. The Council of the City of Palo Alto supports the state’s AB 32 goals, and intends to implement the City’s Cap‐and‐Trade Revenue Utilization Policy in furtherance of those goals. The Council of the City of Palo Alto (“City”) does RESOLVE as follows: SECTION 1. The City’s Cap‐and‐Trade Revenue Utilization Policy (Policy) is adopted as shown in Exhibit A. SECTION 2. The Council grants the City Manager or his designee the authority to implement the Cap‐and‐Trade Revenue Utilization Policy and use allowances or allocate auction revenues to projects or expenditures as defined in Exhibit A, however, the City Manager shall not offer rebates to electric ratepayers under the Policy without first seeking Council approval of such rebates. *NOT YET APPROVED* 120925 dm 6051774A SECTION 3. Should California’s cap and trade program and/or CARB regulations implementing that program be suspended, discontinued, or materially altered such that CPAU no longer receives allocated allowances of significant monetary value, Council reserves the right to terminate the Cap‐and‐Trade Revenue Utilization Policy and discontinue any programs funded from allocated allowance revenues. SECTION 4. The Council finds that the implementation of this Policy and expenditure of funds necessary to comply with AB 32 and California’s cap and trade program are reasonable costs of providing service to CPAU’s electric customers. SECTION 5. The Council finds that the adoption of this resolution does not meet the California Environmental Quality Act’s definition of a “project” under Public Resources Code section 21065. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services City of Palo Alto (ID # 3198) Finance Committee Staff Report Report Type: Action ItemsMeeting Date: 11/14/2012 City of Palo Alto Page 1 Summary Title: Policy for use of GHG Cap-and-Trade Revenue Title: Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution Approving the Cap-and-Trade Revenue Utilization Policy for the Use of Revenues from the Sale of Allocated Allowances in California’s Greenhouse Gas Cap-and-Trade Auctions From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) request that the Finance Committee recommend that the City Council adopt the attached resolution approving the Cap-and-Trade Revenue Utilization Policy, a policy for the use of revenues from the sale of allocated allowances in California’s greenhouse gas (GHG) cap-and-trade auctions. Executive Summary The California Air Resources Board’s (CARB’s) implementation of a cap-and-trade program, aimed at reducing California’s GHG emissions, is due to start November 2012. As an electric distribution company, the City of Palo Alto Utilities (CPAU) has been allocated GHG emission allowances (allowances) free of charge by CARB. These allocated allowances are estimated to have a market value of $5 million per year in 2013 and are expected to increase in value through 2020. Under the terms of CARB’s cap-and-trade regulation, CPAU is required to sell these allowances in the auctions conducted by CARB and utilize the auction sale proceeds exclusively for the benefit of retail electric ratepayers and consistent with the goals of AB 32, California’s Global Warming Solutions Act. While CARB has not provided further guidance on how it will interpret the regulatory limitations on the use of revenue from the sale of the allocated allowances, staff recommends a policy that is consistent with the regulation and minimizes any risk of future CARB action to rescind CPAU’s allowances or disallow funding of specific projects. The key points in the policy include: City of Palo Alto Page 2 Set up a separate account or reserve to track auction revenues. Abide by CARB’s regulations by using auction proceeds and allowance value obtained by an electrical distribution utility for the exclusive benefit of retail ratepayers, consistent with the goals of AB 32, and not use the allowances for the benefit of entities or persons other than such ratepayers. The policy lists the following allowable uses of the auction proceeds: Purchases or investment in renewable resources (outside Palo Alto or locally) for the electric portfolio; Investment in energy efficiency programs for the electric portfolio and retail customers; Investment in other carbon reduction activities, including those required to achieve a carbon-neutral electric portfolio; and Rebate to electric retail ratepayers. If eventually allowed by CARB, allocated allowances may be used to meet CPAU’s compliance obligations. Proposals for rebates to electric customers would be reviewed by Council during the annual budget adoption process. Additionally, staff will provide annual reports to the Council on allowance revenues and expenditures associated with complying with regulations and this policy. Background The Global Warming Solutions Act, also known as Assembly Bill (AB) 32, requires that California’s GHG emissions in 2020 be at the same levels as that of year 1990, or an estimated 15% reduction compared to what emissions might otherwise have been in 2020. CARB was authorized to develop regulations to reach this goal, and the cap-and-trade program is one of several tools designed by CARB to achieve the desired GHG reduction goal. Under the terms of CARB’s cap-and-trade regulation, an overall limit on GHG emissions from capped sectors of the state’s economy will be set and covered facilities subject to the cap will be able to trade permits, or allowances, to emit GHGs. CPAU will be allocated GHG allowances (defined as the authorization to emit up to one metric ton of carbon-dioxide equivalent (CO2e) per allowance) each year for an eight-year period starting in 2013 as shown in Table 1. Table 1: CPAU Annual Allowances Allocation for Years 2013 to 2020 Calendar Year: 2013 2014 2015 2016 2017 2018 2019 2020 Allowance Allocation (metric tons)340,533 336,044 322,284 320,461 324,672 317,776 310,204 310,979 City of Palo Alto Page 3 Title 17 of California Code of Regulations Section 95892 offers publicly-owned utilities, such as CPAU, three options for the use of their allocated allowances: 1. Make the allowances available for auction, using the proceeds of any sale to benefit the customers they serve; 2. Place allowances in their compliance accounts to meet compliance obligations for generation plants they operate directly; or 3. Place allowances in the compliance account of a Joint Powers Agency—such as the Northern California Power Agency (NCPA)—that generates power on their behalf. Only the first option above applies to CPAU’s allocated allowances. CPAU does not own or operate fossil fuel based electric generation covered by the cap-and-trade regulations;1 and NCPA does not operate plants with compliance obligations on CPAU’s behalf. NCPA may import energy for CPAU, which would create a compliance obligation for CPAU, but these quantities will be small and CPAU may be prohibited from using the freely allocated allowances for compliance obligations resulting from imports.2 Therefore, only the first option applies and CPAU will sell its allocated allowances into the auctions that CARB will be conducting on a quarterly basis starting in November 2012.3 CPAU’s allocated allowances are estimated to have a market value of $5 million per year in year 2013 (assuming a $15/ton allowance auction price) and are expected to increase in value through year 2020, the last year of the regulated period. Starting in 2015, the City’s gas utility will also fall under the mandate to participate in the cap- and-trade program, but the impact of the program on the gas utility is not known at this time. Discussion While the governing board of each electric distribution company is given some flexibility in determining how to utilize the value of their allocated allowances, there are limitations. These limitations have been put into CARB’s regulations to ensure that allowance value is used for its intended purposes of protecting electricity ratepayers and advancing the goals of AB 32. 1 The four megawatt City-Owned Back-up Generator (COBUG) does not exceed the 25,000 metric ton CO2e emission threshold. As a result, COBUG does not fall under the cap-and-trade regulation and does not have to show allowances corresponding to the generator’s GHG emissions. 2 Section 95892(d) currently prohibits the use of allocated allowances to meet compliance obligations for electricity sold into the California Independent System Operator markets. 3 The allowances for each year of the regulation will allocated the preceding November, except for vintage 2013 allowances that were allocated to CPAU in September 2012 for the November auction. City of Palo Alto Page 4 Specifically, Section 95892(d) states the following regarding the utilization of allowance sale proceeds by electric utilities: “Auction proceeds and allowance value obtained by an electrical distribution utility shall be used exclusively for the benefit of retail ratepayers of each electrical distribution utility, consistent with the goals of AB 32, and may not be used for the benefit of entities or persons other than such ratepayers.” Starting in June 2014, CPAU will be required to report annually to CARB on the “disposition of any auction proceeds and allowance value received in the prior calendar year” (Sec. 95892(e)). The report must include the monetary value of auction proceeds received by CPAU and how the use of auction proceeds complies with the requirements of the cap-and-trade regulation. The CARB Board has been clear that the allocations can be changed, or restrictions on the use of allowance value made more prescriptive, if the regulations are not followed. Risks and Proposed Strategy The new GHG cap-and-trade market is anticipated to generate billions of dollars in revenue for California over the eight year period from 2013 to 2020. Using CARB’s floor and ceiling prices for allowances ($10 and $50 per ton of emissions, respectively), the total revenues from CARB’s auctions for 2012-13 could range from roughly $660 million to upwards of approximately $3 billion. This level of revenue has generated intense interest from the Governor and Legislature to meet the State’s budget needs. In addition, potential participants in the market are concerned about market manipulation, economic impacts and interstate commerce laws. There are risks that the cap-and-trade market could be suspended, free allowances or revenues rescinded if the regulations are deemed to have been broken, or use of the revenues may be redirected by the legislature. Uncertainties for the UAC and Council consideration include: What happens post 2020—does the market continue and will there still be free allocations to electric utilities? Could the legislature pass laws that reverse CARB’s allocation to electric utilities? Could legal challenges related to interstate commerce reverse the cap-and-trade regulation and would that require refunding of any auction revenues received? Could economic impacts to California result in the governor or legislature overturning or suspending AB 32? Could there be litigation if other market participants believe that there is evidence of market manipulation? To mitigate the uncertainty in the revenue stream generated from the allowances, staff recommends that the revenue be used for programs that provide inherent value to CPAU’s electric ratepayers. Staff also recommends that revenues from sale of the allocated allowances City of Palo Alto Page 5 be used to fund programs that, even if the funding source is lost, would either continue to be funded from ratepayer revenue sources or are the types of program that, if discontinued, would not cause material detrimental economic impact to ratepayers. Proposed Cap-and-Trade Revenue Utilization Policy To address the risk of CPAU’s allowances or auction proceeds being rescinded, staff recommends the following guidelines for use of the auction revenues be part of the policy: Follow as closely as possible the regulatory requirement that auction proceeds be used exclusively for the benefit of retail ratepayers of each electrical distribution utility, consistent with the goals of AB 32, with allowable uses to include: Purchases or investment in renewable resources (outside Palo Alto or locally) for the electric portfolio; Investment in energy efficiency programs for the electric portfolio and retail customers; Investment in other carbon reduction activities, including the pursuit of a carbon- neutral electric portfolio; and Rebate to electric retail ratepayers. To show how the auction proceeds are being utilized to benefit the electric utility customers, staff recommends that the policy require staff to report annually to the Council on allowance revenues and expenditures. Additional Council approval will be required for any proposed rebate to electric ratepayers, and such review would typically occur during the City’s annual budget adoption process. Lastly, staff recommends that the policy allow for the use of the allocated allowances to meet compliance obligations directly if CARB eventually opts to permit this use. In accordance with CARB’s annual reporting requirements, staff will coordinate with the Administrative Services Department to set up a balancing or reserve account that will track the auction revenues received. CPAU will track the expenditures from the reserve account and ensure that they are consistent with the Cap-and-Trade Revenue Utilization Policy. Staff will continue to monitor state proceedings on the use of auction proceeds and provide recommendations on changes to the policy if further guidance from CARB and the state legislature is provided. This year the legislature passed a budget trailer bill, Senate Bill (SB) 1018, which added Section 748.5 to the Public Utilities Code specifying the distribution of City of Palo Alto Page 6 auction proceeds received by the investor-owned utilities (IOUs) such as PG&E. The new code allows the IOUs to use the funds for clean energy, energy efficiency projects, and credits to customers, which is similar to the uses/projects proposed by staff for CPAU. However, the IOU’s are now required to allocate at least 85% of the funds to customer credits. This restriction does not currently apply to CPAU. Commission Review and Recommendation On October 3, 2012, the UAC reviewed the proposed Cap-and-Trade Revenue Utilization Policy. The UAC discussed some of the potential uses of the revenues including the idea of returning some of the revenue to ratepayers in the form of a rebate. The Commission also discussed whether the revenue should be saved in an account until the risk of having to return it was resolved. Staff explained that the regulations require that the money be spent in support of AB 32’s goals and that banking it could be viewed negatively by CARB, who will be looking for how the money was spent to benefit electric ratepayers. The UAC voted unanimously (by a vote of 6 to 0) to recommend that the City Council approve the proposed Cap-and-Trade Revenue Utilization Policy. The excerpted draft minutes from the UAC’s October 2012 meeting are provided in Attachment C. Resource Impact The FY 2013 budget includes revenue of $2.6 million from expected allowance proceeds. In the subsequent fiscal years within the five-year financial forecast, the allowance revenues are expected to range from $5.3 million in FY 2014 to $5.8 million in FY 2017. However, the revenue depends on the actual market value of the allowances. There is no transaction cost associated with participating in the CARB allowance auction. Existing staffing and regulatory resources at NCPA will be utilized to participate in the CARB auctions. As of September 2012 internal guidelines and controls have been put in place to manage CPAU’s participation in the CARB auctions. Policy Implications The proposed recommendation supports the Council-approved 2011 Utilities Strategic Plan’s environmental sustainability and customer service objective. Environmental Review Support of the recommendation to develop a plan to achieve a carbon neutral electric portfolio does not constitute a project for the purposes of the California Environmental Quality Act. Attachments: City of Palo Alto Page 7 Attachment A: Resolution on the Policy on Use of GHG Allowances (PDF) Attachment B: Exhibit A to Resolution (PDF) Attachment C: Excerpted Draft Minutes from the Oct 3, 2012 UAC Meeting (PDF) EXCERPTED FINAL MINUTES OF THE OCTOBER 3, 2012 UTILITIES ADVISORY COMMISSION MEETING ITEM 4: ACTION: UAC Recommendation that Council Adopt a Resolution Approving the Cap- and-Trade Revenue Utilization Policy for the Use of Revenues from the Sale of Allocated Allowances in California’s Greenhouse Gas Cap-and-Trade Auctions Senior Resource Planner Debra Lloyd summarized the requirements of the Global Warming Solutions Act (AB32), which authorized the California Air Resources Board (CARB) to develop a cap-and-trade program for greenhouse gas (GHG) emissions. The City will receive free allowances, which it must sell in the allowance auctions. CARB provided guidance that the auction proceeds must be used for the benefit of electric ratepayers and for purposes consistent with AB32's goals. Lloyd noted that the expected revenue from the allowance auctions is about $5.5 million per year. However, there are risks that the program could be deemed illegal or be stopped if it was determined that it was causing economic problems. There are also risks that allocation of allowances to a utility could be stopped or local control over the use of the revenues rescinded if the regulations are not followed. The proposed policy includes strategies to mitigate these risks by using the funds for programs that the City would invest in anyway such as expenditures for renewable energy and energy efficiency. Lloyd described the elements of the proposed policy. These include using the revenues for carbon reducing activities in the electric portfolio – such as renewable resources and energy efficiency – and rebates to electric utility customers, and annual reporting on the value provided to the utility’s customers. Commissioner Waldfogel suggested earmarking a part of the revenues for a rebate to customers since the investor-owned utilities must do that. Commissioner Hall stated that some of the money should be earmarked for achievement of the carbon neutral plan as that will be expensive, but he did not support ratepayer rebates. Commissioner Eglash noted that the council has not yet approved a carbon neutral plan. Staff noted that any proposals for a rebate would come back to Council for approval. Commissioner Melton stated that he supported the proposal and recommended tracking the money closely. He expects court action and suggested saving the revenue for a couple of years to mitigate the risk of having to return the money. Commissioner Eglash asked for an explanation of the risks of spending vs. holding on to the revenue. Lloyd replied that the CARB regulations required the City to make annual reports starting in 2014 that describe the use of any auction proceeds, and if the proceeds were banked the City would need to explain how that was to the benefit of the utility’s customers. Making good use of the revenue reduces the risk of a losing the free allocation of allowances. Assistant Director Ratchye explained that the amount of revenues anticipated would be a 5% or less impact on rates if the revenues had to be returned. Commissioner Melton noted that money is fungible and, to the extent, we spend this money on renewable energy that we would have spent anyway, there will be more money that could be spent on CIP projects or any other expense. It essentially becomes an accounting issue. Commissioner Eglash asked if we would be required to spend the auction revenue on new, incremental programs to be in line with the spirit of AB 32. Director Fong explained that the regulations did not require incremental programs. ACTION: Vice Chair Foster made a motion to support staff's recommendation. Commissioner Hall seconded the motion. The motion carried unanimously (6-0). FINANCE COMMITTEE DRAFT EXCERPT Page 1 of 5 Special Meeting November 14, 2012 Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution Approving the Cap-and-Trade Revenue Utilization Policy for the Use of Revenues from the Sale of Allocated Allowances in California’s Greenhouse Gas Cap-and-Trade Auctions. Debra Lloyd, Senior Resource Planner talked about AB 32, California’s Global Warming Solutions Act (2006). The goal was to reduce California’s C02 (Carbon Dioxide) emission to the 1990 levels by the year 2020. The California Air Resources Board (CARB) was tasked with implementing AB 32. AB 32 requires that large emitters report their greenhouse gas (GHG) emissions and purchase allowances that equal their emissions. The City of Palo Alto’s electric utility received a free allocation of allowances to help off- set the cost of electric compliance. It was intended to address the cost burden and protect customers because they eventually pay for the cost of the program. She said all of the City’s allowances needed to be auctioned in the CARB auctions, and as required by the regulations, staff assigned 1/3 of the allowances to the November 2013 auction; the expected value of the 2013 allowances was $4.4 million. The price of the allowances went down from what Staff previously projected. There was some discussion of covered emissions through the City’s electric scheduler, the Northern California Power Agency (NCPA). She said NCPA might import energy to meet the city’s load requirement, these imports would be covered under the Cap and Trade Program, and in that case NCPA would have to surrender allowances for the imports. Currently, the regulations did not allow the use of freely allocated allowances toward the resources that were scheduled into the Independent System Operator (ISO) market due to compliance obligations. Beginning June 2014, Staff said they needed to begin reporting to CARB on the use of the allowance value. Regarding the allowance revenue, the allowance value is to be used exclusively for electric retail rate payers. Investor owned utilities (IOU’s) are required to allocate 85 percent of their resources toward direct customer credits. The customer picked up the cost of the AB 32, and an argument was made that electric distribution companies, such as Palo Alto, received the allowance value that protected the customers and mitigated the cost burden. A risk of the program was that the legislation could take away the allocation on account of them DRAFT EXCERPT Page 2 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 making better use of the money. CARB was clear that the resources were meant to benefit the electric customer; they have said that if this intent is not met they can stop the allocation of allowances. Another risk is market manipulation, similar to the energy crises of 2000/2001, there is a lot of money in the program and so there are concerns about market manipulation; staff proposes maintaining separate accounts to ensure transparency, which would help defend against any such accusations. Also, there was a threat of a court ordered reversal. The California Chamber of Commerce filed a lawsuit against the Cap and Trade. Their problem was that the industrial customer was allocated only 90 percent of the requirement, so they called the extra 10 percent tax unconstitutional. Council Member Burt asked if, in that case, it was going to overturn the whole measure. Ms. Lloyd said the suit had not tried to halt the current auction, but they may try to halt future auctions. Council Member Burt said the claim they were trying to make was not that the measure as a whole was unconstitutional, which was what the prior claims were, but it was the 90 percent allocation that was not permissible. Ms. Lloyd said yes. Council Member Burt confirmed that it did not overturn the whole measure, but required a redesign of it. Molly Stump, City Attorney said they needed to look at the way it was framed and what was before the court. Ms. Lloyd said all she had to go by was newspaper reports and the summary. The reports had discussed what the effect might be on the market price. Ms. Stump said that question might be complicated because in one case she cited, it was only one part of a litigation that was inappropriate. Ms. Lloyd said Staff’s strategy was to follow the guidelines, keep separate accounts, and, as a utility, they did not want to purchase allowances to withhold on the market. If they did purchase allowances to withhold on the market they might be at risk of being accused of market manipulation. Staff DRAFT EXCERPT Page 3 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 wanted to use the revenue for programs that provided value to the customer. She said if the revenue went away, they would either use rate payer funds to carry on the program funding, or they could stop the program without any major damage to the customers. The proposal was to follow the regulatory language and use the revenues for the benefit of electric rate payers. The uses included: purchases or investment renewable resources, investment in electric energy efficiency programs, and rebates to electric retail rate payers. Vice Mayor Scharff asked if 85 percent went toward a rebate of the electric rate payers. Ms. Lloyd said the 85% requirement was for investor owned utilities. She said other proposals were, if permitted by CARB regulations, to use the allowances for direct compliance toward the minimal amount of imports they had. Staff planned to give Council annual reports, and if they proposed a rebate, they would come back to Council. They wanted to continue to follow the guidelines on GHG emissions and to coordinate tracking revenues and expenditures. Council Member Price asked, in using the revenue for a potential rebate, was there any language that stated the rebate had to happen within a particular calendar year or was there pressure to provide the rebate within window of time. Ms. Lloyd said there was no timeline but not using the rebate could be seen as not putting the money to good use. Council Member Price confirmed that the staff’s proposal was to not bank the resources and to distribute the resources according to the guidelines. Ms. Lloyd said there were no restrictions on banking revenues but the problem was how we would report the banking and show how this was beneficial to our customers. Council Member Price asked who the enforcers were. Ms. Lloyd said CARB was enforcing the program, and it was CARB who determined the allocation. Council Member Price asked if they were staffed to enforce. DRAFT EXCERPT Page 4 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 Val Fong, Utilities Director said CARB could investigate past service years. Council Member Price said she was not making suggestions. If there was a staffing issue on their end, this was a massive effort. James Keene, City Manager asked what the results of the first auction meant to the Finance Committee. Ms. Lloyd said they would know the clearing price, how much was sold, how competitive the market was. Mr. Keene confirmed that the results would confirm, or not, what the estimate was. This gave Council some data, even though they knew the market fluctuated. Ms. Fong said they could use the information as a floor price. Ms. Keene remarked that it gave Council an idea and thought it might be good to put an explanation of the program on the website. Ms. Fong said they were working on that. Council Member Burt asked how Palo Alto’s allowances were determined and if the City’s future actions affected their future allowances. Ms. Lloyd said the allowances were set out for AB 32 for the next eight years. Even though the State goal was an 80 percent reduction from 1990 emission levels, AB 32 put the program statute through the year 2020. Staff expected that in next eight years things would materialize, as long as legislature or CARB did not stop the program. The formula was based on three primary aspects: cost burden to customers, investment’s made in energy efficiency, and early action in investment in renewables. Council Member Burt said it was important for the community to know a good portion of the $4.4 million was a return on past decisions and investments. Ms. Lloyd said there were some unallocated allowances and there was not any talk about taking back the public owned utility allowances. DRAFT EXCERPT Page 5 of 5 Finance Committee Special Meeting Draft Excerpt 11/14/12 Ms. Fong said Staff’s risk was not that they get the allowance, but that the monies received from the auctions be deemed returned by a court to the people. Council Member Burt questioned what could be done with the allowance revenue. There were several goals for the rate payers. He wanted to know how many goals there were, what they meant, and where they were balanced. Ms. Lloyd said the only indication Staff had was the legislation cost on the IOU’s. MOTION: Chair Shepherd moved, seconded Council Member Price to recommend the City Council adopt the resolution approving the Cap-and Trade Revenue Utilization Policy, a policy for the use of revenues from the sale of allocated allowances in California’s greenhouse gas (GHC) cap-and- trade auctions. John Melton, Utilities Advisory Commissioner said he was not sure what Sacramento might do because the State could take money away under various guises; he recommended not sitting on a project for too long. MOTION PASSED: 4-0 City of Palo Alto (ID # 3208) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Weed Abatement Resolution Title: Adoption of a Resolution Declaring Weeds to be a Public Nuisance and Setting January 14, 2013 for a Public Hearing for Objections to Proposed Weed Abatement From: City Manager Lead Department: Fire Recommendation Staff recommends that Council: 1) Adopt the attached resolution declaring weeds to be a public nuisance and setting January 14, 2013 for a public hearing; and 2) Direct staff to publish a notice of hearing in accordance with the provisions of Chapter 8.08 of the Palo Alto Municipal Code. Background On March 21, 1977, the City Council approved an agreement with Santa Clara County for the administration of weed abatement within the City of Palo Alto. This agreement has reduced the City’s costs and staff time required for administration of weed abatement. For the past 35 seasons, the weed abatement program has been expeditiously carried out by the County Department of Agriculture and Resource Management with results satisfactory to Palo Alto residents. Discussion Palo Alto Municipal Code Chapter 8.08 specifies weed abatement procedures. The chapter requires property owners or occupants to remove certain weeds, as defined in Section 8.08.010 that exist upon their premises, public sidewalks, streets or alleys. It also specifies the procedures to be followed to abate weeds, in the event owners do not remove them. These procedures are: City of Palo Alto Page 2 - Resolution of the City Council declaring weeds to be a public nuisance. This resolution sets the time and place for hearing any objections to the proposed weed abatement. - Public Notice. This notice informs property owners of the passage of the resolution and provides that property owners shall remove weeds from their property, or the abatement will be carried out by Santa Clara County (County). The City then publishes a legal advertisement in the local newspaper announcing the date of the public hearing. - Public Hearing. The Council must conduct a public hearing, at which time any property owner may appear and object to the proposed weed destruction or removal. After the City Council hearing and considering any objections the Council may allow or overrule any or all objections. If objections are overruled, the Council is deemed to have acquired jurisdiction to proceed, at which point the County will be asked to perform the work of destruction and removal of weeds. The action taken by the Council at the December 10 meeting will set the public hearing date for January 14, 2013. Resource Impact There is no direct fiscal impact of this action to the City. The City of Palo Alto administers the weed abatement program with the County Department of Agriculture and Resource Management with a minimal amount of staff time. All charges for the weed abatement services are included as a special assessment on bills for taxes levied against the respective lots and parcels of land. Such charges are considered liens on these properties. The Weed Abatement Program is a cost recovery program and does not receive funding from City or County general funds. Policy Implications This procedure is consistent with existing City policies. Environmental Review The Santa Clara County Counsel has determined the Weed Abatement Program to be categorically exempt from CEQA pursuant to CEQA Guidelines Section 15308. Attachments: City of Palo Alto Page 3 Attachment A - Resolution (PDF) Attachment B - Property List (PDF) ** NOT YET APPROVED ** 121023 sh 8261997 1 Resolution No. ________ Resolution of Intention of the Council of the City of Palo Alto Declaring Weeds to be a Nuisance and Setting January 7, 2013 for a Public Hearing for Objections to Proposed Weed Abatement R E C I T A L S A. Weeds, as defined in Section 8.08.010(b) of the Palo Alto Municipal Code, are anticipated to develop during calendar year 2013 upon streets, alleys, sidewalks, and parcels of private property within the City of Palo Alto sufficient to constitute a public nuisance as a fire menace when dry or are otherwise combustible, or otherwise to constitute a menace to the public health as noxious or dangerous. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Weeds, as defined in Section 8.08.010(b) of the Palo Alto Municipal Code, which are anticipated to develop during calendar year 2013 upon streets, alleys, sidewalks, and parcels of private property within the City of Palo Alto, are hereby found and determined to constitute a public nuisance. Such nuisance is anticipated to exist upon some of the streets, alleys, sidewalks, and parcels of private property within the City, which are shown, described, and delineated on the several maps of the properties in said City which are recorded in the Office of the County Recorder of the County of Santa Clara, reference in each instance for the description of any particular street, alley, or parcel of private property being hereby made to the several maps aforesaid, and, in the event of there being several subdivision maps on which the same lots are shown, reference is hereby made to the latest subdivision map. SECTION 2. THEREFORE, IT IS ORDERED that the said public nuisance be abated in the manner provided by Chapter 8.08 of the Palo Alto Municipal Code: IT IS FURTHER ORDERED that a public hearing shall be held on Monday, the 7th day of January, 2013, at the hour of 7:00pm, or as soon thereafter as the matter may be heard, at the Council Chambers of the Civic Center of said City, at which the Council shall hear objections to the proposed weed abatement of such weeds and give any objections due consideration; IT IS FURTHER ORDERED that the Fire Chief of the City of Palo Alto is directed to give notice of the public hearing in the time, manner and form provided in Chapter 8.08 of the Palo Alto Municipal Code. SECTION 3. Unless the nuisance is abated without delay by the destruction and removal of such weeds, the work of abating such nuisance will be done by the County of Santa Clara Department of Agriculture and Resource Management Office on behalf of the City of Palo ** NOT YET APPROVED ** 121023 sh 8261997 2 Alto, and the expenses thereof assessed upon the lots and lands from which, and/or in the front and rear of which, such weeds shall have been destroyed and removed. SECTION 4. The Santa Clara County, County Counsel has determined the Weed Abatement Program to be categorically exempt from the provisions of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15308. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Sr. Deputy City Attorney City Manager _____________________________ Director of Human Resources _____________________________ Director of Administrative Services Situs APN CITY/STATE 2013 WEED ABATEMENT PROGRAM COMMENCEMENT REPORT CITY OF PALO ALTO EXHIBIT A T GOUYET ALBERT AND CALISA C 931 GUINDA ST PALO ALTO CA 94301-3319 0931GUINDAST003-34-006 KODA, ROSS K TRUSTEE P O BOX 156 SOUTH DOS PALOS, CA 93665 6733RAMONAST120-27-063 "BEN EFRAIM, AMIR TRUSTEE & ET 2021 WEBSTER ST PALO ALTO CA 94301-0000 02021WEBSTERST124-03-070 "KHAN, ANWAR AND KHAN, 2341 FALLING WATER CT SANTA CLARA CA 95054-1316 0128KINGSLEYAV124-15-038 "STELL, BRIAN W AND STELL, 2030 PARK BL PALO ALTO CA 94306-1142 02030PARKBL124-27-002 "TEICHER, ZELMA TRUSTEE PO BOX 899 PALO ALTO CA 94302-0899 0790MONTROSEAV127-16-028 "LAWS, LILY M AND LAWS, 4064 SUTHERLAND DR PALO ALTO CA 94303-4728 04064SUTHERLANDDR127-18-046 "HUANG, HSING YI ET AL 1113 TRINITY LN PALO ALTO CA 94303-0000 0739COLORADOAV127-34-101 BANQUE RAYMOND J 780 CLARA DR PALO ALTO, CA 94303-3905 0780CLARADR127-35-030 ZHANG, LIBIN 3984 WASHINGTON BLVD # FREMONT CA 94538 63101MIDDLEFIELDRD127-53-007 WINDY HILL PV 3 LP 1950 UNIVERSITY AV #220 PALO ALTO CA 94303 03085MIDDLEFIELDRD127-53-008 ESSEX PARK BLVD LLC 925 E MEADOW DR PALO ALTO CA 94043 02785PARKBL132-31-042 "HARRISON, MICHAEL TRUSTEE 375 OLIVE AV PALO ALTO CA 94306-2224 0375OLIVEAV132-32-026 "SMITH, BOYD C AND SMITH, JILL 3201 ASH ST PALO ALTO CA 94306 0315OLIVEAV132-32-029 SI 43 LLC 10600 N DE ANZA BL STE 200 CUPERTINO CA 95014 0OLIVEAV132-32-037 HOHBACH REALTY CO LP 29 LOWERY DR ATHERTON CA 94027 02901PARKBL132-32-052 HOHBACH REALTY CO LP 29 LOWERY DR ATHERTON CA 94027 0195PAGE MILL RD 132-32-054 KUMANO, TADAHIKO 486 JAMES RD UNIT 11 PALO ALTO CA 94306 63370PARKBLV132-33-049 AT&T COMMUNICATIONS INC. 870 N. McCARTHY BLVD MILPITAS CA 95035-5125 6132-33-050 REHABILITATION HOUSING 1796 BAY RD EAST PALO ALTO CA 94303 0325FERNANDOAV132-34-012 ELLIS, BESS TRUSTEE ETAL 6223 FRANCISCAN WY SAN JOSE, CA 95120-4420 6405CURTNERAV132-41-072 4041 EL CAMINO WAY LLC 664 GILMAN ST PALO ALTO CA 94301 64035EL CAMINO WA 132-43-139 ETON CAPITAL LLC 2521 SOUTH CT PALO ALTO CA 94301-4241 04073EL CAMINO 132-46-107 HALL LOIS M TRUSTEE 1135 HOPKINS AV PALO ALTO, CA 94301-3435 62120COLUMBIAST137-06-088 Page 1Santa Clara County Weed Abatement Program25Records Situs APN CITY/STATE 2013 WEED ABATEMENT PROGRAM COMMENCEMENT REPORT CITY OF PALO ALTO EXHIBIT A T "ENT LLC,CAMINO REAL DEVELOPM P.O. BOX 60177 PALO ALTO CA 94306 03606EL CAMINO 137-08-080 ONAGA ATSUO & KAZUKO 754 MATADERO AV PALO ALTO, CA. 94306-2734 0754MATADEROAV137-09-059 KSS INVESTMENT LLC 1380 MIRAVALLE AV LOS ALTOS CA 94024-5744 03700EL CAMINO 137-11-078 "HAMLETT, MILDRED 4031 AMARANTA AV PALO ALTO CA 94306-3103 04031AMARANTAAV137-21-034 "YANG, MICHAEL X AND XU, YING-ZI 4197 BAKER AV PALO ALTO CA 94306-3908 04197BAKERAV137-25-038 "LC,HILLVIEW PALO ALTO L 13155 NOEL RD STE 500 DALLAS TX 75240 03460HILLVIEWRD142-16-059 "NIV BOARD,LELAND STANFORD JR 150 PORTOLA RD PORTOLA VALLEY CA 94025 03495DEER CREEK RD 142-16-062 "NIVERSITY BOARD OF TR,LELAND 2755 SAND HILL RD STE 100 MENLO PARK CA 94025 03500DEER CREEK RD 142-16-066 VAN ZANT, STEVEN L 262 WHITCLEM DR PALO ALTO CA 94306-4112 0262WHITCLEMDR148-02-044 "VINCENT, LUC MAURICE ANTONIN 4237 MANUELA AV PALO ALTO CA 94306-3705 04237MANUELAAV175-02-045 "WEAKLAND, JOHN H AND 620 SAND HILL RD APT 300C PALO ALTO CA 94304 04247MANUELACT175-02-051 "WEAKLAND, ANNA WU TRUSTEE & 620 SAND HILL RD 300 C PALO ALTO CA 94304 04243MANUELACT175-02-053 "SMITHWICK, ALTON D AND PO BOX 60065 PALO ALTO CA 94306 04103OLD TRACE RD 175-20-078 "COLBERT, JAMES L AND COLBERT, 1825 FARDON AV LOS ALTOS CA 94024 0890MOCKINGBIRDLN175-20-082 "LIVINGSTON, DANIEL S AND 900 MOCKINGBIRD LN PALO ALTO CA 94306-3719 0900MOCKINGBIRDLN175-20-083 "SELKER, EDWIN J AND SHAY, ELLEN 910 MOCKINGBIRD LN PALO ALTO CA 94306-3719 0910MOCKINGBIRDLN175-20-084 "GROVE, EVA R AND GROVE, 171 MAIN ST #278 LOS ALTOS CA 94022 0OLD ADOBE RD 175-20-092 RADUCHEL, WILLIAM J TRUSTEE 615 KENTLAND DR GREAT FALLS VA 22066-1017 63111ALEXISDR182-43-018 hwa, george & eileen 29 Ventris Rd B-4 9/f, San Hong Kong China 6ALEXISDR182-43-034 Page 2Santa Clara County Weed Abatement Program43Records City of Palo Alto (ID # 3254) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Bay Area Biosolids to Energy Coalition Membership Title: Approval of a Wastewater Treatment Enterprise Fund Contract to Join the Bay Area Biosolids to Energy Coalition in the Total Amount of $151,553 for Membership in a Regional Coalition Exploring Biosolids to Energy Projects that Benefit the Regional Water Quality Control Plant From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute the Amended and Restated Bay Area Biosolids to Energy Coalition Joint Exercise of Powers Agreement (Attachment A) for the Regional Water Quality Control Plant (RWQCP) to become a member of the Bay Area Biosolids to Energy Coalition for a contribution in the amount of $151,553. Executive Summary The RWQCP will become a member of the Bay Area Biosolids to Energy Coalition, a coalition of 18 agencies throughout the San Francisco Bay region who treat wastewater. Joining the Coalition is consistent with the RWQCP’s effort to develop new solutions for the treatment and reuse of biosolids. It is a proactive step that is part of the development of the Biosolids Facility Plan. The key goals of the coalition are to collaboratively respond to the increasing need for new approaches for biosolids management within the wastewater industry that reduce risk and maximize resource recovery while at the same time diversifying management options and advancing the knowledge and acceptance of new technologies that can convert this resource to energy. City of Palo Alto Page 2 Background The Palo Alto RWQCP treats wastewater originating from approximately 217,000 residents and 170,000 workers. This wastewater is generated in the cities of Los Altos, Mountain View, and Palo Alto, the Town of Los Altos Hills, the East Palo Alto Sanitary District, and Stanford University (Partners). The City owns and operates the RWQCP with operating and capital costs shared by the Partners. On July 2, 2012, the City Council accepted the Long Range Facilities Plan (LRFP) for the RWQCP and directed staff to prepare a Biosolids Facility Plan to finalize a biosolids treatment and disposal option and to retire the Plant incinerators as soon as practical. At the same time, the Council accepted the action plan and timeline for the Measure E Energy/Compost facility or Export option and directed staff to prepare an Organics Resource and Recovery Strategy. In response, the RWQCP developed a Request for Proposal (RFP) to develop a Biosolids Facility Plan. One of the options that will be considered in the development of the Biosolids Facility Plan, is use of an off-site facility that may be constructed by the Bay Area Biosolids to Energy Coalition (BAB2E or Coalition) in the future. The purpose of the Coalition is to develop regional waste to energy facilities for biosolids. Seven wastewater agencies formed the Coalition in 2007 to create a local sustainable solution to biosolids disposition. The Coalition has since expanded to 18 agencies, adding the City of San Jose earlier this year, operating under a Joint Exercise of Powers Agreement (JEPA). The Delta Diablo Sanitation Agency is the fiscal agent for the Coalition. The Coalition has been successful in securing nearly $1 million in grant funding from the California Energy Commission to pilot new biosolids-to-energy technologies and has engaged the Water Environment Research Foundation to conduct peer review of the pilot. Currently, the Coalition is reviewing submissions from a recent Statement of Qualifications effort that shows promising new technologies that may need additional pilot testing. Throughout the process to develop a regional biosolids-to-energy project, the Coalition has contracted with an engineering firm to review proposals and provide advice regarding biosolids-to-energy technologies. The Coalition has also City of Palo Alto Page 3 contracted with advocacy firms in Sacramento and Washington, DC to lobby on issues related to biosolids-to-energy funding and regulation. Discussion Joining the Coalition is consistent with the RWQCP’s effort to develop new solutions for the treatment and reuse of biosolids. It is a proactive step that is part of the development of the Biosolids Facility Plan because it will allow the City to participate in a viable effort to develop sustainable solutions and help determine the path forward so that it meets the City’s goals as well as regional goals. Key benefits to the City include the following: Leadership in sustainable resource management and being part of a successful regional effort that is addressing the biosolids issue in a way that can attract both state and federal partnerships in the form of regulatory and financial assistance. Being part of a group that is proactive in seeking to diversify biosolids management options. Working together, rather than individually, agencies pool resources (knowledge, financial, consultant and strategy). Shared costs for lobbying and consulting. Coalition is now at 18 agencies representing 4 million people. Joining the coalition provides access to a significant base from which to advocate for policies and funding for biosolids to energy that will benefit all Coalition agencies. Approaching as a group reduces risk to individual agencies. The key goals of the coalition are to collaboratively respond to the increasing need for new approaches within the wastewater industry that reduce risk and maximize resource recovery while at the same time diversifying biosolids management options and advancing the knowledge and acceptance of new technologies that can convert this resource to energy. Participation in the Coalition now will allow staff to monitor emerging technologies through the regional effort and be able to participate in the selection of proposals that are City of Palo Alto Page 4 most consistent with the City’s goals. Pooling resources to develop one or more regional biosolids-to-energy projects is expected to result in a lower cost and reduced risk, than if the City pursued alternative projects independently and allows for more options than one agency alone could pursue. Initial Coalition membership contributions are based on the 2007 average dry- weather effluent flow for each facility, which for the RWQCP was 22.9 million gallons per day. Under the terms of the JEPA, Coalition members are not required to contribute additional funds without unanimous consent of the members. The members are not committed, either individually or collectively, to enter into any agreements as a result of the planning effort, although it is the intent of most to proceed with one or more projects, if any of the proposals received meet the goals of the Coalition and are acceptably priced. At that time, members would determine what portion of their biosolids, if any, will be handled by the regional facility as opposed to other options, helping agencies diversify their reuse options. Members of the Coalition that participate in the development of a regional facility will likely have favorable fees, as opposed to joining once a project has been built. The Coalition has been successful in its joint legislative and regulatory advocacy efforts related to biosolids. At the federal level, a Senate committee has accepted language that would make $170,000,000 available in the next fiscal year for biomass projects other than algae biofuels and directs the Department of Energy to consider projects that "include biosolids derived from the municipal wastewater treatment process." The Coalition’s Sacramento consultant is primarily focusing on regulations and legislation related to utility funding for renewable energy projects and the greenhouse gas (GHG) emission allowances, which may be available in the 2012-13 budget year. Currently, the Coalition is working on issues relating to the Electric Program Investment Charge (EPIC), which is intended to replace the Public Goods Charge that funded renewable energy projects; amendments to allow funding of biosolids-to-energy projects in several categories eligible for GHG emission allowances in the future; and exploration of biosolids-to-energy funding opportunities with CalRecycle. Staff participating in the Coalition will monitor legislative positions being considered and will attempt to modify any that are contrary to City policy or interests. Any such legislation of importance to the City will be brought to Council as appropriate for action. Based on the stated goals and previous activities of the City of Palo Alto Page 5 Coalition, it is not anticipated that the Coalition will take positions contrary to the City. The City’s representative to the Coalition will be the Manager of the Environmental Services Division. The benefits of regional biosolids-to-energy technology development, the potential value of joint advocacy efforts regarding biosolids-to-energy funding and regulation, as well as developing additional grants and expanding options analysis for biosolids at the RWQCP, makes this an ideal time to join the Coalition. Resource Impact The RWQCP will become a member of the Bay Area Biosolids to Energy Coalition for a contribution in the amount of $151,553. The funds are available in the FY 2013 Wastewater Treatment Fund Capital Project WQ-10001 (Plant Master Plan). Membership requires staff participation to the Bay Area Biosolids to Energy Coalition Steering Committee but does not mandate participation in future projects. Policy Implications Participation in the Bay Area Biosolids to Energy Coalition is consistent with all City and wastewater management policies. Environmental Review Membership in the Bay Area Biosolids to Energy Coalition does not constitute a project under California Environmental Quality Act (CEQA). Environmental review for any individual projects or activities that the Coalition or the City consider in the future that may impact the environment will be completed on a case-by-case basis as required by CEQA. Attachments: A: Joint Exercise of Powers Agreement for BAB2E (PDF) AMENDED AND RESTATED BAY AREA BIOSOLIDS TO ENERGY COALITION JOINT EXERCISE OF POWERS AGREEMENT This amended and restated joint exercise of powers agreement (this "Agreement") is dated as of July 1,2012 and is by and among the public entities identified on Exhibit A (each, an "Initial Member"). RECITALS A. The California Government Code at Section 6500 et seq. provides that two or more public agencies may, by agreement, jointly exercise powers common to them. B. Each Initial Member is a party to ajoint exercise of powers agreement dated March 30, 2006, between the City and County of San Francisco, the City of Millbrae, the Delta Diablo Sanitation District, the Dublin San Ramon Services District, the East Bay Municipal Utility District, the Fairfield-Suisun Sewer District, and the Union Sanitary District, as amended by Amendment No.1 and by Amendment No.2 (the "Original JEP A"). Among other changes, Amendment No.1 added the following parties to the agreement: City of Burlingame, City of Livermore, City of Richmond, North San Mateo County Sanitation District, West County Wastewater District, Central Marin Sanitation Agency, Ironhouse Sanitary District, South Bayside System Authority, Sausalito-Marin City Sanitary District, Vallejo Sanitation and Flood Control District, and deleted the East Bay Municipal Utilities District. Amendment No.2 created a mechanism for other entities to become parties to the Agreement upon (i) approval by a majority of then-current Parties, and (ii) execution of a completed Addendum. Subsequently, the City of Santa Rosa and the City of San Jose each executed a completed Addendum. As a result of the foregoing, all of the Initial Members listed in Exhibit A are parties to the Original JEP A. C. Under the Original JEP A, the parties cooperated to plan, advocate, and analyze biosolids management solutions for the Bay Area. D. Under the Original JEPA, the parties agreed that certain tasks were to be undertaken and completed in Phase IIIB, as defined in the Original JEPA. The status of those tasks is set forth in Exhibit B. E. Under the Original JEP A, the Delta Diablo Sanitation District was required and empowered to perform certain tasks on behalf of the group, including the following: enter into contracts with consultants to perform certain services and to manage such contracts; and submit funding applications related to the group's purposes and to act as the group's agent for the receipt of any state and federal funds resulting from such applications. Acting on behalf of the group, the Delta Amended and Restated JEPA v7.2 1 B034200111345905-5 Diablo Sanitation District entered into the contracts identified on Exhibit C (together, the "Existing Contracts"). F. The Initial Members now desire to amend and restate the Original JEP A in order to permit the Members, as defined below, to work cooperatively to further explore and develop biosolids management solutions and to permit Members to subsequently enter into contracts for the planning, design, construction, operation, and maintenance of one or more regional biosolids facilities. G. By this Agreement, the parties do not intend to create a separate legal entity. The parties therefore amend and restate the Original JEP A to read in its entirety as follows: SECTION 1 Definitions The following terms have the following meanings: "Addendum" means an agreement that is in substantial conformity with the addendum set forth in Exhibit E. "Coalition" means the Members, when the Members are acting pursuant to this Agreement. The Coalition is sometimes referred to as the "Bay Area Biosolids to Energy Coalition" and the "BAB2E Coalition." The Coalition is not a legal entity. "Contribution" means a payment or payments made to the Coalition by a Member pursuant to Section 4.A. "Existing Contracts" has the meaning ascribed to it in Recital E. "Fiscal Year" means the 12-month period that begins on July 1. "Initial Member" has the meaning ascribed to it in the introductory paragraph. "Lead Agency" means the Member that is designated as the Lead Agency in accordance with this Agreement to perform the duties set forth in Section S.A. on behalf of the Coalition. Unless otherwise determined in accordance with Section S.D., the Lead Agency is Delta Diablo Sanitation District, a California sanitation district organized and existing under the laws of the State of California. "Material Action" means any action taken by or on behalf of the Coalition that will directly (1) create or increase an obligation, debt or liability of any Member, or (2) require any Member to make a payment or payments to the Coalition in excess of that Member's Contribution. Amended and Restated JEPA v7.2 2 B034200111345905-5 "Members" means the parties to this Agreement, including all Initial Members and any Subsequent Members, unless and until such party withdraws from participating in the Coalition in accordance with Section 6.B. "Subsequent Member" means an entity that becomes a party to this Agreement in accordance with Section 6.A. SECTION 2 Purpose The purpose of the Coalition is to provide a vehicle for participating agencies to work together to: (i) explore biosolids management issues and technologies, and (ii) develop a regional project to diversify biosolids management options. The regional project may ultimately consist of one facility or multiple facilities. SECTION 3 Decision Making A. Steering Committee. a. Representatives. Each Member may appoint one individual to serve as its representative on the Coalition's steering committee (the "Steering Committee"). Each such individual is a "Representative." In addition, each Member may appoint an individual to serve in place of its Representative, in the event its Representative is unable to attend a meeting of the Steering Committee (an "Alternate"). Each Member's Representative and Alternate must be a senior manager of the Member (s)he represents. By entering into this Agreement, each Member represents that its Representative and Alternate have the authority to vote on any issue before the Steering Committee and to bind the Member (s)he represents. b. Responsibilities. The Steering Committee is the decision-making body of the Coalition. The Steering Committee decides all matters that affect the Coalition. The Steering Committee oversees all financial matters affecting the Coalition, including the expenditure of Coalition funds. c. Voting. Each Representative has one vote. In order for a Member to cast a vote, the Member's Representative or Alternate must attend the meeting of the Steering Committee at which a vote is taken. If neither a Member's Representative nor its Alternate is able to attend a meeting of the Steering Committee in person, the Member's Representative or Alternate may attend by phone. If a Representative or Alternate is attending a meeting of the Steering Committee by phone, any vote taken at such meeting is to be taken by roll call and all other requirements of a teleconferenced meeting under the Ralph M. Brown Act, as defined below, will be observed. Amended and Restated JEPA v7.2 3 B034200111345905-5 1. Quorum. A majority of the Members constitutes a quorum for any matter requiring a vote. A Representative or Alternate attending a meeting of the Steering Committee by phone counts toward the quorum. 11. Majority Vote. All decisions of the Steering Committee are based on the majority vote of the Members voting on a particular issue; provided, however, the Steering Committee may not take a Material Action without the unanimous consent of all affected Members. Members shall endeavor to avoid abstaining from any vote; however, any abstention does not count toward either the majority or the minority on any vote. d. Delegation of Duties. The Steering Committee may delegate ministerial duties to the Lead Agency. e. Meetings. The Steering Committee will schedule meetings as it deems appropriate. f. Minutes. Unless otherwise provided by the Steering Committee, the Lead Agency will keep minutes of each Steering Committee meeting and will circulate a copy of the minutes of each meeting to each Representative. B. Material Action. If any Members desire to pursue a project that could result in a Material Action without the unanimous consent of all affected Members, the Members desiring the project may separately contract for and finance the project. SECTION 4 Finances A. Contributions. Each Member is required to make a Contribution. Contributions are used to fund Coalition expenses. a. Initial Members. The Contribution made or committed to by each Initial Member is set forth in Exhibit D. b. Subsequent Members. Unless determined otherwise by the Steering Committee prior to the admission of a Subsequent Member, the Contribution required of a Subsequent Member will be based on the Subsequent Member's 2007 average dry weather flow and will be equal to that of the Member identified on Exhibit D that has the same 2007 average dry weather flow as the Subsequent Member. If the Subsequent Member's flow does not match that of an Initial Member identified on Exhibit D, the Subsequent Member's Contribution will be calculated to be proportionately equal to that of the Initial Members. The Contribution by a Subsequent Member may be made either in one lump payment or through installment payments, as approved by the Steering Committee. Amended and Restated JEP A v7.2 4 B034200 1/1345905-5 Upon the admission of a Subsequent Member, the Lead Agency shall update the information shown in Exhibit D and circulate the updated information to all Members. c. In-Kind Payment. If a Member carries out a demonstration of a new technology, or takes other actions substantially beyond those taken by other Members, that contributes to the purpose of this Agreement, the Steering Committee may grant such Member a credit toward its Contribution, or toward future Contributions, in exchange for access to and/or information about the demonstration or other actions. Any such decision by the Steering Committee will be documented by the Steering Committee through a memo to all Members. B. Administration of Funds. a. Account. Coalition funds are to be accounted for by the Lead Agency. b. Financial Obligations. Financial obligations of the Coalition to be covered by Coalition funds, including Lead Agency Costs, as defined below, must be authorized by the Steering Committee. c. Annual Accounting. The Lead Agency shall prepare, or shall hire a consultant to prepare, periodic reports and accountings of all Coalition funds. Within sixty (60) days after the close of each Fiscal Year, the Lead Agency shall prepare, or shall hire a consultant to prepare, a written report of all of the Coalition's financial activities for such Fiscal Year. Such reports shall be distributed to each Member. Should the Lead Agency utilize a consultant for such reporting, the costs shall be reimbursable from the Coalition Contributions. d. Records. The Lead Agency shall maintain accurate records of all Coalition expenditures. Any Member may inspect the books and records of the Coalition at any time during regular business hours. C. Disposition. Upon termination of this Agreement, any Coalition assets from cash contributions remaining after the payment of, or provision for, all debts, liabilities and obligations of the Coalition (including obligations to Members), are to be returned to the Members in proportion to their Contributions. A. Duties SECTION 5 Lead Agency a. General. The Lead Agency shall coordinate the activities of the Steering Committee, including calling and organizing meetings, transmitting notices, minutes, and other communications to the members of the Steering Committee, Amended and Restated JEPA v7.2 5 B034200 1/1345905-5 and ensuring compliance with the "Ralph M. Brown Act" (Government Code section 54950 et seq.), if and to the extent required. b. Custodian of Coalition Funds. The Lead Agency shall maintain an account for Coalition funds and perform the accounting and reporting activities set forth in Section 4. c. Contracts. The Lead Agency is empowered by the Coalition to enter into contracts on behalf of the Coalition, provided (i) the contract relates to ministerial duties that have been delegated to the Lead Agency by the Steering Committee (such as bookkeeping and other administrative services), or (ii) the Steering Committee has approved the essential terms of the contract. No other Member is authorized to enter into contracts on behalf of the Coalition. All contracts signed by the Lead Agency on behalf of the Coalition, including but not limited to the Existing Contracts, bind all Members, including Subsequent Members. Upon request, the Lead Agency will make available to any Member a copy of any contract entered into on behalf of the Coalition. B. Costs. Subject to the approval of the Steering Committee, the Lead Agency is entitled to be reimbursed for costs it incurs in carrying out its duties as Lead Agency, including, but not limited to, the cost of travel for state and federal advocacy, conference call hosting, and copying and postage, but excluding staff time, (hereinafter referred to as "Lead Agency Costs"). Payment of Lead Agency costs from Coalition funds shall only be made with Steering Committee approval. The Lead Agency shall keep a record of Lead Agency Costs and, upon request, shall provide to the Steering Committee a summary thereof. If the parties agree to a future proj ect for the design, construction, or operation of a regional biosolids facility, to the extent not otherwise reimbursed, the Lead Agency may elect to have Lead Agency Costs reimbursed in the form of a credit toward any contribution required ofthe Lead Agency for such project. C. Indemnification. The Members shall defend, indemnify and hold the Lead Agency harmless from and against any and all claims, damages, losses, liens, judgments, penalties, expenses (including reasonable attorneys and consultant fees), andlor liabilities arising out of or relating to any acts of the Lead Agency in its capacity as Lead Agency, except to the extent caused by the intentional or willful misconduct, or the negligent acts, errors, or omissions of the Lead Agency or its agents, officers, or employees. This provision will survive the expiration or telmination of this Agreement. D. Replacement. a. Resignation. If the Member acting as the Lead Agency resigns as Lead Agency, the Steering Committee shall select another Member to serve as the Lead Agency. b. Termination. The Steering Committee may replace the Member acting as Lead Agency with another Member, with or without cause. Amended and Restated JEPA v7.2 6 B034200111345905-5 c. Effective Date. The effective date of the appointment of a new Lead Agency is to be determined by the Steering Committee and the new Lead Agency. The outgoing Lead Agency shall cooperate in transferring management of Coalition funds to the new Lead Agency, as well as the transfer of all appropriate Coalition books and records to the new Lead Agency. SECTION 6 Changes in Coalition Membership A. Subsequent Members. Any public agency in the Bay Area responsible for processing and/or managing biosolids may become a Subsequent Member upon (i) approval by the Steering Committee, and (ii) the execution of an Addendum by such Subsequent Member. The Contribution to be made by a Subsequent Member will be determined in accordance with Section 4.A. B. Withdrawal. A Member may withdraw from the Coalition by providing written notice to the other Members. Withdrawal from the Coalition does not relieve an entity of any obligations incurred while a Member, including its obligations as an indemnitor and its obligation to pay its Contribution in full. At the discretion of the Steering Committee, a Member shall be deemed to have withdrawn pursuant to this sub-Section if the Steering Committee determines, after notice to all Members, the Member has failed to abide by this agreement. Withdrawal from the Coalition, whether voluntary or involuntary, does not entitle a Member to a refund of its Contribution. SECTION 7 Indemnification With the exception of the Lead Agency when performing its duties as Lead Agency, in the performance of this Agreement, each Member and its agents, employees, and contractors shall act in an independent capacity and not as officers, employees, or agents of any other party. Except as, and to the extent, set forth in Section S.C., no Member assumes any liability for the activities of another Member in the performance of this Agreement and each Member (i) is responsible in proportion to its respective fault for all liability, including but not limited to personal injury or property damage that may arise out of this Agreement and, (ii) specifically repudiates the division of liability otherwise provided for in Chapter 21 of Part 2 of Division 3.6 oftitle 1 of the Government Code, entitled "Tort Liability under Agreements between Public Entitles," section 895 et seq. Except to the extent Section S.C. provides otherwise, each Member expressly agrees to defend, indemnify, and hold harmless the other Members and their directors, council members, officers, agents and employees from and against any and all loss, liability, expense, claims, suits, and damages, including attorneys' fees, to the extent arising out of or resulting from the negligent acts, errors or omissions, or the intentional or willful misconduct of the indemnifying Member, its associates, employees, sub-consultants, or other agents, in the operation of and/or Amended and Restated JEPA v7.2 7 B034200 111345905-5 performance under this Agreement. This provision will survive the expiration or termination of this Agreement. SECTION 8 Dispute Resolution A. General. It is the intent of the Members that before the initiation of any administrative, legal or equitable action concerning any dispute arising out of this Agreement, such dispute be subject to the dispute resolution process provided in this Section. The Members shall make good faith efforts to resolve all such disputes by negotiation or mediation as provided in this Section and at the lowest possible cost. B. Dispute Notification and Negotiation. Any Member claiming a dispute arising out of this Agreement shall notify the other Members of the nature of the dispute in writing. The Members shall first attempt to negotiate and resolve the dispute at the technical andlor administrative staff level as appropriate. If the dispute is not resolved at this level, then the General Manager of each of the relevant Members, or other chief staff persons or their designees, shall attempt to negotiate and resolve the dispute. If the Members are unable to resolve the dispute at the staff level, the governing bodies of the Members may each appoint not more than two representatives who will attempt to negotiate and resolve the dispute. If the dispute is not resolved through the negotiation process set forth in this paragraph within ten (10) weeks of the initial written notification of the dispute, any party to the dispute may request mediation as set forth below. C. Mediation. Any party to the dispute may request mediation by sending a written demand for mediation of a dispute to the other parties to the dispute. The parties shall select, by agreement, the mediator. No person shall act as a mediator who is in any way financially interested in the work or the business or political affairs of any party to the dispute. The mediator shall meet with the parties together andlor alone as needed in an attempt to facilitate the resolution of the dispute. The parties will share the cost of the mediation equally. D. Final Recourse. If a dispute is not resolved through mediation within eight (8) weeks of the written demand for mediation, a party to the dispute may resort to such other recourse deemed appropriate, including, but not limited to, seeking administrative, legal or equitable relief. E. Attorneys' Fees. With the exception of the Lead Agency when performing its duties as Lead Agency, each party to a dispute shall bear its own attorneys' fees and costs in all aspects of dispute resolution. If the Lead Agency participates in any dispute resolution process in its capacity as Lead Agency with the prior approval of the Steering Committee, the Lead Agency is entitled to be reimbursed by the Members for any costs, expenses and attorneys' fees it incurs in such capacity. SECTION 9 General Amended and Restated JEPA v7.2 8 B034200 111345905-5 A. Existing Contracts. The Members hereby ratify and approve the Existing Contracts. B. Privileges and Immunities. In accordance with Government Code section 6513, all of the privileges and immunities from liability, exemptions from laws, ordinances and rules, all pension, relief, disability, workmen's compensation, and other benefits that apply to the activity of the officers, agents or employees of the Members when such agents or employees are performing their respective functions within the territorial limits of their respective agencies, apply to them to the same degree and extent while they are engaged in the performance of any of their functions and duties extraterritorially in furtherance of the objectives of this Agreement. C. Term. This Agreement will remain in effect indefinitely unless terminated by mutual written agreement of the parties. D. Officers, Employees, Agents. If the Coalition contracts with any Member for services, none of the persons providing that service on behalf of the Member is, by reason of such contract, an employee or agent of the Coalition. E. Principal Office. The Steering Committee may, but is not obligated to, establish a principal office of the Coalition. F. Notices. Unless and until notified of a substitute address, all notices are to be directed to a Member at the address designated for such Member in Exhibit A or the Addendum executed by such Member, as applicable. Notices are effective three business days after depositing in the United States postal system, upon confirmed facsimile transmission, upon receipt of electronic (e.g., e-mail) transmission, or on the next business day if sent by overnight courier in accordance with this Section. G. Integration; Amendment. This Agreement, including its exhibits, all contracts executed by the Lead Agency on behalf of the Coalition, including but not limited to the Existing Contracts, and all Addendums, together set forth all the promises, agreements, conditions, and understandings of the Members with respect to the subject matter hereof. Except as otherwise provided in Section 9.L and elsewhere herein, no subsequent alteration, amendment, change or addition to this Agreement is binding upon the Members unless reduced to writing and signed by all Members. H. No Construction Against Drafter. Each Initial Member has participated in negotiating and drafting this Agreement. If an ambiguity or a question of intent or interpretation arises, this Agreement is to be construed as if the parties had drafted it jointly, as opposed to being construed against a party because it was responsible for drafting one or more provisions of this Agreement. I. Severability. If any part of this Agreement is held by a court to be invalid, the remainder of the Agreement will continue in full force and effect, provided that the Amended and Restated JEPA v7.2 9 B034200111345905-5 remainder of the Agreement can be interpreted to give effect to the intention of the Members. J. Successors. This Agreement binds and inures to the benefit of the successors of the Members in the same manner as if they were expressly named. Nothing in this Agreement may be construed to give any rights or benefits to anyone other than the parties or their respective successors. K. Governing Law. The laws of the State of California govern all matters arising out of this Agreement. L. Effectiveness. Upon execution by the Initial Members, this Agreement shall be deemed effective as of the date first set forth above, except that execution by an Initial Member that withdraws is not required in order for this Agreement to become effective as to the other Members. M. Entire Agreement. This Agreement supersedes all prior agreements and understandings between the Members on the subject matter hereof.; SECTION 10 Signatures A. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement. B. Signatures. The following signatures attest the parties' agreement hereto. Amended and Restated JEP A v7.2 10 B034200111345905-5 CITY OF BURLINGAME Approved as to form: ____________________ ________________________ Gus Guinan Jim Nantell City Attorney City Manager ____________________ Mary Ellen Kearney City Clerk Amended and Restated JEPA v7.2 11 B0342001/1345905-5 Amended and Restated JEPA v7.2 B0342001/1345905-5 12 CITY OF LIVERMORE Approved as to form: ______________________ _________________________ John Pomidor Marc Roberts City Attorney City Manager CITY OF MILLBRAE Approved as to form: Joan Cassman City Attorney Amended and Restated JEPA v7.2 B034200 1/1345905-5 Marcia Raines City Manager 13 CITY OF RICHMOND Approved as to form: City Attorney Amended and Restated JEPA v7.2 B034200 1/1345905-5 14 Bill Lindsay City Manager CITY OF SAN JOSE Approved as to form: City Attorney Amended and Restated JEPA v7.2 B034200111345905-5 City Manager 15 Amended and Restated JEPA v7.2 B0342001/1345905-5 16 CITY OF SANTA ROSA Approved as to form: ______________________ _________________________ Richard Dowd City Attorney BPU Chairman CENTRAL MARIN SANITATION AGENCY Approved as to form: Jack Govi Assistant County Counsel Amended and Restated JEPA v7.2 17 B03420011134590S-S JasonR. Dow General Manager DELTA DIABLO SANITATION DISTRICT Approved as to form: Mary Ann Mason District Counsel Amended and Restated JEPA v7.2 B03420011l345905-5 18 Gary W. Darling General Manager DUBLIN SAN RAMON SERVICES DISTRICT Approved as to form: Robert B. Maddow General Counsel Amended and Restated JEPA v7.2 B03420011l345905-5 19 Bert L. Michalczyk General Manager FAIRFIELD-SUISUN SEWER DISTRICT Approved as to form: Mark Cornelius . District Counsel Amended and Restated JEP A v7.2 B034200111345905-5 20 Greg Baatrup General Manager IRONHOUSE SANITARY DISTRICT Approved as to fonn: Frederick M. Etzel District Counsel Amended and Restated JEP A v7.2 B034200 1/1345905-5 21 Tom Williams General Manager NORTH SAN MATEO COUNTY SANITATION DISTRICT Approved as to form: Rose Zimmerman District Counsel Amended and Restated JEP A v7.2 B034200111345905-5 22 Patricia E. Martel General Manager SAN FRANCISCO PUBLIC UTILITIES COMMISSION Approved as to form: John S. Roddy City Attorney Amended and Restated JEP A v7.2 B034200Il134S90S-S 23 Ed Harrington, General Manager General Manager SAUSALITO-MARIN CITY SANITARY DISTRICT Approved as to form: Jennifer Fraught District Counsel Amended and Restated JEP A v7.2 B034200 111345905-5 24 Robert Simmons General Manager SOUTH BAYSIDE SYSTEM AUTHORITY Approved as to fonn: David E. Schricker General Counsel Amended and Restated JEP A v7.2 B034200 1/1345905-5 25 Daniel Child Manager UNION SANITARY DISTRICT Approved as to form: David M. O'Hara District Counsel Amended and Restated JEPA v7.2 B034200 1/1345905-5 26 Richard Currie General Manager VALLEJO SANITATION AND FLOOD CONTROL DISTRICT Approved as to form: Favaro, Lavezzo, Gill, Caretti & Heppell District Counsel Amended and Restated JEPA v7.2 B034200 1/1345905-5 27 Ron Matheson District Manager WEST COUNTY WASTEWATER DISTRICT Approved as to form: Alfred A. Cabral Board Attorney Amended and Restated JEPA v7.2 B03420011l345905-5 28 E. 1. Shalaby General Manager EXHIBIT A BAY AREA BIOSOLIDS TO ENERGY COALITION JOINT EXERCISE OF POWERS AGREEMENT INITIAL MEMBERS & REPRESENTATIVES City of Burlingame William E. Toci, Plant Manager 1103 Airport Blvd. Burlingame, CA 94010 Phone: (650) 342-3727 Fax: (650) 342-3712 William. toci@veoliawaterna.com City of Livermore David A. Stoops, Public Works Operations Manager 101 W. Jack London Blvd. Livermore, CA 94551 Phone: (925) 960-8122 Fax: (925) 960-8105 dastoops@ci.livermore.ca.us City of Millbrae Ronald Popp, Director of Public Works 621 Magnolia Avenue Millbrae, CA 94030 Phone: (650) 259-2339 Fax: (650) 697-8158 rpopp@ci.millbrae.ca.us City of Richmond Chad Davisson, WastewaterlStormwater Division Manager City of Richmond 450 Civic Center Plaza Richmond, CA 94804-1630 Phone: (510) 620-5486 Fax: (510) 307-8116 Chad Davisson@cixichmond.ca.us B034200 111249516-1 Central Marin Sanitation Agency (CSMA) Jason Dow, General Manager 1301 Anderson Drive San Rafael, CA 94901 Phone: (415) 459-1455 x 145 Fax: (415) 459-3971 j dow@centralmarinsa.org Delta Diablo Sanitation District (DDSD) Caroline Quinn, District Engineer 2500 Pittsburg-Antioch Highway Antioch, CA 94509-1373 Phone: (925) 756-1928 Fax: (925) 756-1960 caro lineq@ddsd.org Dublin San Ramon Services District (DSRSD) Bert L. Michalczyk, General Manager 7051 Dublin Boulevard Dublin, CA 94568 Phone: (925) 875-2200 Fax: (925) 829-1180 michalczyk@dsrsd.com Fairfield-Suisun Sewer District Gregory G. Baatrup, General Manager 1010 Chadbourne Road Fairfield, CA 94534-9700 Phone: (707) 429-8930 Fax: (707) 429-1280 gbaatrup@fssd.com Ironhouse Sanitarv District (lSD) Jenny Skrel, District Engineer 450 Walnut Meadows Drive Oakley, CA 94561 Phone: (925) 625-2279 Fax: (925) 625-0169 skrelisd@sbcgobal.net EXHIBIT A (Continued) North San Mateo County Sanitation District Patricia E. Martel, General Manager 333-90th Street Daly City, CA 94015 Phone: (650) 991-8127 Fax: (650) 991 -5759 pmartel@dalycity.org San Francisco Public Utilities Commission (SFPUC) Tommy Moala, Assistant General Manager, Wastewater Enterprise 1155 Market St. 11 th Floor San Francisco, CA 94103 Phone: 415-554-2465 Fax: (415) 554-3171 tmoala@sfwater.org Sausalito-Marin City Sanitary District Robert Simmons, General Manager P.O. Box 39 Sausalito, CA 94966 Phone: (415) 332-0244 Fax: (415) 332-0453 bob@smcsd.net South Bayside System Authority Daniel T. Child, Manager 1400 Radio Road Redwood City, CA 94065-1220 Phone: (650) 832-6220 Fax: (650) 591-7122 therrera@sbsa.org Union Sanitary District Richard Currie, General Manager 5072 Benson Road, P.O. Box 5050 Union City, CA 94587-8550 Phone: (510) 477-7502 Fax: (510) 477-7501 rich currie@unionsanitary.com B034200 111249516· 1 Vallejo Sanitation and Flood Control District Ron Matheson, District Manager 450 Ryder Street Vallejo, CA 94590 Phone: (707) 644-8949 x211 Fax: (707) 644-8975 rmatheson@vsfcd.com West County Wastewater District (wCWD) E. J. Shalaby, General Manager 2910 Hilltop Drive Richmond, CA 94806 Phone: (510) 222-6700 Fax: (510) 222-3277 eshalaby@wcwd.org City of Santa Rosa Zachary Kay, Biosolids Manager 4301 Llano Rd Santa Rosa, CA 95407 Phone: (707) 543-3374 Fax: (707) 543-3444 zkay@srcity.org City of San Jose Jo Zientek, Deputy Director of Environmental Services 200 East Santa Clara Street, 10th Floor San Jose, CA 95113 Phone: (408) 535-8557 Fax: (408) 292-6211 Jo.Zientek@sanjoseca.gov TASK 1 2 3 4 5 6 7 EXHIBITB BAY AREA BIOSOLIDS TO ENERGY COALITION STATUS OF "PHASE III.B"(FROM ORIGINAL JEPA) TASKS DESCRIPTION STATUS Biosolids Management Alternatives Complete Engineering Facility Planning Complete Site Screening and Environmental Documentation Complete Project (Agency) Outreach Complete Stakeholder Outreach Complete Grant Funding Assistance Ongoing State and Federal Advocacy Assistance Ongoing B0342001/1249517-2 EXHIBITC BAY AREA BIOSOLIDS TO ENERGY COALITION JOINT EXERCISE OF POWERS AGREEMENT EXISTING CONTRACTS The following is a list of contracts that Delta Diablo Sanitation District (DDSD) has entered into on behalf of the Bay Area Biosolids to Energy Coalition. 1. Consulting Services Agreement between DDSD and Carollo Engineers, dated March 26, 2009, for technical and engineering services. 2. Consulting Services Agreement between DDSD and ENS Resources, dated January 1, 2009, for federal advocacy services. 3. Consulting Services Agreement between DDSD and Edelstein Gilbert Robson & Smith, dated November 1, 2008, for state advocacy services. 4. Agreement between Bay Area Biosolids to Energy Coalition/DDSD and Water Environment Research Foundation, dated May 12, 2011, for WERF to organize and manage a peer review of a demonstration project 5. Contract for legal Services between DDSD and Archer Norris, A Professional Law Corporation, dated March 17,2011, for legal services related to establishing a governance structure (through a JEPA Amendment) for the Bay Area Biosolids to Energy Coalition. 6. Agreement No. 500-10-34 between DDSD and the State of California Energy Resources Conservation and Development Commission (Energy Commission), to provide funding for a technology . demonstration project 7. Project Agreement between DDSD and Intellergy Incorporated, dated June 21,2011, to Transfer Obligations and funding under Funding Agreement 500-10-34 to Intellergy. B0342001/1296384-1 Joint Exercise of Powers Agreement BAY AREA BIOSOLIDS TO ENERGY COALITION EXHIBIT D Project Cost Allocation 2007 Avg Dry Agency Weather Flow(mgd) Total Payment Sausalito Marin 1.3 $46,333 City of Milbrae 1.5 $47,307 Iron house Sanitary District 2.7 $53,153 City of Burlingame 3.6 $57,537 North San Mateo County San 6.6 $72,151 Central Marin Sanitation Agency 7.0 $74,099 City of Livermore 7.1 $74,586 West County Wastewater District 7.2 $75,074 City of Richmond 9.2 $84,816 Dublin San Ramon Services District 11.1 $94,072 Vallejo Sanitation District 11.0 $93,585 Delta Diablo Sanitation District . 14.0 $108,199 Fairfield-Suisun Sewer District 14.5 $110,634 South Bayside System Authority 15.3 $114,531 Santa Rosa 15.3 $114,531 Union Sanitary District 26.5 $169,090 San Francisco Public Utilities District 79.0 $424,835 City of San Jose 112.0 $585,588 TOTAL $2,400,119 San Jose Credit for demonstration $215,000 TOTAL Cash Contributions $2,185,119 EXHIBITE BAY AREA BIOSOLIDS TO ENERGY COALITION JOINT EXERCISE OF POWERS AGREEMENT FORM OF ADDENDUM This addendum to the [date] agreement entitled "Amended and Restated Bay Area Biosolids to Energy Coalition Joint Exercise of Powers Agreement", [as amended on ______ [list dates of any amendments] (the "Agreement"), is dated ______ _ and is made by [name of agency] (the "Agency"), a __________ [state legal capacity, e.g. a municipal corporation] for the purpose of Agency becoming a party to the Agreement and a Member of the Coalition, as those terms are defined in the Agreement. The Agreement is incorporated by reference and made a part of this Addendum. The Agency acknowledges that it has received a copy of the Agreement and, after a thorough review of the Agreement, desires to become a party to the Agreement and a Member. The Agreement permits the addition of parties to the Agreement if (i) such addition is approved by a majority of the members of the Steering Committee, as defined in the Agreement, and (ii) the agency desiring to become a party provides certain information and assumes the obligations of a party through the execution of an addendum. The governing body of the Agency certifies that the Agency has reviewed the Agreement and agrees to its terms. In consideration for the mutual promises set forth in the Agreement, the governing body ofthe Agency hereby agrees to accept and perform all duties, responsibilities and obligations required of a Member as set forth in the Agreement. Further, the governing body authorizes its _________ [title], or his/her designee, as its Representative, with authority to sign all documents necessary to implement the Agreement. The notice address for the Agency's Representative is: [Name of Agency] By: _________________ _ Chairperson The Agreement and the Addendum are approved as to form: By: _______________ , Attorney for AGENCY B034200 111296391-4 Page 1 of 1 City of Palo Alto (ID # 3337) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: BAWSCA Bond Resolution Title: Resolution Authorizing the Making of a Prepayment Under the City's Water Supply Agreement with the City and County of San Francisco and Authorizing the City's Participation in a Bond Issuance by the Bay Area Water Supply and Conservation Agency to Finance the Prepayment From: City Manager Lead Department: Administrative Services Recommendation Staff recommends the City Council consider and approve the resolution electing to be a participant in the Bay Area Water Supply and Conservation Agency’s (BAWSCA’s) prepayment of $367 million capital debt owed by the BAWSCA members to the City and County of San Francisco (San Francisco) and authorizing the City’s Director or Assistant Director of Administrative Services to take all necessary actions to enable BAWSCA to issue and sell bonds to make the prepayment. Based on Palo Alto’s share of water purchases, $36.2 million of this capital debt is attributable to Palo Alto. The present value savings to Palo Alto could be as high as $2.7 million over the life of the bonds and $125 thousand annually. Executive Summary Based on historically low interest rates, staff is seeking Council review and approval to join BAWSCA’s bond issuance to prepay capital improvement debt owed to San Francisco. BAWSCA members could realize present value (PV) savings of $20 million to $34 million over 21.5 years by prepaying approximately $367 million capital debt owed to San Francisco. Palo Alto’s estimated PV savings range from $1.6 million to $2.7 million. Annually, the City is expected to save $73 thousand to $125 thousand on debt service payment. Savings will be dependent, however, upon interest rates at the time of the bond pricing. Based on the BAWSCA Board of Directors’ (the “Directors”) unanimous approval to issue these bonds, staff recommends that Council approve the attached resolution that authorizes BAWSCA to include Palo Alto in the bond issuance and capital debt prepayment and to authorize staff to execute agreements necessary for the bond issuance. City of Palo Alto Page 2 Background Palo Alto contracts with San Francisco to purchase water pursuant to a Water Supply Agreement dated July 2009 (the “WSA”). Palo Alto is also a member of BAWSCA, which represents the interests of 24 cities and water districts, and two private agencies (collectively, the “Wholesale Customers” or “Members”), that purchase water wholesale from the San Francisco regional water system. These entities provide water to 1.7 million people, businesses and community organizations in Alameda, Santa Clara and San Mateo counties. Pursuant to the WSA, the Wholesale Customers agreed to pay San Francisco for capital improvements undertaken by San Francisco prior to their entering into the current WSA (the “Capital Debt”). The Capital Debt was to be repaid over a 25-year period at a fixed interest rate of 5.13 percent. Approximately $367 million of the Capital Debt remains outstanding. Each Wholesale Customer pays for the Capital Debt in the form of a capital cost recovery charge which is one of many components used to establish the annual wholesale water rate paid to San Francisco. The WSA provides that the Wholesale Customers, acting through BAWSCA, may prepay Capital Debt payments due to San Francisco on existing regional assets. BAWSCA is authorized by statute (AB 2167 approved by the Governor September 2012) to issue debt on behalf of its Members in order to make this prepayment and impose fees (aka surcharge) sufficient to pay the principal and interest on the bonds. This will represent BAWSCA’s first bond issuance. Discussion Since Fall 2011, BAWSCA and its Financing Team have been exploring the possibility of a potential bond issuance to prepay the Capital Debt the Members owe San Francisco in order to save Members money. Given the current, historically low interest environment, BAWSCA’s Financial Advisor estimates that by prepaying the outstanding Capital Debt, annual savings between six percent and nine percent of Capital Debt can be realized. These savings will accrue to all water customers (including Palo Alto). The Government Finance Officers Association has adopted a minimum PV savings target of three percent of the par amount of refunding bonds as a “best practices” standard. The Directors approved that PV savings must equal or exceed this “best practices” standard. The Directors present at the November 15th board meeting unanimously approved issuing bonds in an amount sufficient to prepay the Capital Debt and to impose a surcharge on participating Members for paying the bond’s debt service obligation. Other than collecting the debt service payment as part of its monthly water bill from Members and remitting it to the bond trustee, San Francisco has no obligation for the bond being issued by BAWSCA. All the Members who elect to participate in this bond issuance will collectively be liable for the debt service payments. Included in the Director’s deliberation and approval were the following key policy issues: City of Palo Alto Page 3 1) How should the surcharge be set to pay the new bonds debt service? Two different methods were considered: (a) a variable charge based the amount of water purchased during the year; or (b) a fixed charge amount regardless of how much water is used The first method appears equitable to Members in that it is based on water purchases or usage. The latter, however, would be appealing to bond buyers since each BAWSCA members’ debt obligation would be fixed for the duration of the bonds. The Directors approved a method that incorporates both approaches, a “Fixed Volumetric” approach. This approach sets a fixed allocation each year and reconciles the following year based on how much water each agency actually purchased from San Francisco. It is expected that this approach will be positively received by the bond buyers and rating agencies resulting in reduced borrowing costs and increased savings to Members. Also, this method most closely reflects how the Capital Debt payments are currently being allocated to Members. The disadvantage is the greater administrative burden of reconciling 26 Members balancing accounts. 2) How should bond interest or debt service savings be allocated among Members? As mentioned, BAWSCA consists of 26 agencies, two of which are private agencies (California Water Service Company (CalWater) and Stanford University) which, based on water purchases, comprise approximately 24.3 percent of BAWSCA membership. This means that, due to federal tax law restrictions on prepayments, approximately a quarter of the bonds will have to be issued as taxable bonds with a higher interest rate or cost. The remaining bonds will be issued as tax-exempt. The taxable and non-taxable bonds raise an issue of how to allocate debt service savings to BAWSCA members. Two methods could be used: (a) use two different interest rates - one for 24 public agencies and another for the two private agencies); or (b) use a uniform blended interest rate for all Members which is consistent with San Francisco’s uniform wholesale water rates. City of Palo Alto Page 4 On the second policy issue the majority of the BAWSCA Board Policy Committee on October 10th and all of the Board of Directors present on November 15th approved using the blended interest rate (option “b”). This method was adopted for a variety of reasons. A primary rationale is that the San Francisco Public Utilities Commission (SFPUC) charges each BAWSCA member identical rates regardless of location and how much water is used. It was logical, therefore, to treat each BAWSCA member similarly in distributing the benefits of a refunding. Sharing the benefits of the refunding and showing a united agency of 26 members to rating agencies were important objectives of BAWSCA. The cost to the public agency members of allowing the refunding savings to the private agencies is slight, $0.0038 per hundred cubic feet or 0.1%. If a two rate structure had been approved, the customers of the two private members would effectively receive no or little savings from the refunding. The impact of using a blended interest rate is that the savings for the municipalities will be diminished somewhat because of the higher interest rate (estimated at up to one percent higher) on the taxable bonds and sharing saving from the tax exempt bonds with the private agencies. Under option “a”, discussed above, the municipalities would realize higher savings because of their tax exempt status. While public agencies are expected to save money under either approach, the private agencies, under a blended interest rate, are estimated to realize additional present value (PV savings) over 21.5 years of $5.9 million. Conversely, by using the blended rate the remaining public agencies would forego $5.9 million in savings over the life of the bonds. Palo Alto’s share of the foregone savings equals $0.6 million. Council retains the discretion to decide, based on its assessment of the value to the City and its water customers of using a uniform blended interest rate for all Members, to approve the BAWSCA Board Policy Committee’s recommendation and Director’s approval as described above. The table below shows the differences between a blended and non-blended rate. The Directors also approved additional costs necessary for a bond issuance. These included: contracts with the Financial Advisor, and Bond and Disclosure counsels. Rating agency and underwriter fees were also approved as well as selection of a Trustee. A “not to exceed” bond issuance amount of $385 million was approved. City of Palo Alto Page 5 BAWSCA also is in the process of negotiating a Prepayment and Collection Agreement with San Francisco which includes acknowledgement of receipt of prepayment of Capital Debt and provides a written pledge to use bond proceeds in a manner consistent with federal laws and regulations, use of bond proceeds in a way that doesn’t result in additional increases to wholesale prices for Members, and collection and enforcement of debt service surcharge to Members and remittance to trustee. Details of the proposed bond structure can be found in Attachment B. Resource Impact As stated, a preliminary analysis, based on expected interest rates in December, indicates Palo Alto PV total savings (over 21.5 years) range from $1.6 million to $2.7 million and annual savings from $73 thousand to $125 thousand. Actual savings will depend upon prevailing rates at the time the bonds are sold. Savings for all BAWSCA members must exceed a net present value of three percent or about $10.6 million for the bond sale to occur. Policy Implications The traditional City approach has been to issue or refinance City bonds with competitive bids in the open bond market. Recently, the City has departed from this practice for the Golf Course and University Avenue Parking Assessment District bonds. The former were refinanced using a private placement and the latter were issued using a negotiated structure similar to the one BAWSCA is proposing. Due to the complexity of issuing bonds for 26 agencies (two being private agencies) and negotiating a prepayment agreement with San Francisco, BAWSCA is using an Underwriter for a negotiated sale. Timeline September-November, 2012 Finalize transaction structure Negotiated agreement with San Francisco Meet with rating agency regarding preliminary credit rating October 10, 2012 Board Policy Committee discussion November 15, 2012 Board action approving bond documents and delegated authority to execute documents subject to specified conditions November – December, 2012 BAWSCA members adopt participation resolutions San Francisco approval of agreement with BAWSCA December, 2012 Receive final credit ratings January, 2013 Marketing, pricing, and closing bond issuance City of Palo Alto Page 6 Environmental Review The adoption of this resolution does not meet the California Environmental Quality Act’s definition of a “project” pursuant to Public Resources Code Section 21065, thus no environmental review under CEQA is required. Attachments: Attachment A: Resolution.of the City Council Authorizing the Making of a Prepayment Under the Water Supply Agreement with the City and County of San Francisco and Related Matters (PDF) Attachment B: Proposed Bond Structure (PDF) Attachment C: BAWSCA Board of Directors November 15, 2012 Meeting Notes (PDF) Attachment D: BAWSCA Board of Directors November 15, 2012 Presentation (PDF) Attachment E: BAWSCA Board Policy Committee October 10, 2012 Meeting Notes (PDF) NOT YET APPROVED 1 121204 sh 6051847 Resolution No. _______ Resolution of the City Council of the City of Palo Alto Authorizing the Making of a Prepayment Under the City's Water Supply Agreement with the City and County of San Francisco and Authorizing the City's Participation in a Bond Issuance by the Bay Area Water Supply and Conservation Agency to Finance the Prepayment RECITALS A. The City and County of San Francisco (“San Francisco”) and wholesale water customers of San Francisco in Alameda County, San Mateo County and Santa Clara County (the “Wholesale Customers”), including the City of Palo Alto (the “City”), have entered into a Water Supply Agreement, dated July 2009 (the “WSA”), providing for the sale of water by San Francisco to the Wholesale Customers; B. The City and other Wholesale Customers are members of the Bay Area Water Supply and Conservation Agency (“BAWSCA”); C. Pursuant to the terms of the WSA, the cost of water paid by the Wholesale Customers (including the City) includes a component designed to provide San Francisco capital cost recovery for existing regional assets (“ERA Payments”); D. The WSA provides that the Wholesale Customers, acting through BAWSCA, may prepay the remaining principal balance of the ERA Payments, in whole or in part; E. Substantial savings over the term of the WSA may be achievable through the prepayment through BAWSCA (the “Prepayment”) of the ERA Payments to be made by Wholesale Customers participating in such Prepayment (the “Prepayment Participants”; F. BAWSCA proposes to finance the Prepayment through an issuance of revenue bonds (the “Bonds”) by BAWSCA; G. To pay debt service on the Bonds, to maintain required reserves and to satisfy BAWSCA’s other obligations related to the Bonds, BAWSCA will impose charges on Prepayment Participants, which may be in the form of surcharges on water sold by San Francisco to Prepayment Participants under the WSA (the “Surcharge”); H. The Surcharge is expected to be payable by the Prepayment Participants to San Francisco (for delivery to BAWSCA) together with the Prepayment Participants’ other payments to San Francisco under the WSA; I. The issuance of the Bonds and the making of the Prepayment are subject to a variety of conditions, including a determination by BAWSCA that savings for Prepayment Participants can be achieved thereby; and NOT YET APPROVED 2 121204 sh 6051847 J. This City Council has determined that it is in the best interests of the City for the City to be a Prepayment Participant. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The City hereby elects to be a Prepayment Participant and hereby authorizes BAWSCA to make the Prepayment on behalf of the City. SECTION 2. The Director or Assistant Director of Administrative Services of the City are each, acting individually, hereby authorized and directed to take, for and on behalf of the City, all such actions by the City as shall be necessary to enable BAWSCA to issue and sell the Bonds and make the Prepayment, including, without limitation, the following: (A) Certify that the Prepayment has been duly authorized by the City and will not violate any law or agreement (including agreements respecting obligations providing for the issuance of debt secured by the revenues of the City’s water enterprise); (B) Certify that payment of the Surcharge by the City will constitute an operation and maintenance expense of the City’s water enterprise payable from the revenues of the City’s water enterprise prior to the payment of obligations payable from the net revenues of the City’s water enterprise; (C) Certify that any information respecting the City and the City’s water enterprise and the financial and operating data respecting the City’s water enterprise included or incorporated by reference in the Official Statement delivered by BAWSCA in connection with the sale and issuance of the Bonds is true and correct; and (D) Execute and deliver any continuing disclosure undertaking, or agreement to assist BAWSCA in connection with any BAWSCA continuing disclosure undertaking, required in connection with the sale of the Bonds. SECTION 3. All actions heretofore taken by any officers, employees, or agents of the City with respect to the Prepayment and the Bonds are hereby approved, confirmed and ratified; and any such other officers, employees, or agents of the City as may be authorized by City Manager and/or Director or Assistant Director of Administrative Services are hereby authorized and directed, for and in the name of and on behalf of the City, to do any and all things and take any and all actions, which they, or any of them, may deem necessary or desirable to carry out, give effect to and comply with the terms and intent of this Resolution. SECTION 4. The adoption of this resolution does not meet the California Environmental Quality Act’s definition of a “project” pursuant to Public Resources Code Section 21065, thus no environmental review under CEQA is required. // // NOT YET APPROVED 3 121204 sh 6051847 SECTION 5. This Resolution shall take effect immediately upon its adoption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Sr. Deputy City Attorney City Manager _____________________________ Director of Administrative Services (in millions) Total Par Amount 343.6$ Premium 37.6 Total Bond Proceeds 381.2$ Tax‐Exempt Bond Proceeds 268.3$ Taxable Bond Proceeds 85.9 Total Proceeds Paid to San Francisco 354.2 Capitalized Interest Initial Interest Payment Funded by Bond Proceeds 11.9 Cost of Issuance 1.9 Reserves (aka Stabilization Fund)Equivalent to Half Year's Debt. Svc. Payment 13.2 Total Bond Proceeds Uses 381.2$ Estimated Present Value (PV) Savings for All Members $20.0 to $34.0 Estimated Avg. Annual Savings for All Members $1.0 to $2.1 Estimated Palo Alto's PV Savings $1.6 to $2.7 Estimated Palo Alto's Annual Savings $73 thousand to $125 thousand Term Through 2034 or 21.5 years Bond Duration Bond Proceeds Sources Bond Proceeds Uses Financial Advisor, Bond and Disclosure Counsel, Rating Agency, Underwriter's Fee, Trustee, etc. Attachment B Proposed Bond Structure Bond Proceeds Capital Debt Prepayment Funds Savings Bay Area Water Supply and Conservation Agency ''A multicounty agency authorized to plan for and acquire supplemental water supplies, encourage water conservation and use of recycled water on a regional basis." [Bay Area Water Supply and Conservation Agency Act, AB2°58(Papan-2oo2)} Board of Directors Meeting November IS, 2012 otential Bond Issuance to tJrepay Capital Debt Owed to SFPUC Objective: Help water customers by lowering the cost of water purchased from San Francisco Items for consideration and action this evening: #7 A: Policy Decisions #7B: Actions Needed to Proceed #7C: Approval of Financing Structure and Bond Documents #7D: Review of Investment Policy and Proposed Modifications rt Team Analyzed Alternatives, Structured Bonds, Prepared Documents • KNN -Financial advisor • Orrick -Bond counsel and disclosure counsel • Goldman Sachs -Senior Underwriter • De La Rosa & Co -Co-senior Underwriter • Stradling, Yocca, Carlson & Rauth - Underwriter's legal counsel • Hanson Bridget -General counsel • BAWSCAstaff ~ _AN&~~&~~ 11/15/2012 1 #7 A. Policy Decisions Issues: 1. How should the surcharge be set to pay the debt service? 