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2013-12-09 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers December 9, 2013 4:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 December 9, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 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 Closed Session 4:00-5:15 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL Potential Litigation (as plaintiff/defendant) – One Matter Subject: Construction of the Mitchell Park Library and Community Center Authority: Government Code Section 54956.9 2. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL Potential Litigation (as plaintiff) – One Matter Subject: Senate Bill No. 7 – State interference with Constitutional power of Charter Cities to direct municipal affairs Authority: Government Code Section 54956.9 2 December 9, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 3. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL Potential Litigation (as defendant) – One Matter Subject: Potential Challenge to Municipal Code Section 9.06.010 (Human Habitation of Vehicles Prohibited) Authority: Government Code Section 54956.9 Study Session 5:15-6:45 PM 4. Transportation Demand Management Study Session Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. City Manager Comments 6:45-6:55 PM Council Member Questions, Comments and Announcements 6:55-7:05 PM Members of the public may not speak to the item(s) Oral Communications 7:05-7:20 PM Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Consent Calendar 7:20-7:25 PM Items will be voted on in one motion unless removed from the calendar by two Council Members. 5. Approval of Banking Services Contract Extension with Wells Fargo for One Year in a Not to Exceed Amount of $120,000 6. Approval Of The Agreement Between The City Of Palo Alto And The Friends Of The Palo Alto Junior Museum & Zoo For Mutual Cooperation And Support 7. Approval of Contract Number C14152214 in the Amount of $2,000,000 with Toubar Equipment Company Inc. for Soil Brokering and Closure Maintenance Assistance Services at the Palo Alto Landfill and Adoption of a Resolution Approving the Third Amendment of Lease PRC 7348.9 with the California State Lands Commission for Additional Use of Lands Claimed by the State 3 December 9, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:25-8:15 PM 8. Review Infrastructure Survey Findings and Recommendations and Provide Direction to Staff on Next Steps 8:15-8:45 PM 9. Public Hearing: Recommendation From Policy and Services Committee for Council to Adopt an Ordinance for Electric Vehicles Supply Equipment Requirement for all New Single Family Residential Constructions 8:45-9:15 PM 10. Public Hearing: Recommendation From the Policy and Services Committee to Adopt an Ordinance for Penalties on Expired Permit Enforcement for Residential Projects 9:15-10:00 PM 11. Public Hearing: Council Review of an Appealed Architectural Review Approval of a Four Story, 15,000 s.f. Mixed Use Building Replacing a Two Story, 7,000 s.f. Commercial Building at 240 Hamilton, a CD- C(GF)(P) Zoned Parcel; Council Adoption of the Mitigated Negative Declaration and Approval of a Record of Land Use Action for the Project. (A related Variance for Encroachment Into Special Setbacks on Hamilton Avenue and Ramona Street Was Not Appealed) (Continued from November 12, 2013) 10:00-10:45 PM 12. Council Discussion and Direction to Staff Regarding the 567-595 Maybell Avenue Site Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council/Committee, but it is very helpful. 4 December 9, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Council Appointed Officers Committee Monday 12/9/2013 2:00 PM Policy and Services Committee Tuesday 12/10/13 6:00 PM Regional Housing Mandate Committee Thursday 12/12/13 4:00 PM Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Annual Status Report Developers' Impact Fees - Early Memo Receive Palo Alto Citywide Transportation Survey 2013 Findings Report Long-term Electric Acquisition Plan (LEAP) 2013 Update Contracts Awarded by the City Manager form January 1, 2013 through June 30, 2013 Annual Review of the City's Renewable Procurement Plan, Renewable Portfolio Standard Compliance and Carbon Neutral Energy Supplies Public Letters to Council Set 1 City of Palo Alto (ID # 4215) City Council Staff Report Report Type: Study Session Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Study Session - TDM Title: Transportation Demand Management Study Session From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council hold a study session, receive a report from staff and Transportation Demand Management (TDM) experts and engage in a discussion regarding potential TDM solutions for the City of Palo Alto. Background As the economic recovery progresses, concerns about traffic congestion have increased in tandem with employment rates. Traffic congestion impacts everyone in the community, whether they live, work, shop or are only passing through the City of Palo Alto. This congestion not only has a negative quality of life impact on all Palo Alto residents, but can also pose a safety concern for pedestrians, bicyclists and motorists. In fact, traffic congestion and related parking concerns have been one of the primary complaints voiced to staff, the Planning and Transportation Commission and the City Council over the past year. The recent increase in traffic congestion is a regional issue, and certainly not an isolated issue within the City of Palo Alto. As noted in a recent San Jose Mercury News Article (attached), “Bay Area commuters are getting a sinking feeling as we see firsthand what economic recovery looks like -- miles of brake lights on commutes so congested we're wasting hours a week inching to work and back.” Throughout the Bay Area, local agencies and the private sector employers are searching for ways to solve this complicated problem. Single-occupant vehicle transportation also has an increasingly negative impact on the environment. The EPA estimates that transportation emissions account for 23% of all greenhouse gas emissions, and that percentage is rising. In accordance with AB 32: Global Warming Solutions Act, regional and local emissions reductions targets are necessary in order to address the global climate change and the related health and environmental concerns. Given the complexity of the transportation problem and its far-reaching implications, a City of Palo Alto Page 2 comprehensive approach to getting people in, out and through the City of Palo Alto using multiple means of transportation is necessary. The term used for a comprehensive approach to solving transportation issues is “Transportation Demand Management” or “TDM”. Although there are numerous TDM definitions, the San Francisco County Transportation Management Agency summarizes the intent concisely: “Transportation Demand Management (TDM) is a set of programs and policies that respond to real and perceived barriers to taking trips by transit, bicycling, walking, or carpooling/vanpooling, and that use market signals to reduce drive-alone trips. TDM strategies include information and education, incentives, physical changes, technology, and pricing.” In other words, a TDM policies take many forms, all of which aim to get people to reduce “solo” driving, in favor of other modes of transportation. Following a September Colleagues Memo, on October 3, 2013 the City Council gave direction to staff to begin determining whether establishing one or more Transportation Demand Management (TDM) Districts would be a legal, effective, practical and economic solution for the City and its business districts. The Colleagues Memo and October 3rd memo are attached to this report. As part of their direction, the Council requested that staff organize a study session with appropriate speakers with relevant TDM experience. Representatives from Stanford, Google and the Contra Costa Centre Transit Village have all agreed to present an overview of their programs and answers questions of December 9th. The following report gives a brief, written overview of their respective programs; greater detail will be presented in the oral report. The report also outlines several TDM related efforts already underway within the City of Palo Alto. These efforts could potentially become part of a more coordinated TDM program within the City. Staff’s report and recommendations regarding the use of TDM districts in Palo Alto will be scheduled for the Council’s consideration in January or February of 2014. Discussion As noted above, the Council requested that staff organize a study session with TDM experts that have relevant experience. With that in mind, representatives of the Contra Costa Centre Transit Village, Stanford and Google will be present at the December 9th studdy session to give an overview of their respective programs. The following section provides an overview of each program as provided by the speakers or the associated online resources: Contra Costa Centre (CCC) Contra Costa Centre (CCC) is a non-profit mutual benefit company for which its purpose is to enable its members to provide planning and programs designed to promote efficient transportation services thereby reducing traffic congestion. Contra Costa Centre is comprised of 14 property owners with 6,000 employees and includes multi-tenant and single tenant buildings. Transportation Demand Management (TDM) include: Expanding the supply and availability of (more sustainable) alternatives City of Palo Alto Page 3 Controlling demand for the use of unsustainable modes Providing incentives and rewards for undertaking sustainable commuting habits Contra Costa Centre has been operating a Transportation Demand Management (TDM) program since 1988. CCC Transportation Demand Management Programs include a broad range of commute alternative programs offering employees cash incentives and subsidies to help promote taking an alternative to the worksite. These services help offset the cost of their daily commute, provide transit alternatives, and benefit our community by alleviating single- occupant vehicle traffic to and from the Contra Costa Centre area. The TDM programs include: Green Fleet Program with the use of; o Car share vehicles (Smart Cars & Electric Leafs) o Segway’s o Bicycles BART subsidies (Authorized Clipper card dealer) Bus subsidies Carpool incentives Vanpool incentives Bike to Work incentives Walk to Work incentives Guaranteed Ride Home program Free Mid-Day Shuttle to shopping centers Since the Contra Costa Centre TDM’s inception, with a hands-on program, the Centre has successfully achieved a 30-36% rate of employees using a commute alternative to arrive at work for over 20 years. John Muir Hospital– The Commute Solution (Managed and implemented by CCC) The John Muir Health Transportation Demand Management Program is responsible for managing programs to alleviate single-occupant vehicles to and from John Muir facilities, including but not limited to two major hospitals totaling nearly 1,000 beds in Walnut Creek and Concord. The John Muir Health Commute Solutions program is also responsible for creating a good-neighbor policy by keeping employee vehicles from parking in surrounding neighborhoods. The program’s purpose is to provide available parking for the patients and visitors by encouraging commute alternatives for the employees. By encouraging the use of alternative modes of transportation such as carpooling, vanpooling, public transportation, bicycling and walking, John Muir is contributing to the welfare of the community with the reduction of energy consumption, air and noise pollution and traffic congestion. The Commute Solutions program components include; Reduced BART fares (Authorized Clipper card dealer) Free taxi to/from campuses and BART Bus subsidies Monthly carpool incentives Special carpool parking City of Palo Alto Page 4 Train subsidies Bike and Walk to Work Incentives Monthly cash drawings for commute alternative participants Guaranteed Ride Home program Rideshare matching services Since 2006 John Muir Health’s Commute Solutions has provided a comprehensive commute alternative program to reduce single-occupant vehicles on our roadways. Stanford Stanford University operates a comprehensive Transportation Demand Management program in order to reduce traffic congestion, as well as reduce parking demand. A comprehensive list of programs can be found at: http://transportation.stanford.edu/alt_transportation/Programs.shtml. The following is a summary: Commute Club: A club for individuals agreeing not to drive alone to work, that includes: Up to $300/year in Clean Air Cash or Carpool Credit, Reserved parking spaces for all carpools/vanpools, Complimentary daily parking passes for carpoolers, Vanpool subsidies, Online Stanford Ridematching Services, Commuter buddy program, Pretax payroll deduction for transit passes, Caltrain parking, and commuter checks, A Refer-a-friend program pays you $50, Emergency Ride Home , Up to $102 a year in Zipcar driving credit, Up to 12 free hourly car rental vouchers a year (through Enterprise Rent-a-Car), Ability to purchase up to eight daily permits per month, and have them mailed to your home, Exclusive member gifts, and automatic entry into Commute Club promotion prize drawings. Marguerite Shuttle: A free, comprehensive campus shuttle system, open to the public and connects with local transit and Caltrain (as well as shopping and dining options). Also includes a “Midnight Express”, which provides a night safety service. The system includes an Automated Transportation Management System, with real-time information on the web. Subsidized Transit Ridership: Eligible Stanford employees are provided free use of VTA buses and light rail, Dumbarton Express, Highway 17 Express, Monterey-San Jose Express, and Caltrain by (Eco Pass/Go Pass), and free use of “East Bay Express” bus that connects BART and ACE train to Stanford (Line U Stanford Express). In addition, faculty, staff, and students receive a 50- percent discount on ACE train monthly passes or 20-trip tickets (Altamont Corridor Express). Bicycle Program: Bicycle registration, free bike rental and folding-bike promotion (limited time and restrictions apply), complimentary Mid-Peninsula bike map, as well as city and county bike maps, clothes and bike locker rental/shower information, safety education program (Sprocket Man, helmet safety), dorm bike safety road show, bicycle facilities development, commute planning/cycling information, liaison with campus Bike Shop, and bike light giveaways. City of Palo Alto Page 5 Vehicle Rentals: Self-service, on-demand car sharing program with Zipcar, offering discounts and driving credit to Stanford affiliates. Short or long-term car rental (through on-campus Enterprise Rent-A-Car office) with discounts for Stanford affiliates. Both the campus Zipcar and Enterprise programs are available to faculty, staff, and students 18 years of age and older Other services: In addition to the services above, the Transportation program also includes Charter Bus Services, a comprehensive parking program (including Residential Permit Parking), additional bike resources and education, commute planning assistance and flexible work hour for employees. Google OVERVIEW Google’s Transportation program was established in 2004 and includes numerous programs and incentives designed to encourage alternative commute transportation modes. Google’s key program elements include free commute shuttles, community bicycles, self powered commuting incentives, vanpools, carpools and carsharing. Google’s Shuttle (GBus) carries over 6,000 unique riders (12K one way trips) per day. Our shuttles and GFleet result in net annual savings of more than 20,471 metric tons of CO2. That’s like taking about 4,014 cars off the road or avoiding Over 71 million vehicle miles every year. Google has its own carsharing program which is 60+ Evcars Self Powered Commuters travel to and from work on bikes, rollerblades and on foot. Carpooling and vanpooling is encouraged. Community Bikes are available to all employees to travel around campus. Showers and bicycle storage facilities (lockers, racks and indoor storage) are located on campus. Visitor bikes are loaned to provide for short-term use. GRide offers scheduled service for movement around the Mountain View campus. Guaranteed Ride Home is available for emergencies. Tax savings through employee benefit plans. The Hub is designed as a fun and functional space while waiting for GBus. The City of Palo Alto As directed by Council, in January or February, staff will be bringing forward a preliminary report that will provide staff’s initial views on TDM Districts in Palo Alto, outline the steps necessary for an in-depth study of TDM Districts and its timeline, identify any local or regional governments that have comparable TDM Districts and advise whether the services of a consultant would be needed for a more detailed, in-depth study of such proposed TDM Districts and if so what the consultant would be expected to do and his/her expected cost. Although not part of a comprehensive strategy that includes metrics and targets, there are several current or in progress programs that could later become part of a more comprehensive and coordinated TDM framework. Current programs include: City of Palo Alto Page 6 1. Parking Management The City currently provides free short term parking in its commercial districts, and charges for long term (commuter) parking in off-street lots and garages. This form of parking management creates an incentive for commuters to use alternatives to the private automobile where they are available. In addition, the City is considering establishment of an RPP (Residential Preferential Parking) program, which would regulate parking and traffic within residential neighborhoods by restricting the ability of non-residents to park there at certain hours. The City has received significant feedback from residents in favor of a several neighborhood level programs. This has spurred a development of a citywide framework so that all neighborhoods in all of Palo Alto could have the option of becoming an RPP District if they meet certain criteria. Staff will be presenting an RPP framework to Council on December 16th for consideration and policy direction. 2. Caltrain GoPass and Related Incentive Programs Staff entered into discussions with Caltrain around the possibility of creating a Downtown business district GoPass program. Although this was not ultimately approved due to concerns about equity for existing Caltrain customers, Council recommended that the Staff still find a way to leverage Caltrain ridership to relinquish at least 50 parking spots within the Civic Center garage. This can potentially be accomplished through an expansion to the commuter check program or participation in the existing Caltrain Go-Pass program. Staff will also continue to pursue ways in which Caltrain GoPass purchase can be incentivized in the community 3. Development Requirements The City Council has approved recent development with specific conditions of approval related to TDM. For example, as part of the project approvals associated with the Lytton Gateway Planned Community project, the property owner is required to purchase a Caltrain Go-Pass for all employees who work in the building. Staff will look to standardize project conditions to routinely require TDM plans. As is the case with all project conditions, staff is tasked with monitoring project compliance. Staff will also need to gauge the effectiveness of these type of requirements, to determine if they are appropriate for future developments. 4. Carshare Opportunities in Downtown City Staff have engaged with representatives from City CarShare and Zipcar to discuss the potential of dedicating at least 20-30 spots in Downtown lots and garages to a Carshare service. An RFP is in development for a Carshare entity to enter into an agreement with the City to provide these services for Downtown. City of Palo Alto Page 7 5. Satellite Parking Lots City Staff are investigating whether it would be possible to use parking lots located outside of the downtown core to provide additional places for commuters to park. A shuttle would then bring these commuters directly to Downtown. A number of locations are also being investigated. 6. Palo Alto Shuttle Program Staff has drafted an RFP to continue and expand the Palo Alto Shuttle Program, which is a key service to promote use of public transportation. There are currently two shuttles which are free to the public, and the City is investigating aggressive expansion of this service to serve adjacent communities and provide more frequent and user-friendly service. 7. Improved Bike Infrastructure Palo Alto has a variety of existing efforts underway to promote a bike-friendly community, including the following: Improvement of existing and new bike boulevards Multiple events to promote use of bikes around the City Bay Area Bike Share services available at University and California Avenue locations Bike Corrals Bike Lockers for local use Local Adoption of Calgreen ordinance which requires bike parking for all commercial developments with visitors 8. Incentives for Rideshare Applications Rideshare applications accessible by mobile phone allow the users to find out whether employees located in the same area can find a carpool opportunity. The City is investigating the use of these applications to determine if incentives could be provided for local businesses to use apps like Lyft and Sidecar. 9. Safe Routes to School Safe Routes to School is an international movement to make it safe, convenient, and fun for children to bicycle and walk to school. In Palo Alto, City Staff work to make sure that the program embodies what are known as the “5 ‘e’s”: education, encouragement, engineering, enforcement, and evaluation. The program provides infrastructure such as bike and walking paths to support children walking to school rather than being driven by their parents. Parents are also exposed to alternate forms of transportation through the program. City of Palo Alto Page 8 In addition to the demand-based strategies listed above, the City is also aggressively managing its parking supply. While this topic will be discussed at greater length in the context of the Residential Permit Parking framework on December 16, 2013, some strategies to address this include the following: New Garage Studies: City staff is investigating the possibility of creating public/private partnerships to develop garages on existing City lots and is also investigating the potential for public financing of new garages. Attendant Parking: The City has a live RFP which is expected to be awarded in early January to assign at least one City-owned garage (R) with attendants. If the program is successful the City may consider implementing this strategy at other garages. Permit Management: The City actively monitors activity in garages to confirm that the number of permits released is maximized. The most recent permit release was in November of 2013. An online permit management system is in the final stages of development so that applications can be done without visiting City Hall. Technology Enhancements for Garages: The City is developing an RFP for gate controls and parking guidance systems to more actively monitor the occupancy of the garages and provide the infrastructure to potentially implement paid parking solutions in the Downtown. Timeline City staff will be returning to the Council in January or February 2014 with a preliminary report on potential TDM Districts and related programs. In accordance with the October 5th memo from Council, this preliminary report will provide staff’s initial views on TDM Districts, outline the steps necessary for an in-depth study of TDM Districts and its timeline, identify any local or regional governments that have comparable TDM Districts and advise whether the services of a consultant would be needed for a more detailed, in-depth study of such proposed TDM Districts and if so what the consultant would be expected to do and his/her expected cost. Resource Impact Staff has only begun initial work on a comprehensive TDM strategy. In accordance with the October Memo from Council, no more than $100,000 worth of staff time on this initial work. It is expected that a comprehensive TDM program, however, would cost considerably more to establish and operate. Staff will bring forward estimated costs to Council in January. Environmental Review This is only an informational report, therefore no enviromental review is necessary. Attachments: Attachment A: Mercury News Article on Traffic Jams Paralyzing Bay Area (PDF) City of Palo Alto Page 9 Attachment B: September 16, 2013 Colleagues Memo on Palo Alto Traffic Demand Management Plan (PDF) Attachment C: October 3, 2012 Follow Up Memo from Councilmember Klein (PDF) Traffic jams paralyzing Bay Area By Gary Richards grichards@mercurynews.com Posted: 11/10/2013 12:01:00 AM PST Updated: 11/12/2013 08:08:32 AM PST Bay Area commuters are getting a sinking feeling as we see firsthand what economic recovery looks like -- miles of brake lights on commutes so congested we're wasting hours a week inching to work and back. It almost makes you miss the recession. Commuters say trips that took 30 minutes a year ago now may take 60 or more. It's happening on Highway 85 in the South Bay, Highway 101 along the Peninsula, Interstate 880 through the East Bay and Interstate 680 from the Sunol Grade to the Benicia Bridge. Forget talk about Twitter stock. When people gather around the office water cooler, it's often to gripe about traffic, traffic, traffic. Highway 24 in Lafayette, Calif., October 2013. (Kristopher Skinner, Bay Area News Group) San Jose had the 13th worst congestion in the nation in 2010, but now ranks fifth, according to Inrix, which monitors traffic nationwide. Delays are also growing through San Francisco and Oakland, which are counted together and are considered the country's third most congested city, a spot it has held for years. "It's gotten noticeably worse, even in the last two weeks," said KQED traffic reporter Joe McConnell. "Every morning has been nightmarish. "Something may have tipped, but it could be like trying to connect any particular stormy day to climate change or just bad weather." Mostly, experts say, the congestion is a testament to the growth in jobs in Silicon Valley, San Francisco and the East Bay as the economy recovers from the Great Recession. And that has exacerbated problems that were already worse here than elsewhere. Where drivers nationwide spend about 38 hours stuck in traffic a year, drivers in California's most urban areas waste 62 hours a year, says the Texas Transportation Institute. "It takes me 1.5 to 2 hours to drive 30 miles from San Jose to Livermore each evening," said Sean Lamson of his I-680 trek. If Brenda Nguyen hears a crash reported along her route from San Francisco through the Caldecott Tunnel, her 22-mile drive can turn into two hours. "Bank on it," she said. "It used to be maybe 50 minutes at its worst." Chris Lee of San Jose just wants to get her kid to class on time at Archbishop Mitty High School in west San Jose. "In the past few months we have noticed a huge increase in the time it takes to get from 280 and 87 to Saratoga Avenue," she said. "We are now almost late every day, even though we allow 35 minutes to go about four miles." Other than an improving economy that's putting workers back on the road, here are some factors behind our growing woes: Truck traffic from the Port of Oakland to the Central Valley has turned I-80, I-580 and I-880 into big rig alleys. Thieves continue to steal copper wiring at metering lights, and when they don't work, highway traffic backs up. Road construction is underway seemingly everywhere. Schools are back in session. Gas prices have fallen 28 cents a gallon over the past year. And more traffic on the road means likely more crashes that make things even worse. While ridership on BART, Caltrain, light rail and buses continues to grow and carpool use is on the rise, there are simply too many of us driving solo to work. Honolulu ranks as the nation's most congested city, followed by Los Angeles, San Francisco-Oakland, Seattle and San Jose. New York is No. 6. Through the early part of this year, 61 of America's top 100 cities with the worst congestion saw delays worsen compared to the year before -- and San Jose's jump is at the top of the list. In 2012, only six cities experienced increases. "That's incredible, to have such a huge increase so quickly," said Jamie Holter of Inrix. "San Jose people really have no choice but to drive." Traffic delays dropped by more than 22 percent during the recession of 2008, says Inrix, making any increase now seem unbearable. But make no mistake, traffic officials say, delays are on a rapid spiral upward and might be a sample of what is down the road as highway work wraps up and state transportation dollars dwindle. "We are only experiencing the tip of the Silicon Valley congestion iceberg," said Rod Diridon of the Mineta Transportation Institute. "Since what we knew of as full employment before the Great Recession, government has been unable to invest significantly in highway capacity expansion." He says Silicon Valley will soon bump against "terminal gridlock" like the kind that occurred in Beijing six years ago when commuters were trapped in their cars for days. "The capital of China was nearly paralyzed for almost seven days while that massive traffic jam was cleared," Diridon said. "That crisis doesn't happen gradually. There is no quick fix." Not unless we have another recession. City of Palo Alto COLLEAGUES MEMO September 16, 2013 Page 1 of 3 (ID # 4087) DATE: September 16, 2013 TO: City Council Members FROM: Council Member Price, Mayor Scharff, Vice Mayor Shepherd, Council Member Kniss SUBJECT: PALO ALTO TRAFFIC DEMAND MANAGEMENT PLAN Recommendation: Direct staff to develop a comprehensive Transit Demand Management (TDM) plan for the California Ave and University Ave Downtown Districts and the Stanford Research Park with the goal of reducing solo car trips by at least 30% and return to the full Council for further policy direction prior to initiating CEQA review, soliciting contracts, or proposing new fees, ordinances or resolutions. If appropriate, the City Manager may wish to consider retaining a consultant to assist in the expeditious development of a rigorous TDM plan. The TDM plan should: 1) Create a defined TDM boundary area for the University Avenue TDM District, the California Avenue TDM District and the Research Park TDM District; 2) Provide a funding mechanism for the TDM districts (such as, for example, assessments on existing businesses, impact fees on new developments, or a combination of both) that will fund a robust TDM plan with measurable outcomes based on identified goals; 3) Develop a request for proposals (RFP), based on identified goals to contract out ongoing TDM services which would include, but are not limited to, using revenue offsets for subsidizing public transit, parking strategies and management, carpooling incentives, biking, car sharing services, etc. for the purpose of reducing car trips into, out of and within Palo Alto, and supplementing existing services provided by Caltrain, SamTrans, VTA, Margarite Shuttles, AC transit and links to surrounding transit systems such as Bart, ACE and the Capital Corridor express; 4) Outreach to Stanford's TDM director for the purpose of collaboration and integration of services; 5) Develop tools to monitor, evaluate and measure utilization of the various TDM elements and progress towards the overall goal of reducing solo car trips throughout the city. Enforcement could include penalties for applicants not meeting approved TDM criteria. 6) Return to full City Council for discussion and approval. September 16, 2013 Page 2 of 3 (ID # 4087) Background: Parking and traffic are one of the toughest challenges facing the City at this time and a major concern for our residents. The twin challenges of parking and traffic are being dealt with in a multi-pronged approach. The infrastructure committee is working on using a funding mechanism such as a Mello Roos district to create new parking garages both downtown and on California Ave. The City Manager advises that staff is developing a framework for a Comprehensive Residential Parking Permit system for Council to consider in the next 90 days to deal with the substantial issues of parking intrusion into our neighborhoods. In the next 45 days, staff will also bring to Council proposals to suspend parking exceptions so that new developments provide an appropriate amount of parking spaces. However, a Residential Permit Parking program, new parking garages and requiring new developments to be parked appropriately will not alone solve the issues of parking and traffic. The City needs a comprehensive TDM program that will reduce trips by at least 30%. Stanford has reduced trips by 40% or more through a comprehensive TDM program, and with the right focus and attention Palo Alto could have similar results. Comprehensive TDM ordinances and policies cover a range of areas and use various types of management models in the public and private sectors. Over the past 30 years, numerous cities, counties and states have successfully developed comprehensive TDM programs specifically designed to reduce single occupant vehicle trips. During that period, a number of TDM specialists and consultants have prepared plans for both the public and private sectors. In general, the key elements of these comprehensive TDM programs focus on reducing use and reliance on single-occupant vehicles through a combination of regulation, incentives and demand pricing. Ultimate solutions have included transportation options (walking, biking, pedestrian, transit), promotion of the use of alternative transportation modes and parking management/pricing. The key elements of a TDM program should focus on reducing use and reliance on single- occupant vehicles through the promotion of various strategies such as improving transportation options (walking, biking, transit); promotion of alternative transportation modes (ridesharing, vanpools, shuttles), parking management of various types and mass transportation (i.e Caltrain, BART, etc.). Palo Alto now finds itself experiencing significant economic development and prosperity. Although the City has existing Municipal Code provisions that address TDM measures, they are not comprehensive, mandatory or current in nature or consider these districts as a unit. Furthermore, the Municipal Code includes several “by right” parking reductions for new commercial buildings. These provisions, in combination with nearby, unrestricted (free) residential neighborhood parking, have encouraged the use of single-occupant vehicles, while affecting the quality of life in residential neighborhoods. Finally, the workplace itself has changed. The tech and start-up industry have abandoned cubicles and offices in exchange for collaborative rooms that hold more people per square foot. For these and many other reasons traffic and parking demands are currently unmanageable, and a comprehensive, district-wide TDM program needs to emerge in our jobs intensive areas. September 16, 2013 Page 3 of 3 (ID # 4087) In August, Vice Mayor Shepherd, Councilmembers Price and Kniss, and Interim Planning Director Aaron Aknin, took a field trip to the Contra Costa Transit Center to see firsthand how its TDM program has successfully reduced single car trips by more than 30%. The program emerged as BART ridership expanded in the 1980s and large and small companies brought jobs into the area. Palo Alto could have a similar experience as both Contra Costa and Stanford have shown with the right TDM policies and focus in place. The Contra Costa Transit Center offers on-site services for commuters employed by companies of anywhere from 2 to 1,000 employees. The Center’s initial capital came from new commercial development of 50 cents per square foot, grants, and now a voluntary transit district assessment. BART fare subsidies, gas cards and special parking for carpools are examples of their TDM strategies. Car share services are available for mid-day errands or emergency trips home, and a contract with the local taxi company gives the commuter vouchers for final leg journeys if needed. This is all being done in conjunction with a mandatory TDM ordinance that applies to this entire district, thereby creating the regulation that is necessary to create the critical mass of employers participating in the program. This approach actually created a Transportation Management Agency (TMA) to manage these programs. Palo Alto’s review of TDM options should consider a TMA and also explore ways to capture funding and participation related to existing development and existing traffic, in addition to new projects. One emerging trend in terms of demographics is that young adults are choosing not to own a car if there are viable alternative transportation options. A significant percentage of young workers want to live in San Francisco and commute via Caltrain to work in Palo Alto As this trend matures, commute options into, out of and within Palo Alto also need to reflect what is called a "shared economy" where people borrow, rent or pay for the short time use of vehicles and equipment. A TDM program could support and encourage this new trend. Conclusion: Alternative transportation models are not a new idea in Palo Alto. Many of our policy documents have identified the importance of alternative modes as a means of reducing greenhouse gas reductions. The City, employers and transit agencies have already promoted trip reduction and alternative transportation options. Yet, these initiatives are not comprehensive in nature, and have not been effective from a district wide standpoint. The idea of considering downtown districts as a unit, with an experienced TDM contractor, working directly with employers and commuters is a smart, and proven strategy to address the City’s traffic and parking issues. Staff Impact: The implementation of this program will take a considerable amount of staff time in the short term during the RFP and consultant selection process. In addition, an ongoing connection with the TDM contractor will be necessary, and take additional staff time. To some extent, however, this will be offset in the long run. As the more comprehensive strategy takes effect, staff will not have to tackle individual issues to the same degree. A new position in the department, Parking Manager, will soon be hired and will provide needed support in the above mention efforts, under the direction of the Chief Transportation Official. Proposed Motion from Council Member Klein Subject: Transportation Demand Management (TDM) Districts In order for the City Council to determine whether one or more Transportation Demand Management (TDM) Districts as proposed on the Colleagues’ memorandum or as reasonably modified would be legal, effective, practical and economic for any or all of the University Avenue, California Avenue, East Meadow Circle and Stanford Research Park Business District, the City Council hereby directs the City Manager and the City Attorney as follows: City Attorney – Advise the Council whether such TDM Districts would be legal and if so what laws and legal procedures and processes would apply to them; City Manager – 1) Prepare a preliminary report on the proposed TDM Districts, at a cost of not more than $100,000 in staff time, (a) setting forth staff’s initial views on TDM Districts, (b) outlining the steps necessary for an in-depth study of TDM Districts and its timeline, (c) identifying any local or regional governments that have TDM Districts comparable to that proposed in the Colleagues’ memorandum and (d) advising whether the services of a consultant would be needed for a more detailed, in-depth study of such proposed TDM Districts and if so what the consultant would be expected to do and his/her expected cost. 2) Organize one or more Study Sessions on TDM Districts with (a) appropriate speakers with relevant experience in TDM programs such as Stanford’s and Contra Costa County’s and (b) outreach to various stakeholders including but not limited to adjacent residential neighborhoods and potentially effected business interests to attend and participate in such Study Session(s) 3) Advise the Council on other possible solutions to the City’s traffic and parking problems Schedule – The reports from the City Attorney and the City Manager shall be due not later than January 20, 2014 and the initial Study Session shall take place not later than February 03, 2014 City of Palo Alto (ID # 4284) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Extension of Banking Contract Title: Approval of Banking Services Contract Extension with Wells Fargo for One Year in a Not to Exceed Amount of $120,000 From: City Manager Lead Department: Administrative Services Recommended Motion The City Council approves Amendment No. 2 to Contract C09128288 with Wells Fargo Bank for a total contract amount not to exceed $120,000 for one year beginning January 1, 2014 (Attachment A). Recommendation Staff recommends that Council approves extending the current banking services contract with Wells Fargo Bank (Attachment A) for one additional year. The contract would be effective from January 1, 2014 through December 31, 2014. Background In 2005, the City conducted a Request for Proposal (RFP) process for banking services. After reviewing the proposals from a number of banks, the City selected Wells Fargo (Wells) for general banking services. The selection of Wells ended a long-term relationship with Bank of America, the prior banking services provider. The agreement with Wells consisted of a three year contract plus an additional two years based on satisfactory performance which Wells has exceeded. The five year service contracts ended December 31, 2010. In November 2010, staff requested that Council extend the existing contract with Wells for three additional years, rather than initiate a new RFP. This approach was taken at the depth of the recession for a number of operational and cost related issues. Changing banking services represents a significant workload issue for staff but staff believes it is appropriate at this juncture to re-survey the market. City of Palo Alto Page 2 Discussion Staff has completed a new and more disaggregated RFP for financial services. These services are grouped into six distinct categories (see chart below) with the purpose of increasing competition among providers and lowering costs as well as taking advantage of “cutting edge” technology and services. Group Number Service Service Group 1 General Banking (includes Accounts Payable Check Issuance) Service Group 2 Lockbox Service Service Group 3 Accounts Payable Payment Solution(s) Service Group 4 Merchant Service Service Group 5 Investment Safekeeping (Custodial) Service Service Group 6 Purchase (Credit) Card (aka P-Card) The RFP was mailed to 23 companies, posted to City’s website and posted to the California Society of Municipal Finance Offices’ (a professional organization) website which includes firms providing financial services. Staff reached out to financial institutions on file and those that hadn’t solicited business from the City in the past. The City has received eight proposals. Once staff has analyzed the proposals and the components, it will seek Council approval of new contracts in February/March 2014. Due to the increased complexity of the financial services used by the City and as a result of the addition of new services indicated below, the evaluation process is more complicated and will take a longer period than past processes and longer than staff originally expected. outsourcing Utility Payment Processing (Lockbox Service) having the bank consolidate all receipts of third party bill payers ( Internet Bill Payment) new and stronger regulations governing safeguarding of sensitive data (credit card information Development of new Accounts Payable Payment solutions Staff is requesting, therefore, a one year banking services contract extension from January 1, 2014 to December 31, 2014 at an annual estimated cost of $120,000. Actual annual costs will City of Palo Alto Page 3 depend on the volume and mix of fees or services. During the contract extension period, new contracts will be awarded with start date of March/April 1, 2014 via Council action. If Wells is not selected, service transition will begin shortly thereafter and is expected to be completed within a 6 month period. Staff is not requesting separate contract extensions on the lockbox and merchant services because they are currently included in the banking services contract. The accounts payment solution will be a new service and the Purchase Card (P-Card) three year contract does not expire until January 2015. As for the latter (P-Card), staff is taking this opportunity to bid this sooner to determine if the City can obtain better service and/or pricing now and save on staff time in doing a separate RFP a year later. Typically, the financial industry is constantly improving their processes to gain efficiencies and/or lowering costs. In the past, staff has been successful in obtaining pricing concessions during the life of the existing banking services contract. We are applying this experience to the P-Card contract. Timeline and Resource Impact A one year banking services contract extension from January 1, 2014 to December 31, 2014 is expected to result in an annual, not to exceed cost of $120,000. Half of these costs will be covered by existing funding in the FY 2014 operating budget, and half will be covered by funds in the FY 2015 operating budget. Of the total amount, approximately $41,000 will be funded by the operating budget of the Administrative Services Department and approximately $79,000 will be funded by the operating budget of the Utilities Department based on the services provided by the contractor. Environmental Review This report is not a project under the California Environmental Quality Act; therefore, an environmental review is not required. Attachments: Attachment A: Amendment No 2 to Contract No C09128288 Between the City of Palo Alto and Wells Fargo Bank (PDF) AMENDMENT NO. :2 TO CONTRACT NO. C09128:288 BETWEEN THE CITY OF PALO ALTO AND WELLS FARGO BANK This Amendment No.2 to Contract No. C09128288 ("Contract") is entered into on the 9th Day of December, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and WELLS FARGO BANK, located at 550 Califomia Street, 10lh Floor, San Francisco, California, 941040, Telephone (415)396-7485 ("CONSULTANT"). RECIT ALS: WHEREAS, the Contract was entered into between the parties for the provision of Banking Services; and WHEREAS, CITY intends to extend the term to December 31, 2014 and increase Compensation for additional term January 1, 2014 through December 31, 2014 to not exceed $120,000,00; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, telIDs, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 3 TERM is hereby amended to read as follows: "TERM. The services provided under this agreement shaH commence on January 1, 2005 and shall be completed on or before December 31,2011 with an option to renew for up to three additional one year periods through December 31, 2014" SECTION 2. Section 4 is hereby amended to read as follows: "COMPENSATION. City shall pay CONSULTANT as compensation for full performance of this Contract: A not to exceed amount of One Hundred Twenty Thousand Dollars ($120,000.00) in accordance of the fee schedule set forth in Exhibit "B" attached hereto for the 2014 term (January 1, 2014 through December 31). 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. 1 Revision July 25, 20U 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 By:..l""....::..---r---fl--""=--~ APPROVED AS TO FORM: Senior Asst. City Attorney Attachments WELLS FARGO LETTER DATED 11112/2013 CONTRACT NO. C09128288 EXTENSION 2 Revision July 25, 2012 Govel'nment & Institutional Banking Government Banking, NorthWest Division 550 California Street, 1()lh Floor MAC A0112-102 San Francisco, CA 94104 November 14, 2013 Tarun Narayan Senior Management Analyst Administrative Services-Treasury Division 250 Hamilton Ave.,Ath floor Palo Alto, CA 94301 Subject: Contract No. COg128288 Extension Dear Tarun: Wells Fargo is pleased to extend the term of Banking Services Contraet No. C09 [28288, between the City of Palo Alto and Wells Fargo Bank from Deeember 31, 2013 to December 31, 2014. AU terms and eonditions that are eurrently in plaee will remain in effect. Please sign below indicating your aceeptance of this extension and retum one original copy to my attention at the address listed above. Thank you for your business and continued partnership with Wells Fargo Bank. We look forward to continuing to provide banking services and will strive to meet or exeeed your expectations with regard to products and customer service. Sincerely, Mary Lou Lopez Vice President (415) 396-0929 Wells Fargo Bank, N,A, Together we'll go far Government & Institutional Banking Government Banking, NorthWest Division 550 California Street, 10,b Floor MAC A0112-102 San Francisco, CA 94104 ACCEPTED BY; "COMPANY' City of Palo Alto By: Name: Title: Date: By: Name: Title: Date: Wells Fargo Bank, N.A. Together we'll go far City of Palo Alto (ID # 4258) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Approval of Public Private Partnership Agreement between City and Friends of JMZ Title: Approval Of The Agreement Between The City Of Palo Alto And The Friends Of The Palo Alto Junior Museum & Zoo For Mutual Cooperation And Support From: City Manager Lead Department: Community Services Recommendation Staff requests Council approval of the Mutual Cooperation and Support Agreement with the Friends of the Palo Alto Junior Museum and Zoo (Attachment A). Background The Friends of the Palo Alto Junior Museum and Zoo (Friends) have played an integral role in the support and operation of the Palo Alto Junior Museum and Zoo (JMZ) since their inception in 1962. (Note that from 1962 through 1990 the group was called the Junior Museum and Zoo Associates.) In 2002, the Friends approached the City to create a public-private partnership with the intent to raise the capital funds required to renovate the Junior Museum & Zoo facility. (CMR 442:02) In February 2007, a Council Colleague’s memo from then Vice-Mayor Klein and Council Members Beecham and Mossar requested that staff work with the Friends to explore the possibility of a new public/nonprofit partnership that would strengthen the ties between the City and the Friends and that the outcome of any partnership agreement would be contingent upon the completion of a revised public/private partnership policy. That policy was revised and approved by Council in June 2007. City of Palo Alto Page 2 In November 2007, Council approved an Agreement for Mutual Cooperation and Support with the Friends of the Palo Alto Junior Museum & Zoo for a three-year term and in December 2012, Council approved Amendment 1 to the Agreement for Mutual Cooperation and Support with the Friends of the Palo Alto Junior Museum & Zoo, which extended the contract by a second (and final) three-year term (Attachment B). The second (final) term of the amended agreement ends on December 17, 2013. Discussion In order to enhance their efforts as a support organization, the Friends proposed a concept whereby the partnership between the City and the Friends would be strengthened via a written agreement that provides the Friends a greater opportunity to play a role in program planning. By being more engaged in the decision-making process, the Friends’ Board and staff believe the potential for outside funding is increased by enhancing the JMZ program’s organizational capabilities and by providing a higher degree of ownership by the Friends’ Board of Directors and its Members. This partnership concept is based on a model the successful arrangement that the Randall Museum, which is operated by the Parks and Recreation Department of the City of San Francisco and is quite similar to the JMZ program, has with the Randall Museum Friends, a 501(c)3 nonprofit corporation. That agreement unites the efforts of the Randall Friends’ group with the Randall Museum staff to improve the museum and its uses. The Randall Museum Friends support the mission of the museum by serving as its fundraising arm and by providing volunteer resources, while working closely and cooperatively with City-paid museum management and staff. The attached Agreement provides a framework whereby the Friends’ Board Members and staff are integrated into the operation of the JMZ. The Agreement provides the opportunity for the Friends to participate in short- and long-term planning efforts, have use of the facility for administrative and fundraising efforts and for Friends’ staff to attend the JMZ Senior Program Manager’s staff meetings. The Friends’ responsibility is to be fully committed to raising the outside funds and providing volunteer resources required to meet a mutually developed annual work plan. City of Palo Alto Page 3 To further unite the partnership, the City plays a more active role with the Friends. Examples of City participation include nominating the JMZ manager as an ex-officio member of the Friends’ Board, asking the Council to provide a liaison to the Friends’ Board, and enabling the City-paid staff to work in unison with Friends’ staff to realize mutual goals. Final responsibility for the planning and operation of the JMZ continue to lie with the City, but the Friends participate with a high level of engagement in planning and implementing JMZ activities. RESOURCE IMPACT No additional City resources have been required and this partnership has led to enhanced program and capital funding over the life of the first Agreement. Annually, the Friends and the JMZ Senior Program Manager develop a fundraising plan and a spending plan. Since February 2008, when the first Agreement was enacted, the Friends have provided over $1.2 million in goods and services to the JMZ in the following categories: Indoor Children’s Interactive Exhibits $ 122,120 Out-door Exhibits and Animal Habitats $ 627,503 Planning, Architectural and Engineering Services $ 299,081 Teacher Support, East Palo Alto Science Programs, and Volunteer Programs ` $ 174,169 Total $1,222,874 The Friends also advocate for the JMZ in the community and provide leadership support through their Board of Directors. POLICY IMPLICATIONS City of Palo Alto Page 4 This partnership is categorized as a Joint Venture under the City’s Public/Private Partnership Policy. As the Parties have continued unabated their collaboration in accordance with the terms and conditions of the first Agreement, they wish to renew the Agreement for a term of three (3) years. ENVIRONMENTAL REVIEW The approval of this agreement is not considered a project under the California Environmental Quality Act, therefore, no environmental review is required. Attachments: Attachment A: Agreement (DOCX) Attachment B: Prior Agreement and Addenda (PDF) 131120 dm 00710304A 1 Contract No. _______________ AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE FRIENDS OF THE PALO ALTO JUNIOR MUSEUM AND ZOO FOR MUTUAL COOPERATION AND SUPPORT Dated as of _______________________, 2013 131120 dm 00710304A 2 TABLE OF CONTENTS SectionDescription Page 1 Term; Extension; Termination 4 2 Responsibilities of the Parties 4 3 General License to the Friends 6 4 Insurance 6 5 Indemnity 8 6 Waiver 9 7 No Property Rights 9 8 Assignment 9 9 Independent Contractor 10 10 Nondiscrimination 10 11 Notices 10 12 Miscellaneous 11 Exhibit “A” Insurance Requirements Exhibit “B” Certification of Nondiscrimination 131120 dm 00710304A 3 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE FRIENDS OF THE PALO ALTO JUNIOR MUSEUM AND ZOO FOR MUTUAL COOPERATION AND SUPPORT This MUTUAL COOPERATION AND SUPPORT AGREEMENT (the “Agreement”), dated, for convenience, ____________________, 2013 (the “Effective Date”), is entered into by and between the CITY OF PALO ALTO, a California chartered municipal corporation (the "City"), and the FRIENDS OF THE PALO ALTO JUNIOR MUSEUM AND ZOO, a California public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law (the "Friends") (individually, a “Party” and, collectively, the “Parties”), in reference to the following facts and circumstances: RECITALS: 1. The City owns and operates the Junior Museum (the “Museum”) and Zoo (collectively, the “JMZ"), located at 1451 Middlefield Road, Palo Alto, CA 94301. The JMZ is a program of the City’s Community Services Department (the “Department”) and exists within the Department’s Arts and Sciences division. 2. The Friends have assisted the City’s JMZ staff in supporting and advocating on behalf of JMZ operations, programs and activities over the past thirty-eight years. The Friends intend to benefit the City and the Palo Alto community by providing certain services, which the Parties intend to be rendered in accordance with the general scope of the City’s policy on Public/Private Partnerships. By this Agreement, the Friends will, at the direction of the City Manager, or designee, and through the use of both City and/or Department employees and JMZ staff-supervised and unpaid community volunteers, support the operations- and education-related programs, activities and opportunities offered by or within the JMZ. 3. The Parties wish to more closely collaborate and mutually cooperate and support each other in the future, to improve, enhance and sustain the capacity of the JMZ to develop and provide educational opportunities and related services to the Palo Alto community. 4. The Parties entered into a Mutual Cooperation and Support Agreement in 2007 for a three-year term with an option to extend for an additional three-year term. By an Amendment No. One to Agreement, the Parties extended the agreement for the additional three-year term. The Parties desire to renew the 2007 Agreement on the same terms and conditions. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals and the following 131120 dm 00710304A 4 covenants, terms, conditions and provisions of this Agreement, the Parties agree: SECTION 1. TERM; EXTENSION; TERMINATION 1.1 This Agreement will commence on the Effective Date, and the initial term is three (3) years (the “Term”), unless it is earlier terminated by a Party as herein provided. 1.2 The Term may be extended by the Parties for one (1) additional term of three (3) years (the “Extension Term”); provided, however, the City may require the City Council’s approval of the Extension Term. 1.3 A Party may terminate for convenience this Agreement, in whole or in part, by giving the other Party no less than ninety (90) days’ prior written notice. 1.4 This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code (the “PAMC”). This Agreement will terminate without penalty: (A) at the end of any fiscal year in the event that funds are not appropriated for the JMZ program for the following fiscal year; or (B) at any time within a fiscal year in the event that funds are appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section 1.4 will take precedence in the event of a conflict with any other covenant, term, condition or provision of this Agreement and the Exhibits. Nothing in this Section 1.4 is intended to affect the Friends’ rights and remedies as may be available under applicable laws. SECTION 2. RESPONSIBILITIES OF THE PARTIES 2.1 The responsibilities of the City will include the following: A. The management of the JMZ facilities, programs and the City’s staff employees, including any and all City-hired contractors, subcontractors, consultants and volunteers. The City will hire, supervise, evaluate and otherwise exercise supervision and control of its employees. The City may permit the Friends’ duly authorized representatives to participate in the interview process for the hiring of a manager of the JMZ (the “JMZ Manager”); B. The feeding, care and maintenance of the JMZ wildlife residents and basic maintenance and repair of the JMZ facilities as well as the furnishing of internal and external landscaping and utility services to the JMZ; C. The selection of one or more individuals to serve as the City’s liaison(s) to the Friends’ board of directors and/or any board committees (the “Board”), including (1) a Council Member, if any, who will serve as the official liaison of the City to the Board, and (2) the JMZ Manager, whose duties may include providing assistance to the Friends, including the Board, in selected fundraising activities, as may be directed or approved by the City Manager, or 131120 dm 00710304A 5 designee; D. The review of all community-related activities that the Friends may propose for inclusion in the JMZ programs. All activities of the Friends will be pre-approved by the JMZ Manager, or designee; E. Develop and provide educational programs relating to JMZ and supervise community volunteers in connection therewith; F. Manage the JMZ collections and supervise the accessioning, deaccessioning, cataloging, and conservation of the JMZ permanent collection in accordance with City, Department, Museum, state, and federal laws and applicable professional standards; and G. Any other obligation(s) that the City, Department or the Museum may undertake in accordance with this Agreement, upon reasonable notice to the Friends; provided, however, any such undertaking will be memorialized, in writing, by an amendment to this Agreement, in order that such undertaking will be binding upon the City. 2.2 The responsibilities of the Friends will include the following: A. The supervision and management of its directors, officers, employees, volunteers, contractors, subcontractors and consultants, while they, and each of them, are performing obligations on behalf of the Friends pursuant to this Agreement; B. The rendering of assistance to the JMZ Manager (through the Board and/or staff), at the JMZ Manager’s request, including voluntary attendance and contribution at staff meetings of the JMZ Manager; C. The provision and staffing of programs to educate the public about the JMZ and its programs and amenities, and the mobilization of volunteers for JMZ projects and programs; D. The development and implementation of a development plan for the JMZ (the “Friends Plan”), that is consistent with the JMZ strategic plan, referred to in Section 2.3(A), and the annual work plan(s), referred to in Section 2.3(B). The Development Plan will include donor acknowledgment and activities consistent with City policies and practices; and E. The rendering of other services beyond those spelled out in the annual JMZ Plan and related to the preservation, protection and enhancement of the JMZ, will be approved, in writing, by the JMZ Manager. 2.3 The responsibilities of the Parties will include the following: A. Under the direction of the JMZ Manager, develop a long-term strategic plan to 131120 dm 00710304A 6 enhance and improve the vision of the JMZ (the “Strategic Plan”); B. Under the direction of the JMZ Manager and consistent with the Strategic Plan, develop an annual work plan (the “JMZ Plan”), and, on an annual basis, effective July 1 of each year, establish program, budget, fundraising and administrative and operational priorities and activities for each fiscal year of operations. The JMZ Plan will delineate the rights and obligations of the Parties and identify each Party’s duly authorized representative. The JMZ Plan will include, without limitation, specific cash handling procedures to be followed by the Parties and the dispute resolution procedures for informally resolving differences of opinion of each Party regarding the substance and/or implementation of the JMZ Plan; and C. In regard to the JMZ Plan, the Parties will review, on a quarterly basis, the status of reaching and/or exceeding the goals of the JMZ Plan, including budget goals. The Parties will evaluate, annually, the JMZ Plan. 2.4 The responsibility of either Party or the Parties in regard to any capital improvement project (“CIP”) for the JMZ will not be established by this Agreement. The Parties agree to reserve for future consideration any existing or future CIP for the JMZ, including the scope of a capital fundraising program and the responsibilities of each Party in regard to thereto. The provision of any CIP may be addressed by amendment to this Agreement or by separate instrument, as determined by the Parties. 2.5 To the extent this Section 2 does not specifically identify the Party who will be primarily responsible for any action or decision in regard to the JMZ, the Parties agree that the City will be the party to assume all rights and obligations in connection with such decision. SECTION 3. GENERAL LICENSE TO THE FRIENDS 3.1 The City hereby grants the Friends, its directors, officers, employees, contractors, subcontractors and consultants a nonexclusive license to enter upon and use the JMZ facilities in connection with the Friends’ execution of its individual and/or joint responsibilities established by the JMZ Plan, including, but not limited to, organizing small group meetings and large group/community meetings and events at the JMZ, such as fundraising events, programs, and tours of the JMZ facilities, and using the office space afforded to the Friends for their use at the JMZ facilities in connection with this Agreement. Any use of the JMZ facilities will be approved by the JMZ Manager in regards to program scheduling, space availability, and the functionality of shared JMZ spaces for staff use. The City will provide to the employees of the Friends security card access to the JMZ; any additional cards will be approved by the JMZ Manager, upon request, in writing. SECTION 4. INSURANCE 4.1 As of the Effective Date, the Friends, at its sole cost and expense, will obtain and 131120 dm 00710304A 7 maintain the following insurance coverage, and as further described in Exhibit “A,” acceptable to the City’s insurance risk manager (the “Risk Manager”) in full force and effect during the Term, insuring not only the Friends but, with the exception of worker’s compensation and employer’s liability insurance, naming the City as an additional insured, concerning the Friends’ participation under this Agreement. POLICY MINIMUM LIMITS OF LIABILITY A. WORKER’S COMPENSATION Statutory B. COMPREHENSIVE Bodily Injury $1,000,000 ea. person AUTOMOBILE LIABILITY Property Damage $1,000,000 each person, including owned, hired, and non-owned automobiles C. COMPREHENSIVE Bodily Injury $1,000,000 each person, GENERAL $1,000,000 each occurrence, LIABILITY $1,000,000 aggregate including products, Property Damage $1,000,000 each occurrence & completed operations, Personal Injury $1,000,000 each occurrence, broad form contractual, and personal injury. 4.2 Any deductibles or self-insured retentions must be declared to and approved by the Risk Manager. At the City’s option, the insurer will reduce or eliminate such deductibles or self-insured retentions as respects the City. The Friends’ insurance will be carried in full force and effect on or before the Effective Date. Every insurance policy required by this Agreement will contain the following or substantially similar clauses: A. "This insurance shall not be canceled, limited in scope of coverage or nonrenewed until after thirty (30) days written notice has been given to: City of Palo Alto/Junior Museum and Zoo Manager, P.O. Box 10250, Palo Alto, CA 94303". B. "All rights of subrogation are hereby waived against the City of Palo Alto and the members of the City Council and elective or appointive officers or employees, when acting within the scope of their employment or appointment." C. "The City of Palo Alto is added as an additional insured as respects operations of the named insured at or from the JMZ." 131120 dm 00710304A 8 D. "It is agreed that any insurance maintained by the City of Palo Alto will apply in excess of, and not contribute to, insurance provided by this policy." 4.3 Evidence of Insurance Coverage and/or Changes will be, as follows: A. Certificate of Insurance. The Friends agree to deposit with the JMZ Manager before the effective date of this Agreement, certificates of insurance necessary to satisfy the City that the insurance provisions of this Agreement have been complied with, and to ensure that such insurance is kept in effect, with the certificates on deposit with the City, during the Term. Should the Friends fail to provide evidence of such required coverage at least three (3) days prior to the expiration of any existing insurance coverage, the City may purchase such insurance, on behalf of and at the sole expense of the Friends, to provide an additional six-month period of coverage. B. Review of Coverage. The City will retain the right, at any time, to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the Risk Manager, the insurance provisions in this Agreement do not provide adequate protection for the City and for members of the public using the JMZ, the City Manager, or designee, may require an amount to provide adequate protection as determined by the Risk Manager. The City's requirements shall be reasonable and shall be designed to assure protection from and against the kind and extent of risk which exists at the time a change in insurance is required. C. Changes in Coverage. The City Manager, or designee, will notify the Friends, in writing, of any change(s) in the insurance requirements; if the Friends does not deposit copies of acceptable insurance policies (or certificates) with the City, to the attention of the Risk Manager, incorporating such changes within sixty (60) days of receipt of such notice, or in the event the Friends fail to ensure that the required insurance coverage is maintained in effect, the City may terminate this Agreement in accordance with Section 1. D. No Limit of Liability. The procuring of such required policy or policies of insurance will not be construed to limit the Friends’ liability hereunder or to fulfill the indemnification provision and requirements of this Agreement. Notwithstanding the policy or policies of insurance, the Friends will be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this Agreement, with the Friends’ use of the JMZ. E. Acceptability of Insurers. Insurance shall be placed with insurers with a current A.M. Best’s rating of no less than A:X. 131120 dm 00710304A 9 SECTION 5. INDEMNITY 5.1 Except as provided under Section 5.2, the Friends hereby waive all claims, liability and recourse against the City, including the right of contribution for loss or damage of or to persons or property arising from, growing out of, or in any way connected with or related to this Agreement. The Friends will protect, indemnify, hold harmless and defend the City, its officials, officers, employees, representatives and agents, from and against any and all claims, losses, liability, demands, damages, costs, expenses or attorneys' fees, caused by or arising out of the Friends’ negligent acts or omissions, or willful misconduct, in the performance or nonperformance of its obligations under the covenants, terms, conditions and provisions of this Agreement. The preceding sentence notwithstanding, no personal liability will attach to any Board member under the provisions of this Section 5 for any negligent action or inaction. In the event the City is named as co-defendant, the Friends will notify, in writing, the City, to the attention of the City’s City Attorney (the “City Attorney”), of such fact and it will represent the City in such legal action, unless the City undertakes to represent itself as co-defendant in such legal action, in which event the Friends will pay to the CITY its reasonable litigation costs and expenses, including reasonable attorneys' fees. 5.2 The City will protect, indemnify, hold harmless and defend the Friends, its directors. officers, employees and agents, against any and all claims, losses, liability, demands, damages, costs, expenses or attorneys' fees arising out of the City's negligent performance or nonperformance of its obligations under the terms of this Agreement. SECTION 6. WAIVER 6.1 The waiver by either Party of any breach or violation of any covenant, term, or condition of this Agreement or of the provisions of the PAMC or other City law, rule or regulation, will not be deemed to be a waiver of any such covenant, term, condition, or provision or of any subsequent breach or violation of the same or any other covenant, term, condition, or provision. The subsequent acceptance by either Party of any consideration which may become due or payable hereunder will not be deemed to be a waiver of any preceding breach or violation by the other Party SECTION 7. NO PROPERTY RIGHTS 7.1 The Parties agree that this Agreement will not confer any property right upon the Friends, its directors, officers, employees, volunteers, contractors, subcontractors or consultants. Any work performed for the benefit of the JMZ and any improvements placed or constructed at the JMZ will conform to the City’s standards and approved by the City Manager, or designee, and will, upon acceptance, become the property of the City. SECTION 8. ASSIGNMENT 131120 dm 00710304A 10 8.1 Neither Party may assign, transfer, or convey this Agreement or any interest that it may have in this Agreement without the other Party’s express consent or approval. Any attempted assignment without the required consent or approval will be void and will confer no right, title, or interest in or to this Agreement, or part thereof. In the event of an unauthorized assignment, at the option of the Party not making the assignment, this Agreement may be terminated upon reasonable notice to the Party making the assignment. SECTION 9. INDEPENDENT CONTRACTOR 9.1 In the exercise of its rights and responsibilities under this Agreement, the Friends act at all times as an independent contractor and not as an employee of the City. Nothing in this Agreement will be construed to establish a partnership, joint venture, group, pool, syndicate or agency between the Parties. No provision contained herein will be construed as authorizing or empowering either Party to assume or create any obligation or responsibility whatsoever, express or implied, on behalf, or in the name of, the other Party in any manner, or to make any representation, warranty or commitment on behalf of the other Party. In no event will either Party be liable for (a) any loss incurred by the other Party in the course of its performance hereunder, or (b) any debts, obligations or liabilities of the other Party, whether due or to become due. SECTION 10. NONDISCRIMINATION 10.1 The PAMC prohibits discrimination in the employment of any individual under this Agreement because of race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of that person. The Foundation acknowledges that it has read and understands the provisions of PAMC Chapter 2.30 relating to nondiscrimination in employment and the penalties for violations thereof, and it agrees to comply with all requirements of PAMC Chapter 2.30 pertaining to nondiscrimination in employment, including the completion, execution and submission to the City of the Certification of Nondiscrimination, as described in Exhibit “B.” SECTION 11. NOTICES 11.1 Any notice, request, consent or approval by a Party that is required to be furnished by this Agreement, will be given, in writing, and delivered by personal service, the United States Postal Service, mailed, first class, postage prepaid, or by facsimile transmission, to the following: To CITY: To FRIENDS: City Clerk Executive Director City of Palo Alto Friends of the Palo Alto Junior P.O. Box 10250 Museum and Zoo 131120 dm 00710304A 11 Palo Alto, CA 94303 1451 Middlefield Road Palo Alto, CA 94303-4303 with a copy to: Manager, Junior Museum and Zoo City of Palo Alto P.O. Box 10250 Palo Alto, CA 94303 SECTION 12. MISCELLANEOUS 12.1 This Agreement will be governed by and construed in accordance with the laws of the State of California and the Charter of the City of Palo Alto and the Palo Alto Municipal Code. The Parties will comply with all applicable federal, state and local laws in the exercise of their rights and the performance of their obligations under this Agreement. 12.2 All covenants, terms, conditions, and provisions of this Agreement, whether covenants or conditions, will be deemed to be both covenants and conditions. 12.3 This Agreement represents the entire agreement between the Parties and supersedes all prior negotiations, representations and contracts, written or oral. This Agreement may be amended by an instrument, in writing, signed by the Parties. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one and the same instrument. 12.4 All exhibits referred to in this Agreement are by such references incorporated in this Agreement and made a part hereof. The following exhibits are (or will be) made a part of this Agreement: Exhibit “A” - Insurance Requirements Exhibit “B” – Certification of Nondiscrimination. 12.5 At the request of the City, the Friends will furnish to the City Attorney for the City’s review and approval copies of its articles of organization, operating agreement, and other information relating to its organization status. 12.6 The Parties agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement, the Exhibits, or any amendment thereto. 12.7 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 or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. 131120 dm 00710304A 12 12.8 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. 12.9 If a court of competent jurisdiction finds or rules that any provision of this Agreement, the Exhibits, or any amendment thereto, is void or unenforceable, the unaffected provisions of this Agreement, the Exhibits, or any amendment thereto, will remain in full force and effect. 12.10 The term “day” means a calendar day, unless a “business day” is specified; for the purposes of this Agreement, “business day” excludes any “Regular Holiday” or “Other Special Day” referred to in PAMC Section 2.08.100 or any Friday that is considered a ‘9/80’ day, when the City does not require employees, electing to work nine (9) business days in a ten- business days biweekly period, to work on such days. IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement on the Effective Date. APPROVED AS TO FORM: CITY OF PALO ALTO ___________ __________ _________________________ Senior Asst. City Attorney City Manager APPROVED: FRIENDS OF THE PALO ALTO JUNIOR MUSEUM AND ZOO __________________________ ______________________________ Director of Administrative Services Member ______________________________ ______________________________ Director of Community Services Member ______________________________ Member 131120 dm 00710304A 13 EXHIBIT “A” INSURANCE REQUIREMENTS 131120 dm 00710304A 14 EXHIBIT “B” CERTIFICATION OF NONDISCRIMINATION City of Palo Alto (ID # 4204) City Council Staff Report Report Type: Consent Calendar Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Landfill Closure Contract and Resolution for Landfill Lease Amendment Title: Approval of Contract Number C14152214 in the Amount of $2,000,000 with Toubar Equipment Company Inc. for Soil Brokering and Closure Maintenance Assistance Services at the Palo Alto Landfill and Adoption of a Resolution Approving the Third Amendment of Lease PRC 7348.9 with the California State Lands Commission for Additional Use of Lands Claimed by the State From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1. Approve Contract No. S14152214 for a total not to exceed amount of $2,000,000 with Toubar Equipment Company, Inc. for Landfill Closure Maintenance Services and Phase IIC landfill cap installation (Attachment A); and 2. Adopt the attached resolution authorizing the City Manager or his designee to execute the Third Amendment of Lease PRC 7348.9 with the California State Lands Commission (SLC) for additional use of lands claimed by the State (Attachment B). Executive Summary The City of Palo Alto (City) has obtained regulatory agency approvals to change the Palo Alto Landfill Phase IIC cap design from a geosynthetic (plastic) cap to a 4- foot thick soil cap known as an evapo-transpirative (ET) cap. This new design is expected to save the City $3 million in cap construction costs and also make it much less costly to build an Energy/Compost Facility on the former Landfill, City of Palo Alto Page 2 should the City ultimately decide to do so. Staff recommends that Council take the next step toward the soil cap installation and approve a $2M contract with a soil broker/closure maintenance contractor to supply the specified soils and construct the cap. Staff also requests Council’s approval of an amendment to the City’s lease with the State Lands Commission concerning the site, which is needed to move forward with the soil cap installation Background The 126-acre Palo Alto Landfill has been filled to capacity and ceased waste acceptance in July, 2011. The final phase of the landfill, a 51-acre section designated as “Phase IIC”, is the only section not yet capped. The Phase IIC cap construction was originally designed to be a geosynthetic (plastic) cap estimated to cost approximately $6 Million and scheduled to be constructed during the 2012 calendar year. Due to the possible development of an Energy/Compost Facility on a portion of Phase IIC and the potential cost of having to remove a portion of the cap, staff proposed a less costly alternative cap design known as an evapo- transpirative (ET) cap. The ET cap is an engineered designed soil cap that acts like a sponge to absorb water then release it back into the air or provide moisture for plants to uptake. The City has obtained approval from the County and is waiting for approvals from the State to utilize the new ET cap design for the closure of Phase IIC. Landfill Lease Amendment In December 1989, during the site and design review process for Byxbee Park, the State Lands Commission (SLC) and the City entered into Lease PRC 7348.9, whereby the SLC entered into a lease with the City regarding land in the vicinity of Mayfield Slough in Palo Alto. The lease allows the City to construct the improvements contained in the Byxbee Park Master Plan. On May 5, 1992, the lease was amended for the first time prior to the closure of the Phase IIA section of the landfill. On May 2, 2000, the lease was amended (CMR:229:00) for the second time prior to the closure of Phase IIB section of the landfill. The attached resolution authorizes the City Manager or his designee to approve an amendment to the lease (Attachment C) for a third time prior to the closure of Phase IIC section of the landfill. City of Palo Alto Page 3 Discussion The work to be performed under this contract consists of providing approximately 250,000 cubic yards of soil that meets physical and geotechnical specifications for the ET Cap. The soils will be hauled into the landfill by commercial trucking firms and the City will receive a fee for the soils deposited at the landfill. Closure tasks will be discounted to some degree with offsets in the soil revenues (i.e. through discounts in soil fees to the soil broker/contractor). The work associated with the two types of activities (providing soils and construction services) will be completed by the same contractor. In addition to the supply of the soil, this contract’s scope of work requires the contractor to provide equipment and staff to place and compact the ET soil to proper specifications. The contractor is required to test the soils for both chemical contaminants and geotechnical qualities and all soil borrow sources will be approved by the City prior to the installation of the soil. Soil that does not meet the geotechnical requirements may be screened by the contractor to meet the physical and geotechnical specifications. To ensure conformance a third party construction quality assurance (CQA) firm will provide all compaction testing (under contract C12143502). The closure contractor will be responsible for providing all soil management activities including, but not limited to, traffic control at the landfill, dust control, street sweeping, documentation and load checking. In addition, the contractor shall provide on-call services as requested and as directed by the City. On-call services include, but are not limited to, repositioning, burying, and raising the landfill’s environmental control piping systems; excavating and removing or recompacting non-specified soils; installing drainage features; and installing post-closure maintenance pathways. The contractor also will be responsible for hydro-seeding Phase IIC after the cap has been installed. This is a two-year contract with the work scheduled to be completed by the end of December, 2015. If rainfall amounts and soil availability allow, it may be possible to complete the capping of Phase IIC by the end of December 2014. Evaluation of Proposals On October 21, 2013, a notice inviting formal proposals (RFP) for the Closure Maintenance Assistance Services for Palo Alto Landfill was posted on the City’s public website, and was sent to 12 Builder’s Exchanges and 4 Contractors. The proposal period was for 14 calendar days. Proposals were received from 1 (one) City of Palo Alto Page 4 contractor on November 5, 2013. Summary of Solicitation Process Request for Proposals (RFP) Published 10/21/13 Number of Proposals Received 1 Proposal Opening Date 11/5/13 Proposal Range Not To Exceed $2,000,000 The proposal was reviewed by staff based on the following criteria: 1) Quality and completeness or proposal; 2) Quality, performance and effectiveness of the solution, goods and/or services to be provided by the Proposer; 3) Proposers experience, including the experience of staff to be assigned to the project, the engagements of similar scope and complexity; 4) Cost to the City; 5) Proposers’ financial stability; 6) Proposer’s ability to perform the work within the time specified; 7) Proposer’s prior record of performance with city or others; 8) Proposer’s ability to provide future maintenance, repairs, parts and/or services and; 9) Proposer’s compliance with applicable laws, regulations, policies (including Palo Alto City Council policies), guidelines and orders governing prior to existing contracts peformed by the contractor. The Toubar Equipment Company, Inc. was selected because: 1. The proposal was complete. 2. The solutions proposed meet the expectations of the City. 3. Toubar has experience in performing similar work. 4. The soil fee and unit costs proposed by Toubar was in the range expected by City Staff. 5. Toubar has adequate finacial stability. 6. Toubar can perform the work in the time specified in the contract. 7. The City has had good experience with Toubar. 8. Toubar has the ability to provide future maintenance, repairs, and services. 9. Toubar has shown the ability to stay in compliance with applicable laws. Toubar has been the City’s soil broker for the last two years and has performed satisfactorily. City of Palo Alto Page 5 Lease Agreement In September 2013, the SLC was contacted during the State Clearinghouse review of a Negative Declaration for the Palo Alto landfill partial closure, Phase IIC. The SLC determined that an amendment of Lease PRC 7348.9 is required to add the Phase IIC area to the leased premises. The SLC has prepared the attached amendment number three for the landfill site. The City Attorney's Office has reviewed and approved the format and content of the proposed Third Amendment (Attachment B) which contains the following terms: The revised land description, including a new parcel identified as Phase IIC. The City is allowed to construct the improvements on Phase IIC area, including construction of the ET cap as well as Park improvements such as pathways and other amenities. Resource Impact Funding for the ET cap installation and closure maintenance expense is included in Capital Improvement Plan project RF-11001, Landfill Closure which was established as part of the FY 2011 budget process. After approval of this $2 million contract, the available budget (amount remaining) of the project will be $3.0 million. Additional work required by the City will be paid for through the off- set of soil revenue and will be directed by the City. It is estimated that soil revenue could potentially total $500,000 to offset expenses. The City is expected to save $3 Million by utilizing the ET cap design. The City, through its financial assurance mechanism with CalRecycle, originally estimated the remaining closure work to cost $5.8 Million and was required to set aside these funds. Staff will request that CalRecycle authorize the release of all of these funds when the ET cap is constructed. Therefore, once completed, staff expects that $3.8 Million in savings from the Financial Assurance Reserve will be released and added to the Rate Stabilization Reserve which will bring the current Refuse Fund Rate Stablilization Reserve balance from a negative balance to a positve balance on an accounting basis. There are no fees associated with the lease amendment and therefore, no impacts on Refuse Fund resources. City of Palo Alto Page 6 Policy Implications There are no new policy implications with the recommended actions in the report. Environmental Review An Intial Study (IS)/Mitigated Negative Declaration (MND) was completed in August 2013 (Attachment D) by TRA Environmental Services. The City found that the proposed project would have some effects on the environment, the City will use mitigation measures to minimize the effects. A Mitigation Monitoring and Reporting Program (August 13, 2013) was prepared for the project and will be implemented by the City prior to beginning any ET cap installation work. Attachments: Attachment A - Contract S14152214 Phase IIC Closure Maintenance Services (PDF) Attachment B - Council Resolution Approving and Authorizing Amendment of Lease PRC 7348.9. (PDF) Attachment C - Amendment to Lease PRC 7348.9. (PDF) Attachment D - Mitigated Negative Declaration Palo Alto Landfill Phase IIC Closure. (PDF) Professional Services Rev. Nov. 1, 2011 1 CITY OF PALO ALTO CONTRACT NO. S14152214 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND TOUBAR EQUIPMENT COMPANY INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 8th day of November, 2013, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and TOUBAR EQUIPMENT COMPANY, INC., a California Corporation, located at 2535 Pulgas Ave., East Palo Alto, CA, 94303 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to perform Closure Maintenance Assistance Services (“Project”) and desires to engage a consultant to provide closure services including managing the importation of soil, grading and placing the soil as well as performing modifications to the environmental systems required for closure 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, in 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. Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) Services will be authorized by the City, as needed, with a Task Order assigned and approved by the City’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a City Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and the City may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and the technical personnel necessary to perform the services required. Professional Services Rev. Nov. 1, 2011 2 SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 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 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 Two-million Dollars ($2,000,000). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Two Million Dollars ($2,000,000.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. 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 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 shall generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be Professional Services Rev. Nov. 1, 2011 3 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 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 and 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 design 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 of 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. Option A: No Sub-Contractor: 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 Professional Services Rev. Nov. 1, 2011 designee. X Option B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign CHARLIE TOUCHATT as the PROJECT DIRECTOR to have supervisory responsibility for the performance, progress, and execution of the Services and CHARLIE TOUCHATT 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 the 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 present 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 CHUCK MUIR, PUBLIC WORKS Department, ENVIRONMENTAL SERVICES Division, P.O. BOX 10250, Palo Alto, CA 94303, Telephone:(650) 496-6979. 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. Professional Services Rev. Nov. 1, 2011 5 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. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 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 and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 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 and expenses of whatever nature including attorneys 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 an 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 Professional Services Rev. Nov. 1, 2011 6 force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". 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 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. Professional Services Rev. Nov. 1, 2011 7 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: 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 Professional Services Rev. Nov. 1, 2011 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. / / / / / / / / / / Professional Services Rev. Nov. 1, 2011 9 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 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 24.1. 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. Professional Services Rev. Nov. 1, 2011 10 \\ 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. 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. / / / / / / / / / / Professional Services Rev. Nov. 1, 2011 11 EXHIBIT “A” SCOPE OF SERVICES Closure Maintenance Assistance Services City of Palo Alto Landfill Background The City of Palo Alto has selected Toubar Equipment Company Inc. to provide a large amount of suitable soils for the landfill cover project and to provide on-call construction services including earthwork and grading, raising gas and leachate wells, providing and installing drainage features and other maintenance services related to the City of Palo Alto’s final landfill closure. The Palo Alto Landfill began formal refuse filling in the 1950s. The City of Palo Alto (City) has been closing and capping this landfill in phases since 1991. In 2010, the City began performing large scale settlement repair due to subsidence within closed sections of the landfill. In July 2011, the landfill reached final capacity and closed to the public. Since then, the City has been importing a large amount of soil into the landfill in order to prepare the last phase (Phase IIC) for final capping. In addition, there may be need for ancillary repair of settlement in the previously closed area of the Park. This agreement is for closure maintenance services to assist the City in the importation and management of the large amount of required soils. The City’s schedule is to have all soils delivered, placed and compacted before the rainy season of 2014 starts. This agreement shall also fund other tasks related to landfill maintenance as described below. These tasks shall be performed on a time and materials not to exceed. Construction work shall be directed by the City and the specifications confirmed by City’s Construction Quality Control Firm. Hydroseeding of bare slopes and top-decks shall be performed by Toubar or an approved sub- contractor before the onset of the rainy season 2014 as part of this agreement. This agreement involves both fees paid by Toubar to the City for the acceptance and disposal of clean soils at the landfill and costs paid to Toubar by the City as described below. Scope of Work Before any onsite work proceeds, Toubar shall prepare and submit for City approval a site specific Health and Safety Plan (HASP). As work commences, Toubar shall have onsite a full- time designated safety officer to monitor all activities for adherence to the HASP. Toubar shall also delegate a site specific Supervisor onsite at all times. The Health and Safety Officer and Supervisor can be the same personnel if qualified and authorized by Toubar. Toubar shall provide clean soils from regional grading projects and manage the soils at the landfill for the purpose of settlement repair and capping. Toubar shall also provide equipment and staff necessary for other maintenance related tasks at the landfill as described below. Professional Services Rev. Nov. 1, 2011 12 Toubar shall provide, import and properly manage approximately 300,000 cubic yards of suitable soils for placement at the landfill as directed by the City. The City at its sole discretion shall approve all soil borrow sources prior to acceptance based on the criteria listed below: Soil Requirements/Preconstruction Testing (Borrow Source) – Required to be performed and submitted by Toubar before approval by the City Chemical Contamination a)The soils to be provided by Toubar shall not contain any chemical contaminants. Sampling and analytical testing shall be provided by Toubar and official lab results and chain of custody documentation must be submitted to the City and approved before soil can be delivered to the landfill. Minimum Sampling Frequency – A minimum of one sample for each (original) location of soil larger than 500 cubic yards. A minimum of one sample per 5,000 cubic yards of soil originating at any one location. For soil stockpiles of 500 CY or greater four (4) discrete samples shall be taken and submitted as one composite sample. Minimum Testing Required – CAM 17 Metals TTLC, TPH (Oil, diesel and gasoline) by EPA 8015. Additional analyses could be required by the City depending on the risk level of the borrow source. For example, the City may require pesticide analyses if the borrow source has been farmland for a long period of time. City approval criteria shall be the Shallow Soil Screening Levels for Residential Land Use Table B-1 of the San Francisco Bay Area Regional Water Quality Control Board Final Environmental Screening Levels (ESLs). Exceptions shall be made for metals where background levels are higher than the ESLs in the Bay Area. b) The soils shall not be approved if contamination is suspected; c) The soils shall originate from residential or low risk commercial properties such as schools, office locations or previously undeveloped properties where no contamination source(s) are suspected; d) A certification form shall be signed by the generator (or generator’s agent) of each commercial borrow source larger than 1,000 cubic yards certifying that the soil meets the City’s requirements; Physical/Geotechnical Requirements The soils shall be suitable for the ET cover as defined below. Non-compatible soils that contain sand, gravel, or other materials (e.g., asphalt mix/chunks, concrete chunks/ready mix, mulch, or wood chips) or overly saturated soils shall not be accepted. The following grain size distribution Task 1 Provide, Import and Manage Clean Soils Professional Services Rev. Nov. 1, 2011 13 criteria shall be used for approval of borrow sources. Toubar shall sample, test and submit results to City for consideration. Toubar shall not transport any soils onto the site unless the borrow source is approved in writing by the City before importation. The sampling and testing criteria is a minimum of one representative sample per borrow source, and one additional sample for every 5,000 cubic yards or as directed by the City. 1)The ET Cover soils shall meet the following gradation requirements: A maximum particle size of 3 inches provided no more than 2 percent of the material by dry weight is between 1-inch and 3 inches in diameter; No less than 98 percent finer than the 1-inch sieve (by dry weight); No less than 75 percent finer than the No. 4 sieve (by dry weight); No less than 30 percent finer than the U.S. No. 200 sieve (by dry weight). 2) The ET Cover Soil shall have a plastic index (PI) of 25 or less using ASTM D 4318. Construction Testing (by others) Toubar shall place and compact imported soils to the placement specifications listed below. Owner shall contract with a quality control firm to verify conformance. Toubar is solely responsible for placing the soils to the specifications listed below: The ET Cover Soil shall be tested (by others) for compaction characteristics at a frequency of one sample per 10,000 cubic yards using ASTM D 1557 and confirmed in the field by ASTM D6938 (Nuclear methods). Rocks of between 3 and 5 inches in diameter shall be considered insignificant if they comprise less than 1 percent of the total material by dry weight. However, Toubar shall make reasonable efforts to remove any rocks larger than 3-inches in diameter, including removal by hand. Placement and compaction Toubar shall provide equipment and staff to place and compact this soil in accordance with the specifications below. City shall set grade for Toubar. a)The ET Cover Soil shall be placed in maximum 8”-inch loose lifts and compacted to approximately 6”-inch. b)The ET Cover Soil shall be moisture conditioned to within -3% to +4% of optimum as determined by ASTM 1557. c)The ET Cover Soil shall be compacted to a minimum of 90% relative compaction as determined by ASTM 1557. If the soils meet the definition of “Fine Gradation”, the soils shall be compacted to a minimum 87% relative compaction. At a minimum, Toubar must provide the following equipment to place and compact the soils. Equivalent equipment must be approved by the City. Professional Services Rev. Nov. 1, 2011 14 An 815 Compactor; A D-6 bulldozer A Motor Grader. Full time water truck. City shall provide grade control and Toubar shall fine grade the soil to its intended surface elevations as directed by the City. Toubar shall at no additional fee accept and properly manage all City generated soils hauled by City staffs. The City’s Construction Quality Assurance (CQA) firm shall provide all compaction testing. Material Screening and Processing: If Toubar would like to process or otherwise screen borrow source soils to meet the City’s criteria, and if the City allows this option, then Toubar shall provide a suitable shaker deck or other suitable screener and screen the soil to the required particle sizes and shall meet any requirements of the City such as schedule. Toubar shall dispose of spoils onsite as directed by the City. Incoming soil stockpiles and the mixing and screening area may be limited to a maximum area of one acre due to above-ground gas and leachate wells throughout the site. Toubar shall move the screened soils to construct the cap directed by the City. Toubar shall be required to control dust through the processing City shall supply water source near the site for Toubar’s usage. Toubar shall provide a water truck and staff for dust suppression. Other Onsite Soils Management (Related to Task 1): The following tasks are related to the soil management operation and shall be provided at no additional cost to the City. All of this work in this section shall be paid through the Task 1 fee schedule. 1)Toubar shall provide a full time staff near the entrance to the landfill to control and verify trucks. Toubar shall ensure that all trucks originate from City approved soil borrow sources. 2)Toubar shall record and provide soils documentation to the City each week submitted by the following Wednesday as well as a monthly summary submitted within 7 days of the end of each month. This documentation shall include at a minimum: The job address of where the soil originated; The Company that hauled the soil into the Landfill; The number of trucks and the size of each truckload in cubic yards; The total number of cubic yards per borrow source; The total fee calculation to be paid to the City per borrow source; and The grand totals of each category. 3)Toubar shall provide two water trucks (and drivers) on site at all times that shall be used to suppress dust caused by the soil management operation. Normally one water truck is Professional Services Rev. Nov. 1, 2011 15 expected to be sufficient, however at times a second water truck may be needed. City shall provide a nearby location for the water truck to fill with reclaimed water. 4)Toubar shall provide at no cost to the City all traffic control flagmen as needed to control their traffic and to show the truck drivers where to dump their soil loads. Toubar shall use this staff or others to review each load for unacceptable large rocks or other debris and extract the rocks and debris before spreading the load. 5)Street Sweeping Services – Toubar shall also provide at no additional cost to the City adequate street sweeper to sweep and remove soil from the paved Harbor and Embarcadero roadways twice a day or until the soil is clear. Toubar shall sweep a minimum of two hours per day or as directed by the City. Task 2 – Additional Onsite Services Toubar shall supply labor, materials and equipment in order to complete the work that shall be identified by City. City shall direct Toubar on the tasks to be completed and Toubar shall provide the resources needed in accordance with the fee schedule listed below. a) Labor – Toubar shall provide laborers to perform the following tasks as directed by the City: Raise wellheads, vaults or other piping components; Cut and remove piping, replace and weld HDPE piping once filling has occurred; Clean soil out of drainage ditches; Install stormwater controls – silt fencing, waddles, rip rap etc. and Toubar shall have onsite at all times (during construction) three (3) staff certified to weld HDPE pipe in accordance with heat fusion requirements and procedures, Title 49 of the DOT, CFR 192.283, as needed; Toubar shall supply heat fusion welding equipment and piping as needed; Toubar shall supply at least two portable toilet facilities; Other tasks as directed by the City. b) Materials Purchase – Toubar shall purchase rock, piping, geotextiles or other materials as directed by the City. Toubar may apply their markup listed in the fee schedule to each purchase. c) Path Construction – Toubar shall construct pathways as directed by the City. Toubar shall provide and use all equipment needed such as 613 scraper to dig out the path and haul and compact baserock using a motor grader, skip loader, water truck and vibratory smooth drum roller as directed by City. d) Drainage Projects – Toubar shall provide labor, materials and equipment to install onsite drainage features as directed by the City. Tasks may include providing an excavator or backhoe, along with laborers to install piping or rip rap drainage features. Toubar shall also purchase and supply rip rap or other materials as directed by the City. Professional Services Rev. Nov. 1, 2011 16 e) Removal of soils – This task involves the removal and hauling of unspecified soils to locations on the landfill as directed by the City. Equipment may include a large excavator, several 10 wheel truck(s) and a compactor to haul, place and compact the soils. Equipment Availability - Toubar shall have the following equipment (and operators) available onsite within 24 hours of request by the City. Alternate equipment must be approved by the City to be equivalent. A second CAT 815 compactor; A second D-6 or larger bulldozer Large excavator (CAT 350 or equivalent); Backhoe. 48” pad drum compactor 84” smooth drum roller 613 or better paddle wheel scraper 210 john Deere skip loader At least a 9500 watt generator and PE welding machines from 1” to 8” in size; and Two portable toilet facilities at a minimum. Toubar shall supply any tools and personal protective equipment necessary to perform and complete the work. Toubar shall include the above equipment on a rate sheet to be submitted with their proposal. Toubar shall hydroseed bare slopes and decks with the mixes of native grasses, mulches and fertilizer as directed by the City. Toubar shall perform this work within 3 days after the first rain event after October 15, 2014 or when directed by the City. The City shall direct Toubar which sub-Contractor and which seed/fertilizer mixture to use for the hydroseeding task. Toubar shall invoice the City for the cost of hydroseeding plus the contract mark-up listed in the fee schedule. Other Terms and Conditions Guarantee of Work and Termination The City’s goal is to have Toubar provide all of this scope as described in Tasks 1-2 above. However, the City does not guarantee that the amount of work listed in this Agreement shall be completed by Toubar. The City still needs regulatory approval for the Phase IIC capping project. This agreement may be terminated if the following occurs: If Toubar gets behind schedule with the importation or processing of the soil (as determined by the City); If Toubar falsifies any sampling or analytical data; If Toubar truck drivers report transporting soil from one address and the City confirms another address; If Toubar violates any compliance issues such as dust generation, stormwater contamination, hazardous materials or other related issues; Professional Services Rev. Nov. 1, 2011 17 If the City decides to install another type of cap over part of the acreage; If the City Management or City Council decides to cancel this agreement. Schedule Toubar shall begin importing and processing or grading soils on either January 1, 2014 (as weather allows) or 15 days after a notice to proceed from the City and place and grade the soils by December 31, 2014. The City recognizes that these goals are weather dependent and dependent on regulatory agency approval. The term of this agreement is through December 31, 2015. Professional Services Rev. Nov. 1, 2011 18 CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Days/Weeks From NTP 1.Import and place soils in accordance with Closure Plan 730 days 2.Additional work as required by the City 730 days EXHIBIT “B” SCHEDULE OF PERFORMANCE Professional Services Rev. Nov. 1, 2011 16 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed $2,000,000. CONSULTANT agrees to complete all Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $2,000,000. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: (Included in the basic services). A. Travel outside the San Francisco Bay area, including transportation and meals, shall 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. Any expense anticipated to be more than N/A shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. Professional Services Rev. Nov. 1, 2011 17 [OPTIONAL] Work required because the following conditions are not satisfied or are exceeded shall be considered as Additional Services: BUDGET SCHEDULE Budget Schedule Amount Task 1 (Fees paid to the City) - Supply and manage 300,000 cubic yards of suitable soils. Includes all associated work described in Task 1 above, including optional price to deliver and screen soil Estimated -$750,000 (Actual cost will be based on the City’s need and type of work requested of the Contractor. Work associated with Task 1 shall be paid through soil-revenue offsets). Task 2 (Fees paid to Toubar) – On call maintenance or other work described in Task 2 to be completed as directed by City on a Time and Materials basis Toubar Rate Sheet (attached) Toubar Markup 10% Estimated Net Total $2,000,000 The fees paid to the City shall be based on the following unit prices: Category Rate Import soils in accordance with Task 1- Full Load, end dump, bottom dump, or super 10 (cost per load) $50.00 Import soils in accordance with Task 1 - 10 Wheeler (cost per load) $25.00 Import and screen soils (if approved by City) – Full Load, end dump, bottom dump, or super 10 (cost per load) $25.00 Import and screen soils (if approved by City) – 10 Wheeler (cost per load) $15.00 Professional Services Rev Nov. 1, 2011 EXHIBIT “C-1” HOURLY RATE SCHEDULE Professional Services Rev Nov. 1, 2011 Professional Services Rev Nov. 1, 2011 20 EXHIBIT “D” INSURANCE REQUIREMENTS TOUBARS 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 YES 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: TOUBAR, 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 TOUBAR 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 (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR TOUBAR’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” 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. Professional Services Rev Nov. 1, 2011 21 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 RESOLUTION NO._______________ RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING AND AUTHORIZING EXECUTION OF AMENDMENT OF LEASE PRC 7348.9 WITH THE STATE LANDS COMMISSION REGARDING THE PALO ALTO LANDFILL CLOSURE PHASE IIC PROJECT WHEREAS, the State of California, acting through the State Lands Commission (the "State"), and the City of Palo Alto (the "City") have entered into Lease PRC 7348.9, effective September 27, 1989, whereby the State granted to the City a lease in the vicinity of Mayfield Slough within the City; and WHEREAS, because resolution of the respective rights of the State and the City could have been costly and time consuming, the State agreed to modify its general lease agreement to acknowledge that its rights to the property subject to the lease have not been legally confirmed, and to refrain from enforcing the lease except only as to lands which may be "ultimately confirmed into State ownership"; and WHEREAS, the City continues to dispute the State's asserted jurisdiction and believes that the lands in the vicinity of Mayfield Slough are the sole property of the City; and WHEREAS, Paragraph 16(e) of Section 4 of lease PRC 7348.9 provides that the lease may be changed, altered or amended by mutual consent of the parties; and WHEREAS, the City has previously planned for the conversion of the closed Baylands Sanitary Landfill into a pastoral, passive park; and WHEREAS, said plans include the land area described as Parcel I, which was heretofore included in lease PRC 7348.9 between the State and the City; and WHEREAS, the City has asked for the State’s consent to the City’s use of additional land, for whatever interest the State may have therein, shown as Phase IIC on the drawing entitle "Revised Final Grading Plan Palo Alto Landfill," dated 2008, in order to proceed with the Landfill Final Closure, Phase IIC (the "Project") without undue and costly delay; and WHEREAS, The City Council therefore desires to amend Lease PRC 7348.9 to include the additional land for the Project; NOW, THEREFORE, the City Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Acting Director of the Planning and Community Environment Department of the City, on September 21, 2013, approved a mitigated negative declaration for the Project and the City Council hereby finds that no further environmental assessment is required. There have been no substantial changes in the project or the circumstances under which it will be undertaken, and there is no new information of the type identified in the CEQA guidelines 15162 (a) (3). SECTION 2. That certain Third Amendment of Lease PRC 7348.9, by and between the City and the State, a copy of which is attached hereto as Exhibit "A" and incorporated herein by this reference, is hereby approved, and the City Manager is hereby authorized to execute said Third Amendment for and on behalf of the City. SECTION 3. The City Manager is hereby authorized to execute any other permits and agreements with the State that may become necessary in connection with implementation of the Project. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: ______________________________ ________________________________ City Clerk Mayor APPROVED AS TO FORM: ________________________________ City Manager ______________________________ ________________________________ Assistant City Attorney Director of Finance ________________________________ Director of Public Works RECORDED AT THE REQUEST OF AND WHEN RECORDED MAIL TO: STATE OF CALIFORNIA State Lands Commission Attn: Title Unit 100 Howe Avenue, Suite 100-South Sacramento, CA 95825-8202 STATE OF CALIFORNIA OFFICIAL BUSINESS Document entitled to free recordation pursuant to Government Code Section 27383 SPACE ABOVE THIS LINE FOR RECORDER'S USE A.P.N. County: Santa Clara STATE OF CALIFORNIA STATE LANDS COMMISSION AMENDMENT OF LEASE NO. PRC 7348.9 WHEREAS, the State of California, acting through the State Lands Commission, hereinafter called Lessor, and, City of Palo Alto, hereinafter called the Lessee, have heretofore entered into an agreement designated as Lease No. PRC 7348.9 (Lease), authorized by the State Lands Commission on September 27, 1989 and executed by the State Lands Commission on September 27, 1989, and as amended on May 5, 1992 and May 2, 2000, whereby Lessor granted to Lessee a General Permit – Public Agency Use covering certain State lands situated in Santa Clara County; and WHEREAS, Section 4, Paragraph 16(e) provides that the Lease may be terminated and its terms, covenants and conditions amended, revised or supplemented only by mutual written agreement of the Lessor and the Lessee (hereinafter referred to as the Parties); and WHEREAS, the Lessee has previously planned for the conversion of the closed Baylands Sanitary Landfill into a passive park; and WHEREAS, said plans include the land area described as Parcel I, IIA and IIB which was included in lease No PRC 7348.9 between the Lessor and the Lessee; and WHEREAS, by reason of the foregoing, it is now the desire of the Parties to amend the Lease. NOW THEREFORE, the Parties hereto agree as follows: Exhibit A Land Description Revised April 2000 is hereby deleted from Lease No. PRC 7348.9 Exhibit A Land Description Revised October 2013 is hereby added to Lease No. PRC 7348.9 to include parcels identified as Phase I, Phase IIA, Phase IIB and Phase IIC. The existing Authorized Improvements under Section 1 of the Lease and Amendments to PRC 7348.9 are hereby amended to also include the following work and activities authorized in and on Parcel IIC: 1. Cleaning of native vegetation and stripping approximately one (1_ to two (2) inches of existing foundation layer soil; 2. Fine grading and re-compacting the soil; in addition, supplemental fill material shall be placed and compacted to raise low areas to meet final design grades; 3. Placement of up to 4-foot thick evapotranspiration soil layer which will include a top layer mixed with compost to enhance vegetative growth; 4. Hydro-seeding the top layer with native grasses; 5. Construction of perimeter drainage features; 6. Raising and securing existing environmental control systems (leachate and landfill gas collection systems); 7. Construction of hiking trails and other park recreational features The effective date of this Amendment to the Lease shall be, December 2, 2013. This Amendment is a portion of Lease No. PRC 7348.9, with a beginning date of September 27, 1989, consisting of four (4) sections with a total of eight (8) pages. All other terms and conditions of the Lease shall remain in full force and effect. This Amendment will become binding on the Lessor only when duly executed on behalf of the State Lands Commission of the State of California. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the dates hereafter affixed. LESSEE: STATE OF CALIFORNIA City of Palo Alto STATE LANDS COMMISSION By: __________________________ By: ____________________________ Title: _________________________ Title: ___________________________ Date: __________________________ Date: ___________________________ ACKNOWLEDGEMENT This lease was authorized by the California State Lands Commission on _______________________________________ (Month Day Year) Palo Alto Landfill Phase IIC Closure Project Initial Study/Mitigated Negative Declaration August 2013 Palo Alto Landfill Phase IIC Closure Project Page i Initial Study/Mitigated Negative Declaration ENVIRONMENTAL CHECKLIST City of Palo Alto Department of Planning and Community Environment TABLE OF CONTENTS PROJECT DESCRIPTION ..................................................................................................................... 1 ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS .......................................... 13 A. AESTHETICS.................................................................................................................. 14 B. AGRICULTURAL AND FOREST RESOURCES ......................................................... 15 C. AIR QUALITY ................................................................................................................ 17 D. BIOLOGICAL RESOURCES ......................................................................................... 22 E. CULTURAL RESOURCES ............................................................................................ 35 F. GEOLOGY, SOILS AND SEISMICITY ........................................................................ 36 G. GREENHOUSE GAS EMISSIONS ................................................................................ 40 H. HAZARDS AND HAZARDOUS MATERIALS ........................................................... 43 I. HYDROLOGY AND WATER QUALITY ..................................................................... 45 J. LAND USE AND PLANNING ....................................................................................... 50 K. MINERAL RESOURCES ............................................................................................... 54 L. NOISE .............................................................................................................................. 54 M. POPULATION AND HOUSING .................................................................................... 57 N. PUBLIC SERVICES ....................................................................................................... 58 O. RECREATION ................................................................................................................ 59 P. TRANSPORTATION AND TRAFFIC ........................................................................... 59 Q. UTILITIES AND SERVICE SYSTEMS ........................................................................ 62 R. MANDATORY FINDINGS OF SIGNIFICANCE ......................................................... 63 SOURCE REFERENCES ..................................................................................................................... 65 DETERMINATION ............................................................................................................................. 68 Palo Alto Landfill Phase IIC Closure Project Page ii Initial Study/Mitigated Negative Declaration LIST OF FIGURES FIGURE 1. SITE LOCATION MAP...................................................................................................... 2 FIGURE 2. SITE FACILITY PLAN PALO ALTO LANDFILL .......................................................... 5 FIGURE 3. FINAL GRADING PLAN PALO ALTO LANDFILL ....................................................... 7 FIGURE 4. GROUNDWATER MONITORING AND LEACHATE MONITORING AND EXTRACTION NETWORK .................................................................................................................. 8 FIGURE 5. LANDFILL GAS MONITORING PLAN .......................................................................... 9 FIGURE 6. SPECIAL-STATUS PLANTS .......................................................................................... 24 FIGURE 7. SPECIAL-STATUS ANIMALS ....................................................................................... 25 LIST OF TABLES TABLE 1. CLOSURE CONSTRUCTION SCHEDULE FOR PHASE IIC ........................................ 10 TABLE 2. EXISTING AND PROPOSED PROJECT EMISSIONS FROM CONSTRUCTION EQUIPMENT ....................................................................................................................................... 20 TABLE 3. SPECIAL-STATUS PLANT SPECIES POTENTIALLY AFFECTED BY PHASE IIC CLOSURE ............................................................................................................................................ 26 TABLE 4. SPECIAL-STATUS ANIMALS WITH THE POTENTIAL TO OCCUR AT THE PROJECT SITE .................................................................................................................................... 27 TABLE 5. PROJECT GHG EMISSIONS FROM CONSTRUCTION EQUIPMENT ........................ 42 Palo Alto Landfill Phase IIC Closure Project Page 1 Initial Study/Mitigated Negative Declaration ENVIRONMENTAL CHECKLIST City of Palo Alto Department of Planning and Community Environment PROJECT DESCRIPTION 1. PROJECT TITLE Palo Alto Landfill Phase IIC Closure Project 2. LEAD AGENCY NAME AND ADDRESS City of Palo Alto Department of Planning and Community Environment 250 Hamilton Ave. Palo Alto, CA 94303 3. CONTACT PERSON AND PHONE NUMBER Ron Arp Manager, Solid Waste Public Works Department, Operations Division City of Palo Alto 650-496-5930 4. PROJECT SPONSOR’S NAME AND ADDRESS City of Palo Alto Public Works PO Box 10250 Palo Alto, CA 94303 650-329-2151 5. PROJECT LOCATION The Palo Alto Landfill (the landfill) is located in the Palo Alto Baylands at 2380 Embarcadero Road on a 1,100-acre parcel owned by the City of Palo Alto (City) in Santa Clara County, California. It is approximately one-half mile northeast of U.S. Highway 101 and one mile south of the Santa Clara/San Mateo County line in the Palo Alto Baylands adjacent to San Francisco Bay (Figure 1 Site Location Map). Adjacent land uses include the Palo Alto Regional Water Quality Control Plant (PARWQCP) to the northwest, a saltwater marsh area (generally identified as the Emily Renzel Marsh) to the west, the Palo Alto flood basin and wetlands to the east and south, and a reclaimed marsh (old yacht harbor) to the north. Page 2 Palo Alto Landfill Phase IIC Closure Project Page 3 Initial Study/Mitigated Negative Declaration 6. GENERAL PLAN DESIGNATION The project area is in the 2,100-acre Palo Alto Baylands area. The landfill is designated as Public Park in the Palo Alto 1998 – 2010 Comprehensive Plan, and is also included in the Palo Alto Baylands Master Plan. After closure, the Phase IIA, IIB and IIC areas of the landfill will be converted to parkland and will be part of Byxbee Park. However, a citizen’s group (Palo Alto Green Energy) organized the initiative that put Measure E on the November 8, 2011 ballot. The measure passed and made available 8 acres of the landfill and 2 acres of City property for the consideration of a green energy/compost facility. This means that 10 acres of parkland was undedicated and is currently being evaluated for this purpose. If an energy/compost facility is developed on the 10 acres, then the facility impacts would be addressed under a separate environmental study. 7. ZONING The project site is zoned PF(D) – Public Facilities District, Site and Design Review Combining District. The public facilities district is designed to accommodate governmental, public utility, educational, and community service or recreational facilities. The end use of the landfill, including Phase IIC, is passive open space/park, developed in a way that does not conflict with the water quality protections required for the underlying landfill. 8. PROJECT DESCRIPTION The Landfill is a Class III refuse disposal site with a permitted footprint of 137 acres, of which 126 acres have been used for refuse disposal operations. The remaining 11 acres in the Mayfield Slough area were not developed for refuse disposal. Landfill closure and final land use were addressed in the Baylands Master Plan and Environmental Impact Report, and subsequent Initial Study’s (IS)/Mitigated Negative Declarations (MND)s were completed for Phases IIA and IIB because the landfill had been capped in phases as refuse disposal capacity was reached. Phases I, IIA and IIB of the Landfill have been completed and were closed in accordance with permit requirements. The closure plan for the remaining 51 acres (Phase IIC) and postclosure maintenance activities are the subject of this Initial Study. Phase IIC will be closed per requirements set forth in Title 27 of the California Code of Regulation (CCR). Final closure of Phase IIC and the necessary postclosure maintenance for the entire landfill will be detailed in the Final Closure and Postclosure Maintenance Plan that will be finalized in the fall of 2013. Background Information The landfill began receiving waste in the early 1930s and operated as a Class III non-hazardous waste landfill. In 1978, the Palo Alto City Council (Council) approved the Baylands Master Plan and adopted the Environmental Impact Report, which included a principal element of converting the Landfill to a pastoral park after closure (City of Palo Alto, 1999). In 1989, the Council approved the Byxbee Landfill Park Master Plan and Phase I Park development. The park has been developed and opened to the public in phases. Phase I contains 29 acres located in the northeastern part of the Landfill, and it is currently developed as a passive park with trails, restrooms, and art features (see “Byxbee Recreation Area” on Figure 1). Phase IIA and IIB covers 46 acres immediately to the south of Phase I and have been capped and opened to the public. Phase IIC park development (51 acres) will Palo Alto Landfill Phase IIC Closure Project Page 4 Initial Study/Mitigated Negative Declaration start after all landfill capping activities are completed at the site. As noted above, this Initial Study addresses the closure of Phase IIC and the postclosure maintenance activities for the entire site. The Phases are shown on Figure 2 (Site Facility Plan Palo Alto Landfill). A Final Closure and Postclosure Maintenance Plan for each phased closure of Phases IIA, IIB and IIC were approved by the Regional Water Quality Control Board (RWQCB), the California Integrated Waste Management Board (CIWMB), and the Local Enforcement Agency (LEA, which is the Santa Clara County Department of Environmental Health). A Final Closure and Postclosure Maintenance Plan was approved in 2009. [Note: The California Department of Resources Recycling and Recovery (CalRecycle), now administers the programs formerly managed by the California Integrated Waste Management Board.] The landfill reached refuse capacity in late July 2011 and is now in the process of closure. During the first six months of 2012, the former Co-Gen Plant and the Recycling Center areas (see Figure 5) at the landfill were prepared for closure, and a number of facilities and structures were decommissioned at these areas. All hazardous wastes were removed from both areas. An existing control room building and an air compressor unit (that operates a system of pneumatic submersible leachate pumps) will remain on site at the former Co-Gen Plant site. In addition, this area has been outfitted with post- closure maintenance buildings which include a new air compressor shed, office trailer, and storage bins. All temporary and permanent structures at the Recycling Center were demolished and disposed of. Existing Activities Landfill activities have been on-going for decades, including soil import, stockpiling, and waste disposal activities. Traffic and equipment are associated with those ongoing activities. About 100 loads of soil are delivered to the site per day from area-wide borrow sources, primarily on the peninsula from Redwood City to Sunnyvale. Historically, the City-operated composting facility at the site produced 12,000 to 16,000 cubic yards (CY) of compost per year, primarily for use on site to amend the final cover during closure. Both compost and soil are currently stockpiled at the landfill. The City of Palo Alto (City) has been implementing postclosure maintenance activities at the landfill since the closure of Phase I (1991), Phase IIA (1992), and Phase IIB (2001) and will continue to maintain the landfill for a period of not less than 30 years after final closure of Phase IIC. The existing monitoring systems, including landfill gas monitoring and collection systems, leachate monitoring and collection systems, and the groundwater monitoring system will be protected during Phase IIC closure construction, and will be maintained as part of the postclosure maintenance activities. The final cover in the closed phases is regularly inspected for settlement and subsidence, erosion, cracking or other indications that the integrity of the final cover is compromised. It is repaired as necessary, including grading or filling and reseeding of erosion rills, and grading to repair subsidence. As recently as July 2011 (before the landfill closed) mobile equipment use at the landfill included one bulldozer, one compactor, two front loaders, and two water trucks. This equipment, most of which was newer equipment (model year 2008 engines), was operated approximately 120 hours per month or 4 to 8 hours per day on average throughout the year. Following landfill closure, the specific equipment used at the site changed slightly, however, overall mobile equipment operations continued to average 4 to 8 hours per day. Page 5 Palo Alto Landfill Phase IIC Closure Project Page 6 Initial Study/Mitigated Negative Declaration Phase IIC Final Closure Closure activities in the Phase IIC area will include the placement of final cover, construction of perimeter drainage features, removal of the scales, and fencing, and provisions for site security and monitoring. The final grades are shown in Figure 3 (Final Grading Plan Palo Alto Landfill), and the monitoring systems are shown in Figures 4 (Groundwater Monitoring and Leachate Monitoring and Extraction Network) and 5 (Landfill Gas Monitoring Plan) The monitoring and control systems and postclosure maintenance facility will remain in place/operation during the closure and postclosure maintenance periods until it is demonstrated the landfill no longer poses a threat to the environment and regulatory agency approval to decommission the systems is obtained. Phase IIC closure activities include pre-closure planning (completed), closure preparation, and construction of the final cover system and drainage facilities. Closure Preparation Closure preparation will include the following remaining activities: • Soil testing and modeling to refine final cover design • Importation of additional final cover soils. It is anticipated that up to approximately 410,000 CY of final cover soils may be needed to supplement the existing soils currently stockpiled at the site. It is anticipated that the remaining final cover soils can be imported over a 12 to 18- month period, and that final closure construction will begin once the updated Closure Post- Closure Plan is approved. Engineered Cover System The landfill does not have a clay soil borrow source and the previous landfill closure phases have relied upon importation of clay cap material. There are no longer reliable and cost-effective regional borrow sources of suitable clay that can be imported for the cover construction that were implemented in the past for Phase I, IIA, and IIB. Therefore, the City proposes to implement an engineered alternative final cover design, as allowed by Title 27 CCR. The proposed engineered alternative final cover design is an evapotranspiration (ET) final cover. ET final covers are increasingly being considered for use at waste disposal sites when equivalent performance to conventional final cover systems can be demonstrated. Unlike conventional cover system designs that use materials with low hydraulic permeability (barrier layers) to minimize the downward migration of water from the cover to the waste (percolation), ET final cover systems rely on the soil mass to retain and store water during wet periods and then remove the stored water through evapotranspiration. The design of ET final cover systems takes into account the moisture storage capacity of the final cover soil and site-specific weather conditions. The proposed ET final cover will be a monolithic soil layer having a minimum thickness of 4 feet. Soil testing and modeling determined the proposed ET final cover constructed with the appropriate soil types would perform equivalent to or better than a prescriptive standard final cover. Page 7 GROUNDWATER MONITORING ANDLEACHATE MONITORING ANDEXTRACTION NETWORK CITY OF PALO ALTO PALO ALTO LANDFILL PALO ALTO, CALIFORNIA FIGURE 4 TOPOGRAPHIC BASE MAP PREPARED FOR THE CITY OF PALO ALTO BY 3Di WEST GEO TERRA MAPPING GROUP USING PHOTOGRAMMETRIC TECHNIQUES. AERIAL PHOTOGRAPHY: MAY 9, 2012.EXPLANATION GROUNDWATER MONITORING WELL LEACHATE PIEZOMETER LEACHATE EXTRACTION WELL Page 8 Page 9 Palo Alto Landfill Phase IIC Closure Project Page 10 Initial Study/Mitigated Negative Declaration (For CEQA study purposes, a 5-foot thick monolithic soil layer is being assumed. The final soil thickness will be determined based on additional soil testing and modeling.) At completion, the ET final cover will be vegetated with plant species that are consistent with the baylands environment and that promote the removal of water from the final cover soil through transpiration. A report documenting the soil testing and modeling performed to date for the proposed ET final cover was submitted to the RWQCB. The RWQCB has preliminarily approved the proposed ET final cover design. Final construction documents will be prepared and submitted to the LEA, the RWQCB and CalRecycle for review and approval. The construction documents will include final construction drawings, specifications, and a construction quality assurance plan, which will be prepared under the supervision of a Registered Civil Engineer or Certified Engineering Geologist in the State of California. Schedule The proposed implementation schedule is presented in Table 1 below. The schedule will be updated upon completion of bid processes and prior to execution of construction contract. The updated schedule will be submitted to the appropriate regulatory agencies for informational purposes. Table 1. Closure Construction Schedule For Phase IIC Milestone Description Date Submit Final Closure Construction Documents for Regulatory Agency Approval September 2013 Regulatory Agency Approval October 2013 Begin Final Closure Construction November 2013 Complete Final Closure Construction December 2014* Submit Final Construction Quality Assurance Report December 2014 *In case of any unforeseen delays Section B.3 in Stipulated Order No. LEA-2013-01 allows the City to request additional time. Final Postclosure Maintenance Plan The Final Postclosure Maintenance Plan complies with the requirements set forth in Sections 21769(c)(2) and 21830 of Title 27 CCR. It includes the responsible parties, and emergency response plan, inspection and monitoring activities, cover system repair, periodic surveys, and a cost estimate. The inspection and monitoring and cover repair activities are described below since these could have a physical effect on the environment. The final cover is designed to limit water infiltration, minimize leachate generation (leachate is liquid that has come into contact with the refuse), prevent exposure of people and wildlife to the buried refuse, limit landfill gas emissions, minimize odor, control fires and provide for a pleasant experience in the park end use. Postclosure Inspection Activities Palo Alto Landfill Phase IIC Closure Project Page 11 Initial Study/Mitigated Negative Declaration Postclosure inspection activities include the periodic inspection of the final cover, the site drainage system, environmental monitoring and control systems, and security system. These inspections involve driving or walking over the landfill, and already occur for Phases I, IIA, and IIB. They will be extended into the Phase IIC area. Final cover settlement will be inspected twice a year for the first 5 years and once a year after for a minimum of 30 years. The purpose is to ensure that the final cover continues to limit infiltration, since the infiltration of water into the refuse can result in leachate, which can in turn impact groundwater quality. The final cover will also be inspected for areas that lack sufficient vegetative cover. The inspection will identify areas where vegetation is showing stress, stunted growth, wilting, color changes, and bare spots. The surface drainage controls will be inspected twice a year for damage, erosion, settlement and obstruction. The leachate monitoring wells are inspected biweekly for signs of failure or deterioration. The leachate collection piping system and individual well pump controls are inspected biweekly. Postclosure Monitoring Activities Postclosure monitoring includes the following: • Continued monitoring of leachate within the landfill in accordance with the site’s Waste Discharge Requirements (WDRs); • Continued monitoring of groundwater in accordance with the site’s WDRs; • Continued monitoring of the perimeter landfill gas probes in accordance with the site’s WDRs; • Continued monitoring of the landfill surface for gas; • Continued monitoring of the landfill gas control system. These activities require minimal equipment use and are already occurring in adjacent areas of the landfill. Postclosure Final Cover System Repairs The final cover system is designed to minimize the need for maintenance and repair (Golder 2009). However, it anticipated that erosion rills and subsidence will continue to occur and that occasional maintenance and repair will be required. Erosion rills will be graded smooth and/or filled with soil, lightly compacted, reseeded, and covered with mulch. This repair would be completed with a small backhoe or small, low ground-pressure bulldozer. Localized areas of differential settlement (subsidence) that require repair will be regraded and final cover will be re-installed. Palo Alto Landfill Phase IIC Closure Project Page 12 Initial Study/Mitigated Negative Declaration These activities require minimal equipment use and are already occurring in adjacent areas of the landfill. 9. SURROUNDING LAND USES AND SETTING The landfill is situated in an area dominated by open space and recreational land uses, but that also includes industrial and office park land uses. The area north of the landfill includes the former Palo Alto Yacht harbor (reclaimed to wetland), the duck pond, the old Seas Scout/new Environmental Volunteers building, the Palo Alto Baylands nature interpretive center and a natural tidal marsh that edges San Francisco Bay (see Figure 1). The area east and south of the landfill contains the Palo Alto Flood Basin, which is a stormwater retention facility that receives surface and stormwater runoff from the cities of Palo Alto, Mountain View, Los Altos and Los Altos Hills. The flood basin is located near the mouths of Mayfield Slough and Matadero Creek where they enter the bay. The area west of the landfill is an open space area called the Emily Renzel Marsh. This property is owned by the City. Further west of the Emily Renzel Marsh, general office and commercial uses are located along the frontage road to Highway 101. The area northwest of the landfill is bounded by the PARWQCP. The PARWQCP treats wastewater from the communities of Palo Alto, East Palo Alto, Stanford, Mountain View, Los Altos, and Los Altos Hills. The treated wastewater is discharged into San Francisco Bay. Land uses located further west and north of the landfill include the Palo Alto Airport and Municipal Golf Course. 10. OTHER PUBLIC AGENCY APPROVALS REQUIRED San Francisco Bay Regional Water Quality Control Board – Review and approval of the Final Closure and Postclosure Maintenance Plan CalRecycle – Review and approval of the Final Closure and Postclosure Maintenance Plan County of Santa Clara, Department of Environmental Health – Review and approval of the Final Closure and Postclosure Maintenance Plan; acting as the Solid Waste Local Enforcement Agency (LEA) Palo Alto Landfill Phase IIC Closure Project Page 13 Initial Study/Mitigated Negative Declaration ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS EVALUATION OF ENVIRONMENTAL IMPACTS 1) A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. [A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e. g. the project falls outside a fault rupture zone). A "No Impact" answer should be explained where it is based on project-specific factors as well as general standards (e. g. the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis).] 2) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3) Once the lead agency has determined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. Potentially Significant Impact” is appropriate if there is substantial evidence that an effect may be significant. If there are one or more “Potentially Significant Impact” entries when the determination is made, an EIR is required. 4) “(Mitigated) Negative Declaration: Less Than Significant With Mitigation Incorporated” applies where the incorporation of mitigation measures has reduced an effect from “Potentially Significant Impact” to a “Less than Significant Impact.” The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section 17, “Earlier Analysis,” may be cross-referenced). 5) Earlier analysis may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063 (C)(3) (D). In this case, a brief discussion should identify the following: a) Earlier Analysis Used. Identify and state where they are available for review. b) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. c) Mitigation Measures. For effects that are “Less than Significant with Mitigation Measures Incorporated,” describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the project. 6) Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g. general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 7) Supporting Information Sources: A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. Palo Alto Landfill Phase IIC Closure Project Page 14 Initial Study/Mitigated Negative Declaration 8) The explanation of each issue should identify: a) the significance criteria or threshold, if any, used to evaluate each question; and b) the mitigation measure identified, if any, to reduce the impact to less than significance. DISCUSSION OF IMPACTS The following Environmental Checklist was used to identify environmental impacts, which could occur if the proposed project is implemented. Each checklist question indicates the significance criteria or threshold. The next column in the checklist lists the source(s) for the answer to each question. The sources cited are identified at the end of the checklist. Discussions of the basis for each answer are provided after the checklist for each discipline. The column labeled “Potentially Significant Impacts” is checked if the project will result in an impact that would exceed the significance criteria or threshold (a significant impact) and there are no feasible mitigation measures to reduce the impact to less than significant. If that is the case, the project likely requires an Environmental Impact Report. If the column labeled “Potentially Significant Unless Mitigation Incorporated” is checked, the project could have an impact that exceeds the significance criteria or threshold, but the impact can be reduced to less than significant by incorporating certain measures. The mitigation measures are included at the end of the discussion. These must be incorporated into the project before the project qualifies for a Mitigated Negative Declaration. If the column labeled “Less than Significant Impact” is checked, the project will have an effect related to the question, but the significance criteria or threshold will not be exceeded. A No Impact response means that the project has no effects related to the question. A. AESTHETICS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Impacts Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Substantially degrade the existing visual character or quality of the site and its surroundings? 1 X b) Have a substantial adverse effect on a public view or view corridor? 1 X c) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? 3 X d) Violate existing Comprehensive Plan policies regarding visual resources? 4, 5 X e) Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? 1 X f) Substantially shadow public open space (other than public streets and adjacent sidewalks) between 9:00 a.m. and 3:00 p.m. from September 21 to March 21? 1 X Palo Alto Landfill Phase IIC Closure Project Page 15 Initial Study/Mitigated Negative Declaration DISCUSSION: (a) Phase IIC of the Palo Alto Landfill is an existing landform that is subject to CCR Title 27 regulations and will allow it to be converted in the future to park use as planned. The closure activities will not significantly alter the landform or result in new structures that will affect views. The existing postclosure maintenance structures in the Co-gen area are within a 12-foot tall soil berm on three sides of the structures. These structures have limited visibility except from the fenced Palo Alto Regional Water Quality Control Plant from the north. (b) The closure activities involve grading, applying final cover soils, and modifications to the leachate and landfill gas monitoring and control systems. All of these activities are at or near ground level and will not significantly change the current landfill shape. None of the closure activities will change existing views. The ET soil layer may initially be placed an average of 2 to 3 feet higher than the final grading plan contours in some areas. However, this cover is expected to settle to the lower grading plan elevation within 5 years (as was seen after the Phase IIB closure in 2001). Limited elevated mounds that will be considered “habitat islands” have been proposed to be designed into areas of the entire closed landfill. These habitat islands if approved may include small trees and native shrubs. A root barrier would be added above the clay cap in the Phase I, IIA and IIB areas. Additional landfill gas monitoring would be conducted quarterly in areas that would include trees. Drip irrigation would be developed and used for a limited term. (c) The landfill is visible from US Highway 101, however the highway is not designated as scenic in this location (Caltrans information http://www.dot.ca.gov/hq/LandArch/scenic/schwy.htm Viewed 7/3/2013). The only portion of US Highway 101 that is currently designated as a scenic highway by the State is in Del Norte County. (d) The closure of Phase II C is consistent with the Palo Alto Comprehensive Plan and the Palo Alto Baylands Master Plan which identify the end use as parkland. The closure activities facilitate the conversion to parkland. (e) The project does not include any lighting. (f) The project does not include any structures that will shadow public open space. Mitigation Measures: There are no potentially significant aesthetic impacts and no mitigation measures are required. B. AGRICULTURAL AND FOREST RESOURCES In determining whether impacts to agricultural resources are significant environmental effects, lead agencies may refer to the California Agricultural Land Evaluation and Site Assessment Model (1997) prepared by the California Dept. of Conservation as an optional model to use in assessing impacts on agriculture and farmland. In determining whether impacts to forest resources, including timberland, are significant environmental effects, lead agencies may refer to information compiled by the California Department of Forestry and Fire Protection regarding the state’s inventory of forest land, including the Forest and Range Assessment Project and the Forest Legacy Assessment project; and the forest carbon measurement methodology provided in the Forest Protocols adopted by the California Air Resources Board. Palo Alto Landfill Phase IIC Closure Project Page 16 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non-agricultural use? 6 X b) Conflict with existing zoning for agricultural use, or a Williamson Act contract? 7 X c) Conflict with existing zoning for, or cause rezoning of, forest land (as defined in Public Resources Code section 12220(g)1) or timberland (as defined in Public Resources Code section 45262 8, 9 )? X d) Result in the loss of forest land or conversion of forest land to non-forest use? 1 X e) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use or conversion of forest land to non-forest use? 1 X DISCUSSION: (a) The project site is a closed landfill and is designated as “Urban and Built-Up Land” on the Santa Clara County Important Farmlands 2010 map produced by the Farmland Mapping and Monitoring Program (California Department of Conservation 2011). As the project area is not part of the current inventory of agricultural land resources, planned activities will not convert Farmland to a non-agricultural use. (b) The project site is zoned PF(D) - Public Facility (Site and Design Review Combining District). The site is not subject to a Williamson Act contract, as it is designed as “Urban and Built-Up Land” according to the Santa Clara County Williamson Act FY 2012/2013 map (California Department of Conservation 2012). Thus, the project would not conflict with zoning for agricultural use or a Williamson Act contract. (c), (d), and (e) The Palo Alto Baylands is not a forested area. Neither the project site nor the surrounding area is zoned as forest land, timberland, or timberland zoned-timberland production. Therefore, the project would not conflict with zoning for, result in rezoning of forest land or timberland, result in the loss of forest land, or result in the conversion of forest land to a non-forest use. 1 PRC 12220(g): "Forest land" is land that can support 10-percent native tree cover of any species, including hardwoods, under natural conditions, and that allows for management of one or more forest resources, including timber, aesthetics, fish and wildlife, biodiversity, water quality, recreation, and other public benefits. 2 PRC 4526: "Timberland" means land, other than land owned by the federal government and land designated by the board as experimental forest land, which is available for, and capable of, growing a crop of trees of any commercial species used to produce lumber and other forest products, including Christmas trees. Commercial species shall be determined by the board on a district basis after consultation with the district committees and others. Palo Alto Landfill Phase IIC Closure Project Page 17 Initial Study/Mitigated Negative Declaration Mitigation Measures: The project will not affect farmland or timberland and no mitigation measures are required. C. AIR QUALITY Environmental and Regulatory Setting Air quality is a function of pollutant emissions and topographic and meteorological influences. The physical features and atmospheric conditions of a landscape interact to affect the movement and dispersion of pollutants and determine its air quality. The federal and state governments have established ambient air quality standards for “criteria” pollutants considered harmful to the environment and public health. National Ambient Air Quality Standards (NAAQS) have been established for carbon monoxide (CO), lead (Pb), nitrogen dioxide (NO2), ozone (O3), “fine” particulate matter (particles 2.5 microns in diameter and smaller, or PM2.5), “inhalable coarse” particulate matter (particles between 2.5 and 10 microns in diameter, or PM10), and sulfur dioxide (SO2). California Ambient Air Quality Standards (CAAQS) are more stringent than the national standards and include the following additional pollutants: hydrogen sulfide (H2S), sulfates (SOX), and vinyl chloride. In addition to these criteria pollutants, the federal and state governments have classified certain pollutants as hazardous air pollutants (HAPs) or toxic air contaminants (TACs). The City of Palo Alto Landfill is located in the San Francisco Bay Area Air Basin, an area of non-attainment for national and state ozone, state PM10, and national and state PM2.5 air quality standards (U.S. EPA 2012 and BAAQMD 2013). The Bay Area Air Quality Management District (BAAQMD) is responsible for maintaining air quality and regulating emissions of criteria and toxic air pollutants within the San Francisco Bay Area Air Basin. The BAAQMD carries out this responsibility by preparing, adopting, and implementing plans, regulations, and rules that are designed to achieve attainment of state and national air quality standards. The BAAQMD currently has 12 regulations containing more than 100 rules that control and limit emissions from sources of air pollutants, including the City of Palo Alto Landfill, which the City operates in accordance with the requirements and conditions set forth in its Title V and BAAQMD Permit to Operate issued to the City by the BAAQMD in June 2012 (BAAQMD 2012). The Title V program is intended to enhance compliance with the Clean Air Act and include federally enforceable requirements that apply to the facility. The most recent applicable air quality plan prepared by the BAAQMD is the Bay Area 2010 Clean Air Plan. This plan updates the District’s 2005 Ozone Strategy, addresses ozone, PM, toxic air contaminants, and greenhouse gas emissions in a single, integrated document, and contains 55 control strategies that describe specific measures and actions that the District and its partners will implement to improve air quality, protect public health, and protect our climate. These measures focus on stationary and area sources, mobile sources, transportation control measures, land use, and energy and climate measures (BAAQMD 2010). The California Air Resources Board’s In-Use Off-Road Diesel Vehicles Regulation (13 CCR §2449 – 2449.3), adopted in 2007 and amended in 2010, aims to reduce emissions of NOx and PM from in-use off-road (i.e., non-highway) diesel vehicles. The regulation 1) imposed limits on engine idling and limits on adding older (typically pre-1996) off-road diesel vehicles to fleets beginning in 2009; 2) required all vehicles to be reported to CARB and labeled in 2009; and 3) required gradual fleet clean up, including replacement of older engines with newer engines and the installation of exhaust retrofits on existing equipment beginning in 2010. The City’s Comprehensive Plan does not include any policies that specifically apply to landfill closure activities, however, the Natural Environment Element, Program N-39, requires the City to assist the BAAQMD in its efforts to achieve compliance with existing air quality regulations (City of Palo Alto 2007). Palo Alto Landfill Phase IIC Closure Project Page 18 Initial Study/Mitigated Negative Declaration Existing Landfill Emission Sources As described in the Project Description, landfill activities have been occurring at the project site for decades. These existing activities include stationary and mobile equipment operations. Stationary equipment includes the inactive landfill (which closed in July 2011), and its landfill gas collection system, wood grinder, trommel screen, and landfill gas flare. This equipment is permitted and operated in accordance with a Permit to Operate from the BAAQMD (Facility #A2721). The wood grinder and trommel screen were removed from service in 2012. Mobile equipment operations include the use of backhoes, compactors, and a front loader to stockpile soil and perform remedial grading activities. These heavy equipment operations, as well as the use of water trucks, occur approximately 120 hours per month or 4 – 6 hours per day on average. In addition to heavy equipment operated by the City, the facility accepts truck loads of soil that are hauled away from active construction sites throughout the Bay Area. These soil hauling activities, which average approximately 100 truck loads per day, are independent activities that are not related to the project. The export and disposal of soil from active construction sites is a common practice during site development, and the potential effects of soil export operations are subject to environmental review and analysis by the lead agency considering the project that causes the trips. Proposed Closure Activities Emission Sources The proposed closure activities would require heavy equipment operations to stockpile and grade the approximately 410,000 cubic yards of soil necessary to construct the engineered, ET cover, construct perimeter drainage features, and maintain the engineered, ET cover. The City would perform the initial stockpiling and grading associated with the closure activities and would contract to perform the final closure activities. The City anticipates a 12 – 24 month period to stockpile and construct the cover. During this time the amount of heavy equipment at the site may increase slightly for several months in order to compact and grade the ET cover. Heavy equipment, however, would continue to be operated at current activity levels for the majority of the construction period (i.e., several pieces of equipment operating approximately 4 – 8 hours per day). Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Conflict with or obstruct with implementation of the applicable air quality plan (1982 Bay Area Air Quality Plan & 2000 Clean Air Plan)? 10, 11,15, 22 X b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation indicated by the following: i. Direct and/or indirect operational emissions that exceed the Bay Area Air Quality Management District (BAAQMD) criteria air pollutants of 80 pounds per day and/or 15 tons per year for nitrogen oxides (NO), reactive organic gases (ROG), and fine particulate matter of less than 10 microns in diameter (PM10); 1, 2, 10, 13, 14 X Palo Alto Landfill Phase IIC Closure Project Page 19 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact ii. Contribute to carbon monoxide (CO) concentrations exceeding the State Ambient Air Quality Standard of nine parts per million (ppm) averaged over eight hours or 20 ppm for one hour( as demonstrated by CALINE4 modeling, which would be performed when a) project CO emissions exceed 550 pounds per day or 100 tons per year; or b) project traffic would impact intersections or roadway links operating at Level of Service (LOS) D, E or F or would cause LOS to decline to D, E or F; or c) project would increase traffic volumes on nearby roadways by 10% or more)? 2, 10, 13, 14 X c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)? 2, 10, 13, 14, 19 X d) Expose sensitive receptors to substantial levels of toxic air contaminants? i. Probability of contracting cancer for the Maximally Exposed Individual (MEI) exceeds 10 in one million 2, 10, 13, 14 X ii. Ground-level concentrations of non-carcinogenic TACs would result in a hazard index greater than one (1) for the MEI 2, 10, 13, 14 X e) Create objectionable odors affecting a substantial number of people? 2, 10, 13, X f) Not implement all applicable construction emission control measures recommended in the Bay Area Air Quality Management District CEQA Guidelines? 1, 2, 10, 13, 14 X DISCUSSION: (a) The proposed project would not conflict with or obstruct implementation of the BAAQMD’s 2010 Clean Air Plan. The 2010 Clean Air Plan includes particulate matter and ozone pre-cursor pollutant emissions of reactive organic gases (ROG) and oxides of nitrogen (NOX) generated from construction equipment and mobile source activities throughout the BAAQMD in its emissions inventories and plans for achieving attainment of air quality standards. In addition, the City would continue to operate and maintain emissions control equipment in accordance with all applicable BAAQMD permit conditions, which are designed to ensure the facility would not result in significant air quality impacts or conflict with the goals of the 2010 Clean Air Plan. Palo Alto Landfill Phase IIC Closure Project Page 20 Initial Study/Mitigated Negative Declaration (b) The project would not result in a substantial incremental increase in heavy equipment operations and would not result in a net change in emissions from this or any other emissions source that exceeds BAAQMD significance thresholds. Table 2 summarizes the existing and proposed project levels of construction equipment activity and the corresponding emissions that occur under these two scenarios. Table 2. Existing and Proposed Project Emissions From Construction Equipment(A) Scenario/Equipment Model Year Horse-power Annual Hours Pollutant Emissions (tons per year) Existing Conditions NOx PM2.5 / PM10 ROG Crawler Tractor 1980 250 1000 1.22 0.07 0.10 Crawler Tractor 1984 250 1600 2.03 0.07 0.10 Loader/Backhoe 1997 250 800 0.48 0.01 0.02 Rubber Tired Loader 2011 250 1400 0.16 0.00 0.01 Subtotal 4,800 3.88 0.15 0.23 Project Conditions(B) NOx PM2.5 / PM10 ROG Crawler Tractor 2003 250 1760 0.87 0.02 0.04 Motor Grader 2003 250 880 0.46 0.01 0.02 Rubber Tire Loader 2003 250 800 0.37 0.01 0.02 Mini Excavator 2003 175 440 0.15 0.01 0.01 2 Excavators 2003 250 880 0.43 0.01 0.02 Drum Roller 2003 175 320 0.10 0.00 0.01 Drum Roller 2003 250 320 0.14 0.00 0.01 Tractor/Loader/Backhoe 2003 120 330 0.08 0.01 0.01 Tractor/Loader/Backhoe 2003 250 660 0.28 0.01 0.01 Subtotal 6,390 2.89 0.08 0.15 Net Change, tons per year -0.99 -0.07 -0.08 Net Change, pounds per day -8.96 -0.64 -0.74 BAAQMD Threshold (lbs/day) 80 80(C) 80 Significant Impact? No No No Source: TRA Environmental Sciences, 2013 (A) Emissions estimated using OFFROAD 2011. (B) Project conditions are an estimate. All equipment was assumed to be approximately 10 years old and either 120, 175, or 250 horsepower. (C) The BAAQMD maintains a daily significance threshold for construction emission of 80 lbs/day for lbs/day for PM10 (BAAQMD 1999). OFFROAD 2011 outputs PM10 emissions only, however, all PM10 may conservatively be assumed to PM2.5for the purposes of this analysis. The BAAQMD adopted a threshold of 54 lbs/day for PM2.5 construction exhaust emissions in 2011, which the BAAQMD subsequently set aside. As Table 2 shows, the proposed project would result in a net reduction in heavy-duty equipment emissions as a result of the use of cleaner, more efficient equipment. In addition to heavy-duty off-road equipment, the project would result in on-road emissions during construction, primarily from water trucks and pick-up trucks traveling on site, as well as worker commute trips. When combined, project on- and off-road equipment activity may Palo Alto Landfill Phase IIC Closure Project Page 21 Initial Study/Mitigated Negative Declaration result in a small net increase in emissions above existing levels, but would not exceed BAAQMD significance thresholds for exhaust emissions. The proposed project also would not increase or modify any stationary source operations at the inactive landfill site. Thus, the proposed project would not result in an incremental increase in emissions that would violate any air quality standard or contribute substantially to an existing or projected air quality violation. The review and analysis of emissions associated with trucks hauling soil to the landfill that the City would subsequently stockpile and use to construct the engineered, ET cover is not within the scope of this IS since these activities and their potential effects are considered during the CEQA review by the lead agency approving the project that causes these trips (i.e. attributing emissions to this project would be “double counting” emissions). The City notes these soil export and disposal activities would occur with or without the proposed project, and would terminate at one of several landfills that accept clean soil such as the Newby Island facilities in Milpitas, or Zanker Road Landfill or Guadalupe Landfill in San Jose. Thus, the disposal of soil at Palo Alto landfill instead of facilities located further south (e.g. Zanker Road) is likely to result in less vehicle miles travelled and associated emissions for trips originating from Palo Alto and northern vicinities. (c) As discussed in a) and b) above, the project would not result in an incremental increase in short- or long-term emissions that conflict with the BAAQMD’s 2010 Clean Air Plan or City of Palo Alto Comprehensive Plan, violate any air quality standard, or contribute substantially to an existing or projected air quality violation. In developing its CEQA significance thresholds, the BAAQMD considered the emission levels at which a project’s individual emissions would be a cumulatively considerable contribution to air quality in the San Francisco Bay Area Air Basin (BAAQMD 1999, 2011). The BAAQMD considers projects that result in emissions that exceed its CEQA significance thresholds to result in individual impacts that are cumulatively considerable and significant. Since the proposed project would not result in an incremental increase in short- or long-term emissions that exceed any significance thresholds it would not result in any cumulative air quality impacts. (d) A sensitive receptor is generically defined as a location where human populations, especially children, seniors, and sick persons, are located where there is reasonable expectation of continuous human exposure to air pollutants. These typically include residences, hospitals, and schools. As described in the Project Description, land uses surrounding the landfill include open space, recreation, and industrial and office park land uses. Thus, there are no sensitive receptors are located within 1,000 feet of the project area. (e) As discussed in d) above, there are no sensitive receptors located within 1,000 feet of the project area. The proposed project involves landfill closure activities that do not involve handling of waste and would not create odors that affect a substantial amount of people. (f) The Permit to Operate the landfill facility issued by the BAAQMD requires the City to water and/or apply dust suppressants to all unpaved roadways and active soil removal and fill areas associated with the landfill as necessary to prevent visible particulate emissions that persist for longer than 3 minutes in any hour. In addition, the permit to operate requires the City to keep paved roadways at the facility sufficiently clear of dirt and debris as necessary to prevent visible particulate emissions (that persist for longer than 3 minutes in any hour) from vehicle traffic. In addition to these permit requirements, the BAAQMD recommends all projects implement a series of basic measures to control fugitive dust emissions (BAAQMD 2011). Accordingly, the City shall implement and/or require contractors to incorporate the following standard dust control measures into the proposed closure activities, which are consistent with BAAQMD recommendations: Palo Alto Landfill Phase IIC Closure Project Page 22 Initial Study/Mitigated Negative Declaration • Water all exposed surfaces (e.g., staging areas, soil piles, graded areas, and unpaved access roads) two times per day during active landfill closure activities; • Hydroseed or provide other ground cover/soil binders in disturbed and inactive construction areas as soon as possible. • Use wet power vacuum street sweepers at least once per day to remove all visible mud or dirt track-out onto adjacent public roads (dry power sweeping is prohibited); • Vehicle speeds on unpaved roads shall not exceed 15 miles per hour; • Minimize idling time of diesel powered construction equipment to two minutes and post signs reminding workers of this idling restriction at project access points and equipment staging areas. • Require a certified mechanic to check and determine that all equipment is running in proper condition prior to construction operations and properly maintain and tune all construction equipment in accordance with manufacturer's specifications; Mitigation Measures: The project will not result in significant air quality impacts and no mitigation measures are required. D. BIOLOGICAL RESOURCES Environmental Setting Vegetation The Phase IIC closure area is mostly disturbed by construction activities and unvegetated, except for areas of erosion-control grasses that were seeded on the outer slopes. The surrounding areas include diked and tidal salt marsh, and upland areas adjacent to salt marsh. The dominant species in both marshes are cordgrass (Spartina foliosa) and common pickleweed (Salicornia virginica). Upland species include marsh gumplant (Grindelia camporum), tree tobacco (Nicotiana glauca), coyote brush (Baccharis pilularis), and non-native annual grasses (Avena, Lolium spp.) Wildlife The Palo Alto baylands provide habitat for a wide variety of common birds, including both aquatic and upland species such as ducks, herons, sparrows, and blackbirds. Common mammal species include mice (Mus sp.; Peromyscus sp.), vole (Microtus sp.), ground squirrel (Spermophilus beecheyi), brush rabbit (Sylvilagus bachmani), black-tailed hare (Lepus californicus), raccoon (Procyon lotor), and gray fox (Urocyon cinereoargenteus), among others Special status species are discussed below. Special Status Species Special-status species are defined as: • Species listed as threatened, endangered or candidate for listing under the Federal Endangered Species Act; • Species listed as threatened, endangered or candidate for listing under the California Endangered Species Act; Palo Alto Landfill Phase IIC Closure Project Page 23 Initial Study/Mitigated Negative Declaration • Species listed by the California Department of Fish and Wildlife (CDFW) as a Fully Protected species or a California species of special concern and species on the CDFW Watch List; and • Species listed on Lists 1A, 1B or 2 the California Native Plant Society’s (CNPS) Inventory of Rare and Endangered Plants. A nine quad search of the California Natural Diversity Database (CNDDB) and a one quad search of the CNPS Inventory of Rare and Endangered Plants were done to determine the special-status plant and animal species that have been observed in the project area (Figures 6 and 7). The list was reviewed and both prior location records and habitat requirements of the special status species were compared to conditions at the Phase IIC site and the area immediately around it. The list was refined to include the species of concern relative to the Phase IIC closure project (Tables 3 and 4). Congdon’s tarplant. This tarplant is an annual plant that grows in grassland and alkaline soils. It grows in association with the weedy grassland species found adjacent to the salt marsh in association with mustard (Brassica sp.), rattlesnake grass (Briza minor), thistles (Centaurea sp., Cirsium sp.), and horseweed (Conyza canadensis). It is known to occur near Cooley Landing north of the project site and at the mouth of Steven’s creek south of the project site. Due to past disturbance this plant does not occur in the area that will be affected by the Phase IIC closure project. Point Reyes bird’s beak. The Point Reyes bird’s beak is a hemiparasitic flowering plant that grows in coastal salt marsh. The plant’s distribution is restricted to the upper portion of salt marshes typically eight feet above the mean height of water at the lowest of the daily low tide (Oregon Department of Agriculture 2013). Marsh plants such as common pickleweed (S. virginica), serve as a host plant for the bird’s beak. The main threat to the persistence of the species is land conversion and development. Historical populations within the San Francisco Bay salt marshes in San Mateo and Santa Clara counties have not been found in many years and they are assumed to no longer exist (Corelli, 1995). The Phase IIC area of the landfill does not support suitable habitat for this plant. California sea blight. The sea blight is in the goosefoot family and grows in the upper intertidal zone of coastal salt marshes along with pickleweed, alkali heath (Frankenia salina), and salt grass (Distichlis spicata). It no longer occurs in the San Francisco Bay Area (Corelli, 1995). Double-crested cormorant. The double-crested cormorant has recently become a regular breeder in Santa Clara County. It is a colonial nester, and in the south bay the nesting sites are on structures such as bridges or transmission towers. The Phase IIC project site does not provide suitable nesting habitat for the double-breasted cormorant. White-tailed kite, Northern harrier, golden eagle, American peregrine falcon. These birds of prey require trees for nesting, and grassland and marshes for forage. They may occur in the project area and forage in areas adjacent to the project site. California clapper rail, California black rail. Both rail species are restricted to marshes, and are known to occur in areas adjacent to the landfill. The Phase IIC area does not contain suitable habitat for rails. Western snowy plover. Plovers typically breed on sandy beaches. In Santa Clara County this bird species is found in the salt evaporators and impoundments along San Francisco Bay, using dried-out pond bottoms and levees that have similar characteristics to sandy beaches. It is known to breed near the Dumbarton Bridge north of the site and near Moffet Field to the south, but the area around the project site consists of salt marsh, heavily-vegetated flood-control basin, and recreational areas that do not provide breeding habitat for Western snowy plover. It is not expected to occur in the Phase IIC area. ! ! ! ! ! !! ! ! 1987 198X 1949 1971 1914 2002 2001 ! ! !Project Site County Lines Major Roads CNDDB Flora (within 5 mi of Project) California seablite Congdon's tarplant Franciscan onion Point Reyes bird's-beak T:\ C A S E \ E n v \ E L C P - P a l o A l t o L a n d f i l l C l o s u r e \ G I S _ G P S \ M X D \ C N D D B _ P l a n t s . m x d 7 / 1 1 / 2 0 1 3 Sources: California Natural Diversity Database (2013), ESRI (2013). Palo Alto Landfill Closure 0 1 20.5 Miles K Figure 6 Special-status Plants §¨¦280 |ÿ82 £¤101 |ÿ85 |ÿ237 Page 24 ! ! ! ! ! !! ! ! 1933 1893 1900 1938 1908 1894 1914 1984 2009 1946 2006 1985 2009 1976 1993 1991 2001 1997 1985 1993 2006 2006 XXXX 2002 XXXX 2006 2001 1979 2005 1971 1986 2008 2004 2004 2005 2004 1975 1975 2004 1991 2009 19471975 1987 1987 1975 1983 1985 1985 2008 20042004 1975 2003 1975 2002 1971 2004 1990 1919 1988 2004 2001 1981 XXXX 1985 1990 1990 1985 1985 19902003 1983 2004 1998 1988 1990 2004 2004 2002 2005 |ÿ82 £¤101 |ÿ85 |ÿ237 §¨¦280 |ÿ84 XXXX ! ! !Project Site County Lines Major Roads black-crowned night heron breeding rookeryCNDDB Fauna (within 5 mi of Project) Alameda song sparrow American badger California black rail California clapper rail California least tern California red-legged frog California tiger salamander Santa Cruz kangaroo rat burrowing owl mimic tryonia (=California brackishwater snail) northern harrier salt-marsh harvest mouse salt-marsh wandering shrew saltmarsh common yellowthroat snowy egret western pond turtle western snowy plover T:\ C A S E \ E n v \ E L C P - P a l o A l t o L a n d f i l l C l o s u r e \ G I S _ G P S \ M X D \ C N D D B _ A n i m a l s . m x d 7 / 1 1 / 2 0 1 3 Sources: California Natural Diversity Database (2013), ESRI (2013), San Francisco Bay Bird Observatory (2013). Palo Alto Landfill Closure 0 1 20.5 Miles K Figure 7Special-status Animals Page 25 Palo Alto Landfill Phase IIC Closure Project Page 26 Initial Study/Mitigated Negative Declaration Table 3. Special-status Plant Species Potentially Affected by Phase IIC Closure Species Listing Status Range in California Habitat Life Form/Blooming Season Potential to Occur Congdon's tarplant Centromadia parryi ssp. congdonii CRPR 1B.2 Throughout western California from San Luis Obispo to Solano County. Valley and foothill grasslands with alkaline or clay soils; 0-230 m. Annual herb, May - November Low. The Phase IIC closure area is previously disturbed and does not provide suitable grassland habitat for this species. The closest known occurrence of this species is at the mouth of Steven’s Creek, approximately 3 miles south of the site. Point Reyes bird’s beak Chloropyron maritimum ssp. palustre CRPR 1B.2 Extant occurrences in Humboldt, Marin, San Francisco and Sonoma Counties. Marshes and swamps (coastal salt); 0-10 m. Annual herb (hemiparasitic), June-October Low. The Phase IIC closure area is previously disturbed and does not provide suitable marsh habitat for this species, although surrounding marshes may provide suitable habitat. Bayland populations in San Mateo and Santa Clara counties have not been found in many years. California seablite Suaeda californica FE, CRPR 1B.1 Endemic to Alameda, Contra Costa, Santa Clara, San Francisco and San Luis Obispo Counties. Marshes and swamps (coastal salt); 0-15 m. Perennial evergreen shrub, July-October Low. This species has been recorded in the project area at the Palo Alto Yacht Harbor, however it is currently only known to occur in Morro Bay. The site does not provide suitable habitat for this species. Federal Endangered Species Act FE= federally endangered FT= federally threatened California Endangered Species Act ST= state threatened SE= state endangered California Rare Plant Rank 1B= Plants Rare, Threatened, or Endangered in California and Elsewhere 2= Plants Rare, Threatened, or Endangered in California, But More Common Elsewhere 0.1-Seriously threatened in California 0.2-Fairly threatened in California Palo Alto Landfill Phase IIC Closure Project Page 27 Initial Study/Mitigated Negative Declaration Table 4. Special-status Animals with the Potential to Occur at the Project Site Species Listing Status Range in California Habitat Potential to Occur Birds double-crested cormorant Phalacrocorax auritus (nesting colony) WL (nesting colony) Year-round resident along the north and central coast and central California south of the San Francisco Bay Area, winter resident along the south coast. Colonial nester on coastal cliffs, offshore islands, and along lake margins in the interior of the state. Nests along coast in sequestered islets, usually on ground with sloping surface, or in tall trees along lake margins. Low. This species occurs in the project area, but only nesting colonies are special- status. There is no suitable nesting habitat on the project site; the closest known nesting colony is on the San Mateo Bridge, more than 10 miles north of the site. white-tailed kite Elanus lecurus CFP Year-round resident in lowland areas west of Sierra Nevada from head of Sacramento Valley south, including coastal valleys and foothills, to western San Diego County at Mexico border. Inhabits low foothills or valley areas with valley or live oaks, riparian areas, and marshes near open grasslands are used for foraging. Low. The site lacks oak trees and riparian areas for nesting. This species may forage in surrounding grassland and marsh habitats, but probably does not nest in the area. Northern harrier Circus cyaneus CSSC Occurs throughout lowland California; has been recorded in fall at high elevations. Inhabits grasslands, meadows, marshes, and seasonal and agricultural wetlands. Low. The site lacks suitable nesting and contains minimal foraging habitat for this species. Northern harrier occurs in the project area and may forage or even nest in marshes and grasslands surrounding the site. golden eagle Aquila chrysaetos CFP Foothills and mountains throughout California. Nests on cliffs and escarpments or in tall trees overlooking open country; forages in annual grasslands, chaparral, and oak woodlands with plentiful medium and large-sized mammals. Low. There is no suitable nesting habitat on or near the project site, and minimal foraging habitat on the site. Golden eagle occurs in the region and may forage in the marshes and grasslands surrounding the site. American peregrine falcon Falco peregrine anatus CFP Occurs throughout the Central Valley, coastal areas and northern mountains of California. Riparian areas, wetlands, lakes and other aquatic features provide important breeding and foraging habitat for this species. Nests on cliffs or man-made structures such as buildings and bridges; feeds on birds. Low. There is no suitable nesting habitat on or near the project site, and minimal foraging habitat on the site. Peregrine falcon occurs in the region and may forage in the marshes and grasslands surrounding the site. Palo Alto Landfill Phase IIC Closure Project Page 28 Initial Study/Mitigated Negative Declaration Species Listing Status Range in California Habitat Potential to Occur California clapper rail Rallus longirostris obsoletus FE SE This California endemic inhabits salt water and brackish marshes traversed by tidal sloughs in the vicinity of the San Francisco Bay. Associated with abundant growths of pickleweed, but feeds away from cover on invertebrates from mud-bottomed sloughs. Low. This species is known from the project area from a 2006 record from the Palo Alto Baylands, including Byxbee Park. However, the site does not contain suitable marsh habitat for this species. California black rail Laterallus jamaicensis ssp. coturniculus ST This California endemic subspecies of the black rail (Laterallus jamaicensis) occurs in the San Francisco Bay region, parts of the Central Valley and at the southeastern border of the State. Inhabits freshwater marshes, wet meadows and shallow margins of saltwater marshes bordering larger bays. It needs water depths of about 1 inch that do not fluctuate during the year and dense vegetation for nesting habitat. Low. The site does not provide suitable marsh habitat for this species; although the marshes surrounding the site do provide suitable habitat. The closest known occurrence is near the Palo Alto Airport, approximately 0.5 mile north of the site. Western snowy plover Charadrius alexandrinuss nivosus (Pacific population) FT CSSC In California, the Pacific population of western snowy plover occurs along the entire coastline. Occurs on sandy beaches, salt pond levees and shores of large alkali lakes. Needs sandy, gravelly or friable soils for nesting. Low. There is no suitable nesting or foraging habitat for this species on or near the project site. This species is known from the region’s salt ponds and other suitable areas; the closest known occurrence is at San Francisquito Creek at least 2 miles north of the site. California least tern Sternula antillarum FE SE Nests along the coast from San Francisco Bay south to Northern Baja California. Colonial breeder on bare or sparsely vegetated flat substrates, sandy beaches, alkali flats, landfills or paved areas. Low. This species is known from the region’s salt ponds and other suitable areas; the closest known (non-breeding) occurrence is at Charleston Slough approximately 0.5 mile south of the site. burrowing owl Athene cunicularia CSSC Year-round resident throughout much of the State, except the coastal counties north of Marin and mountainous areas. Occurs in open, dry annual or perennial grasslands, deserts and scrublands characterized by low growing vegetation. Nests in small mammal burrows, particularly those of the California ground squirrel. Low. This species is known from the project area and has been recorded at Byxbee Park. Due to disturbance and landfill maintenance the Phase IIC site lacks small mammal burrows. Sparse grassland on the outer slopes of the Phase IIC area could provide forage for this species. Palo Alto Landfill Phase IIC Closure Project Page 29 Initial Study/Mitigated Negative Declaration Species Listing Status Range in California Habitat Potential to Occur short-eared owl Asio flammeus CSSC Year-round resident in certain parts of California; breeds regularly in the Great Basin region and locally in the Sacramento-San Joaquin River Delta, breeds periodically in the Central Coast and San Joaquin Delta. Found in swamp lands, both fresh and salt, lowland meadows and agricultural fields. Tule patches or tall grass are needed for nesting and day time seclusion; nests on dry ground in depression concealed in vegetation. Low. There are no swamp lands, lowland meadows or agricultural fields on the site, but breeding pairs have been observed in the flood control basin south of the site in the past. saltmarsh common yellow throat Geothlypis trichas sinuosa CSSC This supspecies of the common yellow throat (Geothlypis trichas) is endemic to the fresh and salt water marshes of the San Francisco Bay region. Requires thick, continuous cover down to water surface for foraging; and tall grasses, tule patches and willows for nesting. Low. This species has been recorded in the project area at the Mayfield and Charleston Sloughs and east of the Palo Alto Airport. However, the site lacks marsh habitat required by this species. Alameda song sparrow Melospiza melodia pusillula CSSC This California endemic subspecies of song sparrow (Melospiza melodia) is a resident of salt marshes bordering south arm of San Francisco Bay. Inhabits Salicornia marshes, nests low in Grindelia bushes (high enough to escape high tides) and in Salicornia. Low. This species has been recorded in the project area in the Palo Alto Baylands. However, the site lacks salt marsh habitat required by this species. Mammals saltmarsh harvest mouse Reithrodontomys raviventris FE SE This California endemic occurs only in the saline emergent wetlands of the San Francisco Bay and its tributaries. Pickleweed is the primary habitat of this non-burrowing mammal. It builds loosely organized nests and requires higher areas to escape flooding. Low. This species is known from Mayfield Slough and elsewhere in the project area. However, the site does not support saline emergent wetlands, pickleweed. The lower slopes of the Phase IIC area have sparse grass cover that could be used by saltmarsh harvest mouse for forage or cover. saltmarsh wandering shrew Sorex vagrans halicoetes CSSC Endemic to the salt marshes of the south arm of the San Francisco Bay. Inhabits medium-high marsh 6-8 feet above sea level where abundant driftwood is scattered among Salicornia. Low. There are no salt marshes on the project site, and this species has not been recorded in the immediate vicinity, although surrounding salt marshes may provide suitable habitat. Federal Endangered Species Act FE= federally endangered FT= federally threatened California Endangered Species Act ST= state threatened SE= state endangered California Department of Fish and Wildlife CFP= California fully protected species CSSC= California species of special concern WL= CDFW Watch List Palo Alto Landfill Phase IIC Closure Project Page 30 Initial Study/Mitigated Negative Declaration California least tern. The closest least tern breeding site to the landfill was recorded near the Dumbarton Bridge in 1976. The Breeding Bird Atlas of Santa Clara County does not include this species as a breeding species in Santa Clara County. Terns have been known to nest on vegetated flats, sandy beaches, alkali flats, landfills or paved areas, however least tern is not known to occur at the Phase IIC project site. Short-eared owl. Breeding pairs of short-eared owl have historically used the flood control basin south of the landfill. This species requires tall and dense vegetation is required for cover and nesting habitat. The Phase IIC project site does not provide suitable nesting habitat for this species. Burrowing Owl. This small, long-legged owl that shelters underground in mammal burrows is a year-round resident in satisfactory open, dry annual grasslands, deserts and scrublands of low-growing vegetation in California. It has been observed in Byxbee Park. Although the Phase IIC site does not provide burrows for nesting, and burrowing owls have not been observed in adjacent areas in recent years, it is recommended that a pre-construction survey be completed prior to the start of grading of the outer slope areas where grassland exists. Saltmarsh common yellow throat, Alameda song sparrow. The saltmarsh common yellow throat requires dense vegetation at fresh and saltwater marshes for breeding; the Alameda song sparrow is resident in salt marshes. These species could occur in areas around the project site, but the Phase IIC area does not provide marsh habitat suitable for breeding for either of these species. Egret and Heron Rookery. An egret and heron rookery is located 0.5 mile north of the project site, near the duck pond (City of Palo Alto 2008). The rookery provides breeding habitat for common egret (Ardea alba) and black-crested night herons (Nycticorax nycticorax). Salt marsh harvest mouse. The salt marsh harvest mouse is resident in the Palo Alto Baylands in areas dominated by pickleweed. Salt marsh harvest mouse also depends on upland areas adjacent to pickleweed marsh for forage and for shelter during high tide. Marsh areas that provide possible habitat for salt marsh harvest mouse are adjacent to the west of the Phase IIC area. The outer slopes of the Phase IIC area are vegetated with erosion control grasses which could provide upland habitat for salt marsh harvest mouse. A pre- construction survey and restricting vegetation removal to avoid high water situations is recommended for work on the outer slopes. Salt marsh wandering shrew. This small rodent is a resident of the medium to high salt marsh, where driftwood collects. It occurs near the Dumbarton Bridge northeast of the baylands. The Phase IIC area does not provide habitat for this species. Wildlife Movement An early version of the Baylands Master Plan published in 1979 describes corridors of feeding and movement for birds in map format. One prominent corridor lies on the western boundary of the project area, the direction of movement following a bidirectional north – south vector (City of Palo Alto 2008). Ponds and open water of the Emily Renzel Wetlands appear to be the critical wildlife areas driving this movement. Regulatory Setting Federal Federal Endangered Species Act. The Federal Endangered Species Act (FESA) of 1973 (16 USC §§ 1531 et seq.) protects fish and wildlife species that are listed as threatened or endangered, and their habitats. “Endangered” refers to species, subspecies, or distinct population segments that are in danger of extinction in all Palo Alto Landfill Phase IIC Closure Project Page 31 Initial Study/Mitigated Negative Declaration or a significant portion of their range. “Threatened” refers to species, subspecies, or distinct population segments that are considered likely to become endangered in the future. The FESA prohibits “take” of any fish or wildlife species listed under the FESA as endangered or threatened. “Take” is defined as harassing, harming, pursuing, hunting, shooting, wounding, killing, trapping, capturing, or collecting a federally endangered or threatened species, or attempting to engage in such conduct. Take may also include habitat modification that actually kills or injures listed wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering. The FESA also prohibits removing, digging up, cutting, or maliciously damaging or destroying federally listed plants on federal land. The unvegetated portions of the Phase IIC area does not provide habitat for any federally listed species. The salt marsh harvest mouse has a low potential to occur on grassy slopes adjacent to the salt marsh west and south of the site. Migratory Bird Treaty Act. Under the Migratory Bird Treaty Act (MBTA), it is unlawful to “pursue, hunt, take, capture or kill; attempt to take, capture or kill; possess, offer to or sell, barter, purchase, deliver or cause to be shipped, exported, imported, transported, carried or received any migratory bird, part, nest, egg or product, manufactured or not.” In short, under the MBTA it is illegal to disturb a nest that is in active use, since this could result in killing a bird or destroying an egg. The United States Fish and Wildlife Service (USFWS) oversees implementation of the MBTA. The proposed project could affect bird species protected by the MBTA. Clean Water Act Sections 401 and 404. The Regional Water Quality Control Board (RWQCB) has regulatory authority over wetlands and waterways under both the federal Clean Water Act (CWA). Under the CWA, the Water Board has regulatory authority over actions in waters of the United States, through the issuance of water quality certifications (certifications) under Section 401 of the CWA. CWA Section 404 establishes a program to regulate the discharge of dredged and fill material into waters of the United States, including wetlands. Responsibility for administering and enforcing Section 404 is shared by the U.S. Army Corps of Engineers (USACE) and the U.S. Environmental Protection Agency (EPA). USACE administers the day-to-day program, including individual permit decisions and jurisdictional determinations; develops policy and guidance; and enforces Section 404 provisions. The EPA develops and interprets environmental criteria used in evaluating permit applications, identifies activities that are exempt from permitting, reviews/comments on individual permit applications, enforces Section 404 provisions, and has authority to veto USACE permit decisions. There are no Waters of the U.S. on the project site; therefore, the project is not subject to Clean Water Act Sections 401 or 404. State California Endangered Species Act. The California Endangered Species Act (CESA), which is administered by CDFW, protects wildlife and plants listed as “threatened” or “endangered” by the California Fish and Game Commission, as well as species identified as candidates for listing. The CESA restricts all persons from taking listed species except under certain circumstances. The state definition of take is similar to the federal definition, except that the CESA does not prohibit indirect harm to listed species by way of habitat modification. Under the CESA, an action must have a direct, demonstrable detrimental effect on individuals of the species. Under Sections 2080 and 2081 of the California Fish and Game Code, the CDFW may authorize take of listed species, except for species that are designated as fully protected. Fully protected species may not be taken except for scientific research. Various Fish and Game Code sections identify fully protected species. There are no state-listed species with the potential to occur on the project site, but the white-tailed kite and the salt marsh harvest mouse, both Fully Protected species, have a low potential to occur. Palo Alto Landfill Phase IIC Closure Project Page 32 Initial Study/Mitigated Negative Declaration The CDFW maintains lists of animal species of special concern (CSSC) that serve as "watch lists." A CSSC is not subject to the take prohibitions of the CESA. The CSSC are species that are declining at a rate that could result in listing under the ESA or CESA and/or have historically occurred in low numbers, and known threats to their persistence currently exist. This designation is intended to result in special consideration for these animals and is intended to focus attention on the species to help avert the need for costly listing under federal and state endangered species laws. This designation also is intended to stimulate collection of additional information on the biology, distribution, and status of poorly known at-risk species, and focus research and management attention on them (CDFG 2003). California Fish and Game Code. The California Fish and Game Code protects a variety of species, separate from the protection afforded under the CESA. The following specific statutes afford some limits on take of named species: Section 3503 (nests or eggs), 3503.5 (raptors and their nests and eggs), 3505 (egrets, osprey, and other specified birds), 3508 (game birds), 3511 (fully protected birds), 4700 (fully protected mammals), 4800 et seq. (mountain lions), 5050 (fully protected reptiles and amphibians), and 5515 (fully protected fish). Section 3503 simply states, “it is unlawful to take, possess, or needlessly destroy the nest or eggs of any bird, except as otherwise provided by this code or any regulation made pursuant thereto.” The exceptions generally apply to species that are causing economic hardship to an industry. Section 3503.5 states that it is "unlawful to take, possess, or destroy any birds in the order Falconiformes or Strigiformes (birds of prey) or to take, possess, or destroy the nest or eggs of any such bird except as otherwise provided by this code or any regulation adopted.” Section 3505 prohibits taking, selling, or purchasing egrets, osprey, and other named species or any part of such birds. The project could impact birds protected by Fish and Game Code. Certain species are also Fully Protected. This classification was the state's initial effort in the 1960's to identify and provide additional protection to those animals that were rare or faced possible extinction. Lists were created for fish, amphibians and reptiles, birds, and mammals. Most Fully Protected species have also been listed as threatened or endangered species under the more recent endangered species laws and regulations. Fully Protected species may not be taken or possessed at any time, and no licenses or permits may be issued for their take except for collecting these species for necessary scientific research or for habitat restoration that will promote their survival. The white-tailed kite and salt marsh harvest mouse, both Fully Protected species, have a low potential to occur on the site. California Native Plant Protection Act. The California Native Plant Protection Act (CNPPA) of 1977 preserves, protects, and enhances endangered and rare plants in California by specifically prohibiting the importation, take, possession, or sale of any native plant designated by the California Fish and Game Commission as rare or endangered, except under specific circumstances identified in the Act. Various activities are exempt from the CNPPA, although take as a result of these activities may require other authorization from CDFW under the California Fish and Game Code. California Porter-Cologne Water Quality Control Act. California’s Porter Cologne Water Quality Control Act (Porter-Cologne Act) regulates Waters of the State, which includes “any surface water or groundwater, including saline waters, within the boundaries of the State”. Palo Alto Landfill Phase IIC Closure Project Page 33 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? 1, 23, 24, 25, 26 X b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations, including federally protected wetlands as defined by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? 1 X c) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? 1, 4, 5 X d) Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or as defined by the City of Palo Alto’s Tree Preservation Ordinance (Municipal Code Section 8.10)? 27 X e) Conflict with any applicable Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? 1, 28 X DISCUSSION: (a) Work in the Phase IIC area mostly affects unvegetated areas that do not provide habitat for special-status or otherwise protected species. A draft wildlife management plan prepared for Byxbee Park in 2008 included mammal trapping, and determined that the park and landfill do not provide habitat for small mammals due to soil compaction and low plant diversity (ESA 2008). Even though the landfill does not provide habitat for small mammals, the outer slopes that contain grassland planted for erosion control are adjacent to salt marsh, and could be used by the salt marsh harvest mouse and birds, including the burrowing owl, for forage. The harvest mouse could also use these areas as cover when the marsh is flooded during periods of high water. Mitigation MeasuresBIO-1 and BIO-2, listed below, would prevent impacts to special-status species and birds. (b) The project site does not contain riparian habitat. It is adjacent to salt marsh habitat, but the project does not extend into the marsh habitat. Closure activities are intended to provide environmental protections that will benefit the surrounding habitats. (c) The project site is a landfill that already exists and closure activities would not block a known wildlife corridor. Equipment use at the site has been occurring for many decades, so it is assumed that wildlife Palo Alto Landfill Phase IIC Closure Project Page 34 Initial Study/Mitigated Negative Declaration movement in the landfill area is compatible with the equipment use. No new or additional equipment that would disrupt wildlife movement is proposed to be used for the project. (d) No trees are present in the Phase IIC closure area and no trees will be removed for the project. (e) There project is not in the study area of any known habitat conservation or natural community conservation plan (USFWS, http://www.fws.gov/sacramento/es/Habitat-Conservation-Plans/es_hcp.htm accessed 2013). Project work is in accordance with the 4th Edition of the Palo Alto Baylands Master Plan (2008). Mitigation Measures: Impact: Although it is not considered likely due to habitat, it is possible that areas of the landfill that have been inactive pending closure could be inhabited by ground-nesting birds, including the special-status Western burrowing owl. Closure activities could adversely impact these species if they are nesting in the closure area when closure activities start. This would exceed the significance criteria and result in a significant impact. Mitigation Measure BIO-1: If feasible, project construction shall be scheduled outside of the bird nesting season. If project activities start between February 1 and August 31st, a pre-construction survey for nesting birds shall be conducted by a qualified ornithologist to identify active nests that may be disturbed during project implementation. The survey shall include a 250-foot radius around the construction area. The preconstruction survey shall take place no more than 7 days prior to initiation of construction. If an active nest is found, and project activities could cause nest abandonment by a bird protected under the Migratory Bird Treaty Act or California Fish and Game Code, the ornithologist shall, in consultation with the California Department of Fish & Wildlife, designate a construction-free buffer zone (typically 250 feet for raptors and 50 feet for other birds) around the nest. Impact: There is a low potential that salt marsh harvest mouse occurs on the outer slopes of the Phase IIC closure area where erosion control grasses have been planted. Grading in this area could adversely impact salt marsh harvest mouse, which would exceed the significance criteria and result in a significant impact. Mitigation Measure BIO-2: The following steps shall be followed to avoid impacts to salt marsh harvest mouse: 1. Time the removal of vegetation to avoid periods of high water in the adjacent wetlands which could force salt marsh harvest mouse to higher ground. This includes the hour before and after the high tide (typically early morning and late evening), and after a storm event that results in high water adjacent to the site. 2. A qualified biologist shall conduct a tail-gate training session to all construction personnel regarding protected species and habitats in the construction area, the limitations on areas that can be accessed on foot or with equipment, and the legal consequences of take of protected species or habitat. The training shall be conducted whenever new personnel start work at the site. 3. Dogs shall be prohibited from the work site. 4. Construction equipment and materials shall be staged in unvegetated areas away from the grassland slopes. 5. A barrier fence shall be installed between the Phase IIC closure area and the adjacent salt marsh that provides habitat for the salt marsh harvest mouse. The fence shall be designed and installed to prevent Palo Alto Landfill Phase IIC Closure Project Page 35 Initial Study/Mitigated Negative Declaration any SMHM in adjacent marshes from entering the work area during project construction. The areas outside of the exclusion fencing, except for existing roads, parking and other asphalt or concrete areas, shall be off-limits to construction activity and personnel at all times during project construction. The fence shall remain in place until vegetation has been removed from the outer slopes, and then shall be removed by a qualified biologist approved by the USFWS. The proposed fence design is silt fence with 4 to 6-inch wide flashing at the base that is imbedded into the soil. Fence installation shall avoid pickleweed and shall be completed by a qualified biologist approved by the USFWS. 6. After exclusion fencing is installed, a qualified biological monitor shall walk all areas of vegetation immediately prior to removal. If a mouse of any species is found to occur on the project site, construction shall not proceed pending consultation with the USFWS and CDFG. This is because it is not feasible to identify the mouse to species without handling it. Unless otherwise authorized, the mouse shall be left alone and allowed to move out of the area on its own. Vegetation shall not be removed when tides are high. 7. A qualified biologist shall be present onsite to monitor for salt marsh harvest mouse during vegetation removal on the outer slopes adjacent to pickleweed marsh. The biological monitor shall have the authority to stop work if deemed necessary to protect the salt marsh harvest mouse or other state or federally protected species, and shall work directly with the project engineer and foreman. Prior to the start of work each day, the monitor shall thoroughly inspect the work area and adjacent habitat areas to determine if special-status species are present and shall remain onsite throughout the day while vegetation removal activities are occurring. If a mouse of any species is observed in the work area, then work shall stop until the mouse leaves the work area on its own, and the USFWS and CDFG shall be notified immediately. The biological monitor onsite shall determine whether construction activities are remote enough from the animal that it will not be harmed or harassed. If the mouse does not leave the construction zone, work shall not start again until after the USFWS and CDFG have provided guidance about how to proceed with construction activities. E. CULTURAL RESOURCES Environmental Setting Native Americans identified by the Spanish name of “Costanoan” were the first known inhabitants of the region. The tribe expanded into 50 different groups by 1770 with a language consisting of approximately eight dialects. The presence of freshwater, wind protection, and unimpeded access to food and fuel resources encouraged settlement primarily near the Bay. The project site is within this settlement area (San Mateo County 1986). During the Spanish Period, the project site was a component of Rancho Riconada del Arroyo del San Francisquito, owned by Don Rafael Soto. Soto’s embarcadero became Wilson’s Landing during the American Period and was used to ship local produce to San Francisco. Urban development intensified from the 1920s to the 1960s, and parkland was first established in the latter decade from a changing attitude that placed greater value on marshland (City of Palo Alto 2008). The landfill was established in 1921 and stopped receiving waste in July 2011 (City of Palo Alto 2008). Palo Alto Landfill Phase IIC Closure Project Page 36 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Directly or indirectly destroy a local cultural resource that is recognized by City Council resolution? 4, 5 X b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to 15064.5? 4, 5 X c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? 4, 5 X d) Disturb any human remains, including those interred outside of formal cemeteries? 4, 5 X e) Adversely affect a historic resource listed or eligible for listing on the National and/or California Register, or listed on the City’s Historic Inventory? 4, 5 X f) Eliminate important examples of major periods of California history or prehistory? 4, 5 X DISCUSSION: (a) The Phase IIC closure area is part of a landfill that has been present for over 90 years. There are no historic structures in the Phase IIC closure area. (b), (c), and (d) There are no known archaeological resources, paleontological resources, unique geologic features or human remains on the project site. The Phase IIC closure area is part of a landfill that has been present for over 90 years. The closure and post-closure maintenance activities do not require excavation in areas that could contain archaeological, paleontological, unique geologic features, or human remains. Although the project would involve some grading during the construction period, cultural resources are unlikely to be uncovered due to the extended past use of the site as a landfill. Mitigation Measures: There are no potentially significant cultural resources impacts and no mitigation measures are required. F. GEOLOGY, SOILS AND SEISMICITY Existing Setting The following summary of site topography and geology is derived from the Final Closure and Post-closure Maintenance Plan for Phase IIC City of Palo Alto Landfill (Golder Associates, Inc. 2009). Site Topography The topography of the Palo Alto Landfill, including Phase IIC, is influenced by past landfill operations. The topography depicts closed landfill areas, inactive or filled landfill areas, and soil stockpile areas. The maximum elevation is shown to be approximately 60 feet above mean sea level (msl) and the minimum elevation Palo Alto Landfill Phase IIC Closure Project Page 37 Initial Study/Mitigated Negative Declaration approximately 10 feet msl. The current slopes are mild and sweeping, varying throughout the site from 3:1 (horizontal to vertical) to approximately 3 percent. The general topography surrounding the site is flat with elevations at approximately 5 feet msl or less. The old Yacht Harbor to the north is open to San Francisco Bay and the water level fluctuates with the tide. The Palo Alto Flood Basin, which includes Mayfield Slough and Matadero Creek, is on the east and south boundaries of the landfill. Elevations in proximity of the landfill are at or below sea level for most of the year. Surface water elevations in the flood basin can rise above sea level during large storms. Elevations within the saltwater marsh, Emily Renzel Marsh and the KFS property west of the landfill range from zero to 3 feet msl. Finally, elevations in proximity of the Palo Alto Regional Water Quality Control Plant (PARWQCP) are at approximately 10 feet msl. Originally, the site was primarily a low-lying flood plain until its subsequent development for landfill operations. Past landfill operations included excavating several feet of Bay Mud for landfill cover and capacity. Hydrogeologic cross sections from previous studies of the site have indicated that pre-landfill elevations were approximately zero msl. These cross sections revealed that the west side of the landfill was excavated to approximately 13 feet below msl before being filled to approximately 18 feet msl. The northeast and southwest quadrants of the site were likewise excavated prior to the development that brought these areas to present-day elevations. Site Geology The landfill is situated in the northeastern part of the Santa Clara Valley adjacent to the San Francisco Bay. San Francisco Bay is a structural depression that has gradually subsided along several parallel northwest-trending faults. The surface of the depression has been periodically inundated by water in response to global sea level changes. The Franciscan Formation forms the bedrock beneath the landfill at an estimated depth of 1,600 feet. South of the landfill, a boring encountered an alluvial conglomerate possibly of the regionally recognized Santa Clara Formation at a depth of approximately 1,000 feet. Directly overlying the bedrock in the landfill area is a thick layer of alluvium. Subsurface investigations confirm that the landfill is underlain by a thick sequence of Bay Mud with interbedded alluvial deposits. The tidal salt marsh environment on which the landfill is constructed is underlain by approximately 6 to 16 feet of Younger Bay Mud – a very soft, unconsolidated deposit of organic-rich silt and clay with occasional lenses of sandy clay. This material is underlain by Older Bay Mud – a very stiff to firm clay, containing varying amounts of silt and lenses of sandy clay, sand, and gravel. In the site vicinity, the Bay Mud deposits inter-finger with and grade into fine-grained alluvial deposits that have been shed off the Santa Cruz Mountains. Physical testing on both younger and older Bay Muds indicate permeability values are less than 1 x 10-6 centimeters per second (cm/sec). No known faults underlie the landfill. Two minor bedrock faults near the site have been inferred from geophysical data. One inferred fault (San Jose Fault) crosses east of the site and the other (Palo Alto Fault) crosses approximately 2 miles west of the site. There is no historical evidence of ground movement along these faults. Accordingly, it is believed that these faults are not active. The major active faults in the San Francisco Bay Area are the San Andreas and Hayward Faults. The San Andreas Fault, at its closest proximity to the disposal area, is 14 kilometers (10 miles) to the northeast of the site and is the source of the largest potential ground shaking for the landfill. Permanent ground displacement resulting in surface faulting at the site is extremely unlikely. Palo Alto Landfill Phase IIC Closure Project Page 38 Initial Study/Mitigated Negative Declaration It is within the realm of possibility that severe earthquakes, up to a magnitude of 8.5 on the Richter scale (with surface acceleration of 0.4g), along either active fault might occur during the next 100 years. Over the past 175 years, approximately 25 major earthquakes have occurred in the San Francisco Bay Area. Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death involving: i) Rupture of a known earthquake fault, as delineated on the most recent Alquist- Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. 2, 29 X ii) Strong seismic ground shaking? 2 X iii) Seismic-related ground failure, including liquefaction? X iv) Landslides? 2 X b) Result in substantial soil erosion or the loss of topsoil? 2 X c) Result in substantial siltation? 2 X d) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on- or off-site landslide, lateral spreading, subsidence, liquefaction or collapse? 2 X e) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? 2 X f) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water? 1 X g) Expose people or property to major geologic hazards that cannot be mitigated through the use of standard engineering design and seismic safety techniques? 1 X DISCUSSION: (a) The project site is not located within a currently designated Alquist-Priolo Earthquake Fault Zone. The nearest Alquist-Priolo Zone (San Andreas Fault) is approximately 10 miles west of the project site (ABAG 2013). Ground shaking is a general term referring to all aspects of motion of the earth’s surface from an earthquake, and is normally the major cause of damage in seismic events. The project site and the entire San Francisco Bay Area are subject to strong seismic ground shaking due to numerous active faults in the region. According to the Palo Alto Landfill Phase IIC Closure Project Page 39 Initial Study/Mitigated Negative Declaration Association of Bay Area Governments (ABAG) Shaking Potential Map (2003), the site is subject to “very violent” shaking (X on the Modified Mercalli Intensity Shaking Severity Level). However, the proposed project does not include any structures that could be damaged in an earthquake. In addition, the project must conform to the applicable sections of Title 27 of the California Code of Regulations and the landfill cover would be designed and constructed to minimize hazards related to seismic ground shaking. Therefore, the proposed project would not expose people or structures to potential substantial adverse affects involving strong seismic ground shaking. Liquefaction is the temporary transformation of a saturated granular soil layer to a liquefied state as a result of seismic ground shaking. In unique situations where this layer is at or near the surface, increased pressure from rising groundwater may decrease the load bearing capacity of the soil to a quicksand-like consistency, causing buildings and foundations to sink downward. According to Association of Bay Area Governments (ABAG) Hazard Maps, the liquefaction susceptibility of the project site is very high, and the site is mapped as a Liquefaction Zone by the California Geological Survey (ABAG 2013). The project would not include any structures that could be subject to liquefaction, and the landfill cover would be designed and constructed in accordance with the applicable sections of Title 27 of the California Code of Regulations to minimize geologic hazards including seismic-related ground failure. The project site is in an area of “Few Landslides” according to the ABAG Existing Landslides Map, and is not in a Landslide Zone according to the California Geologic Survey (ABAG 2013). A number of slope stability reports for the Palo Alto Landfill indicate that final landfill slopes are stable under static loading conditions, and that the integrity of the landfill would not be jeopardized by the maximum probable earthquake (MPE) (Golder Associates 2009). Therefore, the project would not expose people or structures to potential substantial adverse affects involving landslides. (b) and (c). The proposed project would not result in substantial soil erosion, loss of topsoil or siltation. According to the Final Closure and Postclosure Maintenance Plan (Golder Associates, Inc. 2009), the slope protection and erosion control procedures for Phase IIC project will comply with Title 27 Section 21150. The requirements are as follows: • Implement procedures to protect the integrity of the final cover and enhance its ability to minimize and prevent erosion. • Establish vegetation in the beginning of the rainy season (if feasible). • Establish and maintain the final cover according to the postclosure land use. • Stabilize slopes to prevent soil erosion. • Provide protection of slopes from the erosive effects of water and wind. • Perform a soil loss analysis. The surface of site will be revegetated at the time of closure in accordance with the project specifications, which will protect the surface from erosion and loss of topsoil. A Soil Erosion Control Program was prepared by Emcon (1991). Erosion rates were evaluated by the Universal Soil Loss Equation developed by the United States Department of Agriculture, Soil Conservation Service. The evaluation indicates that soil loss will be limited to less than 2 tons per acre per year, the maximum allowed by the United States Environmental Protection Agency (US EPA) for landfill final covers (Golder Associates, Inc. 2009). Palo Alto Landfill Phase IIC Closure Project Page 40 Initial Study/Mitigated Negative Declaration (d) As stated above, the project site is unlikely to be subject to landslides (see response a.iv above). Although the liquefaction susceptibility of the project site is very high, potential impacts related to liquefaction are less than significant (see response a.iii above). Lateral spreading is the finite, lateral movement of gently to steeply sloping, saturated soil deposits caused by earthquake-induced liquefaction. As the liquefaction susceptibility of the site is very high, the susceptibility to lateral spreading would also be very high. However, impacts related to lateral spreading would be less than significant because the project does not include any structures, and the landfill cover would be designed and constructed in accordance with the applicable sections of Title 27 of the California Code of Regulations to minimize geologic hazards including lateral spreading. The project site is not located on Karst formations and has not been subjected to mining activities; thus, the risk of subsidence or collapse is expected to be low. The final landfill cover would be periodically inspected after construction in accordance with the postclosure maintenance plan to monitor for signs of settlement, subsidence or other problems with the integrity of the cover. Any problems found would be repaired as soon as feasible (Golder Associates, Inc. 2009). (e) When expansive soils undergo alternating cycles of wetting (swelling) and drying (shrinking), the volume of the soil can change markedly. Expansive soils are common throughout California and can cause damage to foundations and slabs unless properly treated during construction. However, the proposed project does not include any structures that could be damaged by expansive soils. In addition, the landfill that would be covered with imported soil. Thus, there would be no impacts related to expansive soils. (f) The proposed project does not involve any connections to a sewer system, nor would it require the installation of septic tanks or alternative wastewater disposal systems. (g) The Phase IIC closure will meet the requirements of Title 27, and will include multiple environmental protection measures. It is engineered and will not expose people or property to major geologic hazards. Mitigation Measures: There are no potentially significant geology, soils, or seismicity impacts and no mitigation measures are required. G. GREENHOUSE GAS EMISSIONS Environmental and Regulatory Setting Gases that trap heat in the atmosphere and affect regulation of the Earth’s temperature are known as greenhouse gases (GHG). Common GHG include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). GHG emissions from human activities contribute to overall GHG concentrations in the atmosphere and climate scientists have become increasingly concerned about the effects of these emissions on global climate change. The United Nations’ Intergovernmental Panel on Climate Change fourth assessment report concluded that recent regional climate changes, particularly temperature increases, are affecting many natural systems including water, ecosystems, food, coasts, and health (IPCC 2007). GHGs can remain in the atmosphere long after they are emitted. The potential for a GHG to absorb and trap heat in the atmosphere is considered its global warming potential (GWP). The reference gas for measuring GWP is CO2, which has a GWP of one. By comparison, CH4 has a GWP of 21, which means that one molecule of CH4 has 21 times the effect on global warming as one molecule of CO2. Multiplying the estimated emissions for non-CO2 GHGs by their GWP determines their carbon dioxide equivalent (CO2e), which enables a project’s combined global warming potential to be expressed in terms of mass CO2 emissions. Palo Alto Landfill Phase IIC Closure Project Page 41 Initial Study/Mitigated Negative Declaration In 2006, the California State Legislature adopted the California Global Warming Solutions Act of 2006, Assembly Bill (AB) 32, which required the California Air Resources Board (ARB) to: 1) determine 1990 statewide GHG emissions, 2) approve a 2020 statewide GHG limit that is equal to the 1990 emissions level, 3) adopt a mandatory GHG reporting rule for significant GHG emission sources, 4) adopt a Scoping Plan to achieve the 2020 statewide GHG emissions limit, and 5) adopt regulations to achieve the maximum technologically feasible and cost-effective reductions. In 2007, the ARB approved a statewide 1990 emissions level and corresponding 2020 GHG emissions limit of 427 million metric tons of carbon dioxide equivalents (MTCO2e) (ARB 2007). In 2008, the ARB adopted its Climate Change Scoping Plan, which projects, absent regulation or under a “business as usual” (BAU) scenario, 2020 statewide GHG emissions levels of 596 million MTCO2e and identifies the numerous measures (i.e., mandatory rules and regulations and voluntary measures) that will achieve at least 174 million MTCO2e of reductions and reduce statewide GHG emissions to 1990 levels by 2020 (ARB 2009). In 2011, the ARB released a supplement to the 2008 Scoping Plan Functional Equivalent Document (FED) that included an updated 2020 BAU statewide GHG emissions level projection of 507 million MTCO2e (ARB 2011). The ARB has also adopted a Regulation for the Mandatory Reporting of Greenhouse Gas Emissions (Title 17, CCR, Section 95100 – 95133 (17 CCR §95100 – 95133)), which requires facilities that emit greater than or equal to 10,000 metric tons of CO2e from combustion annually to report their GHG emissions to the ARB. Since 2008, the ARB has adopted a number of measures to track and report GHG emissions and monitor progress in meeting AB32 GHG reduction goals, including the Landfill Methane Control Measure (LMCM) (17 CCR §95460 - 95476). The LMCM reduces methane from landfills by requiring uncontrolled landfills to install a gas collection and control system and existing gas collection systems to operate optimally. The City of Palo Alto Landfill already operates a landfill gas collection and control system in accordance with its BAAQMD Permit to Operate. In 2010, the BAAQMD released an updated inventory of Bay Area GHG emissions for base year 2007. The Bay Area emitted 95.8 million MTCO2e in 2007, with Santa Clara County contributing 18.8 million MTCO2e of this total (BAAQMD 2010a). The BAAQMD’s 2010 GHG inventory recognizes two types of GHG emissions from landfills – biogenic CO2 emissions and non-biogenic GHG emissions. The BAAQMD’s 2010 GHG inventory defines biogenic CO2 as the “CO2 emissions that are emitted from materials derived from living cells, excluding fossil fuels, limestone and other materials that have been transformed by geologic processes. Biogenic-CO2 originates from carbon that is present in materials such as wood, paper, vegetable oils and food, animal, and yard waste” (BAAQMD 2010a, pg. 3). Since the carbon contained in these materials was recently taken out of the atmosphere, the release or combustion of biogenic sources of CO2 such as LFG does not add any net CO2 to the atmosphere. Biogenic CO2 emissions, therefore, are monitored and reported separately from anthropogenic sources of GHG emissions. Non-biogenic landfill GHG emissions include the methane and nitrous oxide formed during the anaerobic decomposition and combustion processes. Locally, the City of Palo Alto adopted a Climate Protection Plan in December 2007 which sets out the following goals for reducing CO2 emissions from the City and community: • By 2009, the City will reduce emissions by 5% from 2005 emission levels. • By 2012, the City and the Community will reduce emissions by 5% from 2005 levels. • By 2020, the City and the Community will reduce emissions by 15% from 2005 levels, and bring the community in line with State reduction goals. In April 2013, the City Manager reported that 2012 GHG emissions from City operations were 53% below 2005 levels, exceeding the City’s climate reduction goals; Palo Alto community-wide GHG emissions were reported Palo Alto Landfill Phase IIC Closure Project Page 42 Initial Study/Mitigated Negative Declaration to be 28% lower than 1990 emission levels, exceeding the state’s goals established by AB32 and the Climate Change Scoping Plan (City of Palo Alto 2013). Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment? 1, 12, 20, 21 X b) Conflict with any applicable plan, policy or regulation of an agency adopted for the purpose of reducing the emissions of greenhouse gases? 2, 16, 17, 40,18, 20, 21 X DISCUSSION: (a) As discussed in Section C, the proposed activities would not result in a substantial incremental increase in heavy equipment, on-road, or stationary source operations above the existing conditions, and emissions from soil import and disposal operations are not within the scope of this IS. Based on estimates of fuel consumption derived from OFFROAD2011, project off-road construction equipment is expected to increase fuel consumption by approximately 4,250 gallons per year, which would result in a net increase of approximately 44 MTCO2e per year as shown in Table 5 below. Table 5. Project GHG Emissions From Construction Equipment Fuel Consumption GHG Emission Factors CO2 CH4 N2O 4,250 Gallons(A) 10.21 kg/gallon 0.0015 kg/gal 0.0001 kg/gal Subtotal, kilograms 43,366 6.37 0.42 GHG Global Warming Potential(B) 1 21 310 Total Metric Tons CO2 Equivalents(C) 43.4 0.1 0.1 Source: TRA Environmental Sciences, 2013 (A) Fuel consumption estimated using OFFROAD 2011. (B) Global Warming Potential from CARB 2010. (C) Value derived by converting kilograms to metric tons (1000 kilograms = 1 metric ton) and multiplying by global warming potential. To date, the Bay Area Air Quality Management District (BAAQMD), the South Coast Air Quality Management District, and the San Joaquin Air Pollution Control District have adopted quantitative significance thresholds for GHGs. On March 5, 2012 the Alameda County Superior Court issued a judgment finding that the BAAQMD had failed to comply with CEQA when it adopted the air quality and GHG emissions thresholds contained in the BAAQMD’s CEQA Guidelines (Updated May 2011). The court did not determine whether the thresholds were valid on the merits, but found that the adoption of the thresholds was a project under CEQA and therefore determined that the BAAQMD was required to do CEQA analysis on the thresholds. In light of the court’s order, lead agencies will need to determine appropriate air quality and GHG thresholds of significance based on substantial evidence in the record. Palo Alto Landfill Phase IIC Closure Project Page 43 Initial Study/Mitigated Negative Declaration The Palo Alto Climate Protection Plan was adopted in December 2007, and suggests a variety of possible actions to reduce GHG emissions in each of six general categories, including utilities, sustainable purchasing, transportation and sustainable land use, green building, zero waste, and education and motivation. The Climate Protection Plan includes a baseline inventory of the City’s municipal and community (businesses, residents and workers) emissions, citywide emissions reduction targets, and a number of goals and strategies for obtaining those targets. These goals are intended to bring the City and community of Palo Alto in line with State reduction goals of 427 million metric tons of carbon dioxide equivalent emissions in 2020. In the absence of other local GHG thresholds of significance, for this analysis, the City is evaluating the proposed project based on a project-based threshold of 1,100 MTCO2E per year. The City of Palo Alto does not recommend adoption of that threshold for any other purpose at this time, but it is used for this analysis because it was adopted by the BAAQMD as a quantitative GHG emissions threshold for project level analysis (BAAQMD 2011), and the BAAQMD derived the recommended threshold from statewide compliance with AB 32. For this reason the 1,100 MTCO2e per year threshold was considered most reasonable for use in this analysis. As shown in Table 5, the proposed project would not result in an incremental increase in GHG emissions that exceeds 1,100 MTCO2e. In addition, the proposed closure activities would not interfere with the facility’s existing landfill gas monitoring and control systems. These systems would remain in operation during closure and postclosure maintenance activities until it is demonstrated the landfill no longer poses a threat to the environment and regulatory approval for decommissioning these systems is obtained from regulatory agencies. Thus, the project does not have the potential to result in an incremental increase in GHG emissions that may have a direct or indirect significant effect on the environment. (b) The proposed closure activities would not conflict with any applicable plan, policy or regulation of an agency adopted for the purpose of reducing the emissions of greenhouse gases. The landfill is subject to the ARB’s Landfill Methane Control Measure (17 CCR §95460 – 95476), which requires municipal solid waste facilities to reduce methane emissions by collecting and controlling fugitive methane emissions (which the landfill already does). The project also would not conflict with any goals of the state or the Palo Alto Climate Protection Plan, as the City Manager has estimated the City and Community of Palo Alto have already achieved reductions beyond the levels set by state and local GHG reduction plans. Mitigation Measures: The project will not result in potentially significant greenhouse gas emissions impacts and mitigation measures are not required. H. HAZARDS AND HAZARDOUS MATERIALS Note: Some of the thresholds can also be dealt with under a topic heading of Public Health and Safety if the primary issues are related to a subject other than hazardous material use. Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Create a significant hazard to the public or the environment through the routing transport, use, or disposal of hazardous materials? 2 X Palo Alto Landfill Phase IIC Closure Project Page 44 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? 2, 5 X c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? 2, 30 X d) Construct a school on a property that is subject to hazards from hazardous materials contamination, emissions or accidental release? 2 X e) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? 31 X f) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? 2, 30 X g) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working the project area? 30 X h) Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? 32, 33 X i) Expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? 34 X j) Create a significant hazard to the public or the environment from existing hazardous materials contamination by exposing future occupants or users of the site to contamination in excess of soil and ground water cleanup goals developed for the site? 2, 5 X DISCUSSION: (a) The Palo Alto Landfill is a Class III refuse disposal site which does not handle hazardous materials. (b) Gas and leachate extraction wells will be maintained as part of the proposed project and the existing flare will be moved from near Byxbee Park to the Palo Alto Regional Water Quality Control Plant. These facilities will be off-limits to the public once the project area is converted to open space and gas and leachate releases Palo Alto Landfill Phase IIC Closure Project Page 45 Initial Study/Mitigated Negative Declaration will not pose a risk to future users. Monitoring systems will be modified and expanded to detect leachate and gas releases from the landfill. The monitoring and control systems will remain in operation during the closure and postclosure maintenance periods until it is demonstrated that the landfill no longer poses a threat to the environment and regulatory agency approval to decommission the systems is obtained. Soil and compost brought in to develop a vegetative cover will not contain hazardous materials. Waste will not be removed or transported from the landfill as part of the proposed project. (c) and (d) The project is not located within one-quarter mile of any existing or proposed schools, and the proposed project does not propose to construct any educational facilities. (e) The proposed project is not on the Hazardous Waste and Substance Sites (Cortese) List. The nearest Cortese List site is located at 0.26 mile from the proposed project and will not be affected by the proposed project. (f) and (g) The Palo Alto Airport of Santa Clara County is a municipal airport located approximately 0.3 mile from the proposed project. No private airstrips are in the area. The project does not include any structures that could interfere with air space used for the airport, and no additional construction equipment (such as a crane) that could present a hazard to airport use is required for completion of the project. The project site is within the area covered by the Santa Clara County Comprehensive Land Use Plan for the Palo Alto Airport (Windus 2008). The project is therefore subject to the land use compatibility policies contained in the Plan regarding general compatibility, noise, building height and safety. The landfill has been a compatible land use near the airport for decades; the closure of Phase IIC of the landfill does not result in a change in site activities that would result in a safety hazard for people working in the project area. (h) The proposed project is not designated as part of an evacuation route and will not interfere with the implementation of an emergency response plan. (i) The project site is not located within or near the wildland fire danger area. (j) See (a) and (b) above. The landfill is a Class III landfill, and did not accept hazardous waste. It will be closed in accordance with the requirements of Title 27 as explained in the Project Description, and leachate and landfill gas will be controlled and monitored until they no longer pose a threat to the environment. The proposed project closes the last section of the landfill which will be added as planned to the Byxbee Recreational Park. The park is considered to be a compatible end use for the landfill. Mitigation Measures: There are no potentially significant hazards or hazardous materials impacts and no mitigation measures are required. I. HYDROLOGY AND WATER QUALITY Environmental Setting The following summary of site climate, hydrogeology, topography and surface water is derived from the Final Closure and Post-closure Maintenance Plan for Phase IIC City of Palo Alto Landfill (Golder Associates, Inc. 2009). Palo Alto Landfill Phase IIC Closure Project Page 46 Initial Study/Mitigated Negative Declaration Climate Climate at the disposal site and adjacent areas is primarily a function of the geographic location of the area, its proximity to the Bay and its separation from the ocean by the Coast Range. These factors influence precipitation, temperature, evaporation, wind, and fog and clouds. An isohyetal map prepared by the Santa Clara Valley Water District shows the mean annual precipitation at the Palo Alto landfill to be about 13 inches. For a 100-year storm, the landfill site area could be subject to rainfall intensities of nearly one inch an hour, or 3.5 inches in a 24-hour period. Maximum temperature in the vicinity of the disposal area occurs in July, when the average daily maximum temperature is 81oF. Minimum temperatures are expected to occur in January, with an average daily minimum temperature of 38oF. The average annual evaporation for the region is approximately 69 inches based on data recorded at Newark, about 8 miles north-northeast of the Palo Alto Landfill, across San Francisco Bay. Winds in the Palo Alto area are primarily influenced by temperature differences between the land and water bodies, except during the winter season when this influence is overridden by storm systems. A typical daily pattern is a calm morning, with onshore winds increasing to late afternoon or evening. The early night is typically calm with a gentle offshore wind often occurring during the middle of the night. During the winter season, the wind regimen is much less consistent with southeasterly and southerly winds often prevailing during storms. Hydrogeology The landfill lies within the northern part of the Santa Clara Valley groundwater basin, which contains over 1,000 feet of unconsolidated to semi-consolidated clays, silts, sands and gravels. Water-bearing units along the San Francisco Bay margin are typically separated by impervious clay aquitards and groundwater generally occurs under confined conditions. Regional ground water flow is toward the San Francisco Bay, recharged by runoff from the coastal and inland mountains. Previous investigations at the landfill indicate that the underlying sediments contain a shallow and a deep aquifer zone. The shallow aquifer zone occurs from the ground surface to a depth of approximately 80 feet below mean sea level (msl) and is underlain by a laterally extensive clay aquitard to a depth of approximately 180 feet below msl. The deep aquifer zone occurs below this aquitard and forms an extensive drinking water aquifer in the Santa Clara Valley. Previous investigations at the landfill by various consultants have further defined the hydrogeologic conditions under and around the landfill. Two zones of sand, designated as the 20-foot sand and the 40-foot sand, have been identified within the low-permeability Bay Mud. These sand units have been interpreted by previous investigators as being laterally continuous under part or all of the landfill. The 20-foot sand is 2 to 4 feet thick, generally occurs at an elevation of about 20 feet below msl, is considered fairly continuous under the southern portion of the site, and is discontinuous or absent in the northernmost part of the site. The 40-foot sand is 2 to 10 feet thick, occurs at an elevation of about 35 to 40 feet below msl, and is generally considered continuous beneath the site. The sands are fine to medium grained and poorly graded. Thin gravel layers have been encountered in some locations. Available subsurface data indicate that the water-bearing sands may be hydraulically connected beneath parts of the site. Surface water and shallow groundwater occur in the tidal marsh environment surrounding the landfill at or near mean sea level. Therefore, Bay Mud deposits are fully saturated within a few feet of ground surface. The water- Palo Alto Landfill Phase IIC Closure Project Page 47 Initial Study/Mitigated Negative Declaration bearing characteristics of the Bay Mud deposits are poor (i.e., very low hydraulic conductivities), so they are not considered aquifers. Due to their higher transmissivity, the 20-foot and 40-foot sand units have been identified as the primary water-bearing zones beneath the site even though groundwater occurs at shallower depths within the low-permeability Bay Mud. The porosity of the sand units has been estimated to be 25 percent. Hydraulic conductivity for the sands ranges from 1.2 x 10-4 to 5.1 x 10-4 cm/sec for the 20-foot sand, and 3.0 x 10-3 to 1.3 x 10-4 cm/sec for the 40-foot sand. Site groundwater monitoring wells are constructed to monitor either the 20-foot sand unit or the 40-foot sand unit. Groundwater in the uppermost sand zone (approximately 20-foot depth) flows to the southwest with a gradient of approximately 1.0 x 10-3 foot per foot (ft/ft). Groundwater in the lower sand zone flows to the west with a gradient of approximately 1.6 x 10-3 ft/ft. Regionally, groundwater in the shallow aquifer migrates naturally toward San Francisco Bay; however, major pumping from the shallow and deep aquifer in the past altered flow patterns in those systems and locally reversed the bay-ward gradient. The aquifers are no longer extensively pumped but a landward gradient still exists beneath the landfill. The quality of the shallow groundwater underlying the landfill area is extremely poor and non-potable with salinity levels more than double that of bay water. This is the result of seepage from tidal streams and sloughs, restricted circulation, and contact with saline bay sediments. The history of the groundwater conditions in this locality indicate that this situation has always existed and was not the consequence of intrusion-related bay waters. Records of wells kept by the Santa Clara Valley Water District within the general area of the landfill indicate that groundwater use is minor and restricted to small domestic wells south of Highway 101. Total annual pumped groundwater (practically all for irrigation) is less than 4 acre-feet; the average individual well production over the year is less than 150 gallons per day. Future estimated groundwater usage in this area is no more than, and probably less than, present levels. When these small domestic wells become non-operational for any reason, most of them would be replaced in favor of Palo Alto water supplies. The Palo Alto water system makes exclusive use of high quality imported Hetch Hetchy Project water (San Francisco Water Department). Surface Water Waters in the surface streams adjacent to the landfill are shallow and stagnant for most parts of the year. The constant decaying and replacement of vegetation on the stream banks, as well as the algal growth and decomposition in the water, contribute to the green appearance and the poor chemical quality of these surface streams. Before refuse disposal operations started in the early 1930's, the landfill was crossed by a dendritic pattern of meandering sloughs and creeks. These drainages brought upland runoff and flood waters to San Francisco Bay. The main surface water bodies currently adjacent to the landfill are the former Palo Alto Yacht Harbor and marsh (extensions of San Francisco Bay), the Palo Alto Flood Basin (which includes Matadero Creek and Mayfield Slough), and a recently restored wetlands habitat sanctuary (Emily Renzel Wetland). Mayfield Slough has been rechanneled to the south and east perimeter of the site to improve the flood basin. The slough contains stagnant water during most of the year. The downstream end of the slough is closed by a tide gate that regulates inflow and outflow from the flood basin to the Bay. Matadero Creek flows east along the southern perimeter of the landfill and terminates at Mayfield Slough. The creek and flood basin system drains surface runoff from Barron and Adobe creeks, several municipal storm drains, and storm water pumped from collection facilities in Mountain View. Palo Alto Landfill Phase IIC Closure Project Page 48 Initial Study/Mitigated Negative Declaration Regulatory Setting Landfills in California are regulated by a complex framework of federal, state and local government codes and regulations. Two of the primary governing laws are the Resource Conservation and Recovery Act (RCRA) and the California Code of Regulations (Title 27). Resource Conservation and Recovery Act. National regulatory standards are defined in 40 CFR Part 258 (RCRA Subtitle D), promulgated by the U.S. Environmental Protection Agency (U.S. EPA). Implementation of Subtitle D is primarily through approved state permit programs that must be equivalent or more stringent than Subtitle D. California is an approved state, so the U.S. EPA does not independently enforce Subtitle D in California. CalRecycle and the State Water Resources Control Board (SWRCB) jointly implement Subtitle D. The program is consolidated within the California Code of Regulations Title 27 (27 CCR), Division 2. California Code of Regulations Title 27. CalRecycle and the SWRCB both work under Title 27 to protect water quality at landfill sites. Under Title 27, the SWRCB has the authority to require landfill operators to protect water quality through WDRs, which identify specific measures and controls to be used and monitored at each landfill site. The WDRs also establish a water quality protection standard, the constituents of concern, concentration limits, monitoring points, compliance period, ground and surface monitoring systems and monitoring requirements, and corrective action when necessary. Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Violate any water quality standards or waste discharge requirements? 1, 2 X b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? 1, 2 X c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation on- or off-site? 1, 2 X d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding on- or off-site? 1, 2 X e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff? 1, 2 X f) Otherwise substantially degrade water quality? 1, 2 X Palo Alto Landfill Phase IIC Closure Project Page 49 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 1, 2 X h) Place within a 100-year flood hazard area structures which would impede or redirect flood flows? 1, 2 X i) Expose people or structures to a significant risk of loss, injury or death involve flooding, including flooding as a result of the failure of a levee or dam or being located within a 100-year flood hazard area? 1, 2 X j) Inundation by seiche, tsunami, or mudflow? 35 X k) Result in stream bank instability? 1, 2 X DISCUSSION: (a) and (f) The landfill operates under WDRs issued by the RWQCB. The Phase IIC closure and postclosure maintenance and monitoring programs specified in the WDRs are intended to protect water quality. (b) The project does not require the use of groundwater. (c), (d), and (e) The project includes adding final soil cover to an existing landfill and maintaining and monitoring the landfill cover and environmental protection systems. These activities will not alter the drainage patterns on the site or in water bodies adjacent to the site. No new impervious surfaces will be installed which would affect the rate of storm water runoff and the potential for erosion or siltation. The closure plan includes measures to minimize erosion. (g) and (h) The project does not include housing or any other structures to be placed in the 100 year flood zone. (i) The project does not involve a levee or dam. (j) The project is outside of the tsunami zone, according to maps prepared by the Association of Bay Area Governments. The project is in the Palo Alto Baylands and is not subject to mudflows. (k) The project is not located on a stream and will not impact any streambanks. Mitigation Measures: The project will not result in any significant impacts to hydrology or water quality and does not require mitigation measures. Palo Alto Landfill Phase IIC Closure Project Page 50 Initial Study/Mitigated Negative Declaration J. LAND USE AND PLANNING Environmental Setting The Byxbee Recreation Area, located to the north of the site, is composed of portions of the landfill that were previously converted to parkland. The site is bounded by the Palo Alto Regional Water Quality Control Plant (PARWQCP) to the northwest, a saltwater marsh area, the Emily Renzel Marsh and KFS World Communications, Inc. (KFS) radio facilities to the west, the Palo Alto flood basin to the east and south, and a marsh area and former yacht harbor (old Yacht Harbor) to the north. Regulatory Setting Relevant land use and planning documents to the project include the Palo Alto Comprehensive Plan (City of Palo Alto 2007), the Palo Alto Zoning Ordinance (Palo Alto Municipal Code Title 18), the Palo Alto Baylands Master Plan (City of Palo Alto 2008), the Site Assessment and Design Guidelines: Palo Alto Baylands Nature Preserve (Catalyst 2005) and the Comprehensive Land Use Plan, Santa Clara County: Palo Alto Airport (Windus 2008). The relevant portions of these documents are described below. Palo Alto Comprehensive Plan (2007) The Palo Alto Comprehensive Plan land use designation for the site is Public Park. This land use designation is intended for “Open lands whose primary purpose is active recreation and whose character is essentially urban.” (City of Palo Alto 2007). The following goals and policies from the comprehensive plan are relevant to the proposed project: Goal N-1: A Citywide Open Space System that Protects and Conserves Palo Alto’s Natural Resources and Provides a Source of Beauty and Enjoyment for Palo Alto Residents. Policy N-18: Preserve and protect the Bay, marshlands, salt ponds, sloughs, creeks, and other natural water or wetland areas as open space. Goal N-4: Water Resources that are Prudently Managed to Sustain Plant and Animal Life, Support Urban Activities, and Protect Public Health and Safety. Policy N-8: Protect Palo Alto’s groundwater from the adverse impacts of urban uses. Goal N-5: Clean, Healthful Air for Palo Alto and the San Francisco Bay Area. Policy N-27: Reduce emission of particulates from wood burning stoves, construction activity, automobiles, and other sources. Policy N-29: All potential sources of odor and/or toxic air contaminants should be adequately buffered, or mechanically or otherwise mitigated to avoid odor and toxic impacts that violate relevant human health standards. Goal N-6: An Environment Free of the Damaging Effects of Biological and Chemical Hazardous Materials. Goal N-7: Reduced Volumes of Solid Waste; Solid Waste Disposed in an Environmentally Safe, Efficient, Manner. Palo Alto Landfill Phase IIC Closure Project Page 51 Initial Study/Mitigated Negative Declaration Goal N-8: An Environment That Minimizes the Adverse Impacts of Noise. Policy N-43: Protect the community and especially sensitive noise receptors, including schools, hospitals, and senior care facilities, from excessive noise. Goal N-10: Protection of Life and Property From Natural Hazards, Including Earthquake, Landslide, Flooding, and Fire. Policy N-51: Minimize exposure to geologic hazards, including slope stability, subsidence, and expansive soils, and to seismic hazards including groundshaking, fault rupture, liquefaction, and landsliding. Policy N-52: Minimize exposure to flood hazards by adequately reviewing proposed development in flood prone areas. Policy C-27: Seek opportunities to develop new parks and recreation facilities to meet the growing needs of residents and employees of Palo Alto. Policy C-30: Facilitate access to parks and community facilities by a variety of transportation modes. Palo Alto Zoning Ordinance The zoning designation for the site is PF(D)- Public Facility (Site and Design Review Combining District). The PF (public facilities) district is designed to accommodate governmental, public utility, educational, and community service or recreational facilities (Palo Alto Municipal Code Section 18.28.010). The site and design review combining district is intended to provide a process for review and approval of development in environmentally and ecologically sensitive areas, including established community areas which may be sensitive to negative aesthetic factors, excessive noise, increased traffic or other disruptions, in order to assure that use and development will be harmonious with other uses in the general vicinity, will be compatible with environmental and ecological objectives, and will be in accord with the Palo Alto Comprehensive Plan (Palo Alto Municipal Code Section 18.30(G).010). Site and design approval is required for sites in the Site and Design Review Combining District prior to issuance of any permit or other approval (Palo Alto Municipal Code Section 18.30(G).040). A site plan showing the location of all proposed buildings, structures, planted or landscaped areas, paved areas, and other improvements, and indicating the proposed uses or activities within the site must be submitted to the Planning Commission (Palo Alto Municipal Code Section 18.30(G).050). The Planning Commission reviews the project and recommends approval or denial to the City Council, which then approves or denies the project (Palo Alto Municipal Code Section 18.30(G).060-070). Zoning Code Section 18.40.130(c) states that “landscaping should retain or enhance native vegetation in hillside, baylands or other natural open spaces areas or adjacent to such areas. The existing natural vegetation and land formations should remain in a natural state unless modification is found to be necessary or appropriate for a specific use allowed through architectural or site design review.” Relevant landscaping standards for these areas are as follows: (1) In the selection of new landscaping, preference shall be given to natural, indigenous and drought resistant plants and materials. Non-indigenous landscaping should be limited to the immediate area around a structure or structures. (2) Site development plans shall, to the maximum extent feasible, provide for the retention of existing vegetation and land formations, and shall include an erosion and sediment control element setting forth reasonable mitigation measures in accord with the grading and subdivision ordinances of the city. Palo Alto Landfill Phase IIC Closure Project Page 52 Initial Study/Mitigated Negative Declaration (3) Landscaping shall, to the maximum extent feasible, integrate and accommodate existing trees and vegetation to be preserved; make use of water-conserving plants, materials and irrigation systems; and be clustered in natural appearing groups, as opposed to being placed in rows or regularly spaced. (4) Planting of invasive plant species shall not be permitted and removal of invasive species may be required as part of landscape plan requirements. Palo Alto Baylands Master Plan (2008) The following Overall Environmental Quality Policies from the Palo Alto Baylands Master Plan (City of Palo Alto 2008) are relevant to the proposed project: 1. Ensure that the landfill area ultimately becomes an environmental asset and a continuation of the natural green space. 3. Expand bicycle and pedestrian activities while reducing vehicle traffic in the Baylands as far as possible. 4. Restrict storage and parking of vehicles in the Baylands. 5. Keep marshes open to the Bay along the entire shoreline. 6. Control access to environmentally sensitive marshland and upland meadow habitat. 7. Restore the diversity of plants and animals to disturbed upland sites. 8. Ensure there is sufficient native food and cover for wildlife. 12. Continue to allow intensive, structured, and special use recreation only where it is the least destructive to wildlife habitat. In the “Natural Unit” and “Areas of Significant Change” (Harbor Area, Landfill Area, and Former ITT Property), create opportunities for people of all age groups to get near the water to observe and enjoy the unique natural environment and wildlife of the Bay and marshlands, isolated from the urban scene in a setting where natural qualities and forces are dominant. Recreational activities in these areas shall be compatible with the ecological and physical constraints and opportunities of the natural Baylands systems. 13. Follow guidelines established in the Site Assessment and Design Guidelines, Palo Alto Baylands Nature Preserve published in 2005 14. Comply with Airport Comprehensive Land Use Plan (CLUP) adopted by the Santa Clara County Airport Land Use Commission (ALUC) (Mandated by State). In addition, the Landfill Area Chapter (Chapter 2) specifies procedures for landfill closure, Byxbee Park design and development, the Mayfield Slough remnant marsh and RWQCB requirements for landfill closure. The Access and Circulation Chapter (Chapter 14) emphasizes transit, bicycle and pedestrian access to the Baylands and bicycle and pedestrian trails within the Baylands to reduce private vehicle use and provide recreational opportunities. Finally, the Flood Protection Chapter (Chapter 15) contains flood protection measures for the Baylands. Site Assessment and Design Guidelines: Palo Alto Baylands Nature Preserve (2005) This document contains general design principles for signs, vehicle control, paving, site furniture, fences and enclosures, and colors and finishes that would apply to any such features included in the proposed new recreation parkland. Palo Alto Landfill Phase IIC Closure Project Page 53 Initial Study/Mitigated Negative Declaration Comprehensive Land Use Plan, Santa Clara County: Palo Alto Airport (2008) The project site is within the area covered by the Santa Clara County Comprehensive Land Use Plan for the Palo Alto Airport (Windus 2008). The project is therefore subject to the land use compatibility policies contained in the Plan regarding general compatibility, noise, building height and safety. The site is in the 60 and 55 community noise equivalency level (CNEL) contours according to Figure 5, and in the Traffic Pattern Zone according to Figure 7 of the Plan. Measure E In 2011 the City of Palo Alto residents approved Measure E. Measure E undedicated 10 acres of Byxbee Parkland for consideration of an energy-compost facility. Eight of the 10 acres is located on the landfill. See the legal description of the property included in Measure E at the following web address: http://www.cityofpaloalto.org/civicax/filebank/documents/30232. If an Energy-Compost facility is approved by the City Council the City will perform CEQA review of the 10 acre area and may request permission from the State to build an energy-compost facility on the 8 acres of closed Phase IIC area of the landfill. Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Physically divide an established community? 1, 4, 5 X b) Conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? X c) Conflict with any applicable habitat conservation plan or natural community conservation plan? 1, 4, 5 X d) Substantially adversely change the type or intensity of existing or planned land use in the area? 1, 28 X e) Be incompatible with adjacent land uses or with the general character of the surrounding area, including density and building height? 1, 4, 5 X f) Conflict with established residential, recreational, educational, religious, or scientific uses of an area? 1, 4, 5 X g) Convert prime farmland, unique farmland, or farmland of statewide importance (farmland) to non-agricultural use? 1, 6, 7 X DISCUSSION: (a) The closure of Phase IIC of the landfill and postclosure monitoring and maintenance activities will occur on an existing landfill site that does not currently divide an established community. It has been a landfill since at least 1930 and is 0.7 mile from the nearest residential area. Palo Alto Landfill Phase IIC Closure Project Page 54 Initial Study/Mitigated Negative Declaration (b) The project is subject to several applicable plans and policies within the City of Palo Alto, and is regulated by state agencies, including CalRecycle (CIWMB), the Regional Water Quality Control Board, and the Bay Area Air Quality Management District. The project is in compliance with the applicable policies and regulations. Closure of Phase IIC of the landfill is planned so that in the future it can be developed as part of the Byxbee Recreation Area. (c) The project is not located within the study area of an existing HCP or NCCP. (d), (e), and (f) The closure of Phase IIC of the landfill is a planned activity that will allow completion of the Byxbee Recreational Park. It does not change the existing land use. (g) The project site is not designated as farmland. Mitigation Measures: The project will not significantly impact land use and no mitigation is required. K. MINERAL RESOURCES Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state? 4, 5, 36 X b) Result in the loss of availability of a locally-important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan? 4, 5, 36 X DISCUSSION: (a) and (b) There are no known mineral resources of value on the project site or in the area. The site is not delineated as a locally important mineral resource in the Palo Alto Comprehensive Plan (City of Palo Alto 2007) or the Santa Clara County General Plan (Santa Clara County 1994). The project would have no impact on the availability of mineral resources. Mitigation Measures: The project will not impact mineral resources and no mitigation measures are required. L. NOISE Environmental Setting Noise may be defined as unwanted sound. The frequency (pitch), amplitude (intensity or loudness), and duration of noise all contribute to the effect on a listener, or receptor, and whether or not the receptor perceives the noise as objectionable, disturbing, or annoying. The decibel scale (dB) is a unit of measurement that indicates the relative amplitude of a sound. Sound levels in dB are calculated on a logarithmic basis. An increase of 10 dB represents a tenfold increase in acoustic energy, Palo Alto Landfill Phase IIC Closure Project Page 55 Initial Study/Mitigated Negative Declaration while 20 dBs is 100 times more intense, 30 dBs is 1,000 more intense, etc. In general, there is a relationship between the subjective noisiness or loudness of a sound and its amplitude, or intensity, with each 10 dB increase in sound level perceived as approximately a doubling of loudness. There are several methods of characterizing sound. The most common method is the “A-weighted sound level,” or dBA. This scale gives greater weight to the frequencies of sound to which the human ear is typically most sensitive. Thus, most environmental measurements are reported in dBA, meaning decibels on the A-scale. Noise exposure over the course of an entire day can be described by the community noise equivalent level, or CNEL. For CNEL, a 5 dB “penalty” is added to evening hours (7 p.m. to 10 p.m.) and a 10 dB “penalty” is added to nighttime hours (10 p.m. to 7 a.m.) when calculating the 24-hour average noise level. For example, a 45 dBA nighttime sound level would contribute as much to the overall day-night average as a 55 dBA daytime sound level. The artificial penalties imposed during CNEL calculations are intended to account for a receptor’s increased sensitivity to sound levels during quieter nighttime periods. The primary existing noise sources at the project site are from airplane, construction equipment, and vehicle traffic. The Palo Alto Airport is located approximately 0.3 mile from the project site and US Highway 101 is located approximately 0.5 mile from the site. According to the 2022 Aircraft Noise Contours (Figure 7 in the Santa Clara County Comprehensive Land Use Plan for the Palo Alto Airport), the site is in the 55 and 60 dB CNEL contours. Sensitive receptors are facilities that house or attract people who are especially sensitive to the effects of the noise environment. Hospitals, schools, convalescent facilities, parks, and residential areas are examples of sensitive receptors. The closest sensitive receptors to the site are parks including Byxbee Recreation Area and Palo Alto Baylands Park. There are no hospitals, schools, convalescent facilities or residential areas near the site. Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? 1, 2 X b) Exposure of persons to or generation of excessive ground borne vibrations or ground borne noise levels? 1, 2 X c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? 1, 2 X d) A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? 2, 37 X e) For a project located within an airport land use plan or, where such a plan has not been adopted, would the project expose people residing or working in the project area to excessive noise levels? 1, 38 X Palo Alto Landfill Phase IIC Closure Project Page 56 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? 1 X g) Cause the average 24 hour noise level (Ldn) to increase by 5.0 decibels (dB) or more in an existing residential area, even if the Ldn would remain below 60 dB? 1, 30 X h) Cause the Ldn to increase by 3.0 dB or more in an existing residential area, thereby causing the Ldn in the area to exceed 60 dB? 1, 30 X i) Cause an increase of 3.0 dB or more in an existing residential area where the Ldn currently exceeds 60 dB? 1, 30 X j) Result in indoor noise levels for residential development to exceed an Ldn of 45 dB? 1, 30 X k) Result in instantaneous noise levels of greater than 50 dB in bedrooms or 55 dB in other rooms in areas with an exterior Ldn of 60 dB or greater? 1, 30 X l) Generate construction noise exceeding the daytime background Leq at sensitive receptors by 10 dBA or more? 1, 30 X DISCUSSION: (a) and (c) Construction activities at the site has been ongoing for decades, and will continue at existing levels under the project; no additional construction equipment activity over existing conditions is proposed to occur as a result of the Phase IIC closure. Construction noise would occur over the short-term during the construction period. According to the Palo Alto Municipal Code Section 9.10.060, noise levels from individual construction equipment are limited to 110 dBA at a distance of 25 feet from the source or anywhere off of the property plane. Project construction is not expected to exceed this noise level, and construction would be limited to the hours of 8 a.m. to 6 p.m., Monday through Friday, and 9 a.m. to 6 p.m. Saturdays, consistent with the City’s Municipal Code (Section 9.10.060). Therefore, the project would not expose persons to a generation of noise levels in excess of standards during the short-term construction period. (b) Site construction and development would involve the use of construction equipment such as graders, dump trucks and compacters, but would not use equipment such as jack hammers that cause excessive ground borne vibration or ground-borne noise levels. In addition, there is no housing, schools or other structures in the area that could be regularly subjected to groundborne vibration. (c) See response to (a), above. (d) The proposed project would not result in an increase in ambient noise levels in the project vicinity during closure construction because the same equipment is currently operating at the site and no significant amount of new or unusually loud equipment is required to complete the closure of Phase IIC. In addition, the project would comply with noise limits and construction hours required by the City’s Municipal Code (Section 9.10.060). Palo Alto Landfill Phase IIC Closure Project Page 57 Initial Study/Mitigated Negative Declaration (e) The project site is located within the Santa Clara County Comprehensive Land Use Plan for the Palo Alto Airport (Santa Clara County Airport Land Use Commission 2008). The Palo Alto Airport is located approximately 0.3 mile north of the site. The closure of Phase IIC of the landfill will not result in new exposures of people working in the area to airport noise, since people already work at the landfill. There are no residential uses associated with the project. (f) The proposed project is not within the vicinity of a private airstrip. (g), (h), (i), (j), and (k) The project is not near any residential areas. The nearest residential area is 0.7 mile away. (l) Project activities are similar to existing landfill activities and will be temporary. They will not cause a significant increase in noise levels that would affect users at nearby Byxbee Park. Mitigation Measures: The project will not result in significant noise impacts, and no mitigation measures are required. M. POPULATION AND HOUSING Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? 1 X b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? 1 X c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? 1 X d) Create a substantial imbalance between employed residents and jobs? 1 X e) Cumulatively exceed regional or local population projections? 1 X DISCUSSION: (a), (b) (c), (d) and (e) The project is the closure of Phase IIC of the landfill and postclosure monitoring and maintenance activities over the entire landfill. No aspect of the project provides services that would serve growth in the region, and the project does not involve housing in any way. Mitigation Measures: The project does not impact housing and no mitigation measures are required. Palo Alto Landfill Phase IIC Closure Project Page 58 Initial Study/Mitigated Negative Declaration N. PUBLIC SERVICES Environmental Setting The Palo Alto Fire District, headquartered at 250 Hamilton Avenue, provides fire service to the project site. The nearest station to the site is Fire Station 3, located at 799 Embarcadero Road, approximately 1.5 miles west of the site. The Palo Alto Police Department, located at 275 Forest Avenue, provides police protection to the site. The closest school to the site is Ohlone Elementary School, located approximately 0.7 mile west of the site. Visitor serving recreation areas are located around the site. Byxbee Recreation Area (which includes previously closed sections of the landfill) borders the site to the north, and Palo Alto Baylands Park borders the site to the south. The Baylands Nature Preserve, Palo Alto Duck Pond and Palo Alto Golf Course are also located to the north of the site. Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public services: a) Fire protection? 1, 2 X b) Police protection? 1, 2 X c) Schools? 1, 2 X d) Parks? 1, 2, 5 X e) Other public facilities? 1, 2 X DISCUSSION: (a), (b), (c), (d), and (e) The landfill site currently receives fire and police protection, and is planned to be converted to passive parkland in the future. Closure of Phase IIC and postclosure monitoring and maintenance activities at the landfill will not require new structures or activities that will increase the need for fire protection, police protection, and land uses (eg. Housing) that increase the demand for new parks, schools or other public facilities are not proposed. Mitigation Measures: The project will not impact public services and no mitigation is required. Palo Alto Landfill Phase IIC Closure Project Page 59 Initial Study/Mitigated Negative Declaration O. RECREATION Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? 2, 5 X b) Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? 2, 5 X DISCUSSION: (a) and (b) The proposed project would close Phase IIC of the landfill and continue monitoring and maintenance of the landfill into the postclosure period. These activities will provide environmental protections so that in the future Phase IIC can be converted as planned to 51 acres of passive parkland, to be added to the existing Byxbee Park Recreation Area. The project does not affect population numbers or park and recreation demands. The impacts of developing the park were previously addressed in the Byxbee Park Master Plan process. Mitigation Measures: The project will not result in the need for new recreation services and no mitigation is required. P. TRANSPORTATION AND TRAFFIC Environmental Setting Regional access to the site is provided by U.S. Highway 101, a major interstate that runs north-south through the project area. Local access is provided by Embarcadero Road, travelling east from Highway 101. Congestion management measures are under construction at 101 and Embarcadero Road. There are several parking lots in the Palo Alto Baylands; the closest one to the project site is the Byxbee Park Hills parking lot, which has a capacity for 19 vehicles including one ADA accessible space, as well as bicycle parking (City of Palo Alto 2008). The closest transit service to the project site is a shuttle that runs from the California Street Caltrain Station to the Harbor development office park, located approximately 1,000 feet northwest of the site. The shuttle runs on weekdays during commute hours (City of Palo Alto 2008). The primary pedestrian and bicycle trails in the project area include the San Francisco Bay Trail, which runs north-south approximately 0.3 mile west of the site at its closest point, and the Bay to Ridge Trail, which runs east-west approximately 0.2 mile north of the site at its closest point. A third, unnamed pedestrian and bicycle trail encircles the Baylands to the east of the site and extends from the Palo Alto Golf Course to the Palo Alto Baylands Park (City of Palo Alto 2008). Palo Alto Landfill Phase IIC Closure Project Page 60 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exceed the capacity of the existing circulation system, based on an applicable measure of effectiveness (as designated in a general plan policy, ordinance, etc.), taking into account all relevant components of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? 1, 2 X b) Conflict with an applicable congestion management program, including but not limited to level of service standards and travel demand measures, or other standards established by the county congestion management agency for designated roads or highways? 1, 2 X c) Result in change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? 1, 30 X d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? 1 X e) Result in inadequate emergency access? 1 X f) Result in inadequate parking capacity that impacts traffic circulation and air quality? 1 X g) Conflict with adopted policies, plans, or programs supporting alternative transportation (e.g., pedestrian, transit & bicycle facilities)? 1 X h) Cause a local (City of Palo Alto) intersection to deteriorate below Level of Service (LOS) D and cause an increase in the average stopped delay for the critical movements by four seconds or more and the critical volume/capacity ratio (V/C) value to increase by 0.01 or more? 1, 2 X i) Cause a local intersection already operating at LOS E or F to deteriorate in the average stopped delay for the critical movements by four seconds or more? 1, 2 X Palo Alto Landfill Phase IIC Closure Project Page 61 Initial Study/Mitigated Negative Declaration Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact j) Cause a regional intersection to deteriorate from an LOS E or better to LOS F or cause critical movement delay at such an intersection already operating at LOS F to increase by four seconds or more and the critical V/C value to increase by 0.01 or more? 1, 2 X k) Cause a freeway segment to operate at LOS F or contribute traffic in excess of 1% of segment capacity to a freeway segment already operating at LOS F? 1, 2 X l) Cause any change in traffic that would increase the Traffic Infusion on Residential Environment (TIRE) index by 0.1 or more? 1, 30 X m) Cause queuing impacts based on a comparative analysis between the design queue length and the available queue storage capacity? Queuing impacts include, but are not limited to, spillback queues at project access locations; queues at turn lanes at intersections that block through traffic; queues at lane drops; queues at one intersection that extend back to impact other intersections, and spillback queues on ramps. 1, 30 X n) Impede the development or function of planned pedestrian or bicycle facilities? 1 X o) Impede the operation of a transit system as a result of congestion? 1 X p) Create an operational safety hazard? 1, 2 X DISCUSSION: (a), (b), (h), (i), (j), and (k) The Palo Alto landfill has been in operation, and a source of traffic, for over 90 years. Although waste disposal operations have stopped, the landfill still receives approximately 100 loads of soil per day (1,200-1,500 cy) which is stockpiled at the site or used for repair in areas where the landfill has subsided. The Phase IIC closure project and the postclosure maintenance of the landfill will require continued soil import. It is estimated that 410,000 cubic yards of material will be imported over the next 12-18 months at the current rate. Thus the project will not result in increased traffic levels that will impact the circulation system, conflict with congestion management projects, or impact operating levels at any intersections or on Highway 101. (c)The Palo Alto Airport is located approximately 0.3 mile north of the site. However, the proposed project does not include any structures or activities that will affect air traffic patterns or safety. (d) The project does not include road construction. (e) The project does not affect existing emergency access. Palo Alto Landfill Phase IIC Closure Project Page 62 Initial Study/Mitigated Negative Declaration (f) The project does not require additional parking capacity. (g), (n), and (o) The project does not affect alternative transportation facilities. (l), (m), and (p) The project does not result in an increase in traffic over existing conditions that will impact the TIRE index (it is also 0.7 mile from the nearest residential area), change queuing or create an operational safety hazard. Mitigation: The project will not result in significant impacts to transportation and traffic and mitigation measures are not required. Q. UTILITIES AND SERVICE SYSTEMS Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Exceed wastewater treatment requirements of the applicable Regional Water Quality Control Board? 1, 2 X b) Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 1, 2 X c) Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 2 X d) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? 2 X e) Result in a determination by the wastewater treatment provider which serves or may serve the project that it has inadequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments? 2 X f) Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? 2 X g) Comply with federal, state, and local statutes and regulations related to solid waste? 2 X h) Result in a substantial physical deterioration of a public facility due to increased use as a result of the project? 1 X Palo Alto Landfill Phase IIC Closure Project Page 63 Initial Study/Mitigated Negative Declaration DISCUSSION: (a) and (b) The project is the closure of Phase IIC of the Palo Alto Landfill and it does not involve new wastewater generating uses. (c) The closure of Phase IIC of the landfill will not add new impervious surface area and will not increase surface water runoff in the area. There are existing stormwater controls at the landfill, and new stormwater controls will be constructed as part of the landfill closure. The maintenance of stormwater facilities will continue under the closure plan. The proposed ET cover material is designed to absorb stormwater. (d), (e), and (f) The Palo Alto Landfill Phase IIC closure project does not require a significant new water supply or result in land uses which require wastewater treatment or landfill capacity. (g) The closure and postclosure activities that are proposed will be completed in compliance with state and federal regulations, as explained in the Project Description. Mitigation Measures: The project will not result in significant impacts to utilities and service systems and no mitigation measures are required. R. MANDATORY FINDINGS OF SIGNIFICANCE Issues and Supporting Information Resources Would the project: Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? 1, 23, 24, 25, 26 X b) Does the project have impacts that are individually limited, but cumulatively considerable? (“Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects)? 1, 2, 39 X c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? 1, 2, 39 X Palo Alto Landfill Phase IIC Closure Project Page 64 Initial Study/Mitigated Negative Declaration DISCUSSION: (a) As noted under Biological Resources, there is a very small chance that closure activities could impact species that are protected by law. Mitigation measures are recommended to avoid significant impacts. (b), and (c) The landfill closure and postclosure monitoring activities are similar to activities that are ongoing at the landfill, and are intended to provide the necessary environmental protections for air and water quality. The project does not require an increase in equipment amount or new equipment that is particularly tall or loud in order to be completed. The closure activities are short-term and will be completed within two years; the postclosure activities are long term and are essentially the same as existing postclosure activities on other portions of the landfill that were previously closed. Palo Alto Landfill Phase IIC Closure Project Page 65 Initial Study/Mitigated Negative Declaration SOURCE REFERENCES (1) Preparer’s knowledge and analysis (2) Final Closure and Postclosure Maintenance Plan for Phase IIC City of Palo Alto Landfill Palo Alto, CA March 2009 (August 2009 update). Prepared for the City of Palo Alto; Prepared by Golder Associates Roseville, CA. Reference #083-97260 Personal communications with Rich Haughey, Golder Associates, 2013. (3) State Highways Map http://www.dot.ca.gov/hq/LandArch/scenic_highways/ (accessed July 29, 2013) (4) Palo Alto Comprehensive Plan 2007 http://www.cityofpaloalto.org/gov/topics/projects/landuse/compplan.asp (accessed Jan? - July 2013) (5) Palo Alto Baylands Master Plan. 2008. 4th Edition. Adopted by the Palo Alto City Council October, 2008. (6) 2010 Santa Clara County Important Farmlands map; Farmland Mapping and Monitoring Program, California Department of Conservation, Division of Land Resource Protection 2011. (7) Santa Clara County Williamson Act FY 2012/2013 map; California Department of Conservation, Division of Land Resource Protection 2012. (8) Public Resources Code section 12220(g). (9) Public Resources Code section 4526. (10) Bay Area Air Quality Management District (BAAQMD) 1999. BAAQMD CEQA Guidelines: Assessing the Air Quality Impacts of Projects and Plans. San Francisco, CA. December, 1999. (11) _______2010. “2010 Clean Air Plan”. 2010 Clean Air Plan. BAAQMD, Planning, Rules and Research Division, Plans. January 6, 2012. Web. July 2, 2013. <http://www.baaqmd.gov/Divisions/Planning-and-Research/Plans/Clean-Air-Plans.aspx> (12) _______2010a. Source Inventory of Bay Area Greenhouse Gas Emissions. San Francisco, CA. February 2010. <http://www.baaqmd.gov/~/media/Files/Planning%20and%20Research/Emission%20Inventory/regionalinvento ry2007_2_10.ashx> (13) _______ 2011. California Environmental Quality Act Air Quality Guidelines. San Francisco, Ca. June 2010, updated May 2011. (14) _______2012. Final Major Facility Review Permit. Issued to City of Palo Alto Landfill, Facility #A2721. June 4, 2012. <http://www.baaqmd.gov/~/media/Files/Engineering/Title%20V%20Permits/A2721/A2721_2012-6_Renewal- Final-Permit_02.ashx?la=en> (15) _______2013. “Air Quality Standards and Attainment Status.” Air Quality Standards and Attainment Status. BAAQMD, Planning, Rules, and Research Division, Air Quality Standards. n.d. Web. July 2, 2013. <http://hank.baaqmd.gov/pln/air_quality/ambient_air_quality.htm> (16) California Air Resources Board (ARB) 2007. Staff Report California 1990 Greenhouse Gas Emissions Level and 2020 Emissions Limit. Sacramento, CA. November 16, 2007. http://www.arb.ca.gov/cc/inventory/pubs/reports/staff_report_1990_level.pdf Palo Alto Landfill Phase IIC Closure Project Page 66 Initial Study/Mitigated Negative Declaration (17) _______2009. Climate Change Scoping Plan – A Framework for Change. Endorsed by ARB December 2008.Sacramento, CA. May 11, 2009. <http://www.arb.ca.gov/cc/scopingplan/document/scopingplandocument.htm> (18) _______2011. Final Supplement to the AB 32 Scoping Plan Functional Equivalent Document. Released August 19, 2011. Sacramento, CA. Approved August 24, 2011. http://www.arb.ca.gov/cc/scopingplan/fed.htm; and _______2010. “Local Government Operations Protocol for the Quantification and Reporting of Greenhouse Gas Emissions.” Sacramento, CA May 2010. http://www.arb.ca.gov/cc/protocols/localgov/pubs/1go_protocol_v1_1_2010-05-03.pdf (19) City of Palo Alto 2007. “Comprehensive Plan and Amendment.” City of Palo Alto, Government, Hot Topics, City Projects, Land Use and Development, Comprehensive Plan. October 9, 2007. Web. July 3, 2013. <http://www.cityofpaloalto.org/gov/topics/projects/landuse/compplan.asp> (20) _______2007a. Climate Protection Plan. Palo Alto, CA. December 3, 2007. <http://www.cityofpaloalto.org/civicax/filebank/documents/9986> (21) _______2013. Summary of Sustainable Activities. City Council Information Report from the Palo Alto City Manager. Palo Alto, Ca. April 15, 2013. <http://www.cityofpaloalto.org/civicax/filebank/documents/33915> (22) United States Environmental Protection Agency (U.S. EPA) 2012. "Currently Designated Nonattainment Areas for All Criteria Pollutants." The Green Book Nonattainment Areas for Criteria Pollutants, Criteria Pollutant Reports. U.S. EPA. December 14, 2012. Web. July 2, 2013. <http://www.epa.gov/oaqps001/greenbk/ancl.html#CALIFORNIA > (23) CNDDB (24) ESA. August 2008. Draft Wildlife Management – Byxbee Park and Future Landfill Closure Area Wildlife Habitat Assessment. Preliminary Subject to Revision. Prepared for the City of Palo Alto. ESA 205466 Oakland, CA (25) Oregon Department of Agriculture, Plant Programs. Point Reyes bird’s beak (Cordylanthus maritimus ssp. palustris). http://www.oregon.gov/ODA/PLANT/CONSERVATION/pages/profile_comapa.aspx. Accessed July 2, 2013. (26) Orlando, J.L. et, al. South San Francisco Bay Tidal Marsh Vegetation and Elevation Surveys – Corkscrew Marsh, Bird Island, and Palo Alto Baylands, California. United States Geological Survey. 1983. (27) Municipal Code Section 8.10, City of Palo Alto’s Tree Preservation Ordinance. (28) http://www.fws.gov/sacramento/es/Habitat-Conservation-Plans/es_hcp.htm (Accessed July 6, 2013) (29) ABAG Alquist Priolo map: http://gis.abag.ca.gov/website/FaultZones/index.html (Accessed July 2013) (30) Google Earth, 2013. 37o26’53.05”N 122o06’26.28”W (Accessed July 2013) (31) Department of Toxic Substances Control, EnviroStor ID 71003672 (32) Muti-Jurisdictional Local Hazard Mitigation Plan for the San Francisco Bay Area, Association of Bay Area Governments, 2010 (33) City of Palo Alto Emergency Operations Plan, June 2007 (34) Wildland Fire Assessment System, United States Forest Service (35) ABAG Tsunami Map: http://gis.abag.ca.gov/website/Tsunami/index.html (Accessed July 2013) (36) Santa Clara County General Plan 1995-2010. December 1994. (37) Palo Alto Municipal Code Section 9.10.060 Palo Alto Landfill Phase IIC Closure Project Page 67 Initial Study/Mitigated Negative Declaration (38) Santa Clara County Airport Land Use Commission. November 19, 2008. Comprehensive Land Use Plan Santa Clara County Palo Alto Airport. Prepared by Walter Windus, PE, Saratoga, CA. http://www.sccgov.org/sites/planning/PlansPrograms/ALUC/Pages/ALUC.aspx (July 2013). (39) Other sections of this Initial Study (40)_______2010. “Local Government Operations Protocol for the Quantification and Reporting of Greenhouse Gas Emissions.”Sacramento, CA. May 2010. < http://www.arb.ca.gov/cc/protocols/localgov/pubs/lgo_protocol_v1_1_2010-05-03.pdf> City of Palo Alto (ID # 4324) City Council Staff Report Report Type: Action Items Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Infrastructure Survey Findings, Recommendations and Next Steps Title: Review Infrastructure Survey Findings and Recommendations and Provide Direction to Staff on Next Steps From: City Manager Lead Department: City Manager Recommendation Staff recommends that the City Council consider the findings and recommendations of our consultant from the November 2013 infrastructure survey and provide direction to staff on next steps including, but not limited to: 1. Does the City Council want to proceed with ballot measure preparation and community outreach on a potential increase to the City’s Transient Occupancy Tax (TOT) for the November 2014 ballot, with a final decision to be made to place a measure on the ballot at a later date? If so, should it be at a two or a three percent increase to the tax? 2. Does the City Council want to proceed with a follow up survey and further study on a sales tax increase that will yield recommendations on whether to place a measure on the November 2014 ballot? 3. Does the City Council want to proceed with a follow up survey and further study on a general obligation bond to fund transportation related projects that will yield recommendations on whether to place a measure on the November 2014 ballot? 4. Are there any additional information needs, or areas of further study or other next steps that the Council would like to direct staff to pursue? Background On October 28, 2013, the City Council accepted a report from the Infrastructure Committee providing an update on their work to evaluate infrastructure projects and their financing. Attachments A and B provide the staff report and minutes from the October 28 meeting. The Committee focused its discussions in several policy areas and recommended proceeding with further opinion research in five areas. A two or a three percent increase in the transient occupancy tax rate. A one-eighth or a one-quarter percent increase in the sales tax rate. City of Palo Alto Page 2 A $66 million general obligation bond for transportation projects. A $71 million general obligation bond for public safety improvements. The establishment of a community facilities district (CFD) to fund parking improvements. From November 10 - 14, 2013, the City’s public opinion polling firm, Fairbank, Maslin, Maullin, Metz & Associates (FM3) completed a survey of 600 Palo Alto voters likely to cast ballots in November 2014. The margin of error for the full sample is +/- 4.0%; margins of error for the subgroups that were presented with each ballot measure concept were larger. The objective of the survey was to assess voter support for a variety of potential ballot measure concepts for further exploration as potential mechanisms to fund infrastructure improvements. As additional context for the survey findings and recommendations, the success of local revenue measures in California for the November 2013 election passage rates for general and special elections is available at http://californiacityfinance.com/Votes1311final.pdf and included as Attachment C. Analysis This memo provides a summary of FM3’s key findings on the feasibility of each of the ballot measure concepts tested in the current survey and recommendations for additional opinion research. This report mostly conveys the recommendations of our survey consultant to the City Council, with minimal staff interpretation at this point. The exceptions relate to staff provided suggestions related to the public safety building. A full report of the survey findings and conclusions is included as Attachment D. Attachment E provides the survey questionnaire and the topline results. In addition, an overview is provided of each of the financing mechanisms and how they could be structured for the November 2014 ballot. For discussion purposes, example funding scenarios are provided that look at overall project costs, expected revenue from each of the funding options and how currently available and other potential funding sources could be applied to fund infrastructure needs. The memo also transmits the recommendation of TBWB, the City’s communications and outreach consultant, for developing ballot language and materials and for implementing an informational outreach program to inform and engage the Palo Alto community on the City’s infrastructure needs. A draft timeline on next steps is also provided. Infrastructure Survey – FM3’s Key Findings and Recommendations Initially, all respondents were read brief summaries of each measure, roughly replicating the information that might be provided in ballot language. Respondents were then presented with a block of follow-up questions about each measure, testing pro and con arguments and asking about potential structural variations in each funding mechanism. Each funding mechanism was presented as the first of the ballot measure concepts (with its follow-up block of questions also presented first in the sequence) for one-fifth of the sample, to facilitate analysis of voters’ reactions to each ballot measure concept untainted by discussions of the alternative concepts. The measures are discussed below in rank order, from the most feasible to the least: The transient occupancy tax (TOT) increase was clearly the most feasible of the five measures tested. It initially received the support of 79% of likely voters when presented as the first option in the survey, and received backing from at least 65% of voters throughout. Even when the full sample of voters is considered, including those who were presented with the TOT increase after hearing about other alternative measures, support remains at 62% or higher throughout the City of Palo Alto Page 3 survey. The data suggests that limiting the increase to two percent could potentially enhance support (it rose as high as 77% among the full sample of voters, under the assumption that all those supportive at three percent would remain so at two percent). If the Council chose to pursue a special tax (requiring two-thirds support), a two percent increase would likely be prudent; as a general tax (requiring simple majority support) a three percent increase would be feasible. A sales tax increase also shows solid viability – provided that it is structured as a general tax requiring simple majority support. At the outset, among the sample that was presented with sales tax first in the rotation the measure receives 57% support – and retains slight majority support of 51% even after an opposition message. Even when the full sample is taken into account, regardless of the order in which the measures were presented, the sales tax measure receives majority support in every vote question except the final vote after the opposition message – and at that point support falls to 46%. The data does suggest that reducing the rate from one-quarter cent to one-eighth cent might enhance support and provide some additional cushion over the majority threshold. Further research could explore the potential details of a sales tax measure in more depth. The prospects for a general obligation bond for transportation related projects also look strong. The concept initially receives support from 73% of voters when presented as the first ballot measure option, and it receives 67% support after positive messaging even after voters have been exposed to the other potential ballot measure concepts. However, a number of findings suggest that support for a transportation bond is highly fluid, and merits further investigation. A negative message reduces support to 61% even among the sample that presented the transportation bond first in the rotation of questions. Moreover, when the results of the full sample are considered, support for a transportation bond varies from as high as 65% initially to as low as 46% after the negative message. The wide variation in support for the measure suggests that it merits further exploration and research if it is to be pursued. The general obligation bond for public safety does not appear viable. Even when presented as the first in the series of potential ballot measures, it never receives two-thirds support – starting at 62% (a full eleven points lower than the transportation bond) and rising to only 65% after the positive messaging (still below the level of support for the transportation bond). Moreover, negative messaging has a notable impact – dropping support to 55% even among those voters who were presented with the measure as the initial option (six points lower than the transportation bond). Support reaches the two-thirds level when the amount of the bond is dropped to $51 million (69%) under the assumption that all of those supportive of the higher amount would also back the lower amount – but support remains extremely soft, with only one voter in five (19%) “definitely” in favor. Given these results, and those of prior polls that showed similar challenges in obtaining two- thirds support for a public safety bond, it is reasonable to conclude that such a measure is unlikely to win approval absent a restructuring that would significantly reduce its costs. Even if City of Palo Alto Page 4 the measure obtained ultimate support from all of the undecided voters in a best-case initial scenario, it would barely clear the required vote threshold. A community facilities district to fund parking improvements is clearly not feasible. The peak support obtained for the measure in the survey (55%, after voters who heard the measure first in the rotation were presented with only arguments in favor of the measure) is well short of the two-thirds that would be required for approval. And while 64 percent of voters say they would back a CFD that included funding for public transit, shuttles, carpooling incentives, biking, and car sharing, funding such services in addition to parking would cost more than the 24 dollars per household tested in the survey – and at that cost level, only 42 percent of voters indicated a willingness to pay. Even at a substantially lower cost level of nine dollars per household, only 55% of voters indicated support – still far short of the required two-thirds supermajority. When paired with the low level of support for parking improvements observed in the last survey, this new data offers little encouragement for pursuing the formation of a CFD. As the next round of research is considered, FM3 recommends a survey to be conducted shortly after the New Year focusing a more detailed study on the sales tax and the transportation bond. In addition, FM3 recommends: No additional research on the transient occupancy tax due to the broad support it receives, as well as the strong performance of a past TOT increase on the Palo Alto ballot. Such a measure is clearly viable, and does not require additional polling. Setting aside the CFD to fund parking as a revenue-raising option. Both in this survey, as well as the prior survey conducted this spring, parking improvements fail to receive a level of support approaching a level close to the two-thirds threshold. Setting aside the public safety bond for the time being, or until a specific alternate financing plan is defined; the current poll – as well as past survey research – suggests that a general obligation bond to fund the full costs of a public safety building replacement is unlikely to reach two-thirds support. Of course, some funding from a TOT or sales tax increase, levied as a general tax, could support public safety building improvements. Finance Mechanisms and Funding Scenarios The following provides an overview of a TOT, Sales Tax and General Obligation Bond for Transportation related projects and how they could be structured on a November 2014 ballot. For discussion purposes, example funding scenarios are also provided in Attachment F that examine overall project costs, expected revenue from each of the options, and how currently available funding sources and other potential funding sources could be applied to fund infrastructure needs. Each of the three scenarios utilizes one infrastructure revenue measure to fund certain projects, with funding for other high priority projects provided by existing or projected revenue sources. All three of the scenarios would use an identical approach for the remaining projects (Surface Catch-up, Buildings Catch-up, Animal Services Center, Playing Fields, History Museum, and Cubberley Deferred Maintenance); fund gradually through CIP planning process utilizing CIP funds, ongoing surpluses, and development impact fees or defer planning for the project. City of Palo Alto Page 5 In addition, TBWB has provided as Attachment G, recommendations for next steps for each of the funding options for developing ballot language, materials and implementing an informational outreach program to inform and engage the Palo Alto community and the associated timeline. An update on the public safety building is also provided. Transient Occupancy Tax A Transient Occupancy Tax (TOT), commonly known as the "hotel tax," is charged by the City to guests at hotels located in Palo Alto. The tax is computed by multiplying the rent charged by the hotel operator by the tax rate percentage. Hotel tax revenue accounts for 11.5 percent of the City's total general fund revenue. Palo Alto’s transient occupancy tax rate was raised from 10% to 12% percent by the voters in the 2007 November General Election. Eighty-one percent of the electorate voted for the increase. Hotel tax rates vary from city to city. Across California, tax rates range from a low of 9.5% to a high of 15%. Table 1 provides a list of the TOT rates for surrounding communities in comparison to Palo Alto. Table 1. TOT Surrounding Communities Cities TOT Rates Anaheim 15.0% San Francisco 14.0% San Jose 10.0% Oakland 14.0% East Palo Alto 12.0% Menlo Park 12.0% Palo Alto 12.0% Redwood City 12.0% Sunnyvale 10.5% Santa Barbara 12.0% Mountain View 10.0% Santa Clara 9.5% The City tested ballot measure language on support for a TOT increase to provide funding for general City services such as police patrols, 911 emergency response, firefighting, paramedics; streets and sidewalk improvements, parks and recreation, and libraries and community centers. This type of tax can be structured either as a general tax requiring a simple majority vote or a special tax (for a special purpose) requiring 2/3 approval. The City may express its intent to use a general tax to fund a specific list of projects, though it is not required by law to do so. To accomplish this, the City could put a general tax before the voters together with a Council-approved expenditure plan – which could either be approved legislatively or referred to the ballot for an advisory public vote accompanying the tax measure. It is a common practice for cities to adopt an expenditure plan associated with general tax measures when outlays are known. City of Palo Alto Page 6 Staff previously reported that an increase in the TOT rate from 12 to 14 percent on base revenue would yield an additional $1.8 million annually. A three percent rate increase to 15% would raise another $0.9 million to total $2.7 million. New hotels coming on line in the next few years are anticipated to yield $2.4 million at the 12 percent rate. The effect of a two percent increase yields another $0.4 million while a three percent hike would result in $0.6 million. Thus, the combination of a two percent rate increase and new hotel revenues would provide $4.6 million in additional revenue while a three percent increase would yield $5.7 million. Table 2 below illustrates these results. To issue Certificates of Participation (COPs) to debt finance projects, the City must identify existing, increased, or new revenue streams. Based on several assumptions, staff estimates that for each $1.0 million in resources, $14.0 million in project funds can be generated. Hence, a 2 percent increase in the TOT combined with new hotel revenues results in $4.6 million in new revenue that, in turn, translates into $64.4 million in project funds; a 3 percent increase results in $5.7 million that generates $79.8 million in project funds. These figures for the project funds potentially available through COPs combine the revenue already expected from new hotels (under the existing TOT rate of 12%) with new revenue that could be realized through a TOT increase. Please note that the example funding scenarios in Attachment F present the new hotel revenue and TOT increase revenue as separate revenue sources. Table 2. TOT Increases 2% TOT Increase 3% TOT Increase Increase 2% 14% Increase 3% 15% Current base $1.8M Current Base $2.7M New Hotels $2.8M New Hotels $3.0M $4.6M ($64.4M in project funds - COPs) $5.7M ($79.8M in project funds - COPs) For discussion purposes, an example funding scenario is provided in Attachment F that looks at overall project costs, expected revenue from a 2% or 3% TOT increase and how currently available funding sources and other potential funding sources could be applied to fund infrastructure needs. Sales Tax Palo Alto’s current sales tax rate is 8.75%. Sales tax accounts for 15% of the City’s general fund revenue ($23.8M). The base state sales tax is 7.5% and is applied state-wide. One percent of the 8.75% goes to local taxing agencies and is commonly known as the Bradley Burns portion. State law allows local taxing agencies (including cities, transportation agencies and counties) to increase local sales tax in 1/8 percent increments up to a maximum cap of 2%. Once the 2% cap is reached, no additional increases are allowed. Four county-wide initiatives have increased sales tax by 1.25% bringing us to the current rate of 8.75%. There is .75% increase available in Palo Alto. If Palo Alto does not use this increment it remains available for other county-wide taxing agencies. Table 3 provides a list of the sales tax for communities in comparison to Palo Alto. City of Palo Alto Page 7 Table 3. Sales Tax Other Communities Cities Tax Rate East Palo Alto 9.0% Menlo Park 9.0% Oakland 9.0% Redwood City 9.0% Campbell 9.0% San Francisco 8.75% San Jose 8.75% Palo Alto 8.75% Mountain View 8.75% Sunnyvale 8.75% Santa Clara 8.75% Santa Barbara 8.0% Anaheim 8.0% The City tested ballot measure language on support for a sales tax increase to provide funding for general City services such as neighborhood police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers. Given the level of support (57%), this type of tax would be structured as a general tax requiring a simple majority vote. As discussed above the City can, but is not required to, adopt an expenditure plan associated with general tax measures when outlays are known. As illustrated in Table 4 below an increase to 8.875% or one-eight cent would yield $2.6 million in additional revenue, which could be leveraged to generate $36.4 million using COPs. An increase to 9.0% or one-quarter cent would yield $5.2 million in additional revenue, which could be leveraged to generate $72.8 million using COPs. Table 4. Sales Tax Increases One-Eight Cent Sales Tax Increase One-Quarter Cent Sales Tax Increase Current Rate 8.75% Current Rate 8.75% New Rate 8.875% New Rate 9.0% $2.6M ($36.4M in project funds - COPs) $5.2M ($72.8M in project funds - COPs) City of Palo Alto Page 8 An example funding scenario is provided in Attachment F that looks at overall project costs, expected revenue from a one-eighth and one-quarter cent sales tax increase and how currently available funding sources and other potential funding sources could be applied to fund infrastructure needs. General Obligation Bond for Transportation The City tested a $66 million general obligation (GO) bond to fund transportation related projects and priorities for the City which would require 2/3 majority approval by voters. The projects included in the $66 million GO bond tested could fund: Bike/Pedestrian Plan (remaining amount), Bike Bridge (remaining amount), Charleston/Arastradero, California Avenue Parking Garage, Downtown Parking Garages, and additional sidewalk spending. A $66.4 million transportation bond is estimated to impact the property taxes for the median assessed value single family home by $116 per year. An example funding scenario is provided in Attachment F that looks at overall project costs, expected revenue from a GO Bond and how currently available funding sources and other potential funding sources could be applied to fund infrastructure needs. Public Safety Building Providing a modern, seismically safe public safety building for Palo Alto was a key recommendation of the former Infrastructure Blue Ribbon Commission and continues to be a high priority for the City. The November 2013 infrastructure survey demonstrated that a public safety general obligation bond measure that would fund a new public safety building is clearly not viable. However, a public safety building could be funded using existing funding sources and/or by leveraging future revenues from a transient occupancy tax or sales tax measure using Certificates of Participation. Over the past year, the Jay Paul Company proposal for a Planned Community (PC) zone change at 395 Page Mill Road and 3045 Park Boulevard has been the subject of extensive staff review and multiple public hearings. Jay Paul Company has proposed a PC zone change at 395 Page Mill Road and 3045 Park Boulevard that, if approved, would allow construction of office buildings at 395 Page Mill Road, and a three-story approximately 44,500 square foot public safety building (as the primary proposed public benefit). The City’s share of the cost for the public safety building under the proposal is estimated to be $9 million. The total cost of a public safety building, including the land is $57 million. Despite the potential benefit of an almost fully funded Public Safety Building, the City has always made in clear that the zoning decision regarding Jay Paul needed to be made independently of the potential for public safety building funding. There have been inherent land use concerns and impacts related to the proposal from the start. Traffic is one of the most notable (but not the only concern). Past reports to the Infrastructure Committee and to Council have included a schedule for consideration of the Jay Paul Company proposal that would allow Council to consider the project and its traffic and environmental impacts, and to make a final decision on the project in 2014. The Project traffic study is scheduled for consideration by Council in January 2014. It is possible that the results of the Traffic Study could lead the Council to move to deny the project. In any case, the current discussion around PC’s and other land use related concerns (see Future of the City discussions launched by Council December 2, 2013) could lead to a time out or “moratorium” on PC’s to an extent that the Jay Paul project clearly would not factor into any City decision making about the Public Safety Building and its funding. City of Palo Alto Page 9 Council may wish to direct staff to begin planning for the design and construction of a new public safety building to be fully funded by the City. If directed, staff recommends returning to the Infrastructure Committee with a draft plan, schedule and resources needed to undertake that planning and analysis. Timeline In alignment with FM3’s survey findings and recommendations, TBWB has developed a plan and schedule to complete additional opinion research, develop and implement a communication plan, and to prepare for a potential ballot measure(s) for the November 2014 election. If Council directs staff to proceed with work on a transient occupancy tax increase, no additional research is needed at this time and staff can commence with an informational outreach program. If Council directs staff to continue evaluating the sales tax and transportation bond measure, additional public opinion research is recommended to commence in January 2014. The January 2014 research would help provide clearer indications of the level of support for each measure in the face of more specific messages, and will also explore support for these potential measures in the context of another likely to appear on the November 2014 ballot – a Utility User Tax modernization measure. The outcome of the January survey would then yield precise recommendations on whether to place a measure on the November 2014 ballot, and if so, which one or ones. A final tracking survey is also recommended in May 2014 with a final decision on whether to place a measure on the ballot in June 2014. Attachment G provides TBWB’s detailed plan. Table 5 below summarizes the key milestones looking forward. Table 5. 2014 Schedule and Key Milestones January 2014 Prepare draft ballot measure language Develop stakeholder outreach target list Update PaloAltoForward.org microsite Develop briefing packets, talking points and FAQs Conduct second Phase II telephone survey Present second Phase II survey results and communication plan to Infrastructure Committee February 2014 Present second Phase II survey results to Council & direction to staff Refine microsite, refine ballot language and outreach materials based on survey findings & schedule outreach meetings March – April 2014 Conduct outreach meetings, collect feedback, track progress May 2014 Mail first informational brochure with survey response Complete stakeholder outreach and compile feedback Conduct final tracking survey June 2014 Present final tracking survey results to Council & final policy direction whether to place measure(s) on November 2014 ballot Mail second informational brochure (as applicable) City of Palo Alto Page 10 First reading of ordinance/resolution calling for election Final adoption of ordinance/resolution calling for election August 2014 City Clerk Files Ordinance/Resolution Mail third informational mailing (optional) Attachments: Attachment A. 10-28-2013 Staff Report (PDF) Attachment B. 10-28-13 Meeting Minutes (PDF) Attachment C. November 2013 Election Results (PDF) Attachment D. 11-2013 Infrastructure Survey Findings and Recommendations (PDF) Attachment E. Survey Questionnaire and Topline Results (PDF) Attachment F. Example Funding Scenarios (PDF) Attachment G. TBWB Communication Plan and Schedule (PDF) City of Palo Alto (ID # 4207) City Council Staff Report Report Type: Action Items Meeting Date: 10/28/2013 City of Palo Alto Page 1 Summary Title: Update on Infrastructure Committee Work Title: Update on the Infrastructure Committee’s Work to Evaluate Finance Measures to Fund Infrastructure Projects and Financing Measures From: City Manager Lead Department: City Manager Recommendation Accept the staff report providing an update on the Infrastructure Committee’s work to evaluate infrastructure projects and their financing. Executive Summary The Infrastructure Committee has held eight meetings since formed in February 2013. A public opinion survey was conducted in the spring of 2013 to measure public attitudes towards 14 potential infrastructure projects. This staff report provides a status of infrastructure project costs, currently available funding sources & other potential funding sources, areas of additional opinion research that could yield additional revenues to fund infrastructure needs, and schedule and next steps. The infrastructure project costs are currently estimated at $200 million including the full cost of the public safety building. Attachment A provides the current summary of project costs, committed funding, potential funding and unfunded costs, as well as the community support as polled for each of the projects. To fully understand the resource needs to fund infrastructure improvements, staff also identified available one-time funding sources that could be allocated to infrastructure projects at Council’s discretion. Attachment B provides a summary of the funds that are available under “Available One-Time Resources.” It is estimated that $57 million could be available from these funding sources should the Council choose to allocate all the revenue to infrastructure. There are also a number of new sources that could provide revenue to fund infrastructure needs (included in Attachment B). These funding sources are less certain and dependent on future policy and land use decisions. It is estimated that these new potential revenue sources collectively could yield up to $104 million to fund infrastructure needs. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 2 The Committee has focused its discussions in several policy areas and considerations and is proceeding with further opinion research in five areas: 1. A 2% to 3% increase in the existing transient occupancy tax (TOT). 2. A special tax fee to finance parking garages (through a citywide or more localized Mello- Roos Community Facilities District). 3. A general obligation bond measure to fund transportation infrastructure. 4. A general obligation bond measure to fund public safety facilities (public safety building & fire stations). 5. A 1/8 cent sales tax increase. In addition, staff recommends evaluating the interaction of a Utility Users Tax modernization measure with other measures on the same ballot. Background The City’s Infrastructure Committee has met eight times since its formation in February 2013. Staff issued an information memorandum with the October 21, 2013 City Council Agenda packet providing the staff reports and minutes from these meetings (with the exception of the October 3 meeting). Attachment D provides the staff report and the action minutes from the October 3 meeting. An initial baseline survey was conducted in late April and early May 2013 to measure public attitudes and overall perceptions of the condition of the City’s infrastructure; test public support for 14 potential infrastructure improvement projects and several potential ballot measure packages that might combine several of the improvement projects; and evaluate types of funding mechanisms and levels of tax threshold the community is willing to support. The results of the survey were presented to the City Council at its study session on June 24, 2013. Over the Committee’s last several meetings and in its review of the survey findings, the Committee focused its discussions on key policy questions and considerations including: 1. Refining the City’s Infrastructure project costs. 2. Reconciling project costs and the Capital Improvement Program. 3. Evaluating current one-time revenue that may be applied to infrastructure at the Council’s discretion. 4. Evaluating the issuance of Certificates of Participation to fund infrastructure needs. 5. Focusing continued efforts around further study on specific projects with wide community support such as public safety and transportation. 6. Evaluating further study on bundled measures that combine multiple projects. 7. Evaluating further study on specific finance mechanisms that received more than simple majority support, as well as, Mello-Roos Community Facility Districts. The Committee is proceeding with opinion research in five areas. This staff report provides a status of infrastructure project costs, available one-time funding sources and other potential funding sources, reviews the five areas of additional research that the Committee is continuing Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 3 to explore that may yield new revenue to fund infrastructure needs, and the timeline and schedule forward. Discussion I. Status of Infrastructure Project Costs At the City Council meeting on March 18, 2013, the Council approved a list of 14 projects for public opinion polling. Those projects and several others that were not selected for polling were considered by the Infrastructure Committee in its subsequent meetings as the Committee reviewed public opinion survey results and formulated potential approaches for funding the various projects. Attachment A provides the current summary of project costs, committed funding, potential funding and unfunded costs, as well as community support for each project polled. The estimated project costs total $200 million. Funding committed to the projects through either the Five-Year Capital Improvement Program Plan (CIP Plan) or through grants received by the City totals $19 million, leaving the net unfunded cost of the projects at $180 million. The unfunded cost figure of $180 million does not include potential funding of $48 million for a Public Safety Building if the Jay Paul Company proposal is approved. The list of infrastructure projects, their estimated costs, and the committed funding for the projects have evolved over the course of the Infrastructure Committee’s eight meetings. In initial meetings and as described in the March 18, 2013 City Council staff report, the Cubberley Replace/Expand project was removed because the ultimate decisions about uses and funding mechanisms for the Cubberley site have not been made. Committed funding for the Bike Bridge and Charleston/Arastradero projects was increased by a total of $5 million due to grants received by the City in the Spring of 2013. Following the adoption of the FY 2014 Capital Budget, the Infrastructure Committee reviewed the interaction between the CIP Plan and the project list. A reconciliation of the project costs and the CIP Plan resulted in updates to the unfunded costs of the Parks, Surface and Buildings Catch-up projects and the removal of the Ventura and Streets projects. Additionally, a new emphasis on addressing parking needs for Downtown and California Avenue resulted in the development of a $35 million estimate for the construction of three new parking garages. Although these changes to the project list and costs were made through a series of meetings of the Infrastructure Committee, descriptions of most of the changes can be found in the June 6, 2013 and September 3, 2013 Infrastructure Committee staff reports. The basis for the parking garage cost estimates is described in the October 1, 2013 staff report (Attachment D). I. Currently Available Funding Sources & Other Potential Funding Sources To fully understand the resource needs to fund infrastructure improvements, staff identified available one-time funding sources that could be allocated to infrastructure projects at Council’s discretion. These funding sources include the Stanford Medical Center Development Agreement Funds, the Infrastructure Reserve, fees from the Impact and Parking In-Lieu Funds, Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 4 and the FY 2013 surplus. Attachment B provides a summary of one-time funds that are available. It is estimated that $57 million could be available from these funding sources should the Council choose to allocate all the resources to infrastructure. There are also a number of new sources that could provide revenue to fund infrastructure needs also summarized in Attachment B. The use of these potential funding sources for infrastructure projects is at the Council’s discretion and many of the sources are not certain and are dependent on future policy and land use decisions. The potential sources include: new hotel revenue, digital readerboard revenue, sales tax from an auto dealership at Municipal Service Center, lease revenue from renting the current police building (expenses associated with renovating the facility would be deducted from rental income), and lease of the Los Altos Treatment Plant site. Existing, increased or new revenue sources can be used to fund infrastructure on a pay-as-you- go basis or by using debt financing. The primary financing vehicle that does not require voter approval is Certificates of Participation (COPs). Attachment B also shows the estimated amount that could be generated by issuing COPs for infrastructure work. Based on a number of assumptions (e.g. 4.5% to 5.5% interest rate and 30 amortization period), it is estimated that for each $1 million of annual debt service through Certificates of Participation, $13-$15 million of principal can be generated. By leveraging potential new revenues for debt financing by issuing COPs, it is estimated that these new potential revenue sources collectively could yield up to $104 million to fund infrastructure needs. The August 6, 2013 Infrastructure Committee report provides additional detail on current and other potential new funding sources that may be allocated to infrastructure at the Council’s discretion. II. Areas of Additional Research The Committee is proceeding with further study in five areas: A 2% to 3% increase in the existing transient occupancy tax (TOT). A special tax to finance parking garages (through a citywide or more localized Mello- Roos Community Facilities District). A general obligation bond measure to fund transportation infrastructure. A general obligation bond measure to fund public safety facilities (public safety building & fire stations). A 1/8 cent sales tax increase. Attachment B summarizes expected revenue from each of the options and the polling support (if tested). Attachment A of the October 1, 2013 staff report (Attachment D) also provides example project funding scenarios that include options for using a TOT increase or General Obligation bonds, as well as a Mello-Roos Community Facilities District to provide funding for infrastructure projects. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 5 Transient Occupancy Tax The Committee recommends further evaluating community support for a 2 percent or 3 percent increase in the City’s Transient Occupancy Tax (TOT) which is currently 12 percent. A Transient Occupancy Tax, commonly known as the "hotel tax," is charged by the City to guests at hotels located in Palo Alto. The tax is computed by multiplying the rent charged by the hotel operator by the tax rate percentage. Hotel tax revenue currently accounts for 11.5 percent of the City's total general fund revenue. Data from the baseline survey on infrastructure projects and funding mechanisms indicates a potential to pass a TOT increase to fund a variety of general infrastructure needs, especially those needs related to public safety and transportation. Sixty two (62) percent of voters supported a general TOT increase although specific increases such as 2 percent were not tested. Such a measure could be structured as a general tax requiring a simple majority approval from voters. Only a small portion of the initial survey was devoted to a potential TOT measure. To provide a definitive recommendation on the viability of this option, a follow-up survey will test this specific funding mechanism at both a 2 and 3 percent increase. An increase in the TOT rate from 12 to 14 percent on base revenue would yield an additional $1.8 million annually. A three percent rate increase to 15% would raise another $0.9 million to total $2.7 million. New hotels coming on line in the next few years are anticipated to yield $2.4 million at the 12 percent rate. The effect of a 2 percent increase yields another $0.4 million while a 3 percent hike would result in $0.6 million. Thus, the combination of a 2 percent rate increase and new hotel revenues would provide $4.6 million in additional revenue while a 3 percent increase would yield $5.7 million. Table 2 below illustrates these results: Table 2. TOT Increases 2% TOT Increase 3% TOT Increase Increase 2% 14% Increase 3% 15% Current base $1.8M Current Base $2.7M New Hotels $2.8M New Hotel $3.0M $4.6M $5.7M As illustrated in Attachment B, staff estimates at this time that for each $1.0 million in resources, $14.0 million in project funds can be generated by issuing Certificates of Participation (COPs). Hence, a 2 percent increase in the TOT combined with new hotel revenues results in $4.6 million in new revenue that, in turn, translates into $64.4 million in project funds; a 3 percent increase results in $5.7 million that generates $79.8 million in project funds. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 6 Mello-Roos Community Facilities District The Committee is proceeding with additional polling to evaluate community support for a Mello-Roos Community Facilities District (CFD). A CFD is a legal entity in which voters agree to tax themselves to finance new capital improvements and/or new operating costs. The special tax, as envisioned for the type of district described below, would require approval by two-thirds (2/3) of registered voters within the district. The taxes are secured by a continuing lien and are levied annually against property within the district. The October 1, 2013 Committee meeting staff report (Attachment D) and the September 3, 2013 Committee meeting staff report provide additional detail on the formation of a CFD including basic requirements, key considerations, and exploration of two hypothetical districts. The examples provide cost estimates for building garages, a hypothetical tax allocation methodology, and a range of hypothetical financial impacts on parcels within the assumed districts. The basic premise underlying the examples provided is that those parcels generating the most intensive use of garages would bear a greater burden of cost to construct the garages than those having limited use. One of the two examples provided would create a citywide CFD for which three (3) new garages would be built at a cost of $35 million. Two garages would be located downtown and one in the California Avenue area. These garages would provide a total of 575 new or incremental spaces. A professional analysis must be conducted to determine each parcel’s share of the garages’ costs, but a rudimentary estimate by staff indicates a rough range of $9 to $24 per residential parcel and a higher range for commercial properties. Again, all assumptions and financial impacts in the examples provided are for illustration purposes only and will change. If the Council and public indicate a willingness to move forward with a CFD, the next step is to hire a consultant who will develop a rigorous and thorough preliminary rate and tax allocation methodology and to facilitate the CFD election process with the City. Consultant costs are roughly estimated at $20 to $35 thousand. The City’s baseline survey did not test community support for a CFD since staff raised the idea after the poll was conducted. The baseline survey did examine general support for funding parking garages and the idea received low ratings: 44 percent for Downtown and 46 percent for California Avenue. The City’s opinion research consultants have advised, given this low level of general support and no matter how the CFD boundaries are drawn, that a measure to fund parking garages requiring two-thirds support from residents is not likely to be approved. The baseline survey, however, did not specify what tax levels residents could tolerate. The Committee is proceeding with further polling to test support for a citywide or more localized CFD. Given the keen awareness and need for comprehensive traffic and parking solutions, the Committee believes a fresh look at a CFD as one part of the solutions is warranted. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 7 General Obligation Bond Measure to Fund Transportation Infrastructure The City’s baseline survey tested the level of public support for five different potential bond or tax measures that represent combinations of individual projects, with the wording of each potential measure structured as it might appear in an actual ballot measure – minus a funding mechanism and dollar figure. Four measures were found to have support levels greater than two-thirds. A bundled transportation measure (A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure) to fund repairs and improvements to streets, sidewalks, and nine miles of off-road trails elicited support from 74% of voters. The Infrastructure Committee is proceeding with further study on the potential to pass a bond measure to fund a portion of the identified funding needs if the projects included in a measure were bundled to focus on one of the two high priority issues of concern to voters: public safety and transportation. Accordingly, one approach to funding garages to relieve parking, traffic and related transportation concerns, would be to include these projects as part of a larger bundled transportation bond measure, which would require two-thirds approval by voters. While parking garages did not rank among the top priority projects in the voter survey, they could be packaged with other priority projects and presented as part of a comprehensive solution to Palo Alto’s transportation, traffic, and parking needs. As illustrated in Attachment B, a $66.4 million bond could fund the remaining amount for the Bike/Pedestrian Plan, Bike Bridge, Charleston/Arastradero, California Avenue Parking Garage, Downtown Parking Garages, and additional sidewalk spending. A $66.4 million transportation bond is estimated to impact the property taxes for the median assessed value single family home by $116 per year. General Obligation Bond Measure to Fund Public Safety (Fire Stations & Public Safety Building) The baseline survey indicated that a ballot measure to fully fund a public safety building is unlikely to receive two-thirds support; however, according to FM3, the public share of a public- private partnership or the full cost of a public safety building could win approval as part of a broader package. A bundled public safety measure (Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure) to fund fire stations and the public safety building elicited support from 68% of voters. Over the past year, the Jay Paul Company proposal for a Planned Community (PC) zone change at 395 Page Mill and 3045 Park Blvd has been the subject of extensive staff review and multiple public hearings. Jay Paul Company is proposing a Planned Community (PC) zone change at 395 Page Mill and 3045 Park Blvd. that, if approved, would allow construction of office buildings at 395 Page Mill Road, and a three-story approximately 44,500 square foot public safety building (as the primary proposed public benefit). The City’s share of the cost for the Public Safety Building under the proposal is estimated to be $9 million. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 8 The project was formally initiated by the Planning and Transportation Committee at its May 29, 2013 meeting and received a preliminary review by the Architectural Review Board on September 19, 2013. On September 16, 2013 the Council reviewed and commented on a preliminary Public Benefit economic analysis that concluded that the current proposed public benefit is reasonable from a financial perspective and would allow the developer to obtain a return on investment consistent with market standards. The City was also planning to present the preliminary traffic study in September 2013, but staff was concerned about a number of assumptions made in the traffic report, and therefore did not believe it accurately described potential impacts; an updated traffic study is currently scheduled to be reviewed by Council in a Study Session on December 9. Staff anticipates that Council will be able to fully consider the project and its traffic and environmental impacts, and to make a final decision on project approval, in 2014. However, staff believes that sufficient information on the project will be available in spring of 2014 for Council to decide whether or not to include funding for a Public Safety Building in any potential 2014 infrastructure revenue measure. If the development does not proceed and an alternate new location is needed for the public safety building, the City may not be prepared to proceed with a finance measure that addresses funding for a public safety building until 2016 to allow time for the acquisition of the property, and the plan/design/EIR review process. The Infrastructure Committee is proceeding with further study on the potential to pass a bond measure to fund a portion of the public safety needs or the full cost of the fire stations and public safety building. As illustrated in Attachment B, a $71.2 million general obligation bond for public safety (funding the fire stations and public safety building) is estimated to impact property taxes for the median assessed value single family home by $124 per year. A general obligation bond to fund the fire stations and the City share of the public safety building under the Jay Paul proposal is $23.2 million, and is estimated to impact property taxes for the median assessed value single family home by $40 per year. Sales Tax While polling support for a sales tax increase was significantly lower than typically observed at 38%, FM3 highly recommended that the City conduct additional polling on a sales tax measure. The unusually low support may have resulted from the phrasing of the question and not specifying a rate. The Committee is proceeding with further study on community support for a 1/8 cent sales tax increase to fund infrastructure improvements, as well as, testing other increments. As illustrated in Attachment B, the City’s current sales tax is 1%. An increase to 1.125% or 1/8 cent would yield $2.6 million in additional revenue, which could be leveraged to generate $36.4 million using COPs. Utilities Users Tax Modernization Given the City’s ongoing need to seek voter approval for an update to its existing Utility Users Tax (UUT) ordinance, additional surveying may also provide an opportunity to assess the interaction between other finance measures and a UUT measure. This information could help Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 9 to determine whether it would be advisable to place these measures on the same ballot and to evaluate the basic viability of a UUT update measure. Staff also recommends evaluating reactions to the infrastructure measures in the context of a UUT modernization measure. Staff has identified two areas where the UUT, which was adopted in 1987, requires modernization. The first area is the telephone user tax. Since 1987, communication technology has expanded and usage patterns have shifted. Many cities have "refreshed" their UUT's to take into account these changes. Staff also recommends that the modernization include a provision for new technologies that may develop in the future. In addition, the overall UUT structure provides a discount for large volume commercial users. This applies to the following utilities: gas, water and electric. This discount can be viewed as contrary to current city goals of energy conservation. Council may want to consider eliminating this discount or even increasing the tax rate for large volume users. Timeline Given the Committee’s direction and subsequent consultation with staff, FM3 and TBWB recommend next steps as follows: A second poll, to be conducted in November, which will test the basic feasibility of all five concepts – testing 75-word ballot language for all five; gauging support for key structural elements of each measure; and testing single comprehensive pro and con arguments on each. Staff will return to the Committee and Council with the results and request further guidance from the Committee and Council. If the City narrows options and proceeds with further study, a third poll will be recommended to explore support for one or two favored options in more detail (with a much more robust test of project elements and pro and con messages, and also in the context of a potential UUT modernization measure). The survey would be conducted in lieu of conducting focus groups to refine communication messages. As previously approved by Council, a final tracking survey would also be conducted in April 2014 before any final decision to place a measure on the November 2014 ballot. The recommended approach and detailed timeline is provided in a memorandum from FM3 included as Attachment C. Resource Impact No changes to the budget are requested. The additional surveying may be completed within the current budget. An additional telephone survey will be completed in lieu of focus groups. Attachments: Attachment A. Infrastructure Project Summary Sheet (PDF) Attachment B. Funding Sources (PDF) Attachment C. Proposed Phase II Opinion Research and Schedule (PDF) Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 10 Attachment D. October 1, 2013 Infrastructure Committee Staff Report & Action Minutes (PDF) Attachment A. 10-28-2013 Staff Report In f r a s t r u c t u r e P r o j e c t S u m m a r y S h e e t (a l l c o s t s / r e v e n u e s i n m i l l i o n s o f d o l l a r s ) Oc t o b e r 2 8 , 2 0 1 3 Th e p r o j e c t i n f o r m a t i o n a n d c o s t e s t i m a te i n f o r m a t i o n o n t h i s s h e e t r e p r e s en t s t a f f ’ s b e s t i n f o r m a t i o n a t t h i s t i m e . S t a f f w i l l c o n t i n u e t o r e f i n e t h e i n f o r m a t i o n a s n e w a n d m o r e p r e c i s e i n f o r m a t i o n b e c o m e s a v a i l a b l e . Pr o j e c t s c o s t s a n d p r o j e c t - s p e c i f i c f u n d i n g Po l l i n g S u p p o r t ( s u m o f s t r o n g l y an d s o m e w h a t s u p p o r t i v e ) P r o j e c t P o l l i n g C o s t CI P T o t a l Fu n d i n g Es t i m a t e d Co s t Co m m i t t e d Fu n d i n g Ne t C o s t w i t h Co m m i t t e d Po t e n t i a l Fu n d i n g Ne t C o s t w i t h Co m m i t t e d an d P o t e n t i a l 72 % Fi r e S t a t i o n s 1 4 0 1 4 . 2 0 1 4 . 2 0 1 4 . 2 67 % Sidewalks 6 8 . 5 6 0 6 0 6 67 % Pa r k s C a t c h U p 10 6 . 