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City of Palo Alto (ID # 2817)
City Council Staff Report
Report Type: Action ItemsMeeting Date: 6/4/2012
June 04, 2012 Page 1 of 6
(ID # 2817)
Summary Title: Hazardous Material Evaluation and Standards Program
Title: Approval of Budget and Schedule for Technical Analysis of Hazardous
Materials Implications for Zoning at Industrial Locations and for Plating Shop
Operations at Communications and Power Industries (CPI) at 811 Hansen Way
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that Council authorize staff to retain contract services of up to
$35,000 to: (1) conduct an assessment of CPI’s plating shop operation, including
evaluation of both past reports and methodologies related to CPI’s operations
and “best practices” and current operations; and (2) prepare technical support
information related to zoning, amortization and hazardous materials issues. City
staff also will identify potential Zoning and Fire Code amendments, if appropriate,
with input from the selected consultant.
Executive Summary
Communications and Power Industries, Inc. (CPI), or its predecessor firm, Varian
Associates, has occupied the property at 607 and 811 Hansen Way since 1953. In
2006, CPI moved its San Carlos operation to Palo Alto and upgraded its plating
shop, which is located immediately adjacent to residences in the Barron Park
neighborhood. Those neighbors have expressed significant concern about the
operations at CPI, particularly in light of several accidental discharges or releases
of chemicals at the site. In 2007, the Council adopted a zoning ordinance
requiring that the location of new industrial facilities using hazardous chemicals
over the limits described in California Health & Safety Code Title 19 be more than
300 feet away from residential uses. The City also commissioned an
“amortization” study to define a reasonable period of time for CPI to recoup its
investment in the plating shop, but then to relocate it away from the residential
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area.
On April 23, 2012, the City Council reviewed and discussed the “amortization”
study, and heard from neighbors in Barron Park and from CPI representatives. CPI
informed that City and the public that it had reduced its use of hazardous
chemicals below the thresholds in Title 19. The Council directed that staff return
with: (1) an outline of the budget and (2) a schedule for further technical analysis
of both CPI’s potential off-site impacts and a broader evaluation of the potential
impacts of siting industry using hazardous materials in proximity to residential
areas. The intent of the additional technical analysis is to assist the City to
determine whether and to what extent it may be appropriate to modify the
current Fire and Zoning codes in the interests of public health and safety and to
evaluate how the findings of the technical analysis might affect amortization. Staff
has outlined an expected cost of $35,000 for a consultant to complete such a
work effort. Staff also estimates that 240-300 hours of staff time will be required,
across five departments, to coordinate the study and to identify potential zoning
and amortization approaches, if required. The goal would be to complete the
work over the coming 6 months (December 2012).
Background
At the April 23rd meeting, Council asked that staff return within 30 days with an
estimate of budget and schedule to retain a third-party consultant to prepare the
following scope of work:
Scope of Work: Prepare a technical assessment of the risks associated with the
use, storage and handling of hazardous materials, particularly related to potential
risk levels for residential areas and sensitive populations, such as school facilities,
proximate to such hazardous materials facilities operations. Services should be
provided on an independent, third-party basis and should indicate how the
consultant would assure such independence from the regulated industry. There
are a number of independent consultants in the field who work only for public
agencies. A general outline of the consultant and staff work includes:
Inventory and analyze the chemical and other materials on site at CPI. This
would include both an on-site inventory of chemicals and an off-site
hazardous materials assessment of CPI’s hazardous materials use, storage,
and handling, based on multiple assessment models and a comparison to
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the quantities included in prior assessments prepared by CPI. This work
would also include site visits and analysis to consider the current chemical
life-cycle on site, e.g., handling of materials from delivery to the site to
disposal. This should include an analysis of the effects of inadvertent
combination of all chemicals on site, not just single chemicals or those
currently identified as hazardous. This work will require an agreement
between the City, CPI and the consultant regarding access to and use of
proprietary and security-sensitive information. CPI has indicated a
willingness to enter into an appropriate agreement to address these issues.