2. How should bond interest be allocated among agencies? A. Policy Decision 1: "Fixed Volumetric" Surcharge Setting Method Issue: 1. How should the surcharge be set to pay the debt service? Recommended Approach: • Set a surcharge for each agency in proportion to a prior year's purchase of water from the SFPUC • Adjust the surcharge the next year to reflect actual purchases by the agency ("true-up") ~ -....... ...,.~ 11/15/2012 2 A. Policy Decision 1: "Fixed Volumetric" Surcharge Setting Method Advantages of this Approach: • This method minimizes risk to bond buyers, reducing the cost of borrowing and increasing the amount to be saved • This method most closely reflects how ongoing payments would be shared by agencies if the bonds were not issued Disadvantages of this Approach are Manageable: • Administratively, this approach requires BAWSCA maintain 26 separate "balancing accounts" Without the Annual True-up, Agencies Could Pay More or Less Than Their Proportionate Share Three examples: • Variable Purchases: Agency's percentage of water purchases has no trend • Rising Purchases: Agency's percentage of water purchases increases • Falling Purchases: Agency's percentage of water purchases decreases 20% 1 -VariablePurthases-RsingPurohases-FallingPurohases 10% 0% .1[1% 1 Under:Cbame ·20% 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 IMIIII!EA _,..VIIIitI/It"WQ __ , ~!I It 't 11/15/2012 3 With the Annual True-up, Agencies Ultimately Pay Their Proportionate Share Result: Cumulative payments more closely reflect the payments under the base case • Variable Purchases: Agency's percentage of water purchases has no trend • Rising Purchases: Agency's percentage of water purchases increases • Falling Purchases: Agency's percentage of water purchases decreases 20% -Variable Purchases -Rlslng Purchases -FaDing Purchases 10% O%~"~~"~~~=-~~""~~~ ·10% Under=Cbarge -20% 2014 2016 2018 2020 2022 2024 2026 2028 2030 Policy Decision #1 Recommendation 1. "Authorize the CEO/General Manager to include a fixed volumetric surcharge setting methodology in the bond structure" ......:A. _AM ............ a:~ 11/15/2012 4 A. Policy Decision 2: Charge All Agencies a Blended Interest Rate Issue: 2. How should bond interest be allocated among agencies? BAWSCA must issue a portion bonds as taxable to satisfy federal tax restrictions BAWSCA examined two methods for allocating the debt service among members: (1) Two different interest rates (2) A uniform blended interest rate for all participants ow Much Taxable De Issued? ~. The amount depends on how much water privately- owned agencies would purchase of the bond term Breakdown of FY 2011-12 water purchases: o 75.7% Publicly-owned agencies 024.3% Privately-owned agencies [22.8% CalWater + 1.5% Stanford] 11/15/2012 5 ____ ._.,.: Historical SF Wholesale Water Rates are Uniform • SFPUC charges aU agencies at the same "postage- stamp" rate in dollars per hundred cubic feet of water • SFPUC has issued taxable commercial paper for a portion of the WSIP projects • SFPUC does not separate those taxable expenses out or charge CalWater and Stanford at a higher rate • SFPUC's wholesale water rate includes recovering the old capital debt using a uniform 5.13% interest rate Context: Effect of a Blended Interest Rate on Privately-Owned Water Agencies • Would a uniform or blended surcharge generate financial gain for either CalWater or Stanford at the expense of the public agencies? No • Why? These costs are passed through to water rate payers without any mark-up o CalWater cannot mark up operating costs under California Public Utilities Commission regulations o Stanford University is a tax-exempt institution. Its water program is not designed to, and does not, make a profit 11/15/2012 6 Rate on Water Customers • If the incremental cost of taxable debt were allocated only to CalWater and Stanford o Those costs would be passed through to their residential and business customers o Those customers would bear a higher cost than public agency customers and enjoy less of the savings • Public agency customers would pay slightly more 0$0.0038 per hundred cubic feet (wholesale), or 0.1 % a.NSCA _~~~a~ Blended Rate Results in a Uniform Distribution of Savings to Water Customers Breakdown of FY 2011-12 water purchases: 75.7% Publicly-owned agencies III 24.3 % Privately-owned agencies III Blended Rate Savings II Public Agencies II CalWater & Stanford Non-Blended Rate Savings II Public Agencies II CalWater & Stanford 11/15/2012 7 A. Policy Decision 2: Interest Rate -Recommended Action 2. "Authorize the CEO/General Manager to use a blended interest rate on the allocation of debt service" The Board Policy Committee voted to recommend a blended interest rate be approved by the Board ........ "'---"'- #7 A. Recommended Board Actions 1. Authorize the CEO/General Manager to include a fixed volumetric surcharge setting methodology in the bond structure 2. Authorize the CEO/General Manager to use a blended interest rate on the allocation of debt service (Recommended by the Board Policy Committee) ........ ... ---- 11/15/2012 8 #7B. Actions Needed to Proceed The BPC recommends that the Board: 1. Authorize the CEO/General Manager to amend the contract with KNN for their financial advisory services until the completion of the financing 2. Authorize the CEO/General Manager to appoint a bank as the Trustee for the bonds The CEO recommends that the Board also: 3. Authorize the CEO/General Manger to appoint Morgan Stanley and Citigroup Global Markets as Co-Managing Underwriters for the bond issuance 4. Authorize a maximum underwriters' discount of 0.0375% ($3.75 per $1,000 in par amount or "per bond") -1. Authorize KNN Amendment IIAIIUSCA iU$Am~~a~ 1. Authorize the CEO/General Manager to amend the contract with KNN for financial advisory services until the completion of the financing The fee for KNN's services will be $155,000, which will include services provided since August 1,2012 Payment to KNN would be contingent on issuing bonds and would be paid using bond proceeds IIAIIUSCA _~W¥tu~SJ~ 11/15/2012 9 2. Authorize Appoinlfnent of Trustee 2. Authorize the CEO/General Manager to appoint a bank as the Trustee for the bonds KNN requested and received proposals from six qualified banks The Bank of New York's proposed fee was the lowest The Bank of New York has one of the most active trustee practices in the country . Authorize Appol Co-Managing Underwriters ·IJNIUIICA "'---"- 3. Authorize the CEO/General Manger to appoint Morgan Stanley and Citigroup as Co-Managing Underwriters for the bond issuance • Additional underwriting firms are appropriate to ensure the best possible distribution and the lowest interest rate for an issuance of this size • These two firms ranked highest after the senior managers 11/15/2012 10 -4. Authorize Maximum Underwriter's Discount 4. Authorize a maximum underwriters' discount of 0.0375% ($3.75 per $1,000 in par amount) • Anticipated an underwriting discount of $2.75 per bond based on the original proposals • Goldman Sachs submitted a revised proposal for an increase of total discount from $2.75 to $3.45 • The bond authorization provides ability to increase the discount to accommodate changing market conditions • The actual discount rate will likely be lower BIWIIBCA "'---"- #7B. Actions Needed to Proceed The BPC recommends that the Board: 1. Authorize the CEO/General Manager to amend the contract with KNN for their financial advisory services until the completion of the financing. 2. Authorize the CEO/General Manager to appoint a bank as the Trustee for the bonds. The CEO recommends that the Board also: 3. Authorize the CEO/General Manger to appoint Morgan Stanley and Citigroup Global Markets as Co-Managing Underwriters for the bond issuance. 4. Authorize a maximum underwriters' discount of 0.0375% ($3.75 per $1,000 in par amount or "per bond"). ~ -,.....,.....,.~.--.... 11/15/2012 11 c. Approval of Financing Structure and Bond Documents 1. Approve the issuance and structure of a bond issue for an amount not to exceed $385 million with a term ending no later than December 31,2034 2. Approve the substantially final forms of financing documents 3. Authorize the CEO/General Manager to execute the financing documents subject to the following criteria: a. Realize net present value savings of not less than 4% b. San Francisco provides a written pledge to use bond proceeds in a manner consistent with federal laws and regulations ~. #7C-1. Proposed Bond Structure (Values reflect October 29 market conditions and other assumptions, in millions) Bond Proceeds Prepayment Funds Capitalized Interest Cost: (iT I$$uooce Reserves Savings Total Par Amount Premium Total Proceeds Tax-Exempt Proceeds Taxable Proceeds Total Proceeds Paid to SFPUC Interest Funded by Proceeds Cost of Issuance (From Bond Proceeds) PV Savings for All Members over Bond term Avg Annual Savings for All Members l $343.6 ~ Notto ($38iC exceed $385M L $268.3'\" I $85.9 ) \. $354.2/ ~ 11/15/2012 12 . Substantially Fina- Financing Documents • Revenue Bond Indenture • First Supplemental Indenture • Continuing Disclosure Certificate • Preliminary Official Statement • Prepayment and Collection Agreement with San Francisco • Bond Purchase Agreement .......... "'--"- repayment and Collection Agreement with CCSF -under negotiation • SF acknowledges receipt of prepayment • SF acknowledges actions to be taken for non- participating members • SF to collect and enforce payment of surcharges and remit to Trustee • SF to comply with tax restrictions on use of proceeds • SF not to apply proceeds in a way that results in additional increases to wholesale revenue requirement .......... _,..,..,.8IiIt*t.CIMIt I ..., 11/15/2012 13 -3. Criteria for C Financing Documents a. Net present value savings of not less than 4% (or about $14.2 million) over the term of the bonds The BAWSCA Financing Team recommends a net present value savings of not less than 3% (or about $10.6 million) b. San Francisco must provide, in advance of receiving any funds, a written pledge to use bond proceeds in a manner consistent with federal laws and regulations This is accomplished by the Prepayment and Collection Agreement with CCSF ~ . Approval of Finan~cTng Structure and Bond Documents 1. Approve the issuance and structure of a bond issue for an amount not to exceed $385 million with a term ending no later than December 31,2034 2. Approve the substantially final forms of financing documents 3. Authorize the CEO/General Manager to execute the financing documents subject to the following criteria: a. Realize net present value savings of not less than 4% b. San Francisco provides a written pledge to use bond proceeds in a manner consistent with federal laws and regulations I Adoption of Bond Resolution by roll call vote I a.NBCA _AM.,........,.~ 11/15/2012 14 . Review of I nvestmen and Proposed Modifications • The previous review occurred on July 21, 2011. • Recommend restricting investment of bond proceeds: 1. Federal Securities, meaning direct and general obligations of the United States of America, such as Treasury bonds, notes and bills; 2. Money Market Mutual Funds highly rated by S&P and Moody's; 3. Certificates of Deposit. • Board could expand the types of permitted investments over the life of the bonds, if desired . Recommended Invesfments for Bond Proceeds -Continued • This recommended approach is more conservative than all public agencies we surveyed • The only other recommended change to the Policy is to note that FDIC insurance coverage up to $250,000 has been permanently extended to deposits in banks and savings associations • An investment criterion of "social responsibility" to be considered at future Board Policy Committee meeting 11/15/2012 15 . Review of Investment Policy and Proposed Modifications Recommended Action: • To approve the revised modifications to the Investment Policy (attached to staff report) IJIMR'A ----,,- Next Steps and Schedule September-· Finalize transaction structure November · Negotiate agreement with San Francisco · Meet with rating agency regarding preliminary credit rating October-· Board Policy Committee Discussion November · Board action approving bond documents and delegated authority to execute documents subject to specified conditions November-· BAWSCA members adopt participation resolutions December · San Francisco approval of agreement with BAWSCA December Receive final credit ratings January, 2013 Market, price and close bond issue 11/15/2012 16 City of Palo Alto (ID # 3261) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: TheatreWorks Partnership Agreement Title: Approval of the Renewal of a Public-Private Partnership Agreement Between the City of Palo Alto and TheatreWorks for the use of the Lucie Stern Community Theatre From: City Manager Lead Department: Community Services Recommendation Staff requests that Council approve the renewal of a public-private partnership agreement between the City of Palo Alto and TheatreWorks (Attachment A) for the use of the Lucie Stern Community Theatre for a one-year term. Background The Lucie Stern Community Theatre is used by three local theatre companies which produce approximately 15 productions annually. These three companies (TheatreWorks, the Palo Alto Players, and West Bay Opera) partner with the Community Services Department to produce these shows, which foster the cultural and artistic needs of Palo Alto residents and visitors. The City and these companies each benefit from continuing this relationship. TheatreWorks was founded by San Francisco Bay Area native Robert Kelley in 1970 as a theatre arts workshop for teenage and college students. Chartered by the City of Palo Alto to produce work that would reflect the concerns of the community during an unsettled period in American life, the company produced thirteen wholly original works for the stage in its first three years. Although company actors initially performed in a variety of venues, a tradition was established of staging several shows each season at the Lucie Stern Theatre. City of Palo Alto Page 2 When the Mountain View Center for the Performing Arts opened in 1991, the company began producing five main stage productions there each season, along with three productions each season at the Lucie Stern Theatre in Palo Alto. This schedule continues today. Discussion TheatreWorks’ usage of the Lucie Stern Community Theatre is governed by a public/private partnership agreement. Production scheduling is done interdependently between the three groups, and as the cost of relocating a theatre company is prohibitively high, there exists nearly no opportunity for changing the companies that the Lucie Stern Community Theatre serves. Therefore, staff recommends that the City Council approve renewal of the existing public private partnership. The key terms of this agreement are discussed below: Term: The new agreement is for one year. If it is approved, it will have taken effect on September 1, 2012 and will terminate on September 1, 2013. Similar agreements are intended for subsequent years. Revenue: In accordance with the Municipal Fee Schedule and in exchange for providing facility usage, TheatreWorks shall continue to remit to the City a $2/00 surcharge for each ticket sold. This fee is effectively passed on to patrons and is applied to all subscription, group, individual, promotional, and other tickets sold. Complimentary tickets are excluded, and the sum of the surcharge revenue for each production is due to the City within 30 calendar days after the closing of the production. Among other functions, the proposed agreement acts as a revenue contract which governs the application, collection, and accounting of associated revenue. Responsibilities of City: The contract outlines the responsibilities of the City, using the standard terms of public/private and joint-venture partnerships, including specifying goods delivery terms, notice requirements for contract termination, and affirming non-discrimination, insurance, and property guidelines. The City is also responsible for allowing and providing access to the Lucie Stern Community Theatre during designated hours, providing basic maintenance of capital equipment, monitoring production safety, and providing information regarding other scheduled facility uses (such as City-sponsored City of Palo Alto Page 3 events or private rentals). Responsibilities of Company: Additionally, the agreement stipulates the responsibilities of the theatre company, including their duty to abide by City and department policies and procedures (specifically including and as related to, without limitation, conduct in community centers, injury and illness prevention, sale of alcoholic beverages, operations, building emergency procedures, zero waste, and facility use). Other responsibilities include timely remittance of fees and surcharges, requirements for sufficient building supervision/staffing, recordkeeping of ticket sales and surcharge remittance for compliance with audits, and adherence to standard practices for facility security. This renewed agreement is substantially similar to previous agreement. The $2.00 ticket surcharge is consistent with the Municipal Fee Schedule adjustments effective 07/01/2012. Resource Impact No additional City resources are required as a result of the renewal of this agreement and it is anticipated that this partnership will lead to enhanced program and capital funding over the life of the agreement. Policy Implications This partnership would be categorized as a Joint Venture partnership under the City’s Public/Private Partnership Policy (Policy 1-25; Public Private Partnerships; Attachment B). The partnership with TheatreWorks furthers Policy C-7 of the Community Services element of the Comprehensive Plan: “Actively work with private, nonprofit, and public community service organization to avoid duplication and to coordinate the delivery of services like child care, senior services, and recreation” and Policy G-12 of the Governance element: “Continue and expand the opportunities for public and nonprofit organizations serving the City to provide information about themselves to the public.” Environmental Review This is not a project requiring environmental review under the California Environmental Quality Act. City of Palo Alto Page 4 Attachments: Attachment A - Theatre Works Contract (DOCX) Attachment B - Public-Private Partnership Policy (PDF) Page 1 AGREEMENT FOR PERFORMING ARTS SERVICES THIS AGREEMENT FOR PERFORMING ARTS SERVICES (“Agreement”) is made and entered into as of the 5th day of November 2011 by and between THE CITY OF PALO ALTO, a municipality chartered under the laws of the State of California (“City”) and THEATREWORKS, INC., a California nonprofit public benefit corporation, located at 1100 Hamilton Court, Menlo Park, California (telephone: 650-329-2519) (“Contractor”) (individually, a “Party” and, collectively, the “Parties”). In consideration of their mutual covenants, the Parties hereby agree as follows: 1. SERVICES: During the Term of this Agreement, as defined in Section 4 below, Contractor shall present that portion of Contractor’s 2012-2013 theatrical performances (the “Services”) that are produced at City’s Lucie Stern Community Center. 2. FACILITY: For purposes of this Agreement, the defined term “Facility” is deemed to mean those portions of the Lucie Stern Community Center comprising the theatre, lobby, green room, dressing rooms, scene shop, paint shop, flat storage, rehearsal hall and costume shop. 3. FEE: Pursuant to the Municipal Fee Schedule, the services to be performed under this Agreement constitute a “Class I” use of the Facility. 4. EXHIBITS: The Exhibits listed below are attached hereto and are incorporated herein by this reference. The Parties acknowledge that this Agreement shall have no force or effect unless all such Exhibits are attached hereto. Exhibit A: Responsibilities of Contractor Exhibit B: Responsibilities of City Exhibit C: General Conditions Exhibit D: TheatreWorks Addendum Exhibit E: Non-Discrimination Form Exhibit F: Proof of Liability Insurance Exhibit G: Municipal Fee Schedule 5. TERM: The services under this Agreement shall commence as of November 1, 2012 and shall terminate on November 1, 2013 (the “Term”). 6. COMPENSATION:During the Term, Contractor shall pay City: (a) Two Dollars ($2.00) for each ticket sold and (b) compensation for the Facilities Attendant present at each performance, at prevailing rates as set forth in the Municipal Fee Schedule, a copy of which is attached hereto as Exhibit G. Contractor shall send payment of all invoices to City, Attn: Project Manager. 7. HOLD HARMLESS: Contractor shall indemnify, defend and hold harmless City, its Council Members, officers, employees and agents from and against any and all demands, claims or liability of any nature, including wrongful death, caused by or arising from the acts, errors, omissions, willful misconduct, or gross negligence during the Term of Contractor, its officers, directors, employees, contractors or agents, except to the extent such demands, claims or liability of any nature arises from the acts, errors, omissions, willful misconduct, or gross neglignece of Page 2 City, its Council Members, officers, employees, contractors or agents. 8. ENTIRE AGREEMENT: This Agreement and the terms and conditions set forth in the attached Exhibits represent the entire agreement between the Parties with respect to the Services. All prior agreements, representations, statements, negotiations and undertakings whether oral or written are superseded hereby. 9. QUIET ENJOYMENT: Contractor, upon payment of the consideration required hereunder and Contractor’s performance of all obligations of Contractor hereunder and Contractor’s observance of City’s policies referenced herein, shall and may peacefully and quietly have, hold and enjoy the Premises during the Term. IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRITTEN ABOVE THE City OF PALO ALTO, a municipality chartered under the laws of the State of California THEATREWORKS, INC., a California non- profit public benefit corporation By: __________________________________ By: __________________________________ Judge Luckey Phil Santora Its: PROJECT MANAGER AND REPRESENTATIVE FOR City Managing Director Address: P.O. Box 10250 Palo Alto, CA 94303 I.R.S. Number: 140-58-5007 Telephone: (650) 329-2519 City OF PALO ALTO APPROVALS: (ROUTE FOR SIGNATURES ACCORDING TO NUMBERS IN APPROVAL BOXES BELOW) City DEPARTMENT Funds Have Been Budgeted (1) PURCHASING & CONTRACT ADMINISTRATION INSURANCE REVIEW (2) APPROVAL OVER $25,000 (3) PURCHASING MANAGER APPROVAL OVER $25,000 APPROVAL OVER $85,000 City OF PALO ALTO BY:_____________________________________ City ATTORNEY ATTEST: BY:________________________ _______________________ MAYOR City CLERK Page 3 EXHIBIT A RESPONSIBILITIES OF CONTRACTOR (1) Abide by the policies/procedures established by City and City’s Arts and Sciences Division and the Department of Community Services for the use of City facilities, equipment, costumes, props, furniture, scenery and other production elements. These shall include, but are not limited to, Regulations of the City of Palo Alto Regarding Prohibited Conduct In Community Centers and Theaters (Appendix A), the City of Palo Alto Injury and Prevention program (Appendix B), Policy for Sale of Alcoholic Beverages (Appendix C), Operations Manual (Appendix D), Safety Procedures and Guidelines (Appendix E), Building Emergency Procedures (Appendix F), procedure for adjusting the Forestage height, including use of the Scissor lift (Appendix G), House Manager's Guide (Appendix H), Zero Waste Plan (Appendix I), and Costume Room Guidelines (Appendix J). Follow safety procedures for the use of power and hand tools, mechanical lifts, etc. including the use of safety goggles, ear protection, face shields, safety cables, outriggers, etc. (2) Obtain, supervise, and pay all necessary related fees for the services of all professional assistance needed to produce Contractor’s productions (the “Productions.”) Such assistance may include, but is not limited to the following: Production Directors, all Designers, Carpenters, Painters, Production Assistants, Music Directors, Choreographers, Musicians and other Front of House, Artistic or Administrative personnel. (3) Pay all fees and costs for materials, supplies, scripts, royalties, licenses and other fees and expenses connected with the Productions, including all make-up removal supplies. (4) Bear sole responsibility for the control and supervision of all production activities and personnel connected therewith, and notify all personnel of their obligations and responsibilities pertaining to their respective responsibilities. Have primary responsibility for building security when Contractor is occupying City facilities. (5) Provide Project Manager or his/her designee with a list of all pyrotechnic effects (including the use of open flames), all hydro technical effects, all use of fog or haze, all loud noises (e.g., gunshots), and all use of strobe lights at least twenty-one (21) days prior to first use on stage. No flames shall be permitted on stage without the required fire permits from City. Smoking by any of the actors on stage as an integral part of the Production is deemed a pyrotechnic effect. Safety precautions approved by a City Fire Inspector and Project Manager or his/her designee will be taken when smoking is occurring on stage, and the audience shall be notified beforehand that smoking, loud noises (e.g., gunshots) or use of strobe lights will occur on the stage. All Fire Department fees for “Open Flame Permits” and “Candles and Open Flames in Assembly Areas Permits” shall be the responsibility of Contractor. (6) Provide Project Manager with the rehearsal schedule, performance schedule, shop schedule and any requests for the use of City facilities (including but not limited to the Facility, rooms located in the Lucie Stern complex and the Lucie Stern Courtyard and patio) for any purpose. Space reservations should be made at least six (6) weeks in advance. Page 4 (7) Designate as Project Director for the length of this contract an employee or sub- contractor to manage or supervise all areas and items in this contract, including production, technical, house personnel and any and all support groups and to be Contractor’s liaison with Project Manager or his/her designee in all matters relating to the City in any way. (8) Arrange for auditions and casting for the Productions and have sole responsibility for the supervision and control of all performers. With respect to casting, Contractor shall have sole discretion to choose and approve the qualifications and select the cast. In personnel decisions, Contractor shall agree to and comply with the provisions of the City’s non- discrimination policy (Exhibit K). (9) Engage the services and train crew members in appropriate areas of theatre production activity and utilize crew members in a safe and effective manner in the presentation of the Productions. Contractor shall be solely responsible for the control and supervision of such participants and shall indemnify, defend, and hold harmless the City from and against any claims or liabilities arising from the acts or omissions of such personnel. All such personnel shall be deemed the sole agents and employees of Contractor and shall be notified by Contractor of this circumstance. (10) Exercise safe practices in the use of City facilities and equipment, maintain and clear work areas, and, within twenty-four (24) hours, report, on a form provided by City (Appendix K), information regarding accidents. Immediately report to Project Manager or his/her designee on a form provided by City any breakage, malfunction, deterioration or loss of any of the City’s resources (including musical instruments, tools, lights, sound equipment, props, curtains, etc.). Contractor shall not attempt repair of City equipment without prior consultation with the Project Manager. Contractor shall immediately discontinue any activity in which an unsafe or dangerous condition exists. Contractor shall train and supervise Contractor’s staff and volunteers on safe theatre practices and adhere to City’s safety procedures and guidelines. If, in the opinion of any City or Contractor employee, Contractor is conducting an activity in an unsafe manner, Contractor or its agents shall be informed and shall immediately discontinue such activity until such activity is able to be conducted in a safe manner approved by City staff. (11) Print in all publicity for the Productions, including, but not limited to, publications, mailings, flyers, posters, brochures, programs, and paid or public service advertising, the statement, "In cooperation with the City of Palo Alto Community Services Department Division of Arts and Sciences." In conformance with the Americans with Disabilities Act (ADA) of 1990 guidelines and requirements, Contractor shall bear responsibility for providing appropriate auxiliary aids, interpretive services and accommodations where they are necessary to achieve an equal opportunity for patrons to participate in and enjoy the benefits of public performances produced under the Agreement. Printed programs shall include the following statement required by the Americans with Disabilities Act: "Persons with disabilities who require information on 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: ADA Coordinator, City of Palo Alto, 650-463-4952 (Voice) or ada@Cityofpaloalto.org (Internet). Page 5 (12) Maintain its existence as an independent, non-profit corporation under the laws of the State of California. (13) Submit all signs or displays to be located on or in the Facility to Project Manager or his/her designee for approval at the first production meeting. All displays may be put up at load-in and must be removed during strike. Inside the Facility, no display materials may be placed upon stucco walls. Lobby displays may only be placed on the lobby display boards, and all fasteners must be removed at the time display is taken down. Nothing may be posted on the exterior walls or doors of the Facility or in the Stern courtyard, except for items in the display case and an approved production name sign hung from the theatre balcony. Marquee signs must be constructed of light weight material, and shall be secured in such a way that the sign cannot become dislodged by normal vibration or seismic activity. Signs shall be of a standard size no larger than ten feet in length and eight feet in height. All marquee signage must be attached to the theatre balcony with rigging so that the sign may be easily removed for limited periods during photography shoots, special events, or building maintenance. (14) Clean and clear the auditorium, stage, paint shop, scene shop, flat dock, and costume shop, green room, dressing rooms, rehearsal hall, hallways and outdoor areas adjacent to theatre and shop will be cleared. Disassemble and store, to Project Manager or his/her designee’s reasonable satisfaction, scenery, properties, and other production elements, within six hours after the final performance or on such other time schedule mutually agreed upon between Contractor and Project Manager or his/her designee. The stage shall always be returned to its basic set-up as established by Project Manager or his/her designee unless there is a mutual agreement with the incoming group that has been approved by Project Manager or his/her designee. All items on the STRIKE CHECKLIST are to be performed unless there is a mutual agreement with the incoming group that has been approved by the Project Manager or his/her designee. The Project Manager or his/her designee will sign a copy of the STRIKE CHECKLIST form at the completion of the strike to signify acceptance of clean and neat facilities. (15) Leave storage, paint, scene, and costume spaces clean and clear of Contractor’s materials other than those materials necessary for the ongoing maintenance and repair of the sets and costumes by the Monday following opening performance. (16) Leave all spaces clear, clean and orderly at the end of each use. Rehearsal Hall is to be cleared of all materials, except major set pieces and any rehearsal props, after each daily use. Rehearsal Hall is to be completely cleared within twenty-four (24) hours of final use. Kitchen, restrooms and dressing rooms are to be cleaned and cleared after each daily use. Trash, recycling and compostable materials are to be removed from all areas daily. Recyclables and compostable materials are to be placed in the recycling and composting carts near the trash dumpster and garbage and trash are to be placed into the dumpster. Contractor is required to reduce waste, reuse and recycle per the City’s Zero Waste Plan (Appendix I). Office space and hallways are to be kept continually clear, clean and orderly and neither space shall be used for the purpose of set, prop, or costume storage. Materials may not be left or stored any place out-of-doors overnight or when unattended by Contractor’s personnel. Page 6 (17) Enforce current regulations as established by City with regard to smoking, food and drink in City facilities (Appendix A). Contractor shall provide ushers at all previews and performances who will enforce such regulations. Smoking is not permitted inside any City facility. No person shall bring any animal into the theatre. This regulation shall not apply to service animals assisting individuals with disabilities or to animals in training to become service animals. Use of animals on the stage is subject to approval by Project Manager or his/her designee. Food and drink are not permitted in the auditorium, light/sound booth or on stage, unless used as part of a production scene. Food and drink shall be permitted only in approved areas such as the green room and lobby. Contractor shall clean up all food and drink containers daily after use. (18) Contractor will be responsible for cleaning the Lucie Stern hallway restrooms for weekend performances. (19) Comply with City TB test requirement for employees and volunteers of Contractor at any time the City Risk Manager deems it necessary. If minors are involved in the Production, State of California requirements for fingerprinting employees must be followed. (20) Comply with City sound ordinance levels for any outdoor activities, including load-in, strike, dismantling, or disposal. Shop doors facing Hopkins and Harriet Streets shall be closed between 8:00 p.m. and 8:00 a.m. (21) Pay any Attendant in addition to the Facilities Attendant referenced in Section 5 of the Agreement according to prevailing rates as set forth in the Municipal Fee Schedule attached as Exhibit G:, pursuant to the following (a) For a period of one (1) hour prior to until at least one half (1/2) hour after the completion of each Performance listed in TheatreWorks Production and Exclusive Use Schedule, 2011 – 2012 (ATTACHMENT 1). (b) For any Performance not included in ATTACHMENT 1, Contractor may add additional performances of the Productions listed in ATTACHMENT 1 upon thirty (30) days’advance notice to City. (c) When using other City facilities at the same time as a Performance listed in ATTACHMENT 1. (22) Provide house manager and ushers for every Performance or event whenever the public is in attendance. Contractor shall permit only persons who have been trained in theatre emergency, safety and use procedures to usher. Contractor shall submit a list of its trained personnel to Project Manager prior to public performances for each Production. Ushers must be available to assist patrons under all circumstances and must be aware of and able to assist disabled persons. Contractor’s House Manager and ushers must also be available to assist in emergency situations throughout the entire Performance until audience has left the theatre. Ushers must ensure that wheelchairs, walkers, etc. are not blocking any of the aisles or exits. Ushers shall return seats to the upright position and remove litter from the auditorium and restrooms at the conclusion of each performance. (23) Install and/or remove the removable auditorium seats in designated areas to Page 7 accommodate wheelchair patrons and as required due to the needs of the Production. (24) Remove from the Facility, at the conclusion of each Production, costumes, properties and sets created by Contractor with Contractor-owned materials, which costumes, properties and sets will remain the property of Contractor. All office equipment, construction tools, special effects and lighting equipment purchased and owned by Contractor will remain the private property of Contractor and City assumes no responsibility or liability for the loss or maintenance of such materials. All equipment, instruments, costumes and any other materials rented, borrowed or owned by any subcontractor, agent or person for Contractor is the responsibility of Contractor and/or its subcontractors, and City assumes no responsibility or liability for their maintenance or loss. Contractor assumes all liability and responsibility for any default on Production expenses. (25) Replace or repair or cause to be replaced or repaired by factory authorized technicians City owned equipment, instruments or materials identified by Project Manager or his/her designee as having been lost, damaged or destroyed by an agent of Contractor. A written report must be made on a City form whenever City equipment is lost, damaged, or destroyed by Contractor. (26) Upon written application to Project Manager or his/her designee and upon express approval and written authorization of Project Manager or his/her designee, use City- owned properties, sets, costumes, scenery, furniture and equipment for Productions not scheduled in the Agreement. Approval, if any, shall be given to Contractor in writing. In the event any of such items are damaged or destroyed, Contractor shall bear responsibility for the repair or replacement of same items to the reasonable satisfaction of Project Manager. (27) Upon written application to Project Manager or his/her designee at least thirty (30) days prior to the applicable date, and upon express approval and written authorization of Project Manager or his/her designee, may use the Facility for classes, camps or workshops. Approval, if granted, shall be delivered to Contractor in writing. No such activity will be advertised or promoted until it has been expressly approved by the Project Manager. (28) Comply with all State and City laws relating to the sale and consumption of alcoholic beverages. Alcohol is permitted at the Facility if approved by Project Manager. Unless otherwise specifically permitted and pursuant to City policy, the only alcoholic beverages that may be sold or served at City facilities are wines, including champagne and sparkling wine. If alcoholic beverages are to be sold or distributed free of charge, Contractor must possess a State A.B.C. license. A copy of Contractor’s permit for the sale or distribution of alcoholic beverages shall be provided to Project Manager. Proof of liquor liability insurance where City is named as co-insured with liability of at least One Million Dollars ($l,000,000.00) shall be required. Permits are to be displayed as required by law. It is the responsibility of Contractor to ensure that no alcoholic beverage is served to a minor. Identification must be checked if the person appears to be under thirty (30) years of age. After each performance, Contractor shall remove all items, including cups, glasses, bottles, napkins and food from the lobby and other areas within the Facility as well as the courtyard. Contractor is required to adhere to City’s Recycling and Zero Waste Program (Appendix I). Page 8 (29) Shall cause to have present at the Facility at all times when Contractor or any of its employees, subcontractors or volunteers is in the Facility one of Contractor’s designated and CITY approved key and/or proximity card holders. Any exceptions to the foregoing requirement must be approved, in writing, by Project Manager or his/her designee. Any exceptions must be approved by Project Manager or his/her designee in writing. (30) Prevent any modifications of or to the Facility. Contractor may not install or attach anything in or on the Facility without having first submitted a written request to Project Manager and having received written permission from Project Manager or his/her designee. The approval of Project Manager does not relieve Contractor from any responsibility to obtain necessary City permits or Building Department approvals for the modification. Should Contractor violate the provisions of this Paragraph (30), Contractor shall be charged for all repairs necessary to restore the Facility to its original condition and for any additional costs arising from such violation. (31) Immediately report to the police any incidents of a criminal or suspicious nature occurring on City property, and notify Project Manager or his/her designee within twelve hours. If initial notification is verbal, Contractor must subsequently submit the information in writing to Project Manager or his/her designee on a form provided by City. (32) Ensure that the doors to the Scene Shop, Rehearsal Hall, and Costume Shop, as well as any other exterior access doors to any area of the Facility, are not left open, unlocked or left with the locking mechanism disabled, even if only briefly, at any time when the immediate area secured by the door is unoccupied by Contractor. Failure to do this may result in the imposition of greater restrictions imposed on Contractor for access to the Facility, including the possible forfeiture of keys/proximity cards by Contractor and/or restricted access times. (33) Complete a City Report of Accident/Property Damage report (Appendix K) for any and all accidents, injuries or property damage if a City employee is not present to fill out the report. (34) Operate and conduct business in compliance with City’s Zero Waste Plan (Appendix I) for all activities including, but not limited to, set construction and strike, food and beverage service, and office activities. The City Recycling Program department can assist with resources for achieving this goal. The goal is to send as little waste to landfill as possible through waste reduction, reuse and recycling. To achieve this goal Contractor must first reduce waste whenever possible. (35) Avoid the use for food/beverage service of disposables, including, but not limited to, styrofoam and other plastics. Reusable food/beverage service ware should be utilized to the maximum extent possible. Where a reusable food/beverage service option is not available, choose items that are recyclable. For concessions, choose product packaging that is recyclable. (36) Practice reuse before, during and after Production. A list of reuse resources will be provided to avoid the disposal of construction materials, sets and props. Contractor must recycle construction debris from set materials (e.g. wood, metal). Page 9 (37) Recycle all materials included in the City’s Recycling Program including paper (all types), plastic containers #1-#7, cardboard, glass bottles and jars, and metal cans. Compostable materials will be disposed of in designated compost waste receptacles. Page 10 EXHIBIT B RESPONSIBILITIES OF CITY (1) Allow Contractor the use of the Facility Rehearsal Hall, Costume Room, Scene Shop, Paint Shop, Stage, Auditorium, Light/Sound Booth, designated work space, etc. as scheduled in ATTACHMENT 1 for the preparation and presentation of Productions performed under this agreement provided that Contractor submits specific rehearsal schedules, performance schedules and shop use schedules. Any use of City facilities and equipment other than those listed in the Agreement and the Exhibits thereto, which facilities and/equipment are nonetheless required to allow Contractor to perform its Services hereunder are subject to a different contract between City and Contractor. (“Non-Facility Contracts”). (2) Allow the use of the auditorium and the stage for performances and brush-up rehearsals on the following schedule: No performance shall begin earlier than 9:00 a.m. nor end later than midnight. In no event shall Contractor conduct rehearsals or other activities, or otherwise occupy City facilities from 12 midnight to 8:00 a.m. unless prior written permission is obtained from Project Manager or a designated employee of City is on site. Contractor shall observe all facility security rules and regulations as established by City (Appendix A). (3) Allow the use of the stage and the auditorium prior to the opening night of the Productions according to the production schedule set forth in ATTACHMENT 1. Allow the use of the rehearsal hall, box office, scene shop, paint shop and costume shop according to the schedule as set forth in ATTACHMENT 1. Additional facility use may be provided as specified in item (Exhibit B (1); Exhibit A (27)) above; however, priority use of the room will always be given to actual rehearsals of productions covered by a contract with City. City reserves the right to allow other uses of space within the Facility when not in actual, scheduled use by Contractor. (4) Allow Contractor to use all operational production equipment in City’s inventory as requested by Contractor and approved in writing by City. Contractor takes such equipment "as is" and is responsible for ensuring that such equipment is in a safe condition prior to use and is returned in working condition at the conclusion of its use or of the Production. (5) Monitor all aspects of production with respect to safety issues (Appendix E). If Project Manager or any designee(s) deem(s) that any procedure followed by Contractor is unsafe, he or she has the authority to immediately stop such procedure. City and Contractor will work together to prevent or quickly mitigate any fire hazards or any items identified by the Fire Department during facility inspections. (6) Provide persons designated by Contractor and approved by Project Manager or his/her designee with keys, proximity cards (up to a maximum of six), and alarm codes for access to the Facility for the sole purpose of carrying out the requirements of the Agreement. Keys, proximity cards, and alarm codes shall not be loaned or transferred and shall be used only by the designated persons. In the event that Contractor fails to properly open or lock and secure City facilities leading to a false alarm call-out or leaves Page 11 areas of the facility unlocked and unattended, a Two Hundred Dollar ($200.00) penalty shall be paid to City on each such occasion. In the event that a designated key holder loses any key or proximity card issued by City, Contractor shall be assessed a Seventy- Five Dollar ($75.00) replacement charge for each key or proximity card or pay for the cost of rekeying or reprogramming the locks of the facility if circumstances indicate it as determined in City’s reasonable judgment. Contractor will be responsible and held accountable for all personnel, properties and activities of Contractor. (7) Have the right, with no notice, to suspend the Agreement if the building should be declared uninhabitable for reasons of safety by the proper authorities. (i.e. if the building should be damaged in an earthquake and be declared unsafe for occupancy). If there is an outbreak of pandemic flu or other medical emergency and places of public gatherings are closed, City will not assume any financial responsibility for loss of revenue by Contractor. If the Facility is not available due to earthquake, other disaster, or safety related issues, City will not assume any financial responsibility for loss of revenue by Contractor. (8) Have the right to borrow available Community Theatre-owned properties, sets, costumes and scenery for productions scheduled in this Agreement. Costumes, properties and sets created by Contractor with Contractor-owned materials will remain the property of Contractor, and shall be removed from the Facility at the conclusion of the production in which the materials are used. The Project Manager or his/her designee may, on a case- by-case basis, authorize exceptions. All office equipment, construction tools, special effects and lighting equipment purchased and owned by Contractor will remain the private property of Contractor and the City assumes no responsibility or liability for the loss or maintenance of such materials. All equipment, instruments, costumes and any other materials rented, borrowed or owned by any subcontractor, agent or person for the Contractor is the responsibility of the Contractor and/or its subcontractors, and the City assumes no responsibility or liability for its maintenance or loss. Page 12 EXHIBIT C GENERAL CONDITIONS (1) City. The Manager Arts-Children’s Theatre is hereby designated Project Manager for City, who shall render overall supervision of the progress and performance of this Agreement by City. All services herein agreed in this Agreement to be performed by City shall be under the overall supervision of Project Manager or his/her designee. Contractor shall go through Project Manager or his/her designee in all matters dealing with City policies, funding, facilities, equipment and other City departments outside the Facility. (2) Contractor. Contractor shall assign a single Project Director who shall have overall responsibility for the compliance of Contractor with the Agreement. Should circumstances or conditions subsequent to the execution of this Agreement require a different Project Director, Contractor shall notify City immediately of same. The Project Director shall be responsible for all actions of Contractor. The Project Director shall also be responsible for disseminating to appropriate personnel all communication and information from City. (3) Access. Contractor shall not prevent Project Manager, facility maintenance personnel, and others specifically designated by Project Manager from access to the Facility; provided, however, that City shall use its best efforts not to disrupt the activities of Contractor as permitted by the Agreement. The Project Manager and others specifically designated by Project Manager shall attempt to coordinate such access if possible. Notwithstanding the foregoing, except in the case of emergency or if they are present on the premises as members of the audience or specifically invited into the backstage areas of the theatre, Project Manager, facility maintenance personnel and/or others specifically designated by the Project Manager shall not enter the auditorium or backstage areas during public performances of a production. (4) Days Defined. The term "days" shall mean calendar days. (5) Qualifications. Contractor represents that it is qualified to furnish the Services described under the Agreement. (10) Ticket Sales: (a) Contractor’s budget for the Term of the Agreement is attached hereto, marked “ATTACHMENT 2” and incorporated herein by reference as though fully set forth herein. (b) Contractor shall be responsible for sale of season tickets and single tickets, depositing of revenue and reporting of revenue and expenditures, and shall place available tickets for each Production for sale at the theatre box office one hour prior to each performance. Until one (1) hour prior to the beginning of a Performance, Contractor shall not sell (a) seat numbers C1, C2, D1, D2, D3, and D4; (b) either (i) the block of seats T2, T4, T6, T8, T10, U2, U4, U6, U8 and U10 or (ii) the block of seats T1, T3, T5, T7, T9, U1, U3, U5, U7 and U9 for the purpose of making such seats available for the disabled; provided, however, that this Section 10(b) shall not apply to the sale of tickets for such seats to persons Page 13 who identify themselves as disabled when they purchase their ticket. (c) Contractor agrees the price of admission for the season shall be as set forth in ATTACHMENT 3. (d) Contractor shall remit to City a surcharge in the amount of Two Dollars ($2.00) for each and every ticket sold either through subscription, group, individual, promotional or any other means. The foregoing surcharge is due within (thirty) 30 calendar days of the closing date of the Production. The word “sold” as used in this Paragraph (10)(d) is to include any tickets given in exchange for monetary consideration, including donations. There will be a three percent (3%) surcharge levied for payments received between 31 days and 60 days after the closing date of the Production, a four percent (4%) surcharge levied for payments received between 61 days and 90 days after the closing date of the Production, and a five percent (5%) surcharge levied for payments received in excess of 90 days of the closing date of the Production. Payment must be accompanied by the production report specified in “PRODUCTION REPORTS AND RECORDS,” item (a) before payment will be considered to have been made. [See p. 16.] (e) Contractor shall provide City, when requested by Project Manager or his/her designee, with at least six (6) complimentary tickets for each Production on the date(s) requested. Best available seating will be provided to City if any seats are available at the time of the request. (f) Contractor may operate an intermission snack concession during each Performance under this Agreement. Contractor shall conduct such operation in a safe, clean manner and shall hold City harmless from any claim or demand of liability of any nature whatsoever which may arise out of such operation. If alcoholic beverages are to be sold or distributed free of charge, Contractor shall have on display a California State A.B.C. Permit and provide Project Manager with proof of liquor liability where City is named as co-insured with liability of at least one million dollars ($l,000,000.00) (See Exhibit A (29) above). It is the responsibility of Contractor to ensure that no alcoholic beverage is served to a minor by checking I.D.’s if the person appears to be under thirty years of age. Food and drink may not be taken into the Auditorium or the Light/Sound Booth at any time. Contractor shall remove all cups, glasses, bottles, napkins and food from the lobby, green room, and any other affected areas, including the courtyard, after each performance. Contractor is required to adhere to City’s Zero Waste Plan (Appendix I). (11) Composition of Contractor. Throughout the term of this Agreement, Contractor shall remain an independent, non-profit incorporation under the laws of California and be governed solely by a Board of Directors. Any changes in Contractor’s Articles of Incorporation, By-Laws, or tax-exempt status shall be reported by Contractor immediately to Project Manager. Not more than twenty-five percent (25%) of the persons serving on the governing board of Contractor may be interested persons. "Interested persons" means any person currently being compensated by Contractor for services rendered to it, whether as a full or part-time employee, independent or otherwise, but excluding any reasonable compensation paid to a director as director. Page 14 (12) Fiscal Responsibilities of Contractor. (a) Fiscal Agent. Contractor shall appoint a fiscal agent who shall be responsible for the financial and accounting activities of Contractor, including the receipt and disbursement of Contractor funds. Contractor shall provide City with the name of a fiscal agent (ATTACHMENT 4) and notify Project Manager within five (5) business days of any changes occurring during the Term. Contractor shall have sole responsibility for the safekeeping of Contractor tickets and monies. (b) System of Accounts. Contractor and its fiscal agent shall establish and maintain a system of accounts that shall be in conformance with generally accepted principles of accounting for budgeted funds. Such system of accounts shall be subject to the review and approval of City staff. (c) Financial Record. In support of its system of accounts, Contractor shall maintain complete and accurate records of all financial transactions, including, but not limited to, contracts, invoices, time cards, cash receipts, vouchers, canceled checks, and bank statements. These records shall be made available to City upon request. NOTE: Contractor currency is not to be stored on the Premises between Productions. (d) Audit of surcharge payments. Contractor shall retain for a period of at least three (3) years bar-coded electronic records of tickets sold, sales records, and a verified report of sold and unsold tickets which must be made available to City of Palo Alto Auditor upon request. (13) PRODUCTION REPORTS AND RECORDS. (a) Reports. On reasonable notice and with reasons specified, Contractor shall grant Project Manager and/or City’s Auditor access to all Contractor records relating to this Agreement, including performance records, data, statements, and reports. (b) Tax Form 199. A copy of Contractor’s most recently filed California State Tax Form 199, "California Exempt Organizations Annual Information Return" must be filed with Project Manager or his/her designee within fifteen (15) days of when it is due to the State of California and shall also be attached to this agreement prior to its final approval (ATTACHMENT 5). (14) CORRECTIVE ACTION REQUIREMENT. Notwithstanding the requirements of this Agreement, in the event City should determine from any source, including but not limited to reports submitted by Contractor under this Agreement or any evaluation report from any source, that Contractor may not be in compliance with any provision of the Agreement, City may forward to Contractor written notice of same. Such notice shall specify with particularity the nature of the condition(s) or issue(s) that require(s) corrective action and may include a recommendation as to appropriate corrective action. Within fifteen (15) days of City’s request, Contractor shall submit its written response to the notice, which response shall set forth its view of the alleged violation and its proposed plan, if any, for corrective action. Upon request of either Party, the Parties shall meet Page 15 within five (5) days thereafter to discuss the alleged violation and proposed corrective action. (15) CONTRACTS WITH OTHER AGENCIES. Contractor agrees not to enter into any contract or agreement with another person or agency that will materially interfere with or inhibit the full performance of the Services to be provided by Contractor under this Agreement. Contractor agrees to terminate as soon as legally possible any contract or agreement which will materially interfere with or inhibit the full performance of the services to be provided by Contractor to City under this Agreement. Nothing herein is intended to prohibit Contractor from applying for, and receiving, supplementary funding from other than City sources so long as any agreement required for such funding does not materially interfere with or inhibit the full performance of the services to be provided by Contractor under this Agreement. Contractor is specifically encouraged to seek such supplementary funding. Any agreement between Contractor and the Mountain View Center for the Performing Arts or any other theatrical venue shall not be deemed to violate this Section 15. (16) INTEREST OF CONTRACTOR. Contractor covenants that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of its Services hereunder. Contractor further covenants that, in the performance of its Services under the Agreement, no subcontractor or person having such an interest shall be employed by Contractor. It is expressly agreed that, in the performance of the Services hereunder, Contractor shall at all times be deemed an independent contractor and not an agent or employee of City. (17) ASSIGNMENT. Both Parties shall give their personal attention to the faithful performance of this Agreement and shall not assign, transfer, or convey the 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. 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 the Parties’ respective interests herein shall not be assignable by operation of law without the prior written consent of the other Party. (18) SUBCONTRACTORS. Contractor shall be responsible for employing or engaging all persons necessary to perform the Services of Contractor hereunder. No subcontractor of Contractor will be recognized by City as such, rather, all subcontractors are deemed to be employees of Contractor and Contractor agrees to be responsible for their performance. Contractor shall give its personal attention to the fulfillment of the provisions of the Agreement by all of its employees, participants, volunteers, and subcontractors. (19) INDEMNITY. Except to the extent the same arise from the negligence or willful misconduct of City, its officers, contractors, agents, employees, or persons brought onto the Premises by or through City, Contractor shall defend, indemnify and hold harmless City, its officers, contractors, agents, and employees and the Premises from and against (a) any injury or death or property damage arising from the use or occupancy of the Premises by Tenant, its officers, agents, employees or any persons brought onto the Page 16 Premises by or through Contractor, (b) any claims or demands made against City, its officers, agents or employees by reason of any infringement or alleged infringement of any copyright or trademark caused by or alleged to have been caused by Contractor or any subcontractor under this Agreement, (c) any penalties imposed on account of the violation of any law or regulation or of any term or condition of any permit in connection with this Agreement, or (d) any damage arising under this Agreement from any loss or damage to materials and equipment owned, rented or borrowed by Contractor, its employees, subcontractors, participants, volunteers, sponsors or any others engaged in connection with the Services rendered by Contractor under the Agreement. (20) INTOXICATION. Contractor agrees to be responsible for injuries or damage caused by any of its directors, officers, employees, agents, subcontractors, or volunteers under the influence of alcohol, drugs, hallucinogens or narcotics, whether or not legally prescribed. Contractor as well as City shall not permit any of Contractor’s employees or volunteers discovered to be under the influence from remaining in any facility used under the terms of this contract and City reserves the right of denying such persons further participation in the Productions. Consumption of alcoholic beverages or use of illegal drugs is expressly forbidden by any person working for Contractor, paid or volunteer. This includes all staff, actors, crew and musicians while at the Lucie Stern Community Center. (21) WORKER'S COMPENSATION. Contractor certifies that it is aware of the provisions of the Labor Code of the State of California, which requires every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of the code, and it certifies that it will comply with such provisions during the Term of the Agreement. (22) INSURANCE. Contractor, at its sole cost and expense, shall obtain and maintain in full force and effect throughout the Term of the Agreement insurance coverage insuring not only Contractor and its subcontractors, if any, but also, with the exception of workers' compensation and employer's liability insurance, City, its officers, agents, and employees and each of them. City is to be named as co-insured with liability coverage of at least One Million Dollars ($1,000,000.00). A copy of the certificate(s) of insurance shall be attached to the Agreement and shall be filed with City concurrently with the execution of this Agreement. Said certificate shall be subject to the approval of City Attorney and shall contain an endorsement stating that said insurance is primary coverage and will not be canceled or altered by the insurer except after filing with City Clerk thirty (30) days' written notice of such cancellation or alteration. Current certificates of such insurance shall be kept on file at all times during the Term of the Agreement. (23) WEAPONS. No firearms or other weapons, whether loaded or not, shall be allowed in the Facility or on any other City property. Stage weapons and firearms designed solely for the use of blank cartridges will be allowed if they are being used as a prop in the current Production, but must be stored, when not being used, in a secure manner by Contractor’s stage manager or his/her designee. (Please reference City’s Danger Policy, Appendix L.) Page 17 (24) LEGAL COMPLIANCE. Contractor and all its paid employees, subcontractors, and volunteer participants are required to abide by all applicable federal, state and local laws and ordinances. Page 18 EXHIBIT D THEATREWORKS ADDENDUM Contractor’s (THEATREWORKS) personnel shall be permitted to manage, distribute and collect the hearing-impaired devices (“headsets”) that City owns for use by hearing-impaired persons at all Performances at the Facility, subject to the following restrictions: (a) Contractor shall verify that all headsets and batteries are present and functioning normally and shall report to Project Manager or his/her designee any missing or broken items before taking control of them for the run of the Production. (b) For any damage or loss of any headset while under Contractor’s control, Contractor shall promptly, upon request, pay City the fair market price for any necessary replacement or repair of any component of the headsets, as such replacement or repair is reasonably determined by Project Manager or his/her designee. (c) Contractor will diligently ensure the security of the headsets, in a manner approved by Project Manager or his/her designee, when the headsets are not in use. When the headsets are not so secured, Contractor will not leave the headsets unattended. (d) Contractor will provide at least one (1) person in the Facility lobby, whose sole responsibility will be to distribute and collect the headsets, as the case may be, pursuant to the following: (i) Beginning one-half (1/2) hour before each Performance until ten (10) minutes after the Performance begins; (ii) At all times during any and all intermissions; and (iii) From the end of the Performance until all of the headsets have been returned. (e) Contractor shall collect a Driver’s License or credit card as security for the loan of a headset, which Driver’s License or credit card will be returned to its owner upon return of the headset. Contractor will implement procedures for the safe handling of the Driver’s Licenses and credit cards and their return to their owners. (f) Contractor’s responsibility at the end of each performance will include the following: (i) Clean and otherwise sanitize all the earpieces by swabbing them with isopropyl alcohol swabs. (ii) Turn off the on/off/volume switches on all returned headsets and remove the batteries, placing the batteries into the battery charger. (iii) Return all headsets and batteries to their storage case. (iv) Verify the presence of all twenty (20) headsets and batteries. Page 19 (v) Return the headset storage case to its place in the rolling cart. (vi) Return the rolling cart to the House Manager’s Closet. (vii) Be sure the rolling cart is plugged into an electrical outlet. (viii) Make sure the battery charger is getting power, as indicated by the red light on the top of the case. (ix) Padlock the rolling cart’s doors shut, using either the padlock provided by City or a padlock supplied by Contractor, provided that Project Manager or his/her designee has been given a copy of the key or the combination. (x) Immediately report to City’s attendant at the Facility any missing headsets, and turn over to the attendant any malfunctioning headsets. The provisions of this Exhibit D may be terminated upon reasonable notice at any time by Project Manager or his/her designee, and may be terminated upon thirty (30) days’ prior written notice by Contractor. Page 20 EXHIBIT E NON-DISCRIMINATION FORM Certification of Nondiscrimination: As suppliers of goods or services to City of Palo Alto, the firm and individuals listed below certify that they do not discriminate in employment with regard to age, race, color, religion, sex, national origin, ancestry, disability, or sexual preference and that they are in compliance with all federal, state, and local directives and executive orders regarding nondiscrimination in employment. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. Firm: ____________________________________________________________ Signature: ____________________________________________________________ Name: _____________________________________________________________ Signature: ____________________________________________________________ Name: _____________________________________________________________ Note: California Corporations Code Section 313 requires two corporate officers to execute contracts. *The signature of First Officer* must be one of the following: Chairman of the Board; President; or Vice President. **The signature of the Second Officer** must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer; or Assistant Treasurer. (In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) Page 21 EXHIBIT F INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (City), AT THEIR SOLE EXPENSE, SHALL, FOR THE TERM OF THE CONTRACT. OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW AND AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 NO PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE City OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTORAND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” Page 22 A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CONTRACTOR AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2.IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION City OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 Page 23 LIST OF ATTACHMENTS ATTACHMENT 1 TheatreWorks Production and Exclusive Use Schedule, 2011 – 2012 ATTACHMENT 2 Contractor’s Budget for the Term ATTACHMENT 3 Contractor’s Pricing Policy ATTACHMENT 4 Name of Contractor’s Fiscal Agent ATTACHMENT 5 Contractor’s Most Recently Filed California State Tax Form 199 POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 1 PUBLIC/PRIVATE PARTNERSHIPS POLICY STATEMENT The City of Palo Alto encourages the formation of public/private partnerships for the benefits the community receives. For the purposes of this policy, “public/private” also encompasses “public/nonprofit” partnerships. Definitions Public/private partnership: A public/private partnership is an agreement between the City and a nonprofit or private organization to provide services or to assist in funding of public facilities and programs. Such partnerships may take various forms, including: • Acceptance of or solicitation of service or facility proposals • Facilitation of such proposals through the City's regulatory process • Waiver of City General Fund fees to help reduce project costs. • Contributions of City matching funds for construction of facilities to be owned and controlled or operated by the City. • Provision of facilities to the private partner at no charge or at a subsidized rent. Public/private partnerships typically fall into one of three categories: co-sponsorship, alliances or joint ventures. Co-Sponsorships: This is the most common type of public/private partnership. An organization furthers the mission of the City by supporting a City activity or program in conjunction with pursuit of that organization’s own mission or program. Co-sponsorships can take the form of one-time events or annual agreements. Some examples of co-sponsorships include the Palo Alto Tennis Club use of City courts to provide a youth tennis program and American Youth Soccer Organization’s use of space in a City facility to train referees. Co- sponsorships are entered into by staff and normally have no or minimal financial impact. Alliances: This type of public/private partnership involves organizations that have been created for the sole purpose of supporting a City program or an array of City programs. The organization does not expect to receive any direct financial benefit or to alter City policy and/or operations, but undertakes to work closely and cooperatively with staff to implement City goals. Alliance organizations include the Recreation Foundation, the Art Center Foundation (Project Look or Cultural Kaleidoscope), the Friends of the Children’s Theatre (the Magic Castle), the Library Foundation and the Friends of the Palo Alto Library (financial assistance with the renovation and expansion of the Children’s Library). Alliances are approved by the Council if there are any staffing or budgetary implications to the partnership. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 2 Joint Ventures: This type of partnership involves organizations which have programs or missions independent of the City and involve the City entering into a contractual relationship with the public or nonprofit organization with both parties contributing to the partnership for their mutual benefit. Each joint venture is uniquely negotiated by the staff and approved by the City Council. Examples of Joint Ventures include TheatreWorks, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the former police station by older adult service provider, Avenidas. PROCEDURES Initiation of partnerships: Public/private partnerships may be initiated in one of three ways: • By staff: Staff identifies an opportunity for such a partnership and undertakes an informal or formal request for proposal process to identify partners. • By Council: The City Council directs staff to work with a private or nonprofit organization to develop such a partnership. • By a private or nonprofit organization: An organization makes a partnership proposal to the staff or City. City Manager Review: If the partnership proposal involves more than one City department, the City Manager’s Office will appoint a team with representatives of all City departments who are stakeholders in the partnership proposal. The team will analyze the proposal and inform the City Manager of the resource implications of the proposal, including staffing and monetary commitments. This would include proposed fee waivers. If the proposal will require a re-ordering of department priorities that have already been approved by the Council in setting its annual priorities or in the budget process, Council approval will be required prior to commitment to the partnership. Council approval will also be required if the partnership requires a new or adjusted allocation of operating or capital funding. Note: Co-sponsorships usually only involve a single department and do not necessitate the formation of an interdepartmental committee, the involvement of the City Manager’s Office or the approval of the City Council. City-Initiated Partnerships: Such partnerships will be guided by existing policies and procedures governing purchasing and outsourcing, using “requests for proposals” and/or bid processes as the method of initiating a partnership. A City-initiated partnership may incorporate incentives including naming rights, waiver of non-enterprise fund building and planning fees, reduced lease rates, free use of space, subsidies, and staff resources. All incentives may be negotiated on a case-by-case basis. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 3 Evaluation of Viability of Partnering Organization: Staff will provide the City Manager and/or City Council with its assessment of the viability of the proposed partnership, based on the partnering organization’s possession of sound organizational, administrative and fiscal management, and its demonstrated experience to achieve and sustain project tasks, such as fundraising and building community support. For proposed facility improvement or expansion initiatives, the nonprofit or private organization should have the ability and commitment to make a substantial pledge to the project’s cost. Facilities Proposals: • If a City facility is to be renovated, expanded or otherwise be directly affected by the partnership, the Infrastructure Management Plan will have to be adjusted appropriately. • Long-term staffing, operational and maintenance costs must be identified in the proposal. The project’s applicable costs and funding sources for furnishings, fixtures and equipment will be identified. • The parties will negotiate the joint or separate financial responsibility for any project cost overruns on a project-by-project basis. • Staff may recommend that any standard City processing or use fee authorized under the Municipal Fee Schedule, excluding fees and charges levied by City of Palo Alto Utilities or other City enterprise fund programs, should be waived as a condition of the City's participation. Waiver of fees may be granted by the Council and limited to those fees associated with a construction or capital improvement project which, upon its completion, results in a new or improved public facility, building or park, or some portion thereof, that will be solely owned or controlled by the City. In the event that only a portion of a construction or capital improvement project will result in a new or improved City facility, building or park, or portion thereof, then the Council may waive only that portion of any associated fee directly relating to the construction, improvement or enhancement of the City facility, building or park. As appropriate, the summary and recommendation in the report to the Council will include a staff recommendation on waiving fees which the Council can approve or reject. • The City will determine whether the nonprofit or private organization shall use or may forego a formal or informal competitive selection process in the hiring of professionals who will perform the management, design and/or construction phases of the project. The City shall review and approve the requirements for and the performance of all phases of design, planning and construction work for the project. City of Palo Alto (ID # 3260) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Palo Alto Players Title: Approval of the Renewal of a Public-Private Partnership Agreement Between the City of Palo Alto and the Palo Alto Players for the use of the Lucie Stern Community Theatre From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council approve the renewal of a public-private partnership agreement between the City of Palo Alto and the Palo Alto Players (Attachment A) for a one-year term for the use of the Lucie Stern Community Theatre. Background The Lucie Stern Community Theatre is used by three local theatre companies which produce approximately 15 productions annually. The three companies (the Palo Alto Players, West Bay Opera, and TheatreWorks) partner with the Community Services Department to produce shows, which foster the cultural and artistic needs of Palo Alto residents and visitors. The City and these companies each benefit from continuing this relationship. As of 1974, the Palo Alto Players dissolved their ties with the Parks and Recreation Department and became an independent company. Since that time, the City has continued to support the Palo Alto Players by providing a performance, rehearsal, and shop space at the City-owned Community Theater (also known as the Lucie Stern Theater). During its 2012 – 2013 theatre season, the Palo Alto Players will offer five different productions for adults, including musicals, comedies, and classic dramas. City of Palo Alto Page 2 Discussion Palo Alto Players’ usage of the Lucie Stern Community Theatre is governed by a public/private partnership agreement. Production scheduling is done interdependently between the three groups, and as the cost of relocating a theatre company is prohibitively high, there exists nearly no opportunity for changing the companies that the Lucie Stern Community Theatre serves. Therefore, staff recommends that the City Council approve renewal of the existing public private partnership. The key terms of this agreement are discussed below: Term: The new agreement is for one year. If it is approved, it will take effect on September 1, 2012 and will terminate on September 1, 2013. Similar agreements are intended to be renewed in subsequent years. Revenue: In accordance with the Municipal Fee Schedule and in exchange for providing facility usage, the Palo Alto Players shall remit to the City a $2.00 surcharge for each ticket sold. This fee is effectively passed on to patrons and is applied to all subscription, group, individual, promotional, and other tickets sold. Complementary tickets are excluded, and the sum of the surcharge revenue for each production is due to the City within 30 calendar days after the closing of the production. Among other functions, the proposed agreement acts as a revenue contract which governs the application, collection, and accounting of associated revenue. Responsibilities of City: The contract outlines the responsibilities of the City, using the standard terms of public/private and joint-venture partnerships, including specifying goods delivery terms, notice requirements for contract termination, and affirming non-discrimination, insurance, and property guidelines. The City is also responsible for allowing and providing access to the Lucie Stern Community Theatre during designated hours, providing basic maintenance of capital equipment, monitoring production safety, and providing information regarding other scheduled facility uses (such as City-sponsored events or private rentals). Responsibilities of Company: Additionally, the agreement stipulates the responsibilities of the theatre company, including their duty to abide by City and City of Palo Alto Page 3 department policies and procedures (specifically including and as related to, without limitation, conduct in community centers, injury and illness prevention, sale of alcoholic beverages, operations, building emergency procedures, zero waste, and facility use). Other responsibilities include timely remittance of fees and surcharges, requirements for sufficient building supervision/staffing, recordkeeping of ticket sales and surcharge remittance for compliance with audits, and adherence to standard practices for facility security. This renewed agreement is substantially identical to previous agreements. The $2.00 surcharge is consistent with the Municipal Fee Schedule adjustments effective 07/01/2012. Resource Impact No additional City resources are required as a result of the renewal of this agreement. It is anticipated that this partnership will lead to enhanced program and capital funding over the life of the agreement. Policy Implications This partnership would be categorized as a joint venture under the City’s Public/Private Partnership Policy (Policy 1-25; Public Private Partnerships; Attachment B). The partnership with Palo Alto Players furthers Policy C-7 of the Community Services element of the Comprehensive Plan: “Actively work with private, nonprofit, and public community service organization to avoid duplication and to coordinate the delivery of services like child care, senior services, and recreation” and Policy G-12 of the Governance element: “Continue and expand the opportunities for public and nonprofit organizations serving the City to provide information about themselves to the public.” Environmental Review This agreement is not a project requiring environmental review under the California Environmental Quality Act (CEQA). Attachments: Attachment A - Palo Alto Players 2012 Contract (PDF) Attachment B - Public Private Partnership Policy 1-25 (PDF) CITY OF PALO ALTO AND PALO ALTO PLAYERS THEATRE COMPANY AGREEMENT BY THIS AGREEMENT MADE AND ENTERED INTO ON THE 1st DAY OF SEPTEMBER 2012 BY AND BETWEEN THE CITY OF PALO ALTO (“CITY”) AND PALO ALTO PLAYERS- PENINSULA CENTER STAGE (“CORPORATION”), IN CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES HERETO AGREE AS FOLLOWS: CORPORATION SHALL PROVIDE OR FURNISH THE FOLLOWING SPECIFIED 1) GOODS AND MATERIALS, 2) SERVICES OR 3) A COMBINATION THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW. EXHIBITS: The following attached exhibits are incorporated herein by this reference. Contract is not complete unless all exhibits are attached. • Exhibit A: Responsibilities of the Corporation • Exhibit B: Responsibilities of the City • Exhibit C: General Conditions • Exhibit D: Non-Discrimination Form • Exhibit E: Proof of Liability Insurance TERM: The services and/or materials furnished under this agreement shall commence on 9/01/2012 and shall be completed on or before 09/01/2013. COMPENSATION: As compensation for the full performance of this agreement, CORPORATION shall remit fees and surcharges to the CITY in accordance with the prevailing rates set forth in the CITY”s Municipal Fee Schedule. Such payments include, but are not limited to, those defined in EXHIBIT A (Section 22) and EXHIBIT C (Section 10) and shall be be subject to the terms and conditions set forth herein. In consideration of referenced exhibits, attachements, and appendecies, such compensation shall not exceed $50,000. CITY ACCOUNT NUMBER: Fees and surcharges remitted persuant to this agreement shall be credited to the City’s accounts included in the table below: REVENUE TYPE COST CENTER - GL ACCT - INTERNAL ORDER Ticket Surcharge 80020412 – 15540 - 61203 Facility Attendant 80020512 – 13450 - 61203 INVOICING: Send all invoices to the City of Palo Alto. Such invoices shall be sent to the attention of the Project Manager. GENERAL TERMS AND CONDITIONS: General Terms and Coniditions are included on all three pages first three pages of this agreement. . HOLD HARMLESS. CORPORATION shall indemnify, defend and hold harmless CITY, its Council Members, officers, employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of CORPORATION’S, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct, or conduct for which the law imposes strict liability on CORPORATION in the performance of or failure to perform this agreement by CORPORATION. ENTIRE AGREEMENT. This agreement and the terms and conditions on the following pages represent the entire agreement between the parties with respect to the purchase and sale of the goods, equipment, materials or supplies or payment for services which may be the subject of this agreement. All prior agreements, representations, statements, negotiations and undertakings whether oral or written are superseded hereby. THIS AGREEMENT SHALL BECOME EFFECTIVE UPON ITS APPROVAL AND EXECUTION BY CITY. IN WITNESS THEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRITTEN ABOVE. By: ______________________________ Date______________________ Peter Bliznick Executive Director Palo Alto Players By: ______________________________ Date______________________ Judge Luckey Manager Arts, Children’s Theatre Community Services Department City of Palo Alto CITY OF PALO ALTO APPROVALS: APPROVAL OVER $25,000 CITY DEPARTMENT 1 Funds Have Been Budgeted (1) PURCHASING & CONTRACT ADMINISTRATION INSURANCE REVIEW (2) (3) PURCHASING MANAGER APPROVAL OVER $25,000 APPROVAL OVER $85,000 CITY OF PALO ALTO BY:_____________________________________ CITY ATTORNEY ATTEST: BY:________________________ _______________________ MAYOR CITY CLERK CITY OF PALO ALTO - GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. This agreement is limited to the terms and conditions on pages 1, 2, and 3 hereof which includes any exhibits referenced. B. GOVERNING LAW. This agreement shall be governed by the laws of the state of California. C. INTEREST OF CORPORATION. It is understood and agreed that this agreement is not a contract of employment in the sense that the relation of master and servant exists between the CITY and undersigned. At all times CONRACTOR shall be deemed to be an independent contractor and CORPORATION is not authorized to bind CITY to any contracts or other obligations. In executing this agreement, CORPORATION certifies that no one who has or will have any financial interest under this agreement is an officer or employee of CITY. D. INSURANCE. CORPORATION agrees to provide the insurance specified in the “Insurance Requirements” form attached hereto as Exhibit C. In the event CORPORATION is unable to secure a policy endorsement naming the City of Palo Alto as an additional insured under any comprehensive general liability or comprehensive automobile policy or policies, CORPORATION shall at a minimum, and only with the written approval of City’s Risk Manager or designee, cause each such insurance policy obtained by it to contain an endorsement providing that the insurer waives all right of recovery by way of subrogation against CITY, its officers, agents, and employees in connection with any damage, claim, liability personal injury, or wrongful death covered by any such policy. Each such policy obtained by CORPORATION shall contain an endorsement requiring thirty (30) days' written notice from the insurer to CITY before cancellation or reduction in the coverage or limits of such policy. CORPORATION shall provide certificates of such policies or other evidence of coverage satisfactory to City's Risk Manager, together with evidence of payment of premiums, to CITY at the commencement of this agreement, and on renewal of the policy, or policies, not later than twenty (20) days before expiration of the terms of any such policy. E. TERMINATION. This agreement may be terminated by CITY upon ten (10) days written notice to CORPORATION. Monies then owing based upon work satisfactorily accomplished shall be paid to CORPORATION. F. CHANGES. This agreement shall not be assigned or transferred without the written consent of the CITY. No changes or variations of any kind are authorized without the written consent of the City Manager or his or her designee. G. AUDITS. CORPORATION agrees to permit CITY to audit, at any reasonable time during the term of this agreement and for three (3) years thereafter, CORPORATION'S records pertaining to matters covered by this agreement. CORPORATION further agrees to maintain such records for at least three (3) years after the term of this agreement. H. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this agreement. I. CITY'S PROPERTY. Title to CITY’s property furnished to CORPORATION shall remain in the CITY. CORPORATION shall not alter or use property for any purpose, other than that specified by CITY, or for any other person without the prior written consent of CITY. CORPORATION shall store, protect, preserve, repair and maintain such property in accordance with sound professional practice, all at CORPORATION’s expense. J. NON-DISCRIMINATION. No discrimination shall be made in the employment of persons under this agreement because of the race, color, national origin, age, ancestry, religion or sex of such person. CORPORATION agrees to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment, including completing the NonDiscrimination Compliance Form, attached hereto as Exhibit D, and incorporated herein by this reference. K. WARRANTY. CORPORATION expressly warrants that all materials and services covered by this agreement shall conform to the specifications, requirements, instructions, or other descriptions upon which this agreement is based, shall be fit and sufficient for the purpose intended, of good materials and workmanship and free from defect and that materials and services of CORPORATION’S design will be free from defect in design. Inspection, test, acceptance, payment or use of the goods furnished hereunder shall not affect the CORPORATION’S obligation under this warranty, and such warranties shall survive inspection, test acceptance and use. CORPORATION agrees to replace, restore, or correct defects of any materials or services not conforming to the foregoing warranty promptly. Without expense to CITY, when notified of such nonconformity by CITY, in the event of failure by CORPORATION to correct defects in or replace nonconforming goods or service promptly, CITY, after reasonable notice to CORPORATION, may make such corrections or replace such materials or services and charge contractor for the cost incurred by the CITY thereby. L. WORKERS’ COMPENSATION. CORPORATION, by executing this agreement, certifies that it is aware of the provisions of the labor code of the state of California which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and certifies that it will comply with such provisions before commencing the performance of the work of this agreement. M. PRICE TERMS. (a) Extra charges, invoices and payment. No extra charges of any kind will be allowed unless specifically agreed to in writing by CITY. All state and federal excise, sales and use taxes shall be stated separately on the invoices. (b) Transportation charges. Any transportation charges with respect to which CORPORATION is entitled to receive reimbursement shall be added to CONTRAACTOR’S invoice as a separate item, with the receipted freight bill attached thereto. (c) CORPORATION warrants that the prices for materials or services sold to CITY under this agreement are not less favorable than those currently extended to any other customers of the same or like articles or services in equal or less quantities. In event CORPORATION reduces its price for such materials or services during the term of this agreement, CORPORATION agrees to reduce the prices or rates hereof correspondingly. N. SCHEDULES OR DELIVERY. Time is of the essence of this agreement. CORPORATION agrees to comply with the specific schedule provided by the CITY or agreed upon herein without delay and without anticipating CITY’S requirements. CORPORATION also agrees not to make material commitments or scheduling arrangements in excess of the required amount or in advance of the time necessary to meet the schedule(s) of this agreement, if any. O. TRANSPORTATION, PACKAGING & LABELING. All materials or services are to be provided: (a) F.O.B., Palo Alto unless otherwise specified; (b) with a packing list enclosed in cartons, which indicate the agreement number, exact quantity and descriptions, concerning any materials shipments; (c) and comply with current packaging and labeling requirements prescribed by D.O.T. Revised 8/1/2010 Page 5 of 27 EXHIBIT A RESPONSIBILITIES OF THE CORPORATION (1) Abide by the policies/procedures established by CITY and CITY’S Arts and Sciences Division and the Department of Community Services for the use of CITY facilities, equipment, costumes, props, furniture, scenery and other production elements. These shall include, but are not limited to, Regulations Of The City Of Palo Alto Regarding Prohibited Conduct In Community Centers and Theaters (Appendix A), the City of Palo Alto Injury and Prevention program (Appendix B), Policy for Sale of Alcoholic Beverages (Appendix C), Operations Manual (Appendix D), Safety Procedures and Guidelines (Appendix E), Building Emergency Procedures (Appendix F), procedure for adjusting the Forestage height including use of the Scissor lift (Appendix G), House Manager's Guide (Appendix H), Zero Waste Plan (Appendix I), and Costume Room Guidelines (Appendix J). Follow safety procedures for the use of power and hand tools, mechanical lifts, etc. including the use of safety goggles, ear protection, face shields, safety cables, outriggers, etc. (2) Obtain, supervise, and pay all necessary related fees for the services of all professional assistance needed to produce such productions. Such assistance may include, but is not limited to the following: Production Directors, all Designers, Carpenters, Painters, Production Assistants, Music Directors, Choreographers, Musicians and other Front of House, Artistic or Administrative personnel. (3) Pay all fees and costs for materials, supplies, scripts, royalties, licenses and other fees and expenses connected with said productions, including all make-up removal supplies. (4) Be solely responsible for the control and supervision of all production activities and personnel connected therewith and shall notify all personnel of their obligations and responsibilities pertaining to their production area. Act responsibly in matters of building security when CORPORATION is schedule to utilize CITY facilities. (5) Conduct regularly scheduled production meetings, shall notify CITY of such production meetings in writing, and shall coordinate all production activities with CITY'S Project Manager or his/her designee. There shall be at least one or more, as needed, production design meeting(s) for each production as scheduled in ATTACHMENT 1 which shall be convened by CORPORATION at a mutually convenient time prior to start of construction. Provide the Project Manager or his/her designee with a list of major production personnel and their phone numbers for each production at the time of the first production meeting. Construction plans and fly-line plots should be submitted at the aforementioned production design meeting in order for the Project Manager or his/her designee to ascertain compliance with CITY fire or other safety regulations. (6) Provide the Project Manager or his/her designee with a list of all Pyrotechnics effects (including the use of open flames), all Hydro technical effects, all use of Revised 8/1/2010 Page 6 of 27 fog or haze, all loud noises (i.e. gunshots), and all use of strobe lights at least 21 days prior to first use on stage. No flames shall be permitted on stage without the required fire permits from CITY. Smoking by any of the actors on stage as an integral part of the production will be considered a Pyrotechnic effect. Safety precautions approved by a CITY Fire Inspector and the Project Manager or his/her designee will be taken when smoking is occurring on stage, and the audience shall be notified beforehand that smoking, loud noises (i.e. gunshots) or use of strobe lights will occur on the stage. All Fire Department fees for “Open Flame Permits” and “Candles and Open Flames in Assembly Areas Permits” shall be the responsibility of the CORPORATION. (7) Provide the Project Manager with the rehearsal schedule, performance schedule, shop schedule and any requests for the use of CITY facilities (including but not limited to the Community Theatre, rooms located in the Lucie Stern complex and the Lucie Stern Courtyard and patio) for any purpose. Space reservations should be made at least four weeks in advance. CORPORATION shall accommodate other uses of the theatre facility, including but not limited to the stage, auditorium, rehearsal hall, scene shop, paint shop, flat dock, costume shop, and the lobby during periods of non-use during the runs of the productions. CITY shall notify the CORPORATION of such other uses. CORPORATION shall provide personnel for any shifting of CORPORATION'S scenery and/or equipment. (8) Designate as Project Director for the length of this contract an employee or sub- contractor to manage or supervise all areas and items in this contract, including production, technical, house personnel and any and all support groups and to be CORPORATION'S liaison with the Project Manager or his/her designee in all matters relating to the CITY in any way. (9) Arrange for auditions and casting for such productions and be solely responsible for the supervision and control of all performers. With respect to casting, CORPORATION shall have sole discretion to choose and approve the qualifications and select the cast. In personnel decisions, the CORPORATION shall agree to and comply with the provisions of the CITY’S Non-discrimination policy (Exhibit 8). (10) Search for, place and train participants in appropriate areas of theatre production activity and shall utilize personnel in a safe and effective manner in the presentation of such productions. CORPORATION shall be solely responsible for the control and supervision of such participants and shall indemnify, defend, and hold harmless the CITY from any claims or liabilities arising from the acts or omissions of such personnel. All such personnel shall be deemed the sole agents and employees of CORPORATION and shall be notified by the CORPORATION of this circumstance. (11) Exercise safe practices in the use of CITY facilities and equipment, shall maintain and clear work areas, and shall within 24 hours report, with form provided by CITY (Appendix K), information regarding accidents. Immediately report to the Project Manager or his/her designee on form provided by CITY any breakage, malfunction, deterioration or loss of any of the CITY'S resources (including musical instruments, tools, lights, sound equipment, props, curtains, etc.). Revised 8/1/2010 Page 7 of 27 CORPORATION shall not attempt repair of CITY equipment without prior consultation with the CITY’S Project Manager. CORPORATION shall immediately discontinue any activity where an unsafe or dangerous condition exists. CORPORATION shall train and supervise CORPORATION'S staff and volunteers on safe theatre practices and adhere to CITY'S safety procedures and guidelines. If, in the opinion of any CITY or CORPORATION employee, CORPORATION is conducting an activity in an unsafe manner, CORPORATION or its agents shall be informed and shall immediately discontinue such activity until such activity is able to be conducted in a safe manner approved by CITY staff. (12) Promote and publicize all of its productions, and shall print in all publicity, including, but not limited to, publications, mailings, flyers, posters, brochures, programs, and paid or public service advertising, the statement, "In cooperation with the City of Palo Alto Community Services Department Division of Arts and Sciences." In conformance with Americans with Disabilities Act (ADA) of 1990 guidelines and requirements, CORPORATION shall bear responsibility for providing appropriate auxiliary aids, interpretive services and accommodations where they are necessary to achieve an equal opportunity to participate in and enjoy the benefits of public performances produced under this contract. Printed programs shall include the following statement required by the Americans with Disabilities Act: "Persons with disabilities who require information on 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: ADA Coordinator, City of Palo Alto, 650-463-4952 (Voice) or ada@cityofpaloalto.org (Internet). (13) Continue to exist as an independent, non-profit corporation under the laws of the United States and the State of California. (14) Submit all signs or displays to be located on the Theatre premises to Project Manager or his/her designee for approval at the first production meeting. All displays may be put up at load-in and must be removed during strike. Inside the Theatre, no display materials may be placed upon stucco walls. Lobby displays may only be placed on the lobby display boards, and all fasteners must be removed at the time display is taken down. Nothing may be posted on the exterior walls or doors of the Theatre or in the Stern courtyard, except for items in the display case and an approved production name sign hung from the theatre balcony. Marquee signs must be constructed of light weight material, and shall be secured in such a way that the sign cannot become dislodged by normal vibration or seismic activity. Signs shall be of a standard size no larger than ten feet in length and eight feet in height. All marquee signage must be attached to the theatre balcony with rigging so that the sign may be easily removed for limited periods during photography shoots, special events, or building maintenance. (15) Assure that the auditorium, stage, paint shop, scene shop, flat dock, costume shop, green room, dressing rooms, rehearsal hall, hallways and outdoor areas adjacent to theatre and shop will be cleared and clean, and that scenery, properties, and other production elements will be disassembled and stored, to the Project Manager or his/her designee’s satisfaction, within six hours after the final Revised 8/1/2010 Page 8 of 27 performance or on a time schedule mutually agreed upon between the CORPORATION and the Project Manager or his/her designee. The stage shall always be returned to its basic set-up as established by the Project Manager or his/her designee unless there is a mutual agreement with the incoming group that has been approved by the Project Manager or his/her designee. All items on the STRIKE CHECKLIST are to be performed unless there is a mutual agreement with the incoming group that has been approved by the PROJECT MANAGER or his/her designee. The Project Manager or his/her designee will sign a copy of the STRIKE CHECKLIST form at the completion of the strike to signify acceptance of clean and neat facilities. (16) Leave storage, paint, scene and costume spaces clean and clear of CORPORATION'S materials other than those materials necessary for the ongoing maintenance and repair of the sets and costumes by the Monday following opening performance. (17) Leave all spaces clear, clean and orderly at the end of each use. Rehearsal Hall is to be cleared of all materials, except major set pieces and any rehearsal props, after each daily use. Rehearsal Hall is to be completely cleared within 24 hours of final use. Dressing rooms are to be maintained after each daily use. Trash, recycling and compostable materials are to be removed from all areas daily. Recyclables and compostable materials are to be placed in the recycling and composting carts near the trash dumpster and garbage and trash are to be placed into the dumpster. The CORPORATION is required to reduce waste, reuse and recycle per the CITY’s Zero Waste Plan (Appendix I). Office space and hallways are to be kept continually clear, clean and orderly and neither space shall be used for the purpose of set, prop, or costume storage. Materials may not be left or stored any place out-of-doors overnight or when unattended by contractor personnel. (18) Enforce current regulations as established by CITY with regard to smoking, food and drink in CITY facilities (Appendix A). CORPORATION shall provide ushers at all previews and performances who will enforce such regulations. Smoking is not permitted inside any CITY facility. No person shall bring any animal into the theatre. This regulation shall not apply to service animals assisting individuals