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HomeMy WebLinkAbout2014-11-03 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL November 3, 2014 Regular Meeting Council Chambers 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 November 3, 2014 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 may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council 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, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Special Orders of the Day 6:00-6:10 P.M. 1. Summer Science Program (Heidelberg) 6:10-6:20 P.M. 2. Resolution of the City Council Expressing Appreciation to Donna Grider Upon Her Retirement Agenda Changes, Additions and Deletions City Manager Comments 6:20-6:30 P.M. Oral Communications 6:30-6:45 P.M. Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. 2 November 3, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Consent Calendar 6:45-6:50 P.M. Items will be voted on in one motion unless removed from the calendar by three Council Members. 3. Approval of a Contract with Independent Police Auditor in the Amount of $27,500 Per Year for a Period of 1 Year, with Possibility of Renewal for up to Two Years, with Compensation Not to Exceed a Total of $82,500 4. SECOND READING: Adoption of an Ordinance Adding Chapter 4.60 to the Palo Alto Municipal Code Regarding Business Registration Program (First Reading: October 6, 2014 PASSED 8-0 Klein absent) 5. SECOND READING: Adoption of an Ordinance Approving and Adopting a Plan for Improvements to El Camino Park (First Reading: October 20, 2014, PASSED: 9-0) 6. SECOND READING: Adoption of an Ordinance to Amend Section 2.08.130 of the Palo Alto Municipal Code, Office and Duties of the City Auditor, to Reflect Changes in Audit Practices and Clarify the Requirements for Reporting Work Products of the Office of the City Auditor (First Reading: October 6, 2014 PASSED: 8-0 Klein absent) 7. Policy and Services Committee Recommendation to Accept the Report on the Status of Audit Recommendations (June 2014) 8. Approval of Second Amendment to Contract S14151557 with Bartel Associates, LLC for Actuarial Services in a Total Amount Not to Exceed $103,000 9. Approval of and Authorization for the Mayor to Sign a Letter of Support for the National Register Nomination of the Woman’s Club of Palo Alto Building at 475 Homer Avenue 10. Request for Authorization to Increase Existing Contract with Newdorf Legal by an Additional $40,000 For a Total Contract Not to Exceed Amount of $105,000 for Legal Services Related to Litigation Matters 3 November 3, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 6:50-8:50 P.M. 11. Comprehensive Plan Update: Initial Discussion of the Scope and Schedule of the Planning Process, Including Concurrent Zoning Changes (Note: Given the Complexity of These Issues, This will be the First of Two Discussions, with the Second Discussion and Council Action on November 17, 2014) 8:50-9:50 P.M. 12. Finance Committee Recommends Proposed Changes in Development Impact Fees: Direction to Draft Ordinance Implementing New Public Safety Facility and General Government Facilities Impact Fees 9:50-10:05 P.M. 13. Approval of Fiscal Year 2014 Reappropriation Requests for the Municipal Services Center to be Carried Forward Into Fiscal Year 2015 Inter-Governmental Legislative Affairs 10:05-10:30 P.M. 14. Review and Approval of a Letter from the City of Palo Alto to the Environmental Protection Agency (EPA) on the Proposed Rule Change to Waters Protected Under the Clean Water Act Council Member Questions, Comments and Announcements 10:30-10:45 P.M. 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 November 3, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Finance Committee Meeting Cancellation Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Informational Report to City Council on the City of Palo Alto's Participation in the Foster City-Led Residential Solar PV Group-Buy Program Consolidated Annual Performance and Evaluation Report (CAPER) for the Community Development Block Grant (CDBG) Program for Fiscal Year 2014 Public Letters to Council SET 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK November 3, 2014 The Honorable City Council Palo Alto, California Resolution of the City Council Expressing Appreciation to Donna Grider Upon Her Retirement ATTACHMENTS:  Attachment A: Resolution Expressing Appreciation to Donna Grider upon Her Retirement (DOC) Department Head: Donna Grider, City Clerk Page 2 RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO DONNA GRIDER UPON HER RETIREMENT WHEREAS, Donna Grider has worked for the citizens of Palo Alto for more than 15 years, serving as the City Clerk, in which position she provides information and services to help the community fully participate in its government and make informed decisions, including attendance at 653 City Council meetings; and WHEREAS, Donna Grider has served as the City’s Election Official for eight City Council elections and seventeen measures, providing neutral and fair assistance to all candidates and committees and is known for her neutral “Switzerland” approach to the election process; and WHEREAS, Donna Grider has been an advocate of professional development, earning her Bachelor of Art in Business from Menlo College, attaining a Certified Municipal Clerk designation on February 24, 1998, and a Master Municipal Clerk designation on August 31, 2008, a designation held by less than thirteen percent of all professional Municipal and Town Clerks worldwide; and WHEREAS, Donna Grider serves as a mentor to her Staff and encourages them to pursue training and learning opportunities for personal, professional and organizational growth; and WHEREAS, Donna Grider has expanded transparency and service to the public, City Council and Staff through use of technology including posting agendas, minutes, legislative history and campaign statements online, and implementation of automated agenda preparation and management; and WHEREAS, Donna Grider has been a community member, serving on the boards of the local Red Cross, the Mid-Peninsula Community Media Center, and the Palo Alto Women’s Club; and WHEREAS, Donna Grider pursued her 35 years of public service with fairness, professionalism and a strong focus on supporting democracy at the local level; she has been a great face of the City to the public. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Palo Alto, hereby gratefully records and extends its sincere appreciation and the appreciation of the community to Donna Grider for this faithful and excellent service rendered to the City INTRODUCED AND PASSED: November 3, 2014 ATTEST: APPROVED: ___________________ ______________________ Assistant City Clerk Mayor APPROVED AS TO FORM: ____________________ ______________________ City Attorney City Manager CITY OF PALO ALTO OFFICE OF THE CITY CLERK November 3, 2014 The Honorable City Council Palo Alto, California Approval of a Contract with Independent Police Auditor in the Amount of $27,500 Per Year for a Period of 1 Year, with Possibility of Renewal for up to Two Years, with Compensation Not to Exceed a Total of $82,500 Recommendation Staff recommends Council renew the City’s contract with its independent Police Department Auditor, Michael Gennaco, of the Office of Independent Review. Discussion The City of Palo Alto has contracted for the past eight years with Michael Gennaco to act as an Independent Police Auditor of the Palo Alto Police Department. The initial contract with Mr. Gennaco, commenced in 2006 and has since expired. In spring 2014, the City went out to bid for the contract. Four individuals submitted proposals in response to the City’s Request For Proposals (RFP). An evaluation committee consisting of Molly Stump, City Attorney, Donna Grider, City Clerk, Kathryn Shen, Director of People, Strategy and Operations, Community Leader Ray Bachetti, Los Altos Police Captain Andy Galea, and Palo Alto Police Officer Association Representative James Reifschneider were on the selection committee. All four applicants were invited to participate in oral interviews. The committee carefully reviewed each individual’s qualifications and application materials in response to the criteria identified in the RFP. In July 2014, the evaluation committee unanimously selected Michael Gennaco of the Office of Independent Review on the basis of the group’s extensive experience in the field. Accordingly, Staff recommends that the City Council authorize the City Manager to renew the contract with Mr. Gennaco for Fiscal Year 2015 for Independent Police Auditor Services. Staff further recommends that the City Manager have the delegate authority to renew such contract for two additional one-year terms, for a total of three-years, through Fiscal Year 2017. The total contract amount is $27,500 per annum, the same amount it has been since 2006. Since the City began utilizing Mr. Gennaco’s services in 2006, he has maintained his hourly rate of $215. Under the terms of the contract, Mr. Gennaco’s group, Officer of Independent Review, will continue to provide a bi-annual report for Council’s review. Page 2 Resource Impact The contract will cost the City $27,500 per annum. Funding is in the City Council Budget in Fiscal Year 2015 for this contractual service and is subject to annual appropriations thereafter. Policy Implications The contract will further the City’s policy of promoting independent oversight of the police department. Environmental Review Review under the California Environmental Quality Act is not required. ATTACHMENTS:  Attachment A: OIR Contract (PDF) Department Head: Donna Grider, City Clerk Page 3 CITY OF PALO ALTO CONTRACT NO. C15153873 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MICHAEL GENNACO AND STEPHEN CONNOLLY FOR PROFESSIONAL SERVICES INDEPENDENT POLICE AUDITOR This Agreement is entered into on this 3rd day of November 2014, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MICHAEL GENNACO AND STEPHEN CONNOLLY, as individuals, located at 7142 Trask Avenue, Playa del Rey, CA 90293, Telephone: (323) 849-7015 (“CONSULTANT”). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to contract for independent Police audit services (“Project”) and desires to engage a consultant to provide said services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through 08/31/2015 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed Twenty Seven Thousand Five Hundred Dollars ($27,500.00). The CITY reserves the option to extend this contract for two additional one year terms. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included with the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of an in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of the submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement, CONSULTANT, and any person employed by or contracted with CONSULTANT, to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any CONSULTANT’s obligations hereunder without the prior written consent of the City Manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the City Manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the City Manager or designee. DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Michael Gennaco, Email: Michael.gennaco@oirgroup.com, Telephone: (323) 849-7015, as the Director to have supervisory responsibility for the performance, progress, and execution of the Services, and Stephen Connolly, Email: Stephen.connolly@oirgroup.com, Telephone: (714) 834-5445, as the Project Manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or represent a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City’s Project Manager is Donna Grider, Palo Alto City Clerk, c/o City Hall, 250 Hamilton Avenue, 7th Floor, Palo Alto, CA 94301, (650) 329-2226. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 and expenses of whatever nature including attorney’s fees, experts’ fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify and Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "C". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1 In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2 CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3 If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 25.11 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO CONSULTANT _____________________ _____________________ Purchasing Manager Michael Gennaco APPROVED AS TO FORM: _______________________ Asst. City Attorney Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: COMPENSATION EXHIBIT “C”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 EXHIBIT “A” SCOPE OF SERVICES Consultant shall perform the following services: 1. Citizen Complaints and Internal Affairs Investigations Intake – The Consultant may receive citizen complaints directly. The Consultant will forward a summary of the complaint and contact information for the complainant directly to the department. If the department receives the complaint directly or initiates an internal investigation, they will notify the Consultant within (3) working days with nature of the allegation(s). The Department and the Consultant will review each citizen complaint/internal investigation to determine whether a criminal component exits and proceed accordingly. Investigative Plan – As needed, the Consultant will discuss the investigative plan with the Personnel & Training Coordinator and arrange for a mutually convenient way to update Consultant on the progress of the investigation. Review – The Consultant will review each citizen complaint and internal affairs investigation to determine thoroughness, objectively and appropriateness of disposition within (10) working days. Follow-up – After reviewing the completed investigations, the Consultant will confer with the Personnel & Training Coordinator to evaluate results and discuss any suggestions for additional follow-up. Disposition – When all aspects of the investigation are complete, the Consultant will confer with the Police Chief to resolve any issues about the process, disposition or the recommendations outlined in the investigation. Disposition shall be defined as “Sustained”, “Not Sustained”, “Unfounded” or “Exonerated”. Status and Tracking – The Consultant will track each case through its conclusion to insure that each investigation is completed in a timely manner Semi-Annual Reporting – Twice a year, the Consultant will produce a written report to the City Manager and City Council. The report will contain a statistical breakdown of the number of complaints/investigations and any developing trends. The report will also contain the initial allegation(s), the findings and the number and type of recommendations made to the Police Chief. The report will not contain any specific information that would identify the involved officers either internally or externally. Consultant Meetings – The Consultant will formally meet with the City Council, City Manager and Police Chief twice a year in order to provide the report and discuss any trends. DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 2. Review Taser Deployment The Consultant will be promptly notified of each Taser deployment. Once completed, the Consultant will review the Use of Force investigation related to the use of the Taser. The Consultant will make any recommendations on the investigation and findings. The Consultant may also make recommendations to the Police Chief regarding training and policy modifications. The Consultant will include a brief summary of each Taser deployment in their semi-annual report including the findings and any recommendations. 3. Transmittal of Reports Consultant will produce two reports during the year summarizing its findings and reporting on each investigation and disposition. It will produce reports which comply with the Public Safety Officers Procedural Bill of Rights Act (“POBR), California Government Code 3300 and California Penal Code 832.7. Consultant will provide a draft of the report to the City Attorney’s Office and the Chief of Police of the Palo Alto Police Department at least 14 days prior to its final submission for the purpose of review for compliance with state law. Consultant will consider any suggestions from the City Attorney’s Office and the Chief of Police regarding the information contained in the report. The Consultant will meet with the City Council to present each report and discuss any issues or questions raised. Prior to finalizing each report, it shall be the Consultant’s practice to discuss significant identified problems and recommendations with the Police Department and the City Manager. Consultant will solicit the Police Department’s response to the report’s analysis and attempt to reach a consensus as to solutions. Consultant will document the Department’s investigation into the incident and response to suggested solutions in its reports. 4. Definitions: Sustained – There is sufficient credible evidence to believe that the subject officer committed the act charged in the allegation and thereby engaged in misconduct. Not Sustained – The available evidence is insufficient to determine whether the officer did or did not commit misconduct. Unfounded – There is sufficient credible evidence to believe that the subject officer did not commit the alleged act. Exonerated – the subject officer was found to have committed the act alleged but the officer’s actions were determined to be lawful and proper. DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 EXHIBIT “B” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth below. Compensation shall be calculated based on Consultant’s hourly billing rates up to the not to exceed amount of the contract. The hourly billing rate for Michael Gennaco is $215.00 per hour and the hourly billing rate for Stephen Connolly is $190.00 per hour. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $27,500 per year with a potential of extending it for two one-year periods. Travel expenses shall be a portion of total compensation. CONSULTANT agrees to complete all Services, including reimbursable and travel expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined below. Task 1 Review, intake, investigation, and disposition of an estimated 16-22 citizen complaints per year; monitor any related remedial action; Task 2 Internal Affairs investigation planning, monitoring, evaluation and recommendations for an estimated 5 investigations per year; monitor any related remedial action. Task 3 Review Taser policy and training, review each Taser deployment, estimated at 6 per year, to determine if consistent with training and policy. Task 4 Meet with the City Manager and Police Chief quarterly and with City Council semiannually. Total Basic Services and Travel Expenses per year $27,500 Maximum Total Compensation per year $27,500 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth herein. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 EXHIBIT C INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: 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. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 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 DocuSign Envelope ID: 9A903018-CB6C-4C80-AE32-88D2A58FDEB7 CITY OF PALO ALTO OFFICE OF THE CITY CLERK November 3, 2014 The Honorable City Council Palo Alto, California SECOND READING: Ordinance of the Council of the City of Palo Alto Adding Chapter 4.60 to the Palo Alto Municipal Code Regarding Business Registration Program (First Reading: October 6, 2014 Passed 8-0 Klein absent) Attached is the second reading of the Business Registry Ordinance that was first passed on October 6, 2014. ATTACHMENTS:  Attachment A: Business Registry Ordinance (PDF) Department Head: Donna Grider, City Clerk Page 2 Not Yet Approved Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Adding Chapter 4.60 to the Palo Alto Municipal Code Regarding Business Registration Program The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Chapter 4.60 (Business Registration) is hereby added to Title 4 (Business Licenses and Regulations) of the Palo Alto Municipal Code to read as follows: BUSINESS REGISTRATION PROGRAM 4.60.010 Purpose 4.60.020 Definitions 4.60.030 Business Registration Requirement 4.60.040 Exceptions from Business Registration 4.60.050 Fee Required 4.60.060 Application Procedures 4.60.070 Contents of Business Registration Certificate 4.60.080 Term and Annual Renewal of Business Registration 4.60.090 Refunds 4.60.100 Rules and Regulations 4.60.120 Penalties and Remedies 4.60.010 Purpose The purpose of this chapter is to establish a regulatory mechanism to maintain an accurate record of businesses conducting business in the city in order (1) to develop recommendations on land uses; (2) to better coordinate transportation programs; (3) to assist in zoning compliance and (4) to gather statistical information for other city purposes. This chapter is not intended to apply to home based or transitory businesses. 4.60.020 Definitions The following words, terms and phrases, when used in this chapter, shall have the meanings set forth in this section, except where the context clearly indicates a different meaning: (a) “Business” means any commercial enterprise, trade, calling, vocation, profession, occupation, or means of livelihood, whether or not carried on for gain or profit. (b) “Business registration certificate” means a written statement issued by the city to a business owner as evidence of registering a business in the city. 1 140930 jb 0131258 Rev. September 30, 2014 Not Yet Approved (c) “Fixed place of business” means a place of business located in the city boundaries and occupied for the particular purpose of conducting business. (d) “Home based business” means a home occupation as defined in Section 18.04.030. (e) “Person” means and includes any business owner, individual, firm, co-partnership, joint venture, association, corporation, estate, business trust, or any other group or combination acting as a unit. (f) “Transitory business” means a business that is carried on for a short duration (such as pumpkin sales, special events, and filming) or a business that does not have a fixed place of business within Palo Alto (such as landscaping or construction contractors based in other cities). 4.60.030 Business Registration Requirement (a) No person shall conduct any business in a fixed place of business without first having obtained a business registration certificate, paid the applicable business registration fee and complied with all applicable provisions of this chapter. (b) The issuance of a business registration certificate under this chapter shall not excuse the business from complying with other applicable Code requirements. (c) A business registration certificate shall not be transferable. 4.60.040 Exemptions from Business Registration The following types of businesses are exempt from this chapter; (a) Home based business (b) Transitory business. 4.60.050 Fee Required (a) Every person engaging in business in the city shall pay a business registration fee as prescribed by resolution adopted by the city council. (b) The business registration fee is not a revenue raising device, but shall bear a reasonable relationship to the service to be performed by the city and the costs incurred by the city in reviewing, processing and acting upon the application. (c) The city council shall, from time to time, review the resolution fixing the business registration fee and may revoke, modify, adjust, add or determine any amount or rate of such business registration fee. 2 140930 jb 0131258 Rev. September 30, 2014 Not Yet Approved 4.60.060 Application Procedures Every person operating a business in the city shall apply to obtain a business registration certificate on a form prescribed by the city. Upon receipt of a completed application and any fee required, the city shall process the application and issue a business registration certificate. The application may be reviewed by other city departments or governmental agencies to determine if the business premises to be occupied meet the requirements of federal, state, and local laws. 4.60.070 Contents of Business Registration Certificate Upon receipt of a completed application and payment of the prescribed business registration fee, the city shall issue to the applicant a business registration certificate which shall contain the following: (1) Name of business; (2) Business location; (3) Expiration date; (4) Certificate Number; and (5) Such other information as deemed necessary by the city. A separate certificate may be obtained for each and every branch establishment or separate place of business in which a business is carried on. 4.60.080 Term and Annual Renewal of Business Registration (a) Term. A business registration certificate shall be effective for no more than one year. Unless otherwise specified, all certificates shall expire on March 31st. Business registration fees shall be due and payable annually in advance. (b) Renewal. Business registration certificates shall be renewed annually on a form prescribed by the City. Every application for the renewal of a certificate shall be made at least fifteen days prior to the expiration date of such license. Any person applying to renew a business registration shall submit to the city a completed renewal application and pay the renewal fee. (c) Alternative Periods. If deemed necessary, the city may establish alternative registration periods for businesses. 4.60.090 Refunds No business registration fees or penalties collected shall be refundable. 3 140930 jb 0131258 Rev. September 30, 2014 Not Yet Approved 4.60.100 Rules and Regulations The City Manager may adopt rules and regulations from time to time to implement this chapter. Implementing rules and regulations shall not be inconsistent with the provisions of this chapter. 4.60.120 Penalties and Remedies (a) Penalties for delinquency. Any person engaging in business in the city that fails to secure a business registration certificate before commencing business in the city or fails to timely renew their license shall pay, in addition to the amount of the license fee, a penalty in an amount to be determined by ordinance or resolution. (b) Action to collect. If a business fails to comply with the fee requirements of this action, the City may refer the matter to a collection agency and/or the city attorney may file a civil action against any business. Notwithstanding subsection (a) of this section, should court action be required to collect any business registration fee and/or penalties, an additional penalty shall be charged equal to the cost incurred by the city for court action, including but not limited to reasonable attorney fees. All penalties shall be added to the business registration fee and shall become due and payable along with the delinquent business registration fee. (c) Remedies Cumulative. All remedies prescribed under this Chapter shall be cumulative and the use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this Chapter. SECTION 2. Any provision of the Palo Alto Municipal Code inconsistent with the provisions of this chapter, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this chapter. SECTION 3. If any section, subsection, sentence, clause, or phrase of this chapter is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this chapter. The City Council hereby declares that it would have adopted this chapter and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the chapter would be subsequently declared invalid or unconstitutional. SECTION 4. The Council finds that the adoption of this chapter is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA Guideline section 15061 because it can be seen with certainty that there is no possibility that the project will have a significant effect on the environment and section 15378(b) (3) in that it involves creation of a governmental funding mechanism or other governmental fiscal activity that does not involve commitment to any specific project that may result in a potentially significant physical impact on the environment. 4 140930 jb 0131258 Rev. September 30, 2014 Not Yet Approved SECTION 5. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ________________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ________________________________ Senior Assistant City Attorney City Manager 5 140930 jb 0131258 Rev. September 30, 2014 CITY OF PALO ALTO OFFICE OF THE CITY CLERK November 3, 2014 The Honorable City Council Palo Alto, California SECOND READING: Adoption of an Ordinance Approving and Adopting a Plan for Improvements to El Camino Park (First Reading: October 20, 2014, PASSED: 9-0) This item was first heard by Council on October 20, 2014 and no changes were made to the Ordinance. ATTACHMENTS:  Attachment A: El Camino Park Ordinance (PDF) Department Head: Donna Grider, City Clerk Page 2 *NOT YET APPROVED* Attachment A 1 141015 mf00710471 ORDINANCE NO. _____ Ordinance of The Council Of The City Of Palo Alto Approving And Adopting Plans For Sports-Related Improvements And Associated Facilities Located Within El Camino Park The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The City Council finds and declares that: (a)Article VIII of the Charter of the City of Palo Alto and Section 22.08.005 of the Palo Alto Municipal Code require that, before any substantial building, construction, reconstruction or development is commenced or approved, upon or with respect to any land held by the City for park purposes, the Council shall first cause to be prepared and by ordinance approve and adopt a plan therefor. (b)El Camino Park is dedicated to park purposes. (c)On May 21, 2007, Council adopted a Park Improvement Ordinance No. 4952 for the underground reservoir and pump station improvements at El Camino Park. The ordinance referenced installing a 2.5 million gallon water storage reservoir, modifying the Lytton Station (the existing pump station at El Camino Park) by constructing a below grade pump station and well facilities, replacing the existing above-grade structure with a similarly sized structure, and replacing and upgrading the existing turnout and pumping equipment. The ordinance noted that the construction would require the temporary closure of all or a part of the park for up to a two-year period, and that upon completion of construction, the park would be restored and improved with new facilities. It also noted that there would be no reduction in park area and no part of the park will be used for a non-park usage, other than that which is already occupied by the Lytton Station. (d)The City intends to authorize construction of certain additional park improvements within El Camino Park, as shown in Exhibit “A”. Construction and installation of these additional park improvements are being coordinated with the City’s Utilities Department staff in order to avoid any conflict with the completion of the reservoir and pump station project. (e)The following additional sports-related improvements and associated facilities within El Camino Park have been proposed by the Community Services Department in coordination with the Parks and Recreation Commission: (1)Construction of a new synthetic turf athletic field (soccer/lacrosse), which replaces the existing natural turf playing field. (2)Construction of a natural turf athletic field (softball/lacrosse/soccer), which replaces the original natural turf playing field. (3)Construction of a new restroom facility, which replaces the old restroom facility. *NOT YET APPROVED* Attachment A 2 141015 mf00710471 (4)Construction of a new storage building for maintenance equipment. (5)Construction of a new scorekeeper booth. (6)Construction of an expanded parking lot with twenty-two additional spaces and a trash enclosure. (7)Installation of four new field lights on the north field. (8)Installation of two new field lights on the south field. (9)Installation of lighting conduit and footings for all new lights on the south field,which will replace the old lights. (10)Installation of new pathway lights. (11)Construction of soccer catchment fencing on the north field. (12)Installation of twelve single loop bicycle racks which will fit up to twenty four bicycles. (13)The removal of three trees due to poor health and/or a conflict with the new park improvements. (14)Installation of a new decomposed granite pathway and three picnic tables. (15)Installation of new landscaping, trees, fencing, benches and other amenities. (16)Installation of a widened bike path, signage and other pathway improvements. (f)The improvements will avoid existing protected trees located along the perimeter of the park. (g)The improvements described above and as more specifically described in Exhibit "A" are consistent with park and conservation purposes. (h)The Council desires to approve the improvements described above and as more specifically described in Exhibit "A”. SECTION 2. The Council hereby approves the Plan for replacement and construction of improvements in El Camino Park and hereby adopts the Plan attached hereto as Exhibit "A" as part of the official plan for the construction of improvements in El Camino Park. SECTION 3. The Council finds that the Utilities Department’s El Camino Park Reservoir Project was subject to environmental review under provisions of the California Environmental Quality Act (CEQA). A Draft Environmental Impact Report for that Project was prepared and circulated on November 8, 2006, and a Final Environmental Impact Report (”Final EIR”) was prepared and circulated on February 8, 2007. Council certified the adequacy of the Final EIR in March 2007. An addendum to the Final EIR has been prepared to incorporate the Project modifications described in this ordinance. The Project refinements,as described above, for the site improvements to El Camino Park would not result in new significant environmental impacts beyond those already identified in the Final EIR, and would not increase the severity of any significant impact previously identified. *NOT YET APPROVED* Attachment A 3 141015 mf00710471 SECTION 4. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ________________________________________________________ City Clerk Mayor APPROVED AS TO FORM:APPROVED: ________________________________________________________ Senior Asst.City Attorney City Manager ____________________________ Director of Community Services ____________________________ Director of Administrative Services CITY OF PALO ALTO OFFICE OF THE CITY CLERK November 3, 2014 The Honorable City Council Palo Alto, California SECOND READING: Adoption of an Ordinance to Amend Section 2.08.130 of the Palo Alto Municipal Code, Office and Duties of the City Auditor, to Reflect Changes in Audit Practices and Clarify the Requirements for Reporting Work Products of the Office of the City AuditorSecond Reading: Auditor Duties Ordinance (First Reading: October 6, 2014 Passed: 8-0 KIein absent) ATTACHMENTS:  Attachment A: Auditor Ordinance (PDF) Department Head: Donna Grider, City Clerk Page 2 NOT YET APPROVED  ATTACHMENT A    Ordinance No. ______  Ordinance of the Council of the City of Palo Alto Amending Section 2.08.130  (Office and duties of the city auditor) of the Palo Alto Municipal Code to Reflect  Changes in Auditing Practices and Clarify the Requirements for Reporting Work  Products of the Office of the City Auditor   The Council of the City of Palo Alto does ORDAIN as follows:   SECTION 1. Findings.  A. The 2002, 2003, 2007, and 2011 revisions to the Government Auditing  Standards, issued by the Comptroller General of the United States, United States  Government Accountability Office, have resulted in changes in auditing  practices. These standards, first published in 1972, provide the foundation for  government auditors to lead by example in the areas of independence,  transparency, accountability, and quality throughout the audit process.  B. Changes in the Government Auditing Standards have established a framework  that auditors must use to evaluate whether providing a nonaudit service would  create a threat to auditor independence, either by itself or in aggregate with  other nonaudit services provided, with respect to any audit the office of the city  auditor performs.  C. The office of the city auditor has historically used and referenced only the  Government Auditing Standards it its work. Eliminating the requirement to also  apply the Standards for the Professional Practice of Internal Auditing, established  by the Institute of Internal Auditors, will not reduce the quality or credibility of  the work of the office of the city auditor.  D. Clarification is needed regarding which council committees should receive  reports issued by the office of the city auditor.   SECTION 2. Section 2.08.130 of Chapter 2.08 of Title 2 of the Palo Alto Municipal  Code is hereby amended to read as follows:  2.08.130 Office and duties of the city auditor.  (a) The office of the city auditor shall be under the direction of the city auditor who shall be  accountable to the city council. The city auditor shall:  (1) Be knowledgeable in operational and financialconducting performance auditsing under  Government Auditing Standards, as established by the Comptroller General of the United  States; public administration,; public policy; and public financial and fiscal practices;  Attachment A NOT YET APPROVED  (2) Be a licensed certified public accountant (CPA) or certified internal auditor (CIA); and  (3) Establish an organizational structure appropriate to carrying out the responsibilities and  functions of this section.; and  (4) Set and maintain a tone for ethical behavior, establish a positive ethical environment for the  office of the city auditor, and conduct audit work in accordance with the principles of integrity,  objectivity, confidentiality, and competency.  (b) The mission of the office of the city auditor is to promote honest, efficient, effective,  economical, and fully accountable and transparent city government. To fulfill this mission, the  office of the city auditor shall conduct performance audits and examinations and perform  nonaudit services of any city department, program, service, or activity as approved by the city  council. The purpose of these audits and examinations is to provide the city council, and city  management, the residents of Palo Alto, and other stakeholders with independent and  objective information and evaluations regardinganalysis as to whether management is using its  financial, physical, and informational resourcesthe effectivelyness, and efficientlycy,  economically, ethically, and equitably, and in compliance with laws, regulations, contract and  grant requirements, and with which city resources are employed, the adequacy of the system  of internal controls, and compliance with city policies and procedures and regulatory  requirements. Specifically:  (1) The city auditor shall conduct operational and financial audits and other audit work as  requested by the city council. This will include independently determining and evaluating:  (A) The soundness, adequacy, and application of accounting, financial, and other operating  controls towards promoting effective control at a reasonable cost.  (B) The extent of compliance with applicable laws and regulations and with established policies  and procedures.  (C) The extent to which city assets are accounted for and safeguarded from losses of any kind.  (D) The sufficiency, validity and reliability of accounting and statistical data developed within  the organization.  (E) The economy, efficiency, and effectiveness of city departments, programs, services, and  activities.(2) Audits shall be conducted and nonaudit services provided in accordance with  Government Auditing Standards, as established by the Comptroller General of the United  States, General Accounting Government Accountability Office. and the Standards for the  Professional Practice of Internal Auditing, established by the Institute of Internal Auditors  (c) In addition to the aforementioned responsibilities, the office of the city auditor shall:  (1) Select and recommend to the city council for approval an independent certified public  accounting firm to conduct the city’s Coordinate an annual external financial audit for the city  Attachment A NOT YET APPROVED  with an independent certified public accounting firm selected by the city council and coordinate  the annual external financial audit with the approved firm.  (2) Provide consulting services to city operating departments as requested by the city council or  city manager in their efforts to re‐engineer their operating practices and processes.  (3) Provide consulting services to the city council, as requested, regarding the accuracy and  financial impact of information provided to the city council.  (42) Perform other auditing functions consistent with the provisions of this section.  (d) At the beginning of each fiscal year, the city auditor shall submit prepare an annual audit  plan forto the city council for approval. The plan will be issued on the office of the city auditor  website, with written notification to the city council, and be placed on the appropriate  committee agenda. The plan shall identify the preliminary objectives of each audit to be  performed, reflecting the purpose of the engagement and a preliminary description of the  areas which that may be addressed. The city auditor will review the plan and consult with the  city manager prior to submitting it to the appropriate committee of the city council for  approval. The city manager shall may identify areas where the city will benefit from operational  and financialperformance audits or a nonaudit service. The city auditor will may review the plan  with and seek the advice of the city attorney prior to submitting it to the appropriate  committee of the city council for approval. The annual audit plan may be amended during the  fiscal year with approval of the city council.  (e) The office of the city auditor will issueshall prepare quarterly reports to the city council  describing the status and progress towards completing the audits. The reports will be issued on  the office of the city auditor website, with written notification to the city council, and be placed  on the appropriate committee agenda.The annual audit plan may be amended during the year  with the approval of the city council.  (ef) (1) The city auditor shall prepare a written report of the results of each audit conducted  and will be responsible for retaining a copy as a permanent record. The reports shall meet the  reporting requirements specified in the Government Auditing Standards and the views of the  city manager.  (1) Within two weeks after receiving the final draft report, the city manager, or his or her  designee, will prepare an official written response to the findings and recommendations  contained within the report and provide the response to the office of the city auditor. The city  auditor and city manager may agree to an extension of the two‐week time frame if requested  by the city manager. If a response is not received within the established timeframe, the office  of the city auditor will issue the audit report without management’s response.  (2) Each audit report shall include:  (A) A statement of audit objectives and a description of the audit scope and methodology.  Attachment A NOT YET APPROVED  (B) A full discussion of audit findings and conclusions.  (C) Recommendations for necessary or desirable action.  (D) A response from the city manager or the highest official of the audited entity, except as  described in the audit report processing (subsection (f)(4), below).  (f) (1) Upon completion of the final draft of an audit report, and prior to submission of the  report to the city council, tThe office of the city auditor shall transmit also provide a copy of the  draft report to the city manager or the highest official of the audited entity, to the city attorney  for review and comment, including legal advice relating to disclosure of information contained  in the report,; and to other appropriate officials as determined by the city auditor.  (2) Within five weeks after receiving the report, the city manager or the highest official of the  audited entity will prepare an official written response to the findings and recommendations  contained within the report and transmit the response to the city auditor. The report will be  issued to the city council within four weeks of receipt of the response.  (3) The official written response will be included verbatim in the audit report issued to the city  council by the city auditor.  (4) If a response is not received within the established five weeks, as described in subsection  (f)(2), above, the audit report will be issued to the city council without management response.  (5g) The aAudit reports and other work products of the office of the city auditor will be placed  on the agenda of the city council or appropriate city council committee within forty‐five  calendar days after the audit report issued to the city council.consistent with the following  general guidelines:  (1) Information items and items that will be discussed in a study session will be placed on the  council agenda.  (2) Audit reports and other audit work products will be placed on the finance committee  agenda when the subject matter focuses primarily on enterprise fund departments, functions,  or activities, or is concerned primarily with financial matters.  (3) All other audit reports and audit work products will be placed on the policy and services  committee agenda.  (gh) The city auditor will prepare and issue an annual report on the status of recommendations  made in completed audits. The report will reflect the status as reported by the city manager or  the highest official of the audited entityhis or her designee. The report will be issued on the  office of the city auditor website, with written notification to the city council, in the first quarter  of the fiscal year and be placed on the finance appropriate committee agenda. Further follow‐ up audits will be conducted as determined and recommended by the city auditor and approved  by the city council.  Attachment A NOT YET APPROVED  (hi) (1) Unless prohibited by law, Tthe office of the city auditor will have unrestricted access to  all sources of information, property, and personnel relevant to 1) the performance of a council‐ approved audit or 2) the identification of potential risks when developing the annual audit plan,  unless prohibited by law. Department management and staff will not intentionally withhold,  hide, or destroy any information or property that may be potential evidence in a planned or  ongoing audit. Nothing in this section shall authorize the office of the city auditor to have  access to documents, records, and information related to the office of any elected official.  (2) The office of the city auditor will handle Ddocuments and information will be handled  received with the same prudence exercised by those normally accountable for them and  consistent with the standards established by the Institute of Internal Auditorsappropriate  policies and regulations and the ethical principles cited in the Government Auditing Standards.  (j) To the extent possible, the office of the city auditor will accommodate an area’s daily  operations in scheduling and conducting such audits. Nothing in this section shall authorize  access to documents, records, and information related in any way to the office of any elected  official.   SECTION 3. This ordinance shall become effective upon the commencement of the  thirty‐first day after the date of its adoption.  INTRODUCED:  PASSED:  AYES:  NOES:  ABSTENTIONS:  NOT PARTICIPATING:  ABSENT:  ATTEST:  ___________________________________ ___________________________________  City Clerk Mayor  APPROVED AS TO FORM: APPROVED:    ___________________________________ ___________________________________  Senior Assistant City Attorney City Auditor  Attachment A CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 3, 2014 The Honorable City Council Palo Alto, California Policy and Services Committee Recommendation to Accept the Report on the Status of Audit Recommendations (June 2014) The Municipal Code requires the City Auditor to issue an annual report to follow up on the implementation status of audit recommendations from completed audits. Our reporting summarizes the status of 86 audit recommendations from 10 completed audit reports. This includes 50 recommendations that were included in our last status report and 36 new audit recommendations from audit reports issued during this past fiscal year. The City Auditor’s Office recommends acceptance of the Report on the Status of Audit Recommendations (June 2014). At its meeting on September 23, 2014, the Policy and Services Committee approved and unanimously recommended the City Council accept the report. The Policy and Services Committee minutes are included in this packet. Also included in this packet is an updated excerpt (Attachment A) to the status of recommendation #14 from the Fleet Utilization and Replacement Audit as requested by the Policy and Services Committee. Respectfully submitted, Harriet Richardson, CPA, CIA, CGAP, CRMA City Auditor ATTACHMENTS:  Attachment A: Updated Status (Recommendation 14) (PDF)  Attachment B: Report on the Status of Audit Recommendations (June 2014) (PDF)  Attachment C: Policy and Services Committee Meeting Minutes Excerpt (September 23, 2014) (PDF) Department Head: Harriet Richardson, City Auditor Page 2 STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 6 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status realized through right sizing the City’s vehicle and equipment fleet. calendar year. The draft policy will be presented to FRC in September/October for approval, followed by the City Auditor and finally to the City Manager for final approval and dissemination to City staff. 2013 Management Update: Individual policy sections are currently being developed but finalization will not occur until after the operational study recommendations are brought to Council by the end of the calendar year. Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet. 14. Public Works Fleet Management should routinely review the database inventory for completeness and accuracy and develop necessary processes for departments to provide accurate and timely utilization data. Public Works Complete Target Date Not Provided Staff shortages have delayed the implementation of this recommendation. Equipment Management is currently in the process of recruiting a Fleet Services Coordinator. Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface and training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. Additionally staff will conduct a physical inventory to confirm the inventory is accurate. N/A 2014 Management Update: Public Works has reviewed the database for accuracy. The upgrade of this existing software will include correction of minor discrepancies. Utilization data is now tracked by mileage, fuel use, preventative maintenance inspections, and data gathered from any vehicle break-downs. Department utilization was also considered in developing the 5-year replacement plan. 2013 Management Update: Staff recently entered into an amendment with AssetWorks, our fleet software vendor, and is working with Information Technology (IT) to develop an upgrade and training plan. Additionally IT is researching "cloud" based solutions which would benefit disaster recovery and allow accessibility for staff via the Internet. Finding 3: Internal controls over fuel and parts inventory can be improved. 19. PWD Fleet Management should work with the Administrative Services Department and Utilities Department (for CNG) to develop a system to reconcile fuel purchases, balances, and consumption reports. Public Works Complete Target Date Not Provided Staff is working with the Utilities Department to obtain the data necessary to begin periodic reconciliations of compressed natural gas (CNG). With the implementation of the software upgrade to FuelFocus, PWD will have better reporting capabilities for consumption. N/A 2014 Management Update: The PWD has implemented the software upgrade of FuelFocus, a module within AssetWorks, which tracks fuel usage by individual vehicle and cost center and also secures the dispensing of fuel based on employee identification card access. This has increased the level of accuracy in the recording of purchases and consumption for reconciliation. Attachment A CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR September 23, 2014 The Honorable City Council Attention: Policy & Services Committee Palo Alto, California Report on the Status of Audit Recommendations (June 2014) RECOMMENDATION We recommend that the Policy and Services Committee review and recommend to the City Council acceptance of the attached Report on the Status of Audit Recommendations as of June 30, 2014. BACKGROUND The Palo Alto Municipal Code requires the City Auditor to prepare and issue an annual report on the implementation status of recommendations made in completed audits. This report summarizes the status of 86 recommendations from 10 completed audit reports. It includes 50 recommendations from our 2013 status report and 36 new recommendations from audits that we issued in FY 2014. The attached report includes the audit findings, recommendations, City Manager’s original response, original target date for implementation (when provided), the status from prior status reports, the current status, and the revised target date. When possible, we verified the status of recommendations shown as “complete” through interviews with appropriate City staff and reviews of relevant supporting documentation. The status for the open recommendations represents what was reported by City staff responsible for implementation of the recommendations. SUMMARY As of June 30, 2014:  38 of the 50 recommendations open as of June 30, 2013, were completed  4 of the 36 recommendations from audits issued in FY 2014 were completed  39 recommendations were in process  5 recommendations from an audit issued late in FY 2014 had not been started All of the open recommendations are scheduled to be completed no later than June 30, 2015. Attachment B Page 2 The following provides a brief summary of the status of recommendations for each audit report:  Employee Ethics Policies – Issued January 23, 2008 The City Manager’s Office reported that the three open recommendations will be completed by October 31, 2014. Although they were not completed by June 30, 2014, sufficient work has been performed on these recommendations to support that they will likely be completed by the current target date. The Executive Leadership Team has already provided input/feedback on the draft Ethics Policy, which is currently being finalized.  Fleet Utilization and Replacement – Issued April 14, 2010 The Public Works Department (PWD) completed five of its ten open recommendations, reported it will complete four of the in-process recommendations by the end of 2014 and the last in-process recommendation by June 30, 2015. PWD achieved the intent of some audit recommendations through an alternative implementation, which includes: 1) a vehicle pool system, 2) an internal review of the fleet’s minimum utilization standards, 3) an upgrade of the FuelFocus software, 4) monitoring of electronic fueling system data daily and weekly for accuracy, and 5) an annual and blind inventory counting system to manage parts inventories.  Citywide Cash Handling and Travel Expense – Issued September 15, 2010 The Administrative Services Department (ASD) completed one recommendation and has target completion dates of October 31, 2014, for one recommendation), and April 1, 2015, for the last two recommendations. The revised Cash Handling Manual is posted online. ASD is continuing to review cash handling procedures for all cash handling facilities, working to improve progress toward meeting Payment Card Industry (PCI) standards, working on a technology solution to ensure taxable meals are reported as employee income, and working to revise the travel and meal reimbursement policy along with the new ethics policy.  SAP Security – Issued October 18, 2011 The Information Technology (IT) Department completed six of the seven open recommendations and expects to complete the last one by the end of 2014. IT developed several policies and procedures to ensure SAP security, developed information privacy and password security policies, provided information and privacy information security awareness training, developed a roadmap and completed the deliverables to implement standards for ensuring security of the City’s key information systems, and implemented a “write-once” procedure. A consultant is currently conducting a formal risk assessment of the City’s information systems.  Contract Oversight: Office Supplies – Issued November 20, 2012 The City Attorney’s Office completed both open recommendations by terminating the office supplies contract rather than accepting the company’s offer of future discounts in lieu of past discounts. The City now has a new office supplies vendor with better pricing. Attachment B Page 3  Utilities Reserves – Issued December 4, 2012 The Utilities Department completed all four open recommendations. They established formal and comprehensive policies and procedures for its utility reserves, as well as guidelines that the Council adopted in the Financial Plans in June 2014.  Employee Health Benefits Administration – Issued December 11, 2012 The People Strategy and Operations Department completed all 20 of their open recommendations. They have: 1) developed several new standardized procedures, 2) identify and track adjustments, 3) organized employee and retiree health benefit information using an indexed system, 3) completed a review of existing retirees and their health tiers, 4) modified the contract with Employee Benefit Services (EBS), 5) reviewed and discussed with EBS issues identified in the monthly EBS reports, and 6) developed a privacy policy to protect employees’ personally identifiable information (PII) from inappropriate disclosure.  Contract Oversight: Trenching and the Installation of the Electric Substructure – Issued October 30, 2013 The Administrative Services and Utilities Departments completed four of the six open recommendations, and expect to complete the last two no later than June 30, 2015. They 1) implemented procedures to meet with the appropriate parties when there are large variances between the lowest and second lowest bid or the City’s estimate, 2) established a process for verifying and ensuring consistency in figures reported in staff reports to Council, 3) issued a request for proposals for a hosted, web-based, E-procurement solution software system, and 4) developed a vendor evaluation form to address vendor performance, responsiveness, quality of work, change orders, delays, and issues prior to contract renewal.  Inventory Management – Issued December 31, 2013 All of the recommendations are in process and are expected to be completed no later than December 31, 2014. The Administrative Services, Public Works, and Utilities Departments have held several meetings to develop a plan to strategically address the issues identified in the audit. ASD staff have developed a plan, as well as draft policies and procedures, to provide a roadmap for managing inventory in an organized and consistent manner throughout the City.  Solid Waste Program – Issued June 3, 2014 PWD had already made progress on 11 of the 16 recommendations and had not yet started implementing 5 recommendations. PWD reported that it will complete 15 of the recommendations by the end of 2014. By June 30, 2015, they expect to complete the last recommendation, which requires more time because it involves working directly with GreenWaste of Palo Alto to develop a process for conducting route audits and correcting any errors identified as a result of the annual route audits. Attachment B Page 4 The Office of the City Auditor would like to thank the City Manager’s Office, the City Attorney’s Office, and the Administrative Services, Information Technology, People Strategy and Operations, Public Works, and Utilities Departments for their assistance in compiling this report and for their efforts in completing 42 recommendations during the past year and committing to completing all of the remaining open recommendations during FY 2015. Respectfully submitted, Harriet Richardson, CPA, CIA, CGAP, CRMA City Auditor ATTACHMENTS:  Attachment A: Status of Audit Recommendations as of June 30, 2014 (PDF) Department Head: Harriet Richardson, City Auditor Attachment B Page 5 Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 1 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 1. Employee Ethics Policies, Issued 1/23/08 Finding 2: Existing rules and regulations are scattered and a centralized resource is needed. 3. The City should develop a section on the City's intranet site that links city employees to the City or State policy, procedure, law, or regulation that addresses each of the major requirements for avoiding conflicts of interest and for acceptable and ethical behavior. City Manager In Process 6/30/08 A link to relevant City and State policies, procedures, laws and regulations for conflict of interest and ethical behavior will be developed and implemented on the City’s internal website by June 30, 2008. 10/31/14 2014 Management Update: The City's intranet site will include the new Code of Ethics and contain additional links as mentioned in the recommendation. 2013 Management Update: Link to the City's ethics and State conflict of interest code information will be added to the City's intranet site for employees by September 1, 2013. City Auditor's Note: In 2009, the City Manager's Office added the link, "Visit the Ethics Center," to the City's intranet site, which provided a matrix of City and State laws, codes, regulations, policies and procedures on conflicts of interest and ethical behavior; however, the link did not exist on the City's new intranet site as of June 2013. We subsequently reopened this recommendation. Finding 3: The City should adopt an employee code of ethics and formalize its employee ethics program. 4. The City should develop a code of ethics that employees can use as a guidepost for avoiding conflicts of interest, for ethical behavior, for deciding what actions are needed when conflicts of interest occur, and for making decisions. Employees should be required to read and sign an acknowledgment of the policy. City Manager In Process 6/30/08 Staff will research what other cities have developed in terms of a comprehensive ethics policy and develop a policy for the City of Palo Alto by June 30, 2008. 10/31/14 2014 Management Update: The Code of Ethics will be completed and distributed to City Staff. It will also be included in New Employee Orientation. Prior Years’ Management Updates (summarized): The City terminated the services of The Ethics Company because the consultant did not develop the City's code of conduct as outlined in its contract with the City. Due to cost, staff from the City's leadership team opted to complete the new ethics policy rather than engage a new consultant. First draft of the new policy will be completed in August 2013 for the City Manager's review and approval; rollout to all City staff will be immediately thereafter. The employee Intranet site will be updated once the ethics policy is complete. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 2 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Finding 3: The City should adopt an employee code of ethics and formalize its employee ethics program. 5. The City should formalize its policy on ethics training and ensure that employees attend periodic training updates. City Manager In Process Next training season An ethics training program for all employees will be developed and for the next training season. 10/31/14 2014 Management Update: People Strategy & Operations along with the City Attorney's Office leads various training. The new ethics policy will be added to the schedule of trainings. Prior Years’ Management Updates (summarized): The City terminated the services of The Ethics Company because the consultant did not develop the City's code of conduct as outlined in its contract with the City. Due to cost, staff from the City's leadership team opted to complete the new ethics policy rather than engage a new consultant. First draft of the new policy will be completed in August 2013 for the City Manager's review and approval; rollout to all City staff will be immediately thereafter. The employee Intranet site will be updated once the ethics policy is complete. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 3 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 2. Fleet Utilization and Replacement, Issued 4/14/10 Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet. 3. The Public Works Fleet Management should complete implementation of a centralized Citywide vehicle and equipment pool, and make the Citywide pool accessible to all departments. Public Works Complete 6/30/11 The existing automated pool vehicle management system located at the Municipal Services Center (MSC), Building B is being expanded and upgraded. Automated motor pools will be established at MSC, Building C, Civic Center, and the Utilities Department's Elwell Court locations. The pool vehicle management system will provide web-based or spontaneous vehicle reservation capability and automated vehicle key management. Also, the feasibility of contracting out pool vehicle management system with a third- party provider is being evaluated. N/A 2014 Management Update: The Public Works Department (PWD) has implemented the centralized Citywide vehicle and equipment pool system. CIP VR- 07001 was completed in FY2013, spending $114,000 for the pilot program. At the end of the pilot period, the system was discontinued because of the lofty ongoing cost of the system and the vendor's inability to solve operational problems with the system during the pilot period. Despite the discontinuation of the automated pool system, the PWD has taken other measures to accomplish the intended goals, including:  The implementation of 5 vehicle pools, at City Hall, MSC, Lucie Stern, Cubberley, and Elwell Court, totaling 19 pooled vehicles.  A pooled vehicle system was structured to allow for future growth and expansion as the need for pooled vehicles continues to increase.  The near completion of full implementation of the AssetWorks software will allow for improved tracking and monitoring of usage, making it simpler and more accurate to bill the client department.  Underutilized vehicles were reassigned to pooled vehicles and will continue to be monitored and analyzed.  All pooled vehicles are accessible to all staff/departments citywide. 2013 Management Update: The system has been installed and piloted at the MSC and a pilot began at the Civic Center on June 1, 2013 with a limited number of vehicles. Once the pilot proves to be bug free, the remaining pool cars will be added. It has been determined that a system at Elwell Ct. is not Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 4 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status necessary due to the remote location and small number of users. Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet. 4. The City Manager's Office and the Public Works Fleet Manager staff should review the fleet's minimum utilization standards and consider increasing the standards to more cost-effective levels. Public Works Complete Target Date Not Provided Staff drafted revisions to the Vehicle/Equipment Policy, including revised utilization standards. Staff is currently reviewing proposals for Consultant Services for an operational study which will include a review of the City's utilization standards, evaluation of industry standards, other public agencies and recommendations for increasing Fleet operations efficiency and effectiveness. N/A 2014 Management Update: The PWD has conducted an internal review of the fleet's minimum utilization standards and determined that a change to the current policy and procedures, specific to the City's minimum vehicle use requirement of 2,500 miles per year, is not necessary at this time. The PWD will continue to monitor and periodically evaluate the need for this change, including a utilization review of all vehicles conducted on an ongoing basis. Based on the completed consultant study, it is recommended that the PWD continue our utilization review also for larger trucks and equipment. Separate from the audit, the PWD will conduct this review as recommended. 2013 Management Update: The Consultant will issue the draft report by September 2013. PWD is currently recruiting for the Fleet Manager position with a target start date in September. The new Fleet Manager will review the operational study results and bring his/her recommendations to Council by end of the calendar year. Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be realized through right sizing the 8. Public Works Fleet Management should have the authority and responsibility to manage and operate the City fleet to ensure optimized use of fleet resources. Public Works In Process Target Date Not Provided Staff and the Fleet review Committee (FRC) will revise the Vehicle/Equipment Policy to include a new description of PWD Fleet Management's authority and responsibility to manage and operate the City fleet. 12/31/14 2014 Management Update: Policy and Procedures (P&P) 4-01 gives the Fleet Manager the responsibility and authority to operate the fleet. In addition, the Fleet Review Committee oversees important fleet issues and provides direction to the Fleet Manager. The authority for vehicle use comes from the Fleet Review Committee who approves all vehicle replacements and acquisitions. The Fleet Review Committee's roles will be memorialized in the revised policy. A policy update and integration of new sections are in process and will be fully complete by Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 5 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status City’s vehicle and equipment fleet. the end of the calendar year. The draft policy will be presented to FRC in September/October for approval, followed by the City Auditor and finally to the City Manager for final approval and dissemination to City staff. 2013 Management Update: Individual policy sections are currently being developed but finalization will not occur until after the operational study recommendations are brought to Council by the end of the calendar year. Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet. 10. PWD Fleet Management should revise the policy and procedures to clarify the take-home policy and conduct routine follow-ups with departments to document adherence to the policy. Public Works In Process Target Date Not Provided Staff and the FRC are revising the Vehicle/Equipment Policy to include clarifications to the take-home policy and will require take-home vehicle users to provide documentation to ensure their adherence to the policy. 12/31/14 2014 Management Update: The Vehicle Use policy is being rewritten. Changes to the existing policy, or adherence to the existing policy will be under direction from the Fleet Review Committee. A policy update and integration of new sections is in process and will be fully complete by the end of the calendar year. The draft policy will be presented to FRC in September/October for approval, followed by the City Auditor and finally to the City Manager for final approval and dissemination to City staff. 2013 Management Update: Individual policy sections are currently being developed but finalization will not occur until after the operational study recommendations are brought to Council by the end of the calendar year. Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be 13. PWD Fleet Management should revise the policy and procedures to clarify the take-home policy and conduct routine follow-ups with departments to document adherence to the policy. Public Works In Process Target Date Not Provided Staff and the FRC are revising the Vehicle/Equipment Policy to include new standards and criteria for assessing the need of non-rolling stock equipment. 12/31/14 2014 Management Update: The written 5-year replacement plan addresses “non-rolling” stock. The factors used in assessing this type of equipment are engine hours, regulatory compliance, safety, obsolescence, and maintenance costs. The revised vehicle use policy will memorialize these factors. A policy update and integration of new sections is in process and will be fully complete by the end of the Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 6 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status realized through right sizing the City’s vehicle and equipment fleet. calendar year. The draft policy will be presented to FRC in September/October for approval, followed by the City Auditor and finally to the City Manager for final approval and dissemination to City staff. 2013 Management Update: Individual policy sections are currently being developed but finalization will not occur until after the operational study recommendations are brought to Council by the end of the calendar year. Finding 1: The City recently avoided spending about $2.5 million in FY 2010 through a temporary freeze on non-urgent fleet replacements, but longer term efficiencies can be realized through right sizing the City’s vehicle and equipment fleet. 14. Public Works Fleet Management should routinely review the database inventory for completeness and accuracy and develop necessary processes for departments to provide accurate and timely utilization data. Public Works In Process Target Date Not Provided Staff shortages have delayed the implementation of this recommendation. Equipment Management is currently in the process of recruiting a Fleet Services Coordinator. Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface and training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. Additionally staff will conduct a physical inventory to confirm the inventory is accurate. 6/30/15 2014 Management Update: Public Works has reviewed the database for accuracy. The upgrade of this existing software will include correction of minor discrepancies. Utilization data is now tracked by mileage, fuel use, preventative maintenance inspections, and data gathered from any vehicle break-downs. Department utilization was also considered in developing the 5-year replacement plan. 2013 Management Update: Staff recently entered into an amendment with AssetWorks, our fleet software vendor, and is working with Information Technology (IT) to develop an upgrade and training plan. Additionally IT is researching "cloud" based solutions which would benefit disaster recovery and allow accessibility for staff via the Internet. Finding 3: Internal controls over fuel and parts inventory can be improved. 19. PWD Fleet Management should work with the Administrative Services Department and Utilities Department (for CNG) to develop a system to reconcile fuel purchases, balances, and consumption reports. Public Works Complete Target Date Not Provided Staff is working with the Utilities Department to obtain the data necessary to begin periodic reconciliations of compressed natural gas (CNG). With the implementation of the software upgrade to FuelFocus, PWD will have better reporting capabilities for consumption. N/A 2014 Management Update: The PWD has implemented the software upgrade of FuelFocus, a module within AssetWorks, which tracks fuel usage by individual vehicle and cost center and also secures the dispensing of fuel based on employee identification card access. This has increased the level of accuracy in the recording of purchases and consumption for reconciliation. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 7 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status The PWD worked with the Utilities Department to clarify billing for CNG fuel purchase transactions, and to the extent possible, the PWD reviews the billing charged by the Utilities Department before the payment transfer is made by the Administrative Services Department. 2013 Management Update: Staff recently entered into an amendment with AssetWorks, our fleet software vendor, and is working with IT to develop an upgrade and training plan. FuelFocus software is part of this implementation and once upgraded, PWD will have better reporting capabilities for consumption. Finding 3: Internal controls over fuel and parts inventory can be improved. 20. PWD Fleet Management should complete implementation of the fueling system at all city pumps and evaluate its effectiveness at providing internal controls over fuel pump transactions. Public Works Complete 12/31/10 Staff is in the final implementation stage of the new fuel management system. Staff is currently meeting with the existing fleet management software vendor to schedule a system upgrade which includes a more user friendly interface, training for all fleet and administrative staff to ensure a higher level of accuracy within the inventory. This upgrade will also include the FuelFocus module ensuring accurate data is collected for transaction control. N/A 2014 Management Update: The PWD has implemented the software upgrade of FuelFocus, a module within AssetWorks, which tracks fuel usage by individual vehicle and cost center and also secures the dispensing of fuel based on employee ID card access. The PWD fuel distribution at all sites is tracked by an electronic fueling system and the data is analyzed daily/weekly for accuracy. The PWD has also implemented other mitigating controls such as:  The hiring of staff to regularly reconcile and monitor fuel transactions, and resolve discrepancies with fueling transactions and usage, and be an expert user in the FuelFocus system for analyzing data.  Fleet staff have also been trained to detect, identify, and report discrepancies. 2013 Management Update: Staff recently entered into an amendment with AssetWorks, our fleet software vendor, and is working with IT to develop an upgrade and training plan. FuelFocus software is part of this implementation and once upgraded PWD will Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 8 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status have better reporting capabilities for consumption. Finding 3: Internal controls over fuel and parts inventory can be improved. 21. PWD Fleet Management should include requirements for securing vehicles and equipment within the fleet policies and procedures. Public Works In Process Target Date Not Provided Staff and the FRC are revising the Vehicle/Equipment Policy to incorporate requirements for securing vehicles and equipment. 12/31/14 2014 Management Update: Revisions to vehicle use policy (P&P 4-01) will include modification to section 1, item 2, “Safety”. The existing language in that section will include the following language: “Employees are responsible for securing their vehicle at all times when the vehicle is unattended. Securing a vehicle includes not only locking the doors but also making sure tool boxes and any auxiliary equipment is locked.” A policy update and integration of new sections is in process and will be fully complete by the end of the calendar year. The draft policy will be presented to FRC in September/October for approval, followed by the City Auditor and finally to the City Manager for final approval and dissemination to City staff. 2013 Management Update: Individual policy sections are currently being developed but finalization will not occur until after the operational study recommendations are brought to Council by the end of the calendar year. Finding 3: Internal controls over fuel and parts inventory can be improved. 22. PWD Fleet Management should conduct regular inventories of auto parts, develop a system to ensure the parts database is accurate and complete, and secure access to the auto parts inventory. Public Works Complete 4/30/10 A newly constructed parts storeroom is complete. Equipment Management is working on surveying the existing parts and supply inventories, and finalizing a plan for conducting periodic inventory reconciliation. Staff is continuing to work toward more accurate parts inventory control; however due to staffing shortages and higher level priorities, staff has not defined a permanent inventory system or reconciliation process. N/A 2014 Management Update: Fleet Management has completed two fiscal year-end parts inventories, one in June 2013 and one in June 2014. These inventories involved actual part-by-part physical count of every item in the parts room. The AssetWorks upgrade will make that process simpler, but complete inventories have now been done 2 years in a row. Blind inventories will be conducted annually and compared to the AssetWorks database. Also, the PWD has secured access to the auto parts inventory area. Access is granted by employee badge and is limited to the parts staff person and two supervisors. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 9 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 2013 Management Update: Staff recently entered into an amendment with AssetWorks, our fleet software vendor. Public Works and IT staff are working together to implement a system upgrade that includes a parts management/inventory system so that the City will have a fully integrated Fleet Management system. Once operational, staff will evaluate this module of the software to see if it fits the City's needs. Installation of this software is expected to be completed over the next few months and the system should be operational by the end of 2013. If the parts management module is the right fit, the next step will be to purchase the necessary hardware and to update the data in the new system. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 10 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 3. Citywide Cash Handling and Travel Expense, Issued 9/15/10 Finding 1: Stronger controls are needed for cash handling. 1. ASD should update the Citywide Cash Handling policy and procedures to provide sufficient guidance on internal controls related to cash handling. Administrative Services Department Complete Target Date Not Provided Revenue Collections has a copy of the written procedures from 18 facilities. Along with updating the central Cash Handling Manual, staff will review these individual sites' procedures to ensure they are comprehensive, in compliance with best practices, and inclusive of the audit recommendations. ASD will provide a checklist to ensure each facility fulfills each of the procedural requirements. N/A 2014 Management Update: The revised Cash Handling Manual is posted online. ASD-Revenue Collections will continue to review and update daily operating procedures for all cash handling facilities to ensure requirements established by the Cash Handling Manual are incorporated into each facility’s procedures. See Recommendation 4 below. Prior Years’ Management Updates (summarized): A 1991 Administrative Instruction Manual has been updated to cover all areas of cash handling, including the three areas discussed in the Audit Report – segregation of duties, safeguarding of revenue, and proper documentation of all transactions. Staff also reviewed other jurisdictions’ cash handling manuals to integrate the most effective parts of each. Finding 1: Stronger controls are needed for cash handling. 4. ASD should:  Work with the departments to immediately address weaknesses noted in the areas of safeguarding revenue, segregation of duties, and proper documentation and approval of certain types of transactions (e.g., voided transactions and issuance of receipts).  Ensure their list of approved revenue collection locations is Administrative Services Department In Process Target Date Not Provided ASD believes that with more structured training and monitoring, the level of compliance among the departments will increase, but departments will also have to proactively step up their compliance with the proscribed procedures. The updated Cash Handling Manual will specify the documentation requirements for all transactions, and Revenue Collections will work with each facility to ensure their compliance. ASD would like to suggest that other controls, such as safeguarding of 4/1/15 2014 Management Update: ASD-Revenue Collections is continuing to review cash handling procedures for all cash handling facilities and preparing a checklist to ensure each facility fulfills each of the procedural requirements. Revenue Collections is also working with the City’s IT Security Manager to identify improvement opportunities related to Payment Card Industry (PCI) standards. Any recommendations resulting from this review will be incorporated as an addendum to each facility’s cash handling procedures. Prior Years’ Management Updates (summarized): ASD-Revenue Collections met with all facilities within 30 days after the recommendation was finalized to address areas of concerns. Extensive time was spent Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 11 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status complete and updated, and these locations have adequate procedures to safeguard revenue. revenue and complete documentation, be emphasized to balance the relative weakness of the segregation of duties at Animal Services and Foothills Park, due to their particular space and staffing constraints. with Animal Services addressing weaknesses identified in the audit and significant improvement has been made. The revised Cash Handling Manual contains an updated list of approved revenue collection locations. All authorized cash handling facilities are updating their cash handling procedures. Additionally, risk assessment and cost-benefit analysis will be performed to determine the level of controls implemented. Finding 2: Increased oversight and coordination can improve the employee travel expense process. 6. ASD should review the nighttime meeting reimbursement policy. If the City decides to maintain this practice, ASD should report the amounts as income on employee Form W-2s to conform to Internal Revenue Service requirements. In addition, ASD should review other types of meal expense to ensure any reportable amounts are included on employee Form W-2s. Auditor’s Note: The City Auditor and Assistant Director from the Administrative Services Department will meet on September 17, 2014, to discuss changing the requirement for employees to provide meal receipts to use federal per diem rates, which is a best practice. Administrative Services Department In Process Target Date Not Provided ASD has determined that handling such reimbursements through payroll would involve significant staff time. Staff is developing a process that will comply with the IRS regulation in the most economical and efficient fashion. Any change in reimbursements would be subject to meet-and-confer depending on the labor group. 4/1/15 2014 Management Update: ASD staff is reviewing process changes coupled with search and reporting capabilities in the purchase card system that could make it feasible for the Accounts Payable and Payroll processes to sync up so that all taxable meal reimbursements would be included on employee paychecks to ensure proper handling of taxable meal pay to employees. Prior Years’ Management Updates (summarized): ASD updated the travel policy, petty cash policy, and reimbursement form to ensure proper coding of meals. ASD also established a new general ledger account to capture taxable meals for inclusion on employee W-2 forms as compensation. It takes considerable staff time to track and record these taxable meals such as meals provided during one-day training and meals provided to employees during overtime. Given the small number of incidents and the low dollar amounts, probably in the few thousand dollars citywide in a given year, staff is looking at phasing out these types of meals. A further complication is that meals are sometimes purchased with a P-card and may be for several staff. There is currently no easy way to assign these charges to the appropriate person receiving the meal. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 12 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Finding 2: Increased oversight and coordination can improve the employee travel expense process. 8. The City Manager’s Office should include additional guidance to prevent gifts of public resources on the City’s Ethics Center intranet site. City Manager In Process Target Date Not Provided The City Manager’s Office agrees with the recommendation and will update this section of the Intranet. 10/31/14 2014 Management Update: City Manager's Office will reissue travel and meal reimbursement policy along with new ethics policy. Prior Years’ Management Updates (summarized): The City terminated the services of The Ethics Company because they did not complete the work to develop the City's values-based ethics code of conduct as outlined in their contract with the City. Due to cost, staff from the City's leadership team have opted to finish writing the new ethics policy rather than engage a new consultant. First draft of the new policy will be completed in August 2013 for the City Manager's review and approval and rollout to all City staff. The employee Intranet site will be updated once the Ethics Policy is complete. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 13 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 4. SAP Security, Issued 10/18/11 Finding 2: ASD violated two critical security principles by not properly restricting access for all user accounts. 5. To ensure SAP user account administration functions are properly separated, ASD should:  Segregate responsibilities for creating and maintaining roles/profiles, assignment of roles/profiles, and creating and maintaining user accounts, transportation of roles/profiles  Prohibit IT staff from maintaining Human Resources Department employee records.  Assign all SAP user administrators to a designated SAP user group, preventing them from managing their own (and other administrators) accounts and access levels, and designate an individual to manage the SAP user group. Information Technology Complete 6/30/12 Staff concurs and recommends independent external security expert evaluation. Status: Open. Risk level assessment: Low (09/2011) to be further validated by independent external security expert. Segregation of duties is important but difficult to implement without additional resources. We have implemented a mitigation control in the SAP System Monitoring Policy and Procedures to review all user change logs done by the SAP user administrator. In addition, request to transfer maintenance of Employee records back to Human Resources Department (HR) has been initiated. N/A 2014 Management Update: In accordance with an SAP Segregation of Duties Operational (SOD) procedure, IT has separated the following roles: 1. CPA_IT_BASIS_ADMIN [no user assignment, no user role admin] 2. CPA_HELPDESK [user creation, password reset] 3. CPA_HELPDESK_ASSIGN_USER [assignment role to user plus SU01D] 4. CPA_HELPDESK_CREATE_CHG_ROLE [SAP access role development] In addition, SAP user administrators no longer have the ability or authority to manage their own user accounts. Prior Years’ Management Updates (summarized): The SAP team has implemented a work order tracking tool to:  Maintain roles and profiles (per role owner approval)  Assign roles and profiles (per role owner approval)  Create and maintain user accounts (automated program for new hires since Oct 2012) In addition, SAP management has planned to segregate the following SAP basis roles: Role 1: Maintain roles and profiles Role 2: Assign roles and profiles Role 3: Create and maintain user accounts Role 4: Transport roles, profiles and user accounts into the production environment Finding 4: The City needs to formally adopt and implement a recognized 12. ASD should adopt and implement the Payment Card Industry (PCI) Data Security Standard (DSS) and the National Institute Information Technology Complete Target Date Not Provided Staff recommends external security expert evaluation. Status: Open. Risk level assessment: Low (09/2011) to be N/A 2014 Management Update: The City’s Information Security Manager has developed a three-year roadmap to implement the ISO 27001 framework at Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 14 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status information systems control standard to ensure SAP security. of Science and Technology (NIST) SP 800-53 information systems security control frameworks to help ensure security of the City’s key information systems. further validated by independent external security expert. PCI DSS contains six major categories and a total of 200 control points. NIST SP‐53 contains a similar number of control points. Implementing both standards would require significant IT resources and business resources. Staff suggests a comprehensive security audit to determine the risk level and cost. the City, which is consistent and aligned with NIST SP 800-53 and PCI-DSS standards. As of 6/30/2014, all ISO 27001 roadmap deliverables have been completed and are subject to ongoing improvements. Prior Years’ Management Updates (summarized): The City’s Information Security Manager has developed a three year roadmap to implement the ISO 27001 framework at the City, which is consistent and aligned with NIST SP 800-53 and PCI-DSS standards. Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 13. ASD should develop and implement a formal and comprehensive security policy consistent with PCI DSS, NIST, the SAP Library, and other industry standards. Information Technology Complete Pending on external security audit Staff recommends external security expert evaluation. Status: Open. Risk level assessment: Medium (09/2011) to be further validated by independent external security expert. N/A 2014 Management Update: The City's Information Security Manager has already developed and enforced an information privacy security policy, password policy, and several information security procedures in conjunction with ISO 27001, NIST 800- 53 and PCI DSS standards. The City’s Information Security Manager has already developed and released an information privacy policy, password policy, and several information security procedures. The policies and procedures are based on the ISO 27001 framework, and begin to address the audit recommendation to implement a formal and comprehensive security policy consistent with PCI DSS, NIST, and the SAP Library. Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 15. ASD should implement a formal security awareness and training program that meets minimum control standards stated in PCI DSS and NIST control frameworks. The program should include provisions to ensure SAP technical Information Technology Complete Target Date Not Provided Staff recommends external security expert evaluation. Status: Open. Risk level assessment: Low (09/2011) to be further validated by external security expert. N/A 2014 Management Update: The City's Information Security Manager has provided PCI DSS security awareness and information security awareness training to technical staff and functional staff associated with processing credit card transactions and data. In addition, the City’s Information Security Manager has scheduled ongoing PCI DSS and general information security awareness training for all City Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 15 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status staff is trained on current SAP security controls and practices. employees, as appropriate. Prior Years’ Management Updates (summarized): The City’s information security manager has already provided PCI DSS security awareness and information security awareness training to technical staff and functional staff associated with processing credit card transactions and data. In addition, the City’s Information Security Manager has planned to provide information security awareness training to all the employees of the City. Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 16. ASD should implement a formal risk assessment process that meets minimum standards stated in PCI DSS and NIST SP 800-53 to ensure key information system threats and vulnerabilities are routinely (at least annually) and effectively identified, ranked, and addressed. Information Technology In Process Pending on external security audit. Staff recommends external security expert evaluation. Status: Open. Risk level assessment: Medium (09/2011) to be further validated by independent external security expert. 12/31/14 2014 Management Update: The City's IT Department has hired an external firm (CoalFire) to conduct a formal risk assessment to ensure key information system threats and vulnerabilities are assessed, effectively identified, and ranked in conjunction with the risk categorization. The IT Department has confirmed that the Information Security Risk Assessment (ISRA) will be completed by December 31, 2014. Prior Years’ Management Updates (summarized): The City’s Chief Information Officer (CIO) has hired an Information Security Manager (ISM) to manage risk at the City. In 2012, the ISM conducted a PCI-DSS security assessment to identify areas of improvement. The ISM has initiated an “Information Security Risk Assessment” project to conduct a comprehensive IT risk assessment [per ISO 27001/2 Information Security Management Systems (ISMS) standards] by June 2014 to identify all of the possible risks to the City’s IT department, the delivery of IT services and the accuracy and integrity of the City’s financial and personnel data. The risk assessment will also include network penetration testing to ascertain the vulnerabilities of the City’s computer network from hacking attempts. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 16 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 18. ASD should ensure access to SAP system parameters is restricted to only authorized staff, and that policies and procedures incorporate change controls stated in NIST SP 800-53 to ensure all changes are properly planned, authorized, executed, and monitored. Information Technology Complete Target Date Not Provided Staff recommends independent external security expert evaluation. Status: Open. Risk level assessment: Low (09/2011) to be further validated by external security expert N/A 2014 Management Update: The City's IT Department has implemented a Network Access Request (NAR) procedure to grant access to non-employee (consultants/contractors) to SAP’s production environment. Prior Years’ Management Updates (summarized): The SAP system parameter change authorization process was implemented in September 2012. Roles providing authorization in SAP to change system parameters are restricted to only authorized SAP Basis staff, and the role assignment is reviewed by the role owner semiannually. The SAP team is following the formal Request for Change (RFC) process to execute any changes to SAP system parameters and is in the process of implementing and automating scripts to monitor changes in SAP parameters. The SAP Project Management Office is implementing a new process (through TRACK-IT) to identify all SAP system parameter changes. In addition, the IT Department has implemented an exception procedure to grant access to non-employee (consultants/contractors) to SAP’s production environment. Finding 4: The City needs to formally adopt and implement a recognized information systems control standard to ensure SAP security. 19. ASD should develop policies and procedures and implement minimum NIST SP 800-53 and PCI DSS controls applicable to log management in order to ensure:  SAP and Oracle log data is secured using appropriate “write-once” media and/or backup Information Technology Complete Target Date Not Provided Staff recommends external security expert evaluation. Status: Open. Risk level assessment: Low (09/2011) to be further validated by independent external security expert. N/A 2014 Management Update: The City's IT Department has implemented a "Write-Once Log Procedure" to capture SAP and Oracle log data using “write-once” technology. The Information Security Manager has tested archived logs to verify they can be restored for investigative or review purposes. Prior Years’ Management Updates (summarized): Update for item #19A (OPEN): SAP management is Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 17 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status procedures.  Access to SAP and Oracle logs is restricted based on the principles of least privilege and segregation of duties.  Accountability is established for monitoring SAP and Oracle logs and for reporting any incidents to the appropriate levels of management.  SAP and Oracle are properly configured to ensure logs capture appropriate information and retain the information for an appropriate duration. researching a "write-once" solution. Update for item #19B (CLOSED): IT management is in the process of implementing an information security policy to enforce administrative restrictions so that an administrator cannot modify anyone else’s authorization within the group of administrators defined in SAP, including the administrator's own authorizations. Update for item #19C (CLOSED): Accountability is already established for monitoring SAP and Oracle logs and for reporting any incidents to the appropriate levels of management. In addition, the IT security manager has implemented an incident reporting and tracking procedure to enhance security. Update for item #19D (CLOSED): SAP and Oracle environments are properly configured to capture and retain all log data in accordance with the City’s data retention policy. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 18 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 5. Contract Oversight: Office Supplies, Issued 11/20/12 Finding 1: OfficeMax overcharged the City at least $47,563 by applying unauthorized changes to pricing. 1. ASD should consult with the City Attorney’s Office to pursue recovery of unauthorized charges from OfficeMax, including at least $47,563 for contract item overcharges under the America Saves program during the period November 1, 2007 through May 31, 2011. Administrative Services Complete Target Date Not Provided ASD will work with the City Attorney’s Office to request reimbursement. N/A 2014 Management Update: The company offered future discounts in lieu of past discounts. City opted to terminate contract and select an alternate vendor with better pricing. 2013 Management Update: Pending update from City Attorney's Office. Finding 2: The City could have received additional discounts for non- contract office supplies. 2. ASD should consult with the City Attorney’s Office to determine if the City can recover additional discounts ranging from $148,921 to $341,863 for non-contract items it purchased under the America Saves program terms from November 1, 2007 through May 31, 2011. Administrative Services Complete Target Date Not Provided ASD will work with the City Attorney’s Office to consider options for recovering additional discounts. N/A 2014 Management Update: The company offered future discounts in lieu of past discounts. City opted to terminate contract and select an alternate vendor with better pricing. 2013 Management Update: Pending update from City Attorney's Office. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 19 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 6. Utilities Reserves, Issued 12/04/12 Finding 1: Rate Stabilization Reserves are not consistently maintained within Council‐approved guidelines. 1. The Utilities Department should establish formal and comprehensive policies and procedures for its Utility Reserves. Utilities Complete 6/30/13  The Utilities Department will revisit its annual risk assessment model to determine, establish and document appropriate levels of Utility Fund working capital held in unrestricted reserves.  As part of its project to develop financial management policies and procedures, Utilities will revisit its risk assessment models and practices and make any appropriate revisions and will consider the funds available in all unrestricted reserves to support those risks. The completion of the project is delayed until December 2013 due to the loss of key staff and the breadth of the project that is now being undertaken. N/A 2014 Management Update: The Utilities Department has established formal and comprehensive policies and procedures for its Utility reserves in the Financial Plans adopted by Council in June 2014. Finding 1: Rate Stabilization Reserves are not consistently maintained within Council‐approved guidelines. 2. The Utilities Department should re‐evaluate and determine the use of reserve balance guidelines, updating the City’s resolution and the language in key City documents accordingly. Utilities Complete 6/30/13  Utilities Department will re‐evaluate and determine the use of reserve balance guidelines, updating the City’s resolution and the language to key City documents accordingly.  As part of its project to develop financial management policies and procedures, Utilities will develop reserve balance guidelines that support the rate-making objectives that are approved by the Council. Council action will be by resolution. The completion of the project is N/A 2014 Management Update: The Utilities Department has established guidelines for its Utility reserves in the Financial Plans adopted by Council in June 2014. The guidelines describe what steps staff should take when reserves exceed or are lower than these guidelines. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 20 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status delayed until December 2013 due to the loss of key staff and the breadth of the project that is now being undertaken. Finding 1: Rate Stabilization Reserves are not consistently maintained within Council‐approved guidelines. 3. The Utilities Department should revisit its annual risk assessment model to determine, establish, and document appropriate levels of utility fund working capital held in unrestricted reserves. Utilities Complete 6/30/13  The Utilities Department will revisit its annual risk assessment model to determine, establish, and document appropriate levels of utility fund working capital held in unrestricted reserves.  As part of its project to develop financial management policies and procedures, Utilities will revisit its risk assessment models and practices and make any appropriate revisions and will consider the funds available in all unrestricted reserves to support those risks. The completion of the project is delayed until December 2013 due to the loss of key staff and the breadth of the project that is now being undertaken. N/A 2014 Management Update: The Financial Plans adopted by Council in June 2014 describe the appropriate levels of utility fund working capital to be held in unrestricted reserves. These levels have been incorporated into the utility's financial planning models. Finding 1: Rate Stabilization Reserves are not consistently maintained within Council‐approved guidelines. 4. The Utilities Department should revisit and update the 5‐year financial projection rate making worksheets to completely state all reserve balances are consistent with the City’s key financial documents and improve visibility over all unrestricted reserves. Utilities Complete 6/30/13  The Utilities Department will revisit and update the 5‐year financial projection rate making worksheets to completely state all reserve balances are consistent with the City’s key financial documents and improve visibility over all unrestricted reserves.  Utilities now reports all unrestricted reserves on a quarterly basis to the N/A 2014 Management Update: The presentation format for the Financial Plans adopted by Council in June 2014 show all reserve balances are consistent with the City's key financial documents. Similar views have been incorporated into the quarterly reports. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 21 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Utilities Advisory Commission and Council. When the 5-year financial forecasts and rate projections are prepared next (in early 2014 for the FY 2015 budget process), the balances of all reserves will be visible. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 22 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 7. Employee Health Benefits Administration, Issued 12/11/12 Finding 1: Retiree reimbursements were not accurately calculated. 1-A (1). Establish clear, documented procedures to ensure the accuracy of the Reimbursement Report. People Strategy and Operations Complete 3/31/13 Written procedures on the Retiree Medical Reimbursement Report process will be created. N/A Dec. 2013 Management Update: Procedures have been created and documented. Finding 1: Retiree reimbursements were not accurately calculated. 1-A (2). Establish a methodology for reconciling the CalPERS billing to the Reimbursement Report and perform a monthly reconciliation to identify, track, and follow up on any discrepancies. Create and maintain common data fields among key data sources to facilitate such reconciliation in an accurate, complete, and efficient manner. People Strategy and Operations Complete 1/31/13 HR staff will request additional resources to establish an automated methodology for reconciling the CalPERS billing to the HR Reimbursement Report. N/A Dec. 2013 Management Update (summarized): EBS has developed methodology to reconcile the CalPERS billing to the Reimbursement Report. Adjustments and discrepancies are identified, tracked, and notated on an EBS monthly report. City staff reviews the EBS monthly report during monthly teleconferences to review retroactive transactions and notes. Finding 1: Retiree reimbursements were not accurately calculated. 1-A (3). Establish criteria and a methodology for addressing, recording, and reviewing retroactive transactions in the Reimbursement Report. People Strategy and Operations Complete 1/31/13 A methodology for recording and reviewing the monthly retroactive transactions will be developed. N/A Dec. 2013 Management Update (summarized): Procedures have been created and documented. On a monthly basis, the CalPERS Health Event Notification Report is downloaded and securely emailed to EBS. Finding 1: Retiree reimbursements were not accurately calculated. 1-B. Enhance current procedures to ensure that the Retiree Medical Tier Matrix is maintained accurately, completely, and in an organized manner along with a complete set of the labor agreements, resolutions, People Strategy and Operations Complete 1/31/13 Current process for maintaining Retiree Medical Tier Matrix will be improved and organized so it is available on the HR intranet site for business partners. Labor Agreements are currently available on the HR internet site. N/A Dec. 2013 Management Update (summarized): Staff created an index to organize documentation related to health information for eligible active employees and retirees for all bargaining units and non- represented employee groups. This will be maintained as changes are adopted by Council in order to accurately maintain the Retiree Medical Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 23 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status and CalPERS letters. Consider making the Tier Matrix available to all business partners and stakeholders to ensure that the eligibility criteria are clearly communicated to all parties. Matrix. A complete set of labor agreements, resolutions, CalPERS letters, and an updated Retiree Medical Matrix are posted on the City's intranet site. Labor agreements and the Matrix are also available on the City's website. Finding 1: Retiree reimbursements were not accurately calculated. 1-C (1). Establish procedures for determining the health tier for each retiree and maintaining a complete and accurate record of retiree health tiers. People Strategy and Operations Complete 2/28/13 A written procedure for documenting the health tier as soon as a new retiree appears on CalPERS billing will be documented. N/A 2014 Management Update: The review of existing retirees and their tiers was completed. Corrections were made to those identified as incorrect and an ongoing month to month review is performed for all retirees based on changes from CalPERS billing statement. Dec. 2013 Management Update (summarized): Procedures have been established for determining and documenting the health group for retirees. In addition, a review of previous retiree records is being conducted. Finding 1: Retiree reimbursements were not accurately calculated. 1-C (2). Ensure that the tier determination is based on the hire date, retirement date, and employee group at the time of retirement as recorded in SAP and based on the Retiree Medical Tier Matrix. People Strategy and Operations Complete 3/31/13 Review retirees who separated prior to SAP implementation in 2003 to ensure they are accurately recorded on Retiree Medical Tier Matrix. N/A Dec. 2013 Management Update (summarized): Procedures have been established for determining and documenting the health group for retirees. Employee group will be confirmed in SAP and the CalPERS system to ensure accuracy and consistency between the two systems. Finding 2: CalPERS billing was not adequately monitored. 2-A (1). Enhance the current procedures to ensure that any changes in employment affecting the employee’s health eligibility status are accurately and consistently People Strategy and Operations Complete 3/31/13 HR process for promotions will be updated to include recording changes in SAP as well as CalPERS system until such time that two systems are integrated. N/A Dec. 2013 Management Update (summarized): PSO procedures for promotions and any changes in employment affecting the employee's health eligibility status have been updated. Staff created a quarterly exception report to compare data in SAP Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 24 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status recorded in both SAP and CalPERS system in a timely manner and the CalPERS system to maintain accuracy. Finding 2: CalPERS billing was not adequately monitored. 2-A (2). Verify the accuracy of the CalPERS system record by comparing to the SAP record for each employee at the time of retirement to ensure accurate billing by CalPERS. People Strategy and Operations Complete 3/31/13 Quarterly process for reviewing CalPERS billing to ensure accurate billing will be established as well as determining appropriate internal or external resources to accomplish this review. N/A Dec. 2013 Management Update: Monthly procedures have been established to include confirmation of the employee group in SAP and CalPERS system for each employee at the time of retirement. Finding 2: CalPERS billing was not adequately monitored. 2-B (1). Establish procedures for providing CalPERS with clear, written instructions for the employer share calculation on a regular basis. People Strategy and Operations Complete 12/31/12 Although written instructions were provided in the past, to ensure accuracy, HR staff will provide annual instructions to CalPERS to ensure calculations are clearly understood. N/A Dec. 2013 Management Update: PSO procedures have been established to provide annual instructions to the CalPERS health division to ensure calculations are clearly understood. Finding 2: CalPERS billing was not adequately monitored. 2-B (2). Establish monitoring procedures to ensure that the City instructions are followed by systematically reviewing the methodology applied to calculate the employer share. People Strategy and Operations Complete 1/31/13 An automated methodology for reviewing the CalPERS billing calculations will be established. N/A Dec. 2013 Management Update (summarized): This function has been outsourced to EBS. EBS developed a methodology to compare information from the City and CalPERS to ensure the accuracy of the CalPERS billing and the reimbursement amount. Finding 3: HRD has not effectively administered the EBS contract. 3-A. Review the EBS contract to ensure the adequacy of the contract terms and accuracy and clarity of the scope of services including the retiree tier definition. Establish monitoring procedures to ensure the contract terms remain adequate and any changes People Strategy and Operations Complete 12/31/12 HR staff will review the EBS contract with the vendor to ensure the contract accurately reflects retiree tier definitions and services that can be provided given limitations in access to CalPERS records. Periodic review of the contract to ensure the scope of services remains accurate will be conducted. N/A Dec. 2013 Management Update (summarized): PSO reviewed the contract, revised the scope of services, and amended the contract. Monitoring procedures have been established and the contract terms will be reviewed on an annual basis. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 25 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status in the scope of services are documented and properly authorized in accordance with the terms and conditions under the contract. Finding 3: HRD has not effectively administered the EBS contract. 3-B (1). Establish recordkeeping procedures for maintaining monthly Reimbursement Reports and additional payment instructions provided to EBS along with adequate supporting documentation. People Strategy and Operations Complete 1/31/13 Recordkeeping procedures for any payment instructions and adjustments provided to EBS will be established. N/A Dec. 2013 Management Update: Recordkeeping procedures for any payment instructions and adjustments provided to EBS have been outlined in internal staff procedural guidelines. Finding 3: HRD has not effectively administered the EBS contract. 3-B (2). Establish review procedures to ensure accuracy and completeness of retiree reimbursements prior to instructions being provided to EBS for payment. People Strategy and Operations Complete 12/31/12 Review process will be established to ensure retiree reimbursement instructions are complete prior to submitting to EBS for payment. N/A Dec. 2013 Management Update: Review procedures have been established. Finding 3: HRD has not effectively administered the EBS contract. 3-B (3). Request EBS to provide monthly and annual reconciliations of their check register to the Reimbursement Reports and to notify the City of any exceptions noted during the month. People Strategy and Operations Complete 11/30/12 HR staff will request monthly reconciliation of check register and notification to City of any exceptions noted. N/A Dec. 2013 Management Update (summarized): In July 2013, EBS transitioned to a new system, making a new report available online for PSO staff to review returned, voided, and reissued checks on a monthly basis. The report is also discussed during a monthly teleconference meeting. Finding 3: HRD has not effectively administered the EBS contract. 3-B (4). Establish procedures for reviewing the monthly reconciliations and tracking and following up on any discrepancies People Strategy and Operations Complete 2/28/12 Procedures will be established for reviewing monthly reconciliation reports, including follow up on any discrepancies and documenting N/A Dec. 2013 Management Update: Procedures have been established. The reconciliation report is reviewed monthly during a teleconference meeting and any discrepancies are reviewed. Documentation outlining issues and corrections are filed Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 26 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status including returned, voided, reissued checks in a timely manner. If the exceptions require corrective actions, they should be documented and related written communication to EBS be maintained. corrective action. electronically and also noted on a summary report. Finding 3: HRD has not effectively administered the EBS contract. 