The analysis should include definitions of ‘best practices’ for use of
chemicals on site and definitions and thresholds of ‘acceptable level of risk’
in terms that can be incorporated, if appropriate, into the Zoning and Fire
Code requirements for all uses which require these materials in defined
quantities. Where appropriate to address current health and safety needs,
‘best practices’ should also be identified for potential inclusion in the
current CPI hazardous materials handling practices at their Palo Alto site.
This recommendation should focus on minimizing the current use and
impacts from hazardous materials at the CPI site.
Evaluate zoning approaches used by other cities or counties to avoid or
mitigate impacts of hazardous materials use, storage and handling on
adjacent or nearby residential uses.
As appropriate, recommend amendments to the Palo Alto Fire and Zoning
Codes standards based on the identified definitions and thresholds of
hazardous materials use, storage and handling that may be appropriate
proximate to residential uses. After Council review, the Consultant may be
asked to assist City staff in drafting such regulatory revisions for further
public review and discussion.
Present a report summarizing technical assessment and recommendations
as they may affect amortization options so that they may be considered in
the review of any potential action with respect to amortization.
The Council also directed that staff return with the results of the consultant study
and subsequent City action on appropriate city codes with a goal of six months or
less. The Council’s Action Minutes are included as Attachment A to this report.
Staff believes that the outline above captures the intent of the motion, though it
is not verbatim as the motion was developed in the context of several
amendments. The April 23, 2012 Council staff report is provided as Attachment B.
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Discussion
The purpose of this Council meeting is to present an outline of the work effort
required by staff and consultant services to accomplish the direction of Council.
The effort will include input from several departments, including the Manager’s
Office, the City Attorney, Planning and Community Environment, Public Safety
(Fire), and Administrative Services. The discussion is broken down into consultant
services, staff resources, and a proposed schedule.
Technical Consultant Services
If directed to proceed by Council, the staff would prepare a Request for Proposals
(RFP) based on the scope of services identified above. To insure a prompt
response, staff would send the RFP to a preselected group of three qualified
consultants. The response would require each firm to indicate their qualifications
and independence, proposed cost of services, and whether they could accomplish
the work within the proposed time frame. Staff expects that it should take about
two weeks to get the RFP circulated. Respondents should be given at least two
weeks to respond. Within a week of response, a consultant should be selected.
(Total time is estimate at about 30-45 days). Initial inquiries indicate that, based
on the tasks described and providing CPI, the City and the consultant promptly
reach agreement on access to and protection of proprietary and security-sensitive
information, the preparation of the consultant’s report should take about 90 days
from the award of the contract. The consultant would continue to work beyond
the completion of the initial report to assist staff preparing any revisions to the
zoning and fire codes and attending any subsequent public meetings and
hearings. Complications in terms of access to information could result in delay of
the contract or the study, however.
Staff Resources
Staff work on this task would require the involvement of five City departments:
Planning and Community Environment, Public Safety (Fire), Administrative
Services, the City Attorney’s office, and the City Manager. In this case the staff
scope of work is defined as reviewing the consultant’s draft report, research in
preparation for any Zoning and Fire code changes, and, if appropriate, preparing
the appropriate revisions to the Zoning and Fire Codes identified in the
consultant’s study for initiation by Council. The Consultant would be available to
assist staff with terms, issues and measurements including definitions and
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thresholds. Any identified potential zoning and fire code changes will be reported
to the City Council in December for consideration for initiation. Consideration of
amortization implications will also be presented in December. Review of any
changes to the zoning and fire codes by the Planning and Transportation
Commission and adoption action would follow Council initiation. The local Fire
Code changes, if any, based on state law, cannot be adopted until January 2014.
In order to identify any potential zoning and fire code amendments and
amortization recommendations within the 6 month goal, staff members from all
involved departments would need to begin background work on the zoning and
fire codes. Staff estimates that the project would require an estimated 240-300
hours of professional Planning, Fire, and City Attorney staff time, primarily at a
senior management level. Time to prepare necessary staff reports, department
review and attend required public meetings for code adoption is not included in
the estimated staff time. The cost estimate assumes that the services of
additional outside consultants or outside counsel would not become necessary.