with disabilities or to animals in training to become service animals. Use of animals on the stage is subject to approval by the Project Manager or his/her designee. Food and drink are not permitted in the auditorium, light/sound booth or on stage, unless used as part of a production scene. Food and drink shall be permitted only in approved areas such as the green room and lobby. CORPORATION shall clean up all food and drink containers daily after use. (19) Observe all provisions of this agreement when using CITY facilities other than or in addition to the Community Theatre. This includes cleaning up the rooms, returning tables and chairs to their initial locations and depositing all trash and recycling in the appropriate receptacles. CORPORATION will be responsible for the maintenance of the Lucie Stern-Recreation Wing restrooms for weekend performances. Revised 8/1/2010 Page 9 of 27 (20) Comply with CITY TB test requirement for employees and volunteers of CORPORATION at any time the CITY Risk Manager deems it necessary. If minors are involved in the production, State of California requirements for fingerprinting the staff must be followed. (21) Comply with CITY sound ordinance levels for any outdoor activities, including load-in, strike, dismantling, or disposal. Shop doors facing Hopkins and Harriet Streets shall be closed between 8:00 p.m. and 8:00 a.m. (22) Pay Building Attendant fees at prevailing rates as set forth in the Municipal Fee Schedule: (a) For (an) additional Attendant(s) required for the use of CITY facilities other than the Attendant the CITY will furnish for the Lucie Stern Community Theatre facility for the period of from one hour prior to until at least one half hour after the completion of each public performance as listed in ATTACHMENT 1. (b) For any performances not included in ATTACHMENT 1. (c) When using other CITY facilities at the same time as a public performance as listed in ATTACHMENT 1. All building use policies must be adhered to for any CITY facility use. Additional performances of the productions listed in ATTACHMENT 1 may be added to ATTACHMENT 1 with two weeks notice. (23) Provide house manager and ushers for every performance or event whenever public is in attendance. CORPORATION shall permit only persons who have been trained in theatre emergency, safety and use procedures to usher. CORPORATION shall submit a list of their trained personnel to the Project Manager prior to public performances for each production. Ushers must be available to assist patrons under all circumstances and must be aware of and able to assist disabled persons. The CORPORATION’S House Manager and ushers must also be available to assist in emergency situations throughout the entire performance until audience has left the theatre. Ushers must ensure that wheelchairs, walkers, etc. are not blocking any of the aisles or exits. Ushers shall return seats to the upright position and remove litter from the auditorium and restrooms at the conclusion of each performance. (24) Shall be responsible for installing or removing the removable auditorium seats in designated areas to accommodate their wheelchair patrons and as required due to the needs of the production. (25) Shall have privilege of borrowing available Community Theatre- owned properties, sets, costumes and scenery for productions scheduled in this agreement. Costumes, properties and sets created by CORPORATION with Corporation-owned materials will remain the property of CORPORATION, and shall be removed from the theatre facility at the conclusion of the production in Revised 8/1/2010 Page 10 of 27 which the materials are used. The Project Manager or his/her designee may, on a case-by-case basis, authorize exceptions. Any allowed items stored at the theatre will become available for use by all contracting CORPORATIONS and the CITY. All such items created under former agreements will continue to be the property of the CITY. All office equipment, construction tools, special effects and lighting equipment purchased and owned by CORPORATION will remain the private property of CORPORATION and the CITY assumes no responsibility or liability for the loss or maintenance of such materials. All equipment, instruments, costumes and any other materials rented, borrowed or owned by any subcontractor, agent or person for the CORPORATION is the responsibility of the CORPORATION and/or its subcontractors, and the CITY assumes no responsibility or liability for its maintenance or loss. Such items as original play scripts, musical scores, scenic designs, costume designs and photographs belong solely to the authors, composers, artists who created them or their representatives, and any use of them will be at the sole discretion of the CORPORATION. Any use of these items must be in accordance with all applicable laws. CORPORATION assumes all liability and responsibility for any default on production expenses. (26) Shall be required to replace or have repaired by factory authorized technicians CITY owned equipment, instruments or materials identified by the Project Manager or his/her designee as having been lost, damaged or destroyed by an agent of the CORPORATION. A written report must be made on CITY form whenever CITY equipment is lost, damaged, or destroyed by the CORPORATION. (27) May be allowed the use of Community Theatre-owned properties, sets, costumes, scenery, furniture and equipment for CORPORATION productions not scheduled in this agreement upon written request to the Project Manager or his/her designee and upon express approval and written authorization of the Project Manager or his/her designee. CORPORATION must return to Community Theatre all items borrowed for productions at other venues within four days of the final performance and shall, in the event the items are damaged or destroyed, be responsible for the repair or replacement of all such borrowed items to the satisfaction of the Project Manager. (28) May use Community Theatre facilities and equipment only for theatre productions expressly covered under this agreement. Exceptions, such as for classes, camps or workshops, will be considered by the Project Manager or his/her designee upon the receipt from the CORPORATION of a written request at least thirty days prior to the date needed and, if granted, will be approved in writing by the Project Manager or his/her designee. No such activity will be advertised or promoted until it has been expressly approved by the CITY’S Project Manager. (29) Shall enforce all State and City laws relating to the sale and consumption of alcoholic beverages in CITY facilities. Alcohol is permitted at the Lucie Stern Community Center if approved by the CITY’S Project Manager. Unless otherwise specifically permitted the only alcoholic beverages which may be sold or served at CITY facilities by CITY policy are wines, including champagne and sparkling wine. If alcoholic beverages are to be sold or distributed free of charge, Revised 8/1/2010 Page 11 of 27 CORPORATION must possess a State A.B.C. The permit for the sale or distribution of alcoholic beverages obtained by the CORPORATION must be provided to the Project Manager. Proof of liquor liability insurance where CITY is named as co-insured with liability of at least one million dollars ($l,000,000.00) shall be required. Permits are to be displayed as required by law. It is the responsibility of the CORPORATION to ensure that no alcoholic beverage is served to a minor. Identification must be checked if the person appears to be under thirty years of age. CORPORATION shall remove all items, including cups, glasses, bottles, napkins and food from the lobby and any other affected areas, including the courtyard, after each performance. CORPORATION is required to adhere to CITY’S Recycling and Zero Waste Program (Appendix I). (30) Shall have one of their designated and CITY approved key and/or proximity card holders on the premises at all times as a supervisor whenever anyone from the CORPORATION is in the facility working for the CORPORATION, whether as a paid employee, subcontractor or volunteer. The Project Manager or his/her designee must approve any exceptions in writing. (31) Shall not in any way modify CITY facilities and may not install or attach anything in or on CITY facilities without having first submitted a written request to the Project Manager and having received written permission from the Project Manager or his/her designee. The approval of the Project Manager does not relieve the CORPORATION from any responsibility to obtain necessary CITY permits or Building Department approvals for the modification. Any violation shall result in the CORPORATION being charged for all repairs necessary to restore the facility to its original condition and any additional costs pertaining to the restoration of CITY property. (32) Shall immediately report to the police any incidents of a criminal or suspicious nature occurring on CITY property and notify the Project Manager or his/her designee within twelve hours. If initial notification is verbal, it must also be submitted in writing to Project Manager or his/her designee on provided form. (33) Shall make sure that the doors to the Scene Shop, Rehearsal Hall, and Costume Shop, as well as any other exterior access doors to any area of the Lucie Stern Community Theatre, are not left open, unlocked or left with the locking mechanism disabled at any time when the immediate area secured by the door is unoccupied by the CORPORATION, even if only briefly. Failure to do this may result in greater restricted access to the Lucie Stern Community Theatre, including the possible forfeiture of keys/proximity cards by the CORPORATION and/or restricted access times. (34) Must fill out a CITY Report of Accident/Property Damage report (Appendix K) for any and all accidents, injuries or property damage if a CITY employee is not present to fill out the report. (35) Must operate and conduct business in compliance with the CITY’s Zero Waste Plan (Appendix I) for all activities including, but not limited to, set construction and strike, food and beverage service, and office activities. The CITY Recycling Program can assist with resources for achieving this goal. The goal is to send as Revised 8/1/2010 Page 12 of 27 little waste to landfill as possible through waste reduction, reuse and recycling. To achieve this goal CORPORATION must first reduce waste whenever possible. (36) Shall avoid the use of disposables and shall not use Styrofoam™ and other plastics for food/beverage service. Reusable food/beverage service ware should be utilized to the maximum extent possible. Where a reusable food/beverage service option is not available, choose items that are recyclable. For concessions, choose product packaging that is recyclable. (37) Must practice reuse before, during and after production. A list of reuse resources will be provided to avoid the disposal of construction materials, sets and props. CORPORATION must recycle construction debris from set materials (e.g. wood, metal). (38) Must recycle all materials included in the CITY’s Recycling Program including paper (all types), plastic containers #1-#7, cardboard, glass bottles and jars, and metal cans. Compostable materials will be disposed of in designated compost waste receptacles. Revised 8/1/2010 Page 13 of 27 EXHIBIT B RESPONSIBILITIES OF THE CITY (1) Allow CORPORATION the use of the Community Theatre Rehearsal Hall, Costume Room, Scene Shop, Paint Shop, Stage, Auditorium, Light/Sound Booth, designated work space, etc. as scheduled in ATTACHMENT 1 for the preparation and presentation of theatre productions performed under this agreement provided that CORPORATION submits specific rehearsal schedules, performance schedules and shop use schedules. CORPORATION shall be required to comply with all CITY policies. Any use of CITY facilities and equipment other than that listed in this contract but necessary to carry out this contract must be scheduled through and approved in advance by the Project Manager or his/her designee. (2) Allow the use of the auditorium and the stage for performances and brush-up rehearsals on the following schedule: No performance shall begin earlier than 9:00 a.m. nor end later than midnight. In no event shall CORPORATION conduct rehearsals or other activities, or otherwise occupy CITY facilities from 12 midnight to 8:00 a.m. unless prior written permission is obtained from the Project Manager or a designated employee of the CITY is on site. CORPORATION shall observe all facility security rules and regulations as established by CITY (Appendix A). (3) Allow the use of the stage and the auditorium prior to the opening night of such productions according to the production schedule set forth in ATTACHMENT 1. Allow the use of the rehearsal hall, box office, scene shop, paint shop and costume shop according to the schedule as set forth in ATTACHMENT 1. Additional facility use may be provided as specified in item (Exhibit B (1); Exhibit A (28)) above; however, priority use of the room will always be given to actual rehearsals of productions covered by a contract with the CITY. The CITY will not be responsible for obtaining additional space, but may assist in locating other CITY spaces and may act as co-sponsor for use of CITY facilities under appropriate circumstances. Payment as specified in the CITY’s Municipal Fee Schedule will need to be made for any productions/performances/events/other uses that are not included as a part of ATTACHMENT 1. CORPORATION will forfeit the right to any additional reservations of CITY facilities should CORPORATION reserve space which is not used. CITY reserves the right to allow other uses of space when not in actual, scheduled use by CORPORATION. Revised 9/1/2010 Page 14 of 27 (4) Provide the Project Manager or his/her designee with a list of all planned activities utilizing theatre Stage and Auditorium during said periods. This information is to be provided to the Project Manager or his/her designee in production design meetings (5) Allow CORPORATION to use all operational production equipment in CITY'S Community Theatre inventory as requested by CORPORATION and approved in writing by CITY. CORPORATION takes such equipment "as is" and is responsible for ensuring that such equipment is in a safe condition prior to use and is returned in working condition at the conclusion of its use or of the production. The CORPORATION will assist the CITY in keeping the inventory of tools, equipment, instruments and production materials up-to-date so that all theatre users may benefit from the use of these materials. (6) Monitor all aspects of production relative to safety (Appendix E). If the Project Manager or any designee(s) deem(s) that any procedure followed by CORPORATION is unsafe, he or she has the authority to immediately stop such procedure. The CITY and CORPORATION will work together to prevent or quickly mitigate any fire hazards or any items identified by the Fire Department during facility inspections. (7) Provide maintenance of CITY facilities and equipment, replacement lamps for lighting equipment and blades for table power tools, but not hand power tools. CITY shall respond with reasonable speed to make necessary repairs hereunder. (8) Provide persons designated by CORPORATION and approved by the Project Manager or his/her designee with keys, proximity cards (up to a maximum of six), and alarm codes for access to Lucie Stern Community Theatre facilities solely for the purpose of carrying out the requirements of this agreement. Keys, proximity cards, and alarm codes shall not be loaned or transferred and shall only be used by the designated persons. In the event that CORPORATION fails to properly open or lock and secure CITY facilities leading to a false alarm call-out or leaves areas of the facility unlocked and unattended, a two hundred dollar ($200.00) penalty shall be paid to CITY on each occasion. In the event that a designated key holder loses any key or proximity card issued by CITY the CORPORATION shall be assessed a seventy-five dollar ($75.00) replacement charge for each key or proximity card or pay for the cost of rekeying or reprogramming the locks of the facility if circumstances indicate it as determined by the CITY. CORPORATION will be responsible and held accountable for all personnel, properties and activities of CORPORATION. CORPORATION will be responsible and held accountable for all CITY facility and equipment damages or loss due to negligence. Revised 9/1/2010 Page 15 of 27 (9) Have the right to, with no notice; suspend this contract if the building should be declared uninhabitable for reasons of safety by the proper authorities. (i.e. if the building should be damaged in an earthquake and be declared unsafe for occupancy). If there is an outbreak of pandemic flu or other medical emergency and places of public gatherings are closed, CITY will not assume any financial responsibility for loss of revenue by the CORPORATION. If the Lucie Stern Community Theatre is not available due to earthquake, other disaster, or safety related issues, CITY will not assume any financial responsibility for loss of revenue by the CORPORATION. Revised 9/1/2010 Page 16 of 27 EXHIBIT C GENERAL CONDITIONS (1) CITY. The Manager Arts-Children’s Theatre is designated the Project Manager for CITY, who shall render overall supervision of the progress and performance of this agreement by CITY. All services herein agreed in this contract to be performed by CITY shall be under the overall supervision of the Project Manager or his/her designee. Contractor shall go through Project Manager or his/her designee in all matters dealing with CITY policies, funding, facilities, equipment and other CITY departments outside the Community Theatre. (2) CORPORATION. CORPORATION shall assign a single Project Director who shall have overall responsibility for the progress and execution of this agreement by CORPORATION. Should circumstances or condition subsequent to the execution of this agreement require a substitute Project Director, CORPORATION shall notify CITY immediately of such occurrence. The Project Director shall be responsible for all actions of the CORPORATION, including their support groups and volunteers. The Project Director shall also be responsible for all communication and information to and from CITY and CORPORATION'S personnel, including their support groups. (3) ACCESS. CORPORATION shall not prevent the Project Manager, facility maintenance personnel, and others specifically designated by the Project Manager from free and easy access to all CITY facilities. The Project Manager and others specifically designated by the Project Manager shall attempt to coordinate such access if possible. (4) SPECIFIC SERVICES. CORPORATION shall provide all specified services as set forth herein, for the presentation of the 2010-2011 Season’s productions as listed in and on the dates specified in ATTACHMENT 1. (5) PRODUCTION CHANGES. CORPORATION may make changes to its productions within the guidelines of the author or his/her representative. (6) SCHEDULING. CORPORATION may change production scheduling or locations for the purpose of increasing its net revenue and/or audience base, provided that such changes shall not diminish the quality of or access to such offerings by Palo Alto residents. Such changes shall be subject to CITY policies and procedures for space reservation and requests for changes are to be submitted in writing to the Project Manager for approval before any such changes are made. Revised 9/1/2010 Page 17 of 27 (7) FISCAL YEAR DEFINED. The term "fiscal year" shall mean July 1 to June 30, although CORPORATION is not required to use the same period for its own record-keeping and reporting purposes. (8) DAYS DEFINED. The term "days" shall mean calendar days. (9) QUALIFICATIONS. CORPORATION represents that it is qualified to furnish the services described under this agreement and shall be responsible for the performance of this agreement. (10) TICKET SALES: (a) CORPORATION budget for the term of this agreement is attached hereto, marked “ATTACHMENT 2” and incorporated herein by reference as though fully set forth. (b) CORPORATION shall be responsible for sale of season tickets and single tickets, depositing of revenue and reporting of revenue and expenditures, and shall place available tickets for each production for sale at the theatre box office one hour prior to each performance. CORPORATION shall not pre-sell seat numbers C1, C2, D1, D2, D3, and D4. CORPORATION shall also not pre-sell either the block of seats T2, T4, T6, T8, T10, U2, U4, U6, U8 and U10 or the block of seats T1, T3, T5, T7, T9, U1, U3, U5, U7, and U9 but shall hold one of these blocks of seats for disabled seating priorities. Said unsold seats may be released for sale one hour prior to performance. (c) CORPORATION agrees the price of admission for the season shall be as set forth in ATTACHMENT 3. (d) CORPORATION shall remit to CITY a surcharge for each ticket sold of $2.00 for each and every ticket sold either through subscription, group, individual, promotional or any other means. The surcharge of $ 2.00 per ticket sold is due within 60 calendar days after the closing date of the production. “Sold” is to include any tickets given in exchange for monetary consideration. There will be a 10% surcharge levied for payments received between 61 days and 90 days after the closing date of the production; a 15% surcharge levied for payments received between 91 days and 120 days after the closing date of the production; and a 20% surcharge levied for payments received in excess of 121 days of the closing date of the production. Payment must be accompanied by the production report. (e) CORPORATION shall provide CITY, when requested by the Project Manager or his/her designee, with at least six (6) complimentary Revised 9/1/2010 Page 18 of 27 tickets for each production on the date(s) requested, best available seating will be provided to CITY if any seats are available at the time of the request. (f) CORPORATION may operate an intermission snack concession during each performance under this agreement. CORPORATION shall conduct such operation in a safe, clean manner and shall hold CITY harmless from any claim or demand of liability of any nature whatsoever which may arise out of such operation. If alcoholic beverages are to be sold or distributed free of charge, CORPORATION shall have on display a California State A.B.C. Permit and provide the Project Manager with proof of liquor liability where CITY is named as co-insured with liability of at least one million dollars ($l,000,000.00) (See Exhibit A (29) above). It is the responsibility of the CORPORATION to ensure that no alcoholic beverage is served to a minor by checking I.D.’s if the person appears to be under thirty years of age. Food and drink may not be taken into the Auditorium or the Light/Sound Booth at any time. CORPORATION shall remove all cups, glasses, bottles, napkins and food from the lobby, green room, and any other affected areas, including the courtyard, after each performance. CORPORATION is required to adhere to CITY’S Zero Waste Plan (Appendix I). (11) ORGANIZATION OF CORPORATION. (a) Composition of Corporation. Throughout the term of this agreement, CORPORATION shall remain an independent, non- profit corporation under the laws of California governed solely by a Board of Directors. Any changes in CORPORATION'S Articles of Incorporation, By-Laws, or tax-exempt status shall be reported by CORPORATION immediately to the Project Manager. Not more than twenty-five percent (25%) of the persons serving on the governing board of CORPORATION may be interested persons. "Interested persons" means any person currently being compensated by the CORPORATION for services rendered to it, whether as a full or part-time employee, independent or otherwise, but excluding any reasonable compensation paid to a director as director. (b) Meetings of Corporation. All meetings of the Board of Directors of CORPORATION shall be open to the public, except meetings, or portions thereof, dealing with personnel or litigation matters. Project Manager will serve as CITY liaison to CORPORATION'S Board of Directors. Project Manager shall be notified 21 (twenty-one) days in advance of the dates, times, and locations of all Board of Directors meetings. CORPORATION shall provide CITY with names, addresses and telephone numbers of CORPORATION Board Revised 9/1/2010 Page 19 of 27 members, as well as your Board’s meeting schedule (ATTACHMENT 4) to be attached to this agreement prior to its final approval. CORPORATION shall provide an updated roster of Board of Directors as changes may occur. (12) FISCAL RESPONSIBILITIES OF CORPORATION. (a) Fiscal Agent. CORPORATION shall appoint a fiscal agent who shall be responsible for the financial and accounting activities of CORPORATION, including the receipt and disbursement of CORPORATION funds. CORPORATION shall provide CITY with the name of fiscal agent (ATTACHMENT 5) and notify the Project Manager within 24 hours of any changes occurring during the contract period. CORPORATION shall have sole responsibility for the safekeeping of CORPORATION tickets and monies. (b) Fiscal Monitor. CORPORATION shall appoint from its Board an individual who no less than monthly shall review and by signature acknowledge each monthly financial report. (c) System of Accounts. CORPORATION and its fiscal agent shall establish and maintain a system of accounts that shall be in conformance with generally accepted principles of accounting for budgeted funds. Such system of accounts shall be subject to the review and approval of appropriate CITY staff. (d) Financial Record. In support of its system of accounts, CORPORATION shall maintain complete and accurate records of all financial transactions, including, but not limited to, contracts, invoices, time cards, cash receipts, vouchers, canceled checks, and bank statements. These records shall be made available to the CITY upon request. NOTE: CORPORATION currency is not to be stored on the theatre premises. (e) Audits. CORPORATION shall provide for independent audit of its fiscal year transactions, records, and financial reports. The audit shall be at the discretion of CITY and, if required, shall be done by a certified public accountant. The certified public accountant shall submit the report to both parties. The cost of this audit will be borne by CORPORATION. (f) Audit of surcharge payments. Corporation shall retain for a period of at least three years ticket stubs, sales records, and a verified report of sold and unsold tickets which must be made available to the city of Palo Alto Auditor upon request. Revised 9/1/2010 Page 20 of 27 (13) PRODUCTION REPORTS AND RECORDS. (a) Production Reports. CORPORATION shall keep accurate records of and shall file with Project Manager or his/her designee Production Reports within thirty (30) calendar days following the closing of each production, listing number of performances, ticket sales, expense/revenue, number of paid and volunteer participants and paid and volunteer participant hours worked. Each report shall be prepared on the form provided by CITY or on a form approved by the Project Manager. CORPORATION shall make every reasonable effort to supply such other information as the Project Manager and/or CITY Auditor may request. On reasonable notice and with reasons specified, CORPORATION shall grant the Project Manager and/or CITY Auditor access to all CORPORATION records relating to this agreement, including performance records, data, statements, and reports. (b) Evaluation of services. CORPORATION shall furnish all data, statements, records, information, and reports requested by CITY to monitor, review, and evaluate the performance of CORPORATION'S services hereunder. (c) A copy of CORPORATION’S most recently filed California State Tax Form 199, "California Exempt Organizations Annual Information Return" must be filed with the Project Manager or his/her designee within fifteen days of when it is due to the State of California and shall also be attached to this agreement prior to its final approval (ATTACHMENT 6). (14) CORRECTIVE ACTION REQUIREMENT. Notwithstanding the requirements of this agreement, in the event CITY should determine from any source, including but not limited to reports submitted by CORPORATION under this agreement or any evaluation report from any source, that there is a condition which requires correction, CITY may forward to CORPORATION a request for corrective action. Such request shall indicate the nature of the condition(s) or issue(s) which require(s) corrective action and may include a recommendation as to appropriate corrective action. Within fifteen (15) days of CITY'S request, CORPORATION shall submit its response which shall include its view of the problem and proposed action, if any. Upon request of either party, the parties shall meet within five (5) days thereafter to discuss the problem and proposed corrective action. (15) RIGHT TO SUSPEND OR TERMINATE. Either party may suspend or terminate the agreement for any reason by giving thirty (30) days' written Revised 9/1/2010 Page 21 of 27 notice to the other party. Upon the expiration of such notice, performance of the services hereunder shall be immediately discontinued. (16) SURRENDER OF MATERIALS. Upon suspension or termination, CORPORATION shall immediately turn over to CITY all keys and proximity cards issued by CITY, copies of studies, reports, and other data, whether or not completed, prepared by CORPORATION or its subcontractors, if any, in connection with this agreement. Such materials shall become the property of CITY. CORPORATION, however, shall not be liable for CITY'S use of incomplete materials nor for CITY'S use of complete documents if used for other than the services contemplated by this agreement. (17) CONTRACTS WITH OTHER AGENCIES. CORPORATION agrees not to enter into any contract or agreement with another person or agency that will materially interfere with or inhibit the full performance of the services to be provided by CORPORATION under this agreement. CORPORATION agrees to terminate as soon as legally possible any contract or agreement which will materially interfere with or inhibit the full performance of the services to be provided by CORPORATION to CITY under this agreement. Nothing herein is intended to prohibit CORPORATION from applying for, and receiving, supplementary funding from other than CITY sources so long as any agreement required for such funding does not materially interfere with or inhibit the full performance of the services to be provided by CORPORATION under this agreement. CORPORATION is specifically encouraged to seek such supplementary funding. (18) INTEREST OF CORPORATION. CORPORATION covenants that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the services hereunder. CORPORATION further covenants that, in the performance of this agreement, no subcontractor or person having such an interest shall be employed. It is expressly agreed that, in the performance of the services hereunder, CORPORATION shall at all times be deemed an independent contractor and not an agent or employee of CITY. (19) ASSIGNMENT. Both 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. 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 Revised 9/1/2010 Page 22 of 27 and any license or privilege granted herein. This agreement and interest herein shall not be assignable by operation of law without the prior written consent of the other party. (20) SUBCONTRACTORS: EMPLOYEES. CORPORATION shall be responsible for employing or engaging all persons necessary to perform the services of CORPORATION hereunder. No subcontractor of CORPORATION will be recognized by CITY as such, rather, all subcontractors are deemed to be employees of CORPORATION and it agrees to be responsible for their performance. CORPORATION shall give its personal attention to the fulfillment of the provisions of this agreement by all of its employees, participants, volunteers, and subcontractors, if any, and shall keep the work under its control. (21) INDEMNITY. CORPORATION hereby agrees to indemnify and hold harmless CITY, its officers, agents, and employees of and from: (a) Any and all claims and demands which may be made against CITY, its officers, agents, or employees by reason of any injury to or death of any person or damage suffered or sustained by any person or corporation caused by, or alleged to have been caused by, any act or omission, negligent or otherwise, of CORPORATION, its officers, employees, agents, participants, volunteers, or any subcontractor under this agreement or of any of subcontractor's employees or agents. (b) Any and all damage to, loss or destruction of the property of CITY, its officers, agents, or employees occupied or used by or in the care, custody, or control of CORPORATION caused by any act or omission, negligent or otherwise, of CORPORATION, its officers, employees, agents, participants, volunteers or any subcontractor under this agreement. (c) Any and all claims and demands which may be made against CITY, its officers, agents, or employees by reason of any injury to or death of or damage suffered or sustained by any employee, participant, volunteer, or agent of CORPORATION or any subcontractor under this agreement, however caused, excepting, however, any such claims and demands which are the result of the sole negligence or willful misconduct of CITY, its officers, agents or employees. (d) Any and all claims and demands which may be made against CITY, its officers, agents, or employees by reason of any infringement or alleged infringement of any copyright or trademark caused by or alleged to have been caused by CORPORATION or any subcontractor under this agreement. Revised 9/1/2010 Page 23 of 27 (e) Any and all penalties imposed or damages sought on account of the violation of any law or regulation or of any term or condition of any permit in connection with this Agreement. (f) CORPORATION at its own cost, expense and risk shall defend any and all suits, actions, or other legal proceedings that may be brought or instituted by third persons against CITY, its officers, agents, or employees on any such claim or demand referred to in Paragraphs (a), (b), (c) and (d) above, of such third persons, or to enforce any penalty referred to in Paragraph (e) above and pay and satisfy any judgment or decree that may be rendered against CITY, its officers, agents, or employees in any such suit, action, or other legal proceeding. (g) Any and all claims and demands which may be made against CITY, its officers, agents or employees for any loss or damage to materials and equipment owned, rented or borrowed by CORPORATION, its employees, subcontractors, participants, volunteers, sponsors or any others under its project management. (22) INTOXICATION. CORPORATION agrees to be responsible for injuries or damage caused by any of its employees, agents, patrons, subcontractors, or volunteers under the influence of alcohol, drugs, hallucinogens or narcotics, whether or not legally prescribed. CORPORATION as well as CITY shall not permit any of CORPORATION’S employees or volunteers discovered to be under the influence from remaining in any facility used under the terms of this contract and CITY reserves the right of denying such persons further participation in Theatre activities. Consumption of alcoholic beverages or use of illegal drugs is expressly forbidden by any person working for the CORPORATION, paid or volunteer. This includes all staff, actors, crew and musicians while at the Lucie Stern Community Center or any other CITY facility. (23) WORKER'S COMPENSATION. CORPORATION certifies that it is aware of the provisions of the Labor Code of the State of California, which requires every employer to be insured against liability for workers' compensation or to undertake self insurance in accordance with the provisions of the code, and it certifies that it will comply with such provisions before commencing the performance of the work of this agreement. (24) INSURANCE. CORPORATION, at its sole cost and expense, shall obtain and maintain in full force and effect throughout the entire term of this agreement insurance coverage insuring not only Contractor and its subcontractors, if any, but also, with the exception of workers' compensation Revised 9/1/2010 Page 24 of 27 and employer's liability insurance, CITY, its officers, agents, and employees and each of them. CITY is to be named as co-insured with liability coverage of at least one million dollars ($l,000,000.00) to be attached to this agreement prior to its final approval. Certificates of such insurance shall be filed with CITY concurrently with the execution of this agreement. Said certificate shall be subject to the approval of the City Attorney and shall contain an endorsement stating that said insurance is primary coverage and will not be canceled or altered by the insurer except after filing with the City Clerk thirty (30) days' written notice of such cancellation or alteration. Current certificates of such insurance shall be kept on file at all times during the term of this agreement. (25) WEAPONS. No firearms or other weapons, whether loaded or not, shall be allowed in the Lucie Stern Community Theatre or on any other CITY property. Stage weapons and firearms designed solely for the use of blank cartridges will be allowed if they are being used as a prop in the current production but must be stored, when not being used, in a secure manner by the CORPORATION’S stage manager or his/her designee. (Please reference the CITY’S Danger Policy, Appendix K) (26) LEGAL COMPLIANCE. CORPORATION and all its paid employees, subcontractors, and volunteer participants are required to abide by all Federal, State and Local laws and ordinances. Revised 9/1/2010 Page 25 of 27 EXHIBIT D NON-DISCRIMINATION FORM Certification 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 with regards to age, race, color, religion, sex, national origin, ancestry, disability, or sexual preference; that they are in compliance with all Federal, State, and local directives and executive orders regarding nondiscrimination in employment. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. Firm: ____________________________________________________________ Signature: ____________________________________________________________ Name: ____________________________________________________________ Signature: ____________________________________________________________ Name: ____________________________________________________________ Note: California Corporations Code Section 313 requires two corporate officers to execute contracts. *The signature of First Officer* must be one of the following: Chairman of the Board; President; or Vice President. **The signature of the Second Officer** must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer; or Assistant Treasurer. (In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) Revised 9/1/2010 Page 26 of 27 EXHIBIT E INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 NO PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. Revised 9/1/2010 Page 27 of 27 II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 1 PUBLIC/PRIVATE PARTNERSHIPS POLICY STATEMENT The City of Palo Alto encourages the formation of public/private partnerships for the benefits the community receives. For the purposes of this policy, “public/private” also encompasses “public/nonprofit” partnerships. Definitions Public/private partnership: A public/private partnership is an agreement between the City and a nonprofit or private organization to provide services or to assist in funding of public facilities and programs. Such partnerships may take various forms, including: • Acceptance of or solicitation of service or facility proposals • Facilitation of such proposals through the City's regulatory process • Waiver of City General Fund fees to help reduce project costs. • Contributions of City matching funds for construction of facilities to be owned and controlled or operated by the City. • Provision of facilities to the private partner at no charge or at a subsidized rent. Public/private partnerships typically fall into one of three categories: co-sponsorship, alliances or joint ventures. Co-Sponsorships: This is the most common type of public/private partnership. An organization furthers the mission of the City by supporting a City activity or program in conjunction with pursuit of that organization’s own mission or program. Co-sponsorships can take the form of one-time events or annual agreements. Some examples of co-sponsorships include the Palo Alto Tennis Club use of City courts to provide a youth tennis program and American Youth Soccer Organization’s use of space in a City facility to train referees. Co- sponsorships are entered into by staff and normally have no or minimal financial impact. Alliances: This type of public/private partnership involves organizations that have been created for the sole purpose of supporting a City program or an array of City programs. The organization does not expect to receive any direct financial benefit or to alter City policy and/or operations, but undertakes to work closely and cooperatively with staff to implement City goals. Alliance organizations include the Recreation Foundation, the Art Center Foundation (Project Look or Cultural Kaleidoscope), the Friends of the Children’s Theatre (the Magic Castle), the Library Foundation and the Friends of the Palo Alto Library (financial assistance with the renovation and expansion of the Children’s Library). Alliances are approved by the Council if there are any staffing or budgetary implications to the partnership. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 2 Joint Ventures: This type of partnership involves organizations which have programs or missions independent of the City and involve the City entering into a contractual relationship with the public or nonprofit organization with both parties contributing to the partnership for their mutual benefit. Each joint venture is uniquely negotiated by the staff and approved by the City Council. Examples of Joint Ventures include TheatreWorks, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the former police station by older adult service provider, Avenidas. PROCEDURES Initiation of partnerships: Public/private partnerships may be initiated in one of three ways: • By staff: Staff identifies an opportunity for such a partnership and undertakes an informal or formal request for proposal process to identify partners. • By Council: The City Council directs staff to work with a private or nonprofit organization to develop such a partnership. • By a private or nonprofit organization: An organization makes a partnership proposal to the staff or City. City Manager Review: If the partnership proposal involves more than one City department, the City Manager’s Office will appoint a team with representatives of all City departments who are stakeholders in the partnership proposal. The team will analyze the proposal and inform the City Manager of the resource implications of the proposal, including staffing and monetary commitments. This would include proposed fee waivers. If the proposal will require a re-ordering of department priorities that have already been approved by the Council in setting its annual priorities or in the budget process, Council approval will be required prior to commitment to the partnership. Council approval will also be required if the partnership requires a new or adjusted allocation of operating or capital funding. Note: Co-sponsorships usually only involve a single department and do not necessitate the formation of an interdepartmental committee, the involvement of the City Manager’s Office or the approval of the City Council. City-Initiated Partnerships: Such partnerships will be guided by existing policies and procedures governing purchasing and outsourcing, using “requests for proposals” and/or bid processes as the method of initiating a partnership. A City-initiated partnership may incorporate incentives including naming rights, waiver of non-enterprise fund building and planning fees, reduced lease rates, free use of space, subsidies, and staff resources. All incentives may be negotiated on a case-by-case basis. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 3 Evaluation of Viability of Partnering Organization: Staff will provide the City Manager and/or City Council with its assessment of the viability of the proposed partnership, based on the partnering organization’s possession of sound organizational, administrative and fiscal management, and its demonstrated experience to achieve and sustain project tasks, such as fundraising and building community support. For proposed facility improvement or expansion initiatives, the nonprofit or private organization should have the ability and commitment to make a substantial pledge to the project’s cost. Facilities Proposals: • If a City facility is to be renovated, expanded or otherwise be directly affected by the partnership, the Infrastructure Management Plan will have to be adjusted appropriately. • Long-term staffing, operational and maintenance costs must be identified in the proposal. The project’s applicable costs and funding sources for furnishings, fixtures and equipment will be identified. • The parties will negotiate the joint or separate financial responsibility for any project cost overruns on a project-by-project basis. • Staff may recommend that any standard City processing or use fee authorized under the Municipal Fee Schedule, excluding fees and charges levied by City of Palo Alto Utilities or other City enterprise fund programs, should be waived as a condition of the City's participation. Waiver of fees may be granted by the Council and limited to those fees associated with a construction or capital improvement project which, upon its completion, results in a new or improved public facility, building or park, or some portion thereof, that will be solely owned or controlled by the City. In the event that only a portion of a construction or capital improvement project will result in a new or improved City facility, building or park, or portion thereof, then the Council may waive only that portion of any associated fee directly relating to the construction, improvement or enhancement of the City facility, building or park. As appropriate, the summary and recommendation in the report to the Council will include a staff recommendation on waiving fees which the Council can approve or reject. • The City will determine whether the nonprofit or private organization shall use or may forego a formal or informal competitive selection process in the hiring of professionals who will perform the management, design and/or construction phases of the project. The City shall review and approve the requirements for and the performance of all phases of design, planning and construction work for the project. City of Palo Alto (ID # 3255) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: West Bay Opera Agreement Title: Approval of the Renewal of a Public-Private Partnership Agreement between the City of Palo Alto and the West Bay Opera for the use of the Lucie Stern Community Theatre From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council approve the renewal of a public-private partnership agreement between the City of Palo Alto and West Bay Opera for the use of the Lucie Stern Community Theatre (Attachment A). Background The Lucie Stern Community Theatre is used by three local theatre companies which put on approximately 15 productions annually. West Bay Opera, TheatreWorks and the Palo Alto Players partner with the Community Services Department to foster the cultural and artistic needs of Palo Alto residents and visitors. The City and these companies mutually benefit from continuing this relationship. West Bay Opera was founded by Henry Holt in 1955. Originally called the Little Opera Guild, the company began presenting fully staged operatic performances. Under the leadership of Mr. Holt, who was succeeded by his wife, Maria Holt, and then by the present director, Jose Luis Moscovich, West Bay Opera has grown steadily. In 1974, the West Bay Orchestra was established. In 1982, the company acquired space for rehearsals, offices, a costume shop and storage on Lambert Avenue in Palo Alto. Today, West Bay Opera presents three fully staged productions at the Lucie Stern Theatre. City of Palo Alto Page 2 Discussion West Bay Opera’s usage of the Lucie Stern Community Theatre is covered by a public-private partnership agreement (Attachment A). Since production scheduling is done interdependently between the three groups, and the cost of relocating an opera company is prohibitively high, there exists nearly no opportunity for changing the companies that the Lucie Stern Community Theatre serves. Therefore, staff recommends that the City Council approve the modification of the existing public private partnership. The key terms of this agreement are discussed below: Term: The new agreement is for one year. If it is approved, it will have taken effect on September 1, 2012 and will terminate on September 1, 2013. Similar agreements are intended to be entered into in subsequent years. Revenue: In accordance with the Municipal Fee Schedule and in exchange for providing facility usage, West Bay Opera shall remit to the City a $2.00 surcharge for each ticket sold. This fee is effectively passed down to patrons and is applied to all subscription, group, individual, promotional, and other tickets sold. Complementary tickets are excluded, and the sum of the surcharge revenue for each production is due to the City within 30 calendar days after the closing of a production. Among other functions, the proposed agreement acts as a revenue contract which governs the application, collection and accounting of associated revenue. Responsibilities of City: The contract outlines the responsibilities of the City, using the standard terms of public-private and joint-venture partnerships, including specifying good delivery terms, notice requirements for contract termination, and affirming non-discrimination, insurance and property guidelines. The City is also responsible for allowing and providing access to the Lucie Stern Community Theatre during designated hours, providing basic maintenance of capital equipment, monitoring production safety, and providing information regarding other scheduled facility uses (such as City-sponsored events or private rentals). City of Palo Alto Page 3 Responsibilities of Company: Additionally, the agreement stipulates the responsibilities of the opera company, including its duty to abide by City and department policies and procedures (specifically including and as related to, without limitation, conduct in community centers, injury and illness prevention, sale of alcoholic beverages, operations, building emergency procedures, zero waste, and facility use). Other responsibilities include timely remittance of fees and surcharges, requirements for sufficient building supervision/staffing, recording keeping of ticket sales and surcharge remittance for compliance with audits, and adherence to standard practices for facility security. This renewed agreement is substantially identical to previously negotiated agreements. The $2.00 ticket surcharge is consistent with the Municipal Fee Schedule adjustments effective 07/01/2012. Policy Implications This partnership would be categorized as a Joint Venture partnership under the City’s Public-Private Partnership Policy (Policy 1-25; Public Private Partnerships; Attachment B). The partnership with West Bay Opera furthers Policy C-7 of the Community Services element of the Comprehensive Plan: “Actively work with private, nonprofit, and public community service organization to avoid duplication and to coordinate the delivery of services like child care, senior services, and recreation” and Policy G-12 of the Governance element: “Continue and expand the opportunities for public and nonprofit organizations serving the City to provide information about themselves to the public.” Resource Impact No additional City resources are required and it is anticipated that this partnership will lead to enhanced program and capital funding over the life of the agreement. Environmental Review This is not a project requiring environmental review under the California Environmental Quality Act. City of Palo Alto Page 4 Attachments: Attachment A - West Bay Opera Contract (DOC) Attachment B - Public Private Partnership Policy 1-25 (PDF) CITY OF PALO ALTO AND PALO ALTO PLAYERS THEATRE COMPANY AGREEMENT BY THIS AGREEMENT MADE AND ENTERED INTO ON THE 5th DAY OF SEPTEMBER 2012 BY AND BETWEEN THE CITY OF PALO ALTO (“CITY”) AND WEST BAY OPERA (“CORPORATION”), IN CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES HERETO AGREE AS FOLLOWS: CORPORATION SHALL PROVIDE OR FURNISH THE FOLLOWING SPECIFIED 1) GOODS AND MATERIALS, 2) SERVICES OR 3) A COMBINATION THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW. EXHIBITS: The following attached exhibits are incorporated herein by this reference. Contract is not complete unless all exhibits are attached. Exhibit A: Responsibilities of the Corporation Exhibit B: Responsibilities of the City Exhibit C: General Conditions Exhibit D: Non-Discrimination Form Exhibit E: Proof of Liability Insurance TERM: The services and/or materials furnished under this agreement shall commence on 9/10/2012 and shall be completed on or before 09/01/2013. COMPENSATION: As compensation for the full performance of this agreement, CORPORATION shall remit fees and surcharges to the CITY in accordance with the prevailing rates set forth in the CITY”s Municipal Fee Schedule. Such payments include, but are not limited to, those defined in EXHIBIT A (Section 22) and EXHIBIT C (Section 10) and shall be be subject to the terms and conditions set forth herein. In consideration of referenced exhibits, attachements, and appendecies, such compensation shall not exceed $50,000. CITY ACCOUNT NUMBER: Fees and surcharges remitted persuant to this agreement shall be credited to the City’s accounts included in the table below: REVENUE TYPE COST CENTER - GL ACCT - INTERNAL ORDER Ticket Surcharge 80020412 – 15540 - 61203 Facility Attendant 80020512 – 13450 - 61203 INVOICING: Send all invoices to the City of Palo Alto. Such invoices shall be sent to the attention of the Project Manager. GENERAL TERMS AND CONDITIONS: General Terms and Conditions are included on page three of this agreement. . HOLD HARMLESS. CORPORATION shall indemnify, defend and hold harmless CITY, its Council Members, officers, employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of CORPORATION’S, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct, or conduct for which the law imposes strict liability on CORPORATION in the performance of or failure to perform this agreement by CORPORATION. ENTIRE AGREEMENT. This agreement and the terms and conditions on the following pages represent the entire agreement between the parties with respect to the purchase and sale of the goods, equipment, materials or supplies or payment for services which may be the subject of this agreement. All prior agreements, representations, statements, negotiations and undertakings whether oral or written are superseded hereby. THIS AGREEMENT SHALL BECOME EFFECTIVE UPON ITS APPROVAL AND EXECUTION BY CITY. IN WITNESS THEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRITTEN ABOVE. By: ______________________________ Date______________________ José Luis Moscovich General Director West Bay Opera By: ______________________________ Date______________________ Judge Luckey Manager Arts, Children’s Theatre Community Services Department City of Palo Alto CITY OF PALO ALTO APPROVALS: CITY DEPARTMENT Funds Have Been Budgeted (1) PURCHASING & CONTRACT ADMINISTRATION INSURANCE REVIEW (2) APPROVAL OVER $25,000 (3) PURCHASING MANAGER APPROVAL OVER $25,000 APPROVAL OVER $85,000 CITY OF PALO ALTO BY:_____________________________________ CITY ATTORNEY ATTEST: BY:________________________ _______________________ MAYOR CITY CLERK CITY OF PALO ALTO - GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. This agreement is limited to the terms and conditions on pages 1, 2, and 3 hereof which includes any exhibits referenced. B. GOVERNING LAW. This agreement shall be governed by the laws of the state of California. C. INTEREST OF CORPORATION. It is understood and agreed that this agreement is not a contract of employment in the sense that the relation of master and servant exists between the CITY and undersigned. At all times CONRACTOR shall be deemed to be an independent contractor and CORPORATION is not authorized to bind CITY to any contracts or other obligations. In executing this agreement, CORPORATION certifies that no one who has or will have any financial interest under this agreement is an officer or employee of CITY. D. INSURANCE. CORPORATION agrees to provide the insurance specified in the “Insurance Requirements” form attached hereto as Exhibit C. In the event CORPORATION is unable to secure a policy endorsement naming the City of Palo Alto as an additional insured under any comprehensive general liability or comprehensive automobile policy or policies, CORPORATION shall at a minimum, and only with the written approval of City’s Risk Manager or designee, cause each such insurance policy obtained by it to contain an endorsement providing that the insurer waives all right of recovery by way of subrogation against CITY, its officers, agents, and employees in connection with any damage, claim, liability personal injury, or wrongful death covered by any such policy. Each such policy obtained by CORPORATION shall contain an endorsement requiring thirty (30) days' written notice from the insurer to CITY before cancellation or reduction in the coverage or limits of such policy. CORPORATION shall provide certificates of such policies or other evidence of coverage satisfactory to City's Risk Manager, together with evidence of payment of premiums, to CITY at the commencement of this agreement, and on renewal of the policy, or policies, not later than twenty (20) days before expiration of the terms of any such policy. E. TERMINATION. This agreement may be terminated by CITY upon ten (10) days written notice to CORPORATION. Monies then owing based upon work satisfactorily accomplished shall be paid to CORPORATION. F. CHANGES. This agreement shall not be assigned or transferred without the written consent of the CITY. No changes or variations of any kind are authorized without the written consent of the City Manager or his or her designee. G. AUDITS. CORPORATION agrees to permit CITY to audit, at any reasonable time during the term of this agreement and for three (3) years thereafter, CORPORATION'S records pertaining to matters covered by this agreement. CORPORATION further agrees to maintain such records for at least three (3) years after the term of this agreement. H. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this agreement. I. CITY'S PROPERTY. Title to CITY’s property furnished to CORPORATION shall remain in the CITY. CORPORATION shall not alter or use property for any purpose, other than that specified by CITY, or for any other person without the prior written consent of CITY. CORPORATION shall store, protect, preserve, repair and maintain such property in accordance with sound professional practice, all at CORPORATION’s expense. J. NON-DISCRIMINATION. No discrimination shall be made in the employment of persons under this agreement because of the race, color, national origin, age, ancestry, religion or sex of such person. CORPORATION agrees to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment, including completing the NonDiscrimination Compliance Form, attached hereto as Exhibit D, and incorporated herein by this reference. K. WARRANTY. CORPORATION expressly warrants that all materials and services covered by this agreement shall conform to the specifications, requirements, instructions, or other descriptions upon which this agreement is based, shall be fit and sufficient for the purpose intended, of good materials and workmanship and free from defect and that materials and services of CORPORATION’S design will be free from defect in design. Inspection, test, acceptance, payment or use of the goods furnished hereunder shall not affect the CORPORATION’S obligation under this warranty, and such warranties shall survive inspection, test acceptance and use. CORPORATION agrees to replace, restore, or correct defects of any materials or services not conforming to the foregoing warranty promptly. Without expense to CITY, when notified of such nonconformity by CITY, in the event of failure by CORPORATION to correct defects in or replace nonconforming goods or service promptly, CITY, after reasonable notice to CORPORATION, may make such corrections or replace such materials or services and charge contractor for the cost incurred by the CITY thereby. L. WORKERS’ COMPENSATION. CORPORATION, by executing this agreement, certifies that it is aware of the provisions of the labor code of the state of California which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and certifies that it will comply with such provisions before commencing the performance of the work of this agreement. M. PRICE TERMS. (a) Extra charges, invoices and payment. No extra charges of any kind will be allowed unless specifically agreed to in writing by CITY. All state and federal excise, sales and use taxes shall be stated separately on the invoices. (b) Transportation charges. Any transportation charges with respect to which CORPORATION is entitled to receive reimbursement shall be added to CONTRAACTOR’S invoice as a separate item, with the receipted freight bill attached thereto. (c) CORPORATION warrants that the prices for materials or services sold to CITY under this agreement are not less favorable than those currently extended to any other customers of the same or like articles or services in equal or less quantities. In event CORPORATION reduces its price for such materials or services during the term of this agreement, CORPORATION agrees to reduce the prices or rates hereof correspondingly. N. SCHEDULES OR DELIVERY. Time is of the essence of this agreement. CORPORATION agrees to comply with the specific schedule provided by the CITY or agreed upon herein without delay and without anticipating CITY’S requirements. CORPORATION also agrees not to make material commitments or scheduling arrangements in excess of the required amount or in advance of the time necessary to meet the schedule(s) of this agreement, if any. O. TRANSPORTATION, PACKAGING & LABELING. All materials or services are to be provided: (a) F.O.B., Palo Alto unless otherwise specified; (b) with a packing list enclosed in cartons, which indicate the agreement number, exact quantity and descriptions, concerning any materials shipments; (c) and comply with current packaging and labeling requirements prescribed by D.O.T. Revised 8/1/2010 Page 5 of 27 EXHIBIT A RESPONSIBILITIES OF THE CORPORATION (1) Abide by the policies/procedures established by CITY and CITY’S Arts and Sciences Division and the Department of Community Services for the use of CITY facilities, equipment, costumes, props, furniture, scenery and other production elements. These shall include, but are not limited to, Regulations Of The City Of Palo Alto Regarding Prohibited Conduct In Community Centers and Theaters (Appendix A), the City of Palo Alto Injury and Prevention program (Appendix B), Policy for Sale of Alcoholic Beverages (Appendix C), Operations Manual (Appendix D), Safety Procedures and Guidelines (Appendix E), Building Emergency Procedures (Appendix F), procedure for adjusting the Forestage height including use of the Scissor lift (Appendix G), House Manager's Guide (Appendix H), Zero Waste Plan (Appendix I), and Costume Room Guidelines (Appendix J). Follow safety procedures for the use of power and hand tools, mechanical lifts, etc. including the use of safety goggles, ear protection, face shields, safety cables, outriggers, etc. (2) Obtain, supervise, and pay all necessary related fees for the services of all professional assistance needed to produce such productions. Such assistance may include, but is not limited to the following: Production Directors, all Designers, Carpenters, Painters, Production Assistants, Music Directors, Choreographers, Musicians and other Front of House, Artistic or Administrative personnel. (3) Pay all fees and costs for materials, supplies, scripts, royalties, licenses and other fees and expenses connected with said productions, including all make-up removal supplies. (4) Be solely responsible for the control and supervision of all production activities and personnel connected therewith and shall notify all personnel of their obligations and responsibilities pertaining to their production area. Act responsibly in matters of building security when CORPORATION is schedule to utilize CITY facilities. (5) Conduct regularly scheduled production meetings, shall notify CITY of such production meetings in writing, and shall coordinate all production activities with CITY'S Project Manager or his/her designee. There shall be at least one or more, as needed, production design meeting(s) for each production as scheduled in ATTACHMENT 1 which shall be convened by CORPORATION at a mutually convenient time prior to start of construction. Provide the Project Manager or his/her designee with a list of major production personnel and their phone numbers for each production at the time of the first production meeting. Construction plans and fly-line plots should be submitted at the aforementioned production design meeting in order for the Project Manager or his/her designee to ascertain compliance with CITY fire or other safety regulations. (6) Provide the Project Manager or his/her designee with a list of all Pyrotechnics effects (including the use of open flames), all Hydro technical effects, all use of Revised 8/1/2010 Page 6 of 27 fog or haze, all loud noises (i.e. gunshots), and all use of strobe lights at least 21 days prior to first use on stage. No flames shall be permitted on stage without the required fire permits from CITY. Smoking by any of the actors on stage as an integral part of the production will be considered a Pyrotechnic effect. Safety precautions approved by a CITY Fire Inspector and the Project Manager or his/her designee will be taken when smoking is occurring on stage, and the audience shall be notified beforehand that smoking, loud noises (i.e. gunshots) or use of strobe lights will occur on the stage. All Fire Department fees for “Open Flame Permits” and “Candles and Open Flames in Assembly Areas Permits” shall be the responsibility of the CORPORATION. (7) Provide the Project Manager with the rehearsal schedule, performance schedule, shop schedule and any requests for the use of CITY facilities (including but not limited to the Community Theatre, rooms located in the Lucie Stern complex and the Lucie Stern Courtyard and patio) for any purpose. Space reservations should be made at least four weeks in advance. CORPORATION shall accommodate other uses of the theatre facility, including but not limited to the stage, auditorium, rehearsal hall, scene shop, paint shop, flat dock, costume shop, and the lobby during periods of non-use during the runs of the productions. CITY shall notify the CORPORATION of such other uses. CORPORATION shall provide personnel for any shifting of CORPORATION'S scenery and/or equipment. (8) Designate as Project Director for the length of this contract an employee or sub- contractor to manage or supervise all areas and items in this contract, including production, technical, house personnel and any and all support groups and to be CORPORATION'S liaison with the Project Manager or his/her designee in all matters relating to the CITY in any way. (9) Arrange for auditions and casting for such productions and be solely responsible for the supervision and control of all performers. With respect to casting, CORPORATION shall have sole discretion to choose and approve the qualifications and select the cast. In personnel decisions, the CORPORATION shall agree to and comply with the provisions of the CITY’S Non-discrimination policy (Exhibit 8). (10) Search for, place and train participants in appropriate areas of theatre production activity and shall utilize personnel in a safe and effective manner in the presentation of such productions. CORPORATION shall be solely responsible for the control and supervision of such participants and shall indemnify, defend, and hold harmless the CITY from any claims or liabilities arising from the acts or omissions of such personnel. All such personnel shall be deemed the sole agents and employees of CORPORATION and shall be notified by the CORPORATION of this circumstance. (11) Exercise safe practices in the use of CITY facilities and equipment, shall maintain and clear work areas, and shall within 24 hours report, with form provided by CITY (Appendix K), information regarding accidents. Immediately report to the Project Manager or his/her designee on form provided by CITY any breakage, malfunction, deterioration or loss of any of the CITY'S resources (including musical instruments, tools, lights, sound equipment, props, curtains, etc.). Revised 8/1/2010 Page 7 of 27 CORPORATION shall not attempt repair of CITY equipment without prior consultation with the CITY’S Project Manager. CORPORATION shall immediately discontinue any activity where an unsafe or dangerous condition exists. CORPORATION shall train and supervise CORPORATION'S staff and volunteers on safe theatre practices and adhere to CITY'S safety procedures and guidelines. If, in the opinion of any CITY or CORPORATION employee, CORPORATION is conducting an activity in an unsafe manner, CORPORATION or its agents shall be informed and shall immediately discontinue such activity until such activity is able to be conducted in a safe manner approved by CITY staff. (12) Promote and publicize all of its productions, and shall print in all publicity, including, but not limited to, publications, mailings, flyers, posters, brochures, programs, and paid or public service advertising, the statement, "In cooperation with the City of Palo Alto Community Services Department Division of Arts and Sciences." In conformance with Americans with Disabilities Act (ADA) of 1990 guidelines and requirements, CORPORATION shall bear responsibility for providing appropriate auxiliary aids, interpretive services and accommodations where they are necessary to achieve an equal opportunity to participate in and enjoy the benefits of public performances produced under this contract. Printed programs shall include the following statement required by the Americans with Disabilities Act: "Persons with disabilities who require information on 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: ADA Coordinator, City of Palo Alto, 650-463-4952 (Voice) or ada@cityofpaloalto.org (Internet). (13) Continue to exist as an independent, non-profit corporation under the laws of the United States and the State of California. (14) Submit all signs or displays to be located on the Theatre premises to Project Manager or his/her designee for approval at the first production meeting. All displays may be put up at load-in and must be removed during strike. Inside the Theatre, no display materials may be placed upon stucco walls. Lobby displays may only be placed on the lobby display boards, and all fasteners must be removed at the time display is taken down. Nothing may be posted on the exterior walls or doors of the Theatre or in the Stern courtyard, except for items in the display case and an approved production name sign hung from the theatre balcony. Marquee signs must be constructed of light weight material, and shall be secured in such a way that the sign cannot become dislodged by normal vibration or seismic activity. Signs shall be of a standard size no larger than ten feet in length and eight feet in height. All marquee signage must be attached to the theatre balcony with rigging so that the sign may be easily removed for limited periods during photography shoots, special events, or building maintenance. (15) Assure that the auditorium, stage, paint shop, scene shop, flat dock, costume shop, green room, dressing rooms, rehearsal hall, hallways and outdoor areas adjacent to theatre and shop will be cleared and clean, and that scenery, properties, and other production elements will be disassembled and stored, to the Project Manager or his/her designee’s satisfaction, within six hours after the final Revised 8/1/2010 Page 8 of 27 performance or on a time schedule mutually agreed upon between the CORPORATION and the Project Manager or his/her designee. The stage shall always be returned to its basic set-up as established by the Project Manager or his/her designee unless there is a mutual agreement with the incoming group that has been approved by the Project Manager or his/her designee. All items on the STRIKE CHECKLIST are to be performed unless there is a mutual agreement with the incoming group that has been approved by the PROJECT MANAGER or his/her designee. The Project Manager or his/her designee will sign a copy of the STRIKE CHECKLIST form at the completion of the strike to signify acceptance of clean and neat facilities. (16) Leave storage, paint, scene and costume spaces clean and clear of CORPORATION'S materials other than those materials necessary for the ongoing maintenance and repair of the sets and costumes by the Monday following opening performance. (17) Leave all spaces clear, clean and orderly at the end of each use. Rehearsal Hall is to be cleared of all materials, except major set pieces and any rehearsal props, after each daily use. Rehearsal Hall is to be completely cleared within 24 hours of final use. Dressing rooms are to be maintained after each daily use. Trash, recycling and compostable materials are to be removed from all areas daily. Recyclables and compostable materials are to be placed in the recycling and composting carts near the trash dumpster and garbage and trash are to be placed into the dumpster. The CORPORATION is required to reduce waste, reuse and recycle per the CITY’s Zero Waste Plan (Appendix I). Office space and hallways are to be kept continually clear, clean and orderly and neither space shall be used for the purpose of set, prop, or costume storage. Materials may not be left or stored any place out-of-doors overnight or when unattended by contractor personnel. (18) Enforce current regulations as established by CITY with regard to smoking, food and drink in CITY facilities (Appendix A). CORPORATION shall provide ushers at all previews and performances who will enforce such regulations. Smoking is not permitted inside any CITY facility. No person shall bring any animal into the theatre. This regulation shall not apply to service animals assisting individuals with disabilities or to animals in training to become service animals. Use of animals on the stage is subject to approval by the Project Manager or his/her designee. Food and drink are not permitted in the auditorium, light/sound booth or on stage, unless used as part of a production scene. Food and drink shall be permitted only in approved areas such as the green room and lobby. CORPORATION shall clean up all food and drink containers daily after use. (19) Observe all provisions of this agreement when using CITY facilities other than or in addition to the Community Theatre. This includes cleaning up the rooms, returning tables and chairs to their initial locations and depositing all trash and recycling in the appropriate receptacles. CORPORATION will be responsible for the maintenance of the Lucie Stern-Recreation Wing restrooms for weekend performances. Revised 8/1/2010 Page 9 of 27 (20) Comply with CITY TB test requirement for employees and volunteers of CORPORATION at any time the CITY Risk Manager deems it necessary. If minors are involved in the production, State of California requirements for fingerprinting the staff must be followed. (21) Comply with CITY sound ordinance levels for any outdoor activities, including load-in, strike, dismantling, or disposal. Shop doors facing Hopkins and Harriet Streets shall be closed between 8:00 p.m. and 8:00 a.m. (22) Pay Building Attendant fees at prevailing rates as set forth in the Municipal Fee Schedule: (a) For (an) additional Attendant(s) required for the use of CITY facilities other than the Attendant the CITY will furnish for the Lucie Stern Community Theatre facility for the period of from one hour prior to until at least one half hour after the completion of each public performance as listed in ATTACHMENT 1. (b) For any performances not included in ATTACHMENT 1. (c) When using other CITY facilities at the same time as a public performance as listed in ATTACHMENT 1. All building use policies must be adhered to for any CITY facility use. Additional performances of the productions listed in ATTACHMENT 1 may be added to ATTACHMENT 1 with two weeks notice. (23) Provide house manager and ushers for every performance or event whenever public is in attendance. CORPORATION shall permit only persons who have been trained in theatre emergency, safety and use procedures to usher. CORPORATION shall submit a list of their trained personnel to the Project Manager prior to public performances for each production. Ushers must be available to assist patrons under all circumstances and must be aware of and able to assist disabled persons. The CORPORATION’S House Manager and ushers must also be available to assist in emergency situations throughout the entire performance until audience has left the theatre. Ushers must ensure that wheelchairs, walkers, etc. are not blocking any of the aisles or exits. Ushers shall return seats to the upright position and remove litter from the auditorium and restrooms at the conclusion of each performance. (24) Shall be responsible for installing or removing the removable auditorium seats in designated areas to accommodate their wheelchair patrons and as required due to the needs of the production. (25) Shall have privilege of borrowing available Community Theatre- owned properties, sets, costumes and scenery for productions scheduled in this agreement. Costumes, properties and sets created by CORPORATION with Corporation-owned materials will remain the property of CORPORATION, and shall be removed from the theatre facility at the conclusion of the production in Revised 8/1/2010 Page 10 of 27 which the materials are used. The Project Manager or his/her designee may, on a case-by-case basis, authorize exceptions. Any allowed items stored at the theatre will become available for use by all contracting CORPORATIONS and the CITY. All such items created under former agreements will continue to be the property of the CITY. All office equipment, construction tools, special effects and lighting equipment purchased and owned by CORPORATION will remain the private property of CORPORATION and the CITY assumes no responsibility or liability for the loss or maintenance of such materials. All equipment, instruments, costumes and any other materials rented, borrowed or owned by any subcontractor, agent or person for the CORPORATION is the responsibility of the CORPORATION and/or its subcontractors, and the CITY assumes no responsibility or liability for its maintenance or loss. Such items as original play scripts, musical scores, scenic designs, costume designs and photographs belong solely to the authors, composers, artists who created them or their representatives, and any use of them will be at the sole discretion of the CORPORATION. Any use of these items must be in accordance with all applicable laws. CORPORATION assumes all liability and responsibility for any default on production expenses. (26) Shall be required to replace or have repaired by factory authorized technicians CITY owned equipment, instruments or materials identified by the Project Manager or his/her designee as having been lost, damaged or destroyed by an agent of the CORPORATION. A written report must be made on CITY form whenever CITY equipment is lost, damaged, or destroyed by the CORPORATION. (27) May be allowed the use of Community Theatre-owned properties, sets, costumes, scenery, furniture and equipment for CORPORATION productions not scheduled in this agreement upon written request to the Project Manager or his/her designee and upon express approval and written authorization of the Project Manager or his/her designee. CORPORATION must return to Community Theatre all items borrowed for productions at other venues within four days of the final performance and shall, in the event the items are damaged or destroyed, be responsible for the repair or replacement of all such borrowed items to the satisfaction of the Project Manager. (28) May use Community Theatre facilities and equipment only for theatre productions expressly covered under this agreement. Exceptions, such as for classes, camps or workshops, will be considered by the Project Manager or his/her designee upon the receipt from the CORPORATION of a written request at least thirty days prior to the date needed and, if granted, will be approved in writing by the Project Manager or his/her designee. No such activity will be advertised or promoted until it has been expressly approved by the CITY’S Project Manager. (29) Shall enforce all State and City laws relating to the sale and consumption of alcoholic beverages in CITY facilities. Alcohol is permitted at the Lucie Stern Community Center if approved by the CITY’S Project Manager. Unless otherwise specifically permitted the only alcoholic beverages which may be sold or served at CITY facilities by CITY policy are wines, including champagne and sparkling wine. If alcoholic beverages are to be sold or distributed free of charge, Revised 8/1/2010 Page 11 of 27 CORPORATION must possess a State A.B.C. The permit for the sale or distribution of alcoholic beverages obtained by the CORPORATION must be provided to the Project Manager. Proof of liquor liability insurance where CITY is named as co-insured with liability of at least one million dollars ($l,000,000.00) shall be required. Permits are to be displayed as required by law. It is the responsibility of the CORPORATION to ensure that no alcoholic beverage is served to a minor. Identification must be checked if the person appears to be under thirty years of age. CORPORATION shall remove all items, including cups, glasses, bottles, napkins and food from the lobby and any other affected areas, including the courtyard, after each performance. CORPORATION is required to adhere to CITY’S Recycling and Zero Waste Program (Appendix I). (30) Shall have one of their designated and CITY approved key and/or proximity card holders on the premises at all times as a supervisor whenever anyone from the CORPORATION is in the facility working for the CORPORATION, whether as a paid employee, subcontractor or volunteer. The Project Manager or his/her designee must approve any exceptions in writing. (31) Shall not in any way modify CITY facilities and may not install or attach anything in or on CITY facilities without having first submitted a written request to the Project Manager and having received written permission from the Project Manager or his/her designee. The approval of the Project Manager does not relieve the CORPORATION from any responsibility to obtain necessary CITY permits or Building Department approvals for the modification. Any violation shall result in the CORPORATION being charged for all repairs necessary to restore the facility to its original condition and any additional costs pertaining to the restoration of CITY property. (32) Shall immediately report to the police any incidents of a criminal or suspicious nature occurring on CITY property and notify the Project Manager or his/her designee within twelve hours. If initial notification is verbal, it must also be submitted in writing to Project Manager or his/her designee on provided form. (33) Shall make sure that the doors to the Scene Shop, Rehearsal Hall, and Costume Shop, as well as any other exterior access doors to any area of the Lucie Stern Community Theatre, are not left open, unlocked or left with the locking mechanism disabled at any time when the immediate area secured by the door is unoccupied by the CORPORATION, even if only briefly. Failure to do this may result in greater restricted access to the Lucie Stern Community Theatre, including the possible forfeiture of keys/proximity cards by the CORPORATION and/or restricted access times. (34) Must fill out a CITY Report of Accident/Property Damage report (Appendix K) for any and all accidents, injuries or property damage if a CITY employee is not present to fill out the report. (35) Must operate and conduct business in compliance with the CITY’s Zero Waste Plan (Appendix I) for all activities including, but not limited to, set construction and strike, food and beverage service, and office activities. The CITY Recycling Program can assist with resources for achieving this goal. The goal is to send as Revised 8/1/2010 Page 12 of 27 little waste to landfill as possible through waste reduction, reuse and recycling. To achieve this goal CORPORATION must first reduce waste whenever possible. (36) Shall avoid the use of disposables and shall not use Styrofoam™ and other plastics for food/beverage service. Reusable food/beverage service ware should be utilized to the maximum extent possible. Where a reusable food/beverage service option is not available, choose items that are recyclable. For concessions, choose product packaging that is recyclable. (37) Must practice reuse before, during and after production. A list of reuse resources will be provided to avoid the disposal of construction materials, sets and props. CORPORATION must recycle construction debris from set materials (e.g. wood, metal). (38) Must recycle all materials included in the CITY’s Recycling Program including paper (all types), plastic containers #1-#7, cardboard, glass bottles and jars, and metal cans. Compostable materials will be disposed of in designated compost waste receptacles. Revised 8/1/2010 Page 13 of 27 EXHIBIT B RESPONSIBILITIES OF THE CITY (1) Allow CORPORATION the use of the Community Theatre Rehearsal Hall, Costume Room, Scene Shop, Paint Shop, Stage, Auditorium, Light/Sound Booth, designated work space, etc. as scheduled in ATTACHMENT 1 for the preparation and presentation of theatre productions performed under this agreement provided that CORPORATION submits specific rehearsal schedules, performance schedules and shop use schedules. CORPORATION shall be required to comply with all CITY policies. Any use of CITY facilities and equipment other than that listed in this contract but necessary to carry out this contract must be scheduled through and approved in advance by the Project Manager or his/her designee. (2) Allow the use of the auditorium and the stage for performances and brush-up rehearsals on the following schedule: No performance shall begin earlier than 9:00 a.m. nor end later than midnight. In no event shall CORPORATION conduct rehearsals or other activities, or otherwise occupy CITY facilities from 12 midnight to 8:00 a.m. unless prior written permission is obtained from the Project Manager or a designated employee of the CITY is on site. CORPORATION shall observe all facility security rules and regulations as established by CITY (Appendix A). (3) Allow the use of the stage and the auditorium prior to the opening night of such productions according to the production schedule set forth in ATTACHMENT 1. Allow the use of the rehearsal hall, box office, scene shop, paint shop and costume shop according to the schedule as set forth in ATTACHMENT 1. Additional facility use may be provided as specified in item (Exhibit B (1); Exhibit A (28)) above; however, priority use of the room will always be given to actual rehearsals of productions covered by a contract with the CITY. The CITY will not be responsible for obtaining additional space, but may assist in locating other CITY spaces and may act as co-sponsor for use of CITY facilities under appropriate circumstances. Payment as specified in the CITY’s Municipal Fee Schedule will need to be made for any productions/performances/events/other uses that are not included as a part of ATTACHMENT 1. CORPORATION will forfeit the right to any additional reservations of CITY facilities should CORPORATION reserve space which is not used. CITY reserves the right to allow other uses of space when not in actual, scheduled use by CORPORATION. Revised 9/1/2010 Page 14 of 27 (4) Provide the Project Manager or his/her designee with a list of all planned activities utilizing theatre Stage and Auditorium during said periods. This information is to be provided to the Project Manager or his/her designee in production design meetings (5) Allow CORPORATION to use all operational production equipment in CITY'S Community Theatre inventory as requested by CORPORATION and approved in writing by CITY. CORPORATION takes such equipment "as is" and is responsible for ensuring that such equipment is in a safe condition prior to use and is returned in working condition at the conclusion of its use or of the production. The CORPORATION will assist the CITY in keeping the inventory of tools, equipment, instruments and production materials up-to-date so that all theatre users may benefit from the use of these materials. (6) Monitor all aspects of production relative to safety (Appendix E). If the Project Manager or any designee(s) deem(s) that any procedure followed by CORPORATION is unsafe, he or she has the authority to immediately stop such procedure. The CITY and CORPORATION will work together to prevent or quickly mitigate any fire hazards or any items identified by the Fire Department during facility inspections. (7) Provide maintenance of CITY facilities and equipment, replacement lamps for lighting equipment and blades for table power tools, but not hand power tools. CITY shall respond with reasonable speed to make necessary repairs hereunder. (8) Provide persons designated by CORPORATION and approved by the Project Manager or his/her designee with keys, proximity cards (up to a maximum of six), and alarm codes for access to Lucie Stern Community Theatre facilities solely for the purpose of carrying out the requirements of this agreement. Keys, proximity cards, and alarm codes shall not be loaned or transferred and shall only be used by the designated persons. In the event that CORPORATION fails to properly open or lock and secure CITY facilities leading to a false alarm call-out or leaves areas of the facility unlocked and unattended, a two hundred dollar ($200.00) penalty shall be paid to CITY on each occasion. In the event that a designated key holder loses any key or proximity card issued by CITY the CORPORATION shall be assessed a seventy-five dollar ($75.00) replacement charge for each key or proximity card or pay for the cost of rekeying or reprogramming the locks of the facility if circumstances indicate it as determined by the CITY. CORPORATION will be responsible and held accountable for all personnel, properties and activities of CORPORATION. CORPORATION will be responsible and held accountable for all CITY facility and equipment damages or loss due to negligence. Revised 9/1/2010 Page 15 of 27 (9) Have the right to, with no notice; suspend this contract if the building should be declared uninhabitable for reasons of safety by the proper authorities. (i.e. if the building should be damaged in an earthquake and be declared unsafe for occupancy). If there is an outbreak of pandemic flu or other medical emergency and places of public gatherings are closed, CITY will not assume any financial responsibility for loss of revenue by the CORPORATION. If the Lucie Stern Community Theatre is not available due to earthquake, other disaster, or safety related issues, CITY will not assume any financial responsibility for loss of revenue by the CORPORATION. Revised 9/1/2010 Page 16 of 27 EXHIBIT C GENERAL CONDITIONS (1) CITY. The Manager Arts-Children’s Theatre is designated the Project Manager for CITY, who shall render overall supervision of the progress and performance of this agreement by CITY. All services herein agreed in this contract to be performed by CITY shall be under the overall supervision of the Project Manager or his/her designee. Contractor shall go through Project Manager or his/her designee in all matters dealing with CITY policies, funding, facilities, equipment and other CITY departments outside the Community Theatre. (2) CORPORATION. CORPORATION shall assign a single Project Director who shall have overall responsibility for the progress and execution of this agreement by CORPORATION. Should circumstances or condition subsequent to the execution of this agreement require a substitute Project Director, CORPORATION shall notify CITY immediately of such occurrence. The Project Director shall be responsible for all actions of the CORPORATION, including their support groups and volunteers. The Project Director shall also be responsible for all communication and information to and from CITY and CORPORATION'S personnel, including their support groups. (3) ACCESS. CORPORATION shall not prevent the Project Manager, facility maintenance personnel, and others specifically designated by the Project Manager from free and easy access to all CITY facilities. The Project Manager and others specifically designated by the Project Manager shall attempt to coordinate such access if possible. (4) SPECIFIC SERVICES. CORPORATION shall provide all specified services as set forth herein, for the presentation of the 2010-2011 Season’s productions as listed in and on the dates specified in ATTACHMENT 1. (5) PRODUCTION CHANGES. CORPORATION may make changes to its productions within the guidelines of the author or his/her representative. (6) SCHEDULING. CORPORATION may change production scheduling or locations for the purpose of increasing its net revenue and/or audience base, provided that such changes shall not diminish the quality of or access to such offerings by Palo Alto residents. Such changes shall be subject to CITY policies and procedures for space reservation and requests for changes are to be submitted in writing to the Project Manager for approval before any such changes are made. Revised 9/1/2010 Page 17 of 27 (7) FISCAL YEAR DEFINED. The term "fiscal year" shall mean July 1 to June 30, although CORPORATION is not required to use the same period for its own record-keeping and reporting purposes. (8) DAYS DEFINED. The term "days" shall mean calendar days. (9) QUALIFICATIONS. CORPORATION represents that it is qualified to furnish the services described under this agreement and shall be responsible for the performance of this agreement. (10) TICKET SALES: (a) CORPORATION budget for the term of this agreement is attached hereto, marked “ATTACHMENT 2” and incorporated herein by reference as though fully set forth. (b) CORPORATION shall be responsible for sale of season tickets and single tickets, depositing of revenue and reporting of revenue and expenditures, and shall place available tickets for each production for sale at the theatre box office one hour prior to each performance. CORPORATION shall not pre-sell seat numbers C1, C2, D1, D2, D3, and D4. CORPORATION shall also not pre-sell either the block of seats T2, T4, T6, T8, T10, U2, U4, U6, U8 and U10 or the block of seats T1, T3, T5, T7, T9, U1, U3, U5, U7, and U9 but shall hold one of these blocks of seats for disabled seating priorities. Said unsold seats may be released for sale one hour prior to performance. (c) CORPORATION agrees the price of admission for the season shall be as set forth in ATTACHMENT 3. (d) CORPORATION shall remit to CITY a surcharge for each ticket sold of $2.00 for each and every ticket sold either through subscription, group, individual, promotional or any other means. The surcharge of $ 2.00 per ticket sold is due within 60 calendar days after the closing date of the production. “Sold” is to include any tickets given in exchange for monetary consideration. There will be a 10% surcharge levied for payments received between 61 days and 90 days after the closing date of the production; a 15% surcharge levied for payments received between 91 days and 120 days after the closing date of the production; and a 20% surcharge levied for payments received in excess of 121 days of the closing date of the production. Payment must be accompanied by the production report. (e) CORPORATION shall provide CITY, when requested by the Project Manager or his/her designee, with at least six (6) complimentary Revised 9/1/2010 Page 18 of 27 tickets for each production on the date(s) requested, best available seating will be provided to CITY if any seats are available at the time of the request. (f) CORPORATION may operate an intermission snack concession during each performance under this agreement. CORPORATION shall conduct such operation in a safe, clean manner and shall hold CITY harmless from any claim or demand of liability of any nature whatsoever which may arise out of such operation. If alcoholic beverages are to be sold or distributed free of charge, CORPORATION shall have on display a California State A.B.C. Permit and provide the Project Manager with proof of liquor liability where CITY is named as co-insured with liability of at least one million dollars ($l,000,000.00) (See Exhibit A (29) above). It is the responsibility of the CORPORATION to ensure that no alcoholic beverage is served to a minor by checking I.D.’s if the person appears to be under thirty years of age. Food and drink may not be taken into the Auditorium or the Light/Sound Booth at any time. CORPORATION shall remove all cups, glasses, bottles, napkins and food from the lobby, green room, and any other affected areas, including the courtyard, after each performance. CORPORATION is required to adhere to CITY’S Zero Waste Plan (Appendix I). (11) ORGANIZATION OF CORPORATION. (a) Composition of Corporation. Throughout the term of this agreement, CORPORATION shall remain an independent, non- profit corporation under the laws of California governed solely by a Board of Directors. Any changes in CORPORATION'S Articles of Incorporation, By-Laws, or tax-exempt status shall be reported by CORPORATION immediately to the Project Manager. Not more than twenty-five percent (25%) of the persons serving on the governing board of CORPORATION may be interested persons. "Interested persons" means any person currently being compensated by the CORPORATION for services rendered to it, whether as a full or part-time employee, independent or otherwise, but excluding any reasonable compensation paid to a director as director. (b) Meetings of Corporation. All meetings of the Board of Directors of CORPORATION shall be open to the public, except meetings, or portions thereof, dealing with personnel or litigation matters. Project Manager will serve as CITY liaison to CORPORATION'S Board of Directors. Project Manager shall be notified 21 (twenty-one) days in advance of the dates, times, and locations of all Board of Directors meetings. CORPORATION shall provide CITY with names, addresses and telephone numbers of CORPORATION Board Revised 9/1/2010 Page 19 of 27 members, as well as your Board’s meeting schedule (ATTACHMENT 4) to be attached to this agreement prior to its final approval. CORPORATION shall provide an updated roster of Board of Directors as changes may occur. (12) FISCAL RESPONSIBILITIES OF CORPORATION. (a) Fiscal Agent. CORPORATION shall appoint a fiscal agent who shall be responsible for the financial and accounting activities of CORPORATION, including the receipt and disbursement of CORPORATION funds. CORPORATION shall provide CITY with the name of fiscal agent (ATTACHMENT 5) and notify the Project Manager within 24 hours of any changes occurring during the contract period. CORPORATION shall have sole responsibility for the safekeeping of CORPORATION tickets and monies. (b) Fiscal Monitor. CORPORATION shall appoint from its Board an individual who no less than monthly shall review and by signature acknowledge each monthly financial report. (c) System of Accounts. CORPORATION and its fiscal agent shall establish and maintain a system of accounts that shall be in conformance with generally accepted principles of accounting for budgeted funds. Such system of accounts shall be subject to the review and approval of appropriate CITY staff. (d) Financial Record. In support of its system of accounts, CORPORATION shall maintain complete and accurate records of all financial transactions, including, but not limited to, contracts, invoices, time cards, cash receipts, vouchers, canceled checks, and bank statements. These records shall be made available to the CITY upon request. NOTE: CORPORATION currency is not to be stored on the theatre premises. (e) Audits. CORPORATION shall provide for independent audit of its fiscal year transactions, records, and financial reports. The audit shall be at the discretion of CITY and, if required, shall be done by a certified public accountant. The certified public accountant shall submit the report to both parties. The cost of this audit will be borne by CORPORATION. (f) Audit of surcharge payments. Corporation shall retain for a period of at least three years ticket stubs, sales records, and a verified report of sold and unsold tickets which must be made available to the city of Palo Alto Auditor upon request. Revised 9/1/2010 Page 20 of 27 (13) PRODUCTION REPORTS AND RECORDS. (a) Production Reports. CORPORATION shall keep accurate records of and shall file with Project Manager or his/her designee Production Reports within thirty (30) calendar days following the closing of each production, listing number of performances, ticket sales, expense/revenue, number of paid and volunteer participants and paid and volunteer participant hours worked. Each report shall be prepared on the form provided by CITY or on a form approved by the Project Manager. CORPORATION shall make every reasonable effort to supply such other information as the Project Manager and/or CITY Auditor may request. On reasonable notice and with reasons specified, CORPORATION shall grant the Project Manager and/or CITY Auditor access to all CORPORATION records relating to this agreement, including performance records, data, statements, and reports. (b) Evaluation of services. CORPORATION shall furnish all data, statements, records, information, and reports requested by CITY to monitor, review, and evaluate the performance of CORPORATION'S services hereunder. (c) A copy of CORPORATION’S most recently filed California State Tax Form 199, "California Exempt Organizations Annual Information Return" must be filed with the Project Manager or his/her designee within fifteen days of when it is due to the State of California and shall also be attached to this agreement prior to its final approval (ATTACHMENT 6). (14) CORRECTIVE ACTION REQUIREMENT. Notwithstanding the requirements of this agreement, in the event CITY should determine from any source, including but not limited to reports submitted by CORPORATION under this agreement or any evaluation report from any source, that there is a condition which requires correction, CITY may forward to CORPORATION a request for corrective action. Such request shall indicate the nature of the condition(s) or issue(s) which require(s) corrective action and may include a recommendation as to appropriate corrective action. Within fifteen (15) days of CITY'S request, CORPORATION shall submit its response which shall include its view of the problem and proposed action, if any. Upon request of either party, the parties shall meet within five (5) days thereafter to discuss the problem and proposed corrective action. (15) RIGHT TO SUSPEND OR TERMINATE. Either party may suspend or terminate the agreement for any reason by giving thirty (30) days' written Revised 9/1/2010 Page 21 of 27 notice to the other party. Upon the expiration of such notice, performance of the services hereunder shall be immediately discontinued. (16) SURRENDER OF MATERIALS. Upon suspension or termination, CORPORATION shall immediately turn over to CITY all keys and proximity cards issued by CITY, copies of studies, reports, and other data, whether or not completed, prepared by CORPORATION or its subcontractors, if any, in connection with this agreement. Such materials shall become the property of CITY. CORPORATION, however, shall not be liable for CITY'S use of incomplete materials nor for CITY'S use of complete documents if used for other than the services contemplated by this agreement. (17) CONTRACTS WITH OTHER AGENCIES. CORPORATION agrees not to enter into any contract or agreement with another person or agency that will materially interfere with or inhibit the full performance of the services to be provided by CORPORATION under this agreement. CORPORATION agrees to terminate as soon as legally possible any contract or agreement which will materially interfere with or inhibit the full performance of the services to be provided by CORPORATION to CITY under this agreement. Nothing herein is intended to prohibit CORPORATION from applying for, and receiving, supplementary funding from other than CITY sources so long as any agreement required for such funding does not materially interfere with or inhibit the full performance of the services to be provided by CORPORATION under this agreement. CORPORATION is specifically encouraged to seek such supplementary funding. (18) INTEREST OF CORPORATION. CORPORATION covenants that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the services hereunder. CORPORATION further covenants that, in the performance of this agreement, no subcontractor or person having such an interest shall be employed. It is expressly agreed that, in the performance of the services hereunder, CORPORATION shall at all times be deemed an independent contractor and not an agent or employee of CITY. (19) ASSIGNMENT. Both 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. 