3-C. Work with ASD to establish procedures for handling uncashed EBS checks. Based on the procedures, formalize the EBS procedures for notifying the City of the returned or uncashed checks and how to handle them. People Strategy and Operations Complete 2/28/13 HR will work with ASD to establish a procedure for EBS notification of uncashed checks and steps to follow in such circumstances. N/A Dec. 2013 Management Update: Staff worked with ASD to create a stale dated check procedure. Steps for handling uncashed EBS checks have been established. Finding 3: HRD has not effectively administered the EBS contract. 3-D. Establish a methodology for EBS to follow and require specific supporting documentation to be provided to HRD for review. Identify review criteria and establish procedures to verify the accuracy and completeness of the EBS services provided for Form 1099 issuance. People Strategy and Operations Complete 12/31/12 Recordkeeping procedures will be established to ensure EBS accurately issues 1099 forms to retirees who have not submitted Substantiation forms and at the same time, accurately document forms received. N/A Dec. 2013 Management Update: A methodology and recordkeeping procedures have been established to ensure EBS accurately issues 1099 forms to retirees who do not submit the Substantiation form. Review procedures have also been established to verify the accuracy of 1099 issuance and related invoices. Finding 3: HRD has not effectively administered the EBS contract. 3-E. Establish procedures to review EBS invoices to ensure the accuracy of the EBS billing. Review should include reconciliation of the invoice to the actual People Strategy and Operations Complete 2/28/13 Procedure for reviewing EBS invoices will be created to ensure accuracy of EBS billing and completion of services. N/A Dec. 2013 Management Update (summarized): A procedure for reviewing EBS invoices has been created to ensure accuracy of EBS billing, including reconciliation with checks and ACH transactions completed and other services within the contract Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 27 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status services provided. scope. Finding 4: Required documentation to verify the eligibility of dependents for enrollment was not always available. 4. Improve dependent eligibility verification procedures to ensure that required supporting documentation is obtained, reviewed, and maintained in accordance with the CalPERS Circular Letter No. 600-045-12. People Strategy and Operations Complete 4/30/13 Verification procedures will be reviewed and improved to ensure that required supporting documentation is obtained and if not, medical insurance will be cancelled promptly. N/A Dec. 2013 Management Update: A procedure document was provided to PSO staff and a review was completed to ensure verification documentation is obtained and filed in accordance with CalPERS Circular Letter No. 600-045-12. If supporting documentation is not received, dependents will not be enrolled in the health benefit plan. In addition, each Business Partner team will review a sample of the employee benefits files on a quarterly basis. Finding 5: Personally Identifiable Information (PII) has not been adequately protected and controlled. 5. Take applicable steps recommended by the NIST Guide to appropriately maintain the confidentiality of PII. People Strategy and Operations Complete 6/30/13 The NIST guidelines have been reviewed with HR staff. An internal policy will be created. N/A Dec. 2013 Management Update (summarized): The NIST guidelines have been reviewed with PSO staff and a meeting was held with the City's IT Security Manager. PSO has established a privacy policy specific to the department, which was distributed and discussed at a staff meeting. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 28 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 8. Contract Oversight: Trenching and the Installation of Electric Substructure, Issued 10/30/13 Finding 1: The Utilities Department and ASD did not effectively address a significant variance between the City’s estimate and the selected contractor’s flawed bid, which may have resulted in additional costs of approximately $281,000. 1. The Utilities Department and ASD should implement policies and procedures to appropriately address significant variances between City estimates and contractor bids before awarding contracts, in order to ensure staff awards contracts to the lowest responsible and responsive bidder, as required by the Municipal Code. Administrative Services Department and Utilities Complete Original Target: Immediately When there are significant differences between the lowest bid and staff estimates or other bids, City Staff will set up a meeting with the lowest bidder to ensure that its bid is correct, that it can perform the work as described, and to ensure compliance with Municipal Code 2.30.440. Staff will document this discussion with the bidder to include: meeting date, attendees, description of questions, summary, and next steps. N/A 2014 Management Update: When there is variance greater than 25% between the lowest and second lowest bidder or between staff's estimate and lowest bidder, staff will conduct a special meeting with the appropriate parties to review the scope of work, pricing, and timeline to ensure compliance with the Municipal Code. The meeting will be documented and filed along with the contract paperwork. Finding 1: The Utilities Department and ASD did not effectively address a significant variance between the City’s estimate and the selected contractor’s flawed bid, which may have resulted in additional costs of approximately $281,000. 2. The Utilities Department and ASD should ensure the accuracy of key information stated in staff reports submitted to City Council, including those which request authorization for the award of contracts. Administrative Services Department and Utilities Complete Original Target: Immediately ASD will put an extra emphasis as a result of this finding to match key figures in the solicitation summary to the actual solicitation documents. N/A 2014 Management Update: Utilities performs cross checking of figures during the report preparation process. ASD added a new level of review in the staff report process. In addition to the resource impact section, the Office of Management and Budget will verify and ensure consistency in the figures reported in the staff report, solicitation documents, and attachments. Finding 1: The Utilities Department and ASD did not effectively address 3. ASD should prioritize implementing a system to electronically record and track vendor bids as part of any future system Administrative Services Department Complete Issue RFP 2014 Staff is in the early phase of reviewing online bid options and will issue a request for proposal for such a N/A ASD made it a high priority to explore a new procurement system. ASD issued an RFP on 7/9/14 for a hosted, web-based, E-Procurement solution software system to automate one or more of the Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 29 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status a significant variance between the City’s estimate and the selected contractor’s flawed bid, which may have resulted in additional costs of approximately $281,000. implementation for ASD Purchasing. service. City's vendor management, purchase-to-pay, solicitation, evaluation, contract management, insurance and bond management, and reporting processes. The RFP submittal deadline was September 9, 2014. The tentative timeline for implementing a new system is 7/1/15. Finding 2: The Utilities Department and ASD did not appropriately re‐ evaluate or renew the City’s contract for trenching services and the installation of electric infrastructure. 4. The Utilities Department and ASD should review existing policies, implement new policies, and develop procedures to ensure the City’s contracts are appropriately re‐ evaluated and renewed in accordance with applicable contract terms and the Municipal Code. Administrative Services Department and Utilities Complete 12/31/13 Policies and procedures will be reviewed, revised, and implemented to evaluate contractor work every 12 months, at a minimum. The evaluation criteria shall include: performance, contract compliance, responsiveness, accuracy of estimates and invoicing. ASD staff will create a contract monitoring checklist to aide in regular contract administration. The checklist will prompt for review of contract terms, contractor deliverables, project milestones, payments, and overall performance. The information collected via the checklist will aid in performance review when contract renewal is sought. N/A 2014 Management Update: ASD and Utilities have developed a vendor evaluation form, which will be submitted along with Appendix M - PR Transmittal Form, for contract renewal. The vendor evaluation form is a rating checklist which addresses performance, responsiveness, quality of work, change orders, delays, and issues. ASD is providing a contract administration checklist to project managers when a contract is implemented. This checklist provides reminders on the steps to effectively manage a contract. Finding 3: The Utilities Department did not enforce contract billing terms that were the basis. 5. The Utilities Department should work with ASD to review existing contract performance management policies and develop procedures to ensure staff appropriately administers the City’s contracts. Administrative Services Department and Utilities In Process 3/31/14 Utilities staff is formalizing the process by which contractor work is requested, approved, inspected, reviewed, and invoiced. Utilities will hire a Project Coordinator to assist Engineering in administrating 6/30/15 2014 Management Update: Utilities has developed contract management guidelines and a project charter for large construction projects and professional services. These contracts and documents are stored on a centralized SharePoint website. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 30 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Procedures should address the following areas: ● Monitoring of contractor billings to ensure accuracy and compliance with contract terms. ● Ensuring contracts are appropriately and timely modified, if required. contracts, verifying invoices, and processing payments. Utilities will be requesting for similar positions in Operations and Customer Support Services in the 2014 mid‐year budget. Utilities will also develop a tracking mechanism to monitor contractor work, reconcile invoices, and verify payments. ASD will conduct a review of the entire purchasing process citywide. The departments will collaborate to bring contract management training to appropriate staff. This training will be rolled out to all departments. Utilities Engineering hired a Project Coordinator in March 2014 to assist with contract administration and project management. The coordinator has developed a contract database, coordinated project management training, and formalized policies and procedures. Utilities Operations reclassified a position in the FY 2015 to assist with contract and inventory management. Utilities is working with the City Attorney's Office to strengthen the boilerplate language in the IFB and professional service contract templates. ASD hired a consultant to perform an independent review of the entire purchasing process. The review recommended a new purchasing system, increased training, and additions to the Purchasing Manual among other recommendations. Staff is in the process of implementing the recommendations. ASD has selected an online invoice management system to improve the review, approval and tracking invoices received by the City. This system will be implemented in 2015 and will provide increased accountability and visibility into the invoice review and payment process. Finding 4: The Utilities Department did not appropriately manage its contract with Casey Construction, Inc. to ensure the City’s projects were completed in accordance with plans and cost 6. The Utilities Department should work with ASD to review existing contract performance management policies and develop procedures to ensure staff appropriately administers the City’s contracts. Procedures should address the following areas:  Roles and responsibilities for the contract administrator and any Administrative Services Department and Utilities In Process Recommendation 5 & 6 are similar. See response to recommendation 5. 6/30/15 2014 Management Update: Roles, responsibilities, and workflow for contract administration are documented and saved on SharePoint. Utilities Engineering completed a mandatory 3-day project management course in July 2014. ASD provided purchasing and contract administration training to the Executive Team and City staff in 2013 and 2014. This training will continue in 2014 and 2015 as part of an ongoing purchasing training curriculum for City staff. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 31 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status estimates. additional training requirements for staff.  Monitoring of contractor performance.  Ensuring payments are made only for services and materials included in the contract scope.  Ensuring there is an adequate process and documentation to show planned work has been completed. Additional Contract administration training is planned for November 2014 with Purchasing and City Attorney's Office. See responses above related to vendor performance review and new invoice management system. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 32 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 9. Inventory Management, Issued 12/31/13 Finding 1: ASD and City departments should implement inventory management policies and procedures citywide to achieve the City’s inventory goals and objectives. 1. ASD and City departments should implement the City’s inventory management policies and procedures citywide to achieve inventory goals and objectives. Administrative Services (lead) In Process 6/30/14 Citywide policies and procedures will be reviewed, updated, and shared with all departments cited in this audit. Inventory goals and objectives will be stressed and implemented where it is cost-effective to do so. 10/31/14 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 1: ASD and City departments should implement inventory management policies and procedures citywide to achieve the City’s inventory goals and objectives. 2. ASD should review its inventory accounting policies and correct any misstatements in the City’s accounting records. Administrative Services In Process 5/31/14 ASD has reviewed issues raised by the Auditor and has found no material misstatements in its FY 2013 financial records and CAFR. ASD believes its accounting policies are reasonable. Accounting policies and records, however, will be reviewed as staff responds to Recommendation 1. Completed and awaiting Auditor’s verification 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 2: ASD should improve controls to ensure the accuracy of recorded inventory. 3. ASD should update and enforce inventory count policies and procedures to help ensure consistent and accurate inventory records. The update should Administrative Services In Process 6/30/14  ASD has implemented blind inventory counts and appropriate segregation of duties at the MSC warehouse and will continue to improve. Limited staffing at the MSC 10/31/14; All policies and procedures and responsibilities for this recommendation are in place; will go live on 10/31/14 after Finance Committee review 2014 Management Update: When the audit was presented to the Finance Committee in February Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 33 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status at minimum require blind inventory counts, sufficient documentation of counts and adjustments, and appropriate segregation of duties. ASD should consider implementing controls included in the GAO publication titled “Executive Guide Best Practices in Achieving Consistent, Accurate Physical Counts of Inventory and Related Property.” does make segregation of duties challenging.  To achieve greater accuracy in counts at the RWQCP warehouse as well as segregation of duties, additional staffing is necessary. Staff from Public Works and ASD propose to evaluate the costs and benefits of the recommendation and report back to Council.  Staff will strive to implement controls cited in GAO publication and inform Council of its progress. 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 3: Inventory records do not evidence accountability for all inventory transactions. 4. ASD should update and enforce inventory transaction policies and procedures to ensure there is proper authorization and accountability for all transactions. The update should, at minimum, require approved reservations prior to issuance of inventory and separation of the following incompatible roles: a) custody of inventory, b) counting of inventory, and c) making adjustments to inventory. Administrative Services In Process 6/30/14  ASD will reassess its transaction policies and procedures to ensure proper authorization and accountability within its warehouses and whether additional FTE will be needed to achieve the separation of the “incompatible” roles.  Systems, current and new, will be assessed to maximize use of the reservation system. There may be situations, like an emergency, where goods may be withdrawn without a reservation. Staff will work to reconcile this situation. 10/31/14; All policies and procedures and responsibilities for this recommendation are in place; will go live on 10/31/14 after Finance Committee review 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 3: Inventory records do not evidence accountability for 5. ASD should avoid use of generic user accounts. ASD should consult with the IT Department to determine Administrative Services In Process 1/31/14 ASD is working with IT and SAP personnel to change user accounts from generic to specific, identifiable Completed and awaiting Auditor’s verification 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 34 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status all inventory transactions. an appropriate alternative to using a generic account to issue inventory. staff. return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 4: The City’s warehouses have significant quantities of unused or infrequently used inventory. 6. ASD should identify, formalize, and communicate inventory management goals and objectives to City departments. Administrative Services In Process 6/30/14 Once current policies and procedures are reviewed and updated and inventory management goals and objectives are reaffirmed, they will be discussed and left with departments. 10/31/14; All policies and procedures and responsibilities for this recommendation are in place; will go live on 10/31/14 after Finance Committee review 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 4: The City’s warehouses have significant quantities of unused or infrequently used inventory. 7. ASD should update existing policies and develop new policies and procedures to address the following:  Roles and responsibilities for managing inventory levels  Management of slow- moving or dead stock Administrative Services In Process 6/30/14 ASD will update its policies & procedures, to include a review of Muni Code requirements, and work with departments to: a) clearly define responsibilities for managing inventory levels; b) periodic reports will be sent to departments to identify dead stock; c) departments will 10/31/14; All policies and procedures and responsibilities for this recommendation are in place; will go live on 10/31/14 after Finance Committee review 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 35 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status  Transitioning to new materials coordinate with ASD when new materials are ordered and replace old inventory. meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 4: The City’s warehouses have significant quantities of unused or infrequently used inventory. 8. ASD should consult with the IT Department and other City departments to ensure staff:  Identifies and uses key SAP inventory management reports.  Appropriately configures and updates SAP parameters affecting inventory levels. Administrative Services In Process 3/31/14  ASD has worked and will continue to work with SAP staff to use and develop SAP inventory management reports. A list of these reports will be included by Target Date.  Parameters affecting inventory levels will be explored and updated as needed. 10/31/14; All policies and procedures and responsibilities for this recommendation are in place; will go live on 10/31/14 after Finance Committee review 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 5: The City should improve physical security over its inventory. 9. The Public Works Department should perform a citywide physical access risk assessment in collaboration with the Utilities Department, Office of Emergency Services, IT Department, and the Police Department in order to effectively identify, prioritize, and Public Works In Process 12/31/14  Public Works has and is interacting with departments to address access control weaknesses. Hard keys are being transitioned to a card entry system.  A thorough review of those with access cards to the MSC warehouse has been conducted and the number of people with access has been reduced. 12/31/14; MSC and WQCP security measures are completed. Public Works staff will collaborate with the City’s OES Director for recommendations and guidance working toward a citywide risk assessment. 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 36 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status address access control weaknesses.  A cage extension and a card access system have been added to a City Hall storage facility for IT equipment.  Public Works will be working with other departments to identify further improvements such as an improved camera system at the MSC. 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 5: The City should improve physical security over its inventory. 10. The Public Works Department should develop policies and procedures to address the management of citywide physical security. Policies and procedures should address: a. Designation of roles and responsibilities to ensure physical security controls appropriately restrict and monitor access. b. Management (administration) and proper use of the City’s access control systems. c. Processing departmental requests to grant or modify employees’ physical access. d. Granting restricted access to non-employees. e. Ensuring access is timely modified or revoked when roles and responsibilities Public Works In Process 12/31/14  Public Works staff will make improvements to existing policies and procedures to address citywide physical security.  The department is in the process of working with IT, OES, and Police to address items a-e. PW is, for example, evaluating non-employee access to CNG filling equipment. Completed and awaiting Auditor’s verification 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 37 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status change. Finding 5: The City should improve physical security over its inventory. 11. The Public Works Department should configure the fleet access control system to support the City’s security goals and objectives or determine if the AMAG Technology, Inc. Symmetry Security Management System should replace it. Public Works In Process 6/30/14 Prior to audit, PW staff was in the process of converting the Fleet access control system to the AMAG system. The AMAG technology access control system is expected to be implemented by FY end. 12/31/14 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 5: The City should improve physical security over its inventory. 12. The Public Works Department should review and update AMAG Technology, Inc. Symmetry Security Management System access authorization records to ensure access card holders can be uniquely identified. Access cards (especially generic or group cards) should only be assigned with a documented and approved business need. Public Works In Process 6/30/14 Public Works will evaluate the current access control database and remove any access cards that are not uniquely identified. Only uniquely identified access cards will be issued in the future. Completed and awaiting Auditor’s verification 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 5: The City should improve physical security over its inventory. 13. The Public Works Department should assess the adequacy of records of individuals assigned keys and take necessary corrective action to ensure the accuracy and Public Works In Process 12/31/14 PW will review physical key records and update them to reflect the current issuance of keys. The current key system is in process of being replaced, card readers will be added to key 12/31/14 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 38 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status completeness of the records. The Public Works Department should identify and prioritize replacement or rekeying of locks for high risk areas if records do not identify who is in possession of the keys or if the keys issued were of the type that can be duplicated. locations, and cameras will be installed in specific locations. The latter will be done in concert with Police, OES, and IT. meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Finding 5: The City should improve physical security over its inventory. 14. The Public Works Department should improve physical security at the City Hall storage area. Appropriate actions include, but are not limited to, enforcing appropriate key or card access controls and securing areas that have inadequate fencing. Public Works In Process 12/31/14 A review of City storage areas is underway. As stated above IT equipment at City Hall is now caged and will be caged at MSC warehouse as well. Public Works is evaluating new access controls. Completed and awaiting Auditor’s verification 2014 Management Update: When the audit was presented to the Finance Committee in February 2014, the Finance Committee requested that staff return in 6 months (August 2014) to provide a status update. Due to various scheduling conflicts, the meeting has been moved from August 19 to October 7, at which time the Finance Committee will hear staff’s responses to and the implementation plan for the Auditor’s findings and recommendations. Since the Auditor’s Recommendation Status update report ends June 30, 2014, staff will provide status responses to the audit in the FY 2015 Recommendation Status update report. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 39 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status 10. Solid Waste Program, Issued 6/3/14 Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.1. Continue to review and verify the data discrepancies identified during the audit and take corrective action. Public Works In Process 9/30/14 Agree. Staff has already verified 192 out of 685 discrepancies, which represent the largest dollar amounts. The remaining 493 discrepancies will be analyzed and adjusted as appropriate and staff will continue to verify the accounts. When an account discrepancy is identified, staff reviews the account history for a period not to exceed 3 years and either generates a credit or a charge to the customer by following the current Rule and Regulations No. 11. Residential or small commercial/non‐profit accounts that have been undercharged may be back billed for a shorter time period as appropriate, or not back billed if the customer is not at fault. 9/30/14 2014 Management Update: As of June 30, 2014, staff has reviewed 458 accounts. Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.2. Develop methodology and tools to compare the SAP data with RAMS data to detect and correct any discrepancies in an efficient and timely manner. Public Works Not Started 9/30/14 Agree. Staff will implement the comparative method developed by the Auditor comparing SAP data with RAMS data. Additionally, staff has been meeting with GWOPA regularly and are working collaboratively to correct any new discrepancies found in either system. Staff has committed to compare the data semiannually with GWOPA moving forward and taking immediate actions to correct any errors found. 12/31/14 2014 Management Update: Staff has not started on recommendation because it is first focusing on higher priority tasks related to recommendations affecting customer billing and financial issues. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 40 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.3. Perform a cost‐benefit analysis and determine an optimal course of action to maintain the accuracy and integrity of refuse customer data. Public Works In Process 10/31/14 Agree. Staff has reviewed the preliminary cost‐benefit analysis and will continue to evaluate options to address future discrepancies to limit the inaccuracies and potential billing errors resulting from the maintenance of two distinct customer databases; however, staff recommends adding one FTE Business Analyst position to focus on billing issues on a daily basis. This option would also need to invest budget to modify SAP to provide more accuracy for the system integrity. The salary (including benefits) for a Business Analyst is approximately $170,000 and the costs of modifications to SAP are unknown at this time. Contracting directly with GWOPA to perform the Refuse billing functions would have an additional net annual cost impact of approximately $200,000 and would result in residents receiving separate billings for their utilities. Due to the inconvenience to the residents, cost and the need to continue to review GWOPA billing, staff does not recommend this option. 10/31/14 2014 Management Update: Staff has been considering the options and costs and benefits associated with maintaining the accuracy and integrity of the refuse customer data. Staff plans to submit a request in the FY16 Budget process to hire a Business (or Management) Analyst position to focus on future billing discrepancies and assist with the long term billing software modifications. Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.4. Complete the review of all Multi‐Family Dwellings (MFDs) to ensure the accuracy of the customer type classification in RAMS. Public Works In Process 9/30/14 Agree. For various reasons some MFD customers have been classified as single‐family dwelling (SFD), MFD, or Commercial. Staff has already begun reviewing and correcting any MFD classification inaccuracies. Staff will continue to work with GWOPA and 9/30/14 2014 Management Update: Staff has reviewed MFD list and classifications with GreenWaste and begun correcting inaccuracies as well shared with Utilities the drafted MFD categories. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 41 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status consult with Utilities to clarify the guidelines categorizing MFDs in both SAP and RAMS systems, which includes: improving the guidelines and definitions of customer types to ensure that they are further clarified, identifying the number of units for existing MFD customers and reclassifying customers in RAMS, and establishing appropriate collection services as needed. Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.5. Work with the Utilities Department and GWOPA to clarify the roles and responsibilities over obtaining information required for determining customer type, recording data, and maintaining the accuracy and completeness of the refuse customer type data. Public Works In Process 9/30/14 Agree. New Utilities customers, including Refuse accounts, are initially set up through Utilities Customer Service. The move‐in/move‐out data file is transferred every hour to GWOPA. Staff will work with Utilities Customer Service and GWOPA to clarify the roles and responsibilities by creating clear guidelines for the single‐ family, multi‐family, and commercial categories used by both Utilities Customer service and GWOPA. 9/30/14 2014 Management Update: Staff completed initial discussions with Utilities. Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.6. Establish procedures to ensure that necessary data, system capability, and related administrative tasks are identified, assessed, and communicated to stakeholders before refuse rates or exemptions with high complexity are adopted. Public Works In Process 11/30/14 Agree. Staff will identify business requirements and consult with GWOPA, Utilities and IT on required system changes/capabilities and procedures to ensure sufficient data is obtained, and that consequences are considered and communicated to stakeholders when identifying or before adopting new rates or service exemptions. 11/30/14 2014 Management Update: Staff completed initial discussions with Utilities. Further steps are pending rate study. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 42 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Finding 1: The Public Works Department should improve the accuracy of refuse billing. 1.7. Establish procedures to ensure that a service code is defined and added to both systems before a new service fee is implemented. Public Works In Process 9/30/14 Agree. Staff and GWOPA have worked to eliminate the RFZ (a generic billing category) category as documented in this report. Staff will work with the SAP team to establish procedures and ensure that any new charged service code will be added to SAP prior to any billing. 9/30/14 2014 Management Update: Staff completed initial discussions with Utilities and eliminated nearly all customer accounts with RFZ codes. Procedures for new service fees will be created. Finding 2: The Public Works Department should strengthen its oversight of GWOPA to maintain accurate refuse service data. 2. Assess the potential impact of incorrect service records that may remain in RAMS, and provide additional direction as needed to enhance GWOPA’s monitoring activities, such as a route audit, over the accuracy of the refuse customer service records. Public Works In Process 6/30/15 Agree. Staff will strengthen oversight and work with GWOPA to improve the accuracy of customer service records in RAMS. Staff will direct GWOPA to perform regular route audits based on a staff developed process, sampling size, and methodology for more frequent route and service record reviews. Subsequently, staff will continue to work with GWOPA to correct any new errors in a timely method. Until all routes have been subject to an audit, GWOPA will perform quarterly route audits. Once the data is cleaned up, the route audits will be performed annually. 6/30/15 2014 Management Update: Staff has begun discussions with GreenWaste. The first route audit will take place in the first quarter of fiscal year 2015. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.1. Work with Administrative Services Department staff to identify key financial data, clarify the methodology to obtain the data, and develop common terminology to be applied throughout budget, accounting, and staff Public Works Not Started 9/30/14 Agree. Due to various reporting needs, timing, the type of information being communicated and to whom, current budget and reserve numbers can fluctuate. Staff will work with ASD Staff to define the common financial data that will be used or referenced throughout the budget, accounting and staff reports. When available, staff 9/30/14 2014 Management Update: Staff has not started on recommendation because it is first focusing on higher priority tasks related to recommendations affecting customer billing and financial issues. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 43 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status reports to ensure that data is verifiable, understandable, timely, consistent, and useful for decision making processes. will use CAFR numbers and projections based on SAP or budget, and ensure figures will be labeled and referenced. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.2. Update and clarify the Refuse Fund Rate Stabilization Reserve guideline to ensure that the minimum and maximum reserve balance is set at an adequate level required to support the reserve’s intended purpose. Public Works In Process 11/30/14 Agree. Staff will revise and clarify the Refuse Reserve guidelines. 11/30/14 2014 Management Update: Staff will revise and clarify reserve guidelines as part of the rate study project. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.3. Work with Utilities, Information Technology, and Administrative Services Department staff to explore opportunities for improvement to ensure that actual refuse revenues by sector are accurately captured and tracked. Public Works Not Started 9/30/14 Agree. The customer data and refuse service type need to match. The current service types: R‐1 (residential), R‐2 (commercial cart), and R‐3 (commercial bin and roll off), do not match the revenue categories of residential, commercial, and industrial. The Auditor has identified an additional reporting code that will allow for more accurate revenue reporting. Staff is working with IT on the SAP modification. 9/30/14 2014 Management Update: Staff has not started on recommendation because it is first focusing on higher priority tasks related to recommendations affecting customer billing and financial issues. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision 3.4. Work with GWOPA to ensure that data required for accurate tracking of actual expenses are identified and reported by GWOPA on a regular basis. Establish procedures to periodically review Public Works Not Started 9/30/14 Agree. Staff will request updated financial statements and expense records from GWOPA annually and will review the assumptions and methodology used by GWOPA in establishing their expense by sector. Staff will also consider using any 9/30/14 2014 Management Update: Staff has not started on recommendation because it is first focusing on higher priority tasks related to recommendations affecting customer billing and financial issues. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 44 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status making. GWOPA financial records to monitor the accuracy of the data provided by GWOPA. revised GWOPA percentages of expenses by sector and operations into the rate model. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.5. Consult with the City Attorney’s Office and reevaluate the need for establishing the Commercial Sector Reserve. If applicable, work with Administrative Services Department staff to establish the Commercial Sector Reserve and related procedures. Public Works Not Started 11/30/14 Agree. Staff plans to develop and recommend a sustainable rate model for implementation in FY 2016 that will provide a roadmap for eliminating sector imbalances and working with the City Attorney will reevaluate the need for a separate commercial sector reserve and related procedures. 11/30/14 2014 Management Update: Staff has not started on recommendation because it is first focusing on higher priority tasks related to recommendations affecting customer billing and financial issues. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.6. Identify key operational data required for informed decision making to ensure efforts required to monitor program performance and progress are effective and reasonable. Public Works In Process 9/30/14 Agree. Staff will continue to identify and monitor key operational data and measures required for informed decision making by the City as well as for the purposes of monitoring GWOPA’s performance. 9/30/14 2014 Management Update: Staff is evaluating various data to be considered as key measures. Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.7. Establish baseline data and a methodology to evaluate the effectiveness of program activities and related expenses in achieving Solid Waste goals. Public Works In Process 9/30/14 Agree. Existing measures have been in place to evaluate the program effectiveness, which include, but are not limited to, percent of residential customers with mini‐cans, pounds per person, and commercial customers with compost service. Staff is working on additional measures to quantify the benefits of outreach activities. 9/30/14 2014 Management Update: Staff is evaluating various data to be considered as key measures. Attachment B STATUS OF AUDIT RECOMMENDATIONS AS OF JUNE 30, 2014 45 Finding Recommendation Responsible Department Current Status Original Target Date and Response Revised Target Date and Status Finding 3: The Public Works Department should ensure reliable and useful data are provided to stakeholders for informed decision making. 3.8. Establish a process to ensure that financial incentives and output requirements provided in a new or renegotiated contract are aligned with Solid Waste’s key performance measures to effectively support its goals. Public Works In Process 9/30/2014 Agree. Staff will establish a process that will review and identify key information that could ensure that financial incentives and output requirements of a new or renegotiated contract are aligned with the program’s performance measures. Key information may include, but not be limited to tonnages, successes in other jurisdictions, customer surveys or waste characterization studies. 9/30/14 2014 Management Update: Staff started developing negotiation strategy for implementing changes in the GreenWaste contract. Attachment B POLICY AND SERVICES COMMITTEE FINAL MINUTES Page 1 of 7 Special Meeting September 23, 2014 Chairperson Price called the meeting to order at 6:00 P.M. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Klein, Price (Chair), Scharff, Schmid Absent: Agenda Items 1. Report on the Status of Audit Recommendations (June 2014). Harriet Richardson, City Auditor, reported as of June 30, 2014 86 recommendations from 10 audit reports remained open. During the past year, Staff completed 38 of 50 recommendations open as of June 30, 2013. Four of 36 recommendations made in audits issued in Fiscal Year (FY) 2014 were completed. Staff made progress on 39 of the open recommendations but had not begun implementation of five recommendations issued late in FY 2014. Departments expected to complete 37 of 44 remaining open recommendations by the end of calendar year 2014 and the remaining 7 by the end of FY 2015. Audit Staff reviewed Department responses for all completed recommendations to ensure implementation met the intent of the recommendation. In some instances, Departments implemented alternative measures to accomplish the intent of a recommendation, which Audit Staff also verified. The Finance Committee requested a detailed update regarding the Inventory Management Audit, and Staff from several Departments would provide that update on October 7, 2014. Council Member Klein inquired whether the number of closed recommendations was good, bad, indifferent. Ms. Richardson indicated that closing 76 percent of open recommendations represented good progress. In the prior year, only 16 recommendations had been implemented. Significant progress was made on recommendations from audit reports issued in 2008, 2010, and 2012. All recommendations from the Utilities Reserves Audit of the prior fiscal year were implemented. Within the past year, all recommendations from the Employee Benefits Audit Attachment C WORKING MINUTES Page 2 of 7 Policy and Services Committee Special Meeting WORKING Minutes 9/23/14 were implemented. Significant work was being performed on all open recommendations. Council Member Klein noted some recommendations were more important than other recommendations. He asked if any important recommendations were lagging. Ms. Richardson answered no. Some of the highly important recommendations were contained in the Inventory Management Audit. A great deal of work to implement those recommendations had been completed since June 30, 2014. With respect to the Ethics Policy, the Executive Leadership Team had reviewed a draft Ethics Policy. The SAP Security Audit had only one remaining open recommendation. Chair Price requested Staff explain status, original target date, revised target date, and status columns contained in Attachment A. Ms. Richardson advised that a current status of complete indicated the recommendation was closed. The original target date was the date provided in the audit response. ”N/A” in the revised target date column indicated the audit was complete. The 2014 update column indicated the date of the status report. Chair Price was confused by the current status indicating complete, yet the 2014 update contained narrative. Ms. Richardson explained that the 2014 update indicated actions taken to complete or implement recommendations. Council Member Schmid noted that 42 recommendations were completed during the year and anything remaining open would be completed by the end of FY 2015. Efforts to close recommendations were noticeable. Three of the ten audits with outstanding recommendations were at least four years old. In the Contract Oversight Audit, detailed responses allowed a reviewer to see the steps taken. The Employee Health Benefits Audit did not provide the same detail. He asked how the Policy and Services Committee (Committee) should interpret that difference in terms of audit oversight. Ms. Richardson explained that previous updates were summaries taken from old status reports, and Staff carried those forward. For 2014, Audit Staff focused on providing sufficient detail for a reviewer to understand that the recommendation was fully implemented. Departments provided a large amount of detail. Audit Staff determined what to include in the report based on the City Auditor requesting Audit Staff to write a brief summary of each recommendation. Attachment C WORKING MINUTES Page 3 of 7 Policy and Services Committee Special Meeting WORKING Minutes 9/23/14 Council Member Schmid asked if future reports would contain more statements. Ms. Richardson answered yes. Council Member Schmid noted that risk assessment was the City Auditor's responsibility, yet the Auditor requested the Information Technology (IT) Department to perform a risk assessment of itself. The IT Department confirmed that the security risk assessment would be completed. He inquired whether the City Auditor's oversight had occurred. Ms. Richardson replied no. If a recommendation had not been completed, then Audit Staff had not verified actions taken. Auditors performed risk assessments for one purpose; however, the standards for internal control required management to perform risk assessments of its own function. Having the IT Department perform a risk assessment of its function was a commendable practice. The IT Department would attempt to identify the controls it needed to implement in order to mitigate risks. New internal control standards were recently released. Council Member Schmid asked how Audit Staff would determine the IT Department's risk assessment was accurate. Ms. Richardson advised that the Audit Plan included training regarding internal controls. Audit Staff would train Departments on implementing good internal controls. As Audit Staff performed risk assessments in the future, they would ask questions based on the revised standards that would help assess areas for an audit. Council Member Schmid felt the Committee viewed the City Auditor as the major operator in performing risk assessment. Ms. Richardson indicated new standards were issued two weeks previously. Council Member Schmid referred to the Fleet Utilization Audit where Finding Number 1 reported the City recently avoided spending $2.5 million. The City implemented a major change in vehicle use and replacement. He reviewed the Budget for an impact from the reorganization; however, he did not find a substantial change over the past five years. He asked why an impact was not demonstrated in the Budget. Ms. Richardson clarified that the finding indicated the City avoided spending money in the future to replace vehicles. Avoidance of an expense might not be shown in the Budget. Attachment C WORKING MINUTES Page 4 of 7 Policy and Services Committee Special Meeting WORKING Minutes 9/23/14 Council Member Schmid explained that if expenses were flat or increasing, he would expect to find a reduced rate of increase or reduced total expenditure. James Keene, City Manager, wished to understand Council Member Schmid's analysis before attempting to answer the question. Decreased costs in one area could have been offset by increased costs in another area. Staff could review Council Member Schmid's question and the Budget and provide an answer in writing. Council Member Schmid advised that the FY 2007 total budget of the vehicle replacement fund was approximately $7 million. In addition, he reviewed FY 2008, 2010, 2012, 2014, and 2015 Budgets. In FY 2014 the rate of growth was consistent with the overall Budget rate of growth. He also reviewed the Capital Improvement Budget and salaries and benefits over the same periods of time. He could not find anything in vehicle expenses that would demonstrate a change in the pattern of uses, whether capital investment, maintenance costs, or outside contracts. The audit seemed to promise a change in vehicle replacement and utilization. Mike Sartor, Public Works Director, reported Staff had thoroughly reviewed underutilized vehicles and deemed a number of vehicles as surplus since the audit. Another group of vehicles was placed into pools, and a number of vehicles were eliminated. The City recently purchased a Fire ladder truck at a cost of approximately $1 million. Council Member Schmid attempted to find an impact in the Budget. Mr. Sartor would work with the Fleet Review Committee to provide a written response. Council Member Schmid asked if the City owned and operated fewer vehicles. Mr. Sartor had reduced the number of fleet vehicles. Staff was also revising the policy for vehicles assigned to individuals and/or taken home in an effort to reduce the number of those vehicles. Another possibility was leasing vehicles rather than replacing them. The review of fleet vehicles was moving slowly, because the Fleet Manager position had been vacant for two years. The City recently hired a Fleet Manager who would aggressively pursue changes. In addition, Staff submitted a requisition to purchase three electric vehicles and two hybrid vehicles. Council Member Schmid wanted to see an impact from the audit decision. Attachment C WORKING MINUTES Page 5 of 7 Policy and Services Committee Special Meeting WORKING Minutes 9/23/14 Council Member Scharff inquired about the delay in hiring a Fleet Manager. Mr. Sartor explained that Staff selected an applicant approximately a year ago, but the applicant declined the City's offer of employment. Staff did not believe the remaining applicants were well qualified. In a second recruitment, the requirement for municipal experience was changed. The new Fleet Manager had 25 years of experience as a Fleet Manager with UPS. Mr. Keene felt the change in requirements was an adjustment to the marketplace. Mr. Sartor anticipated the new Fleet Manager would perform well for the City. Council Member Scharff referred to Recommendation 14 on packet page 12 that originated in 2008. The 2014 management update seemed to indicate the recommendation was complete. He inquired about remaining steps to be taken. Mr. Sartor advised that the Department upgraded its software in 2013 to a fleet-focused program. Staff had completed the update as recommended in the finding. Council Member Scharff asked why the target date for completion was June 30, 2015. Mr. Sartor explained that ongoing updates were needed. Council Member Scharff inquired whether the recommendation would ever be complete because updates would always be needed. Mr. Sartor did not know why the target date was June 30, 2015. Ms. Richardson used the date provided by the Department when the Department indicated it was not complete. Mr. Sartor would review the matter and report to the Committee. Council Member Scharff remarked that the issue of Departments completing recommendations was almost resolved. Later audit recommendations were being implemented timely. The annual status report to the Council resulted in a lack of oversight. Ms. Richardson reported that Staff was now required to report on open recommendations six months from the date the audit report was approved and every six months thereafter until complete. Current pending audits Attachment C WORKING MINUTES Page 6 of 7 Policy and Services Committee Special Meeting WORKING Minutes 9/23/14 would be reviewed six months from September and every six months thereafter. Staff could report sooner if they completed recommendations. Council Member Scharff inquired whether Audit Staff and Departments agreed on target dates. Ms. Richardson was working closely with Departments to ensure recommendations were feasible. Those discussions included identifying a timeframe for taking action. If action would require a lengthy time period to implement, then Audit Staff and Departments determined reasons and interim steps to mitigate issues. Council Member Scharff asked if the City Auditor had reviewed all target dates and determined they were reasonable. Ms. Richardson advised that completion dates of the end of calendar year 2014 were reasonable. Those target dates of the end of FY 2015 resulted from Staff requesting sufficient time to complete recommendations. Council Member Scharff commented that other Staff work could take priority over responding to audits. The issue was ensuring items were not lost. He appreciated Audit Staff's efforts to resolve outstanding audit items. Chair Price felt more frequent status updates would be helpful. She inquired whether there was a target date for completing training on internal controls and whether training would include all Departments. Ms. Richardson had not developed training as she was waiting for new standards to be released. Training would likely begin in January 2015. She would work with the Administration Services Department (ASD) to prioritize Staff for training. Chair Price was pleased by Audit Staff discussing the feasibility of recommendations and working with Departments. Ms. Richardson believed Audit Staff working directly with Departments along with the City Manager's encouragement for Departments to complete recommendations were responsible for the positive report. MOTION: Council Member Schmid moved, seconded by Council Member Klein to recommend to the City Council acceptance of the Status of Audit Recommendations Report as of June 30, 2014. Council Member Schmid encouraged the City Auditor to continue including detailed actions taken in the report. Attachment C WORKING MINUTES Page 7 of 7 Policy and Services Committee Special Meeting WORKING Minutes 9/23/14 Council Member Scharff could support the Motion if Item Number 14 was revised to explain actions to be taken in the update section or to modify the target date. Without that information, the report was not complete. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER: Regarding Recommendation 14 under Audit Number 2-Fleet Utilization and Replacement, Issued 4/14/10, Council Member Klein noted the Committee was accepting the report rather than approving it. The Committee's responsibility was not to review the work of the City Auditor. MOTION AS AMENDED PASSED: 4-0 Mr. Keene remarked that the City Auditor focused on practical recommendations and discerned recommendations that provided a greater return on investment. That would result in greater efficiency for completing recommendations and a more trusting relationship between the Audit Staff and Departments. ADJOURNMENT: Meeting adjourned at 8:51 P.M. Attachment C City of Palo Alto (ID # 5187) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/3/2014 City of Palo Alto Page 1 Summary Title: Second Amendment to Contract with Bartel Associates, LLC Title: Approval of Second Amendment to Contract S14151557 with Bartel Associates, LLC for Actuarial Services in a Total Amount Not to Exceed $103,000 From: City Manager Lead Department: Administrative Services Recommended Motion Staff recommends that Council approve, and authorize the City Manager or his designee to execute, Amendment No. 2 to Contract No. S14151557 with Bartel Associates, LLC (Contract) by increasing the total compensation by $25,000 from $78,000 to $103,000 for actuarial services until a Request for Proposal for such services has been completed and a new contract awarded. Background The City requires actuarial services for the biannual actuarial valuation related to its Retiree Healthcare Plan as well as actuarial services related to retiree medical and pension benefit in response to Council questions, labor negotiations, and financial planning. Discussion In 2011 the City first contracted with Bartel Associates, LLC to prepare actuarial valuations of its Retiree Medical and other post-retirement benefits. The City will be issuing a new RFP for actuarial services in the coming months, but will likely need actuarial services in the interim. The original contract term expired on August 31, 2014. This term was extended with the first amendment to August 31, 2015 and compensation was increased from $50,000 to $78,000. With this second contract amendment, staff requests that the contract amount by increased by $25,000 from $78,000 to $103,000 so that the City can access actuarial services during the time it takes to issue a new RFP, and undergo the selection process, and seek City Council contract approval. The City does not anticipate needing another Retiree Healthcare Plan valuation during this period, but staff does expect that questions may come up during labor negotiations that City of Palo Alto Page 2 require Bartel Associates’ expertise. The requested increase of $25,000 will provide for three to four substantive yet minor actuarial analyses. Resource Impact There are sufficient funds to cover the cost of this contract amendment in the FY 2015 General Benefits Fund budget. Policy Implications Approval of the agreement is consistent with existing City policies. Environmental Review These services do not constitute a project for the purposes of the California Environmental Quality Act. Attachments:  Attachment A: Contract S14151557-Amendment 2 (PDF) 1 Revision April 28, 2014 AMENDMENT NO. 2 TO CONTRACT NO. S14151557 BETWEEN THE CITY OF PALO ALTO AND BARTEL ASSOCIATES, LLC This Amendment No. 2 to Contract No. S14151557 (“Contract”) is entered into September 1, 2014, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and BARTEL ASSOCIATES, LLC, a California limited liability company, located at 411 Borel Avenue, Ste. 101, San Mateo, CA 94402 (“CONSULTANT”). R E C I T A L S A. The Contract was entered into between the parties for the provision of Actuarial Consulting Services. B. The parties wish to amend the Contract by increasing the compensation by Twenty Five Thousand Dollars ($25,000) to a not to exceed total amount of One hundred Three thousand Dollars ($103,000) for continuation of services. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4 is hereby amended to read as follows: SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses shall not exceed One Hundred three Thousand Dollars ($103,000). In the event Additional Services are authorized, the total compensation for Services, Additional Services and reimbursable expenses shall not exceed One hundred three thousand dollars ($103,000). Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “C” entitled “COMPENSATION”. Attachment A 1 SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: _____________________________ Senior Asst. City Attorney BARTEL ASSOCIATES,LLC By:___________________________ Name:_________________________ Title:__________________________ Attachments: EXHIBIT "C": COMPENSATION 2 Revision April 28, 2014 DocuSign Envelope ID: 4E225411-60C2-4C43-A968-F7C9D0A77E2D       Attachment A 2 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $103,000. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. Any work performed for Basic Services or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. In the event that Additional Services are agreed upon and requested by the City, the compensation to be paid to the Consultant under this agreement shall be in the amount(s) agreed upon by the City, or will be billed by the Consultant at the Consultant’s hourly billing rates, as set forth below in Exhibit C-1. Additional Services may include, but will not be limited to the following: x Meetings and/or conference calls in addition to those already included in Basic Services. x Preparation of analyses of the cost of various health care options as determined by the City. x Preparation of analyses of the City’s OPEB expense under various scenarios as determined by the City. x Attendance at one or more arbitration meetings to testify on actuarial work. 3 Revision April 28, 2014 DocuSign Envelope ID: 4E225411-60C2-4C43-A968-F7C9D0A77E2DAttachment A 3 City of Palo Alto (ID # 5237) City Council Staff Report Report Type: Consent Calendar Meeting Date: 11/3/2014 City of Palo Alto Page 1 Summary Title: Woman's Club National Register Nomination Title: Approval of and Authorization for the Mayor to Sign a Letter of Support for the National Register Nomination of the Woman’s Club of Palo Alto Building at 475 Homer Avenue From: City Manager Lead Department: Planning and Community Environment RECOMMENDATION The Historic Resources Board and staff recommend that the City Council, acting in its capacity as a Certified Local Government, support the nomination of the Woman’s Club of Palo Alto building located at 475 Homer Avenue to the National Register of Historic Places and send a letter of support to the State Historic Resources Commission, Attachment A. EXECUTIVE SUMMARY On September 8, 2014, staff received a request from the State Office of Historic Preservation (OHP) asking for review of the nomination of the Woman’s Club of Palo Alto building at 475 Homer Avenue to the National Register of Historic Places. OHP requested the review because the City is classified as a Certified Local Government (CLG). CLG status requires review by the City’s Historic Resources Board (HRB) prior to any National Register listing. OHP requested that the City review the nomination for compliance with National Register eligibility criteria and, if in support, send a letter of support to the State Historical Resources Commission (State Commission) prior to November 7, 2014, when the item will be reviewed by the State Commission at its quarterly meeting. The Historic Resources Board (HRB) conducted the review at a public hearing on October 15, 2014. The HRB unanimously supported the nomination and recommended that the Council support the nomination and send a letter of support to the State Commission. BACKGROUND Constructed by Charles E. Hodges in 1916, the Woman’s Club of Palo Alto (the Woman’s Club) building at 475 Homer Avenue is currently designated as a Category 2 historic resource under the City’s historic resource inventory. A Category 2 designation “Major Building” is defined as a building of major regional importance, meritorious work of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the City of Palo Alto Page 2 state or region. Although this Craftsman and Tudor Revival style building was altered in 1957 (window replacement) and in 2009 (bathroom remodel), the historic character of the building was well preserved and its rehabilitation effort was recognized by Palo Alto Stanford Heritage in 2010. The National Register of Historic Places (NRHP) designation will provide additional recognition for the building as it reaches 100 years old in 2016. Since 1992, the City has been a Certified Local Government, partnering with the State of California (OHP) and the National Park Service (NPS) to administrator the National Historic Preservation Program in Palo Alto. Under the National Historic Preservation Act of 1966, as amended, the CLG status requires review by a City’s Historic Resources Board of a property prior to any National register listing. As of January 1, 1993, all NRHP properties are automatically included in the California Register of Historical Resources and afforded consideration in accordance with state and local environmental review procedures, in accordance with the California Environment Quality Act (CEQA). On June 18, 2014, Marilyn McDonald and Margaret R. Feuer, on behalf of the Woman’s Club, prepared and submitted the application for nomination to the OHP. On September 8, 2014, staff received a letter from OHP requesting the City’s Historic Resources Board to review the proposed NRHP nomination of the Woman’s Club building for compliance with the National Register eligibility criteria (included as Attachment B to the October 15, 2014 HRB staff report, which is Attachment C to this CMR) and provide written comments before the State Commission quarterly meeting on November 7, 2014. On October 15, 2014, the HRB reviewed the proposal to nominate the Category 2 Woman’s Club building to the National Register of Historic Places for compliance with National Register eligibility criteria. The HRB staff report is provided as Attachment B. After brief discussion, the HRB unanimously supported the nomination (6-0-1 with the absence of one member) and recommended that the Council support the nomination of the Woman’s Club building to the National Register of Historic Places and send a letter of support to the State Commission. DISCUSSION The National Register of Historic Places is the official list of buildings, structures, objects, sites and districts worthy of preservation because of their significance to United States American history. The National Register recognizes resources at local, state and national levels. The subject nomination is for significance at the local level. Effects of National Register designation include: eligibility for tax incentives, tax deductions for donation of preservation easements; building permit review under the State Historical Building Code; eligibility for potential Mills Act contract property tax reductions; consideration in federally funded or licensed undertakings; and consideration as an historical resource under the California Environmental Quality Act. City of Palo Alto Page 3 Listing may also result in restrictions imposed by the State or local jurisdiction. In the case of the Woman’s Club, local land use regulation review policies are already in place due to the building’s placement on the City’s Historic Property Inventory at a Category 2 level. Changes to the structure are subject to analysis under CEQA and review by the Historic Resources Board for compliance with the Secretary of Interior Standards for Rehabilitation. The building at 475 Homer Avenue was constructed in 1916 and has been in continual use as a Woman’s club for social and civic meetings. The Woman’s Club of Palo Alto was founded in 1894. In 1906 the membership raised money to buy the lot on Homer Avenue and it took ten years to raise sufficient funds for construction. Charles E. Hodges, who was the resident architect of Stanford University from 1900 to 1906, was the architect of the building. While the legal name of the organization is the Woman’s Club of Palo Alto, the sign donated by its member reads the Woman’s Club of Palo Alto since 1931. The Club has decided to live with the ambiguity. The building’s proposed nomination is based upon two National Register criteria: 1. Criterion A: The property is associated with events that have made a significant contribution to the broad patterns of our history; and 2. Criterion C: The property embodies the distinctive characteristics of a type, period, or method of construction or represents the work of a master, or possesses high artistic values, or represents a significant and distinguishable entity whose components lack individual distinction. Criterion A represents the period of 1916-1964 when the building was utilized as a venue to hold civic, philanthropic and social events that contributed to the development of Palo Alto, California and the nation. Locally the clubhouse was a venue for community groups to gather, and for civic and social events to take place. The clubhouse also played a significant role as part of the broad pattern of the Woman’s Club Movement, the goal of which was to encourage full participation, both in their communities and in the nation, on issues such as legislation, education, conservation, public health, libraries, Woman’s suffrage, philanthropy and political reform. Although the club experienced a marked decline in membership and activities in the early 1960s, the membership in the Woman’s Club of Palo Alto today is the largest amongst Woman’s Clubs in California. Criterion C represents the architectural significance of the building during the time of construction in 1916, as representative of the work of a master architect, Charles E. Hodges. The construction of the building typifies the design of Woman’s clubs built at the height of Woman’s Club Movement in the United States. Its open floor plan with traditional Craftsman design, Tudor Revival elements and eclectic style was popular in the early decades of the 20th century. The building retains its original architectural and design integrity. City of Palo Alto Page 4 If the Council is in support of the proposed nomination of the Woman’s Club building to the National Register of Historic Places, a letter of support will be submitted to the State Historical Resources Commission prior to its quarterly meeting on November 7, 2014. A draft letter of support is provided as Attachment A. If the Council is not in support of the proposed nomination, a notarized letter of objection would need to be mailed to OHP prior to the scheduled meeting date. TIMELINE The State Commission will hold its quarterly meeting on November 7, 2014. If the State Commission approves the nomination, it is then sent to the State Historic Preservation Officer to forward a nomination to the National Register. The final determination is made 45 days after receipt by the Keeper of the National Register in Washington, D.C. POLICY IMPLICATIONS The NRHP listing will not impact local land use regulations as the current status of the building as a Category 2 historic resource in the City’s Historic Property Inventory would remain unchanged. ENVIRONMENTAL REVIEW The project is categorically exempt from the California Environmental Quality Act (CEQA) review per Section 15331. Attachments:  Attachment A: Draft Letter of Support to OHP (DOCX)  Attachment B: October 15, 2014 HRB Staff report (PDF) Attachment B November 4, 2014 Carol Roland-Nawi State Historic Preservation Officer Office of Historic Preservation P.O. Box 942896 Sacramento, CA 94296-0001 RE: Woman’s Club of Palo Alto, 475 Homer Avenue, Palo Alto, CA National Register of Historic Places Nomination Dear Ms. Roland-Nawi, The Palo Alto Historic Resources Board and City Council, acting in the capacity of a Certified Local Government, finds the above nominated property meet the following criteria for listing on the National Register of Historic Places as established by the National Historic Preservation Act of 1966, as amended, and recommends approval to the State Historical Resources Commission: 1. The property known as the Woman’s Club of Palo Alto is eligible for the National Register under Criterion A at the local level, for its association with persons and events that are important to the development of social history in Palo Alto. As a center for civic, cultural and philanthropic activities since 1916, this facility, along with many Women’s Club in the nation, contributed to the Woman’s Club Movement and encouraged women’s full participation on issues such as legislation, education, conservation, public health, libraries, woman’s suffrage, philanthropy and political reform. 2. The building known as the Woman’s Club of Palo Alto is eligible for the National Register at the local level under Criterion C as representative of the work of a master architect, Charles Hodges, who played a prominent part in the construction of Stanford University. The design of the building combined Craftsman features with Tudor Revival forms, and is an excellent example of local architectural styles in the late 1800s to early 1900s. Sincerely, Nancy Shepherd Mayor of Palo Alto CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY November 3, 2014 The Honorable City Council Palo Alto, California Request for Authorization to Increase Existing Contract with Newdorf Legal by an Additional $40,000 For a Total Contract Not to Exceed Amount of $105,000 for Legal Services Related to Litigation Matters The City Attorney's Office requests authorization to increase and amend the existing contract with Newdorf Legal, Attorneys at Law, by an additional $40,000 for a total not to exceed amount of $105,000 for legal and professional services relating to litigation defense. Newdorf Legal has defended the City in various litigation matters since September 2011. The current contract with Newdorf Legal is for $65,000 and covers litigation defense since May 2014. This amendment brings the not to exceed amount to $105,000. Funding for this contract does not require additional budgetary authority as it can be accommodated within the Office of the City Attorney’s budget for 2014-15. Department Head: Molly Stump, City Attorney Page 2 City of Palo Alto (ID # 5100) City Council Staff Report Report Type: Action Items Meeting Date: 11/3/2014 City of Palo Alto Page 1 Summary Title: Comprehensive Plan Discussion Title: Comprehensive Plan Update: Initial Discussion of the Scope and Schedule of the Planning Process, Including Concurrent Zoning Changes (Note: Given the Complexity of These Issues, This will be the First of Two Discussions, with the Second Discussion and Council Action on November 17, 2014.) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that City Council discuss the scope and breadth of the Comprehensive Plan Update, as well as changes in zoning that the Council would like to consider in advance of and in parallel with the update, and direct staff to proceed with next steps, including scheduling a City Council work session on an annual office/R&D growth management program in January 2015. Specifically, staff recommends that the City Council consider directing staff to: (a) Proceed immediately (i.e. in advance of the Comprehensive Plan Update) with preparation of a draft zoning ordinance(s) to address retail preservation and adjust parking exemptions as discussed at the City Council study session on September 8, 2014; (b) Schedule a Council work session for January 2015 to discuss parameters of an annual office/R&D growth management program; (c) Schedule a series of Community/Commission/Council working sessions on “big picture” planning issues in Spring 2015 utilizing simplified planning scenarios to test the growth management program as well as:  the potential elimination of housing sites on San Antonio and South El Camino in exchange for increased densities or new sites closer to transit and jobs/services,  the potential for major transportation investments in the Caltrain corridor and the County Expressway system, and new public transit; City of Palo Alto Page 2  the potential use of sustainability-based performance measures and programs; and  potential commercial zoning changes discussed at the City Council Study Session on September 8, 2014 (d) Use the Spring 2015 working sessions as a venue to review goals, policies, and programs (i.e. Comprehensive Plan language) from the existing Comprehensive Plan and the Planning and Transportation Commission’s recommendation, building a plan that is consistent with prior Council direction to maintain the fundamentals of the existing plan, with an additional focus on sustainability; (e) Also prepare an impacts analysis (Draft Environmental Impact Report) to inform the Community/Commission/Council work sessions in the Spring of 2015, presenting the impacts of the simplified planning scenarios (and the choices they represent) as well as potential cumulative impacts over the next 15 years; and (f) Concurrent with the Comprehensive Plan Update, prepare a draft zoning ordinance(s) to implement the policy changes inherent in the draft Plan, including many of the ideas discussed at the City Council study session on September 8, 2014. (Note: Given the complexities of these issues, the Council’s initial discussion on November 3, 2014 will be the first of two discussions, with the second discussion and Council action on November 17, 2014.) Executive Summary The State of California requires every local jurisdiction to maintain a general plan containing goals and policies to inform land use and development decisions, as well as capital investments. Palo Alto’s general plan, Embracing the New Century, Palo Alto 1998-2010 Comprehensive Plan, was adopted in the late 1990s, and has served the community well. The City recognized the need to update the plan as early as 2006, and the update has taken longer than anticipated. In early 2014, the City embarced on a process for re-engaging with the community on key issues, with the intention of completing the update and an associated EIR by the end of 2015. Community workshops and other engagement ensued. At the same time, there was increasing realization that the City’s zoning regulations as well as its Comprehensive Plan have enabled the job growth and office development that the City is currently experiencing. On August 6, 2014, the City Council paused the Comprehensive Plan Update process to permit consideration of potential changes to the City’s zoning code and zoning map for commercial areas, and also requested that staff consider a revised scope and breadth for the Comprehensive Plan Update. Then on September 8, 2014, the City Council conducted a study session to provide their ideas about possible commercial zoning changes (Attachment A). As described further in the Discussion section below, staff recomends that some of the Council’s suggested zoning changes related to retail preservation and parking exemptions be City of Palo Alto Page 3 studied and implemented well in advance of the Comprehensive Plan Update and recommends that most of the Council’s other suggested zoning changes be studied in parallel with the Comp Plan Update and adopted concurrently if/as desired at that time. Staff also recommends scheduling a series of Community, Commission, and Council work sessions in the Spring of 2015 about “big picture” planning questions and related goals/policies/programs, and directing staff to prepare the necessary impacts analyss to inform those discussions. The Leadership Group that has been appointed to assist with community engagement would help to prepare for the Spring 2015 work sessions, which would be designed to yield a Comprehensive Plan Update that is consistent with prior City Council direction to maintain the fundamentals of the current Comprehensive Plan with an additional focus on sustainability. Materials presented and developed via the Community/Commission/Council work sessions would include goals/policies/programs (i.e. Comprehensive Plan language) from the existing Comprehensive Plan and the Planning and Transportation Commissoin’s (PTC’s) early 2014 draft, parameters of an annual office/R&D growth management program, which staff proposes be developed at a Council work session to be scheduled for January 2015, and planning scenarios designed to test a limited number of “big picture” planning concepts or choices. As described below, the planning scenarios have been simplified and adjusted since the August 6, 2014 meeting in response to public and Council comments and would allow for community dialog about critical issues (traffic, parking, climate change, housing affordability, etc.) and about:  The pace of development and amount of job growth desired;  The location, type, and amount of housing growth desired, (while recognizing the need to remain compliant with State law);  Major transportation investments desired over the life of the updated Comprehensive Plan; and  Sustainability-based performance measures and programs desired (to be defined in conjunction with the ongoing update to the City’s Sustainability/Climate Action Plan). The simplified planning scenarios can reflect input from the City Council and others during the “scoping” process earlier this year. Scenario 1 can be the “Buisiness as Usual” scenario, in which the Comprehensive Plan is not updated, no major policy changes are made, and current development trends continue. Scenario 2 can be a “slow growth” scenario in which the locations of jobs and housing in Palo Alto do not change, but the pace of job growth is slowed, housing production is focused specifically on local needs (e.g. small units), and roadway capacity is increased along the County expressway system. Scenario 3 can remove housing sites along San Antonio and South El Camino Real and focus new housing in downtown and the California Avenue area; it can also include depressing the Caltrain tracks in a trench (2% grade) south of Oregon Expressway. Scenario 4 can be consistent with ABAG projections and add new housing at nodes along El Camino Real, and envision a future with greater transit accessibility, City of Palo Alto Page 4 less auto ownership, and aggressive programs and performance measures to achieve sustainability goals. The Community, Commission, and Council work sessions in Spring 2015 would review the impacts and benefits of these scenaro, and could result in a final Comprehensive Plan Update that blends the features of multiple scenarios. Updating the Comprehensive Plan Update will ensure that this crucial document accurately expresses the community’s collective vision for the future of the City, reflects changes that have occurred since the bulk of the current Comprehensive Plan was drafted in the 1990s, and responds to current community concerns about housing affordability, traffic and parking, and the pace and character of development in Palo Alto. Also, many sections of the plan are required by State law, and having an up-to-date plan is critical to provide a legal foundation for sound decision-making regarding land use, transportation, and related issues, including capital improvements. Proceeding wth an impacts analysis (i.e. preparation of a Draft EIR) will inform the Community/Commission/Council work sessions, allow the City to test the impacts of doing nothing, as well as the different planning scenarios, and will also present an analyisis of cumulaive impacts expected over the next 15 years (i.e. to the year 2030). Background The City’s Comprehensive Plan, Embracing the New Century, Palo Alto 1998-2010 Comprehensive Plan, was adopted in the late 1990s and sets goals and policies related to land use and development issues, including transportation, housing, natural resource, community services, and safety. Every local jurisdiction (including charter cities) in California is required to have a “general plan” like this (see Government Code 65300 et seq.), and the State recommends these plans be updated on a regular basis. Palo Alto recognized the need to update its plan in 2006 and began the process in earnest in 2008, when a consultant was retained to work with staff and the City’s Planning and Transportation Commission (PTC). The PTC’s draft work product was provided to the City Council in early 2014, at which time staff proposed a process that would complete the plan and an associated Environmental Impact Report (EIR) in parallel (Staff Report 4415 from March 3, 2014). This approach recognized that the Comprehensive Plan Update largely carried over the key principles of protection of residential neighborhoods and open space contained in the prior plan while focusing on two earlier identified growth areas – California Avenue and East Meadow Circle. Also, the EIR process can be an effective way to compare various growth level scenarios. EIR preparation itself takes approximately 18 months, so staff recommended that this effort commence immediately with “scoping” and the identification of possible alternatives for analysis in the EIR that could then be used to inform proposed revisions and additions to the Comprehensive Plan. (Staff Report ID# 4944 from August 4, 2014 is provided as Attachment B.) As noted above, the Council requested a pause in this process on August 6th to permit consideration of potential City of Palo Alto Page 5 changes to the City’s zoning code and zoning map for commercial areas. (Staff Report ID# 5033 from September 8, 2014 is provided as Attachment C) The Comprensive Plan and zoning are directly linked because the zoning map and zoning effectively implement the Comprehensive Plan. The Comprehensive Plan is a policy document that identifies desired land uses and intensities via a Land Use and Circulation Map and the land use designations defined on pp. L-10 through L-13 of the Comprehensive Plan. The City’s zoning ordinance and zoning map are regulatory tools, rather than policy documents, and implement the Comprehensive Plan land use designations by establishing specific uses, densities, and development standards for every area of the City. Thus zoning districts and standards are more specific than Comprehensive Plan land use designations, and each Comprehensive Plan land use designation may be implemented via more than one zoning district. The City Council also requested baseline data regarding environmental issues to be considered in the Comprehensive Plan Environmental Impact Report (EIR), and staff’s suggestions on a revised breadth and scope for the Comprehensive Plan Update. Baseline data was disseminated in a Draft Existing Conditions Report dated August 29, 2014, and the remaining issues (potential zoning changes and the Comprehensive Plan Update process) are discussed in this report. The August 29, 2014 Draft Existing Conditions Report is posted on the City’s website at http://www.paloaltocompplan.org/resources/draft-existing-conditions-report/ and provides information about the regulatory context, existing conditions, and trends related to the 14 topics that will be covered in the program-level EIR that will be necessary to support adoption of the Comprehensive Plan Update. Community comments on this draft report are welcome. Any comments staff receives regarding the data presented or the potential for additional data will be used to inform preparation of the environmental setting sections of the Comprehensive Plan Update Draft EIR. With the City Council’s concurence, the data presented on non-residential development over the last 25 years will also be used to inform a City Council work session on an annual office/R&D growth management program to be scheduled in January 2015. Discussion As noted above, on August 6, 2014, the City Council paused the Comprehensive Plan Update process and directed staff to reconsider the breadth and scope of the effort and expressed concern that needed adjustments to the City’s zoning ordinance would be unnecessarily delayed if they occurred after (instead of before or during) the Comprehensive Plan process. Subsequent to that, on September 8, 2014, the City Council provided their ideas about Commercial zoning changes and requested that staff return with an analysis of which changes could be accomplished before the Comprehensive Plan Update, and which could be accomplished concurrently. (Staff was initially scheduled to return to Council on October 15, 2014 but several Councilmembers could not attend on that date.) City of Palo Alto Page 6 These two related issues – the timing of suggested zoning changes, and the scope/breadth of the Comprehensive Plan Update are discussed below. Commercial Zoning Changes As shown in Attachment A, the City Council advanced a wide range of ideas on September 8, 2014, and these ideas can be grouped into four categories: Changes in Use/Density, Retail Preservation, Parking-Related Changes, and Other Zoning Changes. Determining which should proceed ahead of the Comprehensive Plan effort and which should proceed concurrently involves an assessment of at least three factors: (1) whether a Comprehensive Plan amendment might be needed for the proposed change; (2) whether extensive outreach and environmental review might be required that could be efficiently accomplished concurrent with the Comprehensive Plan Update; and (3) the availability of staff resources, given the host of other planning projects and priorities currently underway. Also, it’s important to note that some of the suggestions are more complex than others, suggesting that they may take more time to address. In addition, all of the suggested changes will involve some level of controversy, potentially affecting the timing and nature of the resulting ordinance. Would Any of the Suggested Changes Require a Comprehensive Plan Amendment? There are no suggestions on the list of suggested zoning changes that would definitely necessitate a Comprehensive Plan amendment, although many would implement policy changes that were discussed as part of the Comprehensive Plan Update during the community engagement process this summer. Specifically, none of the suggested changes in density (Floor Area Ratio or FAR) would require amendments to the FAR associated with land use designations on pp. L-11 to L-12 of the Comprehensive Plan. Also, no changes in land use designations, as they are mapped in the Comprehensive Plan, would be needed to implement the suggested adjustments to commercial zoning districts along El Camino Real and elsewhere. Would Any of the Suggested Changes Require Extensive Outreach & Environmental Review? As noted above, there is no question that the suggested changes will engender some level of controversy, requiring public outreach about why the suggested changes are being pursued, what the alternatives are, etc. If the number of properties that could be affected by the proposed changes provide any indication of their level of controversy, the following information may be instructive:  There are approximately 53 parcels in the retail overlay (R) zone along California Avenue.  There are approximately 119 parcels in the ground floor overlay (GF) in Downtown.  There are approximately 338 parcels zoned Downtown Commercial (CD). City of Palo Alto Page 7  There are approximately 163 parcels zoned Neighborhood Commercial (CN) or Service Commercial (CS) that front on El Camino Real.  There are approximately 7 parcels in the Hotel (H) overlay zone.  There are approximately 97 parcels in the California Avenue area zoned Community Commercial (CC2). For comparison, the ordinance considered by the City Council earlier this year to increase setbacks (and effective sidewalk widths) along El Camino Real would have affected approximately 295 parcels if it had been adopted. The level of environmental review required for the suggested changes is difficult to judge in advance of some further analysis, however many of the suggestions would limit densities in a way that should result in less impacts than the existing zoning. This suggests that taken one by one, the suggested changes would not require extensive review. It is clear, however, that adopting one or more zoning strategies to pace the growth in commercial office space may have unintended consequences, such as stimulating housing growth, and would require careful review for that reason. Also, with limited staff resources and many competing priorities, there is something to be said for consolidating individual changes into a group of similar ideas that can be considered concurrently. Recommended Approach While the City Council may clearly re-prioritize staff’s work as desired, staff’s recommendation is to pursue a limited number of discrete retail preservation and parking-related changes in advance of the Comprehensive Plan Update, and to pursue many of the other items on the list concurrent with the Comprehensive Plan update. For these concurrent items, draft ordinance language would be developed during the planning process for the Comprehensive Plan update, the impacts of the suggested ordinance would be analyzed in the Comprehensive Plan EIR, and the City Council could ultimately consider adoption of a resolution amending the Comprehensive Plan concurrent with an ordinance amending the Municipal Code. If the City Council were to accept staff’s recommendation, the items in Attachment A would be re-grouped as follows: Before the Comprehensive Plan Update is Adopted:  Assess trends related to basement conversions downtown, and consider how to address the loss of basements that support retail uses when these are converted to office space.  Re-examine code provisions regarding square footage and parking exemptions for on-site amenities.  Consider regulating chain stores on Cal Ave by setting a quota for “formula retail.”  Consider limiting the number of restaurants downtown and on Cal Ave.  Re-examine parking exemptions in the code and consider prohibiting applicants from combining them. City of Palo Alto Page 8  Consider eliminating the parking exemption for mixed use.  Clean-up sections of the code that require interpretation, increasing clarity and reducing the reliance on staff interpretations (Part 1). Concurrent with the Comprehensive Plan Update:  Explore reducing commercial densities Downtown and replacing with residential (“modest turning of the dial”). This would mean considering where appropriate locations would be and to what degree we should adjust, also what types of residential should be allowed/encouraged.  Examine areas zoned CN and CS on El Camino Real and consider reducing non-retail portions of the commercial FAR. Also consider whether this FAR should become residential FAR. The goal would be to give more flexibility and achieve better designs.  Re-examine the 2.0 FAR provided in the hotel overlay a few years ago, and make a modest adjustment downward.  Consider reducing the FAR in the CC-2 zoning district near Cal Ave down from 2.0.  Adjust the list of uses allowed (by right and with a CUP) within the area of downtown and Cal Ave with ground floor retail protections to prevent non-retail uses.  Explore the tools that are available to prescribe (regulate or incentivize) employment densities, recognizing that the requirements/incentives might be different depending on how close a project is to transit because parking demand and trip generation are the issues we would be trying to address.  Clean-up sections of the code that require interpretation, increasing clarity and reducing the reliance on staff interpretations (Part 2).  Adopt zoning code changes that slow down the pace of development.  Adjust the zoning code to add incentives for small lot consolidation along El Camino Real. Requiring Further Definition/Discussion:  Ensure areas that are marginal for retail retain their retail requirements so there are places for local-serving retail uses that are priced-out of Downtown and Cal Ave as those areas gentrify.  Consider amortizing non-retail uses in areas of downtown with ground floor retail protections.  Explore what should happen to sites where existing non-conforming uses are phased- out.  Consider changes to code sections about Design Enhancement Exceptions to ensure these are used for minor things, and not as a substitute for variances. Scope & Breadth of the Comprehensive Plan Update Since the Council meeting on August 6, staff has considered ways to simplify the planning effort and still accommodate the City Council’s desire for robust community dialog around critical issues such as the pace of non-residential development and the location of housing sites City of Palo Alto Page 9 needed to meet State requirements. Staff also considered how the list of suggested commercial zoning changes could be accommodated in the process, and how to address several substantive comments about the scope of the Comprehensive Plan EIR received immediately before and during the Council meetings on August 4 and 6. Staff has also begun meeting monthly with the Leadership Group of citizens appointed to assist with community engagement, and benefited from “focus group” type discussions with the Leadership Group in September and October. The City Council’s original direction to staff and the Planning and Transportation Commission envisioned retaining the themes of the current Comprehensive Plan, and adding a theme (with associated goals, policies and programs) about sustainability. This is still very much the plan, however the Council and the public have also identified a number of “big picture” issues that will need to be resolved as part of the planning process and that lend themselves to exploration via simplified planning scenarios. As the Leadership Group has pointed out, planning scenarios can facilitate community engagement around the important policy choices that the City Council is interested in resolving via the Comprehensive Plan Update. With the Council’s concurrence, the simplified planning scenarios would be presented with existing and PTC-proposed goals/policies/programs (i.e. draft Comprehensive Plan language) for review and refinement at Community, Commission, and Council working sessions in the Spring of 2015. Also, quantification of two of the scenarios would be predicated on City Council direction at a working session to be scheduled for January 2015 regarding establishment of an annual office/R&D growth management program. This approach represents a modest adjustment to the planning process articulated earlier this year, and would also mean adjustment to the four scenarios presented to the City Council in August. Changes are summarized below. Changes to the Proposed Process  Planning scenarios would be simplified and designed to illustrate policy choices that need to be made prior to adoption of a Comprehensive Plan Update  The City Council would hold a working session in January 2015 to provide direction regarding desired parameters of a growth management program  Ordinance language would be developed during the Comprehensive Plan Update process, so zoning changes could be adopted concurrent with the updated Plan  The planning scenarios and goals/policies/programs (i.e. draft Comprehensive Plan language) would be the subject of Community, Commission and Council working sessions in the Spring of 2015  The working sessions would be informed by an analysis of impacts (i.e. a Draft EIR) illustrating the impacts and benefits of the various scenarios and the policy choices they represent, as well as cumulative impacts expected over the next 15 years  A proposed Comprehensive Plan Update would be developed based on the working City of Palo Alto Page 10 sessions by the end of 2015, and would be the subject of public hearings in 2016, following certification of a Final EIR. Changes to the Scenarios  The scenarios would be simplified to illustrate clear policy choices that will have to be made as part of the Comprehensive Plan Update. The policy choices relate to the pace of office/R&D development, the location and amount of housing growth, major transportation investments, and sustainability-based programs and performance measures.  As before, two of the scenarios would include and test an annual limit on office/R&D development, and one would include sustainability-based performance measures in lieu of an annual limit. The latter scenario would be revised in response to “scoping” comments about the need for a scenario consistent with ABAG growth projections and about the vulnerability associated with defining an alternative by its performance (e.g. “net zero”). While this scenario (Scenario 4) would not be defined by its performance, it would still envision a future with greater transit accessibility, less auto ownership, and aggressive programs and performance measures to achieve sustainability goals.  Scenario 2 would test roadway capacity improvements included in the County’s Expressway Plan, Scenario 3 would place Caltrain in a trench (2% grade) south of Oregon Expressway, and Scenario 4 would include significantly enhanced transit services.  Scenarios 3 & 4 would eliminate housing sites along San Antonio and outside of pedestrian “nodes” on South El Camino. Scenario 3 would transfer the housing potential to “Pedestrian & Transit Oriented Development” (PTOD) zone in the Downtown and the California Avenue area. Scenario 4 would transfer the housing potential to these areas and to new housing sites along the El Camino Real frontage of the Stanford Research Park and the Stanford Shopping Center. Timeline With Council’s concurrence, next steps would include:  January 2015: Council work session on an annual office/R&D growth management program  Early 2015: Consideration of zoning changes related to retail preservation and parking exemptions  November 2014 – April 2015: Staff and consultant preparation for Spring 2015 working sessions, with the assistance of the Leadership Group. Preparation would include organizing existing and PTC-proposed goals/policies/programs for discussion, describing simplified planning scenarios in a way that illustrates policy choices, and preparing an impacts analysis (program-level Draft EIR) to inform the policy choices  Spring - Summer 2015: Community/Commission/Council work sessions and other community engagement. Council direction regarding preparation of the Comprehensive Plan Update and concurrent zoning ordinance(s) City of Palo Alto Page 11  End of 2015: dissemination of a Comprehensive Plan Update based on input from the work sessions.  2016: certification of a Final EIR, adoption of a Comprehensive Plan Update and concurrent implementing zoning ordinance(s). Resource Impact The City has contracted with the planning firm, Placeworks, to assist with preparation of the Comprehensive Plan Update and the associated EIR. No additional budgettary resources are anticipated at this time. Development of zoning ordinances in advance of and concurrent with the Comprehensive Plan Update will require some additional staff time, including planning and legal support. If the Council wishes to prioritize more items (i.e. more of the zoning suggestions) ahead of the Comprhensive Plan Update, staff would request that the Council review and re-prioritize other planning initiatives. Policy Implications The City’s Comprehensive Plan sets land use policy and forms the foundation for zoning regulations. The Comprehensive Plan must address certain State-mandated topics, and the State recommends that local agencies update their plans every 10 years. Environmental Review Adoption of a Comprehensive Plan Update will require preparation of a program-level EIR to assess the potential cumulative impacts of development expected to occur over the life of the Plan. Adoption of zoning amendments will also require environmental review and may be considered in the same EIR, or in a separate process; the level of review required depends on the specific nature of the proposed zoning amendments. Attachments:  Attachment A: Possible Commercial Zoning Changes (PDF)  Attachment B: August 4, 2014 City Council Staff Report (PDF)  Attachment C: Sept. 8 City Council Staff Report (PDF)  Attachment D: Public Comment (PDF) 1 Ideas Generated at the September 8, 2014 City Council Study Session about Changes to Commercial Portions of the Zoning Code and Zoning Map Changes in Use/Density a)Explore reducing commercial densities Downtown and replacing with residential (“modest turning of the dial”). This would mean considering where appropriate locations would be and to what degree we should adjust, also what types of residential should be allowed/encouraged. b)Assess trends related to basement conversions downtown, and consider how to address the loss of basements that support retail uses when these are converted to office space. c)Examine areas zoned CN and CS on El Camino Real and consider reducing non-retail portions of the commercial FAR. Also consider whether this FAR should become residential FAR. The goal would be to give more flexibility and achieve better designs. d)Re-examine the 2.0 FAR provided in the hotel overlay a few years ago, and make a modest adjustment downward. e)Re-examine code provisions regarding square footage and parking exemptions for on-site amenities. f)Consider reducing the FAR in the CC-2 zoning district near Cal Ave down from 2.0. Retail Preservation a)Ensure areas that are marginal for retail retain their retail requirements so there are places for local-serving retail uses that are priced-out of Downtown and Cal Ave as those areas gentrify. b)Adjust the list of uses allowed (by right and with a CUP) within the area of downtown and Cal Ave with ground floor retail protections to prevent non-retail uses. c)Consider regulating chain stores on Cal Ave by setting a quota for “formula retail.” d)Consider limiting the number of restaurants downtown and on Cal Ave. e)Consider amortizing non-retail uses in areas of downtown with ground floor retail protections. Parking-Related Changes a)Explore the tools that are available to prescribe (regulate or incentivize) employment densities, recognizing that the requirements/incentives might be different depending on how close a project is to transit because parking demand and trip generation are the issues we would be trying to address. b)Re-examine parking exemptions in the code and consider prohibiting applicants from combining them. c)Consider eliminating the parking exemption for mixed use. Attachment A 2 Other Zoning Changes d) Explore what should happen to sites where existing non-conforming uses are phased-out. e) Clean-up sections of the code that require interpretation, increasing clarity and reducing the reliance on staff interpretations. f) Consider changes to code sections about Design Enhancement Exceptions to ensure these are used for minor things, and not as a substitute for variances. g) Adopt zoning code changes that slow down the pace of development. h) Adjust the zoning code to add incentives for small lot consolidation along El Camino Real. Source: Department of Planning & Community Environment, September 2014  ŝƚLJŽĨWĂůŽůƚŽ;/ηϰϵϰϰͿ ŝƚLJŽƵŶĐŝů^ƚĂĨĨZĞƉŽƌƚ   ZĞƉŽƌƚdLJƉĞ͗ĐƚŝŽŶ/ƚĞŵƐDĞĞƚŝŶŐĂƚĞ͗ϴͬϰͬϮϬϭϰ  ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϭ   ^ƵŵŵĂƌLJdŝƚůĞ͗ŽŵƉWůĂŶhƉĚĂƚĞĂŶĚ^ĐŽƉŝŶŐ^ĞƐƐŝŽŶ dŝƚůĞ͗Wh>/,Z/E'͗ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞʹŝƐĐƵƐƐŝŽŶŽĨ ůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐΘ/ƐƐƵĞƐĨŽƌŽŶƐŝĚĞƌĂƚŝŽŶŝŶƚŚĞŶǀŝƌŽŶŵĞŶƚĂů/ŵƉĂĐƚ ZĞƉŽƌƚ;/Z͞^ĐŽƉŝŶŐ͟DĞĞƚŝŶŐͿ͘dŚĞŝƚLJǁŝůůWƌĞƉĂƌĞĂWƌŽŐƌĂŵŵĂƚŝĐ ŶǀŝƌŽŶŵĞŶƚĂů/ŵƉĂĐƚZĞƉŽƌƚ;/ZͿĨŽƌƚŚĞhƉĚĂƚĞŽĨŝƚƐŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘ ^ƚĂĨĨǁŝůů^ƵŵŵĂƌŝnjĞ/ŶƉƵƚZĞĐĞŝǀĞĚĂƚZĞĐĞŶƚWƵďůŝĐDĞĞƚŝŶŐƐĂŶĚ/ŶǀŝƚĞ ŽŵŵĞŶƚƐĂŶĚ^ƵŐŐĞƐƚŝŽŶƐĨƌŽŵƚŚĞWƵďůŝĐĂŶĚƚŚĞŝƚLJŽƵŶĐŝůZĞŐĂƌĚŝŶŐ ƚŚĞůƚĞƌŶĂƚŝǀĞƐĂŶĚ/ƐƐƵĞƐƚŚĂƚ^ŚŽƵůĚďĞ/ŶĐůƵĚĞĚĨŽƌŶĂůLJƐŝƐŝŶƚŚĞ/Z͘ ;EŽƚĞ͗ĨƚĞƌĂŶŝŶŝƚŝĂůƉƌĞƐĞŶƚĂƚŝŽŶ͕ĐŽŵŵĞŶƚƐ͕ĂŶĚĚŝƐĐƵƐƐŝŽŶ͕ƚŚŝƐƉƵďůŝĐ ŚĞĂƌŝŶŐǁŝůůďĞƉƌŽƉŽƐĞĚĨŽƌĐŽŶƚŝŶƵĂŶĐĞƚŽϳ͗ϬϬWDŽŶtĞĚŶĞƐĚĂLJ͕ƵŐƵƐƚ ϲ͕ϮϬϭϰ͘Ϳ &ƌŽŵ͗ŝƚLJDĂŶĂŐĞƌ >ĞĂĚĞƉĂƌƚŵĞŶƚ͗WůĂŶŶŝŶŐĂŶĚŽŵŵƵŶŝƚLJŶǀŝƌŽŶŵĞŶƚ  ZKDDEd/KE ^ƚĂĨĨƌĞĐŽŵŵĞŶĚƐƚŚĂƚƚŚĞŝƚLJŽƵŶĐŝůĐŽŶĚƵĐƚĂƉƵďůŝĐƐĐŽƉŝŶŐŵĞĞƚŝŶŐďLJĂĐĐĞƉƚŝŶŐƉƵďůŝĐ ƚĞƐƚŝŵŽŶLJ ĂŶĚ ƉƌŽǀŝĚŝŶŐ ĨĞĞĚďĂĐŬ ƌĞŐĂƌĚŝŶŐ ĞŶǀŝƌŽŶŵĞŶƚĂů 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≠ŶƐƵƌĞƚŚĂƚƚŚĞƉƵďůŝĐ͛ƐŝŶƉƵƚŝŶĨŽƌŵƐƚŚĞĨŝŶĂůǁŽƌŬƉƌŽĚƵĐƚƚŚĂƚŝƐƉƌĞƐĞŶƚĞĚƚŽĚĞĐŝƐŝŽŶͲ ŵĂŬĞƌƐĨŽƌƚŚĞŝƌĐŽŶƐŝĚĞƌĂƚŝŽŶ͘  dŚƌĞĞǁŽƌŬƐŚŽƉƐǁĞƌĞŚĞůĚŝŶDĂLJĂŶĚ:ƵŶĞ͘dŚĞǁŽƌŬƐŚŽƉƐǁĞƌĞŚĞůĚŝŶǀĂƌŝŽƵƐůŽĐĂƚŝŽŶƐŽĨ ƚŚĞ ŝƚLJ ƚŽ ĞŶŐĂŐĞ ƚŚĞ ĂƐ ŵĂŶLJ ŵĞŵďĞƌƐ ŽĨ ƚŚĞ ƉƵďůŝĐ ĂƐ ƉŽƐƐŝďůĞ͘  ^ƵŵŵĂƌŝĞƐ ŽĨ ĞĂĐŚ ǁŽƌŬƐŚŽƉĂƌĞƉƌŽǀŝĚĞĚĂƐƚƚĂĐŚŵĞŶƚ͘  dŚĞĨŝƌƐƚǁŽƌŬƐŚŽƉ͕ƚŚĞƌŝƚŝĐĂů/ƐƐƵĞƐ&ŽƌƵŵ͕ǁĂƐŚĞůĚŽŶDĂLJϮϵ͕ϮϬϭϰĂƚƚŚĞǀĞŶŝĚĂƐĨĂĐŝůŝƚLJ ŝŶĚŽǁŶƚŽǁŶWĂůŽůƚŽ͘dŚĞŐŽĂůŽĨƚŚŝƐŵĞĞƚŝŶŐǁĂƐƚŽŚĂǀĞƚŚĞĐŽŵŵƵŶŝƚLJŝĚĞŶƚŝĨLJWĂůŽ ůƚŽ͛Ɛ^ƚƌĞŶŐƚŚƐ͕tĞĂŬŶĞƐƐĞƐ͕KƉƉŽƌƚƵŶŝƚŝĞƐĂŶĚdŚƌĞĂƚƐ;^tKdͿ͘ƉƉƌŽdžŝŵĂƚĞůLJϰϬŵĞŵďĞƌƐ ŽĨƚŚĞĐŽŵŵƵŶŝƚLJĂƚƚĞŶĚĞĚƚŚŝƐĨŝƌƐƚǁŽƌŬƐŚŽƉ͘WĂƌƚŝĐŝƉĂŶƚƐǁĞƌĞƉůĂĐĞĚŝŶƐŵĂůůŐƌŽƵƉƐĂŶĚ ĂƐŬĞĚƚŽƐŚĂƌĞƚŚĞŝƌŽƉŝŶŝŽŶƐŽŶĂǀĂƌŝĞƚLJŽĨŝƐƐƵĞƐ͕ŝŶĐůƵĚŝŶŐŚŽƵƐŝŶŐ͕ƚƌĂŶƐƉŽƌƚĂƚŝŽŶ͕ĞŶĞƌŐLJ͕ ƋƵĂůŝƚLJŽĨůŝĨĞ͕ƚĞĐŚŶŽůŽŐLJ͕ĂŶĚƚŚĞƌĞŐŝŽŶĂůĂŶĚŐůŽďĂůĞĐŽŶŽŵLJ͘ŽŵŵŽŶƚŚĞŵĞƐĞŵĞƌŐĞĚ ĨƌŽŵ ƚŚĞ ŐƌŽƵƉ ĚŝƐĐƵƐƐŝŽŶ͘  dŚĞ ƚŚĞŵĞƐ ŝŶĐůƵĚĞ ƚŚĞ ŝŵƉŽƌƚĂŶĐĞ ŽĨ ƚŚĞ ƋƵĂůŝƚLJ ŽĨ ůŝĨĞ͕ ŝŵƉŽƌƚĂŶĐĞŽĨƚŚĞŝƚLJ͛ƐƌĞůĂƚŝŽŶƐŚŝƉǁŝƚŚ^ƚĂŶĨŽƌĚ͕ĐŽŶĐĞƌŶƐŽĨƚƌĂĨĨŝĐ͕ƉƵďůŝĐƚƌƵƐƚ͕ĐŝƚŝnjĞŶ ƉĂƌƚŝĐŝƉĂƚŝŽŶ͕ƚƌĂŶƐŝƚ͕ƚŚĞŚŝŐŚĐŽƐƚŽĨŚŽƵƐŝŶŐĂŶĚŚŝŐŚƐƉĞĞĚƌĂŝů͘ĚĞƚĂŝůĞĚŵĂƚƌŝdžŽĨƚŚĞ ĐŽŵŵŽŶƚŚĞŵĞƐĐĂŶďĞĨŽƵŶĚŝŶƚƚĂĐŚŵĞŶƚ͘dŚĞƐƵŵŵĂƌLJŚĂƐĂůƐŽďĞĞŶŵĂĚĞĂǀĂŝůĂďůĞƚŽ ƚŚĞƉƵďůŝĐŽŶƚŚĞŽŵƉWůĂŶhƉĚĂƚĞǁĞďƐŝƚĞ͘   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϲ   dŚĞƐĞĐŽŶĚǁŽƌŬƐŚŽƉ͕ƚŚĞ'ƌŽǁƚŚDĂŶĂŐĞŵĞŶƚ&ŽƌƵŵ͕ǁĂƐŚĞůĚƚǁŽǁĞĞŬƐůĂƚĞƌŽŶ:ƵŶĞϭϬ͕ ϮϬϭϰ Ăƚ WĂůŽ ůƚŽ ,ŝŐŚ ^ĐŚŽŽů͕ ǁŝƚŚ ĂƉƉƌŽdžŝŵĂƚĞůLJ ϯϬ ĂƚƚĞŶĚĞĞƐ͘   ƐƵŵŵĂƌLJ ŽĨ ƚŚĞ ůĂƐƚ ǁŽƌŬƐŚŽƉǁĂƐƉƌŽǀŝĚĞĚĂŶĚĂƉƌĞƐĞŶƚĂƚŝŽŶŽŶŐƌŽǁƚŚŵĂŶĂŐĞŵĞŶƚƚĞĐŚŶŝƋƵĞƐǁĂƐŐŝǀĞŶ͘dŚĞ ƉƌĞƐĞŶƚĂƚŝŽŶĐŽǀĞƌĞĚũŽďƐ͕ŚŽƵƐŝŶŐĂŶĚƉŽƉƵůĂƚŝŽŶŐƌŽǁƚŚƚƌĞŶĚƐŽĨWĂůŽůƚŽ͕ĂƐǁĞůůĂƐĂŶ ŽǀĞƌǀŝĞǁŽĨƚŽŽůƐƵƐĞĚďLJŽƚŚĞƌũƵƌŝƐĚŝĐƚŝŽŶƐ͘ƵŝůĚŝŶŐƵƉŽŶƚŚĞƚŚĞŵĞƐŝĚĞŶƚŝĨŝĞĚĂƚƚŚĞůĂƐƚ ǁŽƌŬƐŚŽƉ͕ƚŚĞƉƵďůŝĐǁĂƐĂƐŬĞĚƚŽŝĚĞŶƚŝĨLJǁŚŝĐŚĂƌĞĂƐŽĨƚŚĞŝƚLJƚŚĞLJƚŚŽƵŐŚƚŵŝŐŚƚŽƌƐŚŽƵůĚ ĐŚĂŶŐĞĂŶĚǁŚŝĐŚĂƌĞĂƐƐŚŽƵůĚďĞƉƌŽƚĞĐƚĞĚĂŶĚƉƌĞƐĞƌǀĞĚĚƵƌŝŶŐƚŚĞϭϱLJĞĂƌůŝĨĞŽĨƚŚĞ ƵƉĚĂƚĞĚŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘ƚƚĞŶĚĞĞƐǁĞƌĞƉůĂĐĞĚŝŶƐŵĂůůŐƌŽƵƉƐŽĨƐŝdžƚŽĞŝŐŚƚƉĞŽƉůĞƚŽ ĚŝƐĐƵƐƐƚŚĞŝƌŽƉŝŶŝŽŶƐĂŶĚĂƐŬĞĚƚŽŝĚĞŶƚŝĨLJƚŚĞĂƌĞĂƐŽŶůĂŶĚƵƐĞŵĂƉƐ͘^ŝdžĚŝƐƚŝŶĐƚĂƌĞĂƐ ĞŵĞƌŐĞĚĨƌŽŵƚŚĞĚŝƐĐƵƐƐŝŽŶĂƐ͞ŽƉƉŽƌƚƵŶŝƚLJƐŝƚĞƐ͟Žƌ͞ĨŽĐƵƐĂƌĞĂƐ͕͟ǁŚĞƌĞƚŚĞŝƚLJĐŽƵůĚ ĚŝƌĞĐƚĐŚĂŶŐĞĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐĂǁĂLJƚŽƉƌŽƚĞĐƚĂŶĚƉƌĞƐĞƌǀĞŽƚŚĞƌĂƌĞĂƐ͘dŚĞƐŝdžĨŽĐƵƐ ĂƌĞĂƐŝŶĐůƵĚĞĚϭͿŽǁŶƚŽǁŶĂŶĚƚŚĞ^ƚĂŶĨŽƌĚ^ŚŽƉƉŝŶŐĞŶƚĞƌ͕ϮͿůĂŵŝŶŽZĞĂůĐŽƌƌŝĚŽƌ͕ϯͿ ĂůŝĨŽƌŶŝĂǀĞŶƵĞ͕ϰͿ^ƚĂŶĨŽƌĚZĞƐĞĂƌĐŚWĂƌŬ͕ϱͿĂƐƚDĞĂĚŽǁŝƌĐůĞͬĂLJƐŚŽƌĞ͕ĂŶĚϲͿ^ŽƵƚŚ ^ĂŶŶƚŽŶŝŽ͘  dŚĞŵŽƐƚƌĞĐĞŶƚǁŽƌŬƐŚŽƉ͕ůƚĞƌŶĂƚŝǀĞƐ&ƵƚƵƌĞ͕ǁĂƐŚĞůĚĂƚƚŚĞůŬ͛Ɛ>ŽĚŐĞŽŶ:ƵŶĞϮϰ͕ϮϬϭϰ͘ dŚŝƐ ǁŽƌŬƐŚŽƉ͕ ďƵŝůĚŝŶŐ ŽŶ ƚŚĞ ƉƌĞǀŝŽƵƐ ƚǁŽ ǁŽƌŬƐŚŽƉƐ͕ ǁĂƐ ǁĞůů ĂƚƚĞŶĚĞĚ ǁŝƚŚ ŽǀĞƌ ϳϬ ƉĂƌƚŝĐŝƉĂŶƚƐ͘dŚĞƉƵƌƉŽƐĞŽĨƚŚŝƐǁŽƌŬƐŚŽƉǁĂƐƚŽĂƐŬƚŚĞƉƵďůŝĐƚŽŚĞůƉŝĚĞŶƚŝĨLJƉŽƚĞŶƚŝĂů ĂůƚĞƌŶĂƚŝǀĞƐ ďĂƐĞĚ ŽŶ ƚŚĞ ĐŽŶĐĞƉƚƐ ĚŝƐĐƵƐƐĞĚ Ăƚ ƚŚĞ ƉƌĞǀŝŽƵƐ ŵĞĞƚŝŶŐƐ͘  dŚĞ ƉƌĞƐĞŶƚĂƚŝŽŶ ŝŶĐůƵĚĞĚĂŶŽǀĞƌǀŝĞǁŽĨƚŚĞƉĂƐƚƉƌŽĐĞƐƐĂŶĚƚŚĞŐŽĂůƐĨŽƌƚŚĞǁŽƌŬƐŚŽƉ͘ƚƚĞŶĚĞĞƐǁĞƌĞ ƉůĂĐĞĚŝŶƐŵĂůůŐƌŽƵƉƐƚŽĚŝƐĐƵƐƐǁŚĂƚƚŚĞLJƚŚŽƵŐŚƚƚŚĞŝƚLJƐŚŽƵůĚĐŽŶƐŝĚĞƌĂƐĂůƚĞƌŶĂƚŝǀĞƐ͘Ɛ ĂŐƵŝĚĞ͕ƚŚĞƉĂƌƚŝĐŝƉĂŶƚƐǁĞƌĞƉƌŽǀŝĚĞĚǁŝƚŚƉŽƚĞŶƚŝĂůĂůƚĞƌŶĂƚŝǀĞƐ͕ŝŶĂĚĚŝƚŝŽŶƚŽĂŶŽƉƌŽũĞĐƚ ĂůƚĞƌŶĂƚŝǀĞ͗   ϭͿ ^ůŽǁ EŽŶͲƌĞƐŝĚĞŶƚŝĂů ĞǀĞůŽƉŵĞŶƚ ĂŶĚ ŶĐŽƵƌĂŐĞ ,ŽƵƐŝŶŐ͕ ϮͿ ^ůŽǁ EŽŶͲ ƌĞƐŝĚĞŶƚŝĂůĞǀĞůŽƉŵĞŶƚĂŶĚ&ŽĐƵƐ,ŽƵƐŝŶŐŝŶdƌĂŶƐŝƚͲƌŝĐŚƌĞĂƐ͕ϯͿĂŶtĞĞĂEĞƚͲĞƌŽŝƚLJ ĂŶĚ tŚĂƚ ŽĞƐ dŚĂƚ DĞĂŶ͍  ƚƚĞŶĚĞĞƐ ǁĞƌĞ ĂůƐŽ ŐŝǀĞŶ ƚŚĞ ŽƉƚŝŽŶŽĨ ĐƌĞĂƚŝŶŐ ƚŚĞŝƌ ŽǁŶ ĂůƚĞƌŶĂƚŝǀĞ͘ůŝǀĞůLJĚŝƐĐƵƐƐŝŽŶƌĞƐƵůƚĞĚŝŶŶŝŶĞƐĞƉĂƌĂƚĞĂůƚĞƌŶĂƚŝǀĞƐ͘ ŶƵŵďĞƌŽĨŐƌŽƵƉƐ ĚĞƐĐƌŝďĞĚĂůƚĞƌŶĂƚŝǀĞƐƚŚĂƚƐůŽǁĞĚƚŚĞƌĂƚĞŽĨŐƌŽǁƚŚ͕ĂŶĚĨŽĐƵƐĞĚĂŶLJŶĞǁĚĞǀĞůŽƉŵĞŶƚŝŶ ŽŶĞ Žƌ ŵŽƌĞ ŽĨ ƚŚĞ ŵŝdžĞĚͲƵƐĞ ͞ĨŽĐƵƐ ĂƌĞĂƐ͟ ŝĚĞŶƚŝĨŝĞĚ͘  KƚŚĞƌƐƐƵŐŐĞƐƚĞĚ ĂůůŽǁŝŶŐ ŵŽƌĞ ŚŽƵƐŝŶŐĂŶĚŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝŶŐƌĞƚĂŝůŶĞĂƌƚƌĂŶƐŝƚ͘ĚĞƚĂŝůĞĚƐƵŵŵĂƌLJŽĨƚŚĞǁŽƌŬƐŚŽƉ ŽƵƚĐŽŵĞƐŝƐƉƌŽǀŝĚĞĚŝŶƚƚĂĐŚŵĞŶƚ͘  /ŶĂĚĚŝƚŝŽŶƚŽƚŚĞƚŚƌĞĞƉůĂŶŶŝŶŐǁŽƌŬƐŚŽƉƐĚĞƐĐƌŝďĞĚĂďŽǀĞ͕ƉůĂŶŶŝŶŐƐƚĂĨĨĂŶĚĐŽŶƐƵůƚĂŶƚƐ ŚĂǀĞŝŶŝƚŝĂƚĞĚŽŶůŝŶĞƚŽŽůƐƚŽĐŽŶƚŝŶƵĞƚŚĞĚŝƐĐƵƐƐŝŽŶĂŶĚƚŽƉƌŽǀŝĚĞŽƉƉŽƌƚƵŶŝƚLJĨŽƌŝŶƉƵƚďLJ ƚŚŽƐĞǁŚŽǁĞƌĞŶŽƚĂďůĞƚŽĂƚƚĞŶĚƚŚĞŵĞĞƚŝŶŐƐ͘dŚĞŽŵƉWůĂŶǁĞďƐŝƚĞƉƌŽǀŝĚĞƐĂŶĞŵĂŝůůŝƐƚ ĨŽƌŝŶƚĞƌĞƐƚĞĚƉĂƌƚŝĞƐƚŽŬĞĞƉŝŶĨŽƌŵĞĚŽĨƚŚĞƉƌŽũĞĐƚ͘/ƚĂůƐŽƉƌŽǀŝĚĞƐĂŶĞŵĂŝůĨŽƌĂĚĚŝƚŝŽŶĂů ƋƵĞƐƚŝŽŶƐĂŶĚĐŽŵŵĞŶƚƐ͘KŶůŝŶĞǀĞƌƐŝŽŶƐŽĨĞĂĐŚƐŵĂůůŐƌŽƵƉĂĐƚŝǀŝƚLJĨƌŽŵƚŚĞǁŽƌŬƐŚŽƉƐ ŚĂǀĞďĞĞŶĂŶĚǁŝůůďĞƉŽƐƚĞĚŽŶůŝŶĞĂƐƉĂƌƚŽĨKƉĞŶŝƚLJ,Ăůů͘dŚĞĨŝƌƐƚŽŶůŝŶĞĞǀĞŶƚƌĞƋƵĞƐƚƐ ƚŚĞƉƵďůŝĐƚŽŝĚĞŶƚŝƚLJƚŚĞĐƌŝƚŝĐĂůŝƐƐƵĞƐĨŽƌWĂůŽůƚŽ͘dŚĞƐĞĐŽŶĚŽŶůŝŶĞĞdžĞƌĐŝƐĞƌĞƋƵĞƐƚƐ ĨĞĞĚďĂĐŬŽŶƚŚĞƐŝdžĨŽĐƵƐĂƌĞĂƐ͘  ^ƚĂĨĨŚĂƐĂůƐŽƐŽůŝĐŝƚĞĚĂƉƉůŝĐĂƚŝŽŶƐĨŽƌƚŚĞ͞>ĞĂĚĞƌƐŚŝƉ'ƌŽƵƉ͟ƚŚĂƚŝƐĞdžƉĞĐƚĞĚƚŽĂƐƐŝƐƚǁŝƚŚ ĐŽŵŵƵŶŝƚLJ ĞŶŐĂŐĞŵĞŶƚ ĨŽƌ ƚŚĞ ďĂůĂŶĐĞ ŽĨ ƚŚĞ ƉůĂŶŶŝŶŐ ƉƌŽĐĞƐƐ͘ ĂƐĞĚ ŽŶ ĂƉƉůŝĐĂƚŝŽŶƐ   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϳ  ƌĞĐĞŝǀĞĚ͕ƚŚĞŝƚLJDĂŶĂŐĞƌŚĂƐĂƉƉŽŝŶƚĞĚϭϯŵĞŵďĞƌƐ͘KǀĞƌƚŚĞŶĞdžƚϭϴŵŽŶƚŚƐ͕ƚŚĞŐƌŽƵƉ ǁŝůů ǁŽƌŬ ǁŝƚŚ ŝƚLJ ƐƚĂĨĨ ƵŶĚĞƌƚĂŬŝŶŐ ƚŚĞ ĐŽŵŵƵŶŝƚLJ ĞŶŐĂŐĞŵĞŶƚƉŽƌƚŝŽŶ ŽĨ ƚŚĞ ƉůĂŶŶŝŶŐ ƉƌŽĐĞƐƐ͘dŚĞŬŝĐŬŽĨĨŵĞĞƚŝŶŐǁĂƐŚĞůĚŽŶ:ƵůLJϮϭ͕ϮϬϭϰ͘dŚĞ>ĞĂĚĞƌƐŚŝƉ'ƌŽƵƉǁŝůůƉƌŽǀŝĚĞĂ ƌĞŐƵůĂƌ͕ ŵŽŶƚŚůLJ ĨŽƌƵŵ ĨŽƌ ĚŝƐĐƵƐƐŝŶŐ ĐŽŵŵƵŶŝƚLJ ĞŶŐĂŐĞŵĞŶƚ ĂĐƚŝǀŝƚŝĞƐ͕ ŝŶĐůƵĚŝŶŐ ǁĂLJƐ ƚŽ ƌĞĂĐŚƌĞƐŝĚĞŶƚƐĂŶĚďƵƐŝŶĞƐƐĞƐƚŚĂƚĚŽŶ͛ƚƚLJƉŝĐĂůůLJƉĂƌƚŝĐŝƉĂƚĞŝŶƉůĂŶŶŝŶŐĞĨĨŽƌƚƐ͘DĞŵďĞƌƐĂƌĞ ĞdžƉĞĐƚĞĚƚŽďĞĐŽŵĞŬŶŽǁůĞĚŐĞĂďůĞĂďŽƵƚƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͕ǁŚŝĐŚŝƐƚŚĞŝƚLJ͛ƐƉƌŝŵĂƌLJ ƚŽŽůĨŽƌŐƵŝĚŝŶŐƉƌĞƐĞƌǀĂƚŝŽŶĂŶĚĚĞǀĞůŽƉŵĞŶƚŝŶWĂůŽůƚŽ͕ĂŶĚƚŚĞŐƌŽƵƉŵĂLJĂĚǀŝƐĞƐƚĂĨĨ ĂďŽƵƚǁĂLJƐƉƵďůŝĐŝŶƉƵƚƚŚĂƚŝƐƌĞĐĞŝǀĞĚĐŽƵůĚŽƌƐŚŽƵůĚŝŶĨŽƌŵĂůƚĞƌŶĂƚŝǀĞƐĂŶĚŽƵƚĐŽŵĞƐ͘  ůůŽĨƚŚĞĐŽŵŵƵŶŝƚLJĞŶŐĂŐĞŵĞŶƚĂĐƚŝǀŝƚŝĞƐƉůĂŶŶĞĚĂƐƉĂƌƚŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞ ĂŶĚĂůůŽĨƚŚĞĐŽŵŵƵŶŝƚLJŝŶƉƵƚƌĞĐĞŝǀĞĚǁŝůůďĞĚŽĐƵŵĞŶƚĞĚĂŶĚĐĂƚĂůŽŐĞĚƐŽŝƚĐĂŶďĞƵƐĞĚƚŽ ŝŶĨŽƌŵƚŚĞĂŶĂůLJƐŝƐĂŶĚƉŽůŝĐLJĚĞĐŝƐŝŽŶƐƚŚĂƚǁŝůůďĞŵĂĚĞ͘/ŶƚŚĞŶĞĂƌƚĞƌŵ͕ŝŶƉƵƚƌĞĐĞŝǀĞĚƚŚŝƐ ƐƵŵŵĞƌǁŝůůďĞƵƐĞĚƚŽŚĞůƉĚĞĨŝŶĞŝƐƐƵĞƐĂŶĚĂůƚĞƌŶĂƚŝǀĞƐƚŽďĞĂŶĂůLJnjĞĚŝŶƚŚĞƉƌŽŐƌĂŵ/Z͘  Wd,ĞĂƌŝŶŐ WůĂŶŶŝŶŐĂŶĚdƌĂŶƐƉŽƌƚĂƚŝŽŶŽŵŵŝƐƐŝŽŶ;WdͿŚĞĂƌŝŶŐǁĂƐŚĞůĚŽŶ:ƵůLJϵ͕ϮϬϭϰƚŽĐŽŶƐŝĚĞƌ ƚŚĞĚƌĂĨƚĂůƚĞƌŶĂƚŝǀĞƐĂŶĚƚŽƐŽůŝĐŝƚƐĐŽƉŝŶŐĐŽŵŵĞŶƚƐĨŽƌƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞ/Z͘dŚĞ ŚĞĂƌŝŶŐǁĂƐĂƚƚĞŶĚĞĚďLJĂƉƉƌŽdžŝŵĂƚĞůLJϮϯŵĞŵďĞƌƐŽĨƚŚĞƉƵďůŝĐ͕ĂŶĚĞŝŐŚƚŵĞŵďĞƌƐŽĨƚŚĞ ƉƵďůŝĐƉƌŽǀŝĚĞĚĐŽŵŵĞŶƚƐĂƚƚŚĞŚĞĂƌŝŶŐ͘dŚĞƉƵďůŝĐĐŽŵŵĞŶƚƐŝŶĐůƵĚĞĚƚŚĞĨŽůůŽǁŝŶŐ͗  ≠dŚŝƐǁŝůůďĞƚŚĞďĞƐƚǀĞƚƚĞĚĐŽŵƉƌĞŚĞŶƐŝǀĞƉůĂŶ͘ ≠ŶŝŵƉŽƌƚĂŶƚƋƵĞƐƚŝŽŶŝƐŚŽǁƚŽŬĞĞƉƉĞŽƉůĞĞŶŐĂŐĞĚ͘ ≠dŚĞĚĞǀĞůŽƉŵĞŶƚŽĨĂůƚĞƌŶĂƚŝǀĞƐĐĞŶĂƌŝŽƐŝƐĞŶŐĂŐŝŶŐƚŚĞƉƵďůŝĐ͘ŽŶƚŝŶƵĞƚŽƌĞŐƵůĂƌůLJ ĞŶŐĂŐĞƚŚĞƉƵďůŝĐ͘ ≠EĞĞĚĐŝƚLJƐƚĂĨĨĚĞĚŝĐĂƚĞĚƚŽǁĂƌĚĐŽůůĞĐƚŝŶŐĂŶĚĂŶĂůLJnjŝŶŐůĂŶĚƵƐĞ͕ƚƌĂŶƐƉŽƌƚĂƚŝŽŶĂŶĚ ĚĞŵŽŐƌĂƉŚŝĐĚĂƚĂ͘ ≠ŽǁŶƚŽǁŶƉĂƌŬŝŶŐŝƐƉƌŽďůĞŵ͘ ≠EĞŝŐŚďŽƌŚŽŽĚƋƵĂůŝƚLJŝƐŝŵƉŽƌƚĂŶƚ͘ ≠ŝƌĚƐĂŶĚŶĂƚƵƌĞŚĂǀĞŝŶƚƌŝŶƐŝĐǀĂůƵĞƚŽŶĂƚƵƌĞ͕ŶŽƚũƵƐƚďĞŶĞĨŝƚĨŽƌŚƵŵĂŶƐ͘ ≠EŽƚĐůĞĂƌĂďŽƵƚŽŶĐĞƉƚϰ;ƚŚĞ͞ŶĞƚnjĞƌŽ͟ĐŽŶĐĞƉƚͿ͖ƚŚŝƐƐŚŽƵůĚŶŽƚďĞĂŶĂůƚĞƌŶĂƚŝǀĞĨŽƌ ŽŵƉWůĂŶ͘ ≠DŽƌĞŚŽƵƐŝŶŐǁĂŶƚĞĚŝŶ͘DĞĂĚŽǁŝƌĐůĞǁŝƚŚƐĞƌǀŝĐĞƐĂŶĚĂƉĂƌŬ͘ ≠KŶĐĞƚŚĞƐƚƵĚLJĞŶĚƐ͕ŝƚŝƐĂďŽƵƚŝŵƉůĞŵĞŶƚĂƚŝŽŶ͘ ≠hŶĚĞƌŐƌŽƵŶĚŝŶŐĂůdƌĂŝŶƚƌĂĐŬƐŝƐĂŶŽƉƉŽƌƚƵŶŝƚLJĂŶĚƐŽůƵƚŝŽŶ͘ 9/ƚǁŝůůŝŵƉƌŽǀĞĞĂƐƚͬǁĞƐƚĐŽŶŶĞĐƚŝŽŶƐƚŚƌŽƵŐŚWĂůŽůƚŽ͘ 9ƌĞĂƚĞƌĞĂůĞƐƚĂƚĞ;ŽƌŐĞƚŝƚďĂĐŬͿ͘ 9ƌĞĂƚĞďŝŬĞǁĂLJ͘ 9KƉƉŽƌƚƵŶŝƚLJĨŽƌŚŽƵƐŝŶŐĂŶĚĐŽŵŵĞƌĐŝĂů͘ ƒůŝŵŝŶĂƚĞĐƌŽƐƐŝŶŐĚĞůĂLJ͘ ƒ/ŵƉƌŽǀĞƋƵĂůŝƚLJŽĨůŝĨĞ͘ ƒWƌĞƉĂƌĞǁĂLJƚŽƵŶĚĞƌŐƌŽƵŶĚ,^Z͘ ≠/ŶĚĞƉĞŶĚĞŶĐĞŽĨƚŚĞWdŝƐĐƌŝƚŝĐĂů͘ ≠ůƚĞƌŶĂƚŝǀĞηϮƌĞƐŽŶĂƚĞƐŵŽƐƚ͘   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϴ  ≠tŽƵůĚůŝŬĞƐƚƌŝĐƚĞƌĂůůŽĐĂƚŝŽŶƐǁŝƚŚƌĞƐƉĞĐƚƚŽ'ĂůůŽĐĂƚŝŽŶƐ͘ ≠dŚĞŵŽƌĞĐŽŵƉĂŶŝĞƐůŽĐĂƚĞĂŶĚŐƌŽǁŝŶƚŚĞĐŝƚLJ͕ƚŚĞŵŽƌĞ'ǁŝůůƌĞƋƵŝƌĞŚŽƵƐŝŶŐ͘ ≠WĂůŽůƚŽƐŚŽƵůĚƉƌĞƐĞƌǀĞƋƵĂůŝƚLJŽĨůŝĨĞ͘ ≠^ŚŽƵůĚĨŽĐƵƐŽŶŵĂŝŶƚĂŝŶŝŶŐĞdžŝƐƚŝŶŐůĂŶĚƵƐĞĂŶĚĚĞǀĞůŽƉŵĞŶƚĂŶĚĂĚĚŶŽŵŽƌĞ͘ ≠^ŚŝĨƚŐƌŽǁƚŚŽƵƚƐŝĚĞŽĨWĂůŽůƚŽ͘ ≠EĞĞĚƚŽƵƐĞůĂŶĚǁŝƐĞůLJ͘ ≠^ƵƉƉŽƌƚĨŽƌƐůŽǁƌĞƐŝĚĞŶƚŝĂůĂŶĚƐůŽǁŶŽŶͲƌĞƐŝĚĞŶƚŝĂůŐƌŽǁƚŚ͘ ≠<ĞĞƉϱϬ͛ŚĞŝŐŚƚůŝŵŝƚ͘ ≠WůĂĐĞƚĂůůĞƌďƵŝůĚŝŶŐƐŝŶƐŽƵƚŚZĂŶĚƚŚĞƌĞƐĞĂƌĐŚƉĂƌŬ͘ ≠<ĞĞƉŚƵŵĂŶƐĐĂůĞĂŶĚƋƵĂůŝƚLJŽĨůŝĨĞ͘ ≠DŝƐƐŝŶŐŝƐĚŝƐĐƵƐƐŝŽŶĂďŽƵƚ/ZŝƐƚŚĞƉŽƚĞŶƚŝĂůĨŽƌĨůŽŽĚŝŶŐĨƌŽŵƐĞĂůĞǀĞůƌŝƐĞʹŶĞĞĚƚŽ ĂĚĚƌĞƐƐ͘ ≠,ĂnjĂƌĚŽƵƐŵĂƚĞƌŝĂůƐʹŶĞĞĚŵŽƌĞƌĞĐĞŶƚƐƚƵĚLJ͘ ≠ůƚĞƌŶĂƚŝǀĞηϭŝƐŵŽƐƚƌĞĂůŝƐƚŝĐ͕ďƵƚηϮŝƐďĞƐƚŽƚŚĞƌǁŝƐĞ͘ ≠ĞǀĞůŽƉŵĞŶƚ ǁŝƚŚŝŶ Ъ ŵŝůĞ ŽĨ ƚƌĂŶƐŝƚ ŝƐ ůĂƌŐĞƌ ƚŚĂŶ ǁŚĂƚ ' ĐŽŶƐŝĚĞƌƐ ĨŽƌ ƚƌĂŶƐŝƚ ŽƌŝĞŶƚĞĚĚĞǀĞůŽƉŵĞŶƚ͖ЪŵŝůĞǁŽƵůĚŝŶĐůƵĚĞĂƌŽŶWĂƌŬ͘ ≠^ƵƉƉŽƌƚŬĞĞƉŝŶŐϱϬ͛ŚĞŝŐŚƚůŝŵŝƚ͘ ≠EĞĞĚƚŽĨŝŶĚŽƵƚǁŚĂƚƚŚĞĐŽŵŵĞƌĐŝĂůĂŶĚƌĞƐŝĚĞŶƚŝĂůŵĂƌŬĞƚƐǁĂŶƚ͘ ≠EĞƌǀŽƵƐǁŚĞŶĐŚĂŶŐĞƉƌŽƉŽƐĞĚĨŽƌůĂŵŝŶŽZĞĂů͖ƚŽŽŵĂŶLJƉƌŽƉĞƌƚLJŽǁŶĞƌƐƚŚĂƚŶĞĞĚ ƚŽĐŽŽƉĞƌĂƚĞŵĂŬĞƐĐŚĂŶŐĞůĞƐƐůŝŬĞůLJ͘ ≠EĞĞĚƚŽĐŽŶƐŝĚĞƌ^ƚĂŶĨŽƌĚ,ŽƐƉŝƚĂůĞdžƉĂŶƐŝŽŶŝŶĚŝƐĐƵƐƐŝŽŶ͘ ≠WĂůŽůƚŽŝƐŶŽƚŝƐŽůĂƚĞĚ͘EĞĞĚƚŽĐŽŶƐŝĚĞƌĂƐƚWĂůŽůƚŽĂŶĚƚŽůŝĨƚƚŚĞŵĨƌŽŵƚŚĞ ŽƵƚƐŝĚĞ͘^ĂŵĞǁŝƚŚDŽƵŶƚĂŝŶsŝĞǁĂŶĚDĞŶůŽWĂƌŬ͘ ≠EĞĞĚƚŽůŽŽŬĂƚĂŝƌƚƌĂĨĨŝĐͲDŽƌĞƉůĂŶĞƐ͕ŵŽƌĞŶŽŝƐĞĂŶĚŵŽƌĞŝŵƉĂĐƚƐ͘ ≠EĞĞĚĂůƚĞƌŶĂƚŝǀĞƚŽ^ƚĂŶĨŽƌĚĨŽƌŵĞĚŝĐĂůƐĞƌǀŝĐĞƐ͘^ƚĂŶĨŽƌĚŝƐƚŽŽĞdžƉĞŶƐŝǀĞĨŽƌĞǀĞƌLJŽŶĞ͘ ≠ĞĂƵƚŝĨŝĐĂƚŝŽŶŽĨůĂŵŝŶŽZĞĂůŝƐŝŵƉŽƌƚĂŶƚ͘ ≠EĞĞĚƚŽƵŶĚĞƌƐƚĂŶĚƚŚĂƚƚŚĞĂƌĞĂƐƐŽƵƚŚŽĨWĂŐĞDŝůůZŽĂĚĂƌĞĚŝĨĨĞƌĞŶƚĨƌŽŵƚŚĞĂƌĞĂƐŝŶ ƚŚĞŶŽƌƚŚ͘ ≠EĞĞĚƚŽƋƵĂŶƚŝĨLJƚŚĞĂůƚĞƌŶĂƚŝǀĞƐƚŽƐƚƵĚLJŝŵƉĂĐƚƐ͘ ≠EĞĞĚ ƚŽ ďĞ ĂǁĂƌĞ 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ƚŚŝƐ ĐĂƐĞ ƚŚĞ ŝƚLJ ŽĨ WĂůŽ ůƚŽ͕ ŝƐƐƵĞĚ ĂŶ EKW ĨŽƌ ƚŚĞ ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞŽŶDĂLJϯϬ͕ϮϬϭϰ͘dŚĞEKW;ƚƚĂĐŚŵĞŶƚͿǁĂƐĚŝƐƐĞŵŝŶĂƚĞĚĨŽƌ ƉƵďůŝĐ ƌĞǀŝĞǁ ǁŝƚŚ ĂŶ ŽƌŝĞŶƚĂƚŝŽŶ ďƌŽĐŚƵƌĞ ;ŽŶ ƚŚĞ /ŶƚĞƌŶĞƚ Ăƚ͗ ŚƚƚƉ͗ͬͬŐŽŽ͘ŐůͬĂŚϭWDǁͿͿ͕ ƉƵďůŝƐŚĞĚŝŶŵƵůƚŝƉůĞŶĞǁƐƉĂƉĞƌƐ͕ĂŶĚŵĂŝůĞĚƚŽƉƵďůŝĐĂŐĞŶĐŝĞƐĂƐƌĞƋƵŝƌĞĚďLJƚŚĞ^ƚĂƚĞY 'ƵŝĚĞůŝŶĞƐ͘ dŚĞ ĞŶĚ ŽĨ ƚŚĞ EKW ƉƵďůŝĐ ƌĞǀŝĞǁ ƉĞƌŝŽĚ ǁĂƐ ƐƉĞĐŝĨŝĞĚ ĂƐ :ƵŶĞ ϯϬ ĨŽƌ ƉƵďůŝĐ ĂŐĞŶĐŝĞƐĂŶĚƵŐƵƐƚϲ͕ϮϬϭϰĨŽƌƚŚĞŐĞŶĞƌĂůƉƵďůŝĐ͘ůůŝŶƉƵƚƌĞĐĞŝǀĞĚĚƵƌŝŶŐƚŚĞEKWƉĞƌŝŽĚ ǁŝůůďĞĐŽŶƐŝĚĞƌĞĚĚƵƌŝŶŐƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞ/Z͘dŚĞEKWĂůƐŽůŝƐƚĞĚϱƉƵďůŝĐƐĐŽƉŝŶŐŵĞĞƚŝŶŐ ŽƉƉŽƌƚƵŶŝƚŝĞƐ͘ƐŽĨƚŚĞĞŶĚŽĨƚŚĞĂŐĞŶĐLJƉƵďůŝĐƌĞǀŝĞǁƉĞƌŝŽĚ͕ƐƚĂĨĨŚĂƐƌĞĐĞŝǀĞĚƚŚƌĞĞĂŐĞŶĐLJ ĐŽŵŵĞŶƚůĞƚƚĞƌƐ͘>ĞƚƚĞƌƐǁĞƌĞƌĞĐĞŝǀĞĚĨƌŽŵƚŚĞsĂůůĞLJdƌĂŶƐƉŽƌƚĂƚŝŽŶŐĞŶĐLJ;sdͿ͕ƚŚĞĂLJ ƌĞĂ ŝƌ YƵĂůŝƚLJ DĂŶĂŐĞŵĞŶƚ ŝƐƚƌŝĐƚ ;YDͿ ĂŶĚ ƚŚĞ ĂůŝĨŽƌŶŝĂ ĞƉĂƌƚŵĞŶƚ ŽĨ dƌĂŶƐƉŽƌƚĂƚŝŽŶ;ĂůƚƌĂŶƐͿ͘  ƐĐƵƌƌĞŶƚůLJĞŶǀŝƐŝŽŶĞĚ͕ƚŚĞƌĂĨƚ/ZƚŚĂƚŝƐƉƌĞƉĂƌĞĚĨŽƌƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞǁŝůů ĞdžĂŵŝŶĞƐĞǀĞƌĂůĂůƚĞƌŶĂƚŝǀĞƐĂƚĂŶĞƋƵĂůůĞǀĞůŽĨĚĞƚĂŝů͕ĂůůŽǁŝŶŐĨŽƌĂŶŝŶĨŽƌŵĞĚĚĞĐŝƐŝŽŶƚŽ ĂĚŽƉƚ ŽŶĞ ŽĨ ƚŚĞƐĞ ĂůƚĞƌŶĂƚŝǀĞƐ Ăƚ ƚŚĞ ĞŶĚ ŽĨ ƚŚĞ ƉƌŽĐĞƐƐ͕ Žƌ ƉŽƚĞŶƚŝĂůůLJ Ă ďůĞŶĚ ŽĨ ƚŚĞ ĂůƚĞƌŶĂƚŝǀĞƐŝĨƚŚĞŝŵƉĂĐƚƐŽĨƚŚĂƚďůĞŶĚĞĚĂůƚĞƌŶĂƚŝǀĞŚĂǀĞďĞĞŶĂĚĞƋƵĂƚĞůLJďƌĂĐŬĞƚĞĚďLJŽƚŚĞƌ ĂůƚĞƌŶĂƚŝǀĞƐŝŶƚŚĞ/Z͘dŚĞ/ZǁŝůůŚĂǀĞƚŽĚĞƐĐƌŝďĞĂŶĚĚĞĨŝŶĞƚŚĞĂůƚĞƌŶĂƚŝǀĞƐŝŶƐƵĨĨŝĐŝĞŶƚ ĚĞƚĂŝůƚŽƉĞƌŵŝƚĂŶĂŶĂůLJƐŝƐŽĨƚŚĞŝƌƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐĂŶĚƚŽƉĞƌŵŝƚŵĞĂŶŝŶŐĨƵůƉƵďůŝĐŝŶƉƵƚ͘ dŚĞĂůƚĞƌŶĂƚŝǀĞƐĐĂŶĂƐƐĞƐƐĂǀĂƌŝĞƚLJŽĨůĂŶĚƵƐĞĂŶĚŝŶĨƌĂƐƚƌƵĐƚƵƌĞŽƉƚŝŽŶƐ͕ĂŶĚĐŽůůĞĐƚŝǀĞůLJ ƉƌĞƐĞŶƚĂƌĂŶŐĞŽĨƉŽƐƐŝďůĞŽƵƚĐŽŵĞƐƚŽŝŶĨŽƌŵĂĨŝŶĂůĚĞĐŝƐŝŽŶĂďŽƵƚƚŚĞĨƵƚƵƌĞŽĨWĂůŽůƚŽ͘ ;^ĞĞďĞůŽǁĂŶĚĂƚƚĂĐŚĞĚĨŽƌĨƵƌƚŚĞƌĚŝƐĐƵƐƐŝŽŶŽĨĂůƚĞƌŶĂƚŝǀĞƐ͘Ϳ/ƚ͛ƐĂůƐŽŝŵƉŽƌƚĂŶƚƚŚĂƚƚŚĞ ĂůƚĞƌŶĂƚŝǀĞƐĂŶĚƚŚĞ/ZĐŽŶƐŝĚĞƌǁŚĞƚŚĞƌƚŚĞƌĞĂƌĞƉƌŽƉŽƐĞĚƉŽůŝĐŝĞƐĂŶĚƉƌŽŐƌĂŵƐƚŚĂƚŵŝŐŚƚ ŚĂǀĞƉŚLJƐŝĐĂůĞŶǀŝƌŽŶŵĞŶƚĂůŝŵƉĂĐƚƐŝŶĂĚĚŝƚŝŽŶƚŽĂŶLJĐŚĂŶŐĞƐŝŶůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐĂŶĚ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͘    ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϭϭ  dŚĞŝƚLJ͛ƐĐŽŶƐƵůƚĂŶƚ͕WůĂĐĞtŽƌŬƐ͕ǁĂƐŚŝƌĞĚƚŽŚĞůƉƐƚĂĨĨƉƌĞƉĂƌĞƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ hƉĚĂƚĞĂŶĚƚŚĞƉƌŽŐƌĂŵ/Z͘dŚĞĨŝƌŵ͕ŽƌŝŐŝŶĂůůLJŬŶŽǁŶĂƐ͕ǁĂƐŚŝƌĞĚŝŶϮϬϬϴĂŶĚŚĂƐ ĐŽŶƚŝŶƵĞĚƚŽƐƵƉƉŽƌƚƐƚĂĨĨĂƐƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶƵƉĚĂƚĞŚĂƐĞǀŽůǀĞĚŽǀĞƌƚŚĞƉĂƐƚĨŝǀĞ LJĞĂƌƐ͘WůĂĐĞtŽƌŬƐŽĨĨĞƌƐĂƌĂŶŐĞŽĨƉůĂŶŶŝŶŐƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐŐĞŶĞƌĂůƉůĂŶͬĐŽŵƉƌĞŚĞŶƐŝǀĞ ƉůĂŶƉƌĞƉĂƌĂƚŝŽŶ͕ĐŽŵŵƵŶŝƚLJƉĂƌƚŝĐŝƉĂƚŝŽŶƉƌŽŐƌĂŵƐ͕ƉƌĞƉĂƌĂƚŝŽŶŽĨĞŶǀŝƌŽŶŵĞŶƚĂůĚŽĐƵŵĞŶƚƐ ĂŶĚnjŽŶŝŶŐĐŽĚĞͬĨŽƌŵďĂƐĞĐŽĚĞƵƉĚĂƚĞƐ͘dŚĞWůĂĐĞtŽƌŬƐƚĞĂŵĐŽŶƐŝƐƚƐŽĨƚŚƌĞĞŬĞLJƐƚĂĨĨ ŵĞŵďĞƌƐ͘dŚĞLJŝŶĐůƵĚĞWƌŝŶĐŝƉĂůŚĂƌůŝĞ<ŶŽdž͕ƐƐŽĐŝĂƚĞWƌŝŶĐŝƉĂů:ŽĂŶŶĂ:ĂŶƐĞŶĂŶĚƐƐŽĐŝĂƚĞ ŶĚƌĞǁ,ŝůů͘dŚĞĨŝƌŵŚĂƐǁŽƌŬĞĚĐůŽƐĞůLJǁŝƚŚƐƚĂĨĨŝŶƚŚĞĚĞǀĞůŽƉŵĞŶƚŽĨƚŚĞƉƌŽũĞĐƚǁĞďƐŝƚĞ ĂŶĚƚŚĞǀĂƌŝŽƵƐĐŽŵƉŽŶĞŶƚƐŽĨƚŚĞŽƵƚƌĞĂĐŚƉƌŽĐĞƐƐ͕ŝŶĐůƵĚŝŶŐƚŚĞƚŚƌĞĞƌĞĐĞŶƚǁŽƌŬƐŚŽƉƐ͘ WůĂĐĞtŽƌŬƐǁŝůůƉƌŽǀŝĚĞĂďƌŝĞĨŽǀĞƌǀŝĞǁŽĨƚŚĞƌĞĐĞŶƚƉƌŽĐĞƐƐĂŶĚƚŚĞƉƌŽŐƌĂŵ/ZĂƚƚŚĞ ƵŐƵƐƚϰƚŚŝƚLJŽƵŶĐŝůŚĞĂƌŝŶŐ͘  dŚĞĚƌĂĨƚ/ZǁŝůůĂŶĂůLJnjĞƚŚĞĞŶǀŝƌŽŶŵĞŶƚĂůŝŵƉĂĐƚƐŽĨĞĂĐŚŽĨƚŚĞĂůƚĞƌŶĂƚŝǀĞĨƵƚƵƌĞƐĐĞŶĂƌŝŽƐ ĂƉƉƌŽǀĞĚĨŽƌĂŶĂůLJƐŝƐďLJŝƚLJŽƵŶĐŝůŝŶĂĚĚŝƚŝŽŶƚŽĂEŽWƌŽũĞĐƚůƚĞƌŶĂƚŝǀĞ͕ĂƐƌĞƋƵŝƌĞĚďLJ Y͘/ŶŬĞĞƉŝŶŐǁŝƚŚƚŚĞƌĞƋƵŝƌĞŵĞŶƚƐŽĨY͕ƚŚĞƌĂĨƚ/Zǁŝůů ĚĞƚĞƌŵŝŶĞ ƉŽƚĞŶƚŝĂů ĞŶǀŝƌŽŶŵĞŶƚĂůŝŵƉĂĐƚƐĂŶĚŵŝƚŝŐĂƚŝŽŶŵĞĂƐƵƌĞƐŝŶƚŚĞĨŽůůŽǁŝŶŐƌĞƐŽƵƌĐĞĐĂƚĞŐŽƌŝĞƐ͗ ≠ĞƐƚŚĞƚŝĐƐ dŚĞĂĞƐƚŚĞƚŝĐƐĂŶĂůLJƐŝƐǁŝůůƌĞǀŝĞǁŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞƉŽůŝĐŝĞƐĂŶĚƉƌŽŐƌĂŵƐ 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ĚĂƚĂƐŚĞĞƚƐǁŝůůďĞŝŶĐůƵĚĞĚĂƐĂŶĂƉƉĞŶĚŝdž͘ ŝƌ YƵĂůŝƚLJ͗  /Ŷ ĂĐĐŽƌĚĂŶĐĞ ǁŝƚŚ ƚŚĞ ĂLJ ƌĞĂ ŝƌ YƵĂůŝƚLJ DĂŶĂŐĞŵĞŶƚ ŝƐƚƌŝĐƚ͛Ɛ ;YDͿ Y 'ƵŝĚĞůŝŶĞƐ͕ Ă WůĂŶͲůĞǀĞů ĂŶĂůLJƐŝƐ ǁŝůů ďĞ ƉƌĞƉĂƌĞĚ͘ dŚŝƐ ƐĞĐƚŝŽŶ ǁŝůů ŝŶĐůƵĚĞƚŚĞĐƵƌƌĞŶƚĂŝƌƋƵĂůŝƚLJǁŝƚŚŝŶƚŚĞ^ĂŶ&ƌĂŶĐŝƐĐŽĂLJƌĞĂŝƌĂƐŝŶ;^&Žƌŝƌ ĂƐŝŶͿŝŶƚŚĞǀŝĐŝŶŝƚLJŽĨƚŚĞŝƚLJĂŶĚĂƐƵŵŵĂƌLJŽĨƌĞŐƵůĂƚŝŽŶƐĂĚŽƉƚĞĚĨŽƌƚŚĞƉƵƌƉŽƐĞ ŽĨƌĞĚƵĐŝŶŐŚĞĂůƚŚͲďĂƐĞĚŝŵƉĂĐƚƐĂƐƐŽĐŝĂƚĞĚǁŝƚŚƉŽŽƌĂŝƌƋƵĂůŝƚLJ͘ džŝƐƚŝŶŐ ůĞǀĞůƐ ŽĨ ĐƌŝƚĞƌŝĂĂŝƌƉŽůůƵƚĂŶƚƐĂǀĂŝůĂďůĞĨƌŽŵƚŚĞŶĞĂƌĞƐƚĂŝƌƋƵĂůŝƚLJŵŽŶŝƚŽƌŝŶŐƐƚĂƚŝŽŶǁŝůůďĞ ŝŶĐŽƌƉŽƌĂƚĞĚ͘   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϭϮ  dŚĞĂŝƌƋƵĂůŝƚLJĂŶĂůLJƐŝƐǁŝůůŝŶĐůƵĚĞĂƋƵĂůŝƚĂƚŝǀĞĂŶĂůLJƐŝƐŽĨĐƌŝƚĞƌŝĂĂŝƌƉŽůůƵƚĂŶƚƐĂŶĚ ƉƌĞĐƵƌƐŽƌƐŐĞŶĞƌĂƚĞĚĨƌŽŵďƵŝůĚŽƵƚŽĨƚŚĞƉƌŽƉŽƐĞĚůĂŶĚƵƐĞƐƉůĂŶ͘ ƵŝůĚŽƵƚŽĨƚŚĞ ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶǁŽƵůĚŐĞŶĞƌĂƚĞĞŵŝƐƐŝŽŶƐĨƌŽŵĂŶŝŶĐƌĞĂƐĞŝŶƚƌŝƉƐĂŶĚsĞŚŝĐůĞ DŝůĞƐdƌĂǀĞůĞĚ;sDdͿĂƐƐŽĐŝĂƚĞĚǁŝƚŚůĂŶĚƵƐĞƐǁŝƚŚŝŶƚŚĞŝƚLJ͘dŚĞWƌŽŐƌĂŵͲůĞǀĞůĂŝƌ ƋƵĂůŝƚLJĂŶĂůLJƐŝƐǁŝůůŝŶĐůƵĚĞĂĐŽŶƐŝƐƚĞŶĐLJĞǀĂůƵĂƚŝŽŶŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶƚŽƚŚĞ YD͛Ɛ ůĂŶĚ ƵƐĞ ĂŶĚ ƚƌĂŶƐƉŽƌƚĂƚŝŽŶ ĐŽŶƚƌŽů ŵĞĂƐƵƌĞƐ ǁŝƚŚŝŶ ƚŚĞ Ăŝƌ ƋƵĂůŝƚLJ ŵĂŶĂŐĞŵĞŶƚ ƉůĂŶ͘ 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/ŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞŝƚLJ͛ƐŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞǁŽƵůĚƌĞƐƵůƚŝŶĂŶŝŶĐƌĞĂƐĞŝŶ ','ĞŵŝƐƐŝŽŶƐĨƌŽŵĞŶĞƌŐLJƵƐĞ;ŶĂƚƵƌĂůŐĂƐĂŶĚĞůĞĐƚƌŝĐŝƚLJͿ͕ƚƌĂŶƐƉŽƌƚĂƚŝŽŶƐŽƵƌĐĞƐ͕ ǁĂƚĞƌƵƐĞĂŶĚǁĂƐƚĞǁĂƚĞƌŐĞŶĞƌĂƚŝŽŶ͕ĂŶĚƐŽůŝĚǁĂƐƚĞĚŝƐƉŽƐĂů͘;ůƚŚŽƵŐŚ^ĐĞŶĂƌŝŽϰ ǁŽƵůĚĞĨĨĞĐƚŝǀĞůLJŵŝƚŝŐĂƚĞŽƌŽĨĨƐĞƚƚŚĞƐĞŝŶĐƌĞĂƐĞƐ͘ͿdŚĞĂŶĂůLJƐŝƐǁŝůůĚƌĂǁƵƉŽŶƉĂƐƚ ŝŶǀĞŶƚŽƌŝĞƐĐŽŶĚƵĐƚĞĚĨŽƌWĂůŽůƚŽ͘dŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ/ZǁŝůůƐƵŵŵĂƌŝnjĞƚŚĞ ŵŽƐƚ ƌĞĐĞŶƚ ĐŽŵŵƵŶŝƚLJ ',' ĞŵŝƐƐŝŽŶƐ ŝŶǀĞŶƚŽƌLJ ĨŽƌ ĞdžŝƐƚŝŶŐ ;Y ďĂƐĞůŝŶĞͿ ĞŶǀŝƌŽŶŵĞŶƚĂů ĐŽŶĚŝƚŝŽŶƐ ĂŶĚ ĨŽƌĞĐĂƐƚ ',' ĞŵŝƐƐŝŽŶƐ Ăƚ ƚŚĞ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ ,ŽƌŝnjŽŶLJĞĂƌ͘dŚĞ','ŝŶǀĞŶƚŽƌLJĨŽƌYďĂƐĞůŝŶĞĂŶĚďƵŝůĚŽƵƚǁŝůůďĞŵŽĚĞůĞĚƵƐŝŶŐ ƚŚĞůĂƚĞƐƚŵŽĚĞůŝŶŐƚŽŽůƐ;D&͕ĂůDŽĚ͕ĂŶĚK&&ZKͿ͘dŚĞďŽƵŶĚĂƌŝĞƐŽĨƚŚĞ ĐŽŵŵƵŶŝƚLJͲǁŝĚĞ','ĞŵŝƐƐŝŽŶƐŝŶǀĞŶƚŽƌŝĞƐǁŝůůďĞďĂƐĞĚŽŶĂĐŽŵďŝŶĂƚŝŽŶŽĨƐĞĐƚŽƌƐ ŽǀĞƌ ǁŚŝĐŚ ƚŚĞ ŝƚLJ ŚĂƐ ŐĞŽŐƌĂƉŚŝĐ ĂŶĚ ũƵƌŝƐĚŝĐƚŝŽŶ ĐŽŶƚƌŽů͘ &Žƌ ĞdžĂŵƉůĞ͕ ƚŚĞ ƚƌĂŶƐƉŽƌƚĂƚŝŽŶƐĞĐƚŽƌǁŝůůďĞďĂƐĞĚŽŶsDdŐĞŶĞƌĂƚĞĚďLJƚƌŝƉƐƚŚĂƚƐƚĂƌƚŽƌĞŶĚŝŶƚŚĞ ĐŝƚLJĂŶĚĞdžĐůƵĚĞƚƌŝƉƐƚŚĂƚƉĂƐƐƚŚƌŽƵŐŚƚŚĞĐŝƚLJ͘dŚĞ/ZǁŝůůĞǀĂůƵĂƚĞƚŚĞŝŵƉĂĐƚĨƌŽŵ ƚŚĞĐŚĂŶŐĞŝŶ','ĞŵŝƐƐŝŽŶƐŝŶƚŚĞĐŝƚLJĐŽŵƉĂƌĞĚƚŽYďĂƐĞůŝŶĞĐŽŶĚŝƚŝŽŶƐƉƵƌƐƵĂŶƚ ƚŽYDƚŚƌĞƐŚŽůĚƐ͘ƌĞĂͲǁŝĚĞĐŽŶƐƚƌƵĐƚŝŽŶͲƌĞůĂƚĞĚŝŵƉĂĐƚƐ͕ƐƵĐŚĂƐĨƵŐŝƚŝǀĞĚƵƐƚ ĚƵĞƚŽĞĂƌƚŚŵŽǀŝŶŐĂŶĚŐƌĂĚŝŶŐĂŶĚĞdžŚĂƵƐƚĞŵŝƐƐŝŽŶƐĂƐƐŽĐŝĂƚĞĚǁŝƚŚĐŽŶƐƚƌƵĐƚŝŽŶ ĞƋƵŝƉŵĞŶƚĂŶĚŵĂƚĞƌŝĂůŚĂƵůŝŶŐŽƉĞƌĂƚŝŽŶƐ͕ǁŝůůďĞĚŝƐĐƵƐƐĞĚĐŽŵŵĞŶƐƵƌĂƚĞǁŝƚŚƚŚĞ   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϭϰ  ůĞǀĞůŽĨĚĞƚĂŝůĂǀĂŝůĂďůĞƌĞŐĂƌĚŝŶŐĐŽŶƐƚƌƵĐƚŝŽŶĂĐƚŝǀŝƚLJǁŝƚŚŝŶƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ ĂƌĞĂ͘^ƚĂŶĚĂƌĚĐŽŶƐƚƌƵĐƚŝŽŶŵŝƚŝŐĂƚŝŽŶŵĞĂƐƵƌĞƐǁŝůůďĞŝĚĞŶƚŝĨŝĞĚ͕ǁŚĞƌĞĂƉƉƌŽƉƌŝĂƚĞ͘ dŚĞ','ƐĞĐƚŝŽŶŝŶƚŚĞ/ZǁŝůůĂůƐŽĚŝƐĐƵƐƐƚŚĞŝƚLJ͛ƐĐŽŵŵŝƚŵĞŶƚƚŽƌĞĚƵĐŝŶŐ',' ĞŵŝƐƐŝŽŶƐŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞ','ƌĞĚƵĐƚŝŽŶŐŽĂůƐŽĨƐƐĞŵďůLJŝůůϯϮ;ϯϮͿĂŶĚ ^ĞŶĂƚĞŝůůϯϳϱ;^ϯϳϱͿ͘WƌŽũĞĐƚĐŽŶƐŝƐƚĞŶĐLJǁŝƚŚƚŚĞĂůŝĨŽƌŶŝĂŝƌZĞƐŽƵƌĐĞƐŽĂƌĚ ϮϬϬϴ^ĐŽƉŝŶŐWůĂŶĂŶĚϮϬϭϯ^ĐŽƉŝŶŐWůĂŶhƉĚĂƚĞĂŶĚƚŚĞDĞƚƌŽƉŽůŝƚĂŶdƌĂŶƐƉŽƌƚĂƚŝŽŶ ŽŵŵŝƐƐŝŽŶ;DdͿĂŶĚƐƐŽĐŝĂƚŝŽŶŽĨĂLJƌĞĂ'ŽǀĞƌŶŵĞŶƚ;'ͿWůĂŶĂLJƌĞĂǁŝůů ĂůƐŽďĞƌĞǀŝĞǁĞĚ͘dŚĞŝƚLJŽĨWĂůŽůƚŽŚĂƐĂůŝŵĂƚĞWƌŽƚĞĐƚŝŽŶWůĂŶĂŶĚŝƐĞŵďĂƌŬŝŶŐ ŽŶƉƌĞƉĂƌĂƚŝŽŶŽĨĂ^ƵƐƚĂŝŶĂďŝůŝƚLJͬůŝŵĂƚĞĐƚŝŽŶWůĂŶ͘dŚĞ/ZǁŝůůŝŶĐůƵĚĞĂĐŽŶƐŝƐƚĞŶĐLJ ĞǀĂůƵĂƚŝŽŶ ǁŝƚŚ ƚŚĞ ',' ƌĞĚƵĐƚŝŽŶ ŵĞĂƐƵƌĞƐ ŝĚĞŶƚŝĨŝĞĚ ŝŶ ƚŚĞ WĂůŽ ůƚŽ ůŝŵĂƚĞ WƌŽƚĞĐƚŝŽŶ WůĂŶ͕ ĂƐ ŵĂLJ ďĞ ŵŽĚŝĨŝĞĚ ďLJ ƉƌŽƉŽƐĞĚ ŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨ ƚŚĞ ^ƵƐƚĂŝŶĂďŝůŝƚLJͬůŝŵĂƚĞ ĐƚŝŽŶ WůĂŶ͕ ĂƐ ǁĞůů ĂƐ ĐůŝŵĂƚĞ ƉƌŽƚĞĐƚŝŽŶ ƉƌŽŐƌĂŵƐ ŝŶ ƚŚĞ ƵƉĚĂƚĞĚŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘ ≠,ĂnjĂƌĚƐĂŶĚ,ĂnjĂƌĚŽƵƐDĂƚĞƌŝĂůƐ ^ĞǀĞƌĂůƉĂƌƚƐŽĨƚŚĞĐŝƚLJ͕ŝŶĐůƵĚŝŶŐƚŚĞĂůŝĨŽƌŶŝĂǀĞŶƵĞͬ&ƌLJ͛ƐƌĞĂĂŶĚĂƐƚDĞĂĚŽǁ ŝƌĐůĞ ŽŶĐĞƉƚ WůĂŶ ĂƌĞĂƐ ŚĂǀĞ Ă ŚŝƐƚŽƌLJ ŽĨ ƌĞƐĞĂƌĐŚ ĂŶĚ ĚĞǀĞůŽƉŵĞŶƚ ĂŶĚ ŚŝŐŚ ƚĞĐŚŶŽůŽŐLJŝŶĚƵƐƚƌŝĂůƵƐĞƐ͘ŶƵŵďĞƌŽĨƚŚĞƐĞƵƐĞƐŐĞŶĞƌĂƚĞĚŚĂnjĂƌĚŽƵƐŵĂƚĞƌŝĂůƐƚŚĂƚ ĐŽŶƚĂŵŝŶĂƚĞĚƚŚĞĞŶǀŝƌŽŶŵĞŶƚ͘sŽůĂƚŝůĞŽƌŐĂŶŝĐĐŽŵƉŽƵŶĚƐĐŽŵŵŽŶůLJƵƐĞĚďLJŚŝŐŚ ƚĞĐŚĐŽŵƉĂŶŝĞƐĂƌĞƉƌĞƐĞŶƚŝŶŐƌŽƵŶĚǁĂƚĞƌŝŶƐŽŵĞĂƌĞĂƐŽĨƚŚĞĐŝƚLJ͕ƐŽƚŚĞ/Zǁŝůů ŶĞĞĚ ƚŽ ĐĂƌĞĨƵůůLJ ĐŽŶƐŝĚĞƌ ƉŽƚĞŶƚŝĂů ŝŵƉĂĐƚƐ ĨƌŽŵ ǀŽůĂƚŝůĞ ŽƌŐĂŶŝĐ ĐŽŵƉŽƵŶĚ ǀĂƉŽƌ ŝŶƚƌƵƐŝŽŶŝŶƚŽŶĞǁƌĞƐŝĚĞŶƚŝĂůďƵŝůĚŝŶŐƐŽŶĨŽƌŵĞƌŝŶĚƵƐƚƌŝĂůƐŝƚĞƐ͘ dŽŝĚĞŶƚŝĨLJƉŽƚĞŶƚŝĂůŚĂnjĂƌĚƐͲƌĞůĂƚĞĚŝƐƐƵĞƐ͕WůĂĐĞtŽƌŬƐǁŝůůŝĚĞŶƚŝĨLJƉŽƚĞŶƚŝĂůƌŝƐŬĂƌĞĂƐ ĨŽƌƐƵďƐƵƌĨĂĐĞĐŽŶƚĂŵŝŶĂƚŝŽŶ͕ďŽƚŚƐŽŝůĂŶĚŐƌŽƵŶĚǁĂƚĞƌ͕ƚŚĂƚŵĂLJƉŽƚĞŶƚŝĂůůLJĂĨĨĞĐƚ ĚĞǀĞůŽƉŵĞŶƚ͘  WůĂĐĞtŽƌŬƐ ǁŝůů ĂƐƐĞƐƐ ĂǀĂŝůĂďůĞ ƉƵďůŝĐ ĂŶĚ ƉƌŝǀĂƚĞ ƌĞƉŽƌƚƐ ĂŶĚ ĚĂƚĂ ƌĞŐĂƌĚŝŶŐ ƉŽƚĞŶƚŝĂů ƐƵďƐƵƌĨĂĐĞ ĐŽŶƚĂŵŝŶĂƚŝŽŶ͘  WůĂĐĞtŽƌŬƐ ǁŝůůŝĚĞŶƚŝĨLJ ŚŝƐƚŽƌŝĐĂů ĂĐƚŝǀŝƚŝĞƐ ƚŚĂƚ ŵĂLJ ŚĂǀĞ ĐŽŵƉƌŽŵŝƐĞĚ ƚŚĞ ĞŶǀŝƌŽŶŵĞŶƚ ĂŶĚ ŝĚĞŶƚŝĨLJ ƉƌŽĂĐƚŝǀĞ ƌĞƋƵŝƌĞŵĞŶƚƐ ƚŚĂƚ ǁŝůů ďĞ ĂƉƉůŝĞĚ ƚŽ ĨƵƚƵƌĞ ĚĞǀĞůŽƉŵĞŶƚ ƚŽ ŵŝŶŝŵŝnjĞ ĂŶLJ ĨƵƚƵƌĞ ĞŶǀŝƌŽŶŵĞŶƚĂůĐŽŶƚĂŵŝŶĂƚŝŽŶĂŶĚͬŽƌůŝĂďŝůŝƚLJ͘dŚĞŚŝƐƚŽƌŝĐĂůĂƐƐĞƐƐŵĞŶƚǁŝůůĞǀĂůƵĂƚĞ ƚŚĞůŝŬĞůŝŚŽŽĚŽĨƐƵďƐƵƌĨĂĐĞĐŽŶƚĂŵŝŶĂƚŝŽŶĨƌŽŵƉĂƐƚĂĐƚŝǀŝƚŝĞƐ͘WůĂĐĞtŽƌŬƐǁŝůůĂůƐŽ ĚĞƐĐƌŝďĞ ĐƵƌƌĞŶƚ ƌĞŐƵůĂƚŝŽŶƐ ƚŚĂƚ ƌĞƋƵŝƌĞ ƉůĂŶƐ ĂŶĚ ĂĐƚŝŽŶƐ ƚŽŵŝŶŝŵŝnjĞ ĨƵƚƵƌĞ ĞŶǀŝƌŽŶŵĞŶƚĂůŝƐƐƵĞƐ͘^ƚĂŶĚĂƌĚŶǀŝƌŽŶŵĞŶƚĂů^ŝƚĞƐƐĞƐƐŵĞŶƚƌĞŐƵůĂƚŽƌLJĚĂƚĂďĂƐĞƐ ǁŝůůďĞƵƚŝůŝnjĞĚĂůŽŶŐǁŝƚŚĂƚůĞĂƐƚƚǁŽƐŽƵƌĐĞƐŽĨĂǀĂŝůĂďůĞŚŝƐƚŽƌŝĐĂůƐŝƚĞŝŶĨŽƌŵĂƚŝŽŶ ƐƵĐŚĂƐ^ĂŶďŽƌŶŵĂƉƐĂŶĚĂĞƌŝĂůƉŚŽƚŽŐƌĂƉŚƐ͕ĂƐǁĞůůĂƐŝŶĨŽƌŵĂƚŝŽŶƉƌŽǀŝĚĞĚďLJƚŚĞ ŝƚLJŽĨWĂůŽůƚŽĂŶĚͬŽƌ^ĂŶƚĂůĂƌĂŽƵŶƚLJ͘ WůĂĐĞtŽƌŬƐǁŝůůĂůƐŽƵƚŝůŝnjĞƚŚĞZĞŐŝŽŶĂůtĂƚĞƌYƵĂůŝƚLJŽŶƚƌŽůŽĂƌĚ͛ƐϮϬϬϯ^ŽƵƚŚĂLJ ƐƚƵĚLJ͕ ǁŚŝĐŚ ŝĚĞŶƚŝĨŝĞƐ ƌĞŐŝŽŶĂů ƉůƵŵĞƐ ĂŶĚ ĂƌĞĂƐ ŽĨ ƐƵďƐƵƌĨĂĐĞĐŽŶĐĞƌŶƌĞůĂƚĞĚƚŽ ĨŽƌŵĞƌ Žƌ ĐƵƌƌĞŶƚ ŝŶĚƵƐƚƌŝĂů ĂŶĚ ĐŽŵŵĞƌĐŝĂů njŽŶĞƐ͘  LJŝĚĞŶƚŝĨLJŝŶŐ ŐĞŶĞƌĂů ĂƌĞĂƐ ŽĨ ĐŽŶĐĞƌŶ͕ ^^ ǁŝůů ďĞ 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ŶĞĂƌďLJŶŽŝƐĞͲƐĞŶƐŝƚŝǀĞƌĞĐĞƉƚŽƌƐ͘&ƵƚƵƌĞĂŵďŝĞŶƚŶŽŝƐĞĂŶĚůĂŶĚƵƐĞĐŽŵƉĂƚŝďŝůŝƚLJǁŝůů ďĞĚŝƐĐƵƐƐĞĚ͕ĂŶĚŶŽŝƐĞŵŝƚŝŐĂƚŝŽŶǁŝůůďĞƉƌŽǀŝĚĞĚƚŽƌĞĚƵĐĞƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐƚŽ ĨƵƚƵƌĞƐĞŶƐŝƚŝǀĞůĂŶĚƵƐĞƐƌĞůĂƚĞĚƚŽŶŽŝƐĞ͕ŝĨĂƉƉůŝĐĂďůĞ͘ ƒEŽŝƐĞĂŶĚ>ĂŶĚhƐĞŽŵƉĂƚŝďŝůŝƚLJ͗ŶĂŶĂůLJƐŝƐǁŝůůďĞƉƌĞƉĂƌĞĚƚŽĂƐƐĞƐƐŶŽŝƐĞĂŶĚ ůĂŶĚƵƐĞĐŽŵƉĂƚŝďŝůŝƚLJĨŽƌĨŽĐƵƐĞĚĂƌĞĂƐŝŶƚŚĞĐŝƚLJƚŚĂƚĐŽƵůĚďĞĂĨĨĞĐƚĞĚďLJůĂŶĚƵƐĞ ĐŚĂŶŐĞƐŽƌďLJĐŚĂŶŐĞƐŝŶƚƌĂĨĨŝĐƉĂƚƚĞƌŶƐ͘WŽƚĞŶƚŝĂůůĂŶĚƵƐĞĐŽŶĨůŝĐƚƐǁŝƚŚŝŶƚŚĞĐŝƚLJ ǁŝůůďĞŝĚĞŶƚŝĨŝĞĚďĂƐĞĚŽŶƚŚĞƌĞƐƵůƚƐŽĨƚŚĞŶŽŝƐĞŵŽŶŝƚŽƌŝŶŐĂŶĚŵŽĚĞůŝŶŐƌĞƐƵůƚƐ͘ ƒŽŶƐƚƌƵĐƚŝŽŶEŽŝƐĞĂŶĚsŝďƌĂƚŝŽŶ͗WŽƚĞŶƚŝĂů ĐŽŶƐƚƌƵĐƚŝŽŶ ŝŵƉĂĐƚƐ ĂƐƐŽĐŝĂƚĞĚ ǁŝƚŚ ŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶǁŝůůďĞĞǀĂůƵĂƚĞĚĂƚĂƉƌŽŐƌĂŵŵĂƚŝĐůĞǀĞů͘ &ƵƚƵƌĞŶŽŝƐĞĂŶĚǀŝďƌĂƚŝŽŶĞĨĨĞĐƚƐĨƌŽŵĐŽŶƐƚƌƵĐƚŝŽŶĂĐƚŝǀŝƚŝĞƐǁŝůůďĞĚŝƐĐƵƐƐĞĚŝŶ ƚĞƌŵƐŽĨĂĐĐĞƉƚĞĚĨĞĚĞƌĂůƐƚĂŶĚĂƌĚƐ͘  ≠WŽƉƵůĂƚŝŽŶ͕,ŽƵƐŝŶŐĂŶĚŵƉůŽLJŵĞŶƚ dŚŝƐƐĞĐƚŝŽŶǁŝůůĨŽĐƵƐŽŶƚŚĞƉŽƚĞŶƚŝĂůĨŽƌĚŝƐƉůĂĐĞŵĞŶƚŽĨƉĞŽƉůĞŽƌŚŽƵƐŝŶŐĂŶĚĨŽƌ ƉŽƉƵůĂƚŝŽŶŐƌŽǁƚŚƚŚĂƚĐŽƵůĚƌĞƐƵůƚĨƌŽŵŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘ WůĂĐĞtŽƌŬƐǁŝůůĚĞƐĐƌŝďĞĞdžŝƐƚŝŶŐƉŽƉƵůĂƚŝŽŶĂŶĚŚŽƵƐŝŶŐĐŽŶĚŝƚŝŽŶƐĂŶĚƐƵŵŵĂƌŝnjĞƚŚĞ ƌĞůĞǀĂŶƚ^ƚĂƚĞĂŶĚůŽĐĂůƌĞŐƵůĂƚŽƌLJĨƌĂŵĞǁŽƌŬŝŶĐůƵĚŝŶŐƚŚĞŝƚLJ͛ƐZĞŐŝŽŶĂů,ŽƵƐŝŶŐEĞĞĚƐ ƐƐŽĐŝĂƚŝŽŶ ;Z,EͿ ĂŶĚ ƚŚĞ ĐƵƌƌĞŶƚ ,ŽƵƐŝŶŐ ůĞŵĞŶƚ͘ ĂƐĞĚ ŽŶ ƚŚĞ ƉŽƉƵůĂƚŝŽŶ ĂŶĚ ŚŽƵƐŝŶŐ ƐŝŐŶŝĨŝĐĂŶĐĞ ĐƌŝƚĞƌŝĂ͕ WůĂĐĞtŽƌŬƐ ǁŝůů ĂƐƐĞƐƐ ƉŽƚĞŶƚŝĂů ƉŽƉƵůĂƚŝŽŶ ĂŶĚ ŚŽƵƐŝŶŐ ŝŵƉĂĐƚƐ͘/ĨŶĞĐĞƐƐĂƌLJ͕ŵŝƚŝŐĂƚŝŽŶŵĞĂƐƵƌĞƐƚŽƌĞĚƵĐĞŝŵƉĂĐƚƐƚŽĂůĞƐƐͲƚŚĂŶͲƐŝŐŶŝĨŝĐĂŶƚ ůĞǀĞůŝŶƚŚĞĨŽƌŵŽĨŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶƉŽůŝĐŝĞƐǁŝůůďĞƌĞĐŽŵŵĞŶĚĞĚ͘ ≠WƵďůŝĐ^ĞƌǀŝĐĞƐ dŚŝƐƐĞĐƚŝŽŶǁŝůůĞǀĂůƵĂƚĞƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐŽŶƉƵďůŝĐƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐĨŝƌĞͬĞŵĞƌŐĞŶĐLJ   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϭϳ  ŵĞĚŝĐĂů ƐĞƌǀŝĐĞƐ ;D^Ϳ͕ ƉŽůŝĐĞ ƐĞƌǀŝĐĞƐ͕ ĂŶĚ ƐĐŚŽŽůƐ͘ WůĂĐĞtŽƌŬƐ ǁŝůůĚĞƐĐƌŝďĞ ĞdžŝƐƚŝŶŐ ƉƵďůŝĐƐĞƌǀŝĐĞƐǁŝƚŚŝŶƚŚĞĐŝƚLJ͘dŚĞƐĞƚƚŝŶŐǁŝůůŝŶĐůƵĚĞĂĚĞƐĐƌŝƉƚŝŽŶŽĨĞĂĐŚƉƵďůŝĐƐĞƌǀŝĐĞ ƉƌŽǀŝĚĞƌ͕ ŝŶĐůƵĚŝŶŐ ĐƵƌƌĞŶƚ ĂŶĚ ƉƌŽũĞĐƚĞĚ ĐĂƉĂĐŝƚLJ͘ ĂƐĞĚ ŽŶ ƚŚĞ ƉƵďůŝĐ ƐĞƌǀŝĐĞƐ ƐŝŐŶŝĨŝĐĂŶĐĞ ĐƌŝƚĞƌŝĂ͕ WůĂĐĞtŽƌŬƐ ǁŝůů ĂƐƐĞƐƐ ƉŽƚĞŶƚŝĂů ŝŵƉĂĐƚƐ͘ /Ĩ ŶĞĐĞƐƐĂƌLJ͕ ŵŝƚŝŐĂƚŝŽŶ ŵĞĂƐƵƌĞƐ ƚŽ ƌĞĚƵĐĞ ŝŵƉĂĐƚƐ ƚŽ ůĞƐƐͲƚŚĂŶͲƐŝŐŶŝĨŝĐĂŶƚ ůĞǀĞůƐ ŝŶ ƚŚĞ ĨŽƌŵ ŽĨ ƉŽůŝĐLJ ƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐǁŝůůďĞŝĚĞŶƚŝĨŝĞĚ͘ ≠≠WĂƌŬƐĂŶĚZĞĐƌĞĂƚŝŽŶ dŚĞWĂƌŬƐĂŶĚZĞĐƌĞĂƚŝŽŶƐĞĐƚŝŽŶǁŝůůĞǀĂůƵĂƚĞƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐŽŶĞdžŝƐƚŝŶŐƉĂƌŬĂŶĚ ƌĞĐƌĞĂƚŝŽŶĨĂĐŝůŝƚŝĞƐďĂƐĞĚŽŶƚŚĞĂŶƚŝĐŝƉĂƚĞĚŝŶĐƌĞĂƐĞŝŶĚĂLJƚŝŵĞƉŽƉƵůĂƚŝŽŶ͘dŚŝƐƐĞĐƚŝŽŶ ǁŝůůĚƌĂǁŽŶƐƚĂŶĚĂƌĚƐĂŶĚŽďũĞĐƚŝǀĞƐĚĞƐĐƌŝďĞĚŝŶŝƚLJĚŽĐƵŵĞŶƚƐ͕ŝŶĐůƵĚŝŶŐĂŶLJŵĂƐƚĞƌ ƉůĂŶƐĨŽƌĞdžŝƐƚŝŶŐŝƚLJŽƌƌĞŐŝŽŶĂůƉĂƌŬƐ͘WůĂĐĞtŽƌŬƐǁŝůůĚĞƐĐƌŝďĞƚŚĞĞdžŝƐƚŝŶŐƌĞĐƌĞĂƚŝŽŶ ƐĞƚƚŝŶŐ ǁŝƚŚŝŶ ƚŚĞ ŝƚLJ͘ ĂƐĞĚ ŽŶ ƚŚĞ ƌĞĐƌĞĂƚŝŽŶ ƐŝŐŶŝĨŝĐĂŶĐĞ ĐƌŝƚĞƌŝĂ͕ WůĂĐĞtŽƌŬƐ ǁŝůů ĂƐƐĞƐƐƉŽƚĞŶƚŝĂůƉĂƌŬƐĂŶĚƌĞĐƌĞĂƚŝŽŶŝŵƉĂĐƚƐ͘/ĨŶĞĐĞƐƐĂƌLJ͕ŵŝƚŝŐĂƚŝŽŶŵĞĂƐƵƌĞƐŝŶƚŚĞ ĨŽƌŵŽĨƉŽůŝĐLJƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐǁŝůůďĞůŝƐƚĞĚƚŽƌĞĚƵĐĞŝŵƉĂĐƚƐƚŽůĞƐƐͲƚŚĂŶͲƐŝŐŶŝĨŝĐĂŶƚ ůĞǀĞůƐ͘ ≠dƌĂŶƐƉŽƌƚĂƚŝŽŶĂŶĚdƌĂĨĨŝĐ dŚŝƐƐĞĐƚŝŽŶǁŝůůĂĚĚƌĞƐƐĂŶLJƉŽƚĞŶƚŝĂůŽƉĞƌĂƚŝŽŶĂůĂŶĚůĞǀĞůŽĨƐĞƌǀŝĐĞĚĞĨŝĐŝĞŶĐŝĞƐŽŶƚŚĞ ŬĞLJ ƚƌĂŶƐƉŽƌƚĂƚŝŽŶ ĨĂĐŝůŝƚŝĞƐ ďĂƐĞĚ ŽŶ ĞdžƉĞĐƚĞĚ ƉƌŽũĞĐƚŝŽŶƐ ŽĨƚƌĂĨĨŝĐ ǀŽůƵŵĞ͕ ƚƌĂŶƐŝƚ ƌŝĚĞƌƐŚŝƉ͕ ĂŶĚ ǁĂůŬŝŶŐ ĂŶĚ ďŝĐLJĐůŝŶŐ ůĞǀĞůƐ ĂƐƐŽĐŝĂƚĞĚ ǁŝƚŚ ƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ hƉĚĂƚĞ͘ /ŶƉƌĞƉĂƌŝŶŐƚŚĞƚƌĂŶƐƉŽƌƚĂƚŝŽŶĂŶĚƚƌĂĨĨŝĐƐƚƵĚLJ͕ ƚŚĞĐŽŶƐƵůƚĂŶƚƐǁŝůůƵƚŝůŝnjĞƚŚĞŝƚLJ͛Ɛ 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ƐƚĂŶĚĂƌĚƐĂƌĞŵĞƚͿ EŽƚĞƐ͗ ΎZĞŐŝŽŶĂůWƌŽũĞĐƚŝŽŶƐWƌĞƉĂƌĞĚďLJƚŚĞƐƐŽĐŝĂƚŝŽŶŽĨĂLJƌĞĂ'ŽǀĞƌŶŵĞŶƚƐ͘;WƌŽũĞĐƚŝŽŶƐĂƌĞďĂƐĞĚŽŶƌĞŐŝŽŶĂů ĞĐŽŶŽŵŝĐƚƌĞŶĚƐ͘EĞǁĞŵƉůŽLJŵĞŶƚĐĂŶĚĞƌŝǀĞĨƌŽŵƌĞĚĞǀĞůŽƉŵĞŶƚͬƵƐĞŽĨĞdžŝƐƚŝŶŐďƵŝůĚŝŶŐƐĂŶĚƚŚƵƐĚŽĞƐŶŽƚ ĞƋƵĂƚĞƚŽŶĞǁĚĞǀĞůŽƉŵĞŶƚ͘Ϳ ΎΎZĞƉƌĞƐĞŶƚƐŚŝƐƚŽƌŝĐƚƌĞŶĚŽĨϭϲϳŶĞǁĚǁĞůůŝŶŐƵŶŝƚƐͬLJĞĂƌĂŶĚŝƐƐƵďƐƚĂŶƚŝĂůůLJůĞƐƐƚŚĂŶƚŚĞŝƚLJ͛ƐůŝŬĞůLJZĞŐŝŽŶĂů ,ŽƵƐŝŶŐEĞĞĚƐůůŽĐĂƚŝŽŶƐ;Z,EƐͿĨŽƌƚŚĞƉĞƌŝŽĚϮϬϭϱͲϮϬϮϯĂŶĚƚŚĞƉĞƌŝŽĚϮϬϮϰͲϮϬϯϬ͘ ^ŽƵƌĐĞ͗WĂůŽůƚŽWůĂŶŶŝŶŐΘŽŵŵƵŶŝƚLJŶǀŝƌŽŶŵĞŶƚ͕:ƵůLJϯϬ͕ϮϬϭϰ  ĨĞǁŝĚĞĂƐǁĞƌĞƌĂŝƐĞĚĂƚƚŚĞƉƵďůŝĐǁŽƌŬƐŚŽƉƐĂŶĚĂƚƚŚĞWdƐĐŽƉŝŶŐŵĞĞƚŝŶŐƚŚĂƚĂƌĞŶŽƚ ƌĞĨůĞĐƚĞĚŝŶƚŚĞĨŽƵƌƐĐĞŶĂƌŝŽƐ͘dŚĞƐĞŝŶĐůƵĚĞƚŚĞŝĚĞĂŽĨĨƵůůLJƵŶĚĞƌŐƌŽƵŶĚŝŶŐĂůƚƌĂŝŶ͕ǁŚŝĐŚ ƐƚĂĨĨĨĞůƚǁĂƐĂƌĞŐŝŽŶĂůƉƌŽũĞĐƚ͕ĂŶĚƉĞƌŚĂƉƐƚŽŽĂŵďŝƚŝŽƵƐƚŽŝŶĐůƵĚĞǁŝƚŚŝŶƚŚĞϮϬϯϬƉůĂŶŶŝŶŐ ŚŽƌŝnjŽŶ͘ůƐŽ͕ŶŽŶĞŽĨƚŚĞƐĐĞŶĂƌŝŽƐŝŶĐůƵĚĞƚŚĞŝĚĞĂŽĨĂĚĚŝŶŐƐŽŵĞůŝŵŝƚĞĚ͕ĂĚĚŝƚŝŽŶĂůĚĞŶƐŝƚLJ ƚŽZͲϭŶĞŝŐŚďŽƌŚŽŽĚƐ͕ĂŶŝĚĞĂƐƵŐŐĞƐƚĞĚďLJƚŚĞƉƵďůŝĐĐŽŵŵĞŶƚ͘  dŚĞŝƚLJŽƵŶĐŝůŝƐƌĞƋƵĞƐƚĞĚƚŽƉƌŽǀŝĚĞĐŽŵŵĞŶƚƐŽŶƚŚĞĂƚƚĂĐŚĞĚƐĐĞŶĂƌŝŽƐŝŶĂĚĚŝƚŝŽŶƚŚĞŝƌ ĐŽŵŵĞŶƚƐŽŶƐƉĞĐŝĨŝĐŝƐƐƵĞƐƚŚĂƚƐŚŽƵůĚďĞĂĚĚƌĞƐƐĞĚŝŶƚŚĞWƌŽŐƌĂŵ/Z͘  Eyd^dW^ 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ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶĚŽĐƵŵĞŶƚĂƚƚŚĞĞŶĚŽĨƚŚĞLJĞĂƌ͘dŚĞƉƵďůŝĐƌĞůĞĂƐĞŽĨƚŚĞƐĞĚŽĐƵŵĞŶƚƐ ǁŽƵůĚŝŶŝƚŝĂƚĞƚŚĞŶĞdžƚĨŽƌŵĂůƌŽƵŶĚŽĨƉƵďůŝĐĐŽŵŵĞŶƚƐĂŶĚĐŽŵŵƵŶŝƚLJĞŶŐĂŐĞŵĞŶƚŝŶĞĂƌůLJ ϮϬϭϱ͕ĚƵƌŝŶŐǁŚŝĐŚƚŝŵĞƚŚĞŝƚLJŽƵŶĐŝůǁŽƵůĚďĞĂƐŬĞĚƚŽƐĞůĞĐƚ;ĂŶĚƐŚĂƉĞͿĂƉƌĞĨĞƌƌĞĚ ĂůƚĞƌŶĂƚŝǀĞ͕ ĂŶĚ ŽĨĨĞƌ ƐƉĞĐŝĨŝĐ ŐƵŝĚĂŶĐĞ ƌĞŐĂƌĚŝŶŐ ƉƌŽŐƌĂŵƐ ĂŶĚ ƉŽůŝĐŝĞƐ ŝŶ ƚŚĞ ƌĂĨƚ ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘  /ŶƚĞƌŵƐŽĨƚŚĞƚŝŵĞůŝŶĞ͕ƚŚĞƉůĂŶŶŝŶŐƉƌŽĐĞƐƐĂŶĚƐĐŚĞĚƵůĞƌĞǀŝĞǁĞĚďLJƚŚĞŝƚLJŽƵŶĐŝůŝŶ DĂƌĐŚĂƐƐƵŵĞĚƚŚĂƚƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞƌĂĨƚ/ZĂŶĂůLJƐŝƐǁŽƵůĚďĞŐŝŶŝŶĞĂƌůLJƚŽŵŝĚͲƵŐƵƐƚ ϮϬϭϰ ƵƉŽŶ ƌĞĐĞŝƉƚ ŽĨ ŝƚLJ ŽƵŶĐŝů͛Ɛ ĐŽŵŵĞŶƚƐ ŽŶ ƚŚĞ ĐŽŶĐĞƉƚƵĂůĂůƚĞƌŶĂƚŝǀĞƐ ĂŶĚ ŝƐƐƵĞƐ ƐƵŐŐĞƐƚĞĚ ĨŽƌ ŝŶĐůƵƐŝŽŶ ŝŶ ƚŚĞ /Z͘ /Ĩ ƚŚĞ ŽƵŶĐŝů ƚĂŬĞƐ ŵŽƌĞ ƚŝŵĞ ŽŶ ƚŚĞ ĂůƚĞƌŶĂƚŝǀĞƐ ŝĚĞŶƚŝĨŝĐĂƚŝŽŶƉŚĂƐĞĂŶĚĚŝƌĞĐƚŝŽŶƚŽƐƚĂĨĨ͕ƚŚĞŽǀĞƌĂůůƐĐŚĞĚƵůĞǁŝůů͕ŶĂƚƵƌĂůůLJ͕ďĞĞdžƚĞŶĚĞĚ͘  dŚĞŝƚLJŽƵŶĐŝůǁŝůůďĞŝŶǀŽůǀĞĚŝŶĞǀĞƌLJƐƚĞƉŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞƉƌŽĐĞƐƐ͕ĂŶĚ ƚŚĞƚŝŵĞůŝŶĞĚŝƐĐƵƐƐĞĚŝŶDĂƌĐŚĞŶǀŝƐŝŽŶĞĚ͗;ϭͿŽƵŶĐŝůƐŝŐŶͲŽĨĨŽŶƚŚĞĂůƚĞƌŶĂƚŝǀĞƐƉƌŽƉŽƐĞĚ ĨŽƌĂŶĂůLJƐŝƐŝŶƚŚĞƌĂĨƚ/ZŝŶĞĂƌůLJƚŽŵŝĚͲƵŐƵƐƚϮϬϭϰ͖;ϮͿŽƵŶĐŝůƌĞǀŝĞǁŽĨƚŚĞƌĂĨƚ/ZĂŶĚ ƚŚĞƌĂĨƚŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ;ϴϬйĚƌĂĨƚͿŝŶĞĂƌůLJϮϬϭϱ͖;ϯͿŽƵŶĐŝůƐĞůĞĐƚŝŽŶŽĨƚŚĞƉƌĞĨĞƌƌĞĚ ĂůƚĞƌŶĂƚŝǀĞĂƚƚŚĞĐůŽƐĞŽĨƚŚĞĐŽŵŵĞŶƚƉĞƌŝŽĚŽŶƚŚĞƌĂĨƚ/ZĂŶĚƌĂĨƚWůĂŶ͖;ϰͿŽƵŶĐŝů ƌĞǀŝĞǁ ŽĨ ƚŚĞ &ŝŶĂů /Z ĂŶĚ ƚŚĞ ƌĞǀŝƐĞĚ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ ĨŽƌƉŽƐƐŝďůĞ ĐĞƌƚŝĨŝĐĂƚŝŽŶ ĂŶĚ ĂĚŽƉƚŝŽŶĂƚƚŚĞĞŶĚŽĨϮϬϭϱ͕ĂŶĚ;ϱͿŽƵŶĐŝůƌĞǀŝĞǁĂŶĚĂĚŽƉƚŝŽŶŽĨĂ͞ƵƐĞƌ͛ƐŐƵŝĚĞ͟ƚŽƚŚĞ hƉĚĂƚĞĚ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ ŝŶ ĞĂƌůLJ ϮϬϭϲ͘   ĂĐŚ ŽĨ ƚŚĞ ĂďŽǀĞ ƐƚĞƉƐ ŵĂLJ ƚĂŬĞ ŵƵůƚŝƉůĞ ŵĞĞƚŝŶŐƐ͕ǁŚŝĐŚŚĂǀĞŶŽƚďĞĞŶĐĂůůĞĚŽƵƚƐƉĞĐŝĨŝĐĂůůLJŝŶ&ŝŐƵƌĞϭ͘    ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϮϭ      ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϮϮ  &ŝŐƵƌĞϭ͗WůĂŶŶŝŶŐWƌŽĐĞƐƐdŝŵĞůŝŶĞ   WK>/z/DW>/d/KE^ dŚĞ ŝƚLJ͛Ɛ ĞdžŝƐƚŝŶŐ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ ŝƐ ŝƚƐ ŐŽǀĞƌŶŝŶŐ ůĂŶĚ ƵƐĞ ƉŽůŝĐLJ ĚŽĐƵŵĞŶƚ Žƌ ͞ĐŽŶƐƚŝƚƵƚŝŽŶ͟ĂŶĚǁĂƐŝŶƚĞŶĚĞĚƚŽĞdžƚĞŶĚƚŽƚŚĞLJĞĂƌϮϬϭϬ͘tŚŝůĞƚŚĞĞdžŝƐƚŝŶŐƉůĂŶƌĞŵĂŝŶƐ ǀĂůŝĚ͕ƚŚĞŝƚLJŚĂƐůŽŶŐƌĞĐŽŐŶŝnjĞĚƚŚĞŶĞĞĚĨŽƌƵƉĚĂƚŝŶŐ͕ĂŶĚƚŚĞĐƵƌƌĞŶƚƉůĂŶŶŝŶŐƉƌŽĐĞƐƐŚĂƐ ďĞĞŶĚĞƐŝŐŶĞĚƚŽĐŽŶĐůƵĚĞƚŚĞůŽŶŐͲƌƵŶŶŝŶŐƉƌŽĐĞƐƐďLJƚŚĞĞŶĚŽĨϮϬϭϱ͘ dŚĞƉƌŽĐĞƐƐǁŝůů ƵƉĚĂƚĞƚŚĞŐŽĂůƐ͕ƉŽůŝĐŝĞƐ͕ƉƌŽŐƌĂŵƐŽĨƚŚĞƉůĂŶǁŝƚŚĂŶĞLJĞƚŽǁĂƌĚƐƚŚĞƉůĂŶŶŝŶŐŚŽƌŝnjŽŶLJĞĂƌ ŽĨ ϮϬϯϬ͕ ĂŶĚ ǁŝůů ĂůƐŽ ŝŶĐůƵĚĞ ƚŚĞ ĚĂƚĂ͕ ŶĂƌƌĂƚŝǀĞƐ͕ ŵĂƉƐ͕ ĂŶĚĚŝĂŐƌĂŵƐ ŶĞĐĞƐƐĂƌLJ ƚŽ ĐŽŵŵƵŶŝĐĂƚĞƚŚĞŝƚLJ͛ƐĐŽůůĞĐƚŝǀĞǀŝƐŝŽŶĨŽƌƚŚĞŶĞdžƚϭϱLJĞĂƌƐ͘  Es/ZKEDEd>^^^^DEd dŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞǁŝůůďĞƚŚĞƐƵďũĞĐƚŽĨĂƉƌŽŐƌĂŵͲůĞǀĞů/Z͕ĂŶĚƚŽŶŝŐŚƚ͛ƐƉƵďůŝĐ ŚĞĂƌŝŶŐ ŝƐ ĚĞƐŝŐŶĞĚ ƚŽ ƐŽůŝĐŝƚ ŝŶƉƵƚ ƌĞŐĂƌĚŝŶŐ ƚŚĞ ĂůƚĞƌŶĂƚŝǀĞƐĂŶĚŝƐƐƵĞƐƚŚĂƚƐŚŽƵůĚďĞ ĐŽŶƐŝĚĞƌĞĚŝŶƚŚĞƌĂĨƚ/Z͘&ŽůůŽǁŝŶŐƉƵďůŝĐƌĞǀŝĞǁŽĨƚŚĞƌĂĨƚ/Z;ĞdžƉĞĐƚĞĚŝŶĞĂƌůLJϮϬϭϱͿ͕ ŝƚLJƐƚĂĨĨĂŶĚĐŽŶƐƵůƚĂŶƚƐǁŝůůƉƌĞƉĂƌĞǁƌŝƚƚĞŶƌĞƐƉŽŶƐĞƐƚŽĂůůƐƵďƐƚĂŶƚŝǀĞĐŽŵŵĞŶƚƐƌĞĐĞŝǀĞĚ ƌĞŐĂƌĚŝŶŐƚŚĞƌĂĨƚ/ZĂŶĚǁŝůůŵĂŬĞŶĞĐĞƐƐĂƌLJĐŚĂŶŐĞƐƚŽƚŚĞƚĞdžƚĂŶĚĂŶĂůLJƐŝƐŝŶƚŚĞƌĂĨƚ͘ &ŝŶĂů/ZĐŽŶƚĂŝŶŝŶŐƚŚĞƐĞƌĞƐƉŽŶƐĞƐĂŶĚĐŚĂŶŐĞƐŵƵƐƚďĞĐĞƌƚŝĨŝĞĚďĞĨŽƌĞĂŶLJĨŝŶĂůĚĞĐŝƐŝŽŶĐĂŶ ďĞ ŵĂĚĞ ƚŽ ĂĚŽƉƚ ƚŚĞ ƵƉĚĂƚĞĚ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ͘  ůƐŽ͕ ĨĞĂƐŝďůĞ ŵŝƚŝŐĂƚŝŽŶ ŵĞĂƐƵƌĞƐ ŝŶĐůƵĚĞĚ ŝŶƚŚĞ &ŝŶĂů /ZƚŽ ƌĞĚƵĐĞ ŽƌĂǀŽŝĚ ƐŝŐŶŝĨŝĐĂŶƚ͕ ĐƵŵƵůĂƚŝǀĞ ĞĨĨĞĐƚƐ ŽĨ ĚĞǀĞůŽƉŵĞŶƚ ĂŶƚŝĐŝƉĂƚĞĚĚƵƌŝŶŐƚŚĞůŝĨĞŽĨƚŚĞƉůĂŶǁŝůůŚĂǀĞƚŽďĞĂĚŽƉƚĞĚĂƐƐƚĂŶĚͲĂůŽŶĞŵĞĂƐƵƌĞƐŽƌĂƐ ƉŽůŝĐŝĞƐĂŶĚƉƌŽŐƌĂŵƐŝŶƚŚĞƵƉĚĂƚĞĚWůĂŶ͘ ƚƚĂĐŚŵĞŶƚƐ͗ ≠ƚƚĂĐŚŵĞŶƚ͗ŝƚLJŽƵŶĐŝůŽŵŵĞŶƚƐ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ͗WůĂŶŶŝŶŐĂŶĚdƌĂŶƐƉŽƌƚĂƚŝŽŶŽŵŵŝƐƐŝŽŶ,ĞĂƌŝŶŐŽŵŵĞŶƚƐ ;KyͿ ≠ƚƚĂĐŚŵĞŶƚ͗tŽƌŬƐŚŽƉ^ƵŵŵĂƌŝĞƐ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ͗EŽƚŝĐĞŽĨWƌĞƉĂƌĂƚŝŽŶ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ͗:ƵůLJϵ͕ϮϬϭϰWůĂŶŶŝŶŐĂŶĚdƌĂŶƐƉŽƌƚĂƚŝŽŶŽŵŵŝƐƐŝŽŶ^ƚĂĨĨZĞƉŽƌƚ ǁŝƚŚŽƵƚƚŚĞĂƚƚĂĐŚŵĞŶƚƐ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ&͗WůĂŶŶŝŶŐĂŶĚdƌĂŶƐƉŽƌƚĂƚŝŽŶŽŵŵŝƐƐŝŽŶDŝŶƵƚĞƐ ƌĂĨƚͺ/Zͺ^ĐŽƉŝŶŐͺϬϳ͘Ϭϵ͘ϭϰ ;KͿ ≠ƚƚĂĐŚŵĞŶƚ'͗>ĞĂĚĞƌƐŚŝƉ'ƌŽƵƉWƌŽĐĞƐƐ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ,͗KƌŝĞŶƚĂƚŝŽŶŽĐƵŵĞŶƚ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ/͗ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐĨŽƌKƵƌWĂůŽůƚŽϮϬϯϬ;KͿ ≠ƚƚĂĐŚŵĞŶƚ:͗'ƌŽǁƚŚDĂŶĂŐĞŵĞŶƚ^ƚƌĂƚĞŐŝĞƐ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ<͗ĚĚŝƚŝŽŶĂůŽƌƌĞƐƉŽŶĚĞŶĐĞ ;W&Ϳ ≠ƚƚĂĐŚŵĞŶƚ>͗ŽŵƉ͘WůĂŶWŽǁĞƌƉŽŝŶƚWƌĞƐĞŶƚĂƚŝŽŶͲKƵƌWĂůŽůƚŽϮϬϯϬ/Z^ĐŽƉŝŶŐ ,ĞĂƌŝŶŐ ;WWdyͿ ϭ CityCouncilSummaryComments and QuestionsforFurtherConsideration,AdaptedfromCouncil’sComments OurPaloAlto2030PolicyDocument,ver.1.0 CityCouncilMeeting,May5,2014 Housing ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ,ŽƵƐŝŶŐůĞŵĞŶƚͲ>ŽĐĂƚŝŽŶƐĨŽƌŶĞǁŚŽƵƐŝŶŐͲdŚĞƚŚŝƌĚƐĂƉƉƌŽĂĐŚ͗ϭͬϯĚŽǁŶƚŽǁŶ͕ϭͬϯĂůǀĞŶƵĞ͕ϭͬϯ ŽŶZ;^ĐŚŵŝĚͿ͖ĚŝĨĨŝĐƵůƚƚŽďĞƚŚĂƚƉƌĞƐĐƌŝƉƚŝǀĞ;<ŶŝƐƐͿ͘dŚĞĚŽĐƵŵĞŶƚƐŚŽƵůĚĐŽŶƐŝĚĞƌĂƉƌĞƐĐƌŝƉƚŝǀĞ ŵĞƚŚŽĚĨŽƌĚĞƚĞƌŵŝŶŝŶŐǁŚĞƌĞƚŽůŽĐĂƚĞĂĚĚŝƚŝŽŶĂůŚŽƵƐŝŶŐƵŶŝƚƐ͘;<ŶŝƐƐͿ /ŶŵƵůƚŝƉůĞĨĂŵŝůLJƉƌŽũĞĐƚƐŽƌĚŝƐƚƌŝĐƚƐ͕ĐŽƵůĚƐĞƌǀŝĐĞƐďĞďƌŽƵŐŚƚƚŽƚŚĞƐĞĂƌĞĂƐĂƐĂŵĞĂŶƐƚŽƌĞĚƵĐĞĐĂƌ ƚƌŝƉƐ͍;WƌŝĐĞͿ ZĞƚĂŝŶĞdžŝƐƚŝŶŐŚŽƵƐŝŶŐƵŶŝƚƐ͘;,ŽůŵĂŶͿ ŝǀĞƌƐŝƚLJŽĨŚŽƵƐŝŶŐƚLJƉĞƐ͕ďƵƚĐŽŶƐŝĚĞƌƚŚĞĞĨĨĞĐƚŽĨƚŚŝƐŽŶĞdžŝƐƚŝŶŐƌĞƐŝĚĞŶĐĞƐ͘;^ĐŚĂƌĨĨͿ ƌĞƐŝĚĞŶƚͲĐĞŶƚĞƌĞĚĐŽŶĐĞƉƚĨŽĐƵƐĞĚŽŶůŝǀĂďŝůŝƚLJĂŶĚƋƵĂůŝƚLJͲŽĨͲůŝĨĞ͘ĚĚŝƚŝŽŶĂůŚŽƵƐŝŶŐƵŶŝƚƐǁŽƵůĚŶŽƚ ŝŵƉƌŽǀĞƚŚĞƋƵĂůŝƚLJŽĨůŝĨĞ͘;^ĐŚĂƌĨĨͿ EŽŶĞĞĚƚŽĐŽŶƐŝĚĞƌũŽďƐͲŚŽƵƐŝŶŐŝŵďĂůĂŶĐĞ͘;^ĐŚĂƌĨĨ͕<ůĞŝŶͿ YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ ShouldtheCityplanforadditionalhousingbeyondwhatisidentifiedinthe2015Ͳ2023HousingElement? Ifso,whereshoulditbelocatedtotakeadvantageofserviceswithoutarelianceonautomobiles?What typeofhousingshouldtheCitypromote? Giventhatresidentialpopulationisexpectedtoriseoverthenext15years,howdoweprotectand enhancePaloAlto’squalityͲofͲliveforexistingandnewresidents? HowshouldweprotectexistingsingleͲfamilyandlowͲdensityresidentialdistricts? "55"$).