HomeMy WebLinkAboutStaff Report 1954City of Palo Alto (ID # 1954)
City Council Staff Report
Report Type:Meeting Date: 7/25/2011
July 25, 2011 Page 1 of 4
(ID # 1954)
Summary Title: Stanford Community Benefits Discussion
Title: Stanford University Medical Center Community Benefits Discussion and
Appointment of City Representatives to Joint Committee for Community Health
and Safety Programs
From:City Manager
Lead Department: City Manager
Recommendation
Staff recommends that Council authorize the Mayor to appoint two Councilmembers to
the Joint Stanford/City Committee for Community Health and Safety Programs and
provide staff direction regarding the recommended process for expending Community
Benefit funds.
Executive Summary
The Stanford University Medical Center (SUMC) Development Agreement (DA) provides
the City with approximately $40 million in direct payments to the City. The funds are
grouped into broad categories such as Community Health and Safety, Sustainability and
Infrastructure. The Community Health and Safety payment is made up front and the
remaining community benefit dollars are paid in three equal installments:
1st Payment at initial permit—Estimated Summer 2011
2nd Payment at hospital foundation permit—Estimated January 2012
3rd Payment at hospital occupancy—Estimated January 2018
The Development Agreement provides the Council with broad discretion in allocating
these funds. While the agreement provides for a joint City/Stanford committee to
review proposed uses for the Community Health fund, the committee’s role is strictly
advisory to the City Council who retains sole decision making authority. Other than the
City providing an annual report to Stanford on the status of the various funds, no other
University involvement is stipulated in the agreement. Staff recommends that Council
authorize the Mayor appoint two City council members to serve on the joint committee.
Staff recommends that the Council refer recommendations on the allocation of benefit
funds to the Finance Committee who should review and recommend to Council projects
and programs ultimately financed through the community benefits accrued in the
July 25, 2011 Page 2 of 4
(ID # 1954)
agreement.
Background
Attachment A provides a detailed accounting of the various Stanford contributions
required in the agreement including the broad fund categories where the City Council
has maximum discretion. Other specific purpose funds and contributions to other
agencies are also provided. Examples of specific purpose funds are the pedestrian
linkages, healthcare services and revenue neutrality payments. The community
benefits contributions, exclusive of the specific purpose funds are as follows:
Community Benefits Payments Schdule
Fund Name 1st Payment
Summer 2011
2nd Payment
January 2012
3rd Payment
January 2018
Total
Community
Health and
Safety
Programs
(including $2M
for Project
Safety Net)
$4,000,000 $4,000,000
Infrastructure,
Sustainable
Neighborhoods
and Affordable
Housing
$7,733,333 $7,733,333 $7,733,333 $23,200,000
Sustainability
Programs
$4,000,000 $4,000,000 $4,000,000 $12,000,000
TOTAL $39,200,000
Prior to Council’s approval of the DA, the Finance Committee recommended the
designation of $2M from the Community Health and Safety fund toward Project Safety
Net. The Council acted on the Finance Committee’s recommendation to include
language in the DA authorizing that a portion or all of Community Health and Safety
funds be designatec for Project Safety Net. City staff plans to come forward shortly
with a BAO to formalize this action and additional action by Council is not needed at this
juncture.
July 25, 2011 Page 3 of 4
(ID # 1954)
Discussion
The SUMC contributions through the community benefits funds provide the City with an
exceptional opportunity to begin to address its overall infrastructure and sustainability
goals. While the timing of the funding gives the City Council immediate opportunity to
initiate projects, staff believes that a strategic approach incorporating the Council’s
annual goal setting and the prioritization that occurs during the budget process would
assist in applying the community benefit dollars in the most effective manner.
Additionally, Council’s 2012 priority setting and budget process will be informed by the
work of the Infrastructure Blue Ribbon Commission’s report which is scheduled to be
delivered to Council by the end of this year. The report will be an important data set
for discussing the fund allocation.