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 Revised 9/1/2010 Page 22 of 27 and any license or privilege granted herein. This agreement and interest herein shall not be assignable by operation of law without the prior written consent of the other party. (20) SUBCONTRACTORS: EMPLOYEES. CORPORATION shall be responsible for employing or engaging all persons necessary to perform the services of CORPORATION hereunder. No subcontractor of CORPORATION will be recognized by CITY as such, rather, all subcontractors are deemed to be employees of CORPORATION and it agrees to be responsible for their performance. CORPORATION shall give its personal attention to the fulfillment of the provisions of this agreement by all of its employees, participants, volunteers, and subcontractors, if any, and shall keep the work under its control. (21) INDEMNITY. CORPORATION hereby agrees to indemnify and hold harmless CITY, its officers, agents, and employees of and from: (a) Any and all claims and demands which may be made against CITY, its officers, agents, or employees by reason of any injury to or death of any person or damage suffered or sustained by any person or corporation caused by, or alleged to have been caused by, any act or omission, negligent or otherwise, of CORPORATION, its officers, employees, agents, participants, volunteers, or any subcontractor under this agreement or of any of subcontractor's employees or agents. (b) Any and all damage to, loss or destruction of the property of CITY, its officers, agents, or employees occupied or used by or in the care, custody, or control of CORPORATION caused by any act or omission, negligent or otherwise, of CORPORATION, its officers, employees, agents, participants, volunteers or any subcontractor under this agreement. (c) Any and all claims and demands which may be made against CITY, its officers, agents, or employees by reason of any injury to or death of or damage suffered or sustained by any employee, participant, volunteer, or agent of CORPORATION or any subcontractor under this agreement, however caused, excepting, however, any such claims and demands which are the result of the sole negligence or willful misconduct of CITY, its officers, agents or employees. (d) Any and all claims and demands which may be made against CITY, its officers, agents, or employees by reason of any infringement or alleged infringement of any copyright or trademark caused by or alleged to have been caused by CORPORATION or any subcontractor under this agreement. Revised 9/1/2010 Page 23 of 27 (e) Any and all penalties imposed or damages sought on account of the violation of any law or regulation or of any term or condition of any permit in connection with this Agreement. (f) CORPORATION at its own cost, expense and risk shall defend any and all suits, actions, or other legal proceedings that may be brought or instituted by third persons against CITY, its officers, agents, or employees on any such claim or demand referred to in Paragraphs (a), (b), (c) and (d) above, of such third persons, or to enforce any penalty referred to in Paragraph (e) above and pay and satisfy any judgment or decree that may be rendered against CITY, its officers, agents, or employees in any such suit, action, or other legal proceeding. (g) Any and all claims and demands which may be made against CITY, its officers, agents or employees for any loss or damage to materials and equipment owned, rented or borrowed by CORPORATION, its employees, subcontractors, participants, volunteers, sponsors or any others under its project management. (22) INTOXICATION. CORPORATION agrees to be responsible for injuries or damage caused by any of its employees, agents, patrons, subcontractors, or volunteers under the influence of alcohol, drugs, hallucinogens or narcotics, whether or not legally prescribed. CORPORATION as well as CITY shall not permit any of CORPORATION’S employees or volunteers discovered to be under the influence from remaining in any facility used under the terms of this contract and CITY reserves the right of denying such persons further participation in Theatre activities. Consumption of alcoholic beverages or use of illegal drugs is expressly forbidden by any person working for the CORPORATION, paid or volunteer. This includes all staff, actors, crew and musicians while at the Lucie Stern Community Center or any other CITY facility. (23) WORKER'S COMPENSATION. CORPORATION certifies that it is aware of the provisions of the Labor Code of the State of California, which requires every employer to be insured against liability for workers' compensation or to undertake self insurance in accordance with the provisions of the code, and it certifies that it will comply with such provisions before commencing the performance of the work of this agreement. (24) INSURANCE. CORPORATION, at its sole cost and expense, shall obtain and maintain in full force and effect throughout the entire term of this agreement insurance coverage insuring not only Contractor and its subcontractors, if any, but also, with the exception of workers' compensation Revised 9/1/2010 Page 24 of 27 and employer's liability insurance, CITY, its officers, agents, and employees and each of them. CITY is to be named as co-insured with liability coverage of at least one million dollars ($l,000,000.00) to be attached to this agreement prior to its final approval. Certificates of such insurance shall be filed with CITY concurrently with the execution of this agreement. Said certificate shall be subject to the approval of the City Attorney and shall contain an endorsement stating that said insurance is primary coverage and will not be canceled or altered by the insurer except after filing with the City Clerk thirty (30) days' written notice of such cancellation or alteration. Current certificates of such insurance shall be kept on file at all times during the term of this agreement. (25) WEAPONS. No firearms or other weapons, whether loaded or not, shall be allowed in the Lucie Stern Community Theatre or on any other CITY property. Stage weapons and firearms designed solely for the use of blank cartridges will be allowed if they are being used as a prop in the current production but must be stored, when not being used, in a secure manner by the CORPORATION’S stage manager or his/her designee. (Please reference the CITY’S Danger Policy, Appendix K) (26) LEGAL COMPLIANCE. CORPORATION and all its paid employees, subcontractors, and volunteer participants are required to abide by all Federal, State and Local laws and ordinances. Revised 9/1/2010 Page 25 of 27 EXHIBIT D NON-DISCRIMINATION FORM Certification 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 with regards to age, race, color, religion, sex, national origin, ancestry, disability, or sexual preference; that they are in compliance with all Federal, State, and local directives and executive orders regarding nondiscrimination in employment. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. Firm: ____________________________________________________________ Signature: ____________________________________________________________ Name: ____________________________________________________________ Signature: ____________________________________________________________ Name: ____________________________________________________________ Note: California Corporations Code Section 313 requires two corporate officers to execute contracts. *The signature of First Officer* must be one of the following: Chairman of the Board; President; or Vice President. **The signature of the Second Officer** must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer; or Assistant Treasurer. (In the alternative, a certified corporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acceptable) Revised 9/1/2010 Page 26 of 27 EXHIBIT E INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 NO PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. Revised 9/1/2010 Page 27 of 27 II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 1 PUBLIC/PRIVATE PARTNERSHIPS POLICY STATEMENT The City of Palo Alto encourages the formation of public/private partnerships for the benefits the community receives. For the purposes of this policy, “public/private” also encompasses “public/nonprofit” partnerships. Definitions Public/private partnership: A public/private partnership is an agreement between the City and a nonprofit or private organization to provide services or to assist in funding of public facilities and programs. Such partnerships may take various forms, including: • Acceptance of or solicitation of service or facility proposals • Facilitation of such proposals through the City's regulatory process • Waiver of City General Fund fees to help reduce project costs. • Contributions of City matching funds for construction of facilities to be owned and controlled or operated by the City. • Provision of facilities to the private partner at no charge or at a subsidized rent. Public/private partnerships typically fall into one of three categories: co-sponsorship, alliances or joint ventures. Co-Sponsorships: This is the most common type of public/private partnership. An organization furthers the mission of the City by supporting a City activity or program in conjunction with pursuit of that organization’s own mission or program. Co-sponsorships can take the form of one-time events or annual agreements. Some examples of co-sponsorships include the Palo Alto Tennis Club use of City courts to provide a youth tennis program and American Youth Soccer Organization’s use of space in a City facility to train referees. Co- sponsorships are entered into by staff and normally have no or minimal financial impact. Alliances: This type of public/private partnership involves organizations that have been created for the sole purpose of supporting a City program or an array of City programs. The organization does not expect to receive any direct financial benefit or to alter City policy and/or operations, but undertakes to work closely and cooperatively with staff to implement City goals. Alliance organizations include the Recreation Foundation, the Art Center Foundation (Project Look or Cultural Kaleidoscope), the Friends of the Children’s Theatre (the Magic Castle), the Library Foundation and the Friends of the Palo Alto Library (financial assistance with the renovation and expansion of the Children’s Library). Alliances are approved by the Council if there are any staffing or budgetary implications to the partnership. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 2 Joint Ventures: This type of partnership involves organizations which have programs or missions independent of the City and involve the City entering into a contractual relationship with the public or nonprofit organization with both parties contributing to the partnership for their mutual benefit. Each joint venture is uniquely negotiated by the staff and approved by the City Council. Examples of Joint Ventures include TheatreWorks, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the former police station by older adult service provider, Avenidas. PROCEDURES Initiation of partnerships: Public/private partnerships may be initiated in one of three ways: • By staff: Staff identifies an opportunity for such a partnership and undertakes an informal or formal request for proposal process to identify partners. • By Council: The City Council directs staff to work with a private or nonprofit organization to develop such a partnership. • By a private or nonprofit organization: An organization makes a partnership proposal to the staff or City. City Manager Review: If the partnership proposal involves more than one City department, the City Manager’s Office will appoint a team with representatives of all City departments who are stakeholders in the partnership proposal. The team will analyze the proposal and inform the City Manager of the resource implications of the proposal, including staffing and monetary commitments. This would include proposed fee waivers. If the proposal will require a re-ordering of department priorities that have already been approved by the Council in setting its annual priorities or in the budget process, Council approval will be required prior to commitment to the partnership. Council approval will also be required if the partnership requires a new or adjusted allocation of operating or capital funding. Note: Co-sponsorships usually only involve a single department and do not necessitate the formation of an interdepartmental committee, the involvement of the City Manager’s Office or the approval of the City Council. City-Initiated Partnerships: Such partnerships will be guided by existing policies and procedures governing purchasing and outsourcing, using “requests for proposals” and/or bid processes as the method of initiating a partnership. A City-initiated partnership may incorporate incentives including naming rights, waiver of non-enterprise fund building and planning fees, reduced lease rates, free use of space, subsidies, and staff resources. All incentives may be negotiated on a case-by-case basis. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 3 Evaluation of Viability of Partnering Organization: Staff will provide the City Manager and/or City Council with its assessment of the viability of the proposed partnership, based on the partnering organization’s possession of sound organizational, administrative and fiscal management, and its demonstrated experience to achieve and sustain project tasks, such as fundraising and building community support. For proposed facility improvement or expansion initiatives, the nonprofit or private organization should have the ability and commitment to make a substantial pledge to the project’s cost. Facilities Proposals: • If a City facility is to be renovated, expanded or otherwise be directly affected by the partnership, the Infrastructure Management Plan will have to be adjusted appropriately. • Long-term staffing, operational and maintenance costs must be identified in the proposal. The project’s applicable costs and funding sources for furnishings, fixtures and equipment will be identified. • The parties will negotiate the joint or separate financial responsibility for any project cost overruns on a project-by-project basis. • Staff may recommend that any standard City processing or use fee authorized under the Municipal Fee Schedule, excluding fees and charges levied by City of Palo Alto Utilities or other City enterprise fund programs, should be waived as a condition of the City's participation. Waiver of fees may be granted by the Council and limited to those fees associated with a construction or capital improvement project which, upon its completion, results in a new or improved public facility, building or park, or some portion thereof, that will be solely owned or controlled by the City. In the event that only a portion of a construction or capital improvement project will result in a new or improved City facility, building or park, or portion thereof, then the Council may waive only that portion of any associated fee directly relating to the construction, improvement or enhancement of the City facility, building or park. As appropriate, the summary and recommendation in the report to the Council will include a staff recommendation on waiving fees which the Council can approve or reject. • The City will determine whether the nonprofit or private organization shall use or may forego a formal or informal competitive selection process in the hiring of professionals who will perform the management, design and/or construction phases of the project. The City shall review and approve the requirements for and the performance of all phases of design, planning and construction work for the project. City of Palo Alto (ID # 3296) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Trash Boom Agreement for Adobe Creek and Matadero Creek Title: Approval of an Agreement with the Santa Clara Valley Water District for the Installation and Maintenance of Two Trash Booms at Creek Locations in Palo Alto From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached agreement with the Santa Clara Valley Water District (Attachment A) for the installation and maintenance of two trash booms at two different creek locations (Adobe Creek and Matadero Creek) in Palo Alto from the date of execution to July 1, 2022. Background In October 2009, the San Francisco Bay Regional Water Quality Control Board (Water Board) issued a new regional National Pollutant Discharge Elimination System (NPDES) storm water permit to the City of Palo Alto and 76 other Bay Area entities for discharge of municipal storm water to local creeks and San Francisco Bay. This Municipal Regional Permit (MRP) specifies programs and measures to be conducted by local agencies to minimize storm water pollution through the year 2014. One of the new areas of focus in the MRP is control of trash in local waterways. The MRP contains progressively stringent requirements for implementation of trash control measures over the life of the permit. The MRP requires permittees to develop and implement a Short-Term Trash Load Reduction Plan (Short-Term Plan) that will prevent or remove trash loads from City of Palo Alto Page 2 municipal storm drain systems in order to attain a 40% reduction in trash loads by July 1, 2014 (measured from a 2009 baseline trash loading rate). Furthermore, the permittees are required to develop and begin implementation of a Long-Term Trash Load Reduction Plan to attain a 70% reduction in trash loads from their storm drain systems by 2017 and 100% by 2022. The trash load reduction plans are mandated to include implementation of a number of specified actions, such as a mandatory minimum level of trash capture from storm drains, periodic cleanup and abatement of a mandatory minimum number of designated trash hot spots in local creeks; and implementation of other appropriate control measures and best management practices. One such practice is installation of trash booms, floating devices installed across a stream or water body to trap and capture trash, which result in a credit towards trash reduction for one quarter of the catchment area treated. In addition, the MRP explicitly requires the Santa Clara Valley Water District (Water District) to install four trash booms. Discussion The Short-Term Plan that Palo Alto submitted to the Water Board incorporated installation of litter/trash booms resulting in a 0.6% trash reduction credit. The City and Water District entered into an agreement in April 2009 to pilot the use of a trash capture device on Matadero Creek during the dry season. The boom was placed upstream of Highway 101 before the creek flows into the Palo Alto Flood Basin in the Baylands. The trash boom was successful in preventing hundreds of pounds of trash from entering the lower portions of Matadero Creek. The 2009 pilot agreement was extended by a new agreement in July 2010, which expired in October 2012. The City and Water District would like to continue seasonal installation of a trash boom at Matadero Creek and add a second boom at Adobe Creek. Both creeks have been designated as trash hot spots for Palo Alto, and booms will assist with clean up efforts by capturing trash before it enters the Flood Basin, where it is difficult to remove due to limited access and the presence of entangling vegetation. Installation of the booms will provide regulatory credit towards the requirements of the MRP for both the City and the Water District. The Water District will be responsible for compliance with the California City of Palo Alto Page 3 Environmental Quality Act (CEQA) and permitting of trash boom installation and maintenance by resource agencies. The City will purchase an additional trash boom, prepare the new site for installation, and install and maintain both trash booms from April through November of each year. If no rain event has occurred by November then the booms will be allowed to remain in the creeks until December 15 of that year to ensure that the “first flush” rainfall event is captured. Resource Impact The equipment and installation cost for the new boom on Adobe Creek will be approximately $3,000. The funds are available in the City’s FY 2013 Storm Drain Operating Budget. The Matadero Creek boom was purchased in 2008 as per the prior agreement with the Water District. Policy Implications The agreement is consistent with all City and stormwater management policies. Environmental Review As noted in the agreement, CEQA review and regulatory permitting are required before trash booms may be installed or operated. The agreement requires the Santa Clara Valley Water District, as the lead agency, to complete CEQA review for the installation and ongoing operation of the project. Preparation, processing and approval of all required permits for the installation and ongoing operation of the trash booms will also be the responsibility of the Santa Clara Valley Water district as per the agreement. Attachments: Attachment A - Agreement (PDF) Attachment A: AGREEMENT BY AND BETWEEN THE CITY OF PALO ALTO AND THE SANTA CLARA VALLEY WATER DISTRICT FOR THE INSTALLATION AND MAINTENANCE OF TWO TRASH BOOMS AT CREEK LOCATIONS IN PALO ALTO THIS AGREEMENT (hereinafter "AGREEMENT") is made and entered into as of the date it is fully executed by and between the CITY OF PALO ALTO (CITY), a chartered California municipal corporation, and the SANTA CLARA VALLEY WATER DISTRICT (DISTRICT), a special district of the State of California. CITY and District may be referred to individually as "Party" or collectively as the "Parties" or the "Parties to his Agreement." RECITALS WHEREAS, the California Regional Water Quality control Board has issued Order R2- 2009;-0074, dated October 14,2009 under the San Francisco Bay Region Municipal Regional Stormwater National Pollutant Discharge Elimination System Permit No. CAS612008 (MRP) in which reduction of trash entering the San Francisco Bay is required; and WHEREAS, the CITY is required to reduce trash loads from Municipal Separate Storm Sewer Systems (MS4s) by 40 percent by July 1, 2014; by 70% by 2017 and 100% by 2022, using a variety of strategies that include trash capture devices, with booms resulting in a credit of % of the catchment area treated towards the trash load reduction; and WHEREAS, the DISTRICT is required to install 4 trash booms or 8 outfall capture devices per requirements in the MRP and desires to install two of the required trash booms in the CITY; and WHEREAS, Matadero and Adobe Creeks are designated Trash Hot Spots where responsibility for clean up is shared between the DISTRICT and CITY; and WHEREAS, CITY and DISTRICT previously entered into agreements dated April 2009 and July 2010, both of which expired in November 2012, for a joint trash boom project on Matadero Creek (the "Pilot Project") that successfully prevented hundreds of pounds of trash from entering the lower portions of Matadero Creek during the dry season; and WHEREAS, DISTRICT and CITY agree that the Pilot Project was successful and therefore desire to jointly engage in the planning process, environmental review, engineering, and funding of the installation and maintenance of trash booms on Matadero and Adobe Creeks. Agreement for Installation and Maintenance of Two Trash Booms SCVWD/Palo Alto November 2012 Page 1 of7 NOW THERFORE, in consideration of their mutual promises and agreements, and subject to the terms, conditions and provisions hereinafter set forth , the Parties hereto agree as follows: i AGREEMENT 1. DESCRIPTION OF PROJECT AND PROJECT SITE 1.1 PROJECT is a collaborative effort between CITY and DISTRICT to install, maintain, and remove trash booms in order to capture trash before it enters reaches of Matadero and Adobe Creek that have riparian vegetation and wetland areas, where trash is difficult to remove from the Hot Spot. The Matadero Trash Boom will be installed approximately 50 feet upstream of W. Bayshore road/Highway 101 and the Adobe Creek Boom will be installed on the East side of East Bayshore/Highway 101 after the confluence of Barron Creek. The locations are shown in Exhibit A, Project Location Map. 1.2 Trash booms will be installed not earlier than April 15 every year and removed not later than November 15 . However, if a first flush rain event, defined as the runoff volume generated from the first rainfall with 0.75 inches, has not occurred by November 15 of any particular year, the booms may remain in place until December 15 of that year. 1.3At the conclusion of the term of this AGREEMENT as stated in section 6.6 below, the Parties will review the success of the PROJECT and other trash reducing strategies to determine whether to extend this AGREEMENT in five-year or other appropriate increments; enter into a new agreement; or discontinue this PROJECT. 2. SCOPE OF WORK 2.1 DISTRICT shall perform the following: 2.1 .1 Act as the lead agency and project proponent as described by the California Environmental Quality Act (CEQA). DISTRICT is responsible for preparation, processing, and approval of, the necessary CEQA document. The CEQA document will be developed in accordance with current acceptable standards for CEQA documents. 2~ 1.2 Acquire the required permits from regulatory agencies prior to PROJECT installation. DISTRICT will provide a copy of all final permits to CITY. Agreement for Installation and Maintenance of Two Trash Booms SCVWDlPalo Alto November 2012 Page 2 of 7 2.1.3 Support installation of the trash boom by the CITY as needed, including issuance of any needed DISTRICT permits at no cost. 2.2 CITY shall perform the followin~: 2.2.1 Reinstall the Pilot Project trash boom across Matadero Creek at the same location utilizing the same anchor site and appurtenances. 2.2.2 Purchase an additional Elastec Inc. Optimax trash boom (or equivalent) with a maximum skirt length of 6 inches, or equivalent boom with prior approval of DISTRICT for the Adobe Creek site. 2.2.3 Prepare Adobe Creek site for installation of the new boom with anchoring sites approved by DISTRICT. 2.2.4 Install and remove the trash booms in accordance with section 1.2 above. 2.2.5 Maintain the two trash booms, including repair, replacement, removal, and quantification of trash and debris. CITY may contract with a licensed contractor in the State of California for maintenance and trash removal. 2.2.6 Maintain a minimum space of 6 inches at all times between the streambed (invert) and the trash boom curtain or boom itself if no curtain exists. 2.3 The designated project manager for DISTRICT for the duration of the PROJECT is the Engineering Unit Manager, West and Guadalupe River Watersheds. DISTRICT's project manager shall have all the necessary authority to direct technical and professional work within the scope of the AGREEMENT and shall serve as the principal point of contact with CITY. The designated project manager for CITY for the duration of the PROJECT is the Watershed Protection Group Manager. Except as superseded by existing City law, rule, or practice, CITY's project manager shall have all the necessary authority to review, approve, and accept technical and professional work within the scope of the AGREEMENT and shall serve as the principal point of contact with DISTRICT. 2.4 CITY and DISTRICT shall provide staff support for attending project team meetings and reviewing and providing input regarding relevant documents. DISTRICT shall provide expertise and opinions regarding biological and environmental aspects of PROJECT. Agreement for Installation and Maintenance of Two Trash Booms SCVWD/Palo Alto November 2012 Page 3 of7 3. COST-SHARING OF PROJECT 3.1 CITY is responsible for all co~ts associated with the purchase, delivery, and installation and removal of the trash booms. 3.2 CITY is responsible for all costs associated with maintenance of the trash boom including repair, and removal and quantification of trash and debris. 3.3 DISTRICT is responsible for all costs associated with CEQA documentation and regulatory permitting. 3.4 CITY and DISTRICT, may choose to use a contractor for any portion of their individual work, independent of each other, and will be responsible individually for payment of all contractors' work and administration of any contractors' contracts. 3.5 CITY and DISTRICT will each bear its own staff costs, overhead, and other similar expenses relating to the PROJECT. 4. REGULATORY CREDIT 4.1 DISTRICT will take credit for the MRP's Non-Population Based Permittee Trash Hot Spot and Trash Capture Assignment (Table 10-2) for two trash booms as well as Hot Spot clean up. 4.2 CITY will take credit for trash load reduction of % of the catchment area treated by the booms (see MRP Glossary definition for "full trash capture device" as well as Hot Spot clean up. 4.3 If at any time, the regulatory agencies decide not to allow dual credit for the boom, the DISTRICT will take credit for the installation of the booms and the CITY for the Hot Spot clean up at the site. 5. INSURANCE AND INDEMNIFICATION 5.1 In lieu of and notwithstanding -the pro rata risk allocation, which might otherwise be imposed between the Parties pursuant to Government Code Section 895.6, the Parties agree that all losses or liabilities incurred by a Party shall not be shared pro rata but, instead, DISTRICT and CITY agree that, pursuant to Government Code Section 895.4, each of the Parties hereto shall fully indemnify and hold each of the other parties, their officers, board members, employees, and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined Agreement for Installation and Maintenance of Two Trash Booms SCVWD/Palo Alto November 2012 Page 4 of7 in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees, or agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated to such party under this AGREEMENT. No Party, nor any otficer, board member, or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other party hereto, its officers, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other party under this AGREEMENT. 5.2 DISTRICT and CITY shall require all contractors performing any portion of the PROJECT to secure and maintain in full force and effect at all times during PROJECT execution and until PROJECT completion , bodily injury insurance, property damage insurance, and contractual liability worker compensation and auto coverage in forms and limits of liability acceptable to both DISTRICT and CITY, naming DISTRICT and CITY and their respective officers, employees, and agents as additional insured from and against all damages and claims, loss of liability, cost or expense arising out of or in any way connected with the PROJECT. 5.3 The rights, duties, and obligations of the Parties as set forth above in this Section 5 of this AGREEMENT will survive termination and expiration of this AGREEMENT 6. ADDITIONAL PROVISIONS 6.1 A Party's waiver of any term, condition , covenant, or breach of any term , condition or covenant shall not be construed as a waiver of any other term, condition, or covenant or breach of any other term, condition, or covenant. 6.2 This AGREEMENT contains the entire agreement between DISTRICT and CITY relating to PROJECT. Any prior agreements, prom ises, negotiations, or representations not expressly set forth in this AGREEMENT are of no force or effect. 6.3 If any term, condition or covenant of this AGREEMENT is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this AGREEMENT shall be valid and binding on DISTRICT and CITY. 6.4 This AGREEMENT shall be governed and construed in accordance with the laws of the State of California. Agreement for Installation and Maintenance of Two Trash Booms SCVWD/Palo Alto November 2012 Page 5 of7 II II II II II 6.5 This AGREEMENT may be executed in counterparts and will be binding as executed. 6.6 The term of this AGREEMENT shall commence upon execution of the AGREEMENT by both Parties and! expires on July 1, 2022. 6.7 All changes or extensions to this AGREEMENT must be in writing in the form of an amendment approved by both Parties. 6.8 This AGREEMENT is entered into only for the benefit of the Parties executing this AGREEMENT and not for the benefit of any other individual, entity, or person. 7. TERMINATION 7.1 Either DISTRICT or CITY may, upon thirty (30) days written notice, terminate this AGREEMENT at any time prior to CITY's commencement of the PROJECT. 7.2 Once the PROJECT work commences, either DISTRICT or CITY may, upon 30 days notice prior to June 30 of each year, terminate this AGREEMENT. 8. NOTICES 8.1 All correspondence relating to the PROJECT, including all notices required by the terms of this AGREEMENT may be delivered by first class mail addressed to the appropriate party at the following addresses: To DISTRICT: Santa Clara Valley Water District 5750 Almaden Expressway San Jose, CA 95118 Attn: Roger Narsim, Eng. Unit Manager, West and Guad Program Support Unit (408) 630 2928 rnarsim@valleywater.org Agreement for Installation and Maintenance of Two Trash Booms SCVWDlPalo Alto November 2012 Page 6 of7 City of Palo Alto (ID # 3324) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: PEMHCA for PAPOA Title: Adoption of Resolution of Intent to Set the Employer's Contribution Under the Public Employee's Medical and Hospital Care Act with Respect to Members of the Palo Alto Police Officers' Association and Rescinding Resolution No. 8896 From: City Manager Lead Department: Human Resources Recommendation Staff recommends that Council adopt the attached resolution setting the City of Palo Alto’s healthcare premium costs under the Public Employees’ Medical and Hospital Care Act (PEMHCA) for Palo Alto’s Police Officers Association (PAPOA) to clarify that the City’s health care coverage for PAPOA retirees is currently at the Blue Shield Bay Area Basic plan rate. Background The City of Palo Alto contracts with the California Public Employees Retirement System (CalPERS) to provide its employees with healthcare. In 2009, Council approved a resolution to fix the City’s healthcare premium rate for Palo Alto Police Officers Association (PAPOA) members at the second highest plan for all current employees as well as future retirees. At that time, reducing the City contributions from the highest level plan for future PAPOA retirees to the amount of the second highest Bay Area Basic health plan premium offered by CalPERS was a major step to containing future City-paid healthcare costs. This action was consistent with the City’s similar agreement with other employee groups at that time.1 However, in a recent review of these contributions the City and CalPERS discovered that CalPERS was contributing the 1 The City currently contributes 90% of the Blue Shield Bay Area Basic health plan rate for other employee groups; however, as noted in the discussion section, the City and PAPOA are currently completing impasse procedures over this proposed change for PAPOA. City of Palo Alto Page 2 wrong amounts in 2012 CalPERS has requested this new resolution to clarify the proper reimbursement amount. Discussion The City and PAPOA are currently engaged in impasse and fact-finding procedures over the issue of City contributions to retiree medical benefits for future retirees. However, until that issue is resolved, the City must maintain the status quo, which is a City contribution for retirees in the full amount of the Blue Shield Bay Area Basic plan rate. The CalPERS contract amendment process requires Council to approve a resolution to fix the employer contribution. Council approved resolution #8896 on January 12, 2009. However, because the resolution stated that the City of Palo Alto would pay up to the Blue Shield Bay Area health plan rate instead of stating that Palo Alto would pay up to the Blue Shield Bay Area Basic health plan, similar to the amount Palo Alto was paying for active employees, CalPERS reported that it paid some PAPOA retirees in the wrong amounts in 2012. This revised resolution has been requested by CalPERS to correct their billing in 2012 and in addition will serve as direction from the City to calculate the correct employer contributions effective January 1, 2013 until a new agreement is reached with PAPOA on City contributions toward retiree medical benefits. Resource Impact The FY 13 Adopted Budget does not require adjustment to accommodate this contract amendment. This revision affects how PERS administers the current benefit but not what the City has currently budgeted to provide for it. Policy Implications This resolution will allow CalPERS to correctly implement the current benefit for PAPOA retirees. Environmental Review This is not a project under the California Environmental Quality Act (CEQA). Attachments: Resolution to Fix Contribution PEMHCA (DOC) NOT YET APPROVED 1 121204 sh 8262025 Resolution No. ______ Resolution of Intention of the Council of the City of Palo Alto to Fix the Employer’s Contribution Under the Public Employees’ Medical and Hospital Care Act with Respect to Members of the Palo Alto Police Officers’ Association and Rescinding Resolution No. 8896 R E C I T A L S A. Government Code Section 22892(a) provides that a local agency contracting under the Public Employees' Medical and Hospital Care Act shall fix the amount of the employer's contribution at an amount not less than the amount required under Section 22892(b)(1) of the Act; and B. City of Palo Alto, hereinafter referred to as Public Agency is local agency contracting under the Act for participation by members of the Palo Alto Police Officers’ Association. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. That the employer’s contribution for each employee or annuitant shall be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of his/her family members in a health benefits plan up to a maximum of the Blue Shield Bay Area Basic Plan per month, plus administrative fees and Contingency Reserve Fund Assessments. SECTION 2. That the City of Palo Alto has full complied with any and all applicable provisions of Government Code Section 7507 in electing the benefits set forth above. // // // // // // // // NOT YET APPROVED 2 121204 sh 8262025 SECTION 3. Resolution No. 8896 is hereby rescinded. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Sr. Deputy City Attorney City Manager _____________________________ Director of Human Resources _____________________________ Director of Administrative Services City of Palo Alto (ID # 3315) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Mitchell Park Construction Contract Bi-Monthly Report Title: Submittal of Mitchell Park Library and Community Center Bi-Monthly Construction Contract Report From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1)Accept this update on the Mitchell Park Library and Community Center (MPL&CC) construction project; and 2)Direct staff to continue to submit bi-monthly reports to Council and to take related actions which Council may direct. Executive Summary The MPL&CC construction is approximately 75%complete (based on expenditures)and it is anticipated that the three-building complex will be open to the public in the spring of 2013. A major milestone (installation of permanent power)has been completed since the last bi- monthly report. Costs have increased above the bid amount partially due to building complexities and partially due to the performance of the City’s contractors. To date, a total increase (Construction Contract Change Orders)of $2,785,710 has been approved by the City, or approximately 11% above the base construction contract amount.The bid amount was approximately 24% below the City Engineer’s estimate and Council has authorized a maximum increase of 20% above the bid amount in Change Orders.Thus,the project remains below budget, despite the unforeseen costs. City of Palo Alto Page 2 Background At 56,000 square feet, MPL&CC is the City's largest construction project in four decades. Inside the state-of-the-art library building, teens, children, and those just wanting a quiet space will all have their own dedicated areas. The two-building Community Center complex will contain an expansive community room, kitchen, teen center, cafe,computer room and game room. The complex will be the City's model for an eco-friendly facility with extensive green roofs, solar water heating, night sky water cooling, photovoltaic panels, stormwater infiltration, and natural daylight utilization; all wired with a state-of-the-art data feedback and control system. On September 12, 2011,Council authorized an increase in change order authority and a ceiling for the MPL&CC construction contract from 10% to 20% to cover unanticipated construction costs. Council also directed staff to provide Council with a monthly report (subsequently modified to bi-monthly)on Change Orders with Flintco, the general contractor.Council also requested the City Attorney to provide additional confidential briefings regarding potential claims against other responsible parties.Additionally, Council also directed Staff to report on project milestones in the bi-monthly reports. Discussion Construction Progress On June 4, 2012, Council requested information on construction progress and set-backs since the last report,and milestones that staff expects will be reached by the next report. On June 15, 2012 a major milestone was achieved: “dry-in”of the three-building complex. Dry- in means that the buildings are fully protected from the elements and that work can proceed on the interior that had to wait for this key accomplishment such as sheetrock installation which was awaiting dry-in. Installation of drywall (sheetrock) on the interior walls commenced in the Library on September 6, 2012 and in the Community Center on August 6, 2012. Since the last bi-monthly was submitted to Council on September 24, 2012 only one major milestone has been achieved; the installation of permanent power, with roughly six major milestone equivalents remaining. Many corrections to mechanical, electrical,and plumbing work in the walls and above the ceiling were not completed on time. Some floor panels will have to be temporarily removed to allow for corrections and re-inspections. The number of corrections and re-inspections required is much larger than for a typical project. In addition, the drywall contractor cannot proceed efficiently, because a number of wall areas must be left open for corrective work. Another problem is that many corrections are still needed on the sliding glass doors and this issue has been outstanding since April. Many of the windows failed water testing multiple times. City of Palo Alto Page 3 All of these problems were detected by the City’s building inspectors or construction manager (Turner) and the contractor is being required to correct them. The City will pursue recovery of these costs from the contractor, either by way of withholding or through separate action.Sub- standard work will not be accepted. However,these corrections cause delays in the work of the next subcontractor and some could cause a delay in a critical path item,thus further delaying the project. City staff is proactively working with the general contractor and City consultants to avoid delay while not compromising quality. While at one point, the City and contractor were exploring mid-project mediation, the City now believes that would just further delay the project and is thus concentrating its efforts on keeping the contractor on task. The contract contains a liquidated damage provision for each day of contractor delay and the City expects to invoke this provision once the job is finally completed. Looking ahead to the next bi-monthly report, the key milestone will be to pass code inspections and begin ceiling installation.This is a critical milestone because it means that all of the mechanical, electrical,and plumbing equipment at the top of the three-building complex will be installed, inspected, corrected, and re-inspected to ensure that it has passed its inspections. This deadline has been missed and rescheduled multiple times.The contractor failed to finish all of this work by the deadlines shown in the latest schedule. The contractor also failed to start the heating system by October 26, 2012 so that wood finish work can commence as the schedule shows.Staff will report on progress in the next bi-monthly report and will be looking for all possible ways to minimize further slippage. Approved Construction Contract Change Orders To date, 29 change orders have been approved for a total amount of $2,785,710. This amount constitutes approximately 11%of the base construction contract amount. Since the last bi- monthly report, there have been six additional Change Orders issued. Council has authorized change orders up to 20% of the base contract amount;leaving about 9% remaining. A breakdown of the change orders and the key components of each are contained in Table 1 listed below with a brief description of each. Please recognize that change orders can include reductions and credits as well as new costs. You will see this, for example, reflected in Change Order #5 in Table 1 below. The shaded change orders have been issued since the last bi- monthly report. Table 1 Change Order Amount Change Order Summary City of Palo Alto Page 4 1 $41,725 Eight extra work items including the pruning of trees, clean- up of the old building, and removing conduit found during site clearing and grading. 2 $33,102 Four extra work items including the rerouting of a storm drain around tree roots and the addition of a new manhole that the drawings showed being present but wasn’t. 3 $215,501 10 extra work items including an adjustment needed due to tree root interference, an upgrade in wall insulation capability, and design coordination needed for steel installation. 4 $242,754 11 extra work items including the installation of dowels at additional locations, the installation of thicker glass railings to increase stability, increased gas transmission line coordination, and extra concrete water protection. 5 $4,436 24 extra work items including an extra light fixture cost, fire safety drawing coordination, and a variety of additional required supplies totaling $70,536 minus credit given for three of the 24 work items including spare fixtures no longer required and reimbursed City of Palo Alto dump fees totaling $66,100. 6 $25,123 Seven extra work items including additional gas main protection, curb strengthening, and deck support for the Building A green roof. 7 $74,304 19 extra work items including HVAC driven floor adjustments, electrical system adjustments, data cable rerouting, and a new load break cabinet totaling $109,965 minus credit given for two of the 19 work items including stones for the Arch provided by the artist and value engineering totaling $35,661. 8 $385,251 10 extra work items including additional fill, perforated metal panel ceiling work, various waterproofing, and conduit. 9 $195,706 18 extra work items including multiple curb installations, a basketball court slab, and an art sculpture foundation. 10 $78,514 13 extra work items including a Flintco field staff supplement, waterproofing, plumbing and electrical system alterations, and tree protection measures totaling $79,226 minus credit given for one of the 13 work items identified as plumbing fixture changes totaling $712. City of Palo Alto Page 5 11 $224,662 14 extra work items including beam strengthening, interior & exterior roof tank pipe supports, electric vehicle chargers, load break cabinet bollards, and additional steel. 12 $20,347 Seven extra work items including A/V work, electrical changes, and a roof access ladder. 13 $80,721 13 extra work items including metal stud framing, light fixtures, and miscellaneous electrical work. 14 $54,028 Five extra work items including a thickened roof edge, equipment curbs, a Building A ramp, signage support, and a book drop. 15 $176,586 12 extra work items including additional lighting, electrical work, soil for silva cells & planting areas, and HVAC work. 16 $53,256 Four extra work items including traffic signal modifications, construction recovery costs, and a tube steel base plate modification. 17 $278,710 Five extra work items including tube steel and supplemental exterior wall steel revisions. 18 $76,823 Seven extra work items including concrete floor sealer, wall short panels, leakage testing, pipe supports,and permit processing. 19 $36,526 Eight extra work items including building security, lighting, and electrical work. 20 $20,832 Seven extra work items including lighting and electrical work. 21 $122,071 Six extra work items including roof curbs, studs, and roof crickets. 22 $16,839 Six extra work items including duct, gutter, and ceiling work. 23 $122,472 Nine extra work items include occupancy changes, tube steel and the related work, and artwork preparation totaling $123,104 minus credit given for one of the nine work items for roof parapets, flashing, and crickets totaling $632. 24 $46,654 Three extra work items including night sky cooling tank repair work and parapet and roof details. City of Palo Alto Page 6 25 -$37,158 20 extra work items including glass changes and book drop and elevator improvements totaling $44,790 minus credit given for five of the 20 work items including deleted A/V work, geotextile fabric work, and storm drain/gas line cost savings totaling $81,948. 26 $28,056 Five extra work items including roof substrate revisions and curtain wall supports totaling $31,465 minus credit given for one of the five work items related to roof drain plumbing totaling $3,409. 27 $49,470 Eight extra work items including exhaust fan work, additional channels, and roof work. 28 $24,225 Nine extra work items including expansion joint work, kitchen equipment wiring, and roof and plumbing work. 29 $94,174 14 extra work items including exterior wall water proofing, bathroom work, plumbing work, and electrical work totaling $101,983 minus credit given for two of the 14 work items including a WAP reduction and book drop work totaling $7,809. TOTAL $2,785,710 TOTAL CO’s 1-29 ***For further information about each of the change orders see the attached corresponding Contract Change Order Scopes of Work (Attachment A). Change order requests submitted by the contractor are typically bundled together and summarized in one single change order. On September 12, 2011,Council further directed staff to submit any change order request which exceeds $85,000 to Council for approval. Staff is interpreting this to mean an individual change order line item more than $85,000. (One may note over the course of a period of time a number of on-site decisions are made, in order to not slow the project down, which when complied later can add up to more than $85,000. Bundled Change Order 11, for example, totals $224,662, but includes a series of change orders, none of which exceeds $85,000).Council has approved one Change Order to date (Change Order # 17) which contained line items exceeding $85,000). Related Council Directives for the Bi-Monthly Report Council further directed that staff report to Council on oversight activities. Therefore, attached is the most recent Library Bond Oversight Committee agenda (Attachment B)and Library Bond Oversight Committee minutes (Attachment C). On October 17, 2011, Council requested information on two other related topics and these are City of Palo Alto Page 7 addressed below. 1)Expenditures for New Consultants The City Attorney’s Office has hired the following consultants to assist with the review of construction costs requested by Council. The table below shows the amount encumbered and the amount spent to date. Contract Amount Amount Expended ZFA Structural Engineers $25,000 $19,581 Legal Counsel (Jarvis Fay)$75,000 $58,362 Reidinger Consulting (Scheduling)$85,000 $72,327 Legal Counsel (Otis & Iriki)$235,000 $235,000* *Staff will be returning to Council shortly for increased contract authority. 2)Outstanding Change Orders Proposed by the Construction Contractor (Flintco) In addition to knowing the amount of the Change Orders approved to date by the City (above), Council members asked the value of the outstanding change orders proposed by Flintco but not yet approved or rejected. This information is contained in Attachment D. The first graph on Attachment D shows both Potential Change Orders (PCOs), which is an internal list compiled by the City’s construction manager of certain work items that could eventually result in extra work claims,and actual Change Order Requests (CORs),a subset of the PCOs, which have been submitted by Flintco to date. A large batch of CORs was temporarily retracted by Flintco with the stated intention of modifying them. The City has informed Flintco that its retraction may jeopardize the ability of the City to act on these CORs. Due to the failure of Flintco to meet its self-imposed deadlines for resubmittal of the CORs, the City has resumed issuance of Unilateral Change Orders in order to ensure a cash flow for the subcontractors so they will not leave the job. Recently, Flintco began submitting CORs again. Many of the newly submitted CORs appear to be duplicative of,or inconsistent with,previous CORs. City staff and Turner will take extreme steps to ensure that Flintco is not double paid. City of Palo Alto Page 8 The latest bi-monthly report concerning all Library Projects (“Palo Alto Library Projects”) is included as Attachment E. Resource Impact There are no resource impacts associated with providing the bi-monthly reports to Council. The approved change orders are within the Capital Improvement Program Project (CIP)Budget PE- 09006 for the MPL&CC project. Policy Implications There are no policy implications in providing the bi-monthly reports to Council. Environmental Review Providing bi-monthly reports on this topic to Council does not constitute a project under the California Environmental Quality Act (CEQA). Attachments: ·A -MPL COs # 1-29 (PDF) ·B -LBOC Agenda_10-30-2012(PDF) ·C -LBOC Minutes_7-24-2012 (PDF) ·D -MPL Financial Charts (PDF) ·E -PAL Report Sept-Oct 2012 (PDF) , .' Contrac" Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Gontr~ct Ghange Oraer One.,.. continueq , c • , j , , The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for gity of Palo Alto: By: B~~~~ ... By: ~.~ Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: 14~/(O Date: 1'2/ (~(;D Scope of Work 0 z ; 0:: 0 c;; 0 0 0 Description Reason for Change Q. c( W 0 (.) Amount Clean up: Remove owner furnishings and Furnishing and equipment no longer needed by 1.1 x 001 001 001 equipment left behind after move. Recycle where 6,061 practical the city was no moved out of the buildings Proj!ct Sign and Web camera mount: Provide a 1.2 X 001 002 001 second project sign on Meadow. Mou!,lt the 692 Extra features requested by city Owner's webcam on a pole, 2 003 X x 001 ASI·03 Night Skv Cooling Water Service 0 Recommended by engineer and requested by Increase size of pipe to reduce tank fill time city Tree Service & Grinding: In lieu of demolition contractor, use licensed tree service for scheduled Recommended by arborist and requested by 3.1 x X 003 001 removals along north and south property lines. 5,812 city to reduce risk of damage to neighboring Perform work on weekend when school not in properties and to accommodate school hours. seSsion. Pruning: Licensed tree service to prune Recommended by project arborist and city 3.2 X X 004 001 remaining trees to optimize conformation and 10,826 future growth. arborists. 4 X 002 005 001 Floor Tile Abatement: Provide Abatement for 3,058 This was an existing hidden condition approximately 400 sf of ACM floor tile. uncovered during abatement work 6 X 004 009 001 ACM conduit abatement: Provide abatement for 9,832 This was an existing hidden condition concrete encased ACM underground conduit uncovered during site clearing and grading. ASI-01 Conformed Set. ASI·001 and ASI-002 Conformed sets coordinate bid documents, are incorporated into contract documents. 8 001 X 006 001 Electronic files are reissued for construction. 5,444 addenda and the permit set into a Single set of 002 Reprint 10 conformed sets of plans and drawings for construction. Reprint needed specifications. because prints from initial CD were unusable Total for this change order 41,725 ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 I ; ;eo'n'ra~J Cl!Jangi;],\eirde~ FWD -' Gontinued ~i, , ~ ~ • \ , f ' -'-_ ' Contrac'~ Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: By: ~~ S;~------By: jL p~ Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: cz. /ez--/l Q Date: l v{ VC 0{ I>p Scope of Work ci z ~ 0 0::: 0 tn 0 0 Description Reason for Change D-oC( W 0 (.) Amount 5 003 007 002 Fuel Line Abatement 2,062.00 Concealed field condition: An abandoned fuel oil line was uncovered during grading 7.2 004 012 002 ASI-04 Storm drain adjustments per Arborist 10,011.00 Tree roots interfere with new storm drain. Adjust storm drain routing 10 010 002 RFI-045 Sanitary Sewer Manhole 21,029.00 Drawings show existing manhole in street that isn't actually there. Add new manhole. 11 011 002 Drawing backgrounds for fire sprinkler 0.00 COR 011 resolved at no cost Total for this change order 33,102.00 ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 ContraCt.Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 ,': ~. • 1;, • \ ' .' ,q ~(fjf1tract Cbange C!J;rder Three -contil1uec(, .' , . I ),' , ! _ , " 1 -<: " The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each'Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: By: BY:/C ~ R Title: Brian Stevenson Flintco -Project Manager Title: Karen 13engard Public Works Engineering -Sr. Project Manager Date: Date: . -zJ 9'// / Scope of Work ci z ~ 0:: 0 in 0 0 0 c( w 0 0 Description Amount Reason for Change Q. 2.2 003 021 003 ASI-03 Night Sky Cooling WaterprOOfing 3,247 Manufacturer recommendation 7.1 004 014 003 ASI-04 Pavers per Arborist 10,661 Existing tree roots in the way 8.1 002 003 ASI-02 Conformed Set Permit coordination 0 Final plan coordination and printing 13 024 003 Alternate Exterior wall system 93,188 Upgrade wall insulation capability 14 005 005 015 003 ASI-005 Structural steel intersections Bldg B 4,059 Design coordination ASI 007 Steel connection details including 18 007 006 026 • RFI 099, 113, 115, 116,126, 133 & 134 101,752 Design coordination • schedule recovery cost 34 006 017 003 ASI 006 RFI 079 ADD Fire Hydrant Valves 2,594 Design coordination 43.1 008 Curb Plans Bldg A 0 Clarifying to support construction layout 43.2 010 Curb Plans Bldg B 0 Clarifying to support construction layout 43.2 011 Curb Plans Bldg C 0 Clarifying to support construction layout Total for this change order 215,501 ApPENDIX B -CONTRACT CHANGE ORDER ' PAGE20F3 -, , ContraclChange Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change 0r:d,~r Eou,r·'-c6ntintle'tjJ ", , Pt ~ ~ '-; , '" , ~ >" >~" I ~ i, .... ~,'. ~ ,,,? , ~ ~ r ~ k" ' ., -:: , ~ " ," The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto:. L By: ~ S~ ::.. By: £-f2-~ Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: :J/z/t, Date: ",/4//( I ".,. , , Scope of Work 0 z ~ 0:: 0 en 0 u: 0 Description Reason for Change tl. 0:: c( w 0 Amount 7.3 004 023 ASI-04 (partial) Site Electrical at Oak Tree $ 3,253~ Arborist request to min impact to roots 16 139 013 RFI-139 Green Wall Footing $ 7,894' Provide green wall footing by extend (e) footirig 21 185 029 RFI185 Slab Dowels Bldg "B" and "C" $11,477 , Dowels provided at additional locations 22 025 Glazed Handrail Thickness $ 52,627· Thicker glass increase stability to railing 23 022 Energy Dissipater at Curb Cut $ 3,981' Porous concrete infiltration basin prevents mud 26.1 009 019 ASI 009 SS & SD Changes $150,000 Gas transmission line coordination & safety 33 054 016 RFI 054 Wye connections at clean outs $0 Contractor coordination -no cost change 35 140 018 RFI140 Fire Line Riser at Bldg "C" $0 Contractor coordination -no cost change 40.1 258 031 RFI 258 Water Stop at Concrete Transitions $ 8,014 Extra water protection provided 44 233 027 RFI 233 Raised Fir @ Rm A121 & 127 $4,381-Sealed concrete changed to raised floor 45 142 028 RFI142 Encase Columns in Concrete $ 1,127-Extra protection provided at structural steel Total for this change order $ 242,754" ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contrac·t·,Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 ~ontract Change Or,cler P~;.::--cOl1tit;J,tled ' ' r • I ' ,,' The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension oftime allowed, if any, for completion ofthe entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for Ci!y of Palo Alto: By: ~~= -By: fL-/2-£/ Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works EQgineering -Sr. Project Manager Date: ~ft~!t( Date: !fI/(/I/ I SCOPE OF WORK 0 z ~ 0 u:: u; 0:: 0 0 IX: <C w 0 Description Amount Reason for Change D.. 3.3 049 Tree Pruning Supplement (arborist direction) 1,793 Requested by Arborist 17 057 006 ASI 06 RFI 057 Building Grid discrepancies Included' "'Clarification included 17 064 006 ASI 006 RFI 064 Type LR1 Lighting Fixture Included' Clarification Included 17 073 006 ASI 006 RFI 073 Sidewalk Drawing Conflict Included \ /Clarification Included 17 077 006 ASI 006 RFI 077 & 77.1 Stand Pipe Detail Included~ Clarification Included 17 094 006 ASI 006 RFI 094 Hydronic Piping under slabs Included '/ Clarification Included 17 096 006 ASI 006 RFI 096 Slab Elevation Conflicts Included f V Clarification Included 17 111 006 ASI 006 RFI 111 Storm Drain Lines Bldg C Included' Clarification Included 17 144 006 ASI 006 RFI 144 Mechanical Chase Included .... Clarification Included 17.1 237 006 033 ASI-006 -FSD Power & Monitoring 2,574~ Fire safety drawing coordination 17.2 006 038 ASI 006 -Power and Lighting 13,054 ' Original fixture no longer available 17.3 239 006 040 ASI 006 + RFI 239 HVAC Fire Smoke Dampers 28,210 ... /Fire safety drawing coordination 17.3 071 006 040 ASI 006 + RFI 071 & RFI 094 Hot & Chill Water Included" Better utilizes mechanical area 17.3 006 040 ASI 006 -HVAC ductwork Included' Better utilizes mechanical area 17.4 252 006 041 ASI 006 -Plumbing 5,225t !Resolves conflicts with structure 21.2 185 050 RFI 185 -Grade Beam to SOG Dowels Final 1,874' Stiffens foundation 26.2 009 020 ASI 009 -Concrete Driveway -4,500, /Protection over PG&E gas transmission line 41 081 032 RFI 081 -Delete Spare Luminaire Req. -30,000~ VSpare fixtures not required 42 012 044 ASI 012 -Steel Roof Beams 5,464~ VRoof support required 48 267 007 043 RFI163/267 Trapzilla (CM-14,67,95) 5,602 VHealth Department requirement 53.1 254 030 RFI 254 -Raised Floor Boxes @ Program Rm. 2,218. V Connect at finish floor level 58 162 051 RFI162 -Short Grade Beam line A3 3,678", VRequired reinforcing steel 62 182 034 RFI 182 -Conduit for Exterior Signs 844.1 Not previously provided 89 042 City of Palo Alto Dump Fees -31,600 ... Reimburse city expense Total for this change order $4,436.-v ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 , ~ Contrac"tChange Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 : Contract Ghang~ 0t'der Six,-continu~tic ~ " ~ ( c' The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: ./ By: '6~ ~ By: /I/~ Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: +l2-;r~1 Date: tf/k 1ltt I , • SCOPE OF WORK 0 z ~ 0:: 0 (j) (J iL 0 D-o:: <C 0 Description Amount Reason for Change 32 003 071R2 ASI 003 Bike Rack & Other Misc. Changes 3,7531-VTougher finish, required connection 50.1 061R2 Gas Transmission Line Protection 9,128 .. VProtect existing gas main 69 307 068 RFI 307 -Plumbing Pipe to Match Fir Sink 701v V Fixtures must match outlet 70 229 058 RFI 229 -Relocate Rain Water Leader 254. V Strengthen concrete curb 77.1 144 008 048R1 RFI144 -Chase Curb 1 ,296 ~ VStrengthen mechanical chases 77.2 025 063 ASI 025 -Curb Height @ Bldg A Planter 5,198" V Strengthen concrete curb 105 428 069 RFI 428 Deck support for Green Roof Bldg A 4,793~ / Support sloped roof deck Total for this change order $ 25,123~ / ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 - Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 '" ; ~C!Jlitract Change Order Seven -continlJed -. : ' , , : -" -1 The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: ........., By: 13.-.......=. <0"' By: /C~ Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: ~I/r//(' Date: &(0071 ( ~ " SCOPE OF WORK 0 0 z 0 z ~ 0::: 0 :i ;:;: ~ 0 Description Amount Reason for Change D.. 0 0::: w 0 002.3 ! V167 039 028 077 RFI 039 Xypex, EClipse & Fibermesh at NSCT 9,863. ~oisture protection 019.1" ~66 188 013 073R1 ASI 013 -Relocate HVAC at terazzo floor 13,360 ~Ioor and wall conflicts 019.2· D 466 073R1 RFI 466 Duct Shape Change at Bldg A 0, Vlncluded in COR for PCO 019.1 024 t V126 023 066R2 ASI 023 Smoke Damper Electrical 3,727. VFire Detection Coverage 029 ~ v 90 306 075 RFI 306 -Reroute CHWS/R Pipe 9,544, Ii Beams, columns, and electrical conflicts 053.2 I V 74 192 036R1 RFI192 -Power/data Box Rm C126 3,236~ II Missing power/data box 054.1 L v68 259 024 037R1 ASI 024/RFI 259.1 -Data Cable Routing 24,778. lilnfeasible routing 054.2 I 1/136 029 065R1 ASI 029 Data Cable Routing 2 6,536 ;To complete data infrastructure 060 l V99 293 059 RFI 293 & 294 Plumbing Pipes in Curbs 3,470 / Accommodate rebar in curbs and walls 063 . 135 027 064R1 ASI 027 Traffic Signal Plan -Middlefield Rd 5,601 t /Clear ADA path 065 • /108 322 045R1 RFI 322 SS rods at Floor Boxes 4,279\ Vvapor proofing concerns 084 ~ /112 358 055R1 RFI 358 -NSP-2 VFD Location Clarification 2,685, VMore durable enclosure 085 ~ 87 309 060R1 RFI 309 -Grout Pipe 5,094. VProtect penetrations 097 v V 122 371 053R1 RFI 371 Floor Boxes 5,723. VFloor boxes incompatible with AV devices 107 /.. V 152 468 011 080R2 EWA 011 New Loadbreak Cabinet 7,420 . V New city electrical department requirement 111 v V 184 081 Granite Bollards and Accent Stones at Arch -17,208 ho be provided by artist 112 t V175 078R1 Conduit Type MC Cable -18,453~ I Value engineering 113 f /179 481 084R1 RFI 481 CHS&R at FCU-21A 2,942' To complete connection 122 b /180 330 083R2 RFI 330 Roof Hatch at NSC Tank 1,707 Accommodate mechanical systems Total for this change order $74,304 ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: 011136473 Contract Change Order Eight -continued The undersigned Contractor approves this Change Ol'derljs .to the changes, if any, in the contract price specified {or each Line Item and as to the exteilsioil oI(ilile allowed, if any. for completion orlhe entire work onaccollllt of each Line Item, and agrees to filfnish ail labor aild materIals alld perform all work necessary to complete iI!iyadd{tional work specified therein, for the consideration stated therehl. It is understood that the timelllld cost adjusIlllelitS set forth iii this Change Order include filii coillpensati()il for any impacts OJ' delays associated with the Line Items addressed 111 this Change Order. /? 'i: 6ntractor: Accepted for City. By: Title: Tit • Oate: Date: SCOPE()F wo~k ~ 0 0 z ~ 8 ~ :E Ii: .~ . Description Amount 0 0:: 009 012 052 008 RFI 052 -Non-expansive flll Included 028 020 088 07.9 RFI 088 Structural Slab Elevation Included 031 015 065 0~2. RFI 065 -Perforated Metal Panel Ceiling Ircluded (140.2 OS9 119.2 <i39R2 RF1119.2 -Waterproofing at Foollngs Included 040.3 078 263 039R2 RFI263 -Waterproofing Included ·040.4 050 205 039R2 RFI 205 -sqo Waterproofing @ Bldg A Included .040.5 104 343 03\lR2 RFI 343 -Waterproofing at Planters Included 040.6 102 329 020 039R2 ASI 020 RFI ~29 -Vapor Barrier Issues Included. (j~Q.<l 109 339 010 046R1 RFl280/389 Slurry Telcom conduit Included 059 060 035 Spare CondUlIs In.cluded 047 Change Request Settlement $ 214,144. 046 195 Fliiltc() Field Staff Supplement $171,107. Settlem&nt Total $ 385,2~1. ApPENDIX B -COIITRACrCIlANGE ORDER PAGE20F3 / C) Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number! C11136473 !-,-t ' '\ ~:; ': 1"-~.~,,-~~.::: ,", ",~-> ~I,' ,,~. "',--', -~-:,-;-;~ ~ --, ~ :eCYIJtract Cliange'0ra,e,p,'1\l;,ne .,....··co:ti,'tmu~a., ",.:',:,-. '. "" . , " ,',:, . ~: __ ,:.:,~. '.:' ,'~', ,'_:.'~t, ,',:: : : ;'; ':: .:~--: '~"~~' ';::.,:~;'j v~ _ ~ _ _ ~. _>_ .' ~ ~.:. I. L 1_, \ ,_.[c '._ ,.,. _. ::., _ ~l' __ -", The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additiomil work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addfessed in this Change Order. Accepted for Contractor: Accepted for City of Pale Alto: .A By: By: /~ -e Title: Brian Stevenson Title: Karen Bengard Flintco -Project Manager Public Works E;ngineering -Sr. Project Manager If) (c,t(/ I / • Date: Date: ( SCOPE OF WORK 0 US ~ 0:: 0 :E u:: 0 Q. 0 0:: « UJ 0 Description Amount 020 048 187 125R1 RFI 187 Basketball Court Slab 27,969 .. ~ 045.1 171 491 094 RFI 491/435 Encased Col in Cone AA & AB @ A 10 1,215 045.2 186 543 093R1 RFI 543 & 557 Encased Col at Green Wall 6,056 077.3 155 390 035 076R2 ASI 035 Curb @ Library on 2/F 62,961 077.4 159 401 038 096 ASI 038 Curb @ Bldg B 6,988 077.7 168 043 092 ASI 043 Curb Heights @ Library on 2/F 2,320 077.8 181 044 097 ASI 044 Curb @ Bldg C 1,724 095.1 228 042 ASI 042 Cone. Curb at Bldg B bit High & Low Roof 11,453 097.1 122 371 RFI 371 Rock at Floor Boxes 957 101.1 125 022 087 ASI 022 Curb at Stair 3 (Bldg A) 2,811 085R2 . 110.2 196 037 099 ASI 037 Concrete 3,384 116 249 123 Art Sculpture Foundation 20,066 056 126.6 187 064 Tube Steel Anchor Bolts & Base Plate Grout 5,149 079 082 143.1 182 538 095 RFI 538 I 545 Concrete curb at NSC tank 11,821 144 183 540 114 RFI 540 Book Security Gate Recessed Slab 2,825 148.3 189 592 RFI 592 Thickened Concrete on Roof Edge 14,922 157.1 252 724 073 ASI 073 Courtyard Seatwalls 9,957 168 054 212 105 RFI 212 Concrete & Rebar at C.L. OIAB 3,128 Total for this change order $195,706 u ApPENDIX 8 -CONTRACT CHANGE ORDER PAGE20F3 9 ,'lit . ',' :Q \.~. Contract Chang~ Order .-City of Palo Alto Department: Public Works En,gineering Contract Number!: C11136473 Contract Change Order Ten -continued The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: 'A By: By: I~~ Title: Brian Stevenson Title: Ka'ren Bengard I Flintco -Project Manager Public Works Engineering -Sr. Project Manager " /0 /"001 ~{ Date: Date: t SCOPE OF WORK .... ''It: 0 '2 .., '<I' ... 0 u:: en 0 0 a. 0 0:: c( II. 0 Description Amount 002.4 162 489 082 RFI 489& 039,1 Apply Aquaron at NSC Exterior 10,662 003.4 268 026 146 FO-026 Tree Protection Measures 3,598 024.1 093 291 032 086 RFI 291 -FSD in Toilet Room C131 2,736 038 098 362 032 056R1 RFI 362 -Boxes for Light Fixture Drivers 1,549 046.1 Flintco Field Staff Supplement (October 2011) 46,206 071 101 320 032 057R1 RFI 320 -Relocate Elec Recepts to Fir Box 812 072 070 272 032 111 RFI 272 -Obi Check & Hydrant Bury 678 074 067 267 032 088R1 RFI 267 Grease Interceptor riser to 3rd floor 3,929 087.3 138 015 074R2 ASI 015 -HVAC Changes 3,629 103 192 031 098 ASI 031 Plumbing Fixture Changes -712 134 205 381 032 100 RFI 381 Conduit Stub-Up at Bldg C -721 153 208 276 032 102 RFI 276 Relocated Pull Box & Conduits (Courtyard) 2,594 197 264 767 032 139 RFI 767 Wood Fiber Tapered Edge Strip 2,112 Total for this change order $78,514 Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 -' --'-, ~ni1rJ -r4,vsat-to Contract Change Order'- .~'r ~~,1 City of Palo Alto ~~~ ;;I / Department: Public Works Engineering ~~J~~~~'~ ___ c_o_n_t~_a_ct_N_u_m_be_r_: ____ C_1_1_13_6_4_7_3 -------------, --, .. ." _. --. -----~ ----------,------.--------------, Contract Change Order Eleven -continued --. . -. ----.. -.-_. . --------------- The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item -and as to the extension of time allowed, ifany, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. _ Accepted for Contractor: By: Title: Date: ) t' Brian Stevenson Flintco -Project Manager '0 N ... "t-0 ::i u:: tn A. U 0:: c( 039 051 184 051.1 082 195 061 055 063 197 087.1 096 315 015 092.1 121 345 092.2 285 780 092.3 329 911 094.2 123 486 021 110.1 158 037 110.3 144 037 133 134 374 189 265 562 209 288 582 228 317 945 Key: I. Potential Change Order 2. Change Management ApPENDIX B -CONTRACT CHANGE ORDER ID 0 I&. 032 012 012 032 032 Accepted for yity of Palo Alto: By: £~~ Title: Karen Bengard Public Works Engineering -Sr. Project Manager Date: / ~!/l.(/II SCOPE OF WORK '-:) - 'ir: 0 0 Description 122R1 RFI 184 Walkways at North Parking 089R2 ASI 061 Electric Vehicle Chargers 126 RFI 197 -Mech Yard Conc Pad 047R2 ASI 015/ RFI315 Curtain Wall Mullions 108 RFI 345 NSC Tank Interior Pipe Supports 186 RFI 780 NSC Tank Underfloor Return Pipe Supports 164 RFI 911 NSC Tank Roof Pipe Supports 052R2 ASI 021 / RFI 486 Beam & Bent Plate Bldg A 085R3 ASI 037 Beam Strengthening Bldg A 109R1 ASI 037 Steel Column Bldg A 169 RFI374 Load Break Cabinet Bollards 155 RFI562 & 743 Beam Penetrations at G.l. C4 185 RFI582 & 816 Fixture/Relay Cabinet Switches 163 RFI 945 Silva Cells at Canopy Footings Total for this change order Amount 4,353 • 35,903 12,193 5,000 9,602 18,915 45,942 4,067 61,501 9,113 10,623 2,860 2,828 1,762 $224,662 / / /" ./ ./ ,/ ./ ./ 3: Request for Information 5. -Field Order or Extra Work Authorization 6. Change Order Request 4. Architect's Supplemental Instructions PAGE20F3 I ii-• ," Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 , . . ,:, .:~ ";o®'d~t;~ct'6h~rig'~-'e~ae~';:P;;;'~lv'e,~ c'~~:tiiru~ti : .. ,. ~ .. " -" : -:,~-:j ~, <:, " _':' _.. _,', ( r~: ~~~]j , . , .-, t ~ , . ' , ~~ 11 .,' ~,".J.'-""": .'._ . __ ~-!,~.~-,-".. "-"_: '. '. --.. \,-,. _.~_::. ,,, .. ' . ' .. ', ~ ,-' L .-.. -, ~, .. \.. "-~ -. , .---, .,'", The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and\as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. ~ .. Accepted flOr Contractor: By: Title: Date: f~i) \ ... / ' . .I.)Oi/\.i.{-:l>( 'flit'\. be.t:.:-....vsc. 0+' Brian Stevenson Flintco -Project Manager 52e c~.\.-j..~cJ .. ,-e "Q e ""'-''-~ \ '0 '" .., "t.. 0 :E u:: tn D. 0 a: « 077.6 216 585 025 087.2 097 239,1 015 114 174 498 119.4 059 196 034 150 197 172.1 256 075 271 335 967 Key: 1. Potential Change Order 2. Change Management ApPENDIX B -CONTRACT CHANGE ORDER Accepted for City of Palo Alto: -:;tl, l cXlI\..c,(jc,-'l e By: /L, ~ .4' - Title: Karen Bengard Public Works Engineering -Sr. Project Manager Date: / /1/12- SCOPE OF WORK U) D:: 0 0 II. 0 Description Amount 032 152 ASI 025 RFI 585 Curbs @ Stair 1 799 032 090R4 ASI 015 -Electrical C~anges , -3,786 032 113 RFI 498 Plates & Ba~at Bldg A Skylight 318 106R2 ASI 034/RFI 196 Ladder at Penthouse Roof 3,683 v 154R1 Class 1 B 3/4-in Drain Rock 2,707 027 130R1 ASI 075 AN Rough-Ins in MPR (C139) 8,225 211 RFI 967 SDMH Rim Elevation North Parking Lot 829 v Total for this change order 20,347 v 3. Request for Information 5, Field Order or Extra Work Authorization 6, Change Order Request 4. Architect's Supplemental Instructions PAGE20F3 li2;;r;'~;:-~;L':'-;-" ,~>'-' :'~J "",~ _,", ~"'_/~;":-.~-~ -;'f:' z-"~'-~~", -! -:"'-,-;:'-f:;;:':~'\!'l' ,,<;~. " Contract Change Order City of P~lo Alto Department: Public Works Engineering Contract Number: C11136473 -.s _; , 'C • , , ' . " , '" " :·~~;(j:n:t/Jact ~aha(1g~' r!Jraer 7}hifff:~en -con·tif1(teifr ' 1.:t..i'~;_·1:~;'-.: .(!-,_ -~ _-'_ ',~>. ''''~,_~~.l:,",.,J _.--.-':.~ " ..... ! _,,' • _:'.'._' f,'_-._ .-. , , " :',':. .. .. , ") The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension/oftime allowed, if any, for completion ofthe entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts , or delays associated with the Line Items addressed in this Change Order. Accepted' for Contractor: By: Title: Brian Stevenson Flintco -Project Manager Date: 0 N ... "t-0 ::E ii: en a. 0 0:: c( 057.1 064 2,53 034 057.2 064 319 057.3 064 283 081 088 246 121 064 518 125.1 064 426 051 125.2 064 569 053 127.4 312 098 156 064 605 202 277 662 239 319 872 255 353 . 266 320 620 Key: 1. Potential Change Order 2. Change Management ApPENDIX B -CONTRACT CHANGE ORDER III 0 u. 032 032 032, 032 032 032 032 032 Accepted for City of Palo Alto: " . By: ""~ ,,~/ £? Karen Bengard -( Title: Public Works Engineering -Sr. Project Manager Date: 1/;[t/I2-- SCOPE OF WORK it: 0 0 Description 103R4 Metal Stud Framing -Backing, Rating, Soffits, Panels 103R4 RFI319 -Wall thick, for panel @Bldg B 103R4 RFI 283 & 283.1 -Wall thick. for plumbing @ Bldg A 167R2 RFI246 -Tackboard Room A216 103R4 RFI 518 Elevator Shaft & Rated Walls 103R4 ASI 051 Wall Revisions & Dim, Clarifications 103R4 ASI 053 Wall Revisions & Dim Clarifications (B&C) 200R1 ASI 098 Relocate Traffic Control Cabinet 103R4 RFI 605 Partition Wall Conflicts at Beams & Col. 103R4 RFI 662 Stud Framing at Skylights 179 RFI 872 Access Control & Alann Interconnect 199R1 Light Fixture FY1 to FA1 176R1 RFI 620 & 894 Mechanical Yard Exhaust Fan Wiring Total for this change order Amount 69,875 Included Included 1,591 Included Included Included 1,409 Included Included 2,322 3,423 2,101 80,721 ./ ,.,r" 3. Request for Information 5. Field Order or Extra Work Authorization 4. Architect's Supplemental Instructions 6. Change Order Request PAGE20F3 Contract ~hange Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 ;J~iil1il?~dt 'Ghi';'ge ,(iJirder; 'Rti/IJI;,t~en.~· c:clntrni:J~i:i , -, , . I <, '.': I~:\~~ , , " , . , , , b~''i'~''_'~'·I~_ j' '1~~'1. ~"~"_.LF __ ~ i, ,,:" ,'. ". :t , • '" "'1 , . -" . The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed in this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: By: By: ;KA_~ Brian Stevenson Karen Bengard Title: Flintco -Project Manager Title: Public Works Engineering -Sr. Project Manager Date: Date: ~//5/;2- SCOPE OF WORK '0 CD N "l.. "t-Il) 0::. 0 ::E u-rn 0 0 Q. 0 0: « u-0 Description Amount 101.2 125 022 087R1 ASI 022 Stair 3 & Ramp Bldg A 11,384 148.1' 189 592 132R2 RFI 592 Thickened Roof Edge -22,400 205.2 284 782 032 187R2 RFI 782 EF & CU Equipment Curbs 13,939 v 216 296 768 208R2 RFI 768 Signage Support at Stair 1 Exterior 4,055 217 297 840 032 182 RFI 840 FPWB at Book Drop (Bldg A) 2,250 Total for this change order 54,028 Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request EXCLUSIONS "'0 N '-0 ::E Q. 0 Description Exclusions 101.2 125 ASI 022 Stair 3 & Ramp Bldg A Concrete curb (See PCO 101.1 in CO-09) 205.2 284 RFI 782 EF & CU Equipment Curbs Crickets at green roofs (To be processed under pce 165.1-165.3) This Change Order is being issued unilaterally by the City, The basis for the adjustment in the contract price was determined by the City pursuant to Section 7.2.4 (ii) & (iii). Flintco has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE2oF3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted fo!" Contractor: Accepted fOI' City of Palo Alto: By: Signature declined By: Title: Andy Brophy Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: Date: SCOPE OF WORK '0 N C') "t-.., "it: 0 :E u:: U) 0 0 -Q. 0 0:: < u. 0 Description Amount 061.1 163 019 117 ASI 019/049 Electrical 34,900 061.1 163 019 117 ASI 0191049 Access Floor 2,995 061.1 163 019 117 ASI 019/049 HVAC Fire Smoke Damper, Fan Coils, 47,516 ductwork and Hydronicpipinll (see ASI narrative) 061.2 163 511 117 RF15111-114 hydronic line 1 duct conflict Included 061.2 163 536 117 RFI536 1 ASI 019 CHS/HWS piping clarification Included 061.2 163 563 117 RFI 563 Ceiling Returns in Building C Included 061.3 various ASI related RFls 568,609,617,618,623,635 clarify only 0 137 244 716 069 032 148 ASI 069 Telecom Cables to AN Racks in Bldg C 1,980 172.3 311 088 042 180R1 ASI 088 Audience & Presenter Lighting MPR (C139) 43,025 177 301 895 166R3 RFI 895 Import Soil for Silva Cells & Planting Areas 37,736 258 384 112 255 ASI 112 Electrical for Book Sorting (A 118) 2,024 290 429 119 035 253 ASI 119 Lighting Controls Daylight Sensors & Power 6,410 Total for this change order 176,586 Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Qrder Sixteen -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: By: Signature declined By: Title: Andy Brophy Title: Karen Bengard Flintco -Project Manager Public Works Engineering -Sr. Project Manager Date: Date: SCOPE OF WORK .... 0 N .., "t-Il) Q: 0 :E u::: en 0 0 -Q.. 0 a:: < LL 0 Description Amount 126.07 339 784 none 032 175r2 RFI 784 Tube Steel Base Plate modification 4,253. 126.14 340 None None 029 174R2 Exterior Envelope Recovery Cost 15,260. (LB Construction 844 hours overtime over 20 days) 127.1 222 None 045 016 120r2 ASI 045 Traffic Signal Modifications 33,743 127.2 222 none 080 016 120r2 ASI 080 Traffic Signal Modifications inc Total for this change order 53,256. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the. Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 I Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Seventeen -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: By: Signature Declined Title: Andy Brophy Flintco -Project Manager Date: SCOPE OF WORK '0 N ... "'t.. .., a; 0 :::E u::: U> 0 0 Q. 0 0:: <C LL. 0 Description Amount 126.1 187 014 137R5 FO-014 Purchase Material for Tube Steel Included 126.2 187 556 064 015 137R5 ASI 064 FO-015 Fabricate & Install Tube Steel 278,710 126.3 257 056 157R4 ASI 056 Tube Steel for Book Drop & Cafe Front Included 126.4 257 079 157R4 ASI 079 Supplemental Exterior Wall Steel Revisions Included 126.5 257 082 025 157R4 ASI 082 Supplemental Tube Steel Revisions Included Total for this change order 278,710 Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 ;"@,ontract Cbang~ OrtiJ:et:i£ifihf~~~ ~,'bP~tinueCJ .,: , , , L" <, • _ .!. , , < , ~ J~ ~ , , CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accepte~ioI:-C.i~ of ~to: LL By: Signature Declined By: (~~~ Title: Andy Brophy Title: Phil Bobel Flintco -Project Manager Asst. Directpr of Public Works Date: Date: 7/J~/;Z- / f SCOPE OF WORK '0 N '" '<t II> "b:: 0 ::::E u:: en 0 0 D.. 0 0:: <C u. 0 Description Amount 027 022 104 Trailer Permit Processing 8,546. ,/ 040.7 254 024 129.3 FO-024 Concrete Floor Sealer at Bldg A 20,279. ./ 061.2 163 511 117 RFI 511 Pipe Routing Allowance adjustment 1,299. ./ 061.4 163 536 117 RFI 536 Upgrade Pipe and Valves at AHU2A 2,662. / 182 238 694.1 194 RFI 694.1 Roof Pipe Supports over TPO Roofing 11,086. / (include lateral support per code on pipe over 3") 187 258 654 135.1 RFI 654 Duct Leakage Pressure Test 12,024. ,/ 204 279 159.3 Accel-E Wall Short Panels -Bldg A 20,927. V Total for this change order 76,823. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE 20F 3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Qqntract Change Order Ninet~e.t'1 -continueCi . "' \ ' ' , CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: By: Signature Declined Title: Andy Brophy Flintco -Project Manager Date: .... 0 '" '" -.t 0 ::i u: (j) D-O 0:::: c( 172.5 371 108 199.1 281 757 081 199.2 500 1231 200.1 291 086 220 304 095 248 361 975 291 418 121 308 425 1141 Key: 1. Potential Change Order 2. Change Management SCOPE OF WORK on COo:::: 0 0 lL 0 Description 267 ASI108 Projection Screens in MPR (C139) 189 ASI081 Lighting & Pavers on 21F Terrace at Bldg A RFI1231 & 1231.1 Light Fixture mounting on pavers 203 ASI 086 Building Access & Security 204 ASI 095 Lighting on Bldg A 2nd Floor -ASI void 235 RFI 975 Basketball Court Lighting 254 ASI121 Lighting Controls Power Modules (C139) 261 RFI1141 Light Fixtures & Fire Rating (A112) Total for this change order Amount 1,745. 1,126. included 27,112. o. 921. 4,452. 1,170. 36,526. ;/ ./ / ./ II / ./ ./ V 3. Request for Infonnation 5. Field Order or Extra Work Authorization 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 , ,_ ,c,.-, , > {)ontract Change Order Twenty -continU,ed ' -" CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: By: Signature Declined Title: Andy Brophy Flintco -Project Manager Date: SCOPE OF WORK ... '" 0 N ., '<I' 1ft 0:: (,) :it u: en 0 0 a.. 0 0:: « u. (,) Description Amount 051.3 333 953.1 061 252 RFI 953.1 Pullbox for EV Chargers 595. 173 233 382 047 171R1 ASI 047 Light Fixture & Electricity 10,407. 176 289 788 087 184 ASI 087 Smartboard-PC Telecom Connection 4,475. 198 280 077 190 ASI 077 A-V for Flat Panel Displays 729 199.3 281 1231 081 189.1 RFI1231 Light Fixture Price Adjustment 1,980 296 416 1118 233 RFI 1118 Light Fixtures for Ceiling in Stair 1 978. 312 421 1124 285 RFI1124 Elevator Room Hard Lid Ceiling (A121) 1,668. Total for this change order 20,832. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 " Contract Change Order Twenty One -continued . , , , CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: By: Signature Declined Title: Andy Brophy Flintco -Project Manager Date: SCOPE OF WORK "'0 ... .. ., "t.. '" 0:: 0 :E u:: U) 0 0 Cl. 0 0:: <C LL 0 Description Amount 117 176 502 013 133 RFI 502 Sloped Deck & Shear Studs -Bldgs. B & C 43,388. 154 300 731 120. 028 165 RFI 731/ASI120 Roof Curbs to support PV Equipment 49,969. 165 215 501 065 032 124R3 ASI 065 Green Roof Crickets (Bldg B & C) 20,320. 067 215 295 679 032 247 RFI 679 Deck Opening for Duct Shaft 3,803. 254 366 943.1 264 RFI 943.1 NSC roof Sprinkler Branch End SS Cap 4,591. 270 334 963 205 RFI 963 Zero Air Flow Duct Smoke Detector 0 Total for this change order 122,071. Key: 1. Potential Change Order 3. Request for Infonnation 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 ( Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accepted !2!: City of Palo Alto: By: Signature Declined Title: Andy Brophy Flintco -Project Manager Title: Phil Bobel Asst. Director of Public Works Date: Date: I SCOPE OF WORK '0 '" . .., "t.. on ~ (J ::IE u::: en 0 0 Q. 0 0:: c( La. 0 Description Amount 180 591 266 RFI 591 NSC reducer for vortex filter included 180 631 266 RFI 631 NSC gutter to storm drain -Bldg A, line AC included 180 674 266 RFI 674 Duct routing adjustments to ASI 049 included 180 751 266 RFI 751 MEP chase to access ceiling. Bldg C line CO included 180 893 266 RFI 893 Audio Video routing Rack R35 to ceiling. Bldg C, line AO included 180 708 266 RFI 708 & 708.1 MEP chase to access ceiling. Bldg B, line BC included All Trade work related to these RFls is included. included Total for this change order 16,839. ,// Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 , Contract Change Order City of Palo Alto· Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty 71flree -continued F CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Acce~~ City of Palo Alto: By: Signature Declined By:t~~ Title: Andy Brophy Title: Phil Bobel Flintco -Project Manager Assistant Director of Public Works Date: Date: q/5)2- I I SCOPE OF WORK '0 '" "l... "'t.. .., 0:: 0 :E u. U) 0 0 0.. 0 ~ c( u. 0 Description Amount 119.1 665 112 ASI 034 Roof Parapets, Flashing and crickets Credit 119.2 119.3 690 034 118 All AS 034 work not addressed in previous change orders is V 119.5 918 239 included in this change. (632) 056 126.08 262 784 064 219 Trade work related to Addition of Tube Steel 28,945. '" 851 079 222 082 ,/ 126.11 330 811 195.1 RFI 811 & 811.1 Tube Steel for Cantilever Wall at Library Entry 33,941. • 811.1 Notch Stone panels ,/ 175.1 887 050 246 ASI 050 book drops, interior wall and north terrace 1,408 .• 068 ASI 068 Signs RFI 887 NE & NW terraces guardrail bldg A 175.2 948 212 RFI 948 Black Stone Veneer Clips 0.1 /' 175.3 986 230 RFI 986 Interior Stone Tile layout O. / 207.3 287 906 104 031 None ASI104 Occupancy Changes 48,427. / 104.1 257 111 1038 ASI 111 Artwork Backing & Coordination 5,575.-/ 305 276 Stoller Art Piece Anchors 4,808.'" 276.1 Refer to Scope of Work and Cost Summaries attached Total for this change order 122,472. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty Four -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accept~City ~Io Alto: By: Signature Declined By:~(eQf) '<-:--<J~ Title: Andy Brophy Title: Phil Bobel Flintco -Project Manager Assistant Director of Public Works Date: Date: 9/J,jz:- / / I SCOPE OF WORK "0 ... ... <oj" U) D: 0 :E u::: (j) 0 0 a.. 0 It: c( La. 0 Description Amount 002.5 234 703 021 210.1 RFI 703 Night Sky cooling Tank leak repair 18,915. ./ 129 251 517 072 134 ASI 072 Parapet and Roof Details o. 248 Night Sky Cooling Return Pipe Routing. Not limited to COR 248. • Includes complete field modifications of NSR piping as 311 442 1127 037 shown on as-built drawing provided by Bay Mountain Air. 27,739. ./ 281 partial • Includes hole patch tag 1644 on 1131 • Includes relocating pipe at mechanical yard footing Total for this change order 46,654. / Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty Five -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accepted~r City 2! Palo Alto: By: Signature Declined By: ;PJ.Of~ Title: Andy Brophy Title: Phil BODel Flintco -Project Manager Assi~tant Director of Public Works Date: Date: 9kL'2- I I , SCOPE OF WORK '0 N ... 't.. II) ~ 0 :E u:: en 0 0 D.. 0 0::: c( u.. 0 Descr!l!tion Amount 066 153 032 128 ASI 032 Geotextile Fabric Deletion -18,914 ;/ 093.2 124 326 026 168.1 ASI 026 -Handicap Parking & Drains -1,032 , 096 165 756 030 131.1 ASI 030 Glass Canopies Changes 15,982 ./ 126.10 359 969 217.1 RFI 969 HSS & Column BP at North Curtain Wall 1,093 v 149 191 596 032 142.3 RFI 596 TPO Detail at Roof Transition -2,970 " v / 166.1 224 058 127.1 ASI 058 Storm Drain I Gas Line Crossing -8,531 ./ 171.1 247 733 156.1 RFI 733 Wood Grilles Ceilings 3,293 .... J 172.4 350 107 265.2 ASI107 Deleted NV in MPR (C139) -50,501 '" 174.1 243 1238 066 141.1 ASI 066 Pavement Markings & Signage Spec 3,166 ,/ 174.2 243 1238 066.1 ASI 066.1 Pavement Markings & Signage Spec 0 728 , 184 245 799 074 259 ASI 074 Elevator Screen 2,622 0/ 212 292 752 032 268 RFI 752 Concrete Pad for Elevator Controller 2,751 ../ 218 298 181.1 Site Curb & Sidewalk Concrete Mix 1,595 ./ / 225 309 901 214.1 RFI 901 Clerestory Window Elevation 1,211 V' 273 369 1038 226.1 RFI 1038 Fur Wall for Vent Line (A234) 1,270 V 274 370 1041 225.1 RFI 1041 Nested Infill Stud at Storefront Bldg B 2,579 V- 303 426 1144 034 283 RFI 1144 Header & Sill for Book Drop (A1 00) 3,847 ~ 320 440 1154 280.1 RFI 1154 Metal Edge Restraint & Filter Fabric Bldg A 2,753 ./ 1077 V' 334 442 1077.1 282 RF11077 1077.1 1077.2 Motor Starters EF-1A & 2A 1,244 1077.2 338 462 1061 288 RFI 1061 Wallboard Tube Steel Exterior Wall Bldg C 1,384 ./ , Total for this change order -37,158. v' ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F4 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty Six -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accepte~r C~ ~alo AI~: By: Signature Declined BY:~oq-f~ Title: Andy Brophy Title: Phil Bobe! Flintco -Project Manager Assista}lt Djrector of Public Works Date: Date: le/s):z- / / SCOPE OF WORK .... 0 N ... 'It II) it: (,) :E u:: en 0 0 Q. (,) 0::: c( u. 0 Description Amount 061.1 163 019 117.1 Claim Settlement Meet & Confer 10-2-12 ASI19/49 HVAC controls 4,284. , ,,/ 148.2 270 592 145 RFI 592 Roof Substrate Revisions 8,443. ./' 161 225 059 018 147.2 ASI 059 restroom revisions Bldg A & C 1,915. ~ c 577 186 250 577.1 278 RFI 577 Plumbing Piping Roof Drains -(3,409) ,,/ 577.2 NE and NW comers Bldg A . 277.3 261 380 1045 218 Curtain Wall Support Bldg C 16,823. Total for this change order 28,056. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. APPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty Seven -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: By: Signature Declined Title: Andy Brophy Flintco -Project Manager Date: SCOPE OF WORK .... 0 ... ... "t-oo "'0: 0 ::E u:: tn 0 0 Q. 0 I:t: <C u. 0 Description Amount 158 299 884.1 215 RFI 884.1 HSS & Outrigger Conflict Bldg C 1,625. 196 308 100 244r2 ASI100 Roof Access Ladders B&C 4,233. 238 314 202 PVC to Flexible Conduit Between NSC & Bldg A 663. 242 336 103 1045 ASI 103 Handicap Ramp at Trash Enclosure 891. 356 487 134 045 1027 ASI134 Exhaust Fans Bldg C 23,083. 368 471 581.1 275 RFI 581.1 Fixture Mounting at Gates 458. 371 470 881 273.1 RFI 881 Hat Channels for Perforated Panel Soffits 14,198. 399 521 1275 1060 RFI1275 NSC Tank Pump Equipment Pad 4,319. Total for this change order 49,470. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty Eight -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim ursuant to Section 4.2 of the Contract General Conditions within thirt 30 da s of the date of this Chan e Order. Accepted for Contractor: Accepted f Cit alo Alto: By: Signature Declined By: Title: Andy Brophy Flintco -Project Manager Title: Date: ~o U) '" (') .... '" D:: 0 :! u: (j) 0 0 Il. 0 D:: <C u. (J Amount 042 ASI 042 Expansion Joints Bldg BIC (portion not previously added) 95.2 228 1012 070 041 238 ASI 070 Expansion Join.! Bldg BIC and miscellaneous wall framing 4,339. 131 ASI 131 Expansion joint Cover RFI1012 95.3 RFI1 1,562. none GSM included in CO I 071: Convert 10 sf curtainwall to 726 RFI 726: Enlarge chase for piping 693 RFI 693: Electrical panel reframe. 142 230 651 71 170 RFI 651: sheetrock for sound rating in Rooms 129, 130 & 133 3,239. 766 RFI 766: Frame chase at electric water coolers 758 RFI 758: Low wall bracing add 13 kickers Bldg A, 2nd floor 663 RF1663: Box Beam at outriggers change to 16 gauge studs with clips. RF1696: column enclosure ridline A-12 178 273 23 201.2 Kitchen Equipment Wiring -Flex to EMT conduit. ,909. 201 275 722 220.1 RFI Furring under N. Curtain wall A 213. 203 278 251 Reframe D~ct penetration -Multi-purpose room Building C 218.1 298 1 On Site concrete 1,969. 232 343 257.1 RFI 910 Gas Service Line 2,560. 265 453 258 EFVM roof leak detection system. 4,692. Total for this change order 24,225. Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE 2 OF 3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 Contract Change Order Twenty Nine -continued CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim ursuant to Section 4.2 of the Contract General Conditions within of the date of this Chan e Order. Accepted for Contractor: Acce r City of Palo Alto: By: Signature Declined By: Title: Andy I-<rf'\l"\n\l Flintco -er Date: ..... 0 <0 N .., '<t 10 0:: U :1E u: (i) 0 0 c.. U 0:: <C u. U 185.1 332 091.1 ASI 091.1 Exterior Wall Waterproofing 208 290 089 249.1 ASI 089 Vents in Casework for Racks 217.2 476 840.1 840.1 FPWB at Book Drop (Bldg A) 217.3 458 029 289 Exterior Monitor Bldg A 641 245.1 356 853 RFI 853 Backboxes & Column Covers 1,969 ,,/ 389 117 ASI 117 WAP Reduction -5,559 V"" 276.2 181 ASI 181 WAP Enclosure Reduction Included v 279.1 378 031 291 RFI 1031 Bathroom 5,503 ./ 279.2 459 1135 287 RFI 1135 Furred Wall for Lavatory Mount (B11 0) 576 v 295.1 414 1102 229 RFI 1102 Curtain Wall Corner & Flashing Bldg C 0 / 297 413 1066 234.1 RFI1066Lighting Controls Modules (A131 &A132) 1,181 y/' 314 412 1065 256.1 RFI 1065 Power Wires for AHU Outlets & Lights 4,818 t/ 360 388 883 242.1 RFI 883 Reclaimed Water Main Bldg A 3,770 V 366 406 803 236.1 RFI 803 Type FA1 Fixture Mou (A208) ,/ Total for this change order 94,174. .../ Key: 1. Potential Change Order 3. Request for Infonnation 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Agenda Library Bond Oversight Committee Quarterly Meeting October 30, 2012 7th floor conference room 4:00 p.m. – 5:30 p.m. Committee Members: James Schmidt (Chair), Sandra Hirsh (Vice-Chair), John Melton, Dena Mossar, Alice Smith Staff: (Public Works) Brad Eggleston, Phil Bobel, Debra Jacobs, (Library) Monique leConge; (Administrative Services) Joe Saccio, Tarun Narayan, (Auditor) Jim Pelletier, (Attorney) Melissa Tronquet Others: (Turner Construction Management) Greg Smith ROLL CALL ORAL COMMUNICATIONS APPROVAL OF MINUTES – July 24, 2012 AGENDA REVIEW & REVISIONS UNFINISHED BUSINESS 1. DISCUSSION – Construction Progress a. Mitchell Park Library & Community Center b. Temporary Main Library 2. DISCUSSION – Design Progress (Phil Bobel) a. Main Library NEW BUSINESS 3. DISCUSSION - GO bond assessment for FY 2012-13 4. DISCUSSION - Update on reconciliation of Main Library costs (Phil Bobel) 5. DISCUSSION - Draft Financial Report Summary from Administrative Services (Tarun Narayan) a. Expenditures to date – summary spreadsheet 6. ACTION - Approval of Quarterly Report to Finance Committee 7. ACTION – Election of a new LBOC Chair and Vice-Chair 8. Next Steps a. Next meeting – January 22, 2013 1 Minutes Library Bond Oversight Committee Quarterly Meeting July 24, 2012 7th floor conference room 4:00 p.m. – 5:30 p.m. Committee Members: James Schmidt (Chair), Sandra Hirsh (Vice-Chair), John Melton, Dena Mossar, Alice Smith Staff: (Public Works) Brad Eggleston, Phil Bobel, Debra Jacobs, (Library) Monique leConge; (Administrative Services) Joe Saccio, (Auditor) Jim Pelletier, (Attorney) Melissa Tronquet ROLL CALL 4:05 PM ORAL COMMUNICATIONS None APPROVAL OF MINUTES – July 24, 2012 Approved AGENDA REVIEW & REVISIONS UNFINISHED BUSINESS 1. DISCUSSION – Construction Progress (Phil Bobel) a. Mitchell Park Library & Community Center Dry-in was achieved on June 15 Interior work can now proceed Raised flooring started on June 25 Mechanical work isn’t done yet Dry wall nor overhead mechanical dates were achieved Relationship with the contractor has been challenging Contractor is blaming others for problems Attorneys will work on a settlement this fall Building inspection has been very helpful Contractor has been receiving notice of defective work and have asked them to fix it within seven days Specific examples are plaster and sliding doors but plaster was fixed Permanent power is the next milestone Subsequent milestone is custom casework 2 b. Temporary Main Library Art center construction is going well New schedule will be provided by Brad and Matt Critical path is to get Temporary Main up-and-running before shutting down Main Temporary MPL is working well Friends will be supplying leased books for Temporary Main Library 2. DISCUSSION – Design Progress (Phil Bobel) a. Main Library Design is nearly complete Firm schedule will depend on getting through the plan check with the Building department Lesson learned on MPL with be incorporated into Main Construction manager contract will be strengthened and scope clarified Construction contract will also be strengthened before we go out to bid It has not been determined who will review Group 4’s design Part of the change in the CM scope is to be more explicit on what constitutes a constructability review Construction manager for Art Center is Nova Partners Construction schedule dependent on more analysis NEW BUSINESS 3. DISCUSSION – Update on reconciliation of Main Library costs (Phil Bobel) Council approved assessment for last year No question on portion brought to LBOC members attention For GO Bonds, can’t pay underwriters costs with par value, but must pay with premium Attractive to investors with good interest rates far into the future Premium was greater than needed, so it has to be applied solely to offsetting debt service Assessment was reduced accordingly Bond financing cost savings can be used for project costs 4. DISCUSSION -- Draft Financial Report Summary from Administrative Services (Joe Saccio) a. Expenditures to date – summary spreadsheet Consultant and present construction manager have done independent cost estimates Reconciliation of differences were done to a limited extent Brad and Matt will work on this Costs will increase over previous estimates and will change on the budget chart of the bi-monthly report On September 4th a revised chart will be provided to City Council We need to take amendments for Group 4 and Turner for extended costs at MPL 3 New contract will also be put in place for Main and Group 4 MPL $41.3M figure does not include Group 4 and Turner’s amendment. It only includes Council approved contingency. Outstanding PCO’s (exposure) is less than the reserve amount in the bond. Can’t afford similar problems on Main Flintco has submitted claims City should consider prequalification of subcontractors and accounting of attorneys 5. ACTION – Approval of Quarterly Report to Finance Committee Questions were answered 6. Next Steps a. Next meeting: October 23, 2012 Election of officers Update on Main scheduling Adjournment 5:00 PM $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 Co s t Percent Completion Mitchell Park Library Approved Change Orders (CO's) and Outstanding Potential Change Orders (PCO's) Approved CO's Outstanding PCO's Flintco COR's 10% Contingency 20% Contingency 4.19 (DT) 5.21 (DT) 4 (DT) $44.34 (Mitchell) $49.04 (Mitchell) $50 (Mitchell) $22.66* (Main) $18 (Main) $18 (Main) 1.65 (Other) 3.75 (Other) 4 (Other) Cu r r e n t P r o j e c t i o n E n g i n e e r ' s E s t i m a t e Bo n d E l e c t i o n Es t i m a t e Dollars (Millions) Library Bond Fund Utilization Projections (October 2012) (Dollars in Millions) Mitchell Park Library Main Library Temporary Libraries & Bond Costs $72.84M $76M *The Main Library Projection was increased following Council approval on July 25, 2011 (Staff Report #1438) of approximately $1.7M of design amendments and future building improvements related to deferred maintenance, code upgrades and service enhancements. Palo Alto Library Projects Bi-Monthly Progress Report September – October 2012 Mitchell Park Library & Community Center Main Library Mitchell Park Main Entry Table of Contents Mitchell Park Library Status Report Management Summary Schedule Milestones Main Library Status Report Library Closure Plan Financial Summary Mitchell Park Library & Community Center 3700 Middlefield Road, Palo Alto The new Mitchell Park Library and Community Center is a highly sustainable joint-use facility that will be a vibrant destination for civic, cultural, social, educational, and recreational activities. The new center, which will replace undersized and aged facilities, is made possible through Measure N and the strong partnership between the city and the community. During construction, temporary library and teen center facilities are available at the Cubberley Community Center. WEB CAM LINK: http://173.164.239.206/view/viewer_index.shtml September - October PROJECT CONSTRUCTION CONSTRUCTION BEGAN: September 2010 ANTICIPATED OPENING: Spring 2013 PROJECT TEAM OWNER: City of Palo Alto Public Works (650) 329-2295 ARCHITECT: Group 4 Architecture, Research + Planning Inc. South San Francisco, CA (650) 871-0709 GENERAL CONTRACTOR: Flintco Pacific, Inc. Roseville, CA (916) 757-1000 CONSTRUCTION MANAGER: Turner Construction Company San Jose, CA (408) 918-1600 FOR MORE INFORMATION www.cityofpaloalto.org/libraryprojects KEY ACCOMPLISHMENTS • Screen Wall At Entry • Drywall Work Continues • Windows Installed • Permanent Power & PV Permit UPCOMING ACTIVITIES • Stonework • Exterior Painting and Trim • Interior Ceilings • Ornamental Fencing • Pavers Installation Green Wall Framing at Main Entrance Library Roofing Started September - October Courtyard Drainage Being Installed Progress Photos Library Floor Electrical Bonding Work Sun Trellis in the Courtyard Multi Purpose Room Interior Finish Exterior Stone Delivered Library Mechanical Equipment Ready Courtyard Drainage Being Installed Mitchell Park Library & Community Center Management Summary September - October 2012 Noteworthy Accomplishments • Permanent power is connected • Exterior doors are installed • Colorful sunscreen installed • Change Order Request (COR) backlog completed • Photovoltaic systems permits have been issued. Current Project Challenges: • Processing the high volume of change documentation and providing direction ◊ Waterproofing and sheet metal changes orders issued ◊ Significant number of new COR received. Weekly review meetings are in progress. • The pace of work needs to pick up with more manpower assigned to critical path activities. • Disputes over non-compliant work need resolution Safety • Public Safety is a priority outside the fence. No incidents reported to date • School resumed smoothly without any safety issues from construction Quality Control • City and Special Inspection Work: ◊ Work needs to be ready when inspection is requested ◊ Work should pass inspection the first time around • Quality Control Observation Reports: ◊ Open reports need to be signed off before space above ceilings can be covered ◊ Courtyard Concrete benches finishes need remedial work. ◊ Sliding glass doors need remedial work ◊ Window water testing is still incomplete due to high failure rate. Costs: • The City issued 29 Change Orders dealing with over 360 COR. An additional 89 were rejected. • Flintco resumed COR Request submittals with 53 new requests. Schedule: • No improvement on completion date – October schedule still May 2013. • The Contractor needs adequate manpower to support the planed schedule. Next Key Milestones: (from Flintco 10/15 schedule update) • Ceilings start Library 11/30 Teen Center 10/3 Community Center 10/2 • Drywall finish Library 11/8 Teen Center 10/17 Community Center 10/29 • Stonework finish Library 12/7 Teen Center 11/21 Community Center 10/31 Note: Many of the above reported milestone dates have passed and the activities are late. Mitchell Park Library & Community Center Schedule Milestones September - October 2012 ACTIVITY Bldg-A Bldg-B Bldg-C Pad Certification 10/27/10 10/27/10 10/27/10 Foundation Complete 12/28/11 1/16/11 1/7/11 Frame & Place Slab on Grade 2/11/11 5/6/11 5/3/11 Top out Structural Steel Frame 5/31/11 4/15/11 5/12/11 2nd Floor Poured 4/16/11 X X Roof Poured 5/31/11 6/24/11 6/21/11 Frame Ext Walls AEXT 4000 BEXT 4000 CEXT 4000 9/2/11 9/26/11 9/2/11 Building Dried In AEXT 5555 BEXT 5555 CEXT 5555 6/8/12 6/8/12 6/8/12 Frame Interior Walls AINT 1130 BINT 1130 CINT 1130 5/24/11 6/1/11 7/1/11 Hang Drywall Start 1 AINT 1085 BINT 1080 CINT 2330 9/6/12 8/8/12 8/6/12 Permanent Power AINT 2120 BEQU 2020 CEQU2020 9/27/12 9/27/12 9/27/12 Ceiling Start (MEP inspections pass) 2 AINT 1105 BINT 1090 CINT 1090 11/30/12 10/3/12 10/2/12 Drywall Finished2 AINT 1150 BINT 1090 CINT 1090 11/8/12 10/17/12 10/29/12 Ceiling Tile Finished AFIN 1120 BFIN 1120 CFIN 1120 1/7/13 11/9/12 12/19/12 Heat & Air Conditioning Online2 AEQU 1100 BEQU 1090 CEQU 1090 10/26/12 12/18/12 12/11/12 Casework Start Date 4 AFIN 10049 BFIN 1090 CFIN 1090 12/4/12 1/7/13 12/18/12 Elevator Complete AEQU 1090 N-A N-A 12/4/12 N-A N-A Parking Paving & Driveways Complete 1/8/13 x x Owner/Arch Punchlist - Start PCO 5000 PCO 2030 PCO 3030 4/16/13 2/12/13 2/20/13 Substantial Completion 5 PCO 1555 PCO 2555 PCO 3555 4/5/13 4/9/13 3/25/13 Commissioning Finish - Start Air Out AEQU 1070 BEQU 1070 CEQU 1070 5/8/13 4/29/13 5/21/13 Certificate of Occupancy MSA 1210 MSA 1270 MSA 1400 5/20/13 5/20/13 5/20/13 Footnotes 1. Actual from Inspection log 2. Schedule dates passed 4. need walls finished and HVAC online 5. Temporary Certificate of Occupancy Completion DateFlintco Monthly Schedule update 10-15-12 Completed ACTIVITY I.D. STE 1840 Main Library 1213 Newell Road, Palo Alto Exterior View September - October PROJECT CONSTRUCTION CONSTRUCTION STARTS: Summer 2013 ANTICIPATED OPENING: Fall 2014 PROJECT TEAM OWNER: City of Palo Alto Public Works (650) 329-2295 ARCHITECT: Group 4 Architecture, Research + Planning Inc. South San Francisco, CA (650) 871-0709 CONSTRUCTION MANAGER: TBD FOR MORE INFORMATION www.cityofpaloalto.org/libraryprojects KEY ACCOMPLISHMENTS • Plans and Specifications 95% Complete UPCOMING ACTIVITY • Plan Check Completion The Palo Alto Main Library renovation and addition is in the final phase of design “Better Libraries for Palo Alto” projects, funded by the passage of Measure N by voters in 2008. The project incorporates upgrades to the historic building’s structural, electrical and mechanical systems while preserving the integrity of architect Edwards Durrell Stone’s iconic design. The new addition includes a program room and additional restrooms to extend the services of this heavily-used branch. The project targets LEED certification. Library Closure Plan September - October 2012 Mitchell Park Library and Community Center construction started, College Terrace Library re-opened Mitchell Park Library & Community Center Anticipated Public Public Opening in the Spring 2013 Main Library Closes for construction Mid 2013 20 1 0 20 1 1 20 1 2 20 1 3 Downtown Library re-opened 20 1 4 Main Library Opening to the Public in 2014 printed 11/14/2012 MEASURE N ENGINEER'S ESTIMATE PROJECTED RESERVES 09010 Cubberley Temporary Library 645,000 619,687 25,313 09005 Downtown Library 4,000,000 5,212,000 4,189,759 1,022,241 09006 Mitchell Park Library & C.C.50,000,000 49,043,000 44,336,499 4,706,501 11000 Main Library 18,000,000 20,100,000 22,660,263 -2,560,263 11010 Art Center Temporary Library 500,000 528,232 -28,232 Bonding and Financing Costs 4,000,000 500,000 500,000 0 BONDED AMOUNT 76,000,000 76,000,000 72,834,440 3,165,560 data 8/28/12 - - - September - October 2012 Update PALO ALTO LIBRARIES BOND MEASURE N PROJECTS FINANCIAL SUMMARY BUDGET COSTS The combined projects currently have projected cost reserves of $3,165,560. Notes on Projected Cost: Temporary Library at Cubberley finished below estimate. Balance is held for move out costs. Downtown Library is finished. Uncommitted Contingency of $228,352 is released. Mitchell Park Library and Community Center bids were significantly below estimate. Recent Design and C.M. Contract amendments are included. Bond costs were reforecast and the financing budget was reduced to $500,000. Main Library Budget increased $2,100,000 from financing budget reduction. Council increased Project Scope. Projected Cost includes current estimated cost increases. Projected Cost is based on CPA Public Works estimates. Projected Costs are based on contracts awarded to date with their full contingency authorization. Projected Costs for contracts not yet awarded are based on the current estimate. City of Palo Alto (ID # 3232) City Council Staff Report Report Type: Action Items Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Public Hearing For Underground District No. 47 Title: Public Hearing: Adoption of an Ordinance Establishing Underground Utility District No. 47 (Middlefield Road/Addison Avenue/Cowper Street/Homer Avenue) by Amending Section 12.16.02 of the Palo Alto Municipal Code From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council adopt the attached Ordinance to create Underground Utility District No. 47 and thereby amend section 12.16.02 of the Palo Alto Municipal Code. Background At its meeting on September 10, 2012, the Council passed Resolution of Intent No. 9285 to establish Underground Utility District No. 47 [Staff Report ID# 2947]. The Council meeting of December 10, 2012 has been set as the date of the Public Hearing on the matter. Notices announcing the meeting with a description of the project and a copy of the Resolution were mailed to all property owners in the proposed district on October 12, 2012. The Electric Utility’s undergrounding project areas are selected and recommended to AT&T and Comcast based on the age and maintainability of the existing overhead electric system. AT&T and Comcast determine whether the recommended area meets their criteria for undergrounding, based on the guidelines established by the California Public Utilities Commission (CPUC). The attached Exhibit “A” shows the boundaries of underground district No. 47 that encompasses portions of avenues, roads, and streets of Homer, Cowper, Addison, Middlefield, Channing and Webster. Underground Utility District No. 47 meets the City’s and CPUC’s guidelines for undergrounding overhead utility lines. Discussion City of Palo Alto Page 2 This underground project will result in the removal of 34 poles and provide underground services to 82 properties consisting of largely residential and a small percentage of commercial property. Completion of this project will result in higher reliability, increased safety due to elimination of poles and improved aesthetics. If an underground district is created, the Utilities Department will prepare plans and specifications and obtain bids for installation of the underground substructure. Underground substructure construction consists of the installation of conduits, vaults, pads and boxes. The Utility will then install the electric distribution cables, transformers and switches upon completion of the substructure installation. After the new underground system (cable, transformers, switches, etc.) has been tested and energized, the property owners will be notified that they have 60 days to connect to the new underground system. Upon completion of the new connections, Utility crews will remove the overhead power lines, and telephone crews will complete the project by removing the remaining telephone and cable TV (CATV) facilities and poles. Timeline Once the Public Hearing is completed and if Council decides to proceed with the project, the following scheduled is proposed: Serial Number Action Date 1. Public Hearing and first reading of Ordinance Establishing Project Area as UUD No. 47 December 10, 2012* 2. Second Reading of Ordinance January 14, 2013* 3. Letters to property owners with approved Ordinance Chapter 12.167 of Municipal Code, and update February 11, 2013 4. Award of construction contract and Joint Construction Agreement with AT&T/Comcast July 2013* 5. Substructure (conduits, vaults, etc.) installation by Contractor August 2013 through November 2013 6. Installation of underground facilities (cable, switches, etc.) December 2013 through March 2014 7. Resolution determining properties electing to pay service conversion cost over a period of 10 years May 2014* 8. Service conversion work by property owners June 2014 through City of Palo Alto Page 3 August 2014 9. Pole removal and project completion September 2014 through November 2014 *Denotes Council Action Resource Impact The total cost of the project is estimated at $1,800,000. An estimated $750,000 will be for the installation of telephone and CATV conduit and boxes for which the City will be reimbursed by AT&T and Comcast. For fiscal year 2012-2013, $150,000 has been designated for planning and engineering of this project and is budgeted in 2012-2013 Electric Capital Improvement Program. The cost of the required service conversions on private property is to be borne by the individual owners in accordance with Utility Rule and Regulation No. 17. The total cost for the property owners requiring service conversions from overhead to underground has been estimated at $296,000. The property owners have been offered the option of financing their service conversion costs over a period of ten years in accordance with the procedure given in Sections 12.16.090 through 12.16.096 of the Palo Alto Municipal Code. Policy Implications This recommendation is consistent with the Council approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. Environmental Review This project is categorically exempt from the California Environmental Quality Act under Public Resources Code Section 15302(d) (conversion of overhead electric utility distribution system facilities underground). Attachments: Attachment A: Underground District No. 47 Boundary Map (PDF) Attachment B: Ordinance No. XXXX (PDF) Attachment C: Resolution No. 9285 (PDF) 1 121105 dm 6051811 Ordinance No.