Staff also notes that the current Fire Marshal, who is the only management staff
familiar with the site and project history, is retiring in July of 2012, so there may
be additional time or resources required from Fire in order to support the project.
Schedule
Based on initial conversations with experts in the hazardous materials field, staff
estimates that, after the selection of a hazardous materials consultant (about 30-
45 days), it would take about 90 days for the firm to prepare the needed report.
That would leave 60 days to review and finalize the report, consider the
amortization implications and identify potential zoning and fire code amendments
for Council initiation. Consultant work with staff to prepare the amortization
recommendations could not begin until the consultant report is completed.
This schedule assumes that the Planning and Transportation Commission and City
Council have the time in their meeting schedules to address the products of this
effort in a timely and efficient manner. It has also not been determined what
CEQA review and associated circulation review time would be required for any
changes proposed to City codes and regulations. This time would have to be
accommodated in the subsequent review process, and could potentially extend
the schedule.
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Resource Impacts
Funding for the consultant study would be provided from available funds from FY
2011-2012 Planning and Community contract services funds in the current
operating budget. An intensive review as outlined above is outside the current
work program for planning and fire staff. Staff believes that other projects may
need to be deferred to complete the project within six months. Schedules for one
or more of the following City planning efforts may be delayed by the commitment
to the hazardous materials study and zoning: a) the City’s responsiveness to the
Sustainable Communities Strategy (SB375) and housing allocations, b) the
Comprehensive Plan (including the California Avenue/Fry’s area concept plan),
and/or c) the wireless communications review.
Policy Implications
The study and possible zoning changes reflect the City’s efforts to protect public
health and safety of the City’s residents, while promoting economic development
objectives.
Environmental Review
Environmental review is not required at this time, but subsequent actions,
particularly any potential zoning changes, may require an initial study and
subsequent environmental review.
Attachments:
Attachment A: April 23, 2012 City Council Action Minutes (PDF)
Attachment B: April 23, 2012 Council Staff Report w/o Attachments (PDF)
Prepared By: Curtis Williams, Director
Department Head: Curtis Williams, Director
City Manager Approval: ____________________________________
James Keene, City Manager
04/23/2012
Action Minutes
Special Meeting
April 23, 2012
The City Council of the City of Palo Alto met on this date in the Council
Chambers at 6:00 P.M.
Present: Burt, Espinosa, Holman, Klein, Price, Scharff, Schmid, Shepherd,
Yeh (left at 10:00 PM)
Absent:
ACTION ITEMS
1. Discussion of Zoning Amortization Study and Options Related to
Communications and Power Industries (CPI) at 811 Hansen Way.
MOTION: Council Member Burt moved, seconded by Council Member
Espinosa to direct Staff to; 1) return with a budgetary proposal to hire an
independent 3rd party expert to evaluate off-site hazardous assessments
under several models and compare to current zoning and CPI practices, 2)
recommend definitions and thresholds of hazardous materials facilities that
would be considered for a Zoning Ordinance proximate to residential areas,
and 3) initiate a Zoning Ordinance amendment to prohibit plating shops, or
facilities using similar hazardous materials without appropriate separation of
residential areas.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to direct Staff to return within 30 days with a
budget proposal.
AMENDMENT: Council Member Holman moved, seconded by Council
Member XXXX to require amortization for CPI consistent with the
amortization study which is 14 years longer.
AMENDMENT FAILED DUE TO LACK OF A SECOND
INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER
AND SECONDER TO request Staff present to Council recommendations on
2 04/23/2012
potential amortization options to be reviewed in the context of the
information provided by the third party consultant.
INDORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER
AND SECONDER to include within the best practices, best zoning practices.
INDORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER
AND SECONDER to direct Staff return with the results of the consultant
study and the subsequent City action with a goal of six months or less.