&/5" Ϯ  DensityandFloorArea ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ DŽƐƚĐƌŝƚŝĐĂůŝƐƐƵĞƐ͗ĚĞǀĞůŽƉŵĞŶƚ͕ŐƌŽǁƚŚ͕ůŽŶŐͲƚĞƌŵĚĞŶƐŝƚLJ͘;<ŶŝƐƐͿ EĞĞĚƉŽůŝĐĞƐŽŶŵĂdžŝŵƵŵĂŶĚŵŝŶŝŵƵŵĚĞŶƐŝƚŝĞƐ͘;^ĐŚŵŝĚͿ ĞŶƐŝƚLJŝƐƉƌŝŵĂƌLJĐŽŶĐĞƌŶ;<ŶŝƐƐ͕<ůĞŝŶͿ͘ůƚĞƌŶĂƚŝǀĞƐƐŚŽƵůĚĂĚĚƌĞƐƐĚĞŶƐŝƚLJŝƐƐƵĞƐ͘;<ŶŝƐƐͿ ŽŵƉWůĂŶƐĐŽƉĞƐŚŽƵůĚďĞĞdžƉĂŶĚĞĚƚŽŝŶĐůƵĚĞŝŵƉĂĐƚƐŽĨĚĞŶƐŝĨŝĐĂƚŝŽŶŝŶƐŽƵƚŚZ͘;^ŚĞƉŚĞƌĚͿ EĞĞĚƉŽůŝĐĞƐŽŶ&Z͕ŵŝŶŝŵƵŵĂŶĚŵĂdžŝŵƵŵƐ͘;ƵƌƚͿ͘  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ Shouldresidentialdensity(unitsperacre)andcommercialdensity(higherfloorarearatios)beincreased? Ifso,whereshouldthosehigherdensitiesbelocated?WhatareasofPaloAltoshouldremainthesame orhavelowerdensities? Shouldwehaveminimumresidentialorcommercialdensities,orboth? Whatshouldexceptional,wellͲdesigned,highͲdensityprojectslooklike?  UrbanDesign ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ĞƐŝŐŶĂŶĚŵĂŝŶƚĂŝŶŐŽŽĚƐƚƌĞĞƚĨƌŽŶƚĂŐĞƐ͕ǁĂůŬĂďŝůŝƚLJƚŽƉƌŽŵŽƚĞƌĞƚĂŝůǀŝƚĂůŝƚLJ;<ŶŝƐƐͿ͖ĚŝĨĨŝĐƵůƚƚŽĚŽŽŶ Z͕ŶŽƚĐƵƌƌĞŶƚůLJĂŐŽŽĚĂƌĞĂĨŽƌǁĂůŬŝŶŐ͘;<ŶŝƐƐͿ WůĂĐŝŶŐƉƵďůŝĐŐĂƚŚĞƌŝŶŐƐƉĂĐĞƐŝŶĞĂĐŚŶĞŝŐŚďŽƌŚŽŽĚŝƐĚŝĨĨŝĐƵůƚƚŽĚŽ͘;<ŶŝƐƐͿ WƵďůŝĐƐŚŽƵůĚŶŽƚŚĂǀĞƚŽǁĂůŬůŽŶŐͲĚŝƐƚĂŶĐĞƐƚŽŐĞƚƚŽŐĂƚŚĞƌŝŶŐƐƉĂĐĞƐ͘;ƵƌƚͿ tŚĞƌĞĂƌĞƚŚĞŶĞǁƉƵďůŝĐƉůĂnjĂƐƚŚĂƚƚŚĞŝƚLJŚĂƐďƵŝůƚ͍;<ůĞŝŶͿ WŽůŝĐLJƐƚĂƚĞŵĞŶƚƐƚŽŐƵŝĚĞĚĞƐŝŐŶĂƌĞŶĞĞĚĞĚ͖ŝŶĐůƵĚĞƉŽůŝĐŝĞƐŽŶĐŽŵƉĂƚŝďŝůŝƚLJƐƚĂŶĚĂƌĚƐ͘;,ŽůŵĂŶ͕ ^ĐŚŵŝĚͿ͘ ĚŝƐĐƵƐƐŝŽŶŽŶƚŚĞďƵŝůƚĞŶǀŝƌŽŶŵĞŶƚƐŚŽƵůĚƐƚƌŽŶŐůLJĞŵƉŚĂƐŝnjĞĚĞƐŝŐŶƋƵĂůŝƚLJĂŶĚĐŽŵƉĂƚŝďŝůŝƚLJ;ƵƌƚͿ͘ džĐĞƉƚŝŽŶĂůĚĞƐŝŐŶƐŚŽƵůĚďĞĂƌĞƋƵŝƌĞŵĞŶƚĨŽƌĞǀĞƌLJƉƌŽũĞĐƚ͘;,ŽůŵĂŶ͕^ĐŚŵŝĚͿ YƵĂůŝƚLJƵƌďĂŶĚĞƐŝŐŶŝƐǀĞƌLJŝŵƉŽƌƚĂŶƚ;^ĐŚŵŝĚͿ ϯ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ Aretheexistingdesignrequirementsandstandardsadequate,includingArchitecturalReviewFindings (PAMC18.76.020(d)),ContextͲBasedDesignCriteria(varioussectionswithinTitle18(Zoning)),Downtown UrbanDesignGuidelines,ElCaminoRealandSouthElCaminoRealDesignGuidelines,andIndividual ReviewGuidelines? ShouldtheCityundertakeastudyoftheadequacyoftheseguidelines? Howcantheseguidelinesbebetterenforced? WhatshouldbetheCity’splantoimprovepedestrianandbicyclesafetyalongElCaminoReal? Howcanexistingneighborhoodgatheringspacesbeimprovedtoattractmoreneighborhoodactivityand use? ShouldtheCityacquirelandtodeveloppublicgatheringspacesinunderservedareasoftheCity?  Neighborhoods ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ŶŐĂŐĞǁŝƚŚŶĞŝŐŚďŽƌƐƚŽĚĞƚĞƌŵŝŶĞƌĞƐŝĚĞŶƚ͛ƐǁĂŶƚƐ͘;^ĐŚĂƌĨĨͿ ŽDŝĚƚŽǁŶƌĞƐŝĚĞŶƚƐƌĞĂůůLJǁĂŶƚĂƉůĂŶĨŽƌƚŚĞŝƌĂƌĞĂ͍;^ĐŚĂƌĨĨͿ WŽůŝĐŝĞƐƐĞĞŵĞĚƚŽŝŶĚŝĐĂƚĞƚŚĂƚŶĞŝŐŚďŽƌŚŽŽĚĐĞŶƚĞƌƐĂŶĚƐĞƌǀŝĐĞƐĞŶĐŽŵƉĂƐƐĞĚĂůůĐĞŶƚĞƌƐĂŶĚ ƐĞƌǀŝĐĞƐ͘džŝƐƚŝŶŐŽŵƉWůĂŶĚĞĨŝŶĞĚƚŚĞŵƐĞƉĂƌĂƚĞůLJ͘;ƵƌƚͿ ^ŽŵĞŶĞŝŐŚďŽƌŚŽŽĚƐĨĞĞůƵŶĚĞƌƐĞƌǀĞĚǁŝƚŚŐƌŽĐĞƌLJƐƚŽƌĞƐ͘;^ŚĞƉŚĞƌĚͿ͘ 'ƌŽĐĞƌLJƐƚŽƌĞƉƌĞƐĞƌǀĂƚŝŽŶƐŚŽƵůĚďĞŝŶĐŽƌƉŽƌĂƚĞĚŝŶƚŽƚŚĞĚŽĐƵŵĞŶƚ͘;,ŽůŵĂŶͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ: Doeseveryneighborhoodneedaneighborhoodcenter? ShouldtheCityimprovepedestrianandbicycleconnectionsbetweenneighborhoodcenters?Ifso,how shouldthisbedone? WhatspecificallyshouldtheCitydotoretainandattractgrocerystores? ShouldtheCityretainanexistingpolicytodevelopanareaplanforMidtown?  ϰ   GrowthIssues ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ^ƚƌĂƚĞŐŝĐŝŶƚĞůůŝŐĞŶƚŐƌŽǁƚŚĐŽƵůĚďĞŶĞĨŝƚƚŚĞŝƚLJ͘;ĞƌŵĂŶͿ 'ƌŽǁƚŚŵĂŶĂŐĞŵĞŶƚĂŶĚĂůƚĞƌŶĂƚŝǀĞƐĂƌĞĐƌŝƚŝĐĂů͘ ŽŵƉWůĂŶƐŚŽƵůĚĐŽŶƚĂŝŶĨŝŶĂŶĐŝĂůŝŵƉůŝĐĂƚŝŽŶƐĨŽƌǀĂƌŝŽƵƐůĂŶĚƵƐĞƐĐĞŶĂƌŝŽƐ;WƌŝĐĞ͕^ĐŚŵŝĚͿ͘ ŽŵƉWůĂŶƐŚŽƵůĚŝŶĐůƵĚĞŝŵƉůŝĐĂƚŝŽŶƐŽĨƐŵĂƌƚŐƌŽǁƚŚ͕dK͕ĞĐŽŶŽŵŝĐǀŝƚĂůŝƚLJ͕ŚŽƵƐŝŶŐĂŶĚŵŽƌĞ ĞĐŽŶŽŵŝĐĂůůLJĚŝǀĞƌƐĞĐŽŵŵƵŶŝƚLJ͘;WƌŝĐĞͿ ,ĞĂƌƚĂŶĚƐŽƵůŽĨĞdžŝƐƚŝŶŐůĂŶĚƵƐĞŐŽĂůƐŚĂƐďĞĞŶƌĞŵŽǀĞĚ͘'ŽĂůƐƐĞĞŵƚŽĨŽĐƵƐŽŶŝŶŶŽǀĂƚŝŽŶĂŶĚĚŝĚ ŶŽƚŝŶĐůƵĚĞĐŚĂƌĂĐƚĞƌĚĞĨŝŶŝŶŐĚĞƚĂŝůƐ͘EĞǁŐŽĂůƐƐĞĞŵƚŽŽǀĞƌĞŵƉŚĂƐŝnjĞĚĞǀĞůŽƉŵĞŶƚ͘;,ŽůŵĂŶͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ ShouldtheCityconductacityͲwide,15Ͳyearlanduseandgrowthstudy? ShouldtheCityconductacityͲwide,15Ͳyearfiscalanalysisoftheexpectedgrowth? ShouldtheCityconductafiscalandlanduseanalysisoftheeffectsofamoreeconomicallydiverse community? CantheCityadoptlandusepoliciesandprogramswithoutdetailedanalysis?Aregrowthtrends sufficienttoprovidedecisionmakerswiththeinformationneededtoplanforgrowthoverthenext15 years?  Business&CommercialCommunity ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ &ĂŝƌͲƐŚĂƌĞƉĂLJŵĞŶƚƐĨŽƌŝŵƉĂĐƚƐƌĞůĂƚĞĚƚŽĚĞǀĞůŽƉŵĞŶƚ͘;^ĐŚŵŝĚͿ WƌŽŵŽƚĞĚŝǀĞƌƐŝƚLJŽĨƌĞƚĂŝů͘;^ĐŚĂƌĨĨͿ ƵƐŝŶĞƐƐĐŽŵŵƵŶŝƚLJƐŚŽƵůĚƉĂLJƚŚĞŝƌĨĂŝƌƐŚĂƌĞ͘;,ŽůŵĂŶ͕^ĐŚŵŝĚͿ tŚĂƚƉŽůŝĐŝĞƐƐŚŽƵůĚƚŚĞŽŵƉWůĂŶĐŽŶƚĂŝŶƚŽƐƵƉƉŽƌƚůŽĐĂů͕ŝŶĚĞƉĞŶĚĞŶƚďƵƐŝŶĞƐƐĞƐ͍tŚĂƚ͛ƐĐƵƌƌĞŶƚůLJ ĐŽŶƚƌŝďƵƚŝŶŐƚŽƚŚĞŝƌƐƵĐĐĞƐƐ͍;,ŽůŵĂŶͿ  ϱ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ ShouldtheCityadoptimpactfeesthatcover100%ofthecostsofbusinessandcommercialdevelopment withinPaloAlto?Whyorwhynot? Whatarethebestwaystopromoteadiverseretailenvironment?  Transportation ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ dƌĂŶƐƉŽƌƚĂƚŝŽŶůĞŵĞŶƚƐŚŽƵůĚĚŝƐĐƵƐƐŝŵƉůŝĐĂƚŝŽŶƐŽĨdDĂŶĚĐŚĂŶŐĞƐŝŶĚƌŝǀŝŶŐďĞŚĂǀŝŽƌƐƌĞůĂƚĞĚƚŽ ƚŚĞŶĞĞĚĨŽƌƚƌĂĚŝƚŝŽŶĂůďƵŝůƚƉĂƌŬŝŶŐƐƚƌƵĐƚƵƌĞƐ͘ dϮ͘ϭϬ͘ϮŝƐŝŵƉŽƌƚĂŶƚĨŽƌƌŽƵƚŝŶĞŵĞĂƐƵƌĞŵĞŶƚƐ͘;^ŚĞƉŚĞƌĚͿ WƐŚŽƵůĚĞdžĂŵŝŶĞĞdžƉĂŶĚŝŶŐƚŚĞĐƵƌƌĞŶƚƐŚƵƚƚůĞƐLJƐƚĞŵ͘;<ĞůŝŶͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ AreparkingstructuresthebestuseofCityresourcesoverthelongͲterm? ShouldtheCity’sshuttlesystembeexpanded?Howandwhere?  Data ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ,ŝƐƚŽƌŝĐĂůĚĂƚĂƐŚŽƵůĚďĞƵƐĞĚƚŽĂŶĂůLJnjĞŐŽĂůƐĨŽƌƚŚĞĨƵƚƵƌĞ͘WƵďůŝĐǁŽŶ͛ƚƌĞƐƉŽŶĚƚŽĂďƐƚƌĂĐƚƉůĂŶŶŝŶŐ ŝƐƐƵĞƐ͘;<ůĞŝŶͿ͘ ĂƐĞůŝŶĞĚĂƚĂŝƐĐƌŝƚŝĐĂů͘ĂƐĞůŝŶĞĚĂƚĂĐŽŵƉĂƌĞĚƚŽŚŝƐƚŽƌŝĐĂůĚĂƚĂĐŽƵůĚƚƌĂĐŬƚŚĞĐŽŶƐĞƋƵĞŶĐĞƐŽĨ njŽŶŝŶŐĂŶĚƉŽůŝĐLJĐŚĂŶŐĞƐ͘;,ŽůŵĂŶ͕ĞƌŵĂŶ͕^ĐŚŵŝĚͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ ShouldtheCitycreateabusinessregistry?Ifso,whatinformationshouldbecollected? ShouldtheCityinvestintechnologythatallowsdatacollectionofkeymetrics(vehicular,bicycleand pedestriantravel,publicfacilityuse,etc.)toassesslongͲtermtrends? ϲ  ShouldtheCounciladoptpoliciesandprogramsifbaselinedataisnotavailableorincomplete?  Downtown ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ,ŽǁĐĂŶǁĞĞŶĨŽƌĐĞƚŚĞŽǁŶƚŽǁŶĂƉ͍;^ŚĞƉŚĞƌĚͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ ShoulddowntownbeallowedtogrowbeyondtheexistingnonͲresidentialfloorareacap? DotheexistingmultipleͲfamilyresidentialzonedistrictssurroundingdowntownprovidesufficient protectionandtransitionfromthecoredowntowndistrict?Ifnot,whatshouldchange?Whatchanges shouldbemadetothese“transitiondistricts”sothatdowntowncancontinuetogrow? Oncetheresidentialpermitparkingprogramisineffect,shouldwecontinuetoprovidefreeparking downtown? Ifourparkingprogramsaresuccessfulinreducingvehicletripsandautomobileparkingdowntown, shouldwereduceautomobileparkingratios?  CaliforniaAvenueArea ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ĂůŝĨŽƌŶŝĂǀĞĐŽƵůĚŐĞƚĂĐĂƉ͘;^ŚĞƉŚĞƌĚͿ ĂůǀĞƌĞĂŶĞĞĚƐĂĐŽŶĐĞƉƚƉůĂŶ͘;ƵƌƚͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ ShouldautomobileparkingrequirementsbeadjustedtopromotedevelopmentatCaliforniaAvenueand adjacentstreets? HowshouldgrowthintheCaliforniaAvenueareabemanaged?Shouldtherebecapsonfloorarea, automobiletrips,and/orothersitedevelopmentregulations? WhatstepsshouldtheCitytaketoretaintheneighborhoodservingfeelofCaliforniaAvenue? ϳ  Willsurfaceparkinglotscontinuetobethebestusefortheseparcels?Whyorwhynotandwhatarethe tradeͲoffs? HowshouldtheCitytakeadvantageoftheCalTrainserviceatCaliforniaAvenue?  Environment ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ^ƵƐƚĂŝŶĂďůĞůĂŶĚƐĐĂƉŝŶŐĂŶĚĂŐƌŝĐƵůƚƵƌĂůůĂŶĚƐĐĂƉŝŶŐƐŚŽƵůĚďĞŝŶĐůƵĚĞĚ͘dŚĞŝƚLJƐŚŽƵůĚŚĂǀĞĂ ĐŽŵŵƵŶŝƚLJĚŝƐĐƵƐƐŝŽŶŽŶƚŚŝƐ͘;ƵƌƚͿ͘ ĚŝďůĞŐĂƌĚĞŶƐƐŚŽƵůĚďĞĂƉĂƌƚŽĨŵŝdžĞĚͲƵƐĞĚĞǀĞůŽƉŵĞŶƚƐ͘;,ŽůŵĂŶͿ ŶǀŝƌŽŶŵĞŶƚĂůƐƵƐƚĂŝŶĂďŝůŝƚLJĂŶĚĐůŝŵĂƚĞĐŚĂŶŐĞƉƌŽƚĞĐƚŝŽŶĂƌĞŶŽƚƐLJŶŽŶLJŵŽƵƐ͘;ƵƌƚͿ ZĞĐŽŐŶŝnjĞƐĂůǀĂŐĞĂŶĚĂĚĂƉƚŝǀĞƌĞͲƵƐĞŽĨďƵŝůĚŝŶŐŵĂƚĞƌŝĂůƐ͘;,ŽůŵĂŶͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ HowshouldtheCityenhanceandimproveitsexistingenvironmentalregulations? HowshouldtheCityadapttoclimatechange?Aretheproposedpoliciesandprogramssufficient? ShouldtheCitycreatepoliciesorrequirementsforurbanagriculture?IsthisthebestuseofinͲfill developmentland?  Demographics ŽƵŶĐŝůŽŵŵĞŶƚƐ͗ ^ŽĐŝŽͲĞĐŽŶŽŵŝĐĚŝǀĞƌƐŝƚLJƐŚŽƵůĚďĞŝŶĐůƵĚĞĚŝŶƉƵďůŝĐĞŶŐĂŐĞŵĞŶƚ͘;ĞƌŵĂŶͿ >ŝƐƚĞŶƚŽŵŝůůĞŶŶŝĂůĂŶĚƐĞŶŝŽƌƐƉƌĞĨĞƌĞŶĐĞƐĂŶĚŶĞĞĚƐƚŽĚĞƚĞƌŵŝŶĞƚŚĞĞǀŽůƵƚŝŽŶŽĨŶĞĞĚƐ͕ƉŽůŝĐĞƐĂŶĚ ŽƵƚĐŽŵĞƐŝŶƚŚĞĐŽŵŵƵŶŝƚLJ͘;WƌŝĐĞͿ  YƵĞƐƚŝŽŶƐ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ Shouldweplanforthenext15yearsbaseduponcurrentneedsandwantsorshouldweplaninamanner thatprovidestheopportunityforchangetoanextentthatwouldbedecidedbyfuturecitizensand Councils? ϴ  ShouldtheCityundertakeacost/benefitsanalysisofamoresocioͲeconomicallydiversecommunity and/oracommunitywithmorediversehousingtypesandaffordabilitylevels?  Energy ŽƵŶĐŝůŽŵŵĞŶƚ͗ WŽůŝĐLJĚŽĐƵŵĞŶƚĚŽĞƐŶŽƚĂĚĚƌĞƐƐĞŶĞƌŐLJƵƐĞŽĨƚŚĞĞdžŝƐƚŝŶŐďƵŝůƚĞŶǀŝƌŽŶŵĞŶƚ͘dŚŝƐĚĂƚĂĐŽƵůĚŚĞůƉ ĨŽƌŵĂƉƉƌŽƉƌŝĂƚĞƉŽůŝĐŝĞƐ;<ůĞŝŶͿ  YƵĞƐƚŝŽŶ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ WhatelseshouldtheCitydotoaddressexistingandfutureenergyneeds?  Noise ŽƵŶĐŝůŽŵŵĞŶƚ͗ EŽƐŝĞŚĂƐŝŵƉĂĐƚƐŽŶůŝǀĂďŝůŝƚLJƚŚĂƚƐŚŽƵůĚďĞĐŽŶƐŝĚĞƌĞĚ͘EŽŝƐĞƚŚƌĞƐŚŽůĚƐƐŚŽƵůĚďĞƌĞĚƵĐĞĚ͘>ĂƌŐĞƐƚ ĐŽŶƚƌŝďƵƚŽƌƐƚŽŶŽŝƐĞƐŚŽƵůĚďĞŝĚĞŶƚŝĨŝĞĚ͘DŽǀĞŶŽŝƐĞĞƋƵŝƉŵĞŶƚŝŶͲĚŽŽƌƐ͘;,ŽůŵĂŶͿ  YƵĞƐƚŝŽŶ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ: WhatarethetradeͲoffsofreducingnoisethresholds?Whatpoliceswouldbeacceptabletothepublicto achievelowernoisethresholds?  Infrastructure ŽƵŶĐŝůŽŵŵĞŶƚ͗ /ŶĨƌĂƐƚƌƵĐƚƵƌĞ͗ĂƌĞƚŚĞƌĞƉŽůŝĐŝĞƐƚŽĞŶƐƵƌĞƚŚĂƚŝŶĨƌĂƐƚƌƵĐƚƵƌĞŝŵƉƌŽǀĞŵĞŶƚƐǁŽƵůĚƐĞƌǀĞĂůůĂƌĞĂƐŽĨ ƚŚĞĐŝƚLJĨĂŝƌůLJ͍ ;<ŶŝƐƐͿ  YƵĞƐƚŝŽŶ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ IntermsofInfrastructureimprovements,howis“fair”defined?Shouldasenseoffairnessbemore importantthaninfrastructureneed? ϵ   HistoricPreservation ŽƵŶĐŝůŽŵŵĞŶƚ͗ WŽůŝĐŝĞƐŽŶŚŝƐƚŽƌŝĐƉƌĞƐĞƌǀĂƚŝŽŶĂƌĞŝŵƉŽƌƚĂŶƚ;>Ϯ͘ϲ͘ϮͿ͕ƉĂƌƚŝĐƵůĂƌůLJŽŶďƵĨĨĞƌnjŽŶĞƐĂŶĚƚƌĂŶƐŝƚŝŽŶƐ͘ ;,ŽůŵĂŶ͕ĞƌŵĂŶͿ  YƵĞƐƚŝŽŶ͕ĂĚĂƉƚĞĚĨƌŽŵĐŽŵŵĞŶƚƐ͗ Ispreservationofourhistoricresourcesstillabenefittothecommunity,andifso,howshouldtheCity incentivizepreservationfuturehistoricresources?  ComprehensivePlanFormat,Language,Voice ĞĐůĂƌĂƚŝǀĞƉŽůŝĐŝĞƐĂƐƉƌĞƐĞŶƚĞĚǁŽƵůĚŶŽƚŐĂƌŶĞƌƉƵďůŝĐŝŶƉƵƚ͘;<ůĞŝŶͿ DĂdžŝŵŝnjŝŶŐƉƌŽŐƌĂŵƐŝƐŶŽƚĂůǁĂLJƐĨĞĂƐŝďůĞŽƌĚĞƐŝƌĂďůĞ͘;^ĐŚĂƌĨĨͿ ^ƚĂĨĨƐŚŽƵůĚĞdžĞƌĐŝƐĞĐĂƵƚŝŽŶŝŶƵƚŝůŝnjŝŶŐƚŚĞƚĞƌŵ͞Ăůů͟ĂŶĚŝŶŵĂŬŝŶŐĨŝƌŵĐŽŵŵŝƚŵĞŶƚƐƚŽƐŽŵĞƚŚŝŶŐ͘ ;ƵƌƚͿ ŽŵƉWůĂŶƐŚŽƵůĚĐŽŶƚĂŝŶƉƌĞĂŵďůĞŽƌĚĞƐĐƌŝƉƚŝŽŶĂďŽƵƚƚŚĞůĂŶŐƵĂŐĞŽĨƚŚĞƉŽůŝĐŝĞƐ͘tŚLJǁĞƌĞƚŚĞLJ ǁƌŝƚƚĞŶŝŶƚŚĞǁĂLJƚŚĞLJĂƌĞƉƌĞƐĞŶƚĞĚ͍dŚĞŽŵƉWůĂŶƐŚŽƵůĚďĞĂďůĞƚŽĞǀŽůǀĞǁŝƚŚƚŚĞĐŽŵŵƵŶŝƚLJ͘ ;WƌŝĐĞͿ ^ŽŵĞƉŽůŝĐŝĞƐǁĞƌĞƚŽŽƉƌĞƐĐƌŝƉƚŝǀĞ͗ĞŶĞƌŐLJƵƐĞĂŶĚƉĂƌƚŝĐŝƉĂƚŝŽŶŽŶĞŶĞƌŐLJƉƌŽŐƌĂŵĨŽƌĞdžĂŵƉůĞ͘ ;^ĐŚĂƌĨĨͿ ^ŽŵĞƉŽůŝĐŝĞƐŶĞĞĚĚĞĨŝŶŝŶŐŽƌƋƵĂŶƚŝĨLJŝŶŐ͘;^ŚĞƉŚĞƌĚͿ  Other ͞ZĞǀŝƚĂůŝnjĞ͟ǁĂƐŶŽƚƚŚĞĐŽƌƌĞĐƚǁŽƌĚĨŽƌ>ϯ͘ϭϲ͘;^ĐŚĂƌĨĨͿ KŶĞͲǁĂLJƐƚƌĞĞƚƉŽůŝĐŝĞƐ;dϮ͘ϮϯĂŶĚdϮ͘ϮϱͿƐŚŽƵůĚďĞĚĞůĞƚĞĚ͘;<ůĞŝŶͿ >Ϯ͘ϯϮ͘Ϯ;ĐŽŶƐƚƌƵĐƚŝŶŐƚƌĂŝůƐŝŶŶĞŝŐŚďŽƌŚŽŽĚƉĂƌŬƐͿƐŚŽƵůĚŶŽƚďĞŝŶĐůƵĚĞĚ͘;<ůĞŝŶͿ 'ůŽƐƐĂƌLJŝƐŶĞĞĚĞĚ͘;<ůĞŝŶͿ ^ƚĂĨĨƐŚŽƵůĚƌĞǀŝĞǁƉƌŽŐƌĂŵƐĂŶĚƉŽůŝĐŝĞƐĨŽƌƌĞůĞǀĂŶĐLJ͘;<ůĞŝŶͿ ϭϬ  ƌĞƚŚĞƌĞŝŵƉůŝĐĂƚŝŽŶƐŽĨĂŝƚLJƉĂƌƚŶĞƌƐŚŝƉǁŝƚŚ^ƚĂŶĨŽƌĚƚŽƚĞƐƚŽƉƚŝŽŶƐ͍;WƌŝĐĞͿ ^ĐŚŽŽůƐĂŶĚƐĐŚŽŽůĐĂƉĂĐŝƚLJƐŚŽƵůĚďĞĐŽŶƐŝĚĞƌĞĚ͘;WƌŝĐĞͿ dŚĞĚŽĐƵŵĞŶƚƐƐŚŽƵůĚĐŽŶƚĂŝŶŵŽƌĞƐƉĞĐŝĨŝĐŝƚLJŝŶƚŚĞŵĞĂŶŝŶŐŽĨĐŽŵŵƵŶŝƚLJƐĞƌǀŝĐĞƐ͘ ŽƵŶĐŝůƐŚŽƵůĚŚĞĂƌĨƌŽŵƌĞƐŝĚĞŶƚƐďĞĨŽƌĞƚŚĞLJĐŽŶƐŝĚĞƌŽƚŚĞƌĐƌŝƚŝĐĂůŝƐƐƵĞƐ͘;<ŶŝƐƐͿ  ƚƚĂĐŚŵĞŶƚ ^ƵŵŵĂƌLJŽĨŽŵŵĞŶƚƐ WůĂŶŶŝŶŐĂŶĚdƌĂŶƐƉŽƌƚĂƚŝŽŶŽŵŵŝƐƐŝŽŶ :ƵůLJϵ͕ϮϬϭϰ  ≠WƵďůŝĐƉĂƌƚŝĐŝƉĂƚŝŽŶŐƌĞĂƚůLJĂƉƉƌĞĐŝĂƚĞĚ͘ ≠'ŽŽĚƚŽŚĂǀĞĚŝǀĞƌƐŝƚLJŽĨŽƉŝŶŝŽŶƐĨƌŽŵŽŵŵŝƐƐŝŽŶŵĞŵďĞƌƐ͘ ≠tŚĂƚŝƐWĂůŽůƚŽ͛ƐŵƵŶŝĐŝƉĂůŝĚĞŶƚŝƚLJ͍/ƐWĂůŽůƚŽĂƐŵĂůůƚŽǁŶ͍ƐƵďƵƌď͍ ĐŽůůĞŐĞƚŽǁŶ͍ĐŝƚLJ͍EĞĞĚƚŽĐůĂƌŝĨLJŽƵƌŝĚĞŶƚŝƚLJƚŽƐĞƚƉĂƚŚ͘ ≠YƵĂůŝƚLJŽĨůŝĨĞŝƐƵŶŝǀĞƌƐĂůŐŽĂů͕ǁŝƚŚĚŝǀĞƌƐŝƚLJĂŶĚŽƉƉŽƌƚƵŶŝƚLJĨŽƌĂůů͘ ≠ƌĞĂƚŝŶŐŽŶůŝŶĞǀĞƌƐŝŽŶŽĨƚŚĞŽŵƉWůĂŶhƉĚĂƚĞƉƌŽĐĞƐƐŝƐŝŵƉŽƌƚĂŶƚƚŽŵĂŬĞŝƚ ĂĐĐĞƐƐŝďůĞƚŽĂǁŝĚĞĂƵĚŝĞŶĐĞ͘ ≠EĞĞĚĨŝŶĂŶĐŝĂůĂŶĂůLJƐŝƐŽŶƚŚĞĂůƚĞƌŶĂƚŝǀĞƐ͘ ≠>ĂĐŬŽĨƐŝŶŐůĞŽǀĞƌƌŝĚŝŶŐǀŝƐŝŽŶŝŶƚŚĞŽŵƉWůĂŶŝƐĂĨĂƚĂůĨůĂǁ͘dŚĞŽŵƉWůĂŶ ŶĞĞĚƐĂĐůĞĂƌǀŝƐŝŽŶ͘ ≠EĞĞĚƚŽƉƌĞƐĞƌǀĞǁŚĂƚƚŚĞĨƵƚƵƌĞŵĂLJƐĞĞĂƐŚŝƐƚŽƌŝĐ͘ ≠/ŶĨƌĂƐƚƌƵĐƚƵƌĞƐŚŽƵůĚďĞĂŶŝŵƉŽƌƚĂŶƚƉƌŝŽƌŝƚLJ͘ ≠>ŽĐĂƚŝŽŶŽĨDƵŶŝĐŝƉĂů^ĞƌǀŝĐĞƐĞŶƚĞƌŝƐĐƌŝƚŝĐĂů͘dŚĞĐƵƌƌĞŶƚƐŝƚĞŝƐƐƵďũĞĐƚƚŽƐĞĂ ůĞǀĞůƌŝƐĞĂŶĚŚĂƐƉƌŽďůĞŵƐǁŝƚŚĂĐĐĞƐƐĚƵƌŝŶŐĞŵĞƌŐĞŶĐŝĞƐ͘ ≠&ůŽŽĚŝŶŐ͕ƐĞĂůĞǀĞůƌŝƐĞŝƐĂŶŝƐƐƵĞ͘ ≠hŶůŝŵŝƚĞĚĚĞŵĂŶĚĨŽƌŚŽƵƐŝŶŐĂŶĚŽĨĨŝĐĞ͕ƐŽŶĞĞĚƚŽnjŽŶĞĨŽƌǁŚĂƚǁĞǁĂŶƚ͕ŶŽƚ ǁŚĂƚǁŽƵůĚŵĂŬĞĚĞǀĞůŽƉĞƌƐŵŽŶĞLJ͘ ≠EĞĞĚƐƉĞĐŝĨŝĐͬĐŽŶĐĞƉƚƉůĂŶĨŽƌůĂŵŝŶŽZĞĂů͕ĞƐƉĞĐŝĂůůLJĨŽƌƚŚĞĂƌĞĂƐƐŽƵƚŚŽĨ WĂŐĞDŝůůZŽĂĚ͘ ≠ƉƌĞĐŝƐĞƉůĂŶĨŽƌ&ƌLJ͛ƐŝƐŶĞĞĚĞĚ͘ ≠dĞĐŚŶŽůŽŐLJĐŽƵůĚĐŚĂŶŐĞŚŽǁǁĞŵŽǀĞĂďŽƵƚƚŚĞĐŝƚLJĂŶĚŽƵƌĂƉƉƌŽĂĐŚƚŽůĂŶĚ ƵƐĞ͘ ≠^ŚŽƵůĚĐŽŶƐŝĚĞƌŵŝdžĞĚͲƵƐĞnjŽŶĞƐ͕ǁŝƚŚƐĞƉĂƌĂƚŝŽŶŽĐĐƵƌƌŝŶŐŶŽƚŽĨƵƐĞƐďƵƚŽŶ ŽƚŚĞƌĨĂĐƚŽƌƐ͘ ≠EĞĞĚƚŽŵĂƉŬĞLJĐŽŶĐĞƌŶƐ͗ƋƵĂůŝƚLJŽĨůŝĨĞ͕ůŝǀĂďŝůŝƚLJ͕ƚƌĂĨĨŝĐĐŽŶŐĞƐƚŝŽŶ͕ĞŶŚĂŶĐŝŶŐ ƚƌĂŶƐŝƚ͕ŚŽƵƐŝŶŐĐŽƐƚĂŶĚĂĨĨŽƌĚĂďŝůŝƚLJ͕ŐƌŽǁƚŚŽƌĐŚĂŶŐĞŵĂŶĂŐĞŵĞŶƚ͕ ƌĞůĂƚŝŽŶƐŚŝƉǁŝƚŚ^ƚĂŶĨŽƌĚ͕ũŽďƐͲŚŽƵƐŝŶŐƌĂƚŝŽƚĂƌŐĞƚ͕WƉƌŽĐĞƐƐĂŶĚŝŵƉŽƌƚĂŶĐĞ ŽĨƉƵďůŝĐƚƌƵƐƚǁŝƚŚƉƵďůŝĐƚƌĂŶƐƉĂƌĞŶĐLJ͕ŐŽǀĞƌŶĂŶĐĞ͕ĞŶŐĂŐĞŵĞŶƚ͕ĂŐŝŶŐ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͕ŽƉĞŶƐƉĂĐĞ͕ƐƚƌĂƚĞŐLJĨŽƌĚĞŶƐŝƚLJ͕dDͬdD͘  ≠ĂLJƌĞĂĂƐĂǁŚŽůĞĨĂĐĞƐƚŚŝƐĚĞŵĂŶĚĨŽƌŐƌŽǁƚŚ͘dŚĞĐŚŽŝĐĞƐĞĂĐŚĐŽŵŵƵŶŝƚLJ ŵĂŬĞƐĂĨĨĞĐƚƐƚŚĞŽƚŚĞƌĐŝƚŝĞƐŝŶŽƵƌƌĞŐŝŽŶ͘ ≠WĂůŽůƚŽĐĂŶŶŽƚĚĞǀĞůŽƉŝŶŝƐŽůĂƚŝŽŶ͘WĂůŽůƚŽŝƐƉĂƌƚŽĨƌĞŐŝŽŶ͘EĞĞĚŵŽƌĞ ƌŽďƵƐƚŵĞƚŚŽĚŽĨƌĞŐŝŽŶĂůĐŽůůĂďŽƌĂƚŝŽŶ͘  ≠EŽŐƌŽǁƚŚŽƌƌĞĚƵĐĞĚŐƌŽǁƚŚŵĂLJĂůƐŽĂĨĨĞĐƚWĂůŽůƚŽ͛ƐƚƌĂĚŝƚŝŽŶĂůůLJŚŝŐŚ ƋƵĂůŝƚLJŽĨůŝĨĞ͘DĂŬĞƐĚĞǀĞůŽƉŵĞŶƚŵŽƌĞĞdžƉĞŶƐŝǀĞ͘ ≠'ƌŽǁƚŚŝƐĐŽŵŝŶŐ͕ƐŽǁĞŶĞĞĚƚŽŚĂǀĞƉůĂŶƐŝŶƉůĂĐĞƚŽďĞƐƚŵĂŶĂŐĞƚŚŝƐŐƌŽǁƚŚ ≠ĐĞƌƚĂŝŶĂŵŽƵŶƚŽĨŚŝŐŚĞƌĚĞŶƐŝƚLJŝƐŶĞĞĚĞĚ͘ ≠&ŽĐƵƐĚĞǀĞůŽƉŵĞŶƚŽŶƵŶĚĞƌƵƚŝůŝnjĞĚƉƌŽƉĞƌƚŝĞƐ͕ƐƵĐŚĂƐƉĂƌŬŝŶŐůŽƚƐ͘ ≠'ƌŽǁƚŚĂƐƚĞƌŵŝƐŵŝƐůĞĂĚŝŶŐ͘/ƚŝƐĂďŽƵƚĐŚĂŶŐĞ͘ ≠EŽĐŚĂŶŐĞǁŽƵůĚďĞĂĚŝƐĂƐƚĞƌ͘ŚĂŶŐĞĐĂŶďĞŐŽŽĚŝĨƉƌŽƉĞƌůLJŵĂŶĂŐĞĚ͘ ≠ĞǀĞůŽƉŵĞŶƚĐĂƉĚŽĞƐŶŽƚǁŽƌŬďĞĐĂƵƐĞĚĞǀĞůŽƉĞƌƐǁŝůůĚĞŵĂŶĚƚŽďƵŝůĚǁŚĂƚ ŝƐĂůůŽǁĞĚƉĞƌnjŽŶŝŶŐ͘ŽŶƐŝĚĞƌĂůůŽĐĂƚŝŶŐͬƐĞůůŝŶŐĂŝƌƌŝŐŚƚƐŝŶƐƚĞĂĚ͘ ≠'ƌŽǁƚŚŝƐĂĐŚŽŝĐĞ͕ŶŽƚŝŶĞǀŝƚĂďůĞ͘/ƚƐŚŽƵůĚďĞƌĞƐŝĚĞŶƚƐǁŚŽĚĞĐŝĚĞŝĨĐŝƚLJ ƐŚŽƵůĚŐƌŽǁ͘ ≠&ŽŽƚŚŝůůƐĂŶĚŽƉĞŶƐƉĂĐĞŵƵƐƚďĞƉƌŽƚĞĐƚĞĚĨƌŽŵĚĞǀĞůŽƉŵĞŶƚ͘ ≠/ŶĐƌĞĂƐŝŶŐĚĞŶƐŝƚLJĞůƐĞǁŚĞƌĞŝŶƚŚĞƌĞŐŝŽŶǁŽƵůĚďĞďĞƚƚĞƌƚŚĂŶŵĂŬŝŶŐWĂůŽ ůƚŽŐƌŽǁ͘ ≠EĞĞĚƚŽďĞĐĂƌĞĨƵůĂďŽƵƚĚĞƐŝŐŶƚŽĞŶƐƵƌĞĞĨĨŝĐŝĞŶƚƵƐĞŽĨƐƉĂĐĞ͘ ≠ŽŶĐĞƌŶĞĚƚŚĂƚĚŽǁŶƚŽǁŶĐĂƉǁŝůůďĞĞdžĐĞĞĚĞĚ͘ ≠/ŶĐƌĞĂƐĞĚĞŶƐŝƚLJŝŶĚŽǁŶƚŽǁŶ͕ƐŽŝƚǁŝůůĞŶĐŽƵƌĂŐĞǁĂůŬŝŶŐĂŶĚďŝŬŝŶŐ͘ ≠EĞĞĚŵŽƌĞƐƉĞĐŝĨŝĐŝƚLJƌĞŐĂƌĚŝŶŐǁŚĂƚƚŚĞĐŽŶĐĞƉƚŽĨŐƌŽǁƚŚƌĞĂůůLJŵĞĂŶƐ͘ ≠EĞĞĚƚŽĐŽŶƐŝĚĞƌŐƌŽǁƚŚƚŚĂƚŝƐƉĂůĂƚĂďůĞ͘ ≠ŝƚLJƐĞƌǀŝĐĞƐĂƌĞĐůƵƐƚĞƌĞĚŝŶŶŽƌƚŚWĂůŽůƚŽ͘^ŚŽƵůĚĐŽŶƐŝĚĞƌƌĞůŽĐĂƚŝŶŐƐĞƌǀŝĐĞƐ ĂŶĚĐŝƚLJŚĂůůƚŽĐĞŶƚĞƌŽĨƚŚĞĐŝƚLJ͘ ≠ĂůŝĨŽƌŶŝĂǀĞŶƵĞĂƌĞĂƐŚŽƵůĚďĞŵŽƌĞǀŝďƌĂŶƚĂŶĚŚŝŐŚĞƌƐĐĂůĞ͘DŽƌĞŵŝdžĞĚ ƵƐĞ͕ƚƌĂŶƐŝƚŽƌŝĞŶƚĞĚĚĞǀĞůŽƉŵĞŶƚ͘DŽǀĞŝƚLJ,ĂůůƚŚĞƌĞ͘  ≠^ŚŽƵůĚĐŽŶƐŝĚĞƌŵĞĂŶŝŶŐĨƵůŚĞŝŐŚƚůŝŵŝƚĐŚĂŶŐĞ͘ϱϱ͛ĂƐƐƵŐŐĞƐƚĞĚŝƐŽĚĚůŝŵŝƚ͘ ϲϬ͛ŝƐŵŽƌĞƌĞĂůŝƐƚŝĐďĞĐĂƵƐĞŝƚĐŽƵůĚƌĞƐƵůƚŝŶĂďĞƚƚĞƌĚĞƐŝŐŶͬďƵŝůĚŝŶŐ͘ ≠tŽƵůĚƐƵƉƉŽƌƚŝŶĐƌĞĂƐĞŝŶŚĞŝŐŚƚŝŶĐĞƌƚĂŝŶĂƌĞĂƐͬƚƌĂŶƐŝƚ͘ ≠ZĞůĂdžŝŶŐϱϬ͛ŚĞŝŐŚƚůŝŵŝƚƚŽĂůůŽǁŽŶĞŵŽƌĞƐƚŽƌLJŵĂLJďĞĂƉƉƌŽƉƌŝĂƚĞŝŶĐĞƌƚĂŝŶ ĂƌĞĂƐ͘ ≠ĞƚƚĞƌƚŽƚŚŝŶŬŽĨŶƵŵďĞƌŽĨƐƚŽƌŝĞƐŝŶƐƚĞĂĚŽĨŚĞŝŐŚƚ͘ ≠ǀŽŝĚŝŶĐƌĞĂƐĞŚĞŝŐŚƚŽŶůĂŵŝŶŽZĞĂůŶĞĂƌZͲϭŶĞŝŐŚďŽƌŚŽŽĚƐ͕ƐƵĐŚĂƐĂƌŽŶ WĂƌŬ͘ ≠,ĞŝŐŚƚŝŶĐƌĞĂƐĞĨŽƌŚŽƵƐŝŶŐĚŽĞƐŶŽƚŵĂŬĞƐĞŶƐĞ͕ďĞĐĂƵƐĞŚĞŝŐŚƚǁĂƐŽƌŝŐŝŶĂůůLJ ƌĞƋƵĞƐƚĞĚĨŽƌĐŽŵŵĞƌĐŝĂůĚĞǀĞůŽƉŵĞŶƚ ≠'ƌĞĂƚĞƌƵƚŝůŝnjĂƚŝŽŶŽĨĞdžŝƐƚŝŶŐƐƉĂĐĞ͕ƐƵĐŚĂƐƉĂƌŬŝŶŐůŽƚƐŚŽƵůĚďĞƐƚƵĚŝĞĚďĞĨŽƌĞ ŝŶĐƌĞĂƐŝŶŐŚĞŝŐŚƚƐĞůƐĞǁŚĞƌĞ͘  ≠zŽƵŶŐƉĞŽƉůĞƐƵƉƉŽƌƚďƵƐŝŶĞƐƐĞƐĂŶĚŵŽŶĞLJƐƉĞŶƚĂƚƚŚĞƐĞďƵƐŝŶĞƐƐĞƐďĞŶĞĨŝƚƐ ƌĞƐŝĚĞŶƚƐ͘ ≠'ŽŽĚƚŽŚĂǀĞǁŽƌŬĞƌƐǁŚŽƐƉĞŶĚŵŽŶĞLJƚŽƐƵƉƉŽƌƚƌĞƚĂŝůƐĞƌǀŝĐĞƐŶĞĂƌ ƌĞƐŝĚĞŶƚŝĂůĂƌĞĂƐ͘ ≠EĞĞĚĂďƵƐŝŶĞƐƐĞĐŽƐLJƐƚĞŵƚŽƐƵƉƉŽƌƚƌĞƚĂŝůǀŝďƌĂŶĐLJ͘ ≠EĞĞĚƚŽĞǀĂůƵĂƚĞĚŝƐƚƌŝďƵƚŝŽŶŽĨƐĞƌǀŝĐĞƐĂƌŽƵŶĚŶĞŝŐŚďŽƌŚŽŽĚƐ͘ ≠EĞĞĚƚŽƐƚƵĚLJŚŽǁƚŽƐƵƐƚĂŝŶƐĞƌǀŝĐĞƐ͘ ≠EĞĞĚĚŝǀĞƌƐŝƚLJƚŽƐƵƉƉŽƌƚĚŝǀĞƌƐĞƌĂŶŐĞŽĨďƵƐŝŶĞƐƐĞƐ͘ ≠ZĞƚĂŝůŝƐƐĞĐŽŶĚƚŽƐĐŚŽŽůƐĂƐƚŚĞŵŽƐƚŝŵƉŽƌƚĂŶƚƐĞƌǀŝĐĞ͘ ≠KĨĨŝĐĞƵƐĞŝŶƚĞŶƐŝƚLJǁŝůůŝŶĐƌĞĂƐĞĞǀĞŶǁŝƚŚŽƵƚĐŽŶƐƚƌƵĐƚŝŽŶŽĨŵŽƌĞŽĨĨŝĐĞƐƉĂĐĞ͘ ≠EĞĞĚƚŽĞŶĐŽƵƌĂŐĞƌĞƚĂŝůĞdžƉĂŶƐŝŽŶĂŶĚĂŐƌĞĂƚĞƌŵŝdžŽĨƌĞƚĂŝů͘ ≠EĞĞĚƚŽĨĂĐƚŽƌŝŶĐŚĂŶŐĞƚŽĨƵƚƵƌĞŽĨƌĞƚĂŝů͘dŚŝƐĐŚĂŶŐĞĐŽƵůĚĂĨĨĞĐƚŚŽǁƉĞŽƉůĞ ƉƵƌĐŚĂƐĞĂŶĚŽďƚĂŝŶŐŽŽĚƐ͘ ≠ZĞƚĂŝůŵƵƐƚďĞŵĂĚĞŵŽƌĞƌŽďƵƐƚ;ǁĂůŬĂďůĞͿ͘  ≠EĞĞĚƚŽƵƐĞĚĂƚĂƚŽƉƌŽǀŝĚĞĐŽŶƚĞdžƚ͘ ≠ŶŐĂŐĞŝŶƐLJƐƚĞŵͲǁŝĚĞƚŚŝŶŬŝŶŐĂŶĚƵƐĞĚĂƚĂƚŽŝŶŶŽǀĂƚĞ͘ ≠EĞĞĚŚĂƌĚĚĂƚĂƚŽƐƵƉƉŽƌƚĚĞĐŝƐŝŽŶƐ͘ ≠EĞĞĚƚŽƌŝŐŽƌŽƵƐůLJĂŶŶŽƚĂƚĞƌĞƐƵůƚƐͬĂƐƐƵŵƉƚŝŽŶƐ͘ ≠EĞĞĚŵŽƌĞƐƉĞĐŝĨŝĐƐ͕ƐƵĐŚĂƐŝŶƉƵƚƐĂŶĚŵŽĚĞůƐĂŶĚŚŽǁĂƌĞĂƐƐƵŵƉƚŝŽŶƐ ĚĞǀĞůŽƉĞĚ͘ ≠EĞĞĚƚŽƐĞĞŶƵŵďĞƌƐŽĨĐŽŶƐĞƋƵĞŶĐĞƐŽĨĞĂĐŚĂůƚĞƌŶĂƚŝǀĞ͕ƐƵĐŚĂƐĐŽƐƚ͕ ƉŽƉƵůĂƚŝŽŶ͕ĞƚĐ͘  ≠ЪŵŝůĞƌĂĚŝƵƐŝƐƚŽŽǁŝĚĞĨŽƌƚƌĂŶƐŝƚŽƌŝĞŶƚĞĚĚĞǀĞůŽƉŵĞŶƚ͘ ≠,ŽƵƐŝŶŐŶĞĂƌƚƌĂŶƐŝƚŝŵƉƌŽǀĞƐƚƌĂŶƐŝƚƵƐĞĂůŝƚƚůĞ͕ďƵƚǁŝůůŝŶĐƌĞĂƐĞĐĂƌƵƐĞŵŽƌĞ͘ ^ŚŽƵůĚĨŽĐƵƐŽŶŝŶĐƌĞĂƐŝŶŐďŝŬŝŶŐĂŶĚǁĂůŬŝŶŐŽƉƉŽƌƚƵŶŝƚŝĞƐ͘ ≠ŚĂůůĞŶŐĞĨŽƌWĂůŽůƚŽŝƐƚŚĂƚŵŽƐƚůŽƚƐĂƌĞϲ͕ϬϬϬƐƋ͘Ĩƚ͕͘ůŝŵŝƚŝŶŐĚĞǀĞůŽƉŵĞŶƚ͕ ŶŽƚĐŽŶĚƵĐŝǀĞƚŽŐĞŶĞƌĂƚŝŶŐĚĞŵĂŶĚĨŽƌŵĂƐƐƚƌĂŶƐŝƚ͘ ≠ĂƌƐĂƌĞďĞĐŽŵŝŶŐŵŽƌĞŐĂƐĞĨĨŝĐŝĞŶƚ͕ƐŽŵŽǀĞƚŽŶŽŶͲĐĂƌƚƌĂŶƐƉŽƌƚŝƐŵŽƌĞ ĂďŽƵƚƌĞĚƵĐƚŝŽŶŽĨƚƌŝƉƐŽǀĞƌĐĂƌďŽŶ͘ ≠,ŽǁĚŽĞƐďƵŝůĚŝŶŐŶĞdžƚƚŽƚƌĂŶƐŝƚŝŵƉĂĐƚƚƌĂŶƐŝƚƵƐĞ͍tŚĂƚŚĂƉƉĞŶƐŝĨ'ŽWĂƐƐĞƐ ĂƌĞŐŝǀĞŶƚŽĂůůƌĞƐŝĚĞŶƚƐ͍tŝůůƉŽůŝĐŝĞƐĐŚĂŶŐĞĂƐĂƌĞƐƵůƚ͍  ≠dŚĞƌĞŚĂƐƚŽďĞĂƐĐĞŶĂƌŝŽǁŚĞƌĞũŽďƐĂƌĞĂůƐŽĐƌĞĂƚĞĚŽƌĂƚůĞĂƐƚĞdžƉůŝĐŝƚůLJ ĂĚĚƌĞƐƐĞĚ͘ ≠:ŽďƐŶĞĂƌƚƌĂŶƐŝƚƌĞĚƵĐĞĐĂƌďŽŶĨŽŽƚƉƌŝŶƚŵŽƌĞƚŚĂŶŚŽƵƐŝŶŐŶĞĂƌƚƌĂŶƐŝƚ͘  ≠WƌŽƚĞĐƚŝŶŐZͲϭŵĂŬĞƐƐĞŶƐĞ͘ ≠^ŵĂůůĞƌƵŶŝƚƐĨŽƌLJŽƵŶŐƉĞŽƉůĞĂŶĚƐĞŶŝŽƌƐƐŚŽƵůĚďĞĞŶĐŽƵƌĂŐĞĚ͘ ≠&ŽĐƵƐŽŶƉƌŽƚĞĐƚŝŶŐZͲϭƚLJƉĞĚĞǀĞůŽƉŵĞŶƚƉƌĞĐůƵĚĞƐĨŝŶĚŝŶŐŽƚŚĞƌŽƉƉŽƌƚƵŶŝƚŝĞƐ͘ ≠EŽŝŶǀĞŶƚŽƌLJĨŽƌĞŵƉƚLJŶĞƐƚĞƌƐůŽŽŬŝŶŐƚŽĚŽǁŶƐŝnjĞĨƌŽŵƚƌĂĚŝƚŝŽŶĂůƐŝŶŐůĞ ĨĂŵŝůLJŚŽŵĞƐ͘ ≠EĞĞĚƐĞŶŝŽƌŚŽƵƐŝŶŐ͕ƐƚƵĚŝŽƐĂŶĚŽŶĞďĞĚƌŽŽŵƵŶŝƚƐƚŽƉƌŽǀŝĚĞĚŝǀĞƌƐŝƚLJ͘ ≠>ŝŵŝƚŚŽƵƐŝŶŐƚŽZ,EŶƵŵďĞƌƐ͘EŽůŝŵŝƚƐŽŶĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐ͘ ≠DĂƌŬĞƚƐŚŽƵůĚĚŝĐƚĂƚĞƵŶŝƚƐŝnjĞ͘DĂƌŬĞƚƌĞĂĐƚƐŵŽƌĞƋƵŝĐŬůLJƚŚĂŶ ďŽĂƌĚƐͬĐŽŵŵŝƐƐŝŽŶ͘ ≠WƌĞƐĞƌǀĂƚŝŽŶŽĨZͲϭŝƐŝŵƉŽƌƚĂŶƚ͕ďƵƚŶĞĞĚƚŽĂůƐŽŶĞĞĚŚŽƵƐŝŶŐĨŽƌƐĞŶŝŽƌƐ͕ ǁŽƌŬĞƌƐ͕LJŽƵŶŐƐŝŶŐůĞǁŽƌŬĞƌƐ͘ ≠dŚĞƌĞŝƐĚĞŵĂŶĚĨŽƌƐŵĂůůƵŶŝƚƐŝĨnjŽŶĞĚĨŽƌ͕ƐƵĐŚĂƐƌĞĐĞŶƚƋƵŝŶŽdžƉƌŽũĞĐƚ͘  ≠hŶĚĞƌŐƌŽƵŶĚŝŶŐĂůƚƌĂŝŶĐĂŶŚĞůƉĐƌĞĂƚĞƌĞĂůĞƐƚĂƚĞĂďŽǀĞĂŶĚǀĂůƵĞ͘ ≠EĞĞĚƚŽƉůĂŶĨŽƌĂůƚƌĂŝŶƐŽŽŶĞƌƌĂƚŚĞƌƚŚĂŶůĂƚĞƌ͘ ≠dĂŬĞĂĚǀĂŶƚĂŐĞŽĨĂǀĂŝůĂďůĞŵŽŶĞLJĨŽƌŐƌĂĚĞƐĞƉĂƌĂƚŝŽŶĐŽŶƐƚƌƵĐƚŝŽŶ͘ ≠,ŝŐŚ^ƉĞĞĚZĂŝůƐŚŽƵůĚďĞĂŶŝŵƉŽƌƚĂŶƚĚŝƐĐƵƐƐŝŽŶŝŶŽŵƉWůĂŶ͘tŝůůŵĂŐŶŝĨLJ ŝŵƉŽƌƚĂŶĐĞŽĨƚƌĂŶƐŝƚͲŽƌŝĞŶƚĞĚĚĞǀĞůŽƉŵĞŶƚ͘  ≠EĞĞĚƚŽĐŽŶƐŝĚĞƌŝŵƉĂĐƚƐŽŶƐĐŚŽŽůŶŽǁ͘ ≠/ĨǁĞďƵŝůƚĨŽƌĚĞŵĂŶĚ͕ƐĐŚŽŽůƐǁŽƵůĚďĞŽǀĞƌĐƌŽǁĚĞĚĂŶĚƋƵĂůŝƚLJǁŽƵůĚďĞ ĚĞƐƚƌŽLJĞĚ͘ ≠WƌĞƐĞƌǀĂƚŝŽŶŽĨŚŝŐŚƋƵĂůŝƚLJƐĐŚŽŽůƐŝƐŝŵƉŽƌƚĂŶƚʹŝƚ͛ƐĂŶŝŵƉŽƌƚĂŶƚƐĞƌǀŝĐĞ͘ ≠^ĐŚŽŽůƐĂƌĞŽǀĞƌĐĂƉĂĐŝƚLJ͘ ≠tŚĞƌĞĚŽĞƐĂƐƐƵŵƉƚŝŽŶƚŚĂƚŐƌŽǁƚŚŝƐƵŶƐƵƉƉŽƌƚĂďůĞĨŽƌƐĐŚŽŽůƐĐŽŵĞĨƌŽŵ͍ ≠tŽƌŬǁŝƚŚWĂůŽůƚŽhŶŝĨŝĞĚ͕ĞƐƉĞĐŝĂůůLJŽŶĂƐƐƵŵƉƚŝŽŶƚŚĂƚŐƌŽǁƚŚǁŝůůĚĂŵĂŐĞ ƐĐŚŽŽůƋƵĂůŝƚLJ͘  ≠EĞĞĚƚŽĐŽŶƐŝĚĞƌϮϳhŶŝǀĞƌƐŝƚLJŝŶĂůůĂůƚĞƌŶĂƚŝǀĞƐ͘ ≠^ŽŵĞĂůƚĞƌŶĂƚŝǀĞƐŶĞĞĚƚŽĂŶƚŝĐŝƉĂƚĞƐŽŵĞŶŽŶͲƌĞƐŝĚĞŶƚŝĂůŐƌŽǁƚŚ͘ ≠dŚĞ͞ŽEŽƚŚŝŶŐ͟ĂůƚĞƌŶĂƚŝǀĞĐĂŶďĞĐĂůůĞĚ͞ďƵƐŝŶĞƐƐĂƐƵƐƵĂů͘͟ ≠DĂŬĞĂůƚĞƌŶĂƚŝǀĞƐŵŽƌĞƌĞƐƵůƚƐͲŽƌŵŝƐƐŝŽŶͲďĂƐĞĚ͘ ≠KŶĞĐŽŶĐĞƉƚͬĂůƚĞƌŶĂƚŝǀĞƐŚŽƵůĚďĞĂďŽƵƚŚŽǁƚŽŵĂdžŝŵŝnjĞƋƵĂůŝƚLJŽĨůŝĨĞ͘ ≠ĂůƚƌĂŝŶƐŚŽƵůĚďĞŝŶĂůůĂůƚĞƌŶĂƚŝǀĞƐ͕ĞdžĐĞƉƚůƚĞƌŶĂƚŝǀĞηϭ͘ ≠ŽŶĐĞƉƚĨŽƌŝŶĐƌĞĂƐŝŶŐĐŽŵŵĞƌĐŝĂůŐƌŽǁƚŚŽƵƚƐŝĚĞŽĨůƚĞƌŶĂƚŝǀĞηϰŶĞĞĚƐƚŽďĞ ĐŽŶƐŝĚĞƌĞĚ͘ ≠DŝƐƚĂŬĞƚŽŚĂǀĞŶŽůƚĞƌŶĂƚŝǀĞǁŝƚŚŽƵƚĐŽŵŵĞƌĐŝĂůŐƌŽǁƚŚ͕ŶĞĞĚƚŽƐĞĞĂůů ŽƉƚŝŽŶƐ͘  ≠ůƚĞƌŶĂƚŝǀĞηϯ͕ƐŚŽƵůĚĨŽĐƵƐŽŶƚƌĂŶƐŝƚŽƌŝĞŶƚĞĚĚĞǀĞůŽƉŵĞŶƚĨŽƌũŽďƐ͕ĂŶĚŽŶ ŚŽƵƐŝŶŐŶĞĂƌƐĞƌǀŝĐĞƐ͘ ≠ůƚĞƌŶĂƚŝǀĞηϯͲƚƌĂŶƐŝƚŝƐĚŽŵŝŶĂƚĞĚďLJŝŶƚĞƌͲĐŝƚLJƚƌŝƉƐ͕ĐŽŶƐŝĚĞƌŝŶƚƌĂͲĐŝƚLJƚƌŝƉƐ͘  ≠ůƚĞƌŶĂƚŝǀĞηϰƐŚŽƵůĚĐŽŵďŝŶĞůŝŵŝƚŝŶŐƚƌŝƉƐǁŝƚŚďƵŝůĚŝŶŐƐƚƌĂƚĞŐLJ͘ ≠ůƚĞƌŶĂƚŝǀĞηϰƐŚŽƵůĚďĞƌĞĚĞƐŝŐŶĞĚĂƐŽǀĞƌůĂLJŽŶĂůůŽƚŚĞƌĂůƚĞƌŶĂƚŝǀĞƐ͘ ≠ůƚĞƌŶĂƚŝǀĞηϰ͕ĐŽŶƐŝĚĞƌŶĞƚnjĞƌŽ','͕ŶŽƚsDd͘WĂLJĨŽƌŽĨĨƐĞƚƐĨŽƌĂƵƚŽƚƌŝƉƐ͘ ^ŚŽƵůĚĂůƐŽƌĞƐƵůƚŝŶŶĞƚnjĞƌŽǁĂƚĞƌƵƐĞĂŶĚŶŽŶĞƚŽǀĞƌĨůŽǁƉĂƌŬŝŶŐŝŶ ŶĞŝŐŚďŽƌŚŽŽĚƐ͘ ≠ůƚĞƌŶĂƚŝǀĞηϰŝƐŵŽƌĞŽĨĂƉŝůŽƚƉƌŽŐƌĂŵƌĂƚŚĞƌƚŚĂŶĂůƚĞƌŶĂƚŝǀĞƚŽƐĞĞŝĨnjĞƌŽ ŶĞƚƚƌŝƉƐŽƌĞŶĞƌŐLJƉŽƐƐŝďůĞ͘  WORKSHOP SUMMARY PPalo Alto Comprehensive Plan Update Critical Issues Forum May 29, 2014, 6:00 to 8:00 PM The meeting materials and complete set of feedback from the meeting summarized below are available online at http://www.paloaltocompplan.org/ under Community Meetings. OVERVIEW On May 29, Palo Alto citizens gathered at Avenidas for the first of three community workshops that will be held in the next month to elicit input from citizens as the City updates it Comprehensive Plan – to be called Our Palo Alto 2030. The kickoff meeting was a forum on critical issues and covered the tremendous assets the City currently enjoys and how the City could response to a host of changes the future will bring. The event was the first of three community workshops that will be held in May and June to elicit input from community members on potential issues to incorporate throughout the process of updating the Comprehensive Plan – to be called Our Palo Alto 2030. Approximately 40 members of the public participated in the workshop, and two Council members attended as observers. The focus of this workshop was a community discussion to identify Palo Alto’s Strengths, Weaknesses, Opportunities, and Threats. Participants formed six small groups of 5 to 7 people to complete a SWOT analysis, sharing their opinions on all aspects of life in Palo Alto today and the changes we might expect to see over the next 15 years – changes in housing, transportation, energy, water supply, climate, technology, and the regional and global economy. The workshop concluded with a spokesperson from each group summarizing the opportunities that their group identified throughout the SWOT analysis. "55"$).&/5$   KDDKEd,D^DZ'/E'&ZKDd,Z<Khd'ZKhW/^h^^/KE^ A number of common themes emerged from two or more of the breakout groups as they prepared the SWOT Analysis. The matrix below includes some of the most common big-picture themes in each category. A more detailed list is available online at Palo Alto’s OOpen City Hall. The City is encouraging additional responses through an online exercise similar to the one completed at the May 29 workshop, and complete transcriptions of the notes from each small group are available at http://www.paloaltocompplan.org/. Positive Negative 6WUHQJWKV ≠Well-educated population ≠High-quality school system ≠City-owned utilities ≠City services ≠Thriving arts community ≠High quality of life ≠Strong tax base :HDNQHVVHV ≠Jobs-housing imbalance ≠Traffic congestion ≠High cost of living ≠Lack of diversity ≠Aging infrastructure In t e r n a l 2SSRUWXQLWLHV ≠Improve public transit opportunities ≠Take advantage of local talent ≠Collaborate with neighboring communities and the region as a whole ≠Increase telecommuting opportunities ≠Encourage and welcome start-up companies ≠Increase public safety (i.e. bike, pedestrian, transportation) 7KUHDWV ≠Climate change / sea level rise ≠Water supply ≠Income disparity ≠Inefficient regional transportation ≠High speed rail (concerned with dividing the community) Ex t e r n a l WORKSHOP SUMMARY Palo Alto Comprehensive Plan Update Growth Management Forum June 10, 2014, 6:00 to 8:00 PM The meeting materials and complete set of feedback from the meeting summarized below are available online at http://www.paloaltocompplan.org/ uunder Community Meetings. OVERVIEW On June 10th, about 30 community members gathered in the Palo Alto High School Library for the second of three community workshops to learn more about and discuss the City’s update of its Comprehensive Plan, Our Palo Alto 2030. The meeting was a forum on growth management and covered the jobs, housing, and population growth trends of Palo Alto, along with an overview of growth management tools utilized in other cities. The focus of this workshop was to identify which areas of the city might change, and which should be protected and preserved, over the 15-year life of the updated Comprehensive Plan. Participants formed four small groups of six to eight people to complete an exercise, sharing their opinions on where they believe change should or should not occur. Using land use maps and colored markers, each group circled areas or corridors they believe future growth and change could be accommodated, emphasizing the need to preserve the majority of Palo Alto in open space and single-family neighborhoods, as it is today. After the small group discussions, a spokesperson from each group summarized the opportunity sites that their group identified throughout the group exercise. The community input received at this meeting will be used at the “alternative futures” workshop on June 24 at the Palo Alto Elk’s Lodge. Attendees at the June 24 workshop will be asked to consider and evaluate “alternative futures” that would become the basis for alternatives to be studied in the Environmental Impact Report for the Comprehensive Plan Update. These alternatives would be extensively analyzed and discussed in order to develop a collective vision on the policies and programs that will make up Our Palo Alto 2030. 2 KDDKE͞KWWKZdhE/dz^/d^͟DZ'/E'&ZKDd,Z<Khd'ZKhW/^h^^/KE^ A number of common areas that may be appropriate to accommodate growth and change by 2030—dubbed “opportunity sites”—emerged from the breakout groups as they worked through the small group exercise. The map below synthesizes the input from the four groups into a single set of potential opportunity sites. A more detailed map is available online at Palo Alto’s OOpen City Hall. The City is encouraging additional responses through an online exercise similar to the one completed at the June 10th workshop, and copies of each map from each small group are available at http://www.paloaltocompplan.org/. :25.6+236800$5< Palo Alto Comprehensive Plan Update Alternative Futures June 24, 2014, 6:00 to 8:30 PM The meeting materials and complete set of feedback from the meeting summarized below are available online at http://www.paloaltocompplan.org/ uunder Community Meetings. OVERVIEW On June 24th, about 77 community members gathered in the Elk’s Lodge for the third of three community workshops in the first phase of the City’s update of its Comprehensive Plan, Our Palo Alto 2030. The meeting was a forum on alternative futures, asking citizens to explore different ways that Palo Alto might change over the next 15 years. The focus of this workshop was to identify and elicit ideas for a range of scenarios: type of growth, pace of growth, intensity of development, transportation solutions, energy infrastructure, and quality of life. The discussion built upon the six opportunity sites identified based on a synthesis of the input from the June 10th workshop. Participants formed nine small groups of six to ten people to work together to create an alternative scenario, either responding to a preliminary scenario presented by City staff and the consultant team, or an original scenario. The nine alternatives created at the workshop will be used to shape three alternative future scenarios that – along with a legally-required “no project” (or “business as usual”) scenario - will be analyzed in depths in the forthcoming Environmental Impact Report (EIR) on the Comprehensive Plan Update. Next, the draft alternatives will be presented to the Planning and Transportation Commission (PTC) and City Council for review and input before they are finalized for study. ALTERNATIVE FUTURES WORKSHEETS Each of the nine groups used worksheets to record the group’s ideas and comments on the six Opportunity Site building blocks of the alternative scenarios. Scans of each table’s worksheet from each small group are available at http://www.paloaltocompplan.org/. All groups either came up with a new alternative or modified one of the preliminary alternatives offered as a starting point for discussion. The City is encouraging additional responses through an online exercise similar to the one completed at the June 24th workshop at http://www.paloaltocompplan.org/. ATTACHMENT D CITY OF PALO ALTO COMPREHENSIVE PLAN AMENDMENT EIR . Foothills Park Los Trancos Open Space Preserve ·· Monte Bello Open Space Prese.rve _....:..c.........,.,.-'l • Cal Train Stations ,.,,__,.. Creeks 1-··-. 1 ___ _; City Boundary -Public Conservation land ~·-··-, l,_ .. J Sphere of Influence Source: The Planning Center I DC&E, 2013; Th~. City of Palo Alto, 2013. FIGURE I PROJECT LOCATION AND CONTEXT The City of Palo Alto also contains important areas of natural habitat concentrated primarily in open space areas within the City limits, including Arastradero Preserve, Foothills Park, Los Trancos Open Space Preserve, Baylands preserve, and Byxbee Park. Several creeks pass through the city generally flowing nor.th toward San Francisco Bay. These creeks include Adobe Creek, San Francisquito Creek, Matadero Creek, Arastradero Creek, and Barron Creek. 3. Lead Agency Contact: Elena Lee, Senior Planner City of Palo Alto Department of Planning and Community Environment 250 Hamilton A venue Palo Alto, CA 94301 Tel. (650) 617-3196 Email: elena.lee@cityofpaloalto.org 4. · Project Sponsor: City of Palo Alto 250 Hamilton A venue Palo Alto, CA 94301 5. Project Description: The Palo Alto Comprehensive Plan is the City's governing document for land use and development decisions. The City is undertaking a Comprehensive Plan Update in order to establish a shared vision for ·the future of the community through to the year 2030. The Project will update goals, policies, programs, maps and diagrams throughout the Comprehensive Plan and will also involve preparation of two concept plans to establish a broad vision for the California Avenue/Fry's Site Area and the East Meadow Circle/Fabian Way Area. The current Palo Alto Comprehensive Plan includes the following elements, which will be maintained and updated as part of the Comprehensive Plan Update: • Land Use and Community Design: this element sets policy regarding the location and concentration of housing, businesses, public facilities, open space and other land uses. • Transportation: this element sets policy regarding existing and planned roads and transit and pedestrian systems in Palo Alto. • Natural and Urban Environment and .Safety: this element sets policy regarding open space, water supply, air quality, urban forest, special-~tatus species, hazardous materials, climate change and noise, as well as policies for emergency management and safety. • Housing Element: this chapter sets policy regarding the development of housing opportunities that enhance the character, diversity and vitality of the City. The Housing Element is concurrently being updated on a separate schedule for compliance with State requirements .. However, the Comprehensive Plan Update could include some adjustments as needed to maintain internal consistency. • Community Services and Facilities: this element sets policy regarding existing public facilities and planned infrastructure expansions and improvements. • Business and Economics: this element sets policy regarding future business development and industry. Ci!JI Of Palo Alto Mqy30, 2014 3 Comprehensive Plan Update BIR Notice of Preparation • Governance: this chapter sets policy regarding corrununity participation in government, Palo Alto's role in the region, and process management. It will be reframed as a "user's guide" to the Comprehensive Plan that explains how it should be used and how it can be amended in the future. 6, Probable Environmental Effects of the Project: The EIR will evaluate potentially significant environmental impacts associated with the adoption and implementation of the Comprehensive Plan Update. Consistent with the State CEQA Guidelines (Appendix G), the following environmental resource categories will be analyzed in relation to the Project: • Aesthetics • Hydrology and Water Quality • Agriculture and Forestry Resources • Land Use / Planning • AirQuality • Mineral Resources • Biological Resources • Noise • Cultural Resources • Population and Housing • Geology / Soils • Public Services and Recreation • GHG Emissions • Transportation and Traffic • Hazards and Hazardous Materials • Utilities and Service Systems All of the resource categories listed above will be considered in the EIR; however, given the scope of the Project and the location of Palo Alto, it is anticipated that resource categories, such as Mineral Resources, for which it can be clearly demonstrated that no significant impacts would result from Project implementation will be addressed briefly and "scoped out." 7. Public Meetings . The City of Palo Alto will conduct a series of five meetings to provide opportunity for public agencies and interested members of the general public to comment on the scope of the Project and proposed EIR. Members of the public and public agencies are invited to participate and provide corrunents to the City at the meetings listed below. Meeting #1 Community Meeting -Critical Issues Date/Time: May 29, 2014/6:00-8:00 PM Location: A venidas, 450 Bryant Street, Palo Alto , CA 94301 Meeting #2 Community Meeting -Growth Management Date/Time: June 10, 2014/6:00-8:00 PM Location: Palo Alto High School, English Resource Center, 50 Embarcadero Rd, Palo Alto, CA 94301 Meeting #3 Community Meeting -Alternative Futures Date/Time: June 24, 2014/6:00 -8:30 PM Location: Elk's Lodge, 4249 El Camino Real, Palo Alto, CA 94306 Meeting #4 Planning and Transportation Commission EIR Scoping Hearing Date/Time: July 9, 2014/6:00 PM Location: City Hall Council Chambers. 250 Hamilton Ave., Palo Alto, CA 94301 Meeting # 5 City Council Hearing Date/Time: August 4, 2014/7:00 PM Location: City Hall Courn;:il Chambers. 250 Hamilton Ave., Palo Alto, CA 94301 Date May 30. 2014 Signature --,.r---h'~l-PlA---+------­ Title kP1li!i;l!l!l~~~OO.!J:lllt~~nrrv~tt~ollnllmne~n~tJD2!!:tt~ecgt;Qi;or City of Palo Alto Mtry 30, 2014 4 Comprehensive Plan Update BIR 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ƉƌŽĐĞƐƐ͕ ĐŽŵƉŽƐŝƚŝŽŶ ĂŶĚ ƉƌŽĐĞĚƵƌĞƐĨŽƌƚŚĞŽŵŵƵŶŝƚLJ>ĞĂĚĞƌƐŚŝƉ'ƌŽƵƉ͘dŚĞŽƵŶĐŝůĂůƐŽĂƐŬĞĚƐƚĂĨĨƚŽƌĞǀŝĞǁƚŚĞ ƉƌŝŽƌŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶƉƌŽĐĞƐƐĂŶĚ^K&WůĂŶƉƌŽĐĞƐƐĨŽƌůĞƐƐŽŶƐůĞĂƌŶĞĚ͘  KŶ DĂLJ ϱ͕ ϮϬϭϰ͕ ƚŚĞ ŝƚLJ ŽƵŶĐŝů ƌĞǀŝĞǁĞĚ ƚŚĞ ĚƌĂĨƚ ĞůĞŵĞŶƚƐ͕ ĐŽůůĞĐƚŝǀĞůLJ ƚŝƚůĞĚ͕ ͞ƌĂĨƚ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ ϮϬϯϬ͕ sŝƐŝŽŶ ^ƚĂƚĞŵĞŶƚ͕ 'ŽĂůƐ͕ WŽůŝĐŝĞƐ ĂŶĚWƌŽŐƌĂŵƐ ;Ɖƌŝů ϮϬϭϰͿ͟ ŚƚƚƉ͗ͬͬŐŽŽ͘Őůͬ^ƋϵĐǀũ͘ŽƵŶĐŝůƉƌŽǀŝĚĞĚĐŽŵŵĞŶƚƐŽŶŵĂŶLJĂƐƉĞĐƚƐŽĨƚŚĞĚŽĐƵŵĞŶƚ͘ƚƚŚĞ ĐŽŶĐůƵƐŝŽŶ ŽĨ ŽƵŶĐŝů͛Ɛ ƌĞǀŝĞǁ͕ ƚŚĞ ĐŝƚLJ ŵĂŶĂŐĞƌ ŝŶĚŝĐĂƚĞĚ ƚŚĂƚ ƐƚĂĨĨ ǁŽƵůĚ ŽƌŐĂŶŝnjĞ ƚŚĞ ĐŽŵŵĞŶƚƐŝŶƚŽŐƌŽƵƉƐŽĨŝƐƐƵĞƐĂŶĚĐŽŶǀĞƌƚƚŚĞĐŽŵŵĞŶƚƐŝŶƚŽƋƵĞƐƚŝŽŶƐƚŚĂƚĐŽƵůĚďĞĨƵƌƚŚĞƌ ĚŝƐĐƵƐƐĞĚƚŚƌŽƵŐŚƚŚĞĐŽŵŵƵŶŝƚLJĞŶŐĂŐĞŵĞŶƚƉƌŽĐĞƐƐ͘dŚĞĐŽŵŵĞŶƚŐƌŽƵƉƐĂŶĚƋƵĞƐƚŝŽŶƐ ĂƌĞĐŽŶƚĂŝŶĞĚŝŶƚƚĂĐŚŵĞŶƚ͘    ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϯ  ŽŵƉWůĂŶŶŐĂŐĞŵĞŶƚĂŶĚtŽƌŬƐŚŽƉƐ^ƵŵŵĂƌLJ dŚĞĐŽŵŵƵŶŝƚLJĞŶŐĂŐĞŵĞŶƚƉůĂŶĨŽƌƚŚĞŽŵƉWůĂŶƵƉĚĂƚĞŝŶĐůƵĚĞĚĂƐĞƌŝĞƐŽĨĐŽŵŵƵŶŝƚLJ ǁŽƌŬƐŚŽƉƐƚŽŚĞůƉĚĞǀĞůŽƉĂůƚĞƌŶĂƚŝǀĞƐƚŽƐƚƵĚLJŝŶƚŚĞ/Z͘dŚĞŐŽĂůŽĨƚŚĞŽŵƉWůĂŶhƉĚĂƚĞ ŽƵƚƌĞĂĐŚƉƌŽĐĞƐƐŝƐƚŽ͗  ≠^ŽůŝĐŝƚŵĞĂŶŝŶŐĨƵůŝŶƉƵƚƌĞŐĂƌĚŝŶŐƚŚĞĐƌŝƚŝĐĂůŝƐƐƵĞƐĨĂĐŝŶŐŽƵƌŝƚLJĂŶĚĂĚĞƐŝŐŶĨŽƌŝƚƐ 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ƌĞƋƵĞƐƚƐƚŚĞƉƵďůŝĐƚŽŝĚĞŶƚŝƚLJƚŚĞĐƌŝƚŝĐĂůŝƐƐƵĞƐĨŽƌWĂůŽůƚŽ͘dŚĞƐĞĐŽŶĚŽŶůŝŶĞĞdžĞƌĐŝƐĞ ƌĞƋƵĞƐƚƐĨĞĞĚďĂĐŬŽŶƚŚĞƐŝdžĨŽĐƵƐĂƌĞĂƐ͘  ^ƚĂĨĨŚĂƐĂůƐŽƐŽůŝĐŝƚĞĚĂƉƉůŝĐĂƚŝŽŶƐĨŽƌƚŚĞ͞>ĞĂĚĞƌƐŚŝƉ'ƌŽƵƉ͟ƚŚĂƚŝƐĞdžƉĞĐƚĞĚƚŽĂƐƐŝƐƚǁŝƚŚ ĐŽŵŵƵŶŝƚLJ ĞŶŐĂŐĞŵĞŶƚ ĨŽƌ ƚŚĞ ďĂůĂŶĐĞ ŽĨ ƚŚĞ ƉůĂŶŶŝŶŐ ƉƌŽĐĞƐƐ͘  ĂƐĞĚ ŽŶ ĂƉƉůŝĐĂƚŝŽŶƐ ƌĞĐĞŝǀĞĚ͕ƚŚĞŝƚLJDĂŶĂŐĞƌŚĂƐĂƉƉŽŝŶƚĞĚŵĞŵďĞƌƐ͕ĂŶĚƚŚĞŐƌŽƵƉŝƐĞdžƉĞĐƚĞĚƚŽŚĂǀĞŝƚƐ ŝŶŝƚŝĂůŽƌŝĞŶƚĂƚŝŽŶŵĞĞƚŝŶŐďĞĨŽƌĞƚŚĞĞŶĚŽĨƚŚĞŵŽŶƚŚ͘  ůůŽĨƚŚĞĐŽŵŵƵŶŝƚLJĞŶŐĂŐĞŵĞŶƚĂĐƚŝǀŝƚŝĞƐƉůĂŶŶĞĚĂƐƉĂƌƚŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞ ĂŶĚĂůůŽĨƚŚĞĐŽŵŵƵŶŝƚLJŝŶƉƵƚƌĞĐĞŝǀĞĚǁŝůůďĞĚŽĐƵŵĞŶƚĞĚĂŶĚĐĂƚĂůŽŐĞĚƐŽƚŚĞLJĐĂŶďĞƵƐĞĚ ƚŽŝŶĨŽƌŵƚŚĞĂŶĂůLJƐŝƐĂŶĚƉŽůŝĐLJĚĞĐŝƐŝŽŶƐƚŚĂƚǁŝůůďĞŵĂĚĞ͘/ŶƚŚĞŶĞĂƌƚĞƌŵ͕ŝŶƉƵƚƌĞĐĞŝǀĞĚ ƚŚŝƐƐƵŵŵĞƌ͕ǁŝůůďĞƵƐĞĚƚŽŚĞůƉĚĞĨŝŶĞŝƐƐƵĞƐĂŶĚĂůƚĞƌŶĂƚŝǀĞƐƚŽďĞĂŶĂůLJnjĞĚŝŶƚŚĞƉƌŽŐƌĂŵ /Z͘  WƵƌƉŽƐĞŽĨƚŚĞ:ƵůLJϵϮϬϭϰDĞĞƚŝŶŐ dŚĞ ƉƵƌƉŽƐĞ ŽĨ ƚŚŝƐ ƐĐŽƉŝŶŐ ŵĞĞƚŝŶŐ ŝƐ ƚŽ ĂůůŽǁ ƚŚĞ ĐŽŵŵƵŶŝƚLJ ĂŶĚ ƚŚĞ ŽŵŵŝƐƐŝŽŶ͕ ŝŶĚŝǀŝĚƵĂůůLJĂŶĚͬŽƌĂƐĂŐƌŽƵƉ͕ƚŽƉƌŽǀŝĚĞĐŽŵŵĞŶƚƐƌĞŐĂƌĚŝŶŐƚŚĞƐĐŽƉĞŽĨƚŚĞĞŶǀŝƌŽŶŵĞŶƚĂů ŝƐƐƵĞƐĂŶĚĂůƚĞƌŶĂƚŝǀĞƐƚŽďĞĞǀĂůƵĂƚĞĚŝŶƚŚĞ/Z͘  dŚĞĂůŝĨŽƌŶŝĂŶǀŝƌŽŶŵĞŶƚĂůYƵĂůŝƚLJĐƚ;YͿŝƐĂƐƚĂƚĞůĂǁƚŚĂƚƌĞƋƵŝƌĞƐĂůŝĨŽƌŶŝĂĂŐĞŶĐŝĞƐ ƚŽ ŝĚĞŶƚŝĨLJ ƚŚĞ ƐŝŐŶŝĨŝĐĂŶƚ ĞŶǀŝƌŽŶŵĞŶƚĂů ŝŵƉĂĐƚƐ ŽĨ ƚŚĞŝƌ ĂĐƚŝŽŶƐ ĂŶĚ ĚĞƐĐƌŝďĞ ĨĞĂƐŝďůĞ ŵĞĂƐƵƌĞƐƚŚĂƚĐĂŶďĞƚĂŬĞŶƚŽĂǀŽŝĚŽƌŵŝƚŝŐĂƚĞƚŚŽƐĞŝŵƉĂĐƚƐ͘Ŷ ŶǀŝƌŽŶŵĞŶƚĂů /ŵƉĂĐƚ   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϱ  ZĞƉŽƌƚ ;/ZͿ ŝƐ ƌĞƋƵŝƌĞĚ ďLJ Y ǁŚĞŶ ĂŶ ĂŐĞŶĐLJ ĚĞƚĞƌŵŝŶĞƐ ƚŚĂƚĂƉƌŽũĞĐƚŵĂLJŚĂǀĞĂ ƐŝŐŶŝĨŝĐĂŶƚĞĨĨĞĐƚŽŶƚŚĞĞŶǀŝƌŽŶŵĞŶƚ͘Ŷ/ZĞǀĂůƵĂƚĞƐĂƉƌŽƉŽƐĞĚƉƌŽũĞĐƚ͛ƐƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐ ŽŶ ƚŚĞ ĞŶǀŝƌŽŶŵĞŶƚ͕ ĂŶĚ ƌĞĐŽŵŵĞŶĚƐ ŵŝƚŝŐĂƚŝŽŶ ŵĞĂƐƵƌĞƐ Žƌ ĂůƚĞƌŶĂƚŝǀĞƐ ƚŽ ƌĞĚƵĐĞ Žƌ ĞůŝŵŝŶĂƚĞƚŚŽƐĞŝŵƉĂĐƚƐ͘ĞĐŝƐŝŽŶͲŵĂŬĞƌƐƵƐĞŝŶĨŽƌŵĂƚŝŽŶŝŶĂŶ/ZƚŽŚĞůƉĚĞƚĞƌŵŝŶĞǁŚĞƚŚĞƌ ŽƌŶŽƚƚŽĂƉƉƌŽǀĞĂƉƌŽũĞĐƚ͘  dŚĞ ŵŽƐƚ ĐŽŵŵŽŶ ƚLJƉĞ ŽĨ /Z ĂƐƐĞƐƐĞƐ ƉŽƚĞŶƚŝĂů ŝŵƉĂĐƚƐ ĂƐƐŽĐŝĂƚĞĚ ǁŝƚŚ Ă ƐƉĞĐŝĨŝĐ ĚĞǀĞůŽƉŵĞŶƚƉƌŽũĞĐƚ͘dŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞŝƐŶŽƚĂƐƉĞĐŝĨŝĐĚĞǀĞůŽƉŵĞŶƚƉƌŽũĞĐƚ͕ ĂŶĚŝŶƐƚĞĂĚĐŽŶƐƚŝƚƵƚĞƐĂŶĞĨĨŽƌƚďLJƚŚĞŝƚLJŽĨWĂůŽůƚŽƚŽĚĞƚĞƌŵŝŶĞĐŽŵƉƌĞŚĞŶƐŝǀĞůĂŶĚ ƵƐĞƐ͕ƉŽůŝĐŝĞƐ͕ĂŶĚƉƌŽŐƌĂŵƐƚŚĂƚǁŝůůŐƵŝĚĞƉƵďůŝĐĂŶĚƉƌŝǀĂƚĞĚĞĐŝƐŝŽŶŵĂŬŝŶŐƌĞŐĂƌĚŝŶŐůĂŶĚ 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ŚĂǀŝŶŐĞůĞǀĂƚĞĚƌŝƐŬ͕ƚŚĞ/ZǁŝůůĚĞƚĂŝůƉĞƌĨŽƌŵĂŶĐĞƐƚĂŶĚĂƌĚƐĨŽƌĨƵƚƵƌĞĚĞǀĞůŽƉŵĞŶƚ ƉƌŽũĞĐƚ͕ ŝŶĐůƵĚŝŶŐ ƌĞƋƵŝƌĞŵĞŶƚƐ ƚŽ ƌĞĚƵĐĞ ƌŝƐŬ ĨƌŽŵ ĞdžƉŽƐƵƌĞ ƚŽƐŝŐŶŝĨŝĐĂŶƚ ĐŽŶĐĞŶƚƌĂƚŝŽŶƐŽĨWDϮ͘ϱ ĂŶĚdƐ͘ ZĞĐŽŵŵĞŶĚĂƚŝŽŶƐƚŽƌĞĚƵĐĞ ƌŝƐŬ ĂƐƐŽĐŝĂƚĞĚ ǁŝƚŚ ƉůĂĐĞŵĞŶƚŽĨŶĞǁƐĞŶƐŝƚŝǀĞůĂŶĚƵƐĞƐĂƐƐŽĐŝĂƚĞĚǁŝƚŚƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶĂĚũĂĐĞŶƚ ƚŽŵĂũŽƌƐŽƵƌĐĞƐŽĨĂŝƌƉŽůůƵƚŝŽŶǁŝůůďĞďĂƐĞĚŽŶƚŚĞƌĞĐŽŵŵĞŶĚĞĚďƵĨĨĞƌĚŝƐƚĂŶĐĞƐ ďĂƐĞĚ ŽŶ YD ƐĐƌĞĞŶŝŶŐ ƚŽŽůƐ͕ Z ŐƵŝĚĂŶĐĞ͕ ĂŶĚ ƚŚĞ ĂůŝĨŽƌŶŝĂ ŝƌ WŽůůƵƚŝŽŶ ŽŶƚƌŽůKĨĨŝĐĞƌ͛ƐƐƐŽĐŝĂƚŝŽŶ;WKͿŐƵŝĚĂŶĐĞ͘ ≠ŝŽůŽŐŝĐĂůZĞƐŽƵƌĐĞƐ WůĂĐĞǁŽƌŬƐ͛ ƐƵďĐŽŶƐƵůƚĂŶƚ dZ ǁŝůů ƉƌŽǀŝĚĞ Ă ƉƌŽŐƌĂŵŵĂƚŝĐ ĞǀĂůƵĂƚŝŽŶ ŽĨ ďŝŽůŽŐŝĐĂů ƌĞƐŽƵƌĐĞƐŝŶWĂůŽůƚŽ͘dŚĞƌĂĨƚ/ZĂŶĂůLJƐŝƐŽĨďŝŽůŽŐŝĐĂůƌĞƐŽƵƌĐĞƐǁŝůůĂĚĚƌĞƐƐĚŝƌĞĐƚ ŝŵƉĂĐƚƐŽŶƐƉĞĐŝĂůͲƐƚĂƚƵƐƐƉĞĐŝĞƐĂŶĚƐĞŶƐŝƚŝǀĞŚĂďŝƚĂƚƐĨƌŽŵƚŚĞŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞ ƵƉĚĂƚĞĚ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ͘  /ŶĚŝƌĞĐƚ ŝŵƉĂĐƚƐ ŽŶ ƚŚĞƐĞ ƌĞƐŽƵƌĐĞƐĨƌŽŵƚŚĞƵƌďĂŶ ĚĞǀĞůŽƉŵĞŶƚƚŚĂƚŵĂLJďĞĐĂƌƌŝĞĚŽƵƚǁŝůůĂůƐŽďĞĂŶĂůLJnjĞĚ͘^ƉĞĐŝĂůĂƚƚĞŶƚŝŽŶǁŝůůďĞ ŐŝǀĞŶƚŽŝŵƉĂĐƚƐŽŶĂƌƌŽŶ͕DĂƚĂĚĞƌŽ͕ĂŶĚ^ĂŶ&ƌĂŶĐŝƐƋƵŝƚŽƌĞĞŬƐ͘ dŚĞƌĂĨƚ/ZǁŝůůƌĞůLJŽŶƚŚĞĂůŝĨŽƌŶŝĂEĂƚƵƌĂůŝǀĞƌƐŝƚLJĂƚĂďĂƐĞĂŶĚĂƐĞĂƌĐŚŽĨƚŚĞ hŶŝǀĞƌƐŝƚLJ ŽĨ ĂůŝĨŽƌŶŝĂ DƵƐĞƵŵ ŽĨ sĞƌƚĞďƌĂƚĞ ŽŽůŽŐLJ ƌĞĐŽƌĚƐ ŝŶ ĚĞƐĐƌŝďŝŶŐ ƚŚĞ ĂĨĨĞĐƚĞĚĞŶǀŝƌŽŶŵĞŶƚĨŽƌďŝŽůŽŐŝĐĂůƌĞƐŽƵƌĐĞƐ͘EŽƉƌŽƚŽĐŽůͲůĞǀĞůƐƉĞĐŝĞƐͲƐƉĞĐŝĨŝĐĨŝĞůĚ ƐƵƌǀĞLJƐĂƌĞƉƌŽƉŽƐĞĚ͘ dŚĞ /Z ǁŝůů ĂŶĂůLJnjĞ ƚŚĞ ĞĨĨĞĐƚŝǀĞŶĞƐƐ ŽĨ ƚŚĞ ŐŽĂůƐ ĂŶĚ ƉŽůŝĐŝĞƐ ŝŶ ƚŚĞ ƵƉĚĂƚĞĚ ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶŝŶŵŝŶŝŵŝnjŝŶŐĂŶĚŵŝƚŝŐĂƚŝŶŐŝŵƉĂĐƚƐŽŶůŝƐƚĞĚƐƉĞĐŝĞƐ͕ŝŶĐůƵĚŝŶŐ ůŽƐƐŽĨƚŚĞŝƌŚĂďŝƚĂƚ͕ĂŶĚƉƌŽǀŝĚĞĂŶĞǀĂůƵĂƚŝŽŶŽĨŚŽǁƚŚĞŐŽĂůƐŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶǁŝůůĞŶĐŽƵƌĂŐĞƐƵƐƚĂŝŶĂďŝůŝƚLJĂŶĚĐŽŶƐĞƌǀĂƚŝŽŶŽĨŶĂƚƵƌĂůƌĞƐŽƵƌĐĞƐ͘ ≠ƵůƚƵƌĂůZĞƐŽƵƌĐĞƐ WůĂĐĞtŽƌŬƐǁŝůůĂŶĂůLJnjĞƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐƚŽĐƵůƚƵƌĂůƌĞƐŽƵƌĐĞƐƚŚĂƚĐŽƵůĚƌĞƐƵůƚĨƌŽŵ ŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞ͕ĚƌĂǁŝŶŐŽŶƚŚĞWĂůŽůƚŽ,ŝƐƚŽƌŝĐĂů /ŶǀĞŶƚŽƌLJĂŶĚŽƚŚĞƌĞdžŝƐƚŝŶŐĐƵůƚƵƌĂůƌĞƐŽƵƌĐĞƐƵƌǀĞLJƐĂŶĚĚŽĐƵŵĞŶƚƐƉƌĞƉĂƌĞĚĨŽƌƚŚĞ ŝƚLJ͘WƌĞƐĞƌǀĂƚŝŽŶƉƌŽŐƌĂŵƐŽƌŽƚŚĞƌŵĞĂƐƵƌĞƐŶĞĐĞƐƐĂƌLJƚŽĂĚĚƌĞƐƐƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐ ƌĞƐƵůƚŝŶŐĨƌŽŵŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞǁŝůůďĞƐƵŐŐĞƐƚĞĚĨŽƌ ŝŶĐůƵƐŝŽŶĞŝƚŚĞƌŝŶƚŚĞ/ZĂƐŵŝƚŝŐĂƚŝŽŶŵĞĂƐƵƌĞƐŽƌĂƐŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶƉŽůŝĐĞƐŽƌ ƉƌŽŐƌĂŵƐ͘ ≠'ĞŽůŽŐLJ͕^ŽŝůƐ͕ĂŶĚ^ĞŝƐŵŝĐŝƚLJ WůĂĐĞtŽƌŬƐǁŝůůƉƌĞƉĂƌĞƚŚĞ͞^ĞƚƚŝŶŐ͟ƐĞĐƚŝŽŶŽĨƚŚĞ/Z͘/ƚŝƐĞdžƉĞĐƚĞĚƚŚĂƚŐĞŽůŽŐŝĐ ŝŵƉĂĐƚƐ ŵĂLJ ƌĞůĂƚĞ ƚŽ ƐĞŝƐŵŝĐ ƐŚĂŬŝŶŐ͕ ůŝƋƵĞĨĂĐƚŝŽŶ͕ ĞƌŽƐŝŽŶ͕ ĞdžƉĂŶƐŝǀĞ ƐŽŝůƐ͕ ĂŶĚ ƐƵďƐŝĚĞŶĐĞ͘ WŽƚĞŶƚŝĂů ƐĞŝƐŵŝĐ ŝŵƉĂĐƚƐ͕ ŝŶĐůƵĚŝŶŐ ŐƌŽƵŶĚ ƐŚĂŬŝŶŐ͕ ƐƵƌĨĂĐĞ ƌƵƉƚƵƌĞ͕ ůŝƋƵĞĨĂĐƚŝŽŶ͕ĂŶĚůĂŶĚƐůŝĚĞƐǁŝůůďĞĚĞƐĐƌŝďĞĚ͘ĚĚŝƚŝŽŶĂůůLJ͕ƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐƌĞůĂƚĞĚƚŽ ŐĞŽƚĞĐŚŶŝĐĂůƐŽŝůƉƌŽƉĞƌƚŝĞƐ͕ƐƵĐŚĂƐĞƌŽƐŝŽŶ͕ĞdžƉĂŶƐŝǀĞƐŽŝůƐ͕ĂŶĚƐƵďƐŝĚĞŶĐĞǁŝůůďĞ ĚĞƐĐƌŝďĞĚ͘dŚĞWůĂĐĞtŽƌŬƐ͛ƐĞŶŝŽƌŐĞŽůŽŐŝƐƚ͕ǁŝƚŚϯϬLJĞĂƌƐŽĨĞdžƉĞƌŝĞŶĐĞ͕ǁŝůůƌĞǀŝĞǁƚŚĞ ĚƌĂĨƚ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ ƉŽůŝĐŝĞƐ ƉĞƌƚĂŝŶŝŶŐ ƚŽ ŐĞŽůŽŐLJ͕ ƐŽŝůƐ͕ ĂŶĚ ƐĞŝƐŵŝĐŝƚLJ͕ ĂŶĚ ƐƵŐŐĞƐƚƌĞǀŝƐŝŽŶƐƚŽƚŚĞƐĞƉŽůŝĐŝĞƐŽƌŶĞǁƉŽůŝĐŝĞƐ͕ŝĨŶĞĐĞƐƐĂƌLJ͕ŝŶŽƌĚĞƌƚŽŵŝƚŝŐĂƚĞ   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϵ  ƉŽƚĞŶƚŝĂůŐĞŽƚĞĐŚŶŝĐĂůŝŵƉĂĐƚƐ͘ ≠'ƌĞĞŶŚŽƵƐĞ'ĂƐŵŝƐƐŝŽŶƐ /ŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞŝƚLJ͛ƐŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞǁŽƵůĚƌĞƐƵůƚŝŶĂŶŝŶĐƌĞĂƐĞŝŶ ','ĞŵŝƐƐŝŽŶƐĨƌŽŵĞŶĞƌŐLJƵƐĞ;ŶĂƚƵƌĂůŐĂƐĂŶĚĞůĞĐƚƌŝĐŝƚLJͿ͕ƚƌĂŶƐƉŽƌƚĂƚŝŽŶƐŽƵƌĐĞƐ͕ ǁĂƚĞƌƵƐĞĂŶĚǁĂƐƚĞǁĂƚĞƌŐĞŶĞƌĂƚŝŽŶ͕ĂŶĚƐŽůŝĚǁĂƐƚĞĚŝƐƉŽƐĂů͘dŚĞĂŶĂůLJƐŝƐǁŝůůĚƌĂǁ ƵƉŽŶ ƉĂƐƚ ŝŶǀĞŶƚŽƌŝĞƐ ĐŽŶĚƵĐƚĞĚ ĨŽƌ WĂůŽ ůƚŽ͘ dŚĞ ŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ /Z ǁŝůů ƐƵŵŵĂƌŝnjĞƚŚĞ ŵŽƐƚ ƌĞĐĞŶƚ ĐŽŵŵƵŶŝƚLJ ',' ĞŵŝƐƐŝŽŶƐ ŝŶǀĞŶƚŽƌLJĨŽƌĞdžŝƐƚŝŶŐ ;Y ďĂƐĞůŝŶĞͿĞŶǀŝƌŽŶŵĞŶƚĂůĐŽŶĚŝƚŝŽŶƐĂŶĚĨŽƌĞĐĂƐƚ','ĞŵŝƐƐŝŽŶƐĂƚƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞ WůĂŶ,ŽƌŝnjŽŶLJĞĂƌ͘dŚĞ','ŝŶǀĞŶƚŽƌLJĨŽƌYďĂƐĞůŝŶĞĂŶĚďƵŝůĚŽƵƚǁŝůůďĞŵŽĚĞůĞĚ ƵƐŝŶŐƚŚĞůĂƚĞƐƚŵŽĚĞůŝŶŐƚŽŽůƐ;D&͕ĂůDŽĚ͕ĂŶĚK&&ZKͿ͘dŚĞďŽƵŶĚĂƌŝĞƐŽĨ ƚŚĞ ĐŽŵŵƵŶŝƚLJͲǁŝĚĞ ',' ĞŵŝƐƐŝŽŶƐ ŝŶǀĞŶƚŽƌŝĞƐ ǁŝůů ďĞ ďĂƐĞĚ ŽŶ Ă ĐŽŵďŝŶĂƚŝŽŶ ŽĨ ƐĞĐƚŽƌƐŽǀĞƌǁŚŝĐŚƚŚĞŝƚLJŚĂƐŐĞŽŐƌĂƉŚŝĐĂŶĚũƵƌŝƐĚŝĐƚŝŽŶĐŽŶƚƌŽů͘&ŽƌĞdžĂŵƉůĞ͕ƚŚĞ ƚƌĂŶƐƉŽƌƚĂƚŝŽŶƐĞĐƚŽƌǁŝůůďĞďĂƐĞĚŽŶsDdŐĞŶĞƌĂƚĞĚďLJƚƌŝƉƐƚŚĂƚƐƚĂƌƚŽƌĞŶĚŝŶƚŚĞ ĐŝƚLJĂŶĚĞdžĐůƵĚĞƚƌŝƉƐƚŚĂƚƉĂƐƐƚŚƌŽƵŐŚƚŚĞĐŝƚLJ͘dŚĞ/ZǁŝůůĞǀĂůƵĂƚĞƚŚĞŝŵƉĂĐƚĨƌŽŵ ƚŚĞĐŚĂŶŐĞŝŶ','ĞŵŝƐƐŝŽŶƐŝŶƚŚĞĐŝƚLJĐŽŵƉĂƌĞĚƚŽYďĂƐĞůŝŶĞĐŽŶĚŝƚŝŽŶƐƉƵƌƐƵĂŶƚ ƚŽYDƚŚƌĞƐŚŽůĚƐ͘ƌĞĂͲǁŝĚĞĐŽŶƐƚƌƵĐƚŝŽŶͲƌĞůĂƚĞĚŝŵƉĂĐƚƐ͕ƐƵĐŚĂƐĨƵŐŝƚŝǀĞĚƵƐƚ ĚƵĞƚŽĞĂƌƚŚŵŽǀŝŶŐĂŶĚŐƌĂĚŝŶŐĂŶĚĞdžŚĂƵƐƚĞŵŝƐƐŝŽŶƐĂƐƐŽĐŝĂƚĞĚǁŝƚŚĐŽŶƐƚƌƵĐƚŝŽŶ 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ƒdƌĂŶƐƉŽƌƚĂƚŝŽŶEŽŝƐĞ͗EŽŝƐĞĨƌŽŵǀĞŚŝĐƵůĂƌƚƌĂĨĨŝĐǁŝůůďĞĂƐƐĞƐƐĞĚƵƐŝŶŐĂǀĞƌƐŝŽŶŽĨ ƚŚĞh^&ĞĚĞƌĂů,ŝŐŚǁĂLJĚŵŝŶŝƐƚƌĂƚŝŽŶ;&,tͿdƌĂĨĨŝĐEŽŝƐĞDŽĚĞů͖ƚŚĞƐĞĐŽŶƚŽƵƌƐ ǁŝůů ƵƚŝůŝnjĞ ƚŚĞ ƚƌĂĨĨŝĐ ĨŽƌĞĐĂƐƚƐ ƉƌŽǀŝĚĞĚ ŝŶ ƚŚĞ ƚƌĂĨĨŝĐ ŝŵƉĂĐƚ ĂŶĂůLJƐĞƐ ĨŽƌ ƚŚĞ ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ ƵƉĚĂƚĞ͘dŚĞƐĞ ĂŶĂůLJƐĞƐ ǁŝůů ŝĚĞŶƚŝĨLJ ĂƌĞĂƐ ĂůŽŶŐĨƌĞĞǁĂLJĂŶĚ ƌŽĂĚǁĂLJƐĞŐŵĞŶƚƐƚŚĂƚǁŽƵůĚďĞĞdžƉŽƐĞĚƚŽŶŽŝƐĞŝŶĐƌĞĂƐĞƐĂďŽǀĞĐƌŝƚĞƌŝĂƐƉĞĐŝĨŝĞĚ ŝŶƚŚĞŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘/ŶĂĚĚŝƚŝŽŶ͕ƚŚĞŶŽŝƐĞĂŶĂůLJƐŝƐǁŝůůŝĚĞŶƚŝĨLJƉŽƚĞŶƚŝĂůŶŽŝƐĞ ĂŶĚǀŝďƌĂƚŝŽŶŝŵƉĂĐƚƐƚŽƐĞŶƐŝƚŝǀĞƵƐĞƐŝŶƚŚĞĐŝƚLJĨƌŽŵƌĂŝůĂŶĚĂŝƌĐƌĂĨƚƐŽƵƌĐĞƐ͘ ƒ^ƚĂƚŝŽŶĂƌLJEŽŝƐĞ͗EŽŝƐĞŝŵƉĂĐƚƐĨƌŽŵŶŽŶͲƚƌĂŶƐƉŽƌƚĂƚŝŽŶƐŽƵƌĐĞƐƐƵĐŚĂƐŵĂũŽƌƌĞƚĂŝů ĂŶĚ ĐŽŵŵĞƌĐŝĂůͬŝŶĚƵƐƚƌŝĂů ƵƐĞƐ ǁŝůů ďĞ ĚŝƐĐƵƐƐĞĚ ŝŶ ƚĞƌŵƐ ŽĨ ƉŽƚĞŶƚŝĂů ŝŵƉĂĐƚƐ ƚŽ ŶĞĂƌďLJŶŽŝƐĞͲƐĞŶƐŝƚŝǀĞƌĞĐĞƉƚŽƌƐ͘&ƵƚƵƌĞĂŵďŝĞŶƚŶŽŝƐĞĂŶĚůĂŶĚƵƐĞĐŽŵƉĂƚŝďŝůŝƚLJǁŝůů ďĞĚŝƐĐƵƐƐĞĚ͕ĂŶĚŶŽŝƐĞŵŝƚŝŐĂƚŝŽŶǁŝůůďĞƉƌŽǀŝĚĞĚƚŽƌĞĚƵĐĞƉŽƚĞŶƚŝĂůŝŵƉĂĐƚƐƚŽ ĨƵƚƵƌĞƐĞŶƐŝƚŝǀĞůĂŶĚƵƐĞƐƌĞůĂƚĞĚƚŽŶŽŝƐĞ͕ŝĨĂƉƉůŝĐĂďůĞ͘ ƒEŽŝƐĞĂŶĚ>ĂŶĚhƐĞŽŵƉĂƚŝďŝůŝƚLJ͗ŶĂŶĂůLJƐŝƐǁŝůůďĞƉƌĞƉĂƌĞĚƚŽĂƐƐĞƐƐŶŽŝƐĞĂŶĚ 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ŽŶĐĞƉƚϯ͗^ůŽǁEŽŶͲZĞƐŝĚĞŶƚŝĂůĞǀĞůŽƉŵĞŶƚΘŚĂŶŐĞ>ĂŶĚhƐĞĞƐŝŐŶĂƚŝŽŶƐƚŽ&ŽĐƵƐ ,ŽƵƐŝŶŐŝŶdƌĂŶƐŝƚͲ^ĞƌǀĞĚƌĞĂƐǁŝƚŚEĞŝŐŚďŽƌŚŽŽĚ^ĞƌǀŝĐĞƐ /Ŷ ƚŚŝƐ ĂůƚĞƌŶĂƚŝǀĞ͕ ƚŚĞ ŝƚLJ ǁŽƵůĚ ĞƐƚĂďůŝƐŚ Ă ƉƌŽĐĞĚƵƌĞ ĨŽƌ ĐŽŶƚƌŽůůŝŶŐ ƚŚĞ ƉĂĐĞ ŽĨ ŶĞǁ ĐŽŵŵĞƌĐŝĂů;ŽĨĨŝĐĞĂŶĚZΘͿĚĞǀĞůŽƉŵĞŶƚƉƌŽũĞĐƚƐŐƌĞĂƚĞƌƚŚĂŶϭϬ<ƐƋƵĂƌĞĨĞĞƚĂŶĚǁŽƵůĚ ĂĚũƵƐƚůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐ ĂŶĚƉŽůŝĐŝĞƐƚŽĚŝƐĐŽƵƌĂŐĞŽƌƉƌŽŚŝďŝƚŶĞǁŚŽƵƐŝŶŐƵŶůĞƐƐŝƚ͛Ɛ ǁŝƚŚŝŶŽŶĞŚĂůĨŵŝůĞŽĨĂĂůƚƌĂŝŶŽƌƵƐZĂƉŝĚdƌĂŶƐŝƚƐƚŽƉĂŶĚƚŽŝŶĐƌĞĂƐĞĂůůŽǁĂďůĞƌĞƐŝĚĞŶƚŝĂů ĚĞŶƐŝƚŝĞƐ ǁŝƚŚŝŶ ƚŚŽƐĞ ĂƌĞĂƐ͘  dŚŝƐ ͞ƐǁĂƉ͟ ǁŽƵůĚ ĞĨĨĞĐƚŝǀĞůLJ ĚŽǁŶnjŽŶĞĂƌĞĂƐƚŚĂƚĂƌĞŶŽƚ ŝŵŵĞĚŝĂƚĞůLJĂĐĐĞƐƐŝďůĞƚŽƚƌĂŶƐŝƚŝŶĞdžĐŚĂŶŐĞĨŽƌƵƉͲnjŽŶŝŶŐƚƌĂŶƐŝƚƐĞƌǀĞĚĂƌĞĂƐƚŚĂƚŝŶĐůƵĚĞ ŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝĐĞƐ͘ZͲϭŶĞŝŐŚďŽƌŚŽŽĚƐǁŽƵůĚďĞƉƌŽƚĞĐƚĞĚ͕ĂŶĚƉŽůŝĐŝĞƐǁŽƵůĚĞŶĐŽƵƌĂŐĞ ƚŚĞ ƉƌĞƐĞƌǀĂƚŝŽŶ ŽĨ ŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐ ƌĞƚĂŝů ǁŚĞƌĞ ŝƚ ĞdžŝƐƚƐ ƚŚƌŽƵŐŚŽƵƚ ƚŚĞ ŝƚLJ͘   dŚŝƐ ĂůƚĞƌŶĂƚŝǀĞĐŽƵůĚƚĞƐƚƚŚĞŝŵƉĂĐƚƐĂŶĚďĞŶĞĨŝƚƐŽĨĚĞƉƌĞƐƐŝŶŐƚŚĞĂůƚƌĂŝŶƚƌĂĐŬƐďĞůŽǁͲŐƌĂĚĞ ďĞƚǁĞĞŶ^ĂŶŶƚŽŶŝŽǀĞ͘ĂŶĚWĂŐĞDŝůůZĚ͘  y,ŝŐŚĚĞŶƐŝƚLJŚŽƵƐŝŶŐǁŽƵůĚďĞĂĚĚĞĚŽǁŶƚŽǁŶ͘ƐůŝŐŚƚŝŶĐƌĞĂƐĞƚŽƚŚĞŚĞŝŐŚƚůŝŵŝƚ ǁŽƵůĚďĞĂůůŽǁĞĚ͕ƌĂŝƐŝŶŐŝƚƚŽϱϱĨĞĞƚĂƐůŽŶŐĂƐƚŚĞĂĚĚŝƚŝŽŶĂů ŚĞŝŐŚƚ ŝƐ ƵƐĞĚ ĨŽƌ ƌĞƐŝĚĞŶƚŝĂů ƵŶŝƚƐ͘ ^ŵĂůůĞƌ ƵŶŝƚƐ ;ƐƚƵĚŝŽƐ ĂŶĚ ϭͲďĞĚƌŽŽŵ ĂƉĂƌƚŵĞŶƚƐͿ ĂŶĚͬŽƌ ƐĞŶŝŽƌ   ŝƚLJŽĨWĂůŽůƚŽ WĂŐĞϭϲ  ŚŽƵƐŝŶŐǁŽƵůĚďĞĞŶĐŽƵƌĂŐĞĚ͘dŚĞϮϳhŶŝǀĞƌƐŝƚLJǀĞŶƵĞƐŝƚĞǁŽƵůĚďĞĚĞǀĞůŽƉĞĚĂƐĂ ƚƌĂŶƐŝƚĐĞŶƚĞƌǁŝƚŚǁŽƌŬĨŽƌĐĞŚŽƵƐŝŶŐ͘ yůŽŶŐůĂŵŝŶŽZĞĂů͕ŶĞǁĚĞǀĞůŽƉŵĞŶƚǁŽƵůĚďĞĨŽĐƵƐĞĚŝŶŶŽĚĞƐĂƚƉůĂŶŶĞĚZd ƐƚŽƉƐ͕ĂŶĚŚŽƵƐŝŶŐǁŽƵůĚďĞƉƌŽŚŝďŝƚĞĚŽƵƚƐŝĚĞŽĨŝĚĞŶƚŝĨŝĞĚŶŽĚĞƐ͘WŽƌƚŝŽŶƐŽĨƚŚĞ ^ƚĂŶĨŽƌĚZĞƐĞĂƌĐŚWĂƌŬĂŶĚƚŚĞ^ƚĂŶĨŽƌĚ^ŚŽƉƉŝŶŐĞŶƚĞƌĨƌŽŶƚŝŶŐŽŶůĂŵŝŶŽZĞĂů ĐŽƵůĚďĞƌĞĚĞǀĞůŽƉĞĚƚŽŝŶĐůƵĚĞŚŽƵƐŝŶŐŝĨƚŚĞƐĞĂƌĞĂƐĂůƐŽŝŶĐŽƌƉŽƌĂƚĞŶĞŝŐŚďŽƌŚŽŽĚ ƐĞƌǀŝĐĞƐ ĂŶĚ ĂƌĞ ĐŽƵƉůĞĚ ǁŝƚŚ ƐƚƌĞĞƚƐĐĂƉĞ ŝŵƉƌŽǀĞŵĞŶƚƐ ĂŶĚ ƉĞĚĞƐƚƌŝĂŶ͕ ďŝŬĞ͕ ĂŶĚ ƚƌĂŶƐŝƚĐŽŶŶĞĐƚŝŽŶƐƚŽŽǁŶƚŽǁŶĂŶĚĂůǀĞ͘ yĂůŝĨŽƌŶŝĂǀĞŶƵĞŝƚƐĞůĨǁŽƵůĚƌĞŵĂŝŶĂ͞ƋƵŝƌŬLJ͟ůŽǁƐĐĂůĞĐŽŵŵĞƌĐŝĂůƐƚƌĞĞƚ͕ĂŶĚƚŚĞ ƐƵƌƌŽƵŶĚŝŶŐ ĂƌĞĂ ǁŽƵůĚĂĐĐŽŵŵŽĚĂƚĞ ĂĚĚŝƚŝŽŶĂů ŵƵůƚŝĨĂŵŝůLJ ŚŽƵƐŝŶŐ Ăƚ ŵĞĚŝƵŵ ĚĞŶƐŝƚŝĞƐǁŝƚŚƵŶĚĞƌŐƌŽƵŶĚƉĂƌŬŝŶŐ͘ ydŚĞĂƐƚDĞĂĚŽǁŝƌĐůĞͬĂLJƐŚŽƌĞĂŶĚ^ŽƵƚŚ^ĂŶŶƚŽŶŝŽĂƌĞĂƐǁŽƵůĚĐŽŶƚŝŶƵĞƚŽ ƐƵƉƉŽƌƚĂǀĂƌŝĞƚLJŽĨŶŽŶͲƌĞƐŝĚĞŶƚŝĂůƵƐĞƐ͕ĂŶĚŚŽƵƐŝŶŐǁŽƵůĚďĞƉƌŽŚŝďŝƚĞĚ͘  ŽŶĐĞƉƚϰ͗džƉůŽƌĞ/ŶŶŽǀĂƚŝǀĞEĞƚͲĞƌŽ/ŵƉĂĐƚŽŶĐĞƉƚƐ hŶĚĞƌƚŚŝƐĂůƚĞƌŶĂƚŝǀĞ͕WĂůŽůƚŽǁŽƵůĚůĞĂĚƚŚĞƐƚĂƚĞĂŶĚƚŚĞĐŽƵŶƚƌLJŝŶƚĞƐƚŝŶŐǀĂƌŝŽƵƐ͞ŶĞƚ njĞƌŽ͟ĐŽŶĐĞƉƚƐ͗ŶĞƚnjĞƌŽŐƌĞĞŶŚŽƵƐĞŐĂƐĞŵŝƐƐŝŽŶƐ͕ŶĞƚnjĞƌŽŶĞǁǀĞŚŝĐůĞŵŝůĞƐƚƌĂǀĞůĞĚ;sDdͿ͕ ŽƌŶĞƚnjĞƌŽƉŽƚĂďůĞǁĂƚĞƌƵƐĞ͘^ŽŵĞƉŽůŝĐŝĞƐŵŝŐŚƚďĞĂƉƉůŝĞĚĐŝƚLJǁŝĚĞ͖ŽƚŚĞƌƐǁŽƵůĚďĞ ĨŽĐƵƐĞĚ ŽŶ ƐƉĞĐŝĨŝĐ ĂƌĞĂƐ͘  ĨĨŽƌĚĂďůĞ ŚŽƵƐŝŶŐ ĂŶĚ ŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐ ƌĞƚĂŝů ĐŽƵůĚ ďĞ ĞdžĞŵƉƚĞĚĨƌŽŵƐƵĐŚƌĞƋƵŝƌĞŵĞŶƚƐ͕ďƵƚƉƌĞƐƵŵĂďůLJŶŽƐƉĞĐŝĨŝĐŐƌŽǁƚŚŵĂŶĂŐĞŵĞŶƚƐƚƌĂƚĞŐLJ ǁŽƵůĚďĞŶĞĞĚĞĚŽŶƚŚĞƚŚĞŽƌLJƚŚĂƚƚŚĞ͞ŶĞƚͲnjĞƌŽ͟ƌĞƋƵŝƌĞŵĞŶƚƐǁŽƵůĚĂĚĚƌĞƐƐƚŚĞƉĂĐĞĂŶĚ ŝŵƉĂĐƚƐŽĨĚĞǀĞůŽƉŵĞŶƚ͘ZͲϭŶĞŝŐŚďŽƌŚŽŽĚƐǁŽƵůĚďĞƉƌŽƚĞĐƚĞĚĂŶĚƉŽůŝĐŝĞƐǁŽƵůĚĞŶĐŽƵƌĂŐĞ ƚŚĞƉƌĞƐĞƌǀĂƚŝŽŶĂŶĚĞdžƉĂŶƐŝŽŶŽĨŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐƌĞƚĂŝůƚŚƌŽƵŐŚŽƵƚƚŚĞŝƚLJ͘  ydŚĞĐƵƌƌĞŶƚŽǁŶƚŽǁŶĐĂƉŽŶŶŽŶͲƌĞƐŝĚĞŶƚŝĂůĚĞǀĞůŽƉŵĞŶƚǁŽƵůĚďĞƌĞƉůĂĐĞĚǁŝƚŚĂ ƌĞƐƚƌŝĐƚŝŽŶŽŶŶĞƚŶĞǁǀĞŚŝĐůĞƚƌŝƉƐ͘dŚĞĂƌĞĂǁŽƵůĚƌĞƚĂŝŶŝƚƐĐƵƌƌĞŶƚŵŝdžŽĨƵƐĞƐĂŶĚ ǁŽƵůĚďĞƉƌŽŵŽƚĞĚĂƐĂĐƵůƚƵƌĂůŐĂƚŚĞƌŝŶŐƉůĂĐĞĨŽƌĂůůĂŐĞƐ͕ǁŝƚŚĂĨƵůůƌĂŶŐĞŽĨƐĞƌǀŝĐĞƐ ĨŽƌ ƌĞƐŝĚĞŶƚƐ ĂŶĚ ĞŵƉůŽLJĞĞƐ͘  ^ŝŐŶŝĨŝĐĂŶƚ ƉĞĚĞƐƚƌŝĂŶ ŝŵƉƌŽǀĞŵĞŶƚƐǁŽƵůĚďĞ 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Alternative Futures & Issues for Consideration in  the Environmental Impact Report (EIR “Scoping” Meeting). The City will prepare a  programmatic environmental impact report (EIR) for the update of its Comprehensive Plan. Staff will  summarize input received at recent public workshops and invite comments and suggestions from the  public and the Commission regarding the alternatives and issues that should be included for analysis in  the EIR. For more information contact Elena Lee at elena.lee@cityofpaloalto.org   Chair Michael: The next topic is the Comprehensive Plan Update: the discussion of alternative futures and  issues for consideration in the Environmental Impact Report (EIR), the EIR scoping, and we’ll begin with  a report from staff. Director Gitelman?   Hillary Gitelman, Director: Thank you Chair Michael and Commissioners. I’m Hillary Gitelman the  Planning Director and I wanted to start with just a few remarks before turning this over to Steven Turner  who is managing this process with his staff and our consultants. In our earlier discussion it was brought  up what’s the Planning Commission’s role in the Comprehensive Plan Update? And I wanted to  emphasize that it couldn’t be more important. You all contributed those of you who are on the  Commission contributed to a draft policy document that the City Council has received. And that will be  valuable input to this process and even more importantly this evening you’re really taking a first step in  looking at the input we’ve received so far on general concepts and alternatives and teeing that up for a  City Council discussion of alternative futures in early August. We think this is absolutely critical and it’s  going to lead to a very we hope fruitful and productive analysis after we decide on the general concepts  that are to be analyzed.   We know that after the City Council discussion on August 4th we owe you a better description of what  your role will be in later phases of the Comprehensive Plan process. I want you to be aware that we are  thinking about that. A lot of this depends on the Council’s discussion on August 4th and what they choose  to do as next steps, but we will get back to you after that discussion with more specifics about your role  and how we’ll be able to leverage all the work that you’ve done to date and your discussions this evening  to take this plan, planning process to a successful conclusion. As you know our goal is to get to the finish  line by the end of 2015 on a comprehensive update to the City’s Comprehensive Plan.   You can also help us between now and August 4th spread the word about alternatives. And I see that the  Commissioners have some index cards there with website information on it. We’re really trying to get the  word out, thank you, and asking you to distribute those cards to 25 of your closest friends because the  input doesn’t stop this evening or on August 4th. We really want members of the public who can’t come  to meetings to go on our website, provide the kind of input that they would be able to provide if they  were here, any other ideas that occur to them about critical issues that are facing the City of Palo Alto,  what some alternative futures might look like that we should analyze in this process hoping that by the  end of the process we get to forming a collective vision for the future of our City that is every bit as  useful and important as the last Comp Plan was to the future generations and that we’re trying to  leverage or build on.   Anyway that’s all I had to say except with one addition, which is I think I referenced it earlier that I  wanted the Commission to know that the City Manager did appoint what’s called the Leadership Group,   &LW\RI3DOR$OWR  3DJH 13 individuals from our community that we’re asking to help us with community outreach and  engagement during the Comprehensive Plan Update. The group hasn’t even met yet, but we hope that  we’ll convene them this month and that they will help the staff and by extension the Commission get the  word out on all of these issues and ensure that by the end of the day we have a full suite of input from  all directions on this planning process and everybody’s idea is taken into consideration as we start to  winnow down and get to a revised plan. With that I’m going to hand it over to Steven and his  consultants for a brief presentation and then we’ll get on to the main event, which is the public testimony  and the Commission’s feedback on the materials in your packet.   Steven Turner, Advance Planning Manager: Great, thank you Hillary. I’m Steven Turner the Advance  Planning Manager. I’m very pleased to bring this back to the Commission for your review and comment.  The last time that we met with the Commission was back at the end of April on April 30th and at that time  staff presented you with a status update on our work on the Comprehensive Plan Update and we also  described the Our Palo Alto concept that the City Council had adopted as a framework for organizing all  of the concurrent planning efforts that staff has been working on over these past few months. And we  also outlined a schedule for completion of the Comprehensive Plan Amendment by December of 2015.   But we have a lot of good news to report since our last meeting. Number 1, Council reviewed the  Planning Commission’s work of goals, policies, and programs that were contained in our Comprehensive  Plan policy document version 1.0. Council provided a lot of comment and feedback and that feedback is  contained within an attachment in your staff report so you can see what they’ve said about those policies  and programs. Number 2, Council also accepted our plan for community engagement. Staff has been  working extremely hard over the past two or three months to really implement that plan and we have a  lot of information to present to you tonight with that regard. Council also accepted the California Avenue  Concept Plan as part of the Comprehensive Plan Update and so that will be moving forward with the  Comprehensive Plan. As Hillary mentioned we are, have developed the Leadership Group that will advise  us on engagement matters and that will start up very shortly. And I think probably the best news is that  we’re still on schedule. Which is no small feat given all of the time that it’s taken so far.   So really where are we now? As I mentioned before we have draft goals, policies, and programs  contained within our policy document. We’ve released a Notice of Preparation (NOP) at the end of May,  which really signals our intent to prepare a program EIR for the Comprehensive Plan and we’ll talk a little  bit about that as well tonight. We’re in the middle of really the period of soliciting public input and  comment within the program EIR. And tonight’s meeting is a very important step in obtaining that public  input. We have designed two opportunities in addition to the community engagement meetings that we’ll  talk about to solicit that input tonight and then also with the City Council on August 4th. Those are two  opportunities for people to provide comments and questions that will help guide our environmental  review going forward.   For tonight we really have two main goals: we want to accept the public testimony on environmental  issues and the alternatives as proposed, and then have the Commission provide staff and consultants  with any feedback that you might have regarding our direction. You’re not taking any direct action  tonight. Again, this is just one of the two official scoping meetings that we are having to solicit public  input. We’re extremely interested in the comments from the public and from the Commission again to  help guide our efforts. We’re not here tonight necessarily to respond to questions or comments on the  EIR or the analysis tonight. Really what we’re here tonight is to listen and to take in questions and  comments that will help guide our analysis over the next few months. It would be helpful if the Planning  Commission could express some concurrence especially over the draft alternatives that staff has put  together and are contained within the staff report and that you’ll hear more about this evening, but it’s  not required. But certainly having that concurrence that we can then report back to the City Council on  August 4th would be very helpful.   And I think that is about all I wanted to mention before I introduce Joanna Jansen from PlaceWorks.  PlaceWorks has been our consultant on the Comprehensive Plan Update for many years now and I think  she is as excited as I am to finally get to this point of scoping meetings. With that I’ll give it to Joanna.    &LW\RI3DOR$OWR  3DJH Joanna Jansen, PlaceWorks: Thank you Steven. I have a brief presentation to explain to members of the  Commission and the public what the EIR is that we’re accepting scoping comments on tonight and also  briefly go over the alternatives that we or that the initial concepts rather for the alternatives that we’re  hoping to more fully flesh out over the next few weeks and that will be covered in the EIR. Steven’s  already told you that our goals for tonight are mainly to listen to the public and to the Commission and  hear your comments so with that let me explain a little bit about what the EIR is. The… and I just want  to, this is I’m going to talk about the content, purpose, timeline of the environmental review process.  Where are opportunities for public input? Touch briefly on the concept of a program EIR and then go  through the topics that are going to be covered in the EIR we anticipate.   The EIR is an Environmental Impact Report. It’s required by State Law, the California Environmental  Quality Act (CEQA). It explains the objectives of a given project, the location of the project, any actions  that are proposed and potential impacts that could occur to the environment to existing conditions in the  environment. And an EIR is also required to present feasible mitigation measures or alternatives to a  given project that could reduce or avoid the impacts. In our case the project that we’re talking about on  this slide is the update of the Comprehensive Plan and I’ll get into what that means a little bit later.   So the purposes of the EIR are to disclose information about the project and about its potential impacts  as well as about possible mitigation measures, to provide an opportunity for public input, and to support  the Planning and Transportation Commission (PTC) and the City Council in making a decision about a  given project. Again, in this case that project would be the Comprehensive Plan Update. We’re looking  at a timeline of going on over about the next year and a half. We’ve already issued what’s called a NOP.  That’s a form that states for members of the community and for all State and other public agencies that  the City is preparing this document and it gives everyone a chance to respond to the City and say as  you’re preparing this important environmental document here are the topics that you really need to make  sure you address. And this meeting tonight is an important part of that process. So that NOP was issued  on May 30th. Public agencies had until June 30th to give us their comments about what the EIR should  cover and the public has until August 6th to give similar comments including at tonight’s hearing. So  again this is not comments necessarily on the project, but comments on what the environmental impact  analysis needs to keep in mind. It floods behind my house, there’s terrible traffic at this intersection, you  need to keep in mind this important special status species, those are the types of comments that we can  receive during this scoping period about what we need to cover during the EIR.   And then once we have a full set of comments and everyone’s had a chance to make sure that we heard  from them about what the EIR needs to cover we’ll be conducting the analysis later this year through the  end of the year. And we’re aiming to publish the draft EIR containing all of this analysis at the end of the  year in December 2014. And then that the public review period that would be yet another public review  period for people to review all of the information in the EIR. I’m sure most of you are probably familiar  with what an EIR is. It’s often a very lengthy, very detailed document so we have 60 days. Right now  we’re anticipating at least a 60 day public review period. That will be for the community as well as for  any other public agencies that want to review and comment on the draft EIR.   The next slide just gives kind of a visual diagram of the process that I just described highlighting again  the areas for public input, which is one of the key functions of an EIR. So right now we’re in the on the  first column on the left we’re in that white box of the 30 day scoping period, which is for the community  members is actually a 69 day scoping period lasting until August 6th. And then we will be working on  conducting the environmental review and publishing the draft EIR moving into another public review  period. After that second public review period on the draft EIR itself closes then we will be working with  City staff to respond to the comments. And the City is required to respond to each comment individually  in what’s called a final EIR. There is then yet another public review phase for that final EIR document to  review how all of the comments have been responded to. And once that document is published then the  PTC can hold their hearings to review the final EIR and make a recommendation to Council. And then  the final step is for the City Council to certify the EIR and approve a project. So that approval will be  obviously contingent upon the information that’s disclosed in the draft EIR and would likely be some  version of one or more of the alternatives that I’m going to talk about a little bit later in the presentation.  So the approval would be an adoption of an updated Comprehensive Plan.   &LW\RI3DOR$OWR  3DJH  When we’re doing an EIR on a plan especially a plan that affects an area as large as the entire City of  Palo Alto we do what’s called a program or programmatic EIR and that’s distinguished from a project  level EIR. A project level EIR is, deals with a specific site or a certain number of parcels. You will have  diagrams of exactly what the buildings are going to look like on the parcel, where the parking is going to  be, where the entrances and exits are, which trees would be kept or removed, a very high level of detail  about that specific project. And the EIR on that project would look at that level of detail, look at site  specific analyses of hydrology or biological resources or cultural resources and then identify and mitigate  any particular impacts for that project. When we’re looking at a document like the Comprehensive Plan  obviously it’s much more difficult to say exactly how a given parcel would be developed or where a  particular driveway cut would be. We don’t look at the City in that level of detail.   In a programmatic EIR we’re looking much more conceptually at what type of development would be  allowed and where and although there is a quantified analysis of things like traffic impacts and air quality  impacts there are not site specific studies for any particular parcel. So it’s a much more conceptual level  of detail in a programmatic EIR and because of that additional development projects that go forward  under the Comprehensive Plan would then depending on what type of project they are require additional  levels of environmental analysis. And that’s the point where you would get the site specific level of  detail. So that’s just a little bit about the difference between a project level EIR and a programmatic EIR  like the one we’ll be preparing for the Comprehensive Plan Update.   Both EIRs no matter what level of detail they’re at, both types of EIRs including the programmatic EIR  have a similar list of topics that they address and again these are established in the CEQA. So this is a  list of the topics that we anticipate addressing in the EIR. Again it focuses on impacts to the existing  physical environment and it covers as you can see a very wide range of topics including some topics that  are perhaps slightly less about the physical environment like the public services sections, which look not  only at the physical environment, but also at the services provided by the City and to serve development.   So what your EIR is going to cover is a range of alternatives. You can go ahead Elena. And these  alternatives are part of your packet tonight in their very initial preliminary form. They have been the  result, where we are today is the result of a series of meeting that have been held over about the past  month and a half or so since May 29th. The EIR as I mentioned is going to cover each one of the  alternatives in the same level of detail, which is rather unusual and innovative for an EIR on a  comprehensive plan. And so it’s worthwhile to explain a little bit about what those alternatives are and  how they’re shaping up so far. So we’ve had a series of three meetings with the public and I see a lot of  familiar faces from those meetings, so thank you all for continuing to be involved in the process. We’re  very grateful for your time. We’ve had meetings starting on May 29th, June 10th, and June 24th that built  on each other and I’m going to speak briefly about each one of those.   At the first meeting we talked about critical issues and we asked small groups to complete a SWOT  exercise to consider Palo Alto’s strengths, weaknesses, opportunities, and threats. And a number of  common themes emerged from the groups in each one of those four categories including the importance  of maintaining Palo Alto’s high quality of life, building on and taking advantage of the unique relationship  with Stanford, addressing concerns about traffic congestion and public trust, reaching out to citizens and  making sure that they’re integrated and engaged in this process, concerns about the high cost of housing  both rental and ownership, and interest in high speed rail or Caltrain electrification both as a threat and  an opportunity. There were a number of other critical issues that were identified through the SWOT  exercises. Those are just some of the highlights that we heard from many of the small groups. The  complete feedback from that website, excuse me, from that meeting and all of the meetings is available  on the general plan, excuse me, the Comp Plan Update website.   So if you go to the next page you can see an example of the online engagement that we’ve, is also  possible on both this topic and the opportunity sites topic that I’ll address in just a second. In a way, as  one of the ways of reaching out to citizens who can’t take three hours out of their evening to come to a  meeting we have put up online versions of several of the exercises that we’ve done at the workshops and  this is just one of those exercises. So if you go to the project website or if you scan this Quick Response   &LW\RI3DOR$OWR  3DJH (QR) code with your telephone then you can get immediately to this online tool and we’re definitely still  taking input and we’ll welcome additional input through the online tools that are available.   So after working on some of the strengths, weaknesses, opportunities, and threats at the first workshop  we then moved to talking about potential growth in Palo Alto. What’s projected for the region and for  Palo Alto? What do other California cities do to manage growth? And then we asked small groups to get  together and look at maps of Palo Alto and brainstorm about areas that might potentially be appropriate  to accommodate change and which areas should be preserved over the next 15 years during the life of  the updated Comprehensive Plan. So if we see on the next slide there is an example of what one of  those table maps look like after the small group discussion and then looking at all four of the small group  table maps that were created staff and consultants worked together to collate those into a synthesized  map of six specific opportunity site areas that we focused on then at the third workshop. I’m noticing  that the top of this map is a little bit cut off so I apologize for that, but there is also an area including the  Stanford Shopping Center, Downtown, the entirety of the El Camino corridor, the California Avenue area,  the Stanford Research Park area, the East Meadow Circle and Bayshore area, and then the San Antonio  Road area as the six opportunity site areas that came out of the small group work at Workshop Number  2.   And then so at Workshop Number 3 we asked the participants there to look at those areas and think  about for each of those areas what are some different alternative ways that they might develop? And to  help spur that conversation we provided three potential alternatives very conceptual and offered  participants the chance to respond to those alternatives and revise them or to create their own new  alternative. So we had about 70 people ended up working in about nine small groups and each one of  those groups came up with a slightly different variation on the alternatives. Some groups created  completely new alternatives. I think we had two groups that chose that alternative that chose to create  their new alternative. Other groups worked with one of the three preliminary alternatives that we had  suggested and then made changes and refinements to that. So at the end of that workshop we then  took the feedback from those groups and tried to synthesize them into the draft alternatives that you  have to consider tonight. Before I move on to talking about those I just want to note that in addition to  the workshop, the face to face workshop, again online right now we have this tool where we are still  collecting input about these particular opportunity sites, what role they should play in the City in 2030,  what they should look like, what policies or programs might be necessary to achieve your vision for these  areas 15 years from now. So again that’s ongoing and we welcome continued input with that online tool.   So from all these sources we have now the four alternatives that are described in greater detail in your  staff report. They, before I start talking about each one of them individually I just want to stress that all  alternatives would preserve existing open space areas and existing areas that are zoned R1. We’ve heard  very clearly through this process the importance of residential neighborhoods and the importance of open  space to Palo Alto’s character and its quality of life and so none of the alternatives would include changes  in those areas.   The alternatives include a do nothing alternative. In CEQA this is called the “no project alternative.”  That doesn’t mean that nothing would happen between now and 2015, it means that none of the existing  regulatory documents would be changed. So the project that we’ve been talking about is an update to  the Comprehensive Plan. Under the no project alternative the existing Comprehensive Plan and existing  zoning would all stay in place as they are. Number 2 would slow, Concept Number 2 would slow non- residential development and allow some modest housing growth. That’s contrasted with Concept  Number 3, which would slow non-residential development, but would not discourage housing growth or  limit it, but would rather focus it in areas that are served by transit. And then finally Concept Number 4  is somewhat less about the location of development or type of development and more about ensuring  that new development is coupled with exploring potential new net zero impact concepts. And I’ll talk a  bit more about each one of these briefly and that will be the end of my presentation.   So again under Concept Number 1, the do nothing alternative, existing Comprehensive Plan policies and  zoning designations would be in place and those designations do allow for some new development. So  new development would go on, it would go on under the existing policies that are in place. Under those   &LW\RI3DOR$OWR  3DJH existing policies the City is already poised to see a relatively slow change in the types of uses along El  Camino Real. The California Avenue area would continue to see the types of there would be nothing to  change the types of development projects that are being proposed in the California Avenue area.  Existing job centers like the East Meadow Circle area or the Stanford Research Park would remain job  centers and would not have any housing or other types of uses added to them. And again in the staff  report there is much greater detail about each one of these alternatives.   Under Concept Number 2 we would slow non-residential development. Housing growth would be focused  on that that is necessary to meet State requirements and there would be no change to existing land use  designations. Under both this alternative and the next alternative Concept 3 there, the City would adopt  a new procedure for metering the pace of office and Research and Development (R&D) projects over  10,000 square feet. This is the opportunity for me to emphasize that these concepts are all very  preliminary at this point. The ideas are still percolating about what the concepts should be. We’re here  to hear from you tonight. We’re going to be hearing from the Council on August 4th. The particular  mechanism for example for regulating office growth, the legality of that mechanism, the accommodation  of the permit streamlining act, all of those types of details would definitely have to be worked out and  they are not worked out yet. So when we have the alternative and when we do the EIR those are details  that are definitely going to have to be fleshed out before we begin the EIR analysis. We’re not quite  there yet. We’re still working on forming these alternatives.   But in this alternative again we would focus residential growth on meeting State requirements and  limiting residential growth really to that kind of bare minimum that would be needed to meet State  requirements. There is not, there would not be a significant change to the existing character or mix of  uses in Downtown or along Cal Avenue or in any of the places that are primarily job oriented right now  like the Research Park/East Meadow Circle. And along El Camino the character would be a little bit more  lower density, increased setbacks away from the road, three story height limit for example on new  development.   Concept Number 3 would similarly slow non-residential development, but in the case of residential  development it would shift development, residential development capacity from existing residentially  zoned areas to areas that are within a half mile of Caltrain or Bus Rapid Transit (BRT) stations. So the  capacity would essentially be down zoned in many areas in order to up zone those areas that are within a  half mile of the transit stations and accommodate increased development there as a way of further  strengthening protections for existing residential, single family residential areas. Also under this  alternative we might test the possibility of depressing the Caltrain tracks from San Antonio to Page Mill  Road and we would add, Downtown would change to add more housing, adding housing also along El  Camino Real and not along Cal Avenue itself, but in the area around Cal Avenue, and in the Research  Park most likely along El Camino again in areas that are particularly close to the BRT stations or  otherwise well served with transit.   And then finally in Concept 4 there would not be growth management instruments added such as a  restriction on new office and R&D development, but instead the City would adopt policies to address the  impacts of that new development whether it would be from the vehicle trips that the development would  generate, the greenhouse gas emissions, water consumption, energy consumption, net zero is a very  broad concept that could be applied to many different aspects of development. As part of that project or  that alternative rather we would consider mixed-use projects along El Camino and some of those could  even go over 50 feet in height. That might be in exchange for providing a certain type of housing or  achieving a certain net zero goal that the City established. And the Research Park in particular might see  the greatest amount of change under this alternative becoming a proving ground or a testing ground for  a whole range of concepts that might include additional bike sharing programs, urban farming programs,  alternative energy generation, water conservation programs. So the Research Park as a test case for a  lot of net zero concepts under this particular alternative.   Before I end I just want to briefly explain what the process of these alternatives is. We’ve already done  Step 1 of synthesizing the input that we heard from the workshops. We’re now on Step 2, presenting the  draft alternatives to you and to the City Council. Again, once the alternatives are better fleshed out and   &LW\RI3DOR$OWR  3DJH we have a little more input on how they’re evolving then we will need to assign specific estimates of the  quantity and type of development to each alternative so that it can be analyzed in the EIR including  traffic modeling, air quality modeling, noise modeling, and other quantitative analyses. And then again,  each one of those four alternatives will be analyzed at an equal level of detail in the draft EIR which we  hope to publish at the end of this year. And I believe that concludes my presentation. So again, as  Steven mentioned we’re here to hear from the public and from you on the topics of the EIR and on the  content of the alternatives if you have that input.   Chair Michael: So thank you very much for that excellent presentation. Let’s now open the public hearing  and we’ll allow anybody from the public who submitted a speaker card an opportunity to speak. We’re  thinking this is an important topic. We want to definitely give you enough time to share your thoughts or  raise questions so individuals will have, typically we give three minutes, we’ll give you up to five minutes  and if you’re here on behalf of a group then you can have longer. I think there’s at least one such  representative. We’ll give you 9 or 10 minutes. Anyway, so Vice-Chair Keller who is first?   Vice-Chair Keller: Our first speaker is Neilson Buchanan and is he on behalf of a group? So I guess I’ll  give you 10 minutes.   Neilson Buchanan: I brought a companion here and I can take his spot I’m going to be greedy.   Michael Griffin: My name is Michael Griffin. I’m yielding my time to my comrade in arms here.   Mr. Buchanan: I want to thank all of you for and all the people that have been working on the process so  far for this, the Comp Plan, which is got to be one of the most nebulous documents to describe to  someone that there is. There’s one thing for sure for me is this will be certainly one of the best vetted  Comp Plans in a long time. The input I got as talking to sort of the middle management neighborhood  folks out there is that that’s all and good, I don’t want to get involved. It’ll be updated by people brighter  than I am and no more and it will then go back into the usual dead document file. That it’ll be used  heavily by people who know how to manipulate the system and nothing wrong with that, but it’s not a… I  haven’t heard of anybody in the country that has a dynamic comp plan. And something is missing for me  that there’s got to be a companion to the Comp Plan and I’ve talked to the real experts and I still don’t  understand what it could be. Maybe it’s a set of concept plans for the critical areas of the City, maybe it’s  the precise plan features that’s sprinkled out along to hit the future pressure points that we know are  coming. So that’s all I’ve got to say about the Comp Plan. I’m glad I’m not involved.   A more serious issue is your effort to engage people in the City planning. And the Comp Plan is just one  of those engagements. And as far as launching one I think you’ve done about everything that you could  expect to be done and it will be done better and all that stuff. But I, for the life of me I haven’t been  able to figure out how do you keep people engaged? The Comp Plan itself is not an engaging document  in my opinion, but as I honed in on this and talked to a few people and said please take a look at this  there’s one thing that began to excite people and that was these very rough scenarios that are coming  out through the EIR process. And what I would urge is that if you’re looking for a role to take on that  you ought to periodically stop and take a look at the two to three to four scenarios that are going to  come out of this. Have them renewed periodically, take them back to the public and get comments on  just how does this grab you? Because each one of those scenarios, elements of each one of them excites  somebody, I don’t think there’s a single scenario, but there are elements in each one that I guarantee  you will fill up rooms if you properly vet that. And that would be a real interesting way I think to keep  people engaged.   I have about eight points here tonight, but I’m only going to cover about four or five of them. In fact I’m  going to steal ideas that I hear tonight and I’m going to rewrite them accordingly. None of that scenario  development and refinement can happen in my opinion I’ve said this publicly many times with the current  staffing of the Planning Department. There needs to be a dedicated data division and that actually spells  out 3D, but any normal corporation in America today has forward looking, has people that can capture  good data and look forward. And Hillary needs somebody dedicated, I don’t know how much and it’s not  my job to worry about how much, that does nothing more than create data, see where we are for   &LW\RI3DOR$OWR  3DJH baselines and then make high, low, and medium projections whenever possible. That would drive those  scenarios very, in a very healthy fashion. So I don’t think we can get from where we are to where we  want to be without a stronger reliance on professional data. Basically you got to have the tools of the  trade.   And I just want to close on one of my pet projects because it’s going to test the mettle of this City. Let  me step back because I had a good chance to get some education from Steve Levy about something I  think is the overwhelming driver of what we’re into. The regional Gross Domestic Product (GDP) is  growing at Steve? Five, six, seven percent, the stress on the cities is a couple of points below that.  That’s real refined advice from the economist. And that’s creating enormous pressure on every city and  town from the Bay Area, of the southern Bay Area from Oakland down to San Jose. And I don’t think  we’ve begun to deal with the political and social impacts from the last couple of years and put I think is  the next two years. And that’s going to create an enormous stress.   And let me just illustrate that whatever’s going on in Menlo Park we’ll know a little bit more next week on  what the City Council does, the reaction from Save Menlo Park and I’m not going to take sides one way  or the other. We had our own Maybell situation. There’s balance Palo, Balance Mountain View going on  of trying to figure out what their balance between office and housing and density and very creative work  is going to come out of that. I had a chance to talk two hours with people down there yesterday and I  just and I’ve said it over again, I just don’t want to throw our City into mass confusion and hate and  discontent, but we’re creeping up there on that. Downtown parking is going to be a problem. The  parking permit issue is not permit parking, it’s the quality of neighborhood issue and I’m not going to go  into that because we’re going to have a chance to vet that very soon.   And we have an election coming up and whatever this election is I think it’s going to be mild compared to  the election in 2016 because of the economic drivers and the social and political consequences. I hope  I’m going to conclude with that remark and I don’t want it to be negative. It just means that’s another  factor you need to be thinking about. I don’t think the Comp Plan can address that it’s the intermediate  planning processes and how the Council and you operate vis-à-vis the citizens that come forward. So I  wish you the best. I know there are a lot of people in Palo Alto who want to make this a constructive  process. I especially do. Thank you.   Vice-Chair Keller: Michael Griffin do you want to take any of the remaining time? Thank you. Ok, the  next speaker is Shani Kleinhaus to be followed by Stephen Rosenblum.   Shani Kleinhaus: Thank you. I’m Shani Kleinhaus; I’m a resident of Palo Alto and the Environmental  Advocate for Santa Clara Valley Audubon Society. So I’m going to talk about birds a little bit and about  things that concern me as a resident as well.   So one of the things that we saw in Hillary’s presentation was [unintelligible] issues and it talks about  quality of life. So I think there is some kind of an assumption that birds and nature is part of quality of  life. Not that it is not, but it has its own value and that was mentioned in several of the tables there; that  there is an intrinsic value to nature that is not associated with human benefits or quality of life that needs  to be recognized. And the reason I mention that is because in the comments that I have provided  previously on the Natural Element of the Comprehensive Plan there were a lot of comments that we tried  my group to enter about how do we make this a bird friendly city? And that included how do we plant  and how do we trim trees and what kind of windows we have. And what do you do in the natural areas,  but also how do you make our City a living city not only for people? And people love birds. We have a  lot of birders, we have a lot of people that have a bird feeder in the back yard. We don’t want to lose  that. This is the only connection that people still in a city can have to nature is birds. So how do you  improve that? That needs to be a part of the general plan or the Comprehensive Plan and not only as a  quality of life issue.   And I had a few other notes. So I want to go back to the four concepts and the Concept 4 that has  innovative net zero concept and I’m trying to figure out what that means. I don’t think it’s clear. I think  it was really good to have a story about it in the newspaper today, thank you. But it’s still not clear what   &LW\RI3DOR$OWR  3DJH this means and I’m not clear whether this is kind of an experiment on a citywide scale, which would be  really scary because it could be an outcome that is not what we expect at all. And it could be a  mitigation that is actually presented as a general plan and that is not right either. So I think it’s really  interesting concept and could be done on one neighborhood. I would love to see it at East Meadow  Circle, which is really close to my house and I think that could be a good example, but I would not try to  adopt that as an alternative to a general plan or a Comprehensive Plan.   I have followed some of the processes in Mountain View very, very closely and what is going on in terms  of how the North Bayshore area where they have a lot of offices is going to deal with increase. And  there were a lot of concepts so they tried to figure out how do we stop growth of car trips, how do we  stop emissions, what are the other alternatives? So far a lot of creative solutions, but none of them  works to actually have net zero. They just don’t work. So there probably is no solution like that. It  would be wonderful to try and find one, but not on a city scale. It has to be an experiment that is much  smaller in scale.   And as a resident near East Meadow Circle I just want to go back to that specific plan to that side and  say that I would love to see more housing there. I think that to use the Circle for housing and the center  for services and park would be a wonderful thing instead of what’s there right now and a lot of people  came in the last 10 years to live there. Initially there was a response from some of the neighbors who  did not like it, but I see that they assimilated into the neighborhood very well and it’s a really nice  neighborhood to have these people live there.   What else did I have? The last thing I’m going to say is something about the process. When something  is now decided if it’s in a, an alternative is moving forward or something in the EIR is decided and we’re  moving forward with that there is no way back almost. It’s almost impossible and the people in the  audience might not know this, but once something moves forward going and saying well, we’re only  studying this so let’s study what the impact is, the study is not whether or not to do something, the study  is how to do something. So once it’s in there it’s not coming out. And we’ve had at Audubon some big  issues with that and did manage to get some things out of EIR’s at the last moment, but it’s almost  impossible to change a plan after it’s set in motion. And the EIR will not study whether or not something  is a good idea, it will only study how to do it and what kind of cost it’s going to cost all of us and mitigate  for that to some extent, not completely. Thank you.   Vice-Chair Keller: The next speaker is Stephen Rosenblum to be followed by Kevin Murray.   Stephen Rosenblum: Hi, my name’s Steve Rosenblum. I live in Palo Alto as well. I just wanted to bring  up an issue that is a vision issue I think and belongs in this study because of its overarching effect on life  in Palo Alto and that is the undergrounding of Caltrain. I think to me it represents an opportunity and a  solution to many problems. If the Caltrain right of way were underground it would immediately improve  the connectivity between east and west sides of Palo Alto. People could cross the train tracks on any  street again the way they used to be able to before the grade crossings were there. It would create real  estate above the train tracks, which would be accessible to transportation. It would possibly create a  bikeway depending on how the land were used and also opportunities to build housing and commercial  depending on how it was zoned. And this is really a way of creating real estate, something which God  usually doesn’t do except in places like Hawaii. We can actually get real estate back that is, that wasn’t  existing.   And some of the other aspects of it, it would eliminate traffic delays that we have now at the crossings  leading to a lot less loss in time of people waiting and concomitantly will allow Caltrain to increase  frequency of service because they would no longer be limited by gate downtime. So this would enhance  transit in both ways, both mass transit and vehicular and pedestrian transit because of having no more  traffic delays. It would also eliminate accidents at grade crossings as well as suicides, which we’ve had  many in the past. And so I think that’s another improvement. And it would also eliminate the train noise  from our environment. This would include the mechanical noise of the train as well as the horn noise,  which they are required to sound at every grade crossing. So that would be, improve quality of life for all  people living next to the tracks.   &LW\RI3DOR$OWR  3DJH  And then as a final thing it would prepare the way for undergrounding of high speed rail should it  eventually come to Palo Alto. And from what I’m understanding from the latest planning in contradiction  to what high speed rail had said early on is that they plan to retain grade crossings even when the trains  are going by at 125 miles an hour, which I think is not very sensible. I think it’s a real threat to our  environment as well as to our life and limb. So I think just I commend this as an idea to the  consideration of the Commission and that they should consider this as part of their planning process.  Thank you.   Vice-Chair Keller: The next speaker is Kevin Murray to be followed by Beth Bunnenberg. Is Kevin here?  Ok, great. So…   Kevin Murray: Hi, Kevin Murray, 2091 Harvard. I was listening to all of the presentation, thank you. I’ve  looked at the, I’ve read the plans; I’ve had the presentation on the TV. Let me emphasize this  Commission, first in terms of process as a political scientist I’m disappointed to hear that you’re  appointed by Council Members. I want you to be more independent. So maybe we can revisit that  process. Second, I’m not really aware of any of the people on the Commission are in any way related to  commercial development or attorneys related to intellectual property rights. Hopefully there’s no  connection there either. Again, independence is critical. Because those are like the two triads that make  up what is driving Silicon Valley.   Of the four plans Number 2 resonates with me the most. I would even like stricter allocations however  with respect to Association of Bay Area Governments (ABAG) remember the more companies we allow to  expand in Palo Alto the more ABAG will pressure us to bring in housing. Now I know we can do plans for  housing, but we don’t have to build the housing. So that’s the good news. That’s the good caveat and  hopefully we can stay with that.   Mr. Tanaka spoke earlier about the fact and I appreciate your comments trying to be inclusive that we  have to be maybe sensitive to the investment concerns of these commercial developers. Hey folks,  c’mon, they are here to invest and get a return. This is really about power, money, control, glory and I  for one as a Palo Altoan representing the citizens’ voice rather than the commercial interests want to  preserve the quality of life we have here. In my humble opinion your only role should be focusing on  how do you manage the existing development rather than plan for future development. Now we’re going  to hear a lot of survey questions discussing about look at the growth trends. I know we’re living in a  second gold rush boom right now and have been. In fact I saw it in 1984. To me the traffic levels were  too bad in 1984 when I lived here, of course I’ve been here since 1960. In the last 15 years my God,  what happened to the leadership? They just, they just surrendered. They surrendered to the financial  interest.   Our only power is in numbers. I know that. And if we get enough of us, the people in seats, the rest of  the Palo Altoans here it will change, but the true change only comes with electing a whole new slate of  non-developers to the City Council. And then they will direct this Commission to come up with ways on  how to manage our existing traffic. Push the success, the financial success, which I celebrate of Silicon  Valley out of Palo Alto. Shift it to San Jose where it deserves the redevelopment. And for those  urbanites who want to have that world experience, that’s great. I want to get you to move to San  Francisco, we want to get you to move to San Jose and enjoy those days, but for us we still want to feel  like we live in a community. This is the new sea change, so the closest one for a voice for the sea  change is Item Number 2, Item Number 2.   With respect to granny units I own three of those granny units and I applaud Mr. Keller’s earlier remark.  Sure, if you want to rezone so some existing property owners can do granny units on their existing  properties that might be the one way to accommodate housing crunch. All those become an executive  community in terms of the pricing of real estate. The homes are nothing to applaud, but that’s ok. That  was the World War II generation that picked up on the mass development of Middlefield. I remember  when Middlefield was literally a field prior to the Eichlers, but the housing values have so skyrocketed  that we’ve got to be realistic that really again note the success of the Silicon Valley really needs to be   &LW\RI3DOR$OWR  3DJH pushed out to other communities not only in California, but throughout the nation. The challenge here of  course is, and I don’t blame them venture capitalists they want to talk to one another and go across  town. They’re all centered here and again so are the law firms and so are the startups. And they, in  their mind’s eye they think that they need to be a part of the action and understandably the real estate  development says that’s right and we’ll facilitate that by giving them the infrastructures to succeed. We  know what they’re doing here, but it’s gotten out of control. It’s beyond even reasonable.   So it is my passion and hope that the only thing that will get passed here will be Item Number 2, 2 vision.  And I thank you for the time it must have taken to go through all the input. So for a voice of Palo  Altoans who really comes from the numbers not from the domestic and foreign investment that’s driving  the incredible expansion that I’ve ever seen in the history of this town this will be a voice helping to  coordinate a new City Council slate to redirect the direction of this Commission to plan for the existing  density and no more. Thanks for your time, I certainly appreciate it. Good night.   Vice-Chair Keller: The next speaker is Beth Bunnenberg to be followed by Robert Moss.   Beth Bunnenberg: Beth Bunnenberg speaking tonight as an individual. I am a Palo Alto resident. In  terms of vision I don’t envision Palo Alto in 30 years as a collection of skyscrapers that blocks our views  of the coastal hills and the bay. We are locked into our present land area and there aren’t any more  suburbs for us to annex. Therefore we must use our land very wisely.   I favor the option that actually was presented by our group at the Elks Lodge, which was a double slow;  slow growth on residential, slow growth on non-residential. We already have projects in the pipeline that  are greatly going to increase traffic and parking problems. Now history has shown that putting too many  people jammed together too tightly and the quality of life goes down. Already Palo Alto or at this point  Palo Alto has a pretty good balance between residential and parkland, but still there are traffic jams.  Tempers flare, people fight over parking places, and pedestrians are hurt and killed on our streets. We  love that parkland and yet we continue to see some threats to those parklands. I strongly recommend  keeping the 50 foot height limit and sticking to it. Place those 50 foot high buildings in areas such as  Stanford Industrial Park and the southern part of El Camino. Keep the buildings of human scale, both  residential and non-residential. Please accept the double slow alternative and let’s keep our quality of  life. Thank you.   Vice-Chair Keller: The next speaker is Robert Moss to be followed by Sea Reddy.   Robert Moss: Thank you. Couple of comments, in the list of topics one of the things that’s missing is the  potential flooding sea level rise. Under hydrology you should be considering that because it’s almost  certain that within 20 years the sea is going to go up by more than a foot. And a rise of that amount will  flood most of Palo Alto between the bay and Middlefield. So talk about that, you don’t just ignore it.   Second, in the hazardous materials the staff report talks about having a report from 2003. That’s old  data. I have ones from 2005 and I know they’ve been issued from 2010. Furthermore, the toxic levels  for trichloroethene (TCE) was significantly reduced about 18 months ago. So something that would have  been acceptable a year, three or four years ago is not acceptable and the mitigations are different today  than they would have been then. Keep that in mind when you’re talking about building in the California- Olive-Emerson (COE) area in particular.   On the various concepts the two that I think are the most realistic are Number 1, keep the existing  Comprehensive Plan. We spent years getting that developed. We don’t have to come up with a revised  Comprehensive plan for a few years. Let’s live with what we’ve got. If you want to make some changes  Concept 2 makes more sense than the others. One of the things that bothers me about Concept 3 and to  a certain extent Concept 4 is you’re talking about allowing densification within a half a mile of the transit  routes. ABAG is only asking for densification within a quarter mile of transit routes. A half mile would  include almost all of Barron Park, Evergreen Park, I could name the neighborhoods going up and down El  Camino, which would be impacted by increasing density along there.    &LW\RI3DOR$OWR  3DJH The City Council supposedly adopted a basic principle that all existing R1 zones shall not have an increase  in density. That must be adhered to no ifs, no ands, no changes. Same with the 50 foot height limit.  There’s no reason why you can’t build housing within 50 feet. I could show you hundreds of housing  units along El Camino and other major streets that are 50 feet or less. The reason that the CN zone has  a lower height limit is because we wanted it to be compatible with the housing behind it in Barron Park.  We didn’t want a 50 foot height limits.   Now when you talk about housing developments and you’re asking to put in developments that have  studio and one bedroom units find out what the market wants because you may find the market hates  studio and one bedroom units. Let me give you two examples: there’s a townhouse development on El  Camino Way just north of Charleston and there’s another one on San Antonio just east of what used to  be Mayfield Mall. Both of those were developed with the allowed Floor Area Ratio (FAR), but between  half and two-thirds the number of housing units that would have been allowed. And the developers were  asked why do you build these big units, 2,000, 2,500 square feet? And the answer was that’s what the  market wants. The market doesn’t want 800 square foot units. The market doesn’t want one bedroom  units. So find out what the market wants. Don’t tell the market what it ought to be doing, the market’s  going to tell you.   When you talk about changing El Camino I get very nervous because one of the things you’re talking  about is getting all of the property owners to band together and combine lots and work as a group. Been  there, done that, it crashed and burned. We tried that in the Barron Park Association years ago. For any  25 properties along El Camino you will find there are at least 30 property owners, some of whom don’t  talk to each other. So unless you can actually get somebody to come in and buy up the properties and  combine them you’re not going to be doing that. You’re going to have individual properties developed  one at a time.   And as an example there’s a vacant lot just south of Matadero. It’s been vacant for more than 40 years,  since the building that was on there burned. Jim Baer was trying to buy that and develop it as a hotel  about 25 years ago and found out that the person who owns it lives in Texas and the amount that she  wanted for it he considered grossly excessive and that was years ago, decades ago. So you’re going to  find 4146 El Camino, which has now come in with another development and this is the fourth  development they’ve come in with that property is owned by a woman in Hong Kong. She’s had two  projects approved. Both of them were never built. The approvals expired because she never went  forward and actually built them. So getting things done along El Camino is very different than getting  things done under normal development projects.   Vice-Chair Keller: Our final speaker unless we have additional cards is Sea Reddy.   Sea Reddy: Thanks for taking me in. I came in late. A few things that I would like this team to talk  about and include or consider is the Stanford Hospital expansion. Now it’s Stanford and they’re doing  what they’re already doing, so how would we incorporate whatever traffic whatever things that  happened, 24 hour emergency services, all that so would we probably need to I’m sure you’ve already  thought about it, but I just would like to put it as a list of things that we need to talk about.   And then East Palo Alto, you know we don’t live in an isolated world and I’ve seen this in Manhattan  Beach that when we had riots in 1991, Rodney King and all that, so there was Hawthorne and there was  Manhattan Beach. It was only two miles, very similar to here. It’s only about half a mile to East Palo  Alto. So we need to lift up that community so that we can live peacefully as well. We’re not living in an  isolated world, so I think we any of our planning we need to work with them; same thing with Mountain  View, same thing with next door, Menlo Park. So we’re not in an isolated community, we… what they do  impacts us, what we do impacts them. I think I’m more concerned with what they do that we might be  able to understand. So I think that discussion like Stanford would help.   And the other one is the when I look up on the sky; you know Palo Alto is a beautiful community and all  that. I used to live in Newport and there are extensions in the traffic. It seemed like the planes come  above wherever they go I haven’t researched whether they go to Oakland or San Francisco, I don’t know,   &LW\RI3DOR$OWR  3DJH I haven’t researched it. It needs to be looked at. The more traffic that that comes through it’s going to  break us up. An airplane unfortunately could have a mechanical damage, things like that. It’s going to  severely impact our life. So we need to participate there, we need to give more inputs, maybe they could  take an alternate path later at night? But I see planes beyond 10:00, 11:00 at night, which wasn’t the  case in Newport we had restrictions.   And then I think this is very important to me as we get older we need to have an alternate way for going  to the doctor. My five mile zone is Stanford and Menlo Park. We need to allow some other medical care  facilities other than Stanford. Not everybody can afford to go to Stanford. They are more expensive and  citizens might need alternative means of getting that medical care without having to drive. You know  when I call a taxi drive, they need to go they can take a taxi and go $20 and go to the hospital. It’s very  important to the community and a lot of people have a lot of money, but a lot of people don’t. Seniors  are more frugal too and caregivers and all that that need to be considered.   The last thing is beautification of El Camino. El Camino Real is not the prettiest thing and I was totally  surprised when I saw what’s on El Camino south of Page Mill Road. It’s quite different than what we see  on the north side so I think we had one city, one community, I didn’t really consider lifting that  community up like look that area up. Thank you.   Vice-Chair Keller: Speak and then you can turn in the card. So Stephen Levy you will have five minutes.   Stephen Levy: So I’m Steve Levy and I live about a block from here in Palo Alto. In terms Joanne and  Steve of the scoping plan, the EIR, my experience is that the analysis goes forward if you have really  specific alternatives. I’m sure you know that. We’re at a conceptual level. You’ve got people arguing  growth or no growth, but without numbers on those four alternatives not on individual parcels, but on  the program you can’t do your EIR, right? You can’t do the impacts. And nobody here is going to know  what happens. So that’s the first piece. You know that piece.   But there’s a second issue and I’ve been talking to Hillary and Steve back and forth. I don’t know what is  discretionary for the Commission and the Council, what is legal? What is legal under the existing Comp  Plan? That is how much growth the City can expect unless they do something that violates the law. I  think that will inform the discussion in the following way: it will move it to a discussion of where the best  locations and what are the best mitigation measures to handle the amount of growth that is legally  entitled now as opposed to an argument that may not be realistic about stopping growth altogether. I  don’t know the answer, but I think going forward you all need to be informed about what is legal. I  remember Steven and Joanna at the last meeting I think Steven you said there’s a lot of development  capacity generally in the City. Maybe not in Downtown, but I heard that correctly. So those two things  together will bring a lot of specificity to this.   Third, for the scoping plan I think the public deserves to know what it costs to do the mitigation. Ok?  Just saying something’s there, undergrounding Caltrain is a huge expense. I think we know it, need to  know the cost. In terms of the alternatives I have two suggestions. One, the document you passed out  talks alternately about neighborhood retail and neighborhood services. I think probably the correct  concept to think about is services. We have a big shopping center, we have a smaller town and country,  most areas have a grocery store or a CVS or something. What makes those neighborhoods walkable is a  bank and a dry cleaner and a UPS store and a place to get a haircut and tailor, restaurants, but all of  those services I think we focus too much on the commute trips and not enough on reducing walkable  evening and daytime trips for services that people take not the commute trips.   