__________ Ordinance of the Council of the City of Palo Alto Establishing Underground Utility District No. 47 (portions of Homer, Cowper, Addison, Middlefield, Channing and Webster) by Amending Section 12.16.020 of the Palo Alto Municipal Code R E C I T A L S A. This Council, on September 10, 2012, adopted Resolution No. 9285, declaring its intention to establish Underground Utility District No. 47 in the City by amending Section 12.16.020 of the Palo Alto Municipal Code and by such Resolution appointed Monday, December 10, 2012, at the hour of 7:00 o'clock p.m., in the Council Chambers, City Hall, at 250 Hamilton Avenue, Palo Alto, California, as the time and place of hearing protests and receiving evidence for and against the proposed action and notice of direction; and B. Notice was given of the time and place for the public hearing stated in the manner provided by law, as appears from the affidavits on file in the office of the City Clerk; and C. Said matter came on regularly for hearing at the time fixed; and D. All written protests and other written communications were publicly read at said meeting and evidence duly taken and all persons desiring to be heard were fully heard. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The public necessity, health and safety require the removal of poles and overhead lines and associated overhead structures from that certain area described in Resolution No. 9285. SECTION 2. Section 12.16.020 of the Palo Alto Municipal Code is hereby amended by adding Subsection (47) thereto to read as follows: “(47) District No. 47. All of the area in the County of Santa Clara, City of Palo Alto, encompassing the areas contiguous with portions of the following avenues, roads, and streets: Homer, Cowper, Addison, Middlefield, Channing and Webster, all as more particularly described on that certain map entitled "Proposed Underground District No. 47 Homer/Cowper/Addison/Middlefield/Channing/Webster” on file in the office of the City Clerk.” SECTION 3. The "Underground Utility District Maps" referred to in Section 12.16.020 shall be amended to add to the areas shown on the map those referred to in Resolution No. 9285. 2 121105 dm 6051811 SECTION 4. The City Council hereby finds that the adoption of this ordinance is categorically exempt from the California Environmental Quality Act under Public Resources Code Section 15302 (conversion of overhead electric distribution facilities to underground). SECTION 5. This ordinance shall become effective upon the expiration of thirty (30) days from its passage. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: __________________________ _____________________________ City Clerk Mayor ______________________________ APPROVED AS TO FORM: City Manager _____________________________ ______________________________ Senior Deputy City Attorney Director of Utilities City of Palo Alto (ID # 3377) City Council Staff Report Report Type: Meeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: 423-451 Page Mill Title: Public Hearing: Adoption of an Ordinance Rezoning a 0.6-acre Site from Single Family Residential (R-1) to Service Commercial (CS), Adoption of a Resolution Amending the Comprehensive Plan Land Use Designation from Single Family Residential to Service Commercial, and Approval of the Negative Declaration for the Properties located at 423-451 Page Mill Road. From: City Manager Lead Department: Planning and Community Environment The 423-451 Page Mill Road item was continued from the December 3, 2012 City Council hearing to a date certain of December 10, 2012. City of Palo Alto (ID # 3253) City Council Staff Report Report Type: Action ItemsMeeting Date: 12/3/2012 City of Palo Alto Page 1 Summary Title: 423-451 Page Mill Road Title: Public Hearing: Adoption of an Ordinance Rezoning a 0.6-acre Site from Single Family Residential (R-1) to Service Commercial (CS), Adoption of a Resolution Amending the Comprehensive Plan Land Use Designation from Single Family Residential to Service Commercial, and Approval of the Negative Declaration for the Properties located at 423-451 Page Mill Road. From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve the Negative Declaration, adopt an Ordinance rezoning a 0.6-acre site from Single Family Residential (R-1) to Service Commercial (CS), and adopt a Resolution amending the Comprehensive Plan Land Use Designation from Single Family Residential to Service Commercial. Executive Summary The rezoning and Comprehensive Plan Land Use Designation amendment will allow the rezoning of the property from Single Family to Service Commercial. Currently, the properties have four single family residences that front on Page Mill Road and have commercial neighbors to the north and south. Page Mill Road is a busy arterial roadway that is not conducive to single family uses. The homes have been used as rentals with little incentive for investment as single- family homes due to their location on the busy roadway. The requested rezoning would permit commercial uses alone or multifamily residential uses in conjunction with commercial uses to replace the existing one story homes. The rezoning application has been reviewed by the P&TC twice and there has been little public comment on the proposal. The Commission has recommended that the City Council approve the rezoning and the Comprehensive Plan Land Use Designation amendment. Background City of Palo Alto Page 2 Planning and Transportation Commission Review The request for Rezoning and Comprehensive Plan Amendment was heard by the Planning and Transportation Commission (P&TC) on August 29, 2012. At the hearing, there were no public speakers for the item. There were also no written comments from the public. The P&TC was concerned that the public was not adequately noticed about the project and may not be aware of the proposed zone change request. The P&TC voted 6-0-1 to continue the item to October 3, 2012. As part of the P&TCs motion to continue the item, the applicant was asked to conduct public outreach to ensure the public is aware of the proposal and explain why the CS zoning is being requested rather than the CN zoning, in order to get some sense of what could potentially be built under the proposed zoning designation. The P&TC also requested that staff revise the zoning comparison table to add in the R-1 zoning and add in floor area calculations compared to the standards in the zoning code. On October 3, 2012 the item returned to the P&TC after the applicant had conducted additional public outreach. The applicant had two separate community outreach meetings. The details of those meetings are covered in the discussion section below. There were three members of the public that spoke at the second Commission hearing. The issues expressed by the public speakers were not specific to the appropriateness of the proposed rezoning, but rather were related to concerns over the future disturbance of the contaminated ground water below the site as well as traffic and parking issues related to a different development review proposal at 395 Page Mill Road. The Commission voiced concerns about not having been given to opportunity to review draft plans for what may be developed on the property if the rezoning were to be approved, but was ultimately supportive of rezoning the property. Commissioner Tanaka moved, seconded by Commissioner Tuma, to approve the staff recommendation with no additional conditions or changes. They voted 6-0-1 to recommend that the City Council approve the rezone request. The P&TC staff reports from both public hearings and the verbatim minutes from the August 29, 2012 public hearing are attached to this report (Attachments G, H, I). The October 3, 2012 hearing was held in the Council Conference room and a vast majority of the recorded hearing was inaudible. Most of the time the microphones did not pick up any sound and as a result the minutes were significantly incomplete. There are, therefore, no verbatim minutes provided for the October 3, 2012 hearing. Existing Conditions The project comprises four parcels identified as 423, 433, 441, and 451 Page Mill Road. The total site area of the four properties combined is approximately 26,932 square feet. There are currently four, single-story, single-family residences, one on each of the four parcels. Adjacent uses to the northeast include the Kelly Moore Paint Store at 411 Page Mill Road, (a GM zoned parcel) and the AOL office development at 395 Page Mill Road (an ROLM zoned parcel, pending a proposal for a Planned Community zone change by the Jay Paul Company). Adjacent uses to City of Palo Alto Page 3 the southwest include an animal hospital at 461 Page Mill Road, (a CN zoned property) and the AT&T retail store on the corner at 2805 El Camino Real (a CS zoned property). To the southeast, or the rear of the site, are single family residences with the exception of a grandfathered art studio at 440 Pepper Avenue. Across Page Mill Road to the northwest are multifamily residential PC developments. Project Description The proposal is to rezone the four properties from Single Family Residential (R-1) to Service Commercial (CS) as well as a Comprehensive Plan Land Use Map Designation amendment from Single Family Residential to Service Commercial. If the rezoning and land use designation amendment of the properties is approved, it is anticipated that the four properties would be combined and a mixed use development would be proposed for the site. The CS zoning would allow commercial development as well as residential development, provided thatany residential units are provided in combination with commercial uses as a mixed use development. The floor area ratio (FAR) limit for commercial development in the CS zone district is 0.4:1 FAR which would be 10,773 square feet on this site. To encourage mixed use with residential development, the code allows an additional 0.6:1 FAR or 16,159 square feet for the residential use component. The maximum allowable FAR for a mixed use project would be 26,932 square feet (a floor-area-ratio (FAR) of 1:1). Provided below is a table showing the possible floor area ratio (FAR) for a mixed use development. Allowable Mixed Use Development in CS Zone Floor area Ratio Square feet Commercial 0.4:1 10,773 Residential 0.6:1 16,159 Total 1:1 26,932 Discussion Traffic and Parking A Traffic Impact Analysis (TIA) was conducted to review any potential impacts that may possibly result from the proposed future development of the site if it were to be rezoned to CS. Under the CS zoning, a mixed use development of commercial and residential uses could be permitted. The TIA analyzed a hypothetical mixed use project with office, retail, eating and City of Palo Alto Page 4 drinking, and eight residential units. The analysis determined that the hypothetical project would not result in a significant impact to the studied intersections or the nearby residential streets. Soil Contamination The project site is located within the California Olive Emerson (COE) Study area which is known to have contaminated ground water from offsite dumping of Volatile Organic Compounds (VOCs). Based on this location, measures will likely need to be implemented for any future development of the property to prevent vapor migration into any future structures. Submittal of a Phase II Environmental Analysis would be required for any proposed development on the site, and specific measures would likely be needed to ensure building occupants of any development proposal are protected from vapor intrusion and appropriate construction safety precautions are followed. The soil adjacent to the existing residential structures on the site may also be impacted from exterior lead paint weathering and pesticide use for termite control, typically associated with older wood frame structures. Off Site Impacts Potential offsite impacts could result from rezoning to CS because that zone allows for greater FAR (1:1), height (35 feet), and commercial uses than the current R-1 zoning. The property is located on a high traffic arterial with commercial uses on either side but abutting the property to the rear are single family residences. Any future development of the site would need to be respectful of these sensitive uses. The Municipal Code has built in measures to help address potential issues with this kind of adjacency such as reduced height limits, daylight plane limitations, and limited hours of operation for certain types of commercial businesses. In addition, public hearings would be required for any development of the site under the proposed zone. CS-zone mixed use projects having five or more residential units are subject to Planning and Transportation Commission review and Architectural Review Board review (ARB), as well as City Council action through the Site and Design review process. Mixed use projects having four or less residential units would be subject to the Architectural Review Board review and Planning Director action only. Public Outreach The applicant conducted a public outreach effort to ensure that the public has been adequately informed about the project. The applicant provided a letter to owners of all properties within 600 feet of the project site that are south of Page Mill Road and East of El Camino Real. The letter explained the zone change request and invited the residents to a pizza night open house. A postcard was also placed in the envelope with the letter asking recipients to mail it back if City of Palo Alto Page 5 they had no objection to the proposal. In addition to the mailer, the owner went door to door to properties on both sides of Pepper Avenue on the same block as the project site including Page Mill Road, Ash Street, and El Camino Real. The applicant reported to staff that of the 26 doors knocked on, 14 people answered. Of the 14 people the applicant spoke to directly, only two residents (of Pepper Avenue) voiced concerns. These concerns were related to increased traffic and parking on Pepper Avenue. Four people were supportive of the project and other residents only had questions. The first neighborhood meeting was held on September 20, 2012. The meeting was held at 430 Pepper Avenue, conveniently located in the neighborhood close to the project site. Only two residents from one property on Pepper Avenue responded and attended the outreach meeting. The hour and half discussion included the history of Pepper Avenue, its residents and the surrounding neighborhood. The owner spoke about his background and his vision of a three story mixed use building for the site. The earlier failed hotel proposal and the hearing process were also discussed. According to the applicant, two residents were not concerned about the rezoning but rather a future building. They voiced the following concerns: • Increased parking in their neighborhood. The applicant explained that this concern could be addressed if and when a development is proposed by complying with the City’s parking requirements. • Questioned what the allowed height is in the CS zone. They were informed the height limit adjacent to single family residential is 35 feet. • Disturbance of the contaminated ground water. The applicant recognized this concern and indicated that it could be addressed if and when a development is proposed by building only one level below grade. • Intention for the 430 Pepper Avenue site since the past hotel project application included a proposal to use it as access. The applicant explained that they intend to keep the 430 Pepper site, which is not part of this rezone application, as currently zoned (R-1). The applicant indicated that he intends to sell it as a separate single family residential parcel. A second neighborhood meeting date was requested by the Pepper Avenue neighbors as a more convenient date for those interested in attending. The meeting was held on Tuesday September 25, 2012. Nine people indicated they would come to the meeting but only six people attended. The six people represented four separate Pepper Avenue addresses. The following concerns were discussed: City of Palo Alto Page 6 • Increase in traffic - It was noted that the intersection of Page Mill Road and El Camino Real is already congested and that they did not want to see it getting any worse. They explained that it is difficult getting out of Pepper Avenue on to El Camino Real. • Density - The neighbors expressed concerns over the height and size of a future building and how it would feel from their properties. They commented that they would like any new building to be as close to Page Mill Road as possible. • Increased parking in the neighborhood - There was concern that new development may result in increased parking demand on Pepper Avenue and requested that the applicant assist the neighbors to work with the City to initiate a permit parking program. • Ash and Page Mill intersection - The neighbors commented that this intersection is fast and dangerous and that the cars parked on Page Mill Road impede views for cars trying to exit from Ash Street onto Page Mill Road. There was interest to remove the on street parking in that location. • Privacy - the neighbors do not want people looking down into their yards. • Disturbance of the contaminated ground water - The neighbors were concerned about the disturbance of the contaminated ground water. Three neighbors spoke at the October 3, 2012 Planning and Transportation Commission meeting, but their concerns related more directly to the proposal at 395 Page Mill Road, rather than the subject rezoning. Service Commercial (CS) Comparison to Neighborhood Commercial (CN) The applicant believes the CS zoning designation is more appropriate than the CN zoning designation for this site because the subject property is located on a busy arterial street (Page Mill Road). The street has a high volume of fast moving traffic. The stated purpose for the CS zoning is to create and maintain areas accommodating city wide and regional services that may be inappropriate for neighborhood or pedestrian oriented shopping areas, whereas the stated purpose of the CN zoning designation is to create and maintain neighborhood shopping areas. Neighborhood shopping areas are typically more pedestrian oriented and are intended to serve the immediate neighborhood. This section of Page Mill Road would seem more appropriate for city wide uses than neighborhood uses. The busy street does not provide a desirable pedestrian friendly environment for neighborhood shopping and is more appropriate to auto oriented access. The applicant has also stated the desire to redevelop the site with mixed residential and commercial uses. The CS zoning allows for double the housing density (18 units) than the CN zoning (9 units). The CS zoning also allows for a greater residential FAR (2,694 more square feet) than the CN zoning. Timeline City of Palo Alto Page 7 Application Submittal: 01/31/2012 Phase I Environmental Submittal: 05/23/2012 Traffic Analysis Submittal: 06/15/2012 Revised Traffic Analysis Submittal: 07/27/2012 CEQA Document Circulated: 08/23/2012 P&TC Hearing: 08/29/2012 Completion of 30 day CEQA circulation period 09/24/2012 Second P&TC Hearing: 10/03/2012 City Council Hearing: 12/03/2012 Resource Impact The proposed increase in commercial floor area would yield, on a one-time basis, Development Impact Fees of $18.44/sq. ft. and $4.908/sq. ft. for housing and community facilities, respectively, if a commercial only development were proposed. Property values for the site will increase over the present residential use. Specific project impacts will be studied and addressed if and when a development application is submitted for a new building. Policy Implications The project is located within the Cal-Ventura area with frontage on Page Mill Road and its proximity to the California Avenue multimodal transit station. Policy L-31 of the Comprehensive Plan encourages the development of the Cal-Ventura area as a well-designed mixed use district with diverse land uses and two- to three-story buildings. To recommend approval of a zone change, the Council must find that the public interest will be served by rezoning the area being considered for reclassification. The rezoning request is accompanied by a request to amend the Comprehensive Plan land use designation. The four properties are currently designated for Single Family Residential use, consistent with the current Single Family Residential zoning designation. In order for the land use designation to remain consistent with the new zoning, it must also be changed to Service Commercial. While the project site is located within walking distance of the California Avenue Cal Train station, the site was not included in the Pedestrian and Transit Oriented Development (PTOD) area boundary. A commercial land use designation is appropriate for the subject property and is consistent with the commercial uses on each corner of the block and the adjacent pet hospital. The property fronts on Page Mill Road which is a high traffic, major arterial roadway with adjacent City of Palo Alto Page 8 commercial uses. Single family residences are not typically encouraged in such locations. Please see the Comprehensive Plan Policy compliance table (Attachment E) prepared by staff. Environmental Review An Initial Study and Draft Negative Declaration have been prepared and were circulated for public comment on August 23, 2012 (Attachment E). The environmental issues identified in the CEQA review are related to offsite contamination of the groundwater that runs beneath the project site. Volatile Organic compounds (VOCs), primarily Trichloroethylene (TCE), are present in the groundwater and any future development of the site would likely require mitigations such as a vapor barrier and active ventilation for any new structures containing a subterranean garage and residential component, as well as special handling and disposal of any soil and ground water removed from the site. However, because this is only a rezone and no physical development is being proposed that may affect the environment, no mitigation measures are proposed or required. If and when a development application is submitted, environmental review of that project will be required. Attachments: Attachment A: Resolution Amending Comprehensive Plan (PDF) Attachment B: Ordinance Rezoning 423-451 Page Mill Road (PDF) Attachment C: Site Location Map (PDF) Attachment D: Zoning Comparison Table (PDF) Attachment E: Comprehensive Plan Policies Table (PDF) Attachment F: Applicant's Letter (PDF) Attachment G: Planning and Transportation Commission Staff Report of August 29, 2012 (w/o attachments) (PDF) Attachment H: P&TC Excerpt Verbatim Minutes for August 29, 2012 (DOC) Attachment I: Planning and Transportation Commission Staff Report of October 3, 2012 (w/o attachments) (PDF) Attachment J: Draft Initial Study and Negative Declaration (PDF) Attachment K: Project Site Plans (hardcopies to Councilmembers and Libraries only) (TXT) City of Palo Alto Page 1 Attachment H 1 2 Excerpt Minutes of August 29, 2012 3 Planning and Transportation Commission Meeting 4 5 6 7 8 9 10 11 423-451 Page Mill Road 12 13 Chair Martinez: Thanks Curtis. Well, yes, we are resuming our hearing and we are going to go to the 14 next item on our agenda and that’s a request for rezoning of 423 to 451 Page Mill Road, and we’ll 15 begin with the Staff report. 16 17 Russ Reich, Senior Planner: Yes, thank you. Good evening Chair Martinez and Commissioners. The 18 application before you this evening is a request to rezone a .6 acre site from Single Family Residential 19 (R-1) to Service Commercial (CS). The application also includes a request to amend the 20 Comprehensive Plan and land use designation from Single Family Residential to Service Commercial 21 such that the proposed zoning would be consistent with the Comprehensive Plan. The site is currently 22 consists of four single family parcels with a single story, single family residence on each lot. The 23 project site has commercial uses to the north and south with single family residential properties 24 directly behind to the east, and multifamily Planned Community’s (PC) across Page Mill Road to the 25 west. If the proposed zoning is successful it’s anticipated that a mixed use project would be proposed 26 for the site. 27 28 When the Pedestrian and Transit Oriented Development (PTOD) boundary was originally established 29 the City had decided not to include the subject property due to the fact that it was zoned R-1. It was 30 decided at that time that R-1 properties would not be included within the boundary. In 2008 a rezone 31 application was filed to include the subject properties within the PTOD with the proposal for 32 developing a five story hotel on the property. The PTOD zoning would have allowed a building up to 33 50 feet tall. 34 35 On October 15, 2008, the Planning Commission had considered both the PTOD boundary change to 36 broaden the PTOD area and a rezoning of the site to PTOD. The Planning Commission voted to 37 initiate the broadening of the PTOD boundary but to put off the discussion of the specific zoning of the 38 Page Mill Road site until a future meeting so that Staff could examine appropriate alternative zoning 39 for the site and come back with a recommendation. Then the Applicant for the rezoning hotel proposal 40 was withdrawn due to the negative feedback and neighbor concerns. Those concerns included traffic, 41 parking, noise, height, mass, scale, obstruction of views, loss of privacy, blocking of sunlight, safety, 42 and concerns over groundwater. 43 44 While the City has typically not supported the up zoning of single family residential properties to 45 higher density zoning designations, the proposal would be appropriate here. The up zoning of this 46 location would not have the same impact as it might in other locations in the City. The CS zoning is 47 appropriate for this site due to the adjacency of commercial uses. The fact that the site is located on a 48 busy arterial roadway and the fact that the site is located within 2,000 feet of a multi-modal transit 49 center. The CS zoning supports and encourages mixed use development while providing limitations to 50 City of Palo Alto Page 2 protect adjacent residential uses. The PTOD zone would have allowed up to 50 feet in height for a 1 hotel whereas the CS zone district would provide greater limitations on height. The height limit for the 2 CS district is 35 feet, when adjacent to single family residential uses with the requirement for a 3 minimum 10 foot rear yard setback and daylight plane to ensure any commercial or mixed use project 4 is more sensitive to residential uses. There are also limitations on business hours and uses to prevent 5 disturbance of the adjacent residential neighborhood. 6 7 The proposal to rezone the property is also supported by the Comprehensive Plan. Policy L31 8 encourages the development of the Cal-Ventura Area as a well-designed mixed use district. It is also 9 compliant with other Comprehensive Plan policies as outlined in Attachment D of the Staff report. At 10 places you have copies of the draft ordinance and resolution that would be forwarded to the City 11 Council upon a favorable recommendation from the Commission. 12 13 Also at places are responses to questions from Commissioner Alcheck. He had asked if ground floor 14 offices are prohibited in the CS zones, and if so would the ground floor be occupied by retail uses. The 15 answer is yes, ground floor offices are prohibited in the CS zone, but there are a number of uses that 16 would be permitted on the ground floor and retail is one of them. There’s a complete list of permitted 17 and conditionally permitted uses for the CS zone provided in Attachment C of the Staff report. 18 19 Commissioner Alcheck also asked if there was another zoning designation that would allow both office 20 and residential development and allow for ground floor office. The answer is yes, there are other zone 21 districts that would allow mixed use and allow office uses on the ground floor, those being the PTOD, 22 PC, ROLM, and RP zone districts. The PTOD would allow greater overall Floor Area Ratio (FAR), 23 but would allow less commercial square footage. The PC would require public benefits to accompany 24 any proposal. The ROLM would require conditional use permit for residential development, and the 25 RP designations are usually applied to properties within the research park. 26 27 Also at places, you have a table comparing the PTOD, CS, and CN zone districts. Also provided for 28 your review and recommendation are the initial study and draft negative declaration. The issue 29 identified in the environmental review is the contamination of the ground water below the site from 30 offsite sources. Due to the presence of VOC’s, primarily TCE in the groundwater, future mitigations 31 would likely be required such as requirement for vapor barrios and active ventilation systems to 32 prevent toxic fumes from migrating up into any building proposed for this site, particularly for a 33 residential use. It should be noted that any future mixed use project that has five or more residential 34 units would be subject to site and design review. 35 36 Staff has recommended that the Planning Commission, Planning and Transportation Commission 37 recommend approval of the requested zoning change and Comprehensive Plan land use designation 38 amendment. The applicant, John Northway is here to make a brief presentation. Staff and the 39 Applicant are available to answer any questions that you may have. Thank you. 40 41 Chair Martinez: Thank you. Is the Applicant ready to speak? I think 15 minutes, is that right? Ok, 42 you’re, have 15 minutes for your presentation. 43 44 John Northway, Stoecker and Northway Architects: It won’t take that long. John Northway, Stoecker 45 and Northway Architects, 1000 Elwell Court, Palo Alto. For the sake of time and also because we feel 46 the Staff report is very complete and did a very good analysis of, of the request for the zone change, it 47 also includes our letter of application which goes through essentially the same things that the Staff 48 report goes through, I’m not going to do a long presentation. 49 City of Palo Alto Page 3 1 In answering Michael’s question about the, which zone we looked at, we looked at actually all the 2 zones that Russ talked about. And we felt the CS was the best zone to use for the business plan that is 3 being developed and also the fact that retail on the ground floor is not a problem. That would be more 4 than likely, that would be incorporated into a future project which is still to be designed. And we’re 5 available to answer questions. Norm Schwab who is the new owner of the property is also here and 6 he’s happy to answer any of your questions also. But basically we completely concur with the Staff 7 report and its findings and we hope you do too. Thanks. 8 9 Chair Martinez: Thanks. Any questions for the Applicant? Commissioner Tuma. 10 11 Commissioner Tuma: Yeah, I have two questions. One is I noticed that it was mentioned in here that 12 the new owner, have they purchased the property or is it an option to purchase, what’s the status? 13 14 Mr. Northway: It’s been purchased. 15 16 Commissioner Tuma: And, also was purchased is 430 Pepper. Is that right? 17 18 Mr. Northway: Yes. That’s correct. 19 20 Commissioner Tuma: And the, there was something in here that said the intent was for that to remain 21 as a single family home. 22 23 Mr. Northway: That is correct. 24 25 Commissioner Tuma: What’s the reason behind purchasing 430 Pepper? It raised a flag with me 26 because I didn’t quite understand why that would be part of this. Is this the same owner or? 27 28 Mr. Northway: Oh. Yeah, it was all, it was my understanding and Norm just confirmed. It was all, all 29 those parcels were owned by one owner, so all of those parcels were put up to sale. 30 31 Commissioner Tuma: So there’s absolutely no intent whatsoever to incorporate that parcel into any 32 project that would be built here? 33 34 Mr. Northway: No. We actually did some, we did some studies obviously before we applied for the 35 zone change and we just felt that the residential street was very important and that it really wouldn’t 36 have been appropriate to use it as access to the Page Mill properties. We just thought it was not a, it 37 was neither a wise nor prudent thing to do. 38 39 Commissioner Tuma: Completely agree. Ok, more of a purchase of convenience. The second 40 question I have is, is the Applicant prepared to share with us at this point, you said that you’re working 41 on a business plan. Is there a vision for what might go here? 42 43 Mr. Northway: I think it really will be, it will be as the Staff report says, it will be a multiuse type of 44 building. It hasn’t been taken too far yet because you don’t want to spend a lot of money designing a 45 building until you know you got a zone that it’ll fit into. 46 47 Commissioner Tuma: Ok. Thank you. 48 49 City of Palo Alto Page 4 Chair Martinez: Before you go John, Commissioner Keller. 1 2 Commissioner Keller: Thank you. I notice that this property was the four parcels are smack dab 3 between a GM zone on the corner of Ash and a CN zone towards El Camino, and then there’s CS 4 along El Camino. And I’m wondering what your thoughts are about being consistent with the existing 5 CN zoning and having these parcels be, just extend the CN zone all the way to reach GM versus 6 having an island of CN located between, sandwiched between two CS’s. I’m wondering what your 7 thoughts are about that? 8 9 Mr. Northway: Basically the CN zone would not work from a business plan standpoint. 10 11 Commissioner Keller: And I’m wondering if you could elaborate please? 12 13 Mr. Northway: Well the CN zone is far more restrictive as to the amount of office space and things like 14 that that can be used and it really doesn’t, it wouldn’t really, it wouldn’t work for, for the business 15 plan. 16 17 Commissioner Keller: So, the, what I’m hearing you say, is that the CN zone would not allow the 18 degree of office space that you’re planning to have in terms of the CS zone? 19 20 Mr. Northway: Yes. 21 22 Commissioner Keller: So, what in terms of a project that you’re contemplating if we do a CS zone, 23 what are you contemplating in terms of the mix of, of FAR of retail, the FAR of office, and the FAR of 24 residential? Do you have an idea, rough number? 25 26 Mr. Northway: We really haven’t gotten that specific yet. 27 28 Commissioner Keller: Alright, thank you. 29 30 Chair Martinez: Other commissioners? Do you have in your business plan identified the retail that 31 you’re targeting? 32 33 Mr. Northway: I’m sorry; I didn’t hear what you said. 34 35 Chair Martinez: The, the kind of, the retail that you’re targeting. Have you identified that? 36 37 Mr. Northway: We have not. 38 39 Chair Martinez: Ok, fine. 40 41 Mr. Northway: Again, we can only go so far until we know that we even have a zone that’s correct to 42 be working in. So it’s, we need to know that the zone is in place. I’d say there’s a very good 43 possibility that it’s going to be under the subject as the Staff report says, to the site and design, so 44 Architectural Review Board (ARB), you, and the Council will see the final building design. 45 46 Chair Martinez: Ok fine. Thank you. Questions for Staff? Commissioner Tanaka. 47 48 City of Palo Alto Page 5 Commissioner Tanaka: So have the neighbors been informed on the other side, on Pepper? Has, did 1 postcards go out and was there a neighborhood meeting? 2 3 Mr. Reich: There was a 600 foot radius notice mailing advertising this hearing. 4 5 Commissioner Tanaka: Ok, but no one’s actually talked to any of the people on Pepper? 6 7 Mr. Reich: We haven’t heard from any community members. 8 9 Commissioner Tanaka: Ok. And I know it’s here but maybe you could help me with the math. So, 10 when you go from a R-1 zone to a CS zone, obviously it’s an up zoning in terms of FAR, in terms of 11 mass and height. Can you guys tell me like, comparing FAR between residential and the CS what 12 would that be? What is the ratio? How, how much of an increase is this? 13 14 Mr. Reich: The R-1 residential allows 45 percent of the site to be developed if it’s 5,000 square feet. If 15 it’s larger than that you get an additional 30 percent of the remainder. 16 17 Commissioner Tanaka: I know that. I guess if, can you, the size, obviously the mental math without a 18 calculator up here. Do you guys know, can you tell me what, you know it’s X number of feet before, 19 X number of feet after with the CS zone. 20 21 Mr. Reich: So the site is 26,932 square feet, and under the CS zone it allows 1:1 FAR so the allowable 22 total FAR would be the 26,963 or 932, excuse me. 23 24 Commissioner Tanaka: And then the single family total FAR would be what? 25 26 Mr. Reich: I’d have to calculate them individually. Of the first 5,000 for each parcel. 27 28 Commissioner Tuma: It would be, it would be approximately 10,000 because you can put about a 29 2,400 square foot house on a 6,000 square foot lot. 30 31 Commissioner Tanaka: Ok. So this is like a, so it’s going from 10K square feet allowed to 26K square 32 feet allowed. Roughly. Ok. So it’s a 2.6 increase in the square footage. Ok. In general what’s the 33 when there’s like a big up zoning like this, what is the, and this is not PC so there’s no public benefit. 34 Generally is there any sort of, you know, with the PC we actually get some sort of public benefit by 35 giving the owner this kind of up zoning in return. In this case it’s kind of a, you’ve just been up zoning 36 for the benefit of the property owner and there’d be no benefit for the City, correct? No public benefit. 37 38 Curtis Williams, Planning Director: There’s not a, a negotiated public benefit associated with a straight 39 zoning change. The zoning change is the intent of the zoning change is a determination that it’s 40 consistent with the Comprehensive Plan and that it, you know, furthers the goals of zoning and your 41 plan. So that may, you know, that there’s that there’s some inherent sort of, the zoning would be better 42 than what’s there now, and not necessarily just for the property owner, but that there’s an inherent 43 benefit for the community in recognizing that change. 44 45 Commissioner Tanaka: Sure, I just was thinking about just two things, you know, the neighbors on the 46 other side on Pepper. It doesn’t seem like there’s been much dialog yet and I’m also thinking about 47 what they’re going to think when something that could be built there that’s going to be 2X, 2.6X the 48 size of what could currently be zoned there. So those are some of the things that are going on in my 49 City of Palo Alto Page 6 mind maybe we could have more of a discussion about how that, how that works out. Although in 1 general it seems like this is, if you look at Page Mill, seems to make sense. But, I wonder about those 2 two issues. Thanks. 3 4 Mr. Williams: If I could just also add, I’m just going back to the hearing when it was proposed to be a 5 hotel. I do recall and I don’t want to speak for the neighbors, but some of you were on the 6 Commission at that time that you know the 50 foot height was a big deal. There were discussions then 7 about either, as I recall and maybe this isn’t the neighborhood consensus but some of the residents 8 were talking about you know we recognize this is, these are single family homes on Page Mill and that 9 probably wasn’t our expectation that that those would stay like that. That a mixed use or a multifamily 10 product would be something better to look at than a hotel and certainly the 50 foot height was 11 objectionable so I think that’s some of the perspective we had from that previous discussion. 12 13 Chair Martinez: Ok. Commissioner Alcheck. 14 15 Commissioner Alcheck: Is there, can you guys, is there another, this, when I reviewed this proposal it 16 seemed unique to me. I was wondering if there is another site in this City that is, that you would 17 consider similar to this one where there are residential lots that are sort of sandwiched between 18 commercial lots in such a, and on an expressway. Kind of on a, you know, it sort of seemed unique to 19 me. They sort of seem really isolated and un-residential, if you will. And I’m sort of wondering if 20 there are any other sites in our City that present that sort of that orientation where they’re in one block 21 you have kind of isolated units? 22 23 Amy French, Chief Planning Official: Yeah, I think we have something and perhaps in the reverse 24 where, you know, along El Camino there’s quite a few properties that are CS and CN that are on the 25 major thoroughfare of El Camino and then right behind it you have some single families, so it’s kind of 26 more typical to see, you know, what they’re proposing as the case. A commercially zoned parcel along 27 the arterial or major roadway and then R-1 or RM-15 or what have you on the inboard side of that. 28 Yeah, I can’t think of another situation in town where there’s an R-1, you know, I guess there are 29 single family homes on Embarcadero and Oregon Expressway, but there’s not really a lot of 30 commercial along there. 31 32 Commissioner Alcheck: Not in between like two commercial (interrupted) 33 34 Ms. French: It’s just sandwiching like that, like this thing. 35 36 Chair Martinez: Commissioner Keller. 37 38 Commissioner Keller: So I have a few additional questions. I have a few questions of Staff. So, firstly 39 with respect to the question of office space in terms of the CS zoning, you have a rough idea of how 40 much the commercial could be and how much of the commercial could be office? 41 42 Ms. French: Per the table at places it’s .4 maximum FAR for commercial. Yes. 43 44 Commissioner Keller: I mean for the square footage, so if you have an idea. I’m trying to figure out in 45 terms of the office what’s the limitation on office? 46 47 Ms. French: Yeah, it’s 10,772 square feet for commercial. 48 49 City of Palo Alto Page 7 Mr. Reich: It’s .4 of the 26,932. 1 2 Commissioner Keller: And how about the office? 3 4 Ms. French: That’s the total commercial maximum floor area, including whatever type of commercial. 5 So the office in this case would have to be at the second floor level. The first floor could be retail or 6 something non-office. 7 8 Commissioner Keller: Well does the limitation of this regulation of 18.16.050 according to this, and 9 I’m wondering what that does. What that enables in terms of office space. 10 11 Mr. Reich: It limits the office to 5,000 square feet for the site provided there’s no conditional use 12 permit for additional office square footage beyond that. 13 14 Commissioner Keller: So, what I’m wondering is when you say “the site,” does that mean that they get 15 up to 5,000 per each of the four parcels? Or does that mean that they get up to 5,000 for the entire four 16 parcel site? 17 18 Mr. Reich: My understanding is the site would be combined into one site. And so 5,000 square feet 19 would be the limit. I would defer to the City Attorney to confirm that, because they’d have to be 20 developed individually to be able to take advantage of the individual outlets per site I would think. 21 22 Commissioner Keller: So is there a lot line merger? A, is there a merger of the multiple lots as part of 23 this rezoning? 24 25 Ms. French: Not at this time, they would have to apply for the merger of the four lots. As an 26 application along with either the ARB if it was not going to be a mixed use project with five or more 27 units or with a site and design review application if it was five or more residential units along with that 28 retail or commercial. 29 30 Commissioner Keller: Is it legal to condition the, the rezoning to CS on merging the lots into one lot? 31 32 Melissa Tronquet, Sr. Deputy City Attorney: You can’t condition the rezone you would be; you’re 33 rezoning the individual parcels. You can’t force a property owner to merge lots through a rezoning 34 application. 35 36 Commissioner Keller: And they can’t merge lots before, because there’s a limitation on merging R-1 37 lots, if I remember correctly, you can’t create R-1, and you can’t merge R-1 lots over a certain size. 38 39 Ms. Tronquet: Over a certain size, that’s right. I don’t know how it applies to this specific site, but that 40 generally that’s correct there’s a limitation on total lot size in certain zones so… 41 42 Mr. Reich: Commissioner Keller I’d also like to point out that with a .4 FAR for commercial if you 43 look at the size of the lots individually the commercial allowance for each site individually would be 44 2,693 square feet. So they couldn’t put 5,000 square feet of office on each parcel. The maximum they 45 could do is 2,693. 46 47 Commissioner Keller: But would it be possible to have all of the .4 be office as opposed to retail? Was 48 that (interrupted) 49 City of Palo Alto Page 8 1 Mr. Reich: That too would not be possible because the CS zoning doesn’t allow it on the ground floor. 2 3 Ms. French: Yes, it is possible if you had the first floor as structured parking and the second floor as 4 office. 5 6 Commissioner Keller: Ok. Thank you. 7 8 Chair Martinez: Vice-Chair Michael. 9 10 Vice-Chair Michael: So, from the, from the Staff report and what we’ve heard from the Applicant this 11 proposed change in zoning seems to be appropriate to the, the location. The idea of shifting to mixed 12 use with a height limitation of up to 35 feet seems consistent with what’s in that, in that neighborhood 13 with the, the other, other buildings and across the street. 14 15 Also, one of the, I guess the question I have is, as we worked on the Housing Element recently and 16 maybe related to that there was a meeting yesterday of the Council Committee regarding the Housing 17 Mandate, which was responsive to the Association of Bay Area Governments (ABAG) proposed 18 allocation to Palo Alto of the need for 2,179 new housing units in the period 2014 to 2022. It looks 19 like this project is one of those projects that will help us get there. And it, and also it’s, is it within the 20 California Avenue Concept Plan, or is this part of what we’ve already discussed in terms of potential 21 increased density proximate to transit and so forth? Or is this just a unique circumstance that’s before 22 us? 23 24 Mr. Williams: Well this is, I mean I do think this is a unique site. I mean, it’s just as Commissioner 25 Alcheck said, having these single family lots sitting between, you know, on a major commercial 26 thoroughfare is an unusual situation and it is proximate to transit. With California Avenue Plan I, I 27 believe will ultimately recommend something of a more intense nature on these parcels. I couldn’t say 28 right now that that would specifically be commercial service zoning, but it more than likely would be a 29 mixed use or residential. So, you know, it’s got some range to it. 30 31 Chair Martinez: Commissioner Tuma. 32 33 Commissioner Tuma: Procedural question for Staff. It seems to me that in the past when we’ve had 34 applications for rezoning the first hearing is to initiate the rezoning and then that’s followed up by a 35 recommendation to do the rezoning. The way that this Staff report reads, is you’re asking for a 36 recommendation to rezone. Are we getting ahead of ourselves here? 37 38 Ms. Tronquet: We actually looked at that pretty closely and did a closer reading of the code and there’s 39 nothing in the code related to rezoning that requires the initiation. So, you, you know you typically do, 40 do an initiation for PC’s and there is an initiation process for PC developments, but not rezones. 41 42 43 Commissioner Tuma: But, no, no, no, no. I know we do them for PC’s, but we’ve done it for, to the 44 best of my recollection for every rezoning since I’ve been on the Commission. We have an initiation 45 process, we go through a recommendation for initiation, we then come back for the recommendation 46 on the rezoning. So yes we do it for PC’s, but unless I’m, and I, plenty of stuff I don’t remember 47 correctly, but maybe… I mean if we’re going to make a conscious decision to deviate from what we’ve 48 City of Palo Alto Page 9 done in the past then let’s make that conscious decision. But am I misremembering our procedures 1 that we’ve done for the last seven or eight, or six or seven years? 2 3 Ms. French: My recollection is as yours is. We started with that as our, as our report and it kind of 4 morphed. You know it is an Applicant initiated initiation. So they’ve initiated it, Staff is not initiating 5 it. We have had other situations where Staff initiated it and we called that initiation because it was our 6 idea, we were paying for it. This is an Applicant initiated, so they’ve initiated it. I mean if you want to 7 look at it that way I guess. 8 9 Ms. Tronquet: But we did review the process and the code for Applicant initiated rezones and there is 10 nothing that talks about initiation. So, you know, you’re welcome to do that as a discretionary matter, 11 but it’s not legally required by the City code. 12 13 Commissioner Tuma: But it has been our practice historically. Ok. I just want to get clarity on that 14 because I was, I thought maybe there was something that was missing. 15 16 Ms. Tronquet: I think what Staff told me is we have very infrequently have Applicant initiated rezones. 17 So I don’t know that there’s much of a history for this, this type of application. 18 19 Chair Martinez: Ok, are you done Commissioner? 20 21 Commissioner Tuma: In terms of questions, yeah. I’ve got comments, but… 22 23 Chair Martinez: I’ve got a couple questions. How does this score on our, our Regional Housing Needs 24 Allocation (RHNA) allocation? Do we lose four if say they could build a maximum of eight units? 25 26 Mr. Williams: Well we, you know it’s real unclear how they handle loss of units but I think we would 27 have to account for it some way, shape, or form and I think that the overall bigger picture is that 28 California Avenue area is going to increase housing units while this may be an isolated area where 29 there are a few that are lost then it’s made up for somewhere else. But yes, we’d need to account for it 30 in some way. Now it’s not designated in our Housing Element as four for, for, as a housing 31 opportunity site because it’s R-1 zoned. So again, kind of an anomaly but that was one of the criteria 32 that Council had set out for the housing opportunity sites we thought not to rezone R-1 sites for higher 33 density housing. 34 35 Chair Martinez: Thanks Curtis. And say we go ahead with this rezoning how does and this is sort of 36 related to Commissioner Alcheck’s question. How does, how do we then look at the R-1 residential 37 units behind it on Pepper? Because now they’re impacted by a CS zoned kind of relationship to R-1. 38 Do we look at that? Does that soften the sort of overarching idea we have about the sanctity of R-1 39 zoning, or is it a different scenario all together? 40 41 Ms. French: You know certainly a change of circumstance with the, you know, let’s say mixed use 42 building with residential, you know, multifamily residential and commercial below. Again, it’s you 43 know, with the edge condition there the building that would be designed would have to be sensitive to 44 the edge condition. But then yes, when the, you know with the residential homeowners on Pepper 45 wanted to come in with an application to up zone I guess, that would, you know, I mean there would 46 be a change condition there. You know if it is, it is you know, has the underlying single family 47 residential Comp Plan designation, so they would still have to go through this same process if they 48 wanted to up zone and change the land use designation. I mean that’s a, that’s an intact neighborhood 49 City of Palo Alto Page 10 I would say. I would say this site is not a neighborhood because it, it’s a one sided, you know one side 1 of the street and the arterial there doesn’t kind of make it feel like a neighborhood. 2 3 Chair Martinez: Ok, I accept that. Amy since you’ve got the mike what are the next steps? What 4 happens after this? 5 6 Ms. French: Well should you choose to accept your mission, which is a record of land use action and 7 ordinance rezoning, ordinance and resolution, sorry, for the Comp Plan change and the rezoning to 8 recommend it to Council, that’s where it would go next. The, you know, the neighborhood outreach 9 that could happen could happen between now and then if, if that was something that there was some 10 interest and Staff coming up with some of that. We haven’t reached out to the neighbors ourselves. 11 12 Chair Martinez: But under our proposed concessions, if this were eight units or less of mixed use, it 13 wouldn’t come back to the Commission, would it? 14 15 Ms. French: Four units or less would not come back. That would go to the Architectural Review 16 Board. 17 18 Chair Martinez: That’s current, that’s current, but we’re discussing changing. 19 20 Ms. French: Oh, your discussion of, it depends on how soon you’re interested in coming back with a 21 proposal. You might ask the applicant what their plans are. 22 23 Chair Martinez: No. That’s ok. Ok, we’re going to open the Public Hearing. Do we have any speaker 24 cards for this? Vice-Chair? No. Ok, so we will close the Public Hearing at this time and go forth with 25 comments from the Commission. Commissioner Tuma. 26 27 Commissioner Tuma: So, I drive by this, these sites all the time. Seems like I take my kids to the 28 AT&T store too often and so right there, or we’re going to the Kelly More. So this is fairly close to 29 where I live and those single family homes in there have never really made much sense to me. And so, 30 I’m generally supportive of the idea of that changing to something else. However, I’m fairly 31 uncomfortable with the procedure and the lack, and particularly the lack of engagement with the 32 neighbors. And we’ve had a project in this area before. The neighbors, once they found out about it 33 were very engaged, which leads me to believe that their, they don’t know. I just, I believe that. And 34 so I’m sure that we’ve complied with the letter of the law, done the mailings, but I’d like to see, I’d 35 like to see some actual outreach, some discussions happening before we would make a 36 recommendation. 37 38 I’m also very sympathetic to the owner and their representative here, Mr. Northway making the 39 comments of you know, gee, we don’t want to go spend a bunch of money till we kind of sorta know 40 maybe what we have here. And that’s why I think the initiation process is the right process, where we 41 would initiate the zone change, I think depending on what the comments of other Commissioners are, 42 if it’s fairly obvious that we initiate it and are supportive of something along these lines that gives the 43 Applicant an opportunity to develop their concept a little bit more. 44 45 I am concerned about losing four housing sites. I know that maybe is a drop in the bucket in some 46 ways against the ABAG numbers but for example if the Applicant came back and they said, you know 47 we intend to have eight housing units or some number that addresses that issue, I’d be a little bit more 48 comfortable with that. 49 City of Palo Alto Page 11 1 So, as it sits right now I’m not terribly comfortable with us just moving forward with a 2 recommendation to rezone without really having even the slightest idea of what would go here and 3 more importantly, without the, the neighborhood being engaged in the, in the discussion and this 4 feeling like a fait accompli. I know that that could go on after our recommendation, but that doesn’t 5 seem right to me. We ought to make a recommendation based on input and interaction with the 6 community. 7 8 Chair Martinez: Can I ask Melissa a question about that. Can we do that? Can we vote for an 9 initiation when it doesn’t sort of appear on the books as something that we can do? It sounds like a 10 good idea, but can we do that? 11 12 Mr. Williams: Yeah, I don’t, I don’t think you need to consider it an initiation, I think you just have the 13 authority as a Commission on a zoning review to say you’d rather have more neighborhood and have 14 the Applicant have neighborhood meeting and hear from the neighborhood or any other information 15 that you would like to have before you make your decision. That’s discretionary and your court at this 16 point. You don’t have to call it an initiation. 17 18 Chair Martinez: And when the neighbors objected to the hotel, were there actual hotel proposal with 19 drawings? 20 21 Mr. Williams: Yes, there was a very specific set of plans for the hotel. And they had a series of 22 meetings with the neighbors before that came to the Commission. 23 24 Chair Martinez: Ok. Commissioner Keller. 25 26 Commissioner Keller: So, let me make a couple of observations first. If you look at our agenda the 27 agenda lists this as initiation of rezoning even though the Staff report says that is recommended 28 approval of the rezone. So, based on the agenda, I’m wondering whether we even have scope to 29 approve the rezone. So in that regard not only do I agree with Commissioner Tuma, I think that it 30 seems that our agenda indicates that that’s the process we’re supposed to follow anyway. 31 32 In addition, one of the things is that if I were one of the neighbors and I got a postcard saying that 33 some parcels on Page Mill road were being rezoned from R-1 to CS, I might not know what that 34 means. And I might not have any clue about what could be built there, what might be built there. So, 35 I’m in full agreement with Commissioner Tuma that this should be an initiation and should come back 36 to us with several things. First of all it should come back to us with the neighbors giving feedback on 37 the, on how the rezoning would impact them and their understanding of that. 38 39 Secondly, although I don’t think it’s binding, I’m going to suggest that the Applicant actually give 40 some ideas of the concept of what they’re proposing to build so that the adjacent neighbors have an 41 idea of what’s going to happen there. And I realize I’m not going to be binding and you can 42 essentially do what you want but the neighbors are essentially don’t know what what’s being done they 43 can know what might be done. But obviously you have some sort of concept in mind because you’re, 44 you have enough of a concept in mind that you objected to CN zoning and wanted CS zoning. And 45 said that what your concept was wouldn’t fit under CN zoning. And that seems to me that there’s a 46 concept that you could actually fairly inexpensively do some sketches or descriptions so that the 47 neighbors would have an idea what that was. And I would strongly recommend that those drawing, 48 simple drawings be done, shown to neighbors and when it comes back for approval for this body, 49 City of Palo Alto Page 12 before this body that, that the neighbors actually understand what they’re getting next to them. Thank 1 you. 2 3 Chair Martinez: Commissioner Alcheck. 4 5 Commissioner Alcheck: So I concur with Commissioner Tuma and Commissioner Keller about their 6 concerns about whether the public has had an opportunity to kind of speak about this. I think setting 7 that aside for a minute I think the, I’m curious a little bit about the underlying concern about that 8 concern. Which is the following, it appears to me that if they didn’t if the Applicant didn’t pursue a 9 mixed use project, which implies residential, then they would lose out on a major benefit to this 10 rezone. Assuming they didn’t pursue a mixed use project they would be limited to .4 commercial, 11 which would imply essential the least amount of developable space if they had kept it R-1. I mean, it 12 just, it strikes me as highly unprofitable to not pursue a residential component to this project judging 13 that, judging by the fact that the zone wouldn’t allow them to have such a significant residential 14 components. 15 16 So the concern about losing residential on this site seems like a non-issue. I mean, unless this wasn’t, 17 this was like a nonprofit project, maybe. But it seems like a non-issue. I sort of imagine that no 18 project would not consider a residential component, so I’m not worried about losing the R-1, you 19 know, the residential component. And if anything I wonder if, and correct me if I’m wrong, the 20 residential, if it was kept R-1 would be .4 floor area, right? .45. Here we’re anticipating .6? So we’re 21 sort of anticipating essentially a higher density residential in an area that’s within walking distance to 22 public rail and yeah. So I sort of, I really do think, I’m surprised that there isn’t, you know, a neighbor 23 here to be perfectly honest considering what everybody told me to expect about this experience. But, 24 but that being said I’m not really worried about losing residential. If anything I think we’re going to 25 gain some. 26 27 And my other kind of comment with respect to what Commissioner Martinez brought up which is that 28 we’re sort of changing the scope of the neighborhood for the parcels on Pepper. It seems as if, if 29 Pepper is sort of already impacted by commercial zones so there’s essentially what is it, eight 30 properties on Pepper? So 50 percent of them back up already to commercial. And so I sort of wonder 31 if, if, if, you know, I’m not as concerned about that. You know, so, I wonder what options because I’m 32 not familiar with this process as much. I wonder what options if we did, if we really were interested in 33 greater public comment, what are the options there? I mean aside, they could do a neighborhood 34 meeting as one of them. Is it, and then also is there, is there any reason why we would suspect that the 35 neighbors weren’t given enough time or they didn’t, I mean is there any… how long is the typical 36 distribution of mailers put out? 37 38 Ms. French: Well, you know I’m just confirming cause the project Russ said that you know he 39 received his, we always send notices to ourselves to make sure the mail’s working and all that. So you 40 know, they were sent out and cause we received one back ourselves. To ourselves. So we know they 41 were sent out 12, yeah, at least 12 days, 12 to 14 days ahead of this meeting. And then there might 42 have been even earlier notice because separate notice for the environmental document, because of the 43 20 day review period. Or is it 30 day? 30 day. Yep, yeah, mine have been in the paper, in the 44 newspaper for the environmental notice and documents. 45 46 Commissioner Alcheck: Well, yeah. Again I concur with Commissioner Keller and Commissioner 47 Tuma about kind of the lack of presence here. I’m surprised, you know, to a certain extent I’m 48 surprised that maybe there isn’t a representative for the other commercial properties. Because I would 49 City of Palo Alto Page 13 think that you know the presence of ground floor retail would be something that would appeal to them. 1 It would increase maybe foot traffic in an area where there’s not much. So, I, I’m sort of surprised by 2 that. At the same time I don’t know if I share the concerns about loss of residential or loss of, well 3 that’s really it actually. Loss, you know, it seems like we’re going to gain here in terms of residential. 4 5 Chair Martinez: Commissioner Tanaka. 6 7 Commissioner Tanaka: So I’m actually with Commissioner Alcheck here as well. I don’t think there’s 8 going to be a loss of residential. Otherwise you’d be losing much of the bonus of what’s going on 9 here. I do also support the idea of having more neighborhood outreach. I think that’s going to be very 10 critical to avoid problems down the road. And so I actually would like to see that before next meeting 11 on this topic. 12 13 Also like Commissioner Keller’s idea about having more clarity of the proposed project because right 14 now if you look at the CS and CN they’re very slightly different. We’re talking about .6 versus .5 and 15 they’re very, 1 versus .9, we’re almost splitting hairs here, so there’s got to be something in mind 16 otherwise what’s wrong with the CN? Unless it’s a hotel, which kind of brings up another question, 17 which is, what should go there? Should it be a hotel? I mean a hotel’s something the City would 18 benefit from a hotel tax. And so I think that’s something that we should also think about or perhaps 19 the developer could think about. Is, there has to be something in mind about what’s going to be here. 20 21 But I think also back to Commissioner Keller’s point which is, I mean, I think everyone in this room 22 probably understands what is a CS, what is an R-1, and what’s the ramifications. But I bet you most 23 people in the City don’t know what that is. And so some sort of visualization or explanation about, ok, 24 look, instead of a single family house that can only be 20 feet high you’re going to have a something 25 that’s going to be 35 feet high and instead of lot lines or the setback being X number of feet it’s going 26 to be this many feet. I mean I think it has to be pretty, for most residents, it’s going to have to be 27 pretty clear as to what’s, what the impact is. 28 29 Ms. French: If I might, I might be out of order her but since you were on that topic of what is the 30 difference between CN and CS, should note that, you know, with a mixed use project the same 35 foot 31 height limit would be in place for a mixed use project in the CN as the CS. So that was something that 32 Russ had been researching just right before we came down. So there is no height difference if you’re 33 doing a mixed use project. 34 35 Commissioner Tanaka: It says here. It says 35 feet. 36 37 Ms. French: It says 35 feet? Ok. [people talking in background without microphone] Right, but then. 38 39 Mr. Reich: 25 is the limit for commercial only. The 35 feet would be allowed for mixed use in the CN. 40 And I apologize for it not being on your sheets but I came across that after I already put it at places. 41 42 Commissioner Tanaka: Ok, great. Thank you. 43 44 Mr. Northway: Excuse me; may I say one thing before you finalize things? 45 46 Chair Martinez: Actually you’re going to have a chance to make your closing argument. Vice-Chair 47 Michael. 48 49 City of Palo Alto Page 14 Vice-Chair Michael: So I think we’re building towards a pretty strong consensus and I concur with the 1 remarks of all of my colleagues. I just wanted to add that on the one hand if we were to do something 2 that would speed up the Palo Alto process and do something in one meeting that might otherwise take 3 multiple meetings that might not be a bad step. However, I’m not sure this is the moment to sort of 4 make that leap. We’ve, we’ve recently seen sort of a project or proposal for a preschool on Channing 5 where the outreach to the neighbors didn’t, didn’t really happen and when the neighbors were fully 6 cognizant of what was proposed they, they appeared before us and we heard their concerns. And we 7 just had, I ran into one of the neighbors yesterday who said their concerns still had not been resolved 8 and that outreach was still not happening and I think one of the learning’s from that was that by doing 9 the outreach up front that should promote a more successful project. And so the, you know, the 10 compliance with the technical delivery of a mailer may be different from actually inviting people to 11 attend a meeting. Just being more sociable or knocking on doors and getting the word out in the ways 12 that go sort of above and beyond the letter of the law. 13 14 But also I think Commissioner Keller’s comment about the, the explicit language that we have on our 15 agenda this evening of the word “initiation,” and our sensitivities towards Brown Act compliance that 16 we should tonight conceive of what we’re doing as an initiation and I, I think that all the other points 17 have been duly noted. 18 19 Chair Martinez: I apologize, John if you want to speak now you’ll have three minutes of closing 20 remarks. 21 22 Mr. Northway: What I’d like to talk about is actually the process. We’ve been in this process since the 23 31st of January. A lot of money has been spent on traffic reports, environmental reports, and soils 24 reports. We have no problem reaching out to neighbors I think those of you who know me I’ve spent a 25 good portion of my life reaching out to neighbors on any project we’ve designed. The problem you’re 26 putting us into is that it would be much more effective to reach out to the neighbors with a specific 27 design. I can almost guarantee you that we will be back before this body, the ARB, and the City 28 Council with that specific design. I don’t know how much more information we can give anybody 29 than what is in this Staff report because we have to generate the information in order to show it to 30 anybody. 31 32 If you’re going to make us go to neighbors before you’re willing to make a decision on this zone 33 change, give us a date specific when you will at least consider and vote up and down. I would really 34 ask you to not impose the neighborhood outreach just for the zone change. It’s going to be, you’ve 35 seen it with yourselves; you’ve raised a bunch of questions tonight that we can’t answer. And we can’t 36 answer them for the neighbors either. You can tell them it’ll be the CS zone, all the restrictions that 37 are in it, all the protections for projects that are designed next to the neighborhood. 38 39 So I would ask you quite frankly, do your job. You know you’ve got the information. The 40 neighborhood outreach will happen. It will be part of when there is a specific building design. This 41 neighborhood is not going to be bypassed. If you don’t like the building that’s designed under this 42 zoning you can deny it. But by delaying this it just, it is the Palo Alto process. I’m sorry I’ve been in 43 it. I’ve been guilty too. But this is the Palo Alto process. You’re going to drag it out. At least give us 44 a date specific. Maybe in two weeks where you’ll hear it again, but I would urge you not to go down 45 the course you’re going. Thank you. 46 47 Chair Martinez: Ok, I feel the architect’s pain having been in that situation. And I, I’m a little bit 48 perturbed that we, you know, we’re very clear when we’re doing a CUP or PC or something, what the 49 City of Palo Alto Page 15 Applicant is supposed to bring. And we don’t ask for a representation of what the project will look 1 like in this step of the way. So I feel somewhat torn that we’re now saying well, you didn’t comply 2 with what you should’ve known we might’ve asked for. And I think we need to look at it as a body if 3 we’re going to have this process for rezoning that we put some requirement for an architectural 4 drawing, I was really surprised when I opened up that big sheet and it was just a bunch of photographs. 5 I expected more. There’s sort of we all wish we had before us to make this decision easier. 6 7 But at the same time I see what the Applicant is saying. And I don’t feel comfortable asking them 8 because there’s an error in our process to go back and come back to us before we can start the process 9 with them. I just think it’s really a representation of the worst of what we could do. Commissioners? 10 Commissioner Tuma. 11 12 Commissioner Tuma: Couple of things. One is to address the comment from Commissioner Alcheck 13 and Commissioner Tanaka about what, what we’re pretty sure might be developed here. And I will go 14 back to what was generously, or what was referred to as the JJ&F project, which was a project that 15 wound up being a proposal essentially for ground floor retail and an office above. They could’ve put 16 housing there, but they chose not to because their goal was to hang onto the entire project themselves 17 and never to sell any portions of it. So, what to one person may be kind of an obvious path as to what 18 a developer might or might not do, I think we need to be careful about guessing what direction they 19 may go. So depending on what the goals are of a particular developer, we may or may not come up 20 with a certain result. That’s sort of a side comment, or just something to think about as we move 21 forward. 22 23 The biggest problem that I have quite frankly is that I don’t feel that the Applicant has done anything 24 to reach out to the neighbors of any significance to make sure that they had those conversations and we 25 could be accused of the Palo Alto Process and how we’re dragging this thing out, but everybody who 26 comes in front of this body and the Council knows that you better talk to the neighbors first. And I 27 understand that with a rezone we don’t necessarily know exactly what that’s going to be, but I think 28 you need to tell them that. I think you need to have the conversation and they need to know that 29 something’s happening in their neighborhood that’s going to affect them. 30 31 Ok, and I know that, that this particular Applicant has been in front of us before, knows the City 32 process and I, I don’t really take to being accused that we’re dragging this thing out. I think that if the 33 feet were, if the process was done whether it was some outreach and those neighbors whose houses a 34 building of this size is going to be built were told that a process was starting and you sat down with 35 them and discussed it with them, I would feel fairly differently tonight. Ok. But I don’t feel like this is 36 our dragging our feet. 37 38 That said, I’m perfectly happy to make this a short turnaround. I in no way want to delay this for 39 delay’s sake, but I think it’s imperative that the neighborhood, from day one, particularly those four 40 neighbors that abut this property that they are informed about what’s going on. To the extent that we 41 don’t know, we don’t know. You don’t know. I get that. I totally understand that, but they need to 42 know that something’s going on that could very likely result in something very different from what 43 their status quo is. And I think that’s, to me that’s the gating issue here. And to me that is what makes 44 me most uncomfortable about moving forward. 45 46 Chair Martinez: Anyone else? Commissioner Keller. 47 48 City of Palo Alto Page 16 Commissioner Keller: So if you look at page 4 of Attachment C it actually says page 4, but it’s actually 1 the second page. It describes the office use difference between CN and CS, and they both have CUP 2 for medical office. They both have permitted professional and general business office. The difference 3 is that CN does not allow administrative office services and CS allows administrative office services. 4 And as was pointed out by Staff, there’s no requirement there be any retail. They could have podium 5 parking on the first level rather than digging down and considering that there’s some hazardous 6 material down there that might be an easier thing to do than, than dig a garage underneath that’s very 7 expensive. So you have podium parking, office, and that could be the project. We don’t know, and the 8 neighbors don’t know what’s it going to be. 9 10 So I agree that our process is faulty in that we’re not requiring some sense of the project. but I’m not 11 suggesting that you have detail architectural drawings sufficient for a building permit, or even an ARB 12 review. I’m just suggesting a sketch, which should be easy to do to describe what’s going on so when 13 you do an outreach to the neighbor, to the neighbors you can say, “This is what we’re building. We’re 14 going to build a three story building with podium parking, offices on the second floor, and housing on 15 the third floor.” If that’s what you’re going to build. Or you’re going to build something with 16 underground parking and retail on the first floor and housing on the second floor. I don’t really care. 17 You know, whatever you build, it matters to the neighbors what you’re going to build. And without 18 being forthcoming as to what you’re going to build they don’t know what they’re going to get. And 19 therefore it’s hard for them to basically give informed input as to whether the rezoning is good or bad 20 for them. They just know it as a big question mark and they might not even understand what the 21 implications of what can be built with CS. 22 23 One of the things that some communities do and we don’t is when some communities when you build 24 a project on a site instead of putting a little sign saying some project is being done on this site, contacts 25 so and so Staff member. There’s actually a drawing, or maybe a message that says this building will 26 be so many square feet and so much. There’s actually a little bit more information than simply that 27 there’s a project going on. And so maybe we should think a little bit more about the nature of our 28 notices to actually not simply give the legal description of its being rezoned from CS, from R-1 to CN 29 or CS, but actually that that allows for 35 foot building if it’s mixed use, things like that so they 30 actually understand what that rezoning is. Because otherwise, you know, I know lots of people get 31 these postcards they have no idea what to do with it because they don’t know what they mean. So, 32 thank you. 33 34 Chair Martinez: Ok Commissioners we beat this one up. I’d like to see an idea, Motion, what we’re 35 going to do. Commissioner Tanaka first. 36 37 Commissioner Tanaka: Before I make a Motion I just actually had a couple of comments. Actually 38 questions for Staff. So first one is in response to the developer’s comments. I actually, I like the Chair 39 Martinez I actually understand your point of view and I see that you’re trying to invest in Palo Alto 40 and that’s great and we want to encourage that. In general, you know, this seems to be on a very, very 41 busy expressway and it’s probably more compatible than single family residence. Then on the other 42 hand I share a lot of the concerns about neighborhood outreach because it’s going to be a significant 43 change. 44 45 So first I want to ask the Staff, I mean I was just looking at the rear yard setback requirements and it 46 says it’s now 10 feet with CS zone. What is it with single family residence? 47 48 Ms. French: 20 feet. 49 City of Palo Alto Page 17 1 Commissioner Tanaka: 20 feet. Ok, so it’s going to be half the setback so conceivably their going to 2 have a building that’s going to be half the distance away. So there are a lot of impacts like that which I 3 don’t know is captured by the letters CS and R-1. And the other thing I wanted to check is, you know; 4 let’s say hypothetically we did approve this thing the CS zoning up zoning tonight. If they complied 5 with the CS zoning would it actually go back to the Planning Commission or just go to ARB. If they 6 just did the CS zoning exactly and they didn’t try to go for a PC or go outside to get a variance on that? 7 8 Ms. French: It would come to the Planning Commission in the event of a mixed use project with five 9 or more residential units as a part of that project. Otherwise it would go to the Architectural Review 10 Board with a compliant project. 11 12 Commissioner Tanaka: Ok so it doesn’t necessarily, it wouldn’t necessarily have to go back to us. It’s 13 only if it’s, if it was a mixed use. 14 15 Ms. French: With five or more residential units. 16 17 Commissioner Tanaka: With five or more units. Ok. 18 19 Ms. French: Yes. 20 21 MOTION 22 23 Commissioner Tanaka: Ok. I see. So, I guess then I think what developer said that it would come 24 back to us, but that’s not necessarily the case. It’s more only in that condition? Ok. Ok, great. So I, 25 like I said I do think this is more compatible to Page Mill and so I do want to make the Motion that we 26 initiate and I wanted to leave this kind of open so people can make Friendly Amendments and we can 27 try to craft something that seems to work. So I’m going to start off by just saying that we should 28 initiate the process for the rezoning and that I think we should also as kind of the first Amendment 29 have neighborhood outreach. 30 31 SECOND 32 33 Chair Martinez: We have a Motion by Commissioner Tanaka and seconded by Commissioner Keller. 34 Do you want to speak to your Motion? 35 36 Commissioner Tanaka: I already did, thank you. 37 38 Chair Martinez: Commissioner Keller. 39 40 FRIENDLY AMENDMENT 41 42 Commissioner Keller: First of all I think that this site, it does make sense for this site to be up zoned to 43 some extent, but I’m still having trouble understanding whether to be CN or CS. And so I’m going to 44 suggest a Friendly Amendment that the when it comes back to us it could be rezoned as CN and it 45 could be rezoned as CS, and I’d like the Applicant to explain why it should be one versus the other 46 because I’m not, I don’t understand that. And so I’d really like some clarity of that so is that a 47 Friendly Amendment? Is it accepted that this be initiate rezoning and when it comes back to us we 48 have an explanation of whether it should be CN or CS? 49 City of Palo Alto Page 18 1 Chair Martinez: Before, does that fly Melissa? Can we ask for that kind of rezoning to be considered 2 where it’s… 3 4 Ms. Tronquet: You can ask for that, what I’m reviewing in the code is whether it needs to be re-5 noticed, but that, that’s part of the rezoning process is that you can consider what zones are 6 appropriate. It just may affect the process if we’re looking at different types of zones. 7 8 Chair Martinez: Ok. Commissioner Tanaka you wanted to speak to that? 9 10 Commissioner Tanaka: Yeah, I was actually going to ask the City Attorney the same question. But 11 maybe can we just ask, I wanted to hear other peoples, other Commissioner’s comments about that? 12 13 Chair Martinez: Ok, first I’m going to go to Commissioner Alcheck who’s been waiting patiently. 14 15 Commissioner Alcheck: So, I sort of there’s so many things that I agree with. I think that, you know, 16 Commissioner Michael’s comment about the merits of making this process, you know, speedy and 17 your comments about not requiring an Applicant to do something that we didn’t request that Applicant 18 to do ahead of time. I also appreciate the comment about, you know, the public sort of lack of 19 presence here and that concern. 20 21 But, and maybe you can tell me if I’m wrong here, but I don’t think we’re really considering a project. 22 I sort of thing we’re considering a zone and the only, I think we, I think as, as a group we’re always 23 sort of concerned about the impact of up zoning and also reducing the potential for residential in the 24 community. And it seems to me, correct me if I’m wrong, but that the only major difference between 25 CN and CS is that in CN there would be less potential residential. Aside from that, any proposed 26 project would be identical. So if they have a CN zone and this was their project, or if they had a CS 27 zone and this was their project, the only difference would be that in the CS zone the project would 28 have greater residential. 29 30 And if that’s the case, if that’s the case, I guess, I guess my concern is if we open up this process 31 because we’re concerned about what the project’s going to look like, are we not addressing the, are we 32 failing to address the issue of what we think the zone here should be? And it sort of seems to me that 33 all of us agree that these four single family residential lots are really kind of, not out of, I don’t want to 34 say out of place, but it’s just such an odd place for them to exist and if they presented a project that 35 we… I guess my question to you is if you didn’t like the project, are you suggesting you’d prefer R-1? 36 Because if that is the case, then I would, I would say alright then I guess we should review the project, 37 but I think they’re going to have the opportunity to present a project. And I also think maybe the 38 public will have the opportunity to go to City Council, I mean once this gets pushed up they’ll be more 39 public opportunity and I’m just sort of worried that we’re kind of getting off the main decision. 40 41 Chair Martinez: Thank you. Commissioner Keller. 42 43 Commissioner Keller: So, so a couple things. First of all to me the Palo Alto Process breaks down not 44 when there are additional meetings up front to clarify the scope of a project. The Palo Alto Process 45 breaks down when years and hundreds of thousands of dollars have been spent on designing a project 46 and it’s stopped at the 11th hour. So I’d much rather spend the time up front to get it right and make 47 sure that the people understand what they’re getting, and then when the developer spends money on 48 flushing out the design and doing all of that there’s more confidence that will proceeds to, to fruition. 49 City of Palo Alto Page 19 And to me, I’d rather say no upfront than say no on the 11th hour and that’s been my personal 1 philosophy about the Palo Alto Process. And I think if we, if we’re willing to say no a lot earlier we 2 get, we get projects that, that could be, could be changed earlier to be better projects rather than saying 3 no at the end when too much has been spent. 4 5 The second thing is that the Applicant said CN wouldn’t work. Now first of all there’s two 6 differences, one difference I observed with CN is several differences. One is the difference between .6 7 FAR and .5 FAR for residential. Another difference is whether or not you’re allowed to have 8 administrative office services. But another difference is whether or not you’re allowed to have a hotel. 9 And the issue is, I’m not opposed to a hotel. I’m not in favor of a hotel, but the issue is that if there’s a 10 difference between CN and CS and the two adjacent parcels are CN, and a developer actually has 11 something in mind for which they want CS as opposed to CN. It seems strange to me that that’s not 12 going to be disclosed to give us the criteria to make the decision as to whether to do CN or CS. 13 14 And, you know, from my point of view, you know, I’m happy to go with CS if that’s justified, but so 15 far I haven’t seen other than they want it, why CS is justified as opposed to CN. What’s the difference 16 in projects their going to end up proposing between CS and CN, and I’d like clarity on that. Because 17 the interesting thing is it makes sense from a zoning point of view if you had the adjacent parcels be 18 CN to just continue to CN along. And then you have more continuous zoning. Otherwise you wind up 19 with, you know, polyglot of different zones next to each other CS, and that seems to be kind of strange. 20 So that was my first reason for it and then I was surprised when the answer was it makes a difference. 21 Well, if it makes a difference because you have a plan in mind, then share that plan. So that’s, that’s 22 my reasoning behind that. 23 24 So, because we don’t have a procedure that basically says that they have to come up with a plan, a 25 sketch or whatever we can’t require a sketch, but what we can require is justification why it should be 26 CS or CN. And I’m hoping is that for that justification they’ll explain the project that they want to do 27 with sufficient detail. Not very much, some sketch or pliant concept so that neighbors understand it 28 and that we can make the appropriate choice as to whether it’s CN or CS. Thank you. 29 30 Chair Martinez: Commissioner Tuma. 31 32 Commissioner Tuma: I think, you know I’m sympathetic to both I’m sure what the Applicant is 33 thinking as well as what Mr. Alcheck said a couple of minutes ago which is we’re not here to approve 34 or not approve a project. And my real heartburn is over, as I said before, over the, my senses that the 35 neighborhood really doesn’t know that something’s afoot here. And so, if you were to come back with 36 some or even to have meetings within the neighborhood and they were to understand what the range of 37 possibilities might be, what this might look like. You obviously while you don’t know exactly what 38 you want to build, there must be some ideas. There must be some concepts. You wouldn’t go outright 39 and buy property. There’s a difference between buying property and having an option. The last 40 person who was in front of us had an option. They tested the waters on their, on their hotel concept 41 and it wasn’t going to work. But you go as far as to buy a piece of property, or several pieces of 42 property, assemble them, you got to do something. 43 44 So I wouldn’t expect certainly at this point to have full blown plans or details to the point of, you 45 know, where you would need on project approval, but to give the neighborhood a real heads up as to 46 what the possibilities might be here, engage in the discussion. I think what you’re hearing tonight 47 from everybody up here is the idea of replacing these four sort of odd single family homes sitting out 48 by themselves with something that, you know, is a, is an investment in Palo Alto and an investment in 49 City of Palo Alto Page 20 something that, that, you know, adds value to the City is something that we’re supportive of. I mean 1 that’s what I’m hearing anyway. It’s just that the neighborhood hasn’t been involved yet and really 2 there’s not even a concept that’s been talked about. And so yes, we will all go through the process. 3 Maybe the Planning Commission will be involved, maybe we won’t depending on what you guys 4 propose, but there will be a public process that will involve the ARB, will involve City Council about a 5 final project. And we’re not asking for, I’m not asking for a final project or even, you know a 6 definitive project. But you have to give the neighborhood some idea of what the range of possibilities 7 might be here. And I think that that makes for a good process. 8 9 And so, in terms of the proposed Friendly Amendment that’s on the table. You know I think the 10 developer is coming to us and saying that they have a, a particular zoning that they would like. And if 11 they want to propose it as a single zone, change it to a single type of zone then that, that’s their 12 prerogative. If we decide that that doesn’t fly could they in the alternative ask for CN? Sure. Of 13 course, why not? But for us to proscribe in advance what they should be asking for for their 14 development seems a bit heavy handed. There’s nothing that stops them from coming back with an 15 application that says CS or in the alternative CN, but to me, you know, it’s their project and we should 16 listen to what their desires are and what they want to build and how they want to invest in Palo Alto. 17 And we shouldn’t be sort of pushing it on them in terms of what we think the zoning should be. It’s 18 different than where the City has initiated zone changes of various descriptions where it’s been done in 19 partnership with the private party. And so, you know, I’m comfortable just leaving it as initiating what 20 they’ve asked for and then we come back at the next meeting with the, with the, you know, full 21 disclosure to the public and we see where we go from there. 22 23 Chair Martinez: Ok. So are you proposing a Substitute Motion Commissioner? 24 25 FRIENDLY AMENDMENT 26 27 Commissioner Tuma: No, I’m commenting on the request for the Friendly Amendment. I think the 28 Maker of the Motion had left it open wanting to hear on input on whether the Friendly Amendment 29 was appropriate or not. I’m comfortable with the underlying Motion. I would also be comfortable and 30 maybe I will add it as a Friendly Amendment that the matter comes back to us as soon as practicable, 31 but from the perspective of the Applicant as well as our, our calendar. And you know, I mean I, I’d be 32 willing to go with a date certain, but I don’t want to box the developer into having to have these 33 outreach meetings and they can’t get ahold of the people. If their preference is to have a date certain 34 and it works on our calendar, I’m fine with that as well. 35 36 My intent here is not to slow this down whatsoever, but rather to have those meetings. And so as 37 quickly as that could happen and they’re prepared to come back to us I’d be prepared to hear it. So 38 whether that’s a date certain, or as soon as practicable, you know, I’m actually wouldn’t mind hearing 39 from the developer on their preference on that. 40 41 Mr. Northway: Our preference would be to have a date certain. We would also request someone said 42 to make sure we talk to the four properties that are immediately behind. That’s no problem. What we 43 need right now since you’re kind of adding to the process, is clarity. And we’d like to know do you 44 want us to contact the people that were sent postcards? Just be clear. It’s fine; we’ll do what you 45 want. We would like a date certain because these things have a way of drifting and drifting. 46 47 And Arthur the difference that is the most critical between CN and CS is the CN height limit is 25 the 48 CS height limit is 35. 49 City of Palo Alto Page 21 1 Commissioner Tuma: Let me ask you before you step away, what, what sort of time frame do you, I 2 mean assuming that let’s say we’re going to go with everybody who would get notice we’d like for you 3 to knock on the door, ring the doorbell, whatever. Try to outreach them. And then to the extent that 4 you’re willing to come back with some sort of idea whether it’s a sketch or even just some numbers or 5 what have you. What sort of time frame do you need to do the work that you need to do? 6 7 Mr. Northway: We could be back in two weeks. 8 9 Commissioner Tuma: Ok, and (interrupted) 10 11 Chair Martinez: Well that solves that, I don’t think we have room on the calendar. 12 13 Commissioner Tuma: That was my next question to Staff. What are we looking at by way of our 14 calendar? 15 16 Ms. French: The next meeting is the meeting of the 12th, and then we have the meeting of the 19th, the 17 meeting after that is the meeting of the 10th of October. On your agendas are listed what is anticipated 18 to come up on the 12th, what’s been advertised I believe at this point. As of this week it’s going to 19 appear in the paper for the 12th. We have not yet advertised the items for the September 19th meeting. 20 21 Mr. Williams: Yes, I would add with all due respect to Mr. Northway that the 12th is considerably too 22 soon to anticipate that you could get adequate notice to neighbors, get the neighbors together, and get 23 some information back to us to provide to you, you know, several days ahead of your meeting. So, I 24 don’t know if the 19th, the 19th is a busy, is already a full agenda. I know one of the items on that 25 agenda is coming off and can be postponed, but maybe we can shoot for that and see if that works or 26 have a special meeting on October 3rd to try to move it up at least a week from the October 10th agenda. 27 28 Chair Martinez: What do we have scheduled on October 10th? 29 30 Mr. Williams: Right now just the Governance Element of the Comprehensive Plan. 31 32 Chair Martinez: Well he’s asked for a date certain. Why don’t we offer that day? 33 34 Mr. Northway: I won’t be in town on October the 10th. 35 36 Chair Martinez: Ok. 37 38 Mr. Williams: So another option, one of the, pardon? Well another option is, because of Yom Kippur 39 we’ve, you know, moved up the 26th to the 19th so, I don’t know if there’s a possibility that we could 40 fit something in on October 3rd as a special meeting. Either in lieu of the 10th, or because there’s three 41 weeks in between, so that makes kind of a big gap between meetings. 42 43 Commissioner Tuma: You said that there was likely something from the 19th going to bump. Would it 44 be potentially then ready on the 3rd? 45 46 Mr. Williams: Possibly. We could check on that. I think we’re going to have to send out notice in any 47 event of this, so we can see, we can suggest a date of the 3rd, and if that doesn’t work it’ll be the 10th. 48 Oh no, the 10th you’re not here, I’m sorry. 49 City of Palo Alto Page 22 1 Chair Martinez: So the plan is to move things from the 10th to the 3rd? 2 3 Mr. Williams: I think there’s no doubt that we can have something else on the 3rd. Either the 4 Governance item moves up to that, or if this other density bonus ordinance is the one that isn’t going to 5 happen on the 19th, it may be that it could go on the 3rd then. So if you’re ok with us trying that at 6 least, I don’t know if any of you know right now whether the 3rd is a problem? 7 8 Commissioner ? (Not shown on tape): This is November, right? 9 10 Chair Martinez: October. 11 12 Mr. Williams: October. 