MOTION PASSED: 8-0 Yeh Absent
ADJOURNMENT: The meeting was adjourned at 12:24 A.M.
City of Palo Alto (ID # 2712)
City Council Staff Report
Report Type: Action ItemsMeeting Date: 4/23/2012
April 23, 2012 Page 1 of 6
(ID # 2712)
Summary Title: CPI Amortization Study
Title: Discussion of Zoning Amortization Study and Options Related to
Communications and Power Industries (CPI) at 811 Hansen Way
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that Council consider input from staff, CPI and the Barron Park residents, and
direct staff whether to prepare zoning amendments or develop additional materials, including
consultation with a technical peer reviewer regarding the feasibility of potential improvements
to further reduce hazardous materials quantities at CPI and the risk level of such materials in
proximity to residential properties.
Executive Summary
Communications and Power Industries, Inc. (CPI), or its predecessor firm, Varian Associates, has
occupied the property at 607 and 811 Hansen Way since 1953. In 2006, CPI moved its San
Carlos operation to Palo Alto and upgraded its plating shop, which is located immediately
adjacent to residences in the Barron Park neighborhood. Those neighbors have expressed
significant concern about the operations at CPI, particularly in light of a few accidental
discharges or releases at the site. The City has commissioned an “amortization” study to define
a reasonable period of time for CPI to recoup its investment in the plating shop, but then to
relocate it away from the residential area.
The intent of the meeting item is to review and discuss the “amortization” study, to provide
input from staff, CPI and Barron Park residents, and to allow the Council to provide direction for
next steps. A few options are outlined, including a) initiating zoning amendments and
amortization for the CPI plating shop, b) evaluating a broader scope of impacts of hazardous
materials uses adjacent to residential areas, and/or c) working with CPI and neighbors to
facilitate further meaningful reductions in the amount and/or changes in the use,
transportation or storage of hazardous materials in this location to enhance health and safety
of the adjacent neighborhood.
Background
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Communications and Power Industries, Inc. (CPI), or its predecessor firm, Varian Associates, has
occupied the property at 607 and 811 Hansen Way since 1953. The Microwave Products
Division of CPI manufactures klystron vacuum tubes, which are used to amplify microwave and
radio-frequency signals for various applications, including defense systems, satellite
communications and medical devices. As part of the manufacturing facility, CPI operates a
metal plating shop, which is located in a building adjacent to residential property located on
Chimalus Drive in the Barron Park neighborhood (Attachment A). Until recently, the plating
shop was the only facility in Palo Alto that uses or stores hazardous materials (potassium
cyanide and nitric acid) at or above the threshold limits for regulation under the California
Accidental Release Prevention Program (“CalARP”), under Title 19 of the California Code of
Regulations.
In 2005-2006, CPI consolidated the operations of its San Carlos facility (formerly Eimac
Products) in Palo Alto. As part of and subsequent to the consolidation, and in response to three
hazardous materials incidents at the site, CPI has made substantial upgrades to the plating
shop, including upgrades to storage, processing and safety equipment. Some of these upgrades
included:
February 2005: Partial seismic upgrade to plating shop building.
April 2008: Installation of toxic gas alarms outside plating building (on Chimalus side) to
detect nitric acid or hydrogen cyanide fumes or vapors.
January 2009: Relocation of Potassium Cyanide from exterior storage building into
plating building.
March 2009: Installation of natural gas generator to provide emergency power to
plating shop ventilation and treatment system.
May 2009: Installation of filtered fume hood for handling and weighing potassium
cyanide.
2006–2009: Reduction of Potassium Cyanide quantities from approximately 700 pounds
to approximately 400 pounds and reduction of Nitric Acid from over 4000 pounds to less
than 2000 pounds.
In March of 2012, CPI reported to the County that it has reduced the storage or use of
Potassium Cyanide to below 100 pounds and the storage or use of Nitric Acid to below 1,000
pounds, both below the threshold of the Title 19 regulations (Attachment C). CPI also notified
the City’s Fire Department of that action and staff is awaiting confirmation from the County.