The last point I think the half mile of bus stop or transit is not quite the best way to think about it. When  I see Caltrain and those people getting off they’re getting off to go to jobs and it works because half of  them walk Downtown, half of them walk to the shuttle, half/half… a third and a third have bikes. Ok? So  I think if you’re serious around transit to reduce the commute you’d put jobs, which goes in the face of  what a lot of people want. It may not be a distinction which must, with much merit because it turns out  the transit stations are in Downtown areas. And so you’re absolutely I think want to put your housing   &LW\RI3DOR$OWR  3DJH near where services and everyday retail are to really reduce as much as possible the parking and net  commuting of people who can then walk or bike to those services. So thank you.   Vice-Chair Keller: Thank you. Are there any more speakers who have come later? I guess not.   Chair Michael: So I’d like to thank members of the public who spoke this evening very much for your  thoughtful comments. It’s always humbling being on a Commission in a City like Palo Alto where the  collective Intelligence Quotient (IQ) and knowledge base of the residents far exceeds our seven  appointed representatives on the Commission. I think that is instrumental in getting to the best possible  Comprehensive Plan Update.   Let’s, we’re going to close the public hearing and come back to the Commission. And I think given the  importance of this topic maybe we’ll allow for two rounds of comments and take say up to five minutes in  the first round and then you don’t have to talk all that time. If you have more we’ll give you a second,  second chance. So who would like to begin? Commissioner Rosenblum.   Commissioner Rosenblum: Thank you. As opposed to the previous round I may fill up my full time and  have to go to the next time. I’m very passionate about this. So I wanted to divide comments into some  high level comments and low level comments.   On the high level side one of my personal talking points is that this Palo Alto that everyone loves and this  sort of halcyon notion of walkable streets and low traffic and thriving businesses and I think we had a  number of people come up and refer to the Palo Alto of their youth. It’s a system and I think we need to  realize that this no growth/reduced growth in perils that system in some ways. So the Palo Alto of your  youth I’m sure had teachers living in Palo Alto, maybe policeman living in Palo Alto. Different people  could afford to live here. We have a demographic skew that now skews older and skews against young  working people without families. That is different from the Palo Alto of your youth. And a no growth or  negative growth policy exacerbates that difference. It makes it more expensive for young people to live  here, especially if there are no jobs for them. So they’re going to live here, pay a premium to have to  commute somewhere else.   And the interesting thing about young people is they go out every day. When I was a young person I  went out probably two times a day because I ate my lunch out, ate my dinner out, maybe meet friends  for drinks after work. I now have a young family. I go out maybe once a week. It’s very nice that once  a week I occasionally support our Palo Alto businesses, but they don’t live off me. They live off the  people who go there every day. And I benefit from that because I like walking to businesses and all of  us do, but we are in some ways I don’t want to call us free riders, but we benefit from the people who  support businesses intensively. And we make it more difficult for those people to go and support those  businesses, makes it more difficult for the businesses, which by the way are paying very high rents  because we restrict commercial growth. So my one plea here is to recognize that there’s a system and  we talk about changes from the past. A big change from the past frankly is that a lot of people look the  same now. We’re getting older and wealthier and a lot of people can’t afford to live here anymore. And  it’s not just a pity because a diverse place is I think an exciting place, but actually you need diversity to  support diverse businesses. So that’s sort of my high level point.   One other high level point I think it’s important to put us into context. I don’t think that we are a major  city. I also don’t think we’re a suburb. We’re an important college town. If you look at other important  college towns be it Pomona or Davis or San Luis Obispo and I’m only naming California college towns,  we’re far less dense than any of them. And all of us can look up this data and see what our density is  versus others. Even if you get rid of all of our open space and say I’m going to double Palo Alto density  we’re still less dense than they are. They have found solutions to make livable places with colleges, with  a vibrant ecosystem, manage growth in a healthy way. And so my second plea is let’s use the data. It’s  available, we always complain there’s not enough data for this or that and that’s true. A lot of data is  outdated and some data is not that useful, but there is certainly data to put this into context. So I’m  going to jump into the specifics, but the pleas on the high level is engage in system level thinking and  innovate within our context, use the data.   &LW\RI3DOR$OWR  3DJH  On the specific I think all the alternatives that have been mentioned they all are couched in sort of low  growth or anti-growth. I understand that there’s a certain environment where there’s great suspicion of  growth. Alternatives 3 and 4 anticipate some limited growth. I would say neither of them anticipate any  non-residential growth. I think that’s probably wrong. I think there needs to be a scenario where jobs  are also created or at least explicitly addressed. Specifically Alternative 3 around the growth strategies  limits building height to 55 feet if additional height is used for residential. I’m not sure how the additional  five feet really helps to, for residential. I’ve also heard from a number of people that for modern  buildings we now have higher ground floors that a 60 foot limit is more palatable or more, makes for a  nicer building. I think that also should be considered. The 55 feet limit I think is just an odd limit. If  we’re going to violate historic precedent for 50 feet then I think it should be a meaningful violation so to  speak. It should make a good building.   I’d also, I’d like to see something that contemplates a combination. Alternative 4 I view as orthogonal to  the others, which is to try to go for zero growth in trips strategy versus other growth strategies in terms  of building square footage. I think that can be combined to try to limit trips and have a building area  strategy. So I’d like to see kind of the crosstown of those. 27 University is only explicitly discussed in  Alternative 4. I think that’s such an important parcel it has to be part I think of every plan. It’s a big  parcel. It’s Downtown. I think not talking about it is sort of an elephant in the room.   And I’ll say one more thing just quickly then I’ll do the rest in my second piece. I agree with Bob Moss.  Density drops within .25 miles of transit hubs. I think just saying .5 is kind of a cop out and the  usefulness of transit, dense transit oriented design using that big of a radius I think also is a bit of a cop  out. I think having more density but closer to transit makes more sense.   Chair Michael: Commissioner Alcheck.   Commissioner Alcheck: So one of the goals is sort of determine consensus here on the Commission’s  thoughts? I think if your plan is to prepare a summary for Council that’s similar to the summary you  prepared tonight you could add my name behind every single thing Commissioner Rosenblum just said in  the bullet point list of comments. That was like a breath of fresh air, really. I don’t think I could have  said anything you said better than the way you said it.   We often use the word… so I’m going to take the same approach; I’m going to talk high level plea and  then some specifics. We often use the word developers, yeah, we often use the word developers when  we talk about some of the commercial projects that come our way. I really prefer the term  redevelopment and one of the reasons why is because I have a since distinction in my mind between infill  development and sprawl. And I think there’s a lot of residents that are very interested in the notion of  environmental protection particularly when it comes to climate change. And our esteemed community  member Stephen Levy is here and he knows better than probably everybody in this room what sort of  growth California’s going to see in the next 10, 20, 30 years, which is to say that he knows it’s  astronomical. And so the solution is two things, we can create seven more Fresno’s between here and  Los Angeles, which will devastate the environment of California.   Correct me if I’m wrong, not tonight, not at this moment in time, but I once read that California is home  to one of every eight Americans. It ought to be its own country. It’s that massive. And when you think  about that out loud and you think about the growth we’re about to encounter the notion of taking all of  this open space and running water to it and running electricity to it and paving it with concrete is  ludicrous. So every time I meet with an individual in this City and they express to me this notion that the  50 foot height limit is just daunting and they don’t want to see any more homes being built and the  density ideas are awful I like to remind them that the growth is coming, show me where you’d like it.  And if you point to the Foothills of Palo Alto I’ll tell you why I don’t like putting it there.   And so I like to refer to the developers as redevelopers. I like the idea of redeveloping these parcels in a  way that enhances the density. I know that’s not popular among the residentialists. I’d like to think that  we have a diverse Planning Commission membership here because the City Council wanted to hear   &LW\RI3DOR$OWR  3DJH different points of view. I think that’s why I’m on this Commission frankly. Maybe because it pays to  have that sort of urbanist perspective every once in a while, but I really just want to emphasize that it is  an environmental issue where we will grow.   And I walk Downtown, I bike Downtown more and I’d like to think that if we increase the density we’ll  encourage greater walking and biking. I don’t doubt for one minute that even if we were to triple our  residential development in this town there would still end up being maybe three more Fresno’s on the  way to Los Angeles in the next 30 years. Because the truth is it doesn’t matter how much we’re going  to… the truth is our growth is probably not going to be adequate in any real way to make room for the  growth, the population increase. So there will be some impacts to the environment that are essentially  unavoidable. But that is one of the biggest components of the way that I like to look at this concept of  density, which is to say where do we want to put it? And I don’t think it’s just about well what about  Menlo Park and Mountain View and Sunnyvale and San Jose and San Francisco? I think every single one  of these communities is essentially facing the same challenge and to look at it as if we’re really separate  is myopic in my view. I think it’s the One Bay Area unfortunately. Our towns run into each other and  frankly when one town next door makes significant inroads or makes significant decisions it actually  impacts us, right? The San Antonio development is going to impact Palo Alto’s traffic situation.   I’m just going to take 10 more seconds just to say that, well actually you know what I’ll just wait until the  next round.   Chair Michael: Commissioner Tanaka.   Commissioner Tanaka: So I think we’ve had some really good comments from the public as well as from  the Commissioners on this topic. I think it’s a very important question and issue that we’re talking about.  And I think the one comment I think I’ve heard that I think has been pretty consistent whether it be pro- growth or keeping things exactly the way they are is I think what’s important is the quality of life. So I  think that’s probably one universal goal, which I don’t think there’s anyone in this room that would say  no, no, no, I want a decrease in quality of life. I don’t think anyone’s going to say that. I think if  anything people want to increase the quality of life. And then the question of course is well, what does  that mean, right? Is quality of life meaning more growth or less growth? And I think Commissioner  Rosenblum had a very good comment in that Palo Alto from the Sixties to Seventies to Eighties has  grown, has changed, and that’s part of the quality of life. I mean the vibrancy that we get from  Stanford, from the high tech companies in this area is a blessing and a large part is what made the many  property owners in this room wealthy to be honest. And so in terms of quality of life I think we have to  think about is how we get this quality of life by freezing everything. Is that how we get it? And  everyone basically has some of the other Commissioners had mentioned we basically slowly age into a  retirement community. Is that the quality of life, the high quality of life that we all are accustomed to?  Or is it having a diverse, vibrant city that welcomes all walks of life and allows opportunities for  everyone? And I’m more into the favor of I think we want a diversity that allows opportunities for all, not  just the privileged few who came here first. So I think that’s something that we have to think about.   Now with that said I do think that having a, protecting the R1 areas makes total sense. I think we want  to do that. I don’t think there’s anyone here that’s saying that we build a 100 foot skyscraper in the  middle of an R1 neighborhood. I mean I for one had not voted for the Maybell project mainly because it  was a four foot, four story building in, near a R1 neighborhood. That doesn’t make a lot of sense, but so  I think that’s something which I think protection of that makes… this is important because I think that  does protect quality of life. But at the same time I think everyone here enjoys having a grocery store  near their neighborhood, they enjoy having services near them, they enjoy being able to shop and walk  to those places, and I think enabling that to happen is important and enabling that to happen sometimes  means a certain amount of density.   And so I’ve heard this a lot and then I think Palo Alto’s probably at least the citizens think of themselves  as one of the greenest places on Earth, but if you look at per capita compared to let’s say a city like  Manhattan, that’s not suggesting that we should be Manhattan, but per carbon footprint of a person in  Manhattan is much lower than any suburb like Palo Alto because they take transit, they don’t drive,   &LW\RI3DOR$OWR  3DJH there’s a whole bunch of reasons why. And one of the comments I think Stephen Levy mentioned and  it’s, I’ve read it in so many, from so many different areas is that jobs near transit actually reduces the  carbon footprint a heck of a lot more than any housing near transit. So I think having workers who  spend money who can support these retail services that we take for granted in our City near residential  neighborhoods, but not in residential neighborhoods I think is important. Because if you want the quality  of life that we are used to we want this quality of life that is enabled by I think the word that Rosenblum  used was system. We want an ecosystem that can support this kind of vibrancy in retail where we walk  around and get things without having to jump in our cars, which I think is actually important especially  since there is a large, a larger and larger older population which maybe can’t drive all the time anymore.   And I think that’s also why I think you know there’s one thing to say well what does the market want and  there’s another thing to think about well what does it take to keep the quality of life in Palo Alto high?  And that might mean smaller units so that the generation that has helped build Palo Alto and kept it  vibrant can stay in Palo Alto and walk to services. It also might mean smaller units so that the people  that pay all the sales tax and keep all these retail businesses alive so that we can go there one day a  week can survive. And so I think that’s something that we need to think about and so anyways I’ll  continue next time.   Chair Michael: Commissioner King.   Commissioner King: Thank you. I’m going to use my first round at least most of it primarily for  questions. I’d like to ask is it Joanne our consultant? Yeah, can you just explain your firm and I assume  you do these, have done these for multiple cities and maybe if you could just give me answers like how  many towns or cities you’ve done EIRs for in support of Comp Plans?   Ms. Jansen: Sure. I’ve been with the planning, PlaceWorks, which is formerly The Planning Center DC&E  and formerly DC&E for 15 years as of this month. And for most of that time I’ve been working on  general plans and the vast majority of general plans that I work on I also manage the preparation of the  EIR for that general plan. So I would say probably a dozen general plan EIRs over that time.   Commissioner King: Of all different size?   Ms. Jansen: Yeah.   Commissioner King: Ok, great, thanks. And so let’s see, a question so the way I’m interested in the  process of where, how we got here. So now we’ve got the four scenarios, but within each of those  scenarios there are maybe four to eight different components. And so really if you were to say hey,  we’re going to study do the math there would be hundreds of different ways you could take those  components and mix them, mix and match them. But what we’ve ended up with is four scenarios with  specific components, a choice of each of those four to eight components within those plans. How, why is  that and how is that, how does that support the process?   Ms. Jansen: It’s a pretty typical process for a community to go through to do what Palo Alto has done  and use public input to identify the parts of the city that are most likely to change during the horizon of  the general plan or in Palo Alto’s place the Comp Plan like what we did at Workshop Number 2 and then  refined in Workshop Number 3. So when we asked for that input from residents and we thought about it  as staff and the consultant team we came up with these six areas that are the six kind of building blocks  of the alternatives that are in your staff report where it seems like at least some people in some of the  groups from the workshops it felt comfortable saying that one or more of those areas could be a place  that might change over the next 15 years. And that excludes as you can see from the map that we  showed the vast majority of Palo Alto the R1 areas, the open space areas, so when we narrow our focus  to those six opportunity sites as we’re terming them in this process then we can kind of just think about  those as the building blocks for the individual four alternatives.   When we do the analysis in the EIR it’s true that there’s kind of an almost an infinite way that the  different alternatives could be combined or recombined within those areas even if you limit it to those six   &LW\RI3DOR$OWR  3DJH areas, but what we’re going to need is citywide scenarios that we can compare apples to apples for  things like the traffic analysis for example. It is really an incomprehensible level of complexity if we were  to try to publish a document that looks at 6 alternatives in one area and what would that be compared to  12 alternatives in a different area. So we’re going to be using these building blocks to put together four  citywide alternatives and what we’re trying to do is come up with alternatives that both explore different  options for each one of the six areas across the four alternatives, but are also internally coherent so that  they make an alternative that makes sense if it was to be adopted as a whole. But just to be clear  there’s no requirement that what’s ultimately adopted has to be exactly one of the alternatives. It could  be a mixing and matching of different facets of the, that were considered I the alternatives or even  something that wasn’t necessarily considered.   Commissioner King: Ok, so it’s really to reduce complexity that would be just unmanageable you have to  do this. And with the other EIRs you then in support of other general plans, comp plans is this, is that  the same on each? So you come up with four alternatives or is that specific to Palo Alto?   Ms. Jansen: What’s very unique to Palo Alto is that the EIR will cover all of those alternatives at the same  level of detail. Many cities do a very similar process as I’ve said, but the analysis of the alternatives  might come before the EIR and the City would go through the process that you’re going through now to  identity which alternative it thinks it wants to commit to and then only study that one at a great level of  detail in the EIR. So Palo Alto’s kind of leaving those options open much longer and getting a greater  level of analysis about each one of the alternatives because the EIR level of analysis that we would do if  a city had already selected an alternative is much greater than the level of analysis that we would do  earlier in the process for them while they’re kind of still exploring the alternatives and thinking about  which one they like the best or which one they want to create as their preferred land use plan.   Commissioner King: So this is sort of the deluxe process? We’re saying hey, we want to invest… ok,  great.   Ms. Gitelman: Could I, I’m sorry, could I just add one comment? I want to amplify a little bit on that two  ways. One is the reason we chose to go and the City Council supported this idea of analyzing  alternatives at an equal level of detail is it allows us to have a process where we’re getting the kind of  input we’ve received here this evening longer into the process. So well after the draft plan and draft EIR  on the street we’re still going to be talking about tradeoffs and options between the alternatives.  Typically you’d start to narrow that discussion and that engagement process much sooner in the process.  So that was the motivation for the process we’ve developed.   The other thing I wanted to mention is we’re a little bit I don’t know how to say this exactly, but we’re  using our crystal ball to try and come up with alternatives that bracket a range of possible outcomes for  the City and the planning process. And to a large extent we’re counting on the wisdom of the  Commission, the public, and the Council to help us structure that range well so that the plan that is  ultimately considered for adoption falls within that range. But I just wanted to make sure everyone  understood it’s not a guarantee. We might get to the end of the process and if we’ve guessed wrong and  we want to do something outside the range then our EIR is going to be lacking. So we have to do a  good job at selecting this range of alternatives to bracket the possible impacts so that we give ourselves  the maximum possibility at the end of the day to proceed expeditiously to a decision. I hope that’s clear,  that’s a little bit of a (interrupted)   Commissioner King: No, I think that, yeah you just set basically the largest envelope possible so I  understood. Thank you.   Ms. Gitelman: Ok.   Chair Michael: Commissioner Gardias.    &LW\RI3DOR$OWR  3DJH Commissioner Gardias: Thank you Chair. So before I get to the essence I just want to give a couple of  kudos to the audience and a couple of good comments because I felt about the same, so Mr. Neilson  Buchanan thank you very much for about your comments about dynamic plan, right? Of course it’s an  important comment, but also data division that you recommended to Ms. Gitelman. I think that if you tie  it to the conversation about the business registry if we had an analyst to do queries pretty much you  would not need to have a business registry because a person like that probably would answer that  question with just running the queries out of the data. So that’s one point.   The second point that the second comment I heard from Mr. Steve Rosenblum about undergrounding  Caltrain, which is exactly the same scenario that New York had many years ago when they were pretty  much redesigning Grand Central Station they were designing, they were doing this because of the  different objectives they just wanted to, the issue was to address the steam locomotives and that was  their problem, but because they were able to by engineering this they were able just to create this  massive value out of the, for the real estate above the train tracks in the middle of Manhattan and they  created this way Park Avenue. It would create automatically probably a billion dollars or maybe more for  Palo Alto if we did this [unintelligible] this and for the other adjacent municipalities. So thank you very  much for those comments, please come here more often.   So I want to just, I want to… yes. So I want to address a couple of specific aspects on the, from this  concepts that we had. So a couple of Commissioners talked about the Concept Number 4. So it looks  like an overlay to me as opposed to a concept itself. It has a mixture of the prescriptive designations and  then some policy aspects. And I because of this it’s not as clear as you would like, so it may be  confusing for the audience and then may not be clean cut. So I would recommend just to remove it and  as others spoke in the same spirit create an overlay on all the other concepts and then drop some  aspects that are prescriptive in this so just focus on the net zero energy as opposed to planning aspect.  So that’s about Concept Number 4.   From a perspective of Concept Number 3 I would like to we had from the couple of speakers that they  were against 55 feet raising they were against raising 55 limit to the 55 feet and some other, some other  growth elements. What I would like to just supporting this, that notion I would like to just focus on this  concept because it addresses development or redevelopment around the transit nodes and that’s very  important. Other two concepts they don’t have it so maybe by removing this 55 feet limit or increase of  the limit to 55 feet height but then as opposed to this focusing on some other areas that are  underdeveloped and then when I met with Steven we talk about allowing or discussing development of  the parking lots that is not within the Downtown Cap. That could be an opportunity for the Downtown as  well as the California Avenue without raising any limit. Ok? Thank you very much.   Chair Michael: Vice-Chair Keller.   Vice-Chair Keller: Thank you. So firstly I hope that we prominently indicate where people can  subsequently in between the meetings email their comments in and I assume they go to the this Palo  Alto Comp Plan or Our Palo Alto website and there are places to email your comments. So please keep  those cards and letters coming in folks.   The next thing is with respect to a living Comp Plan one of the things I noticed in the chart, it wasn’t  necessarily in the it was in a more Our Palo Alto process in an earlier meeting, not tonight’s meeting was  the idea that as the Comp Plan is created they’ll be some interactive web based thing. And I think that  the idea of creating a highly hyperlinked, highly searchable, highly indexed, highly integrated Comp Plan  that allows you to explore and analyze and find the ones that are relevant I think that it’s possible for  Palo Alto to do that. And I think if we do an excellent job we may even win and award for making a  Comp Plan actually accessible to the community. I would look forward to that.   So let me get into the detailed comments. First of all I would consider myself a data scientist and that  what I know about being a data scientist is this concept of garbage in, garbage out. If the input to your  data is garbage the output will be garbage. So the interesting thing is we need to make sure we have  hard data. I’ve spent several days in the last few weeks analyzing census data based on transportation   &LW\RI3DOR$OWR  3DJH and such and had a number of conversations with Hillary and with Roland Rivera about this and I was  hoping we’d have some data about that. I’ll work on that and produce some of that. But essentially one  of the things from that analysis is yes, when you add more housing near transit you get slightly more  transit use, but you get a lot more cars too. In fact a lot more cars than you get a slight increase in  transit use. And the idea of transit oriented housing makes sense in the East Bay where people are in  bedroom communities commuting to San Francisco. It’s not the kind of commute patterns we have in  Palo Alto. Somewhere on the order of approximately 60 percent, maybe a little less than 60 percent of  people who live in Palo Alto work and are employed work in Palo Alto, Stanford, Menlo Park or Mountain  View, ok? So they’re going to drive or bike or walk. And therefore what you really want to do is increase  walkability and increase bikeablity. And in fact biking has increased dramatically over the last 10, 12  years more than anything else and that’s pretty impressive.   Ok, a couple of things; first of all we need to think about the school impacts of growth. The  Comprehensive Plan is the only time when we look at development or redevelopment as Commissioner  Alcheck I guess he would know the term would be is the idea is this is the only time we can look at  school impacts. We must look at them now or we will not look at them at all. And I think we should also  think about a financial analysis on the City Budget because now’s the time to look at that and it’s not  typically part of an EIR process, but should be added to it.   So alluding to my question is we really need to understand for Palo Alto, not for the East Bay, how much  does housing near transit drive transit use versus driving, driving if you will. When you think about  expanding retail people want to have more opportunities for retail pushing retail making more services.  When we think about services probably the number one service people think about besides schools is  retail. Retail uses being able to walk to that and there are other things like libraries and things like that,  but we think about we probably use retail more than we use any other service besides schools.   I mentioned the idea of promoting bicycling and walking to work. We should have renamed the no  project alternative it’s not do nothing. It is really business as usual. It is really growing to the maximum  allowed by zoning based on market pressures. That’s what it really is, ok. Call it what it is. In terms of  Alternative 3, we should focus on transit oriented jobs, which appropriately they are slow growth and  service oriented housing. And just think of transit as another service. It shouldn’t be elevated among  everything else. Really think about housing near services and I think Stephen Levy’s exactly right, it’s in  terms of all those other trips people take, not just the commute trips that are important. In terms of  Alternative 4 we have, we used to think in terms of no new net trips and may, can I finish Alternative 4?   So in terms of no new net trips with offsets, in other words, if you put more cars on the road get  somebody else’s cars off the road by paying for shuttles, by particularly for our school kids. Think about  the more of our school kids that you get off the roads and parents driving in to school that is a significant  improvement. No new, net zero greenhouse gasses. Now in particular I’m not talking about no net  vehicle miles traveled. Vehicle miles traveled is considered as part of greenhouse gasses, ok? No new  net trips affects Palo Alto and it effects the traffic within Palo Alto. Net zero water and no net overflow  parking into the neighborhoods. To me that’s the real issue of net zero and I’ll continue my comments  later.   Chair Michael: So when I was introduced to the current Comp Plan, which was adopted in 1998 on the  very first section it says that there is no single vision for the City yet each Element has a beginning  portion which is entitled Vision. To me the lack of the single overarching vision is a fatal flaw and I think  it is carried out in terms of leadership of the City, of the Council, the Mayor, whatever who can’t speak to  what the vision is. So there’s this sense of it’s open for debate or maybe there are seeds of mistrust.  And I think that I think it’s critical that the Comp Plan that we adopt from now to 2030 state a clear  vision and not miss that opportunity. And I think part of leadership comes from listening to the public,  but it also may involve leading.   I think that the role of the Chair of the Planning Commission, which I’ve been privileged to do for half a  year now and will do for a while longer is in some sense to ensure that we have an effective deliberative  body and not to show my sort of personal opinions whenever the chance arises, but I think I’m going to   &LW\RI3DOR$OWR  3DJH put on my resident hat a little bit and just say that like some of the speakers from the public I was born  here in 1951, I grew up here, attended Palo Alto public schools and then Stanford. I’ve been very  fortunate I could live anywhere and I sincerely believe that this is a great place to call home. In that  sense I may be a residentialist, but I sincerely disagree with the implications from the militant anti- growth rhetoric that that faction of the voters is discussing as it relates to the Comp Plan.   On a personal level in the foreseeable future my wife and I have this lovely home in the Community  Center neighborhood. It’s a very large house; it’s now an empty nest. We may be looking to follow in  the steps of Stephen Levy and find a nice apartment somewhere. And I think that fact that the Comp  Plan is bowing to the concerns of the community and not touching the R1 allocation in our zoneable living  space is a mistake because when the time comes I don’t think there’s any inventory for me and my wife  to find the kind of place that we’d like to call home much as we’d like to stay in Palo Alto. That inventory  doesn’t exist.   So in no particular sense of priority one of the concerns that comes up throughout the document,  different alternatives is preservation of historic character of the City. And when I first saw the Housing  Element Policy Number 1 of the Housing Element is preserve the character of existing neighborhoods and  I went somewhat berserk because I’d spent decades in large public companies trying to make decisions  based on data and they want character. How do you measure it? Where’s the data? And then realized I  became a history major at Stanford when I took the course on American character. I thought ok, alright,  so I can get my teeth into this, but I think one of the aspects of the preservation of historic character is  we should allow for the creation of resources, the future view as historic because I think that that is one  of the things that we should do in our planning the legacy of Palo Alto.   Growth is an unfortunate metaphor to me. I agree with colleagues who note that this is a built out city.  Any development is infill development or even redevelopment. I think it’s not although growth is not  what everyone uses as the catchphrase I think it’s change. It’s not growth it’s change. And I think if you  think of it as change versus no change to me no change is a recipe for entropy, disaster, decline, not  anything that any one of us would appreciate. If we have yards we plant flowers. We grow trees. We  promote positive change. And I think change is good if properly managed, but it’s always threatening  because it’s change.   Density and height I think that there is many virtues in a community to critical mass relative to vibrancy,  walkability, utilization of infrastructure, distribution of City services and so forth. And I think in many  ways cities that are that allow for selectively more height, greater density can take advantage of those  virtues and leverage those resources which benefit many of us profoundly. My personal opinion although  I’m perfectly willing to follow the law is that relaxing the 50 foot height limit selectively would allow an  additional story going from four stories to five stories in certain neighborhoods where that may be  appropriate, Downtown, perhaps California Avenue, perhaps along El Camino and… can I have more  time? Yes I can. And so I think the sacrosanct nature of the height limit is a mistake personally. But if  it’s the law I will follow the law, but I won’t necessarily think it’s a good policy.   With Stephen Levy and Greg Tanaka I served on the Infrastructure Blue Ribbon Commission (IBRC) and I  think that in the Comp Plan alternatives it’s critical that we address the top priorities of infrastructure  needs. I think the Caltrain plan whether it’s the trench, undergrounding, the longer we wait the more it’s  going to cost and the longer until we have the benefit of that incredibly sensible idea. What to do with  the Municipal Services Center (MSC), which was by the way which was the biggest single ticket item on  the list of the half a billion in infrastructure items are unfunded given to IBRC to study, the MSC is going  to be under water not too many decades hence and that’s going to be a bad thing. So where do you put  it? It’s got emergency response resources and if there’s a catastrophic earthquake and the overpasses  get threatened how do emergency vehicles get to put out the fires and save you? Another thing is the  location of City services and above ground infrastructure is clustered on the north end of town, which I  think is unfair in many ways to the residents who don’t live in the north end of town. And perhaps City  Hall and the Public Safety Building should be relocated to the geographic center of the City, which is close  to California Avenue and maybe allow for incredible opportunity for this block to be used in a different  way.   &LW\RI3DOR$OWR  3DJH  Many colleagues have noted that Palo Alto likes to think of itself as special. Sometimes does planning in  isolation, but we’re actually part of a region. And figuring out more robust processes for regional  collaboration with East Palo Alto, Menlo Park, Stanford, Mountain View, and so on, Los Altos is incredibly  important such that we have a Comprehensive Plan that dovetails with the Comprehensive Plans of the  adjacent communities and the regional plans.   And then finally Palo Alto likes to think of itself as a city. I did a little research, I was a lawyer once and I  did the legal research. It makes no difference under the law if you call yourself a city or a town. It  doesn’t matter, but if you call yourself a city and we’re like 113th largest city in the last census. We’re not  very big, we’re not very important except in our own minds. I think if you think of yourself as a city that  leads you to making decisions that are appropriate to cities. If you think of yourself as a town or a  village then maybe you go in a different direction. So I think that that self-image confusion would be  important to sort of work out in this version of the Comprehensive Plan because if we want to grow up as  a major city then you make different decisions. If we’re perfectly content being a small livable town  that’s different. And that’s ok. I mean as I said I grew up here, like it here, I wouldn’t have lived  anywhere else, but maybe someday I’ll have to.   So I’ll stop for now. Round 2 in maybe a different order from Round 1? Anybody primed and ready to  go? Vice-Chair Keller is ready.   Vice-Chair Keller: Thank you. So a couple of things; first of all there is unlimited demand for housing and  offices in Palo Alto. And it’s certainly true that if you build it they will come. And if you allow them to  build it they will. And that may not be true in the same degree in other communities. And we cannot  quench the demand for people to live in Palo Alto and if we did allow everybody to live in Palo Alto our  schools would be so overcrowded that their quality would be destroyed. That’s what we face if basically  people move here for the schools often. And people want to stay in our community. And therefore it’s  not a matter of the idea that the market wants, it’s not the market who wants big units to be built in  townhouses. It’s the people who build the big units and want to put them in townhouses they want it  because it’s the most profitable, but it’s not our objective to tell to make things as nice for the  redevelopers so that they can maximize their profits. What we instead want to do is zone for what we  want, which is a saying that I’ve heard one of the Council Members use a lot. Zone for what we want.  And in particular the issue is that in order for Chair Michael to stay in the community we need to build the  kind of housing we want to build is housing he can downsize to, which is smaller units. Senior housing,  studios, and one bedrooms are the kind of housing that’s missing and will provide the kind of diversity  that we think we want, that we say we want in Palo Alto.   We think in terms of height 50 feet, 55 feet. I think we need to think in terms of how many stories that  is also. So the reason that the suggestion was to go to 55 feet is because people think of 50 feet as  being four stories, but now the discussion is that they want a few extra feet more for the first story in  order to have higher height retail because that’s what retail wants. So is 55 feet four stories? Is 60 feet  five stories? Well if you go to five stories then you have this short retail. So I think that the idea is to go  to 55 five feet but mean four stories, not five. And so think in terms of the number of stories because  that also affects the number, the amount of square footage.   The even if we don’t build another square foot of office space there will still be an increase in jobs in Palo  Alto due to an intensification of jobs density. There hoteling, they’re pushing people smaller and smaller  spaces. We saw what happened with Facebook when it was adjacent to College Terrace. They crammed  them in cheek to jowl and that’s that trend more so than we have some law offices where people get lots  of space, but we also have startups in which people are crammed in cheek to jowl.   So let me make a couple of detailed comments on this. Firstly in order to think about slowing the jobs  growth what we really want to think about is allowing retail expansion, considering a mix of retail, and if  you’re going to slow the growth of office space of non-residential, non-retail space then you want to think  about how to do it. A cap doesn’t work because when you exceed the cap people say ah, you exceeded  the cap you’re not allowing me to develop what I have the right to develop because of my zoning rights.   &LW\RI3DOR$OWR  3DJH I have the right to develop to my FAR and whatever. Well and so therefore instead what you need to  think about is in terms of an air rights allocation. If you say you’re allowed to grow so many square  footage more than allocate it out and make sure you leave room for TDR’s. You allocate it out somebody  wants to build they got to buy it from somewhere. Other cities do that, they limit the amount of growth  by allocating air rights.   In terms of limiting the market the residential growth you can do that by I believe by limiting market rate  housing to the Regional Housing Needs Allocation (RHNA) allocation for above moderate. You’re not  limiting Below Market Rate (BMR) housing if the BMR housing developers can build, can buy the land and  develop the housing they can do it without having a cap. That’s the way you can, I think that that’s a  legal process for accomplishing the limit of residential growth.   I think that it is very important to limit Caltrain, I’m sorry, underground Caltrain. Now I was an advocate  in back in 2008 before the election the Palo Alto Weekly had a stint about undergrounding Caltrain high  speed rail and I was the advocate for cut and cover. And there’s a zippering approach where you  consider alternating which side you cover and do things like that in order to be able to cover most of it  and yet allow for the escape so it’s not too expensive in terms of if there’s a crash or something like that.  To the extent that we working with SVLG in getting money to Bay Area Rapid Transit (BART), which is  going to happen and we get money for Caltrain and make sure some of that money goes for grade  separations for Caltrain. There will be money for grade separations for the four grade separation in Palo  Alto. If, with that money we could either have overpasses built, a basically train going over or we could  figure out how to spend the additional money through a bond issue that I think would be partly paid for  by developing over that land to put the train underneath. And you could do that both south of Oregon  Expressway, but I think that we should also collaborate with Menlo Park to underground north of Oregon  Expressway. Now you can’t underground where Oregon Expressway is because changing the  interchange is just too expensive, but north of Oregon Expressway into Menlo Park working with Menlo  Park to underground until it gets to Atherton, maybe Atherton wants to pay for undergrounding further,  that’s a possibility. And with a cut and cover approach with the tracks the road is slightly raised over the  tracks, you don’t have to cut under and you sort of essentially tunnel slightly under San Francisquito  Creek, under the El Palo Alto, which you can do because redwood trees go laterally out. Ok.   In terms of El Camino height limit increase we have to be careful about not next to R1 residential  particularly in Barron Park. There are places where the lots are deeper. There are places where the lots  are shallower. There are places where the shallow lots are separated from R1 housing by a narrow  alleyway. You don’t want a 41, a 50 foot or higher canyon to be happening over towering the R1  properties that are often one story and sometimes two on the other side. So we have to think about  where you need to do that and that’s why we need to have an El Camino Real, particularly South El  Camino Real Concept Area Plan so we can study where it makes sense for higher, where it makes sense  for non-higher, and where it makes sense to in fact lower the heights because you want to do it context  based not… you want to do it concept based, based on context not other things.   So let me mention the comment that was made about distribution of services around the City by  neighborhood. I agree with that as a thing that we need to evaluate. In terms of flooding and sea level  rise I think that’s an important consideration particularly for the Regional Water Quality Control Plant. I  won’t even use the expression I would use in terms of what happens if that’s underwater. I think we  need a Fry’s Area Precise Plan in order to understand that big piece of land redevelopment. It’s  comparable to what happened when we redeveloped the Palo Alto Medical Foundation (PAMF) when it  moved. If SOFA deserved a precise plan which it has, in fact there are two of them for South of Forest  Avenue (SOFA) 1 and SOFA 2. We need one for Fry’s.   And I’ll close by asking this question, when… of staff I guess. When will we choose an alternative among  these four? How does that process happen for choosing an alternative among these four including the  mix and match along them? Because I presume that we may not take one alternative over another  alternative, we may pick a mix and match. So maybe you can sort of give that answer tonight.    &LW\RI3DOR$OWR  3DJH Ms. Gitelman: Sure let me start and then Joanna and Steven can add on if necessary, but I think our  concept is that we’ll continue to get input on these, on three or four concepts try and get direction from  the Council at some point to move them forward into the EIR analysis, carry them through to the draft  EIR stage, and the draft EIR will tell us what their relative merits and impacts are. So we’ll understand  their benefits and impacts at a greater level of detail when the draft EIR is available and after the  comment period on the draft EIR that’s when we would try and narrow it down to what our preferred  alternative is. And we could choose one of the alternatives. If we guessed right and one of the  alternatives in the range we described is it, we love it, we’ll go with that. If we want to massage them  and choose one alternative with modifications or elements from another alternative as long as we’ve  captured the impacts of that blend in the range of alternatives we should be ok to proceed to the final  EIR and plan adoption. So that’s the strategy for now. So if we stay on schedule we’re talking about first  quarter of 2015 we’d be making the decision how to get down from four alternatives to one.   Chair Michael: Commissioner Alcheck.   Commissioner Alcheck: Ok, so I just wanted a few specifics. I think in the focused development  alternative I share the view that I think Commissioner Michael suggested which is that in those selected  sites I think the approach should consider a meaningful deviation from the height limit. And I know  we’ve articulated this notion of sort of a greater height on ground floor retail. I’m not sure, I’m not sure,  I’m not just suggesting 55 or 65 or I guess that part is open. I’m not suggesting a specific height  increase, just that that increase could be exceeded potentially.   I’d also like to state that I, this is a unique moment. I share Bob Moss’ opinion regarding dictating  market preference, dictating preferences to the market. I don’t believe this body or the City Council for  that matter has the expertise to dictate what size units should be developed in Palo Alto. I believe the  marketplace and the market players should have freedom and flexibility there especially because I like to  throw this out there I was at Planning Commissioner Academy this year and the key note speaker talked  about the future of transportation specifically personal vehicles. And he showed a picture of 5th Avenue  in 19 whatever, I can’t recall, Twenties, Thirties, and then he showed a picture of it 10 years later. And  the picture basically represented there was a single horse and carriage on 5th Avenue and then 10 years  later there were probably 30 or 40 cars. And he suggested that in that 10 year span this was a just an  unbelievable change in the way we transported ourselves. And then he suggested that do you think that  the change from potentially cars we have to drive to cars that are self-driven will take that long and what  will that, how will that look if we depicted it in a picture? And I only mention that because he suggested  and potentially very accurately what would we do with all our parking garages if suddenly the cars that  took us everywhere didn’t have to be parked because after we used them they picked up another person  and kept on running indefinitely. And so I was astonished after he made that comment because all I  kept picturing were four or five story parking garages that were suddenly empty and what would we do  with all our garages? Obviously that change is not going to be overnight, but I mention it because the  market reacts much more quickly to the needs, its own needs then I think boards and commissions and  councils can really determine.   And so I think part of the Our Palo Alto process will always be flawed to some extent because technology  is changing at a very fast pace and there will be some potentially magnificent impacts specifically in the  transportation, in the transportation category over the next 15 years. We’re all talking about what it was  like 10, 15, 20 years ago and we’re all making the assumption that in 15 years traffic’s going to be 10  times worse. What if this keynote speaker, he was a Stanford professor in the business school and a  transportation expert, what if his predictions come true and suddenly we’re all in self automated cabs  that we own some, have some ownership percentage, I have no idea.   But anyway in a similar vein when it comes to the discussion of rail and transportation infrastructure I’m  reminded of a lecture I attended by Tom Friedman at De Anza and his quote was something like if you  visited Grand Central Station in New York or Grand Central in New York and then you went to the Central  Station in Berlin you would think they won the war. Something to the effect of how we’ve really avoided  investing any money in our mass transit infrastructure. I continue to think that this high speed rail  discussion has a place in our Comprehensive Plan and its alternatives. And I know that there’s significant   &LW\RI3DOR$OWR  3DJH expenses to some of the ideas that people have mentioned and maybe even significant opportunities if  you think about it, but it’s a huge asset to this community and so the potential changes that may come  from the State’s investment in high speed rail. I don’t know how we incorporate that, but that will  magnify the value of Transit Oriented Development (TOD) I think. I think if the rail was faster maybe it  would be even more appealing or I’m not exactly sure how to kind of put that into words, but I just think  there’s some real innovative opportunities for discussion. I think it can be incorporated into the notion of  how we plan for TOD. Ok.   Chair Michael: Commissioner King I see you have some notes there?   Commissioner King: Thanks. Let’s see. I’ve got some questions still, but I guess in keeping with the  theme that we want to do our big picture position statements so regarding Palo Alto as a system and  somehow that resulting in a compelling need for growth I think that every physical system has a  maximum capacity. And in our case our City has a fixed geography and there, that means there’s a fixed  amount of how many humans and how much built stuff can exist within our City. So to ask as if growth  is perpetual and inevitable is not makes, is not logical. Just as if you own a home on a lot you can’t keep  growing infinitely, indefinitely. At some point you’ve got enough stuff there. So I’m not saying we’re  there, but I’m saying that growth is a choice. That’s a stolen quote. And that it’s a function of what’s  here now. It’s a function of the infrastructure we have, how much infrastructure we can put in, and the  type of zoning that we have built now. And that ultimately it’s the residents should decide when is there  enough growth. Again, it cannot go on infinitely.   And regarding the Palo Alto as a town versus a city I call Palo Alto a town. It may be changing, but I  believe it to be a town. If you look at the great cities, the great transport cities they were built, they’ve  got zoning of 20 to 50 units per acre. And so that enables say Manhattan to have transit that’s within a  five to ten minute walk of just about everybody. And so it, in that case density works great and it draws  the services so all residents are I think Commissioner Keller’s quote was service oriented basically. The  issue we have here in Palo Alto, and that’s true also of smaller towns along historical rail districts, along  Caltrain if you look at the core downtowns along Caltrain before the post war boom. If you look at Marin,  Larkspur, Sausalito, Fairfax, all those places have density of probably 20 to 40 units per acre. The  change we have, a challenge we have in Palo Alto is the bulk of the town is on 6,000 square foot lots. So  that’s like five units per acre. And so if you as we densify the Downtown that means and therefore there  will always be with any density there’s not 100 percent usage of transit that means that the impacts to  those people who live on 6,000 square foot lots and are not within a quarter mile walking distance to  services and transport becomes a significant burden. And so I think we have to be very careful in  assuming that this, the density that it, that continued density Downtown or in the identified areas is  manageable without horrendous impacts to those people who can’t change their zoning, their on a one of  those 6,000 square foot lots.   I’d also say regarding the transit versus car, cars are I think I actually did the, looked at the numbers.  Cars are actually getting quite efficient. If you put four people in a Prius it’s about as fuel efficient carbon  efficient as riding the train. There’s an assumption amongst many people that trains and buses are  they’re there so there must be no carbon usage, but in fact trains particularly are a big huge things that  need to be moved up and down tracks that burn a lot of fuel. So in my mind the non, the move to non- car transport is probably more for congestion issues than it is for our carbon footprint. And so my point  is that where we have non-TOD here in Palo Alto the car is probably going to be the solution and  hopefully we can improve its efficiency.   Regarding the climate change and the densification of zoning here saving the planet or materially altering  climate change I’m very hopeful that that could be the case. I’d like to see that scientifically supported.  It may actually make more sense to have seven Fresno’s built with 20 to 50 units per acre for saving the  planet than it does us trying to make 20 to 40, 20 to 50 units per acre in our town and therefore  potentially causing more and more gridlock.   And the other, ok that’s my statement. Statements. Then I’d like to go back for the comments. So I  would like to make sure that we are considering the future of retail. I mean if you look around you see   &LW\RI3DOR$OWR  3DJH how many competitors Google, I think EBay, all these competitors that are about delivering the services  to us rather than us going and purchasing the services so I am curious as to how we factor that into a  plan during which time we can expect significant changes in how we purchase and obtain goods.   And one last one; can you tell me regarding the online input for the Comp Plan is that anonymous?   Ms. Jansen: Users have to register to use the system if you want to provide a comment or respond to a  comment you have to register with your name and address. You don’t have to have an address here in  Palo Alto. Anyone can register it’s just a process of verifying that there is an actual person and not a  robot behind the input that is being received. But once the person registers they have the option of  displaying their name or not displaying their name.   Commissioner King: And so why would we think that that’s appropriate that residents of any town can  have equal input on our Comp Plan?   Ms. Jansen: Sure. There’s, it, there’s not a restriction on registering and people from Palo Alto could  register and give comments on another person’s site as well if they wanted to, but what there are online  are a number of tools if you go to the online forum and look there are tools where you can map the  location of any, not the specific location, but you can map the responses from inside versus outside Palo  Alto and that’s another reason for collecting that address information.   Commissioner King; Oh that’s based on the, but that’s self… they’re not verified by anybody.   Ms. Jansen: It’s just an automatic, automated verification system that this is a legitimate address, but  there’s not a background check to make sure that one person lives at that exact address.   Commissioner King: Ok, well that’s of some concern to me because it means that we don’t know really  who is commenting on our Comp Plan. Thank you.   Chair Michael: Commissioner Tanaka.   Commissioner Tanaka: Ok, well lots of good comments. So I have a suggestion that might help. So I’ve  been looking at the different concepts, Concept 1, 2, 3, 4. And these concepts are all very kind of like  zoning code based, which is not surprising. But I was thinking that rather than making zoning code  based maybe what we should do is make it more results based. Like what do we want out of it? So for  instance maybe, I mean I guess what I’m trying to say is make it more mission based. So maybe one is  Concept 1 although Vice-Chair Keller cynically called it the, I forgot what he called it… business as usual  one, ok. Concept 2 maybe is or I guess Concept 2, 3, 4 are all very similar, but basically no growth  whatsoever or something to that effect.   And then maybe there’d be a third concept or a fifth concept, but maybe and it’s kind of a concept I’m  going to call like trying to maximize not for no development or de facto, but maybe trying to optimize it  for quality of life. And I know that’s extremely subjective and it depends on who you’re talking to, but I  think we’ve heard various comments on the Commission and from the attendees tonight, but what do we  do to maximize the quality of life? And rather than thinking about it in terms of zoning or in terms of like  zero development, development as it is, but what about how do we maximize quality of life? And so I  think that’s a hard one because it’s so very subjective, but I’ve listened to a few thoughts and these will  probably be controversial so I’d love to get feedback and thoughts on it, but so one of them I do think  that the preservation of R1 is important although I do sympathize with the fact that we need housing for  seniors as well as the workers, young single workers in the City, but I think that’s actually kind of an  important tenant for the City. I think also it’s important to if I and I think Vice-Chair Keller said it very  well earlier, which is aside from schools the service that people use most are these retail establishments.  I do agree that the nature of retail is changing dramatically and I think about that a lot all the time, but I  mean what makes I think Palo Alto great is exciting University Avenue. It’s Cal Ave. it’s being able to  walk go somewhere close without having to jump on a train or car and go up to San Francisco, right? I  think that’s actually very important. So how do we make this robust, awesome retail experience that’s   &LW\RI3DOR$OWR  3DJH second to none that makes this place lively? That makes it a place that we want to live, not just a place  we want to retire. And so those are kind of the first two thoughts I’ve been thinking about in terms of  how do we get an awesome quality of life.   I do think preservation of really high quality schools is also important because that’s a service. So I  guess how do you maximize kind of the top level of things how do you maximize the highest level of  service for everyone? And then the thing about it is how do you sustain these services? And I think so  there’s a couple of thoughts there. So one thought is you know I think the tax base in Palo Alto is  actually very important. So we, the Chairman and I both served on IBRC and we know the state of our  infrastructure and the lack of infrastructure funds and the fact that even though we’re a very wealthy city  as individuals, the City itself is not wealthy. I mean compared to a lot of neighboring cities it’s not  wealthy at all. So how do you enable a robust sales tax base or tax base so that it allows us to do all of  the things that we want to do and have the vibrancy that we all want to live in? And so, so I think  thinking about how do we financially make the City strong and robust so we can do the cool things like I  think everyone, there’s no one, I don’t think there’s anyone in this room who thinks that Caltrain should  be above ground. I don’t think there’s anyone here that thinks that. But the problem is that nobody has  a really good answer to how are you going to finance that. I mean could you finance it by selling the  space to make office space perhaps, but could you sell the space to… how do you turn a wish into a  reality? And so if we had the finances if we are able to monetize the land, if we’re able to make these  dreams come true rather than just talk about it I think that’s important. So and because it’s one thing to  wish it or to say oh this is our preference, it’s another thing to actually make it happen. And I think  making a super high quality of life city is something we should make happen.   And yeah, so ok. I’d love to get feedback from others on this quality of life concept.   Chair Michael: Commissioner Rosenblum.   Commissioner Rosenblum: Yeah as I mentioned I used my first session… is it on? Ah, there we go. I  used my first session for some large hopefully not boring but more high level concepts then moving into  specific input for the consultants. And I think this is a really good job and I think it’s easier to engage  with these concepts. And I agree with Mr. Levy that it has to get more specific for it to really have teeth  and so my comments are really about this now.   Ideally people really are going to react to impact on traffic, parking, and then finally schools. The schools  bit may be outside your scope, but I want to come back to that in a second. And so what I’d love to be  able to see is the actual model that you use so the EIR makes mention of the Transportation Demand  Model. I’d like to know the inputs and outputs so what inputs and what assumptions do you use? So  Vice-Chair Keller brought up an excellent point. I’m glad he’s doing the data research. I’d love to see  this that you put a building next to transit that you increase transit use slightly, but you increase car use  dramatically. I think that that’s a difficult data point to digest because that means what if I put a building  there with no other policies? What if I as we do make sure we have adequate parking for all residents or  what if you made sure that all residents had to have Caltrain Go Pass? Would that change the dynamics?  Would the input change if it was optimized for younger people who tend to not have cars or people who  have families that tend to all have cars and have to use their cars?   I think all these things change and so I agree, garbage in, garbage out. It’s a great piece of data, but I’d  like to see if innovative policies change the assumptions. And in particular I’d like to see the consultant’s  models and how they handle these assumptions because I think it’s very subtle. The policies that you  have will influence the variables that you use. I’d like to know how we understand those variables.   Even more specific again we talked about the 55 foot height limit. I completely agree again with Vice- Chair Keller that probably 55 came up because people said oh, you need more height in retail ground  floor it’s probably four stories. So it’s inconsistent with the comment that the additional height should be  used for residential. If that is the case than it has to be even higher, if it’s not the case then you’re  talking about a three story building with additional height for residential, but even then I’m not sure it  actually makes sense. So that one I think go back and see what the actual logic was. I would say in the   &LW\RI3DOR$OWR  3DJH right area I would support a higher height limit. Again taking Bob Moss’ comment to heart, much closer  to transit, but again taking Arthur’s comments to heart. Let’s find out what happens under different  circumstances and policies to encourage transit use.   Next, again 27 University I would like it to be in basically all of them except the business as usual where  by definition it’s not considered. But it’s such a large and important strategically located parcel it has to  be considered. We need a concept that contemplates commercial growth outside of Concept Number 4.  Concept Number 4 I view as a pilot program to see if we can get to zero net trips or energy used or  some concept of zero net. That’s the only way that has any commercial growth whatsoever. I think it’s a  mistake to have no policy specific that would have an increase in commercial cap. As unpalatable as that  may be to some people I think it’s if you’re creating a solution set that goes from one end to the other  and we’re trying to see all the impacts we’re explicitly not using one of the axis, which is increased  commercial space.   Caltrain I had mentioned. We have Caltrain being discussed only in Option Number 3. It probably needs  to be again in all the options except for Number 1. Also you had mentioned it’s from San Antonio to  Page Mill. That doesn’t make a lot of sense to me, in fact if anything it’s from Page Mill through  Downtown. And again I admire Vice-Chair Keller’s knowledge of the root systems of redwoods. I think  that it’s, it would be great if we (interrupted) [unintelligible Ms. Bunnenberg off microphone]. Oh are  they really? Ok, I’m glad you brought that up. I was amazed.   Ms. Bunnenberg: They were, it was searching for water.   Commissioner Rosenblum: Oh, is that so? We should feed it on suds. Ok, well (interrupted)   Ms. Bunnenberg: [Unintelligible] Yeah, so they’re all [unintelligible] around those [unintelligible] that hold  up the bridge.   Chair Michael: So Commissioner Rosenblum has the floor. Thank you very much.   Commissioner Rosenblum: Sorry, I invited it. It’s my fault. And so finally when we do this model as I’ve  asked for so I’ve given some specific inputs on some of the things I think need to get adjusted in the  scenarios. We need to rigorously annotate the assumptions. So for example the woman from the  Autobahn Society had made a statement saying there have been a lot of net zero proposals, none of  them work. I think that that’s demonstrably untrue. There are net zero proposals. Stanford is in our  backyard and has had a net zero trips operation for 10 years. I worked at Google for a while. The  number of Googlers on campus has increased dramatically. The number of cars has also increased at a  much lower rate though through active management of these programs. So with innovative programs  there are things that can be done. There are programs that have worked in many areas of the country,  but her point is generally correct, which is there’s a lot of flimflam. And so when we have the  assumptions it would be good to document why do we believe this is so? Who else has done it, why do  we believe it would work in our case, is our case like their case?   And so the final thing to come back to the things I think are the big tests the two straw men that are  always brought up: growth will lead to more traffic so anything around traffic just rigorous annotations I  want to see where the assumptions come from, and 2) growth puts unsupportable pressure on our  schools. We’re well below the peak population of Palo Alto schools. We’re well above the Nader of Palo  Alto schools. I’m not sure that there’s a correlation necessarily between the degradation of schools  versus the growth or decline, but again to the extent that it can be thought of this has to be done in  conjunction with Palo Alto Unified School District (PAUSD). They’ve been very good at projecting their  population. I’d be shocked if they are surprised by what’s going on and that the overcrowding schools in  inevitable and destructive, but it has to be contemplated.   Chair Michael: Commissioner Gardias.    &LW\RI3DOR$OWR  3DJH Commissioner Gardias: Thank you very much Chair; a couple of points and then a couple of other  comments, but first two major points. In terms of some discussions that we had here about raising  height what I would like to see in all these plans, right, to giving prioritization of utilization of the existing  opportunities. There is so much open space in Palo Alto that taking that space and I’m talking parking  lots, garages, unusual lots, right, before we start considering going over limit height, which should be in  this sequence, right? Because otherwise if we’re going to start just going over the limits and increasing it  it’s easy of course we can do it, right? But then we would be losing that opportunity, which from the  planning perspective it may be an opportunity to build more of the retail space, walking area, and so  forth, right? I’d like to just see it as a continuous walkable spaces streets on the retail left side and right  side, right, as opposed to the higher buildings that have parking or garages between. So that would be  one of the priorities.   And then I can give a couple of examples; for example, we talked in the past about moving cars  underground. All this precious retail area that we have is taken by cars. In some buildings it has  garages underneath, but they need the ramp and ramp takes majority of the retail or the potential retail  area in the ground space or garages, that retail space or some other space for public should be instead.  So that’s a great opportunity I would like just make sure that we don’t miss it. Or at least this should be a  priority. Have this before some other heights.   There is also another opportunity that I see here in the plan in the zoning. Zoning that we have in Palo  Alto and zoning historically right is pretty much based on the historical, on the historical separation of  different land uses. That’s not true today with the material and technology progress. And then also  different laws, you can mix them and match them as you please. And then in many areas, in many  municipalities mixed zoning it’s standing up and then zones are not for the land separation but rather for  regulation of the heights or some other factors, but then larger mixed usage is allowed thus reducing a  number of trips, greenhouse gases commuting to the work and so forth,. And of course greater  utilization of the parking spaces as well.   And then so those are just two main points. A couple of other smaller items that when you prepare the  studies please just give us some numbers. We would like to see the consequences of all of this, all of  this plans that have. It would be for us easy to grasp what is the consequence of Scenario 1, 2, 3, and 4.  Hopefully we’re going to go away with four, so one, two, and three. Quantify it and just show us some  numbers from the perspective of cost, additional population, and so forth. Thank you.   Chair Michael: Vice-Chair Keller.   Vice-Chair Keller: I think I already went, but I’m going to just add very two, three quick things. Ok, so  the first think is that it was mentioned that PAUSD at its peak 15,000 or so students. There are 24  elementary schools, 3 high schools, 3 middle schools. Now it’s about over 12,000, which is somewhat  over 50 percent where the trough was if you will. There are only about a dozen elementary schools, two  high schools; each of these two high schools is at not quite double their original design capacity. And not  only that but if you look at the PAUSD projections the ones that came out in December, which I read, it  says they assumed no increase in housing. They can’t project housing that doesn’t exist. They only  project specific housing units. So when the housing unit is built they project for it. Before the housing  unit is built they don’t project for it. So they actually have this drop off if you look at it showing the rate  of growth of the housing and what happens is that housing they basically had this nice drop off that  happens as the housing gets filled and students flow through the system, but they don’t project out far  enough in terms of additional housing.   And in terms of smaller units I just want to point out that the development that’s replacing Equinox and  We Fix Macs is small units. And so there is demand for it in certain circumstances if we zone for it.  Thank you.   Chair Michael: Actually before the public leaves tonight I just wanted to make a very sad announcement  that former Chair Eduardo Martinez who preceded me as Chair of the Planning Commission and served  with distinction for two terms and was recently honored by the City for service passed away last week.   &LW\RI3DOR$OWR  3DJH And so he was a, he had a wonderful sense of compassion, he brought a sense of humor to discussions  that were often contentious and controversial and I think many of us also were honored to be his friend  and he is, he was a wonderful colleague. So he had a passion for good planning. Hopefully the  Comprehensive Plan will honor his passion and will reflect the collective wisdom of the community. He  worked a lot on the Land Use Element proposed revision. I would just note that perhaps the Land Use  Element is the place where we should identify the need for any specific plans for Downtown or specific or  precise plans South El Camino, East Meadow Circle, Fabian Way, and East Embarcadero.   Commenting on the alternative futures I think this has almost been completely covered by my colleagues  and by the public. I think that the Alternative Number 1 the do nothing or business as usual, well it just  left me with one big question and that’s the reference, the causal reference that the Downtown  Development Cap would be just exceeded. I think that this is too important of a policy for that statement  to be left hanging there. I think that we should understand exactly what the enforcement of this policy  would be or if it needs to be strengthened with an ordinance or a Downtown specific plan. My personal  bias is the Alternative Future Number 1 is not my favorite nor is the Number 2, the slow growth. And  again I’m not seeing many takers in my suggestion that we substitute the metaphor of change for growth  because I think I’m willing to work with the concept of growth because obviously this is meaningful to  most of us if not all of us, but I don’t think it’s parsed in terms of what it actually means sufficiently. So  does this mean population increase? Does it mean absolute number of employees as tabulated in a  business registry against some ongoing metric of sorts? Does it mean non-residential square footage  divided further into retail and office? Does it mean housing units? But I think that if growth at some  level slow, slower, slowest, rapid is the topic we should be more precise.   Option Number 3, which my notes is slow development but focused housing in transit served areas I  think that the question that I’ve always had about the transit and how it serves us is that it’s almost it’s  dominated by intercity commuting transit. And it’s not, doesn’t recognize any particular infrastructure  associated with intra-city movement. And I think that one of the changes in the way we live and work is  that many of us don’t commute intercity. This may be us being fortunate, but I think that for example  most of us came here probably other than Commissioner Alcheck on his skateboard we probably drove  here because there is no intra-city transit that is efficient. So I think if you’re going to have focus on  transit served areas I think that we ought to broaden what transit served means. And I think it ought to  include intra-city transit.   And the two things that disappointed me in Number 3, which was otherwise probably my preferred  bucket was the notion that the ideas in the California Avenue Area Concept Plan would be validated in  terms of keeping California Avenue low scale. And putting off my impartial fiduciary role as Chair of the  Commission I would prefer to see California Avenue sort of more vibrant a little bit higher scale. And I  think that that would provide some more mixed use, more opportunities for retail, more leveraging of  transit and perhaps evening putting City Hall and the Public Safety Building there would be an  improvement in the allocation of resources of the City. Likewise for the what came out of the workshops  I was disappointed that in this notion of walkability and sort of clustering things around sort of villages  that are scattered around the City, places like Midtown and Charleston Plaza seem to be opportunities for  bolstering what’s there that people could use, walk to, and maybe even allow for a little more density,  more height.   And I think I said pretty much everything else in the first round and I’m going to yield to Commissioner  Alcheck.   Commissioner Alcheck: There was one other comment I wanted to make about and you just reminded  me about it and I’ve been thinking about it all week, which is I was sort of hoping that out of the Our  Palo Alto meetings there would be an opportunity to explore this notion of a limitation on chain stores,  particularly in a California Avenue specific environment. I mention that because San Francisco has  implemented chain store limitations in several areas of the City and people often describe San Francisco  as being a retail rainforest. You look at Hayes Valley or the Mission for example you won’t find stores  that have more than 10 locations nationwide. What that does is it changes the way an investor or a  developer looks at a project. They’re not building it for a Chipotle or a McDonald’s or a Gap, they’re   &LW\RI3DOR$OWR  3DJH building it for a potentially local business owner. What I’m hoping exploring that idea will do is it will  encourage potentially an alternative that considers growth in for example the California Avenue area,  mixed-use growth, but it does so in a way that alleviates some of the concern that there won’t be a place  for our mom and pop businesses. So I just wanted to add, I’m not sure how to incorporate that in the  alternatives we have. I also agree with my colleagues here that there should be an alternative that  explores those growth options potentially with certain policies in place that affect the growth in a way  that is palatable. That’s it.   Chair Michael: So I had forgotten to make one comment, which doesn’t respond directly to your  alternatives and that is as one comes to study the Comp Plan it takes a while to figure out where to find  stuff. And what I heard from coming out of the workshops were a number of pretty articulate concerns  that should be in the Comp Plan and should be easy to find. And I’m not sure where they go in terms of  mapping them to the elements or to the alternatives that you’ve laid out, which may be useful for moving  this forward. But the concerns that I noted from the workshops and this was just in the materials that  everybody had, quality of life in Palo Alto, livability, dealing with traffic congestion, enhancing transit,  housing cost and affordability, growth management or change management, utilizing a relationship with  Stanford and neighboring cities, some notion of what’s the target jobs/housing ratio whether that’s an  imbalance or there’s something ideal, something about the Palo Alto process and the importance of trust  with the public transparency, governance, engagement, and so forth I think is coming out of these  workshops is one of the elements in the Comp Plan. Dealing with the aging infrastructure from those of  us who suffered or served on IBRC; we had 300 meetings. Open space, what’s the strategy relative to  density or lack thereof, and then Transit Demand Management, Transportation Management  Associations… TDM/TMA for you TLA fans. But I think that if there are key concerns we ought to figure  out how to map them to what we publish and so somebody who wants to focus on livability can find  what’s relevant to that. And maybe it’s in the glossary or maybe it’s right up front. Maybe it’s in the  structure of some innovative way of presenting the Comp Plan.   I’d like to thank everybody who showed up tonight who listened and commented. Thank my colleagues,  thank staff, consultants. I have more confidence after this evening’s discussion in what will be the end  result than I think I’ve had for the last several years. So hopefully that’s shared. We’re about to go into  some housekeeping items. Maybe we’ll take a five minute break while people can relocate.   Ms. Gitelman: And Chair Michael if I can just for the benefit of everybody talk about the next steps? We  talked about it before the August 4th City Council meeting is our next step. We’re soliciting input on these  concepts, these four concepts between now and then. We’d love that input. We have to decide based  on your input this evening and the public’s input this evening whether we start making changes before  this gets to Council. My instinct is that yes we should. We should reflect all of this and continue to  evolve and change these alternatives until the Council sees them. It might create some confusion  because we’ve asked people to comment on this version, but I think that’s ok. We’re at the part of the  process where all of the input we get will be valuable in starting to winnow down the ideas and get to  one final set of alternatives. So I thank you all for the input. I’m… we’ll have to see what we can do to  open up the hood and get a lot of the ideas you’ve articulated into one or more of these concepts as they  move forward. Thank you.   Chair Michael: Ok, so quick break and then we’ll do some housekeeping.   Commission Action: No action taken, provided comment and suggestions only.  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E v e n w i t h s i g n i f i c a n t n e w r e s i d e n t i a l de v e l o p m e n t i n t h e r e g i o n , t h e p e r c e n t a g e o f f i r s t t i m e ho m e b u y e r s t h a t c a n a f f o r d t o l i v e w h e r e t h e y w o r k dr o p p e d l a s t y e a r a f t e r s i x s t r a i g h t y e a r s o f i m p r o v e m e n t . Al s o , a s o f t h e l a t e s t a v a i l a b l e C e n s u s d a t a f r o m 2 0 1 2 , ab o u t o n e - t h i r d o f P a l o A l t o h o u s e h o l d s , i n c l u d i n g 4 0 % o f re n t e r s , w e r e “ o v e r p a y i n g ” f o r h o u s i n g b y s p e n d i n g m o r e th a n 3 0 % o f t h e i r c o m b i n e d i n c o m e s o n h o u s i n g c o s t s . Al l i n d i c a t i o n s a r e t h a t t h i s t r e n d h a s b e c o m e e v e n m o r e pr o n o u n c e d o v e r t h e p a s t t w o y e a r s . A n d , a c c o r d i n g t o th e S i l i c o n V a l l e y I n d e x , m o r e p e o p l e a r e c o m i n g h e r e th a n a t a l m o s t a n y t i m e o v e r t h e p a s t t h r e e d e c a d e s : t h e re g i o n a l p o p u l a t i o n g r e w a b o u t 1 . 5 t i m e s a s f a s t a s i t d i d st a t e w i d e l a s t y e a r , w i t h a n e t r e g i o n a l i n f l u x u n p a r a l l e l e d si n c e 1 9 9 7 . :2 U N Em p l o y m e n t i n S i l i c o n V a l l e y i s g r o w i n g a c r o s s a l m o s t a l l co m m e r c i a l a n d i n d u s t r i a l s e c t o r s . R i s i n g v e n t u r e c a p i t a l in v e s t m e n t i n l o c a l c o m p a n i e s , i n n o v a t i o n s i n s c i e n c e a n d en g i n e e r i n g , a n d r e n e w e d s m a l l - b u s i n e s s l o a n a c t i v i t y ar e c o n t r i b u t i n g t o a n e w p h a s e o f r e g i o n a l j o b g r o w t h . Of f i c e s p a c e i s t h e p r e d o m i n a t e f o r m o f n e w c o m m e r c i a l de v e l o p m e n t . I n c r e a s e d j o b g r o w t h a n d c o m m e r c i a l de v e l o p m e n t , w h i l e g o o d f o r t h e r e g i o n a l e c o n o m y , c r e a t e co n d i t i o n s t h a t i m p a c t o u r c i t y . P e r h a p s m o s t s t r i k i n g l y , mo s t o f t h e e m p l o y e e s a t b o t h n e w a n d e s t a b l i s h e d j o b s —a b o u t 7 5 % o f t h e S i l i c o n V a l l e y w o r k f o r c e — a r e d r i v i n g to w o r k a l o n e . In d e p e n d e n t o f c o m m u t i n g to j o b s i n P a l o A l t o f r o m ot h e r p l a c e s i n S a n t a C l a r a Co u n t y , a t l a s t c o u n t a b o u t 55 , 0 0 0 p e o p l e f r o m S a n t a Cl a r a C o u n t y c o m m u t e no r t h w a r d t h r o u g h P a l o  R8 5  * 5 R Z , Q *  5 H * , R Q Re n e w e d p r o s p e r i t y , g r o w t h , a n d o p p o r t u n i t y h a v e r e t u r n e d t o P a l o A l t o a n d t h e S i l i c o n V a l l e y r e g i o n . Th e s e p o s i t i v e d e v e l o p m e n t s c o m e w i t h a s s o c i a t e d c o m p l i c a t i o n s , i n c l u d i n g d e v e l o p m e n t p r e s s u r e s , tr a f f i c c o n g e s t i o n , a n d p a r k i n g s c a r c i t y . A c c o r d i n g l y , w e n e e d a p l a n f o r P a l o A l t o t h a t r e c o g n i z e s t h i s co n t e x t , p r e s e r v e s o u r q u a l i t y o f l i f e , a n d c h a r t s a c o u r s e f o r o u r f u t u r e . T h e p l a n m u s t d e f i n e w h e r e an d h o w P a l o A l t o w i l l g r o w , a n d h o w t h e C i t y c a n m a i n t a i n i t s g l o b a l r e p u t a t i o n f o r i n n o v a t i o n a n d s t i l l be a l i v a b l e , s u s t a i n a b l e c o m m u n i t y f o r g e n e r a t i o n s t o c o m e . T h e p r e s s u r e s o f r e g i o n a l g r o w t h a n d ch a n g e m e a n t h a t d o i n g n o t h i n g — t h a t i s , n o t u p d a t i n g t h e c u r r e n t C o m p r e h e n s i v e P l a n — i s s i m p l y n o t an o p t i o n .  Sa n F r a n c i s c o Co u n t y Sa n M a t e o Co u n t y Sa n t a C l a r a Co u n t y 75 , 4 2 6 55 , 0 4 4 41 , 4 3 0 21 , 6 4 4 41 , 9 1 9 13 , 5 0 3 Re g i o n a l Co m m u t e P a t t e r n s So u r c e : s i l i c o n v a l l e y i n d e x . o r g So u r c e : s i l i c o n v a l l e y i n d e x . o r g Si l i c o n V a l l e y E m p l o y m e n t Gr o w t h b y M a j o r A r e a s o f Ec o n o m i c A c t i v i t y Pe r c e n t C h a n g e i n Q 2 ( y e a r - o n - y e a r ) K D D h E / d z  / E & Z  ^ d Z h  d h Z   Θ ^  Z s /   ^ /E E K s  d / K E   E   / E & K Z D  d / K E  WZ K  h  d ^  Θ  ^  Z s /   ^ +3 . 0 % + 2 . 9 % +3 . 4 % + 2 . 1 % h ^ / E  ^ ^  / E & Z  ^ d Z h  d h Z   Θ ^  Z s /   ^ +3 . 8 % + 6 . 4 % Kd ,  Z  D E h &   d h Z / E ' +4 . 4 % + 3 . 1 % dK d  > D W > K z D  E d +2 . 8 % + 3 . 4 % ϮϬ ϭ ϭ Ͳ Ϯ Ϭ ϭ Ϯ Ϯ Ϭ ϭ Ϯ Ͳ Ϯ Ϭ ϭ ϯ Al t o . M e a n w h i l e , m o r e t h a n 7 5 , 0 0 0 p e o p l e c o m m u t e so u t h f r o m h o m e s o n t h e P e n i n s u l a a n d i n S a n F r a n c i s c o , al s o p r i m a r i l y i n t o a n d / o r t h r o u g h P a l o A l t o . S o m e o f t h e s e co m m u t e r s a r e o p t i n g t o u s e M i d d l e f i e l d R o a d , A l m a St r e e t , E l C a m i n o R e a l a n d o t h e r P a l o A l t o r o a d w a y s t o av o i d t r a f f i c o n H i g h w a y 1 0 1 a n d I n t e r s t a t e 2 8 0 . VX V W D L Q D E L O L W \ Pa l o A l t o r e s i d e n t s a n d C i t y o f f i c i a l s a r e e n v i r o n m e n t a l l y pr o a c t i v e . S o l a r i n s t a l l a t i o n s , a l t e r n a t i v e - p o w e r v e h i c l e us e , a n d u t i l i z a t i o n o f r e c y c l e d w a t e r a r e e v e r - i n c r e a s i n g at l o c a l h o m e s , b u s i n e s s e s , a n d g o v e r n m e n t f a c i l i t i e s . El e c t r i c i t y c o n s u m p t i o n i s t r e n d i n g d o w n w a r d l o c a l l y , a n d th e C i t y - o w n e d u t i l i t y n o w p r o v i d e s o n l y c a r b o n - n e u t r a l po w e r , s o m e o f i t g e n e r a t e d i n P a l o A l t o a n d a l l o f i t w i t h i n Ca l i f o r n i a . As a n o t h e r m e a s u r e o f b o t h o u r c o m m i t m e n t t o t h e en v i r o n m e n t a n d t h e i m p o r t a n c e o f t h e c i t y ’ s s p e c i a l pl a c e s , o u r m u l t i - m o d a l t r a n s i t s t a t i o n s m a k e P a l o A l t o se c o n d o n l y t o S a n F r a n c i s c o i n C a l t r a i n r i d e r s h i p . T h e fa c t t h a t o u r h i g h l y t r a n s i t - a c c e s s i b l e b u s i n e s s d i s t r i c t s a r e co m p l e m e n t e d b y a v a r i e t y o f r e s i d e n t i a l n e i g h b o r h o o d s , an a b u n d a n c e o f p a r k s a n d c o m m u n i t y f a c i l i t i e s , a n d hi l l s i d e a n d b a y f r o n t o p e n s p a c e d e f i n e s t h e t r u l y u n i q u e ch a r a c t e r o f P a l o A l t o , a s w e l l a s w h a t ’ s a t s t a k e i f w e d o n ’ t pl a n p r o p e r l y t o p r o t e c t t h e s e p r e c i o u s r e s o u r c e s . So h o w d o w e m a n a g e t h e p r e s s u r e s o f g r o w t h w h i l e pr e s e r v i n g t h e q u a l i t y o f l i f e , n e i g h b o r h o o d s , o p e n s p a c e , an d t h e e n v i r o n m e n t i n P a l o A l t o ? T h e s o l u t i o n s w i l l c o m e fr o m u s , t h e P a l o A l t o c o m m u n i t y , a n d w i l l b e e m b o d i e d in o u r C o m p r e h e n s i v e P l a n — O u r P a l o A l t o 2 0 3 0 . T h e y in c l u d e p l a y i n g a m e a n i n g f u l r o l e i n d e c i s i o n s i n v o l v i n g Sa n t a C l a r a V a l l e y T r a n s p o r t a t i o n A u t h o r i t y ( V T A ) , C a l t r a i n , St a n f o r d , a n d S a n t a C l a r a a n d S a n M a t e o C o u n t i e s , a n d he l p i n g t h e r e g i o n t o e m b r a c e p r e s c r i p t i o n s f o r i m p r o v i n g ou r h e a l t h b y s u b s t i t u t i n g w a l k i n g , b i k i n g , t r a n s i t u s e , a n d ca r p o o l i n g a s m u c h a n d a s o f t e n a s w e c a n f o r s i n g l e - oc c u p a n t a u t o m o b i l e t r i p s t h a t c r o w d o u r s t r e e t s a n d re q u i r e e v e r - m o r e p a r k i n g . P u t s i m p l y , O u r P a l o A l t o 2 0 3 0 mu s t r e f l e c t o u r a g r e e m e n t a s a c o m m u n i t y r e g a r d i n g t h e co n t r i b u t i o n t o r e s o l v i n g o u r t r a f f i c a n d p a r k i n g i s s u e s t h a t wi l l b e r e q u i r e d o f n e w g r o w t h o r d e v e l o p m e n t b e f o r e i t i s al l o w e d t o b e a p p r o v e d . +R Z  W R  * H W  , Q Y R / Y H ' , Q  W + H   3/ $ Q  8 3 ' $ W H  2X U  3 D O 2  D O W 2      Th e C o m p r e h e n s i v e P l a n i s t h e p r i m a r y t o o l f o r g u i d i n g p r e s e r v a t i o n a n d d e v e l o p m e n t i n P a l o A l t o . I t bu i l d s o n s h a r e d c o m m u n i t y v a l u e s a n d a s p i r a t i o n s t o g u i d e p r e s e r v a t i o n a n d t o m a n a g e g r o w t h a n d ch a n g e . Th e P l a n f u l f i l l s t h e S t a t e r e q u i r e m e n t t h a t t h e C i t y a d o p t a G e n e r a l P l a n t o s e r v e a s i t s c o n s t i t u t i o n , w i t h i n t e r n a l l y co n s i s t e n t g o a l s a n d p o l i c i e s t h a t r e f l e c t t h e c o m m u n i t y ’ s pr i o r i t i e s r e g a r d i n g l a n d u s e , c i r c u l a t i o n , c o n s e r v a t i o n , ho u s i n g , o p e n s p a c e , n o i s e , a n d s a f e t y . T h e P l a n p r o v i d e s a fo u n d a t i o n f o r t h e C i t y ’ s d e v e l o p m e n t r e g u l a t i o n s , c a p i t a l im p r o v e m e n t s p r o g r a m , a n d d a y - t o - d a y d e c i s i o n s . Th e c u r r e n t r e v i s i o n s w i l l b r i n g a l l t h e P l a n E l e m e n t s u p to d a t e , a d d r e s s c h a n g i n g d e m o g r a p h i c , e c o n o m i c a n d en v i r o n m e n t a l c o n d i t i o n s , a n d l o o k f o r w a r d t o 2 0 3 0 . T h e Ho u s i n g E l e m e n t i s b e i n g u p d a t e d s e p a r a t e l y t o m e e t a Ja n u a r y 2 0 1 5 d e a d l i n e s e t b y t h e S t a t e . Th e C o m p r e h e n s i v e P l a n w a s l a s t u p d a t e d f r o m 1 9 9 8 to 2 0 0 2 , w i t h t h e i n t e n t o f b e i n g r e - e x a m i n e d b y 2 0 1 0 . Ci t y S t a f f a n d c o n s u l t a n t s s t a r t e d w o r k w i t h t h e P l a n n i n g an d T r a n s p o r t a t i o n C o m m i s s i o n ( P T C ) i n l a t e 2 0 0 8 t o re v i e w e a c h E l e m e n t a n d t o s h a p e c o n c e p t u a l p l a n s f o r th e C a l i f o r n i a A v e n u e / F r y ’ s a n d t h e E a s t M e a d o w C i r c l e / Fa b i a n W a y a r e a s . F r o m t h e n u n t i l r e c e n t l y , t h e P T C h a s ca r e f u l l y r e v i e w e d e a c h E l e m e n t . A s n e e d e d a m e n d m e n t s ha v e b e e n i d e n t i f i e d t o c r e a t e a c l e a r e r , m o r e c o h e s i v e do c u m e n t , t h e u p d a t e p r o g r a m h a s g r o w n t o i n c l u d e ch a n g i n g t h e f o r m a t a n d o r g a n i z a t i o n o f t h e P l a n . ([ W ( Q G ( G  3 X E O L F  U ( Y L ( : Me a n w h i l e , r e n e w e d d e v e l o p m e n t p r e s s u r e s h a v e ex a c e r b a t e d c o n c e r n s a b o u t t r a f f i c , p a r k i n g , a n d o t h e r qu a l i t y o f l i f e i s s u e s i n P a l o A l t o . A c c o r d i n g l y , t h e C i t y i s in i t i a t i n g a n e w c o m m u n i t y d i a l o g t o e n s u r e t h a t t h e up d a t e d P l a n , t o b e c a l l e d O u r P a l o A l t o 2 0 3 0 , i s a b l u e p r i n t fo r p r e s e r v a t i o n , c h a n g e , a n d g r o w t h m a n a g e m e n t o v e r th e n e x t t w o d e c a d e s t h a t t r u l y r e f l e c t s o u r c o l l e c t i v e co m m u n i t y v i s i o n . Th e n e w l y e x p a n d e d p r o c e s s i n c l u d e s a s e r i e s o f p h a s e s th a t e f f i c i e n t l y i n t e g r a t e t h e p l a n n i n g a n d e n v i r o n m e n t a l re v i e w c o m p o n e n t s o f t h e u p d a t e : » Th e Le a d - I n p h a s e w i l l i n v o l v e c o l l e c t i n g d e t a i l e d ba c k g r o u n d d a t a t o i n f o r m t h e c o m m u n i t y a n d up d a t i n g t h e p r o j e c t w e b s i t e t o p o s t t h e f i n d i n g s . » Th e Vi s i o n i n g ph a s e w i l l i n t r o d u c e t h e c o m m u n i t y to O u r P a l o A l t o 2 0 3 0 , e n g a g e s r e s i d e n t s i n co n v e r s a t i o n s a b o u t c r i t i c a l c h a l l e n g e s , d e t e r m i n e s th e s c o p e o f e n v i r o n m e n t a l r e v i e w , a n d d e v e l o p s th r e e a l t e r n a t i v e f u t u r e s f o r d e t a i l e d s t u d y . » Th e Dr a f t P l a n a n d D r a f t E I R w i l l p r e s e n t d r a f t po l i c i e s , p r o g r a m s , a l t e r n a t i v e f u t u r e s , a n d mi t i g a t i o n s t r a t e g i e s . E x t e n s i v e p u b l i c i n p u t w i l l h e l p sh a p e t h e s e f o r c o n s i d e r a t i o n b y t h e C i t y C o u n c i l . » Th e Fi n a l P l a n a n d E I R ǁŝ ů ů in c o r p o r a t e s u b s t a n t i v e pu b l i c c o m m e n t s f o r c o n s i d e r a t i o n a n d f i n a l i z a t i o n by t h e P T C a n d C i t y C o u n c i l i n l a t e 2 0 1 5 . » A Us e r ’ s G u i d e i n p r i n t a n d i n t e r a c t i v e o n l i n e f o r m s ǁŝ ů ů  ex p l a i n h o w t h e C i t y w i l l u s e O u r P a l o A l t o 2 0 3 0 ; ho w i t s g o a l s , p o l i c i e s , a n d p r o g r a m s w i l l a f f e c t t h e co m m u n i t y ; a n d h o w t h e P l a n c a n b e a m e n d e d i n th e f u t u r e .  2014 2015 2016 Us e r ’ s G u i d e ͩ  Ă Ɛ Ğ ů ŝ Ŷ Ğ   Ă ƚ Ă  Z Ğ Ɖ Ž ƌ ƚ ͩ t Ğ ď Ɛ ŝ ƚ Ğ  h Ɖ Ě Ă ƚ Ğ ͩ E K W  Z Ğ ů Ğ Ă Ɛ Ğ Ě ͩ  Ž ŵ ŵ Ƶ Ŷ ŝ ƚ LJ  D Ğ Ğ ƚ ŝ Ŷ Ő Ɛ ͩ K Ŷ ů ŝ Ŷ Ğ   Ŷ Ő Ă Ő Ğ ŵ Ğ Ŷ ƚ ͩ  ů ƚ Ğ ƌ Ŷ Ă ƚ ŝ ǀ Ğ  & Ƶ ƚ Ƶ ƌ Ğ Ɛ ͩ  / Z  t Ž ƌ Ŭ Ɛ Ś Ž Ɖ Ɛ ͩ K Ŷ ů ŝ Ŷ Ğ   Ŷ Ő Ă Ő Ğ ŵ Ğ Ŷ ƚ ͩ K Ƶ ƚ  ƚ Ž  ƚ Ś Ğ   Ž ŵ ŵ Ƶ Ŷ ŝ ƚ LJ Ă ŵ Ɖ Ă ŝ Ő Ŷ ͩ  Ě Ě ŝ ƚ ŝ Ž Ŷ Ă ů  W Ƶ ď ů ŝ Đ  ZĞ ǀ ŝ Ğ ǁ ͩ / Ŷ Đ Ž ƌ Ɖ Ž ƌ Ă ƚ ŝ Ž Ŷ  Ž Ĩ  Ž ŵ ŵ Ğ Ŷ ƚ Ɛ ͩ W Ƶ ď ů ŝ Đ  , Ğ Ă ƌ ŝ Ŷ Ő Ɛ ͩ K Ŷ ů ŝ Ŷ Ğ   Ž ŵ Ɖ Ă Ŷ ŝ Ž Ŷ Dr a f t P l a n & E I R Le a d - I n Fi n a l P l a n & E I R Vi s i o n i n g  Ge n e r a l P l a n U p d a t e E l e m e n t s St a t e - M a n d a t e d E l e m e n t Ƶ ƌ ƌ Ğ Ŷ ƚ   Ž ŵ Ɖ ƌ Ğ Ś Ğ Ŷ Ɛ ŝ ǀ Ğ  W ů Ă Ŷ Ou r P a l o A l t o 2 0 3 0 > E   h ^  / Z  h >  d / K E > E   h ^   Θ   K D D h E / d z    ^ / ' E dZ  E ^ W K Z d  d / K E ,K h ^ / E ' ,K h ^ / E ' ,K h ^ / E ' KW  E  ^ W    K E ^  Z s  d / K E ^ &  d z EK / ^  E d h Z  >   E s / Z K E D  E d h ^ / E  ^ ^  Θ    K E K D /  ^ K D D h E / d z  ^  Z s /   ^  Θ  &   / > / d /  ^ > E   h ^   Θ   K D D h E / d z    ^ / ' E  E d h Z  >  Θ  h Z   E   E s / Z K E D  E d  Θ ^  &  d z h ^ / E  ^ ^  Θ    K E K D /  ^ K D D h E / d z  ^  Z s /   ^  Θ  &   / > / d /  ^ dZ  E ^ W K Z d  d / K E D F 2 Q W L Q X X P  2 I  ( Q J D J ( P ( Q W Th e C i t y i s o f f e r i n g a v a r i e t y o f e n g a g e m e n t t o o l s a n d te c h n i q u e s t o c r e a t e a w e l c o m i n g a n d i n t e r a c t i v e en v i r o n m e n t f o r t h e c o m m u n i t y t o s h a r e i d e a s a n d co n c e r n s a b o u t w h a t s h o u l d b e a d d r e s s e d i n O u r P a l o A l t o 20 3 0 . T h e s e o p p o r t u n i t i e s r a n g e f r o m i n f o r m a l d i s c u s s i o n s wi t h C i t y o f f i c i a l s a n d s t a f f t o o n l i n e s u r v e y s a n d co m m u n i t y m e e t i n g s . T h e e n g a g e m e n t o p p o r t u n i t i e s a r e sc h e d u l e d t h r o u g h o u t t h e p l a n n i n g p r o c e s s a n d t a i l o r e d to e a c h p h a s e . F o r i n s t a n c e , d u r i n g t h e V i s i o n i n g p h a s e , em p h a s i s i s p l a c e d o n c o m m u n i t y m e e t i n g s a n d o n l i n e in p u t t o i n f o r m t h e d e v e l o p m e n t o f a l t e r n a t i v e f u t u r e s . Pu b l i c i n v o l v e m e n t a c t i v i t i e s w i l l b u i l d a w a r e n e s s , en c o u r a g e c o m m e n t o n v i t a l i s s u e s , a n d p r o m o t e pa r t i c i p a t i o n b y P a l o A l t a n s w h o m i g h t n o t o t h e r w i s e ge t i n v o l v e d . T h e C i t y w e l c o m e s y o u r v o i c e i n i m p r o v i n g ou r e f f o r t s . I f y o u w o u l d l i k e C i t y s t a f f t o s p e a k t o y o u r ne i g h b o r h o o d o r g a n i z a t i o n , s e r v i c e c l u b , o r o t h e r g r o u p , pl e a s e l e t u s k n o w a t : ww w . p a l o a l t o c o m p l a n . o r g . A B l u e p r i n t f o r t h e F u t u r e : WƵ ƚ  ƚ Ś Ğ  W ů Ă Ŷ  ŝ Ŷ ƚ Ž  Ă Đ Ɵ Ž Ŷ  ǁ ŝ ƚ Ś  in f o r m e d d e c i s i o n - m a k i n g Re g u l a t e t h e p a c e ĂŶ Ě  ů Ž Đ Ă Ɵ Ž Ŷ  Ž Ĩ  Őƌ Ž ǁ ƚ Ś /Ě Ğ Ŷ Ɵ Ĩ LJ  Ă Ŷ Ě  Ɖ ƌ ŝ Ž ƌ ŝ Ɵ nj Ğ  Ğdž ŝ Ɛ Ɵ Ŷ Ő  Đ Ś Ă ů ů Ğ Ŷ Ő Ğ Ɛ  Ă Ŷ Ě  ŽƉ Ɖ Ž ƌ ƚ Ƶ Ŷ ŝ Ɵ Ğ Ɛ Go a l s Po l i c i e s Pr o g r a m s In - d e p t h f o c u s on s p e c i f i c co n c e r n s Vi r t u a l me e t i n g s , s u r v e y s , fo r u m s , e t c . Pla n n i n g & Tr a n s p o r t a t i o n Co m m i s s i o n , Cit y C o u n c i l Ev e n t s , s t r e e t st a l l s , c o f f e e ti m e s , e t c . COMM U NIT Y M E E T I N G S G O O U T T O T H E PEOPLE P U B L I C H E A RINGS ONLINE E N G A G E M E N T W+ H  / $ Q '  8 V H  $ Q ' &R P P 8 Q , W \  ' H V , * Q  H / H P H Q W Th e L a n d U s e a n d C o m m u n i t y D e s i g n E l e m e n t i s t h e g u i d i n g f o r c e b e h i n d t h e p h y s i c a l f o r m o f o u r c i t y . I t la y s o u t a f r a m e w o r k f o r c o n s e r v a t i o n a n d d e v e l o p m e n t t o p r e s e r v e n e i g h b o r h o o d s , p r o t e c t h i s t o r i c a n d na t u r a l r e s o u r c e s , c h a n n e l g r o w t h a n d c o m m e r c i a l a c t i v i t y t o s u i t a b l e s i t e s , r e s p o n d t o c l i m a t e c h a n g e , re d u c e p o l l u t i o n , a n d p r o m o t e a c t i v e a n d h e a l t h y l i f e s t y l e s . St a t e l a w r e q u i r e s a L a n d U s e E l e m e n t t o e s t a b l i s h t h e l o c a t i o n a n d i n t e n s i t y o f h o u s i n g , b u s i n e s s , in d u s t r y , o p e n s p a c e , r e c r e a t i o n , n a t u r a l r e s o u r c e s , a n d p u b l i c f a c i l i t i e s . T h e a d d e d C o m m u n i t y D e s i g n co m p o n e n t r e f l e c t s a s p e c i a l i n t e r e s t i n P a l o A l t o i n m a i n t a i n i n g h i s t o r i c i n t e g r i t y a n d e n r i c h i n g t h e b u i l t en v i r o n m e n t . Co m m e r c i a l DƵ ů Ɵ Ͳ & Ă ŵ ŝ ů LJ  Z Ğ Ɛ ŝ Ě Ğ Ŷ Ɵ Ă ů ZĞ Ɛ Ğ Ă ƌ Đ Ś ͬ Kĸ Đ Ğ  W Ă ƌ Ŭ KƉ Ğ Ŷ  ^ Ɖ Ă Đ Ğ ͬ Ž Ŷ ƚ ƌ Ž ů ů Ğ Ě  Ğ ǀ Ğ ů Ž Ɖ ŵ Ğ Ŷ ƚ Dŝ dž Ğ Ě  h Ɛ Ğ  0. 2 % 0. 8 % La n d U s e D i s t r i b u t i o n >ŝ Ő Ś ƚ  / Ŷ Ě Ƶ Ɛ ƚ ƌ ŝ Ă ů  24 % 3% 3% 19 % 6% 2% ^Đ Ś Ž Ž ů   ŝ Ɛ ƚ ƌ ŝ Đ ƚ  > Ă Ŷ Ě 42 % WƵ ď ů ŝ Đ   Ž Ŷ Ɛ Ğ ƌ ǀ Ă Ɵ Ž Ŷ  > Ă Ŷ Ě ͬ WĂ ƌ Ŭ ͬ KƉ Ğ Ŷ  ^ Ɖ Ă Đ Ğ ^ŝ Ŷ Ő ů Ğ  & Ă ŵ ŝ ů LJ  Z Ğ Ɛ ŝ Ě Ğ Ŷ Ɵ Ă ů  Vi s i o n S t a t e m e n t Pa l o A l t o ’ s l a n d u s e de c i s i o n s s h a l l b a l a n c e o u r fu t u r e g r o w t h n e e d s w i t h th e p r e s e r v a t i o n o f o u r ne i g h b o r h o o d s , a d d r e s s cl i m a t e p r o t e c t i o n p r i o r i t i e s , fo c u s o n s u s t a i n a b l e de v e l o p m e n t n e a r ne i g h b o r h o o d s e r v i c e s , a n d en h a n c e t h e q u a l i t y o f l i f e i n ou r c o m m u n i t y .  W+ (  F X U U ( Q W  3 O D Q    D V 2 O L G  I 2 X Q G D W L 2 Q Pa l o A l t o w a s a n e a r l y a d o p t e r o f c o m p a c t d e v e l o p m e n t pr i n c i p l e s , a s e m b o d i e d i n t h e U r b a n S e r v i c e Ar e a d e s i g n a t e d t o m a n a g e g r o w t h i n t h e c u r r e n t Co m p r e h e n s i v e P l a n . T h r o u g h t h i s s t r a t e g y , t h e C i t y h a s en d e a v o r e d t o d i r e c t n e w d e v e l o p m e n t i n t o a p p r o p r i a t e lo c a t i o n s — s u c h a s a l o n g t r a n s i t c o r r i d o r s a n d n e a r em p l o y m e n t c e n t e r s — w h i l e p r o t e c t i n g a n d p r e s e r v i n g lo w - s c a l e r e s i d e n t i a l n e i g h b o r h o o d s a n d o p e n s p a c e l a n d s th a t t o g e t h e r c o m p r i s e a b o u t 8 0 % o f t h e c i t y . Th e L a n d U s e a n d C o m m u n i t y D e s i g n E l e m e n t id e n t i f i e s t h e r e s i d e n t i a l a r e a s , c o m m e r c i a l c e n t e r s , an d e m p l o y m e n t d i s t r i c t s t h a t t o g e t h e r c o n s t i t u t e t h e ci t y ’ s “ s t r u c t u r e . ” U n d e r s t a n d i n g h o w t h e s e p a r t s o f t h e co m m u n i t y a r e c o n n e c t e d t o e a c h o t h e r a n d t h e r e g i o n i s es s e n t i a l t o r e s o l v i n g t r a n s p o r t a t i o n a n d t r a f f i c i s s u e s a n d en s u r i n g t h a t b u s i n e s s e s c a n t h r i v e i n p l a c e s w h e r e t h e y ca n s e r v e r e s i d e n t s a n d v i s i t o r s w i t h o u t i n c r e a s i n g i m p a c t s on n e i g h b o r h o o d s . A s t h e a p p e a r a n c e o f b u i l d i n g s a n d pu b l i c s p a c e s g r e a t l y a f f e c t s h o w p e o p l e e x p e r i e n c e P a l o Al t o , t h e E l e m e n t c a l l s f o r h i g h - q u a l i t y d e s i g n t o e n c o u r a g e so c i a l g a t h e r i n g i n a t t r a c t i v e s e t t i n g s . Th e e x i s t i n g L a n d U s e a n d C o m m u n i t y D e s i g n E l e m e n t i s ab l y s u p p o r t i n g t h e c o m m u n i t y ’ s o b j e c t i v e s f o r g r o w t h ma n a g e m e n t , a n d i t s c o r n e r s t o n e p o l i c y t h e m e s w i l l be c a r r i e d f o r w a r d t o g u i d e f u t u r e l a n d u s e d e c i s i o n s , in c l u d i n g : » Su p p o r t i n g t h e c i t y ’ s f u t u r e n e e d s b y ac c o m m o d a t i n g a n a p p r o p r i a t e m i x a n d a m o u n t of r e s i d e n t i a l , c o m m e r c i a l , a n d e m p l o y m e n t u s e s wi t h i n t h e U r b a n S e r v i c e A r e a . » Ma i n t a i n i n g a n d e n h a n c i n g P a l o A l t o ’ s r e s i d e n t i a l ne i g h b o r h o o d s , w h i l e e n s u r i n g t h a t n e w de v e l o p m e n t r e s p e c t s e x i s t i n g n e i g h b o r h o o d ch a r a c t e r . » Pr o v i d i n g a d e q u a t e p u b l i c s e r v i c e s a n d f a c i l i t i e s , pa r k s , a n d o p e n s p a c e . » Re d u c i n g e m i s s i o n s t h r o u g h e n e r g y e f f i c i e n c y st a n d a r d s a n d l a n d u s e d e c i s i o n s t h a t s u p p o r t wa l k i n g , b i k i n g , a n d t r a n s i t . » Fo s t e r i n g h i g h q u a l i t y d e s i g n b y i m p r o v i n g st r e e t s c a p e s , m a i n t a i n i n g a n d i n c r e a s i n g co n n e c t i v i t y , a n d e n h a n c i n g g a t e w a y s . » Pr e s e r v i n g a n d p r o t e c t i n g h i s t o r i c b u i l d i n g s a n d cu l t u r a l a n d n a t u r a l r e s o u r c e s . 2X U  3 D O 2  D O W 2      Th e u p d a t e d P l a n i s i n t e n d e d t o b u i l d o n t h e s o l i d fo u n d a t i o n o f t h e e x i s t i n g L a n d U s e a n d C o m m u n i t y De s i g n E l e m e n t t o d i r e c t g r o w t h , p r o v i d e c l e a r de v e l o p m e n t s t a n d a r d s , r e e x a m i n e t h e g r o w t h c a p s f o r th e C i t y a n d D o w n t o w n , a n d f o c u s o n t h e r e l a t i o n s h i p be t w e e n i n f r a s t r u c t u r e , t r a n s p o r t a t i o n i n v e s t m e n t s , l a n d us e , a n d d e v e l o p m e n t . T h e u p d a t e d E l e m e n t i s e x p e c t e d to r e s p o n d t o e m e r g i n g t r e n d s a n d c o m m u n i t y c o n c e r n s , in c l u d i n g b y : » Li m i t i n g t h e c o n v e r s i o n o f r e t a i l t o r e s i d e n t i a l u s e . » Re q u i r i n g p r o p o s e d d e v e l o p m e n t t o d e m o n s t r a t e th a t a d e q u a t e p u b l i c s e r v i c e s a r e a v a i l a b l e a n d t h a t it s d e s i g n s u p p o r t s w a l k i n g , b i k i n g , a n d t r a n s i t . » In s t i t u t i n g n e w C a l i f o r n i a G r e e n B u i l d i n g C o d e re q u i r e m e n t s . » Di s t r i b u t i n g p r i o r i t y i n f r a s t r u c t u r e i m p r o v e m e n t s eq u i t a b l y a c r o s s t h e c i t y . » Pr o v i d i n g i n f r a s t r u c t u r e t o s t r e n g t h e n D o w n t o w n as a r e g i o n a l e c o n o m i c c e n t e r . » Ex p a n d i n g t h e C i t y ’ s t r e e n e t w o r k , a n d r e s t o r i n g th e B a y l a n d s . » Me e t i n g t h e C i t y ’ s a d o p t e d g r e e n h o u s e g a s re d u c t i o n t a r g e t s . Th e L a n d U s e a n d C o m m u n i t y D e s i g n E l e m e n t a l s o wi l l i n c l u d e m a p s a n d d i a g r a m s t o d e p i c t d e n s i t i e s a n d di s t r i b u t i o n o f l a n d u s e s . Wh a t d o y o u t h i n k ? S h a r e y o u r th o u g h t s a t : ww w . p a l o a l t o c o m p p l a n . o r g W+ (  F X U U ( Q W  3 O D Q    D V 2 O L G  I 2 X Q G D W L 2 Q Th e T r a n s p o r t a t i o n E l e m e n t l a y s t h e f o u n d a t i o n f o r a mu l t i - m o d a l c i r c u l a t i o n n e t w o r k t h a t s e r v e s v e h i c l e s , pe d e s t r i a n s , c y c l i s t s , a n d t r a n s i t u s e r s . T r a n s p o r t a t i o n a n d la n d u s e a r e i n e x t r i c a b l y l i n k e d , a s h i g h e r d e n s i t y a n d m i x e d us e g e n e r a l l y l e a d t o m o r e t r a n s i t u s a g e a n d p e d e s t r i a n ac t i v i t y . T h e T r a n s p o r t a t i o n E l e m e n t e n c o u r a g e s a l a n d us e p a t t e r n t h a t s u p p o r t s r e d u c e d d e p e n d e n c e o n c a r s an d g u i d e s C i t y d e c i s i o n - m a k e r s t o t a k e i n t o a c c o u n t t h e en v i r o n m e n t a l a n d s o c i a l c o s t s o f i n c r e a s e d t r a f f i c w h e n co n s i d e r i n g f u t u r e p r o j e c t s . Th e E l e m e n t c a p i t a l i z e s o n t h e f a c t t h a t P a l o A l t o i s t h e se c o n d l a r g e s t g e n e r a t o r o f w e e k d a y C a l t r a i n t r i p s b e h i n d Sa n F r a n c i s c o a n d a n a t i o n a l l y r e c o g n i z e d l e a d e r i n in n o v a t i v e b i c y c l e p r o j e c t s a n d p r o g r a m s . T r a n s p o r t a t i o n El e m e n t p o l i c i e s c a l l f o r m o r e n o r t h e a s t - s o u t h w e s t b i k e ro u t e s , e a s i e r n a v i g a t i o n a t r a i l r o a d t r a c k s a n d f r e e w a y s , an d b e t t e r a c c o m m o d a t i o n f o r b i c y c l e s o n t r a i n s a n d bu s e s . M u c h o f P a l o A l t o i s i d e a l f o r p e d e s t r i a n s , b u t W+ H  W 5 $ Q V 3 R 5 W $ W , R Q  H / H P H Q W Th e S t a t e r e q u i r e s t h i s E l e m e n t t o a d d r e s s t r a n s p o r t o f p e o p l e a n d g o o d s a n d r e l a t e d i n f r a s t r u c t u r e s u c h as s t r e e t s a n d h i g h w a y s , t r u c k a n d t r a n s i t r o u t e s , b u s a n d r a i l s t a t i o n s , b i c y c l e a n d p e d e s t r i a n f a c i l i t i e s , an d a i r p o r t s . I t s p o l i c i e s t a k e i n t o a c c o u n t t h e p h y s i c a l , s o c i a l , a n d e c o n o m i c e f f e c t s o f c i r c u l a t i o n , a s w e l l as r e g i o n a l i m p a c t s a n d c o o r d i n a t i o n n e e d s . T h e E l e m e n t s u p p o r t s t r a f f i c s a f e t y , r o a d w a y i m p r o v e m e n t , pa r k i n g a n d t r a n s p o r t a t i o n m a n a g e m e n t s o l u t i o n s , s p e c i a l t r a n s p o r t a t i o n n e e d s f o r m o b i l i t y - i m p a i r e d pe r s o n s , a n d e f f o r t s t o i n c r e a s e b u s a n d r a i l u s e . A s i g n i f i c a n t f o c u s o f t h e T r a n s p o r t a t i o n E l e m e n t i s c o n g e s t i o n , w h i c h c o n t r i b u t e s t o a i r , w a t e r , a n d n o i s e po l l u t i o n , a n d t o f r u s t r a t i o n f o r d r i v e r s , b i c y c l i s t s , a n d o t h e r t r a v e l e r s . I n c r e a s e s i n r o a d w a y c a p a c i t y a r e no t a n t i c i p a t e d i n P a l o A l t o , s o t h e T r a n s p o r t a t i o n E l e m e n t a d d r e s s e s c o n g e s t i o n w i t h p o l i c i e s a i m e d a t re d u c i n g a u t o m o b i l e d e p e n d e n c y , i n c r e a s i n g t r a v e l a l t e r n a t i v e s , a n d e n c o u r a g i n g f e w e r t r i p s . Ch a n g e i n P e r C a p i t a Tr a n s i t U s e , 2 0 1 0 - 2 0 1 3 ^Ă Ŷ  D Ă ƚ Ğ Ž  Θ  ^ Ă Ŷ ƚ Ă   ů Ă ƌ Ă   Ž Ƶ Ŷ Ɵ Ğ Ɛ dZ  E ^ W K Z d  d / K E  ^z ^ d  D ^ E d    >  Z   s  > >  z  d Z  E ^ W K d  d / K E   h d , K Z / d z  Έ s d  Ή AL L S E R V I C E 1 6 . 6 9 0. 3 8 5. 5 7 4. 7 9 16 . 7 4 0. 5 3 4. 7 3 6. 0 5 0. 3 % 38 . 3 % ͳϭ ϱ ͘ ϭ й 26 . 4 % EX P R E S S B U S S E R V I C E SA M T R A N S CA L T R A I N ϮϬ ϭ Ϭ  W  Z  W / d  Z/   Z ^ , / W ϮϬ ϭ ϯ  W  Z  W / d  Z/   Z ^ , / W W Z   E d ,  E '   Vi s i o n S t a t e m e n t Ma i n t a i n a n d p r o m o t e a su s t a i n a b l e n e t w o r k o f s a f e , ac c e s s i b l e a n d e f f i c i e n t tr a n s p o r t a t i o n a n d p a r k i n g so l u t i o n s f o r a l l u s e r s a n d mo d e s , w h i l e p r o t e c t i n g a n d en h a n c i n g t h e q u a l i t y o f l i f e in P a l o A l t o n e i g h b o r h o o d s in c l u d i n g a l t e r n a t i v e a n d in n o v a t i v e t r a n s p o r t a t i o n pr a c t i c e s a n d s u p p o r t i n g re g i o n a l t r a n s i t f a c i l i t i e s a n d re d u c t i o n o f g r e e n h o u s e g a s em i s s i o n s .  2X U  3 D O 2  D O W 2      Th e e f f o r t t o u p d a t e t h e C o m p r e h e n s i v e P l a n i s e x p e c t e d to b u i l d o n t h e f o r w a r d - t h i n k i n g T r a n s p o r t a t i o n E l e m e n t , fi n e - t u n i n g i t t o r e s p o n d t o e m e r g i n g t r e n d s a n d co m m u n i t y c o n c e r n s , i n c l u d i n g b y : » Re q u i r i n g p r o p o s e d d e v e l o p m e n t t o d e m o n s t r a t e th a t a d e q u a t e p u b l i c s e r v i c e s a r e a v a i l a b l e a n d t h a t it s d e s i g n s u p p o r t s w a l k i n g , b i k i n g , a n d t r a n s i t . » Su p p o r t i n g r e d u c t i o n o f g r e e n h o u s e g a s e m i s s i o n s an d p r o m o t i n g e l e c t r i c a n d a l t e r n a t i v e f u e l v e h i c l e te c h n o l o g y . » Re i n f o r c i n g “ c o m p l e t e s t r e e t s ” c o n c e p t s a n d po l i c i e s t o p o s i t i o n t h e C i t y t o q u a l i f y f o r r e g i o n a l gr a n t f u n d i n g . » Su p p o r t i n g C a l t r a i n m o d e r n i z a t i o n , i n c l u d i n g by e x p l o r i n g t h e p o t e n t i a l f o r g r a d e - s e p a r a t e d cr o s s i n g s . » Su p p o r t i n g t h e r e g i o n a l G r a n d B o u l e v a r d I n i t i a t i v e fo r E l C a m i n o R e a l , i n c l u d i n g B u s R a p i d T r a n s i t Im p r o v e m e n t s t o e n h a n c e V T A s e r v i c e . » Tr a n s i t i o n i n g t h e M u n i c i p a l A i r p o r t f r o m C o u n t y t o Ci t y c o n t r o l . » St r e n g t h e n i n g p o l i c i e s o n p r e s e r v a t i o n o f ne i g h b o r h o o d r e s i d e n t i a l s t r e e t s , S a f e R o u t e s t o Sc h o o l , a n d g e n e r a l t r a f f i c s a f e t y . ad d i t i o n a l p o l i c i e s e m p h a s i z e f i l l i n g i n g a p s i n t h e s i d e w a l k sy s t e m a n d m a k i n g i n t e r s e c t i o n c r o s s i n g e a s i e r . Th e T r a n s p o r t a t i o n E l e m e n t i n t h e C o m p r e h e n s i v e P l a n co n t i n u e s t o s u p p o r t t h e c o m m u n i t y ’ s v i s i o n o f a l e s s co n g e s t e d a n d m o r e w a l k a b l e , t r a n s i t - r i c h e n v i r o n m e n t , wi t h t h e m a j o r i t y o f i t s p o l i c i e s b e i n g c a r r i e d o v e r i n t o O u r Pa l o A l t o 2 0 3 0 , i n c l u d i n g : » Re d u c i n g a u t o u s e t h r o u g h c a r p o o l i n g , i n c r e a s e d em p h a s i s o n e l e c t r o n i c i n f o r m a t i o n s e r v i c e s , a n d ed u c a t i o n a b o u t t r a n s p o r t a t i o n a l t e r n a t i v e s . » En c o u r a g i n g e m p l o y e r s t o d e v e l o p s h u t t l e s e r v i c e s co n n e c t i n g e m p l o y m e n t a r e a s w i t h t h e m u l t i - m o d a l tr a n s i t s t a t i o n s a n d b u s i n e s s d i s t r i c t s . » Su p p o r t i n g e f f o r t s t o i n t e g r a t e t r a i n , b u s , a n d sh u t t l e s c h e d u l e s a t m u l t i - m o d a l t r a n s i t s t a t i o n s t o ma k e p u b l i c t r a n s i t u s e m o r e t i m e - e f f i c i e n t . » Ac q u i r i n g e a s e m e n t s f o r b i c y c l e a n d p e d e s t r i a n pa t h s t h r o u g h n e w p r i v a t e d e v e l o p m e n t s . » Re d u c i n g n e i g h b o r h o o d s t r e e t a n d i n t e r s e c t i o n wi d t h s a n d w i d e n i n g p l a n t i n g s t r i p s t o s l o w s p e e d s an d i m p r o v e s a f e t y . » Pr o v i d i n g s u f f i c i e n t p a r k i n g i n b u s i n e s s d i s t r i c t s t o ad d r e s s l o n g - r a n g e n e e d s . Wh a t d o y o u t h i n k ? S h a r e y o u r th o u g h t s a t : ww w . p a l o a l t o c o m p p l a n . o r g Vi s i o n S t a t e m e n t Pa l o A l t o s h a l l p r e s e r v e i t s ec o s y s t e m s , i n c l u d i n g i t s op e n s p a c e , c r e e k s , h a b i t a t s , an d a i r q u a l i t y w h i l e w o r k i n g to w a r d s a s u s t a i n a b l e u r b a n en v i r o n m e n t o f u r b a n f o r e s t s , wa t e r q u a l i t y , w a s t e d i s p o s a l re d u c t i o n , e m e r g e n c y pr e p a r e d n e s s , c o m m u n i t y sa f e t y a n d a p l a n f o r c l i m a t e ch a n g e m i t i g a t i o n . W+ H  Q $ W 8 5 $ /  $ Q '   85 % $ Q  H Q Y , 5 R Q P H Q W  $ Q '  V $ ) H W \  H/ H P H Q W Th e N a t u r a l E n v i r o n m e n t E l e m e n t i n t h e C o m p r e h e n s i v e P l a n a d d r e s s e s t h e m a n a g e m e n t o f o p e n l a n d an d n a t u r a l r e s o u r c e s i n P a l o A l t o a n d t h e p r o t e c t i o n o f l i f e a n d p r o p e r t y f r o m n a t u r a l h a z a r d s . I t i s o n e of t h e b r o a d e s t e l e m e n t s o f t h e C o m p r e h e n s i v e P l a n , s a t i s f y i n g t h e r e q u i r e m e n t s f o r f o u r o f t h e S t a t e - ma n d a t e d G e n e r a l P l a n e l e m e n t s :  » Op e n S p a c e — w i t h p o l i c i e s d e s c r i b i n g t h e u s e of o p e n s p a c e f o r t h e p r e s e r v a t i o n o f n a t u r a l re s o u r c e s , t h e m a n a g e d p r o d u c t i o n o f n a t u r a l re s o u r c e s , o u t d o o r r e c r e a t i o n , a n d p u b l i c h e a l t h an d s a f e t y . » Co n s e r v a t i o n — w i t h p o l i c i e s t o p r o t e c t c r e e k s a n d ri p a r i a n a r e a s , w e t l a n d s , t h e u r b a n f o r e s t , w a t e r re s o u r c e s , w i l d l i f e , a n d a i r q u a l i t y ; t o r e g u l a t e a n d li m i t t h e u s e a n d t r a n s p o r t o f h a z a r d o u s m a t e r i a l s ; an d t o m i n i m i z e s o l i d w a s t e d i s p o s a l a n d p r o m o t e cl e a n e n e r g y . » Sa f e t y — w i t h p o l i c i e s d e s c r i b i n g h o w e x p o s u r e w i l l be r e d u c e d t o n a t u r a l h a z a r d s s u c h a s e a r t h q u a k e s , fl o o d i n g , a n d w i l d f i r e s . » No i s e — w i t h p o l i c i e s t o d e c r e a s e e x p o s u r e t o un d e s i r a b l e l e v e l s o f n o i s e i n t h e c o m m u n i t y . W+ (  F X U U ( Q W  3 O D Q   D  V 2 O L G  I2 X Q G D W L 2 Q Pa l o A l t o h a s v a s t o p e n s p a c e r e s o u r c e s f o r a c i t y o f o u r si z e . T h e N a t u r a l E n v i r o n m e n t E l e m e n t s e e k s t o p r o t e c t th e 2 9 n e i g h b o r h o o d a n d d i s t r i c t p a r k s , l a r g e h o l d i n g s i n th e B a y l a n d s , F o o t h i l l s P a r k , M o n t e b e l l o a n d A r a s t r a d e r o Pr e s e r v e s , a n d B a r r o n , M a t a d e r o , a n d S a n F r a n c i s q u i t o Cr e e k s . A l l o f t h e s e a r e a s p r o v i d e i m p o r t a n t h a b i t a t , sc e n i c , a n d r e c r e a t i o n a l v a l u e . Wi t h m o r e t h a n 3 0 0 t r e e s p e c i e s , P a l o A l t o ’ s u r b a n f o r e s t i s an e x t e n s i o n o f t h e n a t u r a l w o o d l a n d a n d g r a s s l a n d p l a n t co m m u n i t i e s a n d p r o v i d e s a b r i d g e f o r w i l d l i f e b e t w e e n th e f o o t h i l l s a n d t h e B a y . T h e E l e m e n t s u p p o r t s t h i s re s o u r c e b o t h f o r i t s b i o l o g i c a l b e n e f i t s a n d c o n t r i b u t i o n to t h e a e s t h e t i c a p p e a l o f P a l o A l t o . Th e N a t u r a l E n v i r o n m e n t E l e m e n t h a s a l s o p r o v e n e f f e c t i v e in p r o t e c t i n g t h e h e a l t h a n d s a f e t y o f o u r c o m m u n i t y b y li m i t i n g n o i s e a n d e x p o s u r e t o h a z a r d s . M o s t o f i t s p o l i c i e s wi l l b e c a r r i e d o v e r i n t o O u r P a l o A l t o 2 0 3 0 , i n c l u d i n g :  32 % 43 % 28 % 29 % 38 % 30 % ZĞ Đ LJ Đ ů Ă ď ů Ğ DĂ ƚ Ğ ƌ ŝ Ă ů Ɛ It e m s F o u n d i n P a l o A l t o G a r b a g e B i n s ZĞ Đ LJ Đ ů Ă ď ů Ğ DĂ ƚ Ğ ƌ ŝ Ă ů Ɛ Ž ŵ Ɖ Ž Ɛ ƚ Ă ď ů Ğ DĂ ƚ Ğ ƌ ŝ Ă ů Ɛ Ž ŵ Ɖ Ž Ɛ ƚ Ă ď ů Ğ DĂ ƚ Ğ ƌ ŝ Ă ů Ɛ Ga r b a g e Ga r b a g e 20 1 3 20 0 5 » Se e k i n g o p p o r t u n i t i e s f o r a d d i n g o p e n s p a c e , in c l u d i n g c o n n e c t i o n s b e t w e e n S k y l i n e R i d g e a n d Sa n F r a n c i s c o B a y . » Re - e s t a b l i s h i n g r i p a r i a n a n d o t h e r n a t u r a l f e a t u r e s th a t h a v e b e e n d i m i n i s h e d b y d e v e l o p m e n t , an d p r o t e c t i n g s u r f a c e a n d g r o u n d w a t e r f r o m po l l u t a n t s . » Ex p a n d i n g t h e u r b a n f o r e s t , i n c l u d i n g b y r e q u i r i n g de v e l o p m e n t t o p r o v i d e l a n d s c a p i n g a n d s t r e e t tr e e s . » Co n s e r v i n g w a t e r a n d e n e r g y , a n d s e c u r i n g l o n g - te r m w a t e r s u p p l i e s a n d r e n e w a b l e , c l e a n e n e r g y . » Re d u c i n g w a s t e , r e c y c l i n g c o n s t r u c t i o n m a t e r i a l s , an d e n c o u r a g i n g r e u s a b l e , r e t u r n a b l e , r e c y c l a b l e , an d r e p a i r a b l e g o o d s . » Pr o t e c t i n g t h e c o m m u n i t y f r o m n o i s e , a i r p o l l u t i o n , ha z a r d o u s c h e m i c a l s , a n d n a t u r a l h a z a r d s . 