13 14 Chair Martinez: Ok, well let’s, let’s shoot for October 3rd then. 15 16 FRIENDLY AMENDMENT 17 18 Commissioner Tuma: Ok, so I’ll offer a Friendly Amendment then that the, that we continue the matter 19 to a date certain of October the 3rd. 20 21 Chair Martinez: Commissioner Tanaka do you accept that? 22 23 Commissioner Tanaka: Actually no. I think we had a Friendly Amendment from Commissioner 24 Keller. 25 26 FRIENDLY AMENDMENT 27 28 Commissioner Keller: I was going to suggest that it be a date certain of October 3rd or as soon as 29 practical thereafter if it turns out that October 3rd doesn’t work because we don’t have a quorum of 30 Commissioners. And that would I think satisfy the requirements because if we had a special meeting 31 it’s not clear whether we can do that so that’s my suggestion. 32 33 Commissioner Tuma: Fine by me. 34 35 Chair Martinez: That’s fine. 36 37 Commissioner Tanaka: I’m good. 38 39 FRIENDLY AMENDMENT 40 41 Commissioner Keller: Thank you. And in terms of the 25 foot I understand that mixed use can be 35 42 foot, that was confirmed by Staff. So I’m not sure if that changes the equation for, for the Applicant. 43 Let me suggest, rather than saying it should come back as CS or CN that it should come back, that it’s 44 fine for it to come back as CS but one of the things we request is an explanation on why it should be 45 CS as opposed to CN and we can evaluate it based on that. In other words the Applicant should 46 answer the question. Why CS rather than CN? Is that acceptable as a Friendly Amendment? 47 48 Commissioner Tanaka: Sounds good. Thank you. 49 City of Palo Alto Page 23 1 Commissioner Keller: Thank you. 2 3 Chair Martinez: Commissioner Alcheck did you (interrupted) 4 5 Commissioner Alcheck: No, I was just going to say kind of on the footsteps of, I think it would make 6 sense for all, it would help us I think if this table had a little bit more information because the table that 7 they prepared to kind of compare, it sort of seems like we’re all a little confused. You know, with 8 what they can do and can’t do. And I think we all initially thought the 25 foot was the height limit and 9 it sounds like maybe in the CN they can’t. Anyway, so that would be a good idea. 10 11 Chair Martinez: So can someone restate the Amendment and the Friendly Amendment, or the Motion 12 and the Friendly Amendment? 13 14 Commissioner Tanaka: Can I ask Staff to do that? Have you guys been taking good notes? To state 15 the Amendment and the Friendly Amendment so far for us? 16 17 Ms. French: Yes. So the Motion obviously is to continue it to initiate the rezone to CS with return on 18 October 3rd or as soon as thereafter as practicable. To discuss the specifics there, to allow for 19 neighborhood outreach and with the presentation back on October 3rd or thereafter to include a you 20 know, further discussion or explanation by the Applicant as to why CN is not something they’re 21 requesting and with some supplemental, I guess, expand on the table. You know, you might let us 22 know what else you’d like to see on that table other than that, you know, more of the development 23 standards or more about the uses or is there something in particular you would like to see, you can let 24 us know. 25 26 Commissioner Tanaka: yeah for me in particular I guess it would be great to have the existing zoning, 27 so single family actually have the square footage of everything so we know like, ok CS does this, CN 28 does this, single family is this, and you know extending to the rear yard setbacks, I think that’s going to 29 be really critical to people living next to it. The height, the heights we know you can have a, in fact 30 this maybe was something we should give to the, to the neighbors. Right? Something that they can 31 see. 32 33 Chair Martinez: So the Motion is to come back with an explanation of why the specific zone, zoning 34 has been requested rezoning, a sketch of what is being proposed, outreach to the four neighbors in 35 particular, and Commissioner Tuma? 36 37 Commissioner Tuma: I don’t think we were asking for a specific sketch. Because they, I think, at least 38 my thought was that it would be some idea. I don’t know, I said specifically whether it’s a sketch or 39 just some, you know, idea of what it might be. 40 41 Chair Martinez: Is that… Commissioner Keller, you framed that. 42 43 Commissioner Keller: I wasn’t requiring it be, I didn’t make an Amendment that said it should be a 44 sketch but perhaps we should do that as some specificity of what’s being proposed which could be in 45 the form of a sketch. Ok. Is that acceptable to the Maker? 46 47 City of Palo Alto Page 24 Commissioner Tanaka: Well, I don’t think we should require the developer to sketch out the project. I 1 think they could tell us what it could be, but I don’t, do you think it makes sense to actually have 2 (interrupted) 3 4 Chair Martinez: The idea was to be able to explain to the neighbors. 5 6 Commissioner Tanaka: Oh yeah, yeah. I agree with that. I thought, sketch I thought you meant like 7 drawings, architectural drawings. 8 9 Commissioner Keller: No, I’m not requesting architectural drawings and I’m not even requiring 10 architectural drawings are even sketched. I’m saying that the full arm of how they explain to 11 neighbors could be in the form of a sketch. And think of it as sort of more like a thumbnail sketch as 12 opposed to a full architectural drawing. 13 14 Commissioner Tanaka: Can I ask the developer what they think about that idea? Is it feasible? 15 16 Mr. Northway: I think I’ve expressed what I think about it. I detest doing drawings of things that 17 haven’t been studied. Basically what we can show the neighbors is the building envelope that is 18 proscribed by the CS zone, and that is the building envelope that the building will be placed inside of. 19 And that’s really where we are right now and we can do a cross section that is allowed under the CS 20 zone and we can do a block diagram of what’s allowed under the CS zone, and that’s really the extent 21 we can do right now. 22 23 Again, I would like some specificity about, I think that’s not a word, but anyway, I’d like to know how 24 many neighbors and specifically the locations. Because we’ll go around and knock on doors, we’ll get 25 it done. it’s just I don’t want to knock on six doors and then come back and find out that you wanted 26 us to knock on eight doors. So just be specific, you can tell the Staff we’ll work directly with them. 27 Just give us the specifics and we’ll do it. 28 29 Chair Martinez: I would suggest you knock on all the doors around the block, including Kelly-Moore 30 and AT&T. Just take that block, and then it’s pretty clear. 31 32 Commissioner Tuma: Can I just ask a question of Staff on that? 33 34 Mr. Northway: So that would be, that’s fine. So basically the block that is El Camino on one side, 35 Pepper on one side, Page Mill on the other side, and I don’t remember the street that Kelly-Moore is 36 on, but yeah. Fine. 37 38 Chair Martinez: Good. Commissioner Tuma you were going to (interrupted) 39 40 Commissioner Tuma: A question of Staff. Is that any different than those that would receive the 41 mailing? 42 43 Mr. Williams: Yeah, that’s broader. I would certainly suggest covering both sides of Pepper. 44 45 Commissioner Tuma: Yeah, I mean to me it would be those that would receive the mailing. At least 46 knock on the door, leave them a note, give them an opportunity say you’ve got a meeting set up for 47 such and such date. But I, I, personally I would say those that are required to be mailed to. It’s a 600 48 foot radius. 49 City of Palo Alto Page 25 1 Chair Martinez: Ok. That’s not what we were talking about earlier and the Applicant asked for, what 2 was the word you used? Specificity? So fine. So, Maker of the Motion? 3 4 Commissioner Tanaka: So, so what I interpreted and I think you also heard the Applicant so I think 5 Commissioner Keller you’re proposing the sketch in terms of not an architectural drawing, but just 6 basically what are the boundaries of the, of the project? 7 8 Commissioner Keller: I’m not being specific as to what the sketch will be and whether a sketch is 9 required, just some, just more description of what could be built or what is proposed to be built and I 10 think we have some still uncertainty as to exactly who should be noticed and I understood 11 Commissioner Tuma as indicating that the people whose door should be knocked on should be those 12 within the 600 foot radius. Is that what Commissioner Tuma is suggesting? 13 14 Commissioner Tuma: To me that seems safe. The required legal notice. In this particular area it’s not 15 a huge number of doors given the layout of the lots and that sort of thing so that doesn’t seem 16 unreasonable to me. 17 18 FRIENDLY AMENDMENT 19 20 Commissioner Keller: Can I suggest that it be all those parcels within a 600 foot radius that are located 21 south of Page Mill Road and east of El Camino? I don’t think it necessary to do the parcels that are 22 north of El Camino, sorry west of El Camino or north of Page Mill road if that happens to be within 23 600 feet. 24 25 Mr. Northway: The ones west of El Camino are essentially parks I think. I mean (interrupted) 26 27 Commissioner Tuma: That’s, that’s fine. 28 29 Commissioner Keller: Yeah. You can’t knock on the door of a parking garage. That’s why I’m 30 specifically excluding that. 31 32 Commissioner Tanaka: I also agree that, that boundary sounds good. It you want, if you want to make 33 that as another Friendly Amendment that’s, that’s fine. 34 35 Commissioner Keller: Thank you. 36 37 VOTE 38 39 Chair Martinez: Anything else? Can we vote on the Motion? Ready to vote? All those in favor of the 40 Motion say aye (Aye). Those opposed? Motion passes unanimously. Thank you. Thank you for 41 coming tonight. 42 43 MOTION PASSED (6-0-1, Commissioner Panelli absent) 44 45 46 6660 Note Only. Page 1 City of Palo Alto (ID # 3335) City Council Staff Report Report Type: Action ItemsMeeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: 827 Chimalus Title: Approval of a Record of Land Use Action for a Preliminary Parcel Map with Exceptions to Subdivide an oversized Single Family Residential lot into two lots, resulting in parcels having a width of 55.845 feet where he R-1 Zone standard minimum width is 60 feet; and Approval of a Negative Declaration located at 827 Chimalus Drive From: City Manager Lead Department: Planning and Community Environment Recommendation Staff and the Planning and Transportation Commission (Commission) recommend that the City Council: (1) approve the Negative Declaration (Attachment E), with a finding that the project will not result in significant environmental impacts; and (2) approve a Record of Land Use Action (Attachment A) approving the Preliminary Parcel Map with exceptions for 827 Chimalus Drive, based on the stated findings and conditions. Executive Summary The project is for a Preliminary Parcel Map with exceptions for the property located at 827 Chimalus Drive. This project is before the Council due to the requested exception to the minimum lot width requirements. Preliminary parcel maps conforming to the Zoning and Subdivision Ordinances may be approved by the Director of Planning and Community Environment without Council action. The Director of Planning and Community Environment, however must forward any preliminary parcel map with exceptions to the Planning and Transportation Commission and the City Council for action. Exceptions may be granted only upon a finding that the approval would substantially secure the objectives of the regulations or requirements, to which the exceptions are requested, shall protect the public health, safety, convenience, and the general welfare and shall be consistent with and implement the policies and objectives of the comprehensive plan. Any approval of City of Palo Alto Page 2 exceptions may be made upon such conditions as are deemed necessary to secure such compliance. Background The application was submitted on September 14, 2012. The Commission reviewed this project at its regularly scheduled meeting of November 14, 2012. The Commission discussed the project and supported the application because the proposed lots would be consistent with the neighborhood character and that the future development of the lots would have little impact on traffic or trees. It noted that the project would be consistent with the lot pattern in the neighborhood, would not impact a historic property, and would create standard lots over 6,000 square feet. After closing the public hearing, the Commission unanimously recommended that the City Council approve the Preliminary Parcel Map with exceptions in accordance with the findings and conditions of approval contained in the draft Record of Land Use Action. The Commission also recommended that the Council adopt the Negative Declaration. (Attachment E) Discussion Minimum Lot Width The project site is a non-conforming parcel located in the Single-Family Residential (R-1) Zone District. The existing lot is approximately 112 feet wide by 113 feet deep. The existing parcel is non-conforming because the lot area of 12,656 exceeds the R-1 Zone’s Maximum Lot Size standard of 9,999 square feet. The Site Development Regulations for the R-1 zone district prohibit newly created parcels to exceed 9,999 square feet, and require newly created parcels to have a minimum site area of 6,000 square feet and minimum site width of 60 feet. The proposal is to subdivide the single 12,666 square foot parcel into two equally sized parcels of 6,333 square feet that would meet the minimum site area and eliminate the site’s existing nonconforming lot size; however, the subdivision would result in lot widths of only 55.845 feet. Since the proposed new parcels would be approximately 4.15 feet narrower than the 60-foot width required by the R-1 zone district, the applicant has requested a conditional exception per Palo Alto Municipal Code (PAMC) Section 21.32.010 which allows exceptions to the requirements and regulations of Title 21. The exceptions are necessary because Section 21.20.100 requires that “the size and shape of lots shall conform with any zoning regulations effective in the area of the proposed subdivisions” and, as noted, the R-1 zone district standard minimum site width is 60 feet. Staff believes the project is consistent with the required findings because the Parcel Map would create lots that do not exceed the maximum lot size and would be consistent with the existing pattern of lots in the neighborhood. The median width of each of the six (6) lots which are City of Palo Alto Page 3 contiguous to subject property is 55 feet (55, 55, 56, 55.4, 55.8 and 55.8 feet). The lot depth would remain 113 feet, a depth which is also consistent with those of the six adjacent properties. In addition, the allowable floor area ratio that could be built on the resulting 6,333 square foot lots would be more compatible with the existing neighborhood then would be allowed on the existing 12,666 square foot lot. Future Development The existing residence on the project site would be required to be demolished prior to recordation of the Parcel Map. If the application is approved, one single-family residence could be built on each of the resulting lots. Any proposal for construction, on either of the two resulting parcels, must conform to all zoning requirements and be subject to all applicable Development Impact Fees. To ensure conformance with the existing neighboring homes, new two-story construction on either lot would be subject to review under the Single Family Individual Review Program. Once the Parcel Map is approved, the parcels cannot be merged again because the resulting parcel would exceed the maximum site area. Resource Impact The two lots that would be created are in an urbanized area of the city that is already served by city services and would not have a detrimental effect on city resources. Utility services are already provided in the street that provides access to the project. Being that only one residence presently exists on the property, Development Impact Fees totaling approximately $12,738 dollars would be required to be paid to the City prior to the issuance of a building permit for the second of two residences that could be built on the resulting two lots. Additionally, the City will realize incremental property and utility user revenues as well as a one-time documenatary transfer tax once the parcel(s) are sold. Policy Implications The project’s Compliance with applicable comprehensive plan policies is provided in a table attached to this report. (Attachment D) Timeline Action: Date: Application Received: September 14, 2012 Application Deemed Complete: October 23, 2012 City of Palo Alto Page 4 Negative Declaration Public Review Period: November 6, 2012- November 26, 2012 P&TC Meeting: November 14, 2012 Required Action by Council: December 10, 2012 Environmental Review The California Environmental Quality Act (CEQA) lists a minor land division of property in an urbanized area into four or fewer parcels as exempt from CEQA if the subdivision is in conformance with all zoning regulations. This project is not exempt from CEQA because the subdivision would create two lots that do not meet the 60 feet minimum lot width required by the zoning ordinance. An Environmental Impact Assessment and a Negative Declaration finding that the division would not result in any significant environmental impacts was prepared for the project and is included as an attachment to this report. The comment period for the Negative Declaration concluded on November 26, 2012. No Comments were received. Attachments: Attachment A: Record of Land Use Action (DOC) Attachment B: Location Map (PDF) Attachment C: Subdivider's Statement (PDF) Attachment D: Comprehensive Plan table (DOC) Attachment E: Initial Study and Negative Declaration (PDF) Attachment F: Project Plans (TXT) ATTACHMENT A 1 ACTION NO. XXXX-XX DRAFT RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 827 CHIMALUS DRIVE: PRELIMINARY PARCEL MAP 12PLN-00000-000369 (SAMIR TUMA AND KRISS DEIGLMEIER, APPLICANTS) At its meeting on December 10, 2012, the City Council of the City of Palo Alto approved the Preliminary Parcel Map for the development of a two-lot subdivision project with exceptions, making the following findings, determinations and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On September 14, 2012, Samir Tuma and Kriss Deiglmeier applied for a Preliminary Parcel Map with exceptions for the development of a Two-lot subdivision project (“The Project”). B. The project site is comprised of one lot (APN No. 137- 15-050) of approximately 12,666 square feet. The site contains one residential structure. Single-family residential land uses are located adjacent to the lot to the north, east and west. C. Following staff review, the Planning and Transportation Commission reviewed the project and recommended approval on November 10, 2004, subject to conditions of approval. 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 Declaration. An environmental impact assessment was prepared for the project and it has been determined that no potentially adverse impacts would result from the development, therefore, the project would have a less than significant impact on the environment. The Negative Declaration was made available for public review beginning November 6, 2012 through November 26, 2012. The Environmental Impact Assessment and Negative Declaration are contained as Attachment E to the November 14, 2012 Planning and Transportation Commission Report to the December 10, 2012 City Council Staff Report and are hereby approved. ATTACHMENT A 2 SECTION 3. Preliminary Parcel Map Findings. A legislative body of a city shall deny approval of a Parcel Map, if it makes any of the following findings (California Government Code Section 66474): 1. That the proposed map is not consistent with applicable general and specific plans as specified in Section 65451: The site is consistent with the Comprehensive Plan as described below. 2. That the design or improvement of the proposed subdivision is not consistent with applicable general and specific plans: The Project is consistent with the following Comprehensive Plan policies: Policy L-1: Continue current City policy limiting future urban development to currently developed lands within the urban service area. The Project site is located within the urban growth boundary and the Project is consistent with this policy by continuing the reuse of land within this area; and Policy L-5: Maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale. The Project would allow construction of two single- family residential structures, which is a permitted use within the R-1 district and which is compatible with other R-1 properties in the neighborhood; and Policy L-12: Preserve the character of residential neighborhoods by encouraging new or remodeled structures to be compatible with the neighborhood and adjacent structures. The Project would permit the subsequent construction of two single-family residential units, which would be subject to the R-1 site development regulations as the other R-1 sites in the neighborhood. Additionally, the parcel is currently non-conforming in terms of maximum lot size. The maximum lot size for R-1 zone parcels is 9,999 square feet. The subject site is 12,666 square feet. Subdividing the lots would remove the non-conformity and provide two conforming lots in terms of lot size, 6,333 square feet, and lot depth. This action would be consistent with Program H-5 which was designed to address the loss of housing due to the combination of single family residential lots and to consider modifying the R-1 Zoning District to create a maximum lot size to prevent the loss of housing or housing opportunities. Furthermore, all new two-story structures would be subject to the Individual Review program, which promotes adequate privacy, compatible massing and appropriate streetscape design with other residential structures. 3. That the site is not physically suitable for the type of development: ATTACHMENT A 3 The Project site is comprised of one large relatively flat lot in a residential neighborhood that would be subdivided into two lots for the purposes of single-family development. Each lot would exceed the minimum lot size requirements for R-1 zoned properties. Each lot would exceed the minimum lot length requirements for R-1 zoned properties. Each lot would allow for single family residential development without the need for zoning requirement exceptions for the construction of single family dwellings. 4. That the site is not physically suitable for the proposed density of development: The project would create two lots that exceed all but one of the site development regulations for properties in the R-1 Single family Residence district. 5. That the design of the subdivision or the proposed improvements are likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat: The Project will not cause environmental damage or injure fish, wildlife, or their habitat, in that property is currently developed and not adjacent to sensitive habitat areas. 6. That the design of the subdivision or type of improvements is likely to cause serious public health problems: The Project will not cause serious public health problems, as the environmental concerns have been reviewed in the Negative Declaration that was prepared for the subdivision project. 7. That the design of the subdivision or the type of improvements will conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. In this connection, the governing body may approve a map if it finds that alternate easements, for access or for use, will be provided, and that these will be substantially equivalent to ones previously acquired by the public. This subsection shall apply only to easements of record or to easements established by judgment of a court of competent jurisdiction and no authority is hereby granted to a legislative body to determine that the public at large has acquired easements for access through or use of property within the proposed subdivision. There are no easements on the subject property and no off site easement will be affected by the proposed project. ATTACHMENT A 4 SECTION 4. Exception Findings 1. There are special circumstances or conditions affecting the property. The subject property is nearly twice the width of many of the other properties up and down the block including all adjoining properties. The Barron Park neighborhood, where the subject property is located, is comprised of varied lot sizes and does not follow a standard pattern. It is however common in the vicinity of the subject property to find lots that do not meet the required minimum 60-foot lot width and are nearly the same width (55 feet) as would result from the proposed subdivision. (See location map Attachment B) 2. The exception is necessary for the preservation and enjoyment of a substantial property right of the petitioner. The City of Palo Alto interprets this finding to describe the existence of a hardship in relation to other neighboring properties. The existing lots adjacent to the subject property do not meet the 60-foot standard lot width established for the R-1 zone district. Many of the other lots on the same side of the street to the left and right of the subject property as well as those to the rear of the subject property are only 55 to 56 feet wide. The proposed lots would be nearly 56 feet wide and would have lot widths consistent with the widths of the neighboring parcels. Additionally, the lot is currently non-conforming in terms of lot size, in that it exceeds the maximum R-1 lot size of 9,999 square feet. The subdivision would create two conforming lots in terms of lot size and lot depth. 3. The granting of the exception will not be detrimental to the public welfare or injurious to other property in the territory in which the property is situated. The division of this single parcel into two separate parcels will not have adverse impacts to other properties in the vicinity. The addition of a single parcel to the street will not negatively impact traffic and the resulting lot widths will be sufficient to provide ample width for standard development of single family houses without the need for exceptions. 4. The granting of the exception will not violate the requirements, goals, policies, or spirit of the law. The granting of the exception is consistent with the goals and policies of the Comprehensive plan as well as the spirit of the ATTACHMENT A 5 law. Policy H-1 of the Palo Alto Comprehensive Plan states “Meet community and neighborhood needs as the supply of housing is increased. Ensure the preservation of the unique character of the city’s existing neighborhoods.” The subdivision of this parcel creates only one new single family lot within an established neighborhood that already receives city services. The new lot therefore would not diminish the quality of City services or diminish the capacity of infrastructure or transportation facilities. The subdivision of this parcel only serves to add further consistency to the existing lot pattern thus preserving the character of the neighborhood. The lot as it is currently situated exceeds the 9,999 square foot maximum lot size for R-1 zoned properties by approximately 2,700 square feet. The subdivision would allow the creation of two smaller lots that are more consistent with Palo Alto Municipal Code (“PAMC”) Section 18.12.040. Policy H-2 states “Identify and implement a variety of strategies to increase housing density and diversity in different locations. Emphasize and encourage the development of affordable and attainable housing. “The division of the lot will allow for the construction of two modestly sized houses more consistent with the existing homes in the neighborhood rather than the construction of one large house on that would be out of scale with the adjacent residences. The two smaller houses would also be more affordable than the one larger home and allow for an additional housing unit in Palo Alto. SECTION 5. Preliminary Parcel Map Approval Granted. Preliminary Parcel Map approval is granted by the City Council under PAMC Sections 21.12 and 21.20 and the California Government Code Section 66474, subject to the conditions of approval in Section 7 of this Record. SECTION 6. Parcel Map Approval. The Final Map submitted for review and approval by the City Council shall be in substantial conformance with the Preliminary Parcel Map prepared by James Toby titled “Tentative Parcel Map”, consisting of one (1) page, dated September 14, 2012 except as modified to incorporate the conditions of approval in Section 7. A copy of this plan is on file in the Department of Planning and Community Environment, Current Planning Division. Within two years of the approval date of the Preliminary Parcel Map, the subdivider shall cause the subdivision or any part thereof to be surveyed, and a Parcel Map, as specified in Chapter 21.08, to be prepared in conformance with the Preliminary Parcel Map as conditionally approved, and in compliance with the provisions of the Subdivision Map Act and PAMC Section 21.16 and submitted to the City Engineer (PAMC Section 21.16.010[a]). ATTACHMENT A 6 SECTION 7. Conditions of Approval. Department of Planning and Community Environment Planning Division 1. Any new two-story construction on the lots will require review under the City’s Individual Review process. 2. The applicant shall confirm the location all existing features of the site, including protected and non-protected trees, wells, structures, utilities, and easements to the satisfaction of Public Works, the Planning Division, and any other agency that would have an interest in those features. 3. Development Impact fees totaling approximately 12,738.83 dollars or, those fees in effect at the time of building permit issuance, shall be paid to the city of Palo Alto prior to the issuance of a building permit for the construction of the second of the two houses that could be built on the two parcels. Building Division 4. The existing buildings within the project area shall be demolished prior to recording the map. A separate permit shall be required for the removal of the building. 5. New addresses will be assigned to each lot with the subdivision, following recordation of the subdivision map. The applicant shall file and “Address request Form” and pay the required fee, to the Palo Alto Development Center. Public Works Engineering Department 6. A Parcel Map will be required after review of the Preliminary Parcel Map 7. No grading or building permits will be issued until Final or Parcel Map is recorded with County Recorder. 8. Any existing buildings must be removed from the site prior to recordation of the Parcel Map. 9. On the Parcel Map change lots to parcels. 10. Show all monuments to be set or found 11. Display width of street and show centerline. ATTACHMENT A 7 Utilities Water Gas Wastewater Department 12. The applicant shall submit a request to disconnect all utility services and/or meters to the existing building including a signed affidavit of vacancy. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued by the Building Inspection Division after all utility services and/or meters have been disconnected and removed. 13. The applicant shall submit a completed water-gas wastewater service connection application-load sheets for City of Palo Alto Utilities. The applicant must provide all the information requested for utility service demands. 14. The applicant shall be responsible for installing and upgrading the existing services a necessary to handle anticipated peak loads. This responsibility includes all cost associated with design and construction for the installation/upgrade of the utility services. 15. Each parcel shall have its own water service, gas service and sewer lateral connection shown on the plans. 16. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas, & wastewater. SECTION 8. Term of Approval. 1. Preliminary Parcel Map. All conditions of approval of the Preliminary Parcel Map shall be fulfilled prior to approval of a Parcel Map (PAMC Section 21.16.010[c]). Unless a Parcel Map is filed, and all conditions of approval are fulfilled within a two- year period from the date of Preliminary Parcel Map approval, or such extension as may be granted, the Preliminary Parcel Map shall expire and all proceedings shall terminate. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTACHMENT A 8 ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: Those plans prepared by James Toby titled “Tentative Parcel Map”, consisting of one page, dated September 14, 2012. 137-09-034 137-15-053 137-09-031137-09-031 137-15-053 137-15-054 137-15-055 137-15-056 15-057 137-15-068 113.0' 55.8' 113.0' 55.8' 113.0' 113.0' 55.0' 11 89.7'131.0' 113.0'113.0' 113.0'113.0' 113.0'113.0' 113.0' 50.4' 55.0' 55.0' 56.0' 56.0' 56.0' 56.0' 113.0' 113.0' 112.0' 112.0' 113.0'113.0' 113.0'113.0' 113.0' 113.0'113.0' 113.0' 50.4' 55.0' 56.0' 56.0' 56.0' 55.8' 55.8'55.4' 55.4'56.0' 56.0'55.0' 55.0' 55.0' 55.0' 113.0' 113.0'113.0' 113.0' 110.0' 110.0' 54.4' 108.0' 38.6' 38.6' 6 0 .7' 1 113.0' 113.0'113.0' 113.0'55.0' 113.0' 55.0' 113.0' 113.0' 113.0'113.0' 113.0'113.0' 113.0'113.0' 113.0' 113.0' 113.0' 113.0' 56.0' 74.4' 74.4' 50.0' 50.0' 104.0' 104.0' 53.0' 1 1 17.9' 85.0' 120.0' 50.0' 55.0' 55.0' 840 820 800 792 811 775 790 7 761 765 825 827 770 823 800 820 830 840 46 827 835 850 855 861 852 CHIM ALUS DRIVE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 0' 59' 827 Chimalus CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2012 City of Palo Alto jnortz, 2012-11-06 10:49:22 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Attachment D 827 Chimalus 12PLN-00000-00369 Applicable Comprehensive Plan Policies Land Use and Community Design Element Policy L-1: Continue current City Policy limiting future urban development to currently developed lands within the urban service area. Policy L-5: Maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale. Policy L-12: Preserve the character of residential neighborhoods by encouraging new or remodeled structures to be compatible with the neighborhood and adjacent structures. Housing Element Policy H-1: Meet community and neighborhood needs as the supply of housing is increased. Ensure the preservation of the unique character of the City’s existing neighborhoods. Policy H-2: Identify and implement a variety of strategies to increase housing density and diversity in different locations. Emphasize and encourage the development of affordable and attainable housing. 827 Chimalus Dr. 12PLN-00369 Page 1 Negative Declaration ENVIRONMENTAL CHECKLIST FORM City of Palo Alto Department of Planning and Community Environment PROJECT DESCRIPTION Request for Planning and Transportation Commission review of a Preliminary Parcel Map with exceptions for the purposes of subdividing a single 12,666 square foot parcel into two 6,333 square foot parcels. The requested exception would be for each parcel to have a width of 55.845 feet where 60 feet is the required minimum width. The site is located at 827 Chimalus Drive in the R-1 zone district. 1. PROJECT TITLE 827 Chimalus Dr. Palo Alto, California 94306 2. LEAD AGENCY NAME AND ADDRESS City of Palo Alto Department of Planning and Community Environment 250 Hamilton Ave. Palo Alto, CA 94303 3. CONTACT PERSON AND PHONE NUMBER Jason Nortz Planner, City of Palo Alto 650-617-3137 4. PROJECT SPONSOR’S NAME AND ADDRESS Samir Tuma 827 Chimalus Dr. Palo Alto, CA 94306 5. APPLICATION NUMBER 12-PLN-00369 6. PROJECT LOCATION 827 Chimalus Dr. Palo Alto Parcel Number: 137-15-050 The project site is located in the southern section of the City of Palo Alto, in the northern part of Santa Clara County, west of U.S. Highway 101 and east of Interstate 280. 827 Chimalus Dr. 12PLN-00369 Page 2 Negative Declaration 7. GENERAL PLAN DESIGNATION: The General Plan designation for this site is Single Family Residential, per the Palo Alto 1998 - 2010 Comprehensive Plan. The Single Family land use designation allows for one dwelling unit on a lot. The net density in single family areas will range from 1-7 units per acre. Population densities will range from 1 to 30 persons per acre. The proposed subdivision within this section of the City is consistent with the Comprehensive Plan. 8. ZONING The project site consists of one parcels under the address of 827 Chimalus Drive. The parcel is zone R-1 (Single Family Residential) and is regulated by the Palo Alto Municipal Code (PAMC) Chapter 18.12. 9. PROJECT DESCRIPTION The proposed project consists of subdividing a single 12,666 square foot parcel into two 6,333 square foot parcels. The site is located at 827 Chimalus Drive in the R-1 zone district. The R-1 zone district requires new parcels to be a minimum of 60 feet in width, 100 feet in depth, and to be a minimum of 6,000 square feet in area. The applicant has requested an exception to create two new parcels approximately 4 feet narrower than is currently allowed in the R-1 development regulations. The proposed lots would be 55.845 feet wide and have a lot depth of 113.40 feet. The total lot area of the new lots would be 6,333 square feet each. The proposed lots would be larger in total area and deeper than is required by zoning requirements. It is only the lot widths that will require the exception. 10. SURROUNDING LAND USES AND SETTING The project site is located on the west side of El Camino Real, approximately a half of mile west of the intersection of El Camino Real and Matadero Avenue. The site is surrounded by single family residential land uses. 11. OTHER PUBLIC AGENCIES Office of the County Clerk-Recorder ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS EVALUATION OF ENVIRONMENTAL IMPACTS 1) A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. [A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e. g. the project falls outside a fault rupture zone). A "No Impact" answer should be explained where it is based on 827 Chimalus Dr. 12PLN-00369 Page 3 Negative Declaration project-specific factors as well as general standards (e. g. the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis).] 2) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3) Once the lead agency has determined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. Potentially Significant Impact” is appropriate if there is substantial evidence that an effect may be significant. If there are one or more “Potentially Significant Impact” entries when the determination is made, an EIR is required. 4) “(Mitigated) Negative Declaration: Less Than Significant With Mitigation Incorporated” applies where the incorporation of mitigation measures has reduced an effect from “Potentially Significant Impact” to a “Less than Significant Impact.” The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section 17, “Earlier Analysis,” may be cross-referenced). 5) Earlier analysis may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063 (C)(3) (D). In this case, a brief discussion should identify the following: a) Earlier Analysis Used. Identify and state where they are available for review. b) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. c) Mitigation Measures. For effects that are “Less than Significant with Mitigation Measures Incorporated,” describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the project. 6) Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g. general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 7) Supporting Information Sources: A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. 8) The explanation of each issue should identify: a) the significance criteria or threshold, if any, used to evaluate each question; and b) the mitigation measure identified, if any, to reduce the impact to less than significance. DISCUSSION OF IMPACTS The following Environmental Checklist was used to identify environmental impacts, which could occur if the proposed project is implemented. The left-hand column in the checklist lists the source(s) for the 827 Chimalus Dr. 12PLN-00369 Page 4 Negative Declaration answer to each question. The sources cited are identified at the end of the checklist. Discussions of the basis for each answer and a discussion of mitigation measures that are proposed to reduce potential significant impacts are included. A. AESTHETICS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Substantially degrade the existing visual character or quality of the site and its surroundings? 1,3 x b) Have a substantial adverse effect on a public view or view corridor? 1,3 x c) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? 1,3 x d) Violate existing Comprehensive Plan policies regarding visual resources? 1,3 x e) Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? 1 x f) Substantially shadow public open space (other than public streets and adjacent sidewalks) between 9:00 a.m. and 3:00 p.m. from September 21 to March 21? 1 x Mitigation Measure: None B. AGRICULTURAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non-agricultural use? 1 X b) Conflict with existing zoning for agricultural use, or a Williamson Act contract? 1,3,4 X c) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of N/A X 827 Chimalus Dr. 12PLN-00369 Page 5 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact Farmland, to non-agricultural use? Mitigation Measures: None C. AIR QUALITY Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Conflict with or obstruct with implementation of the applicable air quality plan (1982 Bay Area Air Quality Plan & 2000 Clean Air Plan)? 1,3 X b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation indicated by the following: 1,3 x i. Direct and/or indirect operational emissions that exceed the Bay Area Air Quality Management District (BAAQMD) criteria air pollutants of 80 pounds per day and/or 15 tons per year for nitrogen oxides (NO), reactive organic gases (ROG), and fine particulate matter of less than 10 microns in diameter (PM10); 1,3 x ii. Contribute to carbon monoxide (CO) concentrations exceeding the State Ambient Air Quality Standard of nine parts per million (ppm) averaged over eight hours or 20 ppm for one hour (as demonstrated by CALINE4 modeling, which would be performed when a) project CO emissions exceed 550 pounds per day or 100 tons per year; or b) project traffic would impact intersections or roadway links operating at Level of Service (LOS) D, E or F or would cause LOS to decline to D, E or F; or c) project would increase traffic volumes on nearby roadways by 10% or more)? 1,3 x c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality 1,3 x 827 Chimalus Dr. 12PLN-00369 Page 6 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)? d) Expose sensitive receptors to substantial levels of toxic air contaminants? 1 x i. Probability of contracting cancer for the Maximally Exposed Individual (MEI) exceeds 10 in one million 1 x ii. Ground-level concentrations of non- carcinogenic TACs would result in a hazard index greater than one (1) for the MEI 1 x e) Create objectionable odors affecting a substantial number of people? 1 x g) Not implement all applicable construction emission control measures recommended in the Bay Area Air Quality Management District CEQA Guidelines? 1 X Mitigation Measures: None D. BIOLOGICAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? 1, 3 x b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations, including federally protected wetlands as defined by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? 1,3 x c) Interfere substantially with the movement of 827 Chimalus Dr. 12PLN-00369 Page 7 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? 1, 3 x d) Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or as defined by the City of Palo Alto’s Tree Preservation Ordinance (Municipal Code Section 8.10)? 1, 3 x e) Conflict with any applicable Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? 1,3 x Mitigation Measure: None E. CULTURAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Directly or indirectly destroy a local cultural resource that is recognized by City Council resolution? 1,3 MapL- 7 x b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to 15064.5? 1,3- MapL8 x c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? 1,3- MapL8 x d) Disturb any human remains, including those interred outside of formal cemeteries? 1,3- MapL8 x e) Adversely affect a historic resource listed or eligible for listing on the National and/or California Register, or listed on the City’s Historic Inventory? 1,3- MapL7 x f) Eliminate important examples of major periods of California history or prehistory? 1 x 827 Chimalus Dr. 12PLN-00369 Page 8 Negative Declaration Mitigation Measures: None F. GEOLOGY, SOILS AND SEISMICITY Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death involving: See below i) Rupture of a known earthquake fault, as delineated on the most recent Alquist- Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. 1, 3 x ii) Strong seismic ground shaking? 3-MapN- 10, x iii) Seismic-related ground failure, including liquefaction? 3-MapN- 5, 5,9 x iv) Landslides? 3-MapN- 5, x b) Result in substantial soil erosion or the loss of topsoil? 1 x c) Result in substantial siltation? 1 x d) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on- or off-site landslide, lateral spreading, subsidence, liquefaction or collapse? 3-MapN- 5, x e) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? 3-MapN-5 x f) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water? 1 x g) Expose people or property to major geologic hazards that cannot be mitigated through the use of standard engineering design and seismic safety techniques? 1 x DISCUSSION: 827 Chimalus Dr. 12PLN-00369 Page 9 Negative Declaration Mitigation Measures None G. HAZARDS AND HAZARDOUS MATERIALS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Create a significant hazard to the public or the environment through the routing transport, use, or disposal of hazardous materials? 1 x b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? 1 x c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? 1 X d) Construct a school on a property that is subject to hazards from hazardous materials contamination, emissions or accidental release? 1 X d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? 1, 3- MapN-9, 5 X e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? 1 X f) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working the project area? 1 X g) Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? 1,3- MapN-7 X h) Expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? 3-MapN-7 X i) Create a significant hazard to the public or the environment from existing hazardous materials contamination by exposing future occupants or users of the site to contamination in excess of soil and ground water cleanup goals developed 1 X 827 Chimalus Dr. 12PLN-00369 Page 10 Negative Declaration for the site? Mitigation Measures: None H. HYDROLOGY AND WATER QUALITY Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Violate any water quality standards or waste discharge requirements? 1,3 X b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? 3-MapN2 X c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation on- or off-site? 1 X d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding on- or off-site? 1 X e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff? 1 X f) Otherwise substantially degrade water quality? 1 X g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 1, 3-Map N-6 X h) Place within a 100-year flood hazard area structures which would impede or redirect flood flows? 3-MapN6 X i) Expose people or structures to a significant risk of loss, injury or death involve flooding, including flooding as a result of the failure of a levee or dam or being located within a 100-year 3-MapN6 N8 X 827 Chimalus Dr. 12PLN-00369 Page 11 Negative Declaration flood hazard area? j) Inundation by seiche, tsunami, or mudflow? 3-MapN6, N8 X k) Result in stream bank instability? 1,3- MapN6,9 X Mitigation Measure: None I. LAND USE AND PLANNING Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Physically divide an established community? 1,2,3 x b) Conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? 1,2,3,4 X c) Conflict with any applicable habitat conservation plan or natural community conservation plan? 1,3 x d) Substantially adversely change the type or intensity of existing or planned land use in the area? 1,2,3 x e) Be incompatible with adjacent land uses or with the general character of the surrounding area, including density and building height? 1,2,3, x f) Conflict with established residential, recreational, educational, religious, or scientific uses of an area? 1,2,3 x g) Convert prime farmland, unique farmland, or farmland of statewide importance (farmland) to non-agricultural use? 1,2,3 X Discussion: The Comprehensive Plan land use designation for this property is Single Family Residential and the Zoning Ordinance designation is R-1 Single Family Residential. Newly created parcels must have a minimum site width of 60 feet. The proposed subdivision is not consistent with this designation because the lot widths resulting from the proposed subdivision would be 55.845 feet wide. The project applicant has applied for an exception to the 60-foot lot width requirement for two new parcels that would be approximately 4.16 feet narrower than required. The granting of this exception would not result in a significant impact because the resulting lot widths would be consistent with the lot widths of the neighboring properties. The exception would not disrupt a consistent lot pattern or result in a detrimental 827 Chimalus Dr. 12PLN-00369 Page 12 Negative Declaration impact on the neighborhood. Mitigation Measures: None. J. MINERAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state? 1,3 X b) Result in the loss of availability of a locally- important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan? 1,3 X Mitigation Measures: None. K. NOISE Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? 1,3 x b) Exposure of persons to or generation of excessive ground borne vibrations or ground borne noise levels? 1,3 x c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? 1,3 x d) A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? 1 x e) For a project located within an airport land use plan or, where such a plan has not been adopted, would the project expose people residing or working in the project area to excessive noise levels? 1 X f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to 1 X 827 Chimalus Dr. 12PLN-00369 Page 13 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact excessive noise levels? g) Cause the average 24 hour noise level (Ldn) to increase by 5.0 decibels (dB) or more in an existing residential area, even if the Ldn would remain below 60 dB? 1 x h) Cause the Ldn to increase by 3.0 dB or more in an existing residential area, thereby causing the Ldn in the area to exceed 60 dB? 1 x i) Cause an increase of 3.0 dB or more in an existing residential area where the Ldn currently exceeds 60 dB? 1 x j) Result in indoor noise levels for residential development to exceed an Ldn of 45 dB? 1 x k) Result in instantaneous noise levels of greater than 50 dB in bedrooms or 55 dB in other rooms in areas with an exterior Ldn of 60 dB or greater? 1 X l) Generate construction noise exceeding the daytime background Leq at sensitive receptors by 10 dBA or more? 1 X Mitigation Measures: None L. POPULATION AND HOUSING Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? 1,3 X b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? 1 X c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? 1 X d) Create a substantial imbalance between employed residents and jobs? 1 X e) Cumulatively exceed regional or local population projections? 1 X 827 Chimalus Dr. 12PLN-00369 Page 14 Negative Declaration Mitigation Measures: None. M. PUBLIC SERVICES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public services: Fire protection? Police protection? Schools? Parks? Other public facilities? 1, 2 1, 2 1, 2 1, 2 1, 2 X X X X X Mitigation Measures: None N. RECREATION Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? 1 X b) Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? 1 X 827 Chimalus Dr. 12PLN-00369 Page 15 Negative Declaration Mitigation Measures: None O. TRANSPORTATION AND TRAFFIC Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Cause an increase in traffic which is substantial in relation to the existing traffic load and capacity of the street system (i.e., result in a substantial increase in either the number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections)? 1,3 x b) Exceed, either individually or cumulatively, a level of service standard established by the county congestion management agency for designated roads or highways? 1 x c) Result in change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? 1 X d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? 1 x e) Result in inadequate emergency access? 1 x f) Result in inadequate parking capacity? 1,3 x g) Conflict with adopted policies, plans, or programs supporting alternative transportation (e.g., pedestrian, transit & bicycle facilities)? 1,3 x h) Cause a local (City of Palo Alto) intersection to deteriorate below Level of Service (LOS) D and cause an increase in the average stopped delay for the critical movements by four seconds or more and the critical volume/capacity ratio (V/C) value to increase by 0.01 or more? 1,3 x i) Cause a local intersection already operating at LOS E or F to deteriorate in the average stopped delay for the critical movements by four seconds or more? 1,3 x j) Cause a regional intersection to deteriorate from an LOS E or better to LOS F or cause 1,3 x 827 Chimalus Dr. 12PLN-00369 Page 16 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact critical movement delay at such an intersection already operating at LOS F to increase by four seconds or more and the critical V/C value to increase by 0.01 or more? k) Cause a freeway segment to operate at LOS F or contribute traffic in excess of 1% of segment capacity to a freeway segment already operating at LOS F? 1,3 x l) Cause any change in traffic that would increase the Traffic Infusion on Residential Environment (TIRE) index by 0.1 or more? 1,3 x m) Cause queuing impacts based on a comparative analysis between the design queue length and the available queue storage capacity? Queuing impacts include, but are not limited to, spillback queues at project access locations; queues at turn lanes at intersections that block through traffic; queues at lane drops; queues at one intersection that extend back to impact other intersections, and spillback queues on ramps. 1,3 x n) Impede the development or function of planned pedestrian or bicycle facilities? 1,3 x o) Impede the operation of a transit system as a result of congestion? 1,3 x p) Create an operational safety hazard? 1, x Mitigation Measures: None P. UTILITIES AND SERVICE SYSTEMS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exceed wastewater treatment requirements of the applicable Regional Water Quality Control Board? 1,3 X b) Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 1,3 X c) Require or result in the construction of new 827 Chimalus Dr. 12PLN-00369 Page 17 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 1,3 X d) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? 1,3 X e) Result in a determination by the wastewater treatment provider which serves or may serve the project that it has inadequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments? 1 X f) Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? 1 X g) Comply with federal, state, and local statutes and regulations related to solid waste? 1 X h) Result in a substantial physical deterioration of a public facility due to increased use as a result of the project? 1 X Mitigation Measures: None Q. MANDATORY FINDINGS OF SIGNIFICANCE Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? 1,3-Map L4,4 x b) Does the project have impacts that are individually limited, but cumulatively 827 Chimalus Dr. 12PLN-00369 Page 18 Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact considerable? (“Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects)? 1,3 x c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? 1,2,3,4, x EXPLANATION FOR CHECKLIST RESPONSES: The proposed project consists of subdividing a single 12,666 square foot parcel into two 6,333 square foot parcels. The site is located in the R-1 zone district requiring new parcels to be a minimum of 60 feet in width. The applicant has requested an exception to create two new parcels approximately 4.16 feet narrower than the 60 foot minimum required by the zoning. The Parcel Map will create two single-family lots in the R-1 zone district where one had previously existed. No public improvements are required as a result of the lot split. One single family home may be built on each of the two new parcels. The construction of two new single family homes is a ministerial act and is exempt under CEQA. The Environmental Chiclets was completed and all but one environmental factor was determined to be “No Impact”. A brief explanation is required for all answers except “No Impact”. Since the project will be creating two non-conforming lot as described above, the project will be in conflict with the “Land Use Planning” portion of the checklist. This impact was determined to be “Less Than Significant” as is discussed below. SOURCE REFERENCES 1. Project Planner’s knowledge of the site and the proposed project 2. Project Plans, Architectural Dimensions, received September14, 2012 3. Palo Alto Comprehensive Plan, 1998-2010. Parenthetical references indicate maps in Comp Plan. 4. Palo Alto Municipal Code, Title 18 – Zoning Ordinance 827 Chimalus Dr. 12PLN-00369 Page 19 Negative Declaration DETERMINATION On the basis of this initial evaluation: I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. x I find that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because revisions in the project have been made by or agreed to by the project proponent. A MITIGATED NEGATIVE DECLARATION will be prepared. I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. I find that the proposed project MAY have a “potentially significant impact” or “potentially significant unless mitigated” impact on the environment, but at least one effect: 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets. An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. I find that although the proposed project could have a significant effect on the environment, because all potentially significant effects (a) have been analyzed adequately in an earlier EIR or NEGATIVE DECLARATION pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that earlier EIR or NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project, nothing further is required. Project Planner Date Director of Planning and Date Community Environment 6764 Plans Page 1 City of Palo Alto (ID # 3344) City Council Staff Report Report Type: Action ItemsMeeting Date: 12/10/2012 City of Palo Alto Page 1 Summary Title: Parking Exemption Moratorium Extension Title: Public Hearing: Consider Extending up to December 28, 2013 a Moratorium on the Use of Certain Parking Exemptions contained in Section 18.52.060(c) of the Zoning Ordinance Related to the Downtown and California Avenue Parking Assessment Areas; and Adopt a Resolution Providing Exceptions to the Moratorium for "Pipeline Projects" at 135 Hamilton Avenue and 636 Waverley Street From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council: 1. Adopt the extension of the Interim Urgency Ordinance (Attachment A) establishing a moratorium on the use of the Exempt Floor Area parking exemption set forth in Section 18.52.060(c) of the Palo Alto Municipal Code in connection with any permit, entitlement or development project, pending further study of Downtown and California Avenue parking issues (Attachment A), for a period of one year through December 28, 2013, and allowing for exceptions for certain projects by separate Resolution; and 2. Approve a Resolution (Attachment B) providing exceptions from the moratorium, with conditions as specified, for properties at 135 Hamilton Avenue and 636 Waverley Street. Background On October 15, 2012, the Council adopted an interim “urgency” ordinance that provides for a moratorium on the use of a parking exemption for Exempt Floor Area (up to a 1.0 FAR) on a site. As further detailed in the October 15 staff report, this zoning provision has been used very infrequently in the past and its rationale no longer applies. In accordance with State law, the City of Palo Alto Page 2 moratorium was adopted on an “urgency” basis by Council with a 4/5 vote, 8-0 (Councilmember Schmid was absent). Council also directed that staff return with recommendations for criteria to identify appropriate exceptions for projects in the development review “pipeline.” The ordinance became effective immediately. State law requires that staff report back within 45 days on a procedure for review of the ordinance, at which time a public hearing would be held and the moratorium may be extended for an additional 10 months and 15 days. State law permits a second extension of the ordinance for a maximum duration of one year beyond the first extension. The ordinance was extended on November 19, 2012 for an additional 30 days, but the consideration of exceptions for “pipeline projects” was deferred until this review on December 10. A 4/5 vote was again required, and an 8-0 vote was recorded (Vice Mayor Scharff absent). The November 19 Council staff report (including the October 15 report) is included as Attachment E, and provides more detailed background about the code and the basis for the moratorium. Discussion Attachment A provides for a further extension of the ordinance for up to a one year period (December 29, 2013), which is permitted by State law for a second extension. A noticed public hearing is required, and approval by a 4/5 vote of the Council (8 members) is again needed. The proposed Interim Ordinance (Attachment A) would continue to suspend use of the “Exempt Floor Area Parking Exemption” pending further study and changes to existing parking and zoning requirements, including re-evaluation of the Downtown “development cap.” Floor area will remain exempt from parking to the extent parking assessments have been paid for a site. The ordinance also includes a provision that would allow the Council to consider exceptions from the moratorium for “pipeline projects” by separate resolution. A draft Resolution is included as Attachment B. The Resolution may be acted upon with a majority vote of the Council. Interim Ordinance Process and Evaluation State law allows for a city to extend the interim ordinance on an “urgency” basis, subject to an interim report that outlines steps that have been and are expected to be taken to alleviate the parking problems associated with the continued use of the Exempt Floor Area Exemption. Staff attached the Parking Study Report presented to Council on November 13 as part of the November 19 staff report (Attachment E) as the background report detailing the proposed evaluation process. The outcome of the Parking Study, particularly related to the Downtown Development Cap, will include recommendations for zoning changes, following public hearing and recommendation by the Planning and Transportation Commission, to either revise the City of Palo Alto Page 3 ordinance as necessary or consider permanent elimination of the exemption, prior to the expiration of the moratorium. Applicability to Pending Projects As outlined in prior reports, cities may revise zoning requirements at any time and new development must comply with those updated requirements. The major exception to this rule is where a property owner has acquired a “vested right” to build a particular structure by obtaining a permit and performing substantial work in reliance on that permit. A vested right is not created by the existence of particular zoning, or by preparatory work performed in advance of obtaining a permit. Staff does not believe there are any pending projects that have acquired a vested right to develop under the prior requirements. Council has discretion, however, to exempt projects from complying with new zoning requirements if there is a rational and equitable basis for the exemption. Staff has noted that there are two development projects currently under review that would be affected by the moratorium: a) 135 Hamilton Avenue, including 19,960 square feet of office space with two residential units above, which has been under discussion and review for more than a year, has been reviewed twice by the Architectural Review Board, and is scheduled for likely final review in January; and b) 636 Waverley Street, including 4,900 square feet of office space with two residential units above, which was submitted on September 10, 2012, and received Preliminary Architectural Review on November 15. Attachment C outlines the parking requirements for each of these projects, and exemptions that were permitted by the code upon submittal of these applications. The 135 Hamilton Avenue project would result in exemption of 40 parking spaces through the use of the 1:1 FAR exemption (plus another 21 spaces with other exemptions) of a total of 84 spaces required. The 636 Waverley Street project would result in exemption of 15 parking spaces through the use of the 1:1 FAR exemption (plus 1 other space with a second exemption) of a total of 25 spaces required. Options for Exempting Pending Projects Staff has identified a few options for potential exceptions for Council consideration: 1. Allow no Exceptions. Each project would need to provide all spaces on site (which may not be practical for either project as currently planned), pay in-lieu parking fees (e.g., approximately $2.4 million for 135 Hamilton and $900,000 for 636 Waverley), or be modified substantially to comply. 2. Allow an Exception for each project, with a requirement to pay the Parking District assessment “equivalent,” but payable to the Downtown Parking “In-Lieu” Fund, to be City of Palo Alto Page 4 used for future construction of parking spaces. The assessment “equivalent” would represent the cost of principal and interest of the project’s share of the overall Assessment District bond, from inception to its terminus (estimated $326,531 for 135 Hamilton and $122,784 for 636 Waverley). Note: Staff evaluated other options for this calculation, using prior assessments, but those were based on year-to-year changes in assessments, which is impractical to recreate now. Note also this calculation does not include interest or inflation. 3. Allow an Exception for each project with a requirement to pay the assessment “equivalent” as outlined in #2, but also including a funding contribution to the proposed Downtown “Cap” planning study, estimated at about $150,000 (approximately $109,005 for 135 Hamilton and $40,995 for 636 Waverley); 4. Allow an Exception for each project, but with a requirement to pay into the Downtown Parking In-Lieu Fund equal to half the spaces for each project that would be exempt due to the 1:1 FAR provision (e.g., about $1.2 million for 135 Hamilton and $450,000 for 636 Waverley). 5. Allow an Exception for 135 Hamilton Avenue, given its length of time in the review process, but deny an Exception for 636 Waverley, or provide some combination of the above differentiating between the projects. Any of the options allowing for an Exception would also include a requirement for an aggressive Transportation Demand Management (TDM) program, including provision of transit passes, Zip Cars (or similar), bicycle facilities, etc., with specified targets for mode-splits and penalties for not meeting objectives. The condition of such language is summarized in the section below and included in the proposed Exemption Resolution (Attachment B). Staff Recommended Exceptions Staff believes that, while there are important reasons to impose this moratorium, and while no “vested rights” exist, it is also important to recognize that such a moratorium works a financial hardship on applicants who have submitted development plans to the City and that the moratorium may project an undesired image to the business community that rules may be changed mid-stream. Staff therefore recommends that Council provide exemptions for the two projects consistent with option #3 above, more specifically: 1. Exemptions would be allowed for “Pipeline Projects,” defined as those discretionary development review applications that were submitted prior to October 15, 2012 (the date of the moratorium) and that have not yet received approval by the Director of Planning or the City Council. The two projects identified are the only ones that meet these qualifications. 2. The Exemption shall only apply to the development project set forth in, or in substantial compliance with, the application pending as of October 14, 2012. 3. An Exemption would expire if approval by the Director of Planning (subsequent to City of Palo Alto Page 5 review by the Architectural Review Board) is not obtained by June 30, 2013, or if building permits are not issued by December 31, 2013. 4. Prior to issuance of building permits, the applicant for an Exempted Project must pay an assessment “equivalent,” to be deposited in the City’s Downtown In-Lieu Parking Fund, with the amount calculated as the pro-rata share of the exempt spaces relative to the total Parking Assessment District spaces spread across the principal and interest schedule from the inception through the life of the current parking district bonds (see Attachment D). 5. Not later than 30 days following approval of the Exemption Resolution, the applicant for an Exempted Project must pay a pro-rata share (based on the ratio of the total exempt spaces between the two projects) of the estimated $150,000 cost of the City’s proposed Downtown Parking “Cap” Study. 6. A condition of approval for any Exempted Project will require a Transportation Demand Management (TDM) program to be approved by the Director of Planning prior to issuance of building permits and to be implemented immediately upon occupancy, setting forth measures to achieve a minimum 20% mode-split for other than single- occupancy vehicles, with annual monitoring and financial penalties established for failure to attain the diversion objectives. The proposed Resolution (Attachment B) provides for these exceptions and would require a majority Council vote for passage. Alternative proposals could be written into the Resolution or Council could provide direction to staff and the revised Resolution could return on Consent at the Council’s first meeting in January. If no Exceptions are granted, the Resolution would not be approved. Policy Implications Staff believes that the interim ordinance extension is necessary to assure parking availability for businesses and to protect nearby neighborhoods from further parking intrusion. The ordinance is also consistent with Council’s recent direction to study parking improvements and requirements for Downtown. The approval of the exceptions would be consistent with the intent of the moratorium by limiting the number of exceptions and by attaching conditions expected to further the provision of parking and studies necessary to fully address these concerns. Environmental Review Environmental review is not required for the urgency ordinance, as it simply maintains the status quo, and is exempt under Section 15061(b)(3) of the California Code of Regulations, pursuant to the California Environmental Quality Act (CEQA). Subsequent ordinance changes will, however, require further environmental review prior to consideration by the Planning and Transportation Commission and Council. The two projects granted exceptions both require City of Palo Alto Page 6 environmental review concurrent with their Architectural Review Board process. Attachments: Attachment A: Ordinance Extending Moratorium Through December 28, 2013 (DOCX) Attachment B: Resolution Exempting Projects at 135 Hamilton Avenue and 636 Waverley Street from Parking Exemption Moratorium (DOCX) Attachment C: Parking Requirements for 135 Hamilton Avenue and 636 Waverley Street (DOCX) Attachment D: Tables Outlining Parking Assessment "Equivalents" for 135 Hamilton Avenue and 636 Waverley Street (PDF) Attachment E: November 19, 2012 Council Staff Report and Attachments (PDF) Not Yet Approved 1 121210 jb 0131022 Ordinance No. ______ Interim Urgency Ordinance of the Council of the City of Palo Alto Extending Ordinance No. 5172 a Temporary Moratorium on the Use of the “Exempt Floor Area” Parking Exemption as Contained in Section 18.52.060(c) of the Palo Alto Municipal Code for New Development in Assessment Districts for a Period of One Year Through December 28, 2013 R E C I T A L S A. The City of Palo Alto downtown area has seen an increase in development and has experienced increases in parking demand, as documented in downtown monitoring reports produced in the past 5 years; and B. The lack of available daytime downtown parking for employees has resulted in complaints from both merchants and other businesses about the lack of parking for their employees; and C. The lack of available daytime downtown parking for employees has also resulted in complaints from residents in downtown areas about congested parking in their neighborhoods; and D. Program L-8 of the Comprehensive Plan limits new nonresidential development in the Downtown Area to 350,000 square feet (10 percent above the amount of development existing or approved in 1986), and requires that this limit be re-evaluated when nonresidential development approvals reach 235,000 square feet of floor area; and E. Section 18.18.040 of the Zoning Ordinance requires a development moratorium on downtown nonresidential development upon an increase of 350,000 square feet of net new nonresidential development (since 1986); and F. The 235,000 square foot study limit will be reached upon approval of projects now pending before the Architectural Review Board; and G. On July 23, 2012, the City Council directed staff to initiate the preparation of the re-evaluation of the downtown development cap; and H. The City’s Zoning Ordinance Chapter 18.18 (Downtown Commercial Districts) and Chapter 18.52 (Parking and Loading Requirements) provide for a variety of exemptions and reductions to parking requirements within the Downtown area and specifically within the Downtown Parking Assessment Area that result in less parking being provided than the calculated demand for parking for new projects; and I. The City’s Zoning Ordinance Section 18.52.060 (c) allows for floor area up to a floor area ratio of 1.0 to 1.0 to be “exempt” from parking requirements within the Not Yet Approved 2 121210 jb 0131022 Downtown Parking Assessment Area and floor are up to 0.5 to 1.0 to be exempt within the California Downtown Parkin Assessment Area (“Exempt Floor Area”); and J. The Exempt Floor Area parking exemption was enacted in the mid 1980’s and appears to have been intended to stimulate downtown development and provide equity to parking assessment district members; and K. The Exempt Floor Area parking exception no longer appears necessary to achieve such purposes, given the vitality of downtown and the need for additional parking; and L. Continued application of the Exempt Floor Area parking exemption will further exacerbate downtown and California Avenue parking deficiencies; and M. The City Council desires on an interim basis to temporarily suspend use of the Exempt Floor Area parking exemption in the City as such use may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time; and N. The City Council adopted Interim Ordinance No. 5167 on October 15, 2012, by a four-fifths vote after a public hearing pursuant to Government Code Section 65858. Ordinance 5167 expired on November 29, 2012; and O. On November 13, 2012, the Council reviewed, filed and heard comment on a Report pursuant to Government Code Section 65858 regarding the current status of parking issues in the Downtown area; and P. On November 19, 2012, the Council adopted Interim Ordinance No. 5172 which extended the use of Exempt Floor Area parking exemption in the City to December 29, 2012; and Q. The Council desires to extend Interim Ordinance 5172 in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings and a 4/5 vote is required for passage; and R. The Interim Urgency Ordinance would continue to suspend the use of “Exempt Floor Area Parking Exemption” pending further study and changes to existing parking and zoning requirements, including re-evaluation of the downtown “development cap”; and S. There are two development projects currently under review that could be affected by the moratorium: a) 135 Hamilton Avenue, , including 19,960 square feet of office space with two residential units above, which has been under discussion and review Not Yet Approved 3 121210 jb 0131022 for more than a year, has been reviewed twice by the Architectural Review Board, and is scheduled for likely final review in January; and b) 636 Waverley, including 4,900 square feet of office space with two residential units above, which was submitted on September 10, 2012, and received Preliminary Architectural Review on November 15; and T. While the Interim Ordinance would apply to all projects, including the two pending pipeline projects, the Council has the authority to address equity exceptions to the moratorium by separate resolution; and U. The Interim Ordinance extension is necessary to assure parking availability for businesses and to protect nearby neighborhoods from further parking intrusion; and V. The Interim Ordinance is consistent with Council’s recent direction to study parking improvements and requirements for Downtown. The approval of the exceptions would be consistent with the intent of the moratorium by limiting the number of exceptions and by attaching conditions expected to further the provision of parking and studies necessary to fully address these concerns. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. Written Report. The Report referenced in Recital O is hereby deemed by the City Council to be the written report describing the measures taken to alleviate the condition which led to the adoption of Interim Urgency Ordinance No. 5167 and the subsequent extension. SECTION 3. Moratorium. The City Council hereby extends Interim Urgency Ordinance Nos. 5167 and 5173 establishing a moratorium on the use of the Exempt Floor Area parking exemption as set forth in Section 18.52.060 of the Palo Alto Municipal Code in connection with any development or issuance of any permit or other land use entitlement for any project located in the Downtown or California Avenue Assessment Districts. SECTION 4. Study. The City Council directs the Planning Department to consider and study possible amendments to the General Plan, Specific Plan or Zoning ordinance to eliminate use of the Exempt Floor Area Parking Exemption contained in Section 18.52.060 (c) of the Palo Alto Municipal Code. SECTION 5. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the Not Yet Approved 4 121210 jb 0131022 measures taken to alleviate the condition which led to the adoption of this Interim Urgency Ordinance. SECTION 6. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 7. Effective Period. This extension ordinance shall take full force and effect immediately upon expiration of Interim Ordinance No. 5172. In accordance with Government Code Section 65856, this ordinance shall be in full force and effect for a period of one year following expiration of Interim Ordinance No. 5172. Thus the moratorium shall expire on December 28, 2013. SECTION 8. Exemptions to Moratorium. The Council may adopt by separate resolution specifying equitable considerations for exempting pending development projects for which an application was submitted to the City prior to October 15, 2012. SECTION 9. CEQA. The City Council finds that this ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: ____________________________ City Manager ______________________________ Senior Assistant City Attorney ____________________________ Director of Planning and Community Environment Not Yet Approved 121210 jb 0131023 1 Resolution No. ______ Resolution of the Council of the City of Palo Alto Providing Exceptions for Limited “Pipeline” Projects from Temporary Moratorium on the Use of the “Exempt Floor Area” Parking Exemption as Contained in Section 18.52.060(c) of the Palo Alto Municipal Code for New Development in Assessment Districts R E C I T A L S A. The City of Palo Alto downtown area has seen an increase in development and has experienced increases in parking demand, as documented in downtown monitoring reports produced in the past 5 years; and B. The lack of available daytime downtown parking for employees has resulted in complaints from both merchants and other businesses about the lack of parking for their employees; and C. The lack of available daytime downtown parking for employees has also resulted in complaints from residents in downtown areas about congested parking in their neighborhoods; and D. Program L-8 of the Comprehensive Plan limits new nonresidential development in the Downtown Area to 350,000 square feet (10 percent above the amount of development existing or approved in 1986), and requires that this limit be re-evaluated when nonresidential development approvals reach 235,000 square feet of floor area; and E. Section 18.18.040 of the Zoning Ordinance requires a development moratorium on downtown nonresidential development upon an increase of 350,000 square feet of net new nonresidential development (since 1986); and F. The 235,000 square foot study limit will be reached upon approval of projects now pending before the Architectural Review Board; and G. On July 23, 2012, the City Council directed staff to initiate the preparation of the re-evaluation of the downtown development cap; and H. The City’s Zoning Ordinance Chapter 18.18 (Downtown Commercial Districts) and Chapter 18.52 (Parking and Loading Requirement) provide for a variety of exemptions and reductions to parking requirements within the Downtown area and specifically within the Downtown Parking Assessment Area that result in less parking being provided than the calculated demand for parking for new projects; and I. The City’s Zoning Ordinance Section 18.52.060 (c) allows for floor area up to a floor area ratio of 1.0 to 1.0 to be “exempt” from parking requirements within the Downtown Not Yet Approved 121210 jb 0131023 2 Parking Assessment Area and floor are up to 0.5 to 1.0 to be exempt within the California Downtown Parking Assessment Area (“Exempt Floor Area”); and J. The Exempt Floor Area parking exemption was enacted in the mid 1980’s and appears to have been intended to stimulate downtown development and provide equity to parking assessment district members; and K. The Exempt Floor Area parking exception no longer appears necessary to achieve such purposes, given the vitality of downtown and the need for additional parking; and L. Continued application of the Exempt Floor Area parking exemption will further exacerbate downtown and California Avenue parking deficiencies; and M. The City Council desires on an interim basis to temporarily suspend use of the Exempt Floor Area parking exemption in the City as such use may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time; and N. The City Council adopted Interim Ordinance No. 5167 on October 15, 2012, by a four-fifths vote after a public hearing pursuant to Government Code Section 65858. Ordinance 5167 expired on November 29, 2012; and O. On November 13, 2012, the Council reviewed, filed and heard comment on a Report pursuant to Government Code Section 65858 regarding the current status of parking issues in the Downtown area; and P. On November 19, 2012, the Council adopted Interim Ordinance No. 5172 which extended the use of Exempt Floor Area parking exemption in the City to December 29, 2012; and Q. On December 10, 2012, the Council adopted Interim Ordinance No. XX which extended the use of Exempt Floor Area parking exemption in the City to December 28, 2013 in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and based on the need to protect the public safety, health and welfare. R. There are two pending development projects currently under review that could be affected by the moratorium: a) 135 Hamilton Avenue, , including 19,960 square feet of office space with two residential units above, which has been under discussion and review for more than a year, has been reviewed twice by the Architectural Review Board, and is scheduled for likely final review in January; and Not Yet Approved 121210 jb 0131023 3 b) 636 Waverley, including 4,900 square feet of office space with two residential units above, which was submitted on September 10, 2012, and received Preliminary Architectural Review on November 15; and S. Application of the Interim Ordinance to these projects could create an appearance of inequity because the City’s past practice in most instances when enacting major land use changes has been to exempt pipeline projects from such changes, regardless of whether legally required to do so. T. While the City recognizes it is not bound by past practice and while applicants do not have a “vested right” to develop in conformance with existing zoning, the Council finds it important to recognize that such a moratorium could work a financial hardship on applicants who have submitted development plans to the City before the moratorium was enacted and that the moratorium may project an undesired image to the business community that rules may be changed mid-stream. U. The Council desires in this instance to exempt pipeline projects in order to preserve certainty for such pending developments, especially since downtown development has been impacted by the national recession. The approval of exceptions would be consistent with the intent of the moratorium by limiting the number of exceptions and by attaching conditions expected to further the provision of parking and studies necessary to fully address these concerns; and NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Interim Ordinance XX, extending Interim Ordinance 5162, shall not apply to any pending Development Projects meeting all of the following criteria (“Exempt Project”) and subject to the following conditions: 1. The applicant has submitted a discretionary development review application to the City prior to October 15, 2012 (the date of the moratorium) and has not yet received approval by the Director of Planning or the City Council. 2. The Exemption shall only apply to the development project set forth in, or in substantial compliance with, the application pending as of October 14, 2012. 3. An Exemption shall expire if applicant fails (a) to receive approval by the Director of Planning (subsequent to review by the Architectural Review Board) by June 30, 2013, or (b) to receive building permits from the City by December 31, 2013. 4. Prior to issuance of building permits, the applicant for an Exempt Project must pay an “equivalent” assessment, to be deposited in the City’s Downtown In-Lieu Parking Fund, in the amount calculated as the pro-rata share of the exempt parking spaces relative to the total Parking Assessment District spaces spread Not Yet Approved 121210 jb 0131023 4 across the principal and interest schedule from the inception through the life of the current parking district bonds (see Exhibit A). 5. Not later than 30 days following approval of this Resolution, the applicant for an Exempt Project must pay to the City a pro-rata share (based on the ratio of the total exempt spaces between the two projects) of the estimated $150,000 cost of the City’s proposed Downtown Parking “Cap” Study. This payment is not refundable. 6. A condition of approval for any Exempt Project will require a Transportation Demand Management (TDM) program to be approved by the Director of Planning prior to issuance of building permits and to be implemented immediately upon occupancy, setting forth measures to achieve a minimum 20% mode-split for other than single-occupancy vehicles, with annual monitoring and financial penalties established for failure to attain the diversion objectives. SECTION 2. If any provision, clause, sentence or paragraph of this resolution, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the provisions of the Interim Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of the Interim Ordinance are hereby declared to be severable from this Resolution. / / / / / / / / / / / / / / / / / / / / / / / / Not Yet Approved 121210 jb 0131023 5 SECTION 3. The Council of the City of Palo Alto finds that this project qualified for a Class 1 Categorical Exemption under CEQA guidelines (Section 15301 – Existing Facilities) and procedures adopted by the City of Palo Alto, and therefore no further environmental assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ Sr. Assistant City Attorney City Manager ______________________________ Director of Planning & Community Environment ______________________________ Director of Administrative Services Not Yet Approved 121210 jb 0131023 6 Exhibit A Exemptions from Parking Exemption Moratorium Equivalent Assessment Requirements 135 Hamilton Avenue and 636 Waverley Street 1. 135 Hamilton Avenue: $326,531 2. 636 Waverley Street: $122,784 Proposed Parking for 135 Hamilton Avenue and 636 Waverley Street 135 Hamilton (4 stories) 636 Waverley (4 stories) Parcel Size 9,910 sf 5,275 sf Proposed Total FAR 28,146 sf (2.8) 10,550 sf (2:1) Commercial FAR 19,960 sf 4,903 sf Residential FAR 8,186 (2 units) 5,846 (2 units) Parking Existing 0* 5 Proposed 23 9 Required 84 25 Exemptions 1:1 Exemption (18.52.060(a)(2)&(c)) 40 15 TDR Exemption (18.18.080(g)) 20 N/A 200 SF Bonus (18.18.070(a)(1)) 1 1 *approximately 20-25 spaces exist on the vacant parcel and are leased for use by private businesses; they are not supporting existing business on the site, however. Spreadsheet for 135 Hamilton 135 Hamilton Pro‐Rated Share of Assessment District Principal and Interest 40 space share from original bond issue 326,531$ Data for Calculations: District Spaces Spaces in District (1) 9,122 135 Hamilton spaces 40 Total District spaces 9,162 135 Hamilton Share 0.004366 Principal and interest payments for original issue and for refunding (in thousands) Original Issue Original Issue Refunded Issues Sept. 2002 Mar. 2012 Sept. 2012‐2030 2001 2002 2012 Total Principal paid (cols. B+C) & outstanding (E) 1,675 5,460 31,300 38,435 Interest 4,441 16,701 15,215 36,357 Total 6,116 22,161 46,515 74,792 Original Par Issues in 2001 and 2002 Assess. Dist. 2001 Series 9,135 Assess. Dist. 2002 Series 35,460 Total Par 44,595 Refunding in 2012 Refunded 2012 Par 31,300 Notes: (1) From original Engineer's Report (2) Principal cited on line 17 will obviously not match original issue. Between what has been paid and the use of some reserves used to pay down principal in refunding, these numbers will not balance but can be reconciled. Spreadsheet for 636 Waverly 15 space share from original bond issue 122,784$ Data for Calculations: District Spaces Spaces in District (1) 9,122 135 Hamilton spaces 15 Total District spaces 9,137 135 Hamilton Share 0.001642 Principal and interest payments for original issue and for refunding (in thousands) Original Issue Original Issue Refunded Issues Sept. 2002 Mar. 2012 Sept. 2012‐2030 2001 2002 2012 Total Principal paid (cols. B+C) & outstanding (E) 1,675 5,460 31,300 38,435 Interest 4,441 16,701 15,215 36,357 Total 6,116 22,161 46,515 74,792 Original Par Issues in 2001 and 2002 Assess. Dist. 2001 Series 9,135 Assess. Dist. 2002 Series 35,460 Total Par 44,595 Refunding in 2012 Refunded 2012 Par 31,300 Notes: (1) From original Engineer's Report (2) Principal cited on line 17 will obviously not match original issue. Between what has been paid and the use of some reserves used to pay down principal in refunding, these numbers will not balance but can be reconciled. City of Palo Alto (ID # 3291) City Council Staff Report Report Type: Action ItemsMeeting Date: 11/19/2012 City of Palo Alto Page 1 Summary Title: Parking Moratorium Extension and Exceptions Title: Public Hearing: Consider Extending through December 29, 2013 a Moratorium on the Use of Certain Parking Exemptions contained in Section 18.52.060(c) of of the Zoning Ordinance Related to the Downtown and California Avenue Parking Assessment Areas; and Considerations for Making Exceptions from the Moratorium for Proposed Projects at 135 Hamilton Avenue and 636 Waverley Street From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council: 1. Adopt the extension of the Interim Urgency Ordinance (Interim Ordinance) establishing a moratorium on the use of the Exempt Floor Area parking exemption set forth in Section 18.52.060(c) of the Palo Alto Municipal Code in connection with any permit, entitlement or development project, pending further study of Downtown and California Avenue parking issues (Attachment A), for a period of thirty (30) days through December 29, 2012; and 2. Direct staff to return prior to further extension of the ordinance with proposed language related to potential exceptions for properties at 135 Hamilton Avenue and 636 Waverley Street. Background On October 15, 2012, the Council adopted an interim “urgency” ordinance that provides for a moratorium on the use of a parking exemption for Exempt Floor Area (up to a 1.0 FAR) on a site. As further detailed in the October 15 staff report, this zoning provision has been used very City of Palo Alto Page 2 infrequently in the past and its rationale no longer applies. Further, its application to properties that have not paid into the assessment district is of some question. In accordance with State law, the moratorium was adopted on an “urgency” basis by Council with a 4/5 vote, 8-0 (Councilmember Schmid was absent). Council also directed that staff return with recommendations for criteria to identify appropriate exceptions for projects in the development review “pipeline.” The ordinance became effective immediately. State law requires that staff report back within 45 days on a procedure for review of the ordinance, at which time a public hearing would be held and the moratorium may be extended for an additional 10 months and 15 days. State law permits a second extension of the ordinance for a maximum duration of two years. The October 15 Council staff report is included as Attachment B, and provides substantially more detailed background about the code and the basis for the moratorium. Discussion Attachment A provides for a further extension of the ordinance for another 30 days, rather than the 10 months, 15 days allowed by State law. A noticed public hearing is required, and approval by a 4/5 vote of the Council (8 members) is needed. Staff has not prepared an “exception” proposal for “pipeline” projects for this meeting, since we are aware that a full Council would not be in attendance. By coming back within 30 days (December 10 is proposed), staff will then propose an exception provision that Council may consider and extension for an additional one year period. The proposed Interim Ordinance (Attachment A) would continue to suspend use of the “Exempt Floor Area Exemption” pending further study and changes to existing parking and zoning requirements, including re-evaluation of the Downtown development cap. Floor area will remain exempt from parking to the extent parking assessments have been paid for a site. Interim Ordinance Process and Evaluation State law allows for a city to extend the interim ordinance on an “urgency” basis, subject to an interim report that outlines steps that have been and are expected to be taken to alleviate the parking problems associated with the continued use of the Exempt Floor Area Exemption. Staff has attached the Parking Study Report presented to Council on November 13 (Attachment C) as the background report detailing the proposed evaluation process. The outcome of the Parking Study, particularly related to the Downtown Development Cap, will include recommendation of zoning changes, following public hearing and recommendation by the Planning and Transportation Commission, to either revise the ordinance as necessary or consider permanent elimination of the exemption, prior to the expiration of the moratorium. City of Palo Alto Page 3 Applicability to Pending Projects As outlined in the October 15 report, cities may revise zoning requirements at any time and new development must comply with those updated requirements. The major exception to this rule is where a property owner has acquired a “vested right” to build a particular structure by obtaining a permit and performing substantial work in reliance on that permit. A vested right is not created by the existence of particular zoning, or by preparatory work performed in advance of obtaining a permit. Staff does not believe there are any pending projects that have acquired a vested right to develop under the old requirements. That being said, Council has discretion to exempt projects form complying with new zoning requirements if there is a rational and equitable basis for the exemption. Staff noted that there are two development projects currently under review: a) 135 Hamilton Avenue, which has been under discussion and review for more than a year and has been reviewed once by the Architectural Review Board; and b) 636 Waverley, which was submitted as a Preliminary Architectural Review application on September 10, 2012. Staff has engaged to some extent in discussions with the property owners for these projects, and will continue to meet and then will return on December 10 with a proposal related to exceptions for these “pipeline” projects, in conjunction with the second ordinance extension. Given the need for 8 votes for any exception, staff believes it is important to have a full Council present to discuss the scope of the exception. Policy Implications Staff believes that the interim ordinance extension is necessary to assure parking availability for businesses and to protect nearby neighborhoods from further parking intrusion. The ordinance is also consistent with Council’s recent direction to study parking improvements and requirements for Downtown. Environmental Review Environmental review is not required for the urgency ordinance, as it simply maintains the status quo, and is exempt under Section 15061(b)(3) of the California Code of Regulations, pursuant to the California Environmental Quality Act (CEQA). Subsequent ordinance changes will, however, require further environmental review prior to consideration by the Planning and Transportation Commission and Council. Attachments: A: Ordinance Extending Interim Urgency Ordinance (PDF) B: October 15, 2012 City Council Staff Report re: Interim Urgency Ordinance (PDF) City of Palo Alto Page 4 C: November 13, 2012 Council Staff Report re: Update of Parking Program (continued from 11/5/12) (PDF) Not Yet Approved 1 121113 jb 0131016 Ordinance No. ______ Ordinance Extending Ordinance No. 5167 of the Council of the City of Palo Alto Adopting a Temporary Moratorium on the Use of the “Exempt Floor Area” Parking Exemption as Contained in Section 18.52.060 (c) [Parking Assessment Districts and Areas ‐ General] of the Palo Alto Municipal Code for New Development in Assessment Districts R E C I T A L S A. The City of Palo Alto downtown area has seen an increase in development and has experienced increases in parking demand, as documented in downtown monitoring reports produced in the past 5 years; and B. The lack of available daytime downtown parking for employees has resulted in complaints from both merchants and other businesses about the lack of parking for their employees; and C. The lack of available daytime downtown parking for employees has also resulted in complaints from residents in downtown areas about congested parking in their neighborhoods; and D. Program L‐8 of the Comprehensive Plan limits new nonresidential development in the Downtown Area to 350,000 square feet (10 percent above the amount of development existing or approved in 1986), and requires that this limit be re‐evaluated when nonresidential development approvals reach 235,000 square feet of floor area; and E. Section 18.18.040 of the Zoning Ordinance requires a development moratorium on downtown nonresidential development upon an increase of 350,000 square feet of net new nonresidential development (since 1986); and F. The 235,000 square foot study limit will be reached upon approval of projects now pending before the Architectural Review Board; and G. On July 23, 2012, the City Council directed staff to initiate the preparation of the re‐evaluation of the downtown development cap; and H. The City’s Zoning Ordinance Chapter 18.18 (Downtown Commercial Districts) and Chapter 18.52 (Parking and Loading Requirements) provide for a variety of exemptions and reductions to parking requirements within the Downtown area and specifically within the Downtown Parking Assessment Area that result in less parking being provided than the calculated demand for parking for new projects; and Not Yet Approved 2 121113 jb 0131016 I. The City’s Zoning Ordinance Section 18.52.060 (c) allows for floor area up to a floor area ratio of 1.0 to 1.0 to be “exempt” from parking requirements within the Downtown Parking Assessment Area and floor are up to 0.5 to 1.0 to be exempt within the California Downtown Parkin Assessment Area (“Exempt Floor Area”); and J. The Exempt Floor Area parking exemption was enacted in the mid 1980’s and appears to have been intended to stimulate downtown development and provide equity to parking assessment district members; and K. The Exempt Floor Area parking exception no longer appears necessary to achieve such purposes, given the vitality of downtown and the need for additional parking; and L. Continued application of the Exempt Floor Area parking exemption will further exacerbate downtown and California Avenue parking deficiencies; and M. The City Council desires on an interim basis to temporarily suspend use of the Exempt Floor Area parking exemption in the City as such use may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time; and N. The City Council adopted Interim Ordinance No. 5167 on October 15, 2012, by a four‐fifths vote after a public hearing pursuant to Government Code Section 65858 and Ordinance 5167 will expire on November 29, 2012. O. On November 13, 2012, the Council reviewed, filed and heard comment on a Report pursuant to Government Code Section 65858 regarding the current status of parking issues in the Downtown area. P. The Council desires to extend Interim Ordinance 5167 in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings and a 4/5 vote is required for passage; and The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. Written Report. The Report referenced in Recital O is hereby deemed by the City Council to be the written report describing the measures taken to alleviate the condition which led to the adoption of Interim Urgency Ordinance No. 5167. SECTION 3. Moratorium. The City Council hereby extends Interim Urgency Ordinance No. 5167 establishing a moratorium on the use of the Exempt Floor Area parking Not Yet Approved 3 121113 jb 0131016 exemption as set forth in Section 18.52.060 of the Palo Alto Municipal Code in connection with any development or issuance of any permit or other land use entitlement for any project located in the Downtown or California Avenue Assessment Districts. SECTION 4. Study. The City Council directs the Planning Department to consider and study possible amendments to the General Plan, Specific Plan or Zoning ordinance to eliminate use of the Exempt Floor Area Parking Exemption contained in Section 18.52.060 (c) of the Palo Alto Municipal Code. SECTION 5. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of this Interim Urgency Ordinance. SECTION 6. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 7. Effective Period. This extension ordinance shall take full force and effect immediately upon expiration of Interim Ordinance No. 5167. In accordance with Government Code Section 65856, this ordinance shall be in full force and effect for a period of thirty (30) days following expiration of Interim Ordinance No. 5167. Thus the moratorium shall expire on December 29, 2012, unless this period is extended by the City Council as provided in Government Code Section 65858. / / / / / / / / / / / / / / / / / / Not Yet Approved 4 121113 jb 0131016 SECTION 8. CEQA. The City Council finds that this ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: ____________________________ City Manager ______________________________ Senior Assistant City Attorney ____________________________ Director of Planning and Community Environment City of Palo Alto (ID # 3174) City Council Staff Report Report Type: Action ItemsMeeting Date: 10/15/2012 City of Palo Alto Page 1 Summary Title: Downtown Parking Exemption Title: Adoption of Interim Urgency Ordinance to Place Temporary Moratorium on use of "Exempt Floor Area Ratio" Parking Exemption Contained in Section 18.52.060(c) of the Zoning Ordinance in the Downtown and California Avenue Assessment Districts From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council adopt the Interim Urgency Ordinance (Interim Ordinance) establishing a moratorium on the use of the Exempt Floor Area parking exemption set forth in Section 18.52.060(c) of the Palo Alto Municipal Code in connection with any permit, entitlement or development project, pending further study of Downtown and California Avenue parking issues (Attachment A). Executive Summary On July 16, 2012, the City Council considered the status of ongoing parking efforts for Downtown and directed staff to look at a variety of approaches to address concerns of businesses and neighbors. Some of the issues to be addressed, particularly in light of the downtown development cap, will include evaluation of zoning measures that might more accurately depict realistic parking ratios and assess the desirability and viability of parking exemptions. Staff has identified, however, that one particular parking exemption, applicable to both the Downtown and the California Avenue areas, is likely to immediately exacerbate parking problems without seeming to provide for any public purpose. This provision (Section 18.52.060(c) of the Zoning Ordinance) appears to allow exemption from parking for any property within the relevant assessment district, up to a 1:1 floor area ratio (FAR) in the Downtown area and up to 0.5:1 in the California Avenue area (see Attachment B.) This clause was included in language adopted in the 1980s to encourage downtown development and as a compromise for then-recently enacted downzoning and establishment of parking assessments. While the basis for those amendments is now outdated and downtown development is thriving, City of Palo Alto Page 2 the provision remains in place and applicants are now invoking it to further exempt parking. This is generally in addition to exemptions due to transfer of development rights (TDR) or other allowances pursuant to the code. Staff recommends that the “Exempt Floor Area exemption” be suspended, at least for the duration of staff’s study of downtown parking, to enable a more complete analysis of its effect in combination with other parking measures. An interim “urgency” ordinance is attached that would allow for such a moratorium on the use of this exemption. According to State law, the moratorium may be adopted on an “urgency” basis by Council with a 4/5 vote, meaning at least eight (8) Council members would need to agree to impose the change for a maximum of 45 days. The ordinance would become effectively immediately. State law requires that staff report back within 45 days on a procedure for review of the ordinance, at which time a public hearing would be held and the moratorium may be extended for an additional 10 months and 15 days. State law permits a second extension of the ordinance for a maximum duration of two years. Background The City of Palo Alto has studied parking limitations, particularly in Downtown, multiple times since the 1980s, when the original assessments for the Downtown and California Avenue areas were established, and Downtown was rezoned (downzoned) to more restrictive building standards. Downtown parking was re-evaluated in the 1990s, leading up to the construction of two new parking garages. Zoning requirements that limit downtown commercial development also mandated that the staff prepare an annual report to monitor downtown development, the use of transferable development rights (TDRs) and parking changes (the most recent report is included as Attachment C). Over the past year, staff has developed considerable data and initiated programs to evaluate the status of parking in Downtown and in the California Avenue area, as well as to assess the impact of overflow parking on nearby residential neighborhoods. On July 16, 2012, the City Council considered the status of ongoing parking efforts and directed staff to look at a variety of approaches to address concerns of businesses and neighbors. Staff is initiating studies of the potential for adding parking facilities Downtown and in the California Avenue area, means to more efficiently use available parking garages and lots, technology to enhance customer service and the customer experience, and evaluation of the downtown development cap and related zoning provisions. Some of the issues to be addressed, particularly in light of the downtown development cap, will include evaluation of zoning measures that might more accurately depict realistic parking ratios and assess the desirability and viability of parking exemptions. Staff has identified, however, that one particular parking exemption, applicable to both Downtown and the California Avenue area, is likely to immediately exacerbate parking problems without seeming to provide for any City of Palo Alto Page 3 public purpose. This provision (Section 18.52.060(c) of the Zoning Ordinance) appears to allow exemption from off-street parking requirements for any property within the relevant assessment district, associated with floor area up to a 1.0:1 floor area ratio (FAR) in Downtown and up to 0.5:1-1.0:1 FAR in the California Avenue area. This clause appears to have been added to the Zoning Code in the 1980s to encourage Downtown development and as a compromise for then-recently enacted downzoning and the establishment of parking assessments. The language is quite convoluted, resulting in varying interpretations by staff and applicants. The City has not been able to locate complete documentation of the history of the exemption. Property owners who never paid into the assessment district have argued that the Exempt Floor Area exemption allows them to retroactively “buy into” the assessment district in order to take advantage of the provision. The exemption has not, to staff’s knowledge, been requested or implemented until recently, specifically: In 2007, a one-story project at 135 Hamilton Avenue was exempted for approximately 7,700 square feet on a 10,000 square foot lot (approximately 31 parking spaces), providing no parking spaces on a site that had not ever paid into the assessment district (note: the project was approved, but was not built and the permit has expired). The applicant, however, was required and had agreed to pay into the assessment district to qualify for the exemption. In 2011, a subsequent application for the same site was submitted for a four-story building, with 10,000 square feet (40 parking spaces) to be exempted from providing on- site parking spaces or paying in-lieu fees, and another 5,000 square feet (20 parking spaces) exempted through the use of TDRs. This project has received review by the Architectural Review Board and is now under redesign. The applicant is again offering to pay into the assessment district to qualify for this exemption. (Note: the applicant has also recently provided a letter stating his intent to revise the application to accommodate the prior one-story proposal). In 2011, the applicants for the four-story Lytton Gateway project at 335 Alma Street requested the 1:1 FAR exemption for the portion of the floor area that was located within the Downtown assessment district, approximately 14,400 square feet (58 spaces). The project was considered as a Planned Community rezoning, however, and the Council did not accept the exemption as a given, instead requiring additional parking and contributions to the City’s In-Lieu Parking Fund. In September 2012, a Preliminary Architectural Review application was filed for a 4,903 square foot office development (with two residences above) at 636 Waverley Street, requesting exemption for the 1:1 FAR equivalent, amounting to 14 spaces of the total 20 required for the office on-site, in addition to other exemptions allowing existing parking deficiencies to be carried over to the new development. Staff has spoken with owners of at least two other sites, for which the 1:1 FAR exemption is being considered, but applications have not yet been submitted. City of Palo Alto Page 4 Given the current parking deficits in the City’s two assessment districts (downtown and California Avenue) and the outdated rationale for applying this exemption, staff has been discouraging recent applications since the 135 Hamilton Avenue and 335 Alma (Lytton Gateway) projects from using this parking exemption. To staff’s knowledge, no project applicant has requested use of the exemption for the California Avenue area. Discussion Staff believes that the basis for the “Exempt Floor Area Exemption”, i.e., encourage development Downtown and compromise for the downzoning and parking assessment requirements, is now outdated, as downtown does not require encouragement to develop, and any equity issues have long been addressed. Nevertheless, the provision remains in place and applicants are now invoking it to further exempt parking. There is also some ambiguity as to whether applicants who have never paid into the assessment district can qualify for the exemption by paying into the district retroactively, and if so, how to calculate the payment. Further, applicants are sometimes coupling this exemption with other parking exemptions due to transfer of development rights (TDR) or other allowances pursuant to the code. The result of the continued use of this exemption would be to exacerbate parking deficiencies in the Downtown and California Avenue assessment district areas. Proposed Ordinance The proposed Interim Ordinance (Attachment A) would suspend use of the “Exempt Floor Area Exemption” pending further study and changes to existing parking and zoning requirements, including re-evaluation of the Downtown development cap. Floor area will of course remain exempt from parking to the extent assessments have been paid for the site. Staff believes it is appropriate to apply the moratorium to both the Downtown and California Avenue areas, as it will in both areas exacerbate parking deficiencies documented previously by staff. Staff distinguishes this provision from others for review, particularly the transferable development rights (TDRs) section, as in those cases other public purposes are readily identified (seismic and historic rehabilitation), and significant investments (either rehabilitation or purchase of TDRs) have been made pursuant to the zoning ordinance. Those provisions will, however, be evaluated as part of the more comprehensive parking studies. Interim Ordinance Process State law allows for a city to enact an interim ordinance on an “urgency” basis, upon a vote of 4/5 of the members of the Council, to protect the health, safety or welfare of the community (the draft ordinance includes the relevant findings). No public hearing and no input from the Planning and Transportation Commission is required prior to the enactment of the urgency ordinance. An ordinance adopted pursuant to this provision of State law takes effect City of Palo Alto Page 5 immediately and does not require second reading. The next steps, pursuant to State law, would be to: 1. Return to Council not later than 45 days later for a public hearing with an interim report with steps taken to alleviate the parking problems associated with the continued use of the Exempt Floor Area Exemption. At that time the Council will also be asked to extend the Interim Ordinance for up to an additional 10 months and 15 days (as allowed under Government Code Section 65858) to allow staff to propose zoning changes; and 2. Recommendation of zoning changes, following public hearing and recommendation by the Planning and Transportation Commission, to either revise the ordinance as necessary or consider permanent elimination of the exemption, prior to the expiration of the 10-month, 15-day extension. Applicability to Pending Projects Cities may revise zoning requirements at any time, except where a property owner has acquired a “vested right” to build a particular structure by obtaining a permit and performing substantial work in reliance on that permit. A vested right is not created by the existence of particular zoning, or by preparatory work performed in advance of obtaining a permit. While the Interim Ordinance as written does not make exceptions for projects that have begun the planning process but not completed it by securing final permits (“pipeline projects”), in the past the City generally has excepted pipeline projects from new ordinance requirements. The City is not legally required to make such exceptions, but the Council may make a policy decision to do so. Two projects are currently under review: a) 135 Hamilton Avenue, which has been under discussion and review for more than a year and has been reviewed once by the Architectural Review Board; and b) 636 Waverley, which was submitted as a Preliminary Architectural Review application on September 10, 2012. Staff has discussed the application of the Exempt Floor Area Exemption for a couple of other projects, but owners have not yet submitted applications for those projects. Council may choose to either include or exempt one or both of the “pipeline” projects from application of the moratorium. If the Council chooses to exclude one or both projects from the moratorium, staff suggests that exclusion be conditional upon: a) preparation of a robust transportation demand management (TDM) program for the project, and b) payment of the equivalent “assessment” amount or increment to the In-Lieu Parking Fund (rather than to pay down the bonds) to contribute to construction of additional parking spaces in the future (note: the amount of the “assessment” should be the present value of a stream of assessments as would originally have been applied over the life of the parking bonds). Staff will be prepared to suggest language to implement these requirements should Council desire. City of Palo Alto Page 6 Policy Implications Staff believes that the interim ordinance is necessary to assure parking availability for businesses and to protect nearby neighborhoods from further parking intrusion. The ordinance is also consistent with Council’s recent direction to study parking improvements and requirements for Downtown. Environmental Review Environmental review is not required for the urgency ordinance, as it simply maintains the status quo, and is exempt under Section 15061(b)(3) of the California Code of Regulations, pursuant to the California Environmental Quality Act (CEQA). Subsequent ordinance changes will, however, require further environmental review prior to consideration by the Planning and Transportation Commission and Council. Attachments: Attachment A: Downtown Parking Exemption Urgency Ordinance (DOCX) Attachment B: Section 18.52.060 of Zoning Ordinance (DOCX) Attachment C: December, 2011 Downtown Monitoring Report to Council (PDF) Not Yet Approved 1 121010 jb 0131000 Ordinance No. _______ Interim Ordinance of the Council of the City of Palo Alto Adopting a Temporary Moratorium on the Use of the “Exempt Floor Area” Parking Exemption as Contained in Section 18.52.060 (c) [Parking Assessment Districts and Areas - General] of the Palo Alto Municipal Code for New Development in Assessment Districts R E C I T A L S A. The City of Palo Alto downtown area has seen an increase in development and has experienced increases in parking demand, as documented in downtown monitoring reports produced in the past 5 years; and B. The lack of available daytime downtown parking for employees has resulted in complaints from both merchants and other businesses about the lack of parking for their employees; and C. The lack of available daytime downtown parking for employees has also resulted in complaints from residents in downtown areas about congested parking in their neighborhoods; and D. Program L-8 of the Comprehensive Plan limits new nonresidential development in the Downtown Area to 350,000 square feet (10 percent above the amount of development existing or approved in 1986), and requires that this limit be re-evaluated when nonresidential development approvals reach 235,000 square feet of floor area; and E. Section 18.18.040 of the Zoning Ordinance requires a development moratorium on downtown nonresidential development upon an increase of 350,000 square feet of net new nonresidential development (since 1986); and F. The 235,000 square foot study limit will be reached upon approval of projects now pending before the Architectural Review Board; and G. On July 23, 2012, the City Council directed staff to initiate the preparation of the re-evaluation of the downtown development cap; and H. The City’s Zoning Ordinance Chapter 18.18 (Downtown Commercial Districts) and Chapter 18.52 (Parking and Loading Requirements) provide for a variety of exemptions and reductions to parking requirements within the Downtown area and specifically within the Downtown Parking Assessment Area that result in less parking being provided than the calculated demand for parking for new projects; and I. The City’s Zoning Ordinance Section 18.52.060 (c) allows for floor area up to a floor area ratio of 1.0 to 1.0 to be “exempt” from parking requirements within the Attachment A Not Yet Approved 2 121010 jb 0131000 Downtown Parking Assessment Area and floor area up to 0.5 to 1.0 to be exempt within the California Downtown Parking Assessment Area (“Exempt Floor Area”); and J. The Exempt Floor Area parking exemption was enacted in the mid 1980’s and appears to have been intended to stimulate downtown development and provide equity to parking assessment district members; and K. The Exempt Floor Area parking exception no longer appears necessary to achieve such purposes, given the vitality of downtown and the need for additional parking; and L. Continued application of the Exempt Floor Area parking exemption will further exacerbate Downtown and California Avenue parking deficiencies; and M. The City Council desires on an interim basis to temporarily suspend use of the Exempt Floor Area parking exemption in the City as such use may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time; and N. This interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings and a 4/5 vote is required for passage. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. Moratorium. The City Council hereby enacts this Interim Urgency Ordinance establishing a moratorium on the use of the Exempt Floor Area parking exemption as set forth in Section 18.52.060 of the Palo Alto Municipal Code in connection with any development or issuance of any permit or other land use entitlement for any project located in the Downtown or California Avenue Assessment Districts. SECTION 3. Study. The City Council directs the Planning Department to consider and study possible amendments to the General Plan, Specific Plan or Zoning ordinance to eliminate use of the Exempt Floor Area Parking Exemption contained in Section 18.52.060 (c) of the Palo Alto Municipal Code. SECTION 4. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of this Interim Urgency Ordinance. Not Yet Approved 3 121010 jb 0131000 SECTION 5. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 6. Effective Period. This urgency ordinance shall take full force and effect immediately upon adoption. In accordance with Government Code Section 65856, this ordinance shall be in full force and effect for a period of forty-five (45) days from adoption. Thus the moratorium shall expire on November 29, 2012, unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 7. CEQA. The City Council finds that this ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: ____________________________ City Manager ______________________________ Assistant City Attorney ____________________________ Director of Planning and Community Environment ATTACHMENT B 18.52.060 Parking Assessment Districts and Areas - General (a) Definitions (1) "Parking Assessment Areas" "Parking assessment areas" means either: The "downtown parking assessment area," which is that certain area of the city delineated on the map of the University Avenue parking assessment district entitled Proposed Boundaries of University Avenue Off-Street Parking Project No. 75-63 Assessment District, City of Palo Alto, County of Santa Clara, State of California, dated October 30, 1978, and on file with the city clerk; or The "California Avenue area parking assessment district," which is that certain area of the city delineated on the map of the California Avenue area parking assessment district entitled Proposed Boundaries, California Avenue Area Parking Maintenance District, dated December 16, 1976, and on file with the city clerk; (2) "Exempt Floor Area" Within the downtown parking assessment area, "exempt floor area" means all or a portion of that floor area of a building which is located at or nearest grade and which does not exceed a floor area ratio of 1.0 to 1.0; Within the California Avenue area parking assessment district, "exempt floor area" means either: (A) All or a portion of that floor area of a building which is located at or nearest grade and which does not exceed a floor area ratio of 0.5 to 1.0 or (B) The amount of floor area shown on the 1983-84 California Avenue area assessment district rolls in the engineer's report for bonds issued pursuant to Title 13 of the municipal code, whichever is greater. (b) In-lieu fees Except as provided in subsection (c) below, within any parking assessment district established by the city for the purpose of providing off-street parking facilities, all or a portion of the off-street parking requirement for a use may be satisfied by payment of assessments or fees levied by such district on the basis of parking spaces required but not provided. (c) Exempt Floor Area (1) Unless a project for the construction of floor area has received design approval prior to December 19, 1983, or has undergone preliminary review pursuant to Sections 18.76.020 and 18.77.070 on December 1st or 15th, 1983, the only portion of off-street parking required for construction of floor area in a parking assessment area which may be satisfied by payment of assessments or levies made within such area on the basis of parking spaces required but not provided, is that portion of the parking requirements associated with the uses proposed to be conducted in that area of the floor equal to the exempt floor area for the site. Where only a portion of floor area constitutes exempt floor area, and uses with more than one parking standard as required by this chapter are proposed for said floor, the use on that portion of the floor which generates the highest parking requirement will be designated as the exempt floor area. (2) All other required off-street parking that is not satisfied by such payment of assessments shall be provided in accordance with this chapter. (3) This subsection shall be interpreted to allow changes in the use of all exempt floor area and nonexempt floor area existing as of February 16, 1984 without requiring additional parking; provided, that the change in use does not consist of a change from residential to nonresidential, or an increase in actual floor area which does not constitute exempt floor area. (4) No project which has received design approval prior to December 19, 1983, or which has undergone preliminary review on December 1st or 15th, 1983, shall increase the amount of floor area approved or reviewed or decrease the area designed or intended for parking without meeting the requirements of this chapter. (Ord. 4964 § 3 (part), 2007) City of Palo Alto (ID # 2424) City Council Informational Report Report Type: Informational Report Meeting Date: 3/5/2012 March 05, 2012 Page 1 of 7 (ID # 2424) Title: Downtown Monitoring Report 2010-2011 Subject: Commercial Downtown (CD) Monitoring Report for 2010-2011 From:City Manager Lead Department: Planning and Community Environment Recommendation This is an informational report and no Council action is required. Executive Summary The annual Commercial Downtown (CD) Monitoring Report tracks total non-residential growth in the commercial downtown area (CD-C zones) and office and retail vacancy rates in CD-C and CD-C (GF)(P) zones. Through mid-January of 2012, there was a 4.8 percent vacancy rate within the Ground Floor Overlay District and a 2.0 percent overall vacancy rate in the Commercial Downtown (CD) zoning district. In this monitoring cycle, approximately 13,500 square feet of space was approved or added to the total downtown non-residential square footage. An additional 61,650 square feet of new non-residential development can be accommodated before the re-evaluation limit of 235,000 square feet growth limit is reached. Background Annual monitoring of available space in Commercial Downtown (CD) zoning area was established in 1998 by Comprehensive Plan Programs L-8 and L-9. These programs require reporting of non-residential development activity and trends within the CD zone district. Staff regularly tracks vacancy rates, changes in floor area and parking in the CD district resulting from approved development to comply with Comprehensive Plan programs and to determine the ground floor vacancy rate in the CD zone district. The zoning code, until 2009, included an exception process to allow office development on the first floor if the ground floor vacancy rate exceeds 5%. In 2009, the City Council adopted zoning ordinance amendments to enhance protection of retail uses in downtown commercial districts to ensure that retail uses are retained and viability enhanced during the economic downturn and beyond. A map of the districts subject to the amendments was included in the 2009 City Council report (CMR 20:09), available on the City’s website. The ordinance amendment eliminated the provision for an exception process if the GF vacancy rate is found to be greater than 5% during the annual monitoring period. March 05, 2012 Page 2 of 7 (ID # 2424) Staff completed field visits for this 2010/2011 monitoring period in early January 2012. Telephone interviews and email exchanges with local real estate leasing agents were also compiled at the same time to determine current vacancy rates and prevailing rents. This report also includes cumulative data on developments in the Commercial Downtown (CD)zone from January 1987 through August 31, 2011 and specific data on vacancy information and rental rates through January 2012. Discussion Economic conditions in Palo Alto downtown area are improving gradually. There is currently a 4.8 percent vacancy rate within the Ground Floor Overlay District and a 2.0 percent overall vacancy rate in the Commercial Downtown (CD) zoning district. This is a noticeable drop of 2.1 percent vacancy in the Ground Floor Overlay District from last year. This number is close to the 2007-2008 period vacancy rate, just before the start of the economic downturn. In the 2010- 2011 monitoring period, the rental rates for retail varied from $2.75 to $4.00 per square foot based on the location, and the average office rental rate was between $4.50 and $7.00 per square foot. Office rental rates have increased in the last year and a half and retail rental rates have remained steady throughout the 2010-2011 monitoring period. The following table shows the approximate total vacant area and percentage of vacancy, beginning in the 2006-2007 monitoring period. TABLE 1: Total Vacancy in CD-C & CD-C (GF) (P) Zones in Downtown Palo Alto Year Total CD-C Vacant (SQFT) % of CD-C Vacancy Total CD-C (GF) (P) Vacant (SQFT) % of CD-C (GF) (P) Vacancy 2006-2007 88,368 2.63 18,330 2.94 2007-2008 120,004 3.60 26,294 4.21 2008-2009 212,189 6.39 56,109 8.99 2009-2010 85,271 2.56 37,888 6.91 2010-2011 66,226 2.0 26, 290 4.8 Non-Residential Development Activity The Downtown Study, approved in 1986, incorporated a growth limit of 350,000 square feet of additional floor area above the total floor area existing in 1986, and provided for a re- evaluation of the CD regulations when net new development reaches 235,000 square feet. Since 1986, a total of 173,356 square feet of non-residential uses has been added (or approved) in the Downtown CD-C zoned area. In the past two monitoring cycles from 2008-2010, March 05, 2012 Page 3 of 7 (ID # 2424) approximately 46,500 square feet of net new commercial floor area was added with a few major contributing projects such as: 317-323 University Avenue, 325 Lytton Avenue, 564 University Avenue, 310 University Avenue, 278 University Avenue, and 265 Lytton Avenue. In this current cycle (2010-2011) approximately 13,499 square feet of net new commercial floor area has been added. Though significant construction activities continue in the downtown CD-C zone area, most of the construction includes redevelopment of existing sites since the existing downtown is close to being built-out. In the current cycle there were approximately five sites that were redeveloped but only one project, at 524 Hamilton Avenue, added significant square footage. Based on this recent monitoring, an additional 61,650 square feet of new non-residential development remains available for development before the re-evaluation limit of 235,000 square feet growth limit is reached. Demonstrating Special Public Benefits The Downtown Study reserved 100,000 square feet of the 350,000 square foot growth limit to be used for projects demonstrating special public benefits. Since 1986, ten projects in the Downtown area have been developed under the Planned Community zoning that requires a finding of public benefit. Five of the projects exceeded the non-residential floor area that would otherwise be allowed under zoning by a total of 34,378 square feet. The total changes in square footage of these projects are shown in the fourth column of Attachment E. The remaining five projects were mixed-use projects that did not exceed allowable non-residential floor areas. All of the projects either provided parking or paid a fee in lieu of providing parking. Projects Qualifying for Seismic, Historic or Minor Expansion Exemptions The Downtown Study designated 75,000 square feet of the 350,000 square foot cap for projects that qualify for seismic, historic or minor expansion exemptions in order to encourage these upgrades. Since 1986, 93,931 square feet have been added in this category. Two projects, 524 Hamilton Avenue and 668 Ramona Street, have used close to 5,000 square feet of Transfer Development Rights (TDR) square footage in this evaluation period. These projects are shown in the fifth column of Attachment E. Parking Inventory At the time of the Downtown Study, performance measures were established that specify that new development in the Downtown should not increase the total parking deficit beyond that expected from development that was existing or approved through May 1986, or 1,601 spaces. In 2003, the City opened two new parking structures: one located on 528 High Street and the other at 445 Bryant Street, adding a total of 899 parking spaces. These parking structure projects, in addition to other projects that provide a parking component, decreased the original 1986 deficit to approximately 628 spaces. At the end of the 2003 monitoring period, the City determined that a re-evaluation of the parking exemption regulations would be undertaken when the unmet parking demand resulting from exemptions (transfer of development rights and FAR bonuses) reaches a cumulative 450 spaces. Currently, the unmet parking demand resulting from exemptions is 323 parking spaces. Through various projects, the total cumulative parking deficit has been significantly reduced from 1,601 in 1986 to 722 in 2011. The main March 05, 2012 Page 4 of 7 (ID # 2424) reasons for the reduction are: 1) the two-floor addition to the Cowper/Webster Garage; 2) significant restriping of on-street parking spaces by the City’s Transportation Division, resulting in 96 additional spaces; and 3) the construction of the two previously mentioned parking structures located on 528 High Street and 445 Bryant Street. Attachment F is a chart of the CD (Commercial Downtown) parking deficit. Staff notes, however, that the effects of the parking deficit, particularly on adjacent neighborhoods, appear to have been exacerbated by the increased employee density of office uses in the downtown. Vacancy Rate for Ground Floor (GF) Combining District The Ground Floor Combining District (GF) was created to encourage active pedestrian uses in the Downtown area such as retail, eating and drinking and personal services. In October 2011, there was approximately 548,675 square feet of total Ground Floor area in the CD-C(GF)(P) zoning district following the adoption of the amended ordinance in December 2009 to enhance protection of retail uses in the heart (University Avenue and side streets) of the downtown commercial district. Attachment C provides the list of parcels affected by adoption of the ordinance. A map showing the location of these parcels is provided as Attachment D. The result was an approximate net 75,660 square feet reduction in the total square footage of GF district. During the staff survey of Downtown vacancies in first week of January 2012, there were seven properties, totaling 26,290 square feet, which met the requirements for vacant and available ground floor area. TABLE 2: Vacant Property Listings for Only Ground Floor (GF) Spaces in CD-C (GF) (P) Combining District. (As of January 4, 2012) Address Vacant Square Feet 541 Bryant 2,556 248 Hamilton 3,000 174 University 2,300* 180 University 12,459 435 University 1,450 429-447 University 1,800 522 Waverley 2,725 Total (GF) Vacancy 26,290 March 05, 2012 Page 5 of 7 (ID # 2424) *Vacant since last year This results in a GF vacancy rate of approximately 4.8 percent, a reduction of 2.1 percent from the vacancy rate of last year. Vacancy Rate for Entire CD District The entire Downtown Commercial (CD) area includes approximately 3,850,000 gross square feet of floor area, including approximately 330,000 square feet within the SOFA CAP Phase 2 area. About 525,000 square feet is used for religious or residential purposes or is vacant and not available for occupancy. Thus, the net square footage of available commercial space is approximately 3,325,000 square feet. Staff conducted a field survey in early January 2012 and communicated with local real estate agents during same time to assess overall vacancies in the downtown area. In this monitoring cycle there was a total vacancy of 66,226 square feet. This vacancy equals a rate of 2.0 percent, somewhat less than the 2.6 percent vacancy noted in last year’s monitoring report. The overall CD-C vacancy rate has reduced considerably since the 2008-2009 period, close to a drop of 4 percent. Table 3 was compiled based on staff conducted fieldwork, research of real estate websites and responses received from local downtown real estate agents. TABLE 3: Vacant Property Listings for Remainder of Commercial Downtown (CD) (As of January 4, 2012) Includes Upper Floor Office Space in CD-C (GF) (P) Combining District and all floors of CD-C (P) District Address Zoning District Vacant Square Feet 635 Bryant CD-C (P)545 644 Emerson CD-C (P)2,238 418 Florence CD-C (P)2,515 155 Forest CD-S (P); CD-C (P)550 120-122 Hamilton CD-C (P)2,260 209 Hamilton CD-C (GF)(P)9,000 261 Hamilton CD-C (GF)(P)783 400 Hamilton CD-C (P)3,320 245 Lytton CD-C (P)13,433 March 05, 2012 Page 6 of 7 (ID # 2424) 550 Lytton CD-C (P)2,892 552 Waverley CD-C (GF)(P)2,400 Total Rest of CD Vacancy 39,936 CD –Commercial Downtown, (C) –Commercial, (S) –Service, GF –Ground Floor Combining District, P -Pedestrian Overlay Trends in Use Composition The primary observation of change in the use composition of Downtown was, in this cycle, a reduction of approximately 12,860 square feet of religious/institutional use that was converted to office use at the 661 Bryant Street project. Since the enactment of new CD zoning regulations in 1986, the total floor area devoted to higher-intensity commercial uses such as office, retail, eating/drinking and housing has increased, while the total floor area in lower- intensity commercial uses like manufacturing and warehousing has decreased (see Attachment G). Retail Rents Retail rental rates have marginally increased since last year’s monitoring report. According to the data gathered from the January 2011 staff survey of commercial real estate agents offering properties for lease in Downtown, rents for retail space generally range from $2.75 to $4.00 per square foot triple net (i.e. rent plus tenant assumption of insurance, janitorial services and taxes). The lower end of this range is generally for spaces in older buildings and away from University Avenue. Retail rental rates in the core downtown University Avenue sometimes increase to highs of $5.00 to $6.00 per square foot. For some vacant properties outside the downtown core, rental rates have been listed as negotiable. Office Rents Based on the information gathered from the commercial real estate agents listing properties for lease in Downtown, rents for Class A Downtown office space (i.e. newer and/or larger buildings on University Avenue and Lytton Avenues) and Class B office space (i.e. older and/or smaller buildings further from University Avenue) range from $4.50 to $7.00 per square foot triple net, compared to $3.50 to $5.50 per square foot triple net in last year’s monitoring report. Timeline This is an annual report. Resource Impact This report has no impact on resources, though the implications of reduced vacancy rates have positive impacts on the City’s potential source of property and sales taxes. Policy Implications This report on the Commercial Downtown (CD) zoning area is mandated by Comprehensive March 05, 2012 Page 7 of 7 (ID # 2424) Plan Programs L-8 and L-9 and by the Downtown Study approved by the City Council on July 14, 1986. Environmental Review This is an informational report only and is exempted from CEQA review. Courtesy Copies Planning and Transportation Commission Architectural Review Board Palo Alto Chamber of Commerce Downtown Palo Alto Palo Alto Board of Realtors Downtown North Neighborhood Association Professorville Neighborhood University Park Neighborhood Association Attachments: ·Attachment A: 1986 Downtown Study Results Summary (PDF) ·Attachment B: Commercial Downtown (CD) Zone District Map(PDF) ·Attachment C: List of Parcels Added and Removed From CD-C(GF) P District (PDF) ·Attachment D: Downtown Map Showing the Zone Changes (PDF) ·Attachment E: CD Non-Residential Change in SQFT 09/01/86 to 08/31/11 (PDF) ·Attachment F: CD Parking Deficit(PDF) ·Attachment G: CommercialDowntown (CD) and SOFA 2 CAP Floor Area by Use Category (PDF) Prepared By:Chitra Moitra, Planner Department Head:Curtis Williams, Director City Manager Approval: James Keene, City Manager ATTACHMENT A DOWNTOWN STUDY RESULTS SUMMARY (July 1986) The following are the primary measures adopted as a result of the study: 1. A new Commercial Downtown (CD) zoning district, including three sub districts (CD-C, CD-S and CD-N), was created and applied to most of the Downtown area previously zoned Community Commercial (CC) or Service Commercial (CS). The basic provisions of the CD district include floor area ratios (FARs) that are more restrictive than in the previous CC and CS zones, limits to project size and to the overall amount of future development, and special development regulations for sites adjacent to residential zones. 2. Growth limits were applied to the CD district restricting future development to a total of 350,000 square feet beyond what was existing or approved in May 1986 and providing for a re-evaluation of the CD regulations when new development reaches 235,000 square feet. In addition, 100,000 square feet of the total new floor area was reserved for projects demonstrating special public benefits and 75,000 square feet for projects which qualify for seismic, historic or minor expansion exemptions. 3. Exemptions to the floor area ratio restrictions of the CD zone were established for certain building expansions involving historic structures, seismic rehabilitation, provision of required handicapped access, or one-time additions of 200 square feet or less. 4. New parking regulations were established for the University Avenue Parking Assessment District that requires new non- residential development to provide parking at a rate of one space per 250 square feet of floor area. Exemptions to this requirement are provided for certain increases in floor area related to provision of handicapped access, seismic or historic rehabilitation, one-time minor additions (200 square feet or less) and development of vacant land previously assessed for parking. The regulations also permit, in certain instances, off-site parking and parking fees in lieu of on-site parking. 5. Performance measures were established that specify that new development in the Downtown should not increase the total parking deficit beyond that expected from development that was existing or approved through May, 1986 (1600 spaces) and that call for re-evaluation of the parking exemption regulations when the unmet parking demand, resulting from exemptions, reaches one half (225 parking spaces) of the minimum 450 parking spaces deemed necessary for construction of a new public parking structure. Staff was directed to monitor the parking deficit. 6. A new Ground Floor (GF) Combining District was created and applied to the area along University Avenue and portions of the major side streets between Lytton and Hamilton Avenues, in order to restrict the amount of ground floor area devoted to uses other than retail, eating and drinking or personal service. 7. Staff was directed to monitor the Downtown area in terms of development activity, vacancy rates, sales tax revenues, and commercial lease rates to facilitate evaluation of the effectiveness of the new regulations. 8. Staff was directed to undertake a site and feasibility study to evaluate an additional public parking structure elsewhere in the Downtown, to consider development of a parking facility on public lots S, L and F, and to explore the possibility of leasing or purchasing privately-owned vacant lots suitable as parking structure sites. 9. Policies and regulations were adopted which encourage Planned Community (PC) zoning for parking structures and limit underground parking to two levels below grade, unless there is proof that regular pumping of subsurface water will not be necessary. 10. A Twelve-Point Parking Program was adopted to increase the efficiency of existing parking. 11. Traffic policies were adopted which prohibit new traffic signals on portions of Alma Street and Middlefield Road, and prohibit a direct connection from Sand Hill Road to Palo Alto/Alma Street. In addition, new signs were approved directing through traffic off of University Avenue and onto Hamilton and Lytton Avenues. 12. Staff and the Architectural Review Board (ARB) were directed to consider the possibility of an Urban Design Plan for Downtown and to develop design guidelines for commercial structures in neighborhood transition areas and for driveways which cross pedestrian walkways. 13. A temporary Design and Amenities Committee was created and charged with developing an incentive program (including FAR increases of up to 1.5) to encourage private development to provide a variety of public amenities in the Downtown area. 14. Staff was directed to study possible restrictions on the splitting and merging of parcels as well as the establishment of minimum lot sizes in the new CD district. COMMERCIAL DOWNTOWN (CD) ZONE DISTRICT MAP ATTACHMENT B o • , ATTACHMENT C LIST OF PARCELS ADDED AND REMOVED FROM CD-C (GF) P DISTRICT The following properties were added to the Ground Floor (GF) Combining District: 200-228 Hamilton Avenue---APN 120-27-008 230-238 Hamilton Avenue---APN 120-27-009 240-248 Hamilton Avenue---APN 120-27-010 412 Emerson Street---APN 120-26-106 420 Emerson Street---APN 120-26-025 430 Emerson Street---APN 120-26-026 The following properties were removed from the Ground Floor (GF) Combining District: 115-119 University Avenue---APN 120-26-108 102-116 University Avenue---APN 120-26-039 124 University Avenue---APN 120-26-043 125 University Avenue---APN 120-26-138 525 Alma Street---APN 120-26-093 529 Alma Street---APN 120-26-110 535-539 Alma Street, 115 Hamilton Avenue---APN 120-26-091 135 Hamilton Avenue---APN 120-26-111 440 Cowper Street---APN 120-15-014 437 Kipling Street---APN 120-15-020 443 Kipling Street---APN 120-15-019 DOWNTOWN MAP SHOWING THE ZONE CHANGES ATTACHMENT D o :~ o .~ , 1 ATTACHMENT E CD NON-RESIDENTIAL CHANGE IN SQUARE FOOTAGE 09/01/86 TO 08/31/11 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in non- Residential Floor Area 520 Ramona Street A CDCGFP 11/20/84 - 400 +400 220 University Avenue CDCGFP 2/5/87 - 65 +65 151 Homer Avenue CDSP 3/17/88 - - -9,750 314 Lytton Avenue CDCP 5/5/88 - - -713 247-275 Alma Street CDNP 8/4/88 - - +1,150 700 Emerson Street CDSP 9/15/88 - - +4,000 431 Florence Street CDCP 9/15/88 - 2,500 +2,500 156 University Avenue CDCGFP 12/15/88 - 4,958 +4,958 401 Florence Street CDCP 3/2/89 - 2,407 +2,407 619 Cowper Street CDCP 5/6/89 - - +2,208 250 University Avenue PC-3872 5/15/89 11,000B 300 +20,300 2 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in non- Residential Floor Area 550 University Avenue CDCP 6/1/89 - - -371 529 Bryant Street PC-3974 5/3/90 2,491C 2,491 +2,491 305 Lytton Avenue CDCP 9/28/90 - 200 +200 550 Lytton AvenueDE CDCP 10/22/90 - - +4,845 531 Cowper Street PC-4052 5/21/91 9,000 475 +9,475 540 Bryant Street CDCGFP 3/24/92 - 404 +404 530/534 Bryant Street CDCGFP 4/15/93 - 432 +432 555 Waverley Street/425 Hamilton AvenueE CDCP 9/21/93 - - +2,064 3 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in non/Residential Floor Area 201 University Avenue CDCGFP 11/18/93 - 2,450 +2,450 518 Bryant Street CDCGFP 3/3/94 - 180 +180 245 Lytton Avenue CDCP 7/21/94 - - -21,320 400 Emerson StreetEF PC-4238 9/19/94 - 200 +4,715 443 Emerson Street CDCGFP 1/5/95 - 26 +26 420 Emerson Street CDCP 3/16/95 - 125 +125 340 University Avenue CDCGFP 4/6/95 - - -402 281 University Avenue CDCGFP 4/20/95 - - -2,500 456 University Avenue CDCGFP 5/18/95 - 7,486 +7,486 536 Ramona Street CDCGFP 7/11/95 - 134 +134 725/753 Alma Street PC-4283 7/17/95 - - -1,038 4 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in non/Residential Floor Area 552 Emerson Street CDCGFP 7/18/95 - 177 +177 483 University Avenue G PC-4296 10/2/95 3,467C 2,789 +7,289 424 University Avenue CDCGFP 9/21/95 - 2,803 +2,803 901/909 Alma Street E,F PC-4389 8/1/96 - - +4,425 171 University Avenue CD-C(GF)(P) 9/19/96 - 1,853 +1,853 401 High Street CD-C(P) 10/3/96 - 350 +350 430 Kipling Street D,H CD-C(P) 10/22/96 - 200 +1,412 460-476 University Avenue CD-C(GF)(P) 3/20/97 - 1,775 +1,775 400 Emerson Street D PC-4238 3/21/97 - - +2,227 275 Alma Street CD-N(P) 7/8/97 - 200 +3,207 390 Lytton Avenue PC-4436 7/14/97 8,420C 689 +17,815 411 High Street H CDCP 12/18/97 - 2,771 +2,771 5 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non Residential Floor Area 530 Ramona CDCGFP 05/20/99 - 2852 +2852 705 Alma St CDSP 09/21/99 - 2814 +2814 200 Hamilton Ave CDCP 10/21/99 - 10913 +10913 550 Lytton Ave CDCP 08/11/00 - - +93 437 Kipling St CDCGFP 02/01/01 - - +945 701 Emerson St CDSP 05/29/01 - - +434 723 Emerson St CDSP 05/29/01 - - +400 880 - 884 Emerson St CDSP 05/29/01 - - +312 539 Alma St CDCGFP 10/23/01 - 2,500 +2,500 270 University Ave CDCGFP 11/01/01 - 2,642 +2,642 901 High St. E, F CDSP 12/12/02 - - +12,063 800 High St. I PC-4779 02/03/03 - - -15,700 6 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non Residential Floor Area 164 Hamilton Ave CDCP 01/13/05 - - -2,799 335 University Ave CDCGFP 08/10/05 - 4,500J +5,249 382 University Ave CDCGFP 07/27/06 - 194 +194 102 University Ave CDCGFP 10/10/2006 - - +8 325 Lytton Ave CDCP 5/2006 - - +17,515 310 University Ave CDCGFP 07/31/2008 - 7,481 +7,481 317-323 University Ave CDCGFP 01/2008 - 2,500 +3,290 564 University Ave CDCP 7/2008 - 2,500 +4,475 278 University CDCGFP 11/2008 - - +137 265 Lytton CDCP 7/2010 - 3,712 +21,151 340 University CDCP 12/2010 - - -1,360 524 Hamilton CDCP 2/2011 - 5,200 +9,345 7 Project Address Zoning Date Approved Public Benefit Bonus Non Residential Square Footage Seismic, Historic, or Minor Bonus Square Footage Net change in Non Residential Floor Area 630 Ramona CDCP 6/2011 - 437 +437 668 Ramona CDCP 7/2011 - 4,940 +4,940 661 Bryant CDCP 2/2011 - 1,906 0 Totals 1986-2011 34,378 93,931 173,356 A: Project approved during the Downtown Moratorium (9/84 to 9/86), but was not included in the Downtown EIR’s “pipeline projects.” As a result, the project is counted among the CD District’s nonresidential development approvals since the enactment of the Downtown Study Policies in 1986 B: Through Assessment District project provided additional 64 public parking spaces as part of public benefit instead of required 44 private spaces C: Project exceeded square footage otherwise allowed by zoning D: Project converted residential space to non-residential space. Net non-residential space counts toward the 350,000 square foot limit E: Project included covered parking that counts as floor area but not counted 350,000 square foot limit F: Project was approved pursuant to PAMC Sections 18.83.120 or 18.83.130 which allow for a reduction in the number required parking spaces for shared parking facilities, joint use parking facilities, or substitution of 8 bike parking spaces for one vehicle space. G. In addition, project paid in-lieu fee for loss of 2 on-site parking spaces H: In addition, projects paid in-lieu fee for loss of 4 on-site spaces I: Part of the SOFA 2 CAP J: Transfer of Development Right (TDR) agreement with 230 and 232 Homer Avenue. 5000 total sq ft of TDR but only 4,500 sq. ft used for Non Residential Floor Area. Page 1 ATTACHMENT F CD PARKING DEFICIT 9/1/86 to 8/31/2011 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 1986 deficit 1,601 520 Ramona StreetA CDCGFP +400 2 0 0 +2 1,603 220 University Avenue CDCGFP +65 0 0 0 0 1,603 151 Homer Avenue CDSP -9,750 0 11 0 -50 1,553 314 Lytton Avenue CDCP -713 0 0 0 -3 1,550 247-275 Alma Street CDNP +1,150 5 5 0 0 1,550 700 Emerson Street CDSP +4,000 16 16 0 0 1,550 431 Florence St CDCP +2,500 10 0 10 +10 1,560 Page 2 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 156 University Avenue CDCGFP +4,958 20 0 20 +20 1,580 401 Florence Street CDCP +2,407 10 0 10 +10 1,590 619 Cowper Street CDCP +2,208 9 9 0 0 1,590 250 University Avenue PC-3872 +20,300 103 131B 0 -28 1,562 550 University Avenue CDCP -371 0 0 0 -1 1,561 529 Bryant Street PC-3974 +2,491 10 0 10 +10 1,571 520 Webster StreetC PC-3499 0 0 163 0 -163 1,408 305 Lytton Ave CDCP +200 1 0 1 +1 1,409 550 Lytton Avenue CDCP +4,845 19 19 0 0 1,409 Page 3 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT Downtown Extensive restriping by Transportation Division of on and off/street parking -96 1,313 531 Cowper Street PC-4052 +9,475 38 0 2 +38 1,351 540 Bryant Street CDCGFP +404 2 0 2 +2 1,353 530/534 Bryant Street CDCGFP +432 2 0 2 +2 1,355 555 Waverley Street/425 Hamilton AvenueD CDCP +2,064 8 0 0 +8 1,363 201 University Avenue CDCGFP +2,450 10 0 10 +10 1,373 518 Bryant Street CDCGFP +180 1 0 1 +1 1,374 245 Lytton Ave CDCP -21,320 90 149 0 -59 1,315 400 Emerson Street PC-4238 +4,715 18 5 1 +14 1,329 Page 4 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 443 Emerson Street CDCGFP +26 0 0 0 0 1,329 420 Emerson Street CDCP +125 1 0 1 +1 1,336 340 University Avenue CDCGFP -402 0 0 0 -2 1,334 281 University Avenue CDCGFP -2,500 0 0 0 -10 1,324 456 University Avenue CDCGFP +7,486 30 0 30 +30 1,354 536 Ramona Street CDCGFP +134 1 0 1 +1 1,355 725-753 Alma Street PC-4283 -1,038 7 7 0 -11 1,344 552 Emerson Street CDCGFP +177 1 0 1 +1 1,345 483 University Avenue PC-4296 +7,289 29 -2E 11 +31 1,376 Page 5 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 424 University Avenue CDCGFP +2,803 11 0 11 +11 1,387 901/909 Alma StreetD PC-4389 +4,425 18 18 0 0 1,387 171 University Avenue CDCGFP +1,853 7 0 7 +7 1,394 401 High Street CDCP +350 1 0 1 +1 1,395 430 Kipling Street CDCP +1,412 5 -4E 1 +10 1,405 460/476 University Avenue CDCGFP +1,775 7 0 7 +7 1,412 400 Emerson Street PC-4238 +2,227 9 0 0 +9 1,421 275 Alma StreetF CDNP +3,207 0 0 1 +1 1,422 390 Lytton Avenue PC-4436 +17,815 74 50 3 +27 1,449 Page 6 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 411 High Street CDCP +2,771 0 -4E 11 +15 1,464 530 Ramona CDCGFP 2852 11 0 11 +11 1475 705 Alma St CDSP 2814 11 0 11 +11 1486 200 Hamilton Ave CDCP 10,913 44 3E 35 +41 1527 550 Lytton Ave CDCP 93 0 0 0 0 1527 528 High St PF 0 0 211 G 0 -211 1316 445 Bryant PF 0 0 688G 0 -688 628 437 Kipling St CDCGFP 945 4 0E 2 +4 632 701 Emerson St CDSP 434 2 1 1 +1 633 723 Emerson St CDSP 400 2 2 0 0 633 Page 7 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 880 / 884 Emerson St CDSP 312 2 5 0 -3 630 539 Alma St CDCGFP 2,500 10 0 10 +10 640 270 University Ave CDCGFP 2,642 11 0E 11 +11 651 SUBTOTAL 86-02 106,930 672 1483 236 -578 651 901 High St. CDSP 12,063 59D 60 0 -1 650 800 High St. H PC-4779 -15,700 0 63 0 -63 587 164 Hamilton Ave CDCP -2499 0 0 0 0 587 335 University AveI CDCGFP 5,249 0 0 0 0 587 Page 8 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 382 University Ave CDCGFP 194 0 0 1 +1 588 102 University Ave CDCGFP 8 0 0 0 0 588 310 University Ave CDCGFP 7,481 30 0 30 +30 618 317-323 University Ave CDCGFP 3,290 0 0 0 0 618 564 University Ave CDCP 4,475 10 0 10 +10 628 325 Lytton Ave CDCP 17,515 110 6 0 -6 622 265 Lytton CDCP 21,151 106 52 0 +54 676 278 University CDCGFP +137 1 0 1 +1 677 340 University CDCP -1,360 0 0 0 0 677 524 Hamilton CDCP +9,345 31 8 23 +23 700 Page 9 PROJECT ADDRESS ZONING NET CHANGE IN NON/ RESIDENTIAL FLOOR AREA ADDED PARKING REQUIRED NET ADDED PARKING SPACES PARKING EXEMPTIONS PER 18.52.060 OF PAMC NET DEFICIT CHANGE TOTAL CUMULATIVE DEFICIT 630 Ramona CDCP +437 2 0 2 +2 702 668 Ramona CDCP +4,940 20 0 20 +20 722 661 Bryant CDCP 0 0 0 0 0 722 TOTAL 173,356 911 1672 323 649 722 A: Project approved during the Downtown Moratorium (9/84 to 9/86, but was not included in the Downtown EIR’s “pipeline projects.”) As a result, the project is counted among the CD District’s nonresidential development approvals since the enactment of the Downtown Study Policies in 1986 B: Through Assessment District project provided additional 64 public parking spaces as part of public benefit C: Addition of 2 levels of parking to Cowper/Webster garage D: Project was approved pursuant to PAMC Sections 18.83.120 or 18.83.130 which allow for a reduction in the number required parking spaces for shared parking facilities, joint use parking facilities, or substitution of 8 bike parking spaces for one vehicle space. E. Project removed existing on-site spaces or met required parking by paying in-lieu fee F: Site had existing parking sufficient to allow expansion G: Construction of 2 city parking lots. 528 High completed on Aug. 2003 and 445 Bryant completed on Nov. 2003 H: Part of the SOFA 2 CAP I: As per PAMC 18.87.055, the TDR area transferred to the site does not increase the number of automobile parking spaces required for the additional floor area. Page 10 ATTACHMENT G Commercial Downtown (CD) and SOFA 2 CAP Floor Area by Use Category (Rounded to the nearest 25,000 square feet) * The above table is rounded to the nearest 25,000 square feet and was based on a table originally prepared in 1986. Over the years, because of the rounding to 25,000 square foot increments, the table has had a greater margin of error. Staff attempted to update the table from the beginning in 1998; therefore the numbers may not compare directly to tables prepared prior to the 1998 report. Use Category Area (October 1986) Area (October 2011) Area Change, percentage 1. Offices 1,100,000 1,350,000 23% 2. Retail 500,000 625,000 25.00% 3. Eating & Drinking 150,000 275,000 83.33% 4. Financial Services 200,000 200,000 0.00% 5. Business Services 150,000 175,000 16.67% 6. Basement Storage 175,000 100,000 -42.86% 7. Hotels 100,000 150,000 50.00% 8. Personal Services 75,000 125,000 66.67% 9. Utility Facility 150,000 100,000 -33.33% 10. Public Facilities 50,000 75,000 50.00% 11. Automotive Services 150,000 50,000 -66.67% 12. Recreation/Private Club 25,000 50,000 100.00% 13. Theaters 50,000 25,000 -50.00% 14. Warehousing & Distribution 50,000 25,000 -50.00% 15. Manufacturing 50,000 0 -100.00% 16. Religious Institutions 50,000 25,000 -50.00% 17. Multi-Family Residential 250,000 400,000 50.00% 18. Single Family Residential 50,000 25,000 -50.00% 19. Vacant & Under Construction 150,000 50,000 -66.66% 20. Vacant & For Sale 0 0 21. Vacant & Available 150,000 100,000 -33.33% Total 3,625,000 3,875,000 5.52% ADJUSTED TOTAL: (Deduct residential uses, religious institutions, vacant & for sale and vacant & under construction.) 3,125,000 3,350,000 City of Palo Alto (ID # 3242) City Council Staff Report Report Type: Action ItemsMeeting Date: 11/5/2012 Summary Title: Parking Program Update Title: Update of Parking Program and Review and Direction on Parking Policy Strategies From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council review this Parking Program Update and provide direction to staff on the Parking Policy Strategies outlined, focused on parking supply options, technology and residential improvements. Executive Summary In the spring of 2011, the City began extensively monitoring downtown parking utilization in response to resident concerns that downtown parking structures were underutilized and on- street parking was intruding into adjacent residential neighborhoods. Extensive parking data collection efforts began immediately in both the Downtown and California Avenue Business Districts so that parking utilization baselines and strategies could be developed for Council consideration along with input from business and residential interests. On July 16, 2012, the City Council discussed a range of proposed work efforts by staff, but focused on potential residential permit parking program (RPPP) for the Professorville neighborhood. The Council directed staff to not proceed with the RPPP at this time and instead to focus on several other parking and zoning efforts. The Council asked for more specifics and an update of the efforts prior to the end of the year. This update provides a summary of parking strategies implemented-to-date within the Background section and outlines policy strategies for enhanced parking supply, technology solutions, and residential improvements in the Discussion section for consideration of the Council. Staff will be making substantive progress on these items over the coming 3-6 months subsequent to Council direction. Background The Council directed at the July 16, 2012 meeting that staff would not move forward with the trial Residential Permit Parking program for Professorville at this time, but would proceed with additional studies and actions related to parking in downtown, including but not limited to: a. Study of potential new public parking garage sites, capacities and costs; b. Methods to increase capacity in existing garages, such as attendant parking and adjustments to the permit/public distribution of spaces; c. Technology enhancements, such as gate controls, parking space identification systems, and parking permit processing improvements, etc.; d. Zoning studies and revisions, including study of the downtown cap on nonresidential space, the use of bonuses and transfer rights, variable parking ratios for office uses, and how to treat non-conforming parking sites; and e. Evaluation of paid parking options. Amendments to the main motion further directed that staff should evaluate: a. Parking exemptions; b. A Transportation Demand Management Program for downtown; c. Underutilized private parking garages; d. Funding options for new public parking garage sites; e. Zoning disincentives to having two car garages; f. Selective parking for those homes without a driveway or garage; and g. The use of the $250,000 from the Lytton Gateway Project earmarked for neighborhood parking preservation. Council asked that Staff to return to Council in three months with check in and return with an update before the end of the year. The Council’s July 16 Action Minutes are included as Attachment D and the full minutes are included as Attachment E. The remainder of this Background section recounts efforts to date and the Discussion section outlines the programmatic effort to address parking in the next 3-6 months. Parking Assessment Districts Both the Downtown and California Avenue Business Districts include parking assessment districts that provide parking for the respective areas. The parking assessment districts include fees paid by property owners/merchants to help repay city bonds issued to cover the cost of parking garage construction and permit fees that are used to cover the operations and maintenance costs of the parking programs including staff costs for the distribution of permits and parking enforcement. In the downtown, fees from parking permits also help to pay for police enforcement. Table 1 provides the current fee structure program for the Downtown and California Avenue Business Districts – Parking Assessment Programs. The table also provides a brief comparison of parking permit fees to those from Redwood City, San Jose, and San Francisco for Council reference. Table 1 Downtown and California Avenue Business Districts Parking Assessment Fee Program Parking Fee Palo Alto Local Agency Comparisons Downtown District California Ave District Redwood City San Jose San Francisco Assessment Fee $1.11/SQ FT * - - - Permit (Monthly) $45.00 $14.33 $30 to $60 $100 $215 to $395 Permit (Annual) $420.00 $123.00 $330 to $660 $1,200 $2,580 to $4,740 Day Permit $16.00 $7.00 None None None * Cal Av Assessment Fee varies by Parcel. Local employees working within the Districts are allowed to purchase parking permits to park in garages or on surface lots pending permit availability. Employees working outside of the assessment districts, however, are not allowed to purchase parking permits, but can purchase Day Passes to park within the facilities. When the two assessment districts were formed, the assessment districts allowed the City to issue bonds for the construction of parking structures and provided a guaranteed revenue mechanism through the assessment fee to pay the bonds back. Assessment districts are not common for jurisdictions, as many more typically opt to fund parking garage construction on their own and then recover the cost of construction strictly through monthly permit sales. Parking Permits In 2011 the City began evaluating changes in the parking permit distribution process in order to better allocate permits to employees within the districts, to fill up underutilized parking garage space, and to reduce parking intrusion to adjacent residential neighborhoods. The following parking permit program changes were implemented: Establish Monthly Parking Permits Distribution Thresholds Permits were previously distributed on a quarterly basis based on parking occupancy counts counted by the City’s parking enforcement unit. The amount of permits available at each lot varied per quarter depending on the results of the parking occupancy counts. Using historical data, the City established a maximum number of permits that should be released at any given time and the City continues to monitor parking occupancy to determine whether the threshold should be increased or decreased. The maximum number of permits released at any given time and the percentage of permits over supply by parking facility is provided in Table 2. Permit sales in the Downtown were up 9% in 2011 compared to 2010 and up 13% in 2012-to-date compared to 2010. In the California Avenue Business District permit sales have remained consistent with prior years. Permit Wait List Management Previously, anyone wishing to obtain a permit within a district could sign up for as many sites as they wanted in efforts to obtain a permit as quickly as possible. This resulted in unusually high wait list numbers at each facility or district in the case of the California Avenue Business District where a parking permit allows a permit holder to park at any parking garage or surface lot. The City now only allows a person getting on the wait list for a parking permit to do so once, and for only one site. In addition, the City charges a $10.00 fee to get onto a wait list, which is credited towards the ultimate first purchase of a parking permit. The number of persons waiting for a parking permit within the two assessment districts is provided in Table 3; the changes in permit wait list management are beginning to have a positive impact with shorter wait lists now than in previous years. California Avenue District – Permit Distribution Previously, because there was no limit on the number of permits or types of permits that a person could obtain within a district, it was not uncommon for someone in the California Avenue District to be on the wait list multiple times. Signing up on the wait list multiple times was a common practice of start-up owners trying to get permits for future employees. With the policy change to only distribute one permit per person, people who are on the wait list multiple times are contacted for permit availability, but only allowed for one permit to be registered to them. For the additional permits that the person may have been waiting for, the permits are allowed to be distributed to members of the same company but the permits are registered to the other individuals directly. This practice does allow for “hopping” of the wait list but there were only a few individuals who were on the wait list multiple times and staff anticipates that this condition will be phased out over the next six months. Unlike Downtown, previously distributed permits in the California Avenue Business District did not require permit holder validation at the time of renewal. People leaving the district simply passed their permits to other people, thereby delaying permit availability for people legitimately on the wait list. This resulted in unusually long permit wait times, sometimes in excess of one year. The City now requires a person renewing a parking permit to prove that they are a valid permit holder to whom the permit was originally distributed. If the person cannot show proof that they are the original permit holder, they are only being allowed a one-time renewal warning and then are required to get on the wait list as the permit will be cancelled at the end of the permit term. Online Permit Management System In the spring of 2012 the City awarded a contract to Progressive Solutions to develop and implement an online permit management system for the City. Using the maximum permit thresholds established by the City, the City can now release permits weekly (instead of quarterly) as they become available. The system also allows for monthly permit renewal versus the traditionally available quarterly or annual renewal options; the monthly permits costs shown in Table 1 reflect the current quarterly fee divided by three. Implementation of the system was delayed through the fall while the online wait list form was being developed. The City also just finalized hosting details for the system server. The wait list module is scheduled to be completed in October and the system should be launched in November. Persons are still required to return to City Hall to obtain their first permit and to validate proof of employment within their business district; the requirement to return to Revenue Collections may eventually be phased out and permits distributed by mail as additional technology enhancements are made. Table 2 Parking Permit Distribution Thresholds Lot Name # Hourly Spaces # Permit Spaces Total # Spaces Max # Permits % Permits to Supply Downtown - Parking Garages Q Alma/High (North) - 134 134 205 153% R Alma/High (South) 77 134 211 200 149% S/L Bryant St 381 307 688 575 187% WC Cowper/Webster 201 388 589 630 162% CC City Hall 187 519 706 820 158% B Ramona/University 63 - 63 - - 800 High Street 10 53 63 85 160% Downtown – Surface Parking Lots O Emerson/High 78 - 78 - - A Emerson/Lytton 68 - 68 - - C Ramona/Lytton 50 - 50 - - F Florence/Lytton 46 - 46 - - H Cowper/Waverly 90 - 90 - - D Hamilton/Waverly 86 - 86 - E/G Gilman St - 87 87 130 149% P High/Hamilton 51 - 51 - - KT Lytton/Kipling-Waverly 40 67 107 96 143% N Emerson/Ramona 48 - 48 - - X Sheridan Hotel - 36 36 55 153% California Avenue Business District California Avenue* 915 30 945 710 75% * Parking permits valid for any garage or lot. Table 3 Parking Permit Wait List as of October 18, 2012 Lot Wait List Lot Wait List CC 99 R 93 CW 152** S 70 EG 41 X 11 KT 4 Q 27 CAL AVE 333 ** Permit distribution temporarily suspended due to active construction at lot. Day Permits The Bryant Street (Lot S/L) and Cowper/Webster (Lot C/W) garages have permit machines that allow drivers to purchase daylong parking permits. Use of the machines has been extremely successful with each unit averaging $8,000 in sales per month each. Each of the downtown parking garages offer three (3) hours of free hourly parking, but requires rigorous enforcement to identify and cite violators. Day Permits may also be purchased at Revenue Collections in City Hall at a cost of $16.00 per day for Downtown and $7.00 per day for California Avenue. The City has also switched to “scratcher” day permits in 2012 in both districts to curb violators who were photocopying the previous paper permit formats. Parking Way-Finding Signage The City deployed 49 parking banners throughout the Downtown in January 2012 to help better guide motorists to surface parking lots and garages. The banners were reviewed and approved by the Architectural Review Board prior to implementation. The City also fabricated signs that matched the banners. However, the signs were ineffective due to the architectural color tones used and sign implementation stopped. There are 125 existing guide signs to parking facilities throughout the Downtown and 40 around the California Avenue Business District. The same parking banners used in Downtown will be presented later this fall to the California Avenue merchants as part of the California Avenue – Transit Hub Corridor Streetscape Project for input so that deployment in that district can occur before next Spring; the City estimates 40 up to 20 banners can be deployed around the existing California Avenue area parking structures and surface lots. The City is continuing its research on effective parking guide signs as discussed further in this report. Neighborhood Parking Preservation Staff spent the first half of the year trying to develop draft policies and pilot projects for a Professorville Residential Permit Parking (RPP) program. The general community consensus on a Professorville RPP pilot program showed that such a program was not supported by the broader neighborhood and Council directed that staff should focus on identifying a range of parking solutions within the Downtown core area and to identify appropriate technologies and strategies to advance as part of a comprehensive parking program for the City. The remainder of this report focuses on proposed parking strategies and policies for Council consideration to help improve the efficiency of parking operations and conditions in residential neighborhoods as a comprehensive parking program is further developed and implemented. The recommendations in the Discussion section are priotized in a time line provided in Attachment A. Discussion The modifications to the City’s permit management program are showing a positive change in the City’s ability to more quickly distribute permits. The impact has been more profound in the Downtown Business District where permits are managed by lot, rather than the California Avenue Business District, where permits can be used at any surface lot or garage and where changes in permit distribution will have a gradual effect over the next year. Permit management has also been the focus of the City’s efforts to get vehicle users to obtain and use permits. Permit management will be ongoing for efficiency purposes but new strategies beyond permit management are now required to enhance the parking program in both districts. It should be noted that in the Downtown District, the Cowper-Webster Garage (Lot C/W) is currently undergoing facade improvements that have resulted in the temporary loss of permit parking through the construction period. Persons with permits for the Cowper-Webster Garage are being temporarily allowed to park at the Bryant Street Garage (Lot S), further slowing down permit distribution at that garage as well. Construction at the Cowper-Webster Garage should be complete before the start of the Holiday shopping season. Several other key efforts are underway to enhance parking supply, more efficiently use available supply, reduce parking demand, and address the impacts of new development. Downtown Parking Garage and Attendant Parking Study The City completed a Request for Proposals (RFP) solicitation in October and will be awarding a contract this fall to complete a feasibility study for an additional parking structure(s) in the Downtown. The study will focus on five surface parking lot sites including: Lot D Hamilton Avenue & Waverley Street Lot EG Gilman Street Lot P High Street between University Avenue & Hamilton Avenue Lot O High Street between University Avenue & Lytton Avenue Caltrain Lot Urban Lane between University Avenue and PAMF For each of the sites the feasibility study will identify potential Parking Garage Footprints, Parking Space Counts, 3D Modeling of Parking Structure Massing, Constructability Factors, and Engineer’s Estimates. Staff will also evaluate potential funding options in its report-out to Council. The Constructability Factors will include elements to determine which sites provide the best value for parking versus construction constraints, such as: parking space count; private property impacts (during and post-construction); construction staging impacts; number of driveway/pedestrian access points for convenience measure; cost; adjacent land uses to determine whether a preferred long-term land use opportunity would be lost if garage construction were pursued; and utility relocation impacts. The study will also include an Attendant Parking Study to determine whether the deployment of a parking attendant program may be a viable option to temporarily or permanently supplement the City’s parking permit program needs. The Attendant Parking Study will determine the number of additional parking spaces that can be gained at each of the existing parking garages in Downtown and provide program outlines to implement them on a trial basis including key-return stations. Two options for attendant programs are typically used: a) where a motorists parks the vehicle themselves, guided by an attendant, and the keys are then handed over to the attendant in case the vehicles needs to be moved; or b) a motorists leaves the vehicle with the attendant who then parks the vehicle. In other cases, a motorist may be issued a valet card to confirm car release later and the vehicles are typically parked behind other parked cars. The study will also focus on likely hours of operation to maximize benefit and minimize cost. The Palo Alto Downtown (PAD) Business and Professional Association – Parking Committee, which is responsible for helping the City provide oversight on the Downtown Parking Assessment District, has indicated a preference towards immediately implementing an attendant pilot project, focused on permit parking. Staff believes such a trial for permit spaces should proceed, however, only after the work on the Cowper-Webster garage is complete and all spaces are then available, and probably after the Holiday season, to avoid any confusion for shoppers. Funding for the trial would come from the Downtown Permit Fee program. The study will take up to 6 months to complete and the results presented to the City Council in the spring. The study is funded substantially by a community benefit contribution from the Lytton Gateway Project, which provided $60,000 to complete the study. The study will cost $100,000 and the gap is being funded by the City through the Capital Improvement Program (CIP), PL-12000 (Transportation & Parking Improvements). The results of the study will be used to determine whether the City should pursue construction of a new parking structure using its own local funding, enterprise funding to build a parking structure in conjunction with additional office facilities, or to pursue a private partnership with land developers to help build a parking facility. The City currently has approximately $2.6 million in the Downtown In-Lieu Parking Fee program (once the building permit is issued for Lytton Gateway, expected prior to the end of the year). During the July 2012 discussion on parking the Council expressed interest in also pursuing opportunities to make available private structure parking for public parking. Staff surveyed the existing private lots around downtown and found them either fully parked or inaccessible due to security procedures. Recommendation No. 1: Direct staff to implement a trial Parking Attendant Valet Parking Program for permit parking in at least one garage, beginning shortly after the first of the year in 2013. The study should monitor operations, estimate costs, and identify benefits/challenges with implementation. Downtown Cap Study Staff is currently developing a Request for Proposals to study the land use types, densities, and recent and projected development around the Downtown to determine future land use and parking needs/strategies to support land use changes. The study is a requirement of the City’s Zoning and Comprehensive Plan, which establishes a Downtown Cap of 350,000 square foot net increase since the adoption of the 1986 Downtown Plan. The Zoning Ordinance requires a re- evaluation of the cap when a 235,000 square foot “study threshold” is met. That threshold is nearly met with the approval of the Lytton Gateway project approved earlier this year and will be exceeded if the 135 Hamilton Avenue and 636 Waverley projects are approved. While the 27 University project is not within the bounds of the Downtown zone prescribed in the 1986 study, staff will be reviewing ways to appropriately consider it in the Downtown study and specific impacts would be considered in that project’s Environmental Impact Report . Staff expects that the Downtown Cap Study will cost approximately $100,000-$150,000 and will take approximately 6 months to complete. The budget does not currently include funding for the study, but staff proposes that at least some of the funding come from the Lytton Gateway “Neighborhood Parking Preservation” benefit (of a total $250,000) and perhaps be supplemented by other development project contributions. Recommendation No. 2: Direct staff to pursue the RFP for the Downtown Cap study, and report back to Council in six months regarding results and recommendations. Zoning/Parking Revisions and Transportation Demand Management (TDM) Program Staff will, simultaneous with the Downtown Cap study, review a variety of zoning provisions related to parking, particularly in Downtown. Staff has recently proposed and Council has enacted a moratorium on one such zoning provision that exempted up to 1.0 floor-area ratio from parking requirements for certain properties. Staff expects to also evaluate: a. Other exemptions from parking requirements, including but not limited to transfer of development rights (TDR); b. Parking reductions for transit proximity, mixed use, transportation demand management (TDM) measures, and for affordable and senior housing; c. Appropriate ratios of parking, particularly for office development, more reflective of recent employee densities, and possible parking incentives for retail over office uses; d. How conversions of existing uses to more intense office uses are treated/managed in the zoning requirements; and e. The relationship between required/covered parking and floor area, particularly for homes (e.g., to avoid discouraging garages, though respective of historic issues where applicable) Planning and Transportation staff also will work with on-call transportation consultants to initiate a Transportation Demand Management (TDM) Program for the City and its employees to demonstrate exemplary means of reducing work and non-work trips. This effort will be a precursor to facilitating a downtown-wide TDM program, coordinated with the Palo Alto Downtown and area businesses to take advantage of programs that can benefit the Downtown as a whole. Recommendation No. 3: Direct staff to develop zoning ordinance revisions to address parking impacts from development, including: a) parking ratios, b) parking exemptions, c) requirements for both TDM programs for new development; and to work with the Downtown businesses to develop a coordinated downtown area TDM effort. Technology Enhancement: Garage Parking Access and Revenue Control Equipment The City’s new Permit Management System will allow the City to more easily distribute permits but when used in combination with garage parking access controls (gates) the City will also be able to track parking permit usage to further manage the permit program. For example, the City currently does not have any data that shows how regularly people use their parking permits. Later this fiscal year, the City will release its first ever transportation survey that aims to measure transportation mode use by region of the City. The high percentage of permits sold over supply (Table 2) shows that within the Downtown, people are likely regularly using another form of transportation to get to work such as Caltrain or are choosing to park elsewhere when it’s more convenient, even though they have a permit. Garage Parking Access control is another step the City can take in the long-term management of its parking infrastructure by helping to reduce operations costs for enforcement. The access controls regulate entry and exit from a garage and allow visitors to continue to enjoy the current three hours of free parking to support downtown business activities, but include Revenue Control equipment that allow visitors to stay parked beyond the free 3-hour period at a fee up to the $16.00 day permit fee. Staff has a prepared a Draft Request for Proposals (RFP) so that cost estimates can be determined and to “bring the best of the technology” to the city for review with participation from the Downtown Parking Committee. The Draft RFP proposes conversion of the Bryant Street Garage (Lot S/L) to gate control with revenue collection elements but identifies the Alma Street/High Street Garage (Lot R) as an alternative site for inclusion depending on bid results. The City estimates the cost of installing Garage Parking Access and Revenue Control Equipment at each garage at approximately $250,000. The RFP proposes unique technology development through the use of QR Codes in combination with apps for processing of payments as a convenience alternative to motorists. The same technology would allow businesses to establish convenient validation alternatives for visitors, patron and employee parking needs. The RFP was shared with the Palo Alto Downtown (PAD) Parking Committee during its September and October 2012 meetings. Concerns have been expressed about the controls being the first step to imposing “paid” parking on downtown, but staff believes that this technology actually provides flexibility for a wider range of parking options, with no increase in parking costs for those visitors staying less than 3 hours. Revenue realized from the metering beyond the free 3- hour period could be partially dedicated towards the Parking In-Lieu Fee program to help fund construction of future parking facilities, consistent with the setup of typical assessment district programs. Funding for a trial garage parking access and revenue control equipment project is available within the existing CIP but, if interested, funding through the current Parking Assessment or Parking In-Lieu fee program are viable alternatives. Recommendation No. 4: Direct staff to release an RFP for Garage Parking Access and Revenue Control Equipment for near-term deployment, and to involve the Downtown Parking Committee in the operations and design process. Technology Enhancement: Parking Occupancy Tracking and Dynamic Way-Finding Directing motorists immediately to available parking helps to reduce greenhouse gas emissions, enhances the customer experience in the downtown, improves the economic vitality of the downtown, and improves safety for bicyclists and pedestrians. The City currently does not have any mechanism in place to monitor parking occupancy “real-time,” so deployment of dynamic way-finding with accurate information is not feasible, nor is pushing parking availability information online feasible either. The City has outreached to three vendors over the past year to help develop new technology to monitor parking occupancy and tabulate information that can be made available to the public online, through apps, and to Parking Guidance Systems that offer dynamic way-finding technology. Unfortunately, no viable option has yet been identified. The City was approached by Streetline Networks in partnership with Cisco Systems over the summer to deploy their technology to monitor and push parking occupancy information online but that was not desirable due to the high on-going annual operations cost. The Streetline Networks/Cisco System solution included one free year of service and included maintenance of field equipment, but the solution though would cost the City over $350,000 per year. Solutions such as that of Streetline Networks only make sense at locations where metering is utilized to offset the cost of the technology, as is the case in the cities of San Francisco and Los Angeles. Staff is not recommending metering on-street parking spaces at this time, but does want to identify parking monitoring solutions that can be City-owned solutions versus leased to reduce long- term operations costs. Effective monitoring of parking occupancy also introduces the ability to consider congestion-pricing parking on-street if the Council wants to consider that type of technology in the future. Being immediately adjacent to the second largest Caltrain Station along the Peninsula supports that type of activity by making alternative modes of transportation more attractive to people over driving. The City will continue to try and outreach to technology firms to develop new market solutions for the City. The Gate Parking Access and Revenue Control Equipment would allow for dynamic way-finding to be deployed, highlighting parking availability at parking structures. Alternative solutions may include establishing detection technology only now, that may be used later by future Garage Parking Access technology, to estimate garage occupancy. In the meantime, the City will continue its seasonal parking occupancy data collection of the Downtown and California Avenue Business Districts, that includes counting each vehicle parking space on-street and within each parking facility by time-of-day to track changes in parking patterns. The City collected parking occupancy data in the Spring/Fall/Winter 2011 and is scheduled to collect data gain in early November. Data collection includes monitoring parking occupancy between 12AM-2AM, 8AM-10AM, 12PM-2PM, and 7PM to 9PM on a weekday and 12PM-2PM on a Saturday. Recommendation No. 5: Direct staff to continue research of technology-based parking solutions to monitor parking occupancy. Electric Vehicle Parking The City currently has 7 electric vehicle charging stations available in the Downtown at the Civic Center Parking Garage (Lot CC – Level A, 3 chargers), Bryant Street Garage (Lot S/L – Level 2, 3 chargers), and the Alma/High North (Lot R – Level 2, 1 charger). The charging stations are extremely popular and realize regular occupancy usage throughout a typical week. There are no charging stations available in the California Avenue Business District. The City has considered the development of a Request for Proposals for the development of a privately- owned network of electric vehicle charging stations network. The Stanford Shopping Center currently has 3 charging stations including Northern California’s only Rapid Charging (Level 3) Charger. The Stanford Shopping Center chargers are privately owned and require a fee-per-use to charge. Development of a private network of chargers in Palo Alto would operate under the same model and convert the existing charging stations into the private network to avoid competition with the private network given the high cost to install the network. To meet the immediate demand for electric vehicle charging in the City, staff recommends conversion of at least five (5) parking spaces in the California Avenue Business District to electric vehicle charging spaces and an additional six (6) parking spaces in the Downtown. Staff recommends additional Level 2 Chargers similar to those currently deployed that can charge a vehicle in as fast as 2 hours. The Downtown Library, which was renovated last year, includes infrastructure for providing electric vehicle charging stations in its parking lot; this could be a location for some of the additional Downtown spaces. The City has 6 electric charging stations included as part of development conditions of approval for the 101 Lytton Gateway Project (4 chargers) and the Edgewood Plaza (2 Chargers) shopping center. These stations will not be available until next year when construction at each site is complete. Recommendation No. 6: Direct staff to pursue the installation of 6 additional electric vehicle charging stations in Downtown and up to 5 electric vehicle charging stations around California Avenue. Bicycle Parking and Bicycle Share Programs The City has approximately 150 bicycle racks (250 bicycle capacity) in the Downtown. This includes 6 recently deployed bicycle corrals deployed around Downtown which offer up to ten bicycle parking spaces in lieu of one on-street parking space. Downtown has an additional three bicycle corrals planned for installation this calendar year as part of the New Apple Store construction at University Avenue & Florence Street (2 bicycle corrals) and one at Lyfe Kitchen, which requested installation by the City this fall. The City offers free installation of bicycle corrals upon submittal of an application (Attachment B) and investigation by the City, including outreach to adjacent businesses to validate support for installation of the facility. In the California Avenue Business District, the City has 24 existing bicycle racks (77 bicycle capacity). The City has a dozen additional bicycle parking facilities identified for the California Avenue Business District for a future bicycle parking capacity of up to 130 bicycles as part of the active California Avenue Transit Hub Corridor Streetscape project including 6 bicycle corrals. Business owners may request free installation of bicycle racks within the public right-of-way following an engineering investigation by staff. Where installation of bicycle racks within the public right-of-way is not feasible for convenient, the City offers free bicycle racks to business and property owners for their installation on their private property; persons interested in free bicycle racks may simply contact the city via email at transportation@cityofpaloalto.org. The Valley Transportation Authority (VTA) Bicycle Share Program will be providing 100 bicycle share bicycles to Palo Alto as part of its partnership program with the Metropolitan Transportation Commission (MTC) to deploy a program along the Peninsula. The program was delayed due to technology development but should return to the City with a deployment schedule by the end of the year. The sites reviewed by the Architectural Review Board include: University Avenue & Emerson Street (adjacent to Lytton Plaza in an on-street Parklet), King Plaza at City Hall, University Avenue & Cowper Street, the University Avenue Caltrain Station, and the California Avenue/Park Boulevard Park Plaza. Additional facilities will be provided around the Stanford Campus as part of the program. As part of the bicycle share investigation, staff identified dozens of additional potential bicycle share sites including the Stanford Research Park, libraries and community centers, senior facilities, and Midtown but during this initial deployment both MTC and the VTA request to keep the deployment focused along the Caltrian stations. As bicycle share deployment continues, staff will outreach to existing business parks to solicit and encourage participation in the program. Recommendation No. 7: Direct staff to pursue additional bicycle parking stations around both the Downtown and California Avenue Business Districts. Residential Parking Policies During the discussion of the Professorville trial Residential Permit Parking (RPP) program in July, the Council requested that staff consider options to allow designated on-street parking spaces for historic homes within the Professorville neighborhood that do not have on-site parking (driveways and/or garages), since consideration for RPP programs is being deferred until a broader parking program is put in place. In response to the Council request, staff has developed two policy approaches focused more collectively to the entire neighborhood concerns: 1) On-Street “Disabled Accessible” Parking Spaces The City does not currently have a policy to allow for the installation of on-street parking spaces for the disabled within residential neighborhoods. Staff recommends Council consider a policy allowing for residents to apply the consideration of on-street accessible parking spaces in front of their homes for convenience and quality of life benefits. If the Council is supportive of this concept, staff will return with a draft policy and application for the Council’s review to define the criteria and investigation that staff would be required to complete to ensure consistent distribution of accessible parking spaces. The policy would address factors including costs of installation and maintenance of the accessible parking, proof of “accessibility” need, and compliance and misuse/removal procedures if abused. The accessible spaces would not be designated spaces for the applicant but by providing the space immediately in front of one’s residence increases the likelihood of having the space available for use by the resident. As an accessible space, however, the parking could be used by any motorist displaying a valid accessible placard issued by the State of California. 2) Neighborhood Short-Term and Commercial Loading Zones One of the frequent concerns from residents adjacent to business districts includes the lack of parking for service vehicles such as landscapers, plumbers, etc., who are trying to provide basic services to residents but cannot do so at times depending on parking availability. Professorville residents who do not have any on-site parking facilities feel an even greater impact. Staff recommends consideration of the deployment of Neighborhood Short-Term and Commercial Loading Zone spaces around the Professorville and Downtown North neighborhoods, at least one per block and spaced a maximum of 500-FT apart to allow for parking availability to accommodate basic service vehicles and short-term parking needs. The spaces can be either a short-term parking restriction (30-minutes) or commercial/service vehicle use (2-hours) to support residents. This solution provides an equitable solution for all residents regardless of whether the homes are historic or not. If the Council is supportive of this concept, staff will provide outreach to neighborhood groups to identify the appropriate on-street parking spaces to support these activities and then will return to the Council following input from the Planning & Transportation Commission for implementation of a demonstration project in the Spring. 3) On-Street Parking Spaces in the Professorville Area During the July 2012 parking discussion, the Council requested that staff consider options to help alleviate parking impacts to homes around the Professorville area without garages, driveways, or other on-site parking. Staff has identified eleven homes around that Professorville area without on-site parking (see Attachment C), additional sites may exist. The proposed Neighborhood Short-Term/Commercial Loading Zone spaces would offer solutions equitably to the community, but may not be enough for residents of these particular homes. If the Council is supportive of such a solution staff will initiate outreach with affected residents and return with a policy for adoption. Staff expects that any related implementation would be on a trial basis. Recommendation No. 8: Direct staff to return to the City Council for consideration of an On-Street Accessible Parking Space Policy. Recommendation No. 9: Direct staff to initiate outreach to residents in Professorville and Downtown North to develop short-term parking space strategies. Recommendation No. 10: Discuss and provide direction for On-Street Parking Permits for homes in the Professorville area without parking or driveways. Parking Permit Management Regular parking permit management and recent enhancements have proven effective to date to more quickly get permits to vehicle users and should be continued. Permit management has benefited the Downtown Business District more quickly than the California Avenue Business District due to the permits being designated to individual facilities. The California Avenue Business District has two parking garages, each of which realize high occupancy during peak noon periods on top floors, but much lesser use at other times. The availability of new parking permits in the California Avenue Business District that can be used only at top floors of each garage may be helpful in more quickly distributing permits to motorists and help to fill underutilized portions of the garages and allow for premium first floor parking to be retained for visitors until after the noon peak hour. Recommendation No. 11: Direct staff to begin discussions with California Avenue merchants focused around the development of new parking permit strategies. Timeline This report recommends several project and policy considerations for the Council focused around further developing parking strategies to develop a comprehensive Parking Program for the City. Staff will return to the Council within three months with a more defined schedule for the implementation of solutions the Council identifies as appropriate for further consideration or immediate implementation. Resource Impact Two new contracts are being pursued as part of the Parking Program, including a $100,000 contract for a Downtown Parking Garage and Attedant Valet Study and $100,000-$150,000 for the Downtown Cap/TDM Study. Each contract will be submitted separately to Council for approval, along with any necessary Budget Amendment Ordinances. This staff report includes recommendations for helping to develop a Parking Program Master Plan. After Council provides feedback on which recommendations to pursue, staff will return to the Council within 3 months with a more refined cost program. Environmental Review This report requests direction from Council on parking strategies that it would like staff to pursue, but at this time no specific projects affecting the environment ar being approved. Each project within the Parking Program may require additional environmental review for compliance with CEQA requirements and will be evaluated prior to implementation. Attachments: Attachment A: Summary of Parking Work Program (PDF) Attachment B: Bicycle Corral Application (PDF) Attachment C: Professorville Homes w/No Driveways - Oct 2012 (PDF) Attachment D: City Council Action Minutes of July 16, 2012 (PDF) Attachment E: City Council Full Minutes of July 16, 2012 (PDF) Attachment F: Public Comments (PDF) Prepared By: Jaime Rodriguez, Chief Transportation Official Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager 1 Nov ‘11 Dec Jan ‘12 Feb Mar Apr May Jun FY2014 Tasks Permit Management Garage Study - Garage Analysis - Valet Analysis Pilot Valet Study Downtown Cap Study Neighborhood Programs - ADA On-Street - Short Term Alternatives/Homes with No Off-Site Parking Technology Solutions Cal Ave Parking Program Parking Program Task Timeline Pending Council Input On‐Street Bicycle Corral Application Bicycle Corrals are enhanced bicycle parking facilities installed on‐street within a traditional vehicle parking space or appropriate on‐street location. The bicycle corral includes a green textured pavement treatment to help designate the space from adjacent vehicle parking spaces with a 10‐bike, bicycle rack. Yellow parking blocks are installed on each end of the bicycle corral to prevent vehicle parking intrusion. The City of Palo Alto installs bicycle corrals to help promote bicycling activity and to help provide visible and secured bicycle parking in high‐use bicycle areas. The bicycle corral installations are a partnership between the City of Palo Alto and the adjacent property owners/businesses through a maintenance agreement (attached). The City provides installation of the bicycle corrals while the property owners/businesses take on maintenance around the bicycle corrals. For a bicycle corral to be considered in front of your business or property, please complete the application below and return to the City of Palo Alto – Transportation Division. Business Owner Property Owner – (Optional) Company Name: Contact Person: Address: Palo Alto, CA 94301 Day Phone: Email: Signature/Date: 1. Preferred Bicycle Corral Location 2. Estimated amount of bicycle activity on weekday and weekends Note: After submission of the application, Transportation staff will contact the applicant to discuss location feasibility and determine if bicycle parking demand exists. Submit to: City of Palo Alto – Transportation Division Staff Review: 250 Hamilton Avenue Date: Palo Alto, CA 94301 O: (650) 329‐2441 F: (650) 329‐2154 Recommend Install: Yes transportation@cityofpaloalto.org No Director Approval: Professorville Historic Neighborhood Homes without accessible Off-Street Parking October 23, 2012 EXCERPT FROM CITY COUNCIL ACTION MINUTES OF JULY 16, 2012 ATTACHMENT D Water, Gas, Wastewater, Storm Drain and Public Works Construction Inspection Services. 10. Resolution 9274 entitled "Resolution of the Council of the City of Plao Alto Placing an Initiative Measure on November 2012 Ballot to Permit Three Medical Marijuana Dispensaries to Operate in Palo Alto. 11. Approval of Contract for Goods (Purchase Order) for the Acquisition of Toshiba Laptops. 12. Approval of Fiscal Year 2012 Re-appropriation Requests to be Carried Forward into Fiscal Year 2013. MOTION PASSED: 5-0 Burt, Klein, Scharff Schmid absent AGENDA CHANGES, ADDITIONS, AND DELETIONS MOTION: Mayor Yeh moved, seconded by Council Member Shepherd to not hear Agenda Item No. 15. -±-5-;-CONFERENCE V/ITH LABOR NEGOTIATORS City DeSignated Representatives: City ~4anager and his designees pursuant to ~4erit System Rules and Regulations (James Keene, Pamela Antil, Dennis Burns, Lalo Perez, Joe Saccio, Kathryn Shen, Sandra Blanch, ~4arcie Scott, Darrell ~4urray) Employee Organization: Palo Alto Police Officers Association (PAPOA) Authority: Government Code Section 54957.6(a) MOTION PASSED: 8-0 Schmid absent ACTION ITEMS 13. Direction on Downtown Parking Strategies and Approval of Trial Residential Permit Parking Program In and Around the Professorville Neighborhood. MOTION: Mayor Yeh moved, seconded by Council Member Holman to not move f6rward with the trial Residential Permit Parking Program, however to: 1. Direct Staff to proceed with additional studies and actions related to parking in downtown, including but not limited to: a. Study of potential new public parking garage sites, capacities and costs; b. Methods to increase capacity in existing garages, such as attendant EXCERPT FROM CITY COUNCIL ACTION MINUTES OF JULY 16, 2012 ATTACHMENT D parking and adjustments to the permit/public distribution of spaces; c. Technology enhancements, such as gate controls, parking space identification systems, and parking permit processing improvements, etc.; d. Zoning studies and revisions, including study of the downtown cap on nonresidential space, the use of bonuses and transfer rights, variable parking ratios for office uses, and how to treat non- conforming parking sites; and e. Evaluate paid parking options. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER TO INCLUDE: 1) parking exemptions, 2) TDM Program, and 3) to direct Staff to look at underutilized private parking garages. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER TO INCLUDE to direct Staff to return to Council in 3 months with check in and return with an update before the end of the year INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER. AND SECONDER to direct Staff to: 1) return with funding options for new public parking garage sites, and 2) include that the zoning studies would evaluate disincentives to having two car garages. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to evaluate the use of $250k currently budgeted in the Lytton Gateway Project. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to include "Professorville at this time" after "Residential Permit Parking Program" in the first part of the Motion. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to evaluate selective parking for those homes without a driveway or garage. MOTION: Council Member Klein moved, seconded by Vice Mayor Scharff to call the question. MOTION PASSED: 5-3 Espinosa, Price, Shepherd no, Schmid absent MOTION PASSED: 6-2 Espinosa, Price no, Schmid absent EXCERPT FROM CITY COUNCIL MINUTES OF JULY 16, 2012 MINUTES ATTACHMENT E ACTION ITEMS 13. Direction on Downtown Parking Strategies and Approval of Trial Residential Permit Parking Program In and Around the Professorville Neighborhood. Curtis Williams, Director of Planning and Community Environment, said one of the main pOints he wanted to make was that while they would probably spend most of the time that evening discussing the trial permit program in the Professorville area that it was a small but important part of a more comprehensive look at the downtown parking situation. There were a number of efforts related to parking management, supply, and demand that the City had worked on. There was an active permit management system they re~ently put into place to distribute permits. Staff was beginning a parking garage study to look at the supply issue as well as more efficient ways to use the garages and parking lots. They were looking at a number of technologies and parking enhancements to more efficiently use the spaces and publicize and provide mobile technology for information purposes. They were before Council to discuss the trial program for a portion of Professorville but would then go into a larger look at areas of downtown including Downtown North. They also had a bicycle share program parking efforts that they were undertaking to study bike parking as well as vehicular parking. In terms of the parking garage study the Staff was looking at using some of the funding provided by the Lytton Gateway project to complete a feasibility study of three or four parking lot sites in the downtown area. The study would determine the feasibility of construction of additional garages at those locations and the capacity and construction costs. Staff was also looking at a trial of attendant parking in some of the garages to see if there was away to provide more spaces and increase the use of the garage space the City had more efficiently. He said they would continue to evaluate the balance of permit and hourly spaces in those garages. They had already converted some hourly spaces to permit spaces which had helped create more parking supply for permits. On the technology side they looked at parking guidance systems which let people know how many spaces were available. They also looked at evaluating gate controls to allow for metered parking and longer stays downtown. Specifically related to the proposed residential parking permit trial program in Professorville, Staff visited with the Council in fall 2011 regarding the broad parking program efforts. Many people attended the meeting who were concerned about the parking impacts from downtown on the Professorville area. He said they convened a Staff generated group to discuss those issues further and included a handful of active residents and representatives from downtown businesses. There were also Staff members and one Council Member and one Planning and Transportation Commissioner in the group. They met monthly for Page 6 of 47 City Council Meeting Minutes: 7/16/12 MINUTES approximately the past six months with the aim of looking at trial parking programs and how the City monitored the effects of the other parking strategies on the neighborhood. He said they also tried to evaluate why people parked on the street as opposed to in garages and parking lots. From there they outlined potential opportunities for residential permit parking programs. Some of the concerns they heard were how parking impacted the quality of life in residential neighborhoods and the parking availability for residents. He stressed the need to balance those concerns with the needs of employee parking in the downtown area because the streets were also public resources. He recognized that they worked with a group they invited to meet with them and not the broader neighborhood of Professorville or the entire downtown residential community. He said that they were looking at a fairly small area, but it was Staff's feeling that it was extremely important to put together something that could be looked at to ascertain the balance of how much residential protection was necessary versus how much employee parking could be allowed without creating an extreme impact one way or the other. They thought a localized program allowed them to beta test the approach. Staff recognized there would be a broader effort following the three to six month trial period. Jaime Rodriguez, Chief Transportation Officer, said it was important to look at the effort Staff made over the last year with the parking issues. He showed a slide of available parking spaces within the downtown corridor. Staff used that data to educate itself about the supply and to try to find ways to maximize on-street spaces. As an example, through analysis, Staff added 32 on-street spaces, reduced red zones, and converted inefficient parking allocations. Staff also measured the occupancy of on-street throughout the greater downtown area from Palo Alto Avenue down to Embarcadero to Alma to Middlefield because they needed it for the permit parking process. on-street Staff used data in conjunction with research from the residents to determine the correct corridor to look at a potential residential permit parking (RPP) study project. The downtown core of Lytton, University, and Hamilton had about 1,100 parking spaces on-street. He said that Staff took the data and guided the discussions held by the working group. They recommended a framework of four specific items to the working group as they developed the RPP program. One was to provide a buffer of at least one block between commercial uses and residential use to allow for transition and change in use. When they considered RPP streets they focused on the streets that were local and not arterial. For example, Alma or Middlefield were not appropriate streets for a RPP. At the same time, residential arterials such as Homer and Channing also moved traffic in and out of the downtown so those were streets that were not appropriate for consideration of RPP. Staff suggested that RPP's should focus on-streets that were more single family home based versus multifamily unit based. Page 7 of47 City Council Meeting Minutes: 7/16/12 MINUTES When the land uses were majority multifamily use it automatically generated a high demand for parking. Streets with those uses did not lend themselves to programs such as the RPP. Staff also wanted to make sure that whatever program was recommended in an RPP form was cost neutral and sustained itself without impacting or drawing from existing City resources. Thinking more globally, Staff tried to pool all of the RPP districts into one fund to help maintain costs for RPP permits around the City, rather than try to manage several RPP funds. Different tiers of RPP only created inequity in the community. He showed the proposed boundary for the proposed RPP district that the working group reached consensus on. It was south of Channing, Addison, Lincoln, Ramona, and Emerson and represented approximately 190 on-street parking spaces. The working group discussed details on how the RPP would work and they came to consensus on several factors. One was that offering one permit to residents was a way to demonstrate what the long term benefit of RPP was because if the program were implemented long term those residents would want to purchase the permits long term. They also wanted to ensure that there were permits available to residents beyond the one free permit. They recommended a cost of $50.00 for each additional specific vehicle or every additional permit that could be hung from a rear view mirror for guests. They recommended random enforcement to help measure the type of compliance they received through changes in regulatory signage as well as citation revenue for future long term operation and sustainability. One of the unique elements of the program was that they wanted to make sure there was a balance between the resident uses and the existing next door commercial uses. One of the items the working group reached consensus on was making a small portion of on-street spaces available for neighboring uses through the sale of non-resident permits at the same cost of $50.00 throughout the trial period. Multi-guest or day passes were also available at the cost of $1.00 per permit. They also discussed the length of the program and decided the trial program should be a minimum of three months and should last up to six months. Because they had collected strong baseline data for the program, it was simple for Staff to measure any impact from people moving from one street onto a street that was outside the RPP area. Once the working group built a consensus on the boundaries and elements of the RPP program it surveyed the people that lived within the area. They sent out approximately 103 surveys and received back about 68 responses. Of the 68 responses, 82 percent supported the implementation of a trial project. He showed the survey that the residents were asked to respond to and noted that a follow up survey was sent, which helped them get to the 68 responses they received. There was much conversation about how to measure the success of a trial. The first and foremost way to measure the success was the parking occupancy on the street. They had the baseline data and they needed a measure to determine if the program provided a benefit or caused an impact to the Page 8 of 47 City Council Meeting Minutes: 7/16/12 MINUTES adjacent streets. They recommended trying to achieve a goal of a maximum of 80 percent occupancy by implementing the RPP trial. He explained that would create more yellow zones within the area. Yellow zones meant that a motorist should be able to find a parking space on the street they wanted to park on. Staff would study what happened to the adjacent streets and see if there were adverse effects. Staff also wanted to measure demand for permit sales not just for the residents but also for the non-residents. They talked about making 51 permits available, but they needed to know if there was demand by the neighboring community for those permits. With respect to measuring parking compliance he said that many times simple regulatory signage went a long way in implementing behavioral change. However, if that was not followed up by enforcement the City would not realize a long term benefit in permanent change. He said that measuring parking compliance helped them measure whether or not they saw cars adhering to the proposed two hour parking restriction which was available for anyone to park in the area, and whether or not they were forced to issue citations as a community to those who did not adhere to the rules. He said that many residents discussed quality of life. The only way to measure that was quality versus quantity based. Staff wanted to survey residents and invite them to participate in community outreach meetings as they contemplated the longer term vision of the RPP. The last thing the working group looked at was the operations cost. There were several factors related to parking compliance which fed into the measure, but the largest piece was the permit sales. If the City had an RPP area but was not selling permits it was not going to be a successful area. The objective was not to simply push people out. The RPP program's purpose was to provide parking to residents. He said that the community received a $250,000 contribution from the Lytton Gateway project for downtown parking preservation projects. Staff discussed dedicating $125,000 of the contribution for projects for the area south of Forest Avenue. Professorville was one option. Another option was to dedicate $125,000 towards projects in Downtown North. He said a pilot Professorville RPP program could cost up to $50,000. That covered the cost of signage, of Revenue Collection Staff to purchase and administer the distribution of permits, of random enforcement by the parking compliance Staff, and allowed the City to measure the long term cost of a RPP in the community. Mr. Williams said the Council was very aware that the parking zoning issues meshed with the recent permit activity, the development downtown and the discussions that went on over some of the projects. Some of the issues relative to those projects were exemptions laid out in the ordinance and parking reductions that were allowed as well as transfer development rights which were used in several projects over the past few years. He thought that had been a successful program in getting historic rehabilitation and Page 9 of 47 City Council Meeting Minutes: 7/16/12 MINUTES seismic upgrades in the downtown area. However, they were 2,500 or 5,000 square feet buildings that did not require the parking that went along with the square footage. He said that as Staff reported with the Lytton Gateway project there was a development cap in the zoning code downtown of 350,000 square feet of nonresidential space which was established in 1985 as part of the downtown study. That study also indicated that when the City reached a total of 235,000 square feet that it should study the appropriate total nonresidential square footage and the associated parking issues. Staff reported during the Lytton Gateway project that the City was at about 220,000 square feet and Staff knew there were one to two other projects that would soon put the City beyond the 235,000 study threshold. Staff wanted to start that analysis immediately regarding the potential and how to better match the parking with the amount of development and the exemptions that were allowed. He said that the zoning regulations in general had parking ratios for office use that deserved to be reevaluated. The City saw office occupancies that were considerably more than one person per 250 square feet. The old model had not held up and it was appropriate to reevaluate those ratios and how the City treated nonconforming parking uses. Finally, Staff thought it was appropriate to look at a downtown transportation demand management program. The City had several downtown employers that did a good job and were on the cutting edge. He thought Lytton Gateway was a building like that, but noted that there were many others including smaller businesses that could not put together their own programs. He thought it was incumbent on the City to help coordinate that effort and provide opportunities for everyone to participate in programs that would enhance transit use, bicycling, walking, and bike shares. That was part of the program Staff intended to flesh out over the next six months along with the parking garage study. Staff's recommendation to Council was to authorize Staff to proceed with the trial program for three to six months. They wanted to run the program for three months and then meet with the working group and report to the Council as to how things were going and see if another three months would be worthwhile or if there was a reason to immediately shift gears. Staff also wanted input and direction related to the studies. If Council was ok with Staff looking at the zoning issues then they wanted approval for that in order to get started on that work. Ray Dempsey spoke on behalf of residents that participated in the study group. He said that the RPP was not the solution but a test case for a broader solution. There were four issues that were brought up by the residents with respect to the RPP: 1) private parking on a public street; 2) size and length of time of the RPP; 3) forcing parking into adjacent areas; and 4) cost and accessibility of permits. With regard to the private parking on a public street the United States Supreme Court ruled in Arlington vs. Page 10 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Richards that the character and safety of neighborhoods trumped intrusive parking. There was a right there and numerous lower courts upheld that ruling. He said that as far as the size and length of the time of the RPP it was determined by the City and not by the business people or residents. It was based on available assets, including financial assets. The City would monitor results and could modify the pilot program. He said that forcing parkers into other areas was another major problem. As mentioned the pilot was not a solution, it was a test for a solution. Many residents noted that there were packed streets and wondered where the relocated cars would park. He said it would obviously move the parked cars out somewhat, but it was temporary and the six months was better than the six years the residents had experienced with the problem. After the RPP, the next step was to apply what was learned to the larger region. The cost and accessibility of permits after the first free permit, the $50.00 charge per permit, was a charge only to users. He said that if a person did not need the permit, they did not have to pay for it. Many people had driveways and garages, some did not. He said that at least the cost was borne by the users and not by all residents of the City as would be the case if the City absorbed the cost. The nonresident permits were negotiated to help bridge long term solutions. He said that if residents wanted an RPP program it would not happen without the pilot program as it was presented. Barbara Gross said that she and Chop Keenan were representing the Palo Alto Downtown Business Association. Chop Keenan, Russ Cohen, and herself were seated on the City sponsored Parking Committee that discussed the public/private parking interests of the downtown commercial district and the neighborhood of Professorville. She said parking was a complicated issue that had a direct influence on the success of the business district and had overflow impacts on surrounding residential areas. She said that there was always a parking deficit in the downtown and there was always a mixed use of space which spilled over into the residential area. There was also always a parking deficit in Professorville as garages were converted to other uses, driveways were eliminated to expand gardens, and garages in the back alleys were too small for modern vehicles or had been converted to other uses. She said that office space changed over the past years to accommodate more Staff. She said that families had increased the number of cars per household and most could no longer self-park on their own property. Representatives of the Professorville neighborhood communicated multiple messages. They said the streets were filled with nonresidential parked cars that remained there throughout the business day. That created a crowding· on the streets which did not allow residents the ability to park near their homes or re-park their cars during the day. She said that created a safety issue with drivers behaving poorly while looking for parking spaces and parking too close together causing vehicle damage and blocking Page 11 of 47 City Council Meeting Minutes: 7/16/12 MINUTES driveways. Equally as important it had changed the feeling of the neighborhood, making it look and feel less residential and negatively impacting housing values. Representatives of the business community began conversation with the fact that three public parking garages had been built to accommodate more customers and downtown employees in the last 10 years. Parking permits for emj)loyees were oversold by a minimum of 25 percent for all garages at a cost of $420.00 annually. Employee spillover to the surrounding neighborhoods had always been a reality and there were ongoing parking improvements in the downtown district. She said that the City was investigating electronic signage to direct cars to available spaces. The parking assessment district suggested stacking cars in select areas of the garages to further increase the number of permit spaces in each garage. That required the use of a valet attendant. She Said that all day parking ticket machines were being added to all garages to offer more options. She said that there was not a way to make things perfect for everyone and there was not going to be one single solution. Professorville was nota walled community situated in a rural setting; it was and always had been adjacent to the downtown. She said they were talking about public streets and who had the rights to access them. The business community could not force everyone working in the downtown to purchase a permit if that was their means of transportation. The negative impacts to the viability of the business district could change the attractive nature of the downtown as a place to do business which could have financial ramifications. It was said that if everyone walked away from a mediation not getting everything they asked for the settlement was successful. She said that everyone was moderately happy with the proposed RPP. The RPP addressed offering residents a guarantee that not all parking spaces would be filled with parked cars and therefore opened the congested feeling of the streets. The proposed RPP also guaranteed that not all parking spaces would be filled with nonresidential cars and offered the opportunity for traffic control. Opening· the RPP door in one community was a gateway for other communities to expect the same program and that became a vast and complicated problem. Chop Keenan said he wanted to fill in data pOints regarding the self-help of the downtown parking district. The downtown parking district met once a month for the last twelve years. It was a 90 minute meeting with a packed agenda and did not work on autopilot. They successfully built two parking structures with 900 spaces over that 12 year period. There were two costs associated with the structures. One was the cost to build them, which was financed by the property owners in the assessment district. That was $0.18 per foot per month, so a 2,000 square foot store paid $360.00 per month for the capital cost of servicing the bond. He said those funds did not guarantee the store a parking space. Spaces were on a first come first served basis Page 12 of 47 City Council Meeting Minutes: 7/16/12 MINUTES and downtown employees paid an incremental $420.00 per year for the operation and maintenance of the district. That was for things such as sweeping and security and totaled $1.2 million per year. He said that it took approximately 90 to 270 days to clear a waiting list. All the garages had waiting lists except for Cowper/Webster. He stated that with stacked parking they might add 300 to 400 more spaces, which was more effective than the $65,000 per space cost of building another structure. He said that parking equaled prosperity and that it was a fragile parking ecosystem that could not take radical disruption. They supported the Staff report. It was a long process and they did not know how it was going to turn out but they anticipated knowing more in six months. He said they would probably return to Council to discuss course correction at that time. Ethan Atwood spoke against the RPP. He said he lived in Palo Alto for 20 years, mostly in Barron Park, but had moved to Downtown North three years ago so he could take the train to work. He loved the vibrant downtown, but paid for that with drunken students and a fair amount of noise and difficulty parking. He said that was part of the deal when he moved to the area and thought that everyone who lived in Professorville near the downtown also understood that was part of the deal. He was annoyed and unhappy about people who tried to keep others from parking in their neighborhood. When he lived in Barron Park he drove to Professorville, parked, and walked downtown. What the RPP did was take away a right from other Palo Alto residents who lived in other neighborhoods and wanted to get downtown and park. The permits went to people of wealth, people who were professionals that lived downtown, and the people who were nurses at Lytton Gardens, Webster House, and Channing House, but the stock men and women at Whole Foods would not get permits and would be hurt by the RPP. He said those people would simply walk four more blocks. He said that RPP hurt the little people and to the rest of Palo Alto. He urged the Council to vote against the RPP. Richard Brand recommended that the Council take a serious look at how the plan would be implemented as it dealt with longer term issues. He supported residential parking permits but did not believe the RPP was ready. One of the issues was that if one did the math they would see that 103 residences ended up with 101 spaces available for one permit. He asked where he would go to purchase an additional permit. People had asked Staff how they measured the success of the program. He did not understand that either and believed it needed to be well delineated in writing so that everyone understood how the RPP was judged. He supported the idea in principle, but thought the program needed further review. Page 13 of47 City Council Meeting Minutes: 7/16/12 MINUTES Beth Bunnenberg said she was speaking as an individual. She said that there was a time when the Stanford Shopping Center had opened and the big stores moved out there and only the banks and a few stalwarts remained downtown. She said that there were boarded up store fronts and empty lots that stayed that way for some time. After David Packard restored the Stanford Theatre people went downtown to the movies and parked close to . the theatre because deserted streets were creepy. Little by little Palo Alto put together a mix of old and new structures and created a unique downtown. The City's transfer of development rights was probably the· strongest support for the historic restorations that had occurred. The architects came in and said that transfer of development rights made it financially possible to redo the buildings and that was how Palo Alto got its historical buildings renovated. She said that it was a balancing act and asked that they understand that in terms of the historic downtown buildings transfer of development rights was very important and Professorville was a very important district. . Rob Steinberg said he was an Urban Designer and Architect who lived on Bryant Street. He concurred with everyone that there was a parking problem in Professorville that needed to be addressed and appreciated the City's willingness to take the issue on. He was concerned that the displaced parked cars from the RPP program would gravitate to adjacent blocks and neighborhoods that were not part of the RPP program. He asked what assurances the City could offer the neighbors that were not part of the RPP program that their streets would not be the recipient of the displaced cars. He hoped there was consensus among the Council that simply moving the problem was not a satisfactory solution. Dena Massar said she had heard that Palo Alto used to be a peaceful place to live but had changed and parking permits would not stop inevitable change. She also heard that some people wanted to park in front of their homes, but permits would not provide that certainty. She heard that Palo Alto High School students were a problem, but parking permits were not a substitute for a conversation with the School District about their parking policies. She heard that the biggest parking problem that neighbors faced was that nonresidents carelessly blocked driveways. She suggested signage and enforcement to solve that problem. She heard that the proposed trial area was not large enough, but there were no stated criteria that helped her decide where the boundaries should be. She heard that it was technology employees or Sirius employees or developers, the City's own policies, or even the neighbors themselves who had caused the problem. She said that issuing parking permits did not get to the root causes. She heard that residents should have free parking permits, Staff said that the cost of permits in a permanent system would be based on cost recovery, but there Page 14 of 47 City Council Meeting Minutes: 7/16/12 MINUTES was no information about those costs and therefore no consensus about the worth of the parking permit. Professorville was not the only neighborhood that wanted permits. She asked if it was the appropriate time to ask if Palo Alto wanted to be a parking permitted community and if so then the community dialogue should come first to establish appropriate policies and set the-rules for implementation. She asked how they got to the place where the area south of Forest Avenue was converted to a test tube. Staff had asked Council to approve a program that had no specified goals, no problem statement, no established criteria that defined success, and would negatively affect residents that lived outside of the trial boundaries. She said the trial had negative consequences for service employees who worked for local retailers, restaurants, coffee shops, and markets. Those services enhanced the livability of Professorville. She said that if the Council decided that· parking permits were necessary she asked that they make sure to establish a process that would ensure an open public dialogue that represented the community's broad interests. Mark Alguard said he opposed the proposal. He lived on Waverley Street 50 feet from Addison. He anticipated that all of the cars displaced from the Addison and Scott blocks would find his house to be the best place to park. He was not being provided a residential parking permit so that he could park. around the corner on Addison, which would probably be the only parking that was available. He suffered the consequences and did not get any of the benefits of the trial and that had been expressed by other people as well. He was also concerned about the survey that was done because he was not surveyed. The only people that were surveyed were in the proposed area. He acknowledged there were parking problems but stated that they bought that when they bought their houses. He did not have much sympathy for people who converted their garages or turned their driveways into gardens. He felt that the City should not reward those people; it should have programs that encouraged homeowners to restore their garages and driveways and move toward off street parking. He said that Menlo Park did not allow overnight on-street parking and asked what would happen if Palo Alto had a program like that. Don Barr spoke against the proposal, not because he was against permits but because he was disappointed in the process. He said that· he spent significant time working on Palo Alto issues. The RPP program process was neither open nor representative. He said that he lived in a house on the historic registry across the street from the district and the first he heard of the RPP was a letter posted July 3, 2012, which he received on July 5, 2012. The letter indicated the program was a done deal and that it was being discussed at Council. He asked why there were not announced, publicized, noticed, open meetings. He asked why it was not a representative process. Page lSof47 City Council Meeting Minutes: 7/16/12 MINUTES He said that the self-appointed representatives on the study group were not representative of the community. Professorville was 15 square blocks; the proposed area was two and a half square blocks, not all of which was in Professorville. He said that most of the homes in the residential parking district had garages and many of them had been converted. Parking in the -City streets was a social good that belonged to all the people of Palo Alto, residents and employees alike. In his opinion residents had no more right to a parking space than a worker. He said that there also needed to be a conversation about the difference between a $12.00 an hour worker and someone who made $120,000 per year. David Epstein said he lived on the one block of Emerson just beyond the proposed trial area toward Embarcadero. One of his problems was not just the downtown area, but the high school students that parked there during the school year. Many high school students did not want to pay for parking so they parked on his block. He said that the trial was a severe burden on his block because residents could not park a street over due to the trial and the displaced cars would park on his block. He said that it pushed both the downtown workers and the high school students to his block. He found it interesting that the RPP provided no solution. He asked where the cars would go. The RPP pushing them out of one area and all that happened was they were moving to another area. He was also disturbed by the process and did not hear about it until several people showed him the. completed survey which did not take into account those that were negatively affected by the trial. He found it unfortunately caviler to say that it was simply a trial and not to worry about it. It was dealing with people's lives over the next six months. He suggested they use computer simulations rather than experimenting on real people. He wanted a more global solution and urged Council not to pass the proposal. Steven Cohen lived on Addison and was between the pilot area and the downtown. He would not receive any benefits from the pilot program or any permanent program. He was against permit parking and was happy living in a vibrant and diverse area where people from downtown could park. After he found out by accident about the implementation of the program he did a casual survey with his neighbors, which looked at the available spaces for the residents. When he walked around at 1 :00 p.m. on several occasions he noticed that out of the 66 driveways with 125 spaces there were about 37 cars parked. He said that many of the garages were repurposed and that in that area there were only about 4 homes that had no garage or driveway. From his perspective the City was subsidizing the bad behavior of those with underutilized driveways and garages at the expense of the public. Page 16 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Ben Cintz said· he lived on Kipling Street with his family. Before that for about 15 years he lived on Alma Street in the affected area. He owned residential property in that area as well as some commercial property What . made Palo Alto and the downtown vibrant was that it was a changing area with many uses for that area. There were many changes over the years. He wasn't sure a· parking permit program in the absence-of additional parking was going to create a solution that could be addressed in six months. He said that 66 percent of the people surveyed responded and of that 80 percent approved. For part of the time he lived on Alma he commuted to San Francisco and took his bike to the train station, and then rode to San Francisco and back. He saw people doing that in the reverse direction now and was concerned that unless the City had solutions the pilot program was not going to give them many answers. Alan Petersen lived in on High Street where there were 12 cars parked on the street at 9:00 a.m. on Sunday morning and 27 parked on .the street at 9:00 a.m. Monday morning, which was basically total capacity. On his block the lifetime of an empty parking space was best measured in seconds. He said that he was sure many people were familiar with that problem. He found it surprising that his block was specifically excluded from not only the pilot program but the entire test region. It was perhaps because there were several duplexes on the block and therefore they were second class citizens in a single family discussion. Nevertheless, parking was clearly a persistent and difficult problem. He was personally ambivalent about parking permits. He enjoyed the vibrant downtown and realized he did not own the City streets. However, he endured aggravation daily. What bothered him most about the RPP program was expressed very well by previous speakers and that was the lack of transparency, fairness, and measurable objectives in the process. He urged the Council to defer the implementation of the RPP until there was a better plan. Justin Birnbaum said that it was striking to him that so many people were present so late in the game expressing concerns about the RPP. It was painfully apparent to him that the process was flawed. People were there to speak to Council because they had not been part of the discussion. The group surveyed was not representative of the broader spectrum of views in Professorville. He was not surprised that the people surveyed lived in the pilot area. He said that the folks who were the loudest about the problem, placed cones in front of their homes, and did not use their garages for parking got what they wanted in part because of some bad behavior. He looked at the data with Mr. Rodriguez and at the very worst time of day people. only had to park a block and a half from their home. He did not feel that was so bad. Page 17of47 City Council Meeting Minutes: 7/16/12 MINUTES Michelle Arden lived on Lincoln Avenue in Professorville. Unusually her home was newly built. She said that many people who chose to live in the area did so because of the proximity to downtown and downtown services. It was because of the urban amenities, which were a huge benefit to the neighborhoods that surrounded the core of Palo Alto. The benefit had consequences, which were that the streets were more urban because they needed to support the workers that provided those urban services. She thought that the City could reward people for using their garages and their Floor Area Ratio (FAR) space to build two car garages, as she had. She suggested Planning could think about that while also considering some of the other initiatives that offered a great deal of promise. Michael Havern lived about six blocks down the street on Ramona and had for 26 years. He had a garage that was not converted with a driveway and used both every day because he could not use the spaces in front of his .' house. He did not suffer as much as the people in his neighborhood that did not have those things. The historic character of the neighborhood that he bought into 26 years earlier was substantially marred and that only alluded to the visual pollution, not to the day to day hassles of the out of control parking situation. He did not think there was a pilot required for the permit program; he thought it was something that should be instituted immediately. He said the City was trying to encourage heavier development near transit hubs, but continued to provide free all day parking. He thought that they should go to no all-day parking anywhere close to the areas where they were trying to encourage transit heavy development and do away with the pilot, which causing several problems by itself. Paul Goldstein lived on Emerson Street in the trial area. He said that the plan before Council was developed by a few self-appointed residents and had not been discussed with the community. He had seen more public outreach around moving a stop sign then there was on the RPP. He was not aware of a single community meeting about the RPP. The Staff report stated there was a downtown community issue in March, but he did not remember receiving a mailing and he looked back at the archives on the Palo Alto Weekly and did not see notification there either. Most of his neighbors had no knowledge of the meeting. In June 2012 letters announcing the trial were sent to the trial residents only. Adjacent residents were notified first through the July 2, 2012 mailing. Some details of the plan were first disclosed in the Staff report. Additionally, he thought the summer was a poor time to survey the neighborhood as many community members were away. He understood that the City was in a difficult position because some vocal residents demanded immediate relief and there was pressure to do something fast, however the only solution to the problem was a comprehensive program developed through an open and inclusive public Page 18of47 City Council Meeting Minutes: 7/16/12 MINUTES process. Given sufficient time and community meetings the impacted groups including businesses and employees could likely come up with a workable solution. He recognized that would take time and City resources, but the people of the neighborhood had lived with the issues for years and they had the time. He urged the Council to reject the trial and if they wished to proceed with it to they create a legitimate, inclusive process moving forward. Irvin Dawid said a residential parking permit was an effective tool used to manage parking, reduce driving and car ownership, promote affordable housing, and to reduce a city's carbon footprint. His apartment building was a great example. They had 107 units and the parking ratio was.5, so there were approximately 53 parking spaces for 107 people. He did not know much about what happened when his building went in in 1993, but the neighbors could have complained and asked what was to prevent the residents from parking in the adjacent neighborhood. That became a reason why one used an RPP. A previous speaker asked where the cars would go. The way he saw it the RPP was not being presented as an effective tool to manage parking. Another speaker used the term parking deficit, which was a term that made no sense anymore. There was no parking deficit; the City had mismanaged parking and parking in garages that went unused as well as a segregated system of permitted parking and free parking. The City needed to use the parking it had effectively, which meant pricing it. They needed to eliminate the permit and have long and short term parking using meters like other cities. The City had people currently buying parking permits and not using them so the spaces went empty. He asked that they use permit parking as a tool and not as a solution. Sandra Martignetti said she lived on Cowper Street and everyone had garages and driveways. Most people used those spaces to park. She said that in the last nine months they were invaded by people who parked and walked downtown. Her neighborhood was different. She said that if they were wondering if cars would be displaced to adjacent streets, it had already happened. She was ambivalent about parking permits. It was a strange concept to her that she would have to pay to park her extra car. What she wanted to have the City do was move forward with innovative ideas such as the ones discussed by Mr. Keenan. She would rather see· money spent on stacked parking, additional garages, and innovation downtown. Adia Levin said she worked in downtown Palo Alto for six years and utilized the permits and was painfully familiar with the permit parking garage system that induced employees to park on the street. She currently lived in Menlo Park and visited Palo Alto often, almost always on her bicycle. She was glad that the Professorville residents raised the parking issue but did not Page 19 of 47 City Council Meeting Minutes: 7/16/12 MINUTES believe that the proposed RPP would solve the problem. She was happy that Staff was working on a set of comprehensive solutions for optimizing downtown parking including allowing businesses to purchase and subsidize permits, using permits for multiple workers, enabling online and kiosk purchases of permits, day passes, digital signs, open data, but she thought there was still a parking management problem. Several people said that the reason they did not pay for parking was that on-street parking was free. She suggested they set the prices so that there was an incentive for people that wanted to park to park at a garage and a disincentive to park on the street. Doria Summa said she lived on Yale Street in College Terrace. She thanked the Council for approving their permit parking program which had been a huge success. She served on the committee that worked with Staff to design that program and continued to serve on another group that worked with Staff to keep the program running smoothly. She supported a similar residential parking program for Downtown North and South. The program allowed anyone to park for two hours during business days. What she did not support about what the City proposed was a program that discriminated against residents that lived in multiunit dwellings and their neighbors. For example Attachment H of the Staff report had the program guidelines for the general RPP going forward. She said that if the City attempted to apply that in College Terrace it would literally exempt all of the parts of College Terrace that had been formerly the most impacted by parking problems from being in any RPP. Additionally, the experience in College Terrace showed that a comprehensive RPP supported the needs of both businesses and residents. Living on Yale Street at the edge of the mixed use zone she could tell the Council that in addition to employee parking businesses needed short term parking. When employees parked everything up, businesses did not have the short term parking either. Residents needed parking spots sufficiently close for themselves and their visitors to their houses. She thought that a RPP in Downtown North and South would support the long term transportation goals of the City, which were to get people to come to the City through alternate modes of transportation. Herb Borock said the main reason there was a parking problem was that the Council kept supporting more intensified development for proposals that exceeded the zoning. The second problem was the intensification of existing development. He stated that for those who were concerned about how to get residents to use their driveways and garages the way to do it was to prohibit parking in residential zones between 2:00 a.m. and 6:00 a.m. He said that was how the system used to work and that back then you could get a hardship permit, but someone would have come out to check to see how long your driveway was and what it accommodated. He stated that the Page 20 of 47 City Council Meeting Minutes: 7/16/12 MINUTES particular proposal was not Professorville; it included the 1000 block of Emerson Street, and the other side of Addison which were not in Professorville. He said that Ken Alsman was the main advocate of intensive development. For example when 800 High Street was on the ballot Mr. Alsman said it would provide enough parking to eliminate business and customers from four or five blocks. Mr. Alsman had also supported 355 Alma. He said that Mr. Alsman thought he was going to get a permit for a spot in front of his house. The Staff report did not say if the permit was for individual spaces or for the whole neighborhood. He hoped they were for the whole neighborhood. The program should not be done for the reasons mentioned by quite a few speakers. John Woodfill said he was a resident of Downtown North where they had a parking issue as well. He was not as worried about the parking issue as he was about the frantic drivers going around looking for spaces in the neighborhood. He felt that the Professorville trial was treating a symptom, not the overall problem. He agreed with those who proposed trying to simultaneously control parking outside of downtown and manage the parking structures that existed better. He understood that the Bryant Street garage was often half full during the day, so if the garages were managed better there would be more reason for people to park elsewhere and if they had a RPP or meters in the outside neighborhoods then the parking might move inward and reduce the traffic. Martin Bernstein said he was the Chair of the Palo Alto Historic Resources Board (HRB). He said that Ms. Gross mentioned a parking deficit in downtown Palo Alto. They had one in 1924 and that was why the underground parking underneath University was built when the Cardinal Hotel was constructed. Mr. Williams mentioned historic preservation and a very successful program of transfer development rights. He suggested that program remain intact and unchanged as it had been very successful. The HRB had seen many applications that benefited from that program. In addition to historic preservation itself as a benefit, two other direct benefits of that program were the seismic retrofitting which aided public safety, and contributing to the economic vitality of downtown Palo Alto. The most specific example was the historic Ramona district where there had been several successful projects and the economics of downtown Palo Alto and Ramona Street in particular had been very important for the vitality of the City. Vice Mayor Scharff thanked the people who served on the committee. He said it was important to note that it was a very contentious committee and there was a lot of tension and difficulty at times between the two groups and certain members of the groups. It was one of those processes where the Page 21 of 47 City Council Meeting Minutes: 7/16/12 MINUTES groups wanted to come together and finally agreed on what they wanted. He thought the agreement was driven significantly by what each group wanted. Downtown parking interests wanted to have parking spaces and permits, whereas the residential group wanted not to have cars in front of their houses. That was something for Council to keep in mind as it reviewed the proposal. Staff had a different proposal at the time, which was to make one side of the street RPP and the other side of the street 4 hour parking. There were concerns amongst the residential group that the 4 hour parking would be in front of their house. He thought that was why Staff's proposal was defeated. He was not sure that was what should drive the discussion. He thought the Council needed a more comprehensive view so he thought it was important for his colleagues to get a sense of what the meetings were like. Council Member Burt said they were calling it a trial, but it was not clear to him if it was· being tried whether or not they would have a permitted program, the form of a permitted program if they were to have one, or the area covered by a permitted program if they were to have one. Mr. Williams said they were looking at a broader area than the trial but from a management standpoint the pilot area was manageable and did not have many cost issues. They were trying to determine what the balance was between the residential component of the use of the streets and the nonresidential component. In other words, assuming there was a restriction on the nonresidential component, they needed to determine if residential component was such that it would take up most of the parking spaces on the street by itself, or would there be empty streets that could accommodate a better balance of resident and nonresident type of parking. That was the number one thing tested. Secondly they were testing if there was an impact on the neighboring areas and to what dfrection it went and again, keeping the area fairly focused they thought would minimize the impacts rather than doing it on a larger scale. After the trial was completed Staff would return with a program that better addressed the overall impacts. Council Member Burt said that it sounded like the intention had some elements of a trial and some of a pilot. The pilot being a reduced scale of something that was anticipated would most likely ultimately be a larger geographic area than what was piloted. The trial was both about the formula that was used and also of spillover impacts, which intersected with the pilot. He thought that laid out for Council what they were talking about even if it did not provide solutions. He saw that Staff recommendation number one in the third line said that within six months Staff would return to Council with the recommendations for a permanent program. He asked if Page 22 of 47 City Council Meeting Minutes: 7/16/12 MINUTES that was really the intention of what Council would be directing that evening based on Staff recommendations. Mr. Williams thought that was a better way to word it because Staff might return with a completely different direction. Council Member Burt said Vice Mayor Scharff mentioned that initially Staff had a different concept of where one side of the street was permitted and the other was not and then there was an agreement between the neighborhood representative subgroup and the downtown business interest to go to the formula proposed. He was interested in what would happen if the City's trial included both forms. He thought there were enough blocks to try separate formulas and asked if there was any reason why they could not do a hybrid trial. Mr. Williams said there was nothing prohibiting a hybrid trial but it might not be advisable because the pilot was a pretty small area and they would only get one or two streets one way and one or two the other which could be confusing for people. What he thought would work better was for the pilot area to take one approach and a second small area take another approach so that they were physically distinctive from each other. Council Member Burt said he saw the downside to having two options tried at once and that those were tradeoffs that needed to be considered. He said there were a number of comments about the representation of the group. He knew the neighborhood well, and when they had the initial South of Forrest Avenue project they had very extensive public participation and it was very open. There were committees and subcommittees and meetings that were neighborhood based meetings, some of which were City sponsored and others were neighborhood sponsored in a very open, inclusive process. He said that for a variety of reasons that did not happen in this scenario. He asked what the thought process was for having the representation solely by those who were in the trial area and advocating a RPP rather than a mixture of options. It seemed from the survey that most people in the trial area favored the trial. He noted that the people outside the trial area who would potentially be in the spillover group were not surveyed. Those people maybe had a moderate parking problem which could become an acute problem as a result of the trial. He explained that those people may not favor a permit program at all because the status quo was better for them than the cure. Mr. Williams said Staff had started with a much larger study area and focused it down. He did not know that he realized as they focused it down that everyone in the group still was within the focused area, but it did go Page 23 of47 City Council Meeting Minutes: 7/16/12 MINUTES there and Staff relied on them to get the word out to the much larger group. There were discussions along the way about getting broader input and even including Downtown North. However they focused it down and Staff should have been more forceful about having broader community knowledge of what was going on even if there was not more participation on the committee. Council Member Burt asked for a rough estimate of the cost of the future program. He saw the cost for the temporary program and asked if the future program would be comparable. Mr~ Williams said the cost of the future program depended on how many participants there were and how many bought permits, what the level of enforcement was, and other factors. Assuming they did not have the funding from the Lytton Gateway project they were estimating permit costs of $200 to $300 per year per household. Council Member Burt said that begged another question because they could get one response level to the program based on pricing. One could imagine the higher pricing, but it could skew responses. If people paid $50 or $100 per year they may favor the program while if they had to pay $200 or $300 they may not. He said that it favored the neighborhood if there were fewer business permits bought because they were more expensive than in the trial. Since Staff was trying to dial the parking to 80 percent occupancy that could be skewed as well if they changed the economic forces. Mr. Williams said they were aware of that and the major goal was to get a sense of how the residential/nonresidential balance was and then assuming they could better equate that then take the next step of what the price sensitivity was. Council Member Burt said he remained concerned that they were adopting a broader policy on a de facto basis. He said it was not a certainty; they had a Downtown North street closure that was repealed after a year and a half or two years. Things were not necessarily permanent, but that was significant wasted time and effort and he did not want to see a repeat of that. He was not saying that he was convinced that the City should not consider a RPP but he was worried about making a broader policy decision and convincing themselves that they were just making a trial decision. Council Member Klein asked if Staff believed the City had a problem, and if so how if was defined. Page 24of47 City Council Meeting Minutes: 7/16/12 MINUTES Mr. Williams said they had defined a problem based on occupancy maps. There were substantial areas with close to 100 percent parking occupancy during at a good portion of the day. Council Member Klein reframed his question and asked if the residents had a problem. Council heard testimony both ways. Some residents said that they did not have a problem and that they lived in the area and only had to park a block and a half away. Others described it as intolerable. He asked if there was a standard that defined a problem if he had to park more than a certain number of blocks away and it took more than a certain amount of time to find a space. Mr. Rodriguez said that they did not use that type of a measure when they went through the process. What Staff typically used when they looked at transit oriented development type of standards was that a half a mile was a comfortable radius for people to walk. Council Member Klein asked how many blocks a half mile was. Mr. Williams said they did not have that kind of criteria. He thought it was a perception issue and Staff felt there was a strong perception among a number of the residents that there was an issue. It was ultimately subjective as to whether it was a problem. There was no traffic problem or traffic hazard in the City. It was a personal convenience issue. Council Member Klein said that he was torn because he heard conflicting testimony as some people said there was a problem. James Keene, City Manager, agreed with Mr. Williams that they did not have any existing quantifiable standard that said if it was the distance, density, or experience that defined it was a problem. People had different reactions. Staff had performed counts and there were locations that were more impacted than others and it was not just a perception issue based on imagined changes. There certainly appeared to be more parking and more impact in the neighborhood. Two blocks was a real problem if someone needed to unload groceries. He said that the way the process unfolded was that a group of neighbors came together and said they had a real problem that they wanted to bring to the City's attention. The City responded to a particular complaint and had a different perspective from the business community so the Staff put those groups together. As difficult as that was he did not know how they would have expanded it to a much larger conversation which possibly involved people that had not expressed any concerns. He thought it made sense for the Staff to try to keep meeting and resolve the issue. Given the testimony that evening this was not just a Page 25 of47 City Council Meeting Minutes: 7/16/12 MINUTES neighbor to the City issue, this was a neighbor to neighbor issue, and a neighbor to the business community issue. Council Member Klein said that was why it was a difficult issue. He did not understand the reference to 500 feet. He assumed that the usual block was a tenth of a mile and therefore he was talking about a five block radius. Mr. Rodriguez said he used 500 feet as an example. Council Member Klein heard that neighbors had placed their own orange cones out to indicate that people should not take a parking space in front of their house. He asked if that was true. Mr. Rodriguez said that happened. Council Member Klein said that was a vigilante act and that the Police ought to prevent people from doing that. He asked if they had any instructions to that effect. Mr. Williams said that he was not aware that they had reports, but they certainly would send the Police out if they had. Council Member Klein said that he did not want to encourage people taking the law into their own hands. He said that there were various comments about how everyone had equal access to the streets and he agreed with that, but did not think that the question was one of Constitutional law. He accepted the idea that the US Supreme Court told cities they could restrict parking in one area of town compared to others. He said there needed to be a compelling reason for different rules form one neighborhood to another. That was why he asked the questions about if there was really a problem. He asked why residents were not charged under the pilot project. Mr. Williams said that they were charging for more than one vehicle, but were not charging for the first vehicle. Staff wanted to see if residents had unlimited access to the streets what kind of load that meant for the street. Staff kept hearing comments about the nonresidential vehicles occupying all the streets and residents not having places to park their cars. Making it easy for the residents for at least the first vehicle in the trial was something that allowed Staff to better visualize the potential balance between the residential and nonresidential use of the street. Council Member Klein said he read that, but he still did not understand. It seemed that it would be a better test if they charged for the first car because presumably that was what would happen if they adopted a Page 26of47 City Council Meeting Minutes: 7/16/12 MINUTES permanent project. For example he could see someone who had a driveway and a garage taking advantage of the permit if it was free, but if they had to pay for it they would not. He was not persuaded by the free first vehicle at all. He had not heard any mention of the experience of other communities and he knew there were many residential permit programs around the country. He asked if Staff looked at and learned from any of those programs. Mr. Rodriguez thought that the specific elements they recommended within the program took advantage of the lessons learned from other communities. That was one of the reasons they did the first two elements of the program. They wanted to define a buffer zone to allow the transition from land use that generated parking to a residential community. The buffer transition was their method of ensuring that they were following a best practice determined by other communities as well as making sure they were protecting arterial streets which served multiple uses. One of the other major successful elements of a RPP program within many communities was that they pulled funds together to help reduce the long term cost of permits for the whole city. Those were the limits or restrictions. The rest were things that they needed to consider and discuss such as single family homes versus multiuse homes. Those were things that they needed to look at when they worked with the community. The attachment that was in the Staff report that talked about the framework really was geared toward trying to define the process that the community needed to follow but was limited to a couple of factors to help define the pattern of a RPP. Council Member Klein thought it was useful to see programs from several other cities that seemed as similar as possible to the Professorville area. Mr. Williams said he did not think they needed to look at if any other cities had done that kind of residential and nonresidential permit combinations. He said it was pretty standard to focus on the residential and then have two hour parking for everyone else. They started with a discussion of that in the group and that was a major impact on the employers so they backed off. Mr. Keene said that Staff would conduct more research. He said that he was previously the City Manager of Berkeley and had lived in Rockridge for quite some time and he did not recall any neighborhood moving to secede from RPP because it was a problem. In general people felt RPP's were essential to living in their neighborhood. He thought Berkeley brought in about $7 million in metered parking revenue and probably about $7 million in parking fines at the same time. So it was a fairly comprehensive program. Page 27 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Council Member Shepherd knew there was good work on the RPP, but was very hesitant to move forward on the pilot. She asked if Council moved forward on the second half of the Staff recommendation would that get Staff closer to answering Council Member Klein's question about if there was a problem. She asked if Staff needed the information from the outcome of the pilot. Mr. Williams said the programs would get them closer to the answers, but they also would take quite a bit of time to get implementation that gave a sense of how much relief was provided. The question was if Staff should try to do something immediately to provide relief in the residential areas or should they hold off and wait to see how some of the things came along. Staff already captured 50 new spaces in downtown, changed parking garage levels from hourly to permit, and did new signage to get people to the garage. Some of those things helped to some extent, but there was still concern in the neighborhood. Council Member Shepherd confirmed the pilot took them out of anecdotal information and into real information. She asked if Staff planned to return to Council after three months to see if there needed to be any course correction in the pilot. Mr. Williams said they planned to report back to the Council in three months. Staff told the working study group that it would meet again and check in at that pOint. If there did not seem to be major problems, they might just let Council know that but otherwise they would report problems and suggest changes or whether to abandon the program~ Council Member Shepherd said she knew there were apartment complexes between the pilot area and downtown that were probably not fully parked. She asked what happened to those cars. Mr. Williams said right now those streets were not part of the program. Apartment complexes were more complicated with respect to a RPP because there was a concentration that could be from under parking or that people used the streets because it was more convenient. Council Member Shepherd said that either the apartment dwellers would park in the unpiloted area or would have to park on the other side of the piloted area. She said Staff had not checked to see if the apartments had garages, so that could be a parking option. Mr. Rodriguez said it could be a combination of all the things Council Member Shepherd mentioned, but Staff did not know. Page 28 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Council Member Shepherd was concerned about some of the comments from the public. Her concern focused on the comments relating to circumventing the permit area and parking somewhere else. She saw both sides of the argument. She asked how impacted Downtown North was because the pilot would shift employees over there. They were already fully parked and impacted so it was the other areas that were in question. She confirmed that was what Staff was trying to look at. Mr. Williams said yes. He said Downtown North was already heavily impacted. Secondly he thought the distance from the trial area to Downtown North was such that people would find spaces closer than Downtown North to park. Council Member Shepherd stated people who work in downtown have to park one way or the other. If they had to walk further they would. Mr. Williams said the trial area was just a small part of the area south of downtown. There were other blocks and that was what the neighbors were talking about that people would park in some place that did not have the RPP restriction rather than going up to the Downtown North. Council Member Shepherd said that was already impacted, so it looked like the only thing Staff would be able to find out was if people went one more block closer to Embarcadero Road. If they did that and the City released the parking permits to the residents and 20 percent of businesses, she asked if the trial area would still be parked up with the two hour parking in front of people's homes in addition to impacting the blocks further out. She questioned if the information was really useful. Dividing the neighborhood concerned her. Mr. Keene thought Staff acknowledged from the beginning preference for the other model, but both groups preferred the current model so Staff went with it. Staff understood that it was imperfect. At the same time, there was a core group of citizens that said parking was a real problem that needed alternatives. Staff found very often in other areas that there was a challenge getting behavior change. There was the challenge of behavior change for businesses and their employees as to how they would have more uptake on Transportation Demand Management (TDM) or how they would maximize use of garages. Staff would have to deal with issues of if RPP programs in a more expanded version if it was something that people wanted. He said that Council Member Klein's points were valid. If they did not price the pilot properly then they might not collect the data they needed. From the beginning Staff understood that it was going to displace parking Page 29 of47 City Council Meeting Minutes: 7/16/12 MINUTES further down the road and require neighbors to come forward and ask for something specific in their neighborhoods as well. He guessed that the situation would probably improve for the six blocks in the pilot. He said that the problem ultimately was the fact that they did not want to ruin the vibrant downtown. The timeframe to plan for new parking or TDM programs were long term issues. They had a dilemma and there-were always consequences in a dilemma that were unsatisfactory. He said the Council meeting was transparent and part of the process. Things were often elevated and people paid more attention at the Council level than the outreach that Staff could do. The Council was free to send Staff back, to put qualifications on the program, or whatever they needed to do. It was not a done deal just because Staff presented an option to the Council. Council Member Shepherd asked if the program went away when the trial ended or if Staff intended that it become an entitlement for that particular configuration of Professorville. She did not mind gathering data for a time period but she thought it was important for it to revert to see if trends went back to the way they were before. She felt that would be informative. Mr. Williams agreed. He said Staff was comfortable saying that the trial ended in six months and it was incumbent on Staff to return to Council with a recommendation to extend set parameters for how to move forward with the community on a broader program. If that did not happen then the program ended at that pOint. Council Member Shepherd asked if they would put up temporary signs. Mr. Williams said they were temporary and the sign would be removed pending a determination of what the ultimate program was if there was one. Vice Mayor Scharff said he wanted to follow up on what Council Member Klein and Council Member Burt said about pricing. One of the things that Staff continually reiterated during the meetings was that if there was a full RPP it had to be cost neutral. He had the sense that the committee did not listen to that part. He thought they could do a disservice to the neighborhood because they were surveyed based on the notion of a free permit for one car and then only $50 for a second permit. The reality of the situation was more in the $200-300 range for a permit. He thought they should survey people with a realistic version of the cost. If they said $250 and they received feedback from 40 percent saying they were interested with 60 percent saying no, that was different information. People would be angry if the cost difference was so great. He thought they should return and complete surveys with realistic numbers. He knew there was a push to get an RPP done as soon as possible and that Staff was under significant Page 30 of47 City Council Meeting Minutes: 7/16/12 MINUTES pressure, but people needed a sense of what would really happen or the whole notion of a trial did not make sense. He also agreed with Council Member Shepherd that if it was a trial then it should have a specific end date. He thought it was better if they said that it ended no matter what and that the City would use the information to design a broader program. He said Staff did a good comprehensive job on the recommendation involving additional studies and actions related to parking in downtown. He wanted Staff to return with funding options for the public parking garage sites. One of the things he realized when sitting on the committee was that there was agreement that some workers should be able to park in the neighborhoods. That was one of the worthwhile things that came from the meetings. He thought people were saying that employees should be allowed to park in the neighborhoods but at a level that did not make life uncomfortable. That was what the City should strive to achieve, making life not uncomfortable. People bought homes in that neighborhood and area knowing that there were many impacts with downtown. They just did not want to feel that the impacts were extreme and he believed some people felt it had gotten extreme. That went back to Council Member Klein's question. He thought that was what people wanted to know; how many cars could be removed from the neighborhoods and how could the City get that done. Mr. Keene heard a difference between Council Member Klein's point of having a no cost first car parking permit and if the price should be closer to what the expected the ultimate was. His understanding was that this was a pilot that would not have the full level of enforcement. If they charged the $200-300 fee than the City risked having residents demand the same level of enforcement that was concomitant with that pricing. The issue of paying for at least every car so there was truly a litmus test was different. Staff wanted to price it in some way that people felt the trial was working into what it would be like based upon the price if it was a permanent program. He thought the sense was the City was not offering a program that mirrored what it would be if it were a permanent program. Vice Mayor Scharff said he thought they should get the trial as close as possible to what it would be like for people and survey them. He thought people were more price sensitive than enforcement sensitive and that Staff would receive push back at the $200-300 mark. If the City was not going to charge $200-300 because it was not going to have that level of enforcement then they should price the program according to the appropriate level. If they did not use the right information they would not receive the right data and they would leave the wrong impression with the community. Mr. Williams said the $200-300 figure assumed a full level of enforcement. It also included all the upfront costs which the City had the potential to Page 31 of 47 City Council Meeting Minutes: 7/16/12 MINUTES cover with the Lytton Gateway project. The figures also depended on the level of participation. He thought that if they did a survey they ought to lay out the options and not assume the highest case. They discussed some of those issues in the group. He also pOinted out that if it was a three month program, $50 equaled $200 per year. Again, they were not charging for the first permit so that sounded like an appropriate way to go. Council Member Holman said she used to live in the neighborhood and she could support those who said the situation had gotten worse and the neighborhood was more impacted. She said that it was a quality of life issue, a neighborhood character issue, and a business vitality issue. Part of the quality of life in the neighborhood was that it was near the business district. That said there were property value impacts and basic disruption. It was not as clean; the streets were not swept as well. There were all kinds of negative impacts on the streets the way there were now. She said that the 900 block of Ramona and the 1100 block of Emerson were full during the midday peak period yet were not included in the study area and asked why that was. Mr. Rodriguez said that when they started they looked at a larger area but worked it down to a symmetrical shape. It was a boundary that was put together with both Staff and resident input. They looked at parking occupancy of the street. If they were at 85 percent there was still open parking on that street so that was another factor. Council Member Holman said that she understood that if there was some space on the street that meant there was available parking but it was tight with 85 to 100 percent occupancy. She said that the pilot used $50,000 of the $100,000 allocated from the Lytton project. She asked if the City was better off using some of the money on the objectives for the recommendation to proceed with additional studies. She was not 100 percent clear on what they were doing. Attachment H, page 301 said "parking program guidelines." The word guidelines threw her because guidelines were not really defining a program they were parameters that could be implemented. There was also not a good description of what the program would be in the document that was the draft proposed RPP. She was not sure that everyone knew what was being proposed. Mr. Rodriguez said the survey focused on the one issue of a potential RPP pilot program. There were many good comments about additional information that could have been included in the survey including the costs of an ongoing long term program. He said that they were in the infancy of developing the RPP and there was significant positive change on the permit sales side and the distribution of permits. It would take more time to try Page 32 of 47 City Council Meeting Minutes: 7/16/12 MINUTES things. Mr. Keene and Mr. Williams both asked if it was the right time to try a RPP and if it should be done under the process Staff defined or in some other form, or if they should accelerate the other programs first and revisit the RPP another day. -Mr. Williams thought Council Member Holman's questions went to the specifics of the RPP. He agreed that the information was dispersed. The question she had about the use of the money going toward the other programs concerned him because he thought there was a commitment at the time of the approval of the Lytton Gateway project that the money was segregated and used specifically for residential protection or parking intrusion. He was not sure it was appropriate to move the money to another type of parking program. Council Member Holman said it seemed to her that without answers to some of these questions they would not have good enough information to deploy. She shared the concerns that this was not an open process. Council could not make changes that evening based on information it just learned. The process could have been improved. There were some things that were added more appropriately or more clearly described in the presentation than were listed in the Staff report. Someone told her that Palo Alto High School was charging for parking which was causing more parking in the neighborhood. She asked if that was correct. She said that Council Member Shepherd just told her that they had always charged for parking .. She said that they might want to work with the School District and Stanford on that. She listed off modes of transportation that were added and asked how those items would be funded or if they could be funded. Mr. Rodriguez thought the concept was a Staff developed toolkit of downtown transportation management tools to be taken advantage of by existing or future development. One of the elements they thought of was a future expansion program participation into a shuttle program which would allow the City to provide new service to the area and help connect it with other residences within the community. He said that participating in a shuttle program could be a way to provide more connections through transit use that did not currently exist through the Santa Clara Valley Transit Authority (VTA) or other resources. Mr. Williams said Staff was not ready to tell Council how it planned to fund anything listed under that option. Council Member Holman said she would add opportunities with underutilized and over parked buildings in the downtown area. She said that other communities managed liability issues and that seemed to never get Page 33 of 47 City Council Meeting Minutes: 7/16/12 MINUTES addressed in Palo Alto. She wanted Staff to look at that as part of the solution. She asked why the overnight parking restriction was no longer in effect. When she moved to the City in 1975 you could not park on the street overnight. She wondered if it was imposed again if it would force people to use their driveways. Mr. Williams said he did not know the background, but he knew as far as the RPP that was not a problem. Council Member Holman said she understood, but it was a little piece because people said that others had converted their driveways as well as their garages to other uses. That was a way to perhaps make people use their driveways again for the intended purpose. She did not have any evidence that there was outreach to the business community to see what the workers behavior was as a response to a RPP if the City moved forward. That was important. She asked if Staff could return in six months with a new and improved pilot that was better informed. Mr. Williams said that if that was Council's -request Staff would accommodate. He felt the recommendation would be more informed in six months' time. Council Member Holman was interested in moving forward with something but what the Council had before them currently was ill defined and did not contain broad enough input. She thought six months was a good time frame to ask Staff to return with a plan. Mr. Keene said that Council's directive needed to be clear about wh'at additional information Council wanted so that Staff was able to respond. Council Member Price was inclined to go ahead with the trial on the RPP because she thought they needed additional information regarding the parameters that were laid out. She thought if they said after all the months of work that further study was needed she was not sure that would move the City forward in addressing the stated problem. She appreciated Staff's comments and the discourse on the additional studies and hoped that when those came back that there was some sense of the cost and the relative priority. She was not asking for an answerimmediately but based on what other communities had done she wanted to know which elements could yield information that could be used in concert with a potential RPP. She appreciated the comments regarding best practices and asked if the draft in Attachment H which had preliminary guidelines was based on an extension of what was in the Staff report, or if Staff looked at guidelines or equivalents that were used successfully in other communities. Page 34of47 City Council Meeting Minutes: 7/16/12 MINUTES Mr. Rodriguez said it was the latter. Council Member Price was inclined to go along with the comments about how if they proceeded with the pilot program that it should have some fee structure associated with it. Issuing free permits was a false or inaccurate litmus test. She said that people who did not need the permit might use it simply because it was free. It made sense to charge some reasonable fee for the parking permits. She said that the price could be scaled or less than what the potential long term would be, but it needed to be recognized in further communication with residents in the trial area about what the likely range of costs were if the program was implemented. With the discussion of under zoning and planning there was a reference to TDM and other options. Within that language it said other options would be examined and she wanted to clarify if Staff was thinking about auto restricted zones or on- street metered parking. Mr. Williams had not thought about auto restricted zones but they would at least look at pricing issues to see if that was something the community and Council wanted to look at. He said that it could be brought forward as part of the menu. Council Member Price said there were many hybrid programs used in different places and every community was different. She encouraged everyone to read the book "The High Cost of Free Parking" by Donald Shoup. Mr. Shoup made the case that free parking inflated parking demand and played into issues related to parking requirements and the zoning code. She clarified that on the College Terrace program there was an opt-out scenario. Mr. Williams clarified that there were two ways. One was not buying a permit, and the second was that whole blocks could opt out if more than 50 percent wanted to opt out. If that happened they would not have the signage on the street. Mr. Rodriguez said that when the College Terrace program was initiated the blocks voted to opt in or out. Afterward they had the opportunity to vote per block and opt out again. Council Member Price said she concurred with all the comments made about the noticing of the public. She thought the City needed to be very mindful of that at every stage. If there was a trial or a post-trial or any discussion of the strategies the public should be noticed. She knew the Staff observed that as well but she thought it was extremely important. Page 35 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Mayor Yeh knew that there were many considerations and iterations of the RPP. Ultimately he did not support the pilot program or really even the development of a RPP because he thought conducting additional studies was the smartest approach. He asked Staff to define what they meant by long term. He discussed the amount of Staff who would have to work on the various options. Mr. Rodriguez said that over the next six months there were many things Staff could move forward on. Some of the initial things were studying the existing surface laws to determine where they could build more garages and if attendant parking made sense in the existing garages. There were many factors including if the structures would support the weight of additional cars. Staff could advance those studies because of a separate contribution from the Lytton Gateway project. Staff also committed to advancing within the next six months the development of some sort of RFP to help them collect data about what they could do with technology deployment within the garages. They also wanted to share more information with the Parking Committee. There was a strong interest within the business community and they had formed the assessment district to help advance many of the solutions that were already in place and the City needed to respect that process and solicit that input before they came back and made a strong recommendation to Council. Mr. Williams thought that some of the things that could be implemented in the next six months were attendant parking, or at least a trial of that somewhere, and some technology efforts. He said that building a parking garage took longer, but in six months Staff would have good study information on that. Mr. Keene had also discussed a public/private garage that would be a faster track than the City building a structure on its own. Mayor Yeh appreciated the thought that went into the pilot, but his greatest concern was that it moved the problem and did not really address or create a systemic solution. He said he favored a systemic solution. MOTION: Mayor Yeh moved, seconded by Council Member Holman to not move forward with the trial Residential Permit Parking Program, however to: 1. Direct Staff to proceed with additional studies and actions related to parking in downtown, including but not limited to: a. Study of potential new public parking garage sites, capacities and costs; b. Methods to increase capacity in existing garages, such as attendant parking and adjustments to the permit/public distribution of spaces; Page 36 of 47 City Council Meeting Minutes: 7/16/12 MINUTES c. Technology enhancements, such as gate controls, parking space identification systems, and parking permit processing improvements, etc.; d. Zoning studies and revisions, including study of the downtown cap on nonresidential space, the use of bonuses and transfer rights, variable parking ratios for office uses, and how to treat non- conforming parking sites; and e. Evaluate paid parking options. Mayor Yeh said he met with residents that .were the strongest proponents of the RPP program and shared with them that he could not support an RPP program in isolation. He felt it was moving a problem around and his greatest concern was that the neighbors not in the trial zone would be negatively impacted for the duration of the pilot. He thought the energy could be more positively channeled to maintain the urgency that was identified in the problem and focus ona systemic and comprehensive solution and to move forward as quickly as possible. He acknowledged that there was a problem and he lived in the Evergreen neighborhood where they looked to College Terrace for having created a problem across EI Camino Real in Evergreen. That was the kind of issue that he did not like. He wanted to focus more on a great set of solutions and evaluations. Council Member Holman said that she was supportive of finding relief for the neighborhood but was not comfortable with what was brought to Council. She said that Staff's time was not a wasted effort, but the RPP was not ready for trial. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER TO INCLUDE: 1) parking exemptions, 2) a Tran~portation Demand Management Program, and 3) to direct Staff to look at underutilized private parking garages. Council Member Holman said that there were parking garages in the downtown area that were underutilized during both the daytime and in the evening. She suggested Staff speak to the property owners to see how the garages could be better utilized. Mayor Yeh agreed with Council Member Holman's additions. Council Member Holman believed that the intention was for Staff to report back in six months. She did not want the business community or residents to feel that this was something that would continue for an unlimited amount of time. She wanted a report in six months. Page 37 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Mr. Rodriguez thought that six months was feasible. Staff started many things and wanted to involve the downtown merchants and allow the community to participate in what the content of the RFP would be so that when Staff solicited cost information for projects or programs they knew they were inquiring about things that were of interest to the community. He thought that within six months Staff could develop the RFP's. Six months gave Staff the opportunity to meet Council's expectations. Mr. Keene agreed with the six month timeframe with the understanding that Staff would return before then with more of a detailed scope of what it was they were asked to do. He said that even though Mr. Rodriguez responded to some of the initial requests he did not believe it gave them a good measure of what the outcomes or percentage of the perceived problem it addressed in whatever period of time. It could be a multiyear effort that Staff would make progress on, but that progress would still be unseen. He suggested returning in the fall with· a more detailed report on what Staff thought the timeframe was on the different components and what they thought the yield was in relation to the problem. If they had to build multiple parking structures that was a different issue than installing some technology to update the existing capacity. He requested that they add something to return to Council in three months. He wanted it to say something about an assessment report. That was very different than having implemented everything. Then Staff would return in six months. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER TO INCLUDE to direct Staff to return to Council in three months with check in and return with an update before the end of the year Council Member Holman said that she hoped that within six months Staff would return with a progress update and identified a better program for a RPP. Mayor Yeh said that his Motion was to remove the consideration of an RPP. Council Member Holman confirmed that Mayor Yeh meant that none of the exercises were intended to lead to a RPP. Mayor Yeh said yes, that the Motion did not include the Staff Recommendation to evaluate an RPP. Council Member Holman said that related to Downtown North. Page 38 of47 City Council Meeting Minutes: 7/16/12 MINUTES Mayor Yeh said his Motion was to not move forward with the Professorville RPP. Everything in the remaining Motion could reset the baseline for what downtown parking would look like. Council Member Holman said her hope and understanding was that gOing through this process would lead the City toward what it should do with an RPP. Mayor Yeh was not open to that and asked if she did not want to second the Motion. Mr. Keene said that there was always the possibility that the report would have an impact on how the Council looked at an RPP. The Motion began with not wanting Staff to work on an RPP and supporting any RPP process, partly because it could be in conflict with the effort invested in the alternatives. Council Member Holman asked Mr. Williams if the information Staff provided in three to six months would include what advancements had been made and what Staff anticipated to see in terms of relief for Professorville so at that pOint in time Council could look at if they wanted to move forward with an RPP. Mr. Williams said Staff would provide Council with an assessment of which components of the work they were doing that would provide or had provided relief to Professorville. At that point Council could revisit whether to try the RPP. He thought Staff would have a real concern trying to retool a whole new RPP program while they were looking at the other ~hings. Council Member Holman said she would maintain her second to the Motion but with the intention that RPP was still on the horizon. Mayor Yeh confirmed he was not open to that. Vice Mayor Scharff said he would support the Motion and suggested language additions to the Motion. He said they change the verbiage to reflect zoning studies and revisions as a concern from the public. He wanted the City to evaluate that issue. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to: 1) return with funding options for new public parking garage sites, and 2) include that the zoning studies would evaluate disincentives to having two car garages. Page 39 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Council Member Holman was hesitant because the neighborhood was built up and much of it was Professorville she did not believe it would have much of an impact. Vice Mayor Scharff said they were looking at more than Professorville. The Council was basically doing a comprehensive for Downtown North and South. He thought they were looking at it on a comprehensive basis and was not suggesting that there should be an outcome, just that it be evaluated as one of the concerns. Council Member Holman said she was comfortable as the seconder of Motion now that it included the Incorporation. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to evaluate the use of $250k currently budgeted in the Lytton Gateway Project. Vice Mayor Scharff said that the other comment that Council Member Holman made was related to the $250,000. He was not suggesting they use it immediately, but the Council never agreed to do an RPP so they could not have placed the funds aside for that. He thought the question was should that money be used and could it be used to get relief. If Staff had that money to use, he asked if they would make faster and better progress. He stressed that he simply wanted to evaluate how to use the money. He thought the Council was taking a good approach and trying to solve the problem on a comprehensive basis. Staff's efforts needed to be focused on the comprehensive basis because they did not have time to do both. It was not saying no to an RPP permanently, it was focusing on the comprehensive basis for six months. Mr. Keene said the intent of the Motion was that unless the Council redirected Staff in the six month time frame that they were taking work on and assessments of RPP as a part of the solution off the table and shifting the attention to see if Staff could identify solutions that may not require an RPP program. Staff would look at ways to solve the problem though TDM, additional parking, and other means knowing that at the end of the six month period Staff would have enough information presented to Council that Council would know what it would take to move forward on that front or if it wanted to bring back up RPP. Council Member Holman clarified the language by addihg the phrase "at this time." She felt that made Council's intentions more clearly stated. Page 40of47 City Council Meeting Minutes: 7/16/12 MINUTES INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to include "Professorville at this time" after "Residential Permit Parking Program" in the first part of the Motion. Council Member Burt agreed with the Motion and thought that if Council -looked at an RPP in the future that it should be more comprehensive. As they looked at what prompted the problem he thought the most legitimate one was that there were 11 homes in the broader study area that had no driveways or garages. He stated that as the spillover grew the problem became more acute. He asked if the City ever looked at simply giving relief to those 11 homes through curb striping. Mr. Williams said that was not evaluated. Council Member Burt asked if Mr. Williams saw any problems if the City went in the direction of a spot program that provided relief to homes without a driveway. He said that those spots could be either the resident's permit or two hour parking. Mr. Williams said Staff had to discuss that and see if it was feasible. He thought one of the issues was that he did not know if those were the people that were complaining about not having spaces. Council Member Burt offered the language to be incorporated into the Motion. He thqught that would not be disruptive to the downtown parking district and would address the most acute problem. He thought that was the most legitimate complaint. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to evaluate selective parking for those homes without a driveway or garage. Council Member Price said she would not support the Motion although she appreciated the modifications because clearly a more aggressive comprehensive plan was important. She thought they needed to have the RPP trial as one element of a comprehensive approach. The other approaches were important, but based on comments from both sides residential parking was a concern to a sufficient number of people. She felt that if a pilot program were done that charging a fee for it made more sense. She said that if the Council really wanted to be comprehensive it would retain the RPP as part of the ambitious list. She said that the RPP was not a panacea, none of the options discussed were a panacea, but the question was if the City was looking at the whole picture comprehensively. Page 41 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Council Member Holman' said that they were doing this because there were concerns from the neighborhood about spill over parking. Council indicated that perhaps addressing some of the issues might alleviate the parking in the neighborhoods but there were many comments that evening about the lack of transparency. She asked about the process moving forward and if it was going to be an open process with public input. Mr. Williams said it depended on the item, but he thought most of them would be put together and a community meeting would be noticed before Staff returned to Council. That would probably not happen before Staff returned with the programmatic information, but it would before the end of the year session. Council Member Holman confirmed that the community meeting would include more than the pilot area. Mr. Keene said that they did not know the parameters of it at that point, but _ the emergent neighborhood complaints alerted Staff that there was a large challenge. Whatever was mitigated ten years ago when PAMF moved had reemerged and Council was asking Staff to look at the parking challenge accommodation of the 2010-2020 decade. There were many issues that would touch many stakeholders. That required engagement and outreach. Council Member Holman suggested more than one community meeting. The reason she suggested not just the area that was included in the pilot was because some of the people in that area were the most invested in the dialogue. She wanted to make sure that it was not a self-selected group again. MOTION: Council Member Klein moved, seconded by Vice Mayor Scharff to call the question. MOTION PASSED: 5-3 Espinosa, Price, Shepherd no, Schmid absent MOTION PASSED: 6-2 Espinosa, Price no, Schmid absent Council Member Shepherd asked a question about the downtown cap and the boundaries of the downtown cap. She said that the Arrillaga project could be coming forward and she wanted to know how that was going to be handled. She knew it was outside the boundary of the downtown cap and asked if Staff would bring that analysis when they returned with the item. Page 42 of 47 City Council Meeting Minutes: 7/16/12 MINUTES Mr. Williams said they probably would, but that he thought Council would see some of the Arrillaga project before that came back. He said they would see the extent to which it was parked. Council Member Shepherd said she was concerned about traffic and parking. She said it was tangential and important for Council to review at the same time. Mr. Williams said they indicated in the Staff report that they would be embodying that but whether it was actually part of the number on the cap was to be determined. 14. Utilities Advisory Commission Recommendation that Council Approve a Definition of Carbon Neutrality in Anticipation of Achieving a Carbon Neutral Electric Supply Portfolio by 2015. James Keene, City Manager, said the Staff was ready to answer questions and that the Chair of the Utilities Advisory Commission (UAC) was present. James Cook, Chair UAC said the item was about the definition. They were not debating the pros and cons or items about carbon neutrality, but the definition. Staff confirmed that this was the industry standard definition, so for the UAC it was a short item and they felt the definition was good. The definition did not preclude a later discussion about how to achieve carbon neutrality or when to do it. This was the framework to start with and the UAC passed it unanimously. He urged the Council to pass the definition. MOTION: Vice Mayor Scharff moved, seconded by Council Member Klein to approve the following definition as the basis for the City's pursuit of a carbon neutral supply portfolio: A carbon neutral electric supply portfolio will demonstrate annual net zero greenhouse gas (GHB) emissions, measured at the citygate, in accordance with The Climate Registry's Electric Power Sector protocol for GHG emissions measurement and reporting. Vice Mayor Scharff said that Staff represented that the definition was achievable, credible, transparent and measurable as well as consistent with current industry standards for GHB accounting and reporting protocols and taking that representation to be true he thought it was the right definition. Council Member Klein asked where the citygate was. Monica Padilla, Senior Resource Planner, said citygate was where they interconnected with Pacific Gas & Electric (PG&E). Page 43 of47 City Council Meeting Minutes: 7/16/12 Gonsalves, Ronna From: Sent: To: Subject: rademps < rademps@aol.com> Saturday, October 27, 2012 3:47 PM Council, City Message from the City Council Home Page Dear Members of the City Council: 21 t;fl; y OUffh\ '5 "rtFl '" 12 OCT 29 AM fO: 42 I know that you are all fully aware of the parking problems plaguing residential areas north and south of University Avenue as well as the downtown area itself, and that the Council has instructed Staff to address the issue on a broad scale. In the meantime, I want to suggest something that would quickly alleviate the parking problem for some of the residents, particularly those in and near Professorville. That area has many older homes, homes that were designed before the great automobile era, homes that have no garage and no driveway. There isra feeling among some in government and among some residents that it is wrong for residents to ask for what amounts to private parking on a public street; however, those homes that have a driveway do have the equivalent of a private parking spot on a public street since no one can park in front of their driveway. The result is, those of us with no driveway suffer from de facto discrimination since the city does not provide us with a parking spot in front of our homes. I'm sure there are a dozen reasons that will come to mind why the City cannot do it, but I am equally sure that with a simple change of polic y the city could make it legal to have a 'virtual driveway" in front of every home that has no real driveway. In our case, we do have access to parking via an alley in back of our home; however'it is ' less safe and less convenient to use than parking a few blocks away. It is very narrow and difficult to enter the carport, more difficult to back out without damaging our back- neighbor's fence. The alley is not lit at night. Because workme~ often use it to park it is not always accessible, unlike a street space, and is sometimes littered with construction materials such as nails and screws. Further, our sliding gate is exceptionally heavy (my wife cannot open it) and the two motorized openers we have had installed over the years have burned out at great cost to us. I would ask the Council members to do some creative thinking about a policy that would allow us to drive away and have the same access to return to our homes that residents with driveway do. Regards, Ray Dempsey 1 036 Bryant Street Palo Alto 10