Hazardous Materials Incidents
In February of 2006, residents in the Chimalus neighborhood reported a noxious odor, which
turned out to be caused by a gas (nitric acid) release from CPI. Following this incident,
neighbors began expressing concerns about the proximity of the plating shop to the residential
neighborhood, as well as “right-to-know” regulations.
In March of 2008, approximately 10 gallons of 31% hydrochloric acid was released in the rear
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driveway and about 60 gallons of a less than 31% mixture of hydrochloric acid and water were
release inside the basement of Building 2 during a chemical delivery due to an improper overfill
and disconnect procedure by the delivery driver. In May of 2008, approximately 50 gallons of
diluted wastewater containing copper and nickel was released to Matadero Creek due to
improper weekend shutdown of process equipment and improper opening of a containment
valve that discharges to the creek.
Corrective actions were taken for each of the events and no incidents have been identified or
reported since 2008. As noted above, a number of upgrades followed some of the incidents and
discussions with the City and neighbors.
Zoning Ordinance Amendments
In 2006, in response to concerns expressed by Barron Park residents about the proximity of
highly toxic chemicals to the neighborhood, the City Council enacted zoning code amendments
to address their concerns. The amendments are encompassed in Section 18.23.100 (Hazardous
Materials) of the Municipal Code and were intended to prevent further intensifying such
hazardous materials use and to provide more notification for residents anywhere throughout
the City when adjacent facilities increased or modified hazardous materials use and storage. In
particular, a conditional use permit (CUP) is required for any new facility that would be subject
to CalARP (Title 19) regulation. In addition, no facility that is subject to CalARP regulation is
allowed within 300 feet of a residential zone or property with existing residential uses.
However, because CPI was in existence at the time of the new requirements, it is considered a
legal nonconforming use. A legal nonconforming use may generally continue, provided that the
level of nonconformity is not expanded and the use does not change. The ordinance did not
include provisions for “amortization,” i.e., phasing out the nonconforming use. The zoning code
section is included as Attachment D.
Amortization Study
In response to continuing neighborhood concerns, the City commissioned an amortization
study to evaluate the time period required to allow the phase out of the plating shop operation
within 300 feet of the residential area while permitting CPI a reasonable period of time to
recoup its investments in that facility. The study was completed in July of 2011 and the results
are discussed below.
Discussion
The purpose of the Council meeting is to present the amortization study results and to outline
zoning or other options to reduce or eliminate potential hazardous materials impacts on
neighboring residential properties.
Amortization Study
Amortization of a nonconforming use is intended to phase out a use that is either incompatible
with adjacent uses or where a change in use is desired as an orderly planning transition to other
uses (for instance, conversion of an area from light industrial uses to residential). The City of
Palo Alto has provided in the past for amortization periods of anywhere from five years to 30
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years for changes in use. The California Supreme Court has held that “zoning legislation may
validly provide for the eventual termination of nonconforming uses without compensation if
[the legislation] provides a reasonable amortization period commensurate with the investment
involved.” Metromedia, Inc. v. City of San Diego (1980) 453 Cal.3d. 848. The City would look to
a number of factors in determining a reasonable amortization period. Where the elimination of
the use would require the removal of physical improvements, “the reasonableness of the
amortization period depends on the interplay of many factors, including the depreciated value
of the structures to be removed, their remaining useful life, and the harm to the public if they
are left standing.” City of Salinas v. Ryan Outdoor Advertising, Inc., (1987) 189 Cal.App. 3d 416.