5 8 . 9 0 8 . 9 0 8 . 9 65 % Bi k e / P e d e s t r i a n P l a n 2 5 8 . 7 5 2 5 8 . 7 5 1 6 . 2 5 0 1 6 . 2 5 61 % Bi k e B r i d g e 6 9 . 8 6 1 0 8 . 3 5 1 . 6 5 0 1 . 6 5 52 % Public S a f e t y B u i l d i n g 5 7 0 5 7 0 5 7 4 8 9 52 % Ch a r l e s t o n / A r a s t r a d e r o 8 0 . 2 5 9 . 7 5 2 . 2 7 7 . 4 8 0 . 3 5 7 . 1 3 47 % An i m a l S e r v i c e s C e n t e r 7 0 6 . 9 0 6 . 9 0 6 . 9 46 % Playing F i e l d s ( a t G o l f C o u r s e ) 6 0 6 0 6 0 6 46 % Ca l . A v e n u e P a r k i n g G a r a g e 1 2 0 1 6 . 5 0 1 6 . 5 0 1 6 . 5 44 % Do w n t o w n P a r k i n g G a r a g e 2 1 0 1 8 . 4 0 1 8 . 4 0 1 8 . 4 38 % History M u s e u m a t R o t h B u i l d i n g 3 0 3 0 3 0 3 no t p o l l e d By x b e e P a r k na 0 3 . 6 0 3 . 6 0 3 . 6 no t p o l l e d Su r f a c e C a t c h U p n a 4 . 5 3 . 4 0 3 . 4 0 3 . 4 no t p o l l e d Bu i l d i n g s C a t c h U p n a 0 . 3 4 . 2 0 4 . 2 0 4 . 2 no t p o l l e d Cu b b e r l e y D e f e r r e d M a i n t e n a n c e n a 0 6 . 9 0 6 . 9 0 6 . 9 no t p o l l e d Ci v i c C e n t e r n a 0 t b d 0 t b d 0 t b d Su b t o t a l s : 1 9 9 . 8 1 9 . 4 1 8 0 . 4 4 8 . 4 1 3 2 . 0 two-thirds support less than majority support majority support Attachment A. 10-28-2013 Staff Report AttachmentB.RevenueSources (allrevenuesinmillionsofdollars)AvailableOneTimeResources StanfordDAforInfrastructure/Housing 22.1 StanfordDAforSustainability 12.3 Parks 1.0 CommunityCenters 1.4 DowntownInLieuParkin g 1.2 InfrastructureReserve(610million) 8.0 TwoParcelsonMiddlefieldRoad* 2.2 FY2013Surplus 8.5 Subtotal 56.7 *futureCouncilactionwould beneededforsal e ExpectedOngoingRevenues NewHotels 2.4Estimatedtogenerate$33.6millioninCOPs Subtotal 2.4 PotentialOngoingRentalRevenues AutoDealershipatMSC Leaserevenue 0.8Estimatedtogenerate$11.2millioninCOPs PoliceBuilding LeaseRevenue 1.4Estimatedtogenerate$19.6millioninCOPs (Doesnotincluderenovationcosts) DigitalReaderboard 0.8Estimatedtogenerate$11.2millioninCOPs LATPRentalRevenue 1.32 Estimatedtogenerate$18.2to$28.0millioninCOPs Subtotal 4.35 PotentialRevenueFromFinanceMeasures PollingSupport TOTIncrease(includesnewhotels) From12%to14%(2%increase)2.2Estimatedtogenerate$30.8millioninCOPs From12%to15%(3%increase)3.3Estimatedtogenerate$46.2millioninCOPs CitywideMelloRoosCommunityFacilitiesDistricttobuildgarages Downtowngarages(2)18.4 Commercialandresidentialassessmentswouldbe na CaliforniaAvenuegarage(1)16.5 calculatedas partofafuturestudy na GOBonds GOBondsforPublicSafetyat$71.2million (includesfullcostofpublicsafetybuilding) 71.2 68% GOBondsforPublicSafetyat$23.2million (includesCityshareofpublicsafetybuilding underJayPaulproposal) 23.2 68% GOBondsforTransportation@66.4million 66.4 74% SalesTaxIncrease From1.0%to1.125%or1/8cent 2.6Estimatedtogenerate$36.4millioninCOPs 38% Estimatedtoimpactmediansinglefamilyhome assessedvalueby$124peryear Estimatedtoimpactmediansinglefamilyhome assessedvalueby$40peryear Estimatedtoimpactmediansinglefamilyhome assessedvalueby $116peryear 62% Attachment A. 10-28-2013 Staff Report AttachmentC.ProposedPhaseIIOpinionResearchandSchedule 2425 Colorado Avenue, Suite 180 Santa Monica, CA 90404 Phone: (310) 828-1183 Fax: (310) 453-6562 1999 Harrison Street, Suite 1290 Oakland, CA 94612 Phone: (510) 451-9521 Fax: (510) 451-0384 TO: City of Palo Alto FROM: David Metz and Shakari Byerly Fairbank, Maslin, Maullin, Metz & Associates RE: Proposed Structure for Phase II Opinion Research for Palo Alto Infrastructure Financing DATE: October 22, 2013 Following the Infrastructure Committee’s meeting earlier this month and subsequent consultation with City staff and TBWB, FM3 is recommending a revised program of opinion research for Phase II of our study of local voter support for various infrastructure finance options. We are not recommending any changes to the number of surveys we had originally suggested (still two to be conducted in the near term, plus a final tracking survey to be conducted before potential Council action next year), nor are we recommending any changes to the project budget. We recommend conducting two surveys in sequence: the first would assess broad relative levels of support for all five measures (testing specific ballot language and structural elements that were not explored in this spring’s survey), and the second survey – based on learnings from the first – would offer a more in-depth exploration of messaging and structural elements for up to two of those measures that the City designates as its preferred options for a 2014 ballot. The balance of this memo presents a proposed structure for each survey, and lays out a timetable for the research and associated communications work. First Survey The first survey will be a 20-minute survey of 600 Palo Alto voters, with a margin of sampling error of +/- 4.0%. Attachment A. 10-28-2013 Staff Report Page 2 FM3 will develop the survey instrument in collaboration with the City and TBWB. The research will explore some of the following topics: Gauging levels of support in response to a draft 75-word ballot measure summary for all five potential measures; Testing critical structural elements of each measure, such as the TOT rate; the key project elements for a bond measure; and the scope, structure and cost of a CFD; Assessing shifts in support in reaction to single, comprehensive pro and con messages on each measure; and Comprehensive demographic characteristics. Upon completion of this research, we will make recommendations to the Council and staff about which ballot measure concepts have the greatest potential for success. The results will be presented to the City Council on December 16th (and to the Infrastructure Committee before Thanksgiving) at which point we will receive direction for the content of the second survey. Second Survey Based on direction from the Infrastructure Committee in November upon receipt of the first survey, FM3 will begin to design the second survey. Final Council direction in December will confirm which potential measures (if any) the Council wishes to focus on, and FM3 will finalize the second survey around those concepts. Again, FM3 will develop the second survey instrument in collaboration with the City and TBWB, but we envision that it will explore some of the following topics: Support for refined 75-word ballot labels for each potential measure; Exploration of any structural elements of either measure that still need to be evaluated, based on the findings of the first survey; Assessment of the impact a UUT modernization measure might have on support for the ballot measure concepts under consideration; Detailed assessment of pro and con messages, and their impact on support for each measure; and Comprehensive demographic characteristics. We envision that the poll will take place right after the New Year. Concurrent with this second round of polling, and based on direction from the Council in December, TBWB will commence with developing a program of public outreach around the two final measures being explored in the final survey, with the nature and content of those plans finalized once the survey is out of the field in mid-January. Survey results will be ready for reporting to the Infrastructure Committee and City Council in late January or early February. After that Council meeting, TBWB will have authorization to begin outreach in earnest. Attachment A. 10-28-2013 Staff Report Page 3 Timeline The following timeline describes key steps to be taking on research and outreach between now and next year’s elections. October Authorization to proceed with first Phase II survey Evaluate proposed methodology and finalize research plan Preparation of first draft of survey questionnaire Finalization of questionnaire November Obtain client approval of final survey instrument Administer telephone survey Generate topline and cross tabulation of survey results Presentation of first Phase II survey results to Infrastructure Committee Begin to draft second Phase II survey based on Committee direction, pending Council meeting December Presentation of first Phase II survey results to City Council Obtain Council direction on content of second Phase II survey Develop outreach plan based on Council direction Develop list of key community members for proposed outreach Review community materials for outreach January Obtain client approval of second Phase II survey instrument Administer telephone survey Generate topline and cross tabulation of survey results Presentation of second Phase II survey results to Infrastructure Committee Based on Survey results, refine outreach plan Begin outreach February Presentation of second Phase II survey results to City Council Continue outreach to key leaders March Preparation of first draft of tracking survey questionnaire Broaden informational outreach to all voters Attachment A. 10-28-2013 Staff Report Page 4 April Authorization to proceed with tracking survey Evaluate proposed methodology and finalize research plan Obtain client approval of final tracking survey instrument Administer telephone survey Generate topline and cross tabulation of tracking survey results Continue outreach to key leaders and all voters Community Meeting re: Proposed Measure (1 of 2) May Develop presentation and reporting materials Schedule presentation of final results to key stakeholders Begin building coalition of leaders who support proposed measure Community Meeting re: Proposed Measure (2 of 2) June Council to make Decision to Place Measure on Ballot Continue outreach as needed July Adopt Resolution of Necessity August City Clerk Files Ordinance Transition to Independent Campaign Committee September - November Independent Campaign Committee works to pass proposed measure Of course, we will be happy to modify this timeline and proposed approach to the research at your request. Please let us know if you have any questions. Attachment A. 10-28-2013 Staff Report City of Palo Alto (ID # 4135) Infrastructure Committee Staff Report Report Type: Meeting Date: 10/1/2013 City of Palo Alto Page 1 Summary Title: Infrastructure Finance Measure Title: Continue Discussion from September 3, 2013 Infrastructure Committee Meeting and Make Recommendations to the City Council on Next Steps in Considering a Potential Infrastructure Finance Measure From: City Manager Lead Department: City Manager Recommendation Staff recommends that the Infrastructure Committee continue discussion from the September 3, 2013 Infrastructure Committee meeting and make recommendations to the City Council on next steps in considering a potential infrastructure finance measure. Executive Summary At the September 3, 2013 Infrastructure Committee meeting, the Committee directed staff to return to the Committee with a draft plan, staff recommendation and options for a potential 2014 ballot measure, including using a Mello-Roos District (MR District) to fund parking garages. The Committee also encouraged staff to provide input on next steps, where appropriate, in light of comments received from Committee members. Staff evaluated further the use of a MR District as a solution to building additional parking garages and has provided a plan for proceeding should the Committee and Council elect to continue further study on formation of a MR District. There are a number of factors that the Committee should consider in determining whether to move forward at this time. Based on experience in other cities, the City’s research consultant does not believe that a measure to fund parking garages that requires two-thirds support from a residential taxpayer base is likely to be approved. While that may be the experience in other cities, register voters in Palo Alto may understand the particular parking issues in Palo Alto and provide a different outcome. The Committee also asked staff to evaluate potential public/private partnerships to build parking garages. Staff recommends proceeding with a request for proposals (RFP) to solicit public-private partnerships to build mixed-used parking on downtown, city-owned lots. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 2 Staff recommends that the Committee consider whether to proceed with further opinion research on one or more of the following potential finance measures: 1. MR District to build parking garages. 2. Transient Occupancy Tax (TOT) increase to fund infrastructure needs. 3. Bundled general bond transportation measure that combines multiple projects. 4. Bundled public safety bond measure that combines the fire stations and public safety building. Concurrent to polling on any priority measures, the City’s communications consultant, recommends that the City reach out to key stakeholders for input and to help build consensus around a ballot measure proposal. For example, if the Council is considering increasing the TOT, the City should consult with Palo Alto hotel owners and managers. If the Council is considering a bundled transportation or public safety measure, the City should consult with key transportation-related or public safety-related stakeholders. Background On June 6, 2013, the City’s Infrastructure Committee reviewed the preliminary findings of a baseline survey assessing the community’s opinions about a potential finance measure to fund infrastructure needs. On August 6, 2013 and September 3, 2013, the Committee continued its discussions and assessment of a potential finance measure to fund infrastructure needs and recommendations that the Committee may make to the full Council about: 1) areas of further study for opinion research, 2) uses of current or potential new revenue sources to fund infrastructure projects, or 3) other next steps. At the September 3, 2013 Infrastructure Committee meeting, the Committee directed staff to return to the Committee with a draft plan, staff recommendation and options for a potential 2014 ballot measure, including using a MR District to fund parking garages. The Committee also encouraged staff to provide input on next steps, where appropriate, in light of comments received from Committee members. The minutes for the September 3 Infrastructure Committee meeting are included as Attachment E. Discussion Based on the baseline survey results, consultant recommendations, and Committee discussion and input over the last several meetings, staff recommends that the Committee consider whether to proceed with further opinion research on one or more of the following potential finance measures: 1. MR District to build parking garages. 2. Transient Occupancy Tax (TOT) increase to fund infrastructure needs. 3. Bundled general bond transportation measure that combines multiple projects. 4. Bundled public safety bond measure that combines the fire stations and public safety building. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 3 An overview of each measure is described below along with an outline of next steps. At the September 3, 2013 Infrastructure Committee meeting, staff reviewed with the Committee a sample project funding scenario that included options for using a TOT increase or General Obligation bonds, as well as MR Districts or assessment districts, to provide funding for infrastructure projects. Based on feedback from the Committee and consultant recommendations, staff updated the project funding scenario information to provide four distinct funding scenarios (Scenarios #1 through #4), that are provided in Attachment A. Each of the four scenarios utilizes one infrastructure revenue measure – TOT increase, MR District, bundled transportation GO bond, or bundled public safety GO bond – to fund certain projects, with funding for other high priority projects provided by existing or projected revenue sources. All four of the scenarios would use an identical approach for the remaining projects (Surface Catch-up, Buildings Catch-up, Animal Services Center, Playing Fields, History Museum, and Cubberley Deferred Maintenance), as outlined in Attachment A. The following changes to project costs and available revenue sources are also incorporated in the funding scenarios: 1. The estimated and unaudited general fund surplus for FY 2013 is $8.5 million, and based on the Council approved reserve policy the funds are expected to be transferred to the Infrastructure Reserve. These funds are designated in the scenarios as “FY 2013 surplus.” 2. The Downtown Parking Garage estimate of $21 million has been reduced to $18.4 million. This change is due to the development of a new estimate of 303 additional spaces that could be built in garages on existing surface lots D (Hamilton Avenue & Waverly Street and P (High Street between University Avenue and Hamilton Avenue), as further described below. Other downtown lots can be considered for garage construction as well, but further funding would need to be identified. 3. The California Avenue Parking Garage estimate of $12 million has been increased to $16.5 million. This change is due to the development of a new estimate for a 391 space parking garage on Lot 8 located on Sherman Avenue between El Camino Real and Ash Street; this lot would provide an increase of 272 parking spaces over the existing 119 space surface lot as further described below. The City’s opinion research and communications consultants’ (Fairbank, Maslin, Maullin, and Metz and TBWB) recommendations on next steps are summarized below and included in Attachment B. 1. Set aside further study on a MR District. 2. Proceed with a finance measure survey with a primary focus on the TOT, and sales tax as a secondary concern. The interaction of a UUT update on the same ballot may also be measured. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 4 3. Proceed with a bundled transportation bond measure survey. 4. Sequence further study as needed on a bundled public safety bond measure in 2014 as related funding issues are more certain. Formation of a Mello-Roos District to Build Parking Garages At the September 3, 2013 Infrastructure Committee meeting, staff outlined the basic requirements of a MR District and how it could be used to fund new parking garages. The Committee requested additional information on potential district boundaries, the number of new garages, and the potential financial impact on property owners. Before providing a preliminary and conceptual outline of a district, some of the key requirements of a MR District bear repeating: 1. If there are fewer than 12 registered voters within the district then election involves a landowner vote; if there are 12 or more registered voters in district, then election involves a registered voter election. Approval requirement is two-thirds (2/3) of voters 2. A MR District requires a “reasonable” basis for its special tax. State code defines “reasonable” as “based on a benefit received by parcels of real property, the cost of making facilities or authorized services available to each parcel, or some other reasonable basis as determined by the legislative body." 3. The special tax is levied pursuant to a rate and method of apportionment (called the "RMA" or "tax formula"), which can assign tax rates on a variety of criteria or one or more of the following factors: Land use: the RMA could assign different tax rates to single family residential, multifamily residential, commercial, retail, etc. Intensity of land use: the RMA could assign different tax rates based on square footage. Proximity to a facility: the RMA could establish tax zones whereby those properties closest to the facility would pay more. Expected burden on a garage: the RMA could assign a tax rate based on the number of car trips expected at different properties or even sales transactions. Requirements 2 and 3 above have not been fully explored and vetted. If the Committee and Council decide to move forward with a MR District, staff would hire a consultant and outside legal counsel to further evaluate the MR requirements and advise the Council on potential measures that meet these conditions. To assist the Committee, staff has delineated two potential districts, estimated costs for new garages, and developed a strictly hypothetical method of apportionment. These are provided for illustration purposes only. All assumptions and financial impacts illustrated below will change if a MR District proposal moves forward and information is refined. Again, neither a “reasonable” basis nor a final “method of apportionment” is determined in this report. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 5 The following illustration is for building two garages in the downtown business district at Lot D (Hamilton Avenue & Waverly Street) and Lot P (High Street between University Avenue and Hamilton Avenue). Each of these sites is currently being studied along with Lots E & G (Gilman Street) and each represent potential garage sites either located in the high-demand parking areas of the downtown (Lot P) or centrally located in the Downtown (Lot D or E/G). Garages that could be built on surface lots D and P would yield 303 incremental or new spaces. The cost of both garages is estimated at $18.4 million. The rough boundaries of a potential district are El Camino to slightly east of Middlefield and from San Francisquito Creek to Melville/Embarcadero Road. Attachment C shows the hypothetical boundaries. Within this area there are 2,798 parcels which include 900 estimated commercial properties and 1,898 residential parcels. Based on a 30 year amortization period and an interest cost of 5.7 percent (tax exempt), the annual debt service for these garages is around $1.3 million. The table below shows a hypothetical method of apportionment that may or may not meet the standard outlined in requirement three above. Three scenarios are assumed whereby commercial properties bear increasingly higher costs based upon an assumed intensity of use of the garages. While residential properties would benefit from new downtown garages in that cars would be removed from surrounding neighborhoods, the assumption here is that businesses generating rising trips by employees and visitors are increasingly responsible for the use and cost for new garages. Columns A through C show rising “intensity of use” (from 5 times to 15 times higher use) and a consequent rising share of debt service allocated to commercial properties compared to residential properties. Commercial and Residential Property Share of Annual Debt Service Per Parcel for Downtown Garages Column A Column B Column C Number of Parcels 5X Scenario 10X Scenario 15X Scenario Residential 1,898 $116 per parcel $63 per parcel $43 per parcel Commercial 900 $1,221 per parcel $1,311 per parcel $1,374 per parcel This example shows that if commercial properties were found to have 15 times the responsibility for garage construction costs compared to residential landowners, they would pay $1,374 annually and residential parcels would pay $43. At 10 times the “intensity of use” residents would pay $63 annually versus $1,311 for commercial properties. Let’s suppose the City wishes to propose a citywide MR District that would support the building of two garages downtown and one in the California Avenue Business District. Assuming that Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 6 272 spaces could be added incrementally in the Cal Ave area (Lot 8 located on Sherman Avenue between El Camino Real and Ash Street), the cost to construct a garage is estimated at $16.5 million. Amortized over 30 years at an interest cost of 5.7 percent, the annual debt service for this garage is around $1.2 million. The boundaries assumed are current City boundaries excluding the Stanford Shopping Center and open space parcels. The number of parcels used in this analysis is 17,384 residential and 1,811 commercial. This excludes planned community and public facility parcels. Commercial and Residential Property Share of Annual Debt Service Per Parcel for Downtown and California Avenue Garages Column A Column B Column C Number of Parcels 5X Scenario 10X Scenario 15X Scenario Residential 17,384 $24 per parcel $13 per parcel $9 per parcel Commercial 1,811 $1,152 per parcel $1,256 per parcel $1,296 per parcel Using the same “intensity of use” assumption, this citywide example shows that if commercial properties were found to have 15 times the responsibility for garage construction costs compared to residential landowners, they would pay $1,296 annually and residential parcels would pay $9. At 10 times the “intensity of use” residents would pay $13 annually versus $1,256 for commercial properties. Each of the examples above is to provide the Committee with cost estimates for building garages, an understanding of the MR District tax allocation, and a range of financial impacts on parcels within the hypothetical districts. The information provided is meant to provide a sense of the magnitude of potential impacts on property owners given certain boundaries and assumptions. Further refinement of costs, parcel information, district boundaries, and an allocation methodology is necessary. As we move toward a citywide boundary with parcels distant from the locales of garages, policy and allocation questions will arise. Finally, there are variables e.g., interest rates and construction costs that will affect impacts cited in this report. Although staff raised the idea of investigating a MR District, the City’s research and communications consultants (FM3 and TBWB) have advised no matter how the MR District boundaries are drawn that a measure to fund parking garages that requires two-thirds support from a residential taxpayer base is not likely to be approved. There are a number of other factors for the Council to consider that suggest not moving forward with a MR District at this time. The factors are: Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 7 1. Parking garages received low ratings in the recent infrastructure survey: 44 percent for Downtown and 46 percent for California Avenue. 2. In light of an emerging and potentially widespread Residential Parking Program, will residential voters support even a nominal tax in the examples above ranging from $9 to $116 per year? 3. The assessed cost is high relative to the number of additional parking spaces created to relieve parking congestion. 4. As with current assessment districts, there is no guarantee to commercial property owners that they will have exclusive use of a space and this may generate significant opposition. The Infrastructure Committee directed staff to research a number of additional issues. These include: 1. How would a MR District be structured in a ballot measure? 2. What are the election requirements? 3. How long would it take to bring a vote to the public? 4. Are there any conflicts with current assessment districts; are there exemptions; conflicts with existing codes? 5. Are there potential public/private partnerships to build garages or are there possibilities of long-term leasing arrangements? 6. Describe an outreach plan and schedule Staff was asked to evaluate the feasibility of potential public/private partnerships to build garages or other possibilities of long-term leasing arrangements. Staff believes that there is a high likelihood of interest and recommends proceeding with a request for proposals (RFP) to solicit public-private partnerships to build mixed-used parking projects on downtown city owned lots. The Planning and Community Environment Department is currently studying the comparative advantages of building parking structures over certain downtown surface parking lots. Staff recommends proceeding directly to Council at the conclusion of the study along with the scope of work for the RFP. In the interest of brevity, the staff responses to the remaining questions are included in Attachment D. In summary, pursuing a MR district may be feasible, but will likely lead to opposition. This financial tool must be viewed in the context of bringing forward other taxes, such as a TOT increase, or a bundled transportation or public safety bond measure for voter approval, as well as a more comprehensive look at area and citywide traffic issues. The City is currently exploring the development of Residential Permit Parking (RPP) Districts around the City including Downtown. The implementation of a Downtown RPP Program may prioritize the need to build additional parking supply for Downtown customers, visitors and employees. Within the California Avenue Business District limited permit supply for employees has resulted in delays to parking permit distribution, so an additional garage in that district should also be considered if initiatives to help fund parking garage construction move forward. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 8 Building additional parking supply, however, may increase citywide traffic concerns as it promotes the use of single-occupant vehicle trips instead of alternative transportation modes such as public/private transit, car sharing/ride sharing, or bicycling. Any parking garage construction should include considerations for a citywide Transportation Management Authority (TMA) to help reduce single-occupant vehicle trip use and encourage private sector participation in reducing vehicle trips while supporting the well-being of employees and the community. Transient Occupancy Tax Data from the baseline survey on infrastructure projects and funding mechanisms indicates a potential to pass a TOT to fund a variety of general infrastructure needs, especially those needs related to public safety and transportation. Such a measure could be structured as a general tax requiring simple majority approval from voters or as a special tax with funds earmarked for specific purposes and would require two-thirds voter approval. Only a small portion of the initial survey was devoted to a potential TOT measure. To provide a definitive recommendation as to the viability of this option, FM3 recommends a follow-up survey to test this specific funding mechanism and how to best package a measure for success. Attachment B provides additional information on the scope and schedule of the recommended survey. The survey would sample 600 likely voters, with a margin of sampling error of +/-4.0 percent. FM3 and TBWB also recommend that the survey further investigate the sales tax as an alternative funding mechanism that would generate significant revenue. Given the City’s ongoing need to seek voter approval for an update to its existing UUT ordinance, this survey may also provide an opportunity to assess the interaction between a TOT and UUT measure, determine whether it would be advisable to place these measures on the same ballot and evaluate the basic viability of a UUT update measure. If further study on a potential TOT increase is pursued, concurrent to polling on the measure, TBWB recommends commencing targeted outreach to Palo Alto hotel owners and managers to explain the City's planning for a potential TOT increase. This will allow the City to identify questions or concerns and collect feedback from impacted businesses. Similar outreach to other business leaders who might be impacted indirectly by this measure should be conducted during the same timeframe. Bundled Transportation Measure The City’s baseline survey tested the level of public support for five different potential bond or tax measures that represent combinations of individual projects, with the wording of each potential measure structured as it might appear in an actual ballot measure – minus a funding mechanism and dollar figure. Four measures were found to have support levels greater than two-thirds. Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 9 As was recommended to the Infrastructure Committee as part of the presentation of the baseline infrastructure survey results, FM3 and TBWB believe that the City has the potential to pass a bond measure to fund a portion of the identified funding needs if the projects included in a measure were bundled to focus on one of the two high priority issues of concern to voters: public safety and transportation. Accordingly, one approach to funding garages to relieve parking, traffic and related transportation concerns, would be to include these projects as part of a larger bundled transportation bond measure, which would require two-thirds approval by voters. While parking garages did not rank among the top priority projects in the voter survey, they could be packaged with other priority projects and presented as part of a comprehensive solution to Palo Alto’s transportation, traffic, and parking needs. To further evaluate the feasibility of a transportation bond measure, FM3 recommends a follow up survey devoted entirely to this measure. In this survey FM3 would test potential ballot language and project descriptions reflecting the array of Palo Alto’s transportation-related needs, sensitivity to specific bond amounts and tax rates, and the impact of supporting and opposing statements and assess the optimal timing of a transportation bond measure. As a starting point for structuring this survey, FM3 would rely on key findings from the prior survey such as voters’ expressed willingness to pay (which seems to peak at $125 per year for a measure requiring two-thirds support) and the bundled proposal that elicited support from 74% of voters (A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure to fund repair and improvements to streets, sidewalks, and nine miles off-road trails. This measure would provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety). Similar to what was described previously for evaluating a potential TOT measure, FM3 would recommend conducting a ballot measure feasibility survey among 600 likely voters, which is associated with a margin of sampling error of +/-4.0 percent. The findings of the survey will be used to inform a recommendation to the City regarding the viability of a transportation focused bond measure, recommended election dates, total bond amount and tax rates. If the City continues to be interested in pursuing a transportation bond measure, TBWB recommends building a coalition of key transportation-related constituencies and stakeholders to participate in outreach and help build consensus around a ballot measure proposal. TBWB will help identify these interested parties, organize a process to enable their participation and provide messaging and materials to allow stakeholders to communicate within their respective networks of influence. Bundled Public Safety Measure As noted previously, the baseline infrastructure survey indicates that a bundled bond measure focused on public safety needs, while polling lower than a bundled transportation measure at 68% support, also appears to be potentially viable. Accordingly, if the Infrastructure Committee and City Council wish to proceed with further study on funding public safety infrastructure Attachment A. 10-28-2013 Staff Report City of Palo Alto Page 10 needs, the survey and outreach approaches outlined here could be applied to refine a bundled public safety measure for the ballot. This may require looking at a 2016 election or beyond for voter approved funding to allow the City to acquire land and conduct the necessary environmental review for a new public safety building. Timeline Given the current schedule, in order to provide the City with definitive recommendations as to the viability of a funding measure in 2014, it is timely for the Committee and Council to prioritize any areas for study and to initiate ballot measure polling in the immediate near term. The schedule for conducting additional surveys is included as Attachment B. Attachments: Attachment A. Funding Scenarios (PDF) Attachment B. FM3 and TBWB Recommendations (PDF) Attachment C. Mello-Roos Hypothetical Boundaries (PDF) Attachment D. Mello-Roos Response to Committee Questions (PDF) Attachment E. September 3, 2013 Infrastructure Committee Minutes (PDF) Attachment A. 10-28-2013 Staff Report Note: Funding from Mello Roos district, GO bonds, and COPs is for construction only and does not include financing costs Potential Infrastructure Project Funding Scenario #1 (2% or 3% TOT increase) Polling Support Project Cost Funding Source Funding Amount 52% Public Safety Building and land 57 City Hall Police area lease - COPs 19.6 52% Charleston/Arastradero 7.5 TOT increase 3% - COPs 46.2 61% Bike Bridge 1.7 New hotels - COPs 33.6 na Byxbee Park 3.6 Stanford Funds 33.4 72% Fire Stations (2)14.2 Infrastructure Reserve 8 67% Sidewalks additional spending 6 FY 2013 surplus 8.5 65% Bike/Pedestrian Plan 16.25 Sum:149.3 67% Parks Catch-up 8.9 46% Cal Avenue Garage 16.5 44% Downtown Parking Garages (2)18.4 Sum: 150.05 OR Funding Source Funding Amount City Hall Police area lease - COPs 19.6 TOT increase 2% - COPs 30.8 New hotels - COPs 33.6 Stanford Funds 33.4 Infrastructure Reserve 8 FY 2013 surplus 8.5 5 years annual surplus ($1M per year)5 Digital Readerboard - COPs 11.2 Sum:150.1 Potential Infrastructure Project Funding Scenario #2 Mello Roos Parking Garage Measure Polling Support Bundled Projects Cost Funding Source Funding Amount 46% Cal. Avenue Parking Garage 16.5 44% Downtown Parking Garages (2)18.4 Sum: 34.9 Polling Support Project Cost Funding Source Funding Amount 52% Public Safety Building and land 57 City Hall Police area lease - COPs 19.6 72% Fire Stations (2)14.2 New hotels - COPs 33.6 67% Sidewalks additional spending 6 Stanford Funds 33.4 na Byxbee Park 3.6 Infrastructure Reserve 8 67% Parks Catch-up 8.9 FY 2013 surplus 8.5 65% Bike/Pedestrian Plan 16.25 Digital Readerboard - COPs 11.2 61% Bike Bridge 1.7 Sum:114.3 52% Charleston/Arastradero 7.5 Sum: 115.15 Mello Roos districts (citywide or localized)34.9 Attachment A. Potential Funding ScenariosAttachment A. 10-28-2013 Staff Report Note: Funding from Mello Roos district, GO bonds, and COPs is for construction only and does not include financing costs Potential Infrastructure Project Funding Scenario #3 Bundled Transportation GO Bond Measure Polling Support Bundled Projects Cost Funding Source Funding Amount Streets additional spending 8 GO Bonds 74.35 Sidewalks additional spending 6 Bike/Pedestrian Plan 16.25 Bike Bridge 1.7 Charleston/Arastradero 7.5 Cal. Avenue Parking Garage 16.5 Downtown Parking Garages (2)18.4 Sum: 74.35 Polling Support Project Cost Funding Source Funding Amount 72% Fire Stations (2)14.2 City Hall Police area lease - COPs 19.6 52% Public Safety Building and land 57 Stanford Funds 33.4 na Byxbee Park 3.6 Infrastructure Reserve 8 67% Parks Catch-up 8.9 FY 2013 surplus 8.5 5 years new hotels ($2.4M per year)12 Sum: 83.7 Sum:81.5 Potential Infrastructure Project Funding Scenario #4 Bundled Public Safety GO Bond Measure Polling Support Bundled Projects Cost Funding Source Funding Amount Public Safety Building and land 57 GO Bonds 71.2 Fire Stations (2)14.2 Sum: 71.2 Polling Support Project Cost Funding Source Funding Amount 67% Sidewalks additional spending 6 City Hall Police area lease - COPs 19.6 na Byxbee Park 3.6 Stanford Funds 33.4 67% Parks Catch-up 8.9 Infrastructure Reserve 8 65% Bike/Pedestrian Plan 16.25 FY 2013 surplus 8.5 61% Bike Bridge 1.7 4 years new hotels 9.6 52% Charleston/Arastradero 7.5 Sum:79.1 46% Cal. Avenue Parking Garage 16.5 44% Downtown Parking Garages (2)18.4 Sum: 78.85 74% 68% Attachment A. Potential Funding ScenariosAttachment A. 10-28-2013 Staff Report Funding Approach For Remaining Projects Polling Support Project Cost Funding Source Funding Amount na Surface Catch-up 3.4 na Buildings Catch-up 4.2 Sum:7.6 Polling Support Project Cost Funding Source Funding Amount 47% Animal Services Center 6.9 46% Playing Fields at Golf (3)6 38% History Museum 3 na Cubberley Deferred Maintenance 6.9 Sum: 22.8 Fund gradually through CIP planning process utilizing CIP funds, ongoing surpluses, and development impact fees Defer planning for potential funding or remove from project list Attachment A. Potential Funding ScenariosAttachment A. 10-28-2013 Staff Report TO: CityofPaloAlto FROM: CharlesHeathandJoyTatarka,TBWBStrategies DaveMetzandShakariByerly,Fairbank,Maslin,Maullin,MetzandAssociates RE: RecommendationsRegardingPotentialInfrastructureFundingMeasures DATE: September24,2013 ___________________________________________________________________________________ TBWBStrategiesandFM3Researchhavereviewed pollingconductedtodateandinformation providedbycitystaffrelatedtothedevelopmentofa TransientOccupancyTax(TOT)tofundgeneral infrastructureneedsandapotentialMelloRoosDistrict(MRD)orgeneralobligationbondtofund parkinggaragesintheDowntownandCaliforniaAvenueareasandrelatedtransportationneeds. Followingisourcollectiveassessmentofthepotentialfeasibilityofthesemeasures,alternativesfor youtoconsiderandrecommendednextsteps. TransientOccupancyTax Datafromthebaselinesurveyoninfrastructureprojectsandfundingmechanismsindicatesa potentialtopassaTOTtofundavarietyofgeneralinfrastructureneeds,especiallythoseneeds relatedtopublicsafetyandtransportation.Sucha measurecouldbestructuredasageneraltax requiringsimplemajorityapprovalfromvotersorasa specialtaxwithfundsearmarkedforspecific purposesandwouldrequiretwothirdsvoterapproval. Onlyasmallportionoftheinitialsurveywas devotedtothisapotentialTOTmeasure.Toprovidea definitiverecommendationastotheviabilityofthisoption,FM3recommendsafollowupsurveyto testthisspecificfundingmechanismandhowtobest packageameasureforsuccess.WhileFM3 continuestobelievethatfocusgroupswouldbe helpfulinunderstandinghowtodevelopmessaging forameasurethatincludesfundingforapublic safetybuildingandrequirestwothirdsvotersupport, webelievetheTOTmeasureshouldfirstberefin edbyastandardballotmeasurefeasibilitysurvey. Similartotheinitialbaselinesurvey,FM3 envisionsconductingaballotmeasurefeasibilitysurvey among600likelyvoters,whichisassociatedwitha marginofsamplingerrorof+/4.0percent.The centralobjectiveoftheresearchwillbetogaugevoterattitudestowardaTOTincreaseofbetween2 and3percenttofunddeferredmaintenanceneedsrelatedtoinfrastructurepriorities,andassessthe optimaltimingofanelection. FM3woulddevelopthesurveyinstrumentincollaboration withtheCityandTBWB.Theresearchwill exploresomeofthefollowingtopics: Attachment BAttachment A. 10-28-2013 Staff Report 2 Gauginglevelsofsupportinresponsetoadraft75wordballotmeasuresummaryofa potentialmeasure; Assessingpublicattitudestowardfundingprioritiesthatmightbefinancedthroughthe measure; Determiningifthemeasureshouldbestructuredasageneraltaxorspecialtax; Identifyingprojectprioritiesandoptimalprojectdescriptions; AssessingpublicsensitivitytotheTOTtaxrate; Measuringsensitivityofsupportinthefaceoflikelyargumentsfromsupportersand opponents,includinganargumentregardingthefactthatanincreaseinthelocalTOTwould bringtheratetoamongthehighestinthestate/region;and Determiningthedemographicprofileoftherespondents toprovidethenecessarycategories forcrosstabulationofthedata,andto ensurethattherespondentsarerepresentativeofthe pooloflikelyvotersinPaloAlto; ProvidearecommendationtotheCityregardingtheviabilityoftheTOTasafinancing mechanismandthespecificcomponentsofameasurethatwillmaximizethelikelihoodof voterapproval. GiventheCity’songoingneedtoseekvoterapprovalforanupdatetoitsexistingUUTordinance,this surveywouldprovideanopportunitytoassessthe interactionbetweenaTOTandUUTmeasure, whetheritwouldbeadvisabletoplacethesemeasures onthesameballotandevaluatethebasic viabilityofaUUTupdatemeasure. Ashasbeennotedaspartofpast recommendationstotheInfrastructureCommittee,FM3andTBWB weresurprisedbytherelativelylowlevelsofsupportmeasuredinthebaselinesurveyforasalestax measure.Wesuspectthatthelowlevelsofsupportmay behaveresultedfromthespecificlanguage testedorothercontextualsurveyissues.Ifdeemed apriority,thissurveywouldprovidean opportunitytofurtherinvestigatethesalestaxasanalternativefundingmechanismthatwould generatesignificantrevenue. FM3ispreparedtobegintheproposedresearch immediately,attheCity’srequest.Aproposed timelineforconductingtheresearchappearsbelow: WeekofOctober28,2013 Authorizationtoproceed Evaluateproposedmethodologyandfinalizeresearchplan Preparationoffirstdraftofsurveyquestionnaire WeekofNovember4,2013 SubmitdraftquestionnairetoCityforreview WeeksofNovember11November18 Finalizesurveyquestionnaire Obtainclientapprovaloffinalsurveyinstrument Drawsample Attachment BAttachment A. 10-28-2013 Staff Report 3 November1822,2013 Administertelephonesurvey Generatetoplineandcrosstabulationofsurveyresults November23December5,2013 Developpresentationandreportingmaterials Schedulepresentationoffinalresultstokeystakeholders Concurrenttopollingonthispotential TOTmeasure,TBWBrecommendscommencingtargeted outreachtoPaloAltohotelownersandmanagersto explaintheCity'splanningforapotentialTOT. ThiswillallowtheCitytoidentifyquestionso rconcernsandcollectfeedbackfromimpacted businesses.Similaroutreachtootherbusinessleaderswhomightbeimpactedindirectlybythis measureshouldbeconductedduringthesame timeframe.Thisoutreachwouldbeconductedduring theNovemberandearlyDecembertimeframeinorder toprovideasummaryoffeedbackalongwith thesurveyresults.TBWBwillworkwiththe Citytodevelopanoutreachtargetlist,informational materialstofacilitatethesemeetingsandscheduleforconductingthemeetingsandsynthesizing feedback. ItshouldbenotedbytheCommitteethatifthismeasureisdesignedasageneraltaxrequiringonly simplemajorityvoterapproval,itmustgotothe ballotatthesametimeascouncilmemberelections. TheexceptionwouldbeiftheCitydeclareda fiscalemergencywithaunanimousvoteoftheCouncil. Thus,iftheTOTwouldbedesignedasageneraltax,TBWBwilldevelopadetailedtimelineidentifying specificplanningstepstopreparefortheNovember2014 municipalelectiondate.Giventhelimited electiondateflexibilityforthistypeofmeasure,the Citymightevaluateotherelectiondateoptions (e.g.June2014,June2016,November2016orsp ecialelectiondates)fortheotherpotentialfunding measuresunderconsideration. FundingforParkingGaragesandRelatedTransportationNeeds AreviewofthedatafromFM3’srecentsurveyo ninfrastructureneedsandfundingoptionsindicates votersupportforameasuretofundparking garagesintheDowntownandCaliforniaAvenueareas wouldfallsubstantiallyshortofthetwothirdssupportthatwouldberequiredforapproval.When theanalysisislimitedtovoterswithinthegeographic areasinorneartheDowntownandCalifornia Avenueareas,supportstillfallswellshortof66.7%.Iftheboundariesweredrawnbroadlytospread thecostandminimizetherequiredtaxrate,wedonotbelievethattheprojectranksashighenough apriorityforvoterstogeneratetwothirdssupport .IftheCommitteeisinterestedinabroadbased measurewithapalatabletaxrateto fundtheseneeds,webelievethatacitywidebondmeasurethat packagesparkinggaragesalongwithmorepopulartransportationprojects(e.g.roadandsidewalk improvements,saferoutestoschool,bikeandpedestrianimprovements,trafficrelief)wouldbea moreviableapproach. Inshort,nomatterhowtheMRDboundariesaredrawn,wedonotbelievethatameasuretofund parkinggaragesthatrequirestwothirdssupportfrom aresidentialtaxpayerbaseislikelytobe approved.Accordingly,weofferthefollowingalternativesandrecommendednextstepsforsecuring additionalfundingforparkinggarages: Attachment BAttachment A. 10-28-2013 Staff Report 4 1. MRDFocusedonNonResidentialProperties Analternativeapproachwouldbetodraw MRDboundariestightlyringingtheDowntownand CaliforniaAvenuecommercialcorridorstoexclude allbutfewerthan12registeredvoters residingwithintheboundaries.Underthisscenario,theMRDmeasureelectionwouldbe decidedbyavoteofpropertyownerswithintheboundaries.TheCitywouldneedtodevelop aconvincingbusinesscasetopresenttotheimpactedpropertyownersandconductextensive individualoutreachamongthisgrouptogaugesupport.Theproposedareasaretoosmallfor traditionalpublicopinionresearchtechniquesand thereforewouldnotprovidereliable results. IftheCitywouldliketoevaluatethe potentialfeasibilityofapropertyownerelection,TBWB willusevotermappingapplicationstodeveloppossibleboundaryoptionsthatincludefewer than12registeredvotersandcomparetheseboundariesagainstpropertyownershipdatato developanoutreachtargetlist.Afterananalysisof howmucheachofthesepropertyowners wouldhavetopayinordertofund theprojects,wewoulddevelopinformationalmaterials andanoutreachplantomeasuretheinterest andsupportamongthepropertyowners. 2. TransportationBondMeasure AswasrecommendedtotheInfrastructure Committeeaspartofthepresentationofthe baselineinfrastructuresurveyresults,webelievethattheCityhasthepotentialtopassa bondmeasuretofundaportionoftheidentifiedfundingneedsiftheprojectsincludedina measurewerebundledtofocusononeofthetwohighpriorityissuesofconcerntovoters: publicsafetyandtransportation.Accordingly,oneapproachtofundinggaragestorelieve parking,trafficandrelatedtransportationconcerns,wouldbetoincludetheseprojectsaspart ofalargerbundledtransportationbondmeasure,whichwouldrequiretwothirdsapprovalby voters.Whileparkinggaragesdidnotrankamong thetoppriorityprojectsinthevoter survey,webelievethattheycouldbepackagedwithotherpriorityprojectsandpresentedasa comprehensivesolutiontoPaloAlto’stransportation,trafficandparkingneeds. Theinitialsurveytouchedonawidearrayofissuesandwasdesignedtonarrowthescopeof optionsunderconsideration.Itwasnotdesignedtodefinitivelydeterminethefeasibilityofa singleballotmeasure.Tofurtherevaluatethefeasibilityofatransportationbondmeasure, werecommendafollowupsurveydevotedentirely tothismeasure.InthissurveyFM3would testpotentialballotlanguage,projectdescriptionsreflectingthearrayofPaloAlto’s transportationrelatedneeds,sensitivitytospecificbondamountsandtaxrates,theimpactof supportingandopposingstatementsandassesstheoptimaltimingofatransportationbond measure.Asastartingpointforstructuringthis survey,wewouldrelyonkeyfindingsfrom thepriorsurveysuchasvoters’expressedwillingnesstopay(whichseemstopeakat$125per yearforameasurerequiringtwothirdssupport)andthebundledproposalthatelicited supportfrom70%ofvoters (ATrafficCongestionReliefandSafeStreets,SidewalksandTrails Measuretofundrepairandimprovementstostreets,sidewalks,andninemilesoffroadtrails. Thismeasurewouldprovidesaferoutes toschoolforchildren,improveaccessibilityforpeople withdisabilities,provideanetworkofsafebike pathsandpedestrianwalkways,increasethe availabilityofparking,andupgradetrafficsignalsandintersectionstoreducecongestionand improvesafety). Attachment BAttachment A. 10-28-2013 Staff Report 5 SimilartowhatwasdescribedpreviouslyforevaluatingapotentialTOTmeasure,FM3would recommendconductingaballotmeasurefeasibilitysurvey among600likelyvoters,whichis associatedwithamarginofsamplingerrorof+/4.0percent.Thissurveycouldbeconducted inlieuoftheTOTsurveydescribedpreviouslyandon thesametimeline.Orthissurveycould beconductedsubsequently.Thefindingsofthesurveywillbeusedtoinforma recommendationtotheCityregarding theviabilityofatransportationfocusedbondmeasure, recommendedelectiondates,totalbondamountand taxrates.InordertoprovidetheCity withdefinitiverecommendationsastotheviabilityofafundingmeasurein2014,we recommendtestingtheTOTorabundledtransportation measure,butnotbothatthesame time.Testingbothmeasuresinasinglepollwill limitthedepthintowhichsupportforeither measurecanbeinvestigated. IftheCitycontinuestobeinterestedinpursuingatransportationbondmeasure,TBWB recommendsbuildingacoalitionofkeytransportationrelatedconstituenciesand stakeholderstoparticipateinoutreachandhelpbuildconsensusaroundaballotmeasure proposal.TBWBwillhelpidentifytheseinterested parties,organizeaprocesstoenabletheir participationandprovidemessagingandmaterialstoallowstakeholderstocommunicate withintheirrespectivenetworksofinfluence.TBWBandFM3wouldappreciateguidance fromtheCommitteeastowhichofthetwomeasuresisahigherpriorityinordertorefinea researchstrategyandtimeline. Asnotedpreviously,thebaselineinfrastructuresurveyindicatesthatabundledbondmeasure focusonpublicsafetyneedsappearsjusta spotentiallyviableasabundledtransportation measure.Thesurveyandoutreachapproaches outlinedhereforabundledtransportation measurecouldbeappliedtorefineabundledpublicsafetymeasurefortheballot.However, theuncertaintysurroundingtheproposedpublicprivatepartnershiptofundapublicsafety facilitymakesthisadifficultoptiontoresearchatthistime.Accordingly,iftheInfrastructure Committeeand/orCityCouncildeterminethatfundingpublicsafetyinfrastructureneedsisa higherpolicyprioritythantransportation,werecommendconductingasurveyonthistopic oncetheoutcomeofthepublicprivatepartnershipandrelatedfundingissuesaremore certain.Weacknowledgethatthismayrequirelooking ata2016electionorbeyondforvoter approvedfundingforpublicsafetyinfrastructure. Wedonotfeelthatthebaselinesurveydataindicatessufficientvotersupporttojustify furtherresearchonageneralinfrastructure bondmeasureoranyothermeasurerequiring twothirdssupportunlessitisfocusedontransportationorpublicsafetyneeds. Attachment BAttachment A. 10-28-2013 Staff Report ElCaminoPark ElCaminoPark KelloggPark ScottPark TimothyHopkinsPark LotA Lot D Lot G Lot H LotF LotO LotP LotQ LotT LotC LotK LotWC CogswellPlaza LotB LotK LotE JohnsonPark AlmaParkette Welcome TimothyHopkinsPark LyttonPlaza StanfordShoppingCenter Parkette El Palo A l t o P a r k CivicCenter Plaza ChanningHouse DwtnChildCareCtr Bryant / L y t t o n Parkin g G a r a g e Parking Tract No. 5447 PKG PKG SunsetMagazine AddisonElementary PaloAlto HighSchool CastillejaSchool WholeFoods Parking WholeFoods Market Oak C o u r t Apartm e n t s HeritagePark El Palo Alto ParkTimothyHopkinsPark WilliamsPark PAMFCLARK BUILDING PAMFPARKINGSTRUCTURE CVS Ph a r m a c y Union B a n k Miyake E-Tra d e Stanf o r d B o o k s GATE1 GATE15GATE14 GATE2 GATE3 GATE4 GATE5 GATE6 GATE7 GATE8GATE9 GATE10 GATE11 GATE12 ELCAMINOGROVE 09-575 GATE13 MALONEYFIELD MASTERSGROVE BOYFA ARTIFICIALTURF FIELD SUNKENDIAMOND PAC-10PLAZA STEUBERFAMILY RUGBYFIELD WOMENSSOFTABLLD ARBORETUMGROVE EUCALYPTUSGROVE LASUENGROVE TOYONGROVE Lot S Lot CC Lot N Lot R QuarryRoad Arboretum RoadQuarryRoad HomerAvenue Lane8 West MedicalFoundation Way Lane7 West Lane7 East EmbarcaderoRoad EncinaAvenue ElCaminoReal UrbanLane WellsAvenue ForestAvenue HighStreet EmersonStreet Channing Avenue Alm aStreet AlmaStreet PaloAltoA ElCaminoReal venue MitchellLane HawthorneAvenue EverettAvenue LyttonAvenue Lane15E HighStreet Alm a S t r e e t BryantStreet Lane6 E Lane11 W Lane21 HighStreet GilmanStreet HamiltonAvenue UniversityAvenue BryantCourt Lane30 FlorenceStreet KiplingStreet TassoStreet CowperStreet RuthvenAvenue HawthorneAvenue Lane33 PaloAltoAvenue EverettAvenue PoeStreet WaverleyStreet TassoStreet CowperStreet PaloAltoAvenue WebsterStreet EverettCourt LyttonAvenue ByronStreet FultonStreet MiddlefieldRoad MelvilleAvenue KelloggAvenue KingsleyAvenue LaneA West LaneB West LaneB East LaneD West Lane 59 East WhitmanCourt KelloggAvenue EmbarcaderoRoad KingsleyAvenue LincolnAvenue AddisonAvenue LincolnAvenue ForestAvenue DowningLane HomerAvenue LaneD East Lane39 Lane56 HamiltonAvenue WebsterStreet WaverleyStreet Kip l i n g S t r e e t BryantStreet RamonaStreet AddisonAvenue Sc o t t S t r e e t ByronStreet LyttonAvenue GuindaStreet Palo AltoAvenue FultonStreet MiddlefieldRoad ForestAvenue WebsterStreet KelloggAvenue MiddlefieldRoad By WebsterStreet CowperStreet TassoStreet CowperStreet AddisonAvenue LincolnAvenue BoyceAvenu HomerAvenue GuindaStreet MiddlefieldRoad ChanningAvenue Ad GuindaStreet LincolnAvenue FultonStreet MelvilleAvenue ByronStreet KingsleyAvenue MelvilleAvenue CoMi We b s Wilso n Stree Ra m o n a S t r e e t AddisonAvenue ChanningAvenue Wa v e r l e y S t r e e t PaulsenLn La n e 1 5 E Em e r s o n S t r e e t Lane 20 WLane20E UniversityAvenue Ca l T r a i n R O W Em e r s o n S t r e e t Wa v e r l e y S t r e e t Kip l i n g S t r e e t OrchardLane SandHillRoad SandHillRoad Br y a n t S t r e e t Ra m o n a S t r e e t PaloRoad Shopp ingCenterWay S hop ping C enterW ay ShoppingCenterWay LondonPlaneWay Plu m La ne SweetOliveWay Pea rLane Lane12W La n e 5 E LasuenStreet PistachePlace EverettAvenue HomerAvenue PaloAltoAvenue Co mm unity La n e H arker Av e nu e Parkinso n Av en u e ByronStreet EmersonStreet ChurchillMall AboretumRoad AboretumRoad GalvezStreet Masters Mall NelsonMall Nelson Road PalmDrive AlmaStreet Alma Street HawthorneAvenue LyttonAvenue SamMcDonaldRoad Mall Th i s m a p i s a p r o d u c t o f t h e Ci t y o f P a l o A l t o G I S Th i s d o c u m e n t i s a g r a p h i c r e p r e s e n t a t i o n o n l y o f b e s t a v a i l a b l e s o u r c e s . Le g e n d Pa r c e l s C o u n t e d w i t h i n P r o p o s e d B o u n d a r y # 0 3 ( 2 , 7 9 8 P a r c e l s ) Pr o p o s e d B o u n d a r y # 0 3 ( 2 , 7 9 8 P a r c e l s ) Co m m e r c i a l D o w n t o w n ( C D ) Z o n i n g D i s t r i c t s Pa r k i n g A s s e s s m e n t D i s t r i c t P a r c e l s Ci t y J u r i s d i c t i o n a l L i m i t s 0' 96 1 ' Mello-Roos District Potential Boundary # 03 Exercise University Avenue Area Map CITY O F PALO A L TO I N C O R PO RAT E D C ALIFOR N I A P a l o A l t o T h e C i t y o f A P R IL 16 1 894 Th e C i t y o f P a l o A l t o a s s u m e s n o r e s p o n s i b i l i t y f o r a n y e r r o r s . © 1 9 8 9 t o 2 0 1 3 C i t y o f P a l o A l t o rri v e r a , 2 0 1 3 - 0 9 - 1 0 1 2 : 0 6 : 3 9 Me l l o R o o s U n i v e r s i t y A v e 0 3 ( \ \ c c - m a p s \ g i s $ \ g i s \ a d m i n \ P e r s o n a l \ r r i v e r a . m d b ) At t a c h m e n t C . H y p o t h e t i c a l M e l l o - R o o s B o u n d a r i e s Attachment A. 10-28-2013 Staff Report ATTACHMENTD StaffResponsetoInfrastructureCommittee’sQuestions onformingaMelloRoosDistrict 1 9/26/2013 TheInfrastructureCommitteedirectedstafftoresearchanumberofissues. 1) Howlongwouldittaketobringavotetothepublic? Response:Itwouldtakeapproximately89monthstoformacommunityfacilities districtundertheMelloRoosAct,fromthefirstmeetingtodiscussthetaxformula throughadoptionofthefinalordinance,assuminga registeredvoterelectionandamail ballotelectionthatisnotconsolidatedwithanotherelection. Iftheelectionisconsolidatedwithanotherelection,thenthetimingmaybeimpacted, althoughitshouldbesimilar. SeeTable1onpage3foratypicalschedule. 2) HowwouldaMelloRoos(MR)Districtbestructuredinaballotmeasure? Response:Theballotmeasurewouldapprovethreeitems:(i)thelevyofthespecialtax accordingtotheRateandMethodofApportionmentofSpecialTaxforthepurposes specifiedintheResolutionofFormation (e.g.,acquisitionandconstructionofapublic parkinggarageatthecornerofXandY ,(ii)theissuanceofbondsinamaximum amount,and(iii)anappropriationslimitfortheCFD.TheMelloRoosActallowsthe threeitemstobeconsolidatedinasingleballotmeasure Otherwise,thegeneralprovisionsofCaliforniael ectionslawwouldgoverntheballot measure,andtheadviceofanelectionconsultantwillbeuseful. 3) Arethereanyconflictswithcurrentassessmentdistricts? Response:Thespecialtaxwouldbeinadditionto,andwouldnothaveanyimpacton, existingspecialbenefitassessments,the1%advaloremtaxoranyvoterapprovedtax overrides.Itwouldbefairtoconsiderthespecial taxtobeanadditionalsourceof revenuetobuildmoreparkinggaragesintheCity,assumingitwouldbedescribedas suchintheformationproceedings. Thespecialtaxshallbecollectedinthesamemannerasordinaryadvaloremproperty taxesarecollectedandshallbesubjecttothesamepenaltiesandthesameprocedure, sale,andlienpriorityincaseofdelinquencyasisprovidedforadvaloremtaxes Attachment A. 10-28-2013 Staff Report ATTACHMENTD 2 9/26/2013 4) Arethereexemptionsfromthetax? Response:Ingeneral,propertiesownedbypublic agenciesareexemptfromspecial taxesundertheMelloRoosAct.Therearesomeexceptions,forexamplewherethe publicagencyleasesitspropertytoataxableentity. TheMRtaxformulawouldapportiontaxesamongvariouslandusesonareasonable basisandcouldidentifyadditionalexemptions,e.g.,lowincomehousing,nursing homes,et.al. 5) DescribeanoutreachplanandtheexpertisenecessarytoformaMRdistrict? Response: InformationfromCity’sOutreachFirm,TBWB Oneofthefirststepsistoidentifythe financedfacilities,identifytheboundariesofthe CFD(whowillpaythetax)anddefine thespecialtaxformula.Becausethespecialtax doesnotneedtobeapportionedonthebasisofspecialbenefit,thereisnoneedto employanengineerforthispurpose;the Citywould,instead,retainaspecialtax consultant,whocouldbeanengineer,withexpertiseinpreparingspecialtaxformulas and,ifpossible,withpublicparkinggarages indevelopedCFDs.SeeattachmentBfor moredetailedplanforoutreach. 6) Aretherepotentialpublic/privatepartnershipstobuildgaragesoraretheirpossibilities oflongtermleasingarrangements? Staffbelievesthereispotentialforpartnershipstobuildgaragesorforlongtermleasing arrangements,andrecommendsproceeding witharequestforproposals. Attachment A. 10-28-2013 Staff Report ATTACHMENTD 3 9/26/2013 TABLE1.TEMPLATEMELLOROOSELECTIONSCHEDULE Date ResponsibleParty Event BeforeDay1 Citystaff,special taxconsultant, financialadvisor, bondcounsel (i)IdentifyCFDboundaries (ii)Identifyfinancedfacilitiesandservices (iii)DefineRateandMethodofApportionmentof SpecialTaxes Day1 CityCouncil Adopt:(1)ResolutionApprovingLocalGoalsand PoliciesforCommunityFacilitiesDistrict;(2) ResolutionofIntentiontoEstablishCommunity FacilitiesDistrict;(3)ResolutionofIntentionto issueBonds ByDay16 CityClerk RecordBoundaryMap(within15daysofadoption ofResolutionofIntention)(Streets&Highways Code§3111) By[7dayspriorto publichearing] CityClerk PublishNoticeofPublicHearing(Gov.Code §§53322;6061) NoearlierthanDay 31 CityCouncil (1)ConductaPublic Hearing;(2)adoptResolution ofFormation;(3)adoptResolutionDeclaring NecessitytoIncurBondedIndebtedness;(4)adopt ResolutionCallingElection(“ROE”) Approx.Day35 CityClerk Publish NoticeofArgumentDeadlines NolaterthanDay 44(w/in14daysof ROE) CityClerk Deadlineforsubmissionofdirectarguments (ElectionsCode§9286) Approx.Day44 CityAttorney Submissionofimpartialanalysis Approx.Day54 (Argumentdeadline +10days) CityClerk Deadlineforsubmissionofrebuttalarguments (ElectionsCode§9285) Approx.Days55– 64 CityClerk 10daypublicinspectionperiod (ElectionsCode§9295) Attachment A. 10-28-2013 Staff Report INFRASTRUCTURE COMMITTEE FINAL MINUTES Page 1 of 13 Special Meeting September 3, 2013 The Infrastructure Committee met on this date in the Council Conference Room at 4:00 P.M. Present: Berman, Klein (Chair), Scharff, Shepherd Absent: ORAL COMMUNICATIONS None ACTION ITEMS 1. Continue Discussion from August 6, 2013 Infrastructure Committee Meeting on Baseline Survey Results and Recommendations to the City Council on Next Steps in Considering an Infrastructure Finance Measure. Herb Borock suggested the Utility Users Tax (UUT) be increased to 5 percent for everyone. This increase would generate approximately the same amount of funds as other taxes without the need to designate a tax for a specific purpose, which would require approval by two-thirds of voters. Sheila Tucker, Assistant to the City Manager, noted the Infrastructure Committee (Committee) requested Staff return with additional information related to the Capital Improvement Program (CIP), costs and scope of projects, and revenue options. Brad Eggleston, Assistant Director Public Works, presented a draft schedule for preparing the CIP Budget and the Five Year CIP Plan. Staff reviewed and updated costs of projects and determined if projects were included in both the CIP Budget and project costs. Staff recommended removing projects from the list or reducing costs for projects because of new funding, discretionary funding, or the need for further study. Jim Keene, City Manager, was unsure whether project costs were actually reduced. For example, the Bicycle and Pedestrian Transportation Plan Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 2 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 decreased from $23.5 million to $16.25 due to funding in the Five Year CIP Plan. However, only the first year was funded through the Capital Budget. There could be issues with respect to future annual funding of $1.2 million for the Bicycle and Pedestrian Transportation Plan. The Committee should remember the tradeoff between priority and funding of projects. Mr. Eggleston believed the information was incorrectly titled. A more suitable title would be "Changes to Unfunded Project Costs." Staff was not indicating that implementation of the Bicycle and Pedestrian Transportation Plan no longer cost $25 million, but that more funding was available through the Five Year CIP Plan. The remaining portion of the cost for the Bicycle and Pedestrian Transportation Plan, for which funding was needed, had decreased. Chair Klein indicated actual costs for some projects could be reduced. He inquired about the increase in funding for the Ventura Community Center. Mr. Eggleston stated that was a typographical error. A portion of funding for the Ventura Community Center was included in the Five Year CIP Plan and another portion was included in the buildings catch-up category. The project was counted twice. Vice Mayor Shepherd noted the worksheet showed the cost as $0. Chair Klein inquired whether the Ventura Community Center was included in the $41 million amount shown on the slide. Ms. Tucker answered yes. That amount should also be reduced. Mr. Keene noted the net amount was $32.75 million. Mr. Eggleston reported the project summary sheet provided the actual cost and amount of funding for projects. With the proposed changes, the amount reduced was approximately $40 million. Because the Committee discussed integration of the CIP Budget with the project list, Staff indicated the Five Year CIP funding for projects with CIP funding and the project cost as stated in polling. Joe Saccio, Assistant Director of Administrative Services, noted a 2 percent increase in the Transient Occupancy Tax (TOT) would generate $1.8 million and could be utilized to finance $25.2 million in Certificates of Participation (COP). Staff utilized the formula of $1 million in revenue to raise $14 million in project funds to calculate the amount of funds resulting from COPs. Applying a 2 percent TOT increase to new hotel revenue generated $2.2 million. A 3 percent TOT increase would generate $3.3 million including new hotels. The original assumption for the Los Altos Treatment Plant (LATP) Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 3 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 revenue included building out the site. Staff revised the assumption to renting the site under current zoning without building it out and determined approximately $1.3 million annually could be generated. If the zoning changed to commercial, the upper limit for potential revenue was $2 million. Two former well sites on Middlefield Road could be made available for residential use. Staff estimated sale of the two sites could generate $2.2 million. Given the recent increase in revenues, Staff believed an additional $1 million in surplus funds could be provided for infrastructure improvements. Staff removed parcel tax and UUT from further consideration in accordance with the Committee's direction. The Mello-Roos District was mentioned with regard to financing Downtown and California Avenue parking garages. The consultant was present to discuss that if the Committee wished. Mr. Keene inquired whether the Committee discussed possible changes with respect to COPs. Mr. Saccio noted potential changes were discussed in the Staff Report. Standard and Poor's and Moody's apparently were considering downgrading COPs generally. Due to municipal bankruptcies, the market was wary of municipal debt. There was general talk of degrading COPs from a credit perspective. Ms. Tucker requested the Committee provide direction regarding other areas for additional opinion research and recommendations to the Council regarding current or new revenue sources for funding infrastructure projects. Mr. Keene expressed concern about the competition of projects and scheduling issues. He wished to provide alternate methods for the Committee to consider projects and funding sources. The projects that received positive polling totaled $88.3 million. New hotel revenue and a 3 percent TOT increase along with Infrastructure Reserve funds would total approximately $88.3 million without the need to issue bonds. The Bicycle and Pedestrian Transportation Plan and the Bike Bridge could receive funding from Stanford University Medical Center (SUMC) Development Agreement funds. Parking garages did not poll well; however, the community was concerned about parking issues. Perhaps a Mello-Roos District or an assessment district strategy was viable. Staff identified projects that could be handled better through the CIP Budget or ongoing surpluses. Staff could return with more definition of the proposals. He noted the Committee's concern with the Jay Paul Company project. Staff could not guarantee the progress of that project in relation to the Committee's planning. Without utilizing a finance measure, approximately $90 million could be available for infrastructure projects. The City had more than one option to consider for funding a Public Safety Building. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 4 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Chair Klein felt the problem was the many options. Council Member Berman inquired whether voters would have to approve a 3 percent TOT increase. Mr. Keene answered yes. Council Member Berman asked if interest rates and debt service costs for General Obligation (GO) bonds remained 15-20 percent higher than costs for COPs. Bob Gamble, Public Financial Management, expected the marginal difference to be substantially less than 15-20 percent, more in the range of 5 percent. The difference varied based on relative credit perceptions. Council Member Berman inquired whether the 12 percent TOT for new hotels had been factored into future budgets. Mr. Saccio felt it was new revenue. Staff budgeted approximately $400,000 in the Fiscal Year (FY) 2013-2014 Budget for Casa Olga. The $2.4 million amount was over and above the Casa Olga projected revenue. Council Member Berman asked when plans could proceed in relation to the LATP site. Mr. Eggleston reported a contract for the design consultant was in place. He estimated the earliest time was fall 2015 if Staff received regulatory clearances. Council Member Berman felt a conservative estimate for use of the LATP site was 2016 or 2017. Lalo Perez, Director of Administrative Services, noted the site was jointly owned by the Refuse Fund. Allocation of net revenue would have to be considered. Council Member Berman inquired about the purposes for issuing past COPs. Mr. Saccio reported COPs were issued in 1983 for civic center improvements; in 1992 for additional improvements to the civic center and for refinancing; in 1998 for improvements to the Golf Course; and in 2002 for the building next to the Bryant Street Garage and for refinancing. Council Member Berman asked which revenue sources paid for the COPs. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 5 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Mr. Saccio indicated the revenue streams from the Golf Course paid for that COP. Rent on the Bryant Street Garage was used to pay for that COP. The civic center COP was paid through General Fund revenue. Mayor Scharff inquired whether a two-thirds vote of the entire city was needed to approve a Mello-Roos District. Mr. Saccio replied yes. Mayor Scharff noted the Council could determine how many parking garages it needed before requesting community approval; and asked if the properties within the District would be required to pay the tax. Mr. Saccio responded yes. Mayor Scharff felt a Mello-Roos District was similar to an assessment district. The main difference was that all citizens voted on a Mello-Roos District. Mr. Saccio understood the City had to strictly ascribe the benefit from a property to the tax. Mayor Scharff asked if one vote could be held to create two Mello-Roos Districts. Molly Stump, City Attorney, answered yes. Mayor Scharff indicated assessments could vary depending on the number of garages built in Downtown and in California Avenue. He asked if an election was required to be held in an even year. He suggested the Council determine the number of garages needed, and then place a measure on the 2014 ballot. He inquired about the actions needed to begin the process. Mr. Keene requested the Committee direct Staff to return with more detailed information regarding a Mello-Roos District. Staff could present information expeditiously. Mr. Saccio agreed. Mayor Scharff asked when the Jay Paul Company project might be presented to the Council for a vote. The Committee needed some idea of that timeframe to determine whether there was sufficient time to place a GO bond for a Public Safety Building on the ballot. Aaron Aknin, Interim Planning Director, was doubtful the Council would vote on the project in April or May 2014, because of the time required for Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 6 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 environmental review, the Planning and Transportation Commission process and the Council process. Mayor Scharff believed Staff would need at least two years to compile a Public Safety Building project if the Council did not approve the Jay Paul Company project. Therefore, it was not logical to consider funding for a Public Safety Building in the 2014 election cycle. If the Council did not approve the Jay Paul Company project, then it could consider a Public Safety Building in 2016. Chair Klein noted the same conversation was held previously. Mr. Keene stated the Council did not have to specify the use of an increase in the TOT. It would be difficult to gain approval of a bond without specifying its use. 2016 was the appropriate timeframe for a GO bond and still practically better for the TOT issue. The Council could have a successful measure in 2014. Mayor Scharff was unsure why a TOT increase would not be perfect for 2014. The Council would not want a GO bond and a TOT increase on the same ballot in 2016. Mr. Keene believed the Council could pursue a TOT increase in 2014 even if it was considering use of the TOT increase for a Public Safety Building. Vice Mayor Shepherd inquired whether the Committee was responsible for forwarding the UUT ballot item to the Council. Ms. Stump reported the Committee had discretion to forward that item to the Council. She understood the Committee verbally directed her to present it to the Council as an administrative measure. Vice Mayor Shepherd wanted to ensure the item was placed on the ballot. She inquired whether GOs were threatened with the loss of tax-exempt status. Mr. Gamble explained that consideration would apply to any tax-exempt bond including GOs, Mello-Roos Districts and COPs. Vice Mayor Shepherd inquired whether the City would have more expense in issuing those types of bonds. Mr. Gamble replied yes, depending on terms in the legislation. Vice Mayor Shepherd noted the Council considered a land swap regarding the Municipal Services Center (MSC), and inquired whether the Committee Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 7 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 should discuss swapping the MSC site for a site to build the Public Safety Building. Mr. Eggleston reported Staff was finalizing the scope of a Request for Proposal (RFP) to study MSC uses. Swapping the MSC site for another site suitable for a Public Safety Building could be considered. Vice Mayor Shepherd wanted to find a way to initiate that conversation. The Staff Report provided a method for the Committee to match taxes, revenues and project costs. Chair Klein recalled the Committee discussed a possible surplus of funds as an available source of revenue, and inquired about the amount of the surplus. Mr. Perez indicated the surplus would be significantly more than $8 million, because sales tax and TOT were trending higher than expected. Staff would have a specific amount shortly. Mr. Keene asked when Staff projected having the exact amount. Mr. Perez believed within the next two weeks Staff would know the amount. Chair Klein assumed the surplus would be closer to $12 million than $8 million. Mr. Keene stated Staff would not have to perform due diligence if the amount were not significantly higher. Chair Klein understood a report on the Jay Paul Company project was coming up in September. Mr. Keene reported Staff was attempting to report to the Council in September 2013 regarding traffic and public benefits. Chair Klein felt the Council could disapprove the project if the traffic report indicated the traffic impact would be great. Mr. Keene commented that Staff had issues with the performance of the initial traffic study. Therefore, the traffic study would need to be reviewed closely. Mr. Aknin indicated the information was a preliminary traffic report, a first draft. The report provided an idea of potential traffic impacts. Staff would want to review it closely and study impacts to additional intersections. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 8 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Chair Klein inquired whether the preliminary nature of the report would provide the Council with sufficient information to understand potential impacts. Mr. Aknin felt the report would provide a picture of potential impacts; however, Staff would want additional detail and additional intersections studied. Chair Klein noted that Staff proposed using approximately half the SUMC Development Agreement funds, and requested Mr. Keene comment. Mr. Keene reported Staff was not comfortable proposing uses for the SUMC Development Agreement funds. Because the Bicycle and Pedestrian Transportation Plan appeared to meet the criteria the Council discussed for projects, Staff proposed utilization of funds for that project. A follow-up session with the Council on SUMC Development Agreement funds was scheduled within the month. Chair Klein indicated the Policy and Services Committee recommendation regarding SUMC Development Agreement funds would be presented to the Council in September 2013. He asked if there were any issues with the Committee proposing use of remaining funds for a Public Safety Building, for example. Mr. Keene stated Staff had not precluded that possibility. Council Member Berman referenced the $1 million increased funding amount included in the FY 2014 Capital Budget and Five Year Plan for sidewalks, and asked if that increased amount would accomplish the goal of completing the sidewalk 30-year cycle in 30 years. Mr. Eggleston believed the increased amount would accomplish the goal. The $6 million amount was utilized in polling and would be additional funding to complete the original sidewalk cycle. The $6 million represented the amount needed to replace approximately 7 percent of the total amount of sidewalks in the City. Council Member Berman inquired whether Staff felt there was a need for that amount of sidewalk repair. Mr. Eggleston reported in some districts, where work was performed many years ago, a great deal of work was needed. Staff did not have a good assessment of the actual amount of work needed; therefore, Staff suggested funding a study of sidewalks in the FY 2015 Budget. The study could consider options for the cost of implementing a 10-year, 15-year or 20-year cycle and other ways to organize the program. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 9 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Council Member Berman concurred with considering a Mello-Roos District. He suggested COPs based upon the revenue stream from renting the current Public Safety Building be issued to fund a new Public Safety Building. The digital reader board was another potential source of revenue. Because an increase in the TOT required a 50 percent approval vote, he felt that revenue stream should fund the least popular infrastructure items, namely a new Public Safety Building. Fire stations, the Bicycle and Pedestrian Transportation Plan, parks catch-up and sidewalks all polled very well and were better suited for a GO bond election. He preferred to increase the TOT rate first, and then utilize revenue from the new hotels for future projects and needs. The civic center and Cubberley Community Center would need major improvements at some point. He did not want to use COPs on the TOT as a first option. The Council needed to impress on the public that all these projects were catch-up items, not ongoing maintenance. Mayor Scharff felt Staff needed to provide details regarding a Mello-Roos District including the boundaries of districts, the number of garages and spaces needed, and impacts on businesses. MOTION: Mayor Scharff moved, seconded by Vice Mayor Shepherd to direct Staff to come back with a plan for a 2014 ballot measure using a Mello-Roos District. Mayor Scharff noted the Committee's concerns that an assessment district was no longer a viable funding mechanism. A Mello-Roos District would provide a solution to the parking problem, and the people who created the problem would pay for the solution. Vice Mayor Shepherd indicated the Committee needed to have sufficient information to determine whether a Mello-Roos District was viable. The public needed to know a Mello-Roos District was a possibility and provide comment on the topic. Chair Klein understood Vice Mayor Shepherd wanted information while Mayor Scharff wanted to include a Mello-Roos District on the 2014 ballot. Mayor Scharff clarified that Staff should present a detailed plan, including options and recommendations, for possibly placing a Mello-Roos District on the 2014 ballot. Chair Klein reiterated that Vice Mayor Shepherd was interested in general information, while Mayor Scharff was interested in details of actual garages and spaces. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 10 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Mayor Scharff inquired whether Vice Mayor Shepherd would agree with Staff providing information about actual Mello-Roos Districts in Downtown and California Avenue. Vice Mayor Shepherd believed detailed information was necessary for the Committee to make a decision. The discussion of Mello-Roos Districts could be iterative as the Committee requested specific details. She assumed the public would comment once they learned the Committee was considering a Mello-Roos District. She inquired whether Mayor Scharff wanted the discussion to be iterative or Staff to provide clearly-defined plans. Mayor Scharff indicated the process could be iterative; however, he wanted a timeline to place a Mello-Roos District on the 2014 ballot. The Committee could make a decision more quickly if the initial presentation was detailed. The Committee and Downtown property owners needed to know the broad impacts of a Mello-Roos District. Chair Klein would support the Motion if it was clear that the Committee was not committed to placing a Mello-Roos District on the ballot in 2014. Vice Mayor Shepherd added that the discussion would be held with the consideration that it could be placed on a 2014 ballot. Chair Klein also wanted Staff to reach out to affected neighborhoods and property owners early to provide sufficient time for public comment. Mr. Keene understood the discussion would be iterative. The question was the level of detail the Committee wanted in the initial presentation. Staff could provide a gross analysis and share information with the public. The public would also be interested in the scale of parking provided by a Mello- Roos District. In six weeks, Staff could provide a schedule for providing a first iteration. He believed the Committee would have sufficient time to discuss the information and inform the public. Vice Mayor Shepherd requested Staff indicate whether any Ordinances conflicted with a Mello-Roos District or whether a Downtown Parking District would be exempt. Mr. Keene indicated the initial presentation would not capture all information. The process would need to be iterative in order to consider many different impacts. The important point was for Staff to return as quickly as possible with as much meaningful information as possible. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to have Staff investigate a public/private Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 11 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 partnership with the possibility of selling to or having a long-term lease with a developer for one of the surface parking lots. Vice Mayor Shepherd also requested information regarding possible overlap with the Transportation Demand Management (TDM) Program. Mr. Keene stated the Vice Mayor was acknowledging the fact that parking and traffic issues would not be addressed solely by building additional parking. The Council requested Staff review an intensive expansion of the TDM Program and standards. Mr. Saccio reported a consultant could be needed to determine how best to develop a tax. Chair Klein believed the Motion was simply requesting information. Work needed to begin soon. MOTION PASSED:4-0 Mayor Scharff inquired whether Staff needed a Motion on the UUT. Ms. Stump did not believe a Motion was necessary. She would provide the needed information. Mayor Scharff felt the Committee needed to provide more details regarding a TOT increase and GO bonds. The Committee should not provide the Council with an open-ended discussion. The Committee needed more information before recommending a TOT increase or a GO bond. He wanted Staff to provide a Staff Report considering the relationship between funding sources and the Jay Paul Company project. The Committee could discuss revenue sources again in October 2013 after reviewing the preliminary traffic analysis for the Jay Paul Company project. He requested Staff comment on his suggestions. Mr. Keene agreed that the Committee should provide the Council with recommendations and clarity regarding a funding source approach soon. If the Committee chose a COP strategy, the real discussion was the use of those funds and the relationship to a back-up option. The Committee needed to tell Staff if it needed specific follow-up information regarding funding sources. If additional information was not needed, then Staff could work on the schedule and interface between funding options and the Jay Paul Company project. He advocated for the Committee choosing a lead funding source sooner rather than later, because other concerns would then fall in line for the Committee and the Council. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 12 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Mayor Scharff suggested the Committee place a TOT increase on the ballot for 2014 with the opportunity to place GO bonds on a 2016 ballot. He was unsure whether the Committee should decide which projects the revenue would fund in terms of which items were popular in the poll. Because there were many projects to fund, the Committee should maintain flexibility. MOTION: Mayor Scharff moved, seconded by Council Member XXX to direct Staff to return to the Committee with possible scenarios for a Transient Occupancy Tax Measure for the 2014 election, being sensitive to the flexible use of the funds. MOTION FAILED DUE TO LACK OF SECOND Chair Klein felt the Committee had enough information regarding a TOT increase. He wanted the TOT to total 14 percent, rather than 15 percent. He also wanted to utilize more SUMC Development Agreement funds. The Council reached consensus that those funds should be used for items with a large impact. Projects on the infrastructure list did provide large impacts. The Bicycle and Pedestrian Transportation Plan, a Public Safety Building, parks catch-up and Byxbee Park met the requirements for use of SUMC Development Agreement funds. The Committee should recommend a plan or plans for Council consideration. Vice Mayor Shepherd asked if there was a reason for Staff not linking funds in the infrastructure/housing category with funds in the sustainability category. Mr. Keene explained that listing the funds in that manner was easier. The Committee could obviously break it up. MOTION: Chair Klein moved, seconded by Mayor Scharff to continue the discussion and encourage Staff to provide input in line with the discussion in order to allow the Committee to do their homework. Mayor Scharff inquired whether the Committee needed to include a study of sidewalks in the Motion. Mr. Eggleston reported Staff discussed proposing a study as part of the CIP Budget for the following fiscal year. Mayor Scharff asked if Staff needed authority to perform that study. Mr. Eggleston replied no. Staff would propose a study as part of the upcoming CIP process. Attachment EAttachment A. 10-28-2013 Staff Report FINAL MINUTES Page 13 of 13 Infrastructure Committee Special Meeting Final Minutes: September 3, 2013 Chair Klein inquired whether the preliminary traffic analysis for the Jay Paul Company project would be presented to the Council in September 2013. Mr. Aknin reported Staff could include it on the September 16, 2013 Agenda. Chair Klein wanted to ensure the Committee had that information prior to the next meeting. Vice Mayor Shepherd inquired whether the Motion could include uses for the MSC site. Mr. Eggleston indicated that information would take time to compile. Vice Mayor Shepherd asked about uses for the LATP site. Mr. Eggleston knew the land uses for which the site was zoned, but the zoning could be changed. Staff did not know the number of acres of usable land the site would provide. Vice Mayor Shepherd asked when that information could be provided. Mr. Eggleston hoped to have the information in spring of 2014. MOTION PASSED:4-0 Chair Klein inquired about possible meeting dates in October 2013. Ms. Tucker indicated October 1, 2013. Mayor Scharff noted a conflict with 4:00 P.M. on October 1. He suggested the meeting begin at 2:00 or 3:00 P.M. Chair Klein announced the next meeting would be held on October 1, 2013 at 3:00 P.M. ADJOURNMENT: The meeting was adjourned at 5:28 P.M. Attachment EAttachment A. 10-28-2013 Staff Report INFRASTRUCTURE COMMITTEE DRAFT MINUTES Page 1 of 18 Special Meeting October 1, 2013 The Infrastructure Committee met on this date in the Council Conference Room at 3:03 P.M. Present: Berman, Klein (Chair), Scharff, Shepherd Absent: ACTION ITEMS 1. Continue Discussion From September 3, 2013 Infrastructure Committee Meeting and Make Recommendations to the City Council on Next Steps in Considering a Potential Infrastructure Finance Measure. Sheila Tucker, Assistant to the City Manager, reported the Infrastructure Committee (Committee) needed to decide the priorities for infrastructure projects. From those priorities, the Committee could determine the means to fund projects, whether to invest in additional study of a finance measure or a combination of both. Staff provided four recommendations regarding: 1) a Mello-Roos District; 2) an increased transient occupancy tax (TAT); 3) a bundled General Obligation (GO) bond transportation measure; and 4) a bundled GO bond public safety measure. Attachment A outlined a funding scenario for each recommendation. Staff increased the Infrastructure Reserve Fund amount to $8.5 million and adjusted the cost of parking garages. Chair Klein suggested the Committee begin the discussion with the Mello- Roos District. Ms. Tucker indicated the Committee directed Staff to present a plan and analysis for implementing a Mello-Roos District to fund parking garages. Constructing parking garages was a small component of the larger City-wide strategy to address parking and traffic issues. No matter how boundaries were drawn, Staff did not believe a Mello-Roos District was a viable option. Public-private partnerships were one option for constructing parking garages. Chair Klein was unsure whether the Committee would agree that a Mello- Roos District was not viable. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 2 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Ms. Tucker encouraged the Council to review that option more closely. Mayor Scharff asked which option Ms. Tucker suggested the Committee review. Ms. Tucker clarified proceeding with a Request for Proposal (RFP) to consider private interests in building garages in the California Avenue area. James Keene, City Manager, asked if the Committee had sufficient background information regarding the Mello-Roos analysis and options. Chair Klein understood Staff indicated a Mello-Roos District was not viable, and requested more information regarding jurisdictions where a Mello-Roos District did not succeed and the circumstances. Mr. Keene inquired whether the Staff Report contained practical issues related to a Mello-Roos District. Joe Saccio, Assistant Director Administrative Services, believed the Staff Report outlined information about Mello-Roos Districts. It contained a few examples of potential districts utilizing hypothetical numbers with respect to the amount a parcel would be taxed under two different scenarios. He asked if the Committee felt the report included sufficient information. Mayor Scharff replied no. The Report did not consider a district where residents paid an assessment of $1 or $2 and commercial entities paid more. There was no explanation as to how the boundaries were drawn. The drawing of the boundaries would determine whether or not a district was politically feasible. Mr. Saccio noted two methods for drawing a Mello-Roos District in terms of voting. The first consideration was whether the District contained 12 or fewer residents or more than 12 residents voting. Through a study, Staff would determine a tax formula for allocating the tax to different properties. Bond counsel opined that there were various factors the City could use for the allocation of the tax; proximity to the garage, car trips generated, square footage, etc. The amount of impact on the resident could be reduced; however, he did not wish to present the information as a rational study. As more of the assessment obligation was allocated to commercial properties, less was allocated to residential properties. Mayor Scharff expressed concern that Staff assigned too high of an assessment to residential properties. He believed voters would support a minimal assessment, and wanted to poll on that. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 3 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Chair Klein explained that the Council would have to provide a rational basis for the assessment. Mayor Scharff inquired whether Staff considered on a rational basis the lowest assessment that could be placed on a residential parcel. He wished to have a study on that and then poll about it. That would provide the information as to whether a Mello-Roos District was feasible. Mr. Saccio agreed that a rational formula was necessary. The City would need to hire a consultant to establish a rational process, because the process could not be arbitrary. The two examples in the Staff Report were meant to demonstrate that with more residential properties in a district, theoretically the lower the cost to a resident would be. The Council needed a rationale for allocating more of the tax to the entities that would generate the traffic and car trips. Mayor Scharff inquired whether a rational basis standard was applicable. Molly Stump, City Attorney, understood bond counsel to advise that the legal standard was a reasonable basis, which was probably a slightly higher standard than the rational basis test. Staff would need to work through the process with an engineer and with bond counsel. Mayor Scharff asked why Staff opposed a Mello-Roos District. Mr. Saccio reported the concern was the need for a two-thirds majority approval. The consultant felt that was a high hurdle, given other factors that could oppose a Mello-Roos District. Mr. Keene noted an additional concern was providing detailed methodologies and different alternatives in a limited amount of time. The Committee also needed to consider the extent that any single measure could provide a solution to parking and traffic issues. Chair Klein inquired about Staff's use of $3 million in the report. Mr. Saccio explained that the total debt service associated with construction of three garages in the second scenario was approximately $3 million a year. The table on page 6 indicated tentative scenarios, according to intensity of use, for the amount of the allocation per parcel per resident. Mayor Scharff felt the Committee did not have sufficient information. He assumed a study was needed to determine the amount of parking needed. The parking problem seemed to be created by the people owning the office Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 4 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 buildings and retail. The Staff Report did not contain a rational basis with respect to the numbers. Chair Klein believed the City needed an impartial consultant to perform a study. All traffic studies showed a significant part of the parking problem was residents. If the numbers in the report were realistic, they would not be a huge hurdle to obtaining a two-thirds vote. Council Member Berman noted in the Downtown District hypothetical, Staff would have to identify a rational basis that the Downtown businesses created 693 times more traffic than residents. He expressed concern regarding confusing voters by proposing a Mello-Roos District, a TOT increase and a Residential Parking Permit (RPP) Program in the same measure. Vice Mayor Shepherd inquired about areas where Mello-Roos Districts were successful and unsuccessful. Shakari Byerly, Fairbanks, Maslin, Maullin, Mertz and Associates, reported no one particular ZIP code or region received 50 plus 1 support. Chair Klein stated a Mello-Roos District was not contained in the poll. Ms. Byerly clarified that parking garages did not receive that level of support. The polling questions were not associated with a particular tax level. Both of the proposals received approximately 52-53 percent overall. By geographic area, one district received 52 percent support. If there was not significant public support in concept for a project with an assessment of $25-$30, the it would be a challenge to receive two-thirds approval. Polling a specific geographic area would be the best method to determine support in specific neighborhoods. She recommended public outreach work, because obtaining a significant number of interviews in such a small area would be difficult. Joy Tartarka, TBWB Strategies, agreed obtaining support in any one region would be difficult. The City could perform extensive outreach and consider different dollar amounts. She could test to determine whether those issues changed some of the variables. Recommendations from the report included shrinking the size of a district to less than 12 voters and creating a business district alone. Again, the City would need to perform extensive outreach to the affected business owners. Mr. Keene added that the City would need to obtain two-thirds support of business owners. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 5 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Council Member Berman questioned how to create a Downtown district. Vice Mayor Shepherd was interested in exploring all the types of business cooperatives. In 2009, support for the business license tax reached the 51 percent level for a revenue stream; however, she was unsure how that would match to a revenue stream for parking garages. If businesses did not support a Mello-Roos District, it might not reach a two-thirds majority. The Council should reach out to the business community to determine what they might support. She was unsure if the Committee should direct Staff to provide additional information, unless there was an example of a successful Mello-Roos District. Mayor Scharff noted the consultant was concerned that parking garages polled between 48 and 52 percent depending on the district. He inquired whether support was 48 percent City-wide. Ms. Byerly reported support was 52 percent for California Avenue and 53 percent for Downtown. Mayor Scharff indicated the concern was how to obtain a two-thirds majority. The TOT increase polled well because residents would not be paying the increase. He asked if the structure of a measure would affect the level of support. Ms. Byerly commented that another consideration was the time horizon. Six months to a year was needed to build public consensus around a structure. Her concern was reaching two-thirds approval and educating the voter. Chair Klein felt the community was more concerned about parking since the poll was conducted. He was willing to poll again to determine the current level of support. He requested examples of Mello-Roos Districts in other communities and information regarding their success or failure. Ms. Tartarka could look into it. She could only speak anecdotally with respect to polling falling short of the goal. Chair Klein stated apparently the consultants did not have recent experiences from other cities. Ms. Byerly could look into that. She was not prepared for that question and did not bring specific examples. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 6 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Vice Mayor Shepherd stated the topical point was the two-thirds vote. She proposed Staff provide experiences from other cities to facilitate an explanation to the full Council. MOTION: Vice Mayor Shepherd moved, seconded by Council Member XXXX to put in the parking lot to direct Staff to obtain from the consultant past Mello-Roos District election information and experiences from other cities. MOTION FAILED DUE TO LACK OF A SECOND Mayor Scharff wanted additional information on the connection between polling. Parking was a high profile issue. He believed residents would support a measure if the amount they paid was nominal. He suggested the Committee test some sort of nominal amount that was rationally justifiable. If support did not reach two-thirds, then the Committee should abandon the concept of a Mello-Roos District. If support reached two-thirds, then a Mello-Roos District was probably a more viable option to build parking garages than some of the other options. MOTION: Mayor Scharff moved, seconded by Council Member Klein to put in the parking lot to direct Staff to: 1) work with the consultant to poll the public on a nominal cost of a parcel tax that is rationally justifiable by the numbers for parking garages, with numbers provided by Staff, 2) some offset of payments that people would be paying for other parking garages. Council Member Berman believed the Committee should focus on other possible options; however, it was difficult to make a decision without discussing the other options. Including Mello-Roos questions in a poll could complicate matters. He did not understand why the Committee would want to perform one poll on a Mello-Roos District to raise $34 million as the Committee had identified other options to raise money to build parking garages. Chair Klein agreed that the Committee's later decisions could impact the first one. He agreed with moving the Motion to a parking lot. Vice Mayor Shepherd wanted to understand the positive and negative aspects of the previous campaign for a business license tax. She would not want to be taxed under a Mello-Roos scenario and pay for an RPP. Perhaps the Committee could consider a universal RPP for parking anywhere in Palo Alto. Chair Klein indicated that topic was beyond the Committee's jurisdiction. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 7 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Vice Mayor Shepherd was attempting to integrate that type of question. Chair Klein stated the full Council might have that responsibility at some point. Vice Mayor Shepherd inquired whether the Committee could only direct Staff to poll regarding the specifics of parking garages. A broader question was needed. Mr. Keene suggested effective polling would need a number of different aspects to be worthwhile, including possible opposition. Staff assumed RPP Programs would be implemented in conjunction with building parking garages, and the community would be asked to pay for both. It would be important to test that. He did not believe the Committee was holding a real discussion about establishing a City-wide RPP Program. Mr. Saccio reported a Mello-Roos District was flexible in that operating expenses and capital expenses could be included in it. An RPP Program could be folded into a Mello-Roos District. It would add a layer of complexity, but it was a possibility. Mayor Scharff agreed with Vice Mayor Shepherd. An RPP Program was an important component of a potential Mello-Roos District. He requested Staff consider different variations, poll on it and include it in the process. Chair Klein inquired whether the Committee on its own could authorize a second poll. Ms. Tucker believed the previous Council authority assumed a poll in the fall. Vice Mayor Shepherd inquired about the Committee's check-ins with the Council. Chair Klein felt the Committee should report to the Council very soon. Mr. Keene inquired whether a report to Council would impact the schedule for the Committee's work. A check-in could trigger issues other than just infrastructure, such as parking issues and RPP policies. The Council might want to authorize the shaping of those issues. Chair Klein preferred not to include Vice Mayor Shepherd's suggestion regarding an RPP Program. Vice Mayor Shepherd asked if he preferred to check-in with the Council first. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 8 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Chair Klein believed that would add a month's delay to the process. Vice Mayor Shepherd noted the Committee held several meetings without updating the Council. She asked that the Motion be restated. Chair Klein reported the Motion contained several items; to poll on parking garages; to provide a rationally justifiable cost per residential parcel with an explanation that businesses would pay more than residents; and to determine the community's position regarding some offset for payments for other parking programs Council Member Berman inquired whether the poll would address only parking garages or other issues as well. Ms. Byerly would need information regarding the scenario the Committee would propose. Whether the Committee placed three measures before voters would determine how she structured the questionnaire. To provide robust data, voters needed to understand the context in which they would be asked to pay for each of the mechanisms. Ms. Tartarka recommended polling along with outreach to the particular community, in this case the affected business communities. That feedback could be incorporated into survey data. Chair Klein supported outreach as long as it could be accomplished in a timely manner for a November 2014 ballot. Mr. Keene stated the Committee did not have an explicit definition of the topic for a poll. He inquired whether the Committee expected to review poll questions prior to polling or grant Staff the authority to proceed. Chair Klein understood that neither the Committee nor the Council would review the questions. Vice Mayor Shepherd requested background information concerning a Mello- Roos District as part of a larger strategy for addressing City-wide parking issues. She inquired about the broad uses of a Mello-Roos District. Mr. Keene noted Berkeley implemented a Mello-Roos Street Light Assessment District. Vice Mayor Shepherd wondered whether the proposed toll in San Francisco would have been a Mello-Roos District. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 9 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Mr. Saccio indicated a prior Staff Report provided three examples of successful Mello-Roos Districts in San Francisco. Vice Mayor Shepherd asked if the question could be broadened. Chair Klein reported that a Motion was on the floor directing three areas for polling. Vice Mayor Shepherd's suggestion should be addressed in future discussion. A substantial portion of Staff's and the consultant's recommendation against a Mello-Roos District concerned the fact that parking garages did not poll well at all. The results of polling would determine whether the Committee considered the details Vice Mayor Shepherd requested. Vice Mayor Shepherd felt the poll response would be different if questions included other costs associated with residential parking issues. Mayor Scharff understood one of those questions would be included in the poll. Vice Mayor Shepherd asked if a question could be included without resolving the RPP problem. Chair Klein requested clarification of the question to include as there was a variety of RPP forms. Mayor Scharff indicated the question address residents receiving an offset. Vice Mayor Shepherd requested clarification of an offset. Chair Klein explained residents would receive an offset if they paid for any other form of parking. Vice Mayor Shepherd did not realize the Motion included that point. MOTION PASSED: 3-1 Berman no Ms. Tucker reported that the baseline survey indicated a number of other approaches would be more successful for financing parking garages. The TOT increased polled well at 62 percent. Staff recommended a survey addressing a TOT increase specifically. A second recommendation was to consider a sales tax increase in association with the TOT increase. This would also be a good opportunity to test the interaction of upgrading the Utility Users Tax (UUT). In addition a poll could test reaction to a 2 percent Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 10 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 and a-3 percent increase. Staff suggested beginning outreach simultaneously with a survey. Council Member Berman suggested Staff include in the survey current revenue sources as noted in the spreadsheet. Mr. Keene asked the consultant to comment on the need to define the use of a TOT increase. That could have some impact on perception of the tax. Ms. Byerly noted the recommendation for additional polling was based on a general purpose measure. Many cities often suggested the types of general purposes for which the tax could be used. She recommended that infrastructure projects be prominently featured in outreach. A high level of risk was associated with a two-thirds measure given an initial vote at 62 percent. Mayor Scharff did not believe the Committee would move to a two-thirds. Ms. Byerly clarified that she was responding to the question regarding specifying uses of tax funds. Mayor Scharff assumed Mr. Keene meant there would be a companion measure. Vice Mayor Shepherd inquired if Staff wanted to test for a 2 percent and 3 percent increase in the TOT. Ms. Tucker recommended that based on Committee input. Vice Mayor Shepherd asked if the prior poll tested for a percentage. Ms. Byerly answered no. The prior poll tested a general concept. Vice Mayor Shepherd agreed with polling for a 2 percent and 3 percent increase. Because the UUT increase would be included on the ballot; therefore, she preferred to determine how it should be placed on the ballot. Ms. Byerly clarified that her recommendation was not that the UUT would not be used to fund infrastructure projects. If the City was interested in a TOT increase, it would be important to know the effect of another revenue neutral measure on the TOT measure. Vice Mayor Shepherd reiterated that the idea was to determine if the two would poll well together. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 11 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Chair Klein noted that the UUT measure was not a renewal. If the UUT measure failed, the tax would remain in effect. Ms. Byerly reported that the goal in developing the research instrument was to model the climate in which voters made decisions. If there was a measure related to the UUT, she wanted to incorporate information concerning the UUT into polling on the TOT measure. Vice Mayor Shepherd did not support polling on sales tax. Mayor Scharff inquired about polling results for sales tax. Mr. Keene suggested the support level was approximately 36 percent. Ms. Byerly explained that a good read on a sales tax measure required context for the tax be provided to voters. When sales tax was explored in depth, often the support level increased. Mayor Scharff believed the issue was whether a sales tax should be explored in more depth as part of the TOT. Chair Klein stated the sales should be considered not as part of the TOT but in addition to the TOT. Mayor Scharff asked if sales tax was included in the bundle. Chair Klein noted sales tax was simply one of the suggestions. MOTION: Vice Mayor Shepherd moved, seconded by Mayor Scharff to put in the parking lot to direct Staff and the consultant to conduct another poll for a 2 percent and 3 percent Transient Occupancy Tax to include the Utilities User Tax (UUT) to clean up the UUT measure and include a 1/8 cent sales tax. Vice Mayor Shepherd wished to understand how the sales tax would be incorporated. Mayor Scharff explained the consultant would poll on a sales tax increase to provide information. Vice Mayor Shepherd questioned the number items that should be included in a poll. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 12 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Ms. Byerly recommended two separate polls. One survey would explore a bond measure. Mr. Keene noted that the participants would be different for each survey. Vice Mayor Shepherd inquired whether the Mello-Roos District questions would be part of the survey concerning a TOT increase. Ms. Byerly responded yes. Vice Mayor Shepherd asked about the appropriate number of questions in a survey. Ms. Byerly explained the number of questions would be based on the length of the survey. It was possible to test two robust measures and potentially a third measure in less detail. MOTION PASSED: 4-0 Ms. Tucker reported that the GO bond bundle would package highly supported projects with lower supported projects. The baseline survey reviewed five measures that bundled different products. The traffic congestion relief, streets, sidewalks and trails bundle polled the highest at 74 percent. If the Committee was interested in funding parking garages, a bundle of projects could be successful. It would require a two-thirds vote. Staff recommended a survey devoted to a bundled measure. Council Member Berman recalled that the Committee determined previously that polling on streets was not necessary, even though streets were popular. Approximately two-thirds of the funding needed was comprised of parking garages and the Charleston-Arastradero project, neither of which polled well. He inquired about possible survey results when two-thirds of the projects in the bundle were unpopular. Ms. Byerly felt it should be tested. The survey would include messaging to make the case to voters in order to determine their reaction. Mayor Scharff agreed streets should not be included in a poll if it was not necessary, because the Committee did not plan on funding streets from a bond measure. Chair Klein did not support performing a poll, because it would be a separate poll and the Jay Paul Company Project was uncertain. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 13 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Mayor Scharff suggested discussing the topics together. Chair Klein did not believe it was logical to perform a poll until the Council had more certainty regarding the Jay Paul Company Project. Ms. Byerly recalled the Committee discussed in a prior meeting a GO bond in 2016. The Committee should discuss the combination and sequence of measures it would put forward. Mayor Scharff wanted the TOT increase and possibly the Mello-Roos District on a ballot in 2014 with bond measures on a ballot in 2016. If the Jay Paul Company Project did not materialize, then he would support the second bond measure. If the Jay Paul Company Project was successful, then he might consider the bundled transportation measure in 2016. He did not support a bundled GO bond measure if a funding was needed for a Public Safety Building (PSB). Chair Klein indicated funding for a PSB would not be needed if the Jay Paul Company Project was approved. If the Jay Paul Company Project was unsuccessful, then a bond measure would be needed to finance a PSB. That would take precedence over other aspects included in the transportation measure. Council Member Berman believed the discussion was different at the prior meeting, because the Committee separated funding into three clean categories. The PSB was an aspect of the TOT increase. A successful TOT measure would eliminate the need for a bond measure in 2016, because it provided the funding needed. Chair Klein disagreed. On the funding source side, there were a number of variables. Council Member Berman considered the categories of projects identified under the different scenarios. Chair Klein indicated a TOT increase would not necessarily fund all projects. Council Member Berman agreed. Chair Klein reiterated that the focus was on subjects for polling. Council Member Berman felt it was logical to poll for a potential transportation GO bond measure. The Committee needed as much information as possible to compare the options. He inquired about the cost Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 14 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 of an additional poll. The cost should not be extraordinary, and now was the right time to obtain information from the public. Ms. Byerly reported that timing was a concern. If there was a scenario under which the Committee would proceed with a GO bond in 2014, she recommended polling now. Otherwise, she recommended polling be delayed on the transportation measure and the focus moving to the measure of most of interest for November 2014. Council Member Berman had difficulty reaching a decision without results from the polling on the TOT. Vice Mayor Shepherd believed support might have changed because of publicity around the Jay Paul Company Project and densification. The Council needed direction from the community on how the PSB would be financed. She supported a poll. Mr. Keene asked if Vice Mayor Shepherd supported a poll under a GO bond scenario in addition to polling on the transportation bond. Vice Mayor Shepherd responded no. Mayor Scharff noted the Committee's reluctance to poll on both measures with a strong desire to poll on a public safety measure. He inquired about the cost to perform a second poll. Ms. Byerly felt a poll on both would be valuable if the Committee was considering a separate bond measure survey. MOTION: Mayor Scharff moved, seconded by Council Member Klein to put in the parking lot to direct Staff to poll for bundled General Obligation Bond measure and Transportation measure. MOTION PASSED: 4-0 Chair Klein inquired about the timing of the polls and when results could be provided to the Committee. Ms. Byerly anticipated finalizing questions in mid-November and reporting in late November or early December. She hoped to complete the initial research phrase prior to the end of 2013. Ms. Tucker noted a check-in with the Council was tentatively scheduled for late October, possibly the October 28, 2013 Council meeting. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 15 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Mr. Keene inquired whether the Committee removed streets from the transportation polling item. Mayor Scharff agreed streets were removed unless Staff provided a rationale for needing financing for streets. Mr. Keene inquired whether the name should be transportation measure or transportation/parking measure. The public could question the lack of streets in a transportation measure. Mayor Scharff explained that the Committee was providing Staff with discretion. Chair Klein reiterated that streets was removed, because funding was not needed for streets. He requested the consultant's recommendation with regard to the name. Mr. Byerly would work with Staff on all issues. Ms. Tucker inquired whether the Committee wished to discuss an RFP on a public-private partnership with respect to parking garages. Chair Klein answered yes. Jaime Rodriguez, Chief Transportation Officer, reported that Staff reviewed the needs for constructing parking garages on existing lots. Staff discussed the best long-term use for parking sites. Developers approached Staff with proposals for partnerships. The Council would need to set parameters regarding projects on the sites. Staff believed the development community was interested in partnerships with the City. Public-private partnerships would allow garages to be built quickly and outside existing assessment districts. Staff could provide a proposed RFP for the next Committee meeting. Mr. Keene noted that the discussion of public-private partnerships was part of the larger parking issue, which the Council should consider. Chair Klein agreed that the topic should be presented to the Council. Council Member Berman felt the Council should determine which parking lots were candidates for garages before issuing an RFP. Mayor Scharff inquired with assessment district permits should be provided to all who paid for them. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 16 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Mr. Rodriguez indicated Staff requested a meeting with bond counsel to address that question. Mr. Keene stated Staff would provide that information to the Council. Mayor Scharff recommended Staff demonstrate the advantages of the various types of partnerships in its information to the Council. Mr. Keene believed a public-private partnership to build a garage was a narrow focus. Development visions for Downtown could include different mixed-use issues, which were broader than the public-private partnership strategy. The discussion should encompass planning and land use rather than solely building a parking garage. Mayor Scharff understood Mr. Keenan built more parking on his project site and paid the in-lieu fee after the Council denied the project. That may have been more beneficial for the City than building the garage in partnership with Mr. Keenan. That type of information should be included in the Staff Report. Chair Klein asked if there was a definitive date for the Committee's check-in with the Council. Ms. Tucker reported it was tentatively scheduled for October 28, 2013. Chair Klein inquired whether the Committee should have another meeting prior to October 28. Ms. Tucker suggested Staff return quickly to the Committee to outline research objectives. Mayor Scharff asked if Staff recommended a Committee meeting on that topic. Ms. Tucker replied yes. Staff would outline the survey topics and ensure the Committee's feedback was correctly represented in the surveys. Mr. Keene asked if that meeting would occur after October 28. Ms. Tucker indicated Staff could return to the Committee in early November with the plan. Chair Klein requested clarification regarding the Committee's review of survey questions. Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 17 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 Ms. Tucker reported Staff provided the Committee with a high-level overview of the objectives and the topics to be tested in the baseline survey. Staff did not provide the questionnaire or the specific questions to the Committee for review. Mr. Keene did not believe Staff should return to the Committee prior to the Council meeting on October 28, 2013. Polling would not be completed prior to October 28. He inquired about a possible date for polling to be completed. Ms. Byerly believed results would be available in early December 2013. Chair Klein understood Ms. Byerly to indicate earlier that polling would be completed in November. Ms. Byerly explained polling would likely be conducted in mid-November. An analysis of the results could be presented in the first week of December. Chair Klein asked if there was a need for the Committee to meet prior to receiving the results from polling. Ms. Tucker replied no. Ms. Byerly would begin work immediately. Chair Klein announced the Committee would not prior to the October 28, 2013 check-in with the Council. He and Ms. Tucker would confer with respect to a presentation to the Council. Council Member Berman inquired whether a TOT increase, a Mello-Roos District and a UUT could be contained in one poll. Ms. Byerly responded yes. Ms. Tucker added that sales tax would be included. Ms. Byerly felt the UUT issue was not a separate measure. MOTION: Mayor Scharff moved, seconded by Council Member Berman to direct Staff to work with the consultant to conduct a poll for the Transient Occupancy Tax, a Mello-Roos Tax, sales tax, and the contrast of the UUT Tax in one poll. MOTION PASSED: 4-0 Attachment A. 10-28-2013 Staff Report DRAFT MINUTES Page 18 of 18 Infrastructure Committee Special Meeting Draft Minutes: 10/1/13 ADJOURNMENT: The meeting was adjourned at 4:42 P.M. Attachment A. 10-28-2013 Staff Report CITY OF PALO ALTO CITY COUNCIL ACTION MINUTES Page 1 of 3 Special Meeting October 28, 2013 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:01 P.M. Present: Berman, Burt, Klein, Kniss, Scharff, Schmid, Shepherd Absent: Holman, Price Absent CLOSED SESSION 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and (James Keene, Pamela Antil, Lalo Perez, David Ramberg, Joe Saccio, Kathryn Shen, Sandra Blanch, Dania Torres Wong, Val Fong, Marcie Scott, Brenna Rowe, Molly Stump) Employee Organization: Service Employees International Union, (SEIU) Local 521 Authority: Government Code Section 54957.6(a) Closed Session adjourned from the Closed Session at 6:45 p.m. and Council took a break. The City Council adjourned to the Council Chambers at 7:00 P.M. Mayor Scharff announced there was no reportable action. AGENDA CHANGES, ADDITIONS, AND DELETTIONS None MINUTES APPROVAL MOTION: Council Member Kniss moved, seconded by Vice Mayor Shepherd to approve the Minutes of September 16 and September 23, 2013. Attachment B. 10-28-2013 Meeting Minutes ACTION MINUTES Page 2 of 3 City Council Meeting Action Minutes: 10/28/13 MOTION PASSED: 9-0 Holman, Price Absent CONSENT CALENDAR MOTION: Vice Mayor Shepherd moved, seconded by Council Member Kniss to approve Agenda Item Numbers 2-3. 2. Approval of a Construction Contract to JCM Construction Inc. in the Amount Not to Exceed $358,600 to Provide Construction Services to Reconfigure the City Hall 6th and 7th Floor Public Works Engineering Services, Fire Department, and City Clerk's Office Areas. 3. Adoption of Resolutions Fixing the City of Palo Alto’s Healthcare Premium Costs Under the Public Employees’ Medical and Hospital Care Act (PEMHCA) for Palo Alto’s New Bargaining Units, Palo Alto Police Management Association and Utilities Managers and Professionals Association of Palo Alto. MOTION PASSED FOR AGENDA ITEM NUMBERS 2-3: 9-0 Holman, Price absent ACTION ITEMS 4. Update on the Infrastructure Committee’s Work to Evaluate Finance Measures to Fund Infrastructure Projects and Financing Measures. MOTION: Council Member Klein moved, seconded by Mayor Scharff to accept the Staff Report providing an update on the Infrastructure Committee’s work to evaluate infrastructure projects and their financing. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER for the poll results from the second round of polling return to the council promptly after the completion of that poll. MOTION PASSED: 6-1 Schmid no, Holman, Price absent 5. Policy Direction on the Development of a Digital Message Center on a City-owned Parcel Along U.S. 101. MOTION: Mayor Scharff moved, seconded by Council Member Kniss that the City not pursue a digital reader board. MOTION PASSED: 7-0 Holman, Price Absent Attachment B. 10-28-2013 Meeting Minutes ACTION MINUTES Page 3 of 3 City Council Meeting Action Minutes: 10/28/13 6. Technology and the Connected City Committee Recommendation to Develop Master Plan to Build Out the City’s Fiber Optic System to Provide Fiber-to-the-Premise and Develop Complementary Wireless Network Plan. MOTION: Council Member Kniss moved, seconded by Council Member Klein to direct Staff to: 1. Develop a Fiber-to-the-Premise Master Plan and conduct a request for proposals to build out the existing dark fiber optic backbone system in Palo Alto. 2. Develop a Wireless Network Plan with a near-term focus on WiFi, and a long-term consideration of other wireless technologies. MOTION PASSED: 7-0 Holman, Price absent ADJOURNMENT: The meeting was adjourned at 10:45 P.M. Attachment B. 10-28-2013 Meeting Minutes CaliforniaCityFinance.Com Local Revenue Measure Results November 2013 Voters in the November 5, 2013 California consolidated election decided 75 local measures. Among these were 48 measures seeking approval for taxes or bonds. Ballots are still being counted and final results will not be known until later this month, but here are the preliminary outcomes. K-12 schools districts and community colleges requested a total of $374.6 million in eight separate bond measure authorizations for bonds to construct facilities, acquire equipment and make repairs and upgrades. There were 6 measures to increase or extend school parcel taxes. Among the 34 non-school local revenue measures were four measures asking for a total of $416.5 million in bonds including the largest this election, a $394 million hospital proposal in Marin. There were 10 special taxes and parcel taxes requiring two-thirds voter approval, including four fire district measures. Twelve proposals sought to extend or increase local sales taxes, including the ¾ cent general tax proposal in Stockton that was accompanied by an advisory measure for use in law enforcement and bankruptcy recovery. These were majority vote measures except two (Huron, Clearlake) that attempted to garner two-thirds approval for 1 cent earmarked special taxes. This is an “off-year” election. There were no state or national primary or general elections. Only 16 of California’s 58 counties had any measures at all. 2217 Isle Royale Lane • Davis, CA • 95616-6616 Phone: 530.758.3952 • Fax: 530.758.3952 © 2013 Michael Coleman City Majority Vote 20City 2/3Vote 5 SpecDistr 2/3Vote 9 School ParcelTax 2/3Vote 6 School Bond 55%Vote 8 Proposed Local Revenue Measures November 2013 November 19, 2013 FINAL COUNTS © 2013 Michael Coleman UtilityUsers Tax MajorityVote 3 HotelTax MajorityVote 2 SalesTax MajorityVote 10 SalesTax 2/3vote 2 ParcelTax 2/3vote 8 G.O. Bond 2/3vote 4 BusinessTax MajorityVote 5 Types of Non-School Local Tax Measures November 2013 Attachment C. November 2013 Election Results Local Revenue Measures Nov 2013 Preliminary Results – 2 – November 19, 2013 CaliforniaCityFinance.com Overall Passage Rates Consistent with results in prior elections, majority vote tax measures fared much better than supermajority measures. Four out of five city tax measures passed but fewer than half of the non- school two-thirds vote bonds and special taxes passed. However, all five school parcel tax measures passed and just two of the eight 55% school bond measures failed. The passage ratio of non-school measures is slightly better than the passage rates of prior elections for majority vote general taxes and statistically identical for supermajority measures. The school band passage rate was statistically identical to prior passage rates. The 100% success of the five school parcel taxes clearly beats historical outcomes. Local Revenue Measures November 2013 Total Pass Passing% City General Tax (Majority Vote)20 17 85% City SpecialTax orG.O.bond (2/3 Vote) 5 2 40% Special District (2/3)9 4 44% School ParcelTax2/3 6 5 83% School Bond 55%8 6 75% Total 48 34 71% 43% (6/14) 85% (17/20) 0% 20% 40% 60% 80% 100% Special Tax 2/3 Voter Measures General Tax Majority Vote Measures Percent Passing City / County / Special District Tax & Bond Measures November 2013 Since 2001 66% Since 2001 47% 83% (5/6) 75% (6/8) 0% 20% 40% 60% 80% 100% 2/3 Vote Tax / bond 55% Vote Bond Percent Passing School Tax & Bond Measures November 2013 Since 2001 81% Since 2001 60% Attachment C. November 2013 Election Results Local Revenue Measures Nov 2013 Preliminary Results – 3 – November 19, 2013 CaliforniaCityFinance.com Among the non-school measures, nine of ten majority vote sales tax measures passed. Modesto’s one cent tax failed with 49.1% yes. Half of the eight parcel taxes passed. All five business license tax measures passed. Among the general obligation bond measures, all in special districts, only the $394 million Marin Healthcare District measure passed. Local Add-On Sales Taxes (Transaction and Use Taxes) Majority vote general purpose add-on sales tax measures fared well. Only Modesto’s Measure X failed. There were two two-thirds vote special add-on sales tax measures. The Clearlake measure garnered 61.2% “yes” but failed. 1 2 1 1 5 4 9 1 0 2 3 0 4 1 SalesTax 2/3vote HotelTax MajVote UtilityUsersTax MajVote G.O. Bond 2/3vote BusinessTax MajVote ParcelTax 2/3vote SalesTax MajVote Passing Failing Transactions and Use Tax (Add-on Sales Tax) - General Tax - Majority Approval Agency Name County Rate YES%NO% City of Scotts Valley Santa Cruz Measure U 1/2cent 74.9%25.1%PASS new City of Larkspur Marin Measure C 1/2cent 74.6%25.4%PASS new City of El Monte Los Angeles Measure GG 1/2cent 71.1%28.9%PASS extend City of San Anselmo Marin Measure D 1/2cent 68.7%31.3%PASS new City of Rohnert Park Sonoma Measure A 1/2cent 68.2%31.8%PASS extend City of Antioch Contra Costa Measure C 1/2cent 68.0%32.0%PASS new City of Corte Madera Marin Measure B 1/2cent 67.1%33.0%PASS new City of San Rafael Marin Measure E 3/4cent 65.0%35.0%PASS was 1/2 City of Stockton San Joaquin Measure A 3/4cent 52.5%47.5%PASS new City of Modesto Stanislaus Measure X 1 cent 49.1%50.9%FAIL new Transactions and Use Tax (Add-on Sales Tax) - Special Tax - Two-Thirds Approval Agency Name County Rate Sunset YES%NO% City of Huron Fresno Measure P 1 cent 68.9%31.2%PASS new City of Clearlake Lake Measure H 1 cent 61.2%38.8%FAIL new Attachment C. November 2013 Election Results Local Revenue Measures Nov 2013 Preliminary Results – 4 – November 19, 2013 CaliforniaCityFinance.com Transient Occupancy (Hotel) Taxes Both measures to increase transient occupancy taxes passed, Selma’s by just four votes. Utility User Taxes Portola Valley and Pacifica, both in San Mateo County, considered measures to modernize and expand their UUTs. Portola Valley succeeded. Grand Terraces new 5% UUT failed to get the majority voter approval needed. Business License Taxes All five measures to increase or expand Business License Taxes passed. Transient Occupancy Tax Tax Measures: All General Majority Vote Agency Name County Rate YES%NO% City of Sunnyvale Santa Clara Measure B 9.5%to10.5%67.6%32.4%PASS increase City of Selma Fresno Measure K 6%to12%50.2%49.8%PASS increase Utility User Taxes - General Tax - Majority Approval Agency Name County Rate YES%NO% City of Portola Valley San Mateo Measure Q 5.5%to4.5%86.5%13.5%PASS reduction City of Grand Terrace San Bernardino Measure C 5% 40.0%60.0%FAIL new City of Pacifica San Mateo Measure V same6.5% 34.1%65.9%FAIL expand Business License Tax Measures: Majority Vote General Agency Name County YES%NO% City of Brisbane San Mateo Measure T on liquid storage 76.7%23.3%PASS City of Marina Monterey Measure I cardrooms 74.3%25.7%PASS City of Foster City San Mateo Measure U general update 73.1%26.9%PASS City of Santa Fe Springs Los Angele Measure S OilBarrelTax 72.7%27.3%PASS City of Palm Springs Riverside Measure B Marijuana 66.9%33.1%PASS Attachment C. November 2013 Election Results Local Revenue Measures Nov 2013 Preliminary Results – 5 – November 19, 2013 CaliforniaCityFinance.com General Obligation Bonds Among the four general obligation measures, all by special districts, only the $394 million Marin Healthcare District measure succeeded. Parcel Taxes and Special Taxes (non-school) Four of the eight non-school parcel tax measures passed. Including two fire measures, a park district measure, and the City of Atherton’s general purpose measure. Among the failing measures were three fire measures and Waterford’s multi-purpose measure. School Bonds Voters approved a total of $216.8 million in new school bonds in six school districts. City, County and Special District Bond Measures - Two-Thirds Approval Agency Name County Amount YES%NO% Marin Healthcare District Marin Measure F $394million 68.0%32.0%PASS Soledad Community Health Care DistrictMonterey Measure J $11.5million 65.8%34.2%FAIL Cottonwood Fire Protection District Shasta Measure A $4million 59.3%40.7%FAIL Strawberry Recreation District Marin Measure J $7million 47.0%53.0%FAIL City, County and Special District Parcel Taxes - Two-Thirds Approval Agency Name County Amount Purpose YES%NO% Fieldbrook Glendale Fire Zone Humboldt Measure K to$75/parcel fire/ems 10yrs 85.2%14.8%PASS increase Kentfield Fire District Marin Measure G to$.10/sf fire/ems 75.5%24.5%PASS increase City of Atherton San Mateo Measure X same general 4yrs 74.1%25.9%PASS extend Mesa Park District Marin Measure I $49/parcel park 4yrs 71.0%29.0%PASS new Little Lake Fire Protection DistrMendocino Measure I $14/du fire station 61.2%38.8%FAIL new Happy Camp Fire Protection DSiskiyou Measure B $55/parcel fire/ems 10yrs 59.3%40.7%FAIL new City of Canyon Lake Riverside Measure D $204/parcel+7% fire/ems 5yrs 49.2%50.9%FAIL new City of Waterford Stanislaus Measure W $52to$60/ru Mello-RoosCFD 30.5%69.5%FAIL increase School Bond Measures Agency Name County Amount YES%NO% Menlo Park City School District San Mateo Measure W $23million 75.1%25.0%PASS Las Lomitas Elementary School District San Mateo Measure S $60million 73.9%26.1%PASS Sunnyvale School District Santa Clara Measure G $96million 67.4%32.6%PASS Laguntas Elementary School District Marin Measure A $5million 67.1%32.9%PASS North Monterey County Unified SchoolMonterey Measure H $23.8million 61.8%38.2%PASS Calipatria Unified School District Imperial Measure T $9million 60.7%39.3%PASS Pacific Grove Unified School District Monterey Measure G $27.8million 51.5%48.5%FAIL San Mateo-Foster City School District San Mateo Measure P $130million 46.6%53.4%FAIL Attachment C. November 2013 Election Results Local Revenue Measures Nov 2013 Preliminary Results – 6 – November 19, 2013 CaliforniaCityFinance.com School Parcel Taxes Among the six school parcel taxes, five passed, including two extensions of existing taxes. Only the Semitropic School District measure failed, with 34 registered voters, 24 of whom voted. A total of nine “no” votes defeated that measure. *This measure was not included in the preliminary vote results report. ************ For more information: Michael Coleman 530-758-3952. coleman@muni1.com Source: County elections offices. mc School Parcel Taxes - Two-Thirds Approval Agency Name County Rate YES%NO% Campbell Union High School District Santa Clara Measure E $85/yr 76.7%23.4%PASS extend Loma Prieta Joint Union School District Santa Clara / SMeasure H $164/yr 75.9%24.1%PASS new Belmont-Redwood Shores School Distri San Mateo Measure R $174/yr 71.4%28.6%PASS extend Moraga School District Contra Costa Measure B $192/yr 68.0%32.0%PASS new Mojave Unified School District Kern Measure C $42/yr 67.1%32.9%PASS new Semitropic School District* (24 voters!) Kern Measure D 62.5%37.5%FAIL new Attachment C. November 2013 Election Results 220-3733 Key Findings from a Citywide Survey of Likely Voters Conducted November 10-14, 2013 Voter Attitudes Toward Potential Infrastructure Ballot Measures Attachment D. Infrastructure Survey Findings and Recommendations 1 Research Objectives The central goal of the survey was to assess voter support for a variety of potential ballot measure concepts, identified by the City Council as priorities for further exploration as potential mechanisms to fund infrastructure improvements: A three percent increase in the transient occupancy tax A one-quarter percent increase in the sales tax rate A $66 million general obligation bond for transportation projects A $71 million general obligation bond for public safety improvements The establishment of a community facilities district (CFD) to fund parking improvements A major objective of the survey was to narrow the list of potential measure needing further exploration in a January survey, pending direction from the Council, to no more than two. Attachment D. Infrastructure Survey Findings and Recommendations 2 Context for the Success of Local Revenue Measures in California Passage Rates for Special and General Taxes Attachment D. Infrastructure Survey Findings and Recommendations 3 Context for the Success of Local Revenue Measures in California (Continued) Passage Rates for Types of Special Taxes Attachment D. Infrastructure Survey Findings and Recommendations 4 Methodology Telephone survey of 600 randomly-selected Palo Alto voters likely to cast a ballot in the November 2014 election Interviews were conducted via landline and cell phones Survey conducted November 10 – 14, 2013 The margin of sampling error is +/-4.0 percent at the 95 percent confidence level; margins of error for population subgroups will be higher. Some percentages do not sum to 100% due to rounding Attachment D. Infrastructure Survey Findings and Recommendations 5 Question Sequence The overall sample of 600 voters was divided into five groups of 120, with each group hearing one of the five measures first in rotation. That was followed by an open-ended question asking the reasons for their vote, and subsequently the initial descriptions of the other measures. Respondents were then asked several follow-up questions about the measure that had been presented to them first, in addition to arguments from supporters and opponents of that measure. Finally, they were presented with the same follow-up questions about each of the other ballot measure concepts, in random order. In our analysis of the results, we focus both on answers from those respondents who were asked about each measure first in the rotation – and are thus providing the most clear-cut responses – as well as among the sample as a whole. The overall sample of 600 voters was divided into five groups of 120, with each group hearing one of the five measures first in rotation. That was followed by an open-ended question asking the reasons for their vote, and subsequently the initial descriptions of the other measures. Respondents were then asked several follow-up questions about the measure that had been presented to them first, in addition to arguments from supporters and opponents of that measure. Finally, they were presented with the same follow-up questions about each of the other ballot measure concepts, in random order. In our analysis of the results, we focus both on answers from those respondents who were asked about each measure first in the rotation – and are thus providing the most clear-cut responses – as well as among the sample as a whole. Attachment D. Infrastructure Survey Findings and Recommendations 6 Attachment D. Infrastructure Survey Findings and Recommendations 7 Ballot Measure Summary Language (PARKING)In order to improve access to businesses and other destinations downtown and throughout Palo Alto through the construction of parking garages, shall the City establish a community facilities district with a tax of up to $24 per year per residential property, and much larger amounts for businesses, limited to 30 years and subject to citizen oversight and independent annual audits? (T.O.T.)To provide funding for general City services such as police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City increase the hotel/motel tax by three percent, with all revenue subject to citizen oversight and independent annual audits? (SALES)To provide funding for general City services such as neighborhood police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City enact a ¼ cent sales tax increase, with all revenue subject to citizen oversight and independent annual audits? (PARKING)In order to improve access to businesses and other destinations downtown and throughout Palo Alto through the construction of parking garages, shall the City establish a community facilities district with a tax of up to $24 per year per residential property, and much larger amounts for businesses, limited to 30 years and subject to citizen oversight and independent annual audits? (T.O.T.)To provide funding for general City services such as police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City increase the hotel/motel tax by three percent, with all revenue subject to citizen oversight and independent annual audits? (SALES)To provide funding for general City services such as neighborhood police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City enact a ¼ cent sales tax increase, with all revenue subject to citizen oversight and independent annual audits? Attachment D. Infrastructure Survey Findings and Recommendations 8 Ballot Measure Summary Language (Continued) (TRANSPORTATION BOND)To provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety, shall the City of Palo Alto authorize $66 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? (SAFETY BOND)To fund construction of a new earthquake-safe public safety building and emergency response command center, replace two obsolete fire stations with modern earthquake-safe buildings, and improve communication systems to ensure rapid 911 response to fires, accidents and other emergencies, shall the City of Palo Alto authorize $71 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? (TRANSPORTATION BOND)To provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety, shall the City of Palo Alto authorize $66 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? (SAFETY BOND)To fund construction of a new earthquake-safe public safety building and emergency response command center, replace two obsolete fire stations with modern earthquake-safe buildings, and improve communication systems to ensure rapid 911 response to fires, accidents and other emergencies, shall the City of Palo Alto authorize $71 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? Attachment D. Infrastructure Survey Findings and Recommendations 9 Total Yes Total No 79%15% 73%22% 62%32% 57%39% 45%40% 21% 17% 21% 23% 13% 58% 56% 41% 34% 32% 10% 12% 13% 20% 25% 11% 20% 18% 15% 7% 5% 6% 15% 0%20%40%60%80%100% Transient Occupancy Tax Transportation Bond Public Safety Bond Sales Tax Parking Assessment Def. Yes Prob./Lean Yes Prob./Lean No Definitely No Undecided Initial support is highest for a transient occupancy tax and a transportation bond measure. 2. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? (Asked First; Highlighted Items Reach Required Threshold) Attachment D. Infrastructure Survey Findings and Recommendations 10 Progression of Support Mechanism Initial Support After Positive After Negative Parking CFD 45% 55% 40% TOT Increase (3%) 79% 70% 65% Sales Tax Increase (1/4 cent) 57% 55% 51% Transportation Bond 73% 67% 61% Public Safety Bond 62% 65% 55% (Asked First) Attachment D. Infrastructure Survey Findings and Recommendations 11 Attachment D. Infrastructure Survey Findings and Recommendations 12 Recent Survey Questions Relevant to Assessing Support for a TOT Increase Q2b/10a. April Poll/Q14b. April Poll Transient Occupancy Tax (Nov. 2013) Generic City Services (April 2013) Transient Occupancy Tax (April 2013) To provide funding for general City services such as police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City increase the hotel/motel tax by 3%, with all revenue subject to citizen oversight and independent annual audits? A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally- controlled funding to address local needs. These funds could not be taken away by the State and would be used to support general City services and facilities, including fire, paramedics, police, streets, sidewalks, parks, recreation, libraries and community centers. Would you support or oppose Increasing the transient occupancy tax, charged to hotel and motel guests? Attachment D. Infrastructure Survey Findings and Recommendations 13 79% 70% 72% 62% 15% 24% 24% 33% 7% 7% 5% 0%20% 40% 60% 80% 100% Asked first Total April 2013 April 2013 Total Yes/Total Support Total No/Total Oppose Undecided A solid majority of voters support a general purpose TOT measure even in context of the other measures. 2b. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? To provide funding for general City services such as police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City increase the hotel/motel tax by 3%, with all revenue subject to citizen oversight and independent annual audits? Conceptual support for a general tax Generic support for a TOT increase Attachment D. Infrastructure Survey Findings and Recommendations 14 25% 39% 13% 1% 7% 10% 4% 0% 20% 40% 60% 24% 35% 11% 4% 9% 11% 6% 0% 20% 40% 60% Definitely yes Probably yes Undecided, lean yes Undecided, lean no Probably no Definitely no Undecided There is little meaningful difference in levels of support for a 2% increase and a 3% increase. 2b. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? 7. Suppose that this measure increased the City’s hotel/motel tax by two percent, instead of three percent. In that case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? 3% Increase (All Respodnents) Total No 19% Total Yes 77% 2% Increase (All Respondents) +7% Total No 24% -5% -2% Difference Total Yes 70% Attachment D. Infrastructure Survey Findings and Recommendations 15 Pro and Con Arguments – Transient Occupancy Tax 8/9. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Opponents say that this measure will increase the cost of hotel and motel stays in Palo Alto, driving visitors away to surrounding communities and depriving our community of badly-needed business and jobs. That’s why the measure is strongly opposed by a coalition of Palo Alto businesses. The City has plenty of money that it already spends on huge salaries and benefits for public employees; the City should tighten its belt and use that money rather than raising taxes. Opponents say that this measure will increase the cost of hotel and motel stays in Palo Alto, driving visitors away to surrounding communities and depriving our community of badly-needed business and jobs. That’s why the measure is strongly opposed by a coalition of Palo Alto businesses. The City has plenty of money that it already spends on huge salaries and benefits for public employees; the City should tighten its belt and use that money rather than raising taxes. Supporters say that this measure will provide funding for essential improvements to public facilities in Palo Alto, like police and fire stations, parks and community centers. And it will be funded by an increase in taxes paid by hotel and motel guests in Palo Alto, with no cost to local Palo Alto residents and property owners. All spending will be subject to full public disclosure, oversight by a citizens’ committee, and independent annual audits. Supporters say that this measure will provide funding for essential improvements to public facilities in Palo Alto, like police and fire stations, parks and community centers. And it will be funded by an increase in taxes paid by hotel and motel guests in Palo Alto, with no cost to local Palo Alto residents and property owners. All spending will be subject to full public disclosure, oversight by a citizens’ committee, and independent annual audits. Attachment D. Infrastructure Survey Findings and Recommendations 16 79% 70%65% 15% 24%27% 7%6%8%0% 20% 40% 60% 80% 100% Transient Occupancy Tax Positive Message Negative Message Total Yes Total No Undecided Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (When Asked First) Support remains well above the majority vote threshold – and close to two-thirds – after messages on both sides. Q2b/Q8/Q9. (Transient Occupancy Tax) Attachment D. Infrastructure Survey Findings and Recommendations 17 Attachment D. Infrastructure Survey Findings and Recommendations 18Q2d. Transportation Bond (Nov. 2013) Generic Transportation Measure (April 2013) Bond Measure (April 2013) To provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety, shall the City of Palo Alto authorize $66 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure to fund repair and improvements to streets, sidewalks, and nine miles of off- road trails. This measure would provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety. Issuing bonds, allowing the City to borrow money to complete the projects and pay it back over time with money from local property taxes. Recent Survey Questions Relevant to Assessing Support for a Transportation Bond Attachment D. Infrastructure Survey Findings and Recommendations 19 73% 65% 74% 64% 22% 31% 24% 35% 5% 5% 0%20% 40% 60% 80% 100% Asked first Total April 2013 April 2013 Total Yes/Total Support Total No/Total Oppose Undecided Support for a transportation bond is consistent with results from the baseline survey. 2d. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? To provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety, shall the City of Palo Alto authorize $66 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? Conceptual support for a transportation measure Generic support for a bond measure Attachment D. Infrastructure Survey Findings and Recommendations 20 Pro and Con Arguments – Transportation Bond 13/14. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Opponents say that this measure will cost way too much – as much as $132 million once interest costs are factored in. It will cost the typical property owner $116 per year, and young families buying homes in Palo Alto will be disproportionately hit with higher tax assessments. And the measure does not include one penny for road repairs or maintenance – the improvements that Palo Alto needs the most. Opponents say that this measure will cost way too much – as much as $132 million once interest costs are factored in. It will cost the typical property owner $116 per year, and young families buying homes in Palo Alto will be disproportionately hit with higher tax assessments. And the measure does not include one penny for road repairs or maintenance – the improvements that Palo Alto needs the most. Supporters say that traffic congestion is one of the biggest problems facing Palo Alto. This measure will fund vital improvements to get traffic moving again, with road upgrades and improvements to intersections and traffic signals designed to speed up the flow of traffic. And it will also fund improvements to sidewalks, bikeways, and other parts of our local transportation system that will make it easier for people to choose other ways of getting around the community. Supporters say that traffic congestion is one of the biggest problems facing Palo Alto. This measure will fund vital improvements to get traffic moving again, with road upgrades and improvements to intersections and traffic signals designed to speed up the flow of traffic. And it will also fund improvements to sidewalks, bikeways, and other parts of our local transportation system that will make it easier for people to choose other ways of getting around the community. Attachment D. Infrastructure Survey Findings and Recommendations 21 73%67%61% 22% 30% 38% 5%3%1% 0% 20% 40% 60% 80% 100% Transportation Bond Positive Message Negative Message Total Yes Total No Undecided Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (When Asked First) Support declines on the final ask, but is within reach of the two-thirds threshold. Q2d/Q13/Q14. (Transportation Bond) Attachment D. Infrastructure Survey Findings and Recommendations 22 Attachment D. Infrastructure Survey Findings and Recommendations 23Q2c. Sales Tax(Nov. 2013)Generic City Services(April 2013)Sales Tax(April 2013) To provide funding for general City services such as neighborhood police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City enact a ¼ cent sales tax increase, with all revenue subject to citizen oversight and independent annual audits? A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally-controlled funding to address local needs. These funds could not be takenawaybytheState and would be used to support general City services and facilities, including fire, paramedics, police, streets, sidewalks, parks, recreation, libraries and community centers. Increasing the local sales tax rate paid by anyone who shops in Palo Alto. Recent Survey Questions Relevant to Assessing Support for a Sales Tax Increase Attachment D. Infrastructure Survey Findings and Recommendations 24 57% 52% 72% 38% 39% 44% 24% 61% 0%20% 40% 60% 80% 100% Asked first Total April 2013 April 2013 Total Yes/Total Support Total No/Total Oppose Undecided A general purpose sales tax measure receives majority support, even in context of the other measures. 2c. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? To provide funding for general City services such as neighborhood police patrols; 911 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City enact a one-quarter cent sales tax increase, with all revenue subject to citizen oversight and independent annual audits? Conceptual support for a general tax Generic support for a sales tax increase Attachment D. Infrastructure Survey Findings and Recommendations 25 21% 31% 10% 4% 15% 18% 2% 0% 20% 40% 60% 20% 25% 8% 8% 17% 18% 4% 0% 20% 40% 60% Definitely yes Probably yes Undecided, lean yes Undecided, lean no Probably no Definitely no Undecided There is notably higher support for a one-eighth cent rate increase. 2c. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? 10. Suppose that this measure increased the City’s sales tax by one-eighth cent, instead of one-quarter cent. In that case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? ¼-cent Increase (All Respondents) Total No 37% Total Yes 61% +9% Total No 44% -7% -2% Difference Total Yes 52% 1/8-cent Increase (All Respondents) Attachment D. Infrastructure Survey Findings and Recommendations 26 Pro and Con Arguments – Sales Tax 11/12. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Opponents say that raising sales taxes will harm our local economy, driving business and jobs outside Palo Alto. In addition, it will significantly increase costs for local families during a difficult economy, when seniors and people on fixed incomes are already having a hard time making ends meet. The City has plenty of money that it already spends on huge salaries and benefits for public employees; the City should tighten its belt and use that money rather than raising taxes. Opponents say that raising sales taxes will harm our local economy, driving business and jobs outside Palo Alto. In addition, it will significantly increase costs for local families during a difficult economy, when seniors and people on fixed incomes are already having a hard time making ends meet. The City has plenty of money that it already spends on huge salaries and benefits for public employees; the City should tighten its belt and use that money rather than raising taxes. Supporters say that this measure will provide funding for essential improvements to public facilities in Palo Alto, like police and fire stations, parks and community centers. And it will apply to purchases by tourists and visitors to Palo Alto, ensuring that people who come from outside our community pay their fair share to support the facilities they use while they are here. All spending will be subject to full public disclosure, oversight by a citizens’ committee, and independent annual audits. Supporters say that this measure will provide funding for essential improvements to public facilities in Palo Alto, like police and fire stations, parks and community centers. And it will apply to purchases by tourists and visitors to Palo Alto, ensuring that people who come from outside our community pay their fair share to support the facilities they use while they are here. All spending will be subject to full public disclosure, oversight by a citizens’ committee, and independent annual audits. Attachment D. Infrastructure Survey Findings and Recommendations 27 57%57% 51% 39%38% 44% 4%5%5%0% 20% 40% 60% 80% Sales Tax Positive Message Negative Message Total Yes Total No Undecided Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (When Asked First) Negative messaging does drive down support for a sales tax. Q2c/Q11/Q12. (Sales Tax) Attachment D. Infrastructure Survey Findings and Recommendations 28 Attachment D. Infrastructure Survey Findings and Recommendations 29Q2e. Safety Bond (Nov. 2013) Generic Public Safety Measure (April 2013) Bond Measure (April 2013) To fund construction of a new earthquake-safe public safety building and emergency response command center, replace two obsolete fire stations with modern earthquake-safe buildings, and improve communication systems to ensure rapid 911 response to fires, accidents and other emergencies, shall the City of Palo Alto authorize $71 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? A Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure to fund improvements to keep Palo Alto safe, including construction of a new earthquake-safe public safety building and emergency response command center, replacing two obsolete fire stations with modern earthquake-safe buildings, and improving communication systems to ensure rapid 911 response to fires, accidents and other emergencies. Issuing bonds, allowing the City to borrow money to complete the projects and pay it back over time with money from local property taxes. Recent Survey Questions Relevant to Assessing Support for a Public Safety Bond Attachment D. Infrastructure Survey Findings and Recommendations 30 62% 64% 68% 64% 32% 32% 30% 35% 6% 0%20% 40% 60% 80% 100% Asked first Total April 2013 April 2013 Total Yes/Total Support Total No/Total Oppose Undecided Support for a public safety bond is consistently in the mid-60’s. 2e. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? To fund construction of a new earthquake-safe public safety building and emergency response command center, replace two obsolete fire stations with modern earthquake-safe buildings, and improve communication systems to ensure rapid 911 response to fires, accidents and other emergencies, shall the City of Palo Alto authorize $71 million in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? Conceptual support for a public safety measure Generic support for a bond measure Attachment D. Infrastructure Survey Findings and Recommendations 31 19% 33% 17% 2% 10% 16% 2% 0% 20% 40% 60% 18% 31% 15% 7% 11% 15% 4% 0% 20% 40% 60% Definitely yes Probably yes Undecided, lean yes Undecided, lean no Probably no Definitely no Undecided Reducing the bond amount lifts support barely above two-thirds. 2e. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? 15. Suppose that this measure increased the City’s sales tax by one-eighth cent, instead of one-quarter cent. In that case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Total No 28% Total Yes 69% +5% Total No 32% -4% -2% Difference Total Yes 64% $71 Million (All Respondents) $51 Million (All Respondents) Attachment D. Infrastructure Survey Findings and Recommendations 32 Pro and Con Arguments – Safety Bond 16/17. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Opponents say that this bond is just another costly measure we do not need. There is no serious crime problem in Palo Alto, police and fire response times are good enough, and our Police Department is doing a good job with its current facility. City administrators are just trying to scare us into giving them more money to build a fancy new City building. If we really do need improvements, they should use existing funds to upgrade the current facility instead of building a brand-new $57 million building, at a cost to taxpayers of $124 per year. Opponents say that this bond is just another costly measure we do not need. There is no serious crime problem in Palo Alto, police and fire response times are good enough, and our Police Department is doing a good job with its current facility. City administrators are just trying to scare us into giving them more money to build a fancy new City building. If we really do need improvements, they should use existing funds to upgrade the current facility instead of building a brand-new $57 million building, at a cost to taxpayers of $124 per year. Palo Alto’s current public safety building and two of its fire stations are dangerously out-of-date, with inadequate facilities that could fail and cut off public safety services in an emergency, or leave the city open to lawsuits and fines by the state. This bond measure will replace local fire stations and the public safety building with new ones that will ensure that police and fire services can still respond rapidly in the event of a natural disaster or emergency; provide safe interview spaces for rape, domestic abuse and child abuse victims; and protect evidence necessary for criminal cases. Palo Alto’s current public safety building and two of its fire stations are dangerously out-of-date, with inadequate facilities that could fail and cut off public safety services in an emergency, or leave the city open to lawsuits and fines by the state. This bond measure will replace local fire stations and the public safety building with new ones that will ensure that police and fire services can still respond rapidly in the event of a natural disaster or emergency; provide safe interview spaces for rape, domestic abuse and child abuse victims; and protect evidence necessary for criminal cases. Attachment D. Infrastructure Survey Findings and Recommendations 33 62%65% 55% 32%28% 40% 6%7%5% 0% 20% 40% 60% 80% Safety Bond Positive Message Negative Message Total Yes Total No Undecided Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Arguments in favor have potential boost support, but opposition statements lower it substantially. Q2e/Q16/Q17. (Safety Bond) Attachment D. Infrastructure Survey Findings and Recommendations 34 Attachment D. Infrastructure Survey Findings and Recommendations 35 45% 38% 46% 44% 40% 53% 52% 53% 15% 10% 0%20% 40% 60% 80% 100% Asked first Total April 2013 April 2013 Total Yes/Total Support Total No/Total Oppose Undecided Initial support for a CFD to fund parking garages is consistent with conceptual support in prior polling. 2a. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? In order to improve access to businesses and other destinations downtown and throughout Palo Alto through the construction of parking garages, shall the City establish a community facilities district with a tax of up to $24 per year per residential property, and much larger amounts for businesses, limited to 30 years and subject to citizen oversight and independent annual audits? A $12 million project to increase parking availability by constructing a new California Avenue parking garage with approximately 200 additional spaces A $21 million project to increase parking availability by constructing a new downtown parking garage with approximately 350 additional spaces Attachment D. Infrastructure Survey Findings and Recommendations 36 Total Willing Total Unwilling 55%42% 48%48% 42%55% 31% 25% 18% 24% 23% 24% 18% 21% 26% 27% 31% 33% 0%20%40%60%80%100% $9 per year $15 per year $24 per year Very Will.Smwt. Will.Smwt. Unwill.Very Unwill./DK/NA Even when the potential cost of the measure is reduced to nine dollars, willingness to pay is well below two-thirds. 4. Regardless of how the District were structured, would your household be willing to pay ______ in additional taxes if it were dedicated to increasing access to parking in Palo Alto, and to support residential parking programs? Attachment D. Infrastructure Survey Findings and Recommendations 37 Pro and Con Arguments – Parking Assessment Q5/Q6. Opponents say it would fund the construction of only about 575 new parking spaces, but will end up costing the average homeowner hundreds of dollars over the years. That’s way too much to pay for more parking, especially when the City has so many other needs, like public safety, libraries, parks, and street repairs – and especially when the City already has a residential parking permit program underway to address parking issues in our neighborhoods without a tax increase. Opponents say it would fund the construction of only about 575 new parking spaces, but will end up costing the average homeowner hundreds of dollars over the years. That’s way too much to pay for more parking, especially when the City has so many other needs, like public safety, libraries, parks, and street repairs – and especially when the City already has a residential parking permit program underway to address parking issues in our neighborhoods without a tax increase. Supporters say that a severe lack of parking has increased traffic and made it inconvenient to access homes in Palo Alto neighborhoods and businesses downtown. This measure would significantly expand the amount of parking available by building parking garages, located in different parts of the City, all funded by an assessment structured so that property owners who benefit most from new parking would pay more. Developers of new buildings in Palo Alto that increase traffic would pay the most, businesses would pay a little more than homeowners, and most homeowners would pay only $24 per year. Supporters say that a severe lack of parking has increased traffic and made it inconvenient to access homes in Palo Alto neighborhoods and businesses downtown. This measure would significantly expand the amount of parking available by building parking garages, located in different parts of the City, all funded by an assessment structured so that property owners who benefit most from new parking would pay more. Developers of new buildings in Palo Alto that increase traffic would pay the most, businesses would pay a little more than homeowners, and most homeowners would pay only $24 per year. Attachment D. Infrastructure Survey Findings and Recommendations 38 45% 55% 40% 40%37% 53% 15% 8%7% 0% 20% 40% 60% 80% Parking Assessment Positive Message Negative Message Total Yes Total No Undecided Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? An argument from supporters fails to lift the measure to two-thirds support, and opposition messaging pushes it well below. Q2a/Q5/Q6. (Parking Assessment) Attachment D. Infrastructure Survey Findings and Recommendations 39 25% 30% 9% 3% 14% 16% 4% 0% 20% 40% 60% 13% 16% 16% 4% 21% 15% 15% 0% 20% 40% 60% Definitely yes Probably yes Undecided, lean yes Undecided, lean no Probably no Definitely no Undecided Adding traffic congestion mitigation components has the potential to lift support. 2a. Please tell me whether you would you vote yes to support it, or no to oppose it. Is that definitely (YES/NO) or just probably? Well, do you lean towards voting yes or no? 4A. Suppose that in addition to parking garages, this measure supported public transit, shuttles, carpooling incentives, biking and car sharing service to reduce traffic congestion. If that were the case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? Parking Garages Alone Total No 32% Total Yes 64% With Additional Traffic Mitigation Total No 40% Total Yes 45% +19% -8% -11% Difference Attachment D. Infrastructure Survey Findings and Recommendations 40 Attachment D. Infrastructure Survey Findings and Recommendations 41 Conclusions and Next Steps Transient Occupancy Tax: Clearly viable, given strong poll numbers and prior success at the ballot. Likely does not require additional research at this time. Transportation Bond: Strong numbers show viability, but fluidity of support in the face of messaging suggests a need for more detailed research on components and messaging. Sales Tax Increase: Clearly viable as a general tax. However, margins are support are not wide, and additional research may provide helpful context. Public Safety Bond: As in past research, the numbers do not reach a two- thirds supermajority except for a best-case scenario for a $51 million bond. Absent a financing plan that reduces costs significantly, additional opinion research is probably not merited at this time. Parking CFD: Given that support does not approach two-thirds under any reasonable cost scenario, this concept probably does not merit further opinion research. As always, results of public opinion research are only one of a number of factors for Council consideration in designing a strategy for financing infrastructure improvements. Attachment D. Infrastructure Survey Findings and Recommendations For more information, contact: 1999 Harrison St., Suite 1290 Oakland, CA 94612 Phone (510) 451-9521 Fax (510) 451-0384 Dave@FM3research.com Shakari@FM3research.com Attachment D. Infrastructure Survey Findings and Recommendations NOVEMBER 10-14, 2013 CITY OF PALO ALTO INFRASTRUCTURE RESEARCH PHASE II – SURVEY 1-WT 220-3733 N=600 MARGIN OF SAMPLING ERROR ±4.0% (95% CONFIDENCE INTERVAL) Hello, I'm ___________ from F-M-Three, a public opinion research company. We are conducting an opinion survey about some important issues that concern residents of Palo Alto. I am definitely not trying to sell you anything, we are only interested in your opinions. May I speak to______________? (YOU MUST SPEAK TO THE VOTER LISTED. VERIFY THAT THE VOTER LIVES AT THE ADDRESS A. Before we begin, I need to know if I have reached you on a cell phone, and if so, are you in a place where you can talk safely without endangering yourself or others? (IF NOT ON A CELL PHONE, ASK: “Do you own a cell phone?”) Yes, cell and can talk safely --------------------------------- (ASK QB) -- 25% Yes, cell but cannot talk safely --------------------------------- TERMINATE No, not on cell, but own one --------------------------------- (ASK QB) -- 53% No, not on cell and do not own one ------------------------ (SKIP QB) -- 22% (DON’T READ) DK/NA/REFUSED ------------------------- TERMINATE (ASK QB ONLY IF CODES 1 OR 2 “OWN A CELL PHONE” IN QA) B. Would you say you use your cell phone to make and receive all of your phone calls, most of your phone calls, do you use your cell phone and home landline phone equally, or do you mostly use your home landline phone to make and receive calls? All cell phone --------------------- 23% Mostly cell phone ---------------- 23% Cell and landline equally -------- 20% Mostly landline ------------------- 32% (DON’T READ) DK/NA --------- 1% (RESUME ASKING ALL RESPONDENTS) 1. First, I am going to describe several different types of elections. After I describe each one, please tell me if you vote in every election of that type, most of them, some, a few or if you never vote in that type of election. Here is the first one…(READ LIST; DO NOT ROTATE) EVERY MOST SOME FEW NONE (DK/NA) a. Statewide November general elections for Governor, Congress and the state legislature ---------------------------------- 84% ---- 13% ----- 3% --- TERM. -- TERM. - TERM. b. Statewide June primary elections for Governor, Congress and the state legislature -------------------------------------------- 68% ---- 17% ----- 8% ------ 2% -------- 5% ------- 1% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 2 EVERY MOST SOME FEW NONE (DK/NA) c. Special elections for local ballot measures --------------------------------------------- 57% ---- 25% ----- 12% ----- 2% -------- 4% ------- 0% NOW I WOULD LIKE TO ASK YOU ABOUT SOME ITEMS THAT MAY APPEAR ON A FUTURE CITY OF PALO ALTO BALLOT. KEEP IN MIND THAT ONLY ONE OR TWO OF THESE MEASURES ARE LIKELY TO APPEAR ON ANY ONE PALO ALTO BALLOT. THERE ARE FIVE ITEMS ON THE LIST, AND SOME OF THEM MAY SOUND A LITTLE SIMILAR, SO PLEASE LISTEN CAREFULLY. 2. After I read each one, please tell me whether you would you vote yes to support it, or no to oppose it. (IF YES/NO, ASK:) “Is that definitely (YES/NO) or just probably?” (IF UNDECIDED, ASK: “Well, do you lean towards voting yes or no?”) (SPLIT SAMPLE A, ASK ITEM a. FIRST, THEN Q3, THEN RANDOMIZE REST OF Q2) (SPLIT SAMPLE B, ASK ITEM b. FIRST, THEN Q3, THEN RANDOMIZE REST OF Q2) (SPLIT SAMPLE C, ASK ITEM c. FIRST, THEN Q3, THEN RANDOMIZE REST OF Q2) (SPLIT SAMPLE D, ASK ITEM d. FIRST, THEN Q3, THEN RANDOMIZE REST OF Q2) (SPLIT SAMPLE E, ASK ITEM e. FIRST, THEN Q3, THEN RANDOMIZE REST OF Q2) DEF PROB LN LN PROB DEF (DK/ TOT TOT YES YES YES NO NO NO NA) YES NO [ ]a. (PARKING) In order to improve access to businesses and other destinations downtown and throughout Palo Alto through the construction of parking garages, shall the City establish a community facilities district with a tax of up to 24 dollars per year per residential property, and much larger amounts for businesses, limited to 30 years and subject to citizen oversight and independent annual audits? (ASKED FIRST) ----------------------- 13% --- 16% --- 16% ---- 4% --- 21% --- 15% --- 15% 45% 40% (TOTAL) -------------------------------- 10% --- 17% --- 11% ---- 7% --- 23% --- 22% --- 10% 38% 53% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 3 DEF PROB LN LN PROB DEF (DK/ TOT TOT YES YES YES NO NO NO NA) YES NO [ ]b. (T.O.T.) To provide funding for general City services such as police patrols; 9-1-1 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City increase the hotel/motel tax by three percent, with all revenue subject to citizen oversight and independent annual audits? (ASKED FIRST) ----------------------- 21% --- 47% --- 11% ---- 4% ----6% ---- 4% ---- 7% 79% 15% (TOTAL) -------------------------------- 24% --- 35% --- 11% ---- 4% ----9% ---- 11% --- 7% 70% 24% [ ]c. (SALES) To provide funding for general City services such as neighborhood police patrols; 9-1-1 emergency response; firefighting; paramedics; streets and sidewalk improvements; parks and recreation; and libraries and community centers, shall the City enact a one-quarter cent sales tax increase, with all revenue subject to citizen oversight and independent annual audits? (ASKED FIRST) ----------------------- 23% --- 27% ---- 7% ---- 4% --- 16% --- 18% --- 4% 57% 39% (TOTAL) -------------------------------- 20% --- 25% ---- 8% ---- 8% --- 17% --- 18% --- 4% 52% 44% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 4 DEF PROB LN LN PROB DEF (DK/ TOT TOT YES YES YES NO NO NO NA) YES NO [ ]d. (TRANSPORTATION BOND) To provide safe routes to school for children, improve accessibility for people with disabilities, provide a network of safe bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and intersections to reduce congestion and improve safety, shall the City of Palo Alto authorize 66 million dollars in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? (ASKED FIRST) ----------------------- 17% --- 47% ---- 9% ---- 2% --- 10% --- 11% --- 5% 73% 22% (TOTAL) -------------------------------- 21% --- 32% --- 11% ---- 3% --- 13% --- 14% --- 5% 65% 31% [ ]e. (SAFETY BOND) To fund construction of a new earthquake-safe public safety building and emergency response command center, replace two obsolete fire stations with modern earthquake-safe buildings, and improve communication systems to ensure rapid 9-1-1 response to fires, accidents and other emergencies, shall the City of Palo Alto authorize 71 million dollars in general obligation bonds, subject to citizen oversight and independent audits, with no money for administrators’ salaries? (ASKED FIRST) ----------------------- 21% --- 33% ---- 8% ---- 5% ----8% ---- 20% --- 6% 62% 32% (TOTAL) -------------------------------- 18% --- 31% --- 15% ---- 7% --- 11% --- 15% --- 4% 64% 32% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 5 (ASK Q3 ONLY IF CODES 1-6 IN FIRST ITEM READ IN Q2) 3. In a few words of your own, why would you vote YES/NO on this measure? (OPEN END, RECORD VERBATIM RESPONSE BELOW; PROBE FOR VERY SPECIFIC RESPONSES – NOT JUST “SOUNDS LIKE A GOOD/BAD IDEA”) a. Yes: TRNSP SAFETY PARKING T.O.T. SALES BOND BOND TOTAL General support ------------------------------------------ 26% ----- 25% ----- 38% ----- 26% ---- 20% ----- 27% Bring in jobs ---------------------------------------------- 3% ------- 0% ------ 0% ------ 0% ------ 0% ------ 0% Need more parking --------------------------------------- 32% ------ 0% ------ 0% ------ 2% ------ 0% ------ 5% To support city services --------------------------------- 22% ----- 40% ----- 45% ----- 10% ---- 16% ----- 27% Increase revenue ----------------------------------------- 1% ------- 7% ------ 1% ------ 2% ------ 0% ------ 3% Support taxing non-residents (hotel tax)/ won’t impact residents ---------------------------------- 1% ------ 13% ------ 1% ------ 0% ------ 0% ------ 4% Safety of residents – general/kids ---------------------- 0% ------- 2% ------ 2% ----- 29% ---- 29% ----- 13% Good for community/people of Palo Alto ------------ 0% ------- 0% ------ 6% ------ 1% ------ 0% ------ 1% Safety of residents – biking ----------------------------- 0% ------- 0% ------ 0% ----- 34% ----- 0% ------ 8% Improve traffic congestion ------------------------------ 10% ------ 3% ------ 0% ----- 20% ----- 0% ------ 7% Need more information ---------------------------------- 0% ------- 7% ------ 2% ------ 3% ------ 2% ------ 3% Earthquake/Emergency preparedness ----------------- 0% ------- 0% ------ 1% ------ 0% ----- 26% ----- 5% Business’s should pay for it ---------------------------- 3% ------- 0% ------ 0% ------ 0% ------ 2% ------ 1% State should pay for services --------------------------- 0% ------- 0% ------ 3% ------ 0% ------ 0% ------ 0% Needs more oversight ----------------------------------- 0% ------- 2% ------ 4% ------ 1% ------ 0% ------ 1% City needs more funding/ Good way to fund the city ------------------------------ 0% ------- 4% ------ 5% ------ 0% ------ 1% ------ 2% Supports the libraries ------------------------------------ 0% ------- 2% ------ 0% ------ 0% ------ 0% ------ 0% Other ------------------------------------------------------- 7% ------- 4% ------ 1% ------ 2% ------ 5% ------ 4% Don’t know ----------------------------------------------- 1% ------- 0% ------ 1% ------ 1% ------ 0% ------ 0% Refused ---------------------------------------------------- 0% ------- 1% ------ 0% ------ 1% ------ 2% ------ 1% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 6 Q3 CONTINUED b. No: TRNSP SAFETY PARKING T.O.T. SALES BOND BOND TOTAL General oppose ------------------------------------------- 11% ------ 8% ------ 1% ------ 6% ----- 26% ----- 11% No new taxes --------------------------------------------- 34% ----- 42% ----- 44% ------ 1% ------ 5% ------ 26% Should improve public transportation ----------------- 4% ------- 0% ------ 0% ------ 0% ------ 0% ------ 1% Budget/Spend wisely the money they already have -------------------------------------------------------- 14% ------ 7% ----- 38% ----- 17% ---- 16% ----- 20% Need more information ---------------------------------- 4% ------ 13% ------ 7% ------ 7% ------ 0% ------ 5% Opposes using bonds ------------------------------------ 0% ------- 0% ------ 0% ------ 6% ------ 3% ------ 1% Will take away from businesses ----------------------- 0% ------- 4% ------ 0% ------ 0% ------ 0% ------ 0% There is enough emergency services ------------------ 0% ------- 0% ------ 0% ------ 0% ------ 4% ------ 1% Cost too much -------------------------------------------- 17% ------ 7% ------ 0% ----- 47% ---- 26% ----- 18% No more regulations/Bureaucracy --------------------- 1% ------ 13% ------ 1% ------ 3% ------ 5% ------ 3% Doesn’t want the money going towards the police ------------------------------------------------------ 0% ------- 0% ------ 0% ------ 0% ------ 2% ------ 0% It’s too general/Not specific enough ------------------- 2% ------ 10% ------ 9% ----- 11% ----- 4% ------ 6% Money could be better used elsewhere ---------------- 0% ------- 0% ------ 0% ------ 6% ------ 2% ------ 1% Business’s should provide parking -------------------- 4% ------- 0% ------ 0% ------ 0% ------ 0% ------ 1% Doesn’t trust the government/unsatisfied with government ----------------------------------------- 0% ------- 0% ------ 3% ----- 12% ---- 10% ----- 5% City should pay for it, not citizens --------------------- 1% ------- 0% ------ 0% ------ 0% ------ 0% ------ 0% Other ------------------------------------------------------ 14% ------ 5% ----- 10% ------ 7% ------ 6% ------ 9% Don’t know ----------------------------------------------- 0% ------- 0% ------ 0% ------ 3% ------ 0% ------ 0% Refused ---------------------------------------------------- 1% ------- 0% ------ 1% ------ 0% ------ 2% ------ 1% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 7 (RESUME ASKING ALL RESPONDENTS) NOW I WOULD LIKE TO ASK YOU A FEW MORE QUESTIONS ABOUT EACH OF THESE POTENTIAL MEASURES IN TURN. AGAIN, KEEP IN MIND THAT ONLY ONE OR TWO OF THEM WOULD APPEAR ON ANY INDIVIDUAL BALLOT. INSTRUCTIONS FOR RANDOMIZING QUESTION BLOCKS: SPLIT SAMPLE A, READ Q4-6 FIRST, THEN RANDOMIZE OTHER BLOCKS SPLIT SAMPLE B, READ Q7-9 FIRST, THEN RANDOMIZE OTHER BLOCKS SPLIT SAMPLE C, READ Q10-12 FIRST, THEN RANDOMIZE OTHER BLOCKS SPLIT SAMPLE D, READ Q13-14 FIRST, THEN RANDOMIZE OTHER BLOCKS SPLIT SAMPLE E, READ Q15-17 FIRST, THEN RANDOMIZE OTHER BLOCKS (BLOCK ONE: Q4-6) FIRST/NEXT, I WOULD LIKE TO ASK YOU ABOUT THE MEASURE TO ESTABLISH A COMMUNITY FACILITIES DISTRICT THAT WOULD FUND CONSTRUCTION OF PARKING GARAGES. 4. Regardless of how the District were structured, would your household be willing to pay ______ in additional taxes if it were dedicated to increasing access to parking in Palo Alto, and to support residential parking programs? (IF WILLING / UNWILLING, ASK:) “Would that be very WILLING/UNWILLING, to pay that amount, or just somewhat? (SPLIT SAMPLE F READ TOP TO BOTTOM, SPLIT SAMPLE G READ BOTTOM TO TOP) VERY SMWT SMWT VERY TOTAL TOTAL WILL WILL UNWL UNWL (DK/NA) WILL UNWL [ ]a. 24 dollars per year --------------------------- 18% ----- 24% ----- 26% ----- 30% ------ 3% 42% 55% [ ]b. 15 dollars per year --------------------------- 25% ----- 23% ----- 21% ----- 27% ------ 4% 48% 48% [ ]c. Nine dollars per year ------------------------ 31% ----- 24% ----- 18% ----- 24% ------ 3% 55% 42% 4A. Suppose that in addition to parking garages, this measure supported public transit, shuttles, carpooling incentives, biking and car sharing service to reduce traffic congestion. If that were the case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK:) “Do you lean toward voting yes or no?”) TOTAL YES ------------------------------ 64% Definitely yes ------------------------------ 25% Probably yes ------------------------------- 30% Undecided, lean yes ------------------------- 9% TOTAL NO ------------------------------- 32% Undecided, lean no -------------------------- 3% Probably no -------------------------------- 14% Definitely no ------------------------------- 16% (DON’T READ) DK/NA ------------------ 4% 5. Next, here is a statement from supporters of this measure. Supporters say that a severe lack of parking has increased traffic and made it inconvenient to access homes in Palo Alto neighborhoods and Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 8 businesses downtown. This measure would significantly expand the amount of parking available by building parking garages, located in different parts of the City, all funded by an assessment structured so that property owners who benefit most from new parking would pay more. Developers of new buildings in Palo Alto that increase traffic would pay the most, businesses would pay a little more than homeowners, and most homeowners would pay only 24 dollars per year. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) SPLIT A: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 55% -------------------- 49% Definitely yes ------------------------------------------ 21% -------------------- 16% Probably yes ------------------------------------------- 29% -------------------- 26% Undecided, lean yes ------------------------------------ 6% ---------------------- 7% TOTAL NO ------------------------------------------- 37% -------------------- 46% Undecided, lean no ------------------------------------- 6% ---------------------- 6% Probably no -------------------------------------------- 12% -------------------- 17% Definitely no ------------------------------------------- 19% -------------------- 24% (DON'T READ) DK/NA ----------------------------- 8% ---------------------- 5% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 9 6. And here is a statement from opponents of this measure. Opponents say it would fund the construction of only about 575 new parking spaces, but will end up costing the average homeowner hundreds of dollars over the years. That’s way too much to pay for more parking, especially when the City has so many other needs, like public safety, libraries, parks, and street repairs – and especially when the City already has a residential parking permit program underway to address parking issues in our neighborhoods without a tax increase. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) SPLIT A: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 40% -------------------- 39% Definitely yes ------------------------------------------ 20% -------------------- 15% Probably yes ------------------------------------------- 17% -------------------- 20% Undecided, lean yes ------------------------------------ 4% ---------------------- 4% TOTAL NO ------------------------------------------- 53% -------------------- 56% Undecided, lean no ------------------------------------- 5% ---------------------- 6% Probably no -------------------------------------------- 21% -------------------- 24% Definitely no ------------------------------------------- 27% -------------------- 27% (DON'T READ) DK/NA ----------------------------- 7% ---------------------- 5% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 10 (BLOCK TWO: Q7-9) FIRST/NEXT, I WOULD LIKE TO ASK YOU ABOUT THE MEASURE TO INCREASE THE CITY HOTEL/MOTEL TAX BY THREE PERCENT TO PROVIDE FUNDING FOR GENERAL CITY SERVICES SUCH AS FIRE AND POLICE; STREET AND SIDEWALK IMPROVEMENTS; PARKS AND RECREATION; AND LIBRARIES AND COMMUNITY CENTERS. (ASK Q7 IF CODES 2-7 IN Q2b) 7. Suppose that this measure increased the City’s hotel/motel tax by two percent, instead of three percent. In that case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) CUMULATIVE ASKED Q7 TOTAL TOTAL YES ------------------------------------------ 60% -------------------- 69% Definitely yes ------------------------------------------ 11% -------------------- 32% Probably yes ------------------------------------------- 43% -------------------- 33% Undecided, lean yes ------------------------------------ 6% ---------------------- 5% TOTAL NO ------------------------------------------- 32% -------------------- 24% Undecided, lean no ------------------------------------- 3% ---------------------- 3% Probably no -------------------------------------------- 14% -------------------- 11% Definitely no ------------------------------------------- 14% -------------------- 10% (DON'T READ) DK/NA ----------------------------- 9% ---------------------- 7% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 11 (RESUME ASKING ALL RESPONDENTS) 8. Next, here is a statement from supporters of this measure. Supporters say that this measure will provide funding for essential improvements to public facilities in Palo Alto, like police and fire stations, parks and community centers. And it will be funded by an increase in taxes paid by hotel and motel guests in Palo Alto, with no cost to local Palo Alto residents and property owners. All spending will be subject to full public disclosure, oversight by a citizens’ committee, and independent annual audits. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) SPLIT B: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 70% -------------------- 67% Definitely yes ------------------------------------------ 25% -------------------- 27% Probably yes ------------------------------------------- 40% -------------------- 36% Undecided, lean yes ------------------------------------ 6% ---------------------- 4% TOTAL NO ------------------------------------------- 24% -------------------- 28% Undecided, lean no ------------------------------------- 1% ---------------------- 3% Probably no -------------------------------------------- 13% -------------------- 13% Definitely no ------------------------------------------- 10% -------------------- 13% (DON'T READ) DK/NA ----------------------------- 6% ---------------------- 5% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 12 9. And here is a statement from opponents of this measure. Opponents say that this measure will increase the cost of hotel and motel stays in Palo Alto, driving visitors away to surrounding communities and depriving our community of badly-needed business and jobs. That’s why the measure is strongly opposed by a coalition of Palo Alto businesses. The City has plenty of money that it already spends on huge salaries and benefits for public employees; the City should tighten its belt and use that money rather than raising taxes. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK:) “Do you lean toward voting yes or no?”) SPLIT B: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 65% -------------------- 62% Definitely yes ------------------------------------------ 27% -------------------- 24% Probably yes ------------------------------------------- 31% -------------------- 32% Undecided, lean yes ------------------------------------ 7% ---------------------- 5% TOTAL NO ------------------------------------------- 27% -------------------- 32% Undecided, lean no ------------------------------------- 4% ---------------------- 4% Probably no -------------------------------------------- 15% -------------------- 15% Definitely no -------------------------------------------- 8% --------------------- 13% (DON'T READ) DK/NA ----------------------------- 8% ---------------------- 6% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 13 (BLOCK THREE: Q10-12) FIRST/NEXT, I WOULD LIKE TO ASK YOU ABOUT THE MEASURE TO INCREASE THE CITY SALES TAX BY ONE-QUARTER PERCENT TO PROVIDE FUNDING FOR GENERAL CITY SERVICES SUCH AS FIRE AND POLICE; STREET AND SIDEWALK IMPROVEMENTS; PARKS AND RECREATION; AND LIBRARIES AND COMMUNITY CENTERS. (ASK Q10 IF CODES 2-7 IN Q2c) 10. Suppose that this measure increased the City’s sales tax by one-eighth cent, instead of one-quarter cent. In that case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) CUMULATIVE ASKED Q10 TOTAL TOTAL YES ------------------------------------------ 45% -------------------- 55% Definitely yes ------------------------------------------- 9% --------------------- 27% Probably yes ------------------------------------------- 31% -------------------- 25% Undecided, lean yes ------------------------------------ 4% ---------------------- 3% TOTAL NO ------------------------------------------- 52% -------------------- 42% Undecided, lean no ------------------------------------- 5% ---------------------- 4% Probably no -------------------------------------------- 24% -------------------- 19% Definitely no ------------------------------------------- 23% -------------------- 19% (DON'T READ) DK/NA ----------------------------- 3% ---------------------- 3% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 14 (RESUME ASKING ALL RESPONDENTS) 11. Next, here is a statement from supporters of this measure. Supporters say that this measure will provide funding for essential improvements to public facilities in Palo Alto, like police and fire stations, parks and community centers. And it will apply to purchases by tourists and visitors to Palo Alto, ensuring that people who come from outside our community pay their fair share to support the facilities they use while they are here. All spending will be subject to full public disclosure, oversight by a citizens’ committee, and independent annual audits. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) SPLIT C: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 57% -------------------- 52% Definitely yes ------------------------------------------ 17% -------------------- 16% Probably yes ------------------------------------------- 37% -------------------- 31% Undecided, lean yes ------------------------------------ 3% ---------------------- 5% TOTAL NO ------------------------------------------- 38% -------------------- 43% Undecided, lean no ------------------------------------- 6% ---------------------- 4% Probably no -------------------------------------------- 17% -------------------- 22% Definitely no ------------------------------------------- 14% -------------------- 17% (DON'T READ) DK/NA ----------------------------- 5% ---------------------- 4% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 15 12. And here is a statement from opponents of this measure. Opponents say that raising sales taxes will harm our local economy, driving business and jobs outside Palo Alto. In addition, it will significantly increase costs for local families during a difficult economy, when seniors and people on fixed incomes are already having a hard time making ends meet. The City has plenty of money that it already spends on huge salaries and benefits for public employees; the City should tighten its belt and use that money rather than raising taxes. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK:) “Do you lean toward voting yes or no?”) SPLIT C: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 51% -------------------- 46% Definitely yes ------------------------------------------ 18% -------------------- 15% Probably yes ------------------------------------------- 27% -------------------- 24% Undecided, lean yes ------------------------------------ 6% ---------------------- 6% TOTAL NO ------------------------------------------- 44% -------------------- 51% Undecided, lean no ------------------------------------- 6% ---------------------- 5% Probably no -------------------------------------------- 14% -------------------- 24% Definitely no ------------------------------------------- 24% -------------------- 22% (DON'T READ) DK/NA ----------------------------- 5% ---------------------- 3% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 16 (BLOCK FOUR: Q13-14) FIRST/NEXT, I WOULD LIKE TO ASK YOU ABOUT THE MEASURE TO ISSUE 66 MILLION DOLLARS IN BONDS TO PROVIDE SAFE ROUTES TO SCHOOL FOR CHILDREN, IMPROVE ACCESSIBILITY FOR PEOPLE WITH DISABILITIES, PROVIDE A NETWORK OF SAFE BIKE PATHS AND PEDESTRIAN WALKWAYS, INCREASE THE AVAILABILITY OF PARKING, AND UPGRADE TRAFFIC SIGNALS AND INTERSECTIONS TO REDUCE CONGESTION AND IMPROVE SAFETY. 13. Next, here is a statement from supporters of this measure. Supporters say that traffic congestion is one of the biggest problems facing Palo Alto. This measure will fund vital improvements to get traffic moving again, with road upgrades and improvements to intersections and traffic signals designed to speed up the flow of traffic. And it will also fund improvements to sidewalks, bikeways, and other parts of our local transportation system that will make it easier for people to choose other ways of getting around the community. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK:) “Do you lean toward voting yes or no?”) SPLIT D: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 67% -------------------- 59% Definitely yes ------------------------------------------ 23% -------------------- 22% Probably yes ------------------------------------------- 40% -------------------- 31% Undecided, lean yes ------------------------------------ 4% ---------------------- 6% TOTAL NO ------------------------------------------- 30% -------------------- 37% Undecided, lean no ------------------------------------- 4% ---------------------- 4% Probably no --------------------------------------------- 9% --------------------- 15% Definitely no ------------------------------------------- 17% -------------------- 19% (DON'T READ) DK/NA ----------------------------- 3% ---------------------- 4% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 17 14. And here is a statement from opponents of this measure. Opponents say that this measure will cost way too much – as much as 132 million dollars once interest costs are factored in. It will cost the typical property owner 116 dollars per year, and young families buying homes in Palo Alto will be disproportionately hit with higher tax assessments. And the measure does not include one penny for road repairs or maintenance – the improvements that Palo Alto needs the most. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) SPLIT D: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 61% -------------------- 47% Definitely yes ------------------------------------------ 18% -------------------- 17% Probably yes ------------------------------------------- 30% -------------------- 25% Undecided, lean yes ----------------------------------- 13% --------------------- 5% TOTAL NO ------------------------------------------- 38% -------------------- 49% Undecided, lean no ------------------------------------- 4% ---------------------- 6% Probably no -------------------------------------------- 14% -------------------- 19% Definitely no ------------------------------------------- 19% -------------------- 23% (DON'T READ) DK/NA ----------------------------- 1% ---------------------- 4% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 18 (BLOCK FIVE: Q15-17) FIRST/NEXT, I WOULD LIKE TO ASK YOU ABOUT THE MEASURE TO ISSUE 71 MILLION DOLLARS IN BONDS TO FUND CONSTRUCTION OF A NEW EARTHQUAKE-SAFE PUBLIC SAFETY BUILDING AND EMERGENCY RESPONSE COMMAND CENTER, REPLACE TWO OBSOLETE FIRE STATIONS WITH MODERN EARTHQUAKE-SAFE BUILDINGS, AND IMPROVE COMMUNICATION SYSTEMS TO ENSURE RAPID 9-1-1 RESPONSE TO FIRES, ACCIDENTS AND OTHER EMERGENCIES. (ASK Q15 IF CODES 2-7 IN Q2e) 15. First, suppose that this bond measure were for a total of 51 million dollars instead of 71 million dollars, with the City providing the balance through other funding sources. In that case, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) CUMULATIVE ASKED Q15 TOTAL TOTAL YES ------------------------------------------ 49% -------------------- 58% Definitely yes ------------------------------------------- 9% --------------------- 26% Probably yes ------------------------------------------- 34% -------------------- 28% Undecided, lean yes ------------------------------------ 6% ---------------------- 5% TOTAL NO ------------------------------------------- 42% -------------------- 35% Undecided, lean no ------------------------------------- 3% ---------------------- 3% Probably no -------------------------------------------- 18% -------------------- 15% Definitely no ------------------------------------------- 21% -------------------- 17% (DON'T READ) DK/NA ----------------------------- 8% ---------------------- 7% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 19 (RESUME ASKING ALL RESPONDENTS) 16. Next, here is a statement from supporters of this measure. Palo Alto’s current public safety building and two of its fire stations are dangerously out-of-date, with inadequate facilities that could fail and cut off public safety services in an emergency, or leave the city open to lawsuits and fines by the state. This bond measure will replace local fire stations and the public safety building with new ones that will ensure that police and fire services can still respond rapidly in the event of a natural disaster or emergency; provide safe interview spaces for rape, domestic abuse and child abuse victims; and protect evidence necessary for criminal cases. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: “Do you lean toward voting yes or no?”) SPLIT E: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 65% -------------------- 61% Definitely yes ------------------------------------------ 23% -------------------- 24% Probably yes ------------------------------------------- 36% -------------------- 30% Undecided, lean yes ------------------------------------ 5% ---------------------- 6% TOTAL NO ------------------------------------------- 28% -------------------- 34% Undecided, lean no ------------------------------------- 1% ---------------------- 3% Probably no --------------------------------------------- 6% --------------------- 14% Definitely no ------------------------------------------- 21% -------------------- 17% (DON'T READ) DK/NA ----------------------------- 7% ---------------------- 4% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 20 17. And here is a statement from opponents of this measure. Opponents say that this bond is just another costly measure we do not need. There is no serious crime problem in Palo Alto, police and fire response times are good enough, and our Police Department is doing a good job with its current facility. City administrators are just trying to scare us into giving them more money to build a fancy new City building. If we really do need improvements, they should use existing funds to upgrade the current facility instead of building a brand-new 57-million dollar building, at a cost to taxpayers of 124 dollars per year. Having heard this, do you think you would vote “yes” in favor of this measure or “no” to oppose it? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, DON’T KNOW, NO ANSWER, NEED MORE INFORMATION ASK: ) “Do you lean toward voting yes or no?”) SPLIT E: ASKED FIRST TOTAL TOTAL YES ------------------------------------------ 55% -------------------- 50% Definitely yes ------------------------------------------ 25% -------------------- 20% Probably yes ------------------------------------------- 27% -------------------- 23% Undecided, lean yes ------------------------------------ 2% ---------------------- 7% TOTAL NO ------------------------------------------- 40% -------------------- 46% Undecided, lean no ------------------------------------- 4% ---------------------- 7% Probably no -------------------------------------------- 15% -------------------- 20% Definitely no ------------------------------------------- 21% -------------------- 20% (DON'T READ) DK/NA ----------------------------- 5% ---------------------- 4% Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 21 HERE ARE MY LAST QUESTIONS, AND THEY ARE FOR STATISTICAL PURPOSES ONLY. 18. (T) Do you ... (READ LIST), Own a single family home --------------- 68% Own a condominium ------------------------ 4% Rent an apartment or home -------------- 22% (DON'T READ) Refused ------------------ 6% (ASK Q19 IF CODE 1 OR 2 IN Q18) 19. (T) Did you buy your home before 1978 or in 1978 or after? Before 1978 -------------------------------- 26% In 1978 or after ---------------------------- 73% (DON'T READ) Refused ------------------ 1% (RESUME ASKING ALL RESPONDENTS) 20. (T) With which racial or ethnic group do you identify yourself: Latino or Hispanic, African American or Black, Caucasian or White, South Asian, some other Asian or Pacific Islander group or some other ethnic or racial background? (READ CHOICES BELOW) Hispanic/Latino ------------------------------ 1% Black/African American ------------------- 1% Anglo/White ------------------------------- 79% South Asian ---------------------------------- 3% Some other Asian/ Pacific Islander group----------------------- 6% Other (SPECIFY_____) ------------------- 0% (DON’T READ) MIXED ----------------- 2% (DON'T KNOW/REFUSED) ------------ 9% 21. (T) I don’t need to know the exact amount, but I’m going to read you some categories for household income. Would you please stop me when I have read the category indicating the total combined income for all the people in your household before taxes in 2012? $50,000 a year or less ----------------------- 9% $50,001 - $100,000 ----------------------- 18% $100,001 - $150,000 ---------------------- 19% $150,001 – $200,000 --------------------- 12% More than $200,000 ----------------------- 20% (DON'T KNOW/REFUSED) ---------- 22% THANK AND TERMINATE Attachment E. Survey Questionnaire and Topline Results FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES 220-3733-WT PAGE 22 GENDER (BY OBSERVATION): Male ----------------------------------------- 48% Female -------------------------------------- 52% PARTY REGISTRATION: Democrat ----------------------------------- 53% Republican --------------------------------- 16% No Party Preference ----------------------- 28% Other ------------------------------------------ 3% FLAGS P08 ------------------------------------------- 62% G08 ------------------------------------------ 87% P10 ------------------------------------------- 68% G10 ------------------------------------------ 93% P12 ------------------------------------------- 69% G12 ------------------------------------------ 96% Blank ----------------------------------------- 1% AGE 18-29 ------------------------------------------ 8% 30-39 ------------------------------------------ 9% 40-49 ----------------------------------------- 17% 50-64 ----------------------------------------- 32% 65-74 ----------------------------------------- 14% 75+ ------------------------------------------- 20% PERMANENT ABSENTEE Yes ------------------------------------------ 79% No ------------------------------------------- 21% VOTE BY MAIL 1 ----------------------------------------------- 8% 2 --------------------------------------------- 11% 3+ -------------------------------------------- 69% Blank ---------------------------------------- 13% HOUSEHOLD PARTY TYPE Dem 1 --------------------------------------- 27% Dem 2+ ------------------------------------- 18% Rep 1 ------------------------------------------ 8% Rep 2+ ---------------------------------------- 4% Ind 1+ --------------------------------------- 20% Mix ------------------------------------------ 24% Attachment E. Survey Questionnaire and Topline Results Attachment F. Example Funding Scenarios Potential Infrastructure Project Funding Scenario #1 (3% or 2% TOT increase) Polling Support Project Cost Funding Source Funding Amount 52% Public Safety Building and land 57 City Hall Police area lease ‐ COPs 19.6 52% Charleston/Arastradero 7.5 TOT increase 3% ‐ COPs 46.2 61% Bike Bridge 1.7 New hotels ‐ COPs 33.6 na Byxbee Park 3.6 Stanford Funds 34.4 72% Fire Stations (2) 14.2 Infrastructure Reserve 8 67% Sidewalks additional spending 6 FY 2013 surplus 8.5 65% Bike/Pedestrian Plan 16.25 Sum: 150.3 67% Parks Catch‐up 8.9 46% Cal Avenue Garage 16.5 44% Downtown Parking Garages (2) 18.4 Sum: 150.05 OR Funding Source Funding Amount City Hall Police area lease ‐ COPs 19.6 TOT increase 2% ‐ COPs 30.8 New hotels ‐ COPs 33.6 Stanford Funds 34.4 Infrastructure Reserve 8 FY 2013 surplus 8.5 5 years annual surplus ($1M per year)5 Sum: 139.9 Potential Infrastructure Project Funding Scenario #2 (1/4 cent or 1/8 cent sales tax increase) Polling Support Project Cost Funding Source Funding Amount 52% Public Safety Building and land 57 City Hall Police area lease ‐ COPs 19.6 52% Charleston/Arastradero 7.5 Sales tax increase 1/4 cent ‐ COPs 72.8 61% Bike Bridge 1.7 New hotels ‐ COPs 33.6 na Byxbee Park 3.6 Stanford Funds 8 72% Fire Stations (2) 14.2 Infrastructure Reserve 8 67% Sidewalks additional spending 6 FY 2013 surplus 8.5 65% Bike/Pedestrian Plan 16.25 Sum: 150.5 67% Parks Catch‐up 8.9 46% Cal Avenue Garage 16.5 44% Downtown Parking Garages (2) 18.4 Sum: 150.05 OR Funding Source Funding Amount City Hall Police area lease ‐ COPs 19.6 Sales tax increase 1/8 cent ‐ COPs 36.4 New hotels ‐ COPs 33.6 Stanford Funds 34.4 Infrastructure Reserve 8 FY 2013 surplus 8.5 5 years annual surplus ($1M per year)5 Sum: 145.5 Note: Funding from GO bonds and COPs is for construction only and does not include financing costs Potential Infrastructure Project Funding Scenario #3 Bundled Transportation GO Bond Measure Polling Support Bundled Projects Cost Funding Source Funding Amount Sidewalks additional spending 6 GO Bonds 66.35 Bike/Pedestrian Plan 16.25 Bike Bridge 1.7 Charleston/Arastradero 7.5 Cal. Avenue Parking Garage 16.5 Downtown Parking Garages (2)18.4 Sum: 66.35 Polling Support Project Cost Funding Source Funding Amount 72% Fire Stations (2) 14.2 City Hall Police area lease ‐ COPs 19.6 52% Public Safety Building and land 57 Stanford Funds 34.4 na Byxbee Park 3.6 Infrastructure Reserve 8 67% Parks Catch‐up 8.9 FY 2013 surplus 8.5 5 years new hotels ($2.4M per year)12 Sum: 83.7 Sum: 82.5 Funding Approach For Remaining Projects Polling Support Project Cost Funding Source Funding Amount na Surface Catch‐up 3.4 na Buildings Catch‐up 4.2 Sum: 7.6 Polling Support Project Cost Funding Source Funding Amount 47% Animal Services Center 6.9 46% Playing Fields at Golf (3) 6 38% History Museum 3 na Cubberley Deferred Maintenance 6.9 Sum: 22.8 74% Fund gradually through CIP planning process utilizing CIP funds, ongoing surpluses, and development impact fees Defer planning for potential funding or remove from project list Note: Funding from GO bonds and COPs is for construction only and does not include financing costs 400 Montgomery Street, 7th Floor | San Francisco, CA 94104 | Phone: (415) 291-1894 | Fax: (415) 291-1172 | TBWB.com TO:$ $ Sheila$Tucker$ $ $ City$of$Palo$Alto$ $ FROM:$$ Charles$Heath$ $ $ TBWB$Strategies$ $ RE:$ $ Communication$and$Outreach$Plan$for$an$Infrastructure$Funding$Measure$ $ DATE:$ $December$2,$2013$ Opinion$research$conducted$earlier$this$month$by$FM3$Research$suggests$that$three$of$the$ funding$measure$concepts$under$consideration$by$the$City$of$Palo$Alto$to$address$infrastructure$ needs$stand$a$strong$probability$of$achieving$voter$approval$if$placed$on$the$ballot$in$November$ 2014.$This$memo$summarizes$a$plan$aiming$to$satisfy$two$essential$prerequisites$for$placing$a$ funding$measure$on$the$ballot$in$2014:$ $ 1. Refine$the$specific$components$of$an$infrastructure$funding$measure,$develop$the$ballot$ language/materials$and$qualify$for$the$ballot;$and$ $ 2. Implement$an$informational$outreach$program$seeking$to$inform$the$public$of$Palo$ Alto’s$infrastructure$funding$needs$and$engage$key$community$leaders/stakeholders$in$ the$process$of$preparing$a$measure$for$the$ballot.$ $ Background+ Concurrent$to$the$first$round$of$opinion$research$designed$to$identify$the$community’s$ infrastructure$funding$priorities$and$narrow$the$list$of$viable$funding$mechanisms,$TBWB$ Strategies$developed$an$initial$set$of$messages$and$materials$related$to$the$city’s$infrastructure$ planning$process.$An$informational$microsite$(www.PaloAltoForward.org)$and$related$ infographic$were$created$to$better$define$the$city’s$infrastructure$funding$needs$and$provide$a$ portal$to$more$detailed$information$pertaining$to$each$need$category.$A$coordinated$social$ media$and$earned$media$strategy$drew$attention$to$these$informational$resources$and$ generally$raised$community$awareness$of$the$infrastructure$planning$efforts.$The$primary$ purpose$of$this$messaging$was$to$begin$shaping$the$community’s$understanding$of$the$city’s$ infrastructure$needs$while$also$providing$a$positive$backdrop$to$the$ongoing$opinion$research$ process.$$ $ Now$that$opinion$research$has$uncovered$a$clear$set$of$infrastructure$funding$priorities$and$a$ finite$set$of$viable$funding$measure$options,$we$can$begin$the$process$of$developing$the$specific$ features$of$a$measure,$vetting$a$draft$ballot$measure$with$key$community$stakeholders$and$ implementing$a$communication$program$specifically$focused$on$the$highWpriority$funding$needs$ and$funding$mechanism.$ Attachment G. TBWB Communication Plan and Schedule 400 Montgomery Street, 7th Floor | San Francisco, CA 94104 | Phone: (415) 291-1894 | Fax: (415) 291-1172 | TBWB.com Drafting+and+Vetting+Ballot+Measure+Language+ Per$FM3$Research’s$recommendations,$if$the$city$wishes$to$pursue$a$Transient$Occupancy$Tax$ (TOT)$to$fund$general$infrastructure$needs,$no$further$polling$is$required$due$to$the$strong$ support$for$the$measure.$Accordingly,$TBWB$will$work$with$the$City$Attorney’s$Office$to$ develop$draft$ballot$language$that$can$be$shared$with$identified$community$leaders$and$ stakeholders$for$review,$feedback$and$input.$In$addition,$TBWB$will$work$with$city$staff$to$ prepare$a$sample$listing$of$the$infrastructure$projects$that$would$be$addressed$with$TOT$ funding$and$a$general$timeline$for$the$completion$of$the$projects.$This$information$will$be$ communicated$as$part$of$the$outreach$process$to$provide$stakeholders$and$the$community$at$ large$with$a$sense$of$what$will$be$accomplished$with$TOT$funding$if$a$measure$is$approved.$$ $ If$the$city$opts$to$pursue$a$general$sales$tax$measure$or$a$general$obligation$bond$to$fund$ transportation$projects,$further$opinion$research$should$be$conducted$in$January$to$test$the$ specific$features$of$the$measure.$As$soon$as$the$data$from$this$polling$is$available,$TBWB$will$ work$with$the$City$Attorney’s$Office$to$prepare$draft$ballot$language$for$one$or$both$of$these$ measures$that$can$be$utilized$as$part$of$the$outreach$process$for$the$reasons$cited$above.$$ $ Under$either$the$TOT$or$sales$tax/bond$measure$scenario,$draft$ballot$language$should$be$ prepared$and$approved$internally$by$no$later$than$the$end$of$February$so$that$the$language$can$ be$utilized$in$outreach$meetings$occurring$in$late$March,$April$and$May.$Any$adjustments$or$ refinements$based$on$feedback$gathered$as$part$of$the$outreach$process$will$be$incorporated$in$ final$ballot$language$that$will$be$prepared$for$testing$in$a$tracking$survey$before$going$to$the$ City$Council$for$final$adoption$in$June.$ + Identifying+Stakeholder+Outreach+Targets+ To$facilitate$an$organized$and$effective$outreach$effort,$TBWB$will$work$with$city$staff$and$its$ community$outreach$subconsultant$to$develop$a$prioritized$list$of$community$leaders$and$ stakeholders$to$be$the$targets$of$outreach$efforts.$These$leaders$and$stakeholders$will$include$ current$and$past$local$elected$officials,$members$of$city$boards$and$commissions,$the$chamber$ of$commerce$and$other$business$leaders,$neighborhood$leaders$and$advocates$working$on$ issues$related$to$the$infrastructure$funding$proposal.$For$efficient$outreach,$individual$outreach$ targets$will$be$combined$into$logical$groupings.$TBWB$will$work$with$city$staff$to$secure$time$on$ scheduled$agendas$for$established$groups$and$organizations.$Each$outreach$target$will$be$ matched$with$an$appropriate$city$representative.$Outreach$assignments,$meetings,$feedback$ and$progress$will$be$tracked$in$a$shared$spreadsheet$accessible$by$all$staff$and$consultants$ participating$in$the$outreach$process.$ $ The$outreach$target$list$will$be$developed,$reviewed$and$approved$in$January.$The$scheduling$ process$will$be$completed$in$February$and$outreach$will$occur$during$the$months$of$March,$ April$and$May.$ $ $ + Attachment G. TBWB Communication Plan and Schedule 400 Montgomery Street, 7th Floor | San Francisco, CA 94104 | Phone: (415) 291-1894 | Fax: (415) 291-1172 | TBWB.com Developing+Messaging+and+Materials+ In$preparation$for$outreach$meetings$with$community$leaders$and$stakeholders,$TBWB$will$ prepare$briefing$packets$with$background$and$summary$information$about$the$infrastructure$ planning$process$to$date,$identified$priority$infrastructure$needs,$the$funding$measure(s)$under$ consideration$and$a$survey$for$collecting$qualitative$feedback.$Specifically,$the$packets$will$ include$a$presentation$that$will$allow$for$a$consistent$setting$of$the$context,$delivery$of$the$ message$and$collection$of$feedback.$Information$in$the$packets$will$direct$the$outreach$targets$ to$online$and$social$media$sites$to$follow$the$process$and$stay$engaged.$ $ To$further$support$outreach$efforts,$TBWB$will$update$the$PaloAltoForward.org$microsite$with$ information$focused$on$the$priority$infrastructure$needs$and$funding$measure.$A$calendar$of$ social$media$updates$and$online$advertising$will$drive$traffic$to$the$updated$site.$In$addition,$we$ will$provide$talking$points$and$onWmessage$answers$to$frequently$asked$questions$to$ensure$a$ consistency$of$message$throughout$the$outreach$process.$Questions$and$answers$will$be$ updated$throughout$the$process$as$new$questions$arise$and$new$information$becomes$ available.$ $ TBWB$will$update$the$microsite$and$develop$the$briefing$packets,$talking$points$and$FAQs$ during$the$month$of$January.$Any$updates$to$the$messaging$based$on$FM3’s$January$poll$will$be$ incorporated$in$early$February$so$that$the$materials$may$be$reviewed,$edited$and$approved$by$ the$end$of$February$for$use$during$the$months$of$March,$April$and$May.$ + Informational+Voter+Communication+ In$addition$to$targeted$outreach$to$community$leaders$and$stakeholders,$TBWB$will$design$and$ implement$a$broadWbased$voter$communication$program$aiming$to$raise$awareness$of$the$city’s$ highWpriority$infrastructure$needs$and$infrastructure$funding$measure.$The$primary$ communication$vehicle$for$this$program$will$be$direct$mail$sent$to$all$registered$voter$ households,$supported$by$coordinated$content$distributed$via$online$and$social$media$ channels.$TBWB$will$write,$design$and$coordinate$the$production$and$mailing$of$the$pieces.$We$ recommend$sending$three$informational$mailings$timed$at$key$points$in$preparing$the$measure$ for$the$ballot.$$Content$utilized$on$the$microsite$and$in$online$advertising/social$media$will$ evolve$over$the$course$of$the$program$to$mirror$the$content$disseminated$in$the$mailings.$$$ $ A$first$mailing$will$be$sent$in$May$with$general$messaging$regarding$the$city’s$priority$ infrastructure$needs,$funding$options$and$including$a$tear$off$response$card$to$allow$for$ community$feedback.$While$not$scientific$like$a$poll,$this$response$mechanism$is$a$useful$ engagement$tool$for$collecting$qualitative$feedback$and$identifying$recurring$questions.$A$ similar$survey$will$be$posted$on$the$PaloAltoForward.org$microsite$for$online$feedback.$$Online$ advertising$and$existing$social$media$networks$will$communicate$coordinated$content$and$drive$ traffic$to$the$online$survey/feedback$tool.$ $ A$second$informational$mailing$will$be$sent$in$June$to$report$back$to$the$community$on$the$ feedback$received$and$provide$an$update$on$the$ballot$measure$planning$process.$Specifically,$ Attachment G. TBWB Communication Plan and Schedule 400 Montgomery Street, 7th Floor | San Francisco, CA 94104 | Phone: (415) 291-1894 | Fax: (415) 291-1172 | TBWB.com this$mailing$will$identify$the$meeting$at$which$the$City$Council$will$adopt$a$resolution$calling$for$ an$election$and$invite$the$community$to$participate.$$Microsite,$online$advertising$and$social$ media$content$will$be$updated$to$mirror$the$content$in$the$second$mailing.$ $ A$third$informational$mailing$will$be$sent$immediately$following$the$Council’s$vote$to$adopt$a$ resolution$calling$for$an$election.$This$final$piece$will$provide$the$final$details$of$the$measure$ heading$to$the$ballot$and$provide$information$about$voting$in$the$election.$Microsite,$online$ advertising$and$social$media$content$will$be$updated$to$mirror$the$content$in$the$third$mailing$ and$transition$to$become$a$static$informational$resource$through$to$Election$Day$in$November.$$ This$mailing$and$related$online$communication$will$mark$the$end$of$the$cityWfunded$ informational$outreach$effort.$Any$additional$public$communication$related$to$the$ballot$ measure$should$be$coordinated$and$funded$by$an$independent$advocacy$campaign$committee.$$ + Tracking+Research++ To$measure$the$impact$of$the$city’s$informational$outreach$efforts,$make$final$refinements$to$ the$ballot$measure$and$ensure$support$remains$at$a$sufficient$level$to$justify$going$to$the$ballot,$ a$tracking$poll$should$be$conducted$at$the$start$of$June.$This$will$provide$upWtoWdate$opinion$ data$that$can$be$presented$to$the$Council$in$late$June$along$with$the$final$resolution$calling$for$ the$election$and$establishing$the$specifics$of$the$measure.$ $ Qualifying+for+the+Ballot+ To$place$a$measure$on$the$November$4,$2014$ballot,$the$City$Council$must$adopt$a$resolution$ calling$for$the$election$no$later$than$August$8,$2014.$Accordingly,$we$recommend$a$schedule$ that$brings$the$resolution$to$the$Council$for$final$adoption$no$later$than$the$third$meeting$in$ June.$A$first$reading$or$consideration$of$a$draft$resolution$should$occur$at$the$first$meeting$in$ June$to$allow$for$any$adjustments$based$on$feedback$from$the$Council.$To$be$ready$for$these$ time$sensitive$meetings,$it$will$be$important$that$an$initial$iteration$of$the$measure$is$drafted,$ reviewed$and$approved$by$the$end$of$February.$This$will$allow$the$draft$to$be$vetted$during$ outreach$meetings$in$March,$April$and$May$and$the$tracking$survey$in$early$June.$Through$this$ process,$we$are$confident$that$the$Council$will$be$considering$a$measure$that$stands$the$best$ chances$for$approval$and$we$will$minimize$the$chances$of$being$surprised$by$unforeseen$issues$ once$the$measure$is$on$the$ballot.$ + Summary+Timeline+ + January'' • Prepare$draft$ballot$measure$language$ • Develop$stakeholder$outreach$target$list$ • Update$PaloAltoForward.org$microsite$ • Develop$briefing$packets,$talking$points$and$FAQs$ • Conduct$second$Phase$II$telephone$survey$ • Present$second$Phase$II$survey$results$to$Infrastructure$Committee$ Attachment G. TBWB Communication Plan and Schedule 400 Montgomery Street, 7th Floor | San Francisco, CA 94104 | Phone: (415) 291-1894 | Fax: (415) 291-1172 | TBWB.com $ February' • Presentation$of$second$Phase$II$survey$results$to$Council$and$direction$to$staff$ • Refine$microsite,$draft$ballot$language$and$outreach$materials$based$on$survey$findings$ and$schedule$outreach$meetings$ + March'–'April' • Begin$outreach$meetings,$collect$feedback,$track$progress$ + May' • Mail$first$informational$brochure$with$survey$response+ • Complete$stakeholder$outreach$and$compile$feedback$ • Conduct$final$tracking$survey$ + June' • Present$final$tracking$survey$results$to$Council$&$policy$direction$whether$to$place$ measure(s)$on$November$2014$ballot+ • Mail$second$informational$brochure$(as$applicable)+ • First$reading$of$ordinance/resolution$calling$for$election$ • Final$adoption$of$ordinance/resolution$calling$for$election$ + August' • City$Clerk$files$Ordinance/Resolution$ • Mail$third$informational$mailing$ $ $ $ $ $ $ $ $ $ $ $ $ $ Attachment G. TBWB Communication Plan and Schedule Attachment G. TBWB Communication Plan and Schedule City of Palo Alto (ID # 4315) City Council Staff Report Report Type: Action Items Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Ordinance for EVSE Requirement for all Single Family Constructions Title: Public Hearing: Recommendation From Policy and Services Committee for Council to Adopt an Ordinance for Electric Vehicles Supply Equipment Requirement for all New Single Family Residential Constructions From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council conduct a public hearing and then adopt the attached ordinance, along with the necessary findings to require that all new construction of single family housing install the necessary circuitry for EV chargers. Executive Summary The Palo Alto City Council in their regular City Council meeting of September 23, 2013 directed staff to bring back to them for their review an ordinance that would require that all new construction of single family housing include the necessary circuitry for EV chargers. On November 19, 2013, staff presented a draft ordinance to the Policy and Services Committee, which directed a minor change. The attached ordinance would require: (1) conduit sufficient to accommodate a 100-ampere circuit terminating in close proximity to an on-site parking space conduit; and (2) panel capacity to accommodate one 50-amp, Level 2 EV charger. This approach lowers the barrier to entry for a new homeowner to install the necessary circuitry to charge an electric vehicle while providing them the flexibility to choose what type and size system they want to install. Background Mobile sources account for well over half of the emissions that contribute to ozone and particulate matter and nearly 40% of the greenhouse gas emissions in California. In order to help meet California’s health-based air quality standards and greenhouse gas emission City of Palo Alto Page 2 reduction goals, significant gains are needed in the transportation sector in terms of reduced petroleum usage. Governor Brown's Executive Order of March 2012, directs state government to support and facilitate the rapid commercialization of zero-emission vehicles (ZEVs), with a target of having 1.5 million ZEVs on California roadways by 2025. In order to meet this goal and in order for electric vehicles to proliferate, it is important that early consumers have a positive experience and that facilities be readily available to provide convenient charging stations for the electric vehicles. According to a 2012 study completed by the California Center for Sustainable Energy in coordination with the Air Resources Board, approximately 1,000 new plug-in vehicles are being sold in the state every month and, in total, Californians own more than 12,000 plug-in electric vehicles (roughly 35% of all plug-in vehicles in the United States). This ordinance is developed in response to numerous requests by stakeholders to provide building standards that will meet current and future demands for Electric Vehicle Supply Equipment (EVSE) in single-family dwellings. This ordinance will encourage and support use of electric vehicles as an alternate means of transportation. The provisions for EVSE are intended to provide low-cost strategies that offer choice and savings in design for homeowners wishing to purchase an electric vehicle without necessitating retroactive installation of higher capacity electrical wiring and supply equipment for charging electrical vehicles. Staff has meet multiple times with a group of stakeholders including EV owners, EVSE installers, contractors, and other related parties to review the recommendations brought before the City Council The recommendations before you were vetted with the Development Center Advisory Group (DCAG). Going forward into the first part of 2014, staff intends to continue the meetings with the EVSE Task Force to draft recommendations for new multi-family, non-residential, and hotel construction. In addition, staff will be reviewing the EV permit fees and process to ensure it is cost neutral and EV friendly. Staff will also be bringing forward recommendations for curbside charging on the public right-of-way. Discussion With this ordinance, the City of Palo Alto (CPA) will require that new detached single family dwellings be plumbed, with panel capacity for at least one Level 2 EVSE. This will require the underground raceways and related underground equipment to be installed at the time of initial construction. Also with this initial construction, the main service panel should be capable of accommodating at least one dedicated 240 Volts/50 Amperes branch circuit. In discussions with the EVSE Task Force, the EV advocacy members were encouraging staff to recommend at least one Level 2 EVSE for each indoor parking space (i.e. at least two outlets per dwelling). However, in consultations with the development community, PA Utilities, and City of Palo Alto Page 3 members of the DCAG, the cost for potentially mandating the circuitry and capacity for the additional EVSE would be overly burdensome. An increased mandate would be an additional cost in upgrading the panel, possibly upgrading the transformers that supply the home as well as possibly the supply lines that feed the home. This cost could be in the magnitude of several thousands of dollars to the homeowner. The City of Palo Alto, on the average, issues approximately 110 permits for new single family dwelling per year. With this requirement alone the penetration into the stock of residential dwelling units will be limited. However, staff, in response to City Council direction, will be bringing forward recommendations for new multi-family, non-residential, hotel, and curbside parking requirements that will make Palo Alto a leader in promotion of EV parking. The CPA staff believes that the currently approved Level 2 EVSE charging connector allows for electrical circuits as high as 80 amperes. In the near future all major manufacturers plan to launch plug-in electric vehicles equipped with bigger and/or more efficient batteries. Since charging stations themselves are not required by this ordinance, the wiring of the EVSE can be deferred to a time when the ownership of the dwellings has decided. This will alleviate increased or unnecessary expenses for the owners who choose not to invest in electric vehicles at this time. Resource Impact Resource impacts from the adoption of this ordinance will be the additional staff time in plan checking and inspection requirements. Going forward the remaining policies that need to be crafted will take approximately 6 months of effort in cooperation with a stakeholder group of Electric Vehicle advocates, installers, contractors, and related stakeholders. Environmental Review This action is exempt from the California Environmental Quality Act. Attachments: Attachment A: Ordinance (PDF) Attachment B: Staff Report to Policy and Services Committee dated Nov 19th 2013 (PDF) Attachment C: Draft Excerpt Minutesdoc of Policy and Services Committee Nov 19th 2013 (DOC) NOT YET APPROVED 131105 dm 0160060 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Adopting Section 16.14.370 of the Palo Alto Municipal Code to Adopt Local Amendments to the California Green Building Standards Code and Related Findings The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The adoption and amendment of Section A4.106.8 of the California Green Building Standards Code is justified on the basis of local topographical and geographical conditions. Failure to address and significantly reduce greenhouse gas emissions could result in rises to sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses, public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood Hazard areas of the City. The aforementioned conditions create hazardous conditions for which departure from California Green Building Standards Code is required. SECTION 2. Section 16.14.370 of the Palo Alto Municipal Code is adopted to read as follows: 16.14.370 Section A4.106.8 Electric Vehicle (EV) Charging. Section A4.106.8 of the California Green Building Standards Code is added and amended to read: A4.106.8 Electric Vehicle (EV) Charging. New detached single-family dwellings shall comply with the following requirements for electric vehicle supply equipment (EVSE): (a) The property owner shall provide as minimum a panel capable to accommodate a dedicated branch circuit and service capacity to install at least a 208/240V, 50 amperes grounded AC outlet (Level 2 EVSE). The raceway shall terminate in close proximity to the proposed location of the charging system into a listed cabinet, box, enclosure, or receptacle. The raceway shall be installed so that minimal removal of materials is necessary to complete the final installation. The raceway shall have capacity to accommodate a 100- ampere circuit. (b) Design. The proposed location of a charging station may be internal or external to the dwelling, and shall be in close proximity to an on-site parking space. The proposed design must comply with all applicable design guidelines, setbacks and other code requirements. SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the NOT YET APPROVED 131105 dm 0160060 2 Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. 