2X U  3 D O 2  D O W 2      To b e t t e r d e s c r i b e i t s i m p o r t a n c e a n d , i n l i g h t o f n e w i s s u e s an d t r e n d s t h a t h a v e e m e r g e d s u b s e q u e n t t o t h e a d o p t i o n of t h e C o m p r e h e n s i v e P l a n , O u r P a l o A l t o 2 0 3 0 i s e x p e c t e d to f e a t u r e a r e n a m e d N a t u r a l a n d U r b a n E n v i r o n m e n t a n d Sa f e t y E l e m e n t , w i t h a d d e d m a j o r c o n c e p t s , i n c l u d i n g : » Mo n i t o r i n g a n d a d a p t i n g t o i m p a c t s c a u s e d b y cl i m a t e c h a n g e . » Re d u c i n g g r e e n h o u s e g a s ( G H G ) e m i s s i o n s . » Em p h a s i z i n g a n d s u p p o r t i n g c o m m u n i t y e m e r g e n c y pr e p a r e d n e s s . » Pr o t e c t i n g s e n s i t i v e h a b i t a t f r o m h u m a n t h r e a t s . » Ba l a n c i n g c o n s e r v a t i o n w i t h i m p r o v e d o p e n s p a c e ac c e s s a n d e n c o u r a g i n g l o w i m p a c t r e c r e a t i o n a l us e . » Ad d r e s s i n g S t a t e r e g u l a t i o n s r e q u i r e m e n t s f o r tr a n s p o r t a t i o n n o i s e g e n e r a t e d f r o m r o a d w a y s , ai r w a y s , a n d r a i l w a y s , a n d l i m i t i n g c o n s t r u c t i o n no i s e a r o u n d s e n s i t i v e r e c e p t o r s . Wh a t d o y o u t h i n k ? S h a r e y o u r th o u g h t s a t : ww w . p a l o a l t o c o m p p l a n . o r g W+ H  & R P P 8 Q , W \  V H 5 Y , & H V  $ Q '  )$ & , / , W , H V  H / H P H Q W Th e C o m m u n i t y S e r v i c e s a n d F a c i l i t i e s E l e m e n t i s n o t a S t a t e r e q u i r e m e n t . I t i s a d d e d t o t h e Co m p r e h e n s i v e P l a n t o r e i n f o r c e t h e s i g n i f i c a n c e a n d i m p o r t a n c e o f s e r v i c e s l i k e l i b r a r i e s a n d s c h o o l s i n Pa l o A l t o a n d t h e v i t a l r o l e t h e y p l a y i n s h a p i n g c o m m u n i t y l i f e . Vi s i o n S t a t e m e n t Th i s g e n e r a t i o n m u s t in v e s t i n t h e p e o p l e , p l a c e s , pr o g r a m s , a n d e n v i r o n m e n t of P a l o A l t o t o e n s u r e t h a t th e q u a l i t y a n d v i t a l i t y o f co m m u n i t y s e r v i c e s a n d fa c i l i t i e s a r e p r e s e n t a n d re s p o n s i v e t o t h e g e n e r a t i o n s to c o m e .  Pa l o A l t o i s a f u l l - s e r v i c e C i t y , w i t h p a r k a n d r e c r e a t i o n di v i s i o n s a n d p o l i c e a n d f i r e d e p a r t m e n t s , l i b r a r y a n d cu l t u r a l a r t s p r o g r a m s , a n d y o u t h , s e n i o r a n d c h i l d c a r e se r v i c e s . I n e a c h o f t h e s e a r e a s , t h e C i t y i s c o m m i t t e d t o pr o v i d i n g r e s p o n s i v e c u s t o m e r s e r v i c e f o r r e s i d e n t s a n d bu s i n e s s e s , e v e n g o i n g s o f a r i n t h i s E l e m e n t t o s p e c i f y st a f f m a n a g e m e n t t e c h n i q u e s , p e r f o r m a n c e r e v i e w cr i t e r i a , a n d p u b l i c c o n t a c t p r o c e s s e s i n a n e f f o r t t o e n s u r e th e q u a l i t y o f s e r v i c e d e l i v e r y . W+ (  F X U U ( Q W  3 O D Q   D  V 2 O L G  I2 X Q G D W L 2 Q Pa l o A l t o r e s i d e n t s h a v e a c c e s s t o a r i c h a r r a y o f p u b l i c se r v i c e s t h a t c a t e r t o a l l a g e s , c u l t u r e s , a n d l e v e l s o f mo b i l i t y a n d e d u c a t i o n . T h e C i t y p r o v i d e s a r a n g e o f di r e c t s e r v i c e s t o a l l c i t i z e n s , a n d a l s o p a r t n e r s w i t h co m m u n i t y o r g a n i z a t i o n s a n d j u r i s d i c t i o n s t o a s s i s t t h o s e wi t h d i s a b i l i t i e s . P a l o A l t a n s a l s o h a v e a c c e s s t o c u l t u r a l an d r e c r e a t i o n a l o p p o r t u n i t i e s o n t h e a d j a c e n t c a m p u s o f St a n f o r d U n i v e r s i t y . T h e C o m m u n i t y S e r v i c e s a n d F a c i l i t i e s El e m e n t c a l l s f o r m a i n t a i n i n g a n d e n h a n c i n g a l l o f t h e se r v i c e s , a n d i t s u p p o r t s t h e e x c e l l e n t s c h o o l s r u n b y t h e Pa l o A l t o U n i f i e d S c h o o l D i s t r i c t ( P A U S D ) , a n i n d e p e n d e n t lo c a l g o v e r n m e n t i n s t i t u t i o n s e p a r a t e f r o m t h e C i t y o f P a l o Al t o . Th e C o m m u n i t y S e r v i c e s a n d F a c i l i t i e s E l e m e n t ac k n o w l e d g e s t h a t p a r k s a n d r e c r e a t i o n a l a n d s o c i a l se r v i c e s p l a y a s i g n i f i c a n t r o l e i n s h a p i n g a h e a l t h y a n d dy n a m i c c o m m u n i t y a n d c a l l s f o r t h e C i t y t o e n c o u r a g e an d e n h a n c e a c c e s s f o r a l l P a l o A l t a n s . T h e E l e m e n t a l s o re c o g n i z e s t h a t t h e r e a r e f i s c a l l i m i t s t o w h a t t h e C i t y c a n pr o v i d e a n d c a l l s f o r c o l l a b o r a t i o n w i t h o u t s i d e a g e n c i e s an d j u r i s d i c t i o n s t o f i l l a n y s e r v i c e g a p s . Th e C o m m u n i t y S e r v i c e s a n d F a c i l i t i e s E l e m e n t p r o v i d e s a s o l i d f r a m e w o r k t o h e l p t h e C i t y d e l i v e r t h e s e r v i c e s re q u i r e d t o m e e t t h e n e e d s o f t h e c o m m u n i t y a n d a d d t o qu a l i t y o f l i f e i n P a l o A l t o . T h e m a j o r i t y o f i t s p o l i c y t h e m e s ar e e x p e c t e d t o b e c a r r i e d f o r w a r d i n t o O u r P a l o A l t o 2 0 3 0 to c o n t i n u e t o m a i n t a i n a n d s t r e n g t h e n p u b l i c s e r v i c e s , in c l u d i n g : » Pr o v i d i n g s e r v i c e s t h a t m e e t t h e n e e d s o f a l l cu l t u r e s , a g e s , a n d a b i l i t i e s . » Me e t i n g f i s c a l c h a l l e n g e s b y p a r t n e r i n g w i t h o t h e r ag e n c i e s , j u r i s d i c t i o n s , n o n - p r o f i t s , a n d b u s i n e s s e s . » Pa r t n e r i n g w i t h P A U S D t o m a x i m i z e t h e u s e o f sc h o o l f a c i l i t i e s f o r c o m m u n i t y u s e d u r i n g n o n - sc h o o l h o u r s . » Ma i n t a i n i n g p a r k s a n d f a c i l i t i e s s o t h e y c a n b e en j o y e d b y f u t u r e g e n e r a t i o n s . » En s u r i n g a n d e x p a n d i n g a c c e s s t o r e c r e a t i o n a l an d p u b l i c s e r v i c e s f o r d i s a b l e d a n d l o w - i n c o m e re s i d e n t s . » Lo c a t i n g p u b l i c f a c i l i t i e s a n d s e r v i c e s n e a r c h i l d r e n an d s e n i o r s . » Ex p a n d i n g n e w p a r k s a n d c o m m u n i t y f a c i l i t i e s t o me e t t h e n e e d s o f a g r o w i n g c o m m u n i t y .  2X U  3 D O 2  D O W 2      In l i g h t o f n e w i s s u e s a n d t r e n d s t h a t h a v e e m e r g e d s i n c e th e a d o p t i o n o f t h e C o m p r e h e n s i v e P l a n , t h e C o m m u n i t y Se r v i c e s a n d F a c i l i t i e s E l e m e n t i n O u r P a l o A l t o 2 0 3 0 i s ex p e c t e d t o i n c l u d e m a j o r n e w c o n c e p t s , i n c l u d i n g : » Ad v o c a t i n g f o r h e a l t h y l i f e s t y l e s f o r a l l r e s i d e n t s . » He l p i n g t e e n s c o m b a t d e p r e s s i o n , i s o l a t i o n , s t r e s s , an d o t h e r m e n t a l h e a l t h i s s u e s . » Ex p a n d i n g p r o g r a m s t o e n g a g e s e n i o r s i n t h e co m m u n i t y . » En c o u r a g i n g u n i v e r s a l a c c e s s t o p a r k s , p u b l i c p l a c e s , an d c o m m u n i t y f a c i l i t i e s . » Ca r r y i n g o u t t h e r e c o m m e n d a t i o n s o f t h e In f r a s t r u c t u r e B l u e R i b b o n C o m m i t t e e r e g a r d i n g th e p o t e n t i a l n e e d f o r n e w a n d / o r u p g r a d e d p u b l i c fa c i l i t i e s . Wh a t d o y o u t h i n k ? S h a r e y o u r t h o u g h t s a t : ww w . p a l o a l t o c o m p p l a n . o r g Vi s i o n S t a t e m e n t Pa l o A l t o s u p p o r t s a cu l t u r e o f i n n o v a t i o n a n d en t r e p r e n e u r s h i p t h a t we l c o m e s i n n o v a t o r s , en t r e p r e n e u r s , b u s i n e s s pr o f e s s i o n a l s , t h e U n i v e r s i t y , vi s i t o r s a n d t h e c o m m u n i t y . Th e C i t y ’ s b u s i n e s s p o l i c i e s , ba l a n c e d e c o n o m i c g o a l s , vi b r a n t d o w n t o w n , a n d di v e r s e l o c a l a n d r e g i o n a l - se r v i n g b u s i n e s s e s c o m b i n e to s t i m u l a t e a n d s u p p o r t vi a b l e b u s i n e s s o p p o r t u n i t i e s . W+ H  % 8 V , Q H V V  $ Q '  H & R Q R P , & V  H/ H P H Q W Th e B u s i n e s s a n d E c o n o m i c s E l e m e n t i s n o t r e q u i r e d b y S t a t e l a w , b u t i t i s j u s t a s i m p o r t a n t a s t h e ma n d a t e d e l e m e n t s i n s h a p i n g t h e f u t u r e o f P a l o A l t o . R e n o w n e d g l o b a l l y f o r i n n o v a t i o n i n r e s e a r c h a n d te c h n o l o g y , P a l o A l t o a l s o h a s r e g i o n a l c o m m e r c i a l d i s t r i c t s a n d n e i g h b o r h o o d s h o p p i n g c e n t e r s t h a t pl a y a m a j o r r o l e i n l o c a l q u a l i t y o f l i f e . T h e E l e m e n t o f f e r s p o l i c i e s t h a t e m p h a s i z e d i v e r s i t y , g r o w t h , a n d fl e x i b i l i t y o f b u s i n e s s e s , a s w e l l a s c o m p a t i b i l i t y w i t h a d j a c e n t a n d n e a r b y l a n d u s e s , i n c l u d i n g r e s i d e n t i a l ne i g h b o r h o o d s .  W+ (  F X U U ( Q W  3 O D Q   D  V 2 O L G  I2 X Q G D W L 2 Q Th e C i t y h a s l o n g a c k n o w l e d g e d t h a t r e v e n u e g e n e r a t i o n an d o t h e r p o s i t i v e e f f e c t s o f b u s i n e s s g r o w t h h a v e t h e po t e n t i a l t o b e o f f s e t b y i m p a c t s o n t h e c o m m u n i t y , es p e c i a l l y c o n c e r n i n g t r a f f i c a n d p a r k i n g b u t a l s o i n c l u d i n g lo s s o f c o m m u n i t y c h a r a c t e r i f n o t p r o p e r l y a d d r e s s e d . Ac c o r d i n g l y , t h e E l e m e n t c a l l s f o r m o d e s t e c o n o m i c g r o w t h in b a l a n c e w i t h p r e s e r v a t i o n o f r e s i d e n t i a l n e i g h b o r h o o d s . In a d d i t i o n t o g r o w t h l i m i t s , t h e C i t y u s e s z o n i n g , de v e l o p m e n t r e v i e w , e n v i r o n m e n t a l r e v i e w , c o o r d i n a t e d ar e a p l a n s , a n d o t h e r p l a n n i n g t o o l s t o m a i n t a i n co m p a t i b i l i t y b e t w e e n r e s i d e n t i a l a n d n o n r e s i d e n t i a l ar e a s . T h e B u s i n e s s a n d E c o n o m i c s E l e m e n t h a s h e l p e d le a d t o s u c c e s s f u l e f f o r t s t o a t t r a c t a n d r e t a i n c o m m e r c i a l ac t i v i t i e s t h a t f i t w i t h — a n d a r e p r i z e d b y — o u r c o m m u n i t y . Th e m a j o r i t y o f i t s p o l i c y d i r e c t i o n s a r e p r o p o s e d t o a p p e a r in O u r P a l o A l t o 2 0 3 0 , i n c l u d i n g : » Ma i n t a i n i n g d i s t i n c t b u s i n e s s d i s t r i c t s a s a m e a n s of r e t a i n i n g l o c a l s e r v i c e s a n d d i v e r s i f y i n g t h e C i t y ’ s ec o n o m i c b a s e . » En s u r i n g t h a t n e i g h b o r h o o d s h o p p i n g a r e a s , in c l u d i n g C a l i f o r n i a A v e n u e , a r e a t t r a c t i v e , ac c e s s i b l e , a n d c o n v e n i e n t t o n e a r b y r e s i d e n t s . » Pr o m o t i n g p u b l i c / p r i v a t e p a r t n e r s h i p s a s a m e a n s o f re v i t a l i z i n g s e l e c t e d a r e a s a n d p r o v i d i n g c o m m u n i t y be n e f i t s a n d s e r v i c e s . » Su p p o r t i n g a d v a n c e d c o m m u n i c a t i o n s in f r a s t r u c t u r e a n d o t h e r i m p r o v e m e n t s t h a t fa c i l i t a t e t h e g r o w t h o f e m e r g i n g i n d u s t r i e s . » En c o u r a g i n g p e d e s t r i a n - o r i e n t e d n e i g h b o r h o o d re t a i l a l o n g E l C a m i n o R e a l . Th e E l e m e n t a l s o r e c o g n i z e s t h e i m p o r t a n t r o l e t h a t St a n f o r d U n i v e r s i t y p l a y s i n o u r l o c a l e c o n o m y a s t h e la r g e s t e m p l o y e r i n P a l o A l t o a n d a s a n i n c u b a t o r o f n e w te c h n o l o g i e s t h a t h a v e h e l p e d m a k e P a l o A l t o a g l o b a l le a d e r i n i n n o v a t i o n . T h e p o l i c y f r a m e w o r k i n t h e E l e m e n t su p p o r t s S t a n f o r d R e s e a r c h P a r k a s a t h r i v i n g e m p l o y m e n t di s t r i c t a n d s e e k s t o s u s t a i n S t a n f o r d S h o p p i n g C e n t e r a s a ma j o r r e g i o n a l c o m m e r c i a l a t t r a c t i o n .  2X U  3 D O 2  D O W 2      Th e P l a n u p d a t e w i l l a s s e s s g r o w t h m a n a g e m e n t st r a t e g i e s , i n c l u d i n g p o t e n t i a l a l t e r n a t i v e s t o t h e c i t y w i d e de v e l o p m e n t c a p i n t h e c u r r e n t C o m p r e h e n s i v e P l a n . Po l i c i e s w i l l e n s u r e t h a t e c o n o m i c p r o s p e r i t y d o e s n o t re s u l t i n u n c o n s t r a i n e d g r o w t h a n d u n a c c e p t a b l e i m p a c t s on P a l o A l t o n e i g h b o r h o o d s . O t h e r p o l i c y g u i d a n c e pr o p o s e d f o r i n c l u s i o n i n t h e B u s i n e s s a n d E c o n o m i c s El e m e n t i n O u r P a l o A l t o 2 0 3 0 i n c l u d e s : » En c o u r a g i n g e n t r e p r e n e u r s h i p a n d i n n o v a t i o n . » En h a n c i n g a n d d i v e r s i f y i n g t h e r e t a i l m i x t h r o u g h bu s i n e s s r e t e n t i o n a n d a t t r a c t i o n . » De v e l o p i n g p o s i t i v e p a r k i n g s o l u t i o n s f o r b u s i n e s s e s in C a l i f o r n i a A v e n u e a n d D o w n t o w n . » Su p p o r t f o r c r e a t i o n o f b u s i n e s s r e g i s t r y . » En h a n c i n g P a l o A l t o ’ s a p p e a l t o vi s i t o r s a n d t o u r i s t s . » Re p l a c i n g t h e c a p o n n o n - r e s i d e n t i a l de v e l o p m e n t i n t h e C i t y a n d i n Do w n t o w n w i t h a n u p d a t e d o r al t e r n a t i v e g r o w t h m a n a g e m e n t st r a t e g y . Wh a t d o y o u t h i n k ? S h a r e y o u r th o u g h t s a t : ww w . p a l o a l t o c o m p p l a n . o r g W+ H  + R 8 V , Q *  H / H P H Q W Th e H o u s i n g E l e m e n t i s r e q u i r e d b y S t a t e l a w , a n d e n s u r i n g i t s c o n s i s t e n c y w i t h t h e o t h e r E l e m e n t s , es p e c i a l l y L a n d U s e a n d C o m m u n i t y D e s i g n , i s v e r y i m p o r t a n t . I t s p r i m a r y p u r p o s e i s t o e n s u r e t h a t t h e Ci t y a d d r e s s e s c h a n g i n g h o u s i n g n e e d s i n P a l o A l t o b y i d e n t i f y i n g s u f f i c i e n t o p p o r t u n i t i e s t o p r o v i d e ho u s i n g f o r a l l e c o n o m i c s e g m e n t s o f t h e c o m m u n i t y . 20 0 7 - 1 4 H o u s i n g E l e m e n t Vi s i o n S t a t e m e n t “O u r h o u s i n g a n d ne i g h b o r h o o d s s h a l l en h a n c e t h e l i v a b l e h u m a n en v i r o n m e n t f o r a l l r e s i d e n t s , be a c c e s s i b l e t o c i v i c an d c o m m u n i t y s e r v i c e s an d s u s t a i n o u r n a t u r a l re s o u r c e s . ”  Ho u s i n g E l e m e n t s a r e u p d a t e d o n a S t a t e - m a n d a t e d sc h e d u l e t h a t d o e s n o t a p p l y t o t h e o t h e r E l e m e n t s . Th e C i t y m u s t c o m p l e t e i t s H o u s i n g E l e m e n t u p d a t e f o r th e p e r i o d 2 0 1 5 - 2 0 2 3 a n d h a v e i t a c c e p t e d b y t h e S t a t e De p a r t m e n t o f H o u s i n g a n d C o m m u n i t y D e v e l o p m e n t (H C D ) b y t h e e n d o f J a n u a r y 2 0 1 5 . A s a r e s u l t , t h e H o u s i n g El e m e n t w i l l b e a d o p t e d a s a s e p a r a t e d o c u m e n t f r o m O u r Pa l o A l t o 2 0 3 0 , a l t h o u g h t h e C i t y c a n c o n s i d e r a d d i t i o n a l am e n d m e n t s t o t h e H o u s i n g E l e m e n t w h e n i t a d o p t s O u r Pa l o A l t o 2 0 3 0 i f t h o s e a m e n d m e n t s a r e a c c e p t a b l e t o HC D . Th e H o u s i n g E l e m e n t m u s t c o n t a i n : » An e v a l u a t i o n o f e x i s t i n g h o u s i n g n e e d s . » Es t i m a t e s o f p r o j e c t e d h o u s i n g n e e d s . » A r e v i e w o f g o a l s a n d p r o g r a m s f r o m t h e p r e v i o u s Ho u s i n g E l e m e n t . » An i n v e n t o r y o f a d e q u a t e s i t e s f o r h o u s i n g a n d an e v a l u a t i o n o f i n f r a s t r u c t u r e c o n d i t i o n a n d re q u i r e m e n t s . » Id e n t i f i c a t i o n o f a n y g o v e r n m e n t a l a n d n o n - go v e r n m e n t a l c o n s t r a i n t s o n h o u s i n g p r o d u c t i o n . » Pr o g r a m s t o a d d r e s s i d e n t i f i e d n e e d s . » Qu a n t i f i a b l e o b j e c t i v e s f o r c o n s t r u c t i o n , re h a b i l i t a t i o n a n d c o n s e r v a t i o n o f h o u s i n g . Co m m u n i t y W o r k s h o p s o n t h e 2 0 1 5 - 2 0 2 3 H o u s i n g El e m e n t w e r e h e l d i n A p r i l 2 0 1 4 . A n y o n e i n t e r e s t e d m a y co n t i n u e t o s u b m i t c o m m e n t s v i a t h e C i t y ’ s w e b s i t e o r a t pu b l i c h e a r i n g s o n t h e D r a f t H o u s i n g E l e m e n t , w h i c h r u n th r o u g h N o v e m b e r 2 0 1 4 . Vi s i o n S t a t e m e n t Pa l o A l t o w i l l m a i n t a i n a po s i t i v e c i v i c i m a g e a n d b e a le a d e r i n t h e r e g i o n a l , s t a t e , an d n a t i o n a l p o l i c y d i s c u s s i o n s af f e c t i n g t h e c o m m u n i t y . T h e Ci t y w i l l w o r k w i t h n e i g h b o r i n g co m m u n i t i e s t o a d d r e s s co m m o n c o n c e r n s a n d p u r s u e co m m o n i n t e r e s t s . T h e p u b l i c wi l l b e a c t i v e l y a n d e f f e c t i v e l y in v o l v e d i n C i t y a f f a i r s , bo t h a t t h e C i t y w i d e a n d ne i g h b o r h o o d l e v e l s . W h e r e ap p r o p r i a t e , t h e C i t y C o u n c i l wi l l d e l e g a t e d e c i s i o n - m a k i n g re s p o n s i b i l i t i e s t o l o c a l b o a r d s an d c o m m i s s i o n s . T h e C o u n c i l wi l l a l s o a s s i g n a d v i s o r y r o l e s to t h e s e b o d i e s a s w e l l a s o t h e r co m m u n i t y g r o u p s . R e s i d e n t s , bu s i n e s s e s , a n d e l e c t e d a n d ap p o i n t e d o f f i c i a l s w i l l w o r k co l l a b o r a t i v e l y t o a d d r e s s th e i s s u e s f a c i n g t h e C i t y i n a ti m e l y m a n n e r . T h i s i n c l u s i v e , pa r t i c i p a t o r y p r o c e s s w i l l h e l p bu i l d a s e n s e o f c o m m u n i t y . W+ H  * R Y H 5 Q $ Q & H  & + $ 3 W H 5 Th e G o v e r n a n c e C h a p t e r o f t h e C o m p r e h e n s i v e P l a n g o e s b e y o n d t h e S t a t e - r e q u i r e d E l e m e n t s t o a f f i r m Pa l o A l t o ’ s c o m m i t m e n t t o p u b l i c p a r t i c i p a t i o n i n d e c i s i o n - m a k i n g . T h e C h a p t e r i n f o r m s c i t i z e n s a b o u t ho w t o p a r t i c i p a t e i n g o v e r n m e n t , a n d i t p r o v i d e s g u i d a n c e t o C i t y s t a f f a n d o f f i c i a l s c a r r y i n g o u t t h e po l i c i e s a n d p r o g r a m s i n t h e C o m p r e h e n s i v e P l a n . T h e C h a p t e r d e s c r i b e s h o w l o c a l p l a n n i n g d e c i s i o n s ar e m a d e , p r o f i l e s t h e C i t y ’ s g o v e r n i n g b o d i e s a n d s t a f f d e p a r t m e n t s , a n d i n c l u d e s g o a l s , p o l i c i e s , a n d pr o g r a m s t o e n s u r e t h a t i n c l u s i o n a n d c l a r i t y s u r r o u n d a l l C i t y d e c i s i o n s .  Th e C i t y o f f e r s m a n y o p p o r t u n i t i e s f o r c i t i z e n s t o pa r t i c i p a t e i n g o v e r n a n c e t h r o u g h a v a r i e t y o f b o a r d s an d c o m m i s s i o n s t h a t a d v i s e t h e C i t y C o u n c i l , a n d i n so m e c a s e s a r e r e s p o n s i b l e f o r f i n a l d e c i s i o n s o n p r o j e c t pr o p o s a l s . T h e s e i n c l u d e t h e : » Ar c h i t e c t u r a l R e v i e w B o a r d » Hi s t o r i c R e s o u r c e s B o a r d » Hu m a n R e l a t i o n s C o m m i s s i o n » Li b r a r y A d v i s o r y C o m m i s s i o n » Pa r k s a n d R e c r e a t i o n C o m m i s s i o n » Pl a n n i n g a n d T r a n s p o r t a t i o n C o m m i s s i o n » Pu b l i c A r t C o m m i s s i o n » St o r m D r a i n O v e r s i g h t C o m m i t t e e » Ut i l i t i e s A d v i s o r y C o m m i s s i o n Pa l o A l t a n s a l s o h a v e a v o i c e i n r e g i o n a l p l a n n i n g v i a t h e Ci t y C o u n c i l m e m b e r s t h a t r e p r e s e n t t h e c o m m u n i t y in o r g a n i z a t i o n s s u c h a s t h e S a n t a C l a r a C o u n t y C i t i e s As s o c i a t i o n , t h e S a n t a C l a r a V a l l e y T r a n s p o r t a t i o n A u t h o r i t y (V T A ) , a n d t h e M e t r o p o l i t a n T r a n s p o r t a t i o n C o m m i s s i o n . Th e G o v e r n a n c e C h a p t e r e m b o d i e s P a l o A l t o ‘ s co m m i t m e n t t o c o n d u c t i n g C i t y b u s i n e s s i n a c o l l a b o r a t i v e an d t r a n s p a r e n t m a n n e r . I t s o b j e c t i v e s w i l l b e f e a t u r e d i n th e E x e c u t i v e S u m m a r y f o r O u r P a l o A l t o 2 0 3 0 , i t s p o l i c i e s wi l l b e c a r r i e d o v e r i n t h e u p d a t e d P l a n , a n d i t w i l l i n f o r m th e O u r P a l o A l t o 2 0 3 0 U s e r ’ s G u i d e . T h e G o v e r n a n c e Ch a p t e r ’ s i n i t i a t i v e s i n c l u d e : » Bu i l d i n g r e l a t i o n s h i p s a m o n g C i t y s t a f f a n d o f f i c i a l s an d n e i g h b o r h o o d g r o u p s . » Pr o v i d i n g a c c e s s t o i n f o r m a t i o n v i a a l l a v a i l a b l e me d i a . » En c o u r a g i n g v o l u n t e e r s , i n c l u d i n g y o u t h a n d se n i o r s , t o p r o v i d e c o m m u n i t y s e r v i c e s . » De v e l o p i n g i n n o v a t i v e n e w p l a n n i n g p r o c e s s e s t h a t em p h a s i z e c o l l a b o r a t i v e e x c h a n g e s o f i d e a s . » Pr o v i d i n g d e c i s i o n - m a k e r s a n d r e s i d e n t s w i t h c l e a r to o l s f o r u n d e r s t a n d i n g p l a n n i n g r e g u l a t i o n s . $& & R P 3 $ Q \ , Q *  & R Q & H 3 W  3/ $ Q V F D O L I 2 U Q L D  D Y ( Q X (  D U ( D In c o n j u n c t i o n w i t h t h e c r e a t i o n o f O u r P a l o A l t o 2 0 3 0 , a c o n c e p t u a l p l a n i s b e i n g d e v e l o p e d t o g u i d e fu t u r e l a n d u s e i n t h e a r e a b e t w e e n C a m b r i d g e A v e n u e , t h e r a i l r o a d t r a c k s , L a m b e r t A v e n u e , a n d E l Ca m i n o R e a l . T h i s a r e a i s h o m e t o a n u m b e r o f i m p o r t a n t l a n d m a r k s , d e s t i n a t i o n s , a n d p o p u l a r l o c a l in s t i t u t i o n s . T h r o u g h c o m m u n i t y i n p u t , t h r e e d i s t i n c t s u b a r e a s h a v e b e e n i d e n t i f i e d w h e r e c h a n g e c a n be a c c o m m o d a t e d : C a l i f o r n i a A v e n u e , P a r k B o u l e v a r d , a n d t h e F r y ’ s s i t e .  Th e C a l i f o r n i a A v e n u e A r e a C o n c e p t P l a n w e a v e s t o g e t h e r a v a r i e t y o f p r i o r p l a n n i n g i n i t i a t i v e s f o r t h e a r e a , i n c l u d i n g Ca l t r a i n s t a t i o n a r e a d e v e l o p m e n t r e g u l a t i o n s , s t r e e t s c a p e im p r o v e m e n t s , a d e s i g n g u i d e l i n e s u p d a t e , d e s i g n a t i o n as a P r i o r i t y D e v e l o p m e n t A r e a , a n d a r a i l c o r r i d o r s t u d y , to g e t h e r i n a u n i f i e d v i s i o n t o g u i d e f u t u r e c h a n g e w h i l e pr e s e r v i n g a n d e n h a n c i n g t h e q u a l i t y o f l i f e i n n e a r b y re s i d e n t i a l n e i g h b o r h o o d s . D e v e l o p e d o n t h e b a s i s o f pu b l i c i n p u t r e c e i v e d d u r i n g a s e r i e s o f f o u r c o m m u n i t y me e t i n g s b e t w e e n 2 0 1 0 a n d 2 0 1 2 , t h e C o n c e p t P l a n ge n e r a l l y m a i n t a i n s e x i s t i n g C o m p r e h e n s i v e P l a n l a n d u s e de s i g n a t i o n s . 32 O L F L ( V  D Q G  3 U 2 J U D P V  I 2 U  FD O L I 2 U Q L D  D Y ( Q X (  » In c e n t i v i z i n g m i x e d - u s e d e v e l o p m e n t a n d r e q u i r i n g ac t i v e u s e s o n t h e g r o u n d f l o o r o f b u i l d i n g s . » Su p p o r t i n g d e v e l o p m e n t o f a h o t e l a n d a s s o c i a t e d ho s p i t a l i t y u s e s i n p r o x i m i t y t o t r a n s i t . » Wo r k i n g w i t h e m p l o y e r s a n d t r a n s i t a g e n c i e s t o en c o u r a g e t r a n s i t u s e . 32 O L F L ( V  D Q G  3 U 2 J U D P V  I 2 U  3 D U N  E2 X O ( Y D U G  » Ad o p t i n g a T e c h n o l o g y C o r r i d o r O v e r l a y a n d de t e r m i n i n g i n c e n t i v e s t o e n c o u r a g e s m a l l e r , te c h n o l o g y - r e l a t e d f i r m s . » St u d y i n g s a f e t y f o r c y c l i s t s a n d p e d e s t r i a n s al o n g P a r k B o u l e v a r d a n d a l t e r n a t i v e r o u t e s , a n d in c o r p o r a t i n g a d d i t i o n a l r e c o m m e n d a t i o n s f o r im p r o v e m e n t s i n t o t h e B P T P . 32 O L F L ( V  D Q G  3 U 2 J U D P V  I 2 U  W + (  I U \ · V  V L W (  » En c o u r a g i n g m i x e d - u s e d e v e l o p m e n t a t t h e h i g h e r en d o f t h e a l l o w e d d e n s i t y r a n g e . » Co o r d i n a t i n g s i t e p l a n n i n g a n d o u t r e a c h t o i m p r o v e th e r e l a t i o n s h i p o f t h e s i t e t o i t s s u r r o u n d i n g s . » Re q u i r i n g a m i n i m u m o f 2 0 % o f t h e t o t a l s q u a r e fo o t a g e o n t h e F r y ’ s s i t e b e r e s i d e n t i a l . To g e t h e r t h e C a l i f o r n i a Av e n u e a n d E a s t M e a d o w / Fa b i a n a r e a s p r e s e n t m u c h of w h e r e P a l o A l t a n s e x p e c t ch a n g e t o o c c u r d u r i n g t h e li f e o f O u r P a l o A l t o 2 0 3 0 . A s ha s b e e n t h e c a s e f o r d e c a d e s , ch a n g e i s a l s o e x p e c t e d i n th e D o w n t o w n , w h e r e t h e cu r r e n t D e v e l o p m e n t C a p i s be i n g r e - e x a m i n e d t o r e f l e c t th e c o m m u n i t y ’ s v i s i o n f o r t h e fu t u r e .  (D V W  P ( D G 2 :  F L U F O (  I D E L D Q  : D \  D U ( D  De v e l o p e d i n 2 0 1 2 , t h i s C o n c e p t P l a n o u t l i n e s a v i s i o n f o r t h e a r e a b e t w e e n H i g h w a y 1 0 1 , C h a r l e s t o n Ro a d , a n d L o u i s R o a d . T h e P l a n i n c l u d e s r e c o m m e n d a t i o n s f o r i m p r o v e m e n t s t o t h e l o c a l b i c y c l e ne t w o r k , a s w e l l a s s p e c i f i c p o l i c i e s a n d p r o g r a m s f o r t h r e e s u b a r e a s : W e s t B a y s h o r e I n d u s t r i a l ; E a s t Sa n A n t o n i o ; a n d C h a r l e s t o n R o a d . A p r o d u c t o f a s e r i e s o f s t a k e h o l d e r m e e t i n g s a n d w e l l - a t t e n d e d pu b l i c w o r k s h o p s , t h e C o n c e p t P l a n i d e n t i f i e s t h e k i n d s o f u s e s a n d t y p e s o f f u t u r e d e v e l o p m e n t t h a t wo u l d b e d e s i r a b l e i n t h e a r e a . Th e C o n c e p t P l a n m a p s p o t e n t i a l n e w p e d e s t r i a n a n d bi k e r o u t e s a l o n g A d o b e C r e e k , B a r r o n C r e e k a n d S t e r l i n g Ca n a l , a n d c a l l s f o r i m p r o v i n g a c c e s s t o t h e B a y l a n d s a c r o s s Hi g h w a y 1 0 1 . R e s i d e n t i a l a n d d a y c a r e u s e s a r e p r o h i b i t e d in t h e P l a n a r e a , w i t h s c h o o l s a l l o w e d o n l y o n s e l e c t e d We s t B a y s h o r e p a r c e l s w i t h c o n d i t i o n a l u s e p e r m i t r e v i e w . 32 O L F L ( V  I 2 U  : ( V W  E D \ V + 2 U (  » En c o u r a g i n g e x p a n s i o n a n d a t t r a c t i o n o f h i g h - e n d re s e a r c h a n d d e v e l o p m e n t u s e s w i t h a p p r o p r i a t e tr a n s i t i o n s t o a d j a c e n t n e i g h b o r h o o d s . » Su p p o r t i n g c o n s t r u c t i o n b y S p a c e S y s t e m s Lo r a l o f a n e w f a c i l i t y i n a n a p p r o p r i a t e lo c a t i o n t o a c c o m m o d a t e a s s e m b l y o f l a r g e r te l e c o m m u n i c a t i o n s a t e l l i t e s . 32 O L F L ( V  I 2 U  ( D V W  V D Q  D Q W 2 Q L 2  » En c o u r a g i n g l a r g e r - s c a l e c o m m e r c i a l d e v e l o p m e n t th a t g e n e r a t e s r e v e n u e , c o m p l e m e n t s e x i s t i n g de v e l o p m e n t , a n d p r o v i d e s a l i v e l y s t r e e t s c a p e th a t a c c o m m o d a t e s v e h i c l e s w h i l e e n c o u r a g i n g pe d e s t r i a n u s e . » Re t a i n i n g e x i s t i n g l a n d u s e a n d z o n e d e s i g n a t i o n s . 32 O L F L ( V  I 2 U  F + D U O ( V W 2 Q  U 2 D G  » Ex p l o r i n g o p p o r t u n i t i e s t o r e h a b i l i t a t e t h e F a i r c h i l d Bu i l d i n g b y w o r k i n g w i t h t h e o w n e r t o a s s e s s ch a l l e n g e s s u c h a s p a r k i n g , p o s s i b l e c l e a n u p , a n d fl o o d - z o n e r e q u i r e m e n t s , a n d c o n s i d e r i n g h i s t o r i c de s i g n a t i o n . » Re t a i n i n g m a n u f a c t u r i n g a n d l i g h t i n d u s t r y u s e s .  F L W \  2 I  3 D O 2  D O W 2 Pl a n n i n g & C o m m u n i t y E n v i r o n m e n t D e p a r t m e n t Hi l l a r y G i t e l m a n , D i r e c t o r Ph o n e : ( 6 5 0 ) 3 2 9 - 2 4 4 1 Hi l l a r y . G i t e l m a n @ c i t y o f p a l o a l t o . o r g 25 0 H a m i l t o n A v e n u e 5t h F l o o r – C i t y H a l l Pa l o A l t o , C A 9 4 3 0 1 ww w . c i t y o f p a l o a l t o . o r g  KƵƌWĂůŽůƚŽϮϬϯϬ ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐͲͲĨŽƌŝƐĐƵƐƐŝŽŶƵŐƵƐƚϰ͕ϮϬϭϰ WĂŐĞϭ KƵƌWĂůŽůƚŽϮϬϯϬ͗ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞ^ĐĞŶĂƌŝŽƐ   dŚĞĨŽůůŽǁŝŶŐĨŽƵƌĐŽŶĐĞƉƚƵĂůĂůƚĞƌŶĂƚŝǀĞƐŽƌƐĐĞŶĂƌŝŽƐǁĞƌĞĚĞǀĞůŽƉĞĚďĂƐĞĚŽŶƉƵďůŝĐŝŶƉƵƚ ƌĞĐĞŝǀĞĚĚƵƌŝŶŐĂŶĚĂĨƚĞƌĂƐĞƌŝĞƐŽĨƉƵďůŝĐǁŽƌŬƐŚŽƉƐŝŶDĂLJĂŶĚ:ƵŶĞϮϬϭϰƌĞŐĂƌĚŝŶŐƚŚĞŝƚLJŽĨ WĂůŽůƚŽ͛ƐŽŶŐŽŝŶŐŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶhƉĚĂƚĞ͘ĂĐŚƐĐĞŶĂƌŝŽƉƌĞƐĞŶƚƐĂƐŽŵĞǁŚĂƚĚŝĨĨĞƌĞŶƚ ǀŝƐŝŽŶĨŽƌWĂůŽůƚŽŝŶƚŚĞLJĞĂƌϮϬϯϬ͕ĂŶĚǁŽƵůĚƌĞƐƵůƚŝŶĚŝĨĨĞƌĞŶƚĂĚũƵƐƚŵĞŶƚƐĂŶĚĂĚĚŝƚŝŽŶƐƚŽƚŚĞ ŝƚLJ͛ƐĐƵƌƌĞŶƚŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶ͘ůůŽĨƚŚĞƐĐĞŶĂƌŝŽƐǁŽƵůĚƉƌŽƚĞĐƚĂŶĚƉƌĞƐĞƌǀĞƐŝŶŐůĞͲĨĂŵŝůLJ ƌĞƐŝĚĞŶƚŝĂů ;ZͲϭͿ ŶĞŝŐŚďŽƌŚŽŽĚƐ ĂŶĚ ƉƵďůŝĐ ŽƉĞŶ ƐƉĂĐĞƐ͘ ŽŵŵĞƌĐŝĂů ĂŶĚ ŵƵůƚŝƉůĞͲĨĂŵŝůLJ ĚĞǀĞůŽƉŵĞŶƚǁŽƵůĚŽĐĐƵƌŝŶĂƌĞĂƐĚĞƐĐƌŝďĞĚǁŝƚŚŝŶĞĂĐŚĐŽŶĐĞƉƚ͘  dŚĞƐĞĨŽƵƌĚƌĂĨƚĐŽŶĐĞƉƚƵĂůĂůƚĞƌŶĂƚŝǀĞƐĂƌĞŝŶƚĞŶƚŝŽŶĂůůLJĚĞƐĐƌŝďĞĚĂƚĂŚŝŐŚůĞǀĞůŝŶĂŶĞĨĨŽƌƚƚŽ 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dŚŝƐĐŽŶĐĞƉƚƌĞƉƌĞƐĞŶƚƐĂďƵƐŝŶĞƐƐͲĂƐͲƵƐƵĂůƐĐĞŶĂƌŝŽ͕ĚĞƐĐƌŝďŝŶŐƚŚĞĐŚĂŶŐĞĂŶĚĚĞǀĞůŽƉŵĞŶƚŝŶ WĂůŽůƚŽƚŚĂƚŝƐůŝŬĞůLJƚŽŽĐĐƵƌďLJϮϬϯϬŝĨƚŚĞĞdžŝƐƚŝŶŐŽŵƉWůĂŶƌĞŵĂŝŶƐŝŶƉůĂĐĞǁŝƚŚŶŽĐŚĂŶŐĞƚŽ ĐƵƌƌĞŶƚůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐ͕ƉŽůŝĐŝĞƐ͕ŽƌƉƌŽŐƌĂŵƐ͘dŚĞĂůŝĨŽƌŶŝĂŶǀŝƌŽŶŵĞŶƚĂůYƵĂůŝƚLJĐƚ ;YͿƌĞƋƵŝƌĞƐĂŶĂůLJƐŝƐŽĨƚŚŝƐƐĐĞŶĂƌŝŽĨŽƌƚŚĞƉƵƌƉŽƐĞŽĨĐŽŵƉĂƌŝŶŐŝƚƐŝŵƉĂĐƚƐǁŝƚŚƚŚŽƐĞŽĨ ŽƚŚĞƌĂůƚĞƌŶĂƚŝǀĞƐ͘  hŶĚĞƌƚŚŝƐƐĐĞŶĂƌŝŽ͕ŶĞǁũŽďŐƌŽǁƚŚǁŽƵůĚďĞĂĐĐŽŵŵŽĚĂƚĞĚŝŶƚŚĞŝƚLJΖƐĞdžŝƐƚŝŶŐĞŵƉůŽLJŵĞŶƚ ĚŝƐƚƌŝĐƚƐ͕ǁŚŝĐŚǁŽƵůĚƐĞĞĂŶĂŶƚŝĐŝƉĂƚĞĚĂŶŶƵĂůƌĂƚĞŽĨŐƌŽǁƚŚŽĨϭ͘ϬϰƉĞƌĐĞŶƚ͕ŝŶůŝŶĞǁŝƚŚ ƐƐŽĐŝĂƚŝŽŶ ŽĨ ĂLJ ƌĞĂ 'ŽǀĞƌŶŵĞŶƚƐ ;'Ϳ ƉƌŽũĞĐƚŝŽŶƐ ĨŽƌ ƚŚĞŝƚLJ͘ dŚŝƐ ƌĂƚĞ ŽĨ ŐƌŽǁƚŚ ƌĞƉƌĞƐĞŶƚƐĂƉƉƌŽdžŝŵĂƚĞůLJϵϵϬŶĞǁũŽďƐƉĞƌLJĞĂƌĨŽƌĂƚŽƚĂůŽĨϭϱ͕ϴϰϬŶĞǁũŽďƐŝŶWĂůŽůƚŽďLJϮϬϯϬ͘ tŚŝůĞƐŽŵĞŶĞǁũŽďƐǁŽƵůĚďĞĐƌĞĂƚĞĚŝŶĞdžŝƐƚŝŶŐĂŶĚƌĞͲĚĞǀĞůŽƉĞĚďƵŝůĚŝŶŐƐ͕ƚŚĞŶĞƚŝŶĐƌĞĂƐĞŝŶ ŶĞǁŶŽŶͲƌĞƐŝĚĞŶƚŝĂůƐƋƵĂƌĞĨŽŽƚĂŐĞŝŶƚŚŝƐĂůƚĞƌŶĂƚŝǀĞĐŽƵůĚĞdžĐĞĞĚƚŚĞŝƚLJǁŝĚĞ͞ĐĂƉ͟ďLJƚŚĞ ƉůĂŶŶŝŶŐŚŽƌŝnjŽŶŽĨϮϬϯϬ͘;dŚŝƐŝƚLJǁŝĚĞĐĂƉŝƐĨŽƵŶĚŝŶWŽůŝĐLJ>ͲϴŽĨƚŚĞĞdžŝƐƚŝŶŐŽŵƉWůĂŶ͘ͿdŚĞƌĞ Attachment I  KƵƌWĂůŽůƚŽϮϬϯϬ ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐͲͲĨŽƌŝƐĐƵƐƐŝŽŶƵŐƵƐƚϰ͕ϮϬϭϰ WĂŐĞϮ ǁŽƵůĚ ďĞ ŶŽ ĂĚĚŝƚŝŽŶĂů ƉƌŽƚĞĐƚŝŽŶƐ Žƌ ŝŶĐĞŶƚŝǀĞƐ ĨŽƌ ŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐ ƌĞƚĂŝů ƵŶĚĞƌƚŚŝƐ ĂůƚĞƌŶĂƚŝǀĞ͕ĂŶĚŶŽŵĂũŽƌƚƌĂŶƐƉŽƌƚĂƚŝŽŶŝŶĨƌĂƐƚƌƵĐƚƵƌĞŝŵƉƌŽǀĞŵĞŶƚƐ͘  hŶĚĞƌƚŚĞŽEŽƚŚŝŶŐͬƵƐŝŶĞƐƐĂƐhƐƵĂůƐĐĞŶĂƌŝŽ͕ŚŽƵƐŝŶŐŐƌŽǁƚŚǁŽƵůĚůŝŬĞůLJĐŽŶƚŝŶƵĞĂƚĂƌĂƚĞŽĨ ĂƉƉƌŽdžŝŵĂƚĞůLJϭϲϳƵŶŝƚƐƉĞƌLJĞĂƌ͕ŝŶůŝŶĞǁŝƚŚƚŚĞŚŝƐƚŽƌŝĐƚƌĞŶĚ͕ƌĞƐƵůƚŝŶŐŝŶϮ͕ϲϲϴŶĞǁƵŶŝƚƐŝŶƚŚĞ ĐŝƚLJďLJϮϬϯϬ͘EĞǁŚŽƵƐŝŶŐǁŽƵůĚďĞďƵŝůƚ ƉƌŝŵĂƌŝůLJƚŚƌŽƵŐŚƌĞĚĞǀĞůŽƉŵĞŶƚŽĨƉƌŽƉĞƌƚLJĂƐ ƉĞƌŵŝƚƚĞĚƵŶĚĞƌĞdžŝƐƚŝŶŐnjŽŶŝŶŐ͘/ŶƚŚĞƐŚŽƌƚͲƚŽŵĞĚŝƵŵͲƚĞƌŵ͕ŚŽƵƐŝŶŐĐŽŶƐƚƌƵĐƚŝŽŶŝƐĂŶƚŝĐŝƉĂƚĞĚ ŽŶƚŚĞƐŝƚĞƐŝĚĞŶƚŝĨŝĞĚŝŶƚŚĞƌĂĨƚϮϬϭϱͲϮϬϮϯ,ŽƵƐŝŶŐůĞŵĞŶƚ͘dŚĞƐĞƐŝƚĞƐĂƌĞĐŽŶĐĞŶƚƌĂƚĞĚ ƉƌŝŵĂƌŝůLJŽǁŶƚŽǁŶ͕ĂůŽŶŐůĂŵŝŶŽZĞĂůĂŶĚŝŶƚŚĞĂůŝĨŽƌŶŝĂǀĞŶƵĞͬ&ƌLJ͛ƐƐŝƚĞĂƌĞĂ͘  ŚĂŶŐĞĂŶĚĨƵƚƵƌĞĚĞǀĞůŽƉŵĞŶƚǁŽƵůĚŶŽƚďĞƐƉĞĐŝĨŝĐĂůůLJĨŽĐƵƐĞĚŝŶŽŶĞŽƌŵŽƌĞŐĞŽŐƌĂƉŚŝĐĂƌĞĂƐ͘ džŝƐƚŝŶŐůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐĂŶĚnjŽŶŝŶŐƌĞŐƵůĂƚŝŽŶƐǁŽƵůĚĐŽŶƚŝŶƵĞƚŽĚĞĨŝŶĞĚĞǀĞůŽƉŵĞŶƚ ƚŚƌŽƵŐŚŽƵƚ ƚŚĞ ŝƚLJ͘ &Žƌ ƚŚĞ ƉƵƌƉŽƐĞƐ ŽĨ ƚŚŝƐ ĚŝƐĐƵƐƐŝŽŶ͕ ƚŚĞ ĨŽůůŽǁŝŶŐ ĂƌĞ ĚĞƐĐƌŝƉƚŝŽŶƐ ŽĨ 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ƉƌĞĚŽŵŝŶĂŶƚůLJĐŽŵŵĞƌĐŝĂůŽĨĨŝĐĞĂŶĚƌĞƚĂŝů͘dŽĂĚĚƌĞƐƐƚŚĞŝŶĐƌĞĂƐĞĚƚƌĂĨĨŝĐĂŶĚ ƉĂƌŬŝŶŐĚĞŵĂŶĚƚŚĂƚǁŽƵůĚĂĐĐŽŵƉĂŶLJƚŚŝƐĐŚĂŶŐĞ͕ƚŚĞŝƚLJĐŽƵůĚŝŵƉůĞŵĞŶƚƉĂƌŬŝŶŐ ŵĂŶĂŐĞŵĞŶƚƉƌŽŐƌĂŵƐ;ƐƵĐŚĂƐƌĞƐŝĚĞŶƚŝĂůƉĞƌŵŝƚƉĂƌŬŝŶŐͿĂŶĚĐŽŶƐƚƌƵĐƚŶĞǁƉĂƌŬŝŶŐ ƐƚƌƵĐƚƵƌĞ;ƐͿ͘ĚĚŝƚŝŽŶĂůƉĂƌŬŝŶŐǁŽƵůĚĂůƐŽďĞƉƌŽǀŝĚĞĚŝŶŶĞǁĚĞǀĞůŽƉŵĞŶƚŝŶ ĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞƌĞƋƵŝƌĞŵĞŶƚƐŽĨĞdžŝƐƚŝŶŐnjŽŶŝŶŐ͘ ƒdŚĞůĂŵŝŶŽZĞĂůĐŽƌƌŝĚŽƌǁŽƵůĚĐŽŶƚŝŶƵĞƚŽĞǀŽůǀĞĂƐƉĞƌŵŝƚƚĞĚƵŶĚĞƌƚŚĞĞdžŝƐƚŝŶŐ ůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐĂŶĚnjŽŶŝŶŐ͘^ŽƵƚŚŽĨ^ƚĂŶĨŽƌĚǀĞŶƵĞ͕ƚŚĞĐŽƌƌŝĚŽƌǁŽƵůĚƚĂŬĞŽŶ ĂŵŽƌĞŵŝdžĞĚͲƵƐĞĐŚĂƌĂĐƚĞƌ͘ƵƚŽͲŽƌŝĞŶƚĞĚƵƐĞƐǁŽƵůĚďĞƌĞƉůĂĐĞĚǁŝƚŚŶĞǁƉƌŽũĞĐƚƐ ƉƌŽǀŝĚŝŶŐŽĨĨŝĐĞƐƉĂĐĞĂŶĚŚŽƵƐŝŶŐŽǀĞƌƌĞƚĂŝůĂƐůŽǁŝŶƚĞŶƐŝƚLJƐŝƚĞƐĂƌĞƌĞĚĞǀĞůŽƉĞĚĂŶĚ ǁŚĞƌĞƐŵĂůůĞƌƉĂƌĐĞůƐĐĂŶďĞĂƐƐĞŵďůĞĚ͘ ƒdŚĞĂůŝĨŽƌŶŝĂǀĞŶƵĞĂƌĞĂǁŽƵůĚĐŽŶƚŝŶƵĞƚŽĞdžƉĞƌŝĞŶĐĞƐƚƌŽŶŐĚĞǀĞůŽƉŵĞŶƚƉƌĞƐƐƵƌĞ ĂŶĚŵƵĐŚŽĨƚŚĞĂƌĞĂǁŽƵůĚƵůƚŝŵĂƚĞůLJƚĂŬĞŽŶĂŵŽƌĞŵŝdžĞĚͲƵƐĞĐŚĂƌĂĐƚĞƌ͕ĐŽŶƐŝƐƚĞŶƚ ǁŝƚŚƚŚĞĞdžŝƐƚŝŶŐůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐĂŶĚnjŽŶŝŶŐ͘EĞǁŚŽƵƐŝŶŐĂŶĚŽĨĨŝĐĞƐƉĂĐĞǁŽƵůĚ ďĞďƵŝůƚŽŶĂůŝĨŽƌŶŝĂǀĞŶƵĞĂŶĚƐƵƌƌŽƵŶĚŝŶŐƐƚƌĞĞƚƐƚŚƌŽƵŐŚƚŚĞƵƚŝůŝnjĂƚŝŽŶŽĨƚŚĞ 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ĚĞƐŝƌŝŶŐƚŽĚŽǁŶƐŝnjĞ͘ŽŵƉƌĞŚĞŶƐŝǀĞWůĂŶƉŽůŝĐŝĞƐĂŶĚƉƌŽŐƌĂŵƐǁŽƵůĚĐŽŶƚŝŶƵĞƚŽĨŽĐƵƐŽŶ ƉƌŽƚĞĐƚŝŶŐƚŚĞƋƵĂůŝƚLJŽĨůŝĨĞŝŶWĂůŽůƚŽΖƐZͲϭƐŝŶŐůĞͲĨĂŵŝůLJŶĞŝŐŚďŽƌŚŽŽĚƐ͕ĂŶĚƚŚĞŝƚLJǁŽƵůĚ  KƵƌWĂůŽůƚŽϮϬϯϬ ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐͲͲĨŽƌŝƐĐƵƐƐŝŽŶƵŐƵƐƚϰ͕ϮϬϭϰ WĂŐĞϰ ĂĚŽƉƚƉŽůŝĐŝĞƐƚŽĞŶĐŽƵƌĂŐĞƚŚĞƉƌĞƐĞƌǀĂƚŝŽŶŽĨŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐƌĞƚĂŝůĂŶĚƐĞƌǀŝĐĞƐǁŚĞƌĞ ƚŚĞLJĐƵƌƌĞŶƚůLJĞdžŝƐƚƚŚƌŽƵŐŚŽƵƚƚŚĞĐŝƚLJ͘  dŚŝƐĂůƚĞƌŶĂƚŝǀĞǁŽƵůĚƚĞƐƚŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨŝŵƉƌŽǀĞŵĞŶƚƐƚŽƚŚĞƌĞŐŝŽŶĂůĞdžƉƌĞƐƐǁĂLJƐLJƐƚĞŵ ƉůĂŶŶĞĚďLJƚŚĞŽƵŶƚLJŽĨ^ĂŶƚĂůĂƌĂ͕ŝŶĐůƵĚŝŶŐ͗  ƒƒKƌĞŐŽŶͲWĂŐĞDŝůůdžƉƌĞƐƐǁĂLJǁŝĚĞŶŝŶŐǁĞƐƚŽĨůĂŵŝŶŽZĞĂů͖ ƒ&ƌĞĞǁĂLJŝŶƚĞƌĐŚĂŶŐĞŝŵƉƌŽǀĞŵĞŶƚƐŽŶƚŚĞKƌĞŐŽŶͲWĂŐĞDŝůůdžƉƌĞƐƐǁĂLJ͖ ƒ&ƵůůŽƌƉĂƌƚŝĂůŐƌĂĚĞƐĞƉĂƌĂƚŝŽŶĂƚƚŚĞůŵĂĂŶĚ&ŽŽƚŚŝůůͬ:ƵŶŝƉĞƌŽ^ĞƌƌĂŽƵůĞǀĂƌĚ ŝŶƚĞƌĐŚĂŶŐĞƐŽŶƚŚĞKƌĞŐŽŶͲWĂŐĞDŝůůdžƉƌĞƐƐǁĂLJ͖ĂŶĚ ƒ&ƵůůŐƌĂĚĞƐĞƉĂƌĂƚŝŽŶŽĨƚŚĞƌĂƐƚƌĂĚĞƌŽŝŶƚĞƌĐŚĂŶŐĞŽŶƚŚĞ&ŽŽƚŚŝůůdžƉƌĞƐƐǁĂLJ͘  dŚĞĐŚĂƌĂĐƚĞƌŽĨĞĂĐŚŽĨƚŚĞƐŝdžĨŽĐƵƐĂƌĞĂƐŝĚĞŶƚŝĨŝĞĚďLJĐŽŵŵƵŶŝƚLJŵĞŵďĞƌƐĂƚǁŽƌŬƐŚŽƉƐŝŶ :ƵŶĞǁŽƵůĚďĞĂƐĨŽůůŽǁƐƵŶĚĞƌƚŚĞ^ĐĞŶĂƌŝŽϮŝŶϮϬϯϬ͗  ƒŽǁŶƚŽǁŶǁŽƵůĚŐĞŶĞƌĂůůLJƌĞƚĂŝŶŝƚƐĐƵƌƌĞŶƚĂƉƉĞĂƌĂŶĐĞĂŶĚŵŝdžŽĨƵƐĞƐ͘dŚĞϱϬͲĨŽŽƚ 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ǁŚŝĐŚǁŽƵůĚĐŽŶƚŝŶƵĞƚŽƐĞƌǀĞĂƐĞŵƉůŽLJŵĞŶƚĚŝƐƚƌŝĐƚƐ͘^ŽŵĞƌĞƚĂŝůĂŶĚƐĞƌǀŝĐĞƵƐĞƐ  KƵƌWĂůŽůƚŽϮϬϯϬ ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐͲͲĨŽƌŝƐĐƵƐƐŝŽŶƵŐƵƐƚϰ͕ϮϬϭϰ WĂŐĞϱ ĐĂƚĞƌŝŶŐƚŽƚŚĞĚĂLJƚŝŵĞĞŵƉůŽLJĞĞƉŽƉƵůĂƚŝŽŶǁŽƵůĚďĞĂĚĚĞĚŝŶƚŚĞƐĞĂƌĞĂƐ͕ďƵƚ ĂĚĚŝƚŝŽŶĂůŚŽƵƐŝŶŐǁŽƵůĚŶŽƚďĞďƵŝůƚŝŶƚŚĞƐĞĂƌĞĂƐ͘ŽŵƉWůĂŶƉŽůŝĐŝĞƐĂŶĚƉƌŽŐƌĂŵƐ ǁŽƵůĚĞŶĐŽƵƌĂŐĞƚŚĞƵƐĞŽĨƚƌĂŶƐŝƚ͕ĐĂƌƉŽŽůŝŶŐ͕ĐLJĐůŝŶŐĂŶĚǁĂůŬŝŶŐŽǀĞƌƚŚĞƵƐĞŽĨ ƉƌŝǀĂƚĞĂƵƚŽŵŽďŝůĞƐ͘ ƒƒdŚĞ^ŽƵƚŚ^ĂŶŶƚŽŶŝŽĂƌĞĂǁŽƵůĚĐŽŶƚŝŶƵĞƚŽƐƵƉƉŽƌƚĂǀĂƌŝĞƚLJŽĨƌĞƐŝĚĞŶƚŝĂůĂŶĚŶŽŶͲ ƌĞƐŝĚĞŶƚŝĂůƵƐĞƐŝŶϮϬϯϬ͘>ĂŶĚƵƐĞĂŶĚnjŽŶŝŶŐĨŽƌƚŚŝƐĂƌĞĂǁŽƵůĚŶŽƚĐŚĂŶŐĞ͖ŚŽǁĞǀĞƌ͕ ĂƐŽƚŚĞƌĂƌĞĂƐŽĨƚŚĞĐŝƚLJĂƌĞƌĞĚĞǀĞůŽƉĞĚ͕ŵĂƌŬĞƚĨŽƌĐĞƐǁŝůůůŝŬĞůLJƌĞƐƵůƚŝŶŵŽƌĞŵŝdžĞĚͲ ƵƐĞĚĞǀĞůŽƉŵĞŶƚŝŶƚŚŝƐĂƌĞĂ͕ĂƐƉĞƌŵŝƚƚĞĚƵŶĚĞƌĞdžŝƐƚŝŶŐnjŽŶŝŶŐ͘  ^ĐĞŶĂƌŝŽϯ͗^ůŽǁ'ƌŽǁƚŚΘĚũƵƐƚƚŚĞ>ŽĐĂƚŝŽŶŽĨ,ŽƵƐŝŶŐ^ŝƚĞƐ dŚŝƐƐĐĞŶĂƌŝŽǁŽƵůĚĞdžƉĞƌŝĞŶĐĞƚŚĞƐĂŵĞĂŵŽƵŶƚŽĨũŽďŐƌŽǁƚŚĂŶĚƌĞƐŝĚĞŶƚŝĂůĚĞǀĞůŽƉŵĞŶƚĂƐ ǁŽƵůĚ^ĐĞŶĂƌŝŽϮ͕ĂŶĚǁŽƵůĚƐŝŵŝůĂƌůLJƌĞƉůĂĐĞƚŚĞĐƵƌƌĞŶƚŽǁŶƚŽǁŶĂŶĚŝƚLJǁŝĚĞ͞ĐĂƉ͟ŽŶ ŶĞǁŶŽŶͲƌĞƐŝĚĞŶƚŝĂůƐƋƵĂƌĞĨŽŽƚĂŐĞǁŝƚŚĂŶĂŶŶƵĂůůŝŵŝƚƚŽĐŽŶƚƌŽůƚŚĞƉĂĐĞŽĨŶŽŶͲƌĞƐŝĚĞŶƚŝĂů ĚĞǀĞůŽƉŵĞŶƚ͘dŚŝƐƐĐĞŶĂƌŝŽǁŽƵůĚĂůƐŽĂĚũƵƐƚůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐĂŶĚƉŽůŝĐŝĞƐƚŽĚŝƐĐŽƵƌĂŐĞ ŽƌƉƌŽŚŝďŝƚŶĞǁŚŽƵƐŝŶŐƵŶůĞƐƐŝƚ͛ƐǁŝƚŚŝŶĂƚƌĂŶƐŝƚͲƌŝĐŚĂƌĞĂǁŝƚŚĂŵƉůĞŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝĐĞƐ͘ dŚŝƐƐĐĞŶĂƌŝŽǁŽƵůĚĂůƐŽƚĞƐƚƚŚĞŝĚĞĂŽĨĚĞƉƌĞƐƐŝŶŐƚŚĞĂůƚƌĂŝŶƚƌĂĐŬƐďĞůŽǁͲŐƌĂĚĞďĞƚǁĞĞŶ ^ĂŶŶƚŽŶŝŽZŽĂĚĂŶĚWĂŐĞDŝůůZŽĂĚ͘  LJĐŚĂŶŐŝŶŐŽŵƉWůĂŶůĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐĂŶĚƉŽůŝĐŝĞƐƚŽĚŝƐĐŽƵƌĂŐĞŽƌƉƌŽŚŝďŝƚŶĞǁŚŽƵƐŝŶŐ ƵŶůĞƐƐŝƚ͛ƐǁŝƚŚŝŶŽŶĞŚĂůĨŵŝůĞŽĨĂĂůƚƌĂŝŶƐƚĂƚŝŽŶŽƌŽŶĞƋƵĂƌƚĞƌŵŝůĞŽĨĂƵƐZĂƉŝĚdƌĂŶƐŝƚ ;ZdͿƐƚŽƉ͕ĂŶĚďLJŝŶĐƌĞĂƐŝŶŐĂůůŽǁĂďůĞƌĞƐŝĚĞŶƚŝĂůĚĞŶƐŝƚŝĞƐǁŝƚŚŝŶƚŚŽƐĞĂƌĞĂƐ͕ƚŚŝƐƐĐĞŶĂƌŝŽ ǁŽƵůĚĞĨĨĞĐƚŝǀĞůLJĚŽǁŶnjŽŶĞĂƌĞĂƐĂůŽŶŐ^ŽƵƚŚůĂŵŝŶŽZĞĂůƚŚĂƚĂƌĞŶŽƚŝŵŵĞĚŝĂƚĞůLJ ĂĐĐĞƐƐŝďůĞƚŽŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝĐĞƐĂŶĚƚƌĂŶƐŝƚŝŶĞdžĐŚĂŶŐĞĨŽƌƵƉͲnjŽŶŝŶŐƚƌĂŶƐŝƚͲƐĞƌǀĞĚĂƌĞĂƐ ǁŝƚŚŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝĐĞƐ͘>ĂŶĚƵƐĞĚĞƐŝŐŶĂƚŝŽŶƐǁŽƵůĚĨŽƐƚĞƌŵŝdžĞĚƵƐĞĚĞǀĞůŽƉŵĞŶƚŝŶ ŶŽĚĞƐĂƚƉůĂŶŶĞĚZdƐƚŽƉƐĂůŽŶŐůĂŵŝŶŽZĞĂůƚŽƐƵƉƉŽƌƚƚŚĞĞǀŽůƵƚŝŽŶŽĨƚŚĞĐŽƌƌŝĚŽƌŝŶƚŽĂ ŐƌĂŶĚďŽƵůĞǀĂƌĚ͘ŽŵƉWůĂŶƉŽůŝĐŝĞƐǁŽƵůĚĞŶĐŽƵƌĂŐĞƐŵĂůůͲƵŶŝƚǁŽƌŬĨŽƌĐĞĂŶĚƐĞŶŝŽƌŚŽƵƐŝŶŐ ǁŝƚŚƌĞĚƵĐĞĚƉĂƌŬŝŶŐƌĞƋƵŝƌĞŵĞŶƚƐ͘ŽŵƉWůĂŶƉŽůŝĐŝĞƐĂŶĚƉƌŽŐƌĂŵƐǁŽƵůĚĐŽŶƚŝŶƵĞƚŽĨŽĐƵƐ ŽŶƉƌŽƚĞĐƚŝŶŐƚŚĞƋƵĂůŝƚLJŽĨůŝĨĞŝŶWĂůŽůƚŽΖƐZͲϭƐŝŶŐůĞͲĨĂŵŝůLJŶĞŝŐŚďŽƌŚŽŽĚƐĂŶĚƚŚĞŝƚLJ ǁŽƵůĚĂĚŽƉƚƉŽůŝĐŝĞƐƚŽĞŶĐŽƵƌĂŐĞƚŚĞƉƌĞƐĞƌǀĂƚŝŽŶŽĨŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐƌĞƚĂŝůĂŶĚƐĞƌǀŝĐĞƐ ǁŚĞƌĞƚŚĞLJĐƵƌƌĞŶƚůLJĞdžŝƐƚƚŚƌŽƵŐŚŽƵƚƚŚĞĐŝƚLJ͘  dŚĞĐŚĂƌĂĐƚĞƌŽĨĞĂĐŚŽĨƚŚĞƐŝdžĨŽĐƵƐĂƌĞĂƐŝĚĞŶƚŝĨŝĞĚďLJĐŽŵŵƵŶŝƚLJŵĞŵďĞƌƐĂƚǁŽƌŬƐŚŽƉƐŝŶ :ƵŶĞǁŽƵůĚďĞĂƐĨŽůůŽǁƐƵŶĚĞƌ^ĐĞŶĂƌŝŽϯŝŶϮϬϯϬ͗  ƒdŚĞƌŽůĞŽĨŽǁŶƚŽǁŶŝŶƚŚĞĐƵůƚƵƌĂůĂŶĚĐŽŵŵĞƌĐŝĂůůŝĨĞŽĨƚŚĞĐŽŵŵƵŶŝƚLJǁŽƵůĚďĞ ƐƵƉƉŽƌƚĞĚǁŝƚŚƚŚĞĂĚĚŝƚŝŽŶŽĨƐŽŵĞŚŝŐŚĞƌĚĞŶƐŝƚLJŚŽƵƐŝŶŐ͘ƐůŝŐŚƚŝŶĐƌĞĂƐĞƚŽƚŚĞ ŚĞŝŐŚƚůŝŵŝƚƚŽĂŵĂdžŝŵƵŵŽĨϱϱͲϲϬĨĞĞƚǁŽƵůĚďĞĂůůŽǁĞĚ͕ĂƐůŽŶŐĂƐƚŚĞĂĚĚŝƚŝŽŶĂů ŚĞŝŐŚƚŝƐƵƐĞĚĨŽƌƌĞƐŝĚĞŶƚŝĂůƵŶŝƚƐ͘ŽŵƉWůĂŶƉŽůŝĐŝĞƐǁŽƵůĚĞŶĐŽƵƌĂŐĞƐƚƵĚŝŽĂŶĚŽŶĞͲ ďĞĚƌŽŽŵƵŶŝƚƐŽƌƐĞŶŝŽƌŚŽƵƐŝŶŐ͘džŝƐƚŝŶŐƐƵƌĨĂĐĞƉĂƌŬŝŶŐůŽƚƐŽǁŶƚŽǁŶĐŽƵůĚďĞ ƌĞĚĞǀĞůŽƉĞĚǁŝƚŚĞŝƚŚĞƌŚŽƵƐŝŶŐŽƌŶŽŶͲƌĞƐŝĚĞŶƚŝĂůƵƐĞƐ͕ĂƐůŽŶŐĂƐƚŚĞŽǀĞƌĂůůĂŵŽƵŶƚ ŽĨƉĂƌŬŝŶŐƉƌŽǀŝĚĞĚŝƐĐŽŶƐŝƐƚĞŶƚǁŝƚŚƚƌĞŶĚƐĂŶĚƉƌŽũĞĐƚŝŽŶƐĨŽƌĂƵƚŽŵŽďŝůĞƵƐĞŝŶƚŚĞ ŽǁŶƚŽǁŶĂƌĞĂ͘dŚĞϮϳhŶŝǀĞƌƐŝƚLJǀĞŶƵĞƐŝƚĞǁŽƵůĚďĞĚĞǀĞůŽƉĞĚƚŽƐĞƌǀĞƉƌŝŵĂƌŝůLJ ĂƐĂƚƌĂŶƐŝƚĐĞŶƚĞƌǁŝƚŚƐŽŵĞǁŽƌŬĨŽƌĐĞŚŽƵƐŝŶŐ͘ ƒůŽŶŐůĂŵŝŶŽZĞĂů͕ŶĞǁĚĞǀĞůŽƉŵĞŶƚǁŽƵůĚďĞĨŽĐƵƐĞĚŝŶŶŽĚĞƐĂƚƉůĂŶŶĞĚZd ƐƚŽƉƐ͕ĂŶĚŚŽƵƐŝŶŐǁŽƵůĚďĞƉƌŽŚŝďŝƚĞĚŽƵƚƐŝĚĞŽĨŝĚĞŶƚŝĨŝĞĚŶŽĚĞƐ͘ŽŵƉWůĂŶƉŽůŝĐŝĞƐ  KƵƌWĂůŽůƚŽϮϬϯϬ ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐͲͲĨŽƌŝƐĐƵƐƐŝŽŶƵŐƵƐƚϰ͕ϮϬϭϰ WĂŐĞϲ ǁŽƵůĚĂůůŽǁĨŽƌĂĚĚŝƚŝŽŶĂůŚĞŝŐŚƚĂŶĚĚĞŶƐŝƚLJǁŝƚŚŝŶƚŚĞƐĞŶŽĚĞƐĂŶĚǁŽƵůĚĞŶĐŽƵƌĂŐĞ ƌĞƚĂŝůĂŶĚƐĞƌǀŝĐĞƐĐĂƚĞƌŝŶŐƚŽƌĞƐŝĚĞŶƚƐŽĨƚŚĞĂĚũĂĐĞŶƚŶĞŝŐŚďŽƌŚŽŽĚƐ͘ ƒƒdŚĞ^ƚĂŶĨŽƌĚZĞƐĞĂƌĐŚWĂƌŬĂŶĚƚŚĞ^ƚĂŶĨŽƌĚ^ŚŽƉƉŝŶŐĞŶƚĞƌǁŽƵůĚƌĞƚĂŝŶƚŚĞĐƵƌƌĞŶƚ ĐŚĂƌĂĐƚĞƌ͕ǁŝƚŚƐŽŵĞŚŽƵƐŝŶŐĂĚĚĞĚŝŶƚŚĞƉŽƌƚŝŽŶƐŽĨƚŚĞƐĞĂƌĞĂƐĨƌŽŶƚŝŶŐůĂŵŝŶŽ ZĞĂůĂƐůŽŶŐĂƐƌĞĚĞǀĞůŽƉŵĞŶƚŝŶĐŽƌƉŽƌĂƚĞƐŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝĐĞƐĂŶĚŝƐĐŽƵƉůĞĚǁŝƚŚ ƐƚƌĞĞƚƐĐĂƉĞŝŵƉƌŽǀĞŵĞŶƚƐĂŶĚƉĞĚĞƐƚƌŝĂŶ͕ďŝĐLJĐůĞ͕ĂŶĚƚƌĂŶƐŝƚĐŽŶŶĞĐƚŝŽŶƐƚŽ ŽǁŶƚŽǁŶĂŶĚƚŚĞĂůŝĨŽƌŶŝĂǀĞŶƵĞĂƌĞĂ͘ ƒĂůŝĨŽƌŶŝĂǀĞŶƵĞŝƚƐĞůĨǁŽƵůĚƌĞŵĂŝŶĂŶ͞ĞĐůĞĐƚŝĐ͕͟ůŽǁͲƐĐĂůĞĐŽŵŵĞƌĐŝĂůƐƚƌĞĞƚ ƉƌŽǀŝĚŝŶŐƐĞƌǀŝĐĞƐĂŶĚƐŚŽƉƉŝŶŐĨŽƌůŽĐĂůƌĞƐŝĚĞŶƚƐ͘&ŽƌŵƵůĂƌĞƚĂŝůĂŶĚƌĞƐƚĂƵƌĂŶƚƵƐĞƐ ǁŽƵůĚďĞĚŝƐĐŽƵƌĂŐĞĚĂůŽŶŐĂůŝĨŽƌŶŝĂǀĞŶƵĞ͕ŝŶĨĂǀŽƌŽĨŝŶĚĞƉĞŶĚĞŶƚůLJŽǁŶĞĚĂŶĚ ŽƉĞƌĂƚĞĚĞƐƚĂďůŝƐŚŵĞŶƚƐ͘dŚĞƐƵƌƌŽƵŶĚŝŶŐĂƌĞĂǁŽƵůĚĂĐĐŽŵŵŽĚĂƚĞĂĚĚŝƚŝŽŶĂů 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ƒĂůŝĨŽƌŶŝĂǀĞŶƵĞŝƚƐĞůĨǁŽƵůĚƐĞĞůŝƚƚůĞĐŚĂŶŐĞŝŶƚŚŝƐĂůƚĞƌŶĂƚŝǀĞĂŶĚǁŽƵůĚƌĞŵĂŝŶĂŶ ĞĐůĞĐƚŝĐ͕ŶĞŝŐŚďŽƌŚŽŽĚͲƐĞƌǀŝŶŐƌĞƚĂŝůĚĞƐƚŝŶĂƚŝŽŶ͕ďƵƚƚŚĞƐƵƌƌŽƵŶĚŝŶŐĂƌĞĂǁŽƵůĚĞǀŽůǀĞ ƚŽŝŶĐůƵĚĞďŽƚŚŵŽƌĞũŽďƐĂŶĚŵŽƌĞŚŽƵƐŝŶŐŐŝǀĞŶƚŚĞƉƌŽdžŝŵŝƚLJŽĨƚŚĞĂůƚƌĂŝŶƐƚĂƚŝŽŶ ĂŶĚŶĞŝŐŚďŽƌŚŽŽĚƐĞƌǀŝĐĞƐ͘^ƉĞĐŝĨŝĐĂůůLJ͕ƚŚĞ&ƌLJ͛ƐƐŝƚĞǁŽƵůĚƚƌĂŶƐĨŽƌŵƚŽŝŶĐůƵĚĞĂŵŝdž ŽĨƵƐĞƐǁŝƚŚŚŽƵƐŝŶŐŽǀĞƌĐŽŵŵĞƌĐŝĂůƵƐĞƐƐƵĐŚĂƐŽĨĨŝĐĞƐ͕ǁŝƚŚƉƵďůŝĐŐĂƌĚĞŶƐƐĞƌǀŝŶŐ ƚŚĞŶĞǁŚŽŵĞƐ͘dĞĐŚŽƌƌŝĚŽƌŽǀĞƌůĂLJĂůŽŶŐWĂƌŬŽƵůĞǀĂƌĚǁŽƵůĚĨĂĐŝůŝƚĂƚĞƚŚĞ ĐƌĞĂƚŝŽŶŽĨƐŵĂůůŶĞǁƚĞĐŚĐŽŵƉĂŶŝĞƐĂŶĚWĂƌŬŽƵůĞǀĂƌĚŝƚƐĞůĨǁŽƵůĚďĞĐŽŵĞĂƚƌƵĞ ͞ďŽƵůĞǀĂƌĚ͟ǁŝƚŚƐƵďƐƚĂŶƚŝĂůƉĞĚĞƐƚƌŝĂŶ͕ďŝĐLJĐůĞ͕ĂŶĚƚƌĂŶƐŝƚŝŵƉƌŽǀĞŵĞŶƚƐĐŽŶŶĞĐƚŝŶŐ ǁŽƌŬĞƌƐĂůŽŶŐƚŚĞdĞĐŚŽƌƌŝĚŽƌĂŶĚŽŶƚŚĞ&ƌLJ͛ƐƐŝƚĞǁŝƚŚƚŚĞĂůǀĞĂůƚƌĂŝŶƐƚĂƚŝŽŶ͘ ƒdŚĞ^ƚĂŶĨŽƌĚZĞƐĞĂƌĐŚWĂƌŬǁŽƵůĚďĞĐŽŵĞĂĐƵƚƚŝŶŐͲĞĚŐĞƉƌŽǀŝŶŐŐƌŽƵŶĚĨŽƌ ŝŶŶŽǀĂƚŝǀĞĐŽŶĐĞƉƚƐŝŶĞŶĞƌŐLJŐĞŶĞƌĂƚŝŽŶ͕ĐĂƌďŽŶƐĞƋƵĞƐƚƌĂƚŝŽŶ͕ƌĞĐLJĐůĞĚǁĂƚĞƌ͕ƵƌďĂŶ ĨĂƌŵŝŶŐĂŶĚĨŽƌĞƐƚƌLJ͕ĂŶĚĚƌŽƵŐŚƚͲƚŽůĞƌĂŶƚůĂŶĚƐĐĂƉŝŶŐ͘/ŶƐŽŵĞĂƌĞĂƐ͕ĞdžŝƐƚŝŶŐƐƵƌĨĂĐĞ ƉĂƌŬŝŶŐĐŽƵůĚďĞƵŶĚĞƌŐƌŽƵŶĚĞĚĂŶĚĐŽǀĞƌĞĚǁŝƚŚǀĞƌƚŝĐĂůŵŝdžĞĚƵƐĞďƵŝůĚŝŶŐƐ͕ ƐƵƌƌŽƵŶĚŝŶŐƉůĂnjĂƐĂŶĚƉƵďůŝĐŐĂƚŚĞƌŝŶŐƉůĂĐĞƐ͕ŝŶĐůƵĚŝŶŐƌĞƐƚĂƵƌĂŶƚƐĂŶĚŶŝŐŚƚƚŝŵĞ ƌĞƚĂŝů͘/ŶƚŚĞƐĞĂƌĞĂƐ͕ŶĞǁŚŽƵƐŝŶŐǁŽƵůĚŝŶĐůƵĚĞƚŽǁŶŚŽŵĞƐ͕ĂƉĂƌƚŵĞŶƚƐ͕ĂŶĚůŽĨƚƐ͕ ĂŶĚŶĞǁƐƚƌĞĞƚƐǁŽƵůĚďĞĂĚĚĞĚƚŽďƌĞĂŬƵƉƚŚĞĐƵƌƌĞŶƚ͞ƐƵƉĞƌďůŽĐŬƐ͘͟ďŝŬĞƐŚĂƌŝŶŐ ƉƌŽŐƌĂŵĂŶĚĂŶĞǁĨƌĞĞƐŚƵƚƚůĞǁŽƵůĚƐĞƌǀĞƌĞƐŝĚĞŶƚƐĂŶĚǁŽƌŬĞƌƐĂůŝŬĞ͘ůůůĂŶĚƐĐĂƉŝŶŐ ǁŽƵůĚďĞƌĞƋƵŝƌĞĚƚŽƵƚŝůŝnjĞůŽǁͬŶŽǁĂƚĞƌƉůĂŶƚƐĂŶĚǁŽƵůĚďĞƐĞůĞĐƚĞĚƚŽƐƵƉƉŽƌƚ ŶĂƚŝǀĞďŝƌĚƐĂŶĚŝŶƐĞĐƚƐ͘ ƒdŚĞĂƐƚDĞĂĚŽǁŝƌĐůĞͬĂLJƐŚŽƌĞĂƌĞĂǁŽƵůĚďĞƐůŽǁůLJƚƌĂŶƐĨŽƌŵĞĚĨƌŽŵĂƌĞƐĞĂƌĐŚ ĂŶĚŽĨĨŝĐĞƉĂƌŬƚŽĂŶĞǁǀŝůůĂŐĞĐĞŶƚĞƌǁŝƚŚĂŵŝdžŽĨŚŽƵƐŝŶŐƚLJƉĞƐĂƌŽƵŶĚĂĐĞŶƚƌĂů ƉůĂnjĂ͕ĂƐǁĞůůĂƐĂƉŽƚĞŶƚŝĂůŶĞǁƐĐŚŽŽů͘dŚĞŽĨĨŝĐĞĂŶĚůŝŐŚƚŝŶĚƵƐƚƌŝĂůƵƐĞƐĂůŽŶŐ&ĂďŝĂŶ tĂLJĂŶĚĂLJƐŚŽƌĞǁŽƵůĚƌĞŵĂŝŶĂƐŝƐĂŶĚƚƌĂŶƐŝƚƐĞƌǀŝĐĞƚŽƚŚĞĂƌĞĂǁŽƵůĚďĞ ĚƌĂŵĂƚŝĐĂůůLJŝŵƉƌŽǀĞĚ͘  KƵƌWĂůŽůƚŽϮϬϯϬ ƌĂĨƚůƚĞƌŶĂƚŝǀĞ&ƵƚƵƌĞƐͲͲĨŽƌŝƐĐƵƐƐŝŽŶƵŐƵƐƚϰ͕ϮϬϭϰ WĂŐĞϴ ƒƒ/ŶƚŚĞ^ŽƵƚŚ^ĂŶŶƚŽŶŝŽĂƌĞĂ͕ĞdžŝƐƚŝŶŐďƵƐŝŶĞƐƐĞƐǁŽƵůĚďĞƉƌŽƚĞĐƚĞĚĨƌŽŵ ĚŝƐƉůĂĐĞŵĞŶƚ͕ĂůƚŚŽƵŐŚƚŚĞƌĞĐŽƵůĚďĞůŝŵŝƚĞĚŶĞǁĚĞǀĞůŽƉŵĞŶƚŽŶĐĞǁĂůŬĂďŝůŝƚLJĂŶĚ ƚƌĂŶƐŝƚƐĞƌǀŝĐĞ;ŝŶĐůƵĚŝŶŐĂůƚƌĂŝŶƐĞƌǀŝĐĞͿĂƌĞŝŵƉƌŽǀĞĚ͘  MEMORANDUM DATE July 29, 2014 TO Palo Alto City staff FROM PlaceWorks consultant team SUBJECT Growth Management Strategies applied in a Sample of California Cities This memo presents a brief outline of growth management strategies put in place in a sample of California cities to offer context for the alternative scenarios currently being formulated for the Palo Alto Comprehensive Plan Update. The sample includes communities with strategies addressing both residential and non-residential development, as well as communities with strategies addressing only one type of development or the other. The communities covered are, in alphabetical order, Carlsbad, Cupertino, Mountain View, Pleasanton, San Luis Obispo County, Santa Monica, and Walnut Creek. The following examples are not intended as a recommendation to adopt one or more of these strategies. Any program adopted in Palo Alto would need a high degree of customization to fit its unique local conditions. In addition, other than the Pleasanton example, these strategies have not been “tested” in court. Legal analysis would have to be prepared for any growth management strategy that Palo Alto may want to adopt. Strategies Addressing Both Residential and Non-residential Development Carlsbad Carlsbad, located on the Pacific Coast in northern San Diego County, is known for its successful growth management program, which ties the provision of public services and infrastructure to new development. In the 1980s, Carlsbad experienced a building boom that put pressure on public services and infrastructure. In response to this growth, voters passed Proposition E, the City’s Growth Management Ordinance, in 1986. The Growth Management Program (GMP) plans for an estimated citywide buildout of 54,600 dwelling units or an estimated population of 135,000. (The City’s current population is about 105,000.) This buildout estimate serves as the basis of the City’s Capital Improvement Plan. The GMP divides the City into 25 geographic sub-areas, each of which has a Local Facility Management Plan that outlines improvements necessary to accommodate new development. In addition, the Local Facility Management Plan establishes any necessary development impact fees to help fund identified improvements. The GMP requires that residential and non-residential "UUBDINFOU+ July 29, 2014 | Page 2 development meet 11 citywide public facility performance standards, established in the Capital Improvement Plan, as well as the specific standards outlined in the applicable Local Facility Management Plan. City staff actively monitor the GMP to make certain that development and services are appropriately timed, as well as to ensure that the growth cap is not exceeded.1 The Carlsbad system is not focused on controlling the pace of growth. The issue in 1986 when it was established was the belief that too much housing was planned, so the program intends to reduce potential density citywide and make sure that (primarily residential) development provides adequate public facilities and services by geographic zone (“pays its way”). • ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĂŶŽǀĞƌĂůůĐĂƉŽŶũŽďƐͬƐƋƵĂƌĞĨĞĞƚ͍ EŽ͘dŚĞƌĞ͛ƐŽŶůLJĂĐĂƉŽŶƌĞƐŝĚĞŶƚŝĂůďƵŝůĚŽƵƚ͘ • ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĂŶĂŶŶƵĂůůŝŵŝƚŽŶĂƉƉƌŽǀĂůƐ͍ EŽ͘ŽŶƚƌŽůůŝŶŐƚŚĞƉĂĐĞŽĨŐƌŽǁƚŚŝƐŶŽƚŽŶĞŽĨƚŚĞŐŽĂůƐŽĨƚŚŝƐƐLJƐƚĞŵ͘;&ŽƌƌĞƐŝĚĞŶƚŝĂů ĚĞǀĞůŽƉŵĞŶƚ͕ƚŚĞƌĞ͛ƐĂ͞ŐƌŽǁƚŚĐŽŶƚƌŽůƉŽŝŶƚ͟ƚŽĞŶƐƵƌĞƌĂŶŐĞĂŶĚĚŝƐƚƌŝďƵƚŝŽŶŽĨĚǁĞůůŝŶŐ ƵŶŝƚͬĚĞǀĞůŽƉŵĞŶƚƐŝnjĞƐͬƚLJƉĞƐ͘/ƚŽƉĞƌĂƚĞƐůŝŬĞĂĐŝƚLJǁŝĚĞdZƉƌŽŐƌĂŵƵŶĚĞƌƚŚĞǀŽƚĞƌ ĂƉƉƌŽǀĞĚWĂŶĚƚĞŶĚƐƚŽůĞĂĚƐƚŽŵĂƐƚĞƌƉůĂŶŶĞĚĐŽŵŵƵŶŝƚŝĞƐ͘Ϳ • ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĐŽŵƉĞƚŝƚŝǀĞƐĐŽƌŝŶŐƚŚĂƚƉŝƚƐƉƌŽũĞĐƚƐĂŐĂŝŶƐƚĞĂĐŚŽƚŚĞƌ͍ƌĞĂŶLJ ĐĂƚĞŐŽƌŝĞƐŽĨƉƌŽũĞĐƚĞdžĞŵƉƚ;Ğ͘Ő͘ĐĞƌƚĂŝŶƚLJƉĞŽĨŝŶĚƵƐƚƌLJ͕ƉƌŽũĞĐƚƐƵŶĚĞƌϭϬŬƐĨͿ͍ EŽ͘ • ŽĞƐƚŚĞƐLJƐƚĞŵĞdžƚƌĂĐƚĐŽŵŵƵŶŝƚLJďĞŶĞĨŝƚƐĨƌŽŵĚĞǀĞůŽƉĞƌƐ͍/ĨƐŽ͕ǁŚĂƚƚLJƉĞƐŽĨďĞŶĞĨŝƚƐ ĂŶĚŚŽǁƐƵĐĐĞƐƐĨƵůŚĂƐƚŚŝƐďĞĞŶ͍ zĞƐ͘&ŽƌŶŽŶƌĞƐŝĚĞŶƚŝĂůƉƌŽũĞĐƚƐďĞŶĞĨŝƚƐĂƌĞĞdžƚƌĂĐƚĞĚƚŚƌŽƵŐŚŶĞŐŽƚŝĂƚĞĚĐŽŶĚŝƚŝŽŶƐŽĨ ĂƉƉƌŽǀĂů͘dLJƉŝĐĂůďĞŶĞĨŝƚƐŝŶĐůƵĚĞƐƚƌĞĞƚƐĐĂƉĞĂŵĞŶŝƚŝĞƐĂŶĚŽƉĞŶƐƉĂĐĞƚŽƐĞƌǀĞƚŚĞ ĚĞǀĞůŽƉŵĞŶƚ͘ • ,ŽǁĨůĞdžŝďůĞŝƐƚŚĞƐLJƐƚĞŵͬ,ŽǁĚŽĞƐŝƚĂůůŽǁĨŽƌĞdžĐĞƉƚŝŽŶƐĂŶĚͬŽƌĐƌĞĂƚŝǀŝƚLJ͍ &ŽƌŶŽŶƌĞƐŝĚĞŶƚŝĂůĚĞǀĞůŽƉŵĞŶƚ͕ƚŚĞƐLJƐƚĞŵŝƐƌĞůĂƚŝǀĞůLJĨůĞdžŝďůĞĂŶĚĂůůŽǁƐĨŽƌĞdžĐĞƉƚŝŽŶƐ ƚŚƌŽƵŐŚƚŚĞŶĞŐŽƚŝĂƚĞĚĐŽŶĚŝƚŝŽŶƐŽĨĂƉƉƌŽǀĂů͘ • tŚĂƚŝƐƚŚĞƐƚĂĨĨďƵƌĚĞŶŽĨĂĚŵŝŶŝƐƚĞƌŝŶŐƚŚĞƐLJƐƚĞŵ͍ƌĞƚŚĞƌĞůĞƐƐŽŶƐůĞĂƌŶĞĚĂďŽƵƚŬĞĞƉŝŶŐ ƚŚĞƐLJƐƚĞŵƐŝŵƉůĞƚŽĂĚŵŝŶŝƐƚĞƌĂŶĚĞĂƐLJƚŽƵŶĚĞƌƐƚĂŶĚǁŚŝůĞĂĐŚŝĞǀŝŶŐŐŽĂůƐ͍ ĂƌůƐďĂĚ͛Ɛ'DWĚŝǀŝĚĞƐƚŚĞŝƚLJŝŶƚŽϮϱƐƵďͲƌĞŐŝŽŶƐ͘ůƚŚŽƵŐŚƚŚĞƐLJƐƚĞŵŚĂƐŵĂŶĂŐĞĚ ŐƌŽǁƚŚǁĞůůĨŽƌƚŚĞŝƚLJ͕ŝƚĚŽĞƐƌĞƋƵŝƌĞĂĐƚŝǀĞƐƚĂĨĨŵŽŶŝƚŽƌŝŶŐŽĨĂŵƵůƚŝĨĂĐĞƚĞĚƐLJƐƚĞŵ͘dŚĞ 1 City of Carlsbad, http://web.carlsbadca.gov/services/departments/planning/pages/growth- management.aspx, accessed on July 2, 1014. July 29, 2014 | Page 3 &ĂĐŝůŝƚŝĞƐDĂŶĂŐĞŵĞŶƚWůĂŶĐŽŶƐŝƐƚĞŶĐLJĐƌĞĂƚĞƐĂŶĂĚĚŝƚŝŽŶĂůůĂLJĞƌŽĨƌĞǀŝĞǁ͕ĂŶĚƚŚĞƐƉĞĐŝĨŝĐ ĂĐĐŽƵŶƚŝŶŐƐLJƐƚĞŵĨŽƌƌĞƐŝĚĞŶƚŝĂůĚĞǀĞůŽƉŵĞŶƚ;Ğ͘Ő͘ƚƌĂĐŬŝŶŐĞdžĂĐƚĂŵŽƵŶƚƐĂŶĚƚLJƉĞƐŽĨ ĚĞǀĞůŽƉŵĞŶƚŝŶϮϱƐƵďͲƌĞŐŝŽŶƐͿĐƌĞĂƚĞƐĂĐŚĂůůĞŶŐŝŶŐƐƚĂĨĨďƵƌĚĞŶ͘ • ŽĞƐƚŚĞƐLJƐƚĞŵŐĞƚƚŚĞƌĞƐƵůƚƐƚŚĞĐŽŵŵƵŶŝƚLJĚĞƐŝƌĞƐ͍ƌĞƚŚĞƌĞĂŶLJƵŶŝŶƚĞŶĚĞĚ ĐŽŶƐĞƋƵĞŶĐĞƐ͍ dŚĞƐLJƐƚĞŵŝƐǁŽƌŬŝŶŐǁĞůů͘dŚĞŽƵŶĐŝůĂŶĚĐŽŵŵƵŶŝƚLJĂƌĞŚĂƉƉLJĂŶĚƐĂƚŝƐĨŝĞĚǁŝƚŚƌĞƐƵůƚŝŶŐ ƐĞƌǀŝĐĞƐ͘dŚĞƌĞƐŝĚĞŶƚŝĂůĚĞǀĞůŽƉŵĞŶƚƚƌĂĐŬŝŶŐƐLJƐƚĞŵĐŽƵůĚďĞŵŽƌĞĞĨĨŝĐŝĞŶƚ͘ Walnut Creek Walnut Creek has regulated commercial growth since 1985, when voters approved Measure H, crafted by Citizens for a Better Walnut Creek, a growth-control initiative that would have limited or prevented non-residential development until traffic congestion at major intersections improved. Measure H was a reaction to resident concerns about traffic and the construction, in the late 1970s and early 1980s, of a number of large commercial office buildings in downtown Walnut Creek, primarily around the Walnut Creek BART station. A major local landowner sued the City, and the case eventually went to the California Supreme Court. In 1990, the Court ruled that Measure H was invalid because it functioned as a zoning ordinance but conflicted with the City’s adopted General Plan, which called for Walnut Creek to be a regional job and retail center. Although Measure H was invalidated, the City continued to regulate the amount of commercial and residential development allowed each year, acknowledging the residents’ desire to meter growth in Walnut Creek. In 1993, the City Council adopted a Growth Limitation Program that limited new commercial growth to 75,000 square feet per year, metered in increments of 150,000 square feet every 2 years, and was adopted for 10 years. The program helped the City to limit growth to 620,000 square feet of new commercial development in the first 10 years (1993-2003), and was extended through 2015 in the City’s 2005 General Plan Update. The Growth Limitation Program excludes the Shadelands Business Park.2 •ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĂŶŽǀĞƌĂůůĐĂƉŽŶũŽďƐͬƐƋƵĂƌĞĨĞĞƚ͍/ĨƐŽ͕ŚŽǁŝƐƚŚĂƚƐĞƚ͍ŚĂŶŐĞĚ͍ ŶĨŽƌĐĞĚ͍ zĞƐ͘ dŚĞ tĂůŶƵƚ ƌĞĞŬ 'ƌŽǁƚŚ DĂŶĂŐĞŵĞŶƚ WƌŽŐƌĂŵ ŝŶĐůƵĚĞƐ ĂŶ ĂŶŶƵĂů ĐĂƉ ŽĨ ϳϱ͕ϬϬϬ ĐŽŵŵĞƌĐŝĂůƐƋƵĂƌĞĨĞĞƚͬLJĞĂƌŵĞƚĞƌĞĚŝŶϮͲLJĞĂƌŝŶĐƌĞŵĞŶƚƐ͕ďƵƚŶŽƚŽƚĂůŽǀĞƌĂůůĐĂƉ͘dŚĞ ƉƵƌƉŽƐĞŽĨtĂůŶƵƚƌĞĞŬΖƐ'ƌŽǁƚŚDĂŶĂŐĞŵĞŶƚWƌŽŐƌĂŵŝƐƚŽŵĞƚĞƌƚŚĞƉĂĐĞĐŽŵŵĞƌĐŝĂů ŐƌŽǁƚŚ͕ƌĂƚŚĞƌƚŚĂŶƚŽĐĂƉŝƚĂƚĂƐƉĞĐŝĨŝĐůĞǀĞů͘dŚĞϳϱ͕ϬϬϬƐƋƵĂƌĞĨŽŽƚĂŶŶƵĂůůŝŵŝƚǁĂƐ 2 City of Walnut Creek, Walnut Creek General Plan 2025, page 4-13. Available online at http://www.walnut- creek.org/citygov/depts/cd/planning/documents/general_plan_2025.asp. July 29, 2014 | Page 4 ĚĞƌŝǀĞĚŽŶƚŚĞďĂƐŝƐŽĨƉŝƉĞůŝŶĞƉƌŽũĞĐƚƐĂŶĚŐƌŽǁƚŚƉƌŽũĞĐƚŝŽŶƐĂǀĂŝůĂďůĞĂƚƚŚĞƚŝŵĞƚŚĞ ŽƌŝŐŝŶĂůƉƌŽŐƌĂŵǁĂƐƉƵƚŝŶƉůĂĐĞŝŶƚŚĞϭϵϵϬƐ͘dŚĞĐĂƉŝƐƐĞƚŝŶƚŚĞ'ĞŶĞƌĂůWůĂŶ;ǁŚŝĐŚ ŝŶĐŽƌƉŽƌĂƚĞĚĂŶĞĂƌůŝĞƌ'ƌŽǁƚŚ>ŝŵŝƚĂƚŝŽŶWƌŽŐƌĂŵĨƌŽŵƚŚĞϭϵϵϬƐͿ͘/ƚŝƐĞŶĨŽƌĐĞĚďLJƚŚĞ WůĂŶŶŝŶŐŝǀŝƐŝŽŶ͘^ƚĂĨĨƚƌĂĐŬƐĂǀĂŝůĂďůĞĂůůŽĐĂƚŝŽŶĂŶĚĂďƵŝůĚŝŶŐƉĞƌŵŝƚĐĂŶŶŽƚďĞŝƐƐƵĞĚ ƵŶůĞƐƐ ĂŶ ĂůůŽĐĂƚŝŽŶ ŝƐ ĂǀĂŝůĂďůĞ͘ /Ĩ ƚŚĞ ďƵŝůĚŝŶŐ ƉĞƌŵŝƚ ŝƐ ĂůůŽǁĞĚ ƚŽ ĞdžƉŝƌĞ ƉƌŝŽƌ ƚŽ ĐŽŶƐƚƌƵĐƚŝŽŶ͕ƚŚĞĂůůŽĐĂƚŝŽŶŝƐƌĞǀŽŬĞĚĂŶĚƌĞƚƵƌŶƐƚŽƚŚĞƉŽŽů͘ ZĞƐŝĚĞŶƚŝĂůĚĞǀĞůŽƉŵĞŶƚŝƐĐĂƉƉĞĚĂƚŶŽŵŽƌĞŶĞƚŶĞǁĚǁĞůůŝŶŐƵŶŝƚƐƚŚĂŶƚŚĞƚŽƚĂůZĞŐŝŽŶĂů ,ŽƵƐŝŶŐEĞĞĚƐůůŽĐĂƚŝŽŶ;Z,EͿĨŽƌĂůůŝŶĐŽŵĞůĞǀĞůƐĂƐƐŝŐŶĞĚƚŽƚŚĞŝƚLJ͘ ^ĞĞWŽůŝĐLJƵůůĞƚŝŶEŽ͘WͲϬϰϭͲ'ƌŽǁƚŚDĂŶĂŐĞŵĞŶƚWƌŽŐƌĂŵ͗ ŚƚƚƉ͗ͬͬǁǁǁ͘ǁĂůŶƵƚͲĐƌĞĞŬ͘ŽƌŐͬĐŝǀŝĐĂdžͬĨŝůĞďĂŶŬͬďůŽďĚůŽĂĚ͘ĂƐƉdž͍ďůŽďŝĚсϱϬϯϱ •ŽĞƐ ƚŚĞ ƐLJƐƚĞŵ ŝŶĐůƵĚĞ ĂŶ ĂŶŶƵĂů ůŝŵŝƚ ŽŶ ĂƉƉƌŽǀĂůƐ͍ tŚĂƚ ŝƐ ŝƚ͍,ŽǁŝƐŝƚƐĞƚĂŶĚ ĐŚĂŶŐĞĚ͍ zĞƐ͕ƚŚĞƌĞŝƐĂŶĂŶŶƵĂůůŝŵŝƚŽĨϳϱ͕ϬϬϬĐŽŵŵĞƌĐŝĂů^&ͬLJĞĂƌ͕ŵĞƚĞƌĞĚŝŶƚǁŽLJĞĂƌŝŶĐƌĞŵĞŶƚƐ ƐƚĂƌƚŝŶŐƉƌŝůϰŽĨĞǀĞŶŶƵŵďĞƌĞĚLJĞĂƌƐ͘dŚĞƌĞĨŽƌĞĂůůŽĐĂƚŝŽŶƐĨŽƌϭϱϬ͕ϬϬϬƐƋƵĂƌĞĨĞĞƚŽĨ ĐŽŵŵĞƌĐŝĂůĚĞǀĞůŽƉŵĞŶƚĂƌĞĂǀĂŝůĂďůĞŝŶĞĂĐŚƚǁŽLJĞĂƌĐLJĐůĞ͘dŚŝƐůŝŵŝƚŝƐƐĞƚŝŶƚŚĞ'ĞŶĞƌĂů WůĂŶĂŶĚŝƐŶŽƚĐŚĂŶŐĞĚŽƌĂĚũƵƐƚĞĚ͘hŶƵƐĞĚĂůůŽĐĂƚŝŽŶƐĨƌŽŵŽŶĞĐLJĐůĞĂƌĞƌŽůůĞĚŽǀĞƌƚŽƚŚĞ ŶĞdžƚ ĐLJĐůĞ͘ WƌŽũĞĐƚ ĂƉƉůŝĐĂŶƚƐ ŐĞƚ ĐƌĞĚŝƚ ĨŽƌ ĂŶLJ ĞdžŝƐƚŝŶŐ ĐŽŵŵĞƌĐŝĂů ^& ƚŚĂƚ ǁŽƵůĚ ďĞ ĚĞŵŽůŝƐŚĞĚǁŝƚŚĐŽŶƐƚƌƵĐƚŝŽŶŽĨƚŚĞŝƌƉƌŽũĞĐƚ͘ &ŽƌƌĞƐŝĚĞŶƚŝĂůƉƌŽũĞĐƚƐ͕ƚŚĞĐĂƉŝƐůŝŶŬĞĚƚŽƚŚĞZ,EĐLJĐůĞƌĂƚŚĞƌƚŚĂŶĂŶĂŶŶƵĂůůŝŵŝƚ͘ƌĞĚŝƚ ŝƐ ŐŝǀĞŶ ĨŽƌ ĞdžŝƐƚŝŶŐ ĚǁĞůůŝŶŐ ƵŶŝƚƐ ƚŚĂƚ ǁŽƵůĚ ďĞ ĚĞŵŽůŝƐŚĞĚ ǁŝƚŚ ĐŽŶƐƚƌƵĐƚŝŽŶ ŽĨ ƚŚĞ ƉƌŽũĞĐƚ͘/ĨƚŚĞŶƵŵďĞƌŽĨƵŶŝƚƐĚĞŵŽůŝƐŚĞĚĞdžĐĞĞĚƐƚŚĞŶƵŵďĞƌƚŽďĞŶĞǁůLJĐŽŶƐƚƌƵĐƚĞĚ͕ƚŚĞ ĚŝĨĨĞƌĞŶĐĞŐĞƚƐĂĚĚĞĚďĂĐŬƚŽƚŚĞĂůůŽĐĂƚŝŽŶƉŽŽů͘ •ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĂĐŽŵƉĞƚŝƚŝǀĞƉŽŝŶƚƐLJƐƚĞŵƉŝƚƚŝŶŐƉƌŽũĞĐƚƐĂŐĂŝŶƐƚĞĂĐŚŽƚŚĞƌ͍ŶLJ ĐĂƚĞŐŽƌŝĞƐŽĨƉƌŽũĞĐƚĞdžĞŵƉƚĞĚ;Ğ͘Ő͘ĐĞƌƚĂŝŶƚLJƉĞŽĨŝŶĚƵƐƚƌLJ͕ƉƌŽũĞĐƚƐƵŶĚĞƌϭϬŬƐĨͿ͍ dŚĞƌĞŝƐŶŽ͞ďĞĂƵƚLJĐŽŶƚĞƐƚ͟ƚLJƉĞĐŽŵƉĞƚŝƚŝŽŶ͘ůůŽĐĂƚŝŽŶƐĂƌĞĂǁĂƌĚĞĚŽŶĂĨŝƌƐƚͲĐŽŵĞ͕ĨŝƌƐƚͲ ƐĞƌǀĞĚďĂƐŝƐǁŚĞŶƚŚĞƉƌŽũĞĐƚƉůĂŶŶĞƌĚĞĞŵƐĂƉƌŽũĞĐƚĂƉƉůŝĐĂƚŝŽŶĐŽŵƉůĞƚĞ͘ ĞǀĞůŽƉŵĞŶƚŝŶƚŚĞ^ŚĂĚĞůĂŶĚƐƵƐŝŶĞƐƐWĂƌŬŽŶƚŚĞĞĂƐƚĞƌŶĞĚŐĞŽĨƚŚĞŝƚLJ͕ĂŶĚƐƉĞĐŝĨŝĐ ƚLJƉĞƐŽĨŽŵŵƵŶŝƚLJ&ĂĐŝůŝƚŝĞƐ͕ĂƌĞĞdžĞŵƉƚĨƌŽŵƚŚĞ'ƌŽǁƚŚDĂŶĂŐĞŵĞŶƚWƌŽŐƌĂŵ;ƐĞĞWŽůŝĐLJ ƵůůĞƚŝŶ EŽ͘ WͲϬϰϭ ĨŽƌ ĐŽŵƉůĞƚĞ ůŝƐƚͿ͘ ĚĚŝƚŝŽŶĂůůLJ͕ ƚŚĞ WůĂŶŶŝŶŐ DĂŶĂŐĞƌ ĐĂŶ ŐƌĂŶƚ ĞdžĞŵƉƚŝŽŶƐ ƚŽ ůĂƌŐĞƌ͕ ŵŽƌĞ ĐŽŵƉůĞdž ƉƌŽũĞĐƚƐ ƐŽ ƚŚĂƚ ƚŚĞŝƌ ĂůůŽĐĂƚŝŽŶ ĐĂŶ ďĞ ƌĞƐĞƌǀĞĚ ĨŽƌ ůŽŶŐĞƌƚŚĂŶƚŚĞϭϮͲŵŽŶƚŚƉĞƌŝŽĚĨŽƌǁŚŝĐŚĂůůŽĐĂƚŝŽŶƐĂƌĞƵƐƵĂůůLJƌĞƐĞƌǀĞĚ͘ July 29, 2014 | Page 5 •ŽĞƐƚŚĞƐLJƐƚĞŵĞdžƚƌĂĐƚĐŽŵŵƵŶŝƚLJďĞŶĞĨŝƚƐĨƌŽŵĚĞǀĞůŽƉĞƌƐ͍tŚĂƚƚLJƉĞƐŽĨďĞŶĞĨŝƚƐ͍,Žǁ ƐƵĐĐĞƐƐĨƵůŚĂƐƚŚŝƐďĞĞŶ͍ ŽŵŵƵŶŝƚLJ&ĂĐŝůŝƚŝĞƐĂƌĞĞdžĞŵƉƚ͘ůƐŽ͕ƚŚĞĨŽůůŽǁŝŶŐƚLJƉĞƐŽĨĚǁĞůůŝŶŐƵŶŝƚƐĂƌĞĞdžĞŵƉƚ͗ ƒ/ŶĐŽŵĞͲƌĞƐƚƌŝĐƚĞĚĚǁĞůůŝŶŐƵŶŝƚƐĨŽƌDŽĚĞƌĂƚĞ͕>Žǁ͕ŽƌsĞƌLJ>Žǁ/ŶĐŽŵĞ,ŽƵƐĞŚŽůĚƐ ĂƐĚĞĨŝŶĞĚďLJWĂƌƚϭ͕ƌƚŝĐůĞϯŽĨƚŚĞŽŶŝŶŐKƌĚŝŶĂŶĐĞ ƒ^ĞĐŽŶĚ&ĂŵŝůLJZĞƐŝĚĞŶƚŝĂůhŶŝƚƐƉĞƌŵŝƚƚĞĚƉƵƌƐƵĂŶƚƚŽWĂƌƚϯ͕ƌƚŝĐůĞϱŽĨƚŚĞŽŶŝŶŐ KƌĚŝŶĂŶĐĞ ƒ/ŶĐůƵƐŝŽŶĂƌLJhŶŝƚƐƌĞƋƵŝƌĞĚƉƵƌƐƵĂŶƚƚŽWĂƌƚϯ͕ƌƚŝĐůĞϵŽĨƚŚĞŽŶŝŶŐKƌĚŝŶĂŶĐĞ ƒĞŶƐŝƚLJŽŶƵƐƵŶŝƚƐƉĞƌŵŝƚƚĞĚƉƵƌƐƵĂŶƚƚŽWĂƌƚϯ͕ƌƚŝĐůĞϭϬŽĨƚŚĞŽŶŝŶŐKƌĚŝŶĂŶĐĞ •,ŽǁĨůĞdžŝďůĞŝƐƚŚĞƐLJƐƚĞŵ͍;,ŽǁͿĚŽĞƐŝƚĂůůŽǁĨŽƌĞdžĐĞƉƚŝŽŶƐĂŶĚͬŽƌĐƌĞĂƚŝǀŝƚLJ͍ zĞƐ͕ƚŚĞƐLJƐƚĞŵĚŽĞƐŚĂǀĞĂĨĂƌĚĞŐƌĞĞŽĨĨůĞdžŝďŝůŝƚLJďƵŝůƚŝŶʹŶŽƚŝŶƚŚĞĐĂƉ͕ďƵƚƌĂƚŚĞƌŝŶŚŽǁ ŝƚŝƐĐĂůĐƵůĂƚĞĚĂŶĚŝŵƉůĞŵĞŶƚĞĚ͘dŚĂƚŝƚŝƐĐĂůĐƵůĂƚĞĚŝŶϮͲLJĞĂƌŝŶĐƌĞŵĞŶƚƐŽĨƵƉƚŽϭϱϬ͕ϬϬϬƐĨ ŽĨĨĞƌƐƐŽŵĞĨůĞdžŝďŝůŝƚLJ͖ƚŚĂƚƵŶƵƐĞĚĂůůŽĐĂƚŝŽŶŝƐĐĂƌƌŝĞĚŽǀĞƌƚŽƚŚĞŶĞdžƚĐLJĐůĞĂůƐŽŽĨĨĞƌƐ ĨůĞdžŝďŝůŝƚLJ͖ ƚŚĂƚ ĐĞƌƚĂŝŶ ĐŽŵŵƵŶŝƚLJ ĨĂĐŝůŝƚŝĞƐ ĂŶĚ ƚŚĞ ^ŚĂĚĞůĂŶĚƐ ƵƐŝŶĞƐƐ WĂƌŬ ĂƌĞ ĞdžĞŵƉƚ ƉƌŽǀŝĚĞƐĨůĞdžŝďŝůŝƚLJƚŽŽ͘&ƵƌƚŚĞƌ͕ƚŚĞƐLJƐƚĞŵĂůůŽǁƐƉƌŽũĞĐƚĂƉƉůŝĐĂŶƚƐƚŽƌĞƐĞƌǀĞĂůůŽĐĂƚŝŽŶƐĂƐ ƐŽŽŶĂƐƚŚĞŝƌĂƉƉůŝĐĂƚŝŽŶŝƐĚĞĞŵĞĚĐŽŵƉůĞƚĞĂŶĚƚŽŚĂǀĞŝƚŚĞůĚĨŽƌƵƉƚŽŽŶĞLJĞĂƌ͕ǁŝƚŚƚŚĞ ƉŽƐƐŝďŝůŝƚLJŽĨŚĂǀŝŶŐƚŚĂƚƌĞƐĞƌǀĂƚŝŽŶĞdžƚĞŶĚĞĚĂƚƚŚĞĚŝƐĐƌĞƚŝŽŶŽĨƚŚĞWůĂŶŶŝŶŐDĂŶĂŐĞƌĨŽƌ ůĂƌŐĞƌ͕ŵŽƌĞĐŽŵƉůĞdžƉƌŽũĞĐƚƐ͘ •tŚĂƚŝƐƚŚĞƐƚĂĨĨďƵƌĚĞŶŽĨĂĚŵŝŶŝƐƚĞƌŝŶŐƚŚĞƐLJƐƚĞŵ͍ dƌĂĐŬŝŶŐŝƐĚŽŶĞŽŶĂƋƵĂƌƚĞƌůLJďĂƐŝƐ͕ƌĞƋƵŝƌŝŶŐĂƉƉƌŽdžŝŵĂƚĞůLJϰͲϱŚŽƵƌƐŽĨƐƚĂĨĨƚŝŵĞƉĞƌ ƋƵĂƌƚĞƌ͘  KŶĞ ^ĞŶŝŽƌ WůĂŶŶĞƌ ŝƐ ĐŚĂƌŐĞĚ ǁŝƚŚ ĐŽŵƉŝůŝŶŐ ĂůůŽĐĂƚŝŽŶƐ ĂŶĚ ƚƌĂĐŬŝŶŐ ƚŚĞ ƚŽƚĂů ǀĞƌƐƵƐƚŚĞĐĂƉ͘/ŶƌĞĐĞŶƚLJĞĂƌƐ͕ƚŚĞůĞǀĞůŽĨƐƚĂĨĨĞĨĨŽƌƚƌĞƋƵŝƌĞĚƚŽĐŽŵƉůĞƚĞƚŚĞƚĂƐŬŚĂƐŶŽƚ ďĞĞŶĞdžĐĞƐƐŝǀĞ͖ŚŽǁĞǀĞƌ͕tĂůŶƵƚƌĞĞŬŚĂƐŶŽƚĐŽŵĞĐůŽƐĞŝƚŝƚƐĐĂƉƌĞĐĞŶƚůLJ͘dƌĂĐŬŝŶŐǁŽƵůĚ ďĞŵŽƌĞĐŽŵƉůĞdžĂŶĚŵŽƌĞƚŝŵĞͲĐŽŶƐƵŵŝŶŐŝĨƚŚĞŝƚLJǁĞƌĞƌƵŶŶŝŶŐƵƉĂŐĂŝŶƐƚƚŚĞĐĂƉĞĂĐŚ LJĞĂƌ͘ •ŽĞƐ ƚŚĞ ƐLJƐƚĞŵ ŐĞƚ ƚŚĞ ƌĞƐƵůƚƐ ƚŚĞ ĐŽŵŵƵŶŝƚLJ ĚĞƐŝƌĞƐ͍ ƌĞ ƚŚĞƌĞ ĂŶLJ ƵŶŝŶƚĞŶĚĞĚ ĐŽŶƐĞƋƵĞŶĐĞƐ͍ dŚĞ ƉƵƌƉŽƐĞ ŽĨ tĂůŶƵƚ ƌĞĞŬΖƐ 'ƌŽǁƚŚ DĂŶĂŐĞŵĞŶƚ WƌŽŐƌĂŵ ŝƐ ƚŽ ŵĞƚĞƌ ƚŚĞ ƉĂĐĞ ĐŽŵŵĞƌĐŝĂůŐƌŽǁƚŚ͕ƌĂƚŚĞƌƚŚĂŶƚŽĐĂƉŝƚĂƚĂƐƉĞĐŝĨŝĐůĞǀĞů͘/ŶƚŚĞůĂƚĞϭϵϵϬƐ͕ƚŚĞƉƌŽŐƌĂŵ ǁĂƐƚĞƐƚĞĚǁŚĞŶƚŚĞŝƚLJƌĂŶƵƉĂŐĂŝŶƐƚƚŚĞĐĂƉŽŶŵŽƌĞƚŚĂŶŽŶĞŽĐĐĂƐŝŽŶ͕ĂŶĚŝƚǁĂƐũƵĚŐĞĚ ĂƐƵĐĐĞƐƐďĞĐĂƵƐĞŝƚĂĐŚŝĞǀĞƚŚĞĂŝŵŽĨŵĞƚĞƌŝŶŐƚŚĞƉĂĐĞŽĨŐƌŽǁƚŚ ǁŝƚŚŽƵƚ ƐĂĐƌŝĨŝĐŝŶŐ ƉƌŽũĞĐƚƐ ĚĞĞŵĞĚ ďĞŶĞĨŝĐŝĂů ƚŽ ƚŚĞ ĐŽŵŵƵŶŝƚLJ͘  dŚĞ ŽƌŝŐŝŶĂů 'ƌŽǁƚŚ >ŝŵŝƚĂƚŝŽŶ WƌŽŐƌĂŵ July 29, 2014 | Page 6 ;ƉƌĞĐƵƌƐŽƌ ƚŽ ƚŚĞ 'ƌŽǁƚŚ ŵĂŶĂŐĞŵĞŶƚ WƌŽŐƌĂŵͿ ŝŶĐůƵĚĞĚ Ă ƐĂĨĞƚLJǀĂůǀĞ ǁŚĞƌĞďLJ ŝƚ ǁĂƐ ƉŽƐƐŝďůĞͲͲǁŚĞƌĞĐĞƌƚĂŝŶĐŽŶĚŝƚŝŽŶƐǁĞƌĞŵĞƚͲͲƚŽďŽƌƌŽǁĂŚĞĂĚĨƌŽŵĨƵƚƵƌĞĂůůŽĐĂƚŝŽŶƐŝŶ ŽƌĚĞƌƚŽĂůůŽǁĨŽƌƚŚĞƌŝŐŚƚƉƌŽũĞĐƚĂƚƚŚĞƌŝŐŚƚƚŝŵĞ͘ŽƌƌŽǁŝŶŐĂŚĞĂĚƌĞƋƵŝƌĞĚĂƐƉĞĐŝĂů ŽƵŶĐŝůƌĞƐŽůƵƚŝŽŶĂŶĚǁĂƐĚŽŶĞŽŶůLJŽŶĐĞŝŶĂďŽƵƚϮϬϬϭ͘^ƵďƐĞƋƵĞŶƚůLJ͕ƚŚĞƉƌŽŐƌĂŵǁĂƐ ƐƚƌĞĂŵůŝŶĞĚ͕ƌĞŶĂŵĞĚ'ƌŽǁƚŚDĂŶĂŐĞŵĞŶƚWƌŽŐƌĂŵ͕ĂŶĚŝŶĐŽƌƉŽƌĂƚĞĚŝŶƚŽƚŚĞ'ĞŶĞƌĂůWůĂŶ ǁŚĞŶƚŚĂƚĚŽĐƵŵĞŶƚǁĂƐůĂƐƚƵƉĚĂƚĞĚŝŶϮϬϬϲ͘^ŝŶĐĞƚŚĞŶƚŚĞŝƚLJŚĂƐŶŽƚĐŽŵĞŶĞĂƌŝƚƐ ĂŶŶƵĂůĐĂƉĂŶĚƚŚĞƉƌŽŐƌĂŵǁŝůůŶŽƚďĞƌĞŶĞǁĞĚǁŚĞŶŝƚƐƵŶƐĞƚƐŝŶϮϬϭϱ͘  Strategies Addressing Non-residential Development Only Cupertino Cupertino, like Palo Alto, is a city that caps the amount of growth that may occur in certain areas. The City’s current General Plan controls the area and density of commercial, office, and hotel uses built in the city through development allocations in terms of square feet (commercial and office) or rooms (hotel).3 Currently, allocations are geographically assigned in certain neighborhoods, commercial and employment centers, so that private development fulfills City goals and priorities, and reduces adverse impacts to the environment. The City allocates development potential on a project-by-project basis to applicants for net new office and commercial square footage and hotel rooms. As a result of several recent approvals of projects, including Apple Campus 2, a large amount of the current office, commercial and hotel development allocation has been granted, leaving an inadequate pool to allocate to additional development in the city. The City Council expressed concern that future development projects, which would benefit retail sales and employment growth in the city, would not have sufficient available development allocation necessary to move forward through the 2020 Horizon year of the current General Plan. Accordingly, in the summer of 2012, the City Council directed staff to evaluate ways to replenish citywide office, commercial, and hotel development allocation to ensure the City’s economic needs and goals are met. That effort is currently underway as the City has drafted a General Plan Amendment to increase the allocations for all development types and has published a Draft EIR analyzing the impacts of the increased development allowances. (See http://www.cupertinogpa.org for more information.) 3 City Of Cupertino, General Plan Amendment, Housing Element Update, And Associated Rezoning Draft EIR, June 2014. Pages 3-7 and 3-8. Available online at http://www.cupertinogpa.org/documents/view/180 July 29, 2014 | Page 7 •Does the system include an overall cap on jobs/square feet? If so, how is that set? Changed? Enforced? Development allocation caps the amount of commercial, office, and retail space, hotel rooms, and residential units. Housing and mixed use development allocation is determined based on certain commercial, office and industrial sites, consistent with long-term City revenue projections.4 Neighborhood residential units are allocated through the building permit process unless subdivision or planned unit development applications are required. Overall, development activity should be controlled so that private development fulfills City goals and priorities. •Does the system include an annual limit on approvals? What is it? How is it set and changed? No annual limit. Development allocation is determined on a case-by-case basis taking into consideration such as community benefits, fiscal benefits, and traffic. •Does the system include a competitive point system pitting projects against each other? Any categories of project exempted (e.g. certain type of industry, projects under 10k sf)? On a case-by-case basis, the City may allocate development potential to private developments based on the community benefits the project would provide.5 Allocations may be adjusted to ensure the City’s economic and goals are met. Citywide development potential is calculated by summing the development potential from each of the City’s areas. Individual properties are assigned base development potential, but most property owners will need to apply for additional allocations to develop their properties. oStrategy 3 Major Companies. Prioritize expansion of office space for existing major companies in Cupertino. Retain a pool of 150,000 square feet to be drawn down by companies with Cupertino sales offices and corporate headquarters. New office development must demonstrate that the development positively contributes to the fiscal well-being of the City. oStrategy 4 Flexible Allocations. Allow flexibility among the allocations assigned to each geographical area. Allocations may be redistributed from one geographical area to another if necessary and if no significant environmental impacts, particularly traffic, are identified. oStrategy 5 Allocation Review. Review allocations of the development priorities periodically to ensure that the development priorities meet City needs and goals. 4 City of Cupertino 2000-2020 General Plan, Land Use/Community Design, page 2-15. 5 City of Cupertino 2000-2020 General Plan, Land Use/Community Design, page 2-16. July 29, 2014 | Page 8 oStrategy 6 Development Agreements. Unused development potential committed in development agreements may be reallocated following the expiration of each development agreement, after a public hearing. •Does the system extract community benefits from developers? What types of benefits? How successful has this been? General Plan Policy 2-23.A states that, at the discretion of the City Council, and as indicated in certain land use policies, the City Council may approve heights different from the maximum base height standard in gateways and nodes, if a project includes a retail component and provides community benefits. The community benefits that can be proposed by developers and agreed upon by the City include: oTransportation and Mobility Improvements ƒFunding towards and/or create new or expanded bicycle and pedestrian facilities above those required by the project to mitigate project impacts ƒContributions toward facilities, transit improvements and/or amenities including adaptive traffic signal management systems, above those required by the project to mitigate project impacts ƒContributions toward ongoing operation and maintenance of community shuttles (to move people around to key commercial centers) above that which might be required by the project to mitigate project impacts. oSchools and Education ƒFunding to the City towards facilities and/or operations benefitting the school district, above that required by the project to mitigate project impacts ƒPublic education facilities within a project ƒTeacher housing ƒContributions toward tax revenue generators specifically for education oAffordable Housing above and beyond Below Market Rate (BMR) requirements ƒAffordable housing within a project ƒLand to build an affordable housing project ƒFunding to build, buy or renovate an affordable housing project oPublic Art and Cultural Facilities ƒFunding toward and/or construction of a new community senior, teen, or youth facility ƒFunding toward and/or construction of a community gathering space (e.g. conference space or cultural center) or a museum oParks and Open Space July 29, 2014 | Page 9 ƒFunding towards new or expanded publicly accessible but privately maintained parkland ƒNew park and/or open space with a project (including rooftop parks open to the public •How flexible is the system? (How) does it allow for exceptions and/or creativity? Policies/strategies in the General Plan 2020 allow for flexibility so that development allocations can be redistributed from one geographical region to another in order to meet economic goals and community benefit. •What is the staff burden of administering the system? We did not receive a response from Cupertino staff. •Does the system get the results the community desires? Are there any unintended consequences? Unintended consequences largely result in allocations in some land use categories being depleted sooner rather than later by one company or industry (e.g. Apple 2 Campus depleted nearly all office allocation), requiring replenishment or reallocation of development from one area to another earlier than expected. Mountain View In its recently-adopted General Plan (July 2012), Mountain View calls out eight “Planning Areas,” identified based on extensive community input as areas where Mountain View might significantly change over the life of the General Plan. Planning Areas are distinct from the rest of the City, which is not expected to change significantly. The General Plan identifies new uses and new land use designations within the Planning Areas, including Mixed Use designations, and increases the allowed intensity of both non-residential and residential development above what was allowed in the 1992 General Plan. Most Planning Areas are located along El Camino Real and/or near BRT or light rail stops. Most of the change in the city is focused in the North Bayshore area and along transit corridors in the East Whisman, El Camino Real and San Antonio areas. Currently, the City is preparing Precise Plans and accompanying Supplemental EIRs for each of the Planning Areas. The Precise Plans will add an additional layer of regulation to the General Plan and Zoning Ordinance and will establish the specific amount of development that can occur in each Planning Area without additional environmental review. Although development is not restricted only to Planning Areas, the General Plan includes an overarching strategy “to support Mountain View’s sustainability” by “focusing future growth around July 29, 2014 | Page 10 major transportation corridors to increase transit ridership.”6 Outside of the Planning Areas, Mountain View does not limit development that is consistent with the adopted General Plan and zoning provisions. However, any project that either a) would require a General Plan or zoning amendment, or b) is inside a Planning Area that does not yet have an adopted Precise Plan, must go through the “gatekeeper” process, which the City uses to allocate available staff resources. In the gatekeeper process, the City Council considers proposals on a quarterly basis to determine whether they should be allowed to move forward. The current generations of Precise Plans are still being formulated and no drafts have been released yet, so many questions about how this system will work are not yet answered. The most recent Precise Plan adopted by City Council is the South Whisman Precise Plan (http://archive.mountainview.gov/civica/filebank/blobdload.asp?BlobID=5889), adopted in April 2009. Responses below are based on that document. •ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĂŶŽǀĞƌĂůůĐĂƉŽŶũŽďƐͬƐƋƵĂƌĞĨĞĞƚ͍/ĨƐŽ͕ŚŽǁŝƐƚŚĂƚƐĞƚ͍ŚĂŶŐĞĚ͍ ŶĨŽƌĐĞĚ͍ The South Whisman Precise Plan limits growth in this 38-acre area to 1,120 units and 37,000 square feet of retail. It specifies that the retail will be built in two phases, a first phase of at least 17,000 feet and a second phase of 20,000 feet. •ŽĞƐ ƚŚĞ ƐLJƐƚĞŵ ŝŶĐůƵĚĞ ĂŶ ĂŶŶƵĂů ůŝŵŝƚ ŽŶ ĂƉƉƌŽǀĂůƐ͍ tŚĂƚ ŝƐ ŝƚ͍,ŽǁŝƐŝƚƐĞƚĂŶĚ ĐŚĂŶŐĞĚ͍ There is currently no instrument to regulate the pace of development that occurs consistent with a Precise Plan. •ŽĞƐƚŚĞƐLJƐƚĞŵŝŶĐůƵĚĞĂĐŽŵƉĞƚŝƚŝǀĞƉŽŝŶƚƐLJƐƚĞŵƉŝƚƚŝŶŐƉƌŽũĞĐƚƐĂŐĂŝŶƐƚĞĂĐŚŽƚŚĞƌ͍ŶLJ ĐĂƚĞŐŽƌŝĞƐŽĨƉƌŽũĞĐƚĞdžĞŵƉƚĞĚ;Ğ͘Ő͘ĐĞƌƚĂŝŶƚLJƉĞŽĨŝŶĚƵƐƚƌLJ͕ƉƌŽũĞĐƚƐƵŶĚĞƌϭϬŬƐĨͿ͍ No. The Precise Plan provides very specific guidance on amount of development, types of uses, density, phasing, design, etc. Within those parameters projects are approved on a first come, first served basis. In the case of the South Whisman Precise Plan, the Precise Plan requires that a Master Plan be submitted for all development within the Plan area, followed by or concurrent with the submittal of a Planned Community (PC) Permit for the first phase of development. 6 City of Mountain View, Mountain View 2030 General Plan, Chapter 2. Available online at http://www.mountainview.gov/civicax/filebank/blobdload.aspx?blobid=10702. July 29, 2014 | Page 11 •ŽĞƐƚŚĞƐLJƐƚĞŵĞdžƚƌĂĐƚĐŽŵŵƵŶŝƚLJďĞŶĞĨŝƚƐĨƌŽŵĚĞǀĞůŽƉĞƌƐ͍tŚĂƚƚLJƉĞƐŽĨďĞŶĞĨŝƚƐ͍,Žǁ ƐƵĐĐĞƐƐĨƵůŚĂƐƚŚŝƐďĞĞŶ͍ Section 2 of the Precise Plan, Development Framework, clearly defines requirements for the specific amenities required as part of development, including street trees, gateway treatments, public and private open space, pedestrian and bike improvements, connections to the Light Rail station, and improvements to existing at-grade rail crossings. Section 3, Development Standards and Design Guidelines, includes both mandatory and advisory guidance on site planning, facades, materials, lighting, signage, open space design, etc. Development has not yet occurred under the South Whisman Precise Plan. •,ŽǁĨůĞdžŝďůĞŝƐƚŚĞƐLJƐƚĞŵ͍;,ŽǁͿĚŽĞƐŝƚĂůůŽǁĨŽƌĞdžĐĞƉƚŝŽŶƐĂŶĚͬŽƌĐƌĞĂƚŝǀŝƚLJ͍ There is a great deal of flexibility during the Precise Plan process. The City is currently completing a new set of Precise Plans to implement the updated General Plan, and the ultimate content and parameters of what a Precise Plan is and does may change as part of this new generation of plans. However, once the Precise Plan is in place, it sets relatively detailed and specific guidance on development, down to the level of detail of fenestration, building materials, signage, and lighting, as well as specific direction on how and in what order the area will develop. The adopted Precise Plan provides great certainty but does not necessarily encourage flexibility or exceptions. The process to amend an adopted Precise Plan is similar to a Specific Plan or General Plan Amendment, potentially requiring community workshops, consultant support, CEQA review, and multiple Planning Commission and City Council hearings, depending upon the nature and extent of changes. •tŚĂƚŝƐƚŚĞƐƚĂĨĨďƵƌĚĞŶŽĨĂĚŵŝŶŝƐƚĞƌŝŶŐƚŚĞƐLJƐƚĞŵ͍ WƌĞĐŝƐĞWůĂŶƐĂĚĚĂŶĂĚĚŝƚŝŽŶĂůůĂLJĞƌŽĨƌĞŐƵůĂƚŝŽŶƚŽƚŚĞ'ĞŶĞƌĂůWůĂŶĂŶĚŽŶŝŶŐKƌĚŝŶĂŶĐĞ͘ ^ƚĂĨĨ ŵƵƐƚ ŽǀĞƌƐĞĞ ƚŚĞ ƉƌĞƉĂƌĂƚŝŽŶ ĂŶĚ ĂĚŽƉƚŝŽŶ ŽĨ ŶƵŵĞƌŽƵƐ WƌĞĐŝƐĞ WůĂŶƐ ĂŶĚ ĂĐĐŽŵƉĂŶLJŝŶŐ^ƵƉƉůĞŵĞŶƚĂů/ZƐ;ĂƉƌŽĐĞƐƐƚŚĂƚĐĂŶďĞĞdžƉĞĐƚĞĚƚŽƚĂŬĞĂƚůĞĂƐƚƚǁŽLJĞĂƌƐ ĂŶĚĐŽƐƚŝŶƚŚĞΨϱϬϬ͕ϬϬϬƚŽΨϳϬϬ͕ϬϬϬƌĂŶŐĞƉĞƌƉůĂŶͿ͘&ŽůůŽǁŝŶŐƚŚĞĂĚŽƉƚŝŽŶŽĨƚŚĞWƌĞĐŝƐĞ WůĂŶ͕ƐƚĂĨĨ;ĂƐǁĞůůĂƐĂƉƉůŝĐĂŶƚƐ͕ĚĞĐŝƐŝŽŶͲŵĂŬĞƌƐ͕ĂŶĚĐŽŵŵƵŶŝƚLJŵĞŵďĞƌƐͿƚŚĞŶŶĞĞĚƚŽďĞ ĨĂŵŝůŝĂƌǁŝƚŚƚŚĞĚŽĐƵŵĞŶƚĂŶĚƌĞǀŝĞǁĂŶĚĐŽŶƐŝĚĞƌĂƉƉůŝĐĂƚŝŽŶƐŝŶƌĞĨĞƌĞŶĐĞƚŽŝƚ͘ •ŽĞƐ ƚŚĞ ƐLJƐƚĞŵ ŐĞƚ ƚŚĞ ƌĞƐƵůƚƐ ƚŚĞ ĐŽŵŵƵŶŝƚLJ ĚĞƐŝƌĞƐ͍ ƌĞ ƚŚĞƌĞ ĂŶLJ ƵŶŝŶƚĞŶĚĞĚ ĐŽŶƐĞƋƵĞŶĐĞƐ͍ ZĞƐƵůƚƐŽĨƚŚĞWƌĞĐŝƐĞWůĂŶƐŚĂǀĞǀĂƌŝĞĚ͘/ŶŐĞŶĞƌĂů͕ĚĞǀĞůŽƉŵĞŶƚŝƐůŝŬĞůLJƚŽďĞĐŽŶƐŝƐƚĞŶƚǁŝƚŚ ƚŚĞWƌĞĐŝƐĞWůĂŶŝŶƚŚĞĨŝƌƐƚĨĞǁLJĞĂƌƐĂĨƚĞƌĂĚŽƉƚŝŽŶ͕ďƵƚWƌĞĐŝƐĞWůĂŶƐĚŽŶŽƚĂůǁĂLJƐƌĞĨůĞĐƚ ĐŚĂŶŐŝŶŐĐŽŶĚŝƚŝŽŶƐŽǀĞƌƚŝŵĞ͘ŝƚLJƐƚĂĨĨŝŶĚŝĐĂƚĞĚƚŚĂƚƚŚĞƌĞƐƵůƚƐŽĨƚŚĞŽǁŶƚŽǁŶWƌĞĐŝƐĞ July 29, 2014 | Page 12 WůĂŶŚĂǀĞďĞĞŶǀĞƌLJƐƵĐĐĞƐƐĨƵů͕ĂŶĚƚŚĂƚƚŚĞWƌĞĐŝƐĞWůĂŶƉƌŽĐĞƐƐŝƐƐƵĐĐĞƐƐĨƵůŝŶĂĐŚŝĞǀŝŶŐƚŚĞ ĚĞƐŝƌĞĚŽƵƚĐŽŵĞŽĨĨŽĐƵƐĞĚŝŶƉƵƚŝŶĂŐŝǀĞŶĂƌĞĂ͘KǀĞƌĂůů͕ƚŚĞWƌĞĐŝƐĞWůĂŶƉƌŽĐĞƐƐĂŶĚƚŽŽů ŚĂƐďĞĞŶƐƵĐĐĞƐƐĨƵůĨŽƌƚŚĞŝƚLJŽĨDŽƵŶƚĂŝŶsŝĞǁ͘ Santa Monica Goal T19 in the Santa Monica Land Use and Circulation Element (LUCE) of the Santa Monica General Plan (adopted in 2010) is to “Create an integrated transportation and land use program that seeks to limit total peak period vehicle trips with a Santa Monica origin or destination to 2009 levels”. This goal is also known as the “No Net New Evening Peak Period Vehicle Trips” goal. The LUCE focuses not only on reducing vehicle trips, but also on encourage walking, bicycling and transit use, creating pedestrian- oriented neighborhoods, and reducing greenhouse gas emissions. The LUCE foresees the creation of a multi-modal transportation system and “identifies local strategies to manage trips, treating the entire City as an integrated transportation management system with aggressive requirements for trip reduction, transit enhancements, pedestrian and bike improvements, and shared parking. Transportation demand management (TDM) programs that reduce automobile travel demand and incentivize alternative modes such as carpool, vanpools, and shuttles, walking, bicycling, and shared parking are all encouraged.”7 The LUCE calls for the City to manage new trips from new development and reduce trips from existing major employers. New trips must be offset through the development of new transportation infrastructure providing alternatives to automobile travel, including public transit, bicycling, ridesharing, and walking. The LUCE also contains a list of transportation policies, projects, and programs that are necessary to accommodate projected growth with no net increase in PM peak hour vehicle trips through 2030. The LUCE identifies the establishment of fees as a tool to manage vehicle trips and increase alternative transportation options. The LUCE states that “New projects will be required to minimize the trips they generate and contribute fees to mitigate their new trips.” However, the LUCE also states that “To achieve the No Net New Trips goal, ĚĞǀĞůŽƉĞƌƐĐĂŶŶŽƚďĞĞdžƉĞĐƚĞĚƚŽŚĂǀĞĞǀĞƌLJƉƌŽũĞĐƚŐĞŶĞƌĂƚĞnjĞƌŽ ƚƌŝƉƐďLJŝƚƐĞůĨ͖͟rather, developers will pay mitigation fees that will fund capital improvement projects citywide, such that the net impact of each development project ultimately is zero. Fees will be used for improvements that benefit the City’s transportation system overall, such as additional buses to increase 7 City of Santa Monica, Transportation Impact Fee Nexus Study (Final), April 2012. Page 1-3. Available online at http://www.smgov.net/uploadedFiles/Departments/PCD/Transportation/Developers/Santa-Monica-Nexus- Study.pdf July 29, 2014 | Page 13 frequency, improved walking routes and new bike lanes.”8 The provision that the City as a whole will achieve no net new trips by 2030, but that individual projects will not be required to generate no net new trips, has created some confusion and concern among Santa Monica residents as the LUCE is implemented. Strategies Addressing Residential Development Only Pleasanton Pleasanton is another jobs-rich Bay Area city that historically capped the amount of growth. Pleasanton capped residential growth with a voter-approved growth management ordinance in 1986. Revisions in 1998 added a limit of 750 housing permits per year and an ultimate maximum cap of 29,000 homes. This cap was re-approved by voters in 2008. However, the cap prevented Pleasanton from meeting its Regional Housing Need Allocation (RHNA), and therefore from achieving a certified Housing Element. The City was sued by affordable housing advocacy organizations, in a case joined by then-Attorney General Jerry Brown, and in 2010 an Alameda County Superior Court judge ruled that the City was in violation of State statute and that the population cap was invalid. As a result of the ruling, the City was ordered to rezone adequate land to accommodate affordable housing within 120 days (not within one year, as the City had proposed) and required to halt all non-residential development immediately. The City did not appeal the ruling, but settled with the plaintiffs.9 San Luis Obispo County San Luis Obispo County utilizes a Resource Management System, enshrined in the Land Use Element of its General Plan, to monitor key infrastructure, service, and environmental indicators and prevent residential development that would exceed the County’s capacity or affect public health. The six resources addressed by the Resource Management System are: 1. Water 2. Sewage Disposal 3. Schools 4. Roads 5. Air Quality 6. Parks 8 City of Santa Monica, Land Use and Circulation Element, July 2010. Page 4.0-12. Available online at http://www.smgov.net/uploadedFiles/Departments/PCD/Plans/General-Plan/Land-Use-and-Circulation- Element.pdf 9 Fulton, William. Guide to California Planning, 4th ed., 2012. Pages 235-236. July 29, 2014 | Page 14 The County’s Planning and Building Department prepares biannual reports on the status of these resources. If resource monitoring indicates that existing development in a given area is beginning to affect a given resource, staff presents the Board of Supervisors with an advisory memo. The memo identifies the severity of the issue, from Level I (Resource capacity problem) through Level III (Resource capacity met or exceeded), and recommends a corrective action or actions. The Board of Supervisors then holds a public process to consider whether there is indeed a problem that needs to be addressed, and if so, what solutions should be implemented. The County may pursue one or more solutions, such as limiting new development; metering new development to allow additional time to solve the problem; instituting new developer fees to fund improvements to address the problem; or funding improvements with public money. 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Ŷ Ɖ Ƶ ƚ ƒ dž Ɖ ů Ă Ŷ Ă ƚ ŝ Ž Ŷ  Ž Ĩ  W ƌ Ž Ő ƌ Ă ŵ   / Z ƒ dŽ Ɖ ŝ Đ Ɛ  ƚ Ž  ď Ğ   Ž ǀ Ğ ƌ Ğ Ě  / Z ͗  d ŝ ŵ Ğ ů ŝ Ŷ Ğ ƒ ;E K W Ϳ  ŝ Ɛ Ɛ Ƶ Ğ Ě  DĂ LJ  ϯ Ϭ ͕  Ϯ Ϭ ϭ ϰ ƒ ů Ž Ɛ Ğ  Ž Ĩ  E K W  Đ Ž ŵ ŵ Ğ Ŷ ƚ  Ɖ Ğ ƌ ŝ Ž Ě ± Ő Ğ Ŷ Đ ŝ Ğ Ɛ ͗  :Ƶ Ŷ Ğ  ϯ Ϭ ± WƵ ď ů ŝ Đ ͗  Ƶ Ő Ƶ Ɛ ƚ  ϲ ƒ Ž Ŷ Ě Ƶ Đ ƚ  Ă Ŷ Ă ů LJ Ɛ ŝ Ɛ ͗  Ƶ Ő Ƶ Ɛ ƚ Ͳ  Ğ Đ Ğ ŵ ď Ğ ƌ  Ϯ Ϭ ϭ ϰ ƒ WƵ ď ů ŝ Ɛ Ś   ƌ Ă Ĩ ƚ   / Z ͗  Ŷ Ě  Ž Ĩ  Ϯ Ϭ ϭ ϰ ƒ ƌ Ă Ĩ ƚ   / Z  Ɖ Ƶ ď ů ŝ Đ  Đ Ž ŵ ŵ Ğ Ŷ ƚ  Ɖ Ğ ƌ ŝ Ž Ě ͗  ĞĂ ƌ ů LJ  Ϯ Ϭ ϭ ϱ  / Z ͗  W Ƶ ď ů ŝ Đ  / Ŷ Ɖ Ƶ ƚ EŽ ƚ ŝ Đ Ğ  Ž Ĩ  Wƌ Ğ Ɖ Ă ƌ Ă ƚ ŝ Ž Ŷ  ; E K W Ϳ ^Đ Ž Ɖ ŝ Ŷ Ő  W Ğ ƌ ŝ Ž Ě Ŷ ǀ ŝ ƌ Ž Ŷ ŵ Ğ Ŷ ƚ Ă ů  ZĞ ǀ ŝ Ğ ǁ ƌ Ă Ĩ ƚ   / Z  W Ƶ ď ů ŝ Ɛ Ś Ğ Ě WƵ ď ů ŝ Đ  Z Ğ ǀ ŝ Ğ ǁ  WĞ ƌ ŝ Ž Ě  Ĩ Ž ƌ  ƌ Ă Ĩ ƚ   / Z ZĞ Ɛ Ɖ Ž Ŷ Ɛ Ğ  ƚ Ž   Ž ŵ ŵ Ğ Ŷ ƚ Ɛ  ĂŶ Ě  & ŝ Ŷ Ă ů   / Z  Ɖ ƌ Ğ Ɖ Ă ƌ Ğ Ě Wd   Z Ğ ǀ ŝ Ğ ǁ  Ă Ŷ Ě  ZĞ Đ Ž ŵ ŵ Ğ Ŷ Ě Ă ƚ ŝ Ž Ŷ ŝ ƚ LJ   Ž Ƶ Ŷ Đ ŝ ů   Ğ ƌ ƚ ŝ Ĩ ŝ Ğ Ɛ  ƚ Ś Ğ  / Z  Ă Ŷ Ě   Ɖ Ɖ ƌ Ž ǀ Ğ Ɛ  ƚ Ś Ğ  Wů Ă Ŷ  2 S S R U W X Q L W L H V  I R U  S X E O L F  L Q S X W DĂ LJ  ϯ Ϭ Ƶ Ő ͘  ϲ Ŷ Ě  Ϯ Ϭ ϭ ϰ Ă ƌ ů LJ  Ϯ Ϭ ϭ ϱ Dŝ Ě  Ϯ Ϭ ϭ ϱ &Ă ů ů  Ϯ Ϭ ϭ ϱ >Ă ƚ Ğ  Ϯ Ϭ ϭ ϱ  tŚ Ă ƚ  ŝ Ɛ  Ă  W ƌ Ž Ő ƌ Ă ŵ   / Z ͍ Wƌ Ž ũ Ğ Đ ƚ Ͳ ů Ğ ǀ Ğ ů   / Z Wƌ Ž Ő ƌ Ă ŵ  / Z ^Ă ŵ Ğ  ů Ğ Ő Ă ů ů LJ Ͳ ƌ Ğ Ƌ Ƶ ŝ ƌ Ğ Ě  Đ Ž Ŷ ƚ Ğ Ŷ ƚ Ɛ ¾ Ž ǀ Ğ ƌ Ɛ Ă  Ɛ Ɖ Ğ Đ ŝ Ĩ ŝ Đ  Ě Ğ ǀ Ğ ů Ž Ɖ ŵ Ğ Ŷ ƚ  Ɖƌ Ž ũ Ğ Đ ƚ ¾ /Ŷ Đ ů Ƶ Ě Ğ Ɛ  Ś ŝ Ő Ś  ů Ğ ǀ Ğ ů  Ž Ĩ  Ě Ğ ƚ Ă ŝ ů  ŝŶ Đ ů Ƶ Ě ŝ Ŷ Ő  Ɛ ŝ ƚ Ğ Ͳ Ɛ Ɖ Ğ Đ ŝ Ĩ ŝ Đ  Ă Ŷ Ă ů LJ Ɛ Ğ Ɛ ¾ /Ě Ğ Ŷ ƚ ŝ Ĩ ŝ Ğ Ɛ  Ă Ŷ Ě  ŵ ŝ ƚ ŝ Ő Ă ƚ Ğ Ɛ  Ɖ ƌ Ž ũ Ğ Đ ƚ Ͳ ƐƉ Ğ Đ ŝ Ĩ ŝ Đ  Ă Ŷ Ě  Đ Ƶ ŵ Ƶ ů Ă ƚ ŝ ǀ Ğ  ŝ ŵ Ɖ Ă Đ ƚ Ɛ ¾ Ž ǀ Ğ ƌ Ɛ  Ɖ Ž ů ŝ Đ ŝ Ğ Ɛ  Ă Ŷ Ě  Ɖ ƌ Ž Ő ƌ Ă ŵ Ɛ  ƚ Ś Ă ƚ  ǁŝ ů ů  Ő Ƶ ŝ Ě Ğ  Ĩ Ƶ ƚ Ƶ ƌ Ğ  Ě Ğ ǀ Ğ ů Ž Ɖ ŵ Ğ Ŷ ƚ  Đŝ ƚ LJ ǁ ŝ Ě Ğ ¾ /Ŷ Đ ů Ƶ Ě Ğ Ɛ Ă  Ő Ğ Ŷ Ğ ƌ Ă ů ͬ Đ Ž Ŷ Đ Ğ Ɖ ƚ Ƶ Ă ů  ůĞ ǀ Ğ ů  Ž Ĩ  Ě Ğ ƚ Ă ŝ ů ͕  Ŷ Ž ƚ  Ɛ ŝ ƚ Ğ Ͳ Ɛ Ɖ Ğ Đ ŝ Ĩ ŝ Đ  ĂŶ Ă ů LJ Ɛ Ğ Ɛ ¾ /Ě Ğ Ŷ ƚ ŝ Ĩ ŝ Ğ Ɛ  Ă Ŷ Ě  ŵ ŝ ƚ ŝ Ő Ă ƚ Ğ Ɛ  Ɖ ƌ Ž Ő ƌ Ă ŵ  ĂŶ Ě  Đ Ƶ ŵ Ƶ ů Ă ƚ ŝ ǀ Ğ  ŝ ŵ Ɖ Ă Đ ƚ Ɛ  Ž Ĩ  ĚĞ ǀ Ğ ů Ž Ɖ ŵ Ğ Ŷ ƚ  Ě Ƶ ƌ ŝ Ŷ Ő  ƚ Ś Ğ  ů ŝ Ĩ Ğ  Ž Ĩ  ƚ Ś Ğ  Ɖů Ă Ŷ  / Z ͗  d Ž Ɖ ŝ Đ Ɛ ƒ Ğ Ɛ ƚ Ś Ğ ƚ ŝ Đ Ɛ ƒ ŝ ƌ  Y Ƶ Ă ů ŝ ƚ LJ ƒ ŝ Ž ů Ž Ő ŝ Đ Ă ů  Z Ğ Ɛ Ž Ƶ ƌ Đ Ğ Ɛ ƒ Ƶ ů ƚ Ƶ ƌ Ă ů ͕  , ŝ Ɛ ƚ Ž ƌ ŝ Đ Ă ů  Θ  ƌ Đ Ś Ă Ğ Ž ů Ž Ő ŝ Đ Ă ů  Z Ğ Ɛ Ž Ƶ ƌ Đ Ğ Ɛ ƒ 'Ğ Ž ů Ž Ő LJ ͕  ^ Ž ŝ ů Ɛ  Θ  ^ Ğ ŝ Ɛ ŵ ŝ Đ ŝ ƚ LJ ƒ 'ƌ Ğ Ğ Ŷ Ś Ž Ƶ Ɛ Ğ  ' Ă Ɛ   ŵ ŝ Ɛ Ɛ ŝ Ž Ŷ Ɛ ƒ ,Ă nj Ă ƌ Ě Ɛ  Θ  , Ă nj Ă ƌ Ě Ž Ƶ Ɛ  D Ă ƚ Ğ ƌ ŝ Ă ů Ɛ ƒ ,LJ Ě ƌ Ž ů Ž Ő LJ  Θ  t Ă ƚ Ğ ƌ  Y Ƶ Ă ů ŝ ƚ LJ ƒ >Ă Ŷ Ě  h Ɛ Ğ  Ă Ŷ Ě  W ů Ă Ŷ Ŷ ŝ Ŷ Ő ƒ Dŝ Ŷ Ğ ƌ Ă ů  Z Ğ Ɛ Ž Ƶ ƌ Đ Ğ Ɛ ƒ EŽ ŝ Ɛ Ğ ƒ WŽ Ɖ Ƶ ů Ă ƚ ŝ Ž Ŷ ͕  , Ž Ƶ Ɛ ŝ Ŷ Ő  Θ  ŵ Ɖ ů Ž LJ ŵ Ğ Ŷ ƚ ƒ WƵ ď ů ŝ Đ  ^ Ğ ƌ ǀ ŝ Đ Ğ Ɛ ƒ WĂ ƌ Ŭ Ɛ  Θ  Z Ğ Đ ƌ Ğ Ă ƚ ŝ Ž Ŷ ƒ dƌ Ă Ŷ Ɛ Ɖ Ž ƌ ƚ Ă ƚ ŝ Ž Ŷ  Θ  d ƌ Ă Ĩ Ĩ ŝ Đ ƒ hƚ ŝ ů ŝ ƚ ŝ Ğ Ɛ  Θ  ^ Ğ ƌ ǀ ŝ Đ Ğ  ^LJ Ɛ ƚ Ğ ŵ Ɛ  Ž ŵ ŵ Ƶ Ŷ ŝ ƚ LJ   Ŷ Ő Ă Ő Ğ ŵ Ğ Ŷ ƚ  Ă Ŷ Ě  / Z   ů ƚ Ğ ƌ Ŷ Ă ƚ ŝ ǀ Ğ Ɛ  ͞^ Đ Ž Ɖ ŝ Ŷ Ő ͟  D Ğ Ğ ƚ ŝ Ŷ Ő Ɛ ƒ ηϭ ͗   ƌ ŝ ƚ ŝ Đ Ă ů  / Ɛ Ɛ Ƶ Ğ Ɛ ͕  D Ă LJ  Ϯ ϵ ͕   ǀ Ğ Ŷ ŝ Ě Ă Ɛ ƒ ηϮ ͗  ' ƌ Ž ǁ ƚ Ś  D Ă Ŷ Ă Ő Ğ ŵ Ğ Ŷ ƚ ͕  : Ƶ Ŷ Ğ  ϭ Ϭ ͕  W Ă ů Ž   ů ƚ Ž  , ŝ Ő Ś  ^ Đ Ś Ž Ž ů ƒ ηϯ ͗   ů ƚ Ğ ƌ Ŷ Ă ƚ ŝ ǀ Ğ  & Ƶ ƚ Ƶ ƌ Ğ Ɛ ͕  : Ƶ Ŷ Ğ  Ϯ ϰ ͕   ů Ŭ Ɛ  > Ž Ě Ő Ğ  ηϭ ͗   ƌ ŝ ƚ ŝ Đ Ă ů  / Ɛ Ɛ Ƶ Ğ Ɛ ƒ Kǀ Ğ ƌ ǀ ŝ Ğ ǁ  Ž Ĩ   Ž ŵ Ɖ  W ů Ă Ŷ  Ɖ ƌ Ž Đ Ğ Ɛ Ɛ ƒ /Ě Ğ Ŷ ƚ ŝ Ĩ LJ  ^ ƚ ƌ Ğ Ŷ Ő ƚ Ś Ɛ ͕  t Ğ Ă Ŭ Ŷ Ğ Ɛ Ɛ Ğ Ɛ ͕  KƉ Ɖ Ž ƌ ƚ Ƶ Ŷ ŝ ƚ ŝ Ğ Ɛ  Ă Ŷ Ě  d Ś ƌ Ğ Ă ƚ Ɛ  ;^ t K d Ϳ ƒ ď Ž Ƶ ƚ  ϰ Ϭ  Ă ƚ ƚ Ğ Ŷ Ě Ğ Ğ Ɛ ƒ Ž ŵ ŵ Ž Ŷ  ƚ Ś Ğ ŵ Ğ Ɛ ͗  Ƌ Ƶ Ă ů ŝ ƚ LJ  Ž Ĩ  ů ŝ Ĩ Ğ ͕  ƌĞ ů Ă ƚ ŝ Ž Ŷ Ɛ Ś ŝ Ɖ  ǁ ŝ ƚ Ś  ^ ƚ Ă Ŷ Ĩ Ž ƌ Ě ͕  ƚ ƌ Ă Ĩ Ĩ ŝ Đ  ĐŽ Ŷ Ő Ğ Ɛ ƚ ŝ Ž Ŷ ͕  Ɖ Ƶ ď ů ŝ Đ  ƚ ƌ Ƶ Ɛ ƚ ͕  Đ ŝ ƚ ŝ nj Ğ Ŷ  ĞŶ Ő Ă Ő Ğ ŵ Ğ Ŷ ƚ ͕  Ś ŝ Ő Ś  Đ Ž Ɛ ƚ  Ž Ĩ  ŚŽ Ƶ Ɛ ŝ Ŷ Ő ͕  , ŝ Ő Ś  ^ Ɖ Ğ Ğ Ě  ZĂ ŝ ů ͬ  Ă ů ƚ ƌ Ă ŝ Ŷ   ů Ğ Đ ƚ ƌ ŝ Ĩ ŝ Đ Ă ƚ ŝ Ž Ŷ  KŶ ů ŝ Ŷ Ğ   Ŷ Ő Ă Ő Ğ ŵ Ğ Ŷ ƚ WĂ ƌ ƚ ŝ Đ ŝ Ɖ Ă ƚ Ğ  Ž Ŷ ů ŝ Ŷ Ğ  ƚŚ ƌ Ž Ƶ Ő Ś Ž Ƶ ƚ  ƚ Ś Ğ  Ɖ ƌ Ž Đ Ğ Ɛ Ɛ  ʹ ǁ Ś Ğ Ŷ Ğ ǀ Ğ ƌ ͕  ǁ Ś Ğ ƌ Ğ ǀ Ğ ƌ ͕  ĂŶ Ě  Ś Ž ǁ Ğ ǀ Ğ ƌ  LJ Ž Ƶ  ǁ Ă Ŷ ƚ ͘  Đ Đ Ğ Ɛ Ɛ ŝ ď ů Ğ  ǀ ŝ Ă  W  ͕  Ɛŵ Ă ƌ ƚ Ɖ Ś Ž Ŷ Ğ ͕  Ž ƌ  ƚ Ă ď ů Ğ ƚ ͘  -. -~ ~. 1l ,~ ~ .fl ._,  ηϮ ͗  ' ƌ Ž ǁ ƚ Ś  D Ă Ŷ Ă Ő Ğ ŵ Ğ Ŷ ƚ ƒ Wƌ Ğ Ɛ Ğ Ŷ ƚ Ă ƚ ŝ Ž Ŷ  Ž Ŷ  Ɖ Ž Ɖ Ƶ ů Ă ƚ ŝ Ž Ŷ 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O~;(Palo Alto DESIGN March 17 • April -May 2014 • Baseline Data Report • Website re-launch • Orientation Document • NOP released COMPREHENSIVE PLAN UPDATE PLANNING PROCESS TIMELINE Mays August4 Mid-2015 • May -August 2014 • Our Palo Alto • Community Meetings • Online Engagement • Alternative Futures • • Early 2015 Dec -July 2015 • Public review • EIR workshop • Online Engagement • Out to the community campaign • WE ARE HERE: • • Convene Leadership Group Aug -Nov 2015 • Public Review • Incorporation of comments • Public Hearings • Conclude Alternative Futures Discussion • Disseminate Baseline Data • Begin EIR analysis Late-2015 • City Council Review 2016 • on line tool  'Ž Ă ů Ɛ  Ĩ Ž ƌ  d Ž Ŷ ŝ Ő Ś ƚ ƒ Đ Đ Ğ Ɖ ƚ  Ɖ Ƶ ď ů ŝ Đ  ƚ Ğ Ɛ ƚ ŝ ŵ Ž Ŷ LJ  Ž Ŷ  Ğ Ŷ ǀ ŝ ƌ Ž Ŷ ŵ Ğ Ŷ ƚ Ă ů  ŝƐ Ɛ Ƶ Ğ Ɛ  Ă Ŷ Ě  Ă ů ƚ Ğ ƌ Ŷ Ă ƚ ŝ ǀ Ğ Ɛ ƒ Wƌ Ž ǀ ŝ Ě Ğ   Ž Ƶ Ŷ Đ ŝ ů  Ĩ Ğ Ğ Ě ď Ă Đ Ŭ  ƚ Ž  Ɛ ƚ Ă Ĩ Ĩ  Ă Ŷ Ě  ĐŽ Ŷ Ɛ Ƶ ů ƚ Ă Ŷ ƚ  ƚ Ğ Ă ŵ  ŝ Ŷ Đ ů Ƶ Ě ŝ Ŷ Ő   Ž Ƶ Ŷ Đ ŝ ů  Ě ŝ ƌ Ğ Đ ƚ ŝ Ž Ŷ  ƚ Ž ͗ ± ďĞ Ő ŝ Ŷ  ƚ Ś Ğ   / Z  Ă Ŷ Ă ů LJ Ɛ ŝ Ɛ ͖  Ž ƌ  ± Ɖƌ Ž ǀ ŝ Ě Ğ  Ɛ Ɖ Ğ Đ ŝ Ĩ ŝ Đ  Ă Ě Ě ŝ ƚ ŝ Ž Ŷ Ă ů  ŝ Ŷ Ĩ Ž ƌ ŵ Ă ƚ ŝ Ž Ŷ  Ĩ Ž ƌ  ƌĞ Ĩ ŝ Ŷ Ğ ŵ Ğ Ŷ ƚ  Ž Ĩ  ƚ Ś Ğ  Ă ů ƚ Ğ ƌ Ŷ Ă ƚ ŝ ǀ Ğ  Ɛ Đ Ğ Ŷ Ă ƌ ŝ Ž Ɛ  KƵ ƌ  W Ă ů Ž   ů ƚ Ž  Ϯ Ϭ ϯ Ϭ ͗ / Z  ^ Đ Ž Ɖ ŝ Ŷ Ő  , Ğ Ă ƌ ŝ Ŷ Ő ŝ ƚ LJ   Ž Ƶ Ŷ Đ ŝ ů  D Ğ Ğ ƚ ŝ Ŷ Ő  Ͳ Ƶ Ő Ƶ Ɛ ƚ  ϰ  Θ  ϲ ͕  Ϯ Ϭ ϭ ϰ City of Palo Alto (ID # 5033) City Council Staff Report Report Type: Study Session Meeting Date: 9/8/2014 Summary Title: Planning Workplan and Zoning Issues Title: Review of Menu of Current Traffic, Parking & Zoning Initiatives Presently Underway & Options for Potential Changes to the Commercial Portions of the Zoning Code and Zoning Map. From: City Manager Lead Department: Planning and Community Environment Recommendation This is a Council study session and is intended to allow for Council discussion only. No action is requested. Executive Summary On Wednesday, August 6, the City Council requested a study session where the Council could brainstorm about potential changes to the commercial portions of the Zoning Code and Zoning Map with the idea that some of these changes could potentially be “fast tracked” ahead of other ongoing initiatives. (Action Minutes are included as Attachment A.) The Council also requested a list or “menu” of studies underway with respect to traffic, parking, and zoning, baseline data related to the Comprehensive Plan Update, and suggestions regarding the Comprehensive Plan Update process. The list of ongoing initiatives is provided as Attachment B and represents only a portion of the Department’s overall work program, which also includes application reviews (for building permits and planning entitlements), and ongoing programs such as code enforcement, housing, safe routes to schools, community block grant, etc. Staff plans to return to the City Council for further discussion of the Comprehensive Plan Update baseline data and planning process at a later date. Baseline data has been made available on the City’s website in draft form in anticipation of this future discussion. It’s expected that tonight’s study session will lead to a future agenda item where staff can provide an estimate of the time and resources necessary to implement suggested zoning changes and the Council can take action to proceed with the initiatives they identify as priorities. Those familiar with Palo Alto’s planning process will realize that even relatively City of Palo Alto Page 1 Attachment C simple initiatives can be controversial and time consuming. Also, discretionary decisions require review under the California Environmental Quality Act (CEQA). Background On Wednesday, August 6, the City Council discussed ongoing efforts to update the City’s Comprehensive Plan, including preparation of a program-level Environmental Impact Report (EIR), and requested that staff return to the Council as soon as possible with (i) a list of studies underway with respect to traffic, parking, and zoning for review, (ii) suggestions on a revised breadth and scope of the Comprehensive Plan Update, and (iii) baseline data regarding environmental issues to be considered in the EIR. The Council also requested (iv) a study session where the Council could consider potential changes to the commercial portions of the Zoning Code and Zoning Map that warrant additional study. The context of the Council’s discussion on August 6th and tonight’s study session includes a long-running effort to update the City’s Comprehensive Plan, and significant community concerns about development activity, traffic, and parking. The City Council embraced the “Our Palo Alto” initiative earlier this year as a way to initiate a community conversation about these issues, focussing on ideas, actions, and a design for the City’s future. The City’s Comprehensive Plan, Embracing the New Century, Palo Alto 1998-2010 Comprehensive Plan, was adopted in the late 1990s and sets goals and policies related to land use and development issues, including transportation, housing, natural resource, community services, and safety. Every local jurisdiction in California is required to have a “general plan” like this, and the State recommends these plans be updated on a regular basis. Palo Alto recognized the need to update its plan in 2006 and began the process in earnest in 2008, when a consultant was retained to work with staff and the City’s Planning and Transportation Commission (PTC). The PTC’s draft work product was provided to the City Council in early 2014, at which time staff proposed a process that would complete the plan and an associated Environmental Impact Report (EIR) in parallel. This approach recognized that the Comprehensive Plan Update largely carried over the key principles of protection of residential neighborhoods and open space contained in the prior plan while focusing on two earlier identified growth areas – California Avenue and East Meadow Circle. The EIR process can also be an effective tool for comparing various growth level scenarios. EIR preparation itself takes approximately 18 months, so staff recommended that this effort commence immediatley with “scoping” and the identification of possible alternatives for analysis in the EIR that could then be used to inform proposed revisions and additions to the Comprehensive Plan. As noted above, the Council requested a pause in this process on August 6th to permit consideration of potential changes to the City’s zoning code and zoning map for commercial areas. The Comprensive Plan and zoning are directly linked because the zoning map and zoning City of Palo Alto Page 2 effectively implement the Comprehensive Plan. The Comprehensive Plan is a policy document that identifies desired land uses and intensities via a Land Use and Circulation Map and the land use designations defined on pp. L-10 through L-13 of the Comprehensive Plan. Commercial land use designations include: Neighborhood Commercial, Regional/Community Commercial, Service Commercial, Mixed Use, Commercial Hotel, Reserarch/Office Park, and Light Industrial. (See Attachment C.) The City’s zoning ordinance and zoning map are regulatory tools, rather than policy documents, and implement the Comprehensive Plan land use designations by establishing specific uses, densities, and development standards for every area of the City. Thus zoning districts and standards are more specific than Comprehensive Plan land use designations, and each Comprhensive Plan land use designation may be implemented via more than one zoning district. The City’s commercial zoning districts and standards are set forth in Chapters 18.16, 18.18. and 18.20 of the Municipal Code, which are included as Attachment D. Traffic, parking, development, and rising housing costs have raised increasing community concerns throughout the region since the economic downturn ended. The City Council recognized these concerns earlier this year by placing a “time out” on one particularly controversial type of project (Planned Community or PC projects), and by directing staff to undertake a variety of intitiaitives aimed at reducing traffic and parking demand and addressing intrusions of employee parking into residental neighborhoods. These initiatives are listed in Attachment B, along with other transportation and zoning-related projects that are currently underway. The status of each effort is indicated, along with any future City Council actions that are anticipated. Timeline & Resource Impact As noted above, this study session will lead to a future agenda item where staff can provide an estimate of the time and resources necessary to implement suggested zoning changes and the Council can take action to proceed with the initiatives they identify as priorities. Policy Implications This is a Council Study Session, and no specific change in policy is being considered. However, the City Council requested this opportunity to “brainstorm” about potential changes to the City’s commercial zoning regulations, and to consider prioritization of ongoing projects to address traffic, parking, and zoning changes. Environmental Review This is a Council Study Session, and no action will be taken requiring review pursuant to the California Environmental Quality Act (CEQA). Attachments:  Attachment A: Action Minutes of the City Council Hearing of August 6, 2014 (PDF) City of Palo Alto Page 3  Attachment B: Work Plan of Traffic, Parking, & Zoning Initiatives Presently Underway (DOCX)  Attachment C: Commercial Land Use Designations: Neighborhood Commercial, Regional/Community Commercial, Service Commercial, Mixed Use, Commercial Hotel, Reserarch/Office Park, and Light Industrial (PDF)  Attachment D: Chapters 18.16, 18.18 and 18.20 of the PAMC (PDF) City of Palo Alto Page 4 Attachment A CITY OF PALO ALTO CITY COUNCIL ACTION MINUTES Special Meeting August 6, 2014 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:00 P.M. Present: Berman, Burt, Holman, Klein, Price, Scharff, Schmid, Shepherd Absent: Kniss ACTION MINUTES MOTION: Council Member Scharff moved, seconded by Council Member Schmid to direct Staff to: 1) return to Council with revised scoping scenarios for the Comprehensive Plan to include revised data input from Council, and 2) return with a plan on parking, traffic, density issues, and move these things forward in a reasonably short period of time. MOTION WITHDRAWN BY THE MAKER MOTION: Council Member Price moved, seconded by Mayor Shepherd to direct Staff to: 1) proceed with the preparation of the Environmental Impact Report (EIR) analysis, taking into consideration input received during the scoping period, and based on the four conceptual alternatives, with specified modifications and refinements that have been requested by the Council, and 2) return to Council with the data on the historic growth of the City within 30 days. SUBSTITUTE MOTION: Council Member Klein moved, seconded by Council Member Burt to continue this item. Direct Staff to return as soon as possible with; 1) a menu and present a work plan for studies underway with respect to traffic, parking, and zoning for Council review; 2) suggestions on a revised breadth and scope of the Comprehensive Plan update; 3) baseline data regarding environmental issues to be considered in the Environmental Impact Report (EIR); and 4) Staff to schedule a study session for Council to consider options for potential changes to the commercial portions of the Zoning Code and Zoning Map. SUBSTITUTE MOTION PASSED: 7-1 Price no, Kniss absent ADJOURNMENT: The meeting was adjourned at 11:16 P.M. Page 2 of 2 City Council Meeting Action: 08/06/14 Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 1 Palo Alto Department of Planning & Community Environment Work Plan of Traffic, Parking, & Zoning Initiatives Presently Underway1 September 2014 Traffic & Parking-Related Initiatives 1. Residential Preferential Parking (RPP) In January 2014, the City Council directed staff to bring forward an ordinance that would establish a process for neighborhoods to apply for and develop residential permit parking programs. The City Council also directed staff to work with stakeholders to develop a permit parking program specific to one priority district, with the intention of beginning implementation in January 2015. Status: Staff and community stakeholders have been working steadily on an RPP program for the Downtown area, and are currently seeking feedback from residents and businesses. The PTC will review a draft of the Citywide ordinance and the Downtown program in November, and the City Council is scheduled to consider adoption of the program on December 1, 2014. 2. Parking Garage Technologies & Parking Management Strategies On August 18, 2014, staff provided the City Council with an update on parking garage technologies and parking management strategies designed to increase occupancy of existing parking garages. Status: As discussed at that meeting, staff is developing requests for proposals (RFPs) to design and implement improved signage and branding for all of the garages, an improved parking website with online permit sales, and enhanced enforcement. Based on Council’s direction, staff will also be soliciting bids on a range of possible access and revenue controls for the garages (e.g. gates and pay stations), integrated with parking guidance systems to help motorists find available parking via changeable message sign at garage entrances and mobile phone Aps. The City’s goal is to implement all of these things as soon as possible, and the City Council requested that staff prepare an implementation schedule, which is forthcoming. Complementing these initiatives, staff will also be reviewing parking permit policies in the garages and lots Downtown, including the length of time visitors are allowed to park, re-evaluating the effectiveness of the existing “color zone” system that regulates how long people can park in the commercial core, and considering metering on-street parking. 3. New Parking Garages In February 2014, the City Council directed staff to recommend three potential locations for new parking structures downtown, and to solicit interest from private developers interested in public-private partnerships to increase the supply of parking by developing City-owned 1 This list of initiatives represents only a portion of the Department’s overall work program and does not include applications being processed by the department or ongoing programs overseen by Department staff (e.g. Code Enforcement, Community Block Grant, etc.). Attachment B Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 2 parking lots. Status: Staff issued a “Request for Information” in May and has been working with the City’s financial advisor to evaluate responses with the goal of returning to the Council with recommendations about the location of new garage(s) and the most effective delivery method in the fall. This item is now scheduled for October 20, 2014. 4. Satellite Parking On August 11, the City Council authorized a consultant contract for design and environmental analysis of a parking area on Embarcadero Road, east of Faber Place. The design will also include landscaping and pedestrian/bicycle improvements. If the lot is constructed, it would provide approximately 132 commuter parking spaces, and would be linked to downtown via a free shuttle. Status: Design and environmental review are expected to take six months. 5. Valet-Assist Parking The City initiated a trial valet parking program for permit holders in Lot R earlier this year. The program makes use of two valet attendants who direct motorists to park in drive aisles once the garage becomes full. The program can accommodate up to 50 additional vehicles in the garage and could be expanded to other garages downtown as a way to increase supplies until new garages can be built. Status: The current three -year contract with the operator allows for expansion to other City garages if desired. Staff will bring forward a recommendation on expansion at the time of RPP implementation. 6. Shuttle Expansion The City is planning to expand its free shuttle program as a way to reduce traffic and parking demand. Historically, the shuttle program has included two routes, the Crosstown and Embarcadero routes, and 75% of the Embarcadero route has been funded by Caltrain. The first phase of the City’s expansion program launched July 1, with a new East Palo Alto route, linking University Avenue with the Woodland Ranch neighborhood in East Palo Alto, and is funded by the City of East Palo Alto. Phase two of the expansion program will either increase frequencies on existing routes, add new routes, or a combination of both. Status: The City’s consultants, Fehr & Peers, are completing an analysis of phase two shuttle expansion options, and have recommended staff undertake a survey of existing/likely riders. When both are complete, staff will present a recommendation to the City Council. This item is now scheduled for October 27, 2017. 7. Transportation Management Association Formation The City Council has directed staff to take the first steps towards creation of a non-profit Transportation Management Association (TMA) made up of major employers in downtown. Once established, the TMA would use marketing and incentives to encourage employees to shift from driving alone to carpools and transit, with the goal of reducing single occupancy vehicle travel by 30% in three years. Status: On August 11, the City Council approved a contract with a group of consultants who will launch the business outreach phase of Palo Alto’s first TMA. Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 3 8. Car Share and Ride Share Programs Earlier this year, the City Council directed staff to establish a car share program downtown, giving residents and employees the option of using a shared vehicle on an as needed basis, rather than having to own their own vehicle or bring their vehicle to work if they have an errand that requires a car during the day. The City Council also expressed interest in rideshare applications, whereby residents and employees can arrange to share rides in private vehicles as an alternative to driving alone. Status: On August 4, the City Council awarded a contract to Zipcar, and starting in August and September, the carshare company will station cars at ten parking spaces downtown. The company will also offer a reduced initiation fee for potential new Zipcar members. Earlier this year, the City also started a pilot with TwoGo, SAP’s ridesharing app, to see whether the mobile platform would encourage riders and drivers heading to Downtown businesses would be able to use technology to find each other. The program has had limited success, but may prove more effective as part of the TMA’s coordinated program over the next few years. (See above.) 9. Transportation Impact Assessment (TIA) Guidelines Update & Travel Demand Model Update. City staff is working with its on-call traffic consultant, TJKM, to update procedures for analyzing traffic impacts associated with proposed projects. This effort coincides with an effort by the VTA to update their guidelines, which the City must follow, and the State’s efforts to identify an alternative metric to intersection Level of Service for use in reviews required by the California Environmental Quality Act. The City is also working with an updated Traffic Demand Model, based on VTA’s regional model, that will yield traffic volumes for use in the Comprehensive Plan Update EIR and individual project reviews. Status: Palo Alto cannot complete the update to its local guidelines until the VTA and the State have completed their ongoing efforts, which is expected later this year. The Comprehensive Plan EIR will use the updated Travel Demand Model and a range of alternative metrics in addition to intersection Level of Service. 10. Traffic Signal Upgrades. The city’s traffic signal system currently includes 100 signalized intersections with fiber optic cables interconnecting most of the traffic signals. The upgrade project includes replacing aged traffic signal controllers with modern equipment that will introduce improved traffic signal coordination capabilities, new bicycle/pedestrian features not available in the existing system, and upgrade communications infrastructure. The project includes new adaptive traffic signals along Sand Hill Road between London Plan Way and Oak Creek Drive, including Welch Road & Pasteur Drive, which are being funded through the SUMC Traffic Impact Fee program. Status: In anticipation of the project, staff started upgrading communications infrastructure in the Spring with new fiber optic cables replacing broken copper cables through the Downtown core, new traffic signal cabinet upgrades, and upgrades to the Traffic Operations Center at the Municipal Service Center. The new cabinets allow for new fiber optic transceivers to be installed at all traffic signal intersections, public art projects to paint the new cabinets are taking place in the Fall. A contract for implementation of the signal system upgrade is scheduled for consideration by the City Council this Fall and the project is scheduled for completion by Summer 2015. Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 4 11. Caltrain Advanced Preemption Improvements. Caltrain is finalizing advanced rail preemption upgrades along the Caltrain corridor that will introduce advanced preemption opportunities at the Alma/Churchill and Alma/Meadow intersections. The advanced preemption time will be used to alert traffic that may be stopped over the railroad tracks in advance of railroad gate arm warnings helping to improve the motorist experience at the tracks. The additional advanced preemption is anticipated to be modest at each intersection: 4 seconds at Churchill and 5 seconds at East Meadow. Status: Caltrain and City staff will be working in September to finalize equipment upgrades and test the new rail operations. Residents may experience delays during late-evenings when upgrades are anticipated to take place. Outreach notices will be distributed as soon as they are available by Caltrain. 12. Bike Plan Implementation Projects The City has 22 active bicycle boulevard projects, implementing key segments of the City’s adopted bicycle plan. In the Spring, staff completed existing conditions data collection and conducted community outreach for 22 active bicycle boulevard projects. The City’s consultant teams spent the summer analyzing data and preparing draft concept plan line drawings for each of the projects. Early implementation activities include traffic calming, roadway markings, and signage along the Matadero Bicycle Boulevard between Laguna Avenue and El Camino Real, all of which are scheduled to be complete by the end of September. Additional information on the Bicycle Boulevard program is available online at www.cityofpaloalto.org/bike. Status: A new Technical Advisory will convene late in August to help shape the format and presentation of data for the community later this fall. PABAC is scheduled to meet twice in the month of September to help provide additional technical review of the concepts for October-November community outreach. 13. Embarcadero Roadway Traffic Operations Improvements. The City is undertaking improvements to Embarcadero Roadway between El Camino Real and the Caltrain overcrossing. The initial phase includes traffic signal modifications aimed at improving coordination between the PALY-Town & Country and PALY Pedestrian Crossing traffic signals, roadway markings improvements, and PALY Driveway improvements to support improved egress movements. The later phase will take a broader look at this segment of Embarcadero Road, and will involve coordination with agency partners at Caltrans, Stanford University, and Palo Alto Unified School District for roadway capacity improvements that involve right-of-way impacts. Status: near term improvements can be bid-out and completed by Spring 2015. Only the design and consultation phase of longer-term improvements is currently scheduled or funded. 14. Safe Routes to School Commute Improvements Over the past two years, a VTA grant supported the development of Walk and Roll Maps of Suggested Routes to School for each of the 17 Palo Alto Unified School District campuses. In addition, this effort identified short- and long-term recommendations to Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 5 improve the suggested routes. Status: Over the 2013-14 year, the City completed 48 intersection and spot improvements along school commute routes. Implementation of the remaining recommendations continues in the 2014-15 year. * * * Planning & Zoning Related Initiatives 15. Housing Element Update Under State law, the City must update the housing chapter or “element” of its Comprehensive Plan for the period 2015-2023 and obtain State certification by the end of January 2015. The Housing Element identifies housing sites, policies, and programs related to housing and is required to address a host of State requirements. Status: The State’s Department of Housing and Community Development (HCD) is currently reviewing a draft of the Housing Element Update, which does not propose to re-zone any new sites for housing. The draft will have to be revised, adopted, and re-submitted to HCD by the end of the year to meet the deadline. There are significant risks and penalties if the deadline is not met, although there is a 120-day contingency period. The Council is scheduled to consider revisions and adoption in November 2014 based on recommendations from the Planning & Transportation Commission, the Housing Community Panel, and the Regional Housing Mandate Committee. 16. Comprehensive Plan Update The City has been working to update its general plan, Embracing the New Century, Palo Alto 1998-2010 Comprehensive Plan, for many years. A requirement of State law, the Plan sets goals and policies related to land use and development issues, including transportation, housing, natural resource, community services, and safety. As the “constitution” of the City, the Comprehensive Plan forms the policy basis for zoning regulations, which must be consisent with it. The State recommends these plans be updated on a regular basis. Status: Palo Alto recognized the need to update its plan in 2006 and began the process in earnest in 2008 when a consultant was retained to work with staff and the City’s Planning and Transportation Commission (PTC). The PTC’s draft work product was provided to the City Council in early 2014, at which time staff proposed a process that would complete the plan and an associated Environmental Impact Report (EIR) in parallel. EIR preparation itself takes approximately 18 months, so staff recommended that this effort commence immediately with “scoping” and the identification of possible alternatives for analysis in the EIR that could then be used to inform proposed revisions and additions to the Comprehensive Plan. On August 6, the City Council requested a pause in this process to permit consideration of potential changes to the City’s zoning code and zoning map for commercial areas. Pursuant to Council direction, staff will be returning to Council in October for discussion of baseline data regarding environmental issues to be considered in the EIR (now available on the City’s website) as well as suggestions on a revised breadth and scope of the Comprehensive Plan update. 17. Downtown Cap Study Comprehensive Plan Program L-8 limits “new” non-residential development in downtown to 350,000 square feet, or 10% more than existed in May 1986, and calls for a re-evaluation of Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 6 this limit when development reaches 235,000 square feet. This re-evaluation is currently underway, and was envisioned in two phases: a first phase of data collection and analysis, and a second phase of policy development. Status: Staff and consultants are nearing the end of their work on four phase one studies, although one of the studies -- the business survey -- has not yielded definitive data on employment densities (i.e. number of employees per square foot), suggesting that a full census of businesses rather than a survey will be needed. Staff hopes to accomplish the policy development phase of the Downtown Cap Study in conjunction with the Comprehensive Plan update process. 18. Fry’s Precise Plan When the City Council reviewed the draft California Area Concept Plan earlier this year, they also authorized staff to apply for a planning grant to fund preparation of a precise plan for the Fry’s site, possibly including adjacent parcels. The City Council also made it clear that the City’s acceptance of the grant would be contingent on agreement on a scope of work that preserved local control regarding the future of this site. Status: The VTA has agreed to fund the City’s grant application and is currently going through a procurement process to select a planning consultant. Concurrently, staff is working on a draft scope of work for presentation to the Council and – once approved -- for use by the selected planning consultant. 19. Build-To-Line Revisions On June 2, 2014, the City Council deferred consideration of an ordinance that would increase setbacks along El Camino Real for consideration in the Comprehensive Plan Update process, and instead directed staff to prepare an ordinance focused on changes to the “Built To Line” standard in the City’s zoning ordinance that requires a percentage of any new building along El Camino and other thoroughfares to be built to the setback line. Status: A draft ordinance was presented to the PTC on July 30th and an updated draft (two versions) is scheduled for review by the Architectural Review Board (ARB) on September 4th Following ARB input, the PTC will reconsider the draft ordinance and make a recommendation to the City Council. 20. CPI Ordinance In April 2012, the City Council requested a risk assessment related to the Communication and Power Industries, Inc. site at 607-811 Hansen Way in the Stanford Research Park, and instructed staff to recommend zoning amendments to address plating shops and facilities using similar hazardous materials without appropriate separation from residential areas. Status: After considerable delay getting started and a much longer planning process than originally envisioned, a draft risk assessment was disseminated earlier this year, and a supplement is scheduled for dissemination after Labor Day, with an analysis of zoning issues. The City Council is scheduled to review the materials, receive public comment, and provide further direction to staff on October 6th. 21. Housing Nexus Study & Impact Fee Revisions The City is in the process of updating all of the impact fees that are charged to new development. Housing impact fees are being examined in a separate, in-depth analysis in the form of a housing nexus study, which will also allow the City to update its BMR/ Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 7 inclusionary zoning ordinance. The City has joined a collaboration of other jurisdictions in San Mateo County to complete the study. Status: The draft nexus study should be ready for internal review in the next month, and a final version will be presented to the Regional Housing Mandate Committee and the City Council with a fee recommendation immediately after certification of the City’s Housing Element Update by HCD. 22. Planned Community Zoning Reform. On February 3, 2014, the City Council deferred consideration of additional Planned Community (PC) rezoning proposals, and directed staff to return with an analysis of potential reforms and alternatives to this process whereby applicants have provided “public benefits” in exchange for rezoning to Planned Community. The Planned Community zoning district allows uses, densities, and other site-specific development standards that would not be allowed under the original zoning district. Status: The Planning and Transportation Commission held study sessions on August 13 and 27, and staff is currently soliciting public input prior to a study session with the City Council tentatively scheduled for October 6. 23. Professorville Design Guidelines Following the review of 405 Lincoln Ave demolition request on October 25, 2010, the City Council directed staff to return to Council with an outline of a process for timely review of proposals regarding demolitions of Contributing Structures in the Professorville Historic District. Staff reviewed the key issues related to the Council’s request and returned to Council on March 14, 2011, when there was general agreement on the process and scope of the effort, which includes developing a written process for review of any future proposed demolitions of Contributing Structure in Professorville, requiring early review of design of both additions and new structures in the Professorville Historic District by the HRB, and developing design guidelines including compatibility criteria for new construction in Professorville. Status: A design guidelines committee was convened in September2011, and public meetings were held in 2012 and 2013. In December 2013, the HRB reviewed the draft Professorville guidelines prepared by the committee, whose recommendation was to incorporate these guidelines into the Single Family Individual Review (IR) guidelines. Draft guidelines were then to be finalized to incorporate/address the December HRB comments, for presentation in a community meeting. Development of draft implementing ordinance(s) for Planning and Transportation Commission and Council review had not yet begun as of August 2014; implementing ordinances are necessary to allow the City to broaden the applicability and scope of the IR program. The community meeting will be held in late 2014/early 2015, and public hearings on the draft ordinance(s) would be scheduled in early 2015 to present and receive comments on the changes. To the extent that members of the community have other issues/concerns about the City’s IR program, these are likely to be discussed at the same time. 24. Other Planning & Zoning Initiatives Over the last several years, the City Council has identified a number of other planning and zoning initiative that it would like staff to undertake, and has given direction to undertake Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 8 these initiatives as part of other planning efforts, or following other planning efforts. For example:  On June 23, 2010, staff was directed to identify policies within the Comprehensive Plan that are consistent with the policies of LEED-ND and add policies if necessary (presumably as part of the Comprehensive Plan Update).  On June 23, 2010, staff was directed to develop a policy for inclusion in the Comprehensive Plan update supporting preparation of a South El Camino Area Concept Plan at a later date, that restricts rezoning for residential intensification unless/until that Concept Plan is approved.  On June 23, 2010, staff was directed to develop a policy for preparation of a concept plan for the Stanford Shopping Center site, to include the exploration of housing at the site without diminishing the ability to support retail (presumably as part of the Comprehensive Plan Update).  In response to residents’ concerns about the AT&T DAS project, the City Council directed staff to retain the services of a qualified wireless communications firm to assess the City’s wireless communication needs, propose a system to meet those needs, and develop a strategy and incentives to encourage the use of this system and colocation over other alternatives. An RFP was issued in October 2012, and the selected consultant, Anthem Telecom, is currently in the early data collection phase of the work.  On November 5, 2012, staff was directed to pursue implementation of expanded ground floor retail protections (identified in a colleagues’ memo) in the course of the Downtown Cap Study.  On November 4, 2013, the City Council adopted an interim ordinance (Ordinance #5214) amending zoning ordinance Section 18.18, Downtown Commercial and Section 18.52, Parking and Loading Requirements, to eliminate certain parking exemptions in downtown. This interim ordinance will be effective until early December 2015, and the Council’s intention was to adopt it permanently concurrent with other desired code changes identified via the Downtown Cap Study.  On June 2, 2014, staff was directed to continue the review of housing sites after HCD certification of the 2015-2022 Housing Element, and to specifically consider the potential for elimination of sites on San Antonio and portions of South El Camino Real that fall outside identified “nodes” in the Comprehensive Plan Update, and their replacement with additional sites or densities in Downtown and/or the California Avenue area.  