Initial receipt of community benefit dollars will occur during this fiscal year and should
be included in Council’s deliberations on the 2012 budget. Concurrent consideration of
the allocation of community benefit resources with the budget achieves many of the
following goals:
1.Ensures community benefits are aligned with Council fiscal priorities.
2.Enables Council to leverage the budget by combining the Capital Improvement
Projects resources with community benefits to consider projects not currently funded in
the CIP.
3.Allows Council to consider Infrastructure Blue Ribbon Commission recommendations
due in December 2011 with the additional resources the community benefit dollars
provide.
4.Budget process, including numerous hearings at the Finance Committee and City
Council, provides the optimal context for public participation.
Policy Implications
Staff is preparing a set of guidelines to account for and manage the various community
benefit funds due to the City later this summer. Guidelines will be developed to ensure
transparency and accountability for the use of community benefits. Guidelines will also
address investment earnings from the designated funds. Staff expects to return to
Council with draft guidelines prior to the start of the budget process in early 2012.
Attachments:
·Attachment A: Summary of SUMC Development Agreement Payments(DOC)
July 25, 2011 Page 4 of 4
(ID # 1954)
Prepared By:Steve Emslie, Deputy City Manager
Department Head:James Keene, City Manager
City Manager Approval: James Keene, City Manager
Stanford University Medical Center Attachment A
Summary of Development Agreement Payments
Updated May 24, 2011
110524 jb 2994.doc
Payment
Description
Development
Agreement
Paragraph
Summer
2011 (Initial
Payment
Date)
January
2012
(Estimated
date of 1st
Hospital
Foundation
Permit)
September
2015
January
2018
(Estimated
date of 1st
Hospital
Occupancy
Permit)
Spring
2026
Cumulative
Total
Payments to Palo Alto
Healthcare Services 5(a)(ii)$560,000/year
for 10 years
$5,600,000 (final
amount depends
upon
construction use
taxes received by
City)
Community Health &
Safety Programs
5(a)(iii)$4,000,000 $4,000,000
Fiscal Neutrality
Payment
5 (b)(iii)$2,417,000 $2,417,000
Linkage from
Downtown through
PAITS to Quarry/ECR
Intersection
5(d)(i)$2,250,000 $2,250,000
Linkage along Quarry
Road for Pedestrian/
Bicycles/Transit
5(d)(ii)$400,000 $400,000
Infrastructure,
Sustainable
Neighborhoods &
Affordable Housing
5(e)(i)$7,733,333 $7,733,333 $7,733,333 $23,200,000
Sustainability Programs 5(f)(i)$4,000,000 $4,000,000 $4,000,000 $12,000,000
Opticom Payment to
Palo Alto
5(c)(iv)$11,200 $11,200
Payment Development Summer January September January Spring Cumulative
Summary of Stanford Hospital
Development Agreement Payments
May 24, 2011
110524 jb 2994.doc
Description Agreement
Paragraph
2011 (Initial
Payment
Date)
2012
(Estimated
date of 1st
Hospital
Foundation
Permit)
2015 2018
(Estimated
date of 1st
Hospital
Occupancy
Permit)
2026 Total
Linkage from Shopping
Center through Barn to
SUMC (Stanford
Builds)
5(d)(iii)$700,000 $700,000
Payments to Menlo
Park
Traffic Mitigation
Payment to Menlo Park
5(c)(ii) $1,233,000 $1,233,000 $1,233,000 $3,699,000
Payments to AC
Transit
Payment to AC
Transit for additional
buses
5(c)(iii)$250,000 $250,000
Payment to AC
Transit for additional
operating costs
5(c)(iii)$50,000/year $50,000/year
(Life of
Project
Payment for long term
lease for Ardenwood
Lot (AC Transit)
5(c)(iii)$45,000/year $45,000/year
(Life of
Project)
Payments to Caltrain
Begin Purchasing Go
Passes
5(c)(v)$1, 800,000
+ CPI
$91,000,000 +
CPI