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: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Development Services ____________________________ Director of Administrative Services City of Palo Alto (ID # 4259) Policy and Services Committee Staff Report Report Type: Meeting Date: 11/19/2013 City of Palo Alto Page 1 Summary Title: Ordinance for EVSE Requirement for all Single Family Constructions Title: Recommendation to City Council to Adopt an Ordinance for Electric Vehicles Supply Equipment Requirement for all New Single Family Residential Constructions From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council conduct a public hearing and adopt the attached ordinance, along with the necessary findings to require that all new construction of single family housing install the necessary circuitry for EV chargers. Executive Summary The Palo Alto City Council in their regular City Council meeting of September 23, 2013 directed staff to draft an ordinance that would require that all new construction of single family housing include the necessary circuitry for EV chargers and to return to the Policy and Services Committee, prior to returning to Council. The attached ordinance would require, in close proximity to an on-site parking space, the wiring and panel capable to accommodate, at minimum, the equivalent of one 50-amp, Level 2 EV charger. Background At the regular City Council meeting of September 23, 2013 the City Council directed the staff to follow through on the following items 1. Review the Electric Vehicle (EV) permit process, and procedures for station installations to streamline the process and insure that it is customer friendly. 2. Adopt code changes requiring that all new construction of single family housing to install the necessary circuitry for EV chargers and a draft program to bring about greater implementation of EV charging stations at commercial, multi-family and mixed use facilities, potentially including Utilities Department or City incentives, and to come back to the Policy and Services Committee with recommendation followed by City Council. City of Palo Alto Page 2 3. Consider ways to encourage and support EV use in the City of Palo Alto and the Bay Area including the following concepts and return to the Policy and Services Committee with recommendations to ensure that Palo Alto is one of the most EV friendly Cities in America. 4. Additional suggested recommendations might include: a) ensuring that all new hotels are required to install EV charging stations and to the extent feasible that all existing hotels are required to install EV charging stations, b) Review the permitting fee structure for EV charging equipment to reduce costs, or develop cost incentives for the permits in such a way that it is streamlined and efficient. 5. Announce at the EV celebration to be hosted at Palo Alto City Hall on September 25, 2013, that Palo Alto will be a leader in the nation in the installation of EV stations by mandating that all new single family housing units be required to install the necessary rough in circuitry. 6. Return to P&S and subsequently to Council with alternatives on a pilot residential curbside EV charging program. 7. Return to P&S and subsequently Council with a draft program to bring about greater implementation of EV charging stations at commercial facilities, potentially including Utilities Department or City incentives to ask staff to consider revising fee structure based on the number of stations at number of potential EV station banks. The minutes from the September 23, 2013 Council meeting are included as Attachment B. In response to the Council direction of September 23, 2013, staff is bringing to the Policy and Services and subsequently to the Council an ordinance requiring that all new construction of single family housing install the necessary circuitry for EV chargers. Staff is anticipating bringing the remaining items to the Policy and Services and subsequently to the Council in the early part of next year. Discussion Mobile sources account for well over half of the emissions that contribute to ozone and particulate matter and nearly 40% of the greenhouse gas emissions in California. In order to help meet California’s health-based air quality standards and greenhouse gas emission reduction goals, significant gains are needed in the transportation sector in terms of reduced petroleum usage. Governor Brown's Executive Order of March 2012 directs state government to support and facilitate the rapid commercialization of zero-emission vehicles (ZEVs), with a target of having 1.5 million ZEVs on California roadways by 2025. In order to meet this goal and in order for electric vehicles to proliferate, it is important that early consumers have a positive experience and that facilities be readily available to provide convenient charging stations for the electric vehicles. City of Palo Alto Page 3 According to a 2012 study completed by the California Center for Sustainable Energy in coordination with the Air Resources Board, approximately 1,000 new plug-in vehicles are being sold in the state every month and, in total, Californians own more than 12,000 plug-in electric vehicles (roughly 35% of all plug-in vehicles in the United States). This ordinance is developed in response to numerous requests by stakeholders to provide building standards that will meet current and future demands for Electric Vehicle Supply Equipment (EVSE) in single-family dwellings. This ordinance will encourage and support use of electric vehicles as an alternate means of transportation. The provisions for EVSE are intended to provide low-cost strategies that offer choice and savings in design for homeowners wishing to purchase an electric vehicle without necessitating retroactive installation of higher capacity electrical wiring and supply equipment for charging electrical vehicles. With this ordinance, the City of Palo Alto (CPA) will require that new detached single family dwellings be plumbed, with panel capacity for at least one Level 2 EVSE. This will require the underground raceways and related underground equipment to be installed at the time of initial construction. Also with this initial construction, the main service panel should be capable of accommodating at least one dedicated 240 Volts/50 Amperes branch circuit. In discussions with the EVSE Task Force, the EV advocacy members were encouraging that staff recommends at least one Level 2 EVSE for each indoor parking space which would mean two car garages would be required to install two dedicated circuits. This would require the electrical panel to be upgraded. In discussions with the development community, PA Utilities, and members of the Development Center Advisory Group (DCAG), and other members of the design and construction community, the cost for potentially mandating the circuitry and capacity for the additional EVSE would be overly burdensome. Mandating an additional dedicated 50 amp circuit would mean an additional cost in upgrading the panel, possibly upgrading the transformers that supply the home as well as possibly the supply lines that feed the home. This cost could be in the magnitude of several thousands of dollars to the homeowner. Conclusion As currently defined, Level 2 EVSE charging connector allows for electrical circuits as high as 80 amperes. In the near future all major manufacturers plan to launch plug-in electric vehicles equipped with bigger and/or more efficient batteries. Since charging stations themselves are not required by this ordinance, the wiring of the EVSE can be deferred to time when the ownership of the dwellings is decided. This eases the point of entry for would be Electric Vehicle purchasers, provides maximum flexibility for the Electric Vehicle Owner, as well as alleviates increased or unnecessary expenses for the owners who choose not to invest in Electric Vehicles at this time. Resource Impact City of Palo Alto Page 4 With this action there are no resource impacts at this time. Currently, the City charges a fee for the inspection of EV charger installations. As part of the assessment of Development Services related fees, the fee will be analyzed and potentially modified. Policy Implications The Palo Alto City Council directed the staff to bring back an ordinance that would require that all new construction of single family housing include the necessary circuitry for EV chargers. Environmental Review This action is exempt from the California Environmental Quality Act. Attachments: Attachment A: Ordinance Adopting PAMC Section 16.14.370 (DOC) Attachment B: September 23, 2013 Council Meeting Minutes (PDF) NOT YET APPROVED 131105 dm 0160060 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Adopting Section 16.14.370 of the Palo Alto Municipal Code to Adopt Local Amendments to the California Green Building Standards Code and Related Findings The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The adoption and amendment of Section A4.106.8 of the California Green Building Standards Code is justified on the basis of local topographical and geographical conditions. Failure to address and significantly reduce greenhouse gas emissions could result in rises to sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses, public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood Hazard areas of the City. The aforementioned conditions create hazardous conditions for which departure from California Green Building Standards Code is required. SECTION 2. Section 16.14.370 of the Palo Alto Municipal Code is adopted to read as follows: 16.14.370 Section A4.106.8 Electric Vehicle (EV) Charging. Section A4.106.8 of the California Green Building Standards Code is added and amended to read: A4.106.8 Electric Vehicle (EV) Charging. New detached single-family dwellings shall comply with the following requirements for electric vehicle supply equipment (EVSE): (a) The property owner shall provide as minimum a panel capable to accommodate a dedicated branch circuit and service capacity to install at least a 208/240V, 50 amperes grounded AC outlet (Level 2 EVSE). The raceway shall terminate in close proximity to the proposed location of the charging system into a listed cabinet, box, or enclosure. The raceway shall be installed so that minimal removal of materials is necessary to complete the final installation. The raceway shall have capacity to accommodate a 100-ampere circuit. (b) Design. The proposed location of a charging station may be internal or external to the dwelling, and shall be in close proximity to an on-site parking space. The proposed design must comply with all applicable design guidelines, setbacks and other code requirements. SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the NOT YET APPROVED 131105 dm 0160060 2 fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. 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: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Planning and Community Environment ____________________________ Director of Administrative Services CITY OF PALO ALTO CITY COUNCIL ACTION Page 1 of 4 Special Meeting September 23, 2013 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:04 P.M. Present: Berman, Burt, Holman, Klein, Kniss, Price, Scharff, Schmid, Shepherd arrived at 5:10 Absent: CLOSED SESSION 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Lalo Perez, Joe Saccio, Kathy Shen, Breena Rowe, Rebecca Burnside) Employee Organization: Service Employees International Union, (SEIU) Local 521; Hourly Unit Authority: Government Code Section 54957.6(a) The Council adjourned from closed session at 6:55 P.M. and Mayor Scharff announced no reportable action. SPECIAL ORDERS OF THE DAY 2. Presentation by Santa Clara County District Attorney Jeff Rosen. CONSENT CALENDAR MOTION: Vice Mayor Shepherd moved, seconded by Council Member Kniss to approve Agenda Item Numbers 3-6. 3. Approval for the City Manager to Purchase a Police Records Management System (RMS), and Field-based Reporting Applications in Partnership With the Cities of Mountain View and Los Altos for Palo Alto’s Participation in the Tri-Cities CAD and RMS “Virtual ACTION Page 2 of 4 City Council Meeting Final Action: 9/23/13 Consolidation” Project and Related Budget Amendment Ordinance in the Amount of $100,000 in Contingency Funding from the Information Technology Internal Service Fund. 4. Approval of Crescent Park - No Overnight Parking (2AM-5AM) Trial Program Resident Permit Application and Program Expansion. 5. Council Appointed Officers Committee Recommendation of Appointment of Acting City Auditor. 6. Reauthorization to Engage in a Non-Binding "Smart Cities Alliance Agreement" with the City of Heidelberg, Germany, and Direction on Exploring Future "Smart City" Alliance. MOTION PASSED: 9-0 ACTION ITEMS 7. Colleague's Memo From Vice Mayor Shepherd, Council Members Berman, Holman, and Price Regarding the Building Code and Stalled Construction. MOTION: Council Member Price moved, seconded by Mayor Scharff to direct Staff to: 1) draft an Ordinance that amends the Municipal Code regarding completion of residential construction projects in a timely manner, to include the imposition of time limits for building permits and daily penalties for projects that exceed the life of a building permit, 2) return to the Policy and Services Committee with a brief update and analysis of delays in commercial construction projects in Palo Alto, if similar issues have arisen, along with potential solutions, and 3) this draft shall be reviewed by Council’s Policy and Services Committee for final recommendation to Council. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to also return with draft Ordinance revisions to address improved fencing of stalled construction sites. MOTION PASSED: 9-0 8. Colleague's Memo from Mayor Scharff, Vice Mayor Shepherd, and Council Member Price Regarding Electric Vehicles. MOTION: Mayor Scharff moved, seconded by Vice Mayor Shepherd to direct Staff to: 1) review the Electric Vehicle (EV) permit process, and ACTION Page 3 of 4 City Council Meeting Final Action: 9/23/13 procedures for station installations to streamline the process and insure that it is customer friendly, 2) adopt code changes requiring that all new construction of single family housing install the necessary circuitry for EV chargers to come back to the Policy and Services Committee, 3) consider ways to encourage and support EV use in the City of Palo Alto and the Bay Area including the following concepts and return to the Policy and Services Committee with recommendations to ensure that Palo Alto is one of the most EV friendly Cities in America, 4) additional suggested recommendations might include: a) ensuring that all new hotels are required to install EV charging stations and to the extent feasible that all existing hotels are required to install EV charging stations, b) that Staff review the permitting fee structure for EV charging equipment to reduce costs, or develop cost incentives for the permits in such a way that it is streamlined and efficient, and 5) announce at the EV celebration to be hosted at Palo Alto City Hall on September 25, 2013, that Palo Alto will be a leader in the nation in the installation of EV stations by mandating that all new housing units be required to install the necessary rough in circuitry. INCORPORATED INTO THE MOTION WITH CONSENT OF MAKER AND SECONDER to: 1) direct Staff to return to P&S and subsequently to Council with alternatives on a pilot residential curbside EV charging program, and 2) direct Staff to return to P&S and subsequently Council with a draft program to bring about greater implementation of EV charging stations at commercial facilities, potentially including Utilities Department or City incentives. INCORPORATED INTO THE MOTION WITH CONSENT OF MAKER AND SECONDER to change the latter half of 2 to “greater implementation of EV charging stations and/or EV charging banks of stations.” And to add after “including Utilities Department or City incentives” “to ask staff to consider revising fee structure based on the number of stations at number of potential EV station banks.” INCORPORATED INTO THE MOTION WITH CONSENT OF MAKER AND SECONDER to change number 5) in the original motion to read “announce at the EV celebration to be hosted at Palo Alto City Hall on September 25, 2013, that Palo Alto will be a leader in the nation in the installation of EV stations by mandating that all new single family housing units be required to install the necessary rough in circuitry.” And to change 2) to read “direct Staff to return to P&S and subsequently Council with a draft program to bring about greater implementation of EV charging stations at commercial, multi-family and mixed use facilities, potentially including Utilities Department or City incentives.” MOTION PASSED: 9-0 ACTION Page 4 of 4 City Council Meeting Final Action: 9/23/13 9. Approval of Response to Grand Jury Report on Law Enforcement Public Complaint Procedures. MOTION: Mayor Scharff moved, seconded by Vice Mayor Shepherd to approve the Staff recommended response, Attachment A of the Staff Report, to the 2012-2013 Santa Clara County Civil Grand Jury Report entitled, “Law Enforcement Public Complaint Procedures” (“Grand Jury Report”). MOTION PASSED: 9-0 ADJOURNMENT: The meeting was adjourned at 9:10 P.M. POLICY AND SERVICES COMMITTEE EXCERPT MINUTES Special Meeting November 19, 2013 6:00 PM 3. Recommendation to City Council to Adopt an Ordinance for Electric Vehicles Supply Equipment Requirement for all New Single Family Residential Constructions. Peter Pirnejad, Development Services Director, reported Staff was presenting the requirement for all new single-family residential housing to install necessary circuitry for electric vehicle (EV) chargers. Staff made the point of entry easy, eliminated barriers, identified costs and routes for installation of circuitry to minimize effort and costs. A house would be equipped with one utility box prepared for installation of a receptacle to charge an EV. Chair Kniss asked if Staff would discuss costs. Mr. Pirnejad responded yes. Approximately $500 would pay for the conduit, utility box and the panel capacity to install the necessary circuitry on the electric panel in a newly constructed home. In early 2014, Staff would present other issues such as methods to require circuitry in non-residential buildings and existing construction. Council Member Holman felt $500 was a little high for adding a 240 amp outlet and requested clarification of the cost. Mr. Pirnejad indicated $500 was a conservative estimate. Installation of conduit, panel capacity, a breaker and a receptacle and labor and materials could cost up to $500. The cost could be substantially less. Council Member Holman noted most garages had power sources. Mr. Pirnejad stated an existing power source was not the same as that used for charging electric vehicles. The raceway for an electric vehicle charger would be substantially larger than the typical 110 outlet. It required a larger gauge wire and a special run of conduit. Council Member Klein inquired about the cost of a retrofit to install a charger. Mr. Pirnejad reported that cost would be substantially more. With a retrofit, the drywall would need to be removed, the conduit installed and the panel upgraded. That cost could be $5,000 or more. MINUTES Council Member Klein asked how many new residences were constructed annually in Palo Alto. Mr. Pirnejad did not know that number. Staff wished to revise Section A4.106.8 (a) of the proposed Ordinance to read "the raceway shall terminate in close proximity to the proposed location of the charging system in a listed cabinet box, box, enclosure, or receptacle." Sheila Tucker, Assistant to the City Manager, would provide the Council with the number of residences constructed annually. Chair Kniss inquired whether Staff based their information on requirements utilized in other cities. Mr. Pirnejad indicated Staff based it on research from other cities. The City Attorney reviewed Ordinances from other cities. Staff vetted the proposed Ordinance with the Development Center Advisory Group and contractors. Chair Kniss asked if the $500 estimated cost aligned with costs from other cities. Mr. Pirnejad noted the cost was estimated across the region and applied to new construction only. Chair Kniss inquired whether a number of other cities implemented the same requirement. Albert Yang, Deputy City Attorney, reported the City of Sunnyvale implemented a similar requirement. The City of Los Angeles' requirement applied to a wider range of buildings and offered options to install just the raceway or the outlet. Chair Kniss asked if this requirement was new for builders. Sven Teesen stated the proposed Ordinance was good and somewhat cutting edge. It offered flexibility that other cities did not. Costs would be higher in Palo Alto than in Sunnyvale because of the flexibility. To be cutting edge, the City should require two charging stations per garage. The cost was higher because of the requirement for a raceway; however, future upgrades would be simpler. MOTION: Council Member Price moved, seconded by Council Member Holman to move the Staff recommendation that the City Council conduct a public hearing and adopt the attached Ordinance, along with the necessary findings to require that all new construction of single family housing install the necessary circuitry for Electric Vehicle (EV) chargers. MINUTES Council Member Klein felt the proposed Ordinance was an experiment because of the low number of houses built annually. In two years, Staff could recommend a more aggressive approach. Mr. Teesen remarked that the Council could require homeowners to install chargers when they sold their homes. Council Member Price congratulated Staff for presenting the Ordinance at such a fast pace. She looked forward to additional items on the topic. MOTION PASSED: 4-0 Chair Kniss inquired if the City had any regulations on usage of the two public charging stations in the City Hall parking garage. Jessica Sullivan, Senior Parking Engineer, reported the time limit for each vehicle was three hours. Vehicles using the stations longer than three hours could receive a ticket. Chair Kniss felt the City should proceed with ticketing vehicles. Mr. Teesen suggested the City provide free usage of charging stations for the first hour and then charge a significant amount for any amount of time thereafter. The charging stations were capable of implementing that fee structure. Chair Kniss asked if Staff could provide that information. Mr. Pirnejad replied yes. City of Palo Alto (ID # 4314) City Council Staff Report Report Type: Action Items Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Ordinance for Expired Permit Enforcement Title: Public Hearing: Recommendation From the Policy and Services Committee to Adopt an Ordinance for Penalties on Expired Permit Enforcement for Residential Projects From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council conduct a public hearing and adopt the attached ordinance, adopting penalties for maintenance of expired residential building permits. Executive Summary The Palo Alto City Council, at its regular meeting of September 23, 2013, directed staff to draft an ordinance imposing time limits on completion of residential construction projects and daily penalties for projects that exceed the life of the building permit. On November 19, 2013, staff presented a draft ordinance to the Policy and Services Committee. The attached ordinance incorporates several amendments consistent with the Committee’s direction. In general the ordinance requires property owners to maintain progress on projects and to promptly renew expired residential building permits. The ordinance imposes strict penalties for the failure to maintain an active permit, and grants the chief building official limited discretion in modifying or waiving accrued penalties. The ordinance requires Council approval for any waivers in excess of $10,000 and whenever a property owner seeks more than three extensions of a building permit. Finally, the ordinance allows the chief building official to require the construction of a wood fence at the site of any stalled construction. Background The September 23, 2013 City Council colleague’s memo regarding stalled construction outlined several negative impacts associated with construction delays, including visual City of Palo Alto Page 2 blight and safety concerns. The memo noted that the City’s current building code does not impose firm time limitations in which construction must be completed and does not impose penalties for expired building permits. The colleague’s memo called for an ordinance addressing both of these issues and provided ordinances adopted by the cities of Atherton and San Bruno as examples. While the Atherton and San Bruno ordinances are similar to each other, Atherton varies the time limits for completion of construction by proposed square footage, while San Bruno varies time limits by the estimated value of the project, as determined by the building official. At the November 19, 2013 meeting of the Policy and Services Committee, the Committee directed: 1) that any waiver or reduction of penalties accrued under the ordinance in excess of $10,000 require Council approval; 2) that the authority of the chief building official be limited to granting three permit extensions, and that additional extensions require Council approval; and 3) that staff provide an analysis of whether the City may foreclose on or force the sale of a property that has stalled construction. Discussion The draft ordinance imposes strict penalties on projects that fail to maintain an active building permit. For building permits that are expired for between 31 and 60 days, the ordinance imposes a penalty of $200 per day. This penalty increases to $400 per day for days 61 through 90 that a permit remains expired, and to $800 per day beginning on the 121st day and for each day thereafter, with no upper limit. The ordinance allows the chief building official to modify or waive the penalty in certain circumstances. Staff intends to enforce these penalties on a complaint-basis. The draft ordinance does not, however, create rigid time limits in which construction must be completed. Staff recommends against adopting strict timelines based on square footage or estimated value, as project complexity and the time required to complete construction vary and are not always proportional to square footage or estimated value. In addition, the staff time required to assign and enforce rigid time limits on all residential construction would create a significant resource burden. Instead, the draft ordinance preserves the City’s current requirement that projects diligently advance construction to the next level of inspection to maintain an active building permit. This approach is consistent with the ultimate goal of completing construction once it has begun; it avoids imposing harsh penalties on minor delays while ensuring that complaint-based enforcement is available to dissuade truly stalled City of Palo Alto Page 3 construction. In addition to imposing penalties, the ordinance declares that the maintenance of an expired building permit is a public nuisance. Under the procedures set forth in Chapter 9.56 of the Municipal Code, in the event a property owner is non-responsive, the City could theoretically complete construction or demolish a partial structure and impose a tax lien on the property to recover the cost of abatement. If the tax lien remains unpaid for more than five years, the County tax collector may initiate proceedings to sell the property pursuant to the California Revenue and Tax Code. Alternatively, in the event the City issues an administrative citation for violation of the ordinance, under Chapter 1.12 of the Municipal Code, any penalty that remains unpaid for more than 90 days after the penalty becomes final may be converted into a lien with the force and effect of a court judgment lien. In theory, the City could seek to foreclose on the judgment lien. However, any approach seeking to force the sale of a property would be very aggressive, dependent on remaining equity in the property, and certain to carry high transaction costs. For this reason, the ordinance is crafted with the ultimate goal of voluntary compliance in mind. Resource Impact Any revenue impact to the General Fund from the fines outlined in the ordinance will be evaluated as part of the development of the 2015 Proposed Budget. Policy Implications The draft ordinance is consistent with the direction of the Policy and Services Committee from November 19, 2013. Attachments: Attachment A: Ordinance (PDF) Attachment B: Policy and Services Report date Nov 19th 2013 (PDF) Attachment C: Draft Excerpt Minutes for Policy and Services Minutes for Nov 19th 2013 (DOC) NOT YET APPROVED 131204 dm 0160059 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Section 16.04.090 of the Palo Alto Municipal Code to Adopt Local Amendments to the California Building Code, Adopting Chapter 16.61 to Impose Penalties for Abandoned Construction and Related Findings The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: Amendment of Section 105.5 of the California Building Code is justified on the basis of a local geological condition. The City of Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake. The other fault is Hayward Fault. This fault is about 74 mi long, situated mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time. Thus, because the City is within a seismic area which includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage and risk to public safety as a result of seismic activity by encouraging prompt completion of construction. SECTION 2. Section 16.04.090 of the Palo Alto Municipal Code is amended to read as follows: 16.04.090 Section 105.5 Expiration Section 105.5 of Division II of the California Building Code is amended to read: 105.5 Expiration. Every permit issued shall become invalid unless the work on the site authorized by such permit is commenced within 180 days after its issuance or if the work authorized on the site by such permit is suspended or abandoned for a period of 180 days after the time the work is commenced. For the purpose of this section, failure to progress a project to the next level of required inspection shall be deemed to be suspension of the work. The chief building official is authorized to grant, in writing, no more than three extensions of permits that would otherwise expire for periods not more than 180 days each and may require: 1) that the construction documents be revised to comply with current codes; and 2) payment of all current and applicable fees. Extensions shall be requested in writing and justifiable cause demonstrated. Additional extensions beyond three may only be granted with the approval of the City Council. NOT YET APPROVED 131204 dm 0160059 2 The chief building official is authorized to grant, in writing, one or more renewals of the expired permits and may require: 1) that the construction documents be revised to partially or fully comply with current codes; 2) payment of a fee; and 3) payment of a penalty pursuant to Chapter 16.61 of the Palo Alto Municipal Code, as it may be amended from time to time. SECTION 3. Chapter 16.61 (Expired Permits for Residential Construction and Demolition) of the Palo Alto Municipal Code is adopted to read as follows: 16.61.010 Application This chapter shall apply to all residential construction and demolition, including, but not limited to, all additions, alterations, modifications, repairs, and improvements, that require a building permit or demolition permit. 16.61.020 Timely Renewal of Expired Permits In the event a permit expires under section 16.04.090 for suspension or abandonment of work, the property owner shall seek renewal of the permit within thirty (30) days following its expiration. 16.61.30 Penalty for Expired Permits A property owner shall be subject to the following penalties for violation of section 16.61.020: Time from permit expiration Penalty 0 to 30 days $0 31st day through 60th day $200.00 per day (i.e., $6,000.00 maximum penalty applicable to this 30-day period) 61st day through 120th day $400.00 per day (i.e., $24,000.00 maximum penalty applicable to this 60-day period) 121st day and every day thereafter $800.00 per day (a) For purposes of this section, if a renewed permit expires and the property owner has not advanced a project to the next level of required inspection, the calculation of penalties shall relate back to the date of the previous permit expiration. (b) The chief building official may reduce or waive a penalty accrued under this chapter upon finding that the property owner acted in good faith and either: (1) the delay was attributable to circumstances beyond the property owner’s control; or (2) imposition of the full accrued penalty would harm the public interest, provided, however, that and reduction or waiver of more than $10,000 must be approved by the City Council. NOT YET APPROVED 131204 dm 0160059 3 16.61.040 Appeal of Assessed Penalty A property owner may request a hearing to contest a citation issued under this chapter in accordance with Chapter 1.12. 16.61.050 Construction of Fence In the event a permit remains expired for more than thirty (30) days, the chief building official may require the construction of a wood fence at least six (6) feet tall, if necessary to secure the property from unauthorized entry and to minimize the aesthetic impacts of the construction visible from the public right of way. Such fence shall comply with the requirements of Chapter 16.24. 16.61.060 Public Nuisance Declared Any violation of this chapter shall constitute a public nuisance and, in addition to being subject to any other remedies allowed by law, may be abated as provided in Chapter 9.56 of the Palo Alto Municipal Code. SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 5. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. // // // // // // // NOT YET APPROVED 131204 dm 0160059 4 SECTION 6. 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: ____________________________ ____________________________ Deputy City Attorney City Manager ____________________________ Director of Planning and Community Environment City of Palo Alto (ID # 4260) Policy and Services Committee Staff Report Report Type: Meeting Date: 11/19/2013 City of Palo Alto Page 1 Summary Title: Ordinance for Expired Permit Enforcement Title: Recommendation to City Council to Adopt an Ordinance for Penalties on Expired Permit Enforcement for Residential Projects From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the Policy and Services Committee recommend that Council adopt the attached ordinance, adopting penalties for maintenance of expired residential building permits. Executive Summary The Palo Alto City Council, at its regular meeting of September 23, 2013, directed staff to draft an ordinance imposing time limits on completion of residential construction projects and daily penalties for projects that exceed the life of the building permit. The attached ordinance requires property owners to maintain progress on projects and to promptly renew expired residential building permits. The ordinance imposes strict penalties for the failure to maintain an active permit, and grants the chief building official limited discretion in modifying or waiving accrued penalties. Finally, the ordinance allows the chief building official to require the construction of a wood fence at the site of any stalled construction. Background The September 23, 2013 City Council colleague’s memo regarding stalled construction outlined several negative impacts associated with construction delays, including visual blight and safety concerns. The memo noted that the City’s current building code does not impose firm time limitations in which construction must be completed and does not impose penalties for expired building permits. City of Palo Alto Page 2 The colleague’s memo called for an ordinance addressing both of these issues and provided ordinances adopted by the cities of Atherton and San Bruno as examples. While the Atherton and San Bruno ordinances are similar to each other, Atherton varies the time limits for completion of construction by proposed square footage, while San Bruno varies time limits by the estimated value of the project, as determined by the building official. At the regular City Council meeting of September 23, 2013 the City Council directed staff to: 1) draft an Ordinance that amends the Municipal Code regarding completion of residential construction projects in a timely manner, to include the imposition of time limits for building permits and daily penalties for projects that exceed the life of a building permit, 2) return to the Policy and Services Committee with the draft ordinance and an update and analysis of delays in commercial construction projects in Palo Alto, if similar issues have arisen, along with potential solutions. The minutes from the September 23, 2013 Council meeting are included as Attachment B. Discussion The draft ordinance imposes strict penalties on projects that fail to maintain an active building permit. For building permits that are expired for between 31 and 60 days, the ordinance imposes a penalty of $200 per day. This penalty increases to $400 per day for days 61 through 90 that a permit remains expired, and to $800 per day beginning on the 121st day and for each day thereafter, with no upper limit. The ordinance allows the chief building official to modify or waive the penalty in certain circumstances. Staff intends to enforce these penalties on a complaint-basis. The draft ordinance does not, however, create rigid time limits in which construction must be completed. Staff recommends against adopting strict timelines based on square footage or estimated value, as project complexity and the time required to complete construction vary and are not always proportional to square footage or estimated value. In addition, the staff time required to assign and enforce rigid time limits on all residential construction would create a significant resource burden. Instead, the draft ordinance preserves the City’s current requirement that projects diligently advance construction to the next level of inspection to maintain an active building permit. This approach is consistent with the overarching goal that construction not be permitted to languish, and avoids imposing harsh penalties on minor delays while ensuring that complaint-based enforcement is available to dissuade truly stalled construction. In response to the City Council direction of September 23 staff has prepared an ordinance for review by the Policy and Services Committee and subsequently by the City Council an Ordinance that amends the Municipal Code regarding completion of residential construction projects in a timely manner, to include the imposition of time City of Palo Alto Page 3 limits for building permits and daily penalties for projects that exceed the life of a building permit. During the staff presentation to the Policy and Services Committee on November 19th City staff will provide an update and analysis of delays in commercial construction projects in Palo Alto, if similar issues have arisen, along with potential solutions. Resource Impact Any revenue impact to the General Fund from the fines outlined in the ordinance will be evaluated as part of the development of the 2015 Proposed Budget. Policy Implications The draft ordinance is largely consistent with the Council’s direction from September 23, 2013. Attachments: Attachment A: Ordinance Amending Section 16.04.090 of the PAMC Adopting Chapter 16.61 (PDF) Attachment B: September 23, 2013 Council Meeting Minutes (PDF) NOT YET APPROVED 131105 dm 0160059 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Section 16.04.090 of the Palo Alto Municipal Code to Adopt Local Amendments to the California Building Code, Adopting Chapter 16.61 to Impose Penalties for Abandoned Construction, and Related Findings The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations Amendment of Section 105.5 of the California Building Code is justified on the basis of a local geological condition. The City of Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake. The other fault is Hayward Fault. This fault is about 74 mi long, situated mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time. Thus, because the City is within a seismic area which includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage and risk to public safety as a result of seismic activity. SECTION 2. Section 16.04.090 of the Palo Alto Municipal Code is amended to read as follows: 16.04.090 Section 105.5 Expiration Section 105.5 of Division II of the California Building Code is amended to read: 105.5 Expiration. Every permit issued shall become invalid unless the work on the site authorized by such permit is commenced within 180 days after its issuance or if the work authorized on the site by such permit is suspended or abandoned for a period of 180 days after the time the work is commenced. For the purpose of this section, failure to progress a project to the next level of required inspection shall be deemed to be suspension of the work. The Chief Building Official is authorized to grant, in writing, one or more extensions of unexpired permits for periods not more than 180 days each and may require: 1) that the construction documents be revised to comply with current codes; and 2) payment of all current and applicable fees. Extensions shall be requested in writing and justifiable cause demonstrated. The Chief Building Official is authorized to grant, in writing, one or more renewals of the expired permits and may require: 1) that the construction documents be revised to partially or fully comply with current codes; 2) payment of a fee; and 3) payment of a penalty pursuant to Chapter 16.61 of the Palo Alto Municipal Code, as it may be amended from time to time. SECTION 3. Chapter 16.61 (Expired Permits for Residential Construction and Demolition) of the Palo Alto Municipal Code is adopted to read as follows: NOT YET APPROVED 131105 dm 0160059 2 16.61.010 Application This chapter shall apply to all residential construction and demolition, including, but not limited to, all additions, alterations, modifications, repairs, and improvements, that require a building permit or demolition permit. 16.61.020 Timely Renewal of Expired Permits In the event a permit expires under section 16.04.090 for suspension or abandonment of work, the property owner shall seek renewal of the permit within thirty (30) days following its expiration. 16.61.030 Penalty for Expired Permits (a) A property owner shall be subject to the following penalties for violation of section 16.61.020: Time from permit expiration Penalty 0 to 30 days $0 31st day through 60th day $200.00 per day (i.e., $6,000.00 maximum penalty applicable to this 30-day period) 61st day through 120th day $400.00 per day (i.e., $24,000.00 maximum penalty applicable to this 60-day period) 121st day and every day thereafter $800.00 per day (b) For purposes of this section, if a renewed permit expires and the property owner has not advanced a project to the next level of required inspection, the calculation of penalties shall relate back to the date of the previous permit expiration. (c) The Chief Building Official may reduce or waive a penalty accrued under this chapter upon finding that the property owner acted in good faith and either: (1) the delay was attributable to circumstances beyond the property owner’s control; or (2) imposition of the full accrued penalty would harm the public interest. 16.61.040 Appeal of Assessed Penalty A property owner may request a hearing to contest a citation issued under this chapter in accordance with Chapter 1.12. 16.61.050 Construction of Fence In the event a permit remains expired for more than thirty (30) days, the chief building official may require the construction of a wood fence at least six (6) feet tall, if necessary to secure the property from unauthorized entry and to minimize the aesthetic impacts of the construction visible from the public right of way. Such fence shall comply with the requirements of Chapter 16.24. NOT YET APPROVED 131105 dm 0160059 3 16.61.060 Public Nuisance Declared Any violation of this chapter shall constitute a public nuisance and, in addition to being subject to any other remedies allowed by law, may be abated as provided in Chapter 9.56 of the Palo Alto Municipal Code. SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 5. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment. SECTION 6. 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: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Planning & Community Community Environment ____________________________ Director of Administrative Services CITY OF PALO ALTO CITY COUNCIL ACTION Page 1 of 4 Special Meeting September 23, 2013 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:04 P.M. Present: Berman, Burt, Holman, Klein, Kniss, Price, Scharff, Schmid, Shepherd arrived at 5:10 Absent: CLOSED SESSION 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and Regulations (James Keene, Pamela Antil, Lalo Perez, Joe Saccio, Kathy Shen, Breena Rowe, Rebecca Burnside) Employee Organization: Service Employees International Union, (SEIU) Local 521; Hourly Unit Authority: Government Code Section 54957.6(a) The Council adjourned from closed session at 6:55 P.M. and Mayor Scharff announced no reportable action. SPECIAL ORDERS OF THE DAY 2. Presentation by Santa Clara County District Attorney Jeff Rosen. CONSENT CALENDAR MOTION: Vice Mayor Shepherd moved, seconded by Council Member Kniss to approve Agenda Item Numbers 3-6. 3. Approval for the City Manager to Purchase a Police Records Management System (RMS), and Field-based Reporting Applications in Partnership With the Cities of Mountain View and Los Altos for Palo Alto’s Participation in the Tri-Cities CAD and RMS “Virtual ACTION Page 2 of 4 City Council Meeting Final Action: 9/23/13 Consolidation” Project and Related Budget Amendment Ordinance in the Amount of $100,000 in Contingency Funding from the Information Technology Internal Service Fund. 4. Approval of Crescent Park - No Overnight Parking (2AM-5AM) Trial Program Resident Permit Application and Program Expansion. 5. Council Appointed Officers Committee Recommendation of Appointment of Acting City Auditor. 6. Reauthorization to Engage in a Non-Binding "Smart Cities Alliance Agreement" with the City of Heidelberg, Germany, and Direction on Exploring Future "Smart City" Alliance. MOTION PASSED: 9-0 ACTION ITEMS 7. Colleague's Memo From Vice Mayor Shepherd, Council Members Berman, Holman, and Price Regarding the Building Code and Stalled Construction. MOTION: Council Member Price moved, seconded by Mayor Scharff to direct Staff to: 1) draft an Ordinance that amends the Municipal Code regarding completion of residential construction projects in a timely manner, to include the imposition of time limits for building permits and daily penalties for projects that exceed the life of a building permit, 2) return to the Policy and Services Committee with a brief update and analysis of delays in commercial construction projects in Palo Alto, if similar issues have arisen, along with potential solutions, and 3) this draft shall be reviewed by Council’s Policy and Services Committee for final recommendation to Council. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to also return with draft Ordinance revisions to address improved fencing of stalled construction sites. MOTION PASSED: 9-0 8. Colleague's Memo from Mayor Scharff, Vice Mayor Shepherd, and Council Member Price Regarding Electric Vehicles. MOTION: Mayor Scharff moved, seconded by Vice Mayor Shepherd to direct Staff to: 1) review the Electric Vehicle (EV) permit process, and ACTION Page 3 of 4 City Council Meeting Final Action: 9/23/13 procedures for station installations to streamline the process and insure that it is customer friendly, 2) adopt code changes requiring that all new construction of single family housing install the necessary circuitry for EV chargers to come back to the Policy and Services Committee, 3) consider ways to encourage and support EV use in the City of Palo Alto and the Bay Area including the following concepts and return to the Policy and Services Committee with recommendations to ensure that Palo Alto is one of the most EV friendly Cities in America, 4) additional suggested recommendations might include: a) ensuring that all new hotels are required to install EV charging stations and to the extent feasible that all existing hotels are required to install EV charging stations, b) that Staff review the permitting fee structure for EV charging equipment to reduce costs, or develop cost incentives for the permits in such a way that it is streamlined and efficient, and 5) announce at the EV celebration to be hosted at Palo Alto City Hall on September 25, 2013, that Palo Alto will be a leader in the nation in the installation of EV stations by mandating that all new housing units be required to install the necessary rough in circuitry. INCORPORATED INTO THE MOTION WITH CONSENT OF MAKER AND SECONDER to: 1) direct Staff to return to P&S and subsequently to Council with alternatives on a pilot residential curbside EV charging program, and 2) direct Staff to return to P&S and subsequently Council with a draft program to bring about greater implementation of EV charging stations at commercial facilities, potentially including Utilities Department or City incentives. INCORPORATED INTO THE MOTION WITH CONSENT OF MAKER AND SECONDER to change the latter half of 2 to “greater implementation of EV charging stations and/or EV charging banks of stations.” And to add after “including Utilities Department or City incentives” “to ask staff to consider revising fee structure based on the number of stations at number of potential EV station banks.” INCORPORATED INTO THE MOTION WITH CONSENT OF MAKER AND SECONDER to change number 5) in the original motion to read “announce at the EV celebration to be hosted at Palo Alto City Hall on September 25, 2013, that Palo Alto will be a leader in the nation in the installation of EV stations by mandating that all new single family housing units be required to install the necessary rough in circuitry.” And to change 2) to read “direct Staff to return to P&S and subsequently Council with a draft program to bring about greater implementation of EV charging stations at commercial, multi-family and mixed use facilities, potentially including Utilities Department or City incentives.” MOTION PASSED: 9-0 ACTION Page 4 of 4 City Council Meeting Final Action: 9/23/13 9. Approval of Response to Grand Jury Report on Law Enforcement Public Complaint Procedures. MOTION: Mayor Scharff moved, seconded by Vice Mayor Shepherd to approve the Staff recommended response, Attachment A of the Staff Report, to the 2012-2013 Santa Clara County Civil Grand Jury Report entitled, “Law Enforcement Public Complaint Procedures” (“Grand Jury Report”). MOTION PASSED: 9-0 ADJOURNMENT: The meeting was adjourned at 9:10 P.M. POLICY AND SERVICES COMMITTEE EXCERPT MINUTES Special Meeting November 19, 2013 6:00 PM 4. Recommendation to City Council to Adopt an Ordinance for Penalties on Expired Permit Enforcement for Residential Projects. Peter Pirnejad, Development Services Director, reported the Council directed Staff to present an Ordinance amending the Municipal Code to require new residential construction projects to have time limitations with strict enforcement of penalties and fines. The proposed Ordinance focused on residential projects, imposed strict penalties for failure to maintain an active building permit and allowed the Chief Building Official to require a fence be installed around the property to prevent a visual impact to the public right- of-way. In reviewing the commercial construction database, he found 11 permits that had expired since 2003. None of those projects were presented as imposing a negative visual impact. The expired permit was on occasion a residential problem. The California Building Code required building permits to expire in 180 days. The new language would provide a list of tiered penalties. Albert Yang, Deputy City Attorney, indicated the graduated penalty schedule was fairly similar to other jurisdictions with similar Ordinances. Staff chose not to have a schedule of time limits based on size or estimated valuation of a project. Council Member Holman was unsure how the proposed Ordinance was an improvement when it allowed the Chief Building Official to grant one or more extensions. The proposed Ordinance did not provide examples of justifiable cause for granting an extension. She was especially troubled by the granting of extensions, because it appeared the project could go on for years. She requested the proposed Ordinance include examples of circumstances beyond the property owner's control under Section 16.61.030. Mr. Pirnejad explained that Staff purposely kept the language of the proposed Ordinance open, because there were many varieties of permits. Staff wanted the Chief Building Official to have the discretion to determine whether construction was proceeding at a reasonable pace and whether the project impacted neighbors or the public right-of-way. Based on those considerations, the City could impose fees, fines or penalties. MINUTES Council Member Holman felt the proposed Ordinance should provide examples. She did not feel the proposed Ordinance would have an impact. She did agree with Section 16.61.050 regarding construction of a fence. She did not believe the language of Section 1, Findings and Declaration, was relevant to the proposed Ordinance. Mr. Yang indicated the language was included because the proposed Ordinance amended the State Building Code in part, and the City was required to make local findings. Homer Maiel, Chief Building Official, reported the first 180-day period began when the permit was issued. One inspection had to be performed before the 180-day period expired. Once the 180-day period expired, the builder could request a second 180-day period. Typically, a second time period was granted. When a third 180-day period was requested, inspectors requested justification in writing from the builder. In the past few years, some cities expanded the 180-day period to a total of 720 days because of economic hardship. Normally when a builder requested a third 180-day period, inspectors did not allow it without justifiable cause. As long as the builder had a justifiable inspection within 180 days, construction could proceed, but not forever. Council Member Holman inquired about City actions if builders did not pay the fines or penalties. Mr. Yang stated a section of the proposed Ordinance declared an expired permit to be a public nuisance, which would permit the City to place a lien on the property. Section 16.61.060 referenced the Public Nuisance Chapter of the Municipal Code. Chair Kniss asked how often the public called to complain about an incomplete project. Mr. Maiel reported in the past year he had received fewer than 5 complaints. Chair Kniss presumed the inspectors would grant extensions judiciously and when necessary. It did not sound as though complaints were made frequently. Mr. Maiel agreed. Council Member Holman felt the small number of problems was not the issue. The issue was the ongoing problem with a few construction projects. Chair Kniss believed an Ordinance existed concerning expired building permits. Mr. Yang noted the existing Ordinance did not provide a consequence for having an expired building permit. In general, Staff attempted to encourage MINUTES completion of a project quickly and on time. Staff could review amendments to the proposed Ordinance. Council Member Price felt the proposed Ordinance provided penalties which previously did not exist. Neighbors complained about two projects over six to eight years with no results. She was comfortable with the proposed Ordinance and suggested the Council review the Ordinance in 6-months to a year to determine if it produced the desired outcome. Council Member Klein remarked that the proposed penalties would amount to $480,000 a year. He asked at what point the City would foreclose on the property to collect the penalties and payoff liens. Mr. Pirnejad explained the City would place a stop order on the project and file an order to ensure a property owner applied for permits for all future work. The City could place a restriction on the deed before the property could be sold. The proposed Ordinance attempted to motivate progress of construction. It was not intended to generate revenue. Council Member Klein assumed only one or two cases would occur each year; therefore, penalties would not generate revenue for the City. He inquired whether the Ordinance could include language stating that once penalties reached a certain dollar amount, the City would move against the project. Mr. Yang indicated there would be challenges to the City attempting to force a builder to complete a project, beyond the imposition of penalties. The main consequence for property owners was placing a lien on the property under the proposed Ordinance. Council Member Klein asked if the City could obtain a court order to sell the property. Mr. Yang did not believe so but would look into it further. Council Member Klein suggested the proposed Ordinance state the City Building Official could grant no more than three extensions of 180 days. If the property owner requested an additional extension, it had to be presented to the City Council. Mr. Pirnejad reported that amendment was within the Council's discretion. Mr. Maiel added that another motivation for completion of a project was the implementation of new Building Codes. If a project's building permit expired and a new Building Code was adopted before a new permit was obtained, the construction under an old permit would have to comply with the new Building Code; which could be costly. Council Member Klein felt an extension beyond two years was unusual. MINUTES Mr. Maiel had not seen more than two extensions granted thus far. Mr. Pirnejad would add that language if the Policy and Services Committee directed. Council Member Klein referenced Staff Report 4260 page 57 regarding delays in commercial construction projects, and inquired whether the proposed Ordinance would apply to both residential and commercial projects. Mr. Pirnejad reported it would only apply to residential projects because a problem did not exist with commercial projects. Council Member Holman believed several people complained about the 195 Page Mill Project. Mr. Pirnejad explained that project was involved in litigation. Work on the project halted because of a PG&E pipeline and compliance with new Codes. The proposed Ordinance would not apply to that type of circumstance. MOTION: Council Member Klein moved, seconded by Council Member Holman that the Policy and Services Committee move to recommend Council adopt the attached Ordinance, adopting penalties for maintenance of expired residential building permits with the changed language to Section 2, 16.04.090, section 105.5 Expiration the second paragraph to: The Chief Building Official is authorized to grant, in writing, one or more no more than three extensions of unexpired permits. Council Member Holman inquired whether the new language needed to be included in the third paragraph as well. Council Member Klein felt it was not necessary in the third paragraph. Council Member Holman wished to correct Section 16.61.030(c) regarding a reduction or waiver of a penalty, but could not provide appropriate language but along the similar lines suggested by Council Member Klein regarding sale of a property once the penalties reached a certain dollar amount. Council Member Klein noted Staff would review that suggestion. Council Member Holman requested Staff provide that information to the Council. Council Member Klein suggested adding "Provided however that the waiver of any penalty in excess of $10,000 shall require the approval of the City Council" to the proposed Ordinance. Chair Kniss inquired whether penalties had ever reached $10,000. MINUTES Mr. Pirnejad noted penalties had not previously existed. MOTION PASSED: 4-0 1. City Auditor's Office Quarterly Report as of September 30, 2013 and the Revised FY 2014 Work Plan. Houman Boussina, Acting City Auditor, provided written summaries of the audit work in the Fiscal Year (FY) 2014 Work Plan, other monitoring and administrative assignments, and the Fraud, Waste and Abuse Hotline administration cases. A revised FY 2014 Work Plan was compiled with considerations for new staffing and priorities. The Policy and Services Committee (Committee) requested Staff consider five areas for possible audits. Those areas were listed on the Audit Horizon. The Committee could direct Staff to prioritize those areas within the FY 2014 or FY 2015 Work Plans. Audit Staff utilized a risk assessment process that selected the audits to be performed. Chair Kniss asked if the audits on the Audit Horizon could be accomplished in FY 2014. Mr. Boussina replied no. Chair Kniss asked if the Committee should select which audits Staff performed. Mr. Boussina indicated the Committee could do that. The existing FY 2014 Work Plan was based on a risk assessment process and the number of hours budgeted for audits. Council Member Price inquired whether the risk assessment for the Committee's proposed areas was not sufficient to warrant modification of the Work Plan. The revised FY 2014 Work Plan included the audits with the most risk and needed to be performed timely. Mr. Boussina answered yes, to the best of his knowledge. Council Member Holman inquired about the action Staff sought with respect to the Audit Horizon. Mr. Boussina noted the Committee requested Staff consider those areas for audit. After speaking with departmental Staff, he felt those audits could be accomplished. However, he asked the Committee to decide whether to substitute one or more of those audits for audits in the FY 2014 Work Plan or to add one or more to the FY 2015 Work Plan. Otherwise, he would proceed with audits selected by the risk-based process. Council Member Holman asked if Staff had insufficient time to accomplish another audit. MINUTES Mr. Boussina responded yes. Audits would have to be substituted. Council Member Holman inquired whether audits in the Work Plan were based on existing evidence that they were the higher risk items. Mr. Boussina answered yes. Council Member Holman asked if the audit regarding Contract Oversight, Trenching and Installation of Electric Substructure would be placed on the Council Consent Calendar because of a unanimous vote by the Finance Committee. Mr. Boussina replied yes. He presented that audit to the Finance Committee which voted unanimously to accept the audit. Council Member Holman inquired whether Staff would add audits from the Audit Horizon to the FY 2015 Work Plan unless circumstances changed. Mr. Boussina explained the new City Auditor would include them as part of the risk assessment model, unless the Committee requested they be included in a Work Plan. Chair Kniss indicated audits on the Audit Horizon did not fall into a risk assessment category. She asked if the Committee could direct Staff to substitute one of the audits. Mr. Boussina replied yes. MOTION: Council Member Klein moved, seconded by Council Member Price that the Policy & services Committee move the City Council accept the Auditor’s Office quarterly report as of September 30, 2013 and the revised FY 2014 Work Plan. MOTION PASSED: 4-0 City of Palo Alto (ID # 4155) City Council Staff Report Report Type: Action Items Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: 240 Hamilton Avenue Appeal Title: Public Hearing: Council Review of an Appealed Architectural Review Approval of a Four Story, 15,000 s.f. Mixed Use Building Replacing a Two Story, 7,000 s.f. Commercial Building at 240 Hamilton, a CD-C(GF)(P) Zoned Parcel; Council Adoption of the Mitigated Negative Declaration and Approval of a Record of Land Use Action for the Project. (A related Variance for encroachment into special setbacks on Hamilton Avenue and Ramona Street was not appealed.) (Continued from November 12, 2013) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council take the following actions; 1. Adopt the Mitigated Negative Declaration (Attachment G) and Mitigation and Monitoring Report (Attachment K) for the project and 2. Deny the appeal of the Director’s Decision and adopt the attached Record of Land Use Action (RLUA, Attachment A) approving the Architectural Review of the project with revised approval conditions to reflect Council’s adoption of an interim ordinance eliminating certain parking exemptions. Executive Summary The Council is requested to review the appeal of the Director of Planning and Community Environment’s architectural review approval for a proposed 4-story building at 240 Hamilton Avenue with a net square footage increase of 8,000 sq. ft.. The Architectural Review Board (ARB) recommended project approval and the Planning Director approved this project in July. The application was then appealed to the Council on August 5th. The reasons for the appeal are described in the appellant’s correspondence (Attachment B). This item was scheduled on the consent calendar on September 9. At that time, it was pulled off consent by the Council and scheduled for a public hearing. Although this is a “de novo” hearing where the Council can City of Palo Alto Page 2 consider all information provided, the scope of the Council review is limited to the architectural components of the project and the related findings adopted by the Planning Director and ARB. Background Project Description & Council Purview The project is a new four-story, 50 foot, mixed-use building comprised of 15,000 square feet (sq. ft.) of floor area. The building would replace a 7,000 sq. ft. one-story building located at 240 Hamilton Avenue. Please note the 7,000 sq. ft. includes a 2,000 square-foot mezzanine that was part of the original construction but removed several years ago. Further description is provided in the attached ARB reports. The Architectural Review (AR) application, submitted on January 1, 2013, was accompanied by a Variance request for encroachments into the special setbacks of Bryant Street and Hamilton Avenue. Following a positive ARB recommendation (3- 0-1), on July 23, 2013 the Planning Director approved the Architectural Review and Variance requests. A Downtown Palo Alto resident then appealed the AR approval, and not the Variance approval. Therefore, the AR approval and associated environmental review is the subject of the Council review. Appeal On August 5, 2013, Douglas Smith (Appellant) submitted a letter of appeal which included 23 co-signers. The appellant’s objection is related to three main topics: 1) The aesthetic quality of the approved design and its impact on the surrounding heritage buildings, 2) staff’s analysis of the parking requirement, and the project’s contribution to the parking deficiency downtown, and 3) the review process itself. The appellant had previously submitted a letter to the ARB outlining his objections to the project. Additional details regarding the appellant’s concerns are discussed below. ARB Review and Recommendation The first ARB hearing of June 6, 2013 was attended by four of the five members on the ARB (one member recused himself due to conflict of interest). The June 6, 2013 staff report and verbatim meeting minutes are attached (Attachment F). At the June 6, 2013 ARB hearing, the ARB received the staff report, took in public comment and recommended the following items return for additional ARB review: 1. Provide pedestrian friendly amenities at the ground floor level; 2. More articulation is needed on the back walls, specifically, on the southwest elevation between floors two and four; and City of Palo Alto Page 3 3. Consider incorporating more cedar siding at another location on the building. On July 18, 2013, three ARB members (one member recused and one absent) conducted the hearing and listened to public testimony. The ARB had also received letters via email prior to the hearing (these are attached to this report along with other public correspondence, as Attachment H). Verbatim meeting minutes and the ARB report of July 18th are provided as Attachment E. After careful consideration, the ARB recommended approval of the project, with a condition to return to subcommittee with an improved relationship of tile banding to cedar siding. The Director’s Designee approved the project on July 23, 2013 as recommended by the ARB. The ARB recommendation included modification to staff’s initial findings (findings #4, 13, and 14.) Finding #4 specifically states: “In areas considered by the board as having a unified design character or historical character, the design is compatible with such character.” Staff’s draft finding #4 was made in the affirmative in that the overall design is consistent with the Downtown Urban Design Guide guidelines in the following ways: 1. The project creates enhanced vehicular and pedestrian entries; 2. The project provides varied building mass and height; 3. The project maintains Hamilton Avenue as pleasing, tree-lined pedestrian environment with complimentary outdoor amenities. At the July 18, 2013 ARB hearing, the ARB recommended that finding #4 be revised as not applicable. The reason for this as stated by the ARB was because the area does not have a unified design character, but contains a diverse mix of historic and modern buildings. Findings #13 and #14 were revised to account for the addition of landscaping to the project. The approval letter is attached to this report. The ARB findings and approval conditions, as well as Variance findings, have been carried forward into the draft RLUA (Attachment A). The condition to return to subcommittee has been placed as the final approval condition (condition #89) in the RLUA. Additional analysis related to the architectural findings can be found in the discussion section below. Project plans can be found here: htttp://www.cityofpaloalto.org/planningprojects City of Palo Alto Page 4 Environmental Review The Draft Initial Study and Mitigated Negative Declaration (MND), which were circulated for 20 days for public review and comment prior to ARB recommendation and Director action, is provided as Attachment G. The MND has not yet been filed in the County offices but will be filed following Council action on the project. Public correspondence from interested parties (other than the appellant) received since the September 9, 2013 Council meeting is provided in Attachment H. Parking Although not the subject of the Council review, it is important to clarify the parking requirements that apply to this project. An interim ordinance was adopted by the Council on October 21, 2013, and the second reading occurred November 4, 2013. The ordinance became effective 30-days thereafter. This interim ordinance eliminated two parking exemptions that would have previously applied to this project. Since this ordinance is now law, the application must comply with the new ordinance and can no longer take advantage of the parking exemptions. Thus, the project will provide four (4) parking spaces onsite (for the residential units) and be responsible for 11 additional spaces. Nine (9) of these spaces are due to the parking code revisions, and two (2) spaces are due to installation of a curb cut and removal of on-street parking. The applicant has stated they will pay in-lieu fees and use existing TDR credits to satisfy this requirement. Discussion Review Process The ARB is charged with design review of all new construction, and changes and additions to commercial, industrial and multiple-family projects. The ARB’s goals and purposes are to: Promote orderly and harmonious development of the City. Enhance the desirability of residence or investment in the City. Encourage the attainment of the most desirable use of land and improvements. Enhance the desirability of living conditions upon the immediate site or in adjacent areas. Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each other. Projects reviewed by the ARB that are located in commercial zone districts, such as the CD (Downtown Commercial) zone district, are subject to the requirements of the Context-Based City of Palo Alto Page 5 Design Criteria. Development in commerical districts are responsible for establishing context and showing compatibility with adjacent development, and are to be pedestrian-oriented. Additionally, for projects located in downtown Palo Alto, both staff and the ARB rely on the Downtown Urban Design Guide, which is a document meant to advise the applicant, staff and the ARB regarding development and design in the downtown area. The Downtown Urban Design Guide divides the downtown area into districts, each having a unique identity and design characteristics. The Director’s approval letter (Attachment C) sets forth the applicable PAMC sections and notes that the project on the subject property met all of the the Architectural Review findings, Variance findings, and was consistent with Comprehensive Plan policies. Appeal Letter The following section gives an overview of the appellant’s concerns and details how the above mentioned guidleines and standards relate to the positive ARB recommendation and the Director approval. ARB Findings, Standards and Guidelines As described in the Municipal Code and noted on the appellant’s letter, one of the purposes of architectural review is to “promote visual environments which are of high aesthetic quality and variety and which, at the same time are considerate of each other.” The ARB reviewed the project at two separate meetings and concluded that the project is consistent with the ARB findings, the Context-Based Design Criteria, and the Downtown Urban Design Guide. In addition, the ARB determined that the project demonstrated consistency with Comprehensive Plan Policies and Programs and was zoning compliant, given the allowances in the zoning code with respect to parking and the Variance requested for special setback encroachments. The project was recommended for approval by the ARB because the project showed consistency with goals of the Context-Based Design Criteria and the Downtown Urban Design Guide. The ARB further determined that the ARB approval findings, which include findings addressing aesthetic concerns, could be met. The project is conditioned with approval conditions incorporated into the attachment to the approval letter. The draft RLUA contains ARB findings presented to and then modified by the ARB on July 18, 2013. The RLUA contains the standard, applicable Context Based Design Findings (six of the eight findings are applicable to the project, findings 1-3, 5, 6, and 8, see Attachment J). An excerpt of the first ARB staff report (included in Attachment F) discussing the project in reference to the Context Based Design Criteria and Downtown Urban Design Guide is provided below (in italics). These have City of Palo Alto Page 6 been placed in the RLUA to support the Context Based Design Findings. Context Based Design Criteria The proposed building design appears to be consistent with many of the requirements of the Context-Based Design Criteria as outlined in Section 18.18.110 of the Zoning Code. In summary, the project would provide pedestrian walk-ability, a bicycle-friendly environment, connectivity through design elements, and street facades having a strong relationship with the sidewalks and the street to support and encourage pedestrian activity. Bicycle storage is to be provided in the below grade parking garage as well as at grade along both Hamilton Avenue and Ramona Street. The ground floor design is intended to be an attractive streetscape design with a combination of clear frameless glass, porcelain tile and stainless steel canopies above each entrance along Ramona and Hamilton. Separate entrances would also be provided for each use along the first floor including the main lobby area. The building would minimize massing with increased setbacks at the first floor in addition to other design elements, such as a recessed entry and canopies that would be located above the primary entry points. The first floor design employs different materials and colors, including porcelain tile, clear frameless glass and cedar cladded garage door. Floors two through three are designed to function as the “architectural block” that distinguishes the commercial office portion of the building from the rest of the building. This area would primarily consist of a structural glazed curtain wall with a combination of clear dual glazed glass and translucent laminate glass. The area would be outlined by a cream colored limestone wall. The residential units on the fourth floor would be set back from the block face below. The units would be capped with a hip roof composed of metal and outlined by a composite metal panel. The elevator shaft and stairwells would be white cement plaster. The parking design is consistent with the design criteria in that the parking spaces would be located below grade and is concealed from public view by a recessed garage door. Downtown Urban Design Guide The Downtown Urban Design Guide is meant to advise the applicant, staff and the ARB regarding development and design in the downtown area. The Downtown Urban Design Guide divides the downtown area into districts, each having a unique identity and design characteristics. The site is located within the Hamilton Avenue City of Palo Alto Page 7 District according to the Downtown Urban Design Guide. The Hamilton Avenue District is a mixed office/commercial/retail district with some residential uses. The primary goal of the Hamilton Avenue District is to promote Hamilton Avenue as an active mixed use district with a pleasing, tree-lined pedestrian experience. The development of three or more story buildings surrounding Civic Center Plaza are encouraged to help create a stronger urban edge within this area. The proposed project is consistent with the recommendations for this district. Staff finds that this project, with its extensive use of storefront glazing, first floor recesses and canopies, and pedestrian friendly amenities such as sunshades, street trees and ample sidewalk widths, would contribute significantly to the goal of creating an exciting pedestrian environment. The guidelines also encourage additional height for buildings at corners. The proposed building of 50 feet is consistent with both the Zoning Code and the Downtown Urban Design Guide. Historic Compatibility In the appeal letter, the appellant concludes that the design is incompatible with the historic buildings in the immediate environment and that the design is neither high quality nor considerate of its surroundings. The appellant provides the addresses of the historic buildings and ratio of historic buildings to newer buildings in a one block radius. In the appellant’s earlier letter (second letter in Attachment B), he provides examples of other buildings which he believes blend harmoniously with heritage architecture in the vicinity (page 5 of the appellant’s first letter). The project site is located across the street from, and therefore outside of, the historic Ramona District (the 500 block of Ramona Street, between Hamilton and University Avenues excluding buildings fronting University). The existing building, constructed in 1938 but since modified, has no historical significance. Thus, the project would replace one historic building with another. The adjacent Reposado Restaurant building is not considered a historic building; it was considered potentially eligible for listing in 1998 but was not placed on the City’s local list. Subsequent remodeling to establish the current restaurant tenant resulted in further modifications to the storefront and mezzanine of that building and it is still not listed on the city’s inventory. Additional discussion is provided in responses to Councilmember Holman questions (Attachment L). As for compatibility with the adjacent Ramona Avenue historic district, in general, the Secretary of Interior’s Standards prescribe a visual distinction between new and historic features. No historic impact to the historic districts or other historic resources would occur as long as the project does not alter the character defining features of the district City of Palo Alto Page 8 resource. By replacing one non-historic building with another in a visually diverse area, ARB and staff judged that no character defining features were affected and compatibility was not an issue. Additional discussion is provided in the CEQA section of this report. Additional Issues Parking As noted, the project must now comply with recently adopted ordinances regarding parking exemptions. The applicant is now subject to the new parking ordinance for an additional 2,200 square feet (sf) of floor area (2,000 s.f. of previously un-assessed floor area and 200 s.f. of bonus floor area), equal to nine parking spaces not provided on site. The applicant is currently proposing to meet the new parking requirements through payment of in-lieu fees and use of additional TDRs (equaling exemption for 2.6 of the nine parking spaces). There are four enclosed spaces currently provided via the use of lifts, and it was determined through the ARB process that only three are required for the two residential units. However, the fourth lift space cannot be utilized for commercial parking because above grade, non-residential, enclosed parking area counts toward floor area, and the project floor area is already at the maximum 3:1 floor area ratio. A table illustrating parking provisions is provided as Attachment I. Development and Design Standards and Guidelines Development on the 5,000 square foot (s.f.) project site is subject to Mixed Use Development Standards for CD-C zoned properties, per PAMC 18.18.060 Table 3. These standards allow a floor area ratio (FAR) of 15,000 s.f. or 3.0:1 FAR (since 2.0:1 FAR is allowed for a residential/commercial building, and up to 3.0:1 FAR is allowed with the transfer of development rights (5,000 s.f. transfer to this site). The standards allow a 50-foot tall building, zero setbacks on all sides with the exception of a 10-foot required rear setback for the residential component and observance of Special Setbacks on both Hamilton Avenue and Bryant Street; a Variance was approved for encroachment into these special setbacks, and the approval was not appealed. Timeline The orignal application was sumbitted on January 1, 2013. The application was heard twice by the ARB in July and forwarded to the Planning Director with a positive recommendation on July 18, 2013. The Director approved the application on July 23, 203. An appeal was submitted on August 5, 2013, and placed on Council consent calendar in August and continued to the consent calendar of September 9, 2013. The item was pulled off consent, and continued to a public hearing. The date of this hearing was set for December 9, 2013. There are no next steps following the public hearing and Council action on the project. City of Palo Alto Page 9 Resource Impact The project that was approved by Director included payment of in lieu parking fees in the amount of $121,500 for the loss of two on-street spaces. In addition, the applicant will be required to pay up to $546,750 in lieu parking fees for the nine spaces not provided for the 2,000 square feet of floor area not previously assessed and the 200 square foot bonus floor area. The total amount of in lieu parking fees, at the current rate of $60,750 per space, would be $668,250 for 11 spaces. However, the applicant may reduce this amount by use of TDRs or provision of onsite parking for the commericial uses. Policy Implications This is the first project that falls under the new parking code provisions, which became effective on December 5, 2013. This project had also raised questions about the appropriateness of contemporary architecture in an area of downtown that contains historic resources. The Council has the discretion to interpret compatibility standards differently than the ARB and the Director. If the Council agrees with the appellant, or believes the project should be revised in some manner, the Council could approve the project with additional conditions, continue the project with specific direction or deny the project outright with specific findings. Environmental Review The Initial Study Mitigated Negative Declaration (MND) for the project was provided in the packet for the September 9, 2013 Council meeting, and is attached to this report (Attachment G). The environmental document has not been modified since the close of the public review period. A Mitigation Monitoring and Reporting Program is provided as Attachment K. Regarding the aesthetics and cultural resources analysis, given the questions raised by the appellant as to compatibility with historic buildings in the vicinity, the City has the discretion to interpret compatibilty broadly. A significant impact under CEQA would only occur if the project would alter character defining features of an historic resource. Since the proposed project would replace one historic building with another and lies outside of the historic district, we can conclude that it will not affect the district in any material way. Since the building is not located next to an historic building, that conclusion applies to the adjacent building as well. City of Palo Alto Page 10 Regarding cumulative traffic impacts, the Initial Study/MND transportation section noted that the project represents an additional 4,527 square feet of non-residential floor area added to the site and contributing to the Downtown Cap area (350,000 s.f.). The Environmental Impact Report associated with the existing Comprehensive Plan included cumulative traffic analysis and anticipated build-out of the downtown to 350,000 square feet. Also noted in the MND, the proposed project is anticipated to generate less than 50 net new peak hour vehicle trips, which is below the City’s threshold for requiring a focused traffic analysis, and less that than the local congestion management agency’s (CMA) threshold for a detailed traffic impact analysis (100 trips). The MND noted that based on the relatively low traffic generation estimates the project is not anticipated to result in significant peak hour or daily traffic impacts. Attachments: Attachment A: Record Of Land Use Action (DOC) Attachment B: All Appellant's correspondence (PDF) Attachment C: Director's Approval Letter (PDF) Attachment D: Council 10 21 13 Action Minutes on Parking Code Item (PDF) Attachment E: July 18, 2013 ARB staff report (without attachments) and verbatim minutes (PDF) Attachment F: June 6, 2013 ARB staff report (without attachments) and verbatim minutes (PDF) Attachment G: Initial Study/Mitigated Negative Declaration (PDF) Attachment H: Public Correspondence (PDF) Attachment I: Parking Table (DOCX) Attachment J: context based design criteria (PDF) Attachment K: Mitigation Monitoring Program (DOC) Attachment L: Council Member Holman Q and A (DOCX) 240 Hamilton Ave Page 1 DRAFT ACTION NO. 2013-0X RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 240 HAMILTON AVENUE ARCHITECTURAL REVIEW 13PLN-00006 (HAYES GROUP, APPLICANT) On December 9, 2013, the Council conducted a public hearing and upheld the Director of Planning and Community Environment’s July 23, 2013 decision to approve the Architectural Review of a new four story, approximately 15,000 square foot retail/office/residential building at 240 Hamilton Avenue, with modifications to approval conditions herein, making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On July 18, 2013, in a public hearing continued from June 6, 2013 to allow the applicant to make project modifications, and following staff review of a Variance request and public review of an Initial Study and Draft Mitigated Negative Declaration, the Architectural Review Board (ARB) recommended approval of a new four story, approximately 15,000 square foot retail/office/residential building at 240 Hamilton Avenue. B. On July 23, 2013, following the ARB’s recommendation for approval, the Director of Planning and Community Environment (Director) approved the project for a new four story, approximately 15,000 square foot retail/office/residential building at 240 Hamilton Avenue. Notices of the Director’s decision were mailed notifying neighbors of the decision. D. Within the prescribed timeframe, an appeal of the Director’s decision was filed by Palo Alto resident Smith. E. On September 2, 2013 the Council continued the consent agenda item to September 9, 2013 and on that date, pulled the item off consent to request that a public hearing be scheduled for review and action by Council. SECTION 2. Environmental Review. The City, as the lead agency for the project, has determined that a Mitigated Negative declaration (MND) will be required for this project subject to the provisions of the California Environmental Quality Act (CEQA. The public notice period for the MND began on May 10, 2013 and concluded on May 30, 2013. Attachment A 240 Hamilton Ave Page 2 SECTION 3. Architectural Review Findings. The design and architecture of the proposed project, as conditioned, complies with the Findings for Architectural Review as required in PAMC Chapter 18.76. (1) The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan. This finding can be made in the affirmative in that the project incorporates quality design that recognizes the regional and historical importance of the area as described in the Comprehensive Plan and reinforces its pedestrian character. The proposed project for a new mixed use building is consistent with the land use designation. The project is also consistent with The Palo Alto Comprehensive Plan policies related to business and economics. The Comprehensive Plan encourages owners to upgrade or replace existing commercial properties so that these commercial areas are more competitive and better serve the community. The commercial properties could be redesigned to be more attractive and inviting for pedestrians; (2) The design is compatible with the immediate environment of the site. This finding can be made in the affirmative in that the project is located at a prominent corner of the commercial downtown in an environment with other large retail/office buildings. The project is designed as a four- story, 50 foot building that is adjacent to similarly sized buildings. The building has been designed to encourage pedestrian activity; (3) The design is appropriate to the function of the project. This finding can be made in the affirmative in that the design would accommodate the proposed retail, office and residential uses. The proposed building would have ample storefront glass, recesses, and awnings to create an inviting retail and pedestrian environment. The design is also consistent with the requirements and recommendations of both the Context Based Design Criteria and the Downtown Urban Design Guide; (4) In areas considered by the board as having a unified design character or historical character, the design is compatible with such character. This finding can be made in the affirmative in that the overall design is consistent with the Downtown Urban Design Guide guidelines in the following ways: 240 Hamilton Ave Page 3 a. The project creates enhanced vehicular and pedestrian entries; b. The project provides varied building mass and height; c. The project maintains Hamilton Ave. as pleasing, tree- lined pedestrian environment with complimentary outdoor amenities. (5) The design promotes harmonious transitions in scale and character in areas between different designated land uses. This finding is not applicable in that this project is not situated in a transition area between different designated land uses; (6) The design is compatible with approved improvements both on and off the site. This finding can be made in the affirmative in that the new building is compatible with the existing context of the retail/commercial downtown environment; (7) The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community. This finding can be made in the affirmative in that the building location is shifted three feet away from the Ramona St. curb and four feet away from Hamilton Ave. to provide wider sidewalks to encourage pedestrian activity down Hamilton Ave; (8) The amount and arrangement of open space are appropriate to the design and the function of the structures. This finding can be made in the affirmative in that the building has provided an adequate amount or recesses to the zoning requirements of the “P” overlay and the intent to add interest at the ground floor for pedestrians. Additionally, the project provides sufficient open space for the residential component in the form of four rooftop terraces; (9) Sufficient ancillary functions are provided to support the main functions of the project and the same are compatible with the project’s design concept. This finding can be made in the affirmative in that project includes sufficient automobile and bicycle parking, and common open space areas. The project includes widening the walkable area for the sidewalks on both Ramona St. and Hamilton Ave. to enhance vehicular and pedestrian safety; 240 Hamilton Ave Page 4 (10) Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles. This finding can be made in the affirmative in that the project has been designed to encourage pedestrian activity with its greater setback on Ramona St. and Hamilton Ave. The project also creates an effective and safe automobile ingress/egress point for the residential occupants; (11) Natural features are appropriately preserved and integrated with the project. This finding can be made in the affirmative in that the existing city street trees adjacent to the proposed building will be removed and replaced with new street trees that are consistent with other street trees in the direct vicinity; (12)The materials, textures, colors and details of construction and plant material are appropriate expression to the design and function. This finding can be made in the affirmative in that the proposed colors and materials are will add detail and interest and are compatible with the commercial retail environment; (13)The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment. This finding can be made in the affirmative in that the proposed landscaping helps achieves the goals of the Pedestrian Combining district by providing five large planter boxes along the Ramona Street and Hamilton Avenue sides of the building. Additionally, closer sidewalk paving score lines have been added to help support smaller tree wells and better tree spacing; (14)Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought-resistant to reduce consumption of water in its installation and maintenance. This finding can be made in the affirmative in that plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought-resistant and to reduce consumption of water in its installation and maintenance in that appropriate plant materials are proposed; 240 Hamilton Ave Page 5 (15)The project exhibits green building and sustainable design that is energy 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: Optimize building orientation for heat gain, shading, daylighting, and natural ventilation; Design landscaping to create comfortable micro-climates and reduce heat island effects; Design for easy pedestrian, bicycle and transit access; Maximize on site stormwater management through landscaping and permeable paving; Use sustainable building materials; Design lighting, plumbing and equipment for efficient energy and water use; Create healthy indoor environments; and Use creativity and innovation to build more sustainable environments. Green building features will be incorporated to achieve CalGreen Tier 2 standards for the commercial portion and Green Point Rated standards for the residential portion. (16)The design is consistent and compatible with the purpose of architectural review as set forth in subsection 18.76.020(a). This finding can be made in the affirmative in that the project design promotes visual environments that are of high aesthetic quality and variety. SECTION 4. Context Based Design Considerations and Findings* *Note: the generic findings are provided for Council consideration; the June 6, 2013 ARB report included the context based criteria provided below in italics. (1) Pedestrian and Bicycle Environment. The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements. (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. 240 Hamilton Ave Page 6 (3) Massing and Setbacks. Buildings shall be designed to minimize massing and conform to proper setbacks. (5) Project Open Space. Private and public open space shall be provided so that it is usable for residents, visitors, and/or employees of the site. (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. (8) Sustainability and Green Building Design. Project design and materials achieve sustainability and green building design is incorporated into the project. Context Based Design Criteria (From June 6, 2013 ARB Report) The proposed building design appears to be consistent with many of the requirements of the Context-Based Design Criteria as outlined in Section 18.18.110 of the Zoning Code. In summary, the project would provide pedestrian walk-ability, a bicycle- friendly environment, connectivity through design elements, and street facades having a strong relationship with the sidewalks and the street to support and encourage pedestrian activity. Bicycle storage is to be provided in the below grade parking garage as well as at grade along both Hamilton Avenue and Ramona Street. The ground floor design is intended to be an attractive streetscape design with a combination of clear frameless glass, porcelain tile and stainless steel canopies above each entrance along Ramona and Hamilton. Separate entrances would also be provided for each use along the first floor including the main lobby area. The building would minimize massing with increased setbacks at the first floor in addition to other design elements, such as a recessed entry and canopies that would be located above the primary entry points. The first floor design employs different materials and colors, including porcelain tile, clear frameless glass and cedar cladded garage door. Floors two through three are designed to function as the “architectural block” that distinguishes the commercial office portion of the building from the rest of the building. This area would primarily consist of a structural glazed curtain wall with a combination of clear dual glazed glass and translucent laminate glass. The area would be outlined by a cream colored limestone wall. The residential units on the fourth floor would be set back from the block face below. The units would be capped with a hip roof composed of metal and outlined by a composite metal panel. The elevator shaft and 240 Hamilton Ave Page 7 stairwells would be white cement plaster. The parking design is consistent with the design criteria in that the parking spaces would be located below grade and is concealed from public view by a recessed garage door. Downtown Urban Design Guide (from June 6, 2013 ARB Report) The Downtown Urban Design Guide is meant to advise the applicant, staff and the ARB regarding development and design in the downtown area. The Downtown Urban Design Guide divides the downtown area into districts, each having a unique identity and design characteristics. The site is located within the Hamilton Avenue District according to the Downtown Urban Design Guide. The Hamilton Avenue District is a mixed office/commercial/retail district with some residential uses. The primary goal of the Hamilton Avenue District is to promote Hamilton Avenue as an active mixed use district with a pleasing, tree-lined pedestrian experience. The development of three or more story buildings surrounding Civic Center Plaza are encouraged to help create a stronger urban edge within this area. The proposed project is consistent with the recommendations for this district. Staff finds that this project, with its extensive use of storefront glazing, first floor recesses and canopies, and pedestrian friendly amenities such as sunshades, street trees and ample sidewalk widths, would contribute significantly to the goal of creating an exciting pedestrian environment. The guidelines also encourage additional height for buildings at corners. The proposed building of 50 feet is consistent with both the Zoning Code and the Downtown Urban Design Guide. Section 5. Variance Findings. Variance approval is based on the findings indicated under PAMC Section 18.76.030 (C). The Variance approval has not been appealed. Variance Request: Three foot encroachment into the six foot special setback along Ramona St. and seven foot encroachment into the seven foot special setback along Hamilton Ave. 1. Because of special circumstances applicable to the subject property, including (but not limited to) size, shape, topography, location, or surroundings, the strict application of the requirements and regulations prescribed in this title substantially deprives such property of privileges enjoyed by other property in the vicinity and in the same zoning district as the subject property. 240 Hamilton Ave Page 8 Special circumstances that are expressly excluded from consideration are: (A) The personal circumstances of the property owner, and (B) Any changes in the size or shape of the subject property made by the property owner or his predecessors in interest while the property was subject to the same zoning designation. The existing building is built to the property line as are many buildings within the commercial downtown district. The special setback of six and seven feet respectively, imposed upon this property, only occurs in one other location within the downtown. Most properties within the commercial downtown have no setback requirement. This corner parcel, at only 50 feet wide, is narrower than the other parcels at this corner. The other parcels range from 75 feet to 100 feet wide. 2. The granting of the application shall not affect substantial compliance with the regulations or constitute a grant of special privileges inconsistent with the limitations placed upon other properties in the vicinity and in the same zoning district as the subject property. The granting of the exception would result in a three foot encroachment into the required 6 foot special setback along Ramona St. and a seven foot encroachment into the required seven foot special setback along Hamilton Ave. It should be noted that only nine feet of the 45 foot wide building wall along Hamilton Ave. would encroach seven feet into the special setback (for the purposes of accommodating an enclosed stairwell). The remaining 36 feet of building wall would encroach approximately five inches into the special setback resulting in setback of 6.5 feet. Even with the granting of the Variance the project would still provide a sidewalk width of approximately 11 feet along Hamilton Ave. and 10 feet along Ramona St. both of which meet or exceed the sidewalk width requirements in the Downtown Urban Design Guide. The wider sidewalk and more importantly the shift of the building mass would improve the pedestrian experience and enhance the opportunity for retail activity along Hamilton Ave. 3. The granting of the application is consistent with the Palo Alto Comprehensive Plan and the purposes of this title (Zoning). 240 Hamilton Ave Page 9 The proposal is consistent with the Comprehensive Plan (Policies, Programs and Goals) as outlined in Attachment E of the Staff Report. 4. The granting of the application will not be injurious to property or improvements in the vicinity and will not be detrimental to the public health, safety, and general welfare, or convenience. The proposed setbacks of three feet along Ramona St. and no setback to 6.5 feet along Hamilton Ave. will improve the existing sidewalk width by adding four additional feet in width to the sidewalk to Ramona St. and three feet additional sidewalk width to Hamilton Ave. The increased sidewalk widths will provide for a better overall pedestrian friendly experience with the Hamilton Ave. District of Downtown. The requested encroachments into the special setback would not result in a detrimental impact as it is an improvement over the existing situation which is a zero setback in this location. SECTION 6. Architectural Review Approval Granted. Architectural Review Approval is hereby granted for the Project by the City Council pursuant to Chapter 18.77 of the Palo Alto Municipal Code. SECTION 7. Plan Approval. The plans submitted for Building Permit shall be in substantial conformance with those plans prepared The Hayes Group titled 240 Hamilton Avenue, consisting of 21 pages, and received June 27, 2013, except as modified to incorporate the conditions of approval in Section 8. A copy of these plans is on file in the Department of Planning and Community Development. SECTION 8. Conditions of Approval. Planning 1. The cover sheet lists the assessor’s parcel as 139-96-797. Our records indicate the assessor’s parcel number is 120-27-010. 2. The project shall be in substantial conformance with the approved plans and related documents received June 27, 2013 except as modified to incorporate these conditions of approval. 240 Hamilton Ave Page 10 3. The Conditions of Approval document shall be printed on all plans submitted for building permits related to this project. 5. The current project is approved to use the one-time 200 square foot FAR bonus, as permitted per PAMC 18.18.070(a)(1), and cannot utilize this bonus again for any future development; however, the bonus area is subject to the provision of in-lieu parking fees for one space not provided for this amount of floor area. 6. 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 the provisions of the Pedestrian (P) combining district. 7. The project reviewed by the ARB included 4,327 square feet of Transfer of Development Rights (TDR), coming from a seismic and historic rehabilitation project at 230-232 Homer Avenue. The applicant now proposes to transfer the remaining 673 square feet of floor area such that 5,000 square feet of transferred area (corresponding to 20 parking spaces) does not need to be parked on site. Prior to building permit submittal, the applicant shall provide sufficient information so that the Director of Planning and Community Environment can 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 8. Development Impact Fees, estimated at $207,135.11 shall be paid prior to the issuance of the project’s building permit. These fees are adjusted annually in August. Fees shall be calculated at the rate in effect at the time of permit issuance. 9. For any on-street parking spaces that are removed to accommodate the project’s driveway curb-cut, the applicant shall be required to pay parking in-lieu fees for the number of spaces lost. This fee shall be due to the City prior to the issuance of the project’s building permit. 10. Additionally, payment of fees is required in lieu of the provision of the six of the eight parking spaces not provided associated with the 2,000 square feet of floor area not previously assessed during the parking assessment district 240 Hamilton Ave Page 11 process. The TDR floor area noted in Condition of Approval 7 (floor area in the amount of 673 s.f. not previously proposed to be transferred) would reduce the number of in-lieu parking fees from eight spaces to six spaces. In-lieu fees for six parking spaces are required in addition to the fees for one in lieu space noted in Condition of Approval #5 (totaling in-lieu fees for seven parking spaces not provided on site). 10. All future signage for this site shall be submitted for Architectural Review. 11. The project approval shall be valid for a period of one year from the original date of approval. In the event a building permit(s), if applicable, is not secured for the project within the time limit specified above, the ARB approval shall expire and be of no further force or effect. Application for extension of this entitlement may be made prior to the one year expiration. 12. Government Code Section 66020 provides that project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR TO FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. 13. This matter is subject to the Code of Civil Procedures (CCP) Section 1094.5, and the time by which judicial review must be sought is governed by CCP Section 1094.6. 14. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City its actual attorney’s fees and costs incurred in defense of the litigation. The City may, in its 240 Hamilton Ave Page 12 sole discretion, elect to defend any such action with attorneys of its own choice. Transportation 15. Car stacker system should provide enough width and depth for full size SUV. Provide details, etc. of the system for further review. 16. Long term bike parking for office use is not apparent. Please identify. Long term bike parking for office cannot be shared with residential unless separate lockers. 17. Parking reductions assumed. Significant credits/reductions assumed could be opposed. Consider providing underground parking, possibly with a vehicle elevator (instead of ramp) to achieve additional parking. 18. Include loss of on-street parking due to new garage. Public Works Urban Forestry 19. Provide optimum public tree replacement for loss of public trees #1-6. 20. Six publicly owned trees are growing in the right-of- way along the Hamilton and Ramona streets. Parking garage ramp and other in-ground elements that will limit new tree growth potential shall be identified. As mitigation to offset the net loss for years of public resource investments and minimize the future years to parity with infrastructure benefits (Co2 reduction, extended asphalt life, water mgmt., etc.) currently provided by the trees, the new frontage should be provided maximum streetscape design and materials to include the following elements: • Consistency with the Public Works Department Tree Management Program. Provide adequate room for tree canopy growth and root growing volume resources. • Utilize city-approved best management practices for sustainability products, such as permeable ADA sidewalk, Silva Cell planters, engineered soil mix base, and services due to being situated within the public right-of-way. Public Works Engineering 21. SIDEWALK, CURB & GUTTER: As part of this project, the applicant must replace those portions of the existing sidewalks, curbs, gutters, curb ramps or driveway approaches in the public right-of-way along the frontage(s) 240 Hamilton Ave Page 13 of the property that are broken, badly cracked, displaced, or non-standard, and must remove any unpermitted pavement in the planter strip. Contact Public Works’ inspector at 650-496-6929 to arrange a site visit so the inspector can determine the extent of replacement work. The site plan submitted with the building permit plan set must show the extent of the replacement work or include a note that Public Works’ inspector has determined no work is required. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Street Work Permit from Public Works at the Development Center. 22. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of- way along the property’s frontage(s). Call the Public Works’ arborist at 650-496-5953 to arrange a site visit so he can determine what street tree work, if any, will be required for this project. The site plan submitted with the building permit plan set must show the street tree work that the arborist has determined, including the tree species, size, location, staking and irrigation requirements, or include a note that Public Works’ arborist has determined no street tree work is required. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way from Public Works’ arborist (650-496-5953). 23. SUBDIVISION: A parcel/condo map will be required if there are any units that are proposed “for sale”. The developer will be required to provide a preliminary parcel map and a parcel map for city review and approval. The Grading/Excavation and Building permits will not be issued until the parcel map is recorded. 24. STREET RESURFACING: The developer will be required to resurface the entire frontage of each street adjacent to the property out to the centerline of the street upon completion of onsite construction. The resurfacing will consist of a slurry seal or grinding 2” of the existing asphalt and overlaying 2” asphalt pavement per Public Works’ standards. Public Works will make the determination between slurry seal and grind/overlay by inspecting the condition of the road and estimating the construction impacts. Thermoplastic striping of the street(s) will be required after resurfacing. The following comments are provided to assist the applicant at 240 Hamilton Ave Page 14 the building permit phase. You can obtain various plan set details, forms and guidelines from Public Works at the City's Development Center (285 Hamilton Avenue) or on Public Works’ website: www.cityofpaloalto.org/depts/pwd/forms_permits. Include in plans submitted for a building permit: 25. BASEMENT DRAINAGE: Due to high groundwater throughout much of the City and Public Works prohibiting the pumping and discharging of groundwater, perforated pipe drainage systems at the exterior of the basement walls or under the slab are not allowed for this site. A drainage system is, however, required for all exterior basement-level spaces, such as lightwells, patios or stairwells. This system consists of a sump, a sump pump, a backflow preventer, and a closed pipe from the pump to a dissipation device onsite at least 10 feet from the property line, such as a bubbler box in a landscaped area, so that water can percolate into the soil and/or sheet flow across the site. The device must not allow stagnant water that could become mosquito habitat. Additionally, the plans must show that exterior basement-level spaces are at least 7-3/4” below any adjacent windowsills or doorsills to minimize the potential for flooding the basement. Public Works recommends a waterproofing consultant be retained to design and inspect the vapor barrier and waterproofing systems for the basement. 26. GARAGE/BASEMENT SHORING: Shoring for the basement excavation, including tiebacks, must not extend onto adjacent private property or into the City right-of-way without having first obtained written permission from the private property owners and/or an encroachment permit from Public Works. 27. DEWATERING: Basement excavations may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is disallowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater level. We recommend a piezometer to be installed in the soil boring. The contractor must determine the depth to groundwater immediately prior to excavation by using the piezometer or by drilling an exploratory hole if the deepest excavation will be within 3 feet of the highest anticipated groundwater level. If groundwater is found within 2 feet of the deepest excavation, a drawdown well dewatering system must be used, or 240 Hamilton Ave Page 15 alternatively, the contractor can excavate for the basement and hope not to hit groundwater, but if he does, he must immediately stop all work and install a drawdown well system before he continues to excavate. Public Works may require the water to be tested for contaminants prior to initial discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for the contaminants Public Works specifies and submit the results to Public Works. 28. Public Works reviews and approves dewatering plans as part of a Street Work Permit. The applicant can include a dewatering plan in the building permit plan set in order to obtain approval of the plan during the building permit review, but the contractor will still be required to obtain a street work permit prior to dewatering. Alternatively, the applicant must include the above dewatering requirements in a note on the site plan. Public Works has a sample dewatering plan sheet and dewatering guidelines available at the Development Center and on our website. 29. GRADING & DRAINAGE PLAN: The plan set must include a grading & drainage plan prepared by a licensed professional that includes existing and proposed spot elevations and drainage flow arrows to demonstrate proper drainage of the site. Adjacent grades must slope away from the structure a minimum of 2%. Downspouts and splashblocks should be shown on this plan, as well as any site drainage features such as swales. Grading will not be allowed that increases drainage onto, or blocks existing drainage from, neighboring properties. Public Works generally does not allow rainwater to be collected and discharged into the street gutter, but encourages the developer to keep rainwater onsite as much as feasible by directing runoff to landscaped and other pervious areas of the site. 30. GRADING & EXCAVATION PERMIT: An application for a grading & excavation permit must be submitted to Public Works when applying for a building permit if the total cubic yardage of dirt being cut for the garage lift and elevator pit is more than 100 cubic yards. The application and guidelines are available at the Development Center and on our website. 31. STORM WATER POLLUTION PREVENTION: The City's full-sized "Pollution Prevention - It's Part of the Plan" sheet must be included in the plan set. Copies are available from Public Works at the Development Center or on our website. 240 Hamilton Ave Page 16 32. STREET TREES: Show all existing street trees in the public right-of-way. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by Public Works' arborist (phone: 650-496-5953). This approval shall appear on the plans. Show construction protection of the trees per City requirements. 33. WORK IN THE RIGHT-OF-WAY: The plans must clearly indicate any work that is proposed in the public right-of-way, such as sidewalk replacement, driveway approach, or utility laterals. The plans must include notes that the work must be done per City standards and that the contractor performing this work must first obtain a Street Work Permit from Public Works at the Development Center. If a new driveway is in a different location than the existing driveway, then the sidewalk associated with the new driveway must be replaced with a thickened (6” thick instead of the standard 4” thick) section. Additionally, curb cuts and driveway approaches for abandoned driveways must be replaced with new curb, gutter and planter strip. 34. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. 35. SIDEWALK ENCROACHMENT: Add a note to the site plan that says, “The contractor using the city sidewalk to work on an adjacent private building must do so in a manner that is safe for pedestrians using the sidewalk. Pedestrian protection must be provided per the 2007 California Building Code Chapter 33 requirements. If the height of construction is 8 feet or less, the contractor must place construction railings sufficient to direct pedestrians around construction areas. If the height of construction is more than 8 feet, the contractor must obtain an encroachment permit from Public Works at the Development Center in order to provide a barrier and covered walkway or to close the sidewalk.” 36. LOGISTICS PLAN: The contractor must submit a logistics plan to the Public Works Department prior to commencing work that addresses all impacts to the City’s right-of-way, including, 240 Hamilton Ave Page 17 but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. The plan will be attached to a street work permit. Public Works Environmental Services 37.Please note the following issues must be addressed in building plans prior to final approval by this department: General Comments: Consider providing separate service for residential and commercial units Trash rooms located in garage will require bins to be placed curbside on collection day or pull-out service at an additional charge. 38. PAMC 18.23.020 Trash Disposal and Recycling (A) Assure that development provides adequate and accessible interior areas or exterior enclosures for the storage of trash and recyclable materials in appropriate containers, and that trash disposal and recycling areas are located as far from abutting residences as is reasonably possible. (B) Requirements: (i) Trash disposal and recyclable areas shall be accessible to all residents or users of the property. (ii) Recycling facilities shall be located, sized, and designed to encourage and facilitate convenient use. (iii) Trash disposal and recyclable areas shall be screened from public view by masonry or other opaque and durable material, and shall be enclosed and covered. Gates or other controlled access shall be provided where feasible. Chain link enclosures are strongly discouraged. (iv) Trash disposal and recycling structures shall be architecturally compatible with the design of the project. (v) 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. 39. PAMC 5.20.120 Recycling storage design requirements 240 Hamilton Ave Page 18 The design of any new, substantially remodeled, or expanded building or other facility shall provide for proper storage, handling, and accessibility which will accommodate the solid waste and recyclable materials loading anticipated and which will allow for the efficient and safe collection. The design shall comply with the applicable provisions of Sections 18.22.100, 18.24.100, 18.26.100, 18.32.080, 18.37.080, 18.41.080, 18.43.080, 18.45.080, 18.49.140, 18.55.080, 18.60.080, and 18.68.170 of Title 18 of this code. All Services: a) Collection vehicle access (vertical clearance, street width and turnaround space) and street parking are common issues pertaining to new developments. Adequate space must be provided for vehicle access. b) Weight limit for all drivable areas to be accessed by the solid waste vehicles (roads, driveways, pads) must be rated to 60,000 lbs. This includes areas where permeable pavement is used. c) Containers must be within 25 feet of service area or charges will apply. d) Carts and bins must be able to roll without obstacles or curbs to reach service areas "no jumping curbs" 40. Garbage, Recycling, and Yard Waste/Compostables cart/bin location and sizing Office Building The proposed commercial development must follow the requirements for recycling container space1. Project plans must show the placement of recycling containers, for example, within the details of the solid waste enclosures. Collection space should be provided for built-in recycling containers/storage on each floor/office or alcoves for the placement of recycling containers. Enclosure and access should be designed for equal access to all three waste streams – garbage, recycling, and compostables. Collection cannot be performed in underground. 1 In accordance with the California Public Resources Code, Chapter 18, Articles 1 and 2 240 Hamilton Ave Page 19 Underground bins locations require a minimum of 77” of vertical clearance. Pull out charges will apply. In instances where push services are not available (e.g., hauler driver cannot push containers up or down ramps), the property owner will be responsible for placing solid waste containers in an accessible location for collection. All service areas must have a clearance height of 20’ for bin service. New enclosures should consider rubber bumpers to reduce ware and tear on walls. For questions regarding garbage, recycling, and compostables collection issues, contact Green Waste of Palo Alto (650) 493-4894. 41. PAMC 5.24.030 Construction and Demolition Debris (CDD) Covered projects shall comply with construction and demolition debris diversion rates and other requirements established in Chapter 16.14 (California Green Building Code). In addition, all debris generated by a covered project must haul 100 percent of the debris not salvaged for reuse to an approved facility as set forth in this chapter. Contact the City of Palo Alto’s Green Building Coordinator for assistance on how to recycle construction and demolition debris from the project, including information on where to conveniently recycle the material. Utilities Electrical Engineering 42. The Utilities will require space on the private property for installing a pad mounted transformer to serve the proposed building at the above location. 43. Pad mounted transformer location must be shown on the plans. Utilities will require a minimum clearance of 8’ in the front and 3’ around the transformer. 44. Public Utility Easements shall be granted as required by the City. 45. Any extension of the power distribution lines/relocation of existing utilities or offsite modification that needs to be done for providing electric service to the building will be at applicant’s expense. Any non-standard installation requested by the applicant shall be treated as a “Special Facilities” and in that case 240 Hamilton Ave Page 20 special facility charges will become applicable. 46. Applicant shall provide preliminary electric load calculations for sizing the transformer. Transformer procurement lead time is 6-8 months. 47. Utilities will provide detailed comments and cost estimates when plans are submitted to the Building Department for review and approval Utilities Water Gas Wastewater PRIOR TO ISSUANCE OF DEMOLITION PERMIT 48. Prior to demolition, the applicant shall submit the existing water/wastewater fixture unit loads (and building as-built plans to verify the existing loads) to determine the capacity fee credit for the existing load. If the applicant does not submit loads and plans they may not receive credit for the existing water/wastewater fixtures. 49. The applicant shall submit a request to disconnect all utility services and/or meters including a signed affidavit of vacancy. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued by the building inspection division after all utility services and/or meters have been disconnected and removed. FOR BUILDING PERMIT 50. The applicant shall submit a completed water-gas-wastewater service connection application - load sheet for City of Palo Alto Utilities. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.p.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 51. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service 240 Hamilton Ave Page 21 requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. 52. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). The applicant shall be responsible for installing and upgrading the existing utility mains and/or services as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services. 53. The applicant's engineer shall submit flow calculations and system capacity study showing that the on-site and off- site water and sanitary sewer mains and services will provide the domestic, irrigation, fire flows, and wastewater capacity needed to service the development and adjacent properties during anticipated peak flow demands. Field testing may be required to determined current flows and water pressures on existing water main. Calculations must be signed and stamped by a registered civil engineer. The applicant is required to perform, at his/her expense, a flow monitoring study of the existing sewer main to determine the remaining capacity. The report must include existing peak flows or depth of flow based on a minimum monitoring period of thirty continuous days or as determined by the senior wastewater engineer. The study shall meet the requirements and the approval of the WGW engineering section. No downstream overloading of existing sewer main will be permitted. 54. For contractor installed water and wastewater mains or services, the applicant shall submit to the WGW engineering section of the Utilities Department four copies of the installation of water and wastewater utilities off-site improvement plans in accordance with the utilities department design criteria. All utility work within the public right-of-way shall be clearly shown on the plans that are prepared, signed and stamped by a registered civil engineer. The contractor shall also submit a complete schedule of work, method of construction and the manufacture's literature on the materials to be used for approval by the utilities engineering section. The applicant's contractor will not be allowed to begin work until the improvement plan and other submittals have been approved by the water, gas and wastewater engineering 240 Hamilton Ave Page 22 section. After the work is complete but prior to sign off, the applicant shall provide record drawings (as-builts) of the contractor installed water and wastewater mains and services per City of Palo Alto Utilities record drawing procedures. For contractor installed services the contractor shall install 3M marker balls at each water or wastewater service tap to the main and at the City clean out for wastewater laterals. 55. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line. RPPA’s for domestic service shall be lead free. Show the location of the RPPA on the plans. 56. An approved reduced pressure detector assembly is required for the existing or new water connection for the fire system to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive (a double detector assembly may be allowed for existing fire sprinkler systems upon the CPAU’s approval). reduced pressure detector assemblies shall be installed on the owner's property adjacent to the property line, within 5’ of the property line. Show the location of the reduced pressure detector assembly on the plans. 57. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. 58. Existing wastewater laterals that are not plastic (ABS, PVC, or PE) shall be replaced at the applicant’s expense. 59. Existing water services that are not a currently standard material shall be replaced at the applicant’s expense. 60. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation 240 Hamilton Ave Page 23 of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 61. Each unit or place of business shall have its own water and gas meter shown on the plans. Each parcel shall have its own water service, gas service and sewer lateral connection shown on the plans. 62. A separate water meter and backflow preventer is required to irrigate the approved landscape plan. Show the location of the irrigation meter on the plans. This meter shall be designated as an irrigation account an no other water service will be billed on the account. The irrigation and landscape plans submitted with the application for a grading or building permit shall conform to the City of Palo Alto water efficiency standards. 63. A new water service line installation for domestic usage is required. For service connections of 4-inch through 8-inch sizes, the applicant's contractor must provide and install a concrete vault with meter reading lid covers for water meter and other required control equipment in accordance with the utilities standard detail. Show the location of the new water service and meter on the plans. 64. A new water service line installation for irrigation usage is required. Show the location of the new water service and meter on the plans. 65. A new water service line installation for fire system usage is required if existing service is not meeting current standards. Show the location of the new water service on the plans. The applicant shall provide to the engineering department a copy of the plans for fire system including all fire department's requirements. 66. A new gas service line installation is required. Show the new gas meter location on the plans. The gas meter location must conform with utilities standard details. 67. A new sewer lateral installation per lot is required. Show the location of the new sewer lateral on the plans 68. The applicant shall secure a public utilities easement for facilities installed in private property. The applicant's engineer shall obtain, prepare, record with the county of Santa 24 Clara, and provide the utilities engineering section with copies of the public utilities easement across the adjacent parcels as is necessary to serve the development. 69. Where public mains are installed in private streets/PUEs for condominium and town home projects the CC&Rs and final map shall include the statement: “Public Utility Easements: If the City’s reasonable use of the Public Utility Easements, which are shown as P.U.E on the Map, results in any damage to the Common Area, then it shall be the responsibility of the Association, and not of the City, to Restore the affected portion(s) of the Common Area. This Section may not be amended without the prior written consent of the City”. All existing water and wastewater services that will not be reused shall be abandoned at the main per WGW utilties procedures. 70. Utility vaults, transformers, utility cabinets, concrete bases, or other structures can not be placed over existing water, gas or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas or wastewater mains/services or meters. New water, gas or wastewater services/meters may not be installed within 10’ or existing trees. Maintain 10’ between new trees and new water, gas and wastewater services/mains/meters. 71. To install new gas service by directional boring, the applicant is required to have a sewer cleanout at the front of the building. This cleanout is required so the sewer lateral can be videoed for verification of no damage after the gas service is installed by directional boring. 72. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas & wastewater. 73. For contractor installed water and wastewater mains or services, the applicant shall prepare and submit to the WGW engineering section of the Utilities Department as-built drawings at the completion of construction of the installation of water and wastewater utilities to be owned and maintained by the City in accordance with: 1. Two sets of as-built drawings (hard copies). 2. As-built drawings in 2008 or 2010 AutoCAD format. 3. As-built drawings in .tiff format. 4. Survey points in .csv format for all new utility features. 25 Note: All survey data shall be collected by a California Licensed Land Surveyor. The surveyor is responsible to setup all control points needed to perform the survey work. The accuracy for all survey data shall be +/- 1cm. Survey data to be collected (what's applicable): I. Collect horizontal and vertical data for: 1. Sanitary sewer manholes (rim and invert elevations and depth) 2. Storm drain manholes and catch basins (rim and invert elevations and depth) 3. Water valves (cover and stem elevations) Fire Department 74. Provide a Fire Apparatus Access Plan. Show elevations and how PAFD Ladder Truck will be utilized. 75. Provide an egress plan. Public Work Water Quality We have reviewed the site floor plans for this project. Please note the following issues must be addressed in building plans prior to final approval by this department: 76.PAMC 16.09.170, 16.09.040 Discharge of Groundwater Prior approval shall be obtained from the city engineer or designee to discharge water pumped from construction sites to the storm drain. The city engineer or designee may require gravity settling and filtration upon a determination that either or both would improve the water quality of the discharge. Contaminated ground water or water that exceeds state or federal requirements for discharge to navigable waters may not be discharged to the storm drain. Such water may be discharged to the sewer, provided that the discharge limits contained in Palo Alto Municipal Code (16.09.040(m)) are not exceeded and the approval of the superintendent is obtained prior to discharge. The City shall be compensated for any costs it incurs in authorizing such discharge, at the rate set forth in the Municipal Fee Schedule. 77. PAMC 16.09.180(b)(9) Covered Parking Drain plumbing for parking garage floor drains must be connected to an oil/water separator with a minimum capacity of 100 gallons, and to the sanitary sewer system 78. PAMC 16.09.180(b)(10) Dumpsters for New and Remodeled Facilities 26 New buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, shall provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. 79.PAMC 16.09.180(b)(14) Architectural Copper On and after January 1, 2003, copper metal roofing, copper metal gutters, copper metal down spouts, and copper granule containing asphalt shingles shall not be permitted for use on any residential, commercial or industrial building for which a building permit is required. Copper flashing for use under tiles or slates and small copper ornaments are exempt from this prohibition. Replacement roofing, gutters and downspouts on historic structures are exempt, provided that the roofing material used shall be prepatinated at the factory. For the purposes of this exemption, the definition of "historic" shall be limited to structures designated as Category 1 or Category 2 buildings in the current edition of the Palo Alto Historical and Architectural Resources Report and Inventory. 80. PAMC 16.09.180(b)(5) Condensate from HVAC Condensate lines shall not be connected or allowed to drain to the storm drain system. 81. 16.09.215 Silver Processing Facilities conducting silver processing (photographic or X-ray films) shall either submit a treatment application or waste hauler certification for all spent silver bearing solutions. 650-329-2421. 82. PAMC 16.09.180(b)(b) Copper Piping Copper, copper alloys, lead and lead alloys, including brass, shall not be used in sewer lines, connectors, or seals coming in contact with sewage except for domestic waste sink traps and short lengths of associated connecting pipes where alternate materials are not practical. The plans must specify that copper piping will not be used for wastewater plumbing. 83. PAMC 16.09.220(c)(1) Dental Facilities That Remove or Place Amalgam Fillings An ISO 11143 certified amalgam separator device shall be installed for each dental vacuum suction system. The installed device must be ISO 11143 certified as capable of removing a minimum of 95 percent of amalgam. The amalgam separator system shall be certified at flow rates comparable to the flow rate of the actual vacuum suction system operation. Neither the separator device nor the related plumbing shall include an automatic flow bypass. For facilities that require an amalgam separator that exceeds the practical capacity of ISO 11143 test methodology, a non-certified separator 27 will be accepted, provided that smaller units from the same manufacturer and of the same technology are ISO-certified. 84. 16.09.215 Silver Processing Facilities conducting silver processing (photographic or X-ray films) shall either submit a treatment application or waste hauler certification for all spent silver bearing solutions. 650-329-2598. 85. 16.09.180(12) Mercury Switches Mercury switches shall not be installed in sewer or storm drain sumps. 86. PAMC 16.09.205(a) Cooling Systems, Pools, Spas, Fountains, Boilers and Heat Exchangers It shall be unlawful to discharge water from cooling systems, pools, spas, fountains boilers and heat exchangers to the storm drain system. 87. PAMC 16.09.165(h) Storm Drain Labeling Storm drain inlets shall be clearly marked with the words "No dumping - Flows to Bay," or equivalent. Undesignated Retail Space: 88. PAMC 16.09 Newly constructed or improved buildings with all or a portion of the space with undesignated tenants or future use will need to meet all requirements that would have been applicable during design and construction. If such undesignated retail space becomes a food service facility the following requirements must be met: Designated Food Service Establishment (FSE) Project: A. Grease Control Device (GCD) Requirements, PAMC Section 16.09.075 & cited Bldg/Plumbing Codes 1. The plans shall specify the manufacturer details and installation details of all proposed GCDs. (CBC 1009.2) 2. GCD(s) shall be sized in accordance with the 2007 California Plumbing Code. 3. GCD(s) shall be installed with a minimum capacity of 500 gallons. 4. GCD sizing calculations shall be included on the plans. See a sizing calculation example below. 5. The size of all GCDs installed shall be equal to or larger than what is specified on the plans. 6. GCDs larger than 50 gallons (100 pounds) shall not be installed in food preparation and storage areas. Santa Clara County Department of Environmental Health prefers GCDs to be installed outside. GCDs shall be installed such that all 28 access points or manholes are readily accessible for inspection, cleaning and removal of all contents. GCDs located outdoors shall be installed in such a manner so as to exclude the entrance of surface and stormwater. (CPC 1009.5) 7. All large, in-ground interceptors shall have a minimum of three manholes to allow visibility of each inlet piping, baffle (divider) wall, baffle piping and outlet piping. The plans shall clearly indicate the number of proposed manholes on the GCD. The Environmental Compliance Division of Public Works Department may authorize variances which allow GCDs with less than three manholes due to manufacture available options or adequate visibility. 8. Sample boxes shall be installed downstream of all GCDs. 9. All GCDs shall be fitted with relief vent(s). (CPC 1002.2 & 1004) 1. GCD(s) installed in vehicle traffic areas shall be rated and indicated on plans. B. Drainage Fixture Requirements, PAMC Section 16.09.075 & cited Bldg/Plumbing Codes 2. To ensure all FSE drainage fixtures are connected to the correct drain lines, each drainage fixture shall be clearly labeled on the plans. A list of all fixtures and their discharge connection, i.e. sanitary sewer or grease waste line, shall be included on the plans. 3. A list indicating all connections to each proposed GCD shall be included on the plans. This can be incorporated into the sizing calculation. 4. All grease generating drainage fixtures shall connect to a GCD. These include but are not limited to: a. Pre-rinse (scullery) sinks b. Three compartment sinks (pot sinks) c. Drainage fixtures in dishwashing room except for dishwashers shall connect to a GCD d. Examples: trough drains (small drains prior to entering a dishwasher), small drains on busing counters adjacent to pre-rinse sinks or silverware soaking sinks e. Floor drains in dishwashing area and kitchens f. Prep sinks g. Mop (janitor) sinks h. Outside areas designated for equipment washing shall be covered and any drains contained therein shall connect to a GCD. i. Drains in trash/recycling enclosures j. Wok stoves, rotisserie ovens/broilers or other grease generating cooking equipment with drip lines k. Kettles and tilt/braising pans and associated floor drains/sinks 29 5. The connection of any high temperature discharge lines and non-grease generating drainage fixtures to a GCD is prohibited. The following shall not be connected to a GCD: a. Dishwashers b. Steamers c. Pasta cookers d. Hot lines from buffet counters and kitchens e. Hand sinks f. Ice machine drip lines g. Soda machine drip lines h. Drainage lines in bar areas 6. No garbage disposers (grinders) shall be installed in a FSE. (PAMC 16.09.075(d)). 7. Plumbing lines shall not be installed above any cooking, food preparation and storage areas. 8. Each drainage fixture discharging into a GCD shall be individually trapped and vented. (CPC 1014.5) C. Covered Dumpsters, Recycling and Tallow Bin Areas PAMC, 16.09.075(q)(2) 9. Newly constructed and remodeled FSEs shall include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste cooking fats, oils and grease (FOG) or tallow. 10. The area shall be designed and shown on plans to prevent water run-on to the area and runoff from the area. 11. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a GCD. 12. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. 13. These requirements shall apply to remodeled or converted facilities to the extent that the portion of the facility being remodeled is related to the subject of the requirement. D. Large Item Cleaning Sink, PAMC 16.09.075(m)(2)(B) 14. FSEs shall have a sink or other area drain which is connected to a GCD and large enough for cleaning the largest kitchen equipment such as floor mats, containers, carts, etc. Recommendation: Generally, sinks or cleaning areas larger than a typical mop/janitor sink are more useful. E. GCD sizing criteria and an example of a GCD sizing calculation (2007 CPC) Sizing Criteria: GCD Sizing: Drain Fixtures DFUs Total DFUs GCD Volume 30 (gallons) Pre-rinse sink 4 8 500 3 compartment sink 3 21 750 2 compartment sink 3 35 1,000 Prep sink 3 90 1,250 Mop/Janitorial sink 3 172 1,500 Floor drain 2 216 2,000 Floor sink 2 Example GCD Sizing Calculation: Note: All resubmitted plans to Building Department which include FSE projects shall be resubmitted to Water Quality. It is frequently to the FSE’s advantage to install the next size larger GCD to allow for more efficient grease discharge prevention and may allow for longer times between cleaning. There are many manufacturers of GCDs which are available in different shapes, sizes and materials (plastic, reinforced fiberglass, reinforced concrete and metal) The requirements will assist FSEs with FOG discharge prevention to the sanitary sewer and storm drain pollution prevention. The FSE at all times shall comply with the Sewer Use Ordinance of the Palo Alto Municipal Code. The ordinances include requirements for GCDs, GCD maintenance, drainage fixtures, record keeping and construction projects. 89. ARB Condition: Prior to submittal of building permit application, the applicant shall submit to ARB subcommittee Quantity Drainage Fixture & Item Number DFUs Total 1 Pre-rinse sink, Item 1 4 4 1 3 compartment sink, Item 2 3 3 2 Prep sinks, Item 3 & Floor sink, Item 4 3 6 1 Mop sink, Item 5 3 3 1 Floor trough, Item 6 & tilt skillet, Item 7 2 2 1 Floor trough, Item 6 & steam kettle, Item 8 2 2 1 Floor sink, Item 4 & wok stove, Item 9 2 2 4 Floor drains 2 8 1,000 gallon GCD minimum sized Total: 30 31 revised project drawings indicating blending of the tile to relate better to the wood siding pattern. SECTION 9. Indemnity. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”)from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City its actual attorney’s fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. SECTION 10. Term of Approval. Architectural Review Approval. The approval shall be valid for one year from the original date of approval, pursuant to Palo Alto Municipal Code Section 18.77.090. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: Those plans prepared by Hayes Group Architects entitled 240 Hamilton Avenue, consisting of 21 pages, and received June 27, 2013. RE: Proposal by Ken Hayes and Forest Casa Real LLC to develop the site at 240-248 Hamilton Avenue Amy French, Chief Planning Official Aaron Aknin, Acting Director of Planning Palo Alto City Hall Dear Ms. French, Planning Staff, and ARB members, Introduction If the Architectural Review Board should approve this design, the Board would be violating its own ordinance and the ARB standards of review. The pertinent passages are as follows (my italics): PAMC Section 18.76.020, Architectural Review (a) “The purpose of architectural review is to: … (5) Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each other.” “d) Findings: Neither the director, nor the city council on appeal, shall grant architectural review approval, unless it is found that: (1) The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan; (2) The design is compatible with the immediate environment of the site;…and (4) In areas considered by the board as having a unified design character or historical character, the design is compatible with such character;…” The applicable passages of the Palo Alto Comprehensive Plan are: “Program L-48: Promote high quality, creative design and site planning that is compatible with surrounding development and public spaces…. “Program L-49: In areas of the City having a historic or consistent design character, design new development to maintain and support the existing character.” The proposed Ken Hayes design is absolutely incompatible with the most valued, historic buildings in the immediate environment. The proposed design is neither high quality nor considerate of its surroundings. It is a modernist glass box which would be entirely out of place at Ramona and Hamilton, surrounded on three sides by heritage structures. Inexplicably, even the Staff Report on this project fails altogether to consider the aesthetic aspects and must be considered null concerning the aesthetics issue. Context The site lies next door to Reposado Restaurant (a building eligible for the California Register of Historical Resources). Across Hamilton it faces obliquely the old classically-inspired former Post Office at 205 Hamilton, and directly faces the Cardinal Hotel. Both use pilasters, among other features, as a decorative motif. The proposed design merely substitutes a few cylindrical posts, a poor, abstract imitation of columns. The 240-248 corner also lies directly across Hamilton from the 500 block of Ramona, a designated district listed on the National Register of Historic Places. In the opposite direction, along the same block of Ramona as the proposed structure, lie three more heritage buildings, numbers 668 (Pacific Art League, building eligible for the National Register), 642 (now Coconuts Restaurant), and 630, a Birge Clark design). Number 630’s design is sufficiently exemplary that it is depicted in the Palo Alto Comprehensive Plan, between paragraphs L-48 and L-49 which mandate high-quality design and support of historic character. In short, the immediate area within one block is saturated with a dozen historic structures that exemplify harmonious style and are officially recognized as deserving preservation and compatibility. There are more historic buildings than newer ones around this site. Staff Report is Incomplete Therefore it is a great surprise to find no mention in the project’s Staff Report on this proposal that any of these buildings has heritage character, nor is the Ramona Street Historic District cited, nor are the three above-mentioned heritage buildings in the 600 block of Ramona mentioned at all. On page 6 of the report, the staff planner points out that the site lies within the Hamilton Avenue District, but excludes any reference to the adjacent extension of Ramona Street that is one of the two designated National Register areas in the city. When I read under staff Findings, Paragraph (1) [The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan], I am amazed that the staff planner states, “This finding can be made in the affirmative in that the project incorporates quality design that recognizes the regional and historical importance of the area as described in the Comprehensive Plan…” In fact the design fails to make any hint of a gesture whatsoever in recognizing “the regional and historical importance of the area.” The whole reason for ultra-simplistic modernist designs like this one is that modernism, from the outset (starting about 1910), was to erase all memory of past design and omit references to traditional architecture. See the writings of Le Corbusier, Loos, Gropius, and other modernist theorist-architects who abhorred ornament and promoted use of flat roofs and large expanses of blank wall or glass, among other elements. Therefore there is no way to improve this design to make it compatible with nearby classical and Spanish Colonial Revival buildings without making the Hayes design look internally inconsistent and ridiculous. As for quality, the review process thus far includes no rationale to support the above finding that this is a high-quality design. The staff planner’s criteria for a quality design are unstated. I deduce that they constitute subjective opinion. But there do exist objective criteria for a good design. First: A good design must have life to it. But the proposed building has no oblique lines (except a slight slant in the roof, invisible from the street), no curvilinear lines, and virtually no color. According to Rudolf Arnheim’s celebrated book The Dynamics of Architectural Form, entirely rectilinear buildings are usually aesthetically dead, for lack of lifelike motion created by these elements. I agree. Second: There’s scarcely anything to look at in this design except large expanses of glass, a thin, brittle building material which has a sterile character and no innate aesthetic appeal for the viewer. Third, a large building requires several levels of formal subdivision or hierarchy in order to create aesthetic complexity and retain viewer interest. But the proposed simple design appears to consist of approximately 80 percent glass walls in large expanses. The structure will have nearly no hierarchy and very little visual variety to it, which are also severe flaws in the unloved City Hall building across the street. They are both far too formally simple for their size and thus monotonous, hence the public’s indifference to or dislike of this kind of design. As for “considerate of its immediate environment” mandated by the Comprehensive Plan and the Municipal Code, the design is emphatically not aesthetically considerate because most of the buildings within one block are heritage buildings, while this design is in a completely antithetical style. In Findings Paragraph (2), the staff planner states that the design is compatible with the immediate environment of the site, but cites as proof only the size and commercial nature of the design. The staff planner omits any mention of the area’s aesthetic, heritage character. For a definition of compatibility, see the city’s South of Forest Area Coordinated Area Plan, which states: “Compatibility is achieved when the apparent scale and mass of new buildings is consistent with that existing in the neighborhood, and when new construction shares general characteristics and establishes design linkages with surrounding existing buildings so that the visual unity of the street is maintained.” (My emphasis.) But the general design characteristics of this proposed new building are totally different from all of the surrounding buildings, excluding only the mediocre ones (285 and 300 Hamilton), and there are no design linkages whatsoever with the many classical and Spanish Colonial Revival structures nearby. Therefore the Hayes glass-curtain design is incompatible with the buildings surrounding the 240- 248 Hamilton location and does not comply with Municipal Code regulations. As for Findings Paragraph (4), the PAMC, Ch. 18.76 requires that, “In areas considered by the board as having a unified design character or historical character, the design is compatible with such character.” Yet the staff planner inexplicably sidesteps mention of historical or unified design of the neighboring buildings by citing only technical aspects of mass and height, enhanced vehicular and pedestrian entries, and a bland description of Hamilton Avenue. He refers to the Downtown Urban Design Guide for guidelines. But the Municipal Code and Comprehensive Plan are the ultimate arbiting documents, and the design does not conform to their aesthetic requirements for Architectural Review. June 6 ARB Meeting At the public ARB meeting on June 6, I addressed the Board and articulated many of the concepts explained in this letter. ARB member Lippert responded that, “the design… is really wonderful.” On the other hand, he admitted that it does not fit in with the neighborhood. Here is his relevant statement, addressing Mr. Hayes: “With regard to Mr. Smith’s comments with regard to the austerity of the building, I appreciate that it doesn’t fit in with the other historic buildings in the neighborhood. If this was in fact in the Ramona District, I think it would be far more problematic. But in fact if you were to follow the Secretary of Interior standards, the underlying rule there is “Thou shalt not create false history.” And so because of the nature of the architectural approach that you’ve taken here, it actually contrasts the other historic structures. And doesn’t impose itself upon them from a false [perspective], ‘Thou shalt not create false history.’ You’re not creating a false historical structure by going with either a Mission or Spanish Revival style building. So I think from the Secretary of Interior standards point of view, you’ve done exactly what it says – ‘Thou Shalt Not Create False History.’ You’ve created here something that is separate and distinct, and will never ever be confused with a Birge Clark building. It’s a Ken Hayes building.” If it doesn’t fit into the neighborhood, then the Municipal Code expressly forbids approval. One cannot consider the site solely as part of the Hamilton Avenue District, when the proposed building is twice as long on its Ramona Street side, on a block with three historic buildings, and when the Ramona Street National Register District is only 50 feet away. That historic district is easily within the “immediate environment” and within the “surrounding development” mentioned in the Municipal Code and Comprehensive Plan. On the quality issue, ARB member Alizadeh* stated that she agreed (“partially”) with my conclusion that the building had no character, saying it had “a lack of general interest … overall.” Thus at least one ARB member concedes that the design does not have the high quality mandated by the Code and the Plan. She defended her defense of the design by referring to her training in architecture school where she was taught not “to create false history,” presumably meaning creating a new building in a more traditional style. (*The full paragraph of Ms. Alizadeh’s statement appears at the end of this letter.) But the ARB members are not beholden to their architecture professors. They are bound by law to administer the letter and spirit of the PAMC and the Comprehensive Plan, which state clearly that a site like this one shall be of high quality and compatible with its historic surroundings. The Municipal Code and Comprehensive Plan do not mention or require “contrast,” “separate and distinct,” nor do they mandate that historic buildings to stand out because the new building is starkly different as a “corporate effect” (the term used by Ms. Alizadeh). Therefore, I am surprised by Mr. Lippert’s apparent inclination to approve the proposal, while admitting that the design “doesn’t fit in with the other historic buildings in the neighborhood.” I interpret Board approval of this proposal as a violation of the ARB’s own Code statutes, which are binding on the Board’s review process. Board member Lew expressed some limited support for my objections regarding the Ramona Street heritage buildings. He stated to Mr. Hayes, “For the people who don’t like abstract [design], I would hope that they would see something else in your building.” He suggested adding limited amounts of filigree, planters and awnings. Yet these little additions would not alter the fundamental character of vast expanses of sterile glass wall incompatibly contrasting with the nearby heritage buildings. Finally, ARB member Pritchard stated, “it is a really handsome building,” offering no justification or adequate findings for her opinion, and expressed no reservations regarding the context. The fifth ARB member had recused himself from review of this project. Regarding so-called “false history,” the Board misunderstands the phrase. False history means building indistinguishably from an old structure in a manner that could deceive a viewer. There is abundant local precedent for creating attractive buildings in a style that is clearly new but similar enough to blend harmoniously with Palo Alto’s heritage architecture. Some such relatively recent commercial buildings within four blocks of 240 Hamilton are: 499 Hamilton Avenue 505 Hamilton Avenue 520 Cowper Street, the Garden Court Hotel 101 University Avenue 499 University Avenue, currently the Sprint building 245 Lytton Avenue, a financial center housing Morgan Stanley and Cornish & Carey 265 Lytton Avenue 250 University, the Plaza Ramona complex Conclusion I cannot conceive how both the Planning Department staff and the Architectural Review Board members can ignore the very clear aesthetic requirements of the city’s Comprehensive Plan and Municipal Code with respect to this proposal. The design does not conform to the ordinance citations presented at the beginning of this letter. The proposal needs to be carefully redesigned for historical compatibility with the immediate environment of the site. If the Board approves the proposal as is or only lightly modified, there will necessarily be an appeal by those of us who are concerned that the City’s approved ordinances and policies be honored. Respectfully submitted, Douglas Smith, Forest Avenue Co-signers: Neilson Buchanan, Bryant Street Michael Hodos, Bryant Street *Ms. Alizadeh addressing Mr. Smith: “I think in general, the way that we’re taught in architecture school is that you don’t want to create false history, like Board member Lippert said. And this also allows those authentic old buildings to stand out, and to really be seen. And so not everything just gets kind of the wash of an age. So this is the approach that we’re taught, and I respect that. In terms of your comment that it’s characterless, I agree with you partially, that there is a bit of a lack of general interest, I think, overall. I guess I would call it the corporate effect, as opposed to character. But I still think that this is the approach that we as architects are trained to take.” ~ 'Ul CI T Y OF PALO LTO Agenda Date: To: From: Subject: July 18, 2013 Architectural Review Board Jason Nortz, Sr. Planner Architectural Review Board Staff Report Department: Planning and Community Environment 240-248 Hamilton Avenue [13PLN-00006]: Request by Ken Hayes of Hayes Group Architects on behalf of Forest Casa Real LLC. for Major Architectural Review Board review for the demolition of an existing 7,000 square foot, two- 'story commercial building and the construction of a four-story, 50 foot, mixed-use building with a new floor area of 15,000 square feet on a site located at 240-248 Hamilton Avenue .. Environmental Assessment: an Initial Study and Mitigated Negative Declaration have been prepared. Zone District: Downtown Community Commercial (CD-C)(P)(GF) with Pedestrian Shopping and Ground Floor combining districts. RECOMMENDATION Staffrecommends that the Architectural Review Board (ARB) consider the project and findings for Architectural Review approval and recommend approval of the proposed project to the Director of Planning and Community Environment (Director), based upon the findings in Attachment A and subject to the conditions of approval in Attachment B. BACKGROUND On June 6, 2013 the Architectural Review Board (ARB) reviewed the application referenced above and as described further below, and voted to continue the item to a date certain. The ARB's recommendation included conditions that the following items return for additional ARB review: 1. Provide pedestrian friendly amenities at the ground floor level; 2. More articulation is needed on the back walls, specifically, on the southwest elevation between floors two and four; 3. Consider incorpor~ting more cedar siding at another location on the building. Additional background information is provided in the June 6, 2013 staff report, provided as Attachment C. A revised zoning code compliance table is provided as Attachment D. I • 1 City of Palo Alto Page 1 1 =================MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 26====================== 2 Thursday July 18, 2013 3 REGULAR MEETING - 8:30 AM 4 City Council Chambers, Civic Center, 1st Floor 5 250 Hamilton Avenue 6 Palo Alto, CA 94301 7 8 240 Hamilton Avenue [13PLN-00006]: Request by Ken Hayes of Hayes Group Architects on behalf 9 of Forest Casa Real LLC for Architectural Review of a new four-story, 50-foot, mixed-use 10 building with 15,000 sq. ft. of floor area, proposed to replace a 5,000 sq. ft., two-story 11 commercial building. Environmental Assessment: an Initial Study and Mitigated Negative 12 Declaration have been prepared. Zone District: Downtown Community Commercial with 13 Ground Floor and Pedestrian Shopping combining districts (CD-C) (GF) (P). This item was 14 reviewed during a public hearing on June 6, 2013; the public hearing was continued to 15 July 18, 2013. 16 17 Chair Malone Prichard: Moving to our first item, 240 Hamilton Avenue. Request by Ken Hayes of 18 Hayes Group Architects on behalf of Forest Casa Real LLC for Architectural Review of a new four-19 story, 50 foot, mixed-use building with 15,000 square feet of floor area, proposed to replace a 5,000 20 square foot, two-story commercial building. Staff presentation please? 21 22 Jason Nortz, Senior Planner: Yes, thank you. Good morning Board Members (interrupted) 23 24 Chair Malone Prichard: Excuse me. 25 26 Board Member Popp: Sorry. Because of a prior working relationship with the applicant’s architect I’m 27 going to recuse myself from this item. 28 29 Chair Malone Prichard: Thank you. So hold a moment until he can clear the room. 30 31 Mr. Nortz: Thank you. The project that you previously mentioned was first reviewed by the 32 Architectural Review Board (ARB) at the June 6th ARB meeting. The ARB voted to continue the item. 33 The ARB’s recommendation included conditions that the following items return for additional ARB 34 review: Item Number 1) provide pedestrian friendly amenities at the ground floor level; 2) incorporate 35 more articulation on the back walls, specifically on the southwest elevation between floors two and 36 four; and 3) consider incorporating more cedar siding at another location on the building. As discussed 37 during the June 6th staff report the commercial portion of the project, which is 11,500 square feet is 38 exempt from parking due to the use of Transferable Development Rights (TDR), one time exemptions 39 and replacement square footage. Staff’s analysis of the parking requirement as originally described in 40 the June 6th staff report has been revised and is provided as Attachment D to today’s staff report. The 41 ARCHITECTURAL REVIEW BOARD VERBATIM MINUTES City of Palo Alto Page 2 applicant Ken Hayes is here to give you a brief presentation and answer any questions that you have. 1 Thank you. 2 3 Chair Malone Prichard: Thank you. You’ll have 10 minutes. 4 5 Ken Hayes, Hayes Group Architects: Good morning Members of the Board, my name’s Ken Hayes 6 with Hayes Group. Hopefully I won’t need all 10. So we were here at the June 6th ARB hearing and at 7 that point the comments that we heard, the project was favorably received, I appreciated the comments 8 that you made. We were asked to come back and address some of these items that Mr. Nortz just 9 mentioned: consider some pedestrian amenities along the streetscape, what can happen sort of on that 10 façade that’s above Reposado, possibly a, I think Alex you had suggested maybe a metal rail on the 11 balcony or something that faced Ramona Street? Maybe add a window at G1, which is facing 12 Hamilton or perhaps some more cedar siding. I think that was suggested by Chair Prichard. 13 14 So we’ve looked at all of those and the first one I’d like to show you would be that, this is the site plan 15 originally proposed, there’s no change in the building footprint. We had been keeping the existing tree 16 wells locations and so when we learned that that could sort of be freed up we’ve proposed what you 17 have in your packet today. We would propose that the concrete be an integrally colored, sort of the 18 City standard lamp black so it kind of blends with the sidewalk on either side of the property, but we’ve 19 relocated the trees to make sense with a new scoring pattern as well as so the tree wells are located here 20 on both sides and then incorporated plant, potted plants that would be located in front of the building 21 here, here, and then down the side there. And the potted plants are something like that, it’s a two foot 22 tall self-watering pot that would be planted there or it would be located in those spots. So we felt like 23 that addressed kind of the concerns that were brought up there just to try to create a little more 24 pedestrian friendly amenity at the streetscape. Obviously it, there’s all this frameless glass back behind 25 here so there will be lots of views into the building itself. 26 27 This was the proposed elevation above Reposado at the time and a number of things were discussed in 28 the meeting on do windows make sense? And I think it sort of boiled down to really try to break up 29 that façade in a way that we felt still worked with the architecture and we really see the architecture as 30 this block that’s been carved out. And so we’ve taken, and this is the, ok I thought it was going to go 31 back. This is the profile of Reposado next door. So what we’ve done is we’ve kept the same 32 vocabulary that we’re, of that block as it wraps the whole corner in line with the stair here, which is this 33 is Hamilton over here, in line with the stair there and in line with the stair there we essentially carve out 34 an area that would have the same metal panels that we’re proposing that you see on the front, the front 35 of the building and in fact have the same detail that comes up the edge and then forms an eyebrow here 36 and then sort of descends back down the façade and then that entire opening right behind there is all the 37 mechanical equipment. So that entire opening would be filled with that perforated metal that you have 38 on your color board. 39 40 And so we’ve, this is a view of the front before the planters and this is the planter locations there and 41 there. So there’s not a whole lot of change to the front. Now this is superimposed on a photograph that 42 has the existing trees, but the new trees with have a different spacing there. We didn’t change the tree, 43 but you can see the planters there and then the view from above before and then afterwards with the 44 plant material, the planters down on the sidewalk there. Around the corner we didn’t have this view 45 before, but we provided it for you today so that you can get an idea. This is across the street. You can 46 see Reposado there and so we’ve kind of matched that same vocabulary of the main limestone block 47 City of Palo Alto Page 3 and then the metal panel you just start to see it sneaking up there. Then at the top we have the metal 1 comes up and then this is the perforated metal there. 2 3 We looked at possibly exploring the opportunity for new penetrations in this front. I think Lee had 4 suggested maybe we study that. We did. I just really felt like it was just a cleaner, simpler solution 5 without adding openings in that area. There’s an abundance of glass as it wraps the building so it’s 6 certainly not a daylighting issue and we felt like this was an appropriate solution. Just to give you an 7 idea of the detail at that so this would be the detail here between the transition there. So we would have 8 the limestone tile then it returns back, and then this is the metal panel so you’ve got some surface relief 9 at that location. So that’s my presentation. Thank you. 10 11 Chair Malone Prichard: Thank you. I have a couple of members of the public who would like to speak 12 about this. The first person will be Jeff Levinski followed by Elena Meyer and you’ll each have three 13 minutes. 14 15 Jeff Levinski: Thank you. Good morning Commissioners [Note—Means Board Members] and staff. 16 I’m part of the large neighborhood effort to work on our downtown parking crisis and in regards to this 17 project first I’d like to note the agenda has an error that it says that this project will be replacing a 5,000 18 square foot building whereas the staff report says it’s 7,000 square feet. It’s going to add four parking 19 spaces for its new residential units, however, that will be at the expense of the public because it’s going 20 to apparently remove two other parking spaces from the street. It also fails to provide 18 additional 21 parking spaces needed for the new offices. In total it creates a deficit of 20 spaces and it’s going to 22 force that many cars to park deeper into our residential neighborhoods worsening our parking, safety, 23 and traffic problems. 24 25 I understand that the project hopes to avoid providing those 20 spaces by using TDR’s, in lieu fees, and 26 a one-time exception, but none of those create a single parking space anywhere. In fact, the in lieu 27 program is a total fiscal scandal being virtually bankrupt while our downtown parking deficit exceeds 28 900 parking spaces. That shortage of parking creates misery every workday in the downtown and 29 Crescent Park neighborhoods and it’s getting worse all the time. 30 31 I’m asking you to do two things today. First, look at the Comprehensive Plan’s requirement that the 32 residential neighborhoods not be impacted by commercial activity. This project does not provide 33 adequate parking and thus will harm the nearby residential neighborhoods. The TDR’s and in lieu fees 34 don’t provide any parking either. Thus this project fails to comply with the Comprehensive Plan. That 35 in turn raises the question whether it merits any variance whatsoever. 36 37 Second, you can help turn around our City’s parking crisis by showing developers how to provide 38 onsite parking. The City’s own analysis for 135 Hamilton just down the street from this project showed 39 that each dedicated parking space increases rent and thus adds approximately $75,000 to $94,000 in 40 value to a building. That’s each spot. Yet they often cost less than that to build. In other words, 41 developers could actually win by providing the onsite parking as well as helping our neighborhoods. 42 And by the way at 135 Hamilton those extra parking spots were going to be across the street, down a 43 ways, and then on the fourth and fifth floors of the garage. For here the added parking would be just a 44 few floors away and thus potentially worth even more. 45 46 City of Palo Alto Page 4 So we’re asking you to take the lead and show new projects how to include onsite parking helping them 1 both earn more money and alleviate our parking crisis. Please address this and the Comprehensive Plan 2 issue today. Thank you. 3 4 Chair Malone Prichard: Thank you for your comments and Elena Meyer is next. 5 6 Elena Meyer: Good morning Commissioners [Note—Board Members]. As you know the intrusion of 7 cars from the downtown workers into the residential area streets has reached an intolerable level. It’s 8 time for the ARB to take its responsibility to the community more seriously by not continuing to allow 9 the construction of buildings that do not park its own resident, its own people. It’s unfair to design a 10 building that does not have enough parking spaces for its inhabitants knowing that the people in the 11 buildings will further overwhelm the downtown neighborhoods with their cars. It’s unfair to exploit 12 every loophole to avoid fulfilling a project’s responsibility to park its own inhabitants. Not only 13 doesn’t this building park its own cars, it takes away two spaces from the public street. This is 14 unconscionable. 15 16 The project violates both the ARB Charter and the Comprehensive Plan. The ARB Charter says among 17 other things “enhance the desirability of living conditions upon the immediate site or in adjacent areas” 18 and as you know the Comp Plan says on Page 3, “The Plan encourages commercial enterprise, but not 19 at the expense of the City’s residential neighborhoods.” Please stop making things worse. Thank you. 20 21 Chair Malone Prichard: Thank you for your comments. So I have a question for staff since there seems 22 to be a lot of neighborhood interest in parking in the downtown can you clarify for the record what the 23 rules are and what ARB’s purview is regarding parking. 24 25 Mr. Nortz: As far as the rules go with the parking I definitely understand where the public is coming 26 from, but technically our code only requires the site to provide the parking for the new residential uses 27 at 1.5 spaces per unit, which would be three spaces and they are actually providing 4. The rest of the 28 existing square footage 7,000 is exempt per code and the remainder, which I believe is in the 29 neighborhood of 4,000 and something, is also exempt per the use of the TDR transfers. Now as a 30 couple of the public speakers have mentioned, I think the overall concern is with a lot of the new 31 development that is occurring downtown and parking as a whole and I know that our new Interim 32 Director Mr. Aknin and the rest of the long range Planning and Transportation Staff is currently 33 reviewing ways to look at that and improve that, but as far as providing any answers for you today as to 34 how we can address them I am unable to do so. 35 36 Chair Malone Prichard: Thank you. So if the neighbors would like to follow up then perhaps Mr. 37 Aknin is the next logical step? 38 39 Mr. Nortz: Well I would probably start with Jaime Rodriguez our Chief Transportation Official and 40 then he can work with Aaron to address their concerns. And I would be happy to follow up with both 41 of the residents after today’s meeting to get their contact info. 42 43 Chair Malone Prichard: Thank you. Ok we’ll move to Board Member questions and comments. Let’s 44 start with Alex. 45 46 Board Member Lew: So I would like to follow up on the parking issue. And so I did review the Comp 47 Plan and the Zoning Ordinance last night just to refresh my memory about the TDR program. And so 48 City of Palo Alto Page 5 the issue just in big picture is the issue is that there’s in the Comp Plan and the Zoning Ordinance there 1 are, there’s a provision for Transfer Development Rights when projects do a systemic upgrade and/or a 2 historic rehab of existing properties and that square footage doesn’t have to be parked as I see it in the 3 Zoning Ordinance, but when I looked at the Comp Plan it didn’t really mention that the parking had to 4 be exempt from the floor area transfer. So it seems to me that there’s some, some wiggle room in there 5 if the residents really want to discuss it with the Planning Department, but it is clearly, it seems to me 6 clear that the intent is to help restore and preserve downtown. And that’s like a very important goal. 7 Downtown’s really, is great and it shouldn’t, the changes really shouldn’t impact the neighborhoods 8 although it is and so I would be curious to see what the parking solutions are. I know I’ve been to some 9 of the Planning and Transportation Commission (PTC) meetings and you know that there’s been a lot 10 of review and discussion about how to improve efficiency of the parking, of the existing parking 11 program to help alleviate the issues and so I’d kind of let you, maybe we should have like an update on 12 that somewhere for the ARB in the future. 13 14 Mr. Nortz: I think that would be a good idea. 15 16 Board Member Lew: Because I mean I think the neighborhood, the neighbors are bringing it up on this 17 one project, but there are actually multiple projects where this same situation is happening. Ok, so on 18 the building design [unintelligible] I don’t want to repeat everything from the last meeting, but [I mean 19 you] generally support of the [party]. I was hoping for more filigree on the building, but I know you 20 Ken, you’re fairly minimalist. The only question I have here today then is really the, your limestone 21 cladding and so I note that the drawings are calling out for limestone. My recollection was that you 22 mentioned it was like porcelain tile from the last meeting. I could be wrong about that, but I wanted to 23 just make sure I understand the… 24 25 Mr. Hayes: Did we bring the color board? The materials board back? I have a photograph of it. 26 27 Board Member Lew: I mean I don’t think you’ve changed it. It was (interrupted) 28 29 Mr. Hayes: [Unintelligible] it is limestone above the, if you look on your screen in front of you. 30 31 Board Member Lew: So on the first floor there’s some porcelain. 32 33 Mr. Hayes: That’s right, yeah. A darker porcelain’s on that ground floor. 34 35 Board Member Lew: Ok. Ok, so I think in my mind that the, I was hoping for more filigree. My take 36 on it though is that the fact that you’re cladding it in real stone and not some like stucco or some sort of 37 synthetic thing actually will give you more subtlety and it doesn’t really show in the drawings like, I 38 know that some of the, we had some of the neighbors that are complaining that the building is too 39 minimal, is too stark. It seems like the rendering isn’t really capturing the subtlety of the natural stones 40 (interrupted) 41 42 Mr. Hayes: Sort of the patina that you’ll have or the variation. 43 44 Board Member Lew: right, yeah. 45 46 Mr. Hayes: No, it’s a beautiful stone. I’m confused here. 47 48 City of Palo Alto Page 6 Mr. Nortz: Apologies, I do have the color board up at my desk if you’d like (interrupted) 1 2 Board Member Lew: That’s fine, I think I, I mean I’ve seen enough limestone’s to, I think I understand. 3 I just wanted to make sure it wasn’t some sort of synthetic product. 4 5 Mr. Hayes: No. Jason, maybe Diana can run upstairs and grab it if it’s handy? 6 7 Board Member Lew: Ok and then I think, oh, and if I could go back [unintelligible] on the parking. So 8 I think Ms. Meyer mentioned or Mr. Levinski mentioned the street parking removal and I know that 9 the, we’ve had some discussions with Amy French, she’s not here today, the Planning Manager that 10 the, that on some projects they’re asking I think the Planning Department has been asking for a fee in 11 lieu for removal of street parking on some projects. So there is some mitigation for that. It’s not like 12 you can add a curb cut and just remove parking and then there’s no (interrupted) 13 14 Mr. Hayes: We are providing two in lieu. 15 16 Mr. Nortz: Right. We worked with Transportation staff and they were ok with that solution as far as 17 providing two in lieu payments and I also believe there’s been some additional discussion about how 18 and Ken can probably speak to this better, but possibly adding an additional off street spot where the 19 existing loading zone is. We had discussed that option and I know we’re still reviewing that with the 20 Transportation staff. So we might actually end up gaining a space at the end of the day, but we haven’t 21 figured that out yet. 22 23 Mr. Hayes: Yeah the loading zone comes around to about here and it’s really not, apparently not used 24 and so Jaime was willing to reduce that loading zone if we could pick up another space. I don’t think 25 we can pick that space up so it’s, the two, we’re, two spaces are going to be lost and then we’ll be 26 paying two in lieu spaces. 27 28 Board Member Lew: Ok. And thank you for adding the planters and I like the plan that you’ve picked, 29 which is called, what is it? Mother’s… Mother in Law’s Tongue. Somebody has a kind of a witty idea 30 for that plant. And but generally I support the project. It’s, I think the general, the massing is well 31 done to integrate it in with the neighboring buildings and yeah, and I really like the mixed-use 32 component of the building. And then on the improvements that you’ve made on the Reposado property 33 line side I think are fine. I didn’t really mind the other, your previous scheme on that mostly because 34 you’re cladding it in stone. 35 36 Mr. Hayes: We were cladding it in stone. 37 38 Board Member Lew: Right, I mean it seems like you were already making an upgrade. 39 40 Mr. Hayes: But we are, we’re doing this, we’re taking this same detail that rises here and around on 41 the… so that actually comes up and down here and then across the top. So it’ll be very consistent I 42 think. I like the change. 43 44 Board Member Lew: Ok, good. I don’t, I don’t object to it. And then on the, you mentioned the 45 window possibly the idea of having a window in the stair tower. Would you be open to having like a 46 skylight on the roof? 47 48 City of Palo Alto Page 7 Mr. Hayes: Oh absolutely. 1 2 Board Member Lew: Because I mean to me I like to do that on buildings. 3 4 Mr. Hayes: Yeah. 5 6 Board Member Lew: Basically those fire stair towers are usually pretty grim and like I think it’s better 7 for people to walk (interrupted) 8 9 Mr. Hayes: I have no problem with that (interrupted) 10 11 Board Member Lew: And having the skylight makes it so much more pleasant. I mean it’s like 12 dramatic change on something that doesn’t really affect the overall aesthetics with the building. And so 13 that’s all that I have. Thank you. 14 15 Mr. Hayes: Thank you Alex. 16 17 Chair Malone Prichard: Lee. 18 19 Vice-Chair Lippert: First of all I would like to address the parking issue. Within the ARB rules we’re 20 only looking at quality and character issues. We do not look at use and zoning and so when you run 21 into the parking for the building even though we review the parking when it’s surface parking we are 22 reviewing it for meeting the standards of quality and character, not the use. Is that correct? 23 24 Mr. Nortz: Yes. 25 26 Vice-Chair Lippert: Ok. So in this case the parking is internal to the building and it’s handled through 27 other provisions of the Municipal Code. Correct? 28 29 Mr. Nortz: Yes. 30 31 Vice-Chair Lippert: So we don’t have any authority over the parking. I appreciate the members of the 32 public raising this as an issue, but we in fact our following what the City’s rules are and if the rules 33 aren’t compatible with what the neighbors think is going on that’s something that they need to address 34 with the City Council and have changed. We can’t indiscriminately follow and change, change the 35 rules. Is that correct? 36 37 Mr. Nortz: Yes. 38 39 Vice-Chair Lippert: And with regard to the current parking moratorium does this fall into the parking 40 moratorium at all? 41 42 Mr. Nortz: That I am not aware of and I’d need to follow up with our Transportation staff to get you a 43 better answer on that. 44 45 Vice-Chair Lippert: Ok. So I sympathize with what the residents in the South of Forest Avenue 46 (SOFA) area and the area further south are dealing with, but frankly our job here is to review the 47 standards with regard to quality and character and seeing to that the building meets those standards. 48 City of Palo Alto Page 8 There is one thing that I do want to mention, which I think is a bit problematic, and again we don’t 1 have any authority over, which is that until the economy started picking up the parking ratio based on 2 square footage was really based on people having cubicles or offices. And today what we’re seeing a 3 lot of office is that they’re going to a different layout or configuration where they’re actually using 4 benches for people who are doing the work. And so what happens is that actually increases the density 5 or the number of bodies that are working in an office environment. Now that is a building code issue 6 because really what happens is that, that number is exceeding the number of bodies that would be 7 permitted and it’s actually going from a B occupancy, this is in the building code, to an A occupancy, 8 which is really an assembly. And it’s a very big difference in terms of the number of bodies. And so if 9 people are in fact doing this that would be a building code violation and the building could be red 10 tagged and shut down through a different vehicle, which is the Building Department or the Fire 11 Department depending on who wants to enforce it. 12 13 Other than that the standards here that we’re following are ones of, again, as I said quality and 14 character. So we’re looking at the envelope of the building. And so I’m going to talk about the 15 envelope of the building. Ken, first of all I want to thank you very much for taking our comments and 16 coming back to us. It’s really a handsome building. You listened to our feedback. The only concerns 17 that I have that are outstanding have to do with the I guess the southwest façade and the southeast 18 façade, which is the back of the building. Yeah, and a couple of things that I think the building could 19 improve on is that it’s still a little austere I think in terms of just being a blank wall. And so what I was 20 going to suggest and maybe my colleagues see it the same way, is that I like the little white element, the 21 little white box that’s on the top there. Yeah. I like the one that happens towards the back and if there 22 was some way to take that texture or that element and have it read vertically so what happens is that it 23 begins to create a little more complexity on that façade. I really like the use of the limestone and the 24 way it wraps around the building. I like the way it happens as a lintel above the metal panels. I think 25 that that’s really handsome, but as far as the module that you’ve got there I think that making it a little 26 bit more complex I think would help tremendously. 27 28 And then on the backside of the building the façade we don’t see that faces… 29 30 Mr. Hayes: Down Ramona. 31 32 Vice-Chair Lippert: Ramona. Can you talk a little bit about that? Because… 33 34 Mr. Hayes: It’s in the packet. 35 36 Vice-Chair Lippert: [Yeah, we know.] 37 38 Mr. Hayes: I have the old presentation here so it’s probably in here. 39 40 Vice-Chair Lippert: Well I’ve got it here. 41 42 Mr. Hayes: Oh. 43 44 Vice-Chair Lippert: It’s on page A3.1. It’s southeast elevation. And again my thought there is if you 45 were to take that little box element on the roof and just simply carry that down as well so that it read as 46 a plain, smooth finish that the module ties into I think that it’s going to achieve what needs to be 47 achieved in terms of some visual complexity to those views. 48 City of Palo Alto Page 9 1 Mr. Hayes: As you can see in that front view right here, this is probably 25 feet back from across the 2 street. 3 4 Vice-Chair Lippert: Right. 5 6 Mr. Hayes: Right. So you start to lose the ability to see beyond that. The same would be true for the 7 other side where the building next door is even a little bit taller. So I’m not sure how much mileage we 8 could get out of that. Here’s the building on the other side right here. So there’s more exposure 9 obviously on the Reposado side than there is here although you could go further down the street on 10 that. I like the block of the limestone. I’m not sure how the, we actually did look at before we arrived 11 at where we are [pause in audio at 30:52] the first thing I did was I took that stairwell down to sort of a 12 base and looked at that and really [unintelligible] having the sort of cornice of the limestone wrap the 13 building was a little bit stronger, but… 14 15 Board Member Lippert: We’ll see how my colleagues feel about it. 16 17 Mr. Hayes: Yeah, ok. But thank you for your comments. Did you get the finish board? You did? Ok, 18 because I found my photograph it was on the floor back here. 19 20 Chair Malone Prichard: We did. Yeah, we’ve got it. Thank you. So thank you for bringing this back. 21 I’m in support of all the changes that you’ve made; much happier about the view over the top of 22 Reposado now and glad to see the planters coming in for more pedestrian amenities. My comment on 23 the cedar siding wasn’t so much that I wanted more of it on the building, but I thought it was odd that it 24 showed up in one spot. 25 26 Mr. Hayes: Right. 27 28 Chair Malone Prichard: And so I’m thinking that maybe it should either show up in more spots or 29 maybe it shouldn’t be there. So I’m interested in hearing why you’ve got cedar there. 30 31 Mr. Hayes: So the cedar is essentially as you know located in the recess here, which if I go back to the 32 plan… one more. So it spans essentially this entire opening from sidewalk to soffit and felt like that 33 was a nice warm material, one that had a lot of texture to it, but felt like it could, just a beautiful door in 34 that one opening and it starts to connote a little bit of familiarity of material and also of residential use. 35 And that was the prime motivation there. When I think of it as a metal door or something like that I 36 hear it clanging and it just felt like a softer, warmer approach that worked well with the porcelain tile 37 and the materials. Didn’t see it anywhere else though, but that was our thinking. 38 39 Chair Malone Prichard: Ok. I respect that. It’s not my building to design. So then just a little bit of 40 housecleaning here on the findings; Findings 13 and 14 need to be modified because now we do have 41 planting material. So I believe the planting proposed does meet both of those findings. And then there 42 had been some correspondence from neighbors who did not, who weren’t able to make it to the meeting 43 regarding the character of the building and I read back through Finding Number 4. Finding Number 4 44 is specific to areas that are considered to have a unified design character and I would pose that this area 45 does not have a unified design character. It actually is very diverse; you have historic buildings, you 46 have modern buildings right up next to each other. This isn’t the only modern building, there’s another 47 one a couple of doors down and there’s City Hall across the street. So I would suggest that that finding 48 City of Palo Alto Page 10 be “not applicable” because it is not a unified design character or you could say the design character is 1 eclectic and this fits into the eclectic. 2 3 Mr. Nortz: I’m sorry, that was Finding Number 4? 4 5 Chair Malone Prichard: Number 4. So that’s all I’ve got. I’m in support of the project as presented. I 6 heard a couple of comments from my colleagues that they would like to have modified. Should we 7 discuss those? So you had the, a follow up. Ok. 8 9 Vice-Chair Lippert: I have one follow up. You know I appreciate Chair Malone Prichard’s comment 10 with regards to the wood siding. Is there any way to maybe carry that around to another ground floor 11 element? I’m thinking of maybe the base of a stair tower over on Hamilton? What do you think? 12 13 Mr. Hayes: Probably not a, and I know it doesn’t have to come to the ground, but probably maybe not 14 be as durable sort of in that exposure. We actually entertained the idea of making the ground floor 15 doors with that, with that same wood. We could do a door that has the same kind of grill pattern and it 16 would be like, are you looking at your screen? 17 18 Vice-Chair Lippert: I am. 19 20 Mr. Hayes: That door there. This door here and perhaps this door here so that at least you see that 21 again and it’s always on a door. It wouldn’t work for the retail door. So we did think about it there and 22 that probably would be something that we’d be open to. 23 24 Board Member Lew: Can I ask a question, follow up question about that? Is the garage door like 25 spaced cedar boards or just a solid, solid panel? 26 27 Mr. Hayes: No, no, no. it’ll be horizontal boards, probably an eighth inch between them and the whole 28 panel that you see there is not operable, so it’ll be sort of hidden, hidden doors. So you’ll have vertical 29 lines. 30 31 Vice-Chair Lippert: You know I’m not that convinced that wood can’t be a durable material. It’s, 32 there’s no automobile traffic there, it’s all pedestrian and it would require a little bit of maintenance, but 33 it’s not a high traffic area. 34 35 Mr. Hayes: Just people leaning against the building, putting their feet on it. I don’t know. I see it as an 36 infill Lee and not as two blocks that support this limestone building above. And so the porcelain seems 37 to have that sense of permanence and durability in mass that the wood would not, which is why I see it 38 as an infill. 39 40 Vice-Chair Lippert: What about using the wood, a one… a 6 inch by 24 tile that, they have tiles that 41 emulate or look like wood. They’re striped; they have some grain running up. 42 43 Mr. Hayes: I can’t believe that the Board is saying that. 44 45 Vice-Chair Lippert: Well it’s not wood. It’s not meant to replicate wood. 46 47 Mr. Hayes: You’re saying from a color standpoint then? 48 City of Palo Alto Page 11 1 Vice-Chair Lippert: Yeah, I’m talking about a material and the ceramic would be highly durable and it 2 would have the same warmth that (interrupted) 3 4 Mr. Hayes: We could certainly look at the porcelain tile and see if we can get it in a, in a finer banding 5 so that instead of being 12 inches it relates to, pardon me, the horizontal striping of the wood siding so 6 that you even get sort of more compression on porcelain tile, but it has a subtle relationship as opposed 7 to trying to be the cedar. 8 9 Vice-Chair Lippert: Yeah, I think that that if you looked at that as opposed to the cedar I would feel a 10 lot more comfortable and it begins to approximate what Chair Malone Prichard was sort of looking for. 11 Do you have any thoughts about that? 12 13 Chair Malone Prichard: I think that’s a good approach because I am in agreement that at the ground 14 floor level there really aren’t any other good locations to put wood. So that would be a good way to get 15 a durable material that relates back to the wood, but certainly not something that tries to emulate wood, 16 but just relates to it in its banding and color tone. 17 18 Mr. Hayes: So I’m proposing that we maintain the porcelain tile we have, but we do a finer horizontal 19 band that relates to the wood in its banding. 20 21 Chair Malone Prichard: That would work for me. 22 23 Vice-Chair Lippert: I would certainly have that return to the subcommittee, to look at that material. 24 25 Chair Malone Prichard: That seems reasonable. And there was discussion of skylight at the stairs. Is 26 that something you feel should be a requirement or just a recommendation? 27 28 Board Member Lew: I think it’s just a suggestion. 29 30 Chair Malone Prichard: Ok and you had some comments about the southwest and southeast elevations? 31 32 Vice-Chair Lippert: Yeah, if my colleagues feel the same way I would get that, the white stucco boxes 33 to read more vertically down the southwest and southeast façade of the building instead of the 34 limestone and that would create a look, it would help break up those two blank sides a little bit better I 35 think. 36 37 Board Member Lew: You know I don’t think that I have a preference. I don’t object to what Ken is 38 showing on the drawings. I’m not sure I quite understand like which view, so if you’re, I understand 39 what you want, what you’re asking for, but I don’t understand like what does that, like was does that 40 achieve? Like from what viewpoint, like who, who would see this, that corner, that back corner view? 41 42 Vice-Chair Lippert: Ok, well… 43 44 Board Member Lew: You’re looking in the alley or something? 45 46 Vice-Chair Lippert: If you’re looking on Hamilton and you’re standing over near I guess it’s just past 47 the Cardinal Hotel 48 City of Palo Alto Page 12 1 Mr. Hayes: That’s where this view is. 2 3 Vice-Chair Lippert: Ok. If you looked at the Cardinal Hotel this is the view from the Cardinal Hotel. 4 The idea is that the white box would just, it would just, the white would continue vertically down and 5 die into Reposado so it would read as a vertical element like it was a tower or it might be mechanical or 6 elevator shaft type element. And then the one that’s towards the rear that would also read the same 7 way. We would still keep the lintel above the metal panels, but then when you go, when you’re 8 walking up Ramona Street you would also see that white element on that southeast view of the 9 building. And the idea is to just simply figure out a way so that the building reads a little more, that 10 blank wall reads a little more complex. 11 12 Board Member Lew: Ok, I think I understand. I think I don’t, I don’t feel that strongly about it, but I 13 think when I look at the perspectives I think Ken’s idea of breaking the material at that line, where the 14 stucco and the stone meet is to bring this building down to scale to match the Cardinal Hotel and the, 15 because he’s trying to match like the cornice line of the Cardinal Hotel and the what is it? 200, 200 16 Hamilton? I forgot the name of it, the… 17 18 Mr. Nortz: The University Art Center. 19 20 Board Member Lew: No, no, no. The, (interrupted) 21 22 Mr. Hayes: Yeah, the AG for RE. Right, right here. 23 24 Board Member Lew: Yeah. 25 26 Vice-Chair Lippert: It doesn’t negate that. It, that still exists on the façade of the building and wrapped 27 around the corner of the building that’s not an issue. I think that that works great. It just, I’m talking 28 about when you go back, how many feet would that be? That would be about… 29 30 Mr. Hayes: 25, 30. Oh no, I’m sorry, no that’s the back (interrupted) 31 32 Vice-Chair Lippert: It’s just past Building Line F so… 33 34 Mr. Hayes: 15 feet. 35 36 Vice-Chair Lippert: And it would just become white cement plaster at that point and then would pick 37 up at Building Line E. You’d still have that stone lintel above where the panelized area is and then just 38 beyond Building Line B. 39 40 Mr. Hayes: So Lee’s suggesting that this edge here come down like that. 41 42 Vice-Chair Lippert: Right. 43 44 Mr. Hayes: And then this edge here come down, so this all would be one. 45 46 MOTION 47 48 City of Palo Alto Page 13 Chair Malone Prichard: So I’m going to jump in here. Looking at the uses on the upper floor I’m 1 actually more in support of what Ken is proposing. I understand what you’re trying to do to dress up 2 that façade, but the way the, that box frame works it’s really it’s surrounding the habitable area and this 3 white element here is around a mechanical area and the same thing on the other side. So I think it 4 makes more sense to have the box where it’s sitting and not to bring it out to the front and to draw more 5 attention to the mechanical area. So I’m actually, I was starting to agree with you until I started 6 looking at the uses of the building and I tend to think that the way Ken’s got it arranged is the way to 7 do it. 8 9 So I will try to craft a Motion that we would recommend approval of the project including the Findings 10 as modified, that would be Findings 4, 13, and 14 modified, that the banding of the porcelain tile be 11 modified to relate better to the wood siding pattern, and that that modification of the banding should 12 come back to subcommittee for review. 13 14 SECOND 15 16 Board Member Lew: I will second. 17 18 Chair Malone Prichard: All in favor? Aye. None opposed. 19 20 MOTION PASSED (3-0-1-1, Board Member Popp recused, Board Member Alizadeh absent) 21 22 Mr. Hayes: Thank you. 23 24 Chair Malone Prichard: Thank you. 25 26 Mr. Hayes: Have a great day. 27 28 NEW BUSINESS: 29 30 Major Items 31 32 2. 1875 Embarcadero Road [13PLN-00103]: Request by the City of Palo Alto Public Works 33 Department on behalf of the City of Palo Alto Community Services Division for Site and 34 Design Review of the Palo Alto Municipal Golf Course reconfiguration project. The meeting 35 will serve as a public hearing for the review of the Draft Environmental Impact Report for the 36 Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion 37 Project. Zone District: PF(D). 38 39 3. 537 Hamilton Ave [13PLN-00087]: Request by Korth Sunseri Hagey Architects, on behalf of 40 Smith Equities III LLC, for Architectural Review of revised plans addressing conditions of 41 approval for a previously approved project to allow a new 14,557 square foot two-story 42 commercial office building. Zone: CD-C(P). Environmental Assessment: Exempt from the 43 provisions of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 44 15332. 45 46 PRELIMINARY REVIEWS: 47 48 City of Palo Alto Page 14 4. 1601 California Avenue [13PLN-00234]: Request by Chris Wuthman of Stanford Real Estate 1 on behalf of the Board of Trustees of Leland Stanford Jr. University for preliminary 2 architectural review board review for the demolition of approximately 290,000 square feet of 3 existing R&D/office space to be replaced with 180 housing units which includes 68 detached 4 single family homes and 112 multi-family units as part of the 2005 Mayfield Development 5 Agreement. Zone: RP(AS2). 6 7 5. 1730 Embarcadero Road [13PLN-00245]: Request by Alan Cross on behalf of Carrera PRB 8 Company for Preliminary Architectural Review of additions to and renovation of the existing 9 Audi car dealership, including a new 7,380 sf showroom, 3,139 sf drop-off area, and a 1,036 sf 10 addition to the service area, along with associated site improvements and landscaping changes. 11 Zone District: Planned Community (PC-4846). 12 13 BOARD MEMBER BUSINESS AND ANNOUNCEMENTS. 14 15 6. Recap of retreat discussion on Colleagues Memo. 16 17 7. Formation of subcommittees – nomination of special topics. 18 19 REPORTS FROM OFFICIALS. 20 21 ADJOURNMENT OF FULL BOARD MEETING. 22 23 SUBCOMMITTEE (Currently ARB members Naseem Alizadeh and Randy Popp): 24 25 8. 2080 Channing Avenue [10PLN-00198]: Request by John Tze for review of proposed wood 26 fence and trash enclosure at the Edgewood Plaza mixed use project. Zone: Planned 27 Community (PC-5150) zoning district. Environmental Assessment: An Environmental Impact 28 Report was certified for the project in accordance with the California Environmental Quality 29 Act (CEQA). 30 31 9. 3445 Alma Street [12PLN-00249: Request for feedback on proposed signs on commercial 32 building at Alma Village. Zone District Planned Community (PC-4956). Environmental 33 Assessment: Exempt from the provisions of CEQA, 15301 (Existing Facilities). 34 35 10. California Avenue Streetscape Improvements [13PLN-00211]: Request by the City of Palo 36 Alto Transportation Division for Architectural Review of streetscape improvements on 37 California Avenue, between El Camino Real and the CalTrain Station, including traffic calming 38 treatments, landscape elements with new street trees, street furniture, new street lighting, 39 parking enhancements, and a reduction from four vehicle travel lanes to two lanes. 40 Environmental Review: A Negative Declaration was adopted on November 28, 2011 for the 41 project. 42 43 STAFF ARCHITECTURAL REVIEW: 44 45 Project Description: Landscape & parking modifications 46 Applicant: Richard Ying 47 Address: 200 San Antonio Avenue [13PLN-00067] 48 City of Palo Alto Page 15 Approval Date: 6/14/13 1 Request for hearing deadline: 6/27/13 2 3 Project Description: Removal of one regulated 30 inch to 40 inch diameter Redwood tree located 4 between the buildings 5 Applicant: Katie Krebs 6 Address: 2100-2400 Geng Road [13PLN-00183] 7 Approval Date: 6/17/13 8 Request for hearing deadline: 7/1/13 9 10 Project Description: Construction of new 2,753 square foot addition to the two story existing building 11 Applicant: John Suppes 12 Address: 412 Olive Avenue [13PLN-00134] 13 Approval Date: 6/20/13 14 Request for hearing deadline: 7/3/13 15 16 17 Project Description: Two new non-illuminated brushed aluminum signs to be installed on the non-18 historic fence posts located at the front of the property 19 Applicant: Dan Kitzmiller 20 Address: 421 Kipling Street [13PLN-00189] 21 Approval Date: 6/20/13 22 Request for hearing deadline: 7/3/13 23 24 Project Description: Replacement signage at the existing financial services business, Wells Fargo 25 Applicant: David Ford 26 Address: 400 Hamilton Avenue [13PLN-00209] 27 Approval Date: 6/24/13 28 Request for hearing deadline: 7/8/13 29 30 Project Description: The scope of the work includes only changing the existing sign color, all lettering 31 and numbering will remain the same 32 Applicant: Thomas Cacioppo 33 Address: 1601 S. California Avenue [13PLN-00241] 34 Approval Date: 6/24/13 35 Request for hearing deadline: 7/8/13 36 37 Project Description: Replacement of the existing deck surround with a code-compliant deck and railing 38 for an existing building at 1610 Sand Hill Road 39 Applicant: Janet Drake 40 Address: 1618 Sand Hill Road [13PLN-00244] 41 Approval Date: 6/26/13 42 Request for hearing deadline: 7/9/13 43 44 Project Description: Removal of five Monterey pine trees and the replacement of an existing six foot 45 high wood fence with a new high six foot concrete 46 Applicant: Paul J. Reed 47 Address: 535 Arastradero Road [13PLN-00180] 48 City of Palo Alto Page 16 Approval Date: 6/27/13 1 Request for hearing deadline: 7/10/13 2 3 City of Palo Alto Page 17 1 Project Description: Two wall signs, new planters, and outdoor dining area for an existing building 2 Applicant: John Adams 3 Address: 401 Lytton Avenue [13PLN-0086] 4 Approval Date: 6/28/13 5 Request for hearing deadline: 7/11/13 6 7 Project Description: 8 Applicant: 9 Address: 10 Approval Date: 11 Request for hearing deadline: 12 13 Project Description: 14 Applicant: 15 Address: 16 Approval Date: 17 Request for hearing deadline: 18 19 20 21 ADA. The City of Palo Alto does not discriminate against individuals with disabilities. To request accommodations to 22 access City facilities, services or programs, to participate at public meetings, or to learn more about the City’s compliance 23 with the Americans with Disabilities Act of 1990 (ADA), please contact the City’s ADA Coordinator at 650.329.2550 (voice) 24 or by e-mailing ada@cityofpaloalto.org. 25 26 Posting of agenda. This agenda is posted in accordance with government code section 54954.2(a) or section 27 54956.Recordings. A videotape of the proceedings can be obtained/reviewed by contacting the City Clerk’s Office at (650) 28 329-2571. 29 30 Materials related to an item on this agenda submitted to the Architectural Review Board after 31 distribution of the agenda packet are available for public inspection in the Planning and Community 32 Environment Department at 250 Hamilton Avenue, 5th floor, Palo Alto, CA. 94301 during normal 33 business hours. 34 35 36 The site is zoned Downtown Commercial with a GrolUld Floor and "Pedestrian" combining district CD-C (GF)(p). The CD-C (GF)(P) zone district is intended to be a comprehensive zoning district for the downtown business area, accommodating a wide range of commercial uses serving citywide and regional business and service needs, as well as providing for residential uses and neighborhood service needs. The Pedestrian combining district is designed to help foster the continuity of retail stores and display windows and to avoid monotonous pedestrian environment in order to establish and maintain economic viability for a healthy retail district. The Ground Floor combining district is intended to modify the uses allowed in the CD district and sub districts to allow only retail, eating and drinking and other service-oriented commercial development uses on the ground floor. The mixed use project includes permitted uses: grolUld floor retail use with two floors of offices and one floor of residential. Proj ect Description The project is the demolition of an existing 7,000 square foot, two-story commercial building and the construction of a four-story, 50-foot tall, mixed-use building with a floor area of 15,000 square feet, via "bonus" floor area including the use of Transferrable Development Rights (TDRs). The ground floor would be retail with office space occupying floors two and three. The fourth floor would be entirely residential consisting of two residentiallUlits. Four on-site parking spaces would be provided for the two residential lUlits. The parking spaces would be provided in a garage located one level below grade. The total floor area in the completed project would be 15,000 sq. ft. This includes 11,527 sq. ft. for con1lllercial uses on the first, second and third floors and 3,473 sq. ft. within two residential lUlits on the fourth floor. The total floor area breakdown for the project site is as follows: Office Retail Residential First Floor: 400 sf 2,337 sf 201 sf Second Floor: 4,395 sf 134 sf Third Floor: 4,395 sf 134 sf Fourth Floor: 3,004 sf Total: 9,190 sf 2,337 sf 3,473 sf Building Total: 15,000 sf The building would have a one story retail base set back from the second and third floors by approximately seven feet along Hamilton Avenue and three feet along Ramona Street. The ground floor would provide a rhythm of clear storefront glass, recesses and awnings to reinforce the pedestrian experience. The second and third floors would function as the "architectural block" that defines the commercial office portion of the building. The fourth floor, would be predominantly clad in windows and would be smaller and set back from the second and third floors, to reduce the apparent height and mass of the building. 13PLN-OOOOO-00006 Page 2 of 8 The applicant has requested a variance to encroach into the required seven foot special setback along Hamilton Avenue, and to encroach into the required six foot special setback along Ramona Street. Further discussion on the variance request is provided below. Additional project details are included in the applicant's project description included as Attachment G and H. Sustainable Design The proj ect would incorporate a variety of sustainable design and transportation friendly concepts that would help the development achieve both Cal Green Tier II requirements for the commercial portion of the project and meet Build it Green, Green Point Rated requirements for the residential portion of the project. In addition, in an effort to reduce overall energy consumption all spaces will be designed around maximizing daylight through the use of various transparent elements. DISCUSSION Floor Area Ratio/Transferred Development Rights The project includes a request to utilize floor area bonuses in the form of "Transferable Development Rights" (TDRs), to be transferred from an off-site historical rehabilitation project. A total of 5,000 square feet ofTDRs would be purchased and transferred to the site, from 230-232 Homer Avenue, where the TDRs were acquired through both a seismic and historic rehabilitation of the building. The proposal would also utilize a one-time, 200 square foot bonus, as provided in PAMC Section 18.18.070. The bonus floor area is considered "exempt" from having to provide the parking spaces otherwise associated with an expansion of conmlercial floor area. The parking provisions for the project are discussed later in this report section. Setback Variance The zoning map shows a seven foot special setback and a six foot special setback along certain streets in the core of the Downtown, as imposed by the special setback map. A seven foot special setback is applied along the Hamilton Avenue side of the subject property, and a six foot special setback is applied along the Ramona Street side of the project site. The seven foot special setback exists on both sides of Hamilton Avenue, extending from Waverley Street to Alma Street. The six foot special setback only exists at two locations in the core of Downtown; 1) along eastern edge of Bryant Street between Hamilton and Channing Avenues, and 2) along Ramona Street between Hamilton and Forest Avenues. Furthermore, there are only two corners in all of Downtown where both a seven foot and six foot special setback are applied; 1) at the northeastenl comer of Hamilton Avenue and Bryant Street (Washington Mutual building), and 2) at the northwestern corner of Hamilton Avenue and Ramona Street (project site). The applicant has requested a Variance for: 1) a three foot encroachment into the required six foot special setback along Ramona Street, and 2) a seven foot encroachment into the required seven foot special setback along Hamilton Avenue. It should be noted that only nine feet of the 45 foot wide building wall along Hamilton Avenue would encroach seven feet into the special setback (for the pUrposes of accommodating an enclosed stairwell). The remaining 36 feet of building wall would encroach approximately five inches into the special setback. The current sidewalk between the existing building and Ramona Street is six feet wide, which is consistent with the sidewalk adjacent to existing buildings on Ramona Street between Forest and Hamilton Avenues. The current sidewalk 13PLN-OOOOO-00006 Page 3 of 8 width between the existing building and Hanlilton Avenue is eight feet, which is consistent with the width of sidewalk adjacent to existing buildings on Hamilton Avenue between Ramona and Emerson Streets. F or purposes of determining the setback, the measurement is taken at the property line and not the face of curb. As it is currently situated, the existing building is on the property line on both the Ramona Street and Hamilton Avenue sides of the project. If the special setbacks were applied to the development, the result would be a 15 foot wide sidewalk along Hamilton Avenue and a 12 foot wide sidewalk along Ramona Street, both of which would result in significantly increased sidewalk widths that would be inconsistent with the sidewalks imnlediately adjacent to the project site. The requested Variance would allow the project to provide a sidewalk width of approximately 11 feet along Hamilton A venue, and 10 feet along Ranl0na Street, both of which meet or exceed the sidewalk width requirements in the Downtown. The wider sidewalk and more importantly, the shift of the building mass, would improve the pedestrian experience and enhance the opportunity for retail activity along Hamilton Avenue. Approval and implementation of the Variance request would result in the new building not being as deeply set back from the adjacent buildings on the same side of the block. This would help maintain the existing continuity. The applicant has requested the special setback encroachments to reduce the loss of valuable ground floor retail square footage and to reduce the gap between the other commercial buildings on Hamilton A venue and Bryant Street. Parking/Circulation As noted, the site is within the Downtown Assessment District. Currently, the project site provides no on-site parking spaces. There are six off-site parking spaces directly adjacent to the site. Three of the six spaces are located along Hamilton Avenue. The renlaining three spaces are located along Ramona Street. There will be a net deficiency in the number of off-site parking spaces directly adjacent to the site, due to the proposed curb cut along Ramona Street for the purpose of creating a new driveway for the underground parking lot. The loss of two curbside parking spaces may incrementally add to parking concerns in the downtown and surrounding neighborhoods. Those impacts, however, will not cause significant increases in congestion or deterioration in air quality. The loss of the two off-site parking spaces will be offset by the applicant's provision of in-lieu payments for two parking spaces. Staff is currently working with the applicant to further study the possibility of reducing the size of the loading zone in front of the project site along Ramona Street for the purpose of providing one additional off-site parking space. The proposed project is only required to provide three parking spaces for the two residential units located on the fourth floor. The project is providing four spaces. The renlaining three floors of non-residential floor area, consisting of 11,527 square feet of floor area, is not associated with a requirement for provision of off-site parking spaces for the following reasons: 1. The existing 7,000 square feet of commercial floor area is grandfathered in the Downtown Assessment District (assessed previously for 20 parking spaces. See Attachment H, 13PLN-OOOOO-00006 Page 4 of 8 Exhibit 2) and as such is not required to provide parking spaces on site for the existing amount of floor area; 2. 4,327 square feet of commercial floor area would be transferred to the site, via a Transfer of Development Rights (TDR) from a valid sender site to an eligible receiver site. These are valid, recorded Transferable Development Rights (TDR). The first 5,000 square feet of floor area transferred to a receiver site is exempt from the otherwise applicable on-site parking requirements for new floor area. 3. The remaining 200 square feet of commercial floor area (7,000 sf + 4,327 sf + 200 sf = 11,527st) is exempt from parking due to a one time allowable 200 square foot bonus, per PAMC 18.18.070. Due to limited space, the four residential parking spaces would be two, tandem "stacking" parking spaces. The proposed parking configuration would also eliminate the need for shared or attendant parking between the two units. The stacking system would have a below grade space as well as two above grade spaces so that there are three locations for two vehicles. This means a single operator can raise or lower a car out of the way of his or her vehicle thereby eliminating the need for an attendant or for coordination between roommates. Rather than entering the covered garage parking spaces facing into the building and then backing onto Ramona Street and crossing the sidewalk in reverse and with dangerous, unclear vision, drivers would enjoy a vehicle rotating turntable (Attachment I Sheet A2.1). The turntable would allow any car exiting the project site to be spun around so that it exits facing onto Ramona Street, therefore providing better visibility of the Ramona Street sidewalk and pedestrians. Downtown Floor Area Cap An annual monitoring report on the Commercial Downtown zoning area is mandated by the Comprehensive Plan Programs L-8 and L-9 that require reporting of non-residential development activity and trends within the CD zone district. These reports are also required as a result of final action on the Downtown Study adopted by the City Council in 1986. The Downtown Study incorporated a growth limit of 350,000 square feet of additional floor area over the total floor area existing in 1986, and provided for a re-evaluation of the CD regulations when new development reaches 235,000 square feet. Since 1986, a total of 223 ,21 0 square feet of non-residential floor area has been added in the Downtown CD-C zoned area. In the past two monitoring cycles from 2009-2011, approximately 34,650 square feet of net new commercial floor area was added with a few major contributing projects such as 524 Hamilton Avenue and 265 Lytton Avenue. In this current cycle, 2011-2012, approximately 49,860 square feet of net new commercial floor area has been added through one major project, 335-355 Alma st. (aka; 101 Lytton Ave.). Based on this recent monitoring, an additional 11,790 square feet of new non-residential development remains for development before the re-evaluation limit of 235,000 square feet growth limit is reached. The existing building consists of 7,000 square feet of non-residential floor area. The proposed project would add an additional 4,527 square feet of non-residential floor area, which would minimally contribute towards the limit of 350,000 square feet of additional floor area. Context Based Design Criteria The proposed building design appears to be consistent with many of the requirements of the Context-Based Design Criteria as outlined in Section 18.18.110 of the Zoning Code. In summary, 13PLN-OOOOO-00006 Page 5 of 8 the project would provide pedestrian walk-ability, a bicycle-friendly environment, connectivity through design elements, and street facades having a strong relationship with the sidewalks and the street to support and encourage pedestrian activity. Bicycle storage is to be provided in the below grade parking garage as well as at grade along both Hanlilton Avenue and Ramona Street. The ground floor design is intended to be an attractive streetscape design with a combination of clear frameless glass, porcelain tile and stainless steel canopies above each entrance along Ramona and Hamilton. Separate entrances would also be provided for each use along the first floor including the main lobby area. The building would minimize massing with increased setbacks at the first floor in addition to other design elements, such as a recessed entry and canopies that would be located above the primary entry points. The first floor design employs different materials and colors, including porcelain tile, clear frameless glass and cedar cladded garage door. Floors two through three are designed to function as the "architectural block" that distinguishes the commercial office portion of the building from the rest of the building. This area would primarily consist of a structural glazed curtain wall with a combination of clear dual glazed glass and translucent lanlinate glass. The area would be outlined by a cream colored limestone wall. The residential units on the fourth floor would be set back from the block face below. The units would be capped with a hip roof composed of metal and outlined by a composite metal panel. The elevator shaft and stairwells would be white cement plaster. The parking design is consistent with the design criteria in that the parking spaces would be located below grade and is concealed from public view by a recessed garage door. Downtown Urban Design Guide The Downtown Urban Design Guide is meant to advise the applicant, staff and the ARB regarding development and design in the downtown area. The Downtown Urban Design Guide divides the dowiltown area into districts, each having a unique identity and design characteristics. The site is located within the Hamilton A venue District according to the Downtown Urban Design Guide. The Hanlilton Avenue District is a nlixed office/commercial/retail district with sonle residential uses. The primary goal of the Hamilton Avenue District is to promote Hamilton Avenue as an active mixed use district with a pleasing, tree-lined pedestrian experience. The development of three or more story buildings surrounding Civic Center Plaza are encouraged to help create a stronger urban edge within this area. The proposed project is consistent with the recommendations for this district. Staff finds that this project, with its extensive use of storefront glazing, first floor recesses and canopies, and pedestrian friendly amenities such as sunshades, street trees and ample sidewalk widths, would contribute significantly to the goal of creating an exciting pedestrian environment. The guidelines also encourage additional height for buildings at comers. The proposed building of 50 feet is consistent with both the Zoning Code and the Downtown Urban Design Guide. Trees/Landscape Plan The existing project site is a completely built out site that contains no open space or any significant landscaping. There are six regulated street trees located around the perimeter of the 13PLN-OOOOO-00006 Page 6 of 8 subject property. Two Flowering Pear trees are located in the public right-of-way along Hamilton Avenue. The remaining four trees are located along Ramona Street and include· three Japanese Pagoda trees and two London Plane trees. The City Arborist has recommended removal of all six trees. The existing trees would be replaced with five new street trees. The City Arborist is currently working with the applicant to determine the appropriate species type and location. Open space for the developn1ent would be provided as a combination of six terraces and ground floor recessed areas. On the fourth floor, four terraces (two for each residential unit) totaling 1,114 square feet would be provided, where the minimum requirement is 200 square feet of usable open space for each residential unit. There would also be two identically sized terraces on each of the second and third floors, totaling 71 square feet each. Additional open space is provided along the ground floor in the forn1 of recessed areas beyond the 10 feet of sidewalk along both Hamilton A venue and Ramona Street. Additional information pertaining to open space requirements can be found in the zoning comparison table provided as Attachment D. Signage Signs are not included in this ARB application. The proposal for signage would be a separate architectural review application and depending on the level of detail, would be reviewed by the ARB or staff on behalf of the ARB. The applicant has been requested to indicate potential locations on the building for signage. Currently, blade signs are not allowed unless they are placed underneath a canopy or a Sign Exception is requested and approved for such signage. ENVIRONMENTAL REVIEW The proposed project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA). Pursuant to the requirements of the California Environmental Quality Act (CEQA), a Draft Initial Study and Mitigated Negative Declaration have been prepared and circulated, with a required 20-day public review and comment period beginning on May 10, 2013 and ending on May 30, 2013. Mitigation measures are proposed to address biological resources, seismicity and noise. To date, no comments have been received on the Draft Mitigated Negative Declaration. The project would not have an impact on fish or wildlife habitat, nor would it impact cultural or historic resources. The use is appropriate for the site and the development would not result in an adverse visual impact. ATTACHMENTS A. ARBN ariance Findings B. Conditions of Approval C. Location Map D. Zoning Compliance Table E. Conformance with Comprehensive Plan Policies F. Draft Initial Study and Negative Declaration G. Applicant's Project Description H. Applicant's Submittal Packet (Board Members only) I. Plan Set received January 7, 2013 (Board Members only) 13PLN-OOOOO-00006 Page 7 of 8 COURTESY COPIES Sal Giovanotto, Owner Ken Hayes, Architect! Applicant ___ h Prepared By: Jason M. Nortz, Senior Planntr I Manager Review: Amy French, Chief Planning OffiCi~ 13PLN-OOOOO-00006 Page 8 of 8 City of Palo Alto Page 1 1 =================MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 26====================== 2 Thursday June 6, 2013 3 REGULAR MEETING - 8:30 AM 4 City Council Chambers, Civic Center, 1st Floor 5 250 Hamilton Avenue 6 Palo Alto, CA 94301 7 8 240 Hamilton Avenue [13PLN-00006]: Request by Ken Hayes of Hayes Group Architects on behalf 9 of Forest Casa Real LLC for Architectural Review of a new four-story, 50-foot, mixed-use building 10 with 15,000 sq. ft. of floor area, proposed to replace a 5,000 sq. ft., two-story commercial building. 