In response to the Barron Park neighborhood concerns, the City commissioned an amortization
study (Attachment B) to determine a reasonable amortization period for CPI to come into
compliance with the current Zoning Ordinance. The study, prepared by CB Richard Ellis
(economic real estate consultants), concluded that a reasonable amortization period is 20 years
from the date that the most significant improvements occurred on the CPI site. Specifically, the
study would support an ordinance eliminating the nonconforming use in 2026, fourteen (14)
years from now. Because CPI indicated at the time it could not achieve compliance with the
zoning regulations (reduction of chemical use below Title 19 thresholds), the study assumes
that CPI would be required to relocate its plating shop to a location more than 300 feet from
residential property. CPI cooperated with the study and provided confidential financial
information to the City’s consultants (note that the study is redacted to exclude some financial
information).
Staff expects CPI to take the position that amortization is unwarranted at this time. Staff also
anticipates CPI to take a different perspective on appropriate amortization methodology and to
contend that a longer period is appropriate should amortization occur.
Zoning Options
Staff notes that, if the County verifies CPI’s statement that it is now below Title 19 thresholds
for hazardous materials, they are currently in compliance with zoning. Staff has identified a few
potential approaches, however, to implement the intent of the amortization study or other
methods to further minimize risk to surrounding neighbors. The potential feasibility or
drawbacks to the options are outlined as well.
1. Initiate a Zoning Ordinance amendment to prohibit plating shops, or facilities using
similar hazardous materials, within 300 feet of residential zones, and require
amortization for CPI consistent with the amortization study. This will entail outreach to
CPI and neighbors and an assessment of other plating shops in the community (three)
and whether there would be any concerns (they are not proximate to residential).
2. Amend the Zoning Ordinance to better define the levels of hazardous materials use and
storage for plating shops and similar industrial processes and appropriate separation
from residential areas, and provide for amortization periods accordingly. This option
would likely rely on technical hazmat experts to provide input for those criteria. The
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resultant regulations may also affect businesses other than CPI, particularly in the
Research Park, where many businesses abut residential sites.
3. Do not modify the zoning, but work with CPI and the neighbors to achieve further
reductions in chemical use and storage, and possibly changes in the handling,
transportation, storage and use of hazardous chemicals, to reduce risk and promote
health and safety in the adjacent neighborhood. Seek technical consultant assistance to
evaluate hazardous materials operations to suggest methods to achieve further
meaningful reductions and improvements in safety practices. Negotiate voluntary
compliance with identified improvements, or, in the absence of voluntary compliance,
evaluate options for regulatory action and appropriate phase-in period.
Staff recommends that Council discuss the input from staff, CPI, and the neighbors and provide
direction regarding the above alternatives and a timeframe for response. At a minimum, it
appears that it would be beneficial for the City to retain a technical consultant to provide a
strong basis for subsequent City actions and/or to work with CPI to further reduce chemical
usage and enhance safety measures.
Resource Impacts
Resource impacts will include staff time to research the issues further and work with the
neighbors and CPI, as well as to amend the Zoning Ordinance (including hearings with the
Planning and Transportation Commission and Council), if so directed by Council. Other costs
may include retaining hazardous materials technical consultants to advise the City. Finally,
there may be potential litigation costs of various actions.
Policy Implications
CPI is currently in compliance with the Zoning Code. However, further action may be
appropriate to assure that health and safety is provided for neighboring residential areas. There
are also policy implications regarding how or whether subsequent actions would affect other
businesses in the Research Park or elsewhere in Palo Alto.
Environmental Review
Environmental review is not required at this stage of discussion. Enviornmental review will,
however, be required at the time of any proposed zoning ordinance amendments. Staff
anticipates, however, that no environmental impacts would accrue from amortization as the
result would generally enhance health and safety for nearby residents.
Attachments:
Attachment A: Location Map (PDF)
Attachment B: July 6, 2011 CPI Amortization Study (PDF)
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Attachment C: March 28, 2012 Letter from CPI to Santa Clara County Re: CalARP
DeRegistration (PDF)
Attachment D: Section 18.23.100 (Hazardous Materials) of the Zoning Code (PDF)
Attachment E: April xx, 2012 Letter from CPI (PDF)
Prepared By: Curtis Williams, Director
Department Head: Curtis Williams, Director
City Manager Approval: ____________________________________
James Keene, City Manager