On June 2, 2014, staff was directed to pursue changes to the Floor Area Ratio (FAR) for Commercial Neighborhood sites on the City’s Housing Inventory in the course of the Comprehensive Plan Update. Summary of Ongoing Traffic, Parking & Zoning Initiatives For Discussion September 8, 2014 Page 9  On June 2, 2014, staff was directed to prepare revisions to the zoning ordinance to explicitly incorporate more of the South El Camino Design Guidelines as development standards after the Comprehensive Plan Update. to 90 persons per acre. Density should be on the lower end of the scale next to single family residential areas. Densities higher than what is permitted by zoning may be al-lowed where measurable community benefits will be derived, services and facili-ties are available, and the net effect will be compatible with the overall Compre-hensive Plan. Village Residential: Allows residential dwellings that are designed to contribute to the har- mony and pedestrian orientation of a street or neighborhood. Housing types include single family houses on small lots, second units, cottage clusters, courtyard housing, duplexes, fourplexes, and small apartment buildings. Design standards will be prepared for each housing type to ensure that development successfully contributes to the street and neigh- borhood and minimizes potential negative impacts. Net densities will range up to 20 units per acre. Transit-oriented Residential: Allows higher density residential dwellings in the University Avenue/Downtown and California Avenue commercial centers within a walkable distance, approximately 2,000 feet, of the City's two multi-modal transit stations. The land use cat- egory is intended to generate residential densities that support substantial use of public transportation and especially the use of Caltrain. Design standards will be prepared to ensure that development successfully contributes to the street and minimizes potential negative impacts. Individual project performance standards will be developed, including parking, to ensure that a significant portion of the residents will use alternative modes of transportation. Net density will range up to 50 units per acre, with minimum densities to be considered during development of new City zoning regulations. Commercial Neighborhood Commercial: Includes shopping centers with off-street parking or a cluster of streetfront stores that serve the immediate neighborhood. Examples include Alma Plaza, Charleston Center, Edgewood Center, and Midtown. Typical uses include supermarkets, bakeries, drugstores, variety stores, barber shops, restaurants, self-service laundries, dry cleaners, and hardware stores. In some locations, residential and mixed use projects may also locate in this category. Non-residential floor area ratios will range up to 0.4. Regional/Community Commercial: Larger shopping centers and districts that have wider variety goods and services than the neighborhood shopping areas. They rely on larger trade areas and include such uses as department stores, bookstores, furniture stores, toy stores, apparel shops, restaurants, theaters, and non-retail services such as offices and banks. Examples include Stanford Shopping Center, Town and Country Village, and Uni- versity Avenue/Downtown. Non-residential floor area ratios range from 0.35 to 2. Service Commercial: Facilities providing citywide and regional services and relying on cus- tomers arriving by car. These uses do not necessarily benefit from being in high volume pedestrian areas such as shopping centers or Downtown. Typical uses include auto ser- vices and dealerships, motels, lumberyards, appliance stores, and restaurants, including fast service types. In almost all cases, these uses require good automobile and service access so that customers can safely load and unload without impeding traffic. In some locations, residential and mixed use projects may be appropriate in this land use category. Examples of Service Commercial areas include San Antonio Road, El Camino Real, and Embarcadero Road northeast of the Bayshore Freeway. Non-residential floor area ratios will range up to 0.4. L-13 Attachment C Embracing the New Century L-14 Palo Alto Comprehensive Plan Mixed Use: This category includes Live/Work, Retail/Office, Residential/Retail and Residen- tial/Office development. Its purpose is to increase the types of spaces available for living and working to encourage a mix of compatible uses in certain areas, and to encourage the upgrading of certain areas with buildings designed to provide a high quality pedestrian-oriented street environment. Mixed Use may include permitted activities mixed within the same building or within separate buildings on the same site or on nearby sites. Live/Work refers to one or more individuals living in the same building where they earn their livelihood, usually in professional or light industrial activities. Retail/Office, Resi- dential/Retail, and Residential/Office provide other variations to Mixed Use with Retail typically on the ground floor and Residential on upper floors. Design standards will be developed to ensure that development is compatible and contributes to the character of the street and neighborhood. Floor area ratios will range up to 1.15, although Residential/ Retail and Residential/Office development located along transit corridors or near multi-modal centers will range up to 2.0 FAR with up to 3.0 FAR possible in areas resis- tant to revitalization. The FAR above 1.15 will be used for residential purposes. Commercial Hotel: This category allows facilities for use by temporary overnight occupants on a transient basis, such as hotels and motels, with associated conference centers and simi- lar uses. Restaurants and other eating facilities, meeting rooms, small retail shops, per- sonal services, and other services ancillary to the hotel are also allowed. This category can be applied in combination with another land use category. Floor area ratio will range up to 1.5 for the hotel portion of the site. Research/Office Park: Office, research, and manufacturing establishments whose operations are buffered from adjacent residential uses. Stanford Research Park is an example. Other uses that may be included are educational institutions and child care facilities. Compat- ible commercial service uses such as banks and restaurants, and residential or mixed uses that would benefit from the proximity to employment centers, will also be allowed. Addi- tional uses, including retail services, restaurants, commercial recreation, churches, and private clubs may also be located in Research/Office Park areas, but only if they are found to be compatible with the surrounding area through the conditional use permit process. Maximum allowable floor area ratio ranges from 0.3 to 0.5, depending on site conditions. Light Industrial: Wholesale and storage warehouses and the manufacturing, processing, repair- ing, and packaging of goods. Emission of fumes, noise, smoke, or other pollutants is strictly controlled. Examples include portions of the area south of Oregon Avenue between El Camino Real and Alma Street that historically have included these land uses, and the San Antonio Road industrial area. Compatible residential and mixed use projects may also be located in this category. Floor area ratio will range up to 0.5. Institutional School District Lands: Properties owned or leased by public school districts and used for educational, recreational, or other non-commercial, non-industrial purposes. Floor area ratio may not exceed 1.0. Major Institution/Special Facilities: Institutional, academic, governmental, and community service uses and lands that are either publicly owned or operated as non-profit organiza- tions. Examples are hospitals and City facilities. Attachment D 18.16.020 Applicable Regulations oriented shopping areas, and which generally.require automotive access for customer /. convenien.ce, servicing of vehicles or equipment, loading or unloading, or parking of commercial service vehides. (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) 18.16.020 Applicable Regulations (a) Applicable Chapters The specific regulations of this chapter and the additional regulations and procedures established by other relevant chapters of the Zoning Code ·shall apply to the CN, CS, and CC districts, and the subdistrict designated as CC(2), as showri on the city's Zoning Map. The term "abutting residential zones.," where used iri this chapter, includes the RI, R2, RMD, RM-15, RM-30, RM-40, or residential Planned Community (PC) districts, unless otherwise specifically noted. (b) Applicable Combining Districts The combining districts applicable to the CN, CS, CC and CC(2) districts shall indude, but shall not be limited to, the following ~istricts: (1) The r~tail shopping (R) combining district regulations, as specified in Chapter 18.30(A), shall apply to the area of the CN, CS, and CC districts designated as "R" combining district as shown on the city's Zoning Map. (2) The pedestrian shopping (P) combining district regulations, as specified in Chapter 18.30(B), shall apply to the area of the CN, CS, CC and CC(2) districts designated "P'' combining district as shown on the City's Zoning Map. {Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) 18.16.030 Definitions For the purposes of this section, the following tenns are defined: (a) "Charleston Shopping Center" is defined as all properties zoned CN and bounded by East Charleston Road, Middlefield Road, and Cubberley Community Center. (b) "Midtown Shopping District" is defined as all properties zoned CN in the vicinity of the · intersection of Colorado A venue and Middlefield Road which border Moreno A venue, Bryson A venue, Colorado A venue, and San Carlos Court, or which border Middlefield Ro~d in the area extending from Moreno A venue to San Carlos Court. '. ( c) 'Town and Country Village Shopping Center" is defined as all properties zoned CC and bounded by El Camino Real, Embarcadero Road, Encina A venue, and the Southern Pacific right-of-way. ( d) "Stanford Shopping Center" is defined as all properties zoned CC and bounded by El Camino Real, Sand Hill Road, Quarry Road, and Vineyard Lane. ( e) "Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and insurance agencies that fit the definition of a neighborhood-serving use. . (Supp. No 13 -10/1/2007) Ch. 18.16-Page 2 18.16.040 Land Uses (f) A "neighborhood serving use" is a use that primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of ·customers and clients travel, rather than the provider of the goods or services traveling off-site. (g) "Ground floor" shall mean the first floor that is above grade. (h) "Mixed use development" shall mean a combination of nonresidential and residential uses arranged on a site. The uses may be combined in a vertical configuration (within a building) or in a horizontal configuration (separate buildings). (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) 18.16.040 Land Uses The uses of land allowed by this chapter in each commercial zoning district are identified in the following tables. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may ·apply as well. {a) Commercial Zones and Land Uses Permitted and conditionally permitted land uses for each commercial zone are shown in Table 1: TABLE 1 CN, CC, CC(2) AND CS PERMITTED AND CONDITIONAL USES [P = Permitted Use • CUP = Conditional Use Permit Required] Accessory facilities and activities customarily associated with or essential to permitted uses, and operated incidental to the · principal use. Drive-in services or take-out .services associated with permitted uses (3> Tire, battery, and automotive service facilities, when operated incidental to a permitted retail service or shopping center having a gross floor area of more than.30,000 square feet. -~ Business and Trade Schools Churches and Religious Institutions Private Educational Facilities Private Clubs, Lodges, or Fraternal Organizations p CUP p CUP CUP [Coniinued on Next Page] Ch. 18.16-Page 3 p p CUP CUP CUP p p p p p p p 18.42 18.42 18.42 (Supp. No 13-10/112007) 18.16.040 Land Uses Eating and Drinking Services, excluding drive-in and take-out p p p services Retail Services, excluding liquor stores p p p CUP p p p Ambulance Services CUP CUP Animal Care, excluding boarding and kennels p p p Boarding and Kennels CUP Automobile Service Stations CUP CUP CUP 18.30,(G) Automotive Services CUP Convalescent Facilities CUP p p Day Care Centers p p p Small Family Day Care Homes p p p Large Family Day Care Homes p p p Small Adult Day Care Homes p p p Large Adult Day Care Homes CUP p p Banks and Financial Services \ CUP p(2) p(2) [Continued on Next Page} · (Supp. No 13-10/1/2007) Ch. 18.16-Page 4 / ./ 18.16.040. Land Uses General Business Services CUP p Hotels p p 18.16.060(d) Mortuaries CUP p p Neighborhood Business Services p 18.16.060(f) Personal Services p p p 18.16.060(f) Reverse Vending Machines P P P Farmer's Markets CUP CUP CUP CUP CUP CUP Temporary Parking Facilities, provided that such facilities shall remain no more than five years. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~arking as a principal use CUP CUP Transportation Tenninals CUP CUP P = Permitted Use CUP = Conditional Use Permit Required 1 (1) Residential is only permitted as part of a mixed use development, purs(Jant to the provisions of Section 18.16.060(b.), or on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions of Section 18.16.060(c). · (2) Except drive-in services. (3) So long as drive up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within 1,000 feet, and each use shall not be less than 150 feet from one another. ( 4) For properties in the CN and CS zone districts, businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00 a.m. require a conditional use permit. (b) Late Night Use and Activities The following regulations restrict businesses that operate or have associated activities at '1;ny time between the hours of 10:00 p.m. and 6:00 a.m., where such site abuts or is located within 50 feet of residentially zoned properties. (1) Such businesses.shall be operated in a manner to protect residential properties from excessive noise, odors, lighting or other nuisances from any sources during thos.e hours. (2) For properties located in the CN or CS zone districts, businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00 a.m. shall be required to obtain a conditional use pennit. The director may apply conditions of approval as are deemed necessary to assure that the operations or activities are compatible with the nearby residentially zoned property. Ch. 18.16-Page 5 (Supp. No 13 -10/1/2007) 18.16.040 Land Uses (c) CN District: Special Use Requirements in the Charleston and Midtown Shopping Centers The following regulations shall apply to areas of Charleston Center and the Midtown Shopping Center as defined in Section 18.16.030. Table 2 shows the uses permitted and conditionally permitted on the ground floor of the applicable areas of the Charleston Center and Midtown Shopping Centers. Pennitted and conditional uses specified in subsection (a) of this section shall only apply to the ground floor of the areas of the Charleston and Midtown Shopping Centers as listed in Table 2. Uses lawfully existing on January 16, 2001 may be continued as non-conforming uses but may only be replaced with uses permitted or conditionally pennitted under this subsection. TABLE2 CHARLESTON AND MIDTOWN SHOPPING CENTERS GROUND FLOOR USES P = Permitted Use• CUP= Conditional Use Permit Required • X = Prohibited Use Churches and Religious Institutions CUP CUP Private Educational Facilities CUP CUP ----· Recycling Centers CUP CUP Neighborhood-serving offices that do not exceed 2,500 square feet in floor area. Neighborhood-serving offices exceeding 2,500 square feet in floor area. Administrative office uses and general business office uses (other than neighborhood-seiving travel agencies and insurance agencies) other than those legally in existence on January 16, 2001 Medical offices not exceeding 2,500 square feet in area, professional offices, travel agencies, and insurance agencies · Utility Facilities essential to provision of utility services but excluding construction or storage yards, maintenance facilities, or corporation yards. p CUP x CUP [Continued on Next Page] (Supp. No 13 -10/112007) Ch. 18.16-Page 6 x CUP CUP 18.16.050 18.16.050 18.16.050 18.16.050 18.16.040 Eating and Drinking Services, excluding drive-in and take- out services · Retail Services, excluding liquor stores Ambulance Services Animal Care, excluding boarding and kennels Automobile Service Stations Convalescent Facilities Day Care Centers Financial Services Mortuaries Neighborhood Business Services Personal Services Reverse Vending· Machines Farmers' Markets Temporary Parking Facilities, provided that such facilities shall remain no more than five years. p p p p CUP CUP ·CUP CUP P· p CUP CUP CUP CUP p p CUP CUP CUP CUP p p p p p p CUP CUP CUP CUP P = Permitted Use CUP =Conditional Use Permit Required ( d) Charleston Shopping Center: Additional Use Restrictions Land Uses 18.30(G) X = Prohibited Use ( 1) Any office use first occupying space at the Center on or after January 16, 2001, shall obtain 3: written determination from the director of planning and community environment that it qualifies as a neighborhood serving use, as defined in this chapter, before occupying its premises. The applicant shall submit such information as the ~ector shall reasonably require in order to make the determination, and the director shall issue the determination within 30 days of receiving a complete application. Failure to· submit the required information shall be grounds for determining that a business is not neighborhood-serving. Ch. 18.16-Page 7 (Supp. No 13-10/1/2007) 18.16.050 Office Use Restrictions (2) No more than 7 ,850 square feet of total floor area at the Center shall be occupied by office uses at any time. · (3) Prior to approving a conditional use permit for neighborhood-serving offices larger than 2,500 square feet in total floor area, the city shall find that the proposed use will be neighborhood-serving, that it will be conducted in a manner that will.enhance and . strengthen the Center as a neighborhood resource, and that it will not di,minish the retail strength of the center. · (e) Midtown Shopping Center: Additional Use Restrictions (1) . An existing grouno floor office may be replaced with another office if (a) the new tenant or owner will continue the existing business or practice; or (b) a conditional use permit is issued for the new office use. (2) No conditional use permit shall be issued for any new office use on the ground floor unless, in addition to the findings required for a conditional use permit as specified in Section 18.76.010, the City finds that the proposed use will be neighborhood-serving,.·· that it will be conducted in a I,Ilanner that will enhance and strengthen the Midtown Shoppin.g District as a neighborhood r~source, and that it will not diminish the retail strength of the District. (3) For properties at 711, 719, and· 721. Colorado A venue, and 689 Bryson A v~nue; . buildings not fronting on Middlefield A venue, designed and used for office purposes, and not well suited to other uses are exempt from the provisiqns of this subsection (b ). (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) 18.16.050 Office Use Restrictions The following restrictions shall apply to offi~e uses: (a) Conversion of Ground Floor Housing and Non-Office Commercial to Office Medical, Professional, and Business offices shall not be located on the ground floor, unless . such offices either: (1) Have ~een continuously in existence in that space since March 19, 2001, and as of such date, were neither non-confonning nor in the process of being amortized pursuant to Chapter 18.30(1); .. (2) Occupy a space that was not occupied by h~using, retail services, personal services, eating and drinking services, or automotive service on March 19, 2001 or thereafter; . (3) · In the case of CS zoned properties with .site frontage on El Camino Real,. were not occupied by housing on March 19, 2001; (4) Occupy a space that was vacant on March 19, 2001; (5) Are located in new or remodeled ground floor area built on or after March .19, 2001 if the ground floor area devoted to housing, retail services, eating and drinking services," personal services, ~nd automobile services does not decrease; (Supp. No 13 ..:. 10/1/2007) Ch. 18.16-Page 8 18.16.060 Development Standards (6) Are on a site located in an area subject to a specific plan or coordinated area plan, which specifically allows for such ground floor medical, professional, and general business offices; or (7) Are located anywhere in Building E or in the rear 50 % of Building C or D of the property at the southeast comer of the intersection of Park Boulevard and California Avenue, as shown on sheet A2 of the plans titled "101 California Avenue Townhouse/Commercial/Office, Palo Alto, CA" by Crosby, Thornton, Marshall Associates, Architects, dated June 14, 1982, revised November 23, 1982, and on file with the Department of Planning and Community Environment. (b) Size Restrictions on Office Uses in the CN and CS Districts (1) In the CN district, office uses shall be governed by the following regulations: (A) Total floor area of permitted office uses on a lot shall not exceed 25 % of the lot area, provided: (i) A lot shall be permitted to have at least a total floor area of 2,500 square feet of office uses, provided the uses meet all other zoning regulations. (ii) No lot shall be permitted to have more than a total floor area of 5,000 square feet of office uses. (B) Such uses may be allowed to exceed the maximum size, subject to issuance of a conditional use permit in accord with the provisions of Chapter 18. 7 6. The maximum size for any conditional use shall be established by the director and specified in the conditional use permit for such use. (2) In the CS district, office uses shall be governed by the following regulations: (A) No lot shall be permitted to have more than a total floor area of 5,000 square feet of office uses. (B) Such uses rriay be allowed to exceed the maximum size, subject to issuance of a conditional use permit in accord with the provisions of Chapter 18. 7 6. The maximum size for any conditional use shall be established by the director and specified in the conditional use permit for such use. (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) 18.16.060 Development Standards (a) Exclusively Non-Residential Uses Table 3 specifies the development standards for exclusively non-residential uses and alterations to non-residential uses or structures in the CN, CC, CC(2) and CS districts. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18~ 16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020. Ch. 18.16 -Page 9 (Supp. No. 26 -4/2014) 18.16.060 Development Standards TABLE3 EXCLUSIVELY NON-RESIDENTIAL DEVELOPMENT STANDARDS 16'::· ~,:·-~>:/:·\':Mr{}:;:, ... :"'::.~ ... \ ·"; '"f' .c-•s,::-·· ,_.,. ;:-:;: ;·.:-h'. (:., . ····· ·.··· ... -···· .. ~~fii~~ ... ·:. ;,;; ?;';·:=·· "' !(_-:•:. ~:;'~•:.: .. -~· ,, ;:c::'.f; ~:;; t]'.~~-~ ;. .. ;-.·• ::-=:,•.'. '· :/~i, ;;~~;i·-. .,'-:;? 1:•/:. ~~Et ._.,:,:; '.•• . ..... ·::.c.'c-' •·•c;; ~:>c:::=.;--,;') .•. :::(,;, ... :."\:.· .'\;.+,::·'>'';~ . ,.,_.c,··:::,.-.,:,:;:. ~:.o. \c:; ";' ·:;: ~i i;:~< .. :-.:•." :.?-.. -~:~;(", ·· ... i ;:.:,: .. ::-> "" ; ':·?;f 5}:~~;::_ "'" .. :: ·:;~;-. \:: t''-1?.l'.-'·:·:_: . <.:: '•''I 1'1~r~. :'.) 2~~'.J .·:· :~:.·:·'<;{ ,.; .. ~-~·"' i,.;.;i/ (~: ;i'.: .·-:"." ~ .,_;(: .. f'· ·.-.· ,.,. ,,_,_ '.'..':·.·;· .,.,.:;,·;.; .. ; -~ .. , ... , " .. ..::"i:::./~ ..... .. -~ :}'' ,;~~1: '"• ·. ''" ~~L ~:=.;;-."..:i'.i:_'.:/···' "'> .. ,'5 .:·::._j, .... r· _., _·.-· '· .i<;::·'-,'..', /.:::'.: .,_,, .. ,,.._ .<c :·: ...... :·1( ';\·c,, .... -.. ·.:-:w :·;:· ·'. . ;-•• -·~ :•. "1 Minimum Site Specifications Site Area (ft2) None Required Site Width (ft) Site Depth (ft) Minimum Setbacks Front Yard (ft) 0 -10' to None 0 -10' to 0 -10' to Setback lines create an 8' Required (8) create an create an imposed by a -12' 8' -12' 8' -12' special setback effective effective effective map pursuant sidewalk sidewalk sidewalk to Chapter width (1), width (1), width (1), 20.08 of this (2), (8) (2), (8) (2), (8) code Rear Yard (ft) None required Interior Side Yard (ft) Street Side Yard (ft) 20' (2) None required Minimum Yard (ft) for lot lines 10' (2) 10' (2) 10' (2) 10' (2) abutting or opposite residential districts or residential PC districts Build-To-Lines 50 % of frontage built to setback C7) 33 % of side street built to setback m Minimum setbacks from alleys for structures other than public parking garages (ft) (3) Comer lots, from rear lot line on 8' the alley Comer lots, from side lot line on Not applicable None Not the alley applicable All lots other than comer lots 20' Maximum Site 50% None Required Coverage [Continued on Next Page] (Supp. No. 26 -4/2014) Ch. 18.16 -Page 10 / 18.16.060 Maximum Height (ft) Standard Within 150 ft. of a residential district (other than an RM-40 or PC zone) abutting or located within 50 feet of the site Maximum Floor Area Ratio (FAR) Maximum Floor Area Ratio (FAR) for Hotels Daylight Plane for lot lines abutting one or more residential zone districts other than an RM-40 or PC zone Initial Height at side or rear lot line (ft) Slope 25' and 2 stories 0.4:1 NIA -(6) -(6) Development Standards 50' 37' <4> 50' 35' 35' 35' 2.0:1 0.4:1 18.18.060(e) -(5) 2.0:1 2.0:1 18 .18. 060( d) -(6) -(6) -(6) -(6) -(6) -(6) (1) No parking or loading space, whether required or optional, shall be located in the first 10 feet adjoining the street property line of any required yard. (2) Any minimum front, street side, or interior yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. A solid wall or fence between 5 and 8 feet in height shall be constructed along any common interior lot line. (3) No setback from an alley is required for a public parking garage. ( 4) As measured to the peak of the roof or the top of a parapet; penthouses and equipment enclosures may exceed this height limit by a maximum of five feet, but shall be limited to an area equal to no more than ten percent of the site area and shall not intrude into the daylight plane. (5) See additional regulations in subsection (e) of this Section 18.16.050. ( 6) The initial height and slope shall be identical to those of the most restrictive residential zone abutting the site line in question. · (7) Twenty-five-foot driveway access permitted regardless of frontage; build-to requirement does not apply to CC district. (8) A 12-foot sidewalk width is required along El Camino Real frontage. (b) Mixed Uses Table 4 specifies the development standards for new residential mixed use developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18.16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020. Ch. 18.16 -Page 11 (Supp. No. 26 -4/2014) 18.16.060 Development Standards TABLE4 MIXED USE DEVELOPMENf STANDARDS Minimum Site Specifications Site Area ( ft2) Site Width (ft) None required Site Depth (ft) MinimUJD.Setbacks Front Yard (ft) O' -10' to None O' -10' to 0' -10' to create an Required cs> create an create an 8' -12' 8' -12' 8' -12' effective effective effective sidewalk sidewalk sidewalk width cs> width cs> width cs> Rear Yard (ft) 10' for residential portion; no requirement for commercial portion Rear Yard abutting residential zone 10' district (ft) Interior Side Yard if abutting 10' residential zone district (ft) Street Side Yard (ft) 5' Build-to-Lines 50 3 of frontage built to setback 0> 33 3 of side street built to setback <1> Permitted Setback Encroachments Balconies, awnings, porches, stairways, and similar elements may extend up to 6' into the setback. Maximum Site Coverage Landscape/Open Space Coverage (Supp. No. 26 -4/2014) Cornices, eaves, fireplaces, and similar architectural features (excluding flat or continuous walls or enclosures of interior space) may extend up to 4' into the front and rear setbacks and up to 3' into interior side setbacks 503 50% 1003 50% 35% 303 203 30% Ch. 18.16 -Page 12 Setback lines imposed bya special setback map pursuant to Chapter 20.08 of this code may apply 18.16.060 Usable Open Space Maximum Height (ft) Standard Within 150 ft. of a residential zone district (other than an RM-40 or PC zone) abutting or located within SO feet of the side Daylight Plane for lot lines abutting one or more residential zoning districts Residential Density (net)C3> Maximum Residential Floor Area Ratio (FAR) Maximum Nonresidential Floor Area Ratio (FAR) Tot.:! Mixed Use Floor Area Ratio (FAR) Minimum Mixed Use Ground Floor Commercial F AR<6> Parking Development Standards 20 sq ft per unit for 5 or fewer units <2>, 150 sq ft per unit for 6 units or more <2> 50' 37' 50' 35' 35•(5) 35•(5} Daylight plane height and slope shall be identical to those of the most restrictive residential zoning district abutting the lot line 15 or 20<9> See sub-30 30 0.5: 1<4> section (e) 0.6:1 0.6:1 below 0.4:1 2.0:1 0.4:1 0.9:1<4> 2.0:1 1.0:1 0.15:1 0.15:1 0.15:1 0.25:1(7) See Chapters 18.52 and 18.54 (Parking) 18.52, 18.54 (1) Twenty-five-foot driveway access permitted regardless of frontage; build-to requirement does not apply to CC district. (2) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space); (3) minimum private open space dimension six feet; and ( 4) minimum common open space dimension twelve feet. (3) Residential density shall be computed based upon the total site area, irrespective of the percent of the site devoted to commercial use. ( 4) For CN sites on El Camino Real, height may increase to a maximum of 40 feet and the FAR may increase to a maximum of 1.0:1 (0.5:1 for nonresidential, 0.5:1 for residential). (5) For sites abutting an RM-40 zoned residential district or a residential Planned Community (PC) district, maximum height may be increased to 50 feet. (6) Ground floor commercial uses generally include retail, personal services, hotels and eating and drinking establishments. Office uses may be included only to the extent they are permitted in ground floor regulations. (7) If located in the California A venue Parking Assessment District. (8) A 12-foot sidewalk width is required along El Camino Real frontage. (9) Residential densities up to 20 units/acre only on Housing Inventory Sites identified in the 2007-2014 Housing Element. Ch. 18.16 -Page 13 (Supp. No. 26 -4/2014) 18.16.060 Development Standards (1) Residential and nonresidential mixed use projects shall be subject to site and design review in accord with Chapter 18.30(G), except that mixed use projects with four or fewer residential units shall only require review and approval by the architectural review board. (2) Nonresidential uses that involve the use or storage of hazardous materials in excess of the exempt quantities prescribed in Title 15 of the Municipal Code, including but not limited to dry cleaning plants and auto repair, are prohibited in a mixed use development with residential uses. (3) Residential mixed use development is prohibited on any site designated with an Automobile Dealership (AD) Combining District overlay. (c) Exclusively Residential Uses Exclusively residential uses are generally prohibited in the CN, CS, CC, and CC(2) zone districts. ( d) Hotel Regulations (1) The purpose of these regulations is to allow floor area for development of hotels in excess of floor area limitations for other commercial uses, in order to provide a visitor-serving use that results in an enhanced business climate, increased transient occupancy tax and sales tax revenue, and other community and economic benefits to the city. (2) Hotels, where they are a permitted use, may develop to a maximum FAR of 2.0:1, subject to the following limitations: (A) The hotel use must generate transient occupancy tax (TOT) as provided in Chapter 2.33 of the Palo Alto Municipal Code; and (B) No room stays in excess of thirty days are permitted, except where the city council approves longer stays through an enforceable agreement with the applicant to provide for compensating revenues. (3) Hotels may include residential condominium use, subject to: (A) No more than twenty-five percent of the floor area shall be devoted to condominium use; and (B) No more than twenty-five percent of the total number of lodging units shall be devoted to condominium use; and (C) A minimum FAR of 1.0 shall be provided for the hotel/condominium building(s); and (D) Where residential condominium use is proposed, room stays for other hotel rooms shall not exceed thirty days. (Supp. No. 26 -4/2014) Ch. 18.16 -Page 14 18.16.060 Development Standards ( 4) Violation of this chapter is subject to enforcement action for stays in excess of thirty days not permitted under the provisions of this chapter, in which case each day of room stay in excess of thirty days shall constitute a separate violation and administrative penalties shall be assessed pursuant to Chapters 1.12 and 1. 16. (e) CC District Shopping Center Floor Area Ratio Regulations (1) The maximum floor area ratio for the Town and Country Village Shopping Center shall be .35 to 1; and office uses at said shopping center shall be limited to 15 % of the floor area of the shopping center existing as of August 1, 1989. Hotel use shall not be included as part of the .35 to 1 maximum floor area ratio, but shall not exceed an additional .25 to 1 floor area ratio, for a maximum site floor area ratio of . 60 to 1. (2) The maximum floor area ratio for mixed use development for the Town and Country Village Shopping Center shall be limited to . 50 to 1; provided that no more than . 35 to 1 floor area shall be nonresidential, consistent with part (1) above, and not more than .15 to 1 floor area shall be residential. (3) Stanford Shopping Center shall not be permitted to add more than 80, 000 square feet of floor area to the total amount of floor area of the shopping center existing as of June 14, 1996, 1,332,362 square feet, for a total square footage not to exceed 1,412,362. Any hotel or mixed use development for the Stanford Shopping Center shall only be included if approved as part of a Development Agreement for the site. (f) Size of Establishments in the CN District In the CN district, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 5. Such uses may be allowed to exceed the maximum establishment size, subject to issuance of a conditional use permit in accord with Section 18. 76.010. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use. TABLE 5 MAXIMUM SIZE OF ESTABLISHMENT Personal Services 2,500 Retail services, except grocery stores 15,000 Grocery stores 20,000 Eating and drinking services 5,000 Nei hborhood business services 2 500 Ch. 18.16 -Page 15 (Supp. No. 16 -8/2009) 18.16.060 Development Standards (g) Nuisances Prohibited All uses, whether permitted or conditional, shall be conducted in such a manner as to preclude nuisance, hazard, or commonly recognized offensive conditions or characteristics, including creation or emission of dust, gas, smoke, noise, fumes, odors, vibrations, particulate matter, chemical compounds, electrical disturbance, humidity, heat, cold, glare, or night illuminations. Prior to issuance of a building permit, or occupancy permit, or at any other time, the building inspector may require evidence that adequate controls, measures, or devices have been provided to ensure and protect the public interest, health, comfort, convenience, safety, and general welfare from such nuisance, hazard, or offensive condition. (h) Outdoor Sales and Storage (1) In the CN district, all permitted office and commercial activities shall be conducted within a building, except for: (A) Incidental sales and display of plant materials and garden supplies occupying no more than 500 square feet of exterior sales and display area, (B) ·Farmers' markets that have obtained a conditional use permit, and (C) Recycling centers that have obtained a conditional use permit. (2) In the CC district and in the CC(2) district, the following regulations shall apply to outdoor sales and storage: (A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for: (i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, (ii) Outdoor eating areas operated incidental to permitted eating and drinking services, (iii) Farmers' markets that have obtained a conditional use permit, and (iv) Recycling centers that have obtained a conditional use permit. (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit. (C) Exterior storage shall be prohibited, except as provided under subparagraph (A)(iv) of this subsection. (Supp. No. 16 -8/2009) Ch. 18.16 -Page 16 18.16.060 Development Standards (3) In the CS district, outdoor sales and display of merchandise, and outdoor eating areas operated incidental to permitted eating and drinking services shall be permitted subject to the following regulations: (A) Outdoor sales and display shall not occupy a total site area exceeding the gross building floor area on the site, except as authorized by a conditional use permit. (B) Areas used for outdoor sales and display of motor vehicles, boats, campers, camp trailers, trailers, trailer coaches, house cars, or similar conveyances shall meet the minimum design standards applicable to off street parking facilities with respect to paving, grading, drainage, access to public streets and alleys, safety and protective features, lighting, landscaping, and screening. (C) Exterior storage shall be prohibited, unless screened by a solid wall or fence of between 5 and 8 feet in height. (i) Recycling Storage All new development, including approved modifications that add thirty percent or more floor area to existing uses, shall provide adequate and accessible interior areas or exterior enclosures for the storage of recyclable materials in appropriate containers. The design, construction and accessibility of recycling areas and enclosures shall be subject to approval by the architectural review board, in accordance with design guidelines adopted by that board and approved by the city council pursuant to Section 18.76.020. (j) Employee Showers Employee shower facilities shall be provided for any new building constructed or for any addition to or enlargement of any existing building as specified in Table 6. TABLE 6 EMPLOYEE SHOWERS REQUIRED Medical, Professional, and General Business Offices, Financial Services, Business and Trade Schools, General Business Services Retail Services, Personal Services, and Eating and Drinking Services 0-9,999 10,000-19,999 20,000-49,999 50 000 and u 0-24,999 25,000-49,999 50,000-99,999 No requirement 2 4 No requirement 2 100 000 and u 4 (Ord. 5230 §§ 5, 6, 2014: Ord. 5035 § 2, 2009: Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) Ch. 18.16 -Page 16.1 (Supp. No. 26 -4/2014) THIS PAGE INTENTIONALLY LEFT BLANK (Supp. No. 16 -8/2009) Ch. 18.16 -Page 16.2 18.16.070 Parking and Loading 18.16.070 Parking and Loading Off-street parking and loading facilities shall be required for all pennitted and conditional uses in accord with Chapters 18.52 and 18.54 of this title. All parking and loading facilities on any site, whether required as minimums or optionally provi~ed in addition to minimum requirements, shall comply with the regulations and the design standards established by Chapters 18.52 and 18.54. (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) 18.16.080 Performance Standards In addition to the standards for development prescribed above, all development in the CN, CS, CC, and CC(2) districts shall comply with the perlorma~ce criteria o~tlined in Chapter 18.23 of the Zoning Ordinance. All mixed use development shall also comply with the provisions of Chapter 18.23 of the Zoning Ordinance. (Ord. 4923 §J (part), 2006: Ord. 4925 § 3 (part), 2006) Editor's Note The text of this chapter continues on the next page. The remainder of this page has been left blank intentionally. Ch. 18.16-Page 17 (Supp. No 13-10/1/2007) 18.16.090 Context-Based Design Criteria 18.16.090 Context-Based Design Criteria (a) Contextual and Compatibility Criteria Development in a commercial district shall be responsible to its context and compatible with adjacent development, and shall promote the establishment of pedestrian oriented design. (1) Context (A) Context as used in this section is intenc~ed to indicate relationships between the site's development to adjacent street types, surrounding land uses, and on-site or nearby natural features, such as creeks or trees. Effective transitions to these adjacent uses and features are strongly reinforced b~ Comprehensive Plan policies. (B) The word "context" should not be construed as a desire to replicate existing · surroundings, but rather to provide appropriate transitions to those surroundings. "Context" is also not specific to architectural style or design, though in some instances relationships may be reinforced by an architectural response. (2) Compatibility (A) Compatibility is achieved when the apparent scale and mass of new buildings is consistent with the pattern of achieving a pedestrian oriented design, and when new construction shares general characteristics and establishes design linkages with the overall pattern of buildings so that the visual unity of the street is maintained. · (B) Compatibility goals may be accomplished thfough various means~ including but not limited to: (i) the siting, scale, massing, and materials; (ii) . the rhythmic pattern of the street established by the general width of the buildings and the spacing between them; (iii) the pattern of roof lines and projections; (iv) the sizes, proportions, and orientations of windows, bays and doorways; (v) the location and treatment of entryways; (vi) the shadow patterns from massing and decorative features; (vii) the siting and treatment of parking; and (viii) the treatment of landscaping. (b) Context-Based Design Considerations and Findings In addition to the findings for Architectural Review contained in Section 18.76.020(d) of the Zoning Ordinance, the following additional findings are applicable in the CN, CS, CC and CC(2) districts, as further illustrated on the accompanying diagrams: (Supp. No 13-10/1/2007) Ch. 18.16-Page 18 18.16.090 Context-Based Design Criteria (1) Pedestrian and Bicycle Environment The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements such as: A. Ground floor uses that are appealing to pedestrians through well-designed visibility and access (Figure 1-1 }; Figure 1-1 B. On primary pedestrian routes, climate and weather protection where possible, such as covered waiting areas, building projections and colonnades, and awnings (Figure 1-2); . Wide sidewalks Bike racks Active ground floor uses activate the street )_,/c? a ,;l"'y6· ... ~gp-ffe..?/7~;~ Bulbouts increase-~;;:-·· pedestrian safety Awnings provide weather protection and create a pedestrian scale .--~~~------. Figure 1-2 C. Streetscape or pedestrian amenities that contribute to the area's streetscape environment such as street trees, bulbouts, benches, landscape elements, and ·public art (Figure 1-3); D. Bicycle amenities that contribute to the area's bicycle environment and safety needs, such as bike racks, storage or parking, or dedicated bike lanes or paths (Figure 1-1 ); and E. Vehicle access from alleys or sidestreets where they exist, with pedestrian access from the public street. Wide sidewalks provide a __ --.../ positive pedestrian experience · in front of retail uses Bulbouts increase pedestrian safety Minimize vehicle access _-=:::::=~~~Mhi to provide a continuous facade and street parking Figure 1-3 Ch. 18.16-Page 19 (Supp. No 13 -10/1/2007) 18.16.090 Context-Based Design Criteria (2) Street Building Facades Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s), to create an environment that supports and encourages pedestrian activity through design elements such as: A. Placement and orientation of doorways, windows, and landscape elements to create strong, direct relationships with the street (Figure 2-1); B. Facades that include projecting eaves and overhangs, porches, and other architectural elements that provide human scale and help break up building mass (Figure 2-2); C. Entries that are clearly defined features of front facades, and that have a scale that is in proportion to the size and type of the building and number of units being accessed; larger buildings should have a . more prominent building entrance, while maintaining a pedestrian scale; D. Residential units and storefronts that have a presence on the street and are not walled- off or oriented exclusively inward; E. Elements that signal habitation such as entrances, stairs, porches, bays and balconies that are visible to people on the street; F. All exposed sides of a building designed with the same level of care and integrity; G. Reinforcing the definition and importance of the street with building mass; and H. Upper floors set back to fit in with the context of the neighborhood. Orient doorways and windows to create strong relationship to street Building mass should _.,,~~i6f articulate a defined pedestrian base Clearly defined entries that are proportional to------ size of building and use Figure 2-2 Property Line Figure 2-1 : Build-to Line I I Residential Residential Commercial 12 ft effective sidewalk Buildings setback from the property line to create an effective 12' sidewalk on El Camino Real. Upper floors set back to fit in with the context of -the neighborhood. (Supp. No 13-10/1/2007) Ch. 18.16 -Page 20 18.16.090 Context-Based-Design Criteria (3) Massing and Setbacks Buildings shall be designed to minimize massing and conform to proper setbacks through elements such as: A Rooflines that emphasize and accentuate significant elements of the building such as entries, bays, and balconies (Figure 3-1); B. Design with articulation, setbacks, and materials that minimize massing, break down the scale of buildings, a~d provide visual interest (Figure 3-1); C. Comer buildings that incorporate special features to reinforce important intersections and create buildings of unique architectural merit and varied styles (Figure 3-1); D. Building facades articulated with a building bas·e, body and roof or parapet edge (Figure 3-2); E. Buildings set back from the property line to create an effective 12' sidewalk on El Camino Real, 8' elsewhere (Figure 3-4 ); F. A majority of the building frontage located at the setback line (Figure 3-3); and G. No side setback for midblock properties, allowing for a continuous street facade, except when abutting low density residential (Figure 3-3). Rooftines can emphasize significant elements such as entries and bays, Figure 3-1 Cornerbuod"Wlgs should be used to reinforce important intorseetlons. Arelai entry can "> strengthen the comer. · BuUdings should provide pedestrian-scaled detail. anicvlation and ctartmanshipofthelacade. Figure 3-2 Building should be set back lo creale a --=~bllt,.. 12' effeclive sidewalk along El Camino Real. Building facade articulaled wilh a building base, body and roof or parapet edge. relate to existing context Figure 3-3 Buildings should maximize the building frontage along build-lo lines. Buildings taller than their surrounding context should step back to maintain a continuous street facade at the build-to line. 12' Effective sidewalk with a setback for outdoor seating Figure3-4 Ch. 18.16-Page 21 (Supp. No 13 -10/112007) 18.16.090 Context-Based Design Criteria (4) Low-Density Residential Transitions Where new projects are built abutting existing lower-scale residential development, care shall be taken to respect the scale and privacy of neighboring properties through: A Transitions of development intensity from B. higher density development building types to building types that are compatible with the lower intensity surrounding uses (Figure 4-1); Massing and orientation of buildings that respect and mirror the massing of neighboring structures by stepping back upper stories to transition to smaller scale buildings, including setbacks and daylight. planes that match abutting R-1 and R-2 zone requirements (Figure 4-2); C. Respecting privacy of neighboring structures, with windows and upper floor balconies positioned so they minimize views .into neighboring properties (Figure 4- 3 ); D. Minimizing sight lines· into and from neighboring properties (Figure 4-3); E. Limiting sun and shade impacts on abutting properties; and F. Providing pedestrian paseos and mews to create separation between uses. future development 1:;;,1;;ii' low density medium density transition area 45 Degree daylight plane \ Initial height of daylight plane 16' at rear yard, 10' at side yard high density Figure 4-1 Massing and orientation of buildings that respect and mirror the massing of neighboring structures by stepping back upper stories to transition to smaller scale buildings . .--------~-.. Figure 4-2 Design windows to enhance privacy Combination of trees and ___.....,......=·~-/..... hedges for screening Existing single family home~. ...£.----i.-=-;U:l;;;;;;;il...l~....iL..-L..U------ Combination of trees and hedges for screening Figure 4-3 (Supp. No 13 -10/1/2007) Ch. 18.16-Page 22 18.16.090 Context-Based Design Criteria (5) Project Open Space Private and public open space shall be provided so that it is usable for the residents, visitors, and/or employees of a site. A. The type and design of the usable private open space shall be appropriate to the character of the building(s), and·shall consider dimensions, solar access, wind protection, views, and privacy; B. Open space should be sited and designed to accommodate different activities, groups, active and .passive uses, and should be located convenient to the users (e.g., residents, employees, or public) C. Common open spaces should connect to the · pedestrian pathways and existing natural . amenities of the site and its surroundings; D. Usabl.e open space may be any combination of private and CC?mmon spaces; E. Usable open space does not need to be located on the ground and may be located in porches, decks, balconies and/or podiums (but not on rooftops) (Figure 5-1 ); F. Open space should be located to activate the street fa~ade and increase "eyes on the street" when possible (Figure 5-1); .;. .. G. Both private and common ·open space areas· should be buffered from noise where feasible through landscaping and bui~ding placement; H. Open space situated over a structural slab/podium or on a rooftop shall have a combination of landscaping and high quality paving materials, including elements such as planters, mature trees, and use of textured and/or colored paved surfaces (Figure 5-2); and I. Parking may not be counted as open space. Open space to be located to. activate the facade ·arid increase''eyes on the s1reer Figure 5·2 Useable open space may be located on parking podiums. Ch. 18.16-Page 23 Figure 5-1 High quality materials and landscaping elements such as planters, mature trees, and textured and/or colored pavers should be used Podium open space should be connected to ground level open space. (Supp. No 13 -10/1/2007) 18.16.090 Context-Based Design Criteria ( 6) Parking Design Parking needs shall be acco:inmodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment, such that: .....-----....... A. Parking is located behind buildings, below Figure 6-1 grade or, where those options are not feasible, screened by landscaping, low walls, etc.; B. Structured parking is fronted or wrapped with habitab~e uses when possible (Figure 6- 1); C. Parking that is semi-depressed is screened. with architectural elements that enhance the streetscape such as stoops, balcony overhangs, and/or art; D. Landscaping such as trees, shrubs, vines, or groundcover is incorporated into surface parking lots (Figure 6-2); E. For properties with parking access from the rear of the site (such as a rear alley or driveway) landscaping shall provide a visual buff er between vehicle circulation areas and abutting properties (Figure 6-3); F. Street parking is utilized for visitor or customer parking and is designed in a manner to enhance traffic calming.; G. For properties with parking accessed from the front, minimize the amount of frontage used for parking access, no more than 25% of the site frontage facing a street should be devoted to garage openings, carports, or open/surface parking (on sites with less than 100 feet of frontage, no more than 25 feet); H. Where two parking lots abut and it is possible for a curb cut and driveway to serve several properties, owners are strongly encouraged to enter in to shared access agreements (Figure 6-4 ); and I. Parking is accessed from side streets or alleys when possible. (Supp. No 13 -10/1/2007) Ch. 18.16-Page 24 Parking podiums shall be fronted or wrapped wilh habitable or active uses when possible. Landscaping such as trees, shrubs, vines or ground cover is incorporated into surface parking lots. ·Existing Residential Figure 6-2 Landscaping shall provide a visual buffer between vehicle areas and adjacent properties. When possible, adjacent proper11es are strongly encouraged to share driveways In order lo limit curb culs. 18.16.090 ' -. ·: ! .......... .; .. ,.;-t \ ...... 12' effective sidewalk width c I --,.. 40 ft hei~imh: Context-Based Design Criteria Figure 6-5 · Mixed-Use with Surface Parking '· ................. . ··· ...... d~.ylight· plane ··,· ... , .. Figure 6-6 -40. ft bei~li'rtir\... Mixed-Use with Parking Podium --------.,~..-------. ~-,,,'-, daylight plane '· t' .,.. • : .~ l!, ~Ii: effecti:ve sid~walk width I I --,.. ............ : .. \!.. .... .... · t '--12' effective sidewalk width I I ---r I I ti" --,: . '\.,__ 11~ effective sidewalk width 20 ft _ 40 ft hei~im·ft-.,, ........................ , ..... "'-. daylight plane ... , . i.o n 1Q.k heillh!Jlm~ ''\. dayl.ight· plane " .. -:-. .. \.. Ch. 18.16 -Page 25 Figure 6-7 Mixed-Use with Partial Sub-Grade Parking Podium Figure6-8 Mixed-Use with Below-Grade Parking Podium (Supp. No 13 -10/1/2007) 18.16.090 Context-Based Design Criteria (7) Large (Multi-Acre) Sites Large (in excess of one acre) sites shall be designed so that street, block, and building patterns are consistent with those of the surroundin nei hborhood, and such that: A. New development of large sites maintains and enhances connectivity with a hierarchy of public streets, private streets, walks and bike paths (integrated with Palo Alto's Bicycle Master Plan, when applicable); B. The diversity of building types increases with increased lot size (e.g., <!"acre= minimum 1 building type; 1-2 acres = minim~ 2 housing-types; greater than 2 acres = minimuin 3 housing types) (Figures 7-1through7-3);· and C. Where a site includes more than one housing type, each building type should respond to its immediate context in terms of scale, massing, and design (e.g., Village Residential building types facing or abutting existing single-family residences) (Figures 7-2 and 7-3). (Supp. No 13-10/112007) Ch. 18.16-Page 26 Figure 7-1 Building type and scale should relate to adjacent or future contexts. Sites greater than two acres should have at least three building t'jpes. \ 18.16.090 Context-Based Design Criteria (8) Sustainability and Green Building Design Project design and materials to achieve sustainability and green building design should be incorporated into the project. Green building design considers the environment during design and construction. Green building design aims for compatibility with the local environment: to protect, respect and benefit from it. In general, sustainable buildings are en~rgy efficient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. The following considerations should be included in site and building design: A. Optimize building orientation for heat gain, shading, daylighting, and natural ventilation (Figure 8-1). B. Design landscaping to create comfortable micro-climates and reduce heat island effects. C. Design. for easy pedestrian, bicycle, and transit access. D. · Maximize onsite stormwater management through landscaping and penneable pavement (Figure 8-2). E. Use sustainable building materials. F. Design lighting, plumbing, and equipment for efficient energy and water use. G. Create healthy indoor environments. H. Use creativity and innovation to build more sustainable environments. One example is establishing gardens with edible fruits, vegetables or other plants to satisfy a portion ofproject open space requirements. I. Provide protection for creeks and riparian vegetation and integrate stormwater management measures and open space to minimize water quality and erosion impacts to the creek environment. J. Encourage installation of photovoltaic panels. (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) South facing windows with Summer Sun ! ,.r··· shading devices to control :1:: • -.ft overheating in Summer. Winter Sun ~ ·,... i i ~;,w ~~~~~~~§:;::.1 .. Use of shading devices to control solar loads in Summer and to gain passive heat in Winter. Figure 8-1 Minimize· stormwater runoff to impermea~le areas with landscaping, green roofs, and swales when possible. .....---------. Figure 8-2 Rack mounted /f Photovoltaics Building integrated PV's :: '"~in the form of sunshades/ canopies/awnings Figure 8-3 Encourage the installation of photovoltaic panels. Ch. 18.16 -Page 27 (Supp. No 13 -10/1/2007) ·~· .• ·~..:: 18.16.100 Grandfathered Uses 18.16.100 Grandfathered Uses (a) CN District Office Uses In the CN district, all office uses existing as of August 1, 1989, which were lawful confonning pennitted uses or conditional uses operating subject to a conditional use pennit and which, as of such date, exceed 5,000 square feet in size or 25% of lot area, may remain as legal nonconforming uses and shall not require a conditional use pemrit or be subject to tenni~ation pursuant to Chapter 18.70, provided, however, that in the case of a conflict between the provisions of this section and the provisions of Chapter 18. 70, this section shall control. Such uses shall be pennitted to remodel, improve, or replace site improvements in accordance with current applicable site development regulations, provided that any such remodeling, improvement, or replacement shall not result in increased floor area devoted to such office uses. (b) CS District Office Uses In the CS district, medical, professional or general business or administrative office uses existing on August 1, 1989 and which, as of such date, were lawful conforming pennitted uses or conditional uses operating subject to· a conditional use permit may remain as legal nonconforming uses and shall not require a conditional use permit or be subject to tennination pursuant to Chapter 18.70, provided, however, that in the case of a conflict between the provisions of this section and the provisions of Chapter 18.70, this section shall control. Such uses shall be pennitted to remodel, improve, or replace site improvements in accordance with current applicable site development regulations, provided that any such remodeling, improvement, or replacement shail not result in increased floor area devoted to such office uses. . . (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) (Supp. No 13-10/112007) Ch. 18.16-Page 28 18.18.010 Purposes . Chapter 18.18 DOWNTOWN COMMERCIAL (CD) DISTRICT Sections: 18.18.010 Purposes 18.18.020 Applicable Regulations 18.18.030 Definitions 18.18.040 Repeal ~f Regulations 18.18.050 Land Uses 18.18.060 Development Standards 18.18.070 Floor Area Bonuses 18.18.080 Transfer of Development Rights 18.18.090 Parking and Loading 18.18.100 Performance Standards · 18.18.110 Context-Based Design Criteria 18.18.120 Grandfathered Uses and Facilities 18.18.QlO Purposes (a) Downtown Commercial District [CD] The CD downtown commercial district is intended to be a comprehensive zoning district for the downtown business area, accommodating a wide range of commercial uses serving city- wide and regional business and service needs, as well as providing for residential uses and neighborhood service needs. The CD commercial downtown district is specifically created to promote the following objectives in the downtown area of Palo Alto: (1) control the rate and size of commercial development; (2) preserve and promote ground-floor retail uses; (3) enhance pedestrian activity; (4) create hannonious.transitions from the commercial areas to adjacent residential areas; and (5) where applied in conjunction with Chapter 16.49 of the Palo Alto Municipal Code, pre~erve historic buildings. · (Ord. 4923 § 4 (part), 2006) 18.18.020 Applicable Regulations (a) Applicable Chapters The specific regulations of this chapter and the additional regulations and procedures established by other relevant chapters of the Zoning Code shall apply to the CD commercial downtown district, including subdistricts designated as CD-C (community), CD-S (service) and CD-N (neighborhood) and site development areas within the CD district, as shown on the city's Zoning Map. The term ."abutting residential zones," where used in this chapter, Ch. 18.18-Page 1 (Supp. No 13 -10/1/2007) 18.18.030 Definitions includes the R-1, R-2, RMD, RM-15, RM-30, RM-40, or residential Planned Community / (PC) districts, unless otherwise specifically noted. (b) Applicable Combining Districts The combining districts applicable to the CD district shall include, but shall not be limited to, the following districts: ( 1) The pedestrian shopping (P) combining district regulations, as specified in Chapter 18.30(B), shall apply to the area of the CD district designated "P" combining district as shown on the city's Zoning Map. (2) The ground floor (GF) combining district regulations, as specified in Chapter 18.30(C), shall apply to the are~ of the CD district designated "GF" combining district as shown on the city's Zoning Map. (Ord. 4923 § 4 (part), 2006) 18.18.030 Definitions (a) For the purposes of calculating floor area ratio for nonresidential uses under this chapter, "gross floor area" includes not·only the area defined in Chapter 18.04, but also all covered at-grade or above-grade parking for nonresidential uses, no matter how slightly above grade such parking is. . (b) As used in this chapter, "historic rehabilitation" means return1ng a property to a state of utility, through repair or alteration, which makes possible an efficient contemporary use while preserving those portions and features of the property which are significant to its historic, architectural, and cultural values. "Historic rehabilitation" shall remedy allthe known rehabilitation needs of the building, and shall not be confined to routine repair and maintenance as detefmined by the director of planning and community environment. ( c) As used in this chapter, "certification" means certification, by the director of planning and community environment, of floor area eligible for transfer to another site as . described in Section 18.18.070. (d) As used in this chapter, "receiver site" means a site which receives floor area pursuant to the provisions of Section 18.18.080. (e) As used in this chapter, "sender site" means a site which has received a certification by the director of planning and community envir~nment of floor area eligible for transfer to another site pursuant to the provisions of this chapter. (f) "Transferable development right" or "TDR" means the floor area eligible for transfer to a receiver site as described in Section 18.18.080 ofthis code. (Ord. 4923 § 4 (part), 2006) 18.18.040 Repeal of Regulations The department of planning and community environment shall monitor the number of square feet approved for ~onresidential development in the CD district and the number of square feet approved (Supp. No 13 - I 0/1/2007) Ch. 18.18-Page 2 / .· 18.18.050 Land Uses for nonresidential development pursuant to a planned community (PC) zone if the site of the PC zone was within the CD district on the effective date of this chapter. When 350,000 square feet of nonresidential development have received final design review approval pursuant to Chapter 18 .. 76 or have received building permits, if no design approval is required, this chapter shall be repealed and a moratorium shall be imposed. This moratorium shall prohibit the city's acceptance or processing of any application for planning approval or a building permit for new nonresidential square footage in the CD district. This moratorium shall remain in effect for one year while the city_ undertakes a study of what regulations would be appropriate in the CD district. The moratoriun:i may be extended by the council until such study is completed and appropriate regulatio~s are implemented. (Ord. 4923 § 4 (part), 2006) 18.18.050 Land Uses The uses of land allowed by this chapter in each commercial zoning district are identified in the following table. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. Permited and conditionally permitted land uses for the CD district are shown in Table 1: TABLE 1 CD PERMITTED AND CONDITIONALLY PERMITTED USES P =Permitted Use• CUP= Conditional Use Permit Required .. ... .... ... . ... ~ .· . Subject to ·CD.-C · :·CD•S . CD-N regulations in .. Chapter: ... . , ... ACCESSORY USES Accessory facilities and activities p p p associated with or essential to permitted uses, and operated incidental to the principal use Drive-in or Take-out Services associated CUP CUP CUP with permitted uses <2> Tire, battery, and .automotive service CUP facilities, when operated incidental to a permitted retail· service or shopping center having a gross floor area of more than 30, 000 square feet (continued on next page) Ch. 18.18 -Page 3 (Supp. No. 17 --12/2009) 18.18.050 Land Uses TABLE 1 (continued) CD PERMITTED AND CONDITIONALLY PERMITTED USES P =Permitted Use• CUP= Conditional Use Permit Required Subject to '" CD~c· CD-S cD~N regulations in .. -.. Chapter: . :.: . .-.. __ ,,,·.,;:·,: ......... : ,.,:>:,:.:.,, ····· .. :· i ...... ,, ,, ·· . .......... ~ .· .. :· .... ·. •; EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Business and Trade Schools p p Churches and Religious Institutions p p p Private Educational Facilities p p CUP Private Clubs, Lodges, or Fraternal p p CUP Organizations MANUFACTURING AND PROCESSING USES Recycling Centers CUP CUP CUP Warehousing and. Distribution CUP OFFICE USES Administrative Office Services p 18.18.060(f) Medical, Professional, and General p p p 18.18.060(f) Business Offices PUBLIC/QUASI-PUBLIC FACILITY USES Utility Facilities essential to provision of CUP CUP utility services but excluding construction or storage yards, maintenance facilities, or corporation yards RECREATION USES Commercial Recreation CUP CUP CUP Outdoor Recreation Services CUP CUP CUP (continued on next page) (Supp. No. 17 -12/2009) Ch. 18.18 -Page 4 18.18.050 TABLE 1 (continued) CD PERMITTED AND CONDITIONALLY PERMITTED USES P = Permitted Use • CUP = Conditional Use Permit Required RESIDENTIAL USES Multiple-Family Home Occupations Residential Care Homes RETAIL USES Eating and Drinking Services, except drive-in or take-out services Retail Services, excluding liquor stores Shopping Centers Liquor Stores SERVICE USES Animal Care, excluding boarding and kennels Ambulance Services Automobile Service Stations Automobile Services Convalescent Facilities Day Care <;enters Small Family Day Care Homes -Large Family Day Care Homes Small Adult Day Care Homes Large Adult Day Care Homes p(l) p(l) p p p p p p p p p p p p p p p CUP p p p CUP CUP CUP CUP CUP CUP CUP p p CUP p p p p p p p p p p p p (continued on next page) Ch. 18.18-Page 5 Land Uses Subj:ect to .regulations in :chapter: 18.18.060(b) 18.18.060(g) 18.18.060(g) 18.18.060(g) 18.30(G) (Supp. No. 17 -12/2009) 18.18.050 TABLE 1 (continued) CD PERMITTED AND CoNDmONALLY PERMITTED USES P = Permitted Use • CUP = Conditional Use Permit Required · .. ~· ·: . .... -..... ~ .. Financial Services, except drive~up services General Business Services Hotels Mortuaries Personal Services Reverse Vending Machines TRANSPORTATION USES Parking as a principal use Passenger Transportation Terminals TEMPORARY USES Indoor Farmers' Markets Temporary Parking Facilities, provided that such facilities shall remain no more than five years P = Permitted Use CD•S CD;.N . :· ;v p p CUP CUP p p p p p p p CUP p p p p p p CUP CUP CUP CUP CUP CUP CUP CUP CUP CUP = Conditional Use Permit Required Land Uses Subject to regulations in Chapter: 18.18.060(d) 18.18.060(g) (1) Residential is only permitted as part of a mixed use development, pursuant to the provisions of Section 18.18.060(b), or on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions of Section 18.18.060(c),. (2) Drive-up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall ·be permitted within 1, 000 feet and each use shall not be less than 150 ft from one another. (Ord. 5065 § 4, 2009: Ord. 4923 § 4 (part), 2006) (Supp. No. 17 -12/2009) Ch. 18.18 -Page 6 18.18.060 Development Standards 18.18.060 Development Standards (a) Exclusively Non-Residential Use Table 2 specifies the development standards for new exclusively non-residential uses and alterations to non-residential uses or structures in the CD district, including the CD-C, CD-S, and CD-N subdistricts. These developments shall be designed and constructed in COJJlpliance with the following requirements and the context-based design criteria outlined, in Section 18. 18. 110, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and co~unity enviromnent, pursuant to Section 18.76.020: TABLE 2 EXCLUSIVELY NON-RESIDENTIAL DEVELOPMENT STANDARDS Subject to CD-C CD-S CD-N regulations in Section: Minimum Setbacks Setback Front Yard (ft) None required 10' (1) lines imposed by Rear Yard (ft) None required a special setback map Interior Side Yard (ft) None required pursuant Street Side Yard (ft) Non~ required 20' (1) to Chapter 20.08 of Minimum street setback for sites sharing a this code common block face with any abutting may apply residential zone district Minimum yard (ft) for lot lines abutting or 10' (1) 10' (1) 10' (1) opposite residential zone districts Maximum Site Coverage None required 50% Maximum Height (ft) Standard 50 50 25 Within 150 ft. of an abutting -(3) _ (3) _(3) residential zone district Maximum Floor Area Ratio (FAR) 1.0: 1 <5> 0.4: 1 <5> 0.4: 1 <5> 18.18.060(e) 18.18.070 (continued on next page) Ch. 18.18 -Page 7 (Supp. No. 17 -12/2009) 18.18.0060 Development Standards TABLE 2 (continued) EXCLUSIVELY NON-RESIDENTIAL DEVELOPMENT STANDARDS Maximum Floor Area Ratio (FAR) for Hotels · Maximum Size of New Non-Residential Construction or Expansion Projects Daylight Plane for lot lines abutting one or more residentfal zone districts Initial Height at side or rear lot line Slope 2.0:1· 2.0:1 NIA SubJect to .. · · ~egUJations :ii1 Secti~t,i: 18.18.060(d ) 25, 00 square feet of gross floor area or 15, 00 square feet above the existing floor area, whichever is greater, provided the ·floor area limits set forth elsewhere in this chapter are not exceeded _(2) 10 10 _(2) 1:2 1:2 ( 1) The yard shall be planted and maintained as a landscaped screen, excluding area required for site access. (2) The initial.height and slope shall be identical to those of the residential zone abutting the site line in question. (3) The maximum height within 150 feet of any abutting residential zone district shall not exceed the height limit of the abutting residential district. ( 4) The minimum street setback shall be equal to the residentially zoneci setback for 150 feet from the abutting single-family or multiple family development. (5) FAR may be increased with transfers of development and/or bonuses for seismic and historic rehabilitation upgrades, not to exceed a total site FAR of 3.0: 1 in the CD-C subdistrict or 2.0: 1 in the CD-Sor CD-N subdistricts. (b) Mixed Use Table 3 specifies the development standards for new residential mixed use developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlines in Section 18.18.110, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18. 76.020: (Supp. No. 17 -12/2009) Ch. 18.18 -Page 8 / 18.18.060 Development Standards TABLE 3 MIXED USE DEVELOPMENT STANDARDS Minimum Setbacks Front Yard (ft) Rear Yard (ft) Interior Side Yard (ft) Street Side Yard (ft) Permitted setback encroachments Maximum Site Coverage Landscape Open Space Coverage Usable Open Space Maximum Height (ft) Standard Within 150 ft. of an abutting residential zone district ·: ;; .· .. · :· . . ..... ~-· . . . . 1-· .• CD-N None required 10' 10' for residential portion; no requirement for commercial portion 10' if 10' if No abutting abutting requirement residential residential zone zone No 5' 5' requirement Balconies, awnings, porches, stairways, and similar elements may extend up to 6' into the setback. Cornices, eaves, fireplaces, and similar architectural features (excluding flat or continuous . walls or enclosures of interior space) may extend up to 4' into the front and rear setbacks and up to 3' into interior side setbacks No requirement 20% 50% 50% 30% 35% 200 sq ft per unit for 5 or fewer units 0> 150 sq ft per unit for 6 or more units 0> 50' 50' 35' 40' <4> 40' <4> 35' <4> (continued on next page) Subject to regulations in Section: Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply Ch. 18.18 -Page 9 (Supp. No. 17 -12/2009) 18.18.060 Development Standards TABLE 3 (continued) MlxED USE DEVELOPMENT STANDARDS ., . Subject to .. CD-C CD-S CD-N regulations .. .. in Section: .. , ... • .... · .... ........ .... ... ; ... Daylight Plane for lot lines abutting one Daylight plane height and slope or more residential zone districts or a identical to those of the most restrictive residential PC district residential zone abutting the lot line Residential Density (net) <2> 40 30 30 Maximum Residential Floor Area Ratio 1.0:1 <3> 0.6: 1 <3> 0.5:1 <3> (FAR) Maximum Nonresidential Floor Area 1.0: 1 <3> 0.4:1 0.4:1 Ratio (FAR) Total Floor Area Ratio (FAR) 2.0:1 <3> 1.0: 1 <3> 0. 9: 1 <3> 18.18.070 Parking Requirement See Chapters 18.52 and 18.54 Ch. 18.52, 18.54 (1) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space); (3) minimum private open space dimension 6'; and (4) minimum common open space dimension 12' (2) Residential ·density shall be computed based upon the total site area, irrespective of the percent of the site devoted to commercial use. There shall be no deduction for that portion of the site area in nonresidential use. (3) FAR may be increased with transfers of development and/or bonuses for seismic and historic rehabilitation upgrades, not to exceed a total site FAR of 3.0: 1 in the CD-C subdistrict or 2.0: 1 in the CD-Sor CD-N subdistrict. (4) For sites abutting an RM-40 zoned residential district or a residential Planned Community (PC) district, maximum height may be increased to 50 feet. (1) Residential and nonresidential mixed use projects shall be subject to site and design review in accord with Chapter 18.30(G), except that mixed use projects with four or fewer units shall only require review and approval by the architectural review board. (2) Nonresidential uses that involve the use or storage of hazardous materials in excess of the exempt quantities prescribed in Title 15 of the Municipal Code, including but not limited to dry cleaning plants and auto repair, are prohibited in a mixed use development with residential uses. (Supp. No. 17 -12/2009) Ch. 18.18 -Page 10 18 .. 18.060 Development Standards (c) Exclusively Residential Uses Exclusively residential uses are generally prohibited in the CD district and ·subdistricts. Such uses are allowed, however, where a site is designated as a Housing Opportunity Site in the Housing Element of the Comprehensive Plan. Such sites shall be developed pursuant to the regulations for the multi- family zone designation (RM-15, RM-30, or RM-40) identified for the site in the Housing Element. ( d) Hotel Regulations (1) The purpose of these regulations is to allow floor area for development of hotels in excess of floor area limitations for other commercial uses, in order to proyide a visitor-serving use that results in an enhanced bus"iness climate, increased transient occupancy tax and sales tax revenue, and other community and economic benefits to the city. · (2) Hotels, where they are a permitted use, may develop to a maximum FAR of 2.0: 1, subject to the followillg limitations: (A) The hotel use must generate transient occupancy tax (TOT) as provided in Chapter 2.33 of the Palo Alto Municipal Code; and (B) No ro~m stays in excess of thirty days are permitted, except where the city council approves longer stays through an enforceable agreement with the applicant to provide for compensating revenues. (3) Hotels may include residential condominium use, subject to: (A) No more than twenty-five percent of the floor area shall be devoted to condominium use; and · (B) No more than twenty-five percent of the total number of lodging units shall be devoted to condominium use; and (C) A minimum FAR of 1.0 shall be provided for the hotel/condominium building(s); and 1, (D) Where residential condominium use is proposed, room stays for other hotel rooms shall not exceed thirty days. (4) Violation of this chapter is subject to enforcement action for stays in excess of thirty days not permitted under the provisions of this chapter, in which case each day of room stay in excess of thirty days shall constitute a separate violation and administrative penalties shall be assessed pursuant to Chapters 1.12 and 1.16. Ch. 18.18 -Page 11 (Supp. No. 17 -12/2009) 18.18.060 Development Standards (e) Exempt Floor Area When a building is being expanded, square footage which, in the judgement of the chief building official, does not increase the usable floor area, and is either necessary to conform the building to Title 24 of the California Code of Regulations, regarding handicapped access, or is necessary to implement the historic rehabilitation of the building, shall not be counted as floor area. (f) Restrictions on Office Uses (1) New construction and alterations in the CD-C zoning district shall be required to design ground floor space to accommodate retail use and shall comply with th~ provisions .of the Pedestrian (P) combining district. (2) In the CD-Sand CD-N subdistricts, the following requirements shall apply to office uses: (A) No new gross square footage of a medical, professional, general business, or administrative office use shall be allowed, once the gross square footage of such office uses, or any combination of such uses, on a site has reached 5,000 square feet. (B) No conversion of gross square footage from any other use to a medical, professional, general business, or administrative office use shall be allowed once the gross square footage of such office uses, or ~ny combination of such uses, on a site has reached 5,000 square feet. (g) Restrictions on Size of Commercial Establishments in CD-N Subdistrict In the CD-N subdistrict, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 4. Such uses may be allowed to exceed the maximum establishment size, subject to the issuance of a conditional use permit in accordance with Chapter 18. 7 6. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use perniit for such use. (Supp. No. 17 -12/2009) Ch. 18.18 -Page 12 18.18.060 Development Standards Table 4 Maximum Size of Establishment Personal Services 2,500 Retail services, except grocery stores 15,000 Grocery stores· 20,000 Eating and drinking services 5,000 (h) Outdoor Sales and Storage. The following regulations shall apply to outdoor sales and storage in the CD district: (1) CD-C Subdistrict In the CD-C subdistrict, the following regulations apply: (A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for: (i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, · (ii) O~tdo~! e_ating areas operated incidental to permitted eating and drinking services, (iii) Farmers' markets which have obtained a conditional use permit, and (iv) Recycling centers that have obtained a conditional use permit. (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit.. (C) Exterior storage shall be prohibited, except recycling centers which have obtained a conditional use permit. Ch. 18.18 -Page 12.1 (Supp. No. 17 -12/2009) 18.18.060 Development Standards (2) CD-S Subdistrict In the CD-S subdistrict, outdoor sales and display of merchandise, and outdo<?r eating areas operated incidental to permitted eating and drinking services shall be permitted subject to the following· regulations: (A) Outdoor sales and display shall not occupy a total site area exceeding the gross building floor area on the site, except as authorized by a conditional use permit. (B) Areas used for outdoor sales and display of motor vehicles, boats, campers, camp trailers, traiJers, trailer co~ches, house cars, or similar conveyance~ shall meet the minimum design standards applicable fo off-street parking facilities with respect to paving, grading, drainage, access to public streets and alleys, safety and protective features, lighting, landscaping, and screening. (C) Exterior storage shall be prohibited, unless screened by a solid wall or fence of between 5 and 8 feet in height. (3) CD-N Subdistrict In the CD-N subdistrict, all permitted office and commercial activities shall be conducted within a building; except for: (A) Incidental sales and display of plant materials and garden supplies occupying not more than 500 square feet of exterior sales and display area, and (B) Farmers' markets that have obtained conditional use permits. (i) Employee Showers Employee shower facilities shall be provided for any new building constructed or for any addition to or enlargement of any existing building as specified in Table 5. (Supp. No. 17 -12/2009) Ch. 18.18 -Page 12.2 18.18.060 Table 5 Employee Showers Required . . . ~ ... ~. _.·:: ::Uses; __ ·: Medical, Professional, and General Business Offices, Financial Services, Business and Trade Schools, General Business Services Retail Services, Personal Services, and Eating and Drinking Services (j) Nuisances Prohibited 0-9,999 10,000-19,999 20, 000-49' 999 50,000 and up 0-24,999 25' 000-49 ,999 50,000-99,999 100,000 and up Development Standards No requirement 1 2 4 No requirement 1 2 4 All uses, whether permitted or conditional, shall be conducted in such a manner as to preclude nuisance, hazard, or commonly recognized offensive conditions or characteristics, including creation or emission of dust, gas, smoke, noise, fumes, odors, vibrations, particulate matter, chemical compounds, electrical disturbance, humidity, heat, cold, glare, or night illuminations. Prior to issuance of a building permit, or occupancy permit, or at any other time, the building inspector may require evidence that adequate controls, measures, or devices have been provided to ensure and protect the public interest, health, comfort, convenience, safety, and general welfare from such nuisance, hazard, or offensive condition. (k) Recycling Storage All new development, including approved modifications that add thirty percent or more floor area to existing uses, shall provide adequate and accessible interior areas or exterior enclosures for the storage of recyclable materials in appropriate containers. The design, construction and accessibility of recycling areas and enclosures shall be subject to approval by the architectural review board, in accordance with design guidelines adopted by that board and approved by the city council pursuant to Section 16.48.070. (Ord. 5065 § 4, 2009: Ord. 5035 § 3, 2009: Ord. 4923 § 4 (part}, 2006) Ch. 18.18 -Page 12.3 (Supp. No. 17 -12/2009) 18.18.070 Floor Area Bonuses 18.18.070 Floor Area Bonuses (a) Available Floor Area Bonuses (1) Minor Bonus for Buildings Not Eligible for Historic or Seismic Bonus A building that is neither in Historic Category 1 or 2 nor in Seismic Category I, II, or ill shall be allowed to increase its floor area by 200 square feet without having this increase count toward the FAR, subject to the restrictions in subsection (b). Such increase in floor area shall not be permitted for buildings that exceed a FAR of 3. 0: 1 in the CD-C subdistrict or a FAR of 2.0: 1 in the CD-Nor CD-S subdistricts. This bonus is not subject to transfer and must be fully parked. In addition to any applicable parking provisions, this bonus may be parked by the payment of in lieu parking fees under Section 18 .18. 090. (2) Seismic Rehabilitation Bonus A building that is in Seismic Category I, II, or ill, and is undergoing seismic rehabilitation, but is not in Historic Category 1 or 2, shall be allowed to increase its floor area by 2,500 square feet or 25 % of the existing building, whichever is greater, without having this increase count toward the FAR, subject to the restrictions in subsection (b). Such increase in floor area shall not be permitted for buildings that exceed a FAR of 3. 0: 1 in the CD-C subdistrict or a FAR of 2.0: 1 in the CP-N or CD-S subdistricts. (3) Historic Rehabilitation Bonus A building that is in Historic Category 1 or 2, and is undergoing historic rehabilitation, but is not in Seismic Category I, II, or ill, shall be allowed to increase its floor area by 2,500 square feet or 25 % of the existing building, whichever is greater, without having this increase count toward the FAR, subject to the restrictions in subsection (b). Such increase in floor area shall not be permitted for buildings that exceed a FAR of 3. 0: 1 in the CD-C subdistrict or a FAR of 2.0: 1 in the CD-Nor CD-S subdistricts, except as provided in subsection (5). ( 4) Combined Historic and Seismic Rehabilitation Bonus A building that is in Historic Category 1 or 2, and is undergoing historic rehabilitation, and is also in Seismic Category I, II, or ill, and is undergoing seismic rehabilitation, shall be allowed to increase its floor area by 5,000 square feet or 50% of the existing building, whichever is greater, without having this increase count toward the FAR, subject to the restrictions in subsection (b). Such increase in floor area shall not be permitted for buildings that exceed a FAR of 3.0:1 in the CD-C subdistrict or a FAR of 2.0:1 in the CD-Nor CD-S subdistricts, except as provided in subsection (5). (Supp. No. 26 -4/2014) Ch. 18.18 -Page 12.4 18.18.070 Floor Area Bonuses (5) Historic Bonus for Over-Sized buildings A building in Historic Category 1 or 2 that is undergoing historic rehabilitation and that currently exceeds a FAR of 3.0: 1 if located in the CD-C subdistrict or 2.0: 1 if located in the CD-Sor CD-N subdistricts shall nevertheless be allowed to obtain a floor area bonus of 50% of the maximum allowable floor area for the site of the building, based upon a FAR of 3.0: 1 if in the CD-C subdistrict and a FAR of 2.0: 1 in the CD-Sand CD-N subdistricts, subject to the restrictions in subsection (b) and the following limitation: (A) The floor area bonus shall not be used on the site of the Historic Category 1 or 2 building, but instead may be transferred to another property or properties under the provisions of Section 18.18.080. (b) Restrictions on Floor Area Bonuses The floor area bonuses in subsection (a) shall be subject to the following restrictions: (1) All bonus square footage shall be counted as square footage for the purposes of the 350,000 square foot limit on development specified in Section 18.18.040. (2) All bonus square footage shall be counted as square footage for the purposes of the project size limit specified in Section 18.18.060 (a). (3) In no event shall a building expand beyond a FAR of 3. 0: 1 in the CD-C subdistrict or a FAR of 2. 0: 1 in the CD-S or CD-N subdistrict. (4) The bonus shall be allowed on a site only once. (5) For sites in Seismic Category I, II, or ID, seismic rehabilitation shall conform to the analysis standards referenced in Chapter 16.42 of this code. (6) For sites in Historic Category 1 or 2, historic rehabilitation shall conform to the Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings (36 CFR §67,7). (7) For sites in both Seismic Category I, II, or III and Historic Category 1 or 2, no bonus shall be granted unless the project includes both seismic and historic rehabilitation conforming to the standards in subsections (5) and (6). (8) For sites in both Seismic Category I, II, or III and Historic Category 1 or 2, a bonus granted under this section that will be used on-site is subject to the following requirements: (A) The city council must approve on-site use of such a FAR bonus. Such approval is discretionary, and may be granted only upon making both of the following findings: (i) The exterior modifications for the entire project comply with the U.S. Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings (36 CPR §67,7); and (ii) The on-site use of the FAR bonus would not otherwise be inconsistent with the historic character of the interior and exterior of the building and site. Ch. 18.18 -Page 13 (Supp. No. 26 -4/2014) 18.18.070 Floor Area Bonuses (B) The applicant for on-site use of a cumulative floor area bonus shall have the burden of demonstrating the facts necessary to support the findings required for council approval. (c) Transfer of Floor Area Bonuses The floor area bonuses described in subsection (a), except the floor area bonus in subsection (a)(l), may be transferred to a non-historic receiver site as described in Section 18.18.080. Such transfer shall not be subject to the discretionary council approval set forth in subsection (b )(8). ( d) Procedure for Granting of Floor Area Bonuses The floor area bonuses described in subsection (a), except the bonus described in subsection (a)(l), shall be granted in accordance with the following requirements: (1) An application for such floor area bonus( es) must be filed with the director of planning and community environment in the form prescribed by the director, stating the amount of such bonus( es) applied for, the basis therefor under this section, and the extent to which such bonus( es) are proposed to be used on-site and/ or for transfer. An application for floor area bonus for rehabilitation of a Category 1 or 2 historic building shall include a historic structure report, prepared by a qualified expert, retained by the city, at the applicant's expense, in accordance with the standards and guidelines of the California State Office of Historic Preservation. It shall also inchide a plan for rehabilitation; if any part of the existing building is proposed to be removed or replaced, the historic rehabilitation project plans submitted for review shall clearly show and identify any and all material proposed for removal or replacement. (2) The city may retain an expert in historic rehabilitation or preservation, at the applicant's expense, to provide the city with an independent evaluation of the project's conformity with the Secretary of the Interior's "Standards for Rehabilitation and Guidelines for Rehabilitation Historic Buildings. " (3) The historic resources board shall review the historic structure report, the historic rehabilitation project plans, and, if required, the expert independent evaluation of the project, and make a recommendation to the director of planning and community environment on the project's conformity with the Secretary of the Interior's "Standards for Rehabilitation and Guidelines for Rehabilitation Historic Buildings. " (4) Upon completion of such an application, written determination of the sender site's.eligibility for bonus( es) shall be issued by the director of planning and community environment or the director's designee, based upon the following: (A) In the case of a floor area bonus for seismic rehabilitation, the chief building official has made a determination that the project complies with or exceeds the analysis standards referenced in Chapter 16.42 of this code; (B) In the case of the floor area bonus for historic rehabilitation of a building in Historic Category 1 or 2, the director, taking into consideration the recorpmendations of the historic resources board, has found that the project complies with the Secretary of the (Supp. No. 26 -4/2014) Ch. 18.18 -Page 14 18.18.080 Transfer of Development Rights Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings (36 CFR §67,7); and (C) In the case of a bonus for both seismic and historic rehabilitation that is proposed to be use on-site, the city council has made the findings set forth in subsection (b )(8) of this section. ( e) Certification of FAR Bonuses The floor area bonuses described in subsection (a), except the bonus described in subsection (a)(l), may 1,Je used on the site of the proposed seismic and/or historic rehabilitation project and a building permit issued therefor only upon satisfaction of all the requirements in subsection (d) above. Upon determining that the project has been completed as approved, or in the case of city-owned buildings upon completion of all of the requirements of Chapter 18. 28, the director or director's designee shall issue a written certification which shall state the total floor area bonus utilized at the site (in the case of buildings in the CD-Commercial Downtown District), and the amount (if any) of remaining floor area bonus which is eligible for transfer to another site pursuant to the provisions of this chapter. The certification shall be recorded in the office of the county recorder and a copy shall be provided to the applicant. As a condition precedent to being credited with a historic rehabilitation floor area bonus whether for use on-site or for transfer, the owner of the site shall enter into an unsubordinated protective covenant running with the land in favor of the city (or, if the city is the owner, in favor of a qualified and disinterested third party if the property is to be rehabilitated after the sale of the transfer of development rights), in a form satisfactory to the city attorney, to assure that the property will be rehabilitated and maintained in accordance with the Secretary of Interior's Standards for Rehabilitation of Historic Buildings, together with the accompanying interpretive Guidelines for Rehabilitation of Historic Buildings, as they may be amended from time to time. For city owned buildings subject to a long term lease of ten or more years where the rehabilitation work is to be performed by the lessee, this protective covenant shall be in favor of the city. (Ord. 5214 § 2, 2013: Ord. 5038 § 1, 2009: Ord. 4964 § 15, 2007: Ord. 4923 § 4 (part), 2006) 18.18.080 Transfer of Development Rights (a) Purpose The purpose of this section is to implement the Comprehensive Plan by encouraging seismic rehabilitation of buildings in Seismic Categories I, II, and ill, and encouraging historic rehabilitation of buildings or sites in Historic Category 1 and 2, and by establishing standards and procedures for the transfer of specified development rights from such sites to other eligible sites. Except as provided in subsection (e)(l) and for city-owned properties as provided in Chapter 18.28, this section is applicable only to properties located in the CD district, and is the exclusive procedure for transfer of development rights for properties so zoned. (b) Establishment of Forms The city may from time to time establish application forms, submittal requirements, fees and such other requirements and guidelines as will aid in the efficient implementation of this chapter. Ch. 18.18 -Page 15 (Supp. No. 26 -4/2014) 18.18.080 Transfer of Development Rights (c) Eligibility for Transfer of Development Rights Transferable development rights may be transferred to an eligible receiver site upon: ( 1) Certification by the city pursuant to Section 18 .18. 070 of the floor area from the sender site which is eligible for transfer; and (2) Compliance with the transfer procedures set forth in subsection (h). (d) Availability of Receiver Sites The city does not guarantee that at all times in the future there will be sufficient eligible receiver sites to receive such transferable development rights. ( e) Eligible Receiver Sites A site is eligible to be a receiver site only if it meets all of the following criteria: (1) It is located in the CD commercial downtown district, or is located in a planned community (PC) district if the property was formerly located in the CD commercial downtown district and the ordinance rezoning the property to planned community (PC) approves the use of transferable development rights on the site. (2) It is neither an historic site, nor a site containing a historic structure, as those terms are defined in Section 16.49.020(e) of Chapter 16.49 of this code; and (3) The site is either: (A) Located at least 150 feet from any property zoned for residential use, not including property·· in planned community zones or in commercial zones within the downtown boundaries where mixed use projects are. (B) Separated from residentially zoned property by a city street with a width of at least 50 feet, and separated from residentially zoned property by an intervening property zoned CD-C, CD-S, or CD-N, which intervening property has a width of not less than 50 feet. (f) Limitations On Usage of Transfer able Development Rights No otherwise eligible receiver site. shall be allowed to utilize transferable development rights under this chapter to the extent such transfer would: (1) Be outside the boundaries of the downtown parking assessment district, result in a maximum floor area ratio of 0.5 to 1 above what exists or would otherwise be permitted for that site under Section 18.18.060, whichever is greater, or result in total additional floor area of more than 10, 000 square feet. (Supp. No. 26 -4/2014) Ch. 18.18 -Page 16 18.18.080 Transfer of Development Rights I (2) Be within the boundaries of the downtown parking assessment district, result in a maximum floor area ratio of 1. O to 1 above what exists, or would otherwise be permitted for that site under Section 18.18.060, whichever is greater, or result in total additional floor area of more than 10, 000 square feet. (3) Cause the development limitation or project size limitation set forth in Section 18.18.040 to be exceeded. ( 4) Cause the site to exceed 3. 0 to 1 FAR in the CD-C subdistrict or 2. 0 to 1 FAR in the CD-S or CD-N subdistricts. (g) Parking Requirements Any square footage allowed to be transferred to a receiver site pursuant to this chapter shall be subject to the parking regulations applicable to the district in which the receiver site is located. (h) Transfer Procedure Transferable development rights may be transferred from a sender site (or sites) to a receiver site only in accordance with all of the following requirements: (1) An application pursuant to Chapter 16.48 of this code for major ARB review of the project proposed for the receiver site must be filed. The application shall include: (A) A statement that the applicant intends to use transferable development rights for the project; (B) Identification of the sender site(s) and the amount of TDRs proposed to be transferred; and (C) Evidence that the applicant owns the transferable development rights or a signed statement from any other owner(s) of the TD Rs that the specified amount of floor area is available for the proposed project and will be assigned for its use. (2) The application shall not be deemed complete unless and until the city determines that the TDRs proposed to be used for the project are available for that purpose. (3) In reviewing a project proposed for a receiver site pursuant to this section, the architectural review board shall review the project in accordance with Section 16.48.120 of this code; however, the project may not be required to be modified for the sole purpose of reducing square footage unless necessary in order to satisfy the criteria for approval under Chapter 16 .48 or any specific requirement of the municipal code. (4) Following ARB approval of the project on the receiver site, and prior to issuance of building permits, the director of planning and community environment or the director's· designee shall issue written confirmation of the transfer, which identifies both the sender and receiver sites and the amount of TDRs which have been transferred. This confirmation shall be recorded in the office of the county recorder prior to the issuance of building permits and shall include the written consent or assignment by the owner(s) of the TDRs where such owner(s) are other than the applicant. Ch. 18 .18 -Page 17 (Supp. No. 26 -4/2014) 18.18.090 Parking and Loading (i) Purchase or Conveyance of TDRs -Documentation (1) Transferable development rights may be sold or otherwise conveyed by their owner(s) to another party. However, no such sale or conveyance shall be effective unless evidenced by a recorded document, signed by the transferor and transferee and in a form designed to run with the land and satisfactory to the city attorney. The document shall clearly identify the sender site and the amount of floor area transferred and shall also be filed with the department of planning and community environment. (2) Where transfer of TD Rs is made directly to a receiver site, the recorded confirmation of transfer described in subsection (h)( 4) shall satisfy the requirements of this section. (Ord. 5214 § 3, 2013: Ord. 4923 § 4 (part), 2006) 18.18.090 Parking and Loading The provisions of Chapters 18.52 and 18.54 shall apply within the CD district, except the provisions of Chapters 18.52 and 18.54 regarding on-site and off-site parking for non-residential uses within an assessment district wherein properties are assessed under a Bond Plan G financing pursuant to Title 13. With respect to such uses, the following requirements shall apply in the CD district in lieu of the requirements in Chapters 18.52 and 18.54: (a) On-Site Parking Requirement Any new development, any addition or enlargement of existing development, or any use of any floor area that has never been assessed under any Bond Plan G financing pursuant to Title 13, shall provide one parking space for each two hundred fifty gross square feet of floor area, except as may be exempt from such requirement by the provisions of subsection (b) of this section. The purpose of this subsection is to regulate the number of parking spaces required. Requirements for the size and other design criteria for parking spaces shall continue to be governed by the provisions of Chapters 18.52 and 18.54. (b) Exceptions to On-Site Parking Requirement The requirement for on-site parking provided in subsection (a) of this section shall not apply in the following circumstances: (1) The following square footage shall be exempt from the on-site parking requirement of subsection (a): (A) Square footage for handicapped access which does not increase the usable floor area, as determined by Section 18 .18. 060( e); (B) Square footage for at or above grade parking, though such square footage is included in the FAR calculations in Section 18 .18. 060( a). (2) A conversion to commercial use of a historic building in Categories 1 and 2 shall be exempt from the on-site parking requirement in subsection (a), provided that the building is fifty feet or less in height and has most recently been in residential use. Such conversion, in order to be (Supp. No. 26 -4/2014) Ch. 18.18 -Page 18 18.18.090 Parking and Loading exempt, shall be done in conjunction with exterior historic rehabilitation approved by the director of planning and community environment upon the recommendation of the architectural review board in consultation with the historic resources board. Such conversion must not eliminate any existing on-site parking. (3) Vacant parcels shall be exempt from the requirements of subsection (a) of this section at the time when development occurs as provided herein. Such development shall be exempt to the extent of parking spaces for every one thousand square feet of site area, provided that such parcels were at some time assessed for parking under a Bond Plan E financing pursuant to Chapter 13.16 or were subject to other ad valorem assessments for parking. ( 4) No new parking spaces will be required for a site in conjunction with the development or replacement of the amount of floor area used for nonresidential use equal to the amount of adjusted square footage for the site shown on the engineer's report for fiscal year 1986-87 for the latest Bond Plan G financing for parking acquisition or improvements in that certain area of the city delineated on the map of the University A venue parking assessment district entitled, "Proposed Boundaries of University Avenue Off-Street Parking Project #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. However, square footage which was developed for nonresidential purposes or which has been used for nonresidential purposes but which is not used for such purposes due to vacancy at the time of the engineer's report shall be included in the amount of floor area qualifying for this exemption. No exemption from parking requirements shall be available where a residential use changes to a nonresidential use, except pursuant to subsection (2). (c) Off-Site Parking Parking required by this chapter may be provided by off-site parking, provided that such off-site parking is within a reasonable distance of the site using it or, if the site is within an assessment district, within a reasonable distance of the assessment district boundary and approved in writing by the director of planning and community environment. The director shall assure that sufficient covenants and guarantees are provided to ensure use and maintenance of such parking facilities, including an enforceable agreement that any development occurring on the site where parking is provided shall not result in a net reduction of parking spaces provided, considering both the parking previously provided and the parking required by the proposed use. ( d) In-lieu Parking Provisions In connection with any expansion of the supply of public parking spaces within the CD commercial downtown district, the city shall allocate a number of spaces for use as "in-lieu parking" spaces to allow development to occur on sites which would otherwise be precluded from development due to parking constraints imposed by monetary contribution to the city to defray the cost of providing such parking. Contributions for each required parking space shall equal the incremental cost of providing a net new parking space in an assessment district project plus cost for the administration of the program, all as determined pursuant to Chapter 16.57 of Title 16 of this code, by the director of planning and community environment, whose decision shall be final. Only sites satisfying one or more of the following criteria, as determined by the director of planning and community environment, shall be eligible to participate in the in-lieu parking program: Ch. 18.18 -Page 19 (Supp. No. 26 -4/2014) 18.18.100 Performance Standards (1) Construction of on-site parking would necessitate destruction or substantial demolition of a designated historic structure; (2) The site area is less than 10,000 square feet, but of such an unusual configuration that it would not be physically feasible to provide the required on-site parking; (3) The site is greater than 10,000 square feet, but of such an unusual configuration that it would not be physically feasible to provide the required on-site parking; ( 4) The site is located in an area where city policy precludes curb cuts or otherwise prevents use of the site for on-site parking; or (5) The site has other physical constraints, such as a high groundwater table, which preclude provision of on-site parking without extraordinary expense. (e) Underground Parking Underground parking deeper than two levels below grade shall be prohibited unless a soils report or engineering analysis demonstrates that regular pumping of subsurface water will not be required. (Ord. 5214 § 4, 2013: Ord. 4923 § 4 (part), 2006) 18.18.100 Performance Standards In addition to the standards for development prescribed above, all development shall comply with the performance criteria outlined in Chapter 18.23 of the Zoning Ordinance. All mixed use development shall also comply with the provisions of Chapter 18.23 of the Zoning Ordinance. (Ord. 4923 § 4 (part), 2006) Editor's Note The text of this chapter continues on the next page. The remainder of this page has been left blank intentionally. (Supp. No. 26 -4/2014) Ch. 18.18 -Page 20 ) 18.18.110 Context-Based Design Criteria 18.18.110 Context-Based Design Criteria (a) Contextual and Compatibility Criteria Development in a commercial district shall be responsible to its context .and compatible with adjacent development, and shall promote the establishment of pedestrian oriented design.' (1) Context (A) Context as used in this section is intended to indicate relationships between the site's development to adjacent street types, surrounding land uses, and on-site or nearby natural features, such as creeks or trees. Effective transitions to these adjacent uses and features are strongly reinforced by Comprehensive Plan policies. (B) ·The word "context" should not be construed as a desire to replicate existing surroundings, but rather to provide appropriate transitions to those surroundings. "Context" is also not specific to architectural style or design, though in some instances relationships may be reinforced by an architectural response. (2) Compatibility (A) Compatibility is achieved when the apparent scale and m~ss of new buildings is consistent with the pattern of achieving a pedestrian oriented design,· and when new construction shares general characteristics and establishes design linkages with the overall pattern of buildings ·so that the visual unity. of the street is maintained. · (B) Compatibility goals may be accomplished through various means, including but not liinited to: (i) the siting, scale, massing, and materials; . (ii) the rhythmic pattern of the street established by the general width of the buildings and the spacing between them; (iii) the pattern ofrooflines and projections; (iv) the sizes, proportions, and orientations of windows,.bays and doorways; (v) the location and treatment of entryways; (vi) the .shadow patterns from massing and decorative features; (vii) the siting and treatment of parking; and (viii) the treatment of landscaping. {b) Context-Based Design Considerations and Findings In addition to the findings for Architectural Review contained in Section 18.76.020( d) of the Zoning Ordinance, the following additional findings are applicable in the. CD district and subdistricts, as further illustrated on the accompanying diagrams: Ch. 18.18-Page 21 (Supp. No 13 -10/1/2007) 18.18.110 Context-Based Design Criteria (1) Pedestrian and Bicycle Environment The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements such as: A Ground floor uses that are appealing to pedestrians through w_ell-designed visibility and access (Figure 1-1); Figure 1-1 B. On primary pedestrian routes, climate and weather protection where possible, such as covered ~ftiting areas, building projections and colonnades, and awnings (Figure 1-2); Wide sidewalks Bike racks Active ground floor uses activate the street - Bulbouts increase J··· .. pedestrian safety Awnings provide weather protection and create a pedestrian scale .--~~~~~.r----, Figure 1-2 C. Streetscape or pedestrian amenities that contribute to tlw area's streetscape . environment such as street trees, bulbouts, benches, landscape elements, and public art (Figure 1-3); D. Bicycle amenities that contribute to the area's bicycle environment and safety needs, such as bike racks, storage or ·parking, or dedicated bike lanes or paths (Figure 1-1); and E. Vehicle access from alleys or sidestreets where they exist, with pedestrian access from the public street. Wide sidewalks provide a ---.-J positive pedestrian experience in front of retail uses Bulbouts increase pedestrian safety Minimize vehicle access _ ___,,,..._,.._~.,,.-:: to provide a conlinuous facade and street parking Figure 1-3 (Supp. No 13 -10/1/2007) Ch. 18.18-Page 22 ·. ;' 18.18.110 Context-Based Design Criteria (2) Street Building Facades Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s ), to create an environment that supports and encourages pedestrian activity through design elements such as: A. Placement and orientation of doorways, windows, and landscape elements to create . strong, direct relationships with the street (Figure 2-1);_ B. Facades that include projecting eaves and overhangs, porches, and other architectural elements that provide human scale and help break up building mass (Figure 2-2); c Entries that are clearly defined features of front facades, and that h~ve a scale that is in proportion to .the size and type of the building and number of units being accessed; larger buildings should have a more prominent building entrance, while maintaining a pedestrian scale; D. Residential units and storefronts that have a presence on the street and are not walled- off or oriented exclusively inward; E. Elements that signal habitation such as entrances, stairs, porches, bays and balconies that are visible to people on the street; F. All exposed sides of a building designed with the same level of care and integrity; G. Reinforcing the definition and importance of the street with building mass; and H. Upper floors set back to fit in with the context of the neighborhood. Orient doorways and windows ·to create strong relationship to street Building mass should articulate a defined pedestrian base ').: Clearly defined entries that are proportional to size of building and use Figure 2-1 Figure 2-2 Property Line : Build-to Line I If. I ·-· --· Residential Residential Commercial 12 ft effective sidewalk Buildings setback from the property line to create an effective 12' sidewalk on !=I Camino Real. Upper floors set back to fit in with the context of the neighborhood. Ch. 18.18 -Page 23 (Supp. No 13 -10/1/2007) ..... 18.18.110 Context-Based Design Criteria (3) Massing and Setbacks Buildings shall be designed to minimize massing and conform to proper setbacks through elements such as: A. Rooflines that emphasize and accentuate significant elements of the building such as entries, bays, and balconies (Figure 3- 1 ); B. Design with articulation, setbacks, and. materials that minimize massing, break down the scale of buildings, and provide visual interest (Figure 3-1); C. Comer buildings that incorporate special features to reinforce important intersections and create buildings of unique architectural merit and varied styles (Figure 3-1); · D. Building facades articulated with a buil~ing base, body and roof or parapet edge (Figure 3-2); E. Buildings set back from the property line to create an effective 12' sidewalk on El Camino Real, 8' elsewhere.(Figure 3-4); F. A majority of the building frontage located at the setback line (Figure 3-3); and G. No side setback for midblock properties, allowing for a continuous street facade, except when abutting low density residential (Figure 3-3). Roollines can emphasize significant elements such as entries and bays. Comer bundlngs should be used to reinforce importanl intersections. Figure 3-1 A retal entry can slrenglhen the comer. Buodlngs should provide pedestrian-scaled delall, articulation and trallmanship ol lhe facade. Figure 3-2 Building should be sel back lo create a -~~lftW · 12' effecllve sidewalk · along El Camino Real. BuTiding facade articulated wllh a bullding base, body and roof or parapel edge. · relate to existing context Buildings should maximize the building frontage along build-to lines. Buildings taller than their surrounding context should step back to maintain a continuous street facade at lhe build-to line. 12' Effective sidewalk with a setback for outdoor seating Figure 3-3 Figure 3-4 (Supp. No 13-10/112007) Ch.18.18-Page24 18.18.110 Context-Based Design Criteria ( 4) ~ow-Density-Residential Transitions Where new projects are built abutting existing lower-scale residential dev~lopment, care shall be t~en .to respect the scale and privacy of neighboring properties through: .· A. Transitions of development intensity from B. higher density development building types to building types that are compatible with the lower intensity surrounding uses (Figure 4-1); . Ma~sing and orientation of buildings that respect and. mirror the massing of ~eighboring structures by stepping back upper stories to transition to smaller scale buildings, including setbacks and.daylight planes that 11).atch al;:mtting R-1 and R-2 zmi.e requirements (Figure 4-2);. C. Respecting privacy of neighboring . structures, with windows and upper fl?or balconies. positioned so they minimize views into neighboring properties (Figure 4-· 3); D: ·Minimizip.g sight lines into and from neighboring properties (Figure 4-3); E. . Limiting sun and shade impacts on abutting properties; and F. · Providing pedestrian paseos and mews to create separa~<?n between u:~es. low density medium density transition area .45 Degree daylight plane""\ lnitfa;il height of daylight plane 16' at rear yard, 1 O' at side yard . high density Figure 4-1 Massir.ig and orientation of buildings that respect and mirror the massing of neighboring structures by stepping back upper stories to transition to smaller scale buil .... d_in.;;...gs._. ____ _.___, Figure4-2 Design windows to enhance privacy Existing single family homes~ -L--~~~;jj.....,~..JL.......L.J.J-~~- Combination of trees and hedges for screening Figure 4-3 Ch. 18.18-Page 25 (Supp. No 13 -10/1/2007) ·<. 18.18.110 Context-Based Design Criteria A. B. C. D. E. F. G. H. H. (5) Project Open Space Private and public open space shall be provided so that it is usable for the residents, visitors, and/or employees of a site. The type and design of the usable private open space shall be appropriate to the character of the building( s ), and shall consider dimensions, solar access, wind protection, views, and privacy; Open space should be sited and designed to accommodate different activities, groups, active and passive uses, and should be located convenient to the users (e.g., residents, employees, or public) Common open spaces should connect to the pedestrian pathways and existing natural amenities of the site and its surroundings; Usable open space may be any combination of private and common spaces; Usable open space does not need to be located on the ground and may be located in porches, decks, balconies· and/or podiums (but not on rooftops) (Figure 5-1); Open space should be located to activate the street fa~ade and increase Heyes on the street" when possible (Figure 5-1 ); Both private and common open space areas should be buffered from noise where feasible thro:ugh landscaping and building placement; Open space situated over a structural slab/podium or on a rooftop shall have a combination of landscaping and high quality paving materials, including elements such as planters, mature trees, and use of textured and/or colored paved surfaces (Figure 5-2); and Parking may not be counted as open space. Open space to be located to activate the facade and increase•eyes on th~ sh-eer Figure 5-1 Useable open.space may be located on parking podiums. High quality materials and landscaping elements such as planters, mature trees, and· textured and/or colored pavers should be used Figure5-2 Podium open space should. be connected to ground level open space. (Supp. No 13 -10/1/2007) Ch. 18.18-Page 26 18.18.110 Context-Based Design Criteria ( 6) Parking Design Parking needs shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment, such that: ..----....... A. Parking is located behind buildings, below . 1 Figure 6-1 B. =~::;~~g~:~:~:~:~~oo ~~ii: . c. with habitable uses when possible (Figure 6-1); Parking that is semi-depressed is screened with architectural elements that enhance the streetscape such as stoops, balcony overhangs, and/or art; D. Landscaping such as trees, shrubs, vi~~s, or groundcover is incorporated into surface. parking lots (Figure 6-2); E. For properties with parking access from the rear of the site (such as a rear alley or driveway) landscaping shall provide a visual buffer between vehicle circulation areas and ab~tting properties (Figure 6-3); F. Street parking is utilized for visitor or customer parking and is designed in a manrier to enhance traffic calming; G. For properties with parking accessed from the fro~t, minimize the amount of frontage used for .parking access, no more than 25 % of the site frontage facing a street should be devoted to garage openings, carports, or open/surface parking (on sites with less than 100 feet of frontage, no more than 25 feet); H. I. Where two parking lots abut and it is possible for a curb cut and driveway to serve several properties, owners are strongly encouraged to enter in to shared access agreements (Figure 6-4); and Parking is acces~ed from side streets or alleys when possible. Parking podiums shall be fronted or wrapped with habitable or active uses when possible. Landscaping such as trees, shrubs, vines or ground cover is incorporated into surface parking lots. Existing Residential Landscaping shall provide a visual buffer between vehicle areas and adjacent properties. When possible, adjacent properties are strongly encouraged to share driveways in order to limit curb cuts. Ch. 18.18-Page 27 (Supp. No 13-10/1/2007) :;~ .•,; 18.18.110 .. ................ =;-.r~--. t \ ..... 12' effective sidewalk width --.-.. , I t·:;__:_ 12' efl:etti:ve·~idewalk width 40 ft heio-ht limit"'- -a..:..!.=-.: "'-, ........... Context-Based Design Criteria Figure 6-5 Mixed-Use with Surface Parking '\,·· ....... , d;;iylight· plane '·,"\. . 20h Figure 6-6 Mixed-Use with Parking Podium , . --r 40 ft heigb!.Jim~·,, Figure 6-7 ---~--.---..::--.;:-_ -·\ ..... ,, Mixed-Use with Partial ·... Sub-Grade Parking Podium I i .. ········-f~ 12' effective sid~~~lk width I I --.-· L 12' effeetive sjdewall< widtR (Supp. No 13-10/1/2007) ·· .......... "'-daylight plane '-----------.----' "" Ch. 18.18-Page 28 1.0 ft Figure 6-8 Mixed-Use with Below-Grad Parking Podium · 18.18.110 Context-Based Design Criteria (7) Large (lVlulti-Acre) Sites Large (in excess of one acre) sites shall be designed so that street, block, and building patt~ms are consistent with those of the surroundin borhood, and such that: A. New development of large sites maintains and enhances connectivity with a hierarchy of public streets, private streets, walks and bike paths (integrated with Palo Alto's Bicycle Master Plan, when applicable); B. The diversity of building types increases with ir)creased lot size (e.g., <1 acre= · minimum 1 building type; 1-2 acres= minimum 2 housing types; greater than 2 acres = minimum 3 housing types) (Figures 7-1through7-3); and C. Where a site includes more than one housing type, each building type should respond to its immediate context in terms of scale, massing, apd design (e.g., Village Residential building types facing <?r abutting existing single-family residences) (Figures 7-2 and 7-3). Ch. 18.18 -Page 29 Figure 7-1 Figure 7-2 Sites greater than two acres should have at least three building types. · (Supp. No 13 -10/1/2007) 18.18.110 Context-Based Design Criteria (8) Sustainability and Green IJuilding Design Project design and materials to achieve sustainability and green building design should be incorporated into the project. Green building design considers the environment during design and construction. Green building design aims for · compatibility with the local environment: to protect, respect and benefit from it. In general, sustainable buildings are energy efficient, wat~r conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. The following considerations should be included in site and building design: A. Optimize building orientation for heat gain, shading, daylighting, and natural ventilation (Figure 8-1). B. Design landscaping to create comfortable micro-climates and reduce heat island effects. C. Design for easy pedestrian, bicycle, and transit access. D. Maximize onsite stormwater management through l~dscaping and permeable pavement (Figure 8-2). E. Use sustainable building materials. F. Design lighting, plumbing, and equipment for efficient energy and water use. G. Create healthy indoor environments. H. · Use creativity and innovation to build more sustainable environments. One example is. establishing gardens with edible fruits, vegetables or other plants to satisfy a portion of project open space requirements. I. Provide protection for creeks and riparian vegetation and integrate stonnwater management measures and open space to :rniriimize water quality and erosion impacts to the creek environment. · J. Encourage installation of photovoltaic panels. (Ord. 4923 § 3 (part), 2006:'0rd. 4925 § 3 (part), 2006) South facing windows with Summer sun [.,r·· shading devices to control ·,::: . -·If overheating in Summer. Winter Sun ~ ·,. . i ! · ii ~~~g~~~:f{~;L Use of shading devices to control solar loads in Summer and to gain passive heat in Winter. Figure 8-1 Figure 8-2 Minimize stormwater runoff to impermeable areas with landscaping, green roofs, and swales ~hen possible. Rackmounted /f Photovoltaics ~;~1f' Building integrated PV's , =<:in the form of sunshades/ canopies/awnings Figure 8~3 Encowage the in~tallation of photovoltaic panels. (Supp. No 13-10/1/2007) Ch. 18.18-Page 30 18.18.120 Grandfathered Uses and Facilities 18 . .18.120 Grandfathered Uses and Facilities (a) Grandfathered Uses (1) The following uses and facilities may remain as grandfathered uses, and shall not require a conditional use pennit or be subject to the provisions of Chapter 18.70: (A) Any use which was being conducted on August 28, 1986; or (B) A use not being conducted on August 28, 1986, if the use was temporarily discontinued due to a vacancy of 6 months or less before August 28, 1986; or (C) Any office use existing on April 16, 1990 on a property zoned CD and GF combining, which also existed as a lawful conforming use prior to August 28, 1986, notwithstanding any intervening confonning use. (2) The grandfathered uses in subsection (1) shall be pennitted to remodel, improve, or replace site improvements on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement: (A) shall not result in increased floor area; (B) shall not shift the building footprint; (C) shall not result in an increase of the height, length, building envelope, or any other increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070; or (E) in the case of medical, professional, general business or administrative office uses of a size exceeding 5,000 square feet in the CD-Sor CD-N district that are deemed grandfathered pursuant to subsection (1), such remodeling, improvement, or replacement shall not result in increased floor area devoted to such office uses. (3) If a grandfathered use deemed existing pursuant to subsection (1) ceases and thereafter remains discontinued for 12 consecutive months, it shall be considered abandoned and may be replaced only by a confonning use. (4) A use deemed grandfathered pursuant to subsection (1) which is changed to or replaced by a conforming use shall not be reestablished, and any portion of a site or any portion of a building, the use of which changes from a grandfathered use to a conforming use, shall not thereafter be used except to accommodate a conforming use. (b) Grandfathered Facilities (1) Any noncomplying facility existing on August 28, 1986 and which, when built, was a complying facility, may remain as a grandfathered facility and shall not be subject to the provisions of Chapter 18.70. (2) The grandfathered facilities specified in subsection (1) shall be permitted to remoc;Iel, improve, or replace site improvements on the same site, provided such remodeling, improvement, or replacement: Ch. 18.18-Page 31 (Supp. No 13 - I 0/1/2007) 18.18.120 (A) shall not result in increased floor area; (B) shall not shift the building foot print; Grandfathered Uses and Facilities ( C) shall not result in an increase of the height, length, building envelope, or any ~th er increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070. (Ord. 4923 § 3 (part), 2006: Ord. 4925 § 3 (part), 2006) (Supp. No 13-10/1/2007) Ch. 18.18-Page 32 I 18.20.010 Sections: 18.20.010 18.20.020 18.20.030 18.20.040 18.20.050 18.20.060 18.20.070 Chapter 18.20 OFFICE, RESEARCH, AND MANUFACTURING (MOR, ROLM, RP and Gl\1) DISTRICTS Purposes Applicability Land Uses Site Development Standards Performance Criteria Grandfathered Uses Conflict with Development Agreement 18.20.010 Purposes Purposes The office research, industrial and manufacturing zoning districts provide sites for office, light industrial, research and development, and limited commercial uses. The specific purposes for each district are listed below. (a) Medical Office and Medical Research (l\10R) District The MOR medical office and medical research district provides for medical office, medical research, and some medical support services in areas characterized by low building intensity, large site size, and landscaped grounds. The MOR district is primarily intended for land that is designated for research and office park use in the Palo Alto Comprehensive Plan, and that is near hospitals. (b) Research, Office and Limited Manufacturing (ROLM) District The ROLM research, office and limited manufacturing district provides for a limited group of office, research and manufacturing uses in a manufacturing/research park environment, where uses requiring larger sites and available natural light and air can locate. Office uses can be accommodated, but should not predominate in the district. The ROLM district is primarily intended for land designated for research ·and office park use by the Palo Alto Comprehensive Plan and located east of El Camino Real. (c) Research, Office and Limited Manufacturing Subdistrict -Embarcadero [ROLM(E)] The research, office and limited manufacturing subdistrict [ROLM(E)] modifies the site development regulations of the ROLM research, office and limited manufacturing district to apply to smaller sites in areas with limited access or with environmental sensitivity due to their proximity to the Palo Alto Baylands in the Embarcardero Road area. ( d) Research Park District [RP] The RP research park district provides for a limited group of research and manufacturing uses that may have unusual requirements for space, light, and air, and desire sites in a research park environment. Premium research and development facilities should be encouraged in the RP district. Support office uses should be limited and should exist primarily to serve the primary research and manufacturing uses. The RP district is intended for application to land designated for research and office park use in the Palo Alto Comprehensive Plan on sites that Ch. 18.20 -Page 1 (Supp. No. 13 -10/1/2007) 18.20.020 Application Regulations are west of El Camino Real and held in large parcels, which may or may not also be subject to ground leases. (e) Research Park Subdistrict 5 [RP(5)] The Research Park site subdistrict [RP(5)] modifies the site development regulations of the RP research park district to regulate large sites in hilly areas. (f) General Manufacturing District [GM] The GM general manufacturing district provides for light manufacturing, research, and commercial service uses. Office uses are very limited in order to maintain the district as a desirable location for manufacturing uses. The GM district is intended for application to land designated for light industrial use in the Palo Alto Comprehensive Plan. Ord. 4884 § 2 (part), 2005: Ord. 4883 § 7 (part), 2005) 18.20.020 Applicable Regulations The specific regulations of this chapter and the additional regulations and procedures established by this Title 18 shall apply to all Office Research, Industrial, and Manufacturing districts. (Ord. 4884 § 2 (part), 2005: Ord. 4883 § 7 (part), 2005) 18.20.030 Land Uses (a) Permitted and Conditionally Permitted Land Uses Table 1 lists the land uses permitted or conditionally permitted in the industrial and manufacturing districts. TABLEl INDUSTRIAL/MANUFACTURING DISTRICT LAND USES [P = Permitted UseCUP = Conditional Use Permit Required] Accessory facilities and activities customarily associated with or essential to permitted uses, and operated p p p incidental to the principal use. Automatic Teller Machines p p p Home Occupations, when accessory to permitted p p p residential uses. (Supp. No. 26 -4/2014) Ch. 18.20 -Page 2 Chs. 18.40, p 18.42 p 18.20.030(d) p Chs. 18.40, 18.42 18.20.030 Business and Trade Schools Religious Institutions Colleges and Universities p Private Clubs, Lodges, or Fraternal Organizations CUP Private Schools (K-12) CUP Ambulance Services CUP Convalescent Facilities CUP Medical Office p Medical Research p Medical Support Retail P Medical Support Services P Manufacturing Recycling Centers Research and Development Administrative Office Services Financial Services Professional and General Business Office Service and Equipment Yards Utility Facilities Utility Facilities essential to provision of utility services but excluding construction/ storage yards, maintenance facilities, or corporation yards CUP CUP Ch. 18.20 -Page 3 Land Uses p p p p p p CUP CUP CUP CUP CUP CUP CUP CUP CUP p p 18.20.030(c) 18.20.030(b) p p p CUP CUP CUP p p p p p CUP CUP CUP p p p CUP CUP CUP (Supp. No. 26 -4/2014) 18.20.030 Commercial Recreation Neighborhood Recreational Centers Single-Family Two-Family Multiple-Family Residential Care Homes Eating and Drinking Services, excluding drive-in and take-out services Retail Services Animal Care, excluding boarding and kennels Boarding and Kennels Day Care Centers Emergency Shelters for the Homeless Family Day Care Homes Small Family Day Care Large Family Day Care General Business Services Lodging Hotels providing not more than 10 3 of rooms with kitchens Mortuaries and Funeral Homes Personal Services CUP CUP p p p p CUP (Supp. No. 26 -4/2014) Ch. 18.20 -Page 4 Land Uses CuP CUP Not permitted 18.20.040(b) Not permitted CUP CUP p p CUP CUP CUP p CUP p p CUP p 18.20.030(d) (ROLM(E) p p p p p p p p CUP CUP CUP 18.20.030 Vehicle Services Automobile Service Stations, subject to site and design review in accord with the provisions of Chapter 18.30(0) Automotive Services Off-site new vehicle storage for auto dealerships located in Palo Alto Land Uses CUP CUP CUP CUP CUP (b) Limitations on Medical Support Service and Medical Support Retail Uses in the Medical Office and Medical Research (MOR) Zone ( 1) The intent of this limitation is to restrict medical support service and medical support retail uses in the Medical Office and Medical Research (MOR) zone in order to preserve and facilitate space for medical offices and medical research facilities. (2) Floor area devoted to medical support services and medical support retail uses in the Medical Office and Medical Research (MOR) zoning district shall not exceed twenty percent (20 % ) of the total gross floor area within the district. (3) The director may require a report from the property owner or applicant whenever application is made to the city to develop new space for medical support service or medical support retail uses or to convert existing space to such uses. The report shall identify the gross floor area of buildings on each site within the zoning district and the gross floor area of medical support service and medical support retail uses for each site. The director may, from time to time, establish procedures and standards implementing this Section 18.20.030(b). (c) Automatic Teller Machines (1) Automatic teller machines may be allowed as an accessory use in the MOR, ROLM, ROLM(E), RP, RP(5), and GM districts when incidental to a primary use on the site and when accessible only from the interior of a building. (2) Automatic teller machines may be allowed as a permitted use in the MOR, ROLM, ROLM(E), RP, RP(5), and GM districts when incidental to a primary use on the site and when accessible from the exterior of a building. Staff level Architectural Review is required prior to issuance of a building permit. Ch. 18.20 -Page 5 (Supp. No. 26 -4/2014) 18.20.030 Land Uses ( d) Emergency Shelters for the Homeless Emergency shelters for the homeless may be allowed as a permitted use in the ROLM(E) district on properties located east of Highway 101, subject to the following performance and design standards. Performance and Design Standards for Emergency Shelters for the Homeless. An emergency shelter for the homeless shall conform to all site development standards and performance criteria of the ROLM(E) zone district except as modified by the following performance and design standards: (1) The construction of and/or renovation of a building for use as an emergency shelter shall conform to all applicable building and fire code standards. (2) There shall be provided one parking space for each three (3) beds in the emergency shelter. (3) Shelters shall have designated smoking areas that are not visible from the street and which are in compliance with all other laws and regulations. ( 4) There shall be no space for outdoor congregating in front of the building adjacent to the street and no outdoor public telephones. (5) There shall be a refuse area screened from view. (6) Maximum number of persons/beds. The emergency shelter for the homeless shall contain no more than 40 beds. (7) Size and location of exterior and interior on-site waiting and client intake areas. Shelters shall provide 1 O square feet of interior waiting and client intake space per bed. In addition, there shall be two office areas provided for shelter staff. Waiting and intake areas may be used for other purposes as needed during operations of the shelter. (8) On-site management. On-site management and on-site security shall be provided during hours when the emergency shelter is in operation. (9) The emergency shelter provider shall submit an operations plan that addresses the standards for operation contained in the Palo Alto Quality Assurance Standards for Emergency Shelters for the Homeless. (10) Distance to other facilities. The shelter must be more than 300 feet from any other shelters for the homeless. (11) Length of stay. Temporary shelter shall be available to residents for no more than 60 days. Extensions up to a total stay of 180 days may be provided if no alternative housing is available. (12) Outdoor lighting shall be sufficient to provide illumination and clear visibility to all outdoor areas, with minimal shadows or light leaving the property. The lighting shall be stationary, and directed away from adjacent properties and public rights-of-way. (Ord. 5230 § 7, 2014: Ord. 4884 § 2 (part), 2005: Ord. 4883 § 7 (part), 2005) (Supp. No. 26 -4/2014) Ch. 18.20 -Page 6 18.20.040 Site Development Standards 18.20.040 Site Development Standards Development in the office research, industrial, and manufacturing districts is subject to the following development standards, provided that more restrictive regulations may be required as part of design review under Chapter 18. 76 of the Palo Alto Municipal Code. (a) Development Standards for Non-Residential Uses Table 2 shows the site development standards for exclusively non-residential uses in the industrial and manufacturing districts. TABLE2 INDUSTRIAL/MANUFACTURING NON-RESIDENTIAL SITE DEVELOPMENT STANDARDS :,~":::~~~I'.~,', ;'.;~i~~~t~i~Jlll111~ ,~ ~~: '~Mi ,:1~11•41 Minimum Site Specifications I Site Area (sq. ft.) 25,000 1 acre 1 acre 5 acres Site Width (sq. ft.) 150 100 100 250 Site Depth (ft.) 150 150 150 250 Minimum Setbacks Setback lines imposed by a special setback map pursuant to Front Yard (ft) Rear Yard (ft) Interior Side Yard (ft) Street Side Yard (ft) Minimum Yard (ft) for site lines abutting or opposite residential districts Maximum Site Coverage Maximum Floor Area Ration (FAR) Parking Landscaping Maximum Height (ft) Standard Within 150 ft. of a residential zone C5) Within 40 ft. of a residential zone<5) 50 <3> 10 (3) 10 20 (3) 10 (3) 30% 0.5:1 50 35 35 Chapter 20.08 of this code may apply. 20 20 100 ll) 20 20 40 20 20 40 20 20 70 20 20 10 30% 30% 15% 0.4: 1 (<) I 0.3: I (4l 0.4: 1 c4> 0.3: 1 c4> 0.5:1 See Chs. 18.40, 18.42 See Section 18.20.050 (Performance Criteria) I 35 <4> 35 (4) 50 35 35 35 25 25 35 Ch. 18.20 -Page 6.1 18.20.060(e)(l)(D) 18.20.060(e)(l)(E) Chs. 18.40, 18.42 18.20.050 (Supp. No. 26 -4/2014) 18.20.040 Daylight Plane for site lines having any part abutting one or more residential districts Initial Height Slope Site Development Standards -(2) 10 -(2) 1:2 (1) For any property designated GM and fronting on East Bayshore Road a minimum setback of 20 feet along that frontage is established. (2) Daylight plane requirements shall be identical to the daylight plane requirements of the most restrictive residential district abutting the side or rear site line. Such daylight planes shall begin at the applicable site lines and increase at the specified slope until intersecting the height limit otherwise established for the MOR district. (3) In the MOR district, no required parking or loading space shall be located in the first 10 feet adjoining the street property line of any required yard. (4) See subsection 18.20.040(e) below for exceptions to height and floor area limitations in the ROLM and RP zoning districts. (5) Residential zones include R-1, R-2, RE, RMD, RM-15, RM-30, RM-40 and residential Planned Community (PC) zones. (b) Development Standards for Exclusively Residential Uses Residential uses shall be permitted in the MOR, RP, RP(5), ROLM, ROLM(E), and GM zoning districts, subject to the following criteria. (1) It is the intent of these provisions that a compatible transition be provided from lower density residential zones to higher density residential or non-residential zones. The Village Residential development type should be evaluated for use in transition areas and will provide the greatest flexibility to provide a mix of residence types compatible with adjacent neighborhoods. (2) No new single-family or two-family residential development is permitted in any of the office, research and manufacturing districts. Existing single-family and two-family uses shall be permitted to remain, consistent with the provisions of Chapter 18. 70 (Nonconforming Uses and Noncomplying Facilities). (3) MOR District. All multi-family development in the MOR zoning district shall be permitted subject to approval of a conditional use permit and compliance with the development standards prescribed for the RM-30 zoning district. (4) RP and RP(5) Districts. All multi-family development in the RP, and RP(5) zoning districts that is located within 150 feet of an R-E, R-1, R-2, RMD, or similar density residential PC zone shall be permitted subject to approval of a conditional use permit and compliance with the development standards prescribed for the RM-15 zoning district, including Village Residential development types. Multi-family development in the MOR, RP, and RP(5) zoning districts that is located greater than 150 feet from an R-E, R-1, R-2, RMD, or low density residential PC shall be permitted subject to (Supp. No. 26 -4/2014) Ch. 18.20 -Page 6.2 18.20.040 Site Development Standards approval of a conditional use permit and compliance with the development standards prescribed for the RM-30 zoning district. (5) ROLM (E) District. All multi-family development in the.ROLM(E) zoning district shall be pennitted subject to approval of a conditional use permit and compliance with the development standards prescribed for the RM-15 zoning district. ( 6) ROLM District. All multi-family development in the ROLM zoning district shall be peniritted subject to approval of a conditional use pennit and compliance with the development .standards prescribed for the RM-30 zoning district. (7) GM District. All residential development is prohibited in the GM zoning district. (c) ~eve~opment Standards for Mixed (Residential and Nonresidential) Uses in the ROLM, • I (d) · 'ROLM(E), and GM zoning Districts Mlxed (residential and nonresid.ential) uses shall be pennitted in the ROLM, ROLM(E), and f]M zo~ng districts, subject to the following criteria: (1) It is the intent of these provisions that a compatible transition be provided from lower · density residential zones. to higher density residential, non-residential, or mixed use · zones. The Yillage Residential development type ~hould be evaluated for use in transition areas and will .provide the ·greatest flexibility to provide a mix of residence types compatible with adjacent neighborhoods .. (2) ROLM(E) District. ·Mixed (residential ·and nonresidential) development in the ROLM(E) zoning district shall be petmitted, subject to approval of a conditional use permit, determination that the nonresidential use is allowable-in the district and that the residential component of the development complies with the development standar~s prescribed for the RM-15 zoning district. The maximum floor area ratio (FAR) for mixed use development is.0.3 to 1. (3) ROLM District. Mixed (residential and nonresidential) development in the ROLM zoning district shall be pennitted, subject to approval of a conditional use permit, · determination that the nonresidential use is allowable in the district and that the residential component of the development complies with the· development standards · prescribed for the RM-30 zoning district. The maximum floor area ratio (FAR) for mixed use devel~pm~nt is 0.4 to 1. ( 4) GM District. Mixed use (residential and nonresidential) development is prohibited in the GM·zoning district. In computing residential densities for mixed (residential and nonresidential) uses, the density calculation for the residential use shall be based on the entire site, including the '· nonresidential portion of the site. Floor Area Bonus for Child Care Facilities Floor area operated as a licensed child care facility shall not be included when calculating floor area ratios for a site. In addition, the permitted floor area on the site shall be increased by an amount equal to fifty percent ( 50%) of the floor area of the child care facility. The floor area bonus is not exempt from parking requirements and shall not be granted unless the director determines that on-site circulation (including for pick-up and drop-off) for the child care facility is adequate. Ch. 18.20 -Page 7 (Supp. No 13 -10/1/2007) 18.20.040 Site Development Standards (e) Height and Floor Area Exceptions for Equipment Storage and Access in the RP and RP(S) Districts · (1) The intent of this subsection is to provide flexibility in height and floor area limitations to accommodate equipment needs for research and development and similar facilities. (2) The maximum height in the RP and RP(5) zoning districts may be increased to forty ( 40) feet where a) interstitial space is provided between floors to accommodate mechanical and/or electrical equipment, b) the load for such interstitial space is limited, to the satisfaction of the Building Official, to preclude conversion to habitable space, c) the building contains no more than two stories of habitable space above grade, and d) the portion of any building over 35 feet in height is located a · minimum of 150 feet from the nearest property line of a residential zone or ·residential PC zone. Interstitial space refers to intermediate floors used for mechanical or electrical systems and access for equipment maintenance purposes. (3) Rooftop and/or basement areas used to enclose mechanical equipment shall be · excluded from floor area calculations, provided that the total of any such excluded areas does not exceed one-third of th~ building footprint area.· Rooftop equipment or rooftop equipment encl~sures shall not extend above a height of fifteen (15) feet above the roof, and any enclosed rooftop equipment located adjacent to residential, property shall be set back at least 20 feet from the building edge closest to the residential site or a minimum of 100 feet from the residential property line, whiChever is closer~ (f) Limitations on Outdoor Uses and Activities. (1) In the GM district, outdoor sales and display of merchandise and outdoor eating areas operated incidental to pennitted eating and drinking services are permitted subject to the following regulations: (A) Outdoor sales and display shall not occupy a total site area exceeding the gross building floor area on the site, except as authorized by a conditional use pennit. (B) Areas used for outdoor sales and display of motor vehicles, boats, campers, camp trailers, trailers, coaches, house cars, or similar conveyances shall meet the minimum standards applicable to off-street parking facilities with respect to paving, grading, drainage, access to public streets and alleys, safety and protective features, lighting, landscaping, and screening. (C) Exterior storage shall be prohibited, unless screened by a solid wall or fence ~f between five and eight feet in height. This requirement is not applicable to recycling centers. (2) In the ROLM and RP districts, all outdoor activities or uses are prohibited except: (A) Outdoor activities associated with residential use; (B) Landscaping; (C) Parking and loading facilities; (D) Recycling centers that have obtained a conditional use permit; (Supp. No 13-10/1/2007) Ch. 18.20 -Page 8 · 18.20.040 Site Development Standards (E) Noncommercial recreational activities and facilities accessory to pennitted or conditional uses; and (F) Activities. and facilities accessory to conditional uses, when authorized by a conditional use permit. (3) In all industrial and manufacturing districts, equipment such as generators and air conditioning compressors is pennitted outdoors so long as it is located out of setbacks adjacent to (including across a street from) a residential use, and is screened from view from the residential area. ( 4) Any outdoor storage or use of hazardous materials in excess of exempt quantities prescribed in Title 15 of the Municipal Code or outdoor storage, use or handling of any amount of toxic gas or materials regulated under Title 15 shall also require a conditional use penni~. (g) Employee Showers. Employee shower fa<::ilities shall be provided for any new building constructed or for any addition to or enlargement of any existing building as specified in Table 4. TABLE4 EMPLOYEE SHOWERS REOUIRE.D Medical, Professional, and General Business Offices, Financial Services, Colleges and Universities, Business and Trade Schools, Research and Development, General Business Services, and Manufacturing (h) Nuisances and Hazards ~0,000-49,999. 50,000 and up No requirement 2 4 In all office research, industrial, and manufacturing districts, excluding the MOR Medical Office and Medical Research district, all uses, whether permitted or conditional, shall be conducted in such a manner so as to preclude any nuisance, hazard, or commonly recognized offensive conditi~ns or characteristics, including creation or emission of dust, gas, smoke, noise, fumes, odors, vibrations, particulate matter, chemical co~pounds, etiological (biological) agents, electrical disturbance, humidity, heat, cold, glare, or night illumination. Prior to issuance of a building permit or occupancy pennit, or at any other time, the building official may require evidence that adequate controls, measures, or devices have been provided to ensure and protect the public interest, health, comfort, convenience, safety, and general welfare from such nuisance, hazard, or offensive condition. (i) Recycling Storage All new development, including approved modifications that add thirty percent or more floor area to existing uses, shall provide adequate and accessible interior areas or exterior enclosures for the storage of recyclable materials in appropriate containers. The design, construction and accessibility of recycling areas and enclosures shall be subject to approval by the architectural review board, in accordance with design guidelines adopted by that board and approved by the city_ council pursuant to Chapter 18.76. Ch. 18.20 -Page 9 (Supp. No 13 -10/1/2007) 18.20.050 Performance Criteria (j) Designated Sites Notwithstanding any other provisions of this Section 18.20.040, on those sites that are Designated Sites under the Development Agreement between the City of Palo Alto and Stanford University approved and adopted by Ordinance No. 4870, the maximum floor area ratio shall be 0.5 to 1 as provided in that Agreement. (Ord. 4883 § 7 (part), 2005: Ord. 4884 § 2 (part), 2005) 18.20.050 Performance Criteria All development in the Office/Research/Manufacturing zoning districts shall comply with the requirements and guidelines outlined in Chapter 18.23. Such requirements and guidelines are intended to reduce the impacts of these non-residential uses on surrounding residential districts. (Ord. 4883 § 7 (part), 2005: Ord. 4884 § 2 (part), 2005) 18.20.060 Grandfathered Uses (a) Applicability (1) Except as provided in this section, nonconforming uses and noncomplying facilities· are governed by Chapter 18. 70 of the Zoning Ordinance. (2) Any use allowed as a conditional use but legally existing as a permitted use prior to the effective date of ~mendments to 'the Zoning Ordinance modifying th~ allowable uses in the MOR, ROLM, ROLM{E), RP, RP(5), or GM districts shall be considered a conforming use, except that a conditional use permit shall be required if the use is expanded as outlined in Section 18.74.020. (b) Grandfathered Uses In the GM District (1) The following uses are grandfathered in the GM District, subject to the provisions in subsection (2): (A) Retail sales service uses or general business office uses existing on January 13, 1986. (B) General business office uses existing on September 6, 1984. · (2) The uses specified in subsection (1) may remain as grandfathered.uses provided that those uses: (A) are located in the GM district; (B) existed on the specified date; (C) on that date, were lawful permitted uses or conditional uses operating subject to a conditional use pennit; and (D) on that date, were confonning uses. (Supp. No 13 -10/1/2007) Ch. 18.20 -Page 10 / 18.20.070 Conflict with Development Agreement (c) Permitted Changes The following regulations shall apply to grandfathered uses in the GM district, as specified in subsection (b) above: (1) Such uses shall be pennitted to remodel, improve, or replace site improvements on the same site, for continual use and occupancy l?Y the same use, with the following provision: (A) Unless a design enhancement exception is granted pursuant to Chapter 18.76, remodeling, improvement or replacement shall not: (i) result in increased floor area or number of rooms, (ii) result in shifting o~ building footprint, (iii) increase the height, length, building envelope, or size of the improvement, or (iv) increase the existing degree of noncompliance. (2) If a grandfathered use ceases and thereafter remains discontinued for twelve consecutive months, it shall be considered abandoned and may be replaced only by a conforming use. (3) A grandfathered use which is changed to or replaced by a conforming use shall not be reestablished, and any portion of a site or any portion of a building, the use of which changes from a grandfathered use to a conforming use, shall not thereafter be used except to accommodate a conforming use. (Ord. 4883 § 7 (part.), 2005: Ord. 4884 § 2 (part), 2005) 18.20.070 Conflict with Development Agreement In the event that any provision of this Chapter 18.20 conflicts with any provision of the Development Agreement between the City of Palo Alto and Stanford University approved and adopted by Ordinance No. 4870, the provisions adopted by Ordinance No. 4870 shall apply. (Ord. 4883 § 7 (part), 2005: Ord. 4884 § 2 (part), 2005) Ch. 18.20-Page 11 (Supp. No 13-10/112007) THIS PAGE INTENTIONALLY LEFT BLANK (Supp. No 13 - I 0/1/2007) Ch. 18.20-Page 12 Attachment D Public Comment Carnahan, David From: Sent: To: Subject:, Attachments: Good morning, Ms. Grider-- Ellen Forbes <eforbes820@att.net> Wednesday, October 29, 2014 10:19 AM Clerk, City Letter from LWVPA re: Comp Plan update Let to City Co urging CompPlan work speed-up.doc 14 OCT 29 AM f6: 44 The League of Women Voters of Palo Alto would like for this letter to be included in the Council's packet for next Monday's meeting, Nov. 3. Thank you very much for your assistance. Ellen Forbes, President League of Women Voters of Palo Alto THE LEAGUE OF WOMEN VOTERS 75 Years in PALO ALTO October 29, 2014 Mayor Nancy Shepard City Council Members 3921 E. Bayshore Rd., SUITE 209 • PALO ALTO, CALIFORNIA 94303 • 650/903-0600 • www.lwvpa/oa/to.on 285 Hamilton Avenue, Palo Alto Palo Alto, CA 94301 Mayor Shepard and Council Members: The Comprehensive Plan is a crucial statement of what Palo Alto most values about itself and how it hopes to thrive in the future. We have fallen behind schedule in the process of updating our most recent Plan. The League of Women Voters of Palo Alto supports your efforts to align this document with our current sense of civic priorities. Our City's decisions risk the appearance of being only short-term adjustments until we have ratified an updc;ited Plan. Therefore, we ask that you work effectively to bring the Plan to completion without undue delay, in order to guide our future decision making most effectively. Thank you, Ellen Forbes, President City of Palo Alto (ID # 5049) City Council Staff Report Report Type: Action Items Meeting Date: 11/3/2014 City of Palo Alto Page 1 Summary Title: Proposed Changes in Development Impact Fees Title: Finance Committee Recommends Proposed Changes in Development Impact Fees: Direction to Draft Ordinance Implementing New Public Safety Facility and General Government Facilities Impact Fees From: City Manager Lead Department: Administrative Services RECOMMENDATION The Finance Committee and Staff recommend that the Council review and approve the recommended new Public Safety Facility and General Government Facility impact fees at 75 percent of the maximum allowable level and direct staff to draft an implementing ordinance. BACKGROUND AND DISCUSSION On May 6, 2014 the Finance Committee passed by a vote of 3 to 1 the following motion: MOTION: Vice Mayor Kniss moved, seconded by Chair Berman that the Finance Committee recommend the City Council review the Development Impact Fee (DIF) Justification Study prepared by David Taussig & Associates and approve the recommended new Public Safety Facility and General Government Facility impact fees at 75 percent of the maximum allowable level. The information presented to Finance Committee that evening may be found in Attachment A, and minutes from the Finance Committee’s discussion may be found in Attachment B. Staff was scheduled to come to the full Council on May 19 following the May 6 Finance Committee meeting, but the item was postponed when other agenda items ran long. The June 2014 Council schedule was packed, the July recess followed, and then staff vacations and consultant schedule conflicts impeded an August Council date. This item was then put on the tentative agenda for September, and then October, but other agenda items were deemed more pressing. Since the original May Council date, the impact fees currently in place have been updated for FY 2015. Attachment C shows the FY 2015 fee levels. City of Palo Alto Page 2 Please note the following corrections and additions to CMR #4697 (Attachment A), as requested by the Finance Committee and discussed by staff. I. Correction: Page 5, Paragraph 1 of Staff Report #4697 should be replaced with the following paragraph (changes underlined): Council members may note that Public Safety Building (PSB) needs are listed at $57 million. Staff acknowledges that there are discussions underway regarding earmarking new hotel revenues for the PSB, and that the needs list above excludes such funds. Staff proposes that for now Council consider that need unfunded, and when the City Council approves the funding for the PSB – if it is finalized before the new fees are implemented-- the resulting fee can be recalculated and reduced to reflect the offsetting revenue source. II. Clarification Regarding Source of Palo Alto Jobs Data: Finance Committee members were concerned about the recommended fees’ allocation between residential and non-residential properties. Specifically, there was concern that the jobs data used in the calculations might be unreliable. For example, the data on page 10 of David Taussig & Associates (DTA) Development Impact Fee Justification Study assumed 93,295 employees in Palo Alto at present, whereas there are other estimates as high as 120,000. Finance Committee members wanted greater detail on how the numbers were derived, given the fact that the City does not have a Business License Tax or Registry Fee, by which aggregate jobs data could be gathered. The consultant used demographic data from Planning and Community Environment (PCE) staff which had taken into account Association of Bay Area Government’s data along with PCE staff’s knowledge of Palo Alto trends. PCE staff had, in fact, modified the ABAG projections before forwarding them to DTA. Staff since received further clarification regarding the specific source of the jobs data used in the original ABAG projections. According to PCE staff: Most jurisdictions, including ABAG, rely on a Census product called Longitudinal Employer-Household Dynamics (LEHD) which is currently the best available information on where, type and number of jobs for smaller geographic areas such as Palo Alto (as opposed to Metropolitan Statistical Areas such as San Jose, Oakland, and San Francisco). LEHD is updated annually and the latest data set is for the year 2011. According to the LEHD web site, the LEHD program “is part of the Center for Economic Studies at the U.S. Census Bureau. The LEHD program produces new, cost effective, public-use information combining federal, state and Census Bureau data on employers and employees...” Staff concluded that these sources are credible and therefore adequate as a basis for DTA’s calculations, until such time as employment data are gathered via a Business Registry Fee. City of Palo Alto Page 3 III. Clarification Regarding Fee Split Between Residential and Nonresidential Uses: Finance Committee members were concerned that the proposed fee levels might be unfairly allocated between residential and nonresidential uses, and that residential developments would pay more than their fair share, and nonresidential development would pay less than theirs. According to DTA, their fee calculations are based on a standard industry assumption that each employee counts as 50% of a “person served,” since employees tend to demand fewer City services than residents. This convention determines the fee levels only. DTA looked at the projected residential growth and the projected job growth, and divided the needed revenue (based on projected capital needs) over the anticipated number of new units (in terms of new houses and new commercial square footage) to set the fees. Given the proposed fee levels, the split in projected revenues from the new fees would be 48.8% from residential development and 51.2% from non-residential development, rather than “60/40” as had been discussed at the Finance Committee meeting. IV. Reformulation of Table Comparing Benchmarked City Fees with Palo Alto’s: Based on Finance Committee members’ feedback, the tables on page 4 of CMR #4697 should be replaced with the following table: The table above shows that although Palo Alto’s single-family fees are high compared to the comparison cities’ fees, when taken as a percentage of single-family home prices, Palo Alto’s fees are reasonable. V. Correction in Table Showing Current DIF Fund Balances: The table found on page 5 of CMR #4697 showing our current Impact Fee Fund Balances (as of fiscal year-end 2013) should read as follows (correction underlined): City of Palo Alto Page 4 Fee Net Funds Available (Thous. of $$) Parks 1,616 Community Centers 5,381 Libraries 678 Residential Housing in-Lieu 4,630 Commercial Housing In-Lieu 3,569 Parkland Dedication 2,051 Citywide Transportation 3,141 Water & Wastewater 2,225 Charleston/Arastradero 569 Stanford Research Park/El Camino 3,847 San Antonio/West Bayshore 829 University Ave. Parking Assessment District 658 VI. Fee Split Among Non-Residential Categories: Another concern of Council Members was that the proposed non-residential fees are broken out by Commercial, Office/Institutional, and Industrial categories; while our current fees are broken out by Commercial/Industrial and Hotel/Motel categories. The question was raised as to why DTA and staff were introducing the new categories with the new fees. DTA explained that the new (proposed) categories are standard fee categories among California cities and reflect the varying demand for City services generated from different non-residential uses. In fact, DTA was unfamiliar with other cities splitting Hotel/Motel usage from other non- residential uses. Staff recommends retaining the new categories for the new fees. Beyond the above clarifications and corrections, the remaining information in Attachment A is valid and may be used to inform Council’s discussion. Attachments:  Attachment A: CMR #4697 from May 6, 2014 Finance Committee with Attachments (PDF)  Attachment B: Excerpt Minutes from May 6, 2014 Finance Committee Meeting (PDF)  Attachment C: FY 2014-15 Impact Fees (PDF) City of Palo Alto (ID # 4697) Finance Committee Staff Report Report Type: Action Items Meeting Date: 5/6/2014 City of Palo Alto Page 1 Summary Title: Proposed Changes in Development Impact Fees Title: Proposed Changes in Development Impact Fees: Implementation of New Public Safety Facility and General Government Facilities Fees From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff requests that the Finance Committee review and discuss the attached “Development Impact Fee Justification Study” prepared by David Taussig & Associates (DTA) (see Attachment A). The report presents proposed maximum fee levels for a new Public Safety Facility Impact Fee and for a new General Government Facilities Impact Fee. Through this process, the Committee and the City Council may determine the following: (a) whether to levy each of the proposed new fees, (b) at what level to set the fee(s), up to and including the maximum allowable fee, and (c) what if any exemptions should be included. MOTION The Finance Committee has reviewed the Development Impact Fee (DIF) Justification Study prepared by David Taussig & Associates and recommends that the Council review the report and approve the recommended new Public Safety Facility and General Government Facility impact fees at 75 percent of the maximum allowable level. BACKGROUND Staff presented to the Finance Committee on November 5, 2013 a list of anticipated Project Needs throughout the City between now and 2035. Staff then presented the list along with additional information requested by the Finance Committee to the City Council on March 3, 2014. Council approved the Project Needs List that evening, so the consultant was able to proceed with calculating the recommended maximum fee levels for certain areas. Process for Developing the Project Needs List: City of Palo Alto Page 2 For several months before the November 5, 2013 Finance Committee meeting, staff assembled an extensive list of projected capital needs for the following categories: Transportation, Public Safety, General Government Facilities, Parks and Recreation, and Libraries. The Administrative Services Department and DTA consulted with City staff of all relevant departments, the IBRC report and the follow-up discussions with the Council Infrastructure Committee, and the Proposed and Adopted CIP Budgets for Fiscal Year 2014. Staff also conducted a series of inter- department meetings to discuss the draft list of projects and any new developments—such as changes in funding or changed cost estimates-- that may have arisen in the intervening weeks. It is important to note that the evaluation of the City’s housing impact fees is not included in DTA’s current contract scope, but is included as a program under the Updated Housing Element, recently adopted by City Council. The list was limited by the following criteria: each project must be “non-speculative” – that is, seriously considered, not just a nice-to-have; have a useful life of over 5 years, and have all offsetting revenues deducted. In addition, given the built-out nature of the City, only a small percentage of the cost of the projects could be allocated to new development. For example, staff’s list of unfunded projected needs for Parks added up to $39 million. Given the Association of Bay Area Governments’ and Planning and Community Environment staff’s projected population growth rates, in the next 20 years about 15% of the City’s parks users will be brought in by new development. The remaining 85% will be “existing users.” Therefore only 15% or about $6 million of those costs could be allocated to the development impact fee. That $6 million is already largely covered by the Parks fee at its current level. The remaining $33 million would have to be funded by the General Fund or by “existing users.” That raises the bar quite high for the amount of funding needed to justify a new or increased fee. In advance of the November meeting with the Finance Committee, DTA determined that the total project needs for Parks and Recreation (at $39 million) and Libraries (at $0.3 million) would not merit an increase in current fees. In fact, the current fee levels should be adequate to fund the new list of needs along with the needs anticipated at the last Impact Fee update. As a result, staff presented Council with a proposed list of projects in the remaining categories: Transportation, Public Safety facilities and General Government facilities. After the Council Meeting on March 3, DTA determined that the Transportation-related project needs, totaling $91.2 million, also would be adequately met by the fees already in place. That left General Government facilities and Public Safety Facilities as the two fee opportunities DTA analyzed in its Fee Justification Study. The following table shows all the categories of fees currently in place in Palo Alto, which ones were included in the Benchmarking study, and which ones were included in the fee updates, and if they were not, when they are expected to be updated. City of Palo Alto Page 3 DTA completed this draft fee recommendation report on April 15. Staff has had the opportunity to review the recommendations and consider them in relation to total impact fees currently in place and the impact to prospective developers. Note that DTA had completed earlier a benchmarking study of Development Impact Fees (DIFs) in neighboring communities. (See Attachment F.) The following chart summarizes the benchmark information with and without the proposed new fees for Palo Alto. City of Palo Alto Page 4 The chart above shows that Palo Alto’s total DIFs are quite a bit higher than the average of the other benchmarked cities. However, taken as a percentage of home prices within the cities, the comparison is more reasonable. The following chart shows the total fees – including the potential new fees - by category as a percentage of average single-family home sale price. The City of Palo’s current DIFs are outlined in Attachment B. Developments may be exempt from all or some impact fees, depending upon the intended use. For instance, 100% affordable housing projects (not a mix of market rate and below market rate) are exempt from current impact fees, as are home remodels or expansions. (Planning and Community Environment is considering whether that exemption needs to be tightened.) Attachment C shows the exempted groups for each of the current fees. Staff recommends that Council maintain the same general exemptions for the new fees. Note that an earlier version of the Current Impact Fees provided to Council on March 3, 2014 contained an inaccuracy: for Parkland Dedication Fees, it indicated that the fees applied only to “Residential Subdivisions of over 50 parcels.” In fact, the statute indicates that the required parkland per unit applies to all residential development, but the in-lieu fees are available only to subdivisions of less than 50 parcels. The version in Attachment B includes the corrected text. The Needs List (see Attachment E), approved by Council on March 3 2014, identifies the City’s projected capital needs through 2035 within the selected categories. As discussed above, this list is a pared-down version of a more extensive review conducted by staff of all the DIF City of Palo Alto Page 5 categories: Transportation, Public Safety, General Government Facilities, Parks and Recreation, and Libraries. Council members may note that Public Safety Building (PSB) needs are listed at $57 million. Staff acknowledges that there are discussions underway regarding earmarking a proposed 2 percent Transient Occupancy Tax increase as a revenue stream for the PSB, and that the needs list above excludes such funds. Staff proposes that for now Council consider that need unfunded, and when the City Council approves the funding for the PSB – if it is finalized before the new fees are implemented-- the resulting fee can be recalculated and reduced to reflect the offsetting revenue source. RESOURCE IMPACT Development Impact Fees provide funding for capital improvements to mitigate the impacts of new development in the community. The revenues received each year vary based on the amount of development (both residential and non-residential) occurring in Palo Alto during that timeframe. Recommended changes to the fees will be presented to Council for approval in future meetings. DTA’s analysis projected revenue impacts over the next 20 years, assuming maximum fee levels, of $22.6 million for Public Safety facilities and $13.1 million for General Government facilities, for a total of $35.6 million. If Council sets the fees at 75 percent of maximum, combined revenues would be in the $27 million range. Actual revenues will vary depending on the specific fee levels approved by Council as well as with year-by-year development activity. The following table summarizes the fund balances for the City’s existing impact fees as of June 30, 2013: Fee Bal. June 30, 2013 (Thous. of $$) Commitments & Encumbrances (Thous. of $$) Net Funds Available (Thous. of $$) Parks 1,626 10 1,616 Community Centers 5,396 15 5,381 Libraries 680 3 678 Residential Housing in-Lieu 14,935 10,306 4,630 Commercial Housing In-Lieu 10,017 6,448 3,569 Parkland Dedication 2,057 6 2,051 Citywide Transportation 3,149 8 3,141 Water & Wastewater 2,225 0 2,225 Charleston/Arastradero 572 3 569 Stanford Research Park/El Camino 3,847 0 3,847 San Antonio/West Bayshore 829 0 829 University Ave. Parking Assessment District 660,852 2,891 657,961 City of Palo Alto Page 6 Staff recommends that some of the net funds listed above be dedicated to relevant infrastructure needs. Specific fund allocations will be included in the Proposed FY 2015 Budget. POLICY IMPLICATIONS Council has the authority to charge new development for its relative share of the cost of specific public facilities, as calculated based on a Nexus Study. Council also has the authority, for policy reasons, to restructure fees based on articulated City policies. The information provided in this report allows Council to take the next step towards re-evaluating and adjusting the City’s Development Impact Fees. Attachments:  Attachment A: Draft Development Impact Fee Justification Study by David Taussig & Assoc. (PDF)  Attachment B: Current Development Impact Fees (PDF)  Attachment C: Current Exemptions from Palo Alto Development Impact Fees (DOCX)  Attachment D: Excerpt Minutes from City Council meeting of March 3, 2014 (PDF)  Attachment E: Public Facilities Needs List (PDF)  Attachment F: Charts from Benchmarking Study (DOCX) B. C. DRAFT DEVELOPMENT IMPACT FEE JUSTIFICATION STUDY CITY OF PALO ALTO APRIL 29,2014 Prepared by: DAVID TAUSSIG &ASSOCIATES,INC. 2250 HYDE STREET,5TH FLOOR SAN FRANCISCO,CALIFORNIA 94109 (800)969-4382 ASSOCIATES,INC. Public Finance Public Private Partnerships Urban Economics TAUSSIG Newport Beach San Francisco Riverside Fresno Chicago, Illinois Dallas, Texas DAVID & City of Palo Alto TOC Development Impact Fee Justification Study April 29, 2014 TABLE OF CONTENTS SECTION PAGE EXECUTIVE SUMMARY...............................................................................................................1 SECTION I.INTRODUCTION ..................................................................................................3 SECTION II.LEGAL REQUIREMENTS TO JUSTIFY DEVELOPMENT IMPACT FEES ..................4 SECTION III.DEMOGRAPHICS ................................................................................................8 SECTION IV.THE NEEDS LIST...............................................................................................12 SECTION V.METHODOLOGY USED TO CALCULATE FEES ...................................................15 A.PUBLIC SAFETY FACILITIES......................................................................................................17 B.GENERAL GOVERNMENT FACILITIES .........................................................................................22 SECTION VI.SUMMARY OF FEES..........................................................................................25 APPENDICES APPENDIX A:FEE DERIVATION WORKSHEETS EXECUTIVE SUMMARY City of Palo Alto Page 1 Development Impact Fee Justification Study April 29, 2014 In order to adequately plan for new development and identify the public facilities and costs associated with mitigating the direct and cumulative impacts of new development, David Taussig & Associates, Inc. (“DTA”) was retained by the City of Palo Alto (the “City”) to prepare an AB 1600 Fee Justification Study (the “Fee Study”) for specific categories of public improvements not currently covered by the City’s Fee Program. The Fee Study is intended to comply with Section 66000 et. seq.of the Government Code, which was enacted by the State of California in 1987, by identifying additional public facilities required by new development (“Future Facilities”) and determining the level of fees that may be imposed to pay the costs of the Future Facilities.Fee amounts have been determined that will finance Public Safety and General Government facilities at levels identified by the various City departments as being necessary to meet the needs of new development through buildout in 2035.The Future Facilities and associated construction costs are identified in the Needs List, which is included in Section IV of the Fee Study.A description of the methodology used to calculate the fees is included in Section V.All new development may be required to pay its “fair share”of the cost of the new infrastructure through the development fee program. ORGANIZATION OF THE REPORT Section I of this report provides an introduction to the Fee Study including a brief description of City surroundings, and background information on development fee financing.Section II provides an overview of the legal requirements for implementing and imposing the fee amounts identified in the Fee Study.Section III includes a discussion of projected new development and demand variables such as future population and employment, assuming current growth trends in housing, commercial, and industrial development extrapolated through buildout in 2035.Projections of future development are based on data provided by the City and the City’s 2007 Comprehensive Plan.1 Section IV includes a description of the Needs List, which identifies the facilities needed to serve new development through buildout in 2035 that are eligible for funding by the impact fees.The Needs List provides the total estimated facilities costs, offsetting revenues, net costs to the City,and costs allocated to new development for all facilities listed in the Needs List.This list is a compilation of projects and costs identified by various City departments.Section V discusses the findings required under the Mitigation Fee Act and requirements necessary to be satisfied when establishing, increasing,or imposing a fee as a condition of new development, and satisfies the nexus requirements for each facility included as part of this study.Section V also contains the description of the methodology used to determine the fees for all facility types.Finally,Section VI includes a summary of the proposed fees justified by this Fee Study.Appendix A includes the calculations used to determine the various fee levels. IMPACT FEE SUMMARY The total fee amounts required to finance new development’s share of the costs of facilities identified in the Needs List are summarized in Table ES-1 below.Fees within this Fee Study reflect the maximum fee levels that may be imposed on new development. 1 City of Palo Alto, Comprehensive Plan (1998) and Comprehensive Plan Amendment (in progress). EXECUTIVE SUMMARY City of Palo Alto Page 2Development Impact Fee Justification Study April 29, 2014 TABLE ES-1 DEVELOPMENT IMPACT FEE SUMMARY EXEMPTIONS California Government Code permits fee exemptions for affordable housing and senior housing at the discretion of local jurisdictions.Such fee exemptions are a policy matter that should be based on the consideration of the greater public good provided by the use exempted from the fee. SECTION I: INTRODUCTION City of Palo Alto Page 3 Development Impact Fee Justification Study April 29, 2014 Part of the San Francisco Metropolitan Area,the City of Palo Alto (“City”or “Palo Alto”)is located approximately 35 miles south of San Francisco within the County of Santa Clara. Named after the coastal redwood tree that grows along San Francisquito Creek, the City is more than 100 years old,encompassing an area roughly the size of 26 square miles and boasting approximately 30,000 housing units, more than 65,000 residents, and over 90,000 jobs.Yet despite the City’s mature and largely developed nature, the presence of excellent schools, the world’s finest employment centers and job creators, and high quality of life marks across the board, make the City incredibly attractive to new residential and non-residential development and re-development. For instance, the average homes sales price recorded in the City in February 2014 was nearly $2.0 million. Thus, in order to adequately plan for new development and identify the public facilities and costs associated with mitigating the direct and cumulative impacts of new development, David Taussig & Associates, Inc.(“DTA”) was retained by the City to prepare an AB 1600 Fee Justification Study (the “Fee Study”)for specific categories of public improvements not currently covered by the City’s Fee Program. Impact fees are calculated here using updated information on development and City facilities. Moreover, the methods used to calculate impact fees in this study are intended to satisfy all legal requirements governing such fees, including provisions of the U. S. Constitution, the California Constitution, and the California Mitigation Fee Act (Government Code Sections 66000 et.seq.).Impact fees calculated in this report are intended to complement the City’s existing impact fees. More specifically, the Fee Study is intended to comply with Section 66000 et.seq.of the Government Code, which was enacted by the State of California in 1987, by identifying additional public facilities required by new development (“Future Facilities”) and determining the level of fees that may be imposed to pay the costs of the Future Facilities.Fee amounts have been determined that will finance facilities at levels identified by the various City departments as deemed necessary to meet the needs of new development.The Future Facilities and associated construction costs are identified in the Needs List, which is included in Section IV of the Fee Study.All new development may be required to pay its “fair share”of the cost of the new infrastructure through the development fee program. The fees are calculated to fund the cost of facilities needed to meet the needs of new development.The steps followed in the Fee Study include: 1.Demographic Assumptions:Identify future growth that represents the increased demand for facilities. 2.Facility Needs and Costs:Identify the amount of public facilities required to support the new development and the costs of such facilities.Facilities costs and the Needs List are discussed in Section IV. 3.Cost Allocation:Allocate costs per equivalent dwelling unit. 4.Fee Schedule:Calculate the fee per residential unit or per non-residential square foot. SECTION II: LEGAL REQUIREMENTS TO JUSTIFY DEVELOPMENT IMPACT FEES City of Palo Alto Page 4Development Impact Fee Justification Study April 29, 2014 The levy of impact fees is one authorized method of financing the public facilities necessary to mitigate the impacts of new development.A fee is “a monetary exaction, other than a tax or special assessment, which is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project...”(California Government Code, Section 66000).A fee may be levied for each type of capital improvement required for new development, with the payment of the fee typically occurring prior to the beginning of construction of a dwelling unit or non-residential building.Fees are often levied at final map recordation, issuance of a certificate of occupancy, or more commonly, at building permit issuance.However, Assembly Bill (“AB”) 2604 (Torrico) which was signed into law in August 2008, encourages public agencies to defer the collection of fees until close of escrow to an end user in an attempt to assist California’s troubled building industry. AB 1600, which created Section 66000 et.seq.of the Government Code was enacted by the State of California in 1987. In 2006, Government Code Section 66001 was amended to clarify that a fee cannot include costs attributable to existing deficiencies, but can fund costs used to maintain the existing level of service (“LOS”)or meet an adopted level of service that is consistent with the general plan. Section 66000 et seq.of the Government Code thus requires that all public agencies satisfy the following requirements when establishing, increasing,or imposing a fee as a condition of new development: 1.Identify the purpose of the fee.(Government Code Section 66001(a)(1)) 2.Identify the use to which the fee will be put.(Government Code Section 66001(a)(2)) 3.Determine that there is a reasonable relationship between the fee’s use and the type of development on which the fee is to be imposed.(Government Code Section 66001(a)(3)) 4.Determine how there is a reasonable relationship between the need for the public facility and the type of development project on which the fee is to be imposed. (Government Code Section 66001(a)(4)) 5.Discuss how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed. This section presents each of these items as they relate to the imposition of the proposed fees in the City of Palo Alto. SECTION II: LEGAL REQUIREMENTS TO JUSTIFY DEVELOPMENT IMPACT FEES City of Palo Alto Page 5Development Impact Fee Justification Study April 29, 2014 A.PURPOSE OF THE FEE (GOVERNMENT CODE SECTION 66001(A)(1)) New residential and non-residential development within the City will generate additional residents and employees who will require additional public facilities.Land for these facilities will have to be acquired and public facilities and equipment will have to be expanded, constructed,or purchased to meet this increased demand. The Fee Study has been prepared in response to the projected direct and cumulative effect of future development.Each new development will contribute to the need for new public facilities.Without future development many of the new public facilities on the Needs List would not be necessary as the existing facilities are generally adequate for the City’s present population.In instances where facilities would be built regardless of new development, the costs of such facilities have been allocated to new and existing development based on their respective level of benefit. The proposed impact fee will be charged to all future development, irrespective of location, within the City.Even future “in-fill”development projects contribute to impacts on public facilities because they are an interactive component of a much greater universe of development located throughout the City of Palo Alto.First, the property owners and/or the tenants associated with any new development in the City can be expected to place additional demands on Palo Alto’s facilities funded by the fee.Second, these property owners and tenants are dependent on and, in fact, may not have chosen to utilize their development, except for residential, retail,employment, and recreational opportunities located nearby on other existing and future development.Third, the availability of residents, employees, and customers throughout the City has a growth-inducing impact without which some of the “in-fill” development would not occur.As a result, all development projects within Palo Alto contribute to the cumulative impacts of development. The impact fees will be used for the acquisition, installation, and construction of public facilities identified on the Needs Lists to mitigate the direct and cumulative impacts of new development within the City. B.THE USE TO WHICH THE FEE IS TO BE PUT (GOVERNMENT CODE SECTION 66001(A)(2)) The fee will be used for the acquisition, installation, and construction of the public facilities identified on the Needs Lists, included in Section IV of the Fee Study and other appropriate costs to mitigate the direct and cumulative impacts of new development in the City.The fee will provide a source of revenue to Palo Alto to allow for the acquisition, installation, and construction of public facilities, which in turn will both preserve the quality of life in the City and protect the health, safety, and welfare of the existing and future residents and employees. SECTION II: LEGAL REQUIREMENTS TO JUSTIFY DEVELOPMENT IMPACT FEES City of Palo Alto Page 6Development Impact Fee Justification Study April 29, 2014 C.DETERMINE THAT THERE IS A REASONABLE RELATIONSHIP BETWEEN THE FEE’S USE AND THE TYPE OF DEVELOPMENT PROJECT UPON WHICH THE FEE IS IMPOSED (BENEFIT RELATIONSHIP)(GOVERNMENT CODE SECTION 66001(A)(3)) As discussed in Section A above, it is the projected direct and cumulative effect of future development that has prompted the preparation of the Fee Study.Each development will contribute to the need for new public facilities.Without future development,the City would have no need to construct many of the public facilities on the Needs List.For all other facilities, the costs have been allocated to both existing and new development based on their level of benefit.Even future “in-fill”development projects, which may be adjacent to existing facilities, further burden existing public facilities.Consequently, all new development within Palo Alto,irrespective of location, contributes to the direct and cumulative impacts of development on public facilities and creates the need for new facilities to accommodate growth. The fees will be expended for the acquisition, installation, and construction of the public facilities identified on the Needs List and other authorized uses, as that is the purpose for which the fee is collected.As previously stated, all new development creates either a direct impact on public facilities or contributes to the cumulative impact on public facilities.Moreover, this impact is generally equalized among all types of development because it is the increased demands for public facilities created by the future residents and employees that create the impact upon existing facilities. For the aforementioned reasons, new development benefits from the acquisition, construction, and installation of the facilities on the Needs Lists. D.DETERMINE HOW THERE IS A REASONABLE RELATIONSHIP BETWEEN THE NEED FOR THE PUBLIC FACILITY AND THE TYPE OF DEVELOPMENT PROJECT UPON WHICH THE FEE IS IMPOSED (IMPACT RELATIONSHIP) (GOVERNMENT CODE SECTION 66001(A)(4)) As previously stated, all new development within the City, irrespective of location, contributes to the direct and cumulative impacts of development on public facilities and creates the need for new facilities to accommodate growth.Without future development, many of the facilities on the Needs Lists would not be necessary.For certain other facilities, the costs have been allocated to both existing and new development based on their level of benefit. For the reasons presented herein, there is a reasonable relationship between the need for the public facilities included on the Needs List and all new development within Palo Alto. SECTION II: LEGAL REQUIREMENTS TO JUSTIFY DEVELOPMENT IMPACT FEES City of Palo Alto Page 7Development Impact Fee Justification Study April 29, 2014 E.THE RELATIONSHIP BETWEEN THE AMOUNT OF THE FEE AND THE COST OF THE PUBLIC FACILITIES ATTRIBUTABLE TO THE DEVELOPMENT UPON WHICH THE FEE IS IMPOSED (“ROUGH PROPORTIONALITY” RELATIONSHIP)(GOVERNMENT CODE 66001(A) As set forth above, all new development within the City impacts public facilities. Moreover, each individual development project and its related increase in population and/or employment, along with the cumulative impacts of all development in Palo Alto, will adversely impact existing facilities.Thus, imposition of the fee to finance the facilities on the Needs Lists is an efficient, practical, and equitable method of permitting development to proceed in a responsible manner. New development impacts facilities directly and cumulatively.In fact, without any future development, the acquisition, construction, and/or installation of many of the facilities on the Needs Lists would not be necessary as existing City facilities are generally adequate.Even new development located adjacent to existing facilities will utilize and benefit from facilities on the Needs List. The proposed fee amounts are roughly proportional to the impacts resulting from new development based on the analyses contained in Section V.Thus there is a reasonable relationship between the amount of the fee and the cost of the facilities. SECTION III: DEMOGRAPHICS City of Palo Alto Page 8 Development Impact Fee Justification Study April 29, 2014 In order to determine the public facilities needed to serve new development as well as establish fee amounts to fund such facilities, the City provided DTA with projections of future population and development within Palo Alto.DTA categorized developable residential land uses as Single Family and Multi-Family.Developable non-residential land uses within the City’s commercial, office,and industrial zones are categorized as Commercial, Office/Institutional,and Industrial respectively. Additional details are included in the table below.Based on these designations, DTA established fees for the following five (5)land use categories to acknowledge the difference in impacts resulting from various land uses and to make the resulting fee program implementable. LAND USE CLASSIFICATION FOR FEE STUDY DEFINITION Single Family Includes single family detached homes Multi-Family Includes buildings with attached residential units including apartments, town homes, condominiums, and all other residential units not classified as Single Family Detached Commercial Includes, but is not limited to, buildings used as the following: Retail Service-oriented business activities Department stores, discount stores, furniture/appliance outlets, home improvement centers Entertainment centers Sub-regional and regional shopping centers Office/Institutional Includes, but is not limited to, buildings used as the following: Business/professional office Professional medical offices and hospitals Schools Industrial Includes, but is not limited to, buildings used as the following: Light manufacturing, warehouse/distribution, wholesaling; Large-scale warehouse retail Service commercial activities Public uses, arterial roadways and freeways providing automobile and public transit access Automobile dealerships Support commercial services The City of Palo Alto’s Comprehensive Plan1 (the “Comprehensive Plan”)demographics were used as estimates of the number of housing units and nonresidential building square feet to be built in the City.In addition, the Comprehensive Plan was used to project the additional population generated from new development.However, Comprehensive Plan Update data was also reviewed in light of projections prepared by the Association of Bay Area Governments (“ABAG”). 1 City of Palo Alto, Comprehensive Plan (1998).See also Comprehensive Plan Amendment (in progress). SECTION III: DEMOGRAPHICS City of Palo Alto Page 9Development Impact Fee Justification Study April 29, 2014 Notably, DTA attempted to utilize metrics (e.g. average household size) that standardized existing demographics with the projections found in the Comprehensive Plan. Future residents and employees will create additional demand for facilities that existing public facilities cannot accommodate.In order to accommodate new development in an orderly manner, while maintaining the current quality of life in the City, the facilities on the Needs List (Section IV), as reviewed and approved by the City Council on March 3, 2014,will need to be constructed.For those facilities that are needed to mitigate demand from new development, facility costs have been allocated to new development only.In those instances when it has been determined that the new facilities will serve both existing and new development, facility costs have been allocated based on proportionate benefit (see Equivalent Dwelling Unit discussion in Section V). The following sections summarize the existing and future development figures that were used in calculating the impact fees. 1.EXISTING POPULATION FOR LAND USE CATEGORIES According to information provided by the City of Palo Alto, and generally confirmed by the California Employment Development Department –Demographic Research Unit, there are 17,614 existing Single Family units and 10,843 existing Multi-Family units within the City. DTA has used the following demographic information provided by the City of Palo Alto and the Comprehensive Plan which assume resident-per-unit factors of 2.68 and 2.12 per Single Family unit and Multi-Family unit, respectively.Therefore, the City population is generally comprised of 70,193 residents living in 28,457 Single Family and Multi-Family homes. Table 1 below summarizes the existing demographics for the residential land uses. TABLE 1 CITY OF PALO ALTO ESTIMATED EXISTING RESIDENTIAL DEVELOPMENT DTA has also utilized the following non-residential demographic information provided by the City of Palo Alto which assumes existing City non-residential land uses utilize employees-per-thousand-square-foot factors of 3.00, 2,50 and 1.00 employees per 1,000 building square feet of Commercial, Office/Institutional, and Industrial, SECTION III: DEMOGRAPHICS City of Palo Alto Page 10Development Impact Fee Justification Study April 29, 2014 respectively.This results in 11,662 existing Commercial employees,63,534 existing Office/Institutional employees, and 18,099 existing Industrial City employees,as shown in Table 2 below.Each of these figures are generally confirmed by data from the Association of Bay Area Governments (“ABAG”) and the U.S. Census Bureau. Importantly,for many of the facilities considered in this Fee Study,EDUs are calculated based on the number of residents or employees (“Persons Served”)generated by each land use class.“Persons Served”equal Residents plus 50% of Employees,and is a customary industry practice designed to capture the reduced levels of service demanded by employees.For existing Persons Served estimates, please reference Table 2 below. TABLE 2 CITY OF PALO ALTO ESTIMATED EXISTING NON-RESIDENTIAL DEVELOPMENT 1 Persons served equal Residents plus 50% of employees. 2.FUTURE POPULATION FOR NEW LAND USE CATEGORIES (2035) According to information provided by the City of Palo Alto,and confirmed by ABAG, there are projected to be an additional 6,839 Single Family units and 3,331 Multi- Family units within the City-wide area at 2035, the time horizon utilized for this Fee Study. DTA has used the following demographic information provided by the City of Palo Alto which assumes future resident-per-unit factors of 2.68 and 2.12 per Single Family unit and Multi-Family unit, respectively. This results in an additional 10,170 residents living in 4,123 Single Family and Multi-Family homes within the City. Table 3 on the following page summarizes the future demographics for the residential land uses. TABLE 3 CITY OF PALO ALTO FUTURE RESIDENTIAL DEVELOPMENT SECTION III: DEMOGRAPHICS City of Palo Alto Page 11Development Impact Fee Justification Study April 29, 2014 In terms of non-residential property, Palo Alto expects to generate 21,428 future jobs, which can be broken down into 2,679 jobs relating to Commercial development, 14,592 jobs for Office/Institutional development, and 4,157 jobs for Industrial development within the City. The City of Palo Alto provided the projected employment discussed above, which results in estimated employees-per-thousand-square-foot factors of 3.00,2,50,and 1.00 employees per 1,000 building square feet of Commercial, Office/Institutional, and Industrial, respectively,as shown in Table 4 below. Again,for many of the facilities considered in this Fee Study, EDUs are calculated based on the number of residents or employees (“Persons Served”)generated by each land use class.“Persons Served”equal Residents plus 50% of Employees,and is a customary industry practice designed to capture the reduced levels of service demanded by employees.For future Persons Served estimates, please reference Table 4 below. TABLE 4 CITY OF PALO ALTO FUTURE NON-RESIDENTIAL DEVELOPMENT 1 Persons served equal Residents plus 50% of employees. Importantly, the land use categories that have been discussed above are consistent with (i) growth projections prepared by the City for the Comprehensive Plan, and (ii) land uses generally included in other development impact fee programs of the City. 3.EQUIVALENT DWELLING UNIT (EDU)PROJECTIONS Equivalent Dwelling Units (“EDU”) are a means of quantifying different land uses in terms of their equivalence to a residential dwelling unit, where equivalence is measured in terms of potential infrastructure use or benefit for each type of public facility.Since nearly all of the facilities proposed to be financed by the levy of impact fees will serve both residential and non-residential property, DTA projected the number of future EDUs based on the number of residents or employees generated by each land use class.For other facilities, different measures, such as number of trips, more accurately represent the benefit provided to each land use type.The EDU projections for each facility are shown in the fee derivation worksheets in Appendix A. SECTION IV: THE NEEDS LIST City of Palo Alto Page 12 Development Impact Fee Justification Study April 29, 2014 Identification of the facilities to be financed is a critical component of any development impact fee program.In the broadest sense,the purpose of impact fees is to protect the public health, safety, and general welfare by providing for adequate public facilities.“Public Facilities”per Government Code Section 66000 includes “public improvements and community amenities.” Government Code Section 66000 requires the identification of those facilities for which impact fees are going to be used as the key financing mechanism.Identification of the facilities may be made in an applicable general or specific plan, other public documents, or by reference to a Capital Improvement Program (“CIP”). DTA has worked closely with City staff to develop the list of facilities to be included in the Fee Study (“the Needs List”).Additionally, the Needs List was reviewed and approved by the City Council on March 3, 2014 at a public hearing.For purposes of the City’s fee program, the Needs List is intended to be the official public document identifying the facilities eligible to be financed, in whole or in part, through the levy of a development impact fee on new development within Palo Alto.The Needs List is organized by facility element (or type) and includes a cost section consisting of six (6)columns, which are defined in Table 5 below: TABLE 5 CITY OF PALO ALTO NEEDS LIST EXPLANATION OF COST SECTION Column Title Contents Source Total Cost for Facility The total estimated facility cost including engineering, design, construction, land acquisition, and equipment (as applicable) City Offsetting Revenues to New & Existing Development Share of Total Offsetting Revenues allocated to new and existing development City Net Cost to City The difference between the Total Cost and the Offsetting Revenues (column 1 plus column 2) Calculated by DTA Percent of Cost Allocated to New Development Net Cost Allocated to New Development based on New Development’s Share of Facilities Calculated by DTA Net Cost Allocated to New Development The Net Cost to City Multiplied by the Percentage Cost Allocated to New Development Calculated by DTA Policy Background or Objective Identifies policy source or rationale for facility need City Council or Comprehensive Plan SECTION IV: THE NEEDS LIST City of Palo Alto Page 13Development Impact Fee Justification Study April 29, 2014 DTA surveyed City staff on required facilities needed to serve new development as a starting point for its fee calculations.As part of the survey, DTA conducted extensive research with City departments such as Planning, Public Works, Parks & Recreation, Library, Transportation, etc.,and then narrowed the focus to those facility needs that were deemed most timely and prudent to include in the Fee Study.More specifically, the survey included the project description, justification, public benefit, estimated costs, and project financing for each proposed facility.Through regular discussions between DTA and City staff, the Needs List has gone through multiple series of revisions to fine-tune the needs, costs, and methodologies used in allocating the costs for each facility.For purposes of the fee program, it was determined that a planning horizon through 2035 would be appropriate.Importantly, escalations in project construction costs could be included in future fee increases that would need to be approved by the Palo Alto City Council. The final Needs List is shown on the following page. SECTION IV: THE NEEDS LIST City of Palo Alto Page 14Development Impact Fee Justification Study April 29, 2014 SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 15 Development Impact Fee Justification Study April 29, 2014 Pursuant to the nexus requirements of Government Code 66000, a local agency is required to “determine how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed.”It is impossible to precisely determine the impact that a specific new residential unit, commercial project, or industrial development will have on existing facilities.Additionally, predicting future residents’or employees’specific behavioral patterns, park and transportation, and health and welfare requirements is extremely difficult, and would involve numerous assumptions that are subject to substantial variation.Recognizing these limitations, the Legislature drafted AB 1600 to specifically require that a “reasonable” relationship be determined, not a direct cause and effect relationship. There are many methods or ways of calculating fees, but they are all based on determining the cost of needed improvements and assigning those costs equitably to various types of development.Each of the fee calculations employs the concept of an Equivalent Dwelling Unit (“EDU”) or Equivalent Benefit Unit (“EBU”)to allocate benefit among the five (5)land use classes.EDUs are a means of quantifying different land uses in terms of their equivalence to a residential dwelling unit, where equivalence is measured in terms of potential infrastructure use or benefit for each type of public facility.For many of the facilities considered in this Fee Study, EDUs are calculated based on the number of residents or employees (“Persons Served”)generated by each land use class.For other facilities, different measures, such as number of trips, more accurately represent the benefit provided to each land use class.Table 6 below shows total existing and projected EDUs or EBUs by facility type. Notably,“Persons Served”equal Residents plus 50% of Employees,and is a customary industry practice designed to capture the reduced levels of service demanded by employees. TABLE 6 CITY OF PALO ALTO CITY EQUIVALENT DWELLING UNITS The following sections present the reasonable relationship for benefit, impact,and rough proportionality tests for each fee element (i.e.,public safety and general government) and the analysis undertaken to apportion costs for each type of facility on the Needs List.More detailed fee calculation worksheets for each type of facility are included in Appendix A. Importantly, since the level of service (“LOS”)being requested for new development by City department heads is above the existing service level for certain types of facility, the cost of the new facilities has been carefully apportioned between existing and new development in the following manner: SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 16Development Impact Fee Justification Study April 29, 2014 1.New development was assigned 100% of the cost for a LOS that is equivalent to the existing LOS within the City. 2.The cost of the incremental difference between the new, higher LOS being requested by the City and the existing LOS was then allocated between existing development and new development, based on the relative number of equivalent dwelling units (“EDUs”) assigned to existing development and new development. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 17Development Impact Fee Justification Study April 29, 2014 A.PUBLIC SAFETY FACILITIES The Public Safety element includes those facilities used by the City to protect life and property. In order to serve new development through buildout in 2035, the City identified the need for two (2)new fire stations. One (1)of the two (2)fire stations, and the equipment required to service this fire station, is needed to serve new development almost exclusively and will be funded 100% by new development, while the other fire station will serve both new and existing development.Thus, the cost of the incremental difference between the new, higher LOS being requested by the City and the existing LOS has been allocated between existing development and new development, based on the relative number of EDUs assigned to existing development and new development. Additionally, there is a need for other facilities,public safety specialty vehicles,and training stations to serve both existing and projected development.Therefore, the costs of these facilities have been allocated between existing development and new development based on their percentage of build out EDUs. TABLE 7 PUBLIC SAFETY FACILITIES ELEMENT Identify Purpose of Fee Public Safety Facilities Identify Use of Fee Construction,acquisition and/or upgrade of Police and Fire Facilities and equipment Demonstrate how there is a reasonable relationship between the need for the public facility, the use of the fee, and the type of development project on which the fee is imposed New residential and non-residential development will generate additional residents and employees who will require additional service calls increasing the need for trained Police and Fire personnel. Buildings and vehicles used to provide these services will have to be expanded, constructed,or purchased to meet this increased demand.Thus a reasonable relationship exists between the need for Public Safety facilities and the impact of residential and non-residential development.The Public Safety fees collected from new development will be used exclusively for public safety purposes. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 18Development Impact Fee Justification Study April 29, 2014 Table 8 below identifies the facilities proposed to be funded in whole or in part with the collection of Public Safety fees.Costs are based on estimates provided by the City. TABLE 8 PUBLIC SAFETY FACILITIES FACILITY COSTS Calculation Methodology Fee amounts for this element were calculated for both residential and non-residential land uses as detailed in Appendix A.Each land use classification was assigned an EDU factor which was derived from the number of Persons Served, which again is defined as the persons per household (for residential units)and 50% of the number of employees per 1,000 building square feet of each category of non-residential development. Public Safety Building Improvements According to the City,it has been determined that this facility is needed to serve new development.Currently,this proposed facility is operating at an appropriate and acceptable level of service; therefore,the costs of facilities have been allocated to new development and existing development based on their percentage of their expected facility usage at build out.Consequently, 84.81%of the costs will be allocated to existing development and 15.19% of the costs will be allocated to new development. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 19Development Impact Fee Justification Study April 29, 2014 TABLE 9 PUBLIC SAFETY BUILDING IMPROVEMENT COST ALLOCATION SUMMARY Fire Station Improvements According to the City,it has been determined that these facilities are needed to serve new development.Currently, these facilities are generally operating at an appropriate and acceptable level of service, though less so than many of the other public safety facilities and improvements; therefore,the costs of facilities have been allocated to new development and existing development based on their percentage of their expected facility usage at build out.Consequently, 46.85% of the costs will be allocated to existing development and 53.15% of the costs will be allocated to new development. TABLE 10 FIRE STATION IMPROVEMENTS COST ALLOCATION SUMMARY Public Safety Vehicles According to the City,it has been determined that these facilities are needed to serve new development.Currently, these facilities are generally operating at an appropriate and acceptable level of service; therefore,the costs of facilities have been allocated to new development and existing development based on their percentage of their expected facility usage at build out.Consequently, 69.63% of the costs will be allocated to existing development and 30.37% of the costs will be allocated to new development. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 20Development Impact Fee Justification Study April 29, 2014 TABLE 11 PUBLIC SAFETY VEHICLES COST ALLOCATION SUMMARY Public Safety Training Tower Modernization According to the City,it has been determined that this facility modernization is needed to serve new development.Currently,this facility is operating at an appropriate and acceptable level of service; therefore,the costs of facilities have been allocated to new development and existing development based on their percentage of their expected facility usage at build out.Consequently, 84.81% of the costs will be allocated to existing development and 15.19% of the costs will be allocated to new development. TABLE 12 PUBLIC SAFETY TRAINING TOWER MODERNIZATION COST ALLOCATION SUMMARY Fee Amounts Table 13 presents a summary of the derivation of EDUs, fee amounts,and the costs financed by fees for the Public Safety Facilities on the Needs List.The details of the fee calculation are presented in Appendix A. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 21Development Impact Fee Justification Study April 29, 2014 TABLE 13 PUBLIC SAFETY FACILITIES FEE DERIVATION SUMMARY Based on the development projections in Appendix A, the fee amounts presented in Table 13 will finance 23.47% of the net costs of the Public Safety Facilities identified on the Needs List.The remaining 76.53% of the net costs of facilities will be funded through other sources. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 22Development Impact Fee Justification Study April 29, 2014 B.GENERAL GOVERNMENT FACILITIES The General Government Facilities Element includes those facilities used by the City to provide basic governmental services and public facilities maintenance services, exclusive of public safety. TABLE 14 GENERAL GOVERNMENT FACILITIES Identify Purpose of Fee General Government Service Facilities Identify Use of Fee Modernization of City Office and Building Improvements and Replacement of Municipal Services Center. Demonstrate how there is a reasonable relationship between the need for the public facility, the use of the fee, and the type of development project on which the fee is imposed New residential and non-residential development in the City will generate additional residents and employees who will increase the demand for services,including municipal services and general government functions.Population and growth has a direct impact on the need for government services and facilities, thus a reasonable relationship exists between new development and government facilities, which will have to be acquired to meet the increased demand.Fees collected from new development will be used exclusively for the City Government Service Facilities on the Needs List. TABLE 15 GENERAL GOVERNMENT FACILITIES COST SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 23Development Impact Fee Justification Study April 29, 2014 Calculation Methodology Fee amounts for this element were calculated for both residential and non-residential land uses as detailed in Appendix A.Each land use classification was assigned an EDU factor which was derived from the number of Persons Served, which again is defined as the persons per household (for residential units)and 50% of the number of employees per 1,000 building square feet of each category of non-residential development. CITY OFFICE AND BUILDING IMPROVEMENTS According to the City,it has been determined that these facilities are needed to serve new development.Currently, these facilities are operating at an appropriate and acceptable level of service; therefore,the costs of facilities have been allocated to new development and existing development based on their percentage of their expected facility usage at build out.Consequently, 84.81% of the costs will be allocated to existing development and 15.19% of the costs will be allocated to new development as presented in Table 16 below. TABLE 16 CITY OFFICE AND BUILDING IMPROVEMENTS COST ALLOCATION SUMMARY Municipal Services Center Replacement According to the City,it has been determined that these facilities are needed to serve new development.Currently, these facilities are operating at an appropriate and acceptable level of service; therefore,the costs of facilities have been allocated to new development and existing development based on their percentage of their expected facility usage at build out.Consequently, 84.81% of the costs will be allocated to existing development and 15.19% of the costs will be allocated to new development as presented in Table 17 below. SECTION V: METHODOLOGY USED TO CALCULATE FEES City of Palo Alto Page 24Development Impact Fee Justification Study April 29, 2014 TABLE 17 MUNICIPAL SERVICES CENTER REPLACEMENT COST ALLOCATION SUMMARY Fee Amounts Table 18 presents a summary of the derivation of EDUs, fee amounts and the costs financed by fees for the general government facilities on the Needs List.The details of the fee calculation are presented in Appendix A. TABLE 18 GENERAL GOVERNMENT FACILITIES FEE DERIVATION SUMMARY Based on the development projections in Appendix A, the fee amounts presented in Table 18 will finance 15.19% of the net costs of the General Government Facilities identified on the Needs List.The remaining 84.81% of the net costs of facilities will be funded through other sources. SECTION VI: SUMMARY OF FEES City of Palo Alto Page 25 Development Impact Fee Justification Study April 29, 2014 The total fee amounts to finance new development’s share of the costs of facilities in the Needs Lists are summarized in Tables 19 & 20 below. TABLE 19 DEVELOPMENT IMPACT FEE SUMMARY TABLE 20 DEVELOPMENT IMPACT FEE SUMMARY http://localhost/resources/home/Clients/Palo Alto/AB 1600 -2012/AB 1600 Update/DIFReport DRAFT v.8.docx Appendix A Fee Derivation Worksheets I. Inventory of Existing Facilities Facility Type Quantity Facility Units Public Safety Building (Replacement)0 Square Feet Fire Stations (Modernized)5 Integrated Facility Vehicles (Van, Trucks, Engines, Ambulances)18 No. of Vehicles Training Tower (Modernized)0 Integrated Facility Public Safety Facilities NA NA II. Existing EDU Calculation [a][d] Number of [b][c]Total Units/Persons Served per Unit/EDUs per Unit/Number of EDUs Land Use Type Non-Res. 1,000 SF 1,000 Non-Res. SF Per 1,000 Non-Res. SF [a]*[c] Single Family Residential 17,614 2.68 1.00 17,614 Multi Family Residential 10,843 2.12 0.79 8,577 Commercial 3,887 1.50 0.56 2,176 Office/Institutional 25,414 1.25 0.47 11,853 Industrial 18,099 0.50 0.19 3,377 Total 43,597 III. Existing Facility Standard Quantity Facility Type Quantity Facility Units per 1,000 EDU's Public Safety Building (Replacement)0 Square Feet 0 Fire Stations (Modernized)5 Integrated Facility 0.11 Vehicles (Van, Trucks, Engines, Ambulances)18 No. of Vehicles 0.41 Training Tower (Modernized)0 Integrated Facility 0 Public Safety Facilities NA NA NA IV. Future EDU Calculation [a][b][d] Number of Residents per Unit/[c]Total Units/Employees per EDUs per Number of EDUs Land Use Type Non-Res. 1,000 SF [1]Non-Res. 1,000 SF [2]Unit/per 1,000 Non-Res. SF [a]*[c] Single Family Residential 2,552 2.68 1.00 2,552 Multi Family Residential 1,571 2.12 0.80 1,257 Commercial 893 1.50 0.56 500 Office/Institutional 5,837 1.25 0.47 2,722 Industrial 4,157 0.50 0.19 776 Total 7,807 V. Proposed Inventory, Cost, and Service Standard Quantity Facility Type Quantity Facility Units Facility Cost per 1,000 EDU's Public Safety Building (Replacement)44,850 Square Feet $57,000,000 5,745.17 Fire Stations (Modernized)2 Integrated Facility $14,200,000 0.26 Vehicles (Van, Trucks, Engines, Ambulances)18 No. of Vehicles $17,000,000 2.31 Training Tower (Modernized)1 Integrated Facility $8,000,000 0.13 Offsetting Revenues $0 Total Cost of Public Safety Facilities $96,200,000 VI. Allocation of Public Safety Facilities to Existing & New Development (based on total EDUs) A.1 Public Safety Building Improvements [a][b][c][d][e][f][g] Existing Total Future SF Allocated 100%Proposed Service SF per EDU SF Beyond Existing Total Proposed SF Per EDU's To New Development [3]Standard Per Beyond Existing Service Standard [4] New SF 1,000 EDU's [a]*[b]1,000 EDU's [d]-[a][b]*[e][c]+[f] 0.00 7,806.55 0.00 5,745.17 5,745.17 44,850.00 44,850.00 City of Palo Alto Public Safety Fee Calculation A - 1 City of Palo Alto Public Safety Fee Calculation A.2 SF Beyond Existing Service Standard Split Between New and Existing, plus Facility Units allocated 100% to New Development Facility Units Split Facility Units Number of Percentage of Total Between New and Existing Allocated 100% To Total Facility Units Facility Type EDU's EDU's Development New Development Allocated Existing 43,597 84.81%38,038.73 NA 38,038.73 New Development 7,807 15.19%6,811.27 0.00 6,811.27 Total 51,404 100.00%44,850.00 44,850.00 A.3 Cost Allocated Between Existing and New Development Total Number of Percentage of Facility Type SF Cost Allocated Facility Cost Existing 38,039 84.81%$48,343,543New Development 6,811 15.19%$8,656,457 Total 44,850 100.00%$57,000,000 B.1 Fire Station Improvements [a][b][c][d][e][f][g] Existing Total Future Facility Units Allocated 100%Proposed Service Facility Units per EDU Facility Units Beyond Total Proposed Facility Units Per EDU's To New Development [3]Standard Per Beyond Existing Existing Service Standard [4]New Facility Units1,000 EDU's [a]*[b]1,000 EDU's [d]-[a][b]*[e][c]+[f] 0.11 7,806.55 0.90 0.26 0.14 1.10 2.00 B.2 Facility Units Beyond Existing Service Standard Split Between New and Existing, plus Facility Units allocated 100% to New Development Facility Units Split Facility Units Number of Percentage of Total Between New and Existing Allocated 100% To Total Facility Units Facility Type EDU's EDU's Development New Development Allocated Existing 43,597 84.81%0.94 NA 0.94 New Development 7,807 15.19%0.17 0.90 1.06 Total 51,404 100.00%1.10 2.00 B.3 Cost Allocated Between Existing and New Development Total Number of Percentage of Facility Type New Facility Units Cost Allocated Facility Cost Existing 0.94 46.85%$6,652,177New Development 1.06 53.15%$7,547,823 Total 2.00 100.00%$14,200,000 C.1 Public Safety Vehicles [a][b][c][d][e][f][g] Existing Total Future Facility Units Allocated 100%Proposed Service Facility Units per EDU Facility Units Beyond Total Proposed Facility Units Per EDU's To New Development [3]Standard Per Beyond Existing Existing Service Standard [4]New Facility Units1,000 EDU's [a]*[b]1,000 EDU's [d]-[a][b]*[e][c]+[f] 0.41 7,806.55 3.22 2.31 1.89 14.78 18.00 C.2 Facility Units Beyond Existing Service Standard Split Between New and Existing, plus Facility Units allocated 100% to New Development Facility Units Split Facility Units Number of Percentage of Total Between New and Existing Allocated 100% To Total Facility Units Facility Type EDU's EDU's Development New Development Allocated Existing 43,597 84.81%12.53 NA 12.53 New Development 7,807 15.19%2.24 3.22 5.47 Total 51,404 100.00%14.78 18.00 A - 2 City of Palo Alto Public Safety Fee Calculation C.3 Cost Allocated Between Existing and New Development Total Number of Percentage of Facility Type Facility Units Cost Allocated Facility Cost Existing 12.53 69.63%$11,836,499 New Development 5.47 30.37%$5,163,501 Total 18.00 100.00%$17,000,000 D.1 Public Safety Training Tower (Modernized) [a][b][c][d][e][f][g] Existing Total Future Facility Units Allocated 100%Proposed Service Facility Units per EDU Facility Units Beyond Total Proposed Facility Units Per EDU's To New Development [3]Standard Per Beyond Existing Existing Service Standard [4]New Facility Units 1,000 EDU's [a]*[b]1,000 EDU's [d]-[a][b]*[e][c]+[f] 0.00 7,806.55 0.00 0.13 0.13 1.00 1.00 D.2 Facility Units Beyond Existing Service Standard Split Between New and Existing, plus Facility Units allocated 100% to New Development Facility Units Split Facility Units Number of Percentage of Total Between New and Existing Allocated 100% To Total Facility Units Facility Type EDU's EDU's Development New Development Allocated Existing 43,597 84.81%0.85 NA 0.85 New Development 7,807 15.19%0.15 0.00 0.15 Total 51,404 100.00%1.00 1.00 D.3 Cost Allocated Between Existing and New Development Total Number of Percentage of Facility Type Facility Units Cost Allocated Facility Cost Existing 0.85 84.81%$6,785,059 New Development 0.15 15.19%$1,214,941 Total 1.00 100.00%$8,000,000 Section Cost Allocated Total Cost Per VI Facility Type to New Development Future EDU's EDU E.1 Public Safety Facilities $22,582,723 7,807 $2,892.79 Offsetting Revenues $0 7,807 $0.00 Total $22,582,723 $2,892.79 VIII. Development Impact Fee per Unit or per 1,000 Non-Res. SF EDUs Per Fees Per Number of Units/Cost Financed by Land Use Type Unit/1,000 Non-Res. SF Unit/1,000 Non-Res. SF Non-Res. 1,000 SF DIF Single Family Residential 1.00 $2,893 2,552 $7,382,429 Multi Family Residential 0.80 $2,314 1,571 $3,635,639 Commercial 0.56 $1,619 893 $1,445,601 Office/Institutional 0.47 $1,349 5,837 $7,875,517 Industrial 0.19 $540 4,157 $2,243,537 Total Allocated to New Development $22,582,723 Outside Funding Responsibility $73,617,277 Total Cost of Public Safety Facilities $96,200,000 Notes: [1] Expected Housing Units based on data provided by the City of Palo Alto's Planning Department, confirmed by ABAG. [2] Average Household Size Based on information obtained from the California Department of Finance (2013), City, and U.S. Census Bureau. [3] Allocates 100% to new development square feet or equipment necessary to fund existing service standard for new residents. [4] Denotes proposed service standard in excess to that currently provided to existing residents. VII. Summary Cost Data A - 3 I. Inventory of Existing Facilities Facility Type Quantity Facility Units City Office & Building Improvements (Modernized)0 Square Feet Municipal Services Center Replacement 0 Square Feet City Office & Building Improvements NA NA II. Existing EDU Calculation [a][d] Number of [b][c]Total Units/Persons Served per Unit/EDUs per Unit/Number of EDUs Land Use Type Non-Res. 1,000 SF 1,000 Non-Res. SF Per 1,000 Non-Res. SF [a]*[c] Single Family Residential 17,614 2.68 1.00 17,614 Multi Family Residential 10,843 2.12 0.79 8,577 Commercial 3,887 1.50 0.56 2,176 Office/Institutional 25,414 1.25 0.47 11,853 Industrial 18,099 0.50 0.19 3,377 Total 43,597 III. Existing Facility Standard Quantity Facility Type Quantity Facility Units per 1,000 EDU's City Office & Building Improvements (Modernized)0 Square Feet 0 Municipal Services Center Replacement 0 Square Feet 0 City Office & Building Improvements NA NA NA IV. Future EDU Calculation [a][b][d] Number of Residents per Unit/[c]Total Units/Employees per EDUs per Number of EDUs Land Use Type Non-Res. 1,000 SF [1]Non-Res. 1,000 SF [2]Unit/per 1,000 Non-Res. SF [a]*[c] Single Family Residential 2,552 2.68 1.00 2,552 Multi Family Residential 1,571 2.12 0.80 1,257 Commercial 893 1.50 0.56 500 Office/Institutional 5,837 1.25 0.47 2,722 Industrial 4,157 0.50 0.19 776 Total 7,807 V. Proposed Inventory, Cost, and Service Standard Quantity Facility Type Quantity Facility Units Facility Cost per 1,000 EDU's City Office & Building Improvements (Modernized)21,481 Square Feet $25,556,000 2,751.66 Municipal Services Center Replacement 83,000 Square Feet $60,450,000 10,632.09 Offsetting Revenues $0 Total Cost of General Government Facilities $86,006,000 VI. Allocation of General Government Facilities to Existing & New Development (based on total EDUs) A.1 City Office & Building Improvements [a][b][c][d][e][f][g] Existing Total Future SF Allocated 100%Proposed Service SF per EDU SF Beyond Existing Total Proposed SF Per EDU's To New Development [3]Standard Per Beyond Existing Service Standard [4] New SF 1,000 EDU's [a]*[b]1,000 EDU's [d]-[a][b]*[e][c]+[f] 0.00 7,806.55 0.00 2,751.66 2,751.66 21,481.00 21,481.00 A.2 SF Beyond Existing Service Standard Split Between New and Existing, plus SF allocated 100% to New Development Facility Units Split Facility Units Number of Percentage of Total Between New and Existing Allocated 100% To Total Facility Units Facility Type EDU's EDU's Development New Development Allocated Existing 43,597 84.81%18,218.73 NA 18,218.73 New Development 7,807 15.19%3,262.27 0.00 3,262.27 Total 51,404 100.00%21,481.00 21,481.00 City of Palo Alto General Government Fee Calculation A - 4 City of Palo Alto General Government Fee Calculation A.3 Cost Allocated Between Existing and New Development Total Number of Percentage of Facility Type SF Cost Allocated Facility Cost Existing 18,218.73 84.81%$21,674,870 New Development 3,262.27 15.19%$3,881,130 Total 21,481.00 100.00%$25,556,000 B.1 Municipal Services Center Replacement [a][b][c][d][e][f][g] Existing Total Future SF Allocated 100%Proposed Service SF per EDU SF Beyond Existing Total Proposed SF Per EDU's To New Development [3]Standard Per Beyond Existing Service Standard [4] New SF 1,000 EDU's [a]*[b]1,000 EDU's [d]-[a][b]*[e][c]+[f] 0.00 7,806.55 0.00 10,632.09 10,632.09 83,000.00 83,000.00 B.2 Facility Units Beyond Existing Service Standard Split Between New and Existing, plus SF allocated 100% to New Development Facility Units Split Facility Units Number of Percentage of Total Between New and Existing Allocated 100% To Total Facility Units Facility Type EDU's EDU's Development New Development Allocated Existing 43,597 84.81%70,394.98 NA 70,394.98 New Development 7,807 15.19%12,605.02 0.00 12,605.02 Total 51,404 100.00%83,000.00 83,000.00 B.3 Cost Allocated Between Existing and New Development Total Number of Percentage of Facility Type New Facility Units Cost Allocated Facility Cost Existing 70,394.98 84.81%$51,269,599 New Development 12,605.02 15.19%$9,180,401 Total 83,000.00 100.00%$60,450,000 Section Cost Allocated Total Cost Per VI Facility Type to New Development Future EDU's EDU C.1 City Office & Building Improvements $13,061,531 7,807 $1,673.15 Offsetting Revenues $0 7,807 $0.00 Total $13,061,531 $1,673.15 VIII. Development Impact Fee per Unit or per 1,000 Non-Res. SF EDUs Per Fees Per Number of Units/Cost Financed by Land Use Type Unit/1,000 Non-Res. SF Unit/1,000 Non-Res. SF Non-Res. 1,000 SF DIF Single Family Residential 1.00 $1,673 2,552 $4,269,893 Multi Family Residential 0.80 $1,339 1,571 $2,102,803 Commercial 0.56 $936 893 $836,116 Office/Institutional 0.47 $780 5,837 $4,555,089 Industrial 0.19 $312 4,157 $1,297,630 Total Allocated to New Development $13,061,531 Outside Funding Responsibility $72,944,469 Total Cost of General Government Facilities $86,006,000 Notes: [1] Expected Housing Units based on data provided by the City of Palo Alto's Planning Department, confirmed by ABAG. [2] Average Household Size Based on information obtained from the California Department of Finance (2013), City, and U.S. Census Bureau. [3] Allocates 100% to new development square feet or equipment necessary to fund existing service standard for new residents. [4] Denotes proposed service standard in excess to that currently provided to existing residents. VII. Summary Cost Data A - 5 Existing EDU Calculation Service Factor (Residents and Employees) Residents per Unit**/ Number of Persons Served per EDUs per Unit/Total Land Use Type Persons Served *1,000 Non-Res. SF per 1,000 Non-Res. SF Number of EDUs Single Family Residential 47,206 2.68 1.00 17,614 Multi Family Residential 22,987 2.12 0.80 8,674 Commercial 5,831 1.50 0.56 2,176 Office/Institutional 31,767 1.25 0.47 11,853 Industrial 9,050 0.50 0.19 3,377 Total 116,840 43,694 * Source: David Taussig & Associates; City of Palo Alto Comprehensive Plan, U.S. Census Bureau QuickFacts (American Community Survey). ** Persons Served = Residents plus 50% of Employees, customary industry practice designed to capture the reduced levels of service demanded by employees. Future EDU Calculation Service Factor (Future Residents and Employees) Residents per Unit**/ Number of Persons Served per EDUs per Unit/Total Land Use Type Persons Served *1,000 Non-Res. SF per 1,000 Non-Res. SF Number of EDUs Single Family Residential 6,839 2.68 1.00 2,552 Multi Family Residential 3,331 2.12 0.80 1,257 Commercial 1,339 1.50 0.56 500 Office/Institutional 7,296 1.25 0.47 2,722 Industrial 2,079 0.50 0.19 776 Total 20,884 7,807 * Source: David Taussig & Associates; City of Palo Alto Comprehensive Plan, U.S. Census Bureau QuickFacts (American Community Survey). ** Persons Served = Residents plus 50% of Employees, customary industry practice designed to capture the reduced levels of service demanded by employees. City of Palo Alto EBU & EDU Calculation Year to Build-Out (2035) A - 6 Public Finance Public Private Partnerships Urban Economics 2250 Hyde Street 5th Floor San Francisco, CA 94109 Phone (800) 969-4382 City of Palo Alto Development Impact Fees As per FY 2014 Adopted Municipal Fee Schedule page 17-3, with revisions Type of Project Parks Community Centers Libraries Housing Total Fees (NIC Transp.)Transportation Residential - New Homes Only* Single family < 3,000 sq. feet $10,638/residence $2,758/residence $963/residence EXEMPT $14,359/res. $3,197 per net new PM peak hr trip Single family >3,000 sq. feet $15,885/residence $4,129/residence $1,434/residence EXEMPT $21,448/res. $3,197 per net new PM peak hr trip Multi-family </= 900 sq. feet $3,521/unit $916/unit $316/unit EXEMPT $4,753/unit $3,197 per net new PM peak hr trip Multi-family >900 sq. feet $6,963/unit $1,815/unit $565/unit EXEMPT $9,343/unit $3,197 per net new PM peak hr trip Non-residential Commercial/Industrial $4,517 per 1,000 sq ft or fraction thereof $255 per 1,000 sq ft or fraction thereof $243 per 1,000 sq ft or fraction thereof $18.89 per sq ft $23.89 per net new sq ft $3,197 per net new PM peak hr trip Hotel/Motel $2,043 per 1,000 sq ft or fraction thereof $115 per 1,000 sq ft or fraction thereof $102 per 1,000 sq ft or fraction thereof $18.89 per sq ft $21.15 per net new sq ft $3,197 per net new PM peak hr trip Residential Subdivisions Single-family Multi-family Special Zones Traffic Impact Fee Stanford Research Park/El Camino Real CS Zone $11.08 per net new sq ft San Antonio/West Bayshore Area $2.28 per sq ft Charleston/Arastradero Commercial $0.34 per sq ft Charleston/Arastradero Residential $1,168 per unit Parking in-lieu fee for Downtown Assessment District $60,750 per parking space Notes: "Single-family" is defined as a single dwelling unit that does not share a common wall with another dwelling unit **In-Lieu Parkland Dedication Fee is an option only for projects of < 50 parcels. Fee Category Parkland Dedication Fee** *Square footage refers to living area, not lot size. 531 sq ft of parkland/unit or $58,366/unit in-lieu fee 366 sq ft of parkland/unit or $40,187/unit in-lieu fee Attachment C ACTION ITEMS 8. From Finance Committee Review of Development Impact Fees: List of Public Facilities Capital Needs. Lalo Perez, Administrative Services Director and Chief Financial Officer, indicated Staff was asked to review Development Impact Fees (DIF). Information was introduced at the Finance Committee a few months prior. Nathan Perez, Vice President of David Taussig and Associates (DTA), reported DIF were not taxes, special assessments, or user fees. DIF could not be used to cover ongoing operations, maintenance costs, and the like. Per AB 1600, DIF were an attempt to allow municipalities to recover their fair share from new development. DIF had a nexus requirement and could not be arbitrary. DIF required a great deal of demographic research and costing of projected facilities throughout the timeframe of the Nexus Study update. The current study covered the timeframe through 2035. Previously the City asked DTA to provide a comparative survey of DIF for peer communities to Palo Alto. There were not many peer communities to Palo Alto. Sometimes information was difficult to obtain, because staff in other cities were not always helpful. Per the Finance Committee's request, DTA reviewed DIF as a percentage of average home sales price. With the $1.5 million average home price in December 2013, Palo Alto was in line with other cities on the Peninsula. DTA recommended updating the Citywide transportation fee, adding a public safety fee for the Public Safety Building, and adding a general government fee for larger municipal offices and capital improvements. DTA sought the Council's approval of the needs list. Following Council approval of the needs list, DTA would calculate fee levels and then prepare a draft and/or final Nexus Study for review. If the final study reflected updates to fees, they would be incorporated via City Ordinance and could be a source for additional revenue in the future. Mr. Lalo Perez noted the Infrastructure Committee was working on funding for infrastructure projects. Some of the numbers on the needs list would not align to the infrastructure item later in the Agenda. Staff requested the Council focus on the list itself. The cost and funding sources would be updated as decisions were made. The needs list contained more projects than the infrastructure project list, because the Infrastructure Committee was considering projects that were not fundable with existing City funds. Staff compiled the needs list beginning with projects that were currently in the Capital Improvement Program (CIP). The needs list was a snapshot in time for projects likely to be undertaken. Staff initially had an effective date of July 1. It became evident in Finance Committee discussions that Staff needed more time to review the project list. The Finance Committee questioned why the water, sewer and storm drain fee connections seemed to Page 9 of 31 City Council Meeting Minutes: 03/03/14 be higher than surrounding benchmarked cities. In 2008, the Council approved an increase in fees be phased in over three years based upon a fee analysis. The resetting of that fee was based on a complete analysis of the total cost including projected needs for infrastructure. The City provided an exemption for residential remodeling. The Finance Committee also questioned the possibility of changing the residential remodeling exemption. Council Member Burt, Chair of the Finance Committee in 2013, reported the Finance Committee recommended the topic be an action item in order to provide adequate transparency and additional opportunity for public participation and Council comment. Three main areas dominated the Finance Committee's discussion: 1) whether the transportation fee was adequate; 2) why the wastewater fee was higher than surrounding cities; and 3) should the City have a public safety or fire fee. The Finance Committee did not want to limit Council discussion to those three topics. Vice Mayor Kniss requested the Finance Committee's determination as to why the City did not have a public safety or fire fee. Council Member Burt stated the Finance Committee did not make a determination. Vice Mayor Kniss asked why the City did not have a public safety or fire fee. Council Member Burt noted the Finance Committee discussed that. Vice Mayor Kniss wanted to know what would be required for the City to develop a public safety or fire fee. The City was always searching for ways to augment revenue. Mr. Nathan Perez needed the Council's approval of the needs list in order to develop fees. DTA would then utilize demographic information and cost to arrive at estimated fees. To calculate a fee, the costs in any given category were divided by generally the number of dwelling units projected over the horizon of the fee update. Vice Mayor Kniss felt the Council first should determine whether or not the City needed such a fee. She understood Council Member Burt wanted Council feedback. She wanted to know what the Council needed to do to get a policy on the table and then to decide whether or not to implement a fee. Mr. Lalo Perez referenced Attachment A of DTA's report, Item B Public Safety facilities. The first item was the Public Safety Building (PSB). At the time that the listing was compiled, the Council had multiple options for funding a PSB. Once the Council made decisions regarding a funding source, the $57 million amount in the table could change to $0. A fully funded project could Page 10 of 31 City Council Meeting Minutes: 03/03/14 not be contained in the needs list. As the Council made decisions, Staff could calculate an amount for a potential fee. Council Member Scharff asked if DTA would recommend changes to fee amounts based on the Nexus Study. Mr. Nathan Perez explained that consultants typically did not recommend new fees that were less than existing fees. The Council retained the authority to charge less than the existing fee amount. Council Member Scharff noted the City's park fee was substantially less than park fees charged in other cities. He inquired whether the Nexus Study would suggest the maximum park fee the City could charge. Mr. Nathan Perez reported the Nexus Study would utilize the costs noted in Attachment A divided by demographic numbers to calculate a projected fee moving forward. Park fees were omitted from the list because he understood that park fees would not be increased based upon total costs. Mr. Lalo Perez explained that most of the projects identified for parks was funded through the CIP. The net cost for identified park projects was very low. Community Services and Public Works Departments were approximately one year away from completing a Master Plan for parks; therefore Staff did not have a full picture of parks needs. Council Member Scharff did not believe Staff was ready to move forward with the study. He asked why a purchase of land for parks was not included in the needs list. Mr. Nathan Perez surveyed every City department for a list of projects. The threshold for needs for parks would not result in a higher fee. Council Member Scharff felt there were many needs for parks over the next 30 years. He was not comfortable moving forward on that basis. Mr. Nathan Perez reported the parks list of projects was inclusive, but the ultimate cost of the facilities on that list would not be great enough to increase the fee. Council Member Scharff asked if the list contained all the facilities, including additional parks, that could possibly be needed. Staff presented information before completing the Master Plan for parks. Mr. Lalo Perez noted the Council in the future could consider any fees that were not adjusted at the current time and have the Master Plan as a source. Page 11 of 31 City Council Meeting Minutes: 03/03/14 If the Council delayed its decision, it could lose the opportunity of adjusting other fees at the current time. Council Member Scharff asked if the Council could carve out the parks fee and return to it in the future. Mr. Nathan Perez answered yes. Parks could be omitted at the current time and the fee would remain the same. DTA could either add new categories or increase other categories as applicable. Council Member Scharff reiterated that the parks fee would remain in place and the Council could review it at a later time. Mr. Keene indicated the Council typically reviewed DIF every two to four years. Staff could perform the review more often if the Council directed them to do so. Council Member Scharff asked why Cubberley was not included in the needs list. Mr. Lalo Perez reported the needs for Cubberley were not fully known. Council Member Scharff stated the amount for a PSB was not known, and asked how that discussion was different from Cubberley. Mr. Lalo Perez explained that the review of DIF had been delayed because of the number of pending decisions. At the current time, the Council was more likely to make a decision regarding the PSB than Cubberley. Cubberley needed a great deal of negotiation and discussion. To include Cubberley in the needs list, Staff needed a degree of certainty that a project would occur. Council Member Scharff inquired whether the needs list was a vision for the community through 2035 or simply a list of projects that needed a funding source. He did not see a consistent methodology. Mr. Keene commented that the goal was to set a fee that was applied in a given year to a new construction project. The Council could adjust fees each year. Nothing precluded the Council from marginally adjusting one area without reviewing all areas. Mr. Nathan Perez noted the recommendations considered the total cost per category. Given the lack of dollars in some categories, DTA determined that updates could be better discussed at a later time. Mr. Keene reported the needs list did not contain all definite unfunded capital needs or community facilities. The Council could set a policy Page 12 of 31 City Council Meeting Minutes: 03/03/14 direction to add those needs. At the same time, DIF were practically applied when a building permit was obtained. If the Council delayed adjustments on recommended categories to obtain information for all categories, then the City would lose revenue from increased fees for recommended categories. Moving forward on some categories was in the City's best interests even if the Council acknowledged it needed additional information for other categories. Council Member Scharff understood the City Manager suggested reviewing DIF more frequently. He asked if more projects should be contained in the needs list even though they could be removed from the list by November 2014. Mr. Lalo Perez acknowledged that Staff should have given the Council the full list of areas considered so the Council could appreciate the extensive review. The full list for parks and recreation facilities contained 33 items totaling a net cost of $57 million and included $6 million for athletic fields at the Golf Course, $11 million for a City gymnasium, Cubberley field restrooms, Cubberley roof replacement, Cubberley mechanical and electrical upgrades, and Cubberley tennis courts. Even after including those dollar figures, the analysis determined that an increased fee was not warranted. Council Member Scharff stated rates did not necessarily decrease. Mr. Nathan Perez responded correct. The Council retained authority to charge less. Council Member Scharff asked if the City was forced to lower the rate because cost amounts were insufficient to maintain the current fee amount. Mr. Nathan Perez replied no. Council Member Scharff inquired whether legally the Council was required to reduce an existing fee. Mr. Nathan Perez indicated the law did not specifically state that. City departments did an excellent job of reviewing projects. He did not encourage benchmarking or finding a certain number that would result in increased DIF. Staff developed a list of needs that did not meet the threshold to increase rates. It could happen in a few years, at which time the rates could be updated. Council Member Scharff inquired whether a decision was made on the three issued mentioned at the Finance Committee meeting. Page 13 of 31 City Council Meeting Minutes: 03/03/14 Mr. Nathan Perez remarked that if the Council chose to eliminate big-ticket items from the list, then they would be removed from the list prior to calculating fees. Council Member Scharff added that some big-ticket items needed to be added to the list prior to calculating fees. Council Member Burt mentioned a transportation fee, a wastewater fee, and a public safety fee. The question was whether they would be included in the study to determine a fee. Mr. Lalo Perez reported a transportation fee would be studied because the net cost of many of the projects was relatively stable. Several projects, especially the PSB, might be eliminated resulting in a low amount of costs and a smaller fee. The Council should proceed with consideration of a transportation fee until it made the final decisions on those projects. The general government facilities fee could proceed, because MSC funding sources were unclear. Council Member Scharff asked why the MSC with an approximate cost of $300 million was not included in the list. Mr. Lalo Perez Staff explained that the dollar amount was not reliable and was part of the CIP process. Council Member Holman noted that parking impact fees were not included on the list to be increased and had not been updated since 1989. The in-lieu parking fee for Downtown development was updated in 1995 and recommended for update. She asked why those were not included on the list. Mr. Nathan Perez agreed that those fees may need to be updated. Zonal fees were outside the scope of DTA's contract. Mr. Lalo Perez explained that Staff was reviewing fees in manageable groups and would continue the process with all fees. Council Member Holman stated the definition of home demolition needed to be changed, because of the exemption from impact fees and the lack of proper assessment for property taxes. She inquired about the number of projects that were more than 50 parcels in reference to page 87, Residential Subdivisions of Over 50 Parcels. Mr. Lalo Perez did not have an answer but would report back. Council Member Holman felt the number should be lower, certainly not 50 as she could not think of a single project over 50 parcels. She asked if a California Avenue in-lieu fee was outside the scope of the presentation. Page 14 of 31 City Council Meeting Minutes: 03/03/14 Mr. Lalo Perez answered yes. Council Member Holman concurred with Council Member Scharff's comments regarding parks. She inquired whether Staff presented the impact fee to the Parks and Recreation Commission for consideration. Mr. Lalo Perez replied no. That had not been a part of the process. Council Member Holman suggested Staff not be married to process. The chart was all based on residential information. Mr. Keene noted non-residential, commercial and industrial could be found in the middle of the chart. Council Member Holman had nothing to compare non-residential information to as the chart was not provided in the packet. It was important to know how Palo Alto tracked with other communities. Mr. Lalo Perez would include that information in future Staff Reports. Council Member Holman inquired whether Staff could provide that information when the item returned to the Council. Mr. Nathan Perez replied yes. Council Member Holman noted the Staff Report did not contain the chart referenced in the Finance Committee Minutes, which made it difficult to follow the discussion. The chart appeared to be misleading because it included the sewer hookup fee in the water, sewer, and storm drain fee. Mr. Nathan Perez could reflect it either way. It was an outlier in otherwise consistent data. Council Member Holman felt it should at least have a footnote. Mr. Lalo Perez indicated each agency within Santa Clara County set fees in different manners. Mr. Nathan Perez reported the comparison was difficult because Palo Alto suggested a larger water main diameter than other cities. Each city had different requirements that had to be considered in a comparison. Council Member Holman was unsure whether commercial and industrial was lower than residential. Mr. Nathan Perez would provide that data. Palo Alto was relatively lower compared to peer communities on the non-residential side. Page 15 of 31 City Council Meeting Minutes: 03/03/14 Council Member Klein inquired about the amount of money collected and the length of time required to collect sufficient funds to construct a PSB. Mr. Nathan Perez did not believe the City would collect sufficient funding over the timeframe of the study. Fees would assist with funding but would not solely fund a $57 million project. The cost of the project had to be allocated between existing and new development. Using 25 percent for new development, the fee would finance a maximum of $15 million. Council Member Klein inquired about the source of 25 percent. Mr. Nathan Perez explained that 25 percent was an approximation for discussion. It generally considered existing versus future demographics. Council Member Klein assumed that new construction, both commercial and residential, would result in 1-2 percent of existing stock. Mr. Nathan Perez concurred. Palo Alto was largely built out. The Nexus Study could result in a figure closer to 15-20 percent. Council Member Klein clarified that 15-20 percent was over the 20-year period. Utilizing gross numbers, the most a fee devoted to the PSB would generate was 20 percent of the cost over 20 years. Mr. Nathan Perez agreed. Council Member Klein calculated the present value to be a quarter of that or 5 percent. That fee would generate only a few million of the needed $57 million. Mr. Nathan Perez concurred. Council Member Klein inquired about the amount of funds collected from DIF. Mr. Lalo Perez did not have a cumulative total, but the transportation fee collected $600,000 and the wastewater fee collected $1.3 million. Council Member Klein asked about the time period over which those collections spanned. Mr. Lalo Perez reported funds had to be utilized within a five-year period. Council Member Klein noted the report was delivered to Staff in May 2012, and asked why Staff delayed presenting it to the Council for 22 months. Page 16 of 31 City Council Meeting Minutes: 03/03/14 Mr. Lalo Perez indicated the lack of a Budget Director prevented the project from being a high priority for Staff. Council Member Klein believed the City had cost itself money because the project was not presented sooner. Mr. Lalo Perez agreed there could have been a loss of revenue on the transportation side. He did not know whether Staff would have had a good inventory of projects if the project was presented sooner. Council Member Klein inquired whether Staff could have hired a temporary person with sufficient skills to shepherd the project. Mr. Lalo Perez explained that such a person would need a certain amount of internal knowledge to navigate the multitude of departments and personnel to obtain data. Council Member Price recalled Mr. Nathan Perez's comments regarding cities not being forthcoming with information. She inquired whether the various city categories in the chart of comparative survey results was a true picture of all fees. Mr. Nathan Perez reported it was a true picture except for the City of Santa Clara. Council Member Price felt the information contained significant gaps, and asked if Mr. Nathan Perez was comfortable with the information. Mr. Nathan Perez replied yes. Council Member Price asked if the information was complete. Mr. Nathan Perez responded yes. Affordable housing was the one category that was charged incredibly differently across all cities. The affordable housing category was sometimes difficult to equalize on a per unit basis. Council Member Price concurred with other comments regarding adding Cubberley to the list. This was a phased approach to DIF, because the Council was attempting to determine a logical and proper methodology. She inquired whether Mr. Nathan Perez's experience included situations where DIF contained automatic Cost of Living Adjustment (COLA). Mr. Nathan Perez reported that was quite common. Mr. Lalo Perez added that COLA was utilized when fees were below 100 percent. The Council policy was not to set some fees at 100 percent. The Page 17 of 31 City Council Meeting Minutes: 03/03/14 Council was concerned about total impacts to projects. That was the reason Staff did not mention use of an inflator. Council Member Price asked if Staff considered cumulative impacts rather than built-in adjustments for each category. Mr. Lalo Perez indicated that was the Finance Committee's focus. Council Member Price suggested Staff include more clarification points in the chart. In facility costs or estimated facility costs, Staff should note the baseline year. She inquired whether Mr. Nathan Perez was aware of the Council's sensitivity to projected rates of growth promulgated by different agencies. Mr. Nathan Perez answered yes. Council Member Price asked if his assumptions were consistent with Council policies. Mr. Nathan Perez replied yes. Mayor Shepherd indicated the impact fees were for a new unit of housing. She viewed the project as an effort to capture brand new fire stations and police stations. There was a parks policy which Staff followed. MOTION: Mayor Shepherd moved, seconded by Vice Mayor Kniss to approve the Development Impact Fee (DIF) Project Needs List prior to having the City’s consultant prepare the quantitative analyses and narratives needed to update some categories of the City’s Development Impact Fees. Mayor Shepherd expected the discussion would evolve and recognized that the Council would need to make decisions regarding infrastructure. Vice Mayor Kniss agreed the discussion would continue. Staff asked the Council to approve a particular recommendation. Council Member Burt noted the Committee reviewed DIF in early November 2013. Since that time, the Council had moved forward with infrastructure projects. The Finance Committee was interested in vetting thoroughly a number of major areas. Because of changes over the last five months, returning the item to the Finance Committee for an update could be appropriate. SUBSTITUTE MOTION: Council Member Burt moved, seconded by Council Member Scharff to return this item to the Finance Committee to be re- evaluated. Page 18 of 31 City Council Meeting Minutes: 03/03/14 Council Member Burt reiterated that a number of projects had changed since the Finance Committee reviewed DIF. Returning the item to the Finance Committee would not require a great deal of Staff time. He wished to move the item forward rapidly and integrate the study with changes made in infrastructure planning. Council Member Scharff felt a more thorough vetting by the Finance Committee would be productive and would save time. Mr. Keene reported returning the item to the Finance Committee would require some direction to Staff. Staff and DTA could continue with the rational nexus component. Staff could work more quickly with clear direction from the Council about specific gaps in the capital facilities needs plan. Council Member Klein was aghast that the Finance Committee would require six months to vet the item. He requested Council Member Burt amend the Substitute Motion to indicate the Finance Committee would provide a recommendation to the Council, hopefully on the Consent Calendar, within 60 days. Council Member Burt felt 90 days would be reasonable. Council Member Klein wished the Finance Committee would complete its review prior to beginning Budget hearings. Perhaps the Finance Committee could provide a recommendation by May 15, 2014. Council Member Burt requested the City Manager comment. Council Member Klein suggested the Finance Committee would have more work than Staff would have in vetting the item. Council Member Burt noted Staff needed to reflect changes made by the Infrastructure Committee, input from the Finance Committee, and input from the Council discussion. Council Member Klein agreed to the item returning to the Council in three months, by the Council's first meeting in June. Council Member Burt concurred. The item might be imperfect at that time, but it would be more contemporary. Council Member Scharff preferred to wait for work to be complete than to have imperfect information. He questioned whether the item should return on the Consent Calendar. Page 19 of 31 City Council Meeting Minutes: 03/03/14 Council Member Klein indicated a return on the Consent Calendar was only a hope. He wanted to see an item returned to the Council by the first meeting in June 2014. Mr. Keene explained that if the Finance Committee identified other capital facility objectives, then that would require a rigorous analysis by Staff. Projects should not be driven by a desire to set a new fee. The same Staff would be working on this item and the Budget. Council Member Scharff would agree to the Finance Committee hearing the item in May 2014. The Finance Committee could decide it was not ready for the Council at that time. He did want the Finance Committee to hear the item prior to beginning the Budget. Council Member Klein expressed concern that the item had already been delayed two years as that cost the City money. Council Member Scharff felt acting too quickly could also cost the City money. Council Member Klein believed if the Finance Committee did not finish the item prior to beginning Budget hearings, then it would have a good excuse not to work on it. INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to bring this back to the Council on Consent Calendar, contingent on a unanimous vote by the Finance Committee, and to return to the Council by the first meeting in June 2014 with whatever portion is ready. Council Member Holman requested Staff answer questions such as the meaning of residential subdivision of over 50 parcels. She inquired about the basis for Mr. Nathan Perez stating commercial impact fees appeared to be low compared to other communities. She suggested the Finance Committee complete as much work as soon as possible and then determine whether a second phase of work was needed. Mayor Shepherd indicated the Finance Committee would have to make that determination. Council Member Burt agreed with the Finance Committee having the discretion to bring some or all of the item to the Council at the same time. The item would return on the Consent Calendar only if there was unanimous approval by the Finance Committee. Page 20 of 31 City Council Meeting Minutes: 03/03/14 Council Member Schmid agreed with many of Council Member Scharff's comments. The Council was assessing DIF by utilizing the current CIP. Using the CIP allowed the Council to determine the real expenditure for the range of infrastructure needs at a point in time. The Council should not chase itself by going back to the Finance Committee and removing some items. The goal was to get a picture at one point time and use that as a framework. Council Member Price inquired whether Staff had sufficient information and guidance to make some progress on this item, to make changes. Mr. Keene reported if the work at the Finance Committee was anything like the current discussion, Staff would not return for a long time. The Amendment to the Substitute Motion was important. Staff did not provide a meaningful response about the amount of work needed for this item. Staff work needed to be contained if the Council wanted action at the current time or in three months. The Council would have to settle for something less than all the topics mentioned during the Council discussion. To do the work correctly, Staff would need additional involvement from the Planning Department, which was involved in many other Council projects. Council Member Berman indicated Council Member Schmid's comments were profound in that the Council could be chasing itself in trying to find the perfect list of projects. He inquired whether the Finance Committee would remove projects that were on the infrastructure list and maybe add projects that had not been identified. Mr. Lalo Perez stated that was his understanding. Staff would focus on the three areas in their recommendation, rather than everything else. Council Member Berman asked if the PSB would be removed from the list if the Council decided to fully fund it regardless of the item returning to the Finance Committee. Mr. Lalo Perez answered yes. Council Member Berman asked when the analysis would be completed if the item was not returned to the Finance Committee. Mr. Nathan Perez reported the goal would be to provide estimated fees for the categories discussed to Staff within a month, and then to review those fees with the Finance Committee or the Council. He wished to provide fee levels as soon as possible. Council Member Berman inquired whether projects contingent upon a community vote would remain on the list. Page 21 of 31 City Council Meeting Minutes: 03/03/14 Mr. Nathan Perez responded yes. Council Member Berman would support the Motion, because the information was sufficient. Mr. Nathan Perez added that if the PSB were removed in two months, he would have to redo everything because the PSB was such a large project. Council Member Klein would not support the Substitute Motion because of the language regarding the Finance Committee providing whatever portion was ready. Mayor Shepherd would not support the Substitute Motion. Council Member Schmid articulated the situation well. The changes the Council made with regard to infrastructure would be reflected in the list without returning the item to the Finance Committee for review. SUBSTITUTE MOTION AS AMENDED FAILED: 3-6 Burt, Holman, Scharff yes MOTION PASSED: 8-1 Holman no Council Member Holman inquired when Staff could provide requested information regarding fees. Mayor Shepherd indicated Staff could provide the information outside the Council meeting due to the lack of time. She inquired whether the Council would have sufficient time to address Agenda Item Number 10, naming the Main Library. Mr. Keene announced naming of the Main Library would be continued to a date uncertain. MOTION: Council Member Scharff moved, seconded by Vice Mayor Kniss to discuss Agenda Item No. 11 prior to Agenda Item Number 9. MOTION PASSED: 7-2 Schmid, Shepherd no Mr. Keene requested a time check-in at 10:00 P.M. to determine whether Staff could be excused from the meeting. 11. Infrastructure Project and Funding Plan. Richard Hackmann, Management Analyst, recalled that the Infrastructure Committee met three times since the item was last before the Council on December 9, 2013. The Infrastructure Committee recommended the Council Page 22 of 31 City Council Meeting Minutes: 03/03/14 {1}{2}{3} Facility Name Total Cost for Facility Off-setting Revenues Net Cost to City A. PUBLIC SAFETY FACILITIES 1. Police Facilities 1 Public Safety Building ("PSB") - Replace (44,850 square feet)$57,000,000 $0 $57,000,000 Subtotal $57,000,000 $0 $57,000,000 2. Fire Facilities 2 Fire Station 3 (Rinconada Park - built 1948) - Replace $6,700,000 $0 $6,700,000 3 Fire Station 4 (Meadow/Middlefield - built 1953) - Replace $7,500,000 $0 $7,500,000 5 BC Van (x 2)$200,000 $0 $200,000 6 Fire Trucks (x 2)$2,000,000 $0 $2,000,000 7 Type III Engine (x 2)$800,000 $0 $800,000 8 Training Tower & Related Land Acquisition $8,000,000 $0 $8,000,000 9 Type I Engine (x 8) - 2024 $4,200,000 $0 $4,200,000 10 Ambulances (x 4) - 2022-2025 $1,300,000 $0 $1,300,000 11 Vehicles (Van, Trucks, Engines, Ambulances)$8,500,000 $0 $8,500,000 Subtotal $39,200,000 $0 $39,200,000 12 Pubic Safety Revenues not yet Committed $0 $0 TOTAL PUBLIC SAFETY FACILITIES $96,200,000 $0 $96,200,000 1 Information Technology Upgrades $750,000 ($75,000)$675,000 2 Buildings Systems Improvements $6,300,000 ($100,000)$6,200,000 3 Civic Center Plaza Deck $16,000,000 $0 $16,000,000 4 Municipal Services Center Improvements (through 2020) $ 1,991,000 $0 $1,991,000 5 Municipal Services Center - Replace (after 2020)$93,000,000 ($32,550,000)$60,450,000 6 Ventura Buildings Improvements $690,000 $0 $690,000 7 General Government Revenues not yet Committed $0 $0 TOTAL GENERAL GOVERNMENT FACILITIES 118,731,000$ (32,725,000)$ 86,006,000$ GRAND TOTAL $214,931,000 -$32,725,000 $182,206,000 B. GENERAL GOVERNMENT FACILITIES (COMMUNITY CENTER, INFORMATION TECHONOLOGY, PUBLIC ART, ETC.) ATTACHMENT E CITY OF PALO ALTO DEVELOPMENT IMPACT FEE PROGRAM PUBLIC FACILITIES NEEDS LIST THROUGH 2035 1 Attachment F Attachment F Attachment F Finance Committee Minutes Special Meeting Tuesday, May 6, 2014 Chair Berman called the meeting to order at 8:17 P.M. in the Council Chambers, 250 Hamilton Avenue, Palo Alto, California. Present: Berman (Chair), Burt, Holman, Kniss Absent: ORAL COMMUNICATIONS None. AGENDA ITEMS 1. Proposed Changes in Development Impact Fees: Implementation of New Public Safety Facility and General Government Facilities Fees. Lalo Perez, Chief Financial Officer, reported Staff began the process of reviewing Development Impact Fees (DIF) with a benchmark study conducted by David Taussig & Associates (DTA). The process called for development of a project needs list. From the net project cost of needs, only 15 percent could be attributed to new development. The vast majority of funds were allocated to current residents. Staff suggested the Finance Committee (Committee) focus on two new fees. In November 2013, the Committee recommended the project needs list be forwarded to the Council. The Council accepted the list of projects for the two new DIFs. In April 2014, DTA completed a nexus study and developed two new fees, one for a Public Safety Facility and one for General Government Facilities. Staff recommended the Committee review the fees and make a recommendation to the Council. DTA did not recommend changes to existing DIFs. Nathan Perez, David Taussig & Associates, developed DIF amounts that satisfied legal and technical requirements of Government Code Section 66000, also known as the Fee Mitigation Act and Assembly Bill 1600 (AB 1600). The goal of AB 1600 was to demand that new development only pay its fair share. Existing deficiencies could not be charged to new development. The fee calculation employed the concept of an Equivalent Dwelling Unit (EDU) to equalize or normalize impacts of residential versus non-residential development. The Planning Department provided 1 Minutes demographics, and he confirmed them generally against Association of Bay Area Governments (ABAG) and U.S. Census data. The nexus for the proposed DIFs was that new development demanded public safety and general government facilities. Mr. L. Perez recommended the Committee adopt the two DIFs at 75 percent, consistent with current DIFs. He corrected a statement on Packet Page 7 in that the revenue for a Public Safety Building would be derived from the Transient Occupancy Tax (TOT) increase on new hotels only. MOTION: Vice Mayor Kniss moved, seconded by Chair Berman that the Finance Committee recommend the City Council review the Development Impact Fee (DIF) Justification Study prepared by David Taussig & Associates and approve the recommended new Public Safety Facility and General Government Facility impact fees at 75 percent of the maximum allowable level. Vice Mayor Kniss understood existing homes would not be affected by new DIFs. Council Member Holman recalled inquiring about commercial impact fee rates and learning that commercial rates were low. That was not reflected in the Staff Report. The chart for Total Fees as an Average of Average Home Price included office, retail, and industrial fees. Those numbers and percentages were low. She asked how Staff accounted for those differences. The descriptions for charts on Packet Pages 6 and 34 were different. The presentation stated different classifications of non-residential use had different demand. Daytime demand for emergency services was much greater than nighttime demand, which indicated that non-residential demand was greater than residential demand. Fees for non-residential appeared to be low. Mr. N. Perez believed the grouping was a product of charging the affordable housing fee to commercial only and then industrial, research, and development. Folks were not typically interested in industrial fees. Council Member Holman inquired whether office was not charged an affordable housing fee. Mr. N. Perez responded yes, the affordable housing fee was not charged to office. It was grouped in that manner because the $17.90 charge was not levied on office. The current proposed fee structure was approximately 60 residential/40 non-residential. That could be modified, but it was within the range of acceptable. Tilting it toward non-residential posed problems, because some residents were employees and they were the same people 2 May 6, 2014 Minutes demanding daytime services. Bi-furcating it would be very difficult. DTA typically employed a service factor of 50 percent to account for that. Chair Berman asked if Council Member Holman was questioning whether the City's office, retail and industrial fee was lower than other communities' fees. Council Member Holman clarified that she was asking whether the City was low compared to demand being created and low compared to other communities. Mr. N. Perez viewed fees by category and then rolled them into a non- residential fee. Non-residential fees as a whole could be low compared to peer cities. Council Member Holman stated the Committee was considering implementing two fees, one of which is for public safety. There was a direct relationship. James Keene, City Manager, asked if Council Member Holman wanted to know whether the City's non-resident fees for public facilities and public safety were low in comparison to other cities. Mr. N. Perez did not believe non-residential public safety and general government fees were low. Chair Berman interpreted the table differently. The City was lower than other communities on residential and higher than other communities on office and commercial. For example, the City's retail/industrial was twice the average of the other eight cities. Council Member Burt referred to the table heading "total fees as percent of average home price," and asked why office fees or retail/industrial fees would be correlated to home price. Mr. Keene indicated the heading was wrong. Nancy Nagel, Senior Management Analyst, explained that DTA presented the residential fees as a percentage of home price. She extrapolated from that and also looked at non-residential as a way of comparing communities. Non-residential properties could pay more in Palo Alto possibly for the same reasons that home prices were elevated in Palo Alto. Council Member Burt did not understand the impact of average home price in eight other cities on office and retail/industrial, and inquired about the comparison. 3 May 6, 2014 Minutes Ms. Nagel advised it was the average home price of all eight cities. Mr. Keene clarified that Council Member Burt was inquiring about the office component. Ms. Nagel utilized per 1,000 square feet for the percentages. Mr. Keene reported the fees were 1.2 percent of the cost per 1,000 square feet. Ms. Nagel stated that the fees per 1,000 square feet of office were 1.2 percent of the average home price in the other cities. Council Burt did not see the relevance of that information. Mr. N. Perez understood the information indicated office space would cost more generally. Mr. Keene interpreted the data to mean Palo Alto's fees were significantly higher than the average fees per square foot in the eight other cities. Vice Mayor Kniss asked Council Member Holman if she felt fees were too low and should be altered. Council Member Holman believed fees were too low. The presentation discussed residential and non-residential development in a couple of places. The fourth paragraph on page 4 of the Staff Report stated in part, Staff's list of unfunded projected needs, given ABAG and Staff's projected population growth rates ...." Population growth rates spoke to residential. She questioned the impacts from office increases. She did not understand whether the City was charging the correct rates for non-residential. Mr. N. Perez considered the differential between existing and new. The most important point was like comparisons. Palo Alto had great jobs data, so DTA reviewed the existing number of jobs versus the bump to 2035. Council Member Burt stated the City had relatively poor data. The Council held significant community and Staff discussions regarding the uncertainty of jobs data from various sources. If Mr. N. Perez had good jobs data, the Council wanted to hear it. Mr. N. Perez indicated Staff provided him with jobs data. He meant the data was good relative to data provided by other communities. 4 May 6, 2014 Minutes Council Member Burt reported that the City did not have a business registry or a business license tax. Mr. Keene reiterated that Mr. N. Perez received data from Staff that was good relative to the data other jurisdictions gave him. That did not mean that within Palo Alto the data was viewed as good. In commercial just as in residential, the number of people determined service levels. The Committee was interested in more accurate data regarding the business/commercial side of the employee base. Once the City instituted a business registry and obtained more specific employee counts, Staff and the Council would automatically consider changing DIF methodologies. Council Member Burt explained that Palo Alto was one of a small number of cities that had neither a business registry nor a business license tax. Those were fundamental vehicles by which other cities gathered data. He did not understand how the City had better data when it lacked the most valuable tool in gathering data. He needed Staff to reconcile Mr. N. Perez's understanding that he received solid data on jobs and the Council's understanding that Staff did not have that data. Mr. N. Perez was utilizing the differential or margin of difference. To the degree there was a flaw in existing data and it was carried through to future projections, the flaw would be equalized. Council Member Burt felt the 60/40 ratio may not apply either, because the City's jobs to resident ratio was quite different from almost every other city as well. It was not just the differential moving forward; it was the baseline as well. Mr. Keene clarified that the consultant made a qualitative statement about the data. He would prefer to discuss methodologies. Council Member Burt could agree to continuing the discussion if the Committee began with that premise. If the premise was that the City had good data, he could not agree to continue. Mr. Keene believed the consultant drew conclusions based on factors other than Staff indicating the data was good. He inquired whether a lack of good data would change Mr. N. Perez's recommendations. Mr. N. Perez responded no. Council Member Holman was trying to understand the information and the basis for the recommendation. She inquired about the City's daytime population. 5 May 6, 2014 Minutes Mr. Keene asked if she wanted the non-resident population as well. Council Member Holman requested daytime population compared to nighttime population. Mr. Keene reported daytime population included workers who did not live in Palo Alto, and asked if that was the figure she wanted. Council Member Holman replied yes. She wanted to know why residential paid 60 percent and non-residential 40 percent of fees when the City had 99,000 office workers and 65,000 residents. Mr. Keene did not know the exact number for daytime population. Mr. Steve Levy reported the City had the highest jobs to resident ratio in the state at more than 3:1. It would be fair to say that a 60/40 split would not be a normal distribution for Palo Alto. Council Member Holman reiterated that 60/40 was the recommendation. Those were her concerns about the foundation of the recommendations. Council Member Burt had heard 99,000 and 120,000 for daytime population. He inquired whether the normal split of fees would be 60 percent residential and 40 percent commercial. Mr. N. Perez indicated the fees as calculated were 60/40. Council Member Burt asked if that was a typical approximation for other cities. Mr. N. Perez advised other cities would have a higher residential burden, perhaps 75/25 or 70/30. Council Member Burt remarked that the City had a baseline of residents who remained in the community during the day. The higher service level served both the baseline of residents during the day and workers. He inquired about assumptions or base figures utilized for number of workers in calculating the 60/40 baseline. Mr. N. Perez utilized 65,000 to 75,000 existing residents and approximately 90,000 existing jobs. For 2035, he assumed an additional 10,000 residents and an additional 20,000 jobs. Council Member Burt asked if a jobs figure of 120,000 would change calculations. 6 May 6, 2014 Minutes Mr. N. Perez reported it would not change the existing versus new, assuming projections for the future would be based on the same data. The number of jobs would change the burden between residential and non-residential. There were two elements to the calculations, and the Committee was discussing the second one. Council Member Burt inquired whether the baseline would change. Mr. N. Perez replied yes. Council Member Burt asked if the proportionate increase was the second consideration. Mr. N. Perez answered yes. The percentage as the existing incremental differential would not change it. If the gradient remained roughly the same, then it would not really change the burden. Council Member Burt inquired whether a significantly higher number of existing daytime workers than used in calculating other fees would change the calculations for the amount the City charged commercial currently. Mr. N. Perez would need to know the employee count for the target year and the percentage increase. The important component was the differential. Council Member Burt understood the issues to be whether the City had been charging the correct fees and what fees should be charged in the future. The City had a critical need for data. Mr. N. Perez had never seen a 50/50 split. A 50/50 split would create backlash from developers. Council Member Burt asked if Mr. N. Perez had worked with other communities that had twice as many workers as residents. Mr. N. Perez answered of course not. Council Member Burt felt Palo Alto was an anomaly in terms of the job to resident ratio. Because Palo Alto was different from other cities, he struggled with comparing Palo Alto to other communities. Mr. N. Perez advised that counting an employee as 50 percent of a resident was an industry standard. He could examine changing that; however he would have reservations. If there was a different service factor, he could 7 May 6, 2014 Minutes investigate and rerun the numbers. There was a defensibility to being a unique community; however, he had never seen a fee study like that. Council Member Burt asked if Mr. N. Perez stated the rule of thumb was one worker equaled 50 percent of a resident. Mr. N. Perez responded yes. Council Member Burt stated that a 60/40 split would not be correct for 65,000 residents and 120,000 workers. Mr. N. Perez concurred. Analyzing the workers was very difficult. Mr. L. Perez understood the Committee's concerns. The Committee could make decisions based on the current data and direct Staff to return in two years when new demographics and data sets were available. Mr. Keene supported that as the City could update and enhance fees at a later time. If the Committee recommended fees outside the norm, then Staff would need to perform sophisticated modeling to defend moving outside the norm. He recommended the Committee adopt improvements now and direct Staff to return later with updates as better information became available. Mr. N. Perez advised Staff was conscientious about the data they gave him. He did not see that very often. Council Member Holman noted jobs numbers had been published on the City's web site and other places. Defensibility was an important criteria. Fair share was an exceedingly important criteria. Residents recognized that they subsidized non-residential development in the community. Everybody should be responsible for their fair share; as best the City could calculate fair share. AMENDMENT: Council Member Holman moved, seconded by Council Member XX to split the residential and non-residential impact fees to 50/50 from 60/40. Vice Mayor Kniss felt 50/50 might be more fair, but she did not believe the City could defend it. The Committee's responsibility was to deliver the data to the Council along with a recommendation that in the future non- residential should bear more of the burden. AMENDMENT FAILED DUE TO LACK OF SECOND 8 May 6, 2014 Minutes Council Member Holman would vote against the Motion. Other Council Members would share her questions. She did not see the recommendation as fair share. A great deal of information was available regarding the unique jobs/housing imbalance. Council Member Burt did not support the Amendment because the Committee did not have sufficient data to make a determination. A 50/50 split would be based upon an assumption of slightly more than 120,000 workers. The Committee did not have that data. That would not be a new industry standard; that would be a new assumption on the data. He inquired about a timeline for updates regarding data. Mr. Keene reported that a business registry would be the most direct path to obtaining good data. He did not recall the timeframe for instituting a business registry. A year would be a realistic timeframe to collect sufficient data to conduct a good comparison. Staff would need an additional six months to determine how to apply data, how to factor it, and other variables. Not having a clear methodology or not being able to draw a clear nexus placed the City in an awkward position. Council Member Burt did not hear a response regarding the 90,000 worker assumption. That was outside the range of figures he had heard over an extensive period of time. Mr. Keene would verify that information. Council Member Burt suggested using the mean or a conservative number. Mr. N. Perez did not indicate that was outside the range of his understanding. Mr. Keene advised that Staff was working to align all variable data points generated over time. That could be done in the near term and would go beyond the impact fee discussion. Mr. N. Perez reported the 50/50 target was the reason AB 1600 was enacted. He could not target a specific number. He could work with Staff about the service factor and run additional numbers. He would not provide something that was 50/50. MOTION PASSED: 3-1 Holman no 9 May 6, 2014 City of Palo Alto Development Impact Fees As per FY 2015 Adopted Municipal Fee Schedule pages 23-1 and 23-2 Type of Project Parks Community Centers Libraries Housing Total Fees (NIC Transp.)Transportation Residential - New Homes Only* Single family < 3,000 sq. feet $11,180/residence $2,898/residence $1,012/residence EXEMPT $15,090/res. $3,354 per net new PM peak hr trip Single family >3,000 sq. feet $16,695/residence $4,339/residence $1,507/residence EXEMPT $22,541/res. $3,354 per net new PM peak hr trip Multi-family </= 900 sq. feet $3,700/unit $963/unit $332/unit EXEMPT $4,995/unit $3,354 per net new PM peak hr trip Multi-family >900 sq. feet $7,318/unit $1,907/unit $604/unit EXEMPT $9,829/unit $3,354 per net new PM peak hr trip Non-residential Commercial/Industrial $4,748 per 1,000 sq ft or fraction thereof $268 per 1,000 sq ft or fraction thereof $255 per 1,000 sq ft or fraction thereof $19.31 per sq ft $23.89 per net new sq ft $3,354 per net new PM peak hr trip Hotel/Motel $2,147 per 1,000 sq ft or fraction thereof $121 per 1,000 sq ft or fraction thereof $107 per 1,000 sq ft or fraction thereof $19.31 per sq ft $21.15 per net new sq ft $3,354 per net new PM peak hr trip Residential Subdivisions Single-family Multi-family Public Art Fee*** 1% of first $100 mill. const. valuation; 0.9% of valuation above $1 mill. Special Zones Traffic Impact Fee Stanford Research Park/El Camino Real CS Zone $11.64 per net new sq ft San Antonio/West Bayshore Area $2.40 per sq ft Charleston/Arastradero Commercial $0.36 per sq ft Charleston/Arastradero Residential $1,225 per unit Parking in-lieu fee for Downtown Assessment District Notes: "Single-family" is defined as a single dwelling unit that does not share a common wall with another dwelling unit ***Public Art Fee applies to residential projects of 5 units or more and new commercial projects with a floor area of at least 10,000 sq ft and a construction value of at least $200,000. **In-Lieu Parkland Dedication Fee is an option only for projects of < 50 parcels. (Larger projects must dedicate land.) Certain Residential Projects and New Commercial Projects*** Fee Category Parkland Dedication Fee** *Square footage refers to living area, not lot size. 531 sq ft of parkland/unit or $56,736/unit in-lieu fee 366 sq ft of parkland/unit or $39,106/unit in-lieu fee $63,848 per parking space City of Palo Alto (ID # 5234) City Council Staff Report Report Type: Action Items Meeting Date: 11/3/2014 City of Palo Alto Page 1 Summary Title: Municipal Services Center Fiscal Year 2014 Reappropriation Requests Title: Approval of Fiscal Year 2014 Reappropriation Requests for the Municipal Services Center to be Carried Forward Into Fiscal Year 2015 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the City Council approve the Fiscal Year 2014 reappropriation for the Municipal Services Center Facilities Study (PE-12004) to be carried forward into Fiscal Year 2015. Background As part of the fiscal year-end process, staff reviews the City’s unencumbered and unspent appropriations of the fiscal year just ended, along with the City’s spending plans. Encumbered amounts are those subject to the legal claims of other parties due to contractual obligations (for example, commitments made through purchase orders). The City has a process for carrying forward encumbrances from one fiscal year to the next. However, each year there are a small number of important projects the City carries forward into the next year with unencumbered funds. As established in the Municipal Code, the reappropriations process is used for these projects, which are generally one-time needs. Although the Municipal Code also requires that the Council provide final approval once the accounting books are closed, the Council is requested to provide a preliminary approval at this time to allow the reappropriations to move forward. On September 16, the Finance Committee recommended that the City Council approve the Fiscal Year 2014 reappropriations as identified in Finance Committee staff report. This report was then brought forward for City Council consideration on October 20, 2014 on the Consent Calendar. As part of approval of the Consent Calendar, a Council Member expressed concern about this project’s mention of the Animal Services Center. As a result, some City Council Members pulled the item from Consent for discussion. After comments by the City Manager, City of Palo Alto Page 2 explaining why the business of the City requires such reappropriations to be carried forward, the City Council approved all reappropriation requests as listed in the attached report with the exception of the Municipal Services Center Facilities Study reappropriation request in the amount of $249,780. Discussion On December 22, 2011 the Infrastructure Blue Ribbon Commission (IBRC) released its final report, titled “Palo Alto’s Infrastructure: Catching Up, Keeping Up, and Moving Ahead”. The final report included a number of recommendations for improving the City’s management and funding of its infrastructure needs and on January 17, 2012 IBRC presented this report to Council (Staff Report #2454). Contained within the report was a recommendation to expand the scope of an existing Municipal Service Center (MSC) and Animal Services Center (ASC) consultant study to include the possibility of establishing an auto dealer cluster or other economic development project on East Bayshore Road and to consider the best use of parcels the City may acquire on the Embarcadero East corridor. Staff included PE-12004, Municipal Services Center Facilities Study in the FY 2012 Capital Budget and asked for funding in the amount of $100,000 which was approved by Council. Subsequently, the City Council reviewed IBRC recommendations including the recommendation regarding the MSC. Based on the additional questions raised by the City Council during this review, as part of the FY 2013 budget process, staff reviewed the cost estimate for the project again and the Council approved staff’s recommendation to increase the funding for the project by $150,000 from $100,000 to $250,000. Please note that $220 was spent on the project for an aerial photograph. Aerial photographs are taken as one of the initial steps of developing the scope of such studies. Staff did not immediately implement the study as efforts were directed to pursuing an Infrastructure Management System, prioritizing CIPs recommended by IBRC, and developing a funding plan to achieve IBRC’s recommendations. Also, during this time the economic climate was changing and beginning to rebound. Staff’s inclusion of the reappropriation request for PE-12004 in Finance Committee’s recommendation for Approval of Fiscal Year 2014 Reappropriation Requests to be carried forward into Fiscal Year 2015 (Staff Report #5129) is required per Municipal Code section 2.28.090. Per this section, any project with no activity in a two year period requires that the project be carried forward with a City Council approved reappropriation request. Once the funding was approved to be carried forward, staff intended to review the scope and seek direction from Council on next steps. To clarify the intended scope of the project, a future study will not include the potential relocation of the Animal Shelter. The aforementioned Municipal Code section was amended by the City Council in October this year and will become effective in November. With the amendment of the Municipal Code staff is required that all Capital projects need to be brought forward for discussion to the Finance Committee as part of the annual budget process and included in the annual capital budget document. Previously, only capital projects with changes in appropriations or new capital City of Palo Alto Page 3 projects were included in the annual capital budget document. Therefore, as part of the Fiscal Year 2016 Proposed Capital Budget, staff will bring forward this project and related funding for discussion including changes to the project scope. Finance Committee Review and Recommendation At the September 16 Finance Committee meeting, after addressing the Committee’s questions, the Finance Committee unanimously approved (3-0, Council Member Holman absent) staff’s recommendation (see Attachment B for the Minutes) to carry forward staff’s reappropriation requests. Resource Impact The funding for the Municipal Services Center Facility Study has been previously reviewed and approved by City Council as part of annual budget processes. Staff has determined that sufficient funds exist to allow for the approval of the Fiscal Year 2014 reappropriations for this project in the amount of $249,780. Policy Implications This recommendation is consistent with adopted Council policy. Environmental Review The action recommended is not a project for the purposes of the California Environmental Quality Act. Attachments:  Attachment A - Fiscal Year 2014 Reappropriation Requests CMR, Council Meeting Date Oct. 20, 2014 (PDF) City of Palo Alto (ID # 5129) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/20/2014 City of Palo Alto Page 1 Summary Title: Approval of Fiscal Year 2014 Reappropriation Requests to be Carried Forward into Fiscal Year 2015 Title: Finance Committee Recommends Approval of Fiscal Year 2014 Reappropriation Requests to be Carried Forward Into Fiscal Year 2015 From: City Manager Lead Department: Administrative Services Recommendation The Finance Committee and staff recommend that the City Council preliminarily approve the Fiscal Year 2014 reappropriations to be carried forward into Fiscal Year 2015. Background As part of the fiscal year-end process, staff reviews the City’s unencumbered and unspent appropriations of the fiscal year just ended, along with the City’s spending plans. Encumbered amounts are those subject to the legal claims of other parties due to contractual obligations (for example, commitments made through purchase orders). The City has a process for carrying forward encumbrances from one fiscal year to the next. However, each year there are a small number of important projects the City carries forward into the next year with unencumbered funds. The reappropriations process is used for these projects, which are generally one-time needs. Although the Municipal Code also requires that the Council provide final approval once the accounting books are closed, the Council is requested to provide a preliminary approval at this time to allow the reappropriations to move forward. Discussion On September 16, the Finance Committee recommended that the City Council approve the Fiscal Year 2014 reappropriations as identified in Finance Committee staff report (see Attachment A). The projects for which reappropriations are recommended can generally be grouped into the following categories: Attahcment A 1 City of Palo Alto Page 2  Timing and Workload Delays- Certain projects were delayed due to competing workload demands, appropriation of funds late in the fiscal year, or other unanticipated delays. Examples of projects in this category include the Police Utilization Study, Airport Legal Outside Counsel, Comprehensive Plan, Business Registry Certificate Program, Ecological Footprint Analysis, Virtual Private Network Upgrade, Virtual Private Clout, and Council Chambers Voting System Replacement.  Capital Projects with no Expenditures in FY 2014 or FY 2013- A limited number of capital projects have not had funds expended for two years, however staff still intends to complete the project. As mentioned in the attached report to the Finance Committee, appropriation of capital improvement funds, per the existing Municipal Code, are to remain in full force and effect until the purpose for which each was made has been accomplished or abandoned. The purpose of any capital appropriation is deemed abandoned if two years pass without any expenditure from the appropriation. There are two projects that fall into this category (Municipal Services Center Facilities Study and Long Range CCTV Cameras). It is anticipated that work will commence on these projects during FY 2015.  Library Materials- Savings were realized in the area of Library Materials in FY 2014 in anticipation of the 2015 openings of Mitchell Park Library and the Rinconada Library. These funds, from the Palo Alto Library Foundation, will allow for the library to purchase publications and materials for library patrons.  Teen Programs- At the June 2, 2014 City Council meeting, the City Council approved a recommendation from the Policy and Services Committee to use the net revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 ($213,834) to fund Teen Programs. Per City Council action/direction, the net revenue from prior years in the amount of $213,834 in addition to $84,000 for Fiscal Year 2014 for a total of $297,834 is to be brought forward for reappropriation. A long term expenditure plan will be brought to the City Council in fall 2014, including the use of estimated Fiscal Year 2015 revenue of $84,000.  Management and Professional Development funds- A number of City employees, as part of their compensation plan, are eligible for certain self-improvement activities. These funds are available to certain employees for civic and professional association memberships, conference participation and travel, educational programs, certain tuition costs, and professional and trade journal subscriptions, and are recommended to be carried over to Fiscal Year 2015 to improve and supplement the job and professional skills of employees. Finance Committee Review and Recommendation At the September 16 Finance Committee meeting, after addressing the Committee’s questions, the Finance Committee unanimously approved (3-0, Council Member Holman absent) staff’s Attahcment A 2 City of Palo Alto Page 3 recommendation (see Attachment B for the Minutes) to carry forward staff’s reappropriation requests. Resource Impact The requested items have been previously reviewed and approved by City Council as part of annual budget processes. Staff has determined that sufficient funds exist to allow for the approval of the attached Fiscal Year 2014 reappropriations list (see Attachment A of the attached Finance Committee report). For Fiscal Year 2015, staff recommends $1.6 million in carryover funds in the General Fund and $0.8 million in all other funds with a total of $2.4 million citywide. Policy Implications This recommendation is consistent with adopted Council policy. Environmental Review (If Applicable) The action recommended is not a project for the purposes of the California Environmental Quality Act. Attachments:  ATTACHMENT A: Reappropriations to FY 2015 Report, Finance Committee, Sept. 16, 2014 (PDF)  Attachment B_ 9-16-14 FCMINUTES (PDF) Attahcment A 3 City of Palo Alto (ID # 5043) Finance Committee Staff Report Report Type: Action Items Meeting Date: 9/16/2014 City of Palo Alto Page 1 Summary Title: Approval of Fiscal Year 2014 Reappropriation Requests to be Carried Forward into Fiscal Year 2015 Title: Approval of Fiscal Year 2014 Reappropriation Requests to be Carried Forward Into Fiscal Year 2015 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the Finance Committee preliminarily approve the Fiscal Year 2014 reappropriations to be carried forward into Fiscal Year 2015 and direct staff to forward the Finance Committee’s recommendation to the City Council. Background As a part of the fiscal year-end process, staff reviews the City’s unencumbered and unspent appropriations of the fiscal year just ended, along with the City’s spending plans. Encumbered amounts are those subject to the legal claims of other parties due to contractual obligations (for example, commitments made through purchase orders). The City has a process for carrying forward encumbrances from one fiscal year to the next. However, each year there are a small number of important projects the City carries forward into the next year with unencumbered funds. The reappropriations process is used for these projects, which are generally one-time needs. Although the Municipal Code also requires that the Council provide final approval once the accounting books are closed, the Council must provide a preliminary approval at this time to allow the reappropriations to move forward. In 1995, the Municipal Code was amended to allow the Council to preliminarily approve the reappropriations (Chapter 2.28, Section 2.28.090) because projects may need funding in the first part of the fiscal year. The Municipal Code also states that unless amended by Council, the appropriations of capital improvement funds for project expenditures shall continue in full force and effect until the purpose for which each was made has been accomplished or abandoned. The purpose of any capital appropriation is deemed abandoned if two years pass Attahcment A 4 City of Palo Alto Page 2 without any expenditure from the appropriation. On August 18, 2014, the Finance Committee approved a recommendation to amend Chapter 2.28, Section 2.28.090 of the Municipal Code to eliminate the provision allowing for the automatic reappropriation of capital improvement funds. The City Council is scheduled to approve this change in to the Municipal Code at the September 22, 2014 City Council meeting. If this ordinance change is approved by the City Council, staff will bring forth a second reading of the ordinance and the ordinance will become effective 30 days after the second reading. Therefore, this change would not affect the FY 2014 reappropriation process. Discussion As noted above, the Municipal Code requires the “preliminary” approval of reappropriations, with final approval by the City Council at the same time as the normal year-end closing ordinance. Attachment A identifies those reappropriation requests that staff recommends for preliminary approval, including any capital projects that have had no expenditures within the last two years. The projects for which reappropriations are recommended can generally be put in the following categories:  Timing and Workload Delays- Certain projects were delayed due to competing workload demands, appropriation of funds late in the fiscal year, or other unanticipated delays. Examples of projects in this category include the Police Utilization Study, Airport Legal Outside Counsel, Comprehensive Plan, Business Registry Certificate Program, Ecological Footprint Analysis, Virtual Private Network Upgrade, Virtual Private Clout, and Council Chambers Voting System Replacement.  Capital Projects with no Expenditures in FY 2014 or FY 2013- A limited number of capital projects have not had funds expended for two years, however staff still intends to complete the project. As mentioned previously in the report, appropriation of capital improvement funds, per the existing Municipal Code, are to remain in full force and effect until the purpose for which each was made has been accomplished or abandoned. The purpose of any capital appropriation is deemed abandoned if two years pass without any expenditure from the appropriation. There are two projects that fall into this category (Municipal Services Center Facilities Study and Long Range CCTV Cameras). It is anticipated that work will commence on these projects during FY 2015.  Library Materials- Savings were realized in the area of Library Materials in FY 2014 in anticipation of the 2015 openings of Mitchell Park Library and the Rinconada Library. These funds, from the Palo Alto Library Foundation, will allow for the library to purchase publications and materials for library patrons.  Teen Programs- At the June 2, 2014 City Council meeting, the City Council approved a recommendation from the Policy and Services Committee to use the net revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 ($213,834) to fund Attahcment A 5 City of Palo Alto Page 3 Teen Programs. Per City Council action/direction, the net revenue from prior years in the amount of $213,834 in addition to $84,000 for Fiscal Year 2014 for a total of $297,834 is to brought forward for reappropriation. A long term expenditure plan will be brought to the City Council in fall 2014, including the use of estimated Fiscal Year 2015 revenue of $84,000.  Management and Professional Development funds- A number of City employees, as part of their compensation plan, are eligible for certain self-improvement activities. These funds are available to certain employees for civic and professional association memberships, conference participation and travel, educational programs, certain tuition costs, and professional and trade journal subscriptions, and are recommended to be carried over to Fiscal Year 2015 to improve and supplement the job and professional skills of employees. Resource Impact The requested items have been previously reviewed and approved by City Council as part of annual budget processes. Staff has determined that sufficient funds exist to allow for the approval of the attached Fiscal Year 2014 reappropriations list (Attachment A). For Fiscal Year 2015, staff recommends $1.6 million in carryover funds in the General Fund, and $0.8 million across all other funds. Policy Implications This recommendation is consistent with adopted Council policy. Environmental Review (If Applicable) The action recommended is not a project for the purposes of the California Environmental Quality Act. Attachments:  ATTACHMENT A: Reappropriations to FY 2015 CMR (XLSX) Attahcment A 6 2014 Reappropriations Attachment A General Fund Department Fund Amount Recommended Reappropriation Justification City Manager's Office General Fund 35,000 Business Registry Certificate Program: At the April 29, 2014 City Council meeting, the Council approved a recommendation to fund a Business Registry Certificate (BRC) Ordinance and Fee Program as a full cost-recovery replacement/enhancement of the existing Use Certificate Process, with funds from the City Council Contingency. These funds were to be used for start-up costs including outreach, training, and program/ technology development; however, staff was not able to work on this project due to other competing priorities and the funding becoming available late in the fiscal year. Staff committed to return to Council before December 30, 2014 for approval of the BRC ordinance and program implementation and launch. City Manager's Office General Fund 25,000 Electric Vehicle Consultant:At the May 13, 2014 Policy and Services Committee Meeting, an ordinance was approved requiring all new multi-family residential and non-residential construction to provide for current or future installation of electric vehicle (EV) chargers at the recommendation of the Electric Vehicle Supply Equipment Task Force. Funding was allocated on June 12, 2014 from the City Manager's Contingency to hire a consultant to implement this direction and guide developers in technical equipment decision making as well as provide training to staff during the review process; however, since this was not approved until the end of Fiscal Year 2014, staff could not complete the contract before the end of the fiscal year. On June 16, the City Council approved the ordinance change. City Manager's Office General Fund 25,000 Ecological Footprint Analysis:A study is needed to assess the demand and consumption of resources by the City as a whole compared to the availability of resources in the ecosystem surrounding and supporting the City. The results will provide a Palo Alto Consumption Land Use Matrix (CLUM) and the data from the CLUM will be used for the subsequent Climate Action Plan, which was presented to the CIty Council on August 11, 2014. Funding was allocated from the City Manager's Contingency in FY 2014 to conduct this study; however, staff was not able to complete the project in Fiscal Year 2014. 11503.xlsx 1 9/17/2014,9:20 AM Attahcment A 7 2014 Reappropriations Department Fund Amount Recommended Reappropriation Justification Community Services General Fund 297,834 Teen Programs:At the June 2, 2014 City Council meeting, the Council approved a recommendation from the Policy and Services Committee to use the net revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 ($213,834) to fund Teen Programs for Fiscal Year 2015. Per Council action, the fund balance of $213,834 is to be reappropriated in addition to the $84,000 in Fiscal Year 2014 proceeds for a total of $297,834. A long-term expenditure plan will be brought to Council in fall 2014, including use the estimated revenue for Fiscal Year 2015 of $84,000. Development Services/Fire General Fund 50,000 Digitize Fire Prevention Records: This funding will be used to digitize historical records in the Fire Prevention Bureau (FPB) and implement an electronic records management system for historical and future documents with collaboration from the Information Technology (IT) Department. This funding was appropriated in the Fire Department as part of the Fiscal Year 2014 Operating Budget; however, the IT Department is still developing a citywide electronic records management strategy. As part of the Fiscal Year 2015 Operating Budget, FPB was moved from the Fire Department to the Development Services Department. Reappropriation of these funds to the Development Services Department will allow the FPB to move forward with the digitizaton of their records and move the electronic records into a records management system once IT implements a citywide solution. Library General Fund 600,000 Library Publications: In Fiscal Year 2012, the library received a donation of $1.9 million from the Palo Alto Library Foundation, of which $1.4 million was appropriated to the CIP and the balance of $500,000 was appropriated to the General Fund for the purchase of library collection materials (CMR 2258). The remaining General Fund balance of $100,000 has been reappropriated through Fiscal Year 2014 in anticipation of the completion of the new Mitchell Park library. In addition, a second donation of $1.2 million was received from the Palo Alto Library Foundation in Fiscal Year 2014 (CMR 4092) of which $500,000 is requested for reappropriation in anticipation of completion of the new Rinconada library in Fiscal Year 2015. The balance of $100,000 from CMR 2258 and $500,000 from CMR 4092, for a total of $600,000, will be used for the purchase of collection materials in Fiscal Year 2015 in order to provide library patrons with the most current publications and productions. People Strategy and Operations General Fund 50,000 Temporary Salaries: Two employees, one working as a Human Resources Assistant and one working as a Labor Relations Manager will be out on maternity leave for approximately six months in Fiscal Year 2015. Reappropriating Fiscal Year 2014 vacancy savings will allow PSO to hire temporary staff to backfill for the vacancies in Fiscal Year 2015. 11503.xlsx 2 9/17/2014,9:20 AM Attahcment A 8 2014 Reappropriations Department Fund Amount Recommended Reappropriation Justification People Strategy and Operations General Fund 165,000 Management Development: Savings from Fiscal Year 2013 was carried forward to Fiscal Year 2014 to develop a citywide management training program; however, staffing resources were not available in Fiscal Year 2014 in PSO to fully implement the program. PSO is fully staffed going into Fiscal Year 2015, so this funding ($85,000 in savings from FY 2013 and $80,000 from FY 2014) will be used for training programs in the following areas: Civics and Citizen Engagement, Leadership and Talent Exchange, Budget, Finance and Procurement, Interpersonal communication, Ethics and legal awareness, Presentation Skills, Business Writing, Time Management, Project management, Change Management, SkillSoft for Computer skills, Safety & Security and Personal and Professional Development. People Strategy and Operations General Fund 25,000 Wellness Program: Funding will be used to hire a third party vendor to create a holistic, accessible and fun employee wellness program that encourages and supports healthy eating, work life balance, and an active lifestyle. The vendor will be responsible for managing a wellness website for City staff, organizing training seminars, coordinating coaching, organizing team challenges, organizing an incentive program, coordinating biometric screening, and reporting on the overall program. The City launched an RFP in Fiscal Year 2014 and received several responses; however, a vendor was unable to be selected before the end of FY 2014. The Department is currently in the process of reviewing the proposals and anticipates seletcing a vendor prior to the City's Health and Wellness Fair in early October 2014. Planning & Community Environment General Fund 256,596 Comprehensive Plan:The Comprehensive Plan update is a large project involving significant community engagement. The Plan is scheduled for completion at the end of 2015. Funds were budgeted in FY 2014 and $56,596 is available for reapproriation in addition to the Council approved a BAO on March 17, 2014 for an additional $200,000. These expenses include meetings, advertising, supplies, note taking, and additional professional services to address unanticipated events and needs. Police General Fund 78,000 Police Utilization Study:In Fiscal Year 2013, funding was allocated for the department to hire a consultant to conduct a utilization study of overall police operations; however the study was not completed due to competing workload demands. The funds were reappropriated to Fiscal Year 2014 to conduct the study; however, the Technical Services Division had many other projects that took precedence (Tri-City Computer Aided Dispatch, Records Management System, Patrol Vehicle Mobile Audio Video, etc.) and were again unable to conduct the utilization study. Reappropriation of these funds will allow Technical Services staff to determine the scope of the study, integrate it into their workload, and hire a consultant to conduct the study in Fiscal Year 2015. 1,607,430$ Total General Fund Reappropriations 11503.xlsx 3 9/17/2014,9:20 AM Attahcment A 9 2014 Reappropriations Department Fund Amount Recommended Reappropriation Justification Other Funds Fund Fund Rec. Amount Reappropriation Justification Airport Fund 530 50,000 Airport Legal Outside Counsel: On August 11, 2014 the City Council approved the City's takeover of the Alto Airport, three years sooner than the end of the lease (2017) with the County of Santa Clara.The 2015 Adopted Operating Budget has assumed a Fiscal Year 2015 takeover. There were numerous documents that needed to be written, negotiated, and approved by the City Council prior to the City taking back ownership of the operations. This reappropriation will support outside legal counsel required due to the workload of the City Attorney's Office and specific expertise needed in this transaction. Due to the volume and complexity of the work associated with the takeover, it is anticipated that additional resources, above and beyond this $50,000, will be required for Airport related outside legal counsel for Fiscal Year 2015. Capital Improvement Fund 471 249,780 Municipal Services Center Facilities Study:This project will study options for relocating City functions, personnel, and equipment currently operating out of the Municipal Services Center (MSC) and Animal Services Center (ASC), and then repurposing the sites to produce long term economic benefits for the City. Over the past year, staff has developed a scope of services that could be performed by a consultant team to advance the project, but the preparation and issuance of an RFP has yet to be completed. Public Works staff plans to advance this project in Fiscal Year 2015. Capital Improvement Fund 471 65,000 Long Range CCTV Cameras: Reappropriating these funds will allow the Fire Department to purchase a fire weather camera to replace the current outdated camera that is mounted by Fire Station 8 in Foothill Park. This funding was originally appropriated as part of the FD-13000 CIP to replace the existing fire weather camera and add a second camera with thermal detection capabilities to act as an early warning system for fires in the foothills south of Palo Alto. The technology needs for the project were reevaluated in Fiscal Year 2014, and it was determined that the current funding will only be able fund the replacement of the fire weather camera. Reappropriation of these funds will allow for the purchase of the replacement camera in Fiscal Year 2015. The second thermal detection camera is expected to be brought back for Council consideration in the future as a separate CIP. 11503.xlsx 4 9/17/2014,9:20 AM Attahcment A 10 2014 Reappropriations Department Fund Amount Recommended Reappropriation Justification Storm Drainage Fund 528 45,000 Storm Drainage Pump Station:This reappropriation will allow for a repair to one of the 24' pumps at the Storm Pump Station located at the Airport. During a routine inspection, it was recently discovered that water was leading from one of the pumps, which could lead to larger damages. The repair was not completed in Fiscal Year 2014 as a portion of the funding was used for design and configuration of storm software, a maintenance contract for storm software, and debris disposal. Funding will be used, in conjunction with Fiscal Year 2015 approved funding, to repair the pump in Fiscal Year 2015. Technology Fund 682 35,000 Council Chambers Voting System Replacement:Reappropriating these funds will allow for the replacement of the existing analog voting system in the Council Chambers, which is over 20 years old and no longer supported by the manufacturer. This project was unable to be completed in Fiscal Year 2014 due to other infrastructure and technology related projects that took precedence. Technology Fund 682 50,000 Virtual Private Network Upgrade: Reappropriating these funds will allow the IT Department to complete upgrades to the Virtual Private Network (VPN) in order to enhance the security and scalability of the computing network, create additional functionality and access of mobile devices to the network, and ensure the City can upgrade to the most current operating system. This project was approved as part of the application replacement funding in the Fiscal Year 2014 Budget; however, IT was unable to be complete the project due to other infrastructure and technology related projects that took precedence. Technology Fund 682 275,000 Virtual Private Cloud: Reappropriating these funds will allow the IT Department to implement a primary and redundant storage area network through the Virtual Private Cloud. This project was approved as part of the infrastructure replacement funding in the Fiscal Year 2014 Budget, and the Department was going to award the project prior to the end of Fiscal Year 2014; however, a vendor could not be selected to meet that deadline. This funding will allow the project to be awarded in Fiscal Year 2015. 769,780$ Total Other Funds Reappropriations 2,377,210$ Total- All Reappropriations 11503.xlsx 5 9/17/2014,9:20 AM Attahcment A 11 Regular Meeting September 16, 2014 Chairperson Berman called the meeting to order at 7:04 P.M. in the Council Chambers, 250 Hamilton Avenue, Palo Alto, California. Present: Berman (Chair), Burt, Kniss Absent: Holman ORAL COMMUNICATIONS None AGENDA ITEMS Chair Berman encouraged the community and public watching to apply for the Architectural Review Board, Historic Resource Board, and the Planning & Transportation Commission. 1. Approval of Fiscal Year 2014 Reappropriation Requests to be Carried Forward Into Fiscal Year 2015. Walter Rossmann, Budget Director, requested the Finance Committee (Committee) recommend the full Council approve the annual process of carrying funds forward from Fiscal Year (FY) 2014 to FY 2015. The funds were generally for projects that could not be completed within the initial Fiscal Year either due to contractual issues or the Request for Proposal (RFP) process was delayed. The amount being requested to carry forward was $1.6 million in the General Fund and $800,000 in other Funds. Vice Mayor Kniss asked why there were question marks on the Staff Report. Mr. Rossmann explained the areas darkened and with question marks were Staff’s working areas and were inadvertently printed. The City Manager had approved the reappropriation of funds for the People, Strategy and Operations (PSO) for training and for the Comprehensive Plan. Council Member Burt asked for a status update on the reallocation of funds associated with the business registry. The Staff report noted there were Attahcment A 12 other competing priorities where the business registry was unable to be worked on. The business registry was a Council priority and he felt other actions would be informed by the business registry process. Mr. Rossmann stated the business registry certificate program was scheduled to go before the Council on September 22nd. The issue was the Funds did not become available until later in the FY14 so Staff was unable to encumber the funds in time and recommends that the funds be carried forward to FY15. MOTION: Vice Mayor Kniss moved, seconded by Council Member Burt that that the Finance Committee preliminarily approve the Fiscal Year 2014 reappropriations to be carried forward into Fiscal Year 2015 and direct Staff to forward the Finance Committee’s recommendation to the City Council. MOTION PASSED: 3-0 Holman absent 2. Utilities Advisory Recommendation that the Finance Committee Recommend that the City Council Approve Design Guidelines for the 2014 Water Utility Drought Rate Cost of Service Study. Jon Abendschein, Senior Resources Planner, informed the Finance Committee (Committee) of the proposed drought plans for the City. The San Francisco Public Utilities Commission (SFPUC) has asked for a voluntary 10 percent reduction from all of their wholesale customers. Palo Alto residents and businesses have responded positively to the recommendation with a 15 percent reduction in usage and the City facilities have made a 25 percent reduction. Staff proposed designing drought rate guidelines in the event the drought continued and there was a need for revenue. The Utilities Department felt updating the 2012 Cost of Service Study to include rates for drought conditions was more cost effective than requesting a new study. Staff understood altering a Cost of Services Study was difficult once it was completed; therefore, they were seeking policy guidance. There were a few reasons for having a drought rate available: 1) preserve the Utilities financial position and 2) to send a price signal to make some contribution toward water conservation goals. Drought rates modified or replaced normal rates: 1) there could be a separate set of rates that replaced normal rates or 2) there could be a surcharge on normal year rates. The rates could be implemented when the SFPUC declared a Stage 2 drought alert and could be deactivated when the restrictions were removed. Council Member Burt said depending on which mandated reduction SFPUC implemented the corresponding costs would reflect on the rates. Attahcment A 13 Mr. Abendschein stated yes, that was the goal. If the household or business met the reduction goal their bills would not reflect a change. Vice Mayor Kniss stated Staff mentioned the SFPUC worked with an 8.5 year design drought. She asked where Palo Alto was within that cycle. Mr. Abendschein believed the City was in the second year of the design drought. Vice Mayor Kniss recalled in the early 1990’s there was a long term plan in place and the City was not as sophisticated in dealing with the situation. She asked whether Staff was reviewing the past to learn from the errors made. Council Member Burt noted a lesson learned by SFPUC was not to waste water burning inexpensive hydro in the middle of a drought. Mr. Abendschein acknowledged the SFPUC had made changes and continued to maximize the water benefits rather than the hydro benefits. Staff had an archive of past events and they had been reviewing them for reference. Vice Mayor Kniss stated the drought in the 1990’s was significant and she was pleased Staff was reviewing the events to avoid a reoccurrence. Mr. Abendschein presented a hypothetical customer bill with and without the drought reductions. Vice Mayor Kniss asked what the starting usage point was for determining the customer usage baseline. Mr. Abendschein said the average baseline was the first calendar year prior to the drought. He noted there was a difference in indoor and outdoor water usage. Vice Mayor Kniss shared a concern from a customer who had been conserving for the sake of being prepared so when the review process occurs their rate would not be reflective of a normal use. Chair Berman asked Committee Members to refrain from asking questions until after the presentation because some of the questions may be answered. Attahcment A 14 Mr. Abendschein stated tier 1 users would need to reduce by 9 percent, tier 2 users would need to reduce by 15 percent and tier 3 users would need to reduce by 30 percent. He discussed various reduction rate options for residential and non-residential. He explained the timeline was to receive feedback from the Utilities Advisory Commission (UAC) and the Committee then provide said feedback to the Consultant to begin the analysis during the month of September. Return to the UAC and the Committee with a draft rate schedule and request preliminary approval in December. Herb Borock understood the role of the Committee was to advice Council and not provide advice to Staff. He recalled a few years back Council did not approve a three tier process. John Foster, Utilities Advisory Commission Chair, addressed a point of variation between the UAC and Staff recommendations. Fundamentally there were three points the UAC discussed changing of the Staff recommendation. The first change was agreed upon by the Staff and was made; therefore, was no longer an issue. The second was Staff allowing the Cost of Services Analysis to review three tiers. The third was individual allocations for residential customers. The UAC recommendation was to drop the three tier language and not to recommend the individual residential allocations. Chair Berman clarified the language recommended by the UAC would not preclude three tiers; it was a bit more general. Mr. Foster stated that was correct. The Staff recommendation had the firm providing the Cost of Service Study to look at three tiers. The question was whether or not the firm could review the process without the language and the reply was yes. Vice Mayor Kniss asked if there was a new normal as far as water consumption. She understood that was not a discussion for the table; although she requested the matter be broached. Mr. Foster agreed with the need for a new normal consumption usage. He, the UAC and Staff had discussed the subject of recycled water usage. One of the challenges with that option was the pipe systems. Valerie Fong, Director of Utilities, noted the City Manager was requesting Staff make recycled water a higher priority. Staff was researching available funding sources for such a project. Attahcment A 15 Council Member Burt mentioned the City had a preliminary study on running a recycled water pipeline up Page Mill Road; there was already one installed running down to Shoreline Road. The Page Mill Road project was put on hold five years ago because of objections from the Stanford Research Park with concerns with the total dissolved solids and the salinity of the water. The City had driven their Total Dissolved Solids (TDS) down principally because it was discovered the incoming pipes from Shoreline Road had holes in them and the City was treating salt water. The current TDS was at a level of water quality that there should not be objections for using the water for landscaping. The scheduled TDS for 2015 were comparable to other cities drinking water. The Page Mill Road project was a Public Works project and not that of Utilities. Ms. Fong believed the pipes portion of the project belonged to Utilities although the treatment portion was Public Works. Council Member Burt stated the Santa Clara Valley Water District (SCVLWD) were interested in contributing to the capital costs of recycled system in ways similar to where they have in other areas of the Water District. The outstanding question was whether to perform reverse osmosis treatment rendering the water basically drinkable which was what the City of San Jose had just begun. The decision was a major policy discussion that would approve or prevent the moving forward. Vice Mayor Kniss agreed the discussion was not the issue but the decision o use water in the correct way. Council Member Burt said although the recycled water projects may not affect the current recommendations it was a subject that needed to be on the table. He asked whether there was a decision made on right-of-way tree watering during droughts. Mr. Abendschein stated he would research and return an answer to the Committee at a later date. Council Member Burt requested Staff provide the response to the full Council via electronic. He asked about indoor reduction opportunities. The primary reduction opportunity was outdoor landscaping but he asked whether Staff reviewed what reductions there might be with best practices including changed in appliances. Attahcment A 16 Mr. Abendschein stated there were quite a few programs in the area of appliance exchange. Catherine Elvert, Communications Manager, noted it would be difficult to determine a percent reduction for indoor water use versus outdoor without further analysis. Staff discussed with the Council how the population had increased by approximately 14 percent with a reduced water usage of 4 to 6 percent. Council Member Burt corrected the water reduction had been closer to 35 percent. Ms. Elvert explained there were a variety of efficiency programs for indoor water use including rebates and free surveys. The programs were offered to residential and commercial customers. Staff could review the total citywide aggregate water use for indoor consumption versus outdoor and return to the Committee with further analysis with the potential. She noted there would likely be a greater potential in the residential sector then the commercial. Council Member Burt agreed there was an interest and felt there would be interest in different levels of implementation. He believed there was a good amount of indoor opportunity for reduction but he was unaware of the percentage and what it would take to achieve it. Whether there was a new normal of available water, which may or may not happen, the City should be thinking of a new standard on their own of the amount of water consumed for other reasons; less damage to natural water ways or other reasons to state these were sustainability goals of Palo Alto. He asked out of 20 years we have had what percentage increase in the population in the City, what percentage reduction in potable water use and also what percentage reduction per capita. Jane Ratchye, Assistant Director of Utilities, stated the 2015 Urban Water Management Plan was being released soon and many of the questioned being asked including the analysis would be performed in the Plan. Council Member Burt asked if the Plan was the appropriate place to bring up matters such as gray water and billing code related changes. Ms. Ratchye stated yes, the Plan should cover all of the potential water sources discussed. Attahcment A 17 Council Member Burt was pleased the information included in the utility bill was reflective of the context of reduction and conservativeness I simple terms. Chair Berman asked for clarification on the law stating the City could only account for 30 percent of fixed costs through fixed fees. Mr. Abendschein clarified it was not a law although it was a best management practice from the California Urban Water Conservation Council which the City was a signatory of. Chair Berman asked was it because of that the fixed costs do not change and as the variable amounts of water use changes needed to be accounted for in the fixed rates. Ms. Fong explained basically all costs were fixed. The City recovered the costs through part volumetric and part fixed cost rates. The goal was to balance through a conservation signal and still recover all of the costs which were fixed. Chair Berman attempted to sum up the Utility strategy. The first tier of water used tended to be for indoor water usage. There was not a large amount of opportunity to cut usage, and because of that there would not be a significant cut. The next tier was outdoor use which had a greater opportunity to cut through certain available measures; therefore, the cost was increased in the third tier. The idea of the size of the lot did not correlate to the usage of water which was the driving force for the three tier approach. Mr. Abendschein agreed Chair Berman relayed the process correctly. Council Member Burt misunderstood the comment of the entire City’s costs were fixed. He believed the rates were set by SFPUC for the commodity. Ms. Fong acknowledged she may have over simplified; although, even the SFPUC costs were fixed. Council Member Burt agreed the SFPUC costs were fixed but the City’s costs from there were not. Ms. Fong said that was correct. Attahcment A 18 Ms. Ratchye expanded on the fixed rates from SFPUC. Whether the fees were paid in advance or later the costs were fixed. San Francisco’s costs were fixed if people used a lower amount the City paid those costs to San Francisco. Council Member Burt asked if the City had no reduction in usage and San Francisco increased the rates, if San Francisco increased the rates and all customers had a proportionate across the board reduction of 13 percent; based on the 10 to 15 percent rate increase, the commodity rates remained the same. If the consumption was dropped by 25 percent in Palo Alto but only 5 percent in another city Palo Alto would have a lower commodity cost. Ms. Ratchye agreed, the cost related to the amount of savings Palo Alto had relative to other cities. But, if all of the cities saved the same amount it was fixed. Council Member Burt agreed the SFPUC costs were fixed although how they allocated the fees was based on the cities consumption. Vice Mayor Kniss said water was a scarce recourse but she expressed the considered 8 year drought may not be over at that anticipated time. She stated the water conservation needed to be looked at on a regional level and her understanding was Palo Alto was doing well. Mr. Abendschein stated over the past decade the Palo Alto residents has decreased consumption by more than other Bay Area cities. Vice Mayor Kniss understood where the City needed to go although she expressed there would be residents speaking out about their conservation versus higher rates. Ms. Fong was aware of the conflict between rates and consumption. During the review of the Cost of Service Study Staff would be looking at the users who used the least and the goal would be to impact them the least. Vice Mayor Kniss suggested a Public Relations campaign to personalize the acknowledgement of consumption. Council Member Burt noted Council Member Klein made the assertion that even though the City had greater reductions than other jurisdictions, on a per capita basis Palo Alto was still at the higher end of SFPUC customers. Attahcment A 19 Which did not necessarily give clarity on whether Palo Altans were water guzzlers or not. He was not certain what Council Member Klein was referring to when looking at total water versus night time population when the City had a much higher daytime population than other jurisdictions. He would be interested in the upcoming Master Plan meeting so that Council and the Community began to understand context, and what the true baseline comparison was versus other cities in the region. Ms. Ratchye explained the per capita number was based on residential usage only. The calculation was residential usage divided by the nighttime population. She believed there were only 4 other cities higher than Palo Alto. Palo Alto also had higher than normal lot sizes. Council Member Burt felt Redwood City and Menlo Park would be valid comparisons for water usage, lot sizes and house size. Chair Berman asked the percentage the City cuts its usage of water in the past year. Mr. Abendschein stated 25 percent cumulative savings over the previous year since February of 2014. Chair Berman said that was City operations. He felt it was notable the City was reducing water usage as they were requesting the community to. Mr. Abendschein mentioned the City began utilizing recycled water at the Municipal Golf Course and exchanged plantings for drought resistant greenery. Those were two examples of how the City improved their water consumption. MOTION: Vice Mayor Kniss moved, seconded by Chair Berman to recommend the City Council approve the proposed Design Guidelines for the 2014 Water Utility Drought Rate Cost of Service Study as shown in Attachment A of the Staff report. MOTION PASSED: 3-0 Holman absent FUTURE MEETINGS AND AGENDAS Lalo Perez, Director of Administrative Services stated the next meeting was October 7, 2014. Attahcment A 20 ADJOURNMENT: The meeting was adjourned at 8:19 P.M. Attahcment A 21 City of Palo Alto (ID # 5227) City Council Staff Report Report Type: Inter-Governmental Legislative Affairs Meeting Date: 11/3/2014 City of Palo Alto Page 1 Summary Title: City of Palo Alto Letter to the EPA on Waters of the US Title: Review and Approval of a Letter from the City of Palo Alto to the Environmental Protection Agency (EPA) on the Proposed Rule Change to Waters Protected Under the Clean Water Act From: City Manager Lead Department: City Manager Recommendation Staff recommends that Council review and approve the attached draft letter from the City of Palo Alto to the Environmental Protection Agency on a proposed rule change defining the scope of waters protected under the Clean Water Act. Background and Summary The Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) have published for public comment a proposed rule change defining the scope of waters protected under the Clean Water Act (CWA). The stated purpose of the rule rule change is intended to increase CWA program transparency, predictability, and consistency and result in more effective and efficient CWA permit evaluations with increased certainty and less litigation, however, the City of Palo Alto, our federal legislative advocate Van Scoyoc Associates, the US Conference of Mayors, the National Association of Counties, and many other municipalities and jurisdictions are concerned that this proposed rule change will have the opposite effect. Outlined below are some of the major concerns City of Palo Alto staff and our federal legislative advocate have as referenced in the attached draft comment letter (Attachment A):  Prior to the release of the proposed rule, the EPA failed to conduct adequate federal consultations with state and local governments. In recognition of the fact that state and local governments are strategic partners and co-regulators in enforcing the Clean Water Act, the EPA should restart the proposed rule process by first consulting with its municipal partners. City of Palo Alto Page 2  The proposed rule expands the EPA’s statutory and regulatory limits. By proposing to define certain water features as broadly as possible, the EPA is ensuring that their jurisdiction could be asserted almost anywhere in the U.S. In Palo Alto, this could include features of, or the entire, storm water drainage system, virtually any water within the floodplain of the Bay and San Francisquito Creek, and roadside ditches.  The EPA undertook the rulemaking process to clarify recent U.S. Supreme Court decisions regarding waters and adjacent wetlands subject to the Clean Water Act. While attempts to clarify the agencies’ regulatory authority are welcomed, the rule is far more comprehensive in scope than the Section 404 program of the Clean Water Act, which was the subject of the Supreme Court cases, and creates new definitions and terms that broaden and deepen the regulatory requirements for all aspects of the CWA.  Tributaries are defined so broadly in the rule as to regulate every ditch and channel. The rule exempts only a narrow class of ditches that are excavated only in uplands, drain only uplands, and have less than perennial flow. In Palo Alto, as in most jurisdictions, it will be difficult to satisfy the burden of proof that a ditch meets these narrow requirements, especially given the topography and proximity to the Bay.  The proposed rule attempts to define new categories of jurisdictional waters including tributaries and adjacent waters. Due to the extraordinarily broad definitions of these water features, we believe storm water and other water infrastructure features such as ditches, canals, and culverts could be deemed “waters of the U.S.” and, thus, see a dramatically different regulatory structure. Stormwater is already regulated under the 402(p) program of the CWA, requiring an NPDES permit. If determined to be waters of the U.S., storm water features would have to meet water quality standards for fishable and swimmable water, be subject to increased monitoring, and all discharges into and from the system would have to be controlled to meet those standards.  Although wastewater treatment systems would be exempt from being designated as a water of the U.S., that exemption would not necessarily apply to water reclamation and reuse facilities, which are often located in floodplains and are designed to achieve benefits not required by the Clean Water Act, as is specified in the rule. This poses new and costly requirements on the regional water reuse facility being planning and constructed for south San Francisco Bay.  The agencies’ proposed “other waters” category is designed to capture any wet feature that cannot be found jurisdictional under the “tributary” or “adjacent water” categories. Under the proposed rule, the agencies will assert jurisdiction over “other waters, including wetlands,” that “alone, or in combination with other City of Palo Alto Page 3 similarly situated waters, including wetlands, located in the same region, have a significant nexus” to a traditional navigable water, interstate water, or territorial sea. Additionally, buried deep within the proposed rule’s definition of “other waters” lies a proposal that would allow the EPA and Corps to assert jurisdiction, without conducting site-specific analysis, over entire “Ecoregions,” many of which make up large swaths of the state of California, including the City of Palo Alto. To be clear, staff is not recommending that the City oppose improvements made by the EPA to the Clean Water Act that enhance the natural environment. Instead, staff’s recommendation is that the EPA start over with the rule change process and more directly engage impacted stakeholders. By doing so regulation that provides more clarity, not less, can be achieved. Staff feels that legal clarity concerning water regulation is especially important in light of the issues that have arisen as part of the San Francisquito Creek improvement project. The deadline for the submission of public comments is November 14, 2014. Attachments:  A - Draft Comment Letter_11-3-2014 (DOCX) 1 DRAFT Water Docket Environmental Protection Agency Mail Code 2822T 1200 Pennsylvania Avenue, NW Washington, DC 20460 Docket ID No. EPA-HQ-OW-2011-0880 Subject: Definition of “Waters of the United States” Under the Clean Water Act The City of Palo Alto, California, appreciates this opportunity to comment on the rule proposed by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers to define “waters of the United States.” After careful review of the proposed rule and thorough consideration of its potential impacts on our City, we urge the federal agencies to withdraw this rule and engage state and local governments and stakeholders in a rulemaking process that can feasibly advance the goals of the Clean Water Act. Palo Alto is a city of 62,000 residents in the heart of Silicon Valley. Our city borders the southern end of the San Francisco Bay and is traversed by San Francisquito Creek. We are unique in that we operate a full suite of utility services including electricity, water supply, storm water, and wastewater. Because Palo Alto is an urban community within one of the most densely populated areas of the United States in an arid western state, one would suspect that a rule to define waters of the U.S. would have minimal impact on our city and region. However, the proposed rule could significantly impact our city budget, dramatically increase utility and insurance fees for our businesses and residents, significantly alter land use decisions, and further complicate our long-delayed flood control project. The proposed rule is more than a recitation of water features subject to regulation under the Clean Water Act. Rather, the rule redefines waters of the U.S. in new categories of water bodies that are already regulated under the Act but as a point source, not as a water of the U.S. Such definition triggers a panoply of regulation that will dramatically increase the cost and regulatory burden for all levels of government and permitted activities. These regulatory requirements for each water body will include beneficial use designation (assumed as fishable and swimmable), attainment of water quality standards to meet those designated uses, permits for the discharge of any pollutants, development of Total Maximum Daily Loads, water quality monitoring, listing each water that fails to attain standards, inventory of all point source discharges, inventory of all non-point sources contributing to a failed water quality standard, and EPA consideration of any petition to list an impaired water. With the proposed rule’s broad definitions of “tributary,” “floodplain,” “riparian area,” and “other waters” within an 2 ecoregion that the EPA proposes to categorically consider as jurisdictional water, virtually every water body in Palo Alto, not expressly exempted, could be designated waters of the U.S. Specifically, we are concerned with the rule’s impact on storm water, flood protection and floodplain management, water reuse, water supply, and the potential for litigation. Storm Water Palo Alto owns and operates its municipal separate storm sewer system (MS4) and is a co- permittee of the San Francisco Bay Municipal Regional Stormwater NPDES Permit. We strongly recommend that because MS4s are already permitted under the Clean Water Act and are regulated as point sources, they and their component features should be exempt from definition as waters of the U.S. The existing Section 402(p) permit program mandates the management and discharge of storm water in our community. The proposed definition of tributaries creates the prospect of MS4 features being defined as waters of the U.S., resulting in uncertainty at best and ultimately complex and costly new regulatory requirements for storm water. The rule proposes that all tributaries are waters of the U.S. and defines a tributary as a water characterized with a bed and banks and ordinary high water mark, which directly or indirectly contributes flow to other waters of the U.S. Likewise, wetlands, lakes, and ponds are a tributary if they contribute flow to other waters. The rule goes further to clarify that a tributary does not lose its status as water of the U.S. if, for any length, there are natural breaks (such as wetlands, debris piles, boulder fields, or streams that flow underground) or man-made breaks (such as bridges, culverts, pipes, or dams). Therefore, by tracing this definition upstream from a storm water discharge point, any MS4 feature that collects rain water or runoff could be considered as water of the U.S., including surface ditches or channels that are part of our storm water system because these features have beds, banks, and ordinary high water marks that conduct flow to a water of the U.S. Even our upstream detention basins would be jurisdictional because they hold water that drains through ditches and pipes to a water of the U.S. If MS4 features escape the “tributary” definition, they could nevertheless be captured as water of the U.S. if they lie in the floodplain, which covers a significant portion of Palo Alto. Palo Alto is committed to green infrastructure, yet green infrastructure itself can be defined as water of the U.S. Constructed wetlands, swales, and detention basins invite the additional regulation required for waters of the U.S., and cities will be dissuaded from building such features if they are subject to additional, costly regulation. Flood Protection and Floodplain Management Palo Alto lies within a 50-square-mile floodplain than reaches from the Santa Cruz Mountains to San Francisco Bay. For the past 16 years Palo Alto and neighboring communities, impacted by a major flood in 1998, have tried to focus the resources and priorities of the federal government on restoring an adequate level of flood protection. Construction is now delayed because water 3 quality permits are being used by regulatory agencies as leverage for mitigation demands. The proposed rule would further complicate this matter and create untenable circumstances for further improvements in flood protection and use of the floodplain and riparian areas. The proposed rule would categorically include all “waters” within a floodplain or riparian area as waters of the U.S. The rule does not enumerate criteria for defining nor does it identify boundaries for these areas, yet asserts jurisdiction over all “waters,” which are also undefined, because these waters are neighboring or adjacent to other jurisdictional waters. The rule assures that the EPA will use its best professional judgment to determine the boundary for these areas. This lack of specificity requires that every activity, including public improvements in flood protection, infrastructure, and facility maintenance, engage federal and state agencies in any land use decision within an area that is undefined. While this has historically been a large enough challenge in permitting Section 404 dredge and fill activities, the experience is now extended to every other aspect of the Clean Water Act, as required in this rule. As waters of the U.S., any activity would have to ensure the attainment of water quality standards for the designated use of the identified water, and permit applicants would be subject to variable and often arbitrary compensatory mitigation requirements imposed by the permitting agency. We ask that a final rule include science-based criteria and greater clarity of adjacent and neighboring “waters” and a definition of floodplain and riparian areas that are not entirely arbitrary. The Federal Emergency Management Agency (FEMA) expends over $100 million annually identifying floodplains, and recognizes the authority of local government to adopt the appropriate ordinances to manage land uses within the designated floodplain. This proposed rule grants full discretion to EPA to exercise best professional judgment to identify a floodplain and imposes the full force of the Clean Water Act on any land use decision that could affect undefined “water” within that floodplain or riparian area. Water Reuse Palo Alto is an active participant in the Regional Water Quality Control Plant Water Reuse Program. Since 1980 this program has reused over 10 billion gallons of water for irrigation and cooling, reducing the need to import potable water and reducing discharges of wastewater into San Francisco Bay. Water reuse in California is an essential requirement to meet demand, particularly at a time of recurring droughts. Investing in the necessary infrastructure and facilities to increase water reuse is expensive, and while government must ensure public safety and environmental compliance, it should not discourage the investment. Unfortunately, the proposed rule introduces impediments to water reuse and does not protect investments made in water reuse, even though federal agencies encourage such activity. Recycled water is treated and distributed in ancillary infrastructure to a wastewater treatment system and can include channels to convey wastewater, settling or retention basins, and a separate pipe system to deliver the recycled water. Some of these facilities could fall under the definition of “tributary” of the proposed rule, could be located within a floodplain or riparian 4 area, and would not necessarily be covered by the wastewater treatment exemption in the rule, which stipulates the exemption only for “waste treatment systems, including treatment ponds or lagoons, designed to meet the requirements of the Clean Water Act.” While water recycling provides further treatment of wastewater, the purpose for its treatment is not “designed to meet the requirements of the Clean Water Act.” Further, the rule’s exemption for settling basins does not afford sufficient protection for water reuse facilities because it does not cover detention basins, reservoirs, or associated infrastructure such as channels, ditches, or other conveyances. At a minimum, we ask that the final rule include a clear exemption for all water reuse and water reclamation facilities. Water Supply The City of Palo Alto purchases its water supply from the San Francisco Regional Water Supply System, a system of reservoirs and aqueducts that delivers water from the Sierra Mountains to San Francisco and surrounding communities. The quality of the water from the SF Regional Water Supply System is such that it requires minimal to no pre-treatment. The system of reservoirs and many of the associated rivers and streams are already considered “Waters of the United States” under the Clean Water Act. We are unaware of any consultation that has taken place with state and regional entities that own and manage these water supply facilities with respect to any changes that may occur as a result of this proposed rule. We urge the agencies to carefully consider the impact of this rule on water supply systems and make the appropriate changes in the final rule to ensure that the public can continue to rely upon these sources for dependable and affordable water supply. Potential for Litigation The City of Palo Alto prides itself on environmental stewardship and exceeds state and federal mandates for the utility services we provide our residents. We consider ourselves a partner with the federal and state governments in achieving the objectives of the Clean Water Act. However, the proposed rule fails to provide the necessary clarity that gave impetus to this rule. We support a rulemaking process that interprets court decisions and ensures future progress in meeting the requirements of the Act. Unfortunately, the aggressive reach of this rule and its ambiguous provisions and terminology introduces uncertainty, requires more agency analysis and intervention, and creates increased potential for litigation. In order to avoid bureaucratic delays and litigation, we provide the following examples of ambiguity that require clarification:  The definition of all “waters” adjacent to other jurisdictional waters needs to be clarified. Existing requirements cover only adjacent wetlands, yet the concept is expanded in the rule to include all waters. 5  “Significant nexus” should be defined in science-based terms to determine whether “other waters” are sufficiently linked to waters of the U.S. The rule defines significant nexus as any connection that is “more than speculative or insubstantial.”  “Riparian area” and “floodplain” must be defined to better inform land use decisions and describe the jurisdictional boundaries of regulation.  Ditches that are excavated in uplands, drain only uplands, and have less than perennial flow are exempt from the rule. However “upland” is not defined, nor is “perennial flow.” It is unclear how an applicant would be able to prove that a ditch would warrant the exemption and whether the exemption is nullified if the ditch traverses a wet area. This is particularly important for municipalities that maintain roadside ditches.  The wastewater treatment exemption has a history of legal challenge. Its application to water reuse facilities and storm water features must be clearly defined. We appreciate your consideration of these comments. The proposed rule is an ambitious start to the necessary rulemaking process, but in its current form introduces greater uncertainty, costly regulation, possible water supply reductions, and potential litigation. We strongly urge the agencies to withdraw the rule and engage Clean Water Act partners, namely state and local governments, and stakeholders in crafting a more feasible rule. Sincerely, Nancy Shepherd Mayor, City of Palo Alto cc: Palo Alto City Council Palo Alto City Manager Senator Barbara Boxer Senator Dianne Feinstein Congresswoman Anna Eshoo