11 Environmental Assessment: an Initial Study and Mitigated Negative Declaration have been prepared. 12 Zone District: Downtown Community Commercial with Ground Floor and Pedestrian Shopping 13 combining districts (CD-C) (GF) (P). 14 15 Chair Malone Prichard: Ok, are we ready? Item Number 5, 240 Hamilton Avenue, request by Ken 16 Hayes of Hayes Group Architects on behalf of Forest Casa Real, LLC for Architectural Review of a 17 new four-story, 50-foot, mixed-use building with 15,000 square feet of floor area, proposed to replace a 18 5,000 square foot, two-story commercial building. We have a staff presentation? 19 20 Jason Nortz, Senior Planner: Yes. Good morning. Excuse me, good afternoon Board Members. The 21 project at 240 through 248 Hamilton Avenue is the demolition of an existing 7,000 square foot, two-22 story commercial building and the construction of a four-story, 50 foot tall, mixed-use building with a 23 Floor Area Ratio (FAR) of 15,000 square feet, which is a 3:1 Floor Area Ratio. The reason this site is 24 able to achieve a 3:1 FAR is because of the use of Transferable Development Rights (TDR), which 25 when applied to a mixed-use development allow a higher Floor Area Ratio which otherwise would be a 26 2:1 Floor Area Ratio for other mixed-use projects that aren’t applying TDR’s. 27 28 The project site is located within the Downtown Parking Assessment District and close to the southern 29 edge of the Commercial Downtown Zone District. The site is 50 feet wide by 100 feet deep and is 30 located at the southern corner of Hamilton Avenue and Ramona Street intersection. Surrounding land 31 uses include office, restaurants, and retail. The ground floor would be retail with office space 32 occupying floors two and three. The 4th floor would be entirely residential consisting of two residential 33 units. Four onsite parking spaces would be provided for the 2 residential units. The parking spaces 34 would be provided in a garage located at grade with the below grade area to accommodate the car 35 stacker. The applicant has requested a variance to encroach into the required seven foot special setback 36 along Hamilton Avenue and to encroach onto the required six foot special setback along Ramona 37 Street. Staff is in support of the variance request as described in the staff report and confirmed in the 38 variance findings. 39 40 ARCHITECTURAL REVIEW BOARD MINUTES City of Palo Alto Page 2 As previously mentioned the applicant is providing four parking spaces for the residential portion of the 1 development. As discussed in the staff report the commercial portion of the project, which is 11,527 2 square feet is exempt from parking due to the use of TDR’s, one time exemptions, and replacement 3 square footage. Staff’s analysis of the parking requirement as originally described in the staff report 4 may be incorrect. My previous calculation as described on Page 4 and 5 of the staff report asserts that 5 7,000 square feet or twenty spaces was previously assessed for the downtown assessment. The 6 assessment rolls only show 5,000 square feet as assessed, which is consistent with twenty spaces. Staff 7 is currently working with the City Attorney’s Office to further analyze the situation in order to make a 8 determination. So we’ll be continuing that discussion after this meeting today with the City Attorney. 9 10 Finally, staff has provided at places light cut sheets. And with that the applicant Ken Hayes is here to 11 make a brief presentation. Thank you. 12 13 Chair Malone Prichard: Thanks. You have 10 minutes Ken. 14 15 Ken Hayes, Hayes Group Architects: And I don’t think I’ve ever said this before, good afternoon 16 Members, it’s always been in the morning. My name is Ken Hayes with Hayes Group Architects. I’ll 17 be presenting the project on behalf of my client, Sal Giovannotto and Casa Real. Is this on? I’d like to 18 thank Jason for his help in bringing the application forward. It is a pretty complicated application and I 19 think we’ll be able to resolve the parking policy issue. 20 21 The site here is a corner site on Ramona. I think we’re all familiar with the old Radio Shack buildings; 22 the corner of Ramona and Hamilton. It’s a key parcel in that it’s one of the few one story buildings I 23 guess that face City Hall Plaza. The building is one story with a mezzanine inside. It will be 24 demolished. Here are some photographs of the existing building and then a streetscape photograph. 25 This is along Ramona Street, you can see the Cardinal Hotel here. Along Hamilton Avenue we have 26 the [Thoightes] building here, which are all tall, taller buildings and then the subject property is 27 indicated here. In terms of sort of a site analysis, this is the solar orientation here, which actually is 28 really favorable for being able to capitalize if you will on the City Hall Plaza canopy of magnolia trees, 29 which I find very exciting, but Hamilton Avenue, Ramona primary vehicle corridors. There is an alley 30 towards the rear of the block, but we are landlocked, separated from that alley. So we have no ability to 31 get services from the alley. So we are creating a service area most, proposed down at this end of the 32 building, which is where we’ll have trash, electrical room, and that’s where our parking will be as well 33 trying to preserve the corner. 34 35 Pedestrian flow again it’s pretty much on the grid. We see this corner as primary ground floor 36 commercial space, be ideal for a retailer or anyone that would want that. The blue areas indicate where 37 we have office entry. The main office entry however is on Ramona Street trying to preserve the 38 frontage on Hamilton as much as possible for exposure to Hamilton. And then the red arrows indicate 39 where we have entries for the ground floor commercial space. 40 41 This is a diagram that shows the buildings that are significant in terms of height along City Hall Plaza. 42 So we have 300 Hamilton, which is multi-story, easily over 50 feet. 285 Hamilton is five stories, 43 clearly over 50 feet. 261, which is the University Art building also over 50 feet. 235 Hamilton, which 44 is Cardinal Hotel, significantly taller than any of the other buildings around. So we feel like 240-248 45 Hamilton is an opportunity to kind of complete that, the definition of the City Hall Plaza and of course 46 there’s City Hall in the center. 47 48 City of Palo Alto Page 3 Like I said what I find fascinating about this site other than being able to kind of complete this 1 enclosure at the edge of City Hall Plaza is the fact that we can look out across the canopy of trees and 2 the Plaza itself. So this diagram’s trying to show, we see that as a major opportunity for the building to 3 not only look across the Plaza with the trees, but also at the University Art building. And you’ll see 4 how the architecture responds to our desire to do that. This is a view from Google Earth; kind of the 5 site is obviously here, University Art building and then City Hall Plaza. I walked through there today. 6 The canopy is just enormous. I’m not sure when this picture was taken. 7 8 So the project statement, yes, I’m going to bore you again with project statements and read this to you. 9 Create a new modern 15,000 square foot office and residential condominium mixed-use building that 10 responds to the site and respects the context. We want to embrace sustainable design practices and 11 enhance the living and working experience in downtown Palo Alto. The goals are to increase the 12 height and mass at the corner to support the downtown Comp Plan of trying to get greater mass around 13 City Hall, create a clean, modern architectural statement that suits our time, minimize the visibility of 14 parking and trash and utilities and that sort of thing, and obviously create a vibrant ground floor 15 commercial frontage that enhances the pedestrian experience. 16 17 Some of the imagery we’re using, the side that faces Hamilton is sort of northwestern so we’d like to 18 employ some glass shading devices [unintelligible] similar to this here so we have translucent glass 19 shading devices that create a texture and also some sun shading along that façade, but as it wraps 20 around to Ramona Street it’s all structural, four sided structural glazed system. So very, a very kind of 21 a smooth and fleshy and clean. The block of the building itself is the office block and so we’ve kind of 22 elevated that block up similar to what you see here or perhaps here and then the roof terraces for the 23 residential units will just be wonderful I think up on top. So that’s the imagery that we’re using and the 24 ground floor plan shows you sort of the main circulation or I’m sorry, the retail/commercial area. 25 We’re putting the stair cores on the two sort of blank wall property lines. Obviously we’re landlocked 26 there so that’s a good place for that to happen. 27 28 We want to open up this entire corner. This is the seven foot special setback that Mr. Nortz talked 29 about and then the six foot special setback so that you can clearly see what that looks like. We’re 30 opening up the ground floor so there’s 15 feet of sidewalk here at the corner. That’s a very constrained 31 corner at the pedestrian level so we really want to open that up, but then as the building moves up in 32 height it will be more respective of the block face of the buildings that line both street frontages. 33 34 These are the commercial entries on Hamilton and then on Ramona we have a commercial entry there 35 as well as the main office entry and elevator here. This is office and residential entry to take you 36 above. What’s interesting about something that we’re employing is that although we have cars pulling 37 in forward here this is the garage they would come in. These are stackers that actually go down and up 38 so that you can, you don’t have to move another person’s car to get your car out. So very usable, but 39 when you back up you don’t back onto the street; we’re going to employ a turntable so you’ll back onto 40 the turntable, the turntable will turn the vehicle around so that you can drive out facing so it’s much 41 safer I think for pedestrians and the drivers. Trash enclosure, electrical room, ancillary emergency exit 42 all come out towards that end of the building. Long term bike parking for the residential and the 43 commercial is inside the garage. The commercial people will have access to that as well. 44 45 This is just a diagram that shows, it was in your packet back in the variance section, the special setback 46 as it applies to the whole block and this is our building here. You can see that nothing along the block, 47 even the [Thoightes] new building Reposado here the buildings further down they don’t respond to it. 48 City of Palo Alto Page 4 So we’re responding to it on the ground floor along Hamilton and about 50 percent of a response along 1 Ramona where we’re setting back three feet more on the ground floor. I think we have about an 11 foot 2 sidewalk now on Ramona and 15 like I said on Hamilton, but that kind of puts it in perspective. 3 4 I don’t know if I need to walk through this, but fairly open plans. This is the side of the building here 5 that would have the glass fins and so the glass is set back about two feet from the face of the building 6 block on both frontages, but on this frontage with the harsher sun exposure we have the glass finds and 7 then this is just nothing but structural glazed curtain wall there. The residential terrace here, our units 8 are here; two 2 bedroom units with ample exterior terrace space. 9 10 This is the block face along Hamilton and how we’re responding sort of with the cornice line of the 11 [Thoightes] building. I forget the address of that building, but this red line is to indicate how we’re 12 tying across there and then this is the Cardinal Hotel. In a similar fashion how we’re relating to that 13 and then the residential piece floats above. And just a more detailed view of that. This is the garage 14 door. 15 16 Section longitudinally through the building this is the commercial entry off of Hamilton, a nice 17 translucent glass canopy that would extend out over the property line over the sidewalk and then back 18 through the building. This is the garage it sort of displays how the stackers work for you there and then 19 the two levels of office space and the residential units above. And there’s a view of the building from 20 above. It shows the building block, the glass curtain wall as well as the frameless glass at the base of 21 the building. We’re trying to integrate the units, the housing with this metal panel that kind of comes 22 up and wraps down like that, which I think is a real interesting form. It sort of mimics the building 23 form, the block form in a subtle way and then a similar thing happening there. 24 25 This is all a void in the building so you come out of the elevator and you have an opportunity to have a 26 balcony at the commercial level, but then at the fourth floor residential level when you come out of the 27 elevator you’re outside essentially so you can look across the terrace. And the last picture of the 28 building here from eye level. And that’s my presentation. 29 30 Chair Malone Prichard: Well done. We have one member of the public to speak on this. Is Douglas 31 Smith still here? And you’ll have three minutes. Three. 32 33 Douglas Smith: Let’s see… how do I? Let’s see, whoops. I just got rid of my, can someone bring up 34 the desktop? 35 36 Good afternoon, I’m Douglas Smith a Palo Alto resident and a scholar of aesthetics. I wish to discuss 37 the aesthetic and heritage issue in this project. Let’s consider the context; the new building at 248 38 Hamilton will sit directly across the street from two of the most charming buildings in this City, the 39 Cardinal Hotel and the University Art building, both Birge Clark structures. Looking northwest up 40 Ramona the whole 500 block constitutes the Ramona Street Architectural District recognized as a 41 landmark by the City of Palo Alto. In the same 600 block of Ramona is the proposed design right 42 across the street here we find three more Birge Clark structures in Spanish or Colonial, California 43 Colonial styles each rated Category 2 a major building of local, regional significance. That is these 44 buildings. 45 46 In this context the proposed design, a mostly glass box with no particular stylistic character to my mind 47 is an alien, a dead, sterile design. I say dead for three reasons. First, it is entirely rectilinear. No 48 City of Palo Alto Page 5 oblique or curvilinear lines generate a sense of motion without which there is no life. The University 1 Art building in contrast, the gabled roof sweeps the eye up and down again. The top floor invites the 2 eye to sweep across the arcades and then back down to the ground floor where the awnings echo the 3 arches up above. The Cardinal Hotel features other classic principles which interest the eye including 4 [laurels] of detail. Let’s see… none of these lower levels of detail are found under the proposed design 5 which therefore is missing a critical element of aesthetic interest both at the street level and above 6 hence my description of “dead.” Thirdly, the walls of the new design constitute about 75 to 80 percent 7 glass, which is a colorless, brittle, artificial, extremely unappealing building material that has no life of 8 its own. 9 10 Now in the Palo Alto Municipal Code pages on architectural review I find that today’s review’s 11 purpose is partly to “promote visual environments which are of high aesthetic value, quality, and 12 variety and at the same time are considerate of each other. Further, in areas considered by the Board as 13 having a unified design character or historical character namely the Ramona area the design is 14 compatible with such character.” But I find this design totally incompatible with Ramona Street; 15 therefore, I am surprised to read the staff report for this review where I find no mention of the Ramona 16 Street Architectural District right across the street aside from mention of University Art and the 17 Cardinal Hotel nor of the three Spanish California Colonial Revival buildings in the 600 block. The 18 report finally concludes, at any rate I find the staff report does not meet my assessment of this building. 19 20 Chair Malone Prichard: Thank you for your comments. Alright, let’s start with Lee. 21 22 Mr. Smith: Let me figure out how to get the… do I hit escape? 23 24 Vice-Chair Lippert: Thank you very much Ken for your presentation. First of all I want to say I think 25 your, the designing of this building is really wonderful. It’s really a different approach than you’ve 26 taken on other buildings and I like the openness of the building and the way it responds to the corner. I 27 think that it responds particularly well. I like the use of materials, how you’ve expressed that. In fact, 28 architecturally I think it completes that whole Hamilton Street block as well as responding directly 29 across the street to the Cardinal Hotel as well as the… well, it’s not the University Art Center building. 30 I think it’s called Plaza Ramona, no, it’s not part of Plaza Ramona, but it’s the Ramona Street building 31 across the street. 32 33 I think from a height and massing point of view it begins to do what a building of that, on that corner 34 needs to do. It’s a very constrained site and I appreciate that. I have no problem with you encroaching 35 into the setback and I like the way you’ve stepped back at the corner. The sidewalk is very tight there 36 right now and what you’ve proposed here begins to relieve some of that narrowness on the sidewalk 37 and I don’t think it needs to necessarily comply with the six foot setback or the seven foot setback. I 38 think what you’ve done here at the ground level in spirit does what that setback wants property owners 39 to do. 40 41 Mr. Hayes: Thank you. 42 43 Vice-Chair Lippert: With regard to Mr. Smith’s comments with regard to the austerity of the building I 44 appreciate that it doesn’t fit in with the other historic buildings in the neighborhood. If this was in fact 45 in the Ramona District I think it would be far more problematic, but in fact if you were to follow the 46 Secretary of the Interior’s standards the underlying rule there is thou shalt not create false history. And 47 so because of the nature of the architectural approach that you’ve taken here it actually contrasts the 48 City of Palo Alto Page 6 other historic structures and doesn’t impose itself on them from a false, thou shalt not create false 1 history, you’re not creating false historical structure by going with either a Mission or Spanish Revival 2 style building. So I think that it from the Secretary of the standards point of view you’ve done exactly 3 what it does, thou shalt not create false history. You’ve created something here that’s separate and 4 distinct and will never, ever be confused with a Birge Clark building. It’s a Ken Hayes building. 5 6 The only concerns that I have with the project and they are relatively minor is the Steve Jobs effect. 7 What do you do with the back side of the fence? You’ve done a great job of dealing with Hamilton 8 Street. You’ve done a great job dealing with Ramona Street, but then when I look at the backside of 9 the building what am I looking at? 10 11 Mr. Hayes: I think I have that slide in here so we can all look at it. 12 13 Vice-Chair Lippert: It’s actually, it’s in our packet. “City Elevations.” If you go to the exterior 14 (interrupted) 15 16 Mr. Hayes: On the Reposado side… Here you go. 17 18 Vice-Chair Lippert: Yep. 19 20 Mr. Hayes: So Reposado this is essentially the line of Reposado. 21 22 Vice-Chair Lippert: Correct. 23 24 Mr. Hayes: And so we are sort of respecting this idea of the block of stone and obviously we can’t have 25 openings on that side, but we are continuing the stone down that façade up to the railing line of, just so 26 it wraps around. This is the, this is where the roof screen for the, it’s a perforated metal that is set back 27 from that outside edge of the wall and that is where the mechanical condensing units are located. The 28 stair tower here and here is also set back so there’s relief from the face of the stone to the face of the 29 plaster stair tower and the same thing occurs there. So we’ve just taken that simple statement all the 30 way around it and so there’s, it’s probably 20 feet above the Reposado building and above the building 31 on Ramona, which is a two story building here. 32 33 Vice-Chair Lippert: You can have openings; they just can’t be on the property line. So you could in 34 fact create wells on that side of the building and incorporate windows. They’ve done it 200 Hamilton 35 building, which is directly across from (interrupted) 36 37 Mr. Hayes: [Unintelligible] yeah. 38 39 Vice-Chair Lippert: From Reposado. 40 41 Mr. Hayes: Five foot one back and then you can have protected openings. 42 43 Vice-Chair Lippert: Correct. And then also they’ve done that on University Avenue, the building 44 adjacent to the Union Bank also has wells… 45 46 Mr. Hayes: Yes. 47 48 City of Palo Alto Page 7 Vice-Chair Lippert: In that area. Is there a way to incorporate some elements like that, not necessarily 1 on the second floor, but maybe on the third floor? 2 3 Mr. Hayes: Never, never even thought about studying that really just because the floor plate’s so small. 4 I don’t know if, it’s just a matter of give and take with the floor plate that we have. I think we were 5 trying to get the relief along the street frontages so the glass wall’s two feet back there from the face of 6 the building and we felt that continuation of the block was a pretty clean, clean statement. I don’t think 7 it will look oppressive certainly with a pattern of the stone on there it’ll have some relief in it, but to 8 answer your question, no we didn’t study windows because the floor plate’s so small and we were kind 9 of pushing it all the other way. 10 11 Vice-Chair Lippert: Yeah (interrupted) 12 13 Mr. Hayes: All the [view force]. 14 15 Vice-Chair Lippert: What I’m thinking of is if you look at your third floor plate the, maybe the area 16 that’s to the left of column line E, next to the staircase could in some way become some sort of outdoor 17 terrace area? You see the staircase there? Column line E to the left of that? 18 19 Mr. Hayes: Yeah. 20 21 Vice-Chair Lippert: Or perhaps if you look at the below the staircase along column line A between A 22 and B again on the backside of the building. 23 24 Mr. Hayes: Probably have more control if we were to do that more control over the gridline once at the 25 Reposado side because I believe that’s an historic building and so it’s more likely to be open space. If 26 you were to put something here that someone could enjoy as opposed to column line A, which don’t 27 know what could happen there with that. The building that’s there today could expand perhaps. 28 29 Vice-Chair Lippert: Right. 30 31 Mr. Hayes: So if, and that would be the long elevation. 32 33 Vice-Chair Lippert: And then the only other question I have is what would somebody use that area up 34 in the upper right hand corner of the building where it’s to the right of the staircase there’s sort of like a 35 little [unintelligible] it’s only about maybe nine feet wide. 36 37 Mr. Hayes: Right. The stair inside is, yeah, eight. So yeah it’s probably about the same size as the stair 38 so about eight feet wide this direction. So the gridline one is intended to be where the core is. At one 39 time we had layout of electrical rooms, toilet rooms and so on primarily between the two stairs and then 40 when you get up front there, I mean that would be most likely storage or something like that because 41 there’s no windows. 42 43 Vice-Chair Lippert: You know from an architectural point of view when I look at the façade of your 44 building I like the heaviness of the ends, but when I look at the plan of the building I want to put a 45 couple of, punctuate that with a couple of windows because it’s ideal to actually make those into maybe 46 a small, it could be a small office in there or it could be a break room, but if it was punctuated with 47 something it would be wind up to be usable. You have enough surface area along the back wall of the 48 City of Palo Alto Page 8 building that you could put those ancillary functions like supply rooms, closets, the telephone 1 (interrupted) 2 3 Mr. Hayes: Yeah, there’s certainly enough room between B and E, between the two stairs for that. I 4 think compositionally we have so much glass that it does need to have that mass kind of stopping it on 5 the sides. There’s always a need for rooms that don’t have lots of windows. This could be open office 6 and someone could have their sort of a this notion of caves and commons where you’ve got a place to 7 go kind of to get away from the big group and that could be one of those kinds of spots and then you’ve 8 got the windows out. So I can justify so how that space could be used depending upon who the tenant 9 is and the challenge with all these buildings is we don’t know who the tenant’s going to be so it makes 10 it particularly difficult sort of challenge for the architect to sort of impose a program on the building. 11 12 Vice-Chair Lippert: Well just to give you, thinking, again, I’m thinking out loud… it looks like that 13 ends of the building is punctuated by three, it’s a grid so it’s one, two, three at the ends of the building 14 there maybe it could be punctuated with a window in the middle? You know at the (interrupted) 15 16 Mr. Hayes: [Unintelligible] elevation? Right here? 17 18 Vice-Chair Lippert: Yeah. That middle row. Maybe punctuate it with (interrupted) 19 20 Mr. Hayes: Yeah, I think that’s certainly something that I could look at. 21 22 Vice-Chair Lippert: It just negates the usability of that space where it’s just a little bit bigger, it’s a little 23 too big to be a storage room and it’s a little too small to be… 24 25 Mr. Hayes: An office. 26 27 Vice-Chair Lippert: Neglected. 28 29 Mr. Hayes: A real office. 30 31 Vice-Chair Lippert: Yeah. But other than that I think you have a really handsome building. I like your 32 approach and other than what I’ve suggested with regard to wells I don’t have a problem with it. 33 34 Chair Malone Prichard: Naseem. 35 36 Board Member Alizadeh: Thanks. Thank you for this set. I will address as well the comments of the 37 public, Mr. Smith. I think in general the way that we’re taught in architecture school is that you don’t 38 want to create false history like Board Member Lippert said. And this also allows those authentic old 39 buildings to stand out and to really be seen and so not everything just gets kind of wash of an age. So 40 this is the approach that we’re taught and I respect that. In terms of your comment that it’s 41 characterless I can, I agree with you partially that there is a bit of a kind of lack of general interest I 42 think overall. I guess I would call it the corporate effect as opposed to characterless, but I still think 43 that this is the approach that we as architects are trained to take. 44 45 So in regard to the specifics the kind of capping thing, the [c channel] thing that you have it seems that 46 it’s as a result like Board Member Lippert was saying on the two back sides it’s very nice I like that 47 articulation, but it is creating problems where it needs to be bare it’s creating problems because it’s bare 48 City of Palo Alto Page 9 against open space. And so I think that might be problematic. So if you can do wells or something 1 which articulate a bit more of that opening and further your idea in that regard I think it would be well 2 worth pursuing. 3 4 At the same time I think it kind of ties into this issue of the setback. So that kind of two story element 5 because your ground floor, your stairwell is flush with it, it takes away from (interrupted) 6 7 Mr. Hayes: It’s not. 8 9 Board Member Alizadeh: It’s not flush? 10 11 Mr. Hayes: No, no. It’s setback plus it’s a different material on both ends. It changes to the dark grey 12 tile, porcelain tile. It gets (interrupted) 13 14 Board Member Alizadeh: So no and the, ok let’s say like (interrupted) 15 16 Mr. Hayes: You’re talking about that right there and that right there? 17 18 Board Member Alizadeh: I am talking about that right there, that right there. 19 20 Mr. Hayes: Yeah, that’s setback. 21 22 [Unidentified man at 32:27]: It’s not (interrupted) 23 24 Board Member Lew: Do we have the color board? 25 26 [Unidentified man at 32:27]: It’s setback on the ground level. 27 28 [Unidentified man at 32:27]: It’s setback (interrupted) 29 30 Vice-Chair Lippert: This is not setback, but this (interrupted) 31 32 Board Member Alizadeh: That’s what I’m saying. Yeah, I’m talking about the parts that aren’t setback. 33 There is a part that’s not setback, right? Which is where your core is, the solid bits. 34 35 Mr. Hayes: No, that’s supposed to be setback. It’s not just a stone to tile transition. 36 37 Board Member Alizadeh: How much is it setback? 38 39 [Unidentified man at 32:27]: I believe it’s six inches. 40 41 Board Member Alizadeh: Ok. So alright. I would just suggest that I don’t think, ok… so it’s, I guess I 42 see six inches. It’s quite tight, but good, but also I think since you’re not really as Board Member 43 Lippert was saying, I’m not quite sure what that space is, what you’re gaining from there, so if, if you 44 could literally do the full setback to be flush with the glass or maybe six inches protruding from the 45 glass I think it would benefit your concept a bit more personally. 46 47 City of Palo Alto Page 10 Mr. Hayes: So let’s talk about that for a second, if I may? Ok. So if you were to take it all the way, 1 excuse me, all the way to the property line, if you, let’s say if you took that entire black, black, grey 2 box at the floor, at the first floor and pushed it back and eliminated it and extended the glass over to the 3 property line you would have to have a wall at the property line because what you’ve done is you’ve 4 essentially created an opening in the side of the building now because it’s cantilevering out and that’s 5 not allowed from a building code standpoint. So you’d have to have like a fin wall that would come 6 down at the end of the building that the glass would run into to prevent the overhang from being open 7 to the property line. 8 9 Board Member Alizadeh: Ok. So you have to continue that in order to have your overhang above? In a 10 way. 11 12 Mr. Hayes: So we felt like we didn’t want a little fin wall there. 13 14 Board Member Alizadeh: Right. 15 16 Mr. Hayes: We wanted it to be (interrupted) 17 18 Board Member Alizadeh: Solid. Ok. 19 20 Mr. Hayes: [Unintelligible] yeah. And so we’ve done that at both ends. 21 22 Board Member Alizadeh: So it’s a six inch difference between that (interrupted) 23 24 Mr. Hayes: Street plane to street plane, yes. 25 26 Board Member Alizadeh: Six inches? 27 28 Mr. Hayes: Yes. 29 30 Board Member Alizadeh: Ok. So basically on the entire ground floor I know that it’s a special setback 31 and it’s kind of a weird situation as to why this special setback exists, but so there’s no, at no point is it 32 being respected, is that right? Or is there points where it’s, at no point is it being respected? 33 34 Mr. Nortz: On the ground floor at no point is it being respected. 35 36 Board Member Alizadeh: Ok. 37 38 Mr. Nortz: Basically the stairwell is what encroaches that 7 feet for about like 9 feet wide more or less 39 and the remainder of that wall 36 feet or so I believe is at 6 and a half feet roughly. 40 41 Board Member Alizadeh: But it corresponds to the neighboring buildings? 42 43 Mr. Hayes: Right, so we came back out to line with the block face. 44 45 Board Member Alizadeh: And so staff is ok with that as a kind of general policy to kind of? Ok. I just 46 want to make sure I got that, with a variance, of course. Ok. So then the other issue with, the kind of 47 last issue about this element here, which I think has positives and negatives is that there’s this 48 City of Palo Alto Page 11 suggestion that the neighboring, the immediate neighboring buildings in the future based on this design 1 will be, will go up. And I never have a problem with height, so I think height is fine, but in this case 2 there’s this feeling like the building where Reposado is and the other ones are eventually going to be 3 taken down and the height will match the rest of the block. So that is a bit, I don’t know if there’s a 4 way to kind of soften then that edge with those other buildings so that it doesn’t read so strongly to 5 have that kind of division between the two. You know what I mean, that kind of harsh edge where 6 Reposado is? Maybe it is some type of filtration along that back wall. 7 8 Mr. Hayes: Filtration meaning? 9 10 Board Member Alizadeh: Some type of wells or something which make it a bit more (interrupted) 11 12 Mr. Hayes: A different scale. 13 14 Board Member Alizadeh: Yeah, yeah. Exactly. 15 16 Mr. Hayes: So certainly that’s worth looking at. The height, the reason we stepped the whole fourth 17 floor back (interrupted) 18 19 Board Member Alizadeh: Sure. 20 21 Mr. Hayes: Because we don’t, we didn’t want to be that much higher than everything else. 22 23 Board Member Alizadeh: Sure. 24 25 Mr. Hayes: So I think when you look at the whole context it does make sense. Reposado is going to be 26 I think like that for a long, long time. 27 28 Board Member Alizadeh: Potentially, yeah. 29 30 Mr. Hayes: Yeah, because it is historic. As you go down Ramona don’t know what’s going to happen 31 there. 32 33 Board Member Alizadeh: So yeah, so then maybe addressing that fact I think would be important for 34 me because the capping is interesting so it’s just a question of maintaining the vocabulary but then also 35 dealing with the fact that on the back edges it needs some massaging potentially. 36 37 Other bits… I would like, oh, ok, so yeah, we talked about that. If you could explain your California 38 Green Building Standards Code (CALGreen) measures please. 39 40 Mr. Hayes: So we will comply with Tier 2. 41 42 Board Member Alizadeh: Ok. 43 44 Mr. Hayes: Essentially. We’re not going, we’re not pursuing a Leadership in Energy and 45 Environmental Design (LEED) or United States Green Building Council (USGBC) category, but we 46 will comply with LEED Tier 2. 47 48 City of Palo Alto Page 12 Board Member Alizadeh: Can you discuss any in terms of materials or (interrupted) 1 2 Mr. Hayes: Well we’re using a lot, this is a concrete building number one, so certainly will have fly ash 3 and it’s a recyclable material. The glazing system is all high performance glazing systems. The 4 mechanical system, which obviously is very important is a VRV Mitsubishi system, which is a very 5 highly efficient system that we’re now using on all these little projects in the downtown because it can 6 get up 20 percent more efficient than Title 24 requirements. And so what it does is very small 7 compressors upon the roof like residential size kind of compressors and then a, goes through a, it’s 8 called a BC controller and so these compressors hook to the BC controller and then at each floor you 9 have one and these fan coils on each floor all hook, you can have like nine different zones per floor per 10 controller and what’s interesting is that if this zone over here is calling for heat and this one over here is 11 calling for cooling they can borrow energy or expel energy through this variable refrigerant volume 12 technology. That’s about as much as I can do. 13 14 Board Member Alizadeh: These windows aren’t operable, is that right? They’re not operable 15 (interrupted) 16 17 Mr. Hayes: No we’re actually [unintelligible] 18 19 Board Member Alizadeh: And there’s no landscaping, is also correct or is that going to be further down 20 the road? 21 22 Mr. Hayes: There’s no landscaping at the ground plane. I would imagine that the residential units 23 would probably have some landscaping. We are not proposing any at this point. 24 25 Board Member Alizadeh: Ok. 26 27 Mr. Hayes: The residential units are operable windows. 28 29 Board Member Alizadeh: Ok. I saw the materials board just arrived so I will look at that and then let 30 the other ones comment. Thank you. 31 32 Mr. Hayes: You bet. 33 34 Chair Malone Prichard: Alex. 35 36 Board Member Lew: So thank you Ken. 37 38 Mr. Hayes: You’re welcome. 39 40 Board Member Lew: You know I’m actually of two minds on this project. One is when I look at the 41 rendering I really like what I see and at the same time I actually had the same concerns in the back of 42 my mind as Mr. Smith really because it’s on Ramona Street. It seems like Ramona has a very distinct 43 character to it and it is even though all of those Pedro de Lemos and the Birge Clark buildings there are 44 sort of a faux historic aesthetic and they have a certain scale and detail that I think is missing in your 45 building and I think could be improved in your building to make it more compatible with Ramona 46 Street. And I think that these are like minor, small details not any major massing changes or arches or 47 anything like that. 48 City of Palo Alto Page 13 1 The, but I did want to talk a little bit about how your building is compatible with the neighboring 2 buildings and I don’t think you really talked about it that much, but the I think it’s shown pretty clearly 3 in your conceptual street elevations. So on sheet A.2 on the Ramona Street elevation as your, you have 4 a very strong vertical rhythm of your second and third floor windows that pick up on the vertical 5 proportions of the Cardinal Hotel and you’re kind of creating like a, at the top of your third floor it’s 6 sort of aligning with the cornice height of the Cardinal Hotel so that you’re, the massing is trying to 7 match that even though your building is taller and I think that those are all very good things to do. And 8 I think that your, that the continuous retail the glass on the first floor is very important and right now 9 it’s actually not that great in terms of pedestrian activity and I think you’re actually improving, you’re 10 improving it by and you’re also that the sidewalks on Ramona are pretty narrow and you’re actually 11 enhancing the sidewalk and I think all of the buildings on, most of the buildings on Ramona have this 12 really nice arcades and stuff that has that depth to the façade and you’re actually adding it where it 13 doesn’t exist now. And so I think those are all very positive things on your project. 14 15 I’m a little worried about the glass. I was wondering if you could walk us through the material board. 16 My main concern with the glass is that it’s not too dark and I don’t really see the actual sample of your 17 main glass. 18 19 Mr. Hayes: So we typically use either PPG Solarban 60 or 70 and we haven’t run the envelope [calcs] 20 yet, but it will be one of those two and it essentially is about as clear as you can get and still have a high 21 performance glass so there’s no deliberate reflectivity. It’ll have a green sort of cast to it. We’re not 22 going to use a low iron glass so it’ll have some kind of a just a light green cast to it which we thought 23 would work well with the palate of materials. Would you like me to walk through these, the board? 24 25 Board Member Lew: Yeah, if you could and then especially with the, if you… I think like you haven’t 26 talked about at all the perforated metal and then you mentioned the fins a little bit. 27 28 Mr. Hayes: Yeah. 29 30 Board Member Lew: I think the pictures that you showed were kind of a greenish tint glass and this is a 31 very white tint and so if you (interrupted) 32 33 Mr. Hayes: So that piece there is intended to be the not only the vertical fins, so essentially if we look 34 at the model here, so from this corner to this edge over here there will be the vertical fins that go full 35 height and they will be in that translucent glass. 36 37 Board Member Lew: That’s this one, right? 38 39 Mr. Hayes: Correct. 40 41 Board Member Lew: Right. 42 43 Mr. Hayes: [Pause in audio at 44:13] Then down the Ramona side it will just be the surface of the glass 44 itself alright with the joints. The mullions will be behind the glass. So it’s a, it will have a mullion it’s 45 probably going to be an eight inch deep mullion because of the span of the curtain wall. So you’ll see 46 that through the glass, which will be interesting I think, but there’s no mullion outboard of the glass 47 pane itself or glass plane. The translucent glass is also used on the two canopies. So there’s a canopy 48 City of Palo Alto Page 14 that defines the office entry that extends out right there and there’s one that defines the Hamilton entry, 1 alright, into the ground floor commercial space. And so that will have the stainless steel frame and then 2 the probably some standoffs and then the glass, translucent glass horizontal cover. 3 4 Board Member Lew: And you have some railings, I’m sorry. You have some railings at the elevator 5 landings. 6 7 Mr. Hayes: Right. So those will be glass railings, clear glass railings with the stainless steel just an 8 edge cap, little rectangular edge cap on the top of it. And so that occurs yeah, here and here. The slab 9 edge will be wrapped in the metal panel. This is the stone obviously. The metal panel that is the silver, 10 the metal composite [rayobond] panel would be all of this detail that comes down and intersects and 11 then exposes itself and then this whole side here essentially and then it runs around this opening it sort 12 of repeats that C shape and then it descends again to there and so that will all be that [rayobond] 13 material. The porcelain tile we talked about, but just to reiterate it’s essentially the block here and the 14 block located there and then running along the top of the stone and you won’t see this from the ground, 15 but you’ll see it from other buildings I suppose is a metal railing to sort of cap the top off so it’s not just 16 stone, it has a little detail on top and that is the M3 color, which is the lower right hand corner and so 17 it’s supposed to kind of, I could also see that as an accent as well, but we decided to sort of give it a, 18 just a light color as opposed to a darker color. 19 20 And then the roof is the [a standing seam] metal roof. All of the sloped pitched roof up here and then 21 on the backside between the two stair towers is where you find the metal panel. I’m sorry, the 22 perforated metal panel and that is just to sort of provide the screening of the mechanical units but allow 23 sort of air to kind of pass through that zone. And then all the window frames that really are on the 24 inside will be a either a clear, probably a clear anodized because they’re on the inside. 25 26 Board Member Lew: Great, thank you Ken. 27 28 Mr. Hayes: Oh, I’m sorry I didn’t mention the western red cedar. 29 30 Board Member Lew: Yeah, the door. Right. 31 32 Mr. Hayes: Yeah, so that’s the door. So we thought that that would be really nice as you walk by you 33 have this very, very beautiful door that’ll fold up and there’s also a man door that will be built into the 34 panel. 35 36 Board Member Lew: Great, so thank you. So I guess my thought was on like to add a little bit more 37 filigree to the building was maybe instead of like the glass railings at the landings if it was… 38 39 Mr. Hayes: Metal or something. 40 41 Board Member Lew: Metal. Also maybe if the, maybe to enhance the awnings that you do have there, I 42 mean I think the ones you have are nice. They are very minimalist, but I was wondering if there was a 43 way to have more of them or have them more expressive or like at the Walgreens there’s like a wood 44 soffit on them or something. I was just looking, I mean it’s or like the bank opposite your project, I call 45 it Great Western, but it’s the [Calps] building, the one that used to be pink. What is that (interrupted) 46 47 Mr. Hayes: Yeah, yeah, yeah… Wells Fargo. 48 City of Palo Alto Page 15 1 Board Member Lew: No, no. Wells Fargo is on Waverly. 2 3 Mr. Hayes: Oh right. 4 5 Board Member Lew: Chase. 6 7 Mr. Hayes: Yeah, sorry. 8 9 Board Member Lew: Has the big planters. I’m looking for something for the people who don’t like 10 abstract I think that they should see something, I would hope they would see something else in your 11 building. 12 13 Mr. Hayes: Ok. 14 15 Board Member Lew: I think, you know, like [Chop] brought us a project on Hamilton and it has 16 awnings, it’s the corner building on High and Hamilton and he has awnings on both sides. He has 17 planters on both sides of the sidewalk. 18 19 Mr. Hayes: Maybe it might be nice to have some really beautiful modern moveable but permitted pots. 20 21 Board Member Lew: Yeah and I think those are all things that are in our urban design for downtown 22 guidelines and I think with just small elements like that would go a long way to giving this a little bit 23 more character without going in the direction of Spanish Revival or something like that. 24 25 Mr. Hayes: Great. Those are all good comments, thank you. 26 27 Board Member Lew: But I would say really my most, my main comment though is the glass color. 28 The, I think given the solar orientation of the building I’m really concerned that it’s going to look too 29 dark and my hunch is that it’s not going to look like how you have it rendered in this. I mean the 30 rendering’s beautiful, but I’m looking at how your illustrator has like depicted the lighting inside of the 31 building [in a reflectivity] and I’m not sure that you’re actually going to get that. I have a hunch that 32 it’s just going to look, that it may look darker, flatter, and less luminous than what you’re showing and 33 so it’s a concern of mine. But generally I like the [party]; I can support the variance, and I think 34 generally you’re making all the right moves. 35 36 If there is, I think the other Board Members expressed a concern on the property line conditions. We 37 do have, there are buildings downtown that have windows on the property line wall, special glazing, 38 special (interrupted) 39 40 Mr. Hayes: [Unintelligible] the glass, yeah, (interrupted) 41 42 Board Member Lew: Yeah, special mullions and everything like that. 43 44 Mr. Hayes: But I think it’s (interrupted) 45 46 Board Member Lew: It’s been done. So I don’t feel that strongly about that particular wall. I’m really 47 more concerned about the, your Ramona Street elevation. Thank you Ken. 48 City of Palo Alto Page 16 1 Mr. Hayes: Thank you Alex. 2 3 Chair Malone Prichard: This is a really handsome building. 4 5 Mr. Hayes: Thank you. 6 7 Chair Malone Prichard: As far as the way it fits into the context I think it does relate very well in a 8 massing standpoint to the hotel across the street and it also speaks in a little way to the City Hall with 9 the verticality that you’re creating here with the glazing system. So I don’t have a problem with a 10 building of this type in this location. 11 12 The blank back wall jumped out at me. I would like to see something done with that to articulate it 13 better. If you do that I think bring it forwards over Reposado is the way to go because that’s where 14 you’re going to see it when you’re coming down Hamilton. I think the further back you put it towards 15 the rear stair the less it’s going to have an impact. 16 17 The cedar siding is a beautiful material, but it seems like kind of an anomaly. It’s just here in that one 18 spot where the doors are. I’m wondering if there’s any other place you could work it in, be that soffits 19 or something, something at pedestrian scale or something on the upper floor for the residential units 20 perhaps. 21 22 And then you are in the pedestrian district so you’re supposed to do something to provide pedestrian 23 amenities. I understand you’ve pulled the building back, that’s great, you’ve got the wider sidewalk 24 and you do have awnings at your entrances. Are you looking at anything on the ground surface, any 25 special paving or treatment? 26 27 Mr. Hayes: I, it just, I think we’re just looking at the lamp black standard sidewalk, but… and we 28 probably would want it to read all as one and not like say this is the City sidewalk between the property 29 and the street. 30 31 Chair Malone Prichard: That would be wonderful, yeah. 32 33 Mr. Hayes: But we could look at the paving pattern. I like Alex’s idea of some, maybe some nice 34 planters that could really enhance that frontage provided they don’t block views into the retail or 35 commercial space, but yeah. 36 37 Chair Malone Prichard: Yeah, it just something you could do to provide some more amenities to 38 respect the pedestrian district. And that’s really all I’ve got. I think it’s a very handsome building. 39 40 Mr. Hayes: Great, thank you very much. 41 42 Board Member Alizadeh: Can I add one thing? I was going to say something similar to what Board 43 Member Prichard said about the cedar. Alone it looks really awkward here, but yet now it’s an 44 opportunity. I think if you add more of that it would really impact, it would add warmth to this 45 building. So alone as a garage door it’s not, I think it’s not working, but if there’s more of it somehow 46 at locations of your choosing I think it would really add something. 47 48 City of Palo Alto Page 17 Mr. Hayes: Thank you. 1 2 Chair Malone Prichard: So who would like to craft a Motion on this one? 3 4 Vice-Chair Lippert: I think that I’m inclined to continue the project. I think that the back wall, the back 5 walls really need to be resolved before we can move forward with this and look at the entire building. I 6 think there have been enough comments from each of us and we each see it differently, but there needs 7 to be some reconciliation on it. So Ken, I hate to do this, but I’m inclined to continue the project and 8 that you take some of our comments back and think about them and try to incorporate them into the 9 project. I think you’re moving in the right direction (interrupted) 10 11 Mr. Hayes: They seemed like fairly minor comments, but… 12 13 Vice-Chair Lippert: Yeah, but I don’t feel as though I can condition making you put windows on the 14 backside of the building and that needs to be addressed. 15 16 Mr. Hayes: Right. And this would be a consent? And so you pull it if there’s discussion or? 17 18 Vice-Chair Lippert: I think it’s a little more than consent. I think it needs to be continued to a either a 19 date certain or a date uncertain. And I just want to say I have one other thing, you know I was while 20 you were making your presentation I was looking at, on my smartphone a particular building, Rafael 21 Moneo, the Chace Center Rhode Island School of Design has done a really great job of dealing with 22 solid walls and punctuating them. Maybe you might want to take a look at that. Chace is spelled 23 Chace, but I’m sure there’s a lot of his projects that are similar and it might give you some inspiration 24 as to how to deal with the backside of the building. So I move to continue the project to a date certain. 25 26 Chair Malone Prichard: Well I guess (interrupted) 27 28 Amy French, Chief Planning Official: The 20th has already been flown, I think we’ve got a number of 29 items on that agenda, but yes, the 18th of July would be the meeting. It would give them plenty of time 30 to come up with something. 31 32 Vice-Chair Lippert: Is that agreeable for you? 33 34 Mr. Hayes: I think I’m here on the 18th of July already so. 35 36 MOTION 37 38 Vice-Chair Lippert: Ok, so let’s move, I move that we continue the item to the 18th of July. 39 40 SECOND 41 42 Board Member Alizadeh: Ok, I’ll second that. 43 44 Vice-Chair Lippert: Great, thank you. 45 46 VOTE 47 48 City of Palo Alto Page 18 Chair Malone Prichard: Naseem. All in favor? Aye. And none opposed. 1 2 MOTION PASSED (4-0, Board Member Popp absent) 3 4 Chair Malone Prichard: Brief break while we get the computer set up. That was brief, ok. 5 6 PRELIMINARY REVIEWS: 7 8 1. 2209-2215 El Camino Real [12PLN- 00404]: Request by Karen Kim on behalf Tai Ning 9 Trading & Innovations Co. for Preliminary Architectural Review of a new three-story, 9,780 10 square foot mixed use building proposed to replace a 3,239 sq. ft., one-story commercial 11 building on a 5,392 square foot lot. The proposal would include a request for a Design 12 Enhancement Exception (DEE), to allow the building to encroach into the 20-foot required 13 setback at the rear alley way. Zone District: Community Commercial (CC (2)) 14 15 2. 2500 El Camino Real [13PLN-00161]: Request by Stanford Real Estate for Preliminary 16 Architectural Review of a new four-story, mixed use building with 70 below market rental 17 housing units (one, two and three bedroom units) and approximately 7,300 sq. ft. of commercial 18 space within a 100,000 sq. ft. building, proposed to replace a 38,416 sq. ft. commercial 19 building. Zone District: Commercial Service/Alternative Standards Overlay (CS (AS1)). This 20 item is continued to the regular meeting of June 20, 2013. 21 22 BOARD MEMBER BUSINESS AND ANNOUNCEMENTS. 23 24 3. Recap of retreat discussion on Colleagues Memo. 25 26 4. Formation of subcommittees – nomination of special topics. 27 28 REPORTS FROM OFFICIALS. 29 30 Subcommittee Members: Naseem Alizadeh and Randy Popp 31 SUBCOMMITTEE: 32 33 5. 2080 Channing Avenue [10PLN-00198]: Request by John Tze for review of proposed shade 34 screen structures for the public park and other related items at the Edgewood Plaza mixed use 35 project. Zone: Planned Community (PC-5150) zoning district. Environmental Assessment: An 36 Environmental Impact Report was certified for the project in accordance with the California 37 Environmental Quality Act (CEQA). 38 39 STAFF ARCHITECTURAL REVIEW: 40 41 Project Description: Installation of two illuminated wall signs & two projecting wall (blade) signs 42 Applicant: Kevin Grant 43 Address: 278 University Avenue [13PLN-00164] 44 Approval Date: 5/17/13 45 Request for hearing deadline: 5/30/13 46 47 Project Description: New fencing and gate at an existing fire station 48 City of Palo Alto Page 19 Applicant: Cecil Lectura, PWD Facilities 1 Address: 2675 Hanover Street [13PLN-00195] 2 Approval Date: 5/20/13 3 Request for hearing deadline: 6/3/13 4 5 Project Description: Installation of one internally illuminated channel letter wall sign 6 Applicant: Unju Lee 7 Address: 3375 El Camino Real [13PLN-00108] 8 Approval Date: 5/22/13 9 Request for hearing deadline: 6/4/13 10 11 ADA. The City of Palo Alto does not discriminate against individuals with disabilities. To request accommodations to 12 access City facilities, services or programs, to participate at public meetings, or to learn more about the City’s compliance 13 with the Americans with Disabilities Act of 1990 (ADA), please contact the City’s ADA Coordinator at 650.329.2550 (voice) 14 or by e-mailing ada@cityofpaloalto.org. 15 16 Posting of agenda. This agenda is posted in accordance with government code section 54954.2(a) or section 17 54956.Recordings. A videotape of the proceedings can be obtained/reviewed by contacting the City Clerk’s Office at (650) 18 329-2571. 19 20 Materials related to an item on this agenda submitted to the Architectural Review Board after 21 distribution of the agenda packet are available for public inspection in the Planning and Community 22 Environment Department at 250 Hamilton Avenue, 5th floor, Palo Alto, CA. 94301 during normal 23 business hours. 24 25 26 ENVIRONMENTAL CHECKLIST FORM City of Palo Alto Department of Planning and Community Environment PROJECT DESCRIPTION Request by Ken Hayes of Hayes Group Architects on behalf of Forest Casa Real LLC. for Major Architectural Review Board review for the demolition of an existing 5,000 square foot, two -story commercial building and the construction of a four-story, 50 foot, mixed- use building with a new floor area of 15,000 square feet on a site located at 240-248 Hamilton Avenue. Environmental Assessment: an Initial Study and Mitigated Negative Declaration have been prepared. Zone District: Downtown Community Commercial (CD-C)(P)(GF) with Pedestrian Shopping and Ground Floor combining districts. 1. PROJECT TITLE 240-248 Hamilton Avenue Palo Alto, California 94301 2. LEAD AGENCY NAME AND ADDRESS City of Palo Alto Department of Planning and Community Environment 250 Hamilton Ave. Palo Alto, CA 94303 3. CONTACT PERSON AND PHONE NUMBER Jason Nortz, Senior Planner City of Palo Alto 650-617-3137 4. PROJECT SPONSOR'S NAME AND ADDRESS Ken Hayes 2657 Spring StreetRedwood City, CA 94063 5. APPLICATION NUMBER 13PLN-00006 6. PROJECT LOCATION 240-248 Hamilton Avenue 240-248 Hamilton Avenue Page 2 Negative Declaration Palo Alto Parcel Numbers: 120-27-010 The project site is located in the northern section of the City of Palo Alto, in the northern part of Santa Clara County, west of U.S. Highway 101 and east of State Route 82 (El Camino Real), as shown on Figure 1, Regional Map. The parcel is contained within the city block bounded by Hamilton Avenue to the northwest Ramona Street the northeast, Emerson Street to the southwest and Forest Avenue to the southeast, as shown on Figure 2, Vicinity Map. 7. GENERAL PLAN DESIGNATION: 240-248 Hamilton Avenue is designated as Regional Community Commercial in the Palo Alto 1998 - 2010 Comprehensive Plan. This land use designation includes office, retail, and residential land uses. Examples include Stanford Shopping Center, Town and Country Village, and University A venuelDowntown district. 8. ZONING The site is zoned Downtown Commercial with a Ground Floor and "Pedestrian" comBining district CD-C (GF)(P). The CD-C (GF)(P) zone district is intended to be a comprehensive zoning district for the downtown business area, accommodating a wide range of commercial uses serving citywide and regional business and service needs, as well as providing for residential uses and neighborhood service needs. The Pedestrian combining district is designed to help foster the continuity of retail stores and display windows and to avoid monotonous pedestrian environment in order to establish and maintain economic viability for a healthy retail district. The Ground Floor combining district is intended to modify the uses allowed in the CD district and subdistricts to allow only retail, eating and drinking and other service-oriented commercial development uses on the ground floor. The mixed use project is a permitted use in this zone district in that it proposes to provide a ground floor retail use with two floors of office and one floor of residential. 9. PROJECT DESCRIPTION The project consists of an application for Major Architectural Review Board review for the demolition of an existing 7,000 square foot, two -story commercial building and the construction of a four-story, 50 foot, mixed-use, building with a floor area of 15,000 square feet. The ground floor would be retail with office space occupying floors two and three. The fourth floor would be entirely residential consisting of two residential units. Four on-site parking spaces would be provided for the two residential units. The parking would be provided in a one level below grade parking garage. The project proposes to utilize floor area bonuses in the form of "Transferable Development Rights" (TDRs) from an off-site historical rehabilitation project. A total of 5,000 square feet ofTDR would be purchased and transferred from 230- 232 Homer Avenue where the TDR was acquired through both a seismic and historic rehabilitation of the building. The proposal would also utilize the one-time 200 square feet bonus as provided in P AMC Section 18.18.070. The total tloor area in the completed project would be 15,000 sq. ft. This includes 11,527 sq. ft. for commercial uses on the first, second and third floors and 3,473 sq" ft within two residential units on the fourth floor. 240-248 Hamilton Avenue Page 3 Negative Declaration A variance is requested to encroach into the required seven foot special setback along Hamilton Avenue and to encroach into the required six foot special setback along Ramona Street. 10. SURROlTNDING LAND USES AND SETTING 240-248 Hamilton Avenue is located close to the southern edge of the Commercial Downtown zone district (see Figure 2, Vicinity Map). The site is 50 feet wide by 100 feet deep and is located at the southern comer of the Hamilton A venuelRamona Street intersection. Surrounding land uses include office, restaurants, and retail. Directly east of the project site on the eastern side of Ramona St. is the eight story Palo Alto City Hall building. Directly adjacent to the project site along the western side of Ramona st. is a two-story office building. Also directly adjacent to the project site along the southwestern side of Hamilton Ave. is a two-story restaurant. Across the street on the northern side of Hamilton Ave. is three- story commercial building occupied by ground floor retail, a restaurant and a hotel lobby. The hotel occupies the remaining two floors. A four-story commercial building with ground floor retail and office uses on the uppers floors in located kitty comer to the project site. 11. OTHER PUBLIC AGENCIES • County of Santa Clara, Office of the County Clerk-Recorder ENVIRONMENTAL CHECKLIST AND DISCUSSION OF IMPACTS EVALUATION OF ENVIRONMENTAL IMPACTS I) A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the infonnation sources a lead agency cites in the parentheses following each question. [A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e. g. the project falls outside a fault rupture zone). A "No Impact" answer should be explained where it is based on project-specific factors as well as general standards (e. g. the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis).] 2) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3) Once the lead agency has detennined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. Potentially Significant Impact" is appropriate if there is substantial evidence that an effect may be significant. If there are one or more "Potentially Significant Impact" entries when the detennination is made, an EIR is required. 4) "(Mitigated) Negative Declaration: Less Than Significant With Mitigation Incorporated" applies where the incorporation of mitigation measures has reduced an effect from "Potentially Significant Impact" to a "Less than Significant Impact." The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section 17, "Earlier Analysis," may be cross-referenced). 240-248 Hamilton Avenue Page 4 Negative Declaration DISCUSSION OF IMPACTS The following Environmental Checklist was used to identify environmental impacts, which could occur if the proposed project is implemented. The left-hand column in the checklist lists the source(s) for the answer to each question. The sources cited are identified at the end of the checklist. Discussions of the basis for each answer and a discussion of mitigation measures that are proposed to reduce potential significant impacts are included. A. AESTHETICS Issues and Supporting Information Sources Potentially Potentially Less Than No Resources Significant Significant Significant Impact Issues Unless Impact Wou1d the project: Mitigation Incorporated a) Substantially degrade the existing visual X character or quality of the site and its 1,6 surroundings? b) Have a substantial adverse effect on a public view or view corridor? 1,2,6 X MapL4 c) Substantially damage scenic resources, including, but not limited to, trees, rock X outcroppings, and historic buildings within 1,2,5 a state scenic highway? MapL4 d) Violate existing Comprehensive Plan 1,2,6 policies regarding visual resources? X e) Create a new source of substantial light or X glare which would adversely affect day or nighttime views in the area? 1, 6 f) Substantially shadow public open space 1,6 X (other than public streets and adjacent sidewalks) between 9:00 a.m. and 3:00 p.m. from September 21 to March 21 ? DISCUSSION: The subject site is located one block over from a view corridor (University Avenue) as identified in the Comprehensive Plan 1998 -2010. The project is not large enough or close enough to impede the view through the corridor. The project is subject to final review by the Architectural Review Board (ARB), which will ensure a design that is aesthetically pleasing and compatible with its surroundings. The project has been designed to be compatible with the scale of the surrounding development in the downtown area and is compatible with zoning requirements for height and daylight plane Mitigation Measures: None 240-248 Hamilton Avenue Page 8 Negative Declaration Significance after Mitigation: NA B. AGRICULTURAL RESOURCES In determining whether impacts to agricultural resources are significant environmental effects, lead agencies may refer to the California Agricultural Land Evaluation and Site Assessment Model (1997) prepared by the California Dept. of Conservation as an optional model to use in assessing impacts on agriculture and farmland. Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and I Monitoring Program of the California X Resources Agency, to non-agricultural use? b) Conflict with existing zoning for agricultural 1,2, use, or a Williamson Act contract? MapL9, X c) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of 1 X Farmlano, to non-agricultural use? DISCUSSION: The site is not located in a "Prime Farmland", "Unique Farmland", or "Farmland of Statewide Importance" area, as shown on the maps prepared for the Fannland Mapping and Monitoring Program of the California Resources Agency. The site is not zoned for agricultural use, and is not regulated by the Williamson Act. Mitigation Measures: None Significance after Mitigation: NA c. AIR QUALITY Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Conflict with or obstruct with implementation X of the applicable air quality plan (1982 Bay 1 Area Air Quality Plan & 2000 Clean Air Plan)? b) Violate any air quality standard or contribute X substantially to an existing or projected air 1 quality violation indicated by the following: i. Direct and/or indirect operational 1 X emissions that exceed the Bay Area Air 240-248 Hamilton Avenue Page 9 Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated Quality Management District (BAAQMD) criteria air pollutants of 80 pounds per day and/or 15 tons per year for nitrogen oxides (NO), reactive organic gases (ROG), and fine particulate matter of less than 10 microns in diameter (PMIO); ii. Contribute to carbon monoxide (CO) 1, 10 X concentrations exceeding the State Ambient Air Quality Standard of nine parts per million (ppm) averaged over eight hours or 20 ppm for one hour( as demonstrated by CALINE4 modeling, which would be performed when a) project CO emissions exceed 550 pounds per day or 100 tons per year; or b) project traffic would impact intersections or roadway links operating at Level of Service (LOS) D, E or F or would cause LOS to decline to D, E or F; or c) project would increase traffic volumes on nearby roadways by 10% or more)? c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an X applicable federal or state ambient air quality standard (including releasing emissions which 1 exceed quantitative thresholds for ozone precursors )? d) Expose sensitive receptors to substantial levels e) f) of toxic air contaminants? 1 X i. Probability of contracting cancer for the 1 X Maximally Exposed Individual (MEl) exceeds 10 in one million ii. Ground-level concentrations of non-1 X carcinogenic T ACs would result in a hazard index greater than one (1) for the MEl Create objectionable odors affecting a X substantial number of people? 1 Not implement all applicable construction 1 X emission control measures recommended in the Bay Area A ir Quality Management District CEQA Guidelines? DISCUSSION: The subject site is in an area of mixed uses including commercial retail, office and residential uses in Downtown Palo Alto. According to the Comprehensive Plan, the property is not located in an area that contains uses or activities that are major pollutant emitters. The project is not expected to result in a significant impact on air quality. 240-248 Hamilton Avenue Page 10 Negative Declaration The project will result in temporary dust emISSIons during demolition, grading and construction activities. The impacts are expected to be greatest during demolition. Therefore, the following conditions of approval will be incorporated as part of an approved demolition and construction management plan secured before building permit issuance. • Demolition activities shall be conducted in such a manner that will minimize dust and another airborne particulate matter. The contractor or builder shall water debris during demolition and before transport to an off-site facility. • Areas of exposed earth surfaces during demolition, grading and construction shall be watered in the early morning and early evening. • Avoid overloading of trucks so· that potential spillage in the public right-of-way is minimized. The contractor shall be required to clean up all spillage in the public right of-way. • Submit a plan for the recovery/recycling of demolition waste and debris before the issuance of a demolition permit. The standard conditions would result in impacts that are less than significant. Mitigation Measures: None Significance after Mitigation: NA D. BIOLOGICAL RESOlTRCES Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional 1,2, plans, policies, or regulations, or by the MapN1 X California Department of Fish and Game or u.s. Fish and Wildlife Service? b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, 1,2, X policies, regulations, including federally MapN1 protected wetlands as defmed by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? c) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or 1,2 X migratory wildlife corridors, or impede the use MapN1 of native wildlife nursery sites? 240-248 Hamilton Avenue Page 11 Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated d) Conflict with any local policies or ordinances X protecting biological resources, such as a tree preservation policy or as defined by the City of 1,2, 5,13 Palo Alto's Tree Preservation Ordinance (Municipal Code Section 8.1 O)? e) Conflict with any applicable Habitat 1, 2, 13 X Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? DISCUSSION: There are six regulated street trees located around the perimeter of the subj ect property. Two Flowering Pear trees are located in the public right-of-way along Hamilton Avenue. The remaining four trees are located along Ramona Street and include: three Japanese Pagoda trees and two London Plane trees. The City Arborist has recommended removal of all six trees. The existing trees would be replaced with five new street trees. The trees would be protected to the satisfaction of the Planning Division and Public Works Department Arborists, based upon the requirements of the City of Palo Alto's Tree Technical Manual. Any damage to the trees would be treated in accordance with the Tree Technical Manual. Mitigation Measures: Bl: provide optimum public tree replacement for loss of public trees #1-6. Six publicly owned trees are growing in the right-of-way along the Hamilton and Ramona streets. Parking garage ramp and other in-ground elements that will limit new tree growth potential shall be identified. As mitigation to offset the net loss for years of public resource investments and minimize the future years to parity with infrastructure benefits (Co2 reduction, extended asphalt life, water mgmt., etc.) currently provided by the trees, the new frontage should be provided maximum streetscape design and materials to include the following elements: • Consistency with the Public Works Department Tree Management Program. Provide adequate room for tree canopy growth and root growing volume resources. • Utilize city-approved best management practices for sustainability products, such as permeable ADA sidewalk, Silva Cell planters, engineered soil mix base, and services due to being situated within the public right-of-way along El Camino Real and Monroe Drive. Implementation of this mitigation measure would reduce the loss of public trees impacts to a less than significant level. Significance after Mitigation: Less than significant E. CLTL TLTRAL RESOURCES 240-248 Hamilton Avenue Page 12 Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Directly or indirectly destroy a local cultural X resource that is recognized by City Council 1,2,6 resolution? L7 b) Cause a substantial adverse change in the significance of an archaeological resource 1,2 X pursuant to 15064.5? MapL8 c) Directly or indirectly destroy a unique paleontological resource or site or unique 1,2 X geologic feature? MapL8 d) Disturb any human remains, including those 1,2 interred outside of formal cemeteries? MapL8 X e) Adversely affect a historic resource listed or X eligible for listing on the National and/or California Register~ or listed on the City's 1,2,6 Historic Inventory? MapL7 f) Eliminate important examples of major periods 1,6 X of California history or prehistory? DISCUSSION: The project site is located in an area of moderate to high sensitivity in terms of archaeological resource areas, as indicated in the City of Palo Alto Comprehensive Plan, 1998-2010.Based on existing conditions and the extent of the proposed project, no significant impacts are expected. If approved, the project would contain conditions in the form of instructions in the case of the discovery of any cultural resources during demolition or construction. The standard conditions would result in impacts that are less than significant. Mitigation Measures: None Significance after Mitigation: NA F. GEOLOGY, SOILS AND SEISMICITY Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Expose people or structures to potential substantial adverse effects, including the See risk of loss; injury, or death involving: below i) Rupture of a known earthquake fault, X as delineated on the most recent 240-248 Hamilton Avenue Page 13 Negative Declaration Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on 7 other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. ii) Strong seismic ground shaking? 2, MapN10 X iii) Seismic-related ground failure, including liquefaction? 2 X M@NS iv) Landslides? 2 X MapNS b) Result in substantial soil erosion or the loss X of topsoil? 1, 6 c) Result in substantial siltation? 1,6 X d) Be located on a geologic unit or soil that is unstable, or that would become unstable as . a result of the project, and potentially ·X result in on-or off-site landslide, lateral 2, spreading, subsidence, liquefaction or MapNS collapse? e) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building X Code (1994), creating substantial risks to MapNS life or property? f) Have soils incapable of adequately supporting the use of septic tanks or altemativewaste water disposal systems 1 where sewers are not available for the X disposal of waste water? g) Expose people or property to major 4 X geologic hazards that cannot be mitigated through the use of standard engineering design and seismic safety techniques? DISCUSSION: The entire state of California is in a seismically active area and the site located in a strong seismic risk area, subject to strong ground shaking in the event of an earthquake. Seismic ground failure, including liquefaction and subsidence of the land are possible, but not likely at the site. No known faults cross the project site; therefore fault rupture at the site is very unlikely, but theoretically possible. The site is located in an area of expansive soils. All new construction will be subject to the provisions of the most current Uniform Building Code (UBC), portions of which are directed at minimizing seismic risk and preventing loss of life and property in the event of an earthquake. The City'S required standard conditions of approval ensure that potential impacts on erosion and soil will not be significant. Project conditions of approval will require the applicant to submit a final grading and drainage plan subject to review by the Department of Public Works prior to issuance of any grading and building permits. 240-248 Hamilton Avenue Page 14 Negative Declaration Mitigation Measures: F-l: Prior to final approval of any development plan and prior to building permit issuance the applicant will be required to retain a geotechnical engineer to 1) perfonn a final geotechnical investigation once site development plans are complete, 2) review the final construction plans and specifications, and 3) observe the earthwork and foundation installation Significance after Mitigation: NA G. GREENHOUSE GAS EMISSIONS Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Generate greenhouse gas emissions, either 1,5,7 X directly or indirectly, that may have a I significant impact on the environment? b) Conflict with any applicable plan, policy or 1,5,7 X regulation of an agency adopted for the purpose of reducing the emissions of greenhouse gases? DISCUSSION: The San Francisco Bay Area Air Basin (SFBAAB) is currently designated as a nonattainment area for state and national ozone standards and national particulate matter ambient air quality standards. SFBAAB's non attainment status is attributed to the region's development history. Past, present and future development projects contribute to the region's adverse air quality impacts on a cumulative basis. By its very nature, air pollution is largely a cumulative impact. No single project is sufficient in size to, by itself, result in nonattainment of ambient air quality standards. Instead, a project's individual emissions contribute to existing cumulatively significant adverse air quality impacts. If a project's contribution to the cumulative impact is considerable, then the project's impact on air quality would be considered significant. The Bay Area Air Quality Management District's (BAAQMD) approach to developing a Threshold of Significance for Green House Gas (GHG) emissions is to identify the emissions level for which a project would not be expected to substantially conflict with existing California legislation adopted to reduce statewide GHG emissions needed to move us towards climate stabilization. If a project would generate GHG emissions above the threshold level, it would be considered to contribute substantially to a cumulative impact, and would be considered significant. The Thresholds of Significance for operational-related GHG emissions are: • For land use development projects, the threshold is compliance with a qualified GHG reduction Strategy; or annual emissions less than 1,100 metric tons per year (MT/yr) of C02e; or 4.6 MT C02e/SP/yr (residents + employees). Land use development projects include residential, commercial, industrial, and public land uses and facilities. • For stationary-source projects, the threshold is 10,000 metric tons per year (MT/yr) of C02e. Stationary-source projects include land uses that would accommodate processes and equipment that emit GHG emissions·and would require an Air District permit to operate. If annual emissions of operational- 240-248 Hamilton Avenue Page 15 Negative Declaration related GHGs exceed these levels, the proposed project would result in a cumulatively considerable contribution of GHG emissions and a cumulatively significant impact to global climate change. The BAAQMD has established project level screening criteria to assist in the evaluation of impacts. If a project meets the screening criteria and is consistent with the methodology used to develop the screening criteria, then the project's air quality impacts may be considered less than, significant. For a "General Office building" land use, the facility would need to be 53,000 square feet or larger to have a significant impact for Green House Gases (BAAQMD CEQA Air Quality Guidelines, 06/2010; Table 3-1, Operational-Related Criteria Air Pollutant and Precursor Screening Level Sizes). For a "Single-family" dwelling unit would need to exceed 56 dwelling units to have a significant impact for Green House Gases. The proposed project does not exceed the significance thresholds established by the BAAQMD; the proposed project is 15,000 square feet, of which 11,527 square feet is commercial space and two, residential dwelling units totaling 3,473 square feet. Mitigation Measures: None Required H. HAZARDS AND HAZARDOUS MATERIALS Note: Some of the thresholds can also be dealt with under a topic heading of Public Health and Safety if the primary issues are related to a subject other than hazardous material use. Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Create a significant hazard to the public or the X environment through the routing transport, use, or disposal of hazardous materials? 1,6,12 b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the X release of hazardous materials into the 1,6,12 environment? c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or X waste within one-quarter mile of an existing or 1,6, 12 proposed school? d) Construct a school on a property that is subject X to hazards from hazardous materials contamination, emissions or accidental release? e) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a 1,2,6 X result, would it create a significant hazard to MapN9 the public or the environment? t) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or X 240-248 Hamilton Avenue Page 16 Negative Declaration public use airport, would the project result in a safety hazard for people residing or working in 1 the project area? g) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working the 1 X project area? h) Impair implementation of or physically interfere with an adopted emergency response 1,2, 12 X plan or emergency evacuation plan? MapN7 i) Expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to X urbanized areas or where residences are 2 intermixed with wildlands? MapN7 j) Create a significant hazard to the public or the 1 X environment from existing hazardous materials contamination by exposing future occupants or users of the site to contamination in excess of soil and ground water cleanup goals developed '" for the site? DISCUSSION: No known conditions exist on the site regarding existing materials that may be deemed harmful or .hazardous. The site is not located near any known hazardous materials facilities. Mitigation Measures: None Significance after Mitigation: NA I. HYDROLOGY AND WATER QUALITY Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorp_orated a) Violate any water quality standards or waste discharge requirements? 1, X b) Substantially deplete groundwater supplies or X interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production 2 rate of pre-existing nearby wells would drop to MapN2 . a level which would not support existing land uses or planned uses for which permits have been granted)? 240-248 Hamilton Avenue Page 17 Negative Declaration c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial X erosion or siltation on-or off-site? 1,6 d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result 1, 6, 10 X in flooding on-or off-site? e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide X substantial additional sources of polluted 1, 10 runoff? f) Otherwise substantially degrade water quality? 1,5, X g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 1,6,2 X MapN6 h) Place within a 100-year flood hazard area structures which would impede or redirect 2 X flood flows? MapN6 i) Expose people or structures to a significant risk of loss, injury or death involve flooding, including flooding as ares ult of the failure of a 2, 7 levee or dam or being located within a 100-year MapN6 X flood hazard area? N8 j) Inundation by seiche, tsunami, or mudflow? 2, 7 X MapN6 N8 k) Result in stream bank instability? 1,6 X DISCUSSION: The site is in Flood Zone X, which is not a special flood hazard zone. During demolition, grading and construction, storm water pollution could result. Runoff from the project site flows to the San Francisco Bay without treatment. Nonpoint source pollution is a serious problem for wildlife dependant on the waterways and for people who live near polluted streams or baylands. Therefore, conditions of approval, incorporated as part of an approved demolition and construction management plan (secured before building permit issuance) would include the following: • Before submittal of plans for a building permit, the applicant shall subn1it a drainage plan which includes drainage patterns on site and from adjacent properties. • The Applicant shall identify the Best Management Practices (BMP's) to be incorporated into a Storm Water Pollution Prevention Plan (SWPPP) for the project. The SWPPP shall include both temporary BMP's to be implemented during demolition and construction. 240-248 Hamilton Avenue Page 18 Negative Declaration The standard conditions would result in impacts that are less than significant. Mitigation Measures: None Significance after Mitigation: NA J. LAND USE AND PLANNING Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Significant Significant Significant Impact Would the project: Issues Unless Impact Mitigation Incorporated a) Physically divide an established community? 1,6 X b) Conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not X limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an 1,3,6 environmental effect? c) Conflict with any applicable habitat conservation plan or natural community 1,2 X conservation plan? MapN1 d) Substantially adversely change the type or 1, 2, 3, 6 X intensity of existing or planned land use in the area? e) Be incompatible with adjacent land uses or with 1, 6 X the general character of the surrounding area, including density and building height? f) Conflict with established residential, 1, 6 X recreational, educational, religious, or scientific uses of an area? g) Convert prime farmland, unique farmland, or 1 X farmland of statewide importance (farmland) to non-a§icultural use? DISCUSSION: The site is designated for Regional/Community Commercial use in the City of Palo Alto's Comprehensive Plan, 1998-2010. This land use provides a variety and depth of goods, services and uses usually not available in the neighborhood shopping areas. The replacement of an office/retail building with a mixed use building with ground floor retail is consistent with this land use and the surrounding area. The site is located within the Hamilton Avenue District according to the Downtown Urban Design Guide. The Hamilton Avenue District is a mixed office/commercial/retail district with some residential uses. The primary goal of the Hamilton Avenue District is to promote Hamilton Avenue as an active mixed use district with a pleasing, tree-lined pedestrian experience. The development of three or more story buildings surrounding Civic Center Plaza are encouraged to help create a stronger urban edge within this area. The proposed project is consistent with the recommendations for this district. The project is subject to final review by the Architectural Review Board, which will ensure a design that is aesthetically pleasing and compatible with its surroundings. 240-248 Hamilton Avenue Page 19 Negative Declaration A variance is requested to encroach into the required seven foot special setback along Hamilton Avenue and to encroach into the required six foot special setback along Ramona Street. The exception is being requested in order to maintain the existing streetscape and setbacks that the other properties adjacent to the subject site follow. Findings for Variance requests will need to be reviewed and approved by the Director of Planning as part of the overall project approval Mitigation Measures: None Significance after Mitigation: NA K. MINERAL RESOURCES Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents ofthe state? 1, X b) Result in the loss of availability of a locally- important mineral resource recovery site delineated on a local general plan, specific plan 1, X or other land use plan? DISCUSSION: The project will not impact known mineral or locally important mineral resources. Mitigation Measures: None Required. L. NOISE Issues and Supporting Information Resources Sources PotentialJy Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Exposure of persons to or generation of noise X levels in excess of standards established in the local general plan or noise ordinance, or 1,2,6 applicable standards of other agencies? b) Exposure of persons to or generation of X excessive ground borne vibrations or ground 1,2,6 borne noise levels? c) A substantial permanent increase in ambient noise levels in the project vicinity above levels 1, 5,9 X existing without the project? d) A substantial temporary or periodic increase in X 240-248 Hamilton Avenue Page 20 . Negative Declaration Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated ambient noise levels in the project vicinity above levels existing without the project? 1 e) For a project located within an airport land use X plan or, where such a plan has not been adopted, would the project expose people residing or working in the project area to excessive noise levels? 1 f) For a project within the vicinity of a private X airstrip, would the project expose people residing or working in the project area to 1 excessive noise levels? g) Cause the average 24 hour noise level (Ldn) to 6 X increase by 5.0 decibels (dB) or more in an existing residential area, even if the Ldn would remain below 60 dB? h) Cause the Ldn to increase by 3.0 dB or more in 6 X· .. an existing residential area, thereby causing the Ldn in the area to exceed 60 dB? i) Cause an increase of3.0 dB or more in an 6 X existing residential area where the Ldn currently exceeds 60 dB? j) Result in indoor noise levels for residential 6,9 X development to exceed an Ldn of 45 dB? k) Result in instantaneous noise levels of greater 6,9 X 1) than 50 dB in bedrooms or 55 dB in other rooms in areas with an exterior Ldn of 60 dB or greater? Generate construction noise exceeding the 6 X daytime background Leq at sensitive receptors by 10 dBA or more? DISCUSSION: The project site is located in an area with an existing noise level ranging between 65-70dBA. This noise level is typical for commercial districts and residential areas located in close proximity to commercial districts. Sources of environmental noise at the site include sirens from fire trucks associated with the Alma Fire Station, vehicles on local roadways, nearby CalTrain station and associated noise from adjacent eating and drinking establishments. Noise from the proposed mixed use would primarily be generated by roof top mechanical equipment. This will consist of HV AC equipment on top of the fourth floor only. All mechanical equipment is required to comply with the City's Noise Ordinance (PAMC Chapter 9.10). Grading and construction activities will result in tenlporary increases in local ambient noise levels. Typical noise sources would include mechanical equipment associated with excavation, grading and construction, which will be short term in duration. Standard approval conditions would require the project to comply with the City's Noise Ordinance (PAMC Chapter 9.10), which restricts the timing and 240-248 Hamilton Avenue Page 21 Negative Declaration overall noise levels associated with construction activity. Short-term construction that complies with the Noise Ordinance would result in impacts that are expected to be less than significant. Demolition and Construction Activities will result in temporary increases in local ambient noise levels. In addition, there may be increases in ground-borne vibrations resulting from demolition and construction. Therefore, conditions of approval, incorporated as part of an approved demolition and construction management plan (secured before building permit issuance) would include the following: • Require implementation of and compliance with the City of Palo Alto's Noise Ordinance (PAMC 9.10). In addition, construction hours shall be established as per the construction management plan to minimize disturbance to surrounding residents, visitors, and businesses. Mitigation Measures N-l: In order to meet the indoor noise level criteria, sound rated exterior facades and windows shall be required. The windows and facades shall meet the STC rated recommendations as provided in the Noise Assessment by Charles M. Salter Associates, Inc. Mitigation Measures N-2: In order to mitigate noise impacts associated with outdoor mechanical equipment mitigation"-measures will be -required. These may include a combination of selecting quiet units; maintain, minimum distances to property lines, and physical barriers and/or enclosures. The applicant shall work with staff during the design phase to determine to specific requirements. Significance after Mitigation: NA M. POPITLATION AND HOUSING Issues and Supporting Information Resources Sources Potential1y Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation IncorI>orated a) Induce substantial population growth in an X area, either directly (for example, by proposing new homes and businesses) or indirectly (for 1,6 example, through extension of roads or other infrastructure) ? b) Displace substantial numbers of existing X housing, necessitating the construction of replacement housing elsewhere? 1 c) Displace substantial numbers of people, X necessitating the construction of replacement housing elsewhere? 1 d) Create a substantial imbalance between 1 X employed residents and jobs? e) Cumulatively exceed regional or local I X population projections? 240-248 Hamilton Avenue Page 22 Negative Declaration There would not be any substantial change in required services, including Fire, Police, Schools, Parks and other public facilities as a result of the proposed project. Mitigation Measures: None Significance after Mitigation: NA o. RECREATION Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Would the project increase the use of existing neighborhood and regional parks or X other recreational facilities such that substantial physical deterioration of the 1,5 facility would occur or be accelerated? b) Does the project include recreational X facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the 1, 5 environment? DISCUSSION: The development project would be subject to payment of impact fees for parks, libraries and community facilities. The project in total would therefore not have any significant impact on existing parks, nor include or require construction of recreational facilities. No mitigation is required. There would not be a significant change to the demand of recreation services as a result of the proposed project. The development project includes a proposal for separate common areas for both the residential and the commercial portions of the project. Mitigation Measures: None Significance after Mitigation: NA P. TRANSPORTATION AND TRAFFIC Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Cause an increase in traffic which is substantial in relation to the existing traffic load and capacity of the street system (Le., 1, 11 240-248 Hamilton Avenue Page 24 Negative Declaration result in a substantial increase in either the X number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections )? b) Exceed, either individually or cumulatively, a level of service standard established by the county congestion management agency for 1, 11 X designated roads or highways? c) Result in change in air traffic patterns, X including either an increase in traffic levels or a change in location that results in 1 substantial safety risks? d) Substantially increase hazards due to a X design feature (e.g., sharp curves or dangerous intersections) or incompatible 1,6 uses (e.g., farm equipment)? e) Result in inadequate emergency access? 1,11 X f) Result in inadequate parking capacity? 1, 11 X g) Conflict with adopted policies, plans, or X programs supporting alternative transportation (e.g., pedestrian, transit & 1, bicycle facilities)? h) Cause a local (City of Palo Alto) intersection 1, 11 X to deteriorate below Level of Service (LOS) D and cause an increase in the average stopped delay for the critical movements by four seconds or more and the critical volume/capacity ratio (V /C) value to increase by 0.01 or more? i) Cause a local intersection already operating at 1, 11 X LOS E or F to deteriorate in the average stopped delay for the critical movements by four seconds or more? j) Cause a regional intersection to deteriorate 1, 11 X from an LOS E or better to LOS F or cause critical movement delay at such an intersection already operating at LOS F to increase by four seconds or more and the critical VIC value to increase by 0.01 or more? k) Cause a freeway segment to operate at LOS F 1, 11 X or contribute traffic in excess of 1 % of segment capacity to a freeway segment I already operating at LOS F? 1) Cause any change in traffic that would 1, 11 X increase the Traffic Infusion on Residential Environment (TIRE) index by 0.1 or more? m) Cause queuing impacts based on a 1, 11 X comparative analysis between the design queue length and the available que~e storage capacity? Queuing impacts include, but are not limited to, spillback queues at proj ect access locations; queues at tum lanes at 240-248 Hamilton Avenue Page 25 Negative Declaration intersections that block through traffic; queues at lane drops; queues at one intersection that extend back to impact other intersections, and spillback queues on ramps. n) Impede the development or function of 1, 11 X planned pedestrian or bicycle facilities? 0) Impede the operation of a transit system as a 1, 11 X result of congestion? p) Create an operational safety hazard? 1, 11 X DISCUSSION: The proposed project is anticipated to generate less than 50 net new peak hour vehicle trips, which is below the City's threshold for requiring a focused traffic analysis, and less that than the local congestion management agency's (CMA) threshold for a detailed traffic impact analysis (100 trips). Based on the relatively low traffic generation estimates, the project is not anticipated to result in significant peak hour or daily traffic impacts. Parking in and of itself is not· considered an environmental impact, but rather the related vehicle emissions that are generated by the project's patrons, who have to drive around looking for parking. The proposed project is only required to provide three parking spaces for the two residential units located on the fourth floor. The project is however providing four spaces. The remaining three floors of non- residential floor area consisting of 11,527 square feet of floor area is not required to provide parking for the following reasons: 1. The existing 7,000 square feet of commercial floor area is grandfathered in and as such is not required to provide parking; 2. 4,327 square feet of commercial floor area has been transferred via a Transfer of Development Rights from a valid sender site to an eligible receiver site from a valid, recorded Transferable Development Right( (TDR). The first 5,000 square feet of floor area transferred to a receiver site is exempt from the otherwise applicable on-site parking requirements. 3. The remaining 200 square feet of commercial floor area (7,000 sf+4,327 sf+200 sf= 11,527st) is exempt from parking due to a one time allowable 200 square foot bonus. There will, however, be a net deficiency in the amount of off-site parking spaces directly adjacent to the site due to a new curb cut along Ramona Street for the purposes of creating a new driveway for the underground parking lot. The loss of those parking spaces may incrementally add to parking concerns in the downtown and surrounding neighborhoods. Those impacts, however, will not cause significant increases in congestion or deterioration in air quality. The loss of the two off-site parking spaces will be offset by providing an in-lieu payment for two parking spaces. An annual monitoring report on the Commercial Downtown zoning area is mandated by the Comprehensive Plan Programs L-8 and L-9 that require reporting of non-residential developn1ent activity and trends within the CD zone district. These reports are also required as a result of final action on the Downtown Study adopted by the City Council in 1986. The Downtown Study incorporated a growth limit of 350,000 square feet of additional floor area over the total floor area existing in 1986, and provided for are-evaluation of the CD regulations when new development reaches 235,000 square feet. 240-248 Hamilton Avenue Page 26 Negative Declaration Since 1986, a total of 223,21 0 square feet of non-residential floor area has been added in the Downtown CD-C zoned area. In the past two monitoring cycles from 2009-2011, approximately 34,650 square feet of net new comnlercial floor area was added with a few major contributing projects such as 524 Hamilton Avenue and 265 Lytton Avenue. In this current cycle, 2011-2012, approximately 49,860 square feet of net new commercial floor area has been added through one major project, 335-355 Alma Street. Based on this recent monitoring, an additional 11,790 square feet of new non-residential development remains for development before the re-evaluation limit of235,000 square feet growth limit is reached. The existing building consists of 7,000 square feet of floor area. The proposed project would add an additional 4,527 square feet of non-residential floor area which would minimally contribute towards the limit of 350,000 square feet of additional floor area. Temporary impacts to transportation, traffic and pedestrian circulation will result from demolition and construction activities. Therefore, conditions of approval, incorporated as part of an approved demolition and construction management plan (secured before building permit issuance) would include the following: • Traffic control measures during demolition and construction • Removal of demolition debris • Delivery of construction materials • Retention of parking spaces for construction workers and on.:.site staff. Mitigation: None Significance after Mitigation: NA Q. lTTILITIES AND SERVICE SYSTEMS Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incor)!orated a) Exceed wastewater treatment requirements of the applicable Regional Water Quality X Control Board? 1,6,114 b) Require or result in the construction of new X water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant 1,6,14 environmental effects? c) Require or result in the construction of new X storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental 1,6,14 effects? 240-248 Hamilton Avenue Page 27 Negative Declaration Issues and Supporting Information Resources Sources PotentialJy PotentiaHy Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated d) Have sufficient water supplies available to X serve the project from existing entitlements and resources, or are new or expanded 1,6,14 entitlements needed? e) Result in a determination by the wastewater X treatment provider which serves or may serve the project that it has inadequate capacity to serve the project's projected demand in addition to the provider's existing 1,6,14 commitments? f) Be served by a landfill with sufficient X permitted capacity to accommodate the project's solid waste disposal needs? 1 g) Comply with federal, state, and local statutes X I and regulations related to solid waste? 1 h) Result in a substantial physical deterioration 1 X of a public facility due to increased use as a result of the proiect? DISCUSSION: The proposed project would not significantly increase the demand on existing utilities and service systems, or use resources in a wasteful or inefficient manner. As standard conditions of ARB approval, the applicant shall be required to submit calculations by a registered civil engineer to show that the on- site and off site water, sewer and fire systems are capable of serving the needs of the development and adjacent properties during peak flow demands. Trash and recycling facilities are proposed in the project to accommodate the expected waste and recycling streams that would be generated by the expected uses within the building. The development project would be subject to all conditions of approval that would be provided by all applicable city departments including but not limited to Utilities Electrical Engineering and Utilities Water, Gas, Wastewater,. Mitigation Measures: None Significance after Mitigation: NA R. MANDATORY FINDINGS OF SIGNIFICANCE Issues and Supporting Information Resources Sources Potentially Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated 240-248 Hamilton Avenue Page 28 Negative Declaration Issues and Supporting Information Resources Sources PotentiaJly Potentially Less Than No Impact Significant Significant Significant Would the project: Issues Unless Impact Mitigation Incorporated a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal X community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major 1,2 periods of California history or prehistory? b) Does the project have impacts that are individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a X project are considerable when viewed in connection 'with the effects of past projects, 1,2 . r'- the effects of other current projects, and the effects of probable future projects)? c) Does the project have environmental effects which will cause substantial adverse effects X on human beings, either directly or 1,2 indirectly? DISCUSSION: The project does not have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal. The proposed project would not eliminate and important example of CalifoTI1ia history. The project does not have impacts that are individually limited, but cumulatively considerable nor does it have substantial environmental effects which will cause substantial adverse effects on human beings either directly or indirectly. The project is located within the City's commercial downtown area where there are other projects that are under review and planned for the future. These projects are redevelopment proj ects where existing buildings are either rehabilitated or demolished and replaced. This infill development does not result in considerable effects to the environment. 240-248 Hamilton Avenue Page 29 Negative Declaration DETERMINATION On the basis of this initial evaluation: I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. I find that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because revisions in the X project have been made by or agreed to by the project proponent. A MITIGATED NEGATIVE DECLARATION will be prepared. . , I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. I find that the proposed project MAY have a "potentially significant impact" or "potentially significant unless mitigated" impact on the environment, but at least one effect: 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets. An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. I find that although the proposed project could have a significant effect on the environment, because all potentially significant effects (a) have been analyzed adequately in an earlier EIR or NEGATIVE DECLARATION pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that earlier EIR or NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project, nothing further is required. Project Planner Director of Planning and Community Environment 240-248 Hamilton Avenue Date Date Page 31 Negative Declaration Attachment I: Parking Table Original Proposal 1. The existing 7,000 square feet of commercial floor area is grandfathered in the Downtown Assessment District (5,000 s.f. assessed previously for 20 parking spaces, remainder area of 2,000 s.f. exempt from providing parking as existing but previously un-assessed) and as such is not required to provide parking spaces on site for the existing amount of floor area (per 18.52.070(a)(3)); 2. 4,327 square feet of commercial floor area would be transferred to the site, via a Transfer of Development Rights (TDR) from a valid sender site to an eligible receiver site. These are valid, recorded Transferable Development Rights (TDR). The first 5,000 square feet of floor area transferred to a receiver site is exempt from the otherwise applicable on-site parking requirements for new floor area. 3. The remaining 200 square feet of commercial floor area (7,000 sf + 4,327 sf + 200 sf = 11,527sf) is exempt from parking due to a one time allowable 200 square foot bonus, per PAMC 18.18.070. Existing Proposed Existing floor area 7,000 sf Assessed Parking 20 spaces (5,000 sf) Existing on-site parking 0 spaces Replace existing floor area 0 spaces Added commercial floor area 200 sf 1x exception 4,327 sf TDRs 250 sf ADA area 0 spaces 0 spaces 0 spaces Residential 2 spaces/unit = 4 spaces TOTAL PARKING 20 Assessed Spaces 4 spaces Revised Proposal 1. 5,000 square feet of existing commercial floor area is grandfathered in the Downtown Assessment District (assessed previously for 20 parking spaces) and as such is not required to provide parking spaces on site; 2. 2,000 square foot mezzanine space subject to provide 8 parking spaces, given Interim Ordinance deletion of 18.52.070(a)(3) applicable to vacant un-assessed area at the time of assessment. Applicant subject to payment of in-lieu fees for area not reduced by additional TDR area (reduction below for 2.6 spaces via TDR results in need for in-lieu fees for six spaces.) 3. 200 square feet of commercial floor area that was currently exempt from parking due to a one time allowable 200 square foot bonus, per PAMC 18.18.070.200 is now subject to provide payment of in-lieu fees for one space. Lift space cannot be used for commercial since above grade covered commercial parking counts toward floor area in the CD-C zone and maximum 3.0:1 FAR is already proposed. 4. 5,000 square feet of commercial floor area transferred to the site, via a TDR from a valid sender site. Original proposal applied 4,327 square feet of TDR’s (Difference of 673 sf or 2 additional spaces). Existing Proposed Existing floor area 7,000 sf Assessed parking 20 spaces (5,000sf) Existing on-site parking 0 spaces Replace existing 2,000 sf mezzanine floor area In lieu fees for 8 spaces (reduced to 6 spaces via TDR) Added commercial floor area 200 sf 1x exception 5,000 sf TDRs 250 ADA area in-lieu fee for 1 space 0 spaces 0 spaces Residential 2 spaces/unit = 4spaces TOTAL PARKING 20 Assessed Spaces 4 residential spaces* In-lieu fees for 7 spaces *The applicant may not utilize one of the residential lift spaces for commercial use. Though it was determined through the ARB process that only three of the four lift spaces are required for the two residential units (development being treated as two-unit and not multi-family development which requires 1.5 spaces/unit per PAMC 18.52.040), covered commercial parking above grade counts toward FAR. 1 of 1 MITIGATION MONITORING AND REPORTING PROGRAM Project Name: 240 Hamilton Application No.: 13PLN-00006 Approved by: Date: 7/23/2013 Environmental Impacts Mitigation Measures Responsibility for Compliance Timing of Compliance Oversight of Implementation Biological resources Conflict with local policies or ordinances protecting biological resources Mitigation Measure 1: Provide optimum public tree replacement for loss of public trees #1- 6. Six publicly owned trees are growing in the right-of-way along the Hamilton and Ramona streets. Parking garage ramp and other in-ground elements that will limit new tree growth potential shall be identified. As mitigation to offset the net loss for years of public resource investments and minimize the future years to parity with infrastructure benefits (Co2 reduction, extended asphalt life, water mgmt., etc.) currently provided by the trees, the new frontage should be provided maximum streetscape design and materials to include the following elements: • Consistency with the Public Works Department Tree Management Program. Provide adequate room for tree canopy growth and root growing volume resources. • Utilize city-approved best management practices for sustainability products, such as permeable ADA sidewalk, Silva Cell planters, engineered soil mix base, and services due to being situated within the public right-of-way along El Camino Real and Monroe Drive. Implementation of this mitigation measure would reduce the loss of public trees impacts to a less than significant level. Applicant Prior to issuance of building permit Director of Public Works- Arborist/Urban Forester Attachment K Attachment L Attachment L: Staff Responses to 9/9/13 Questions from Councilmember Holman Design Q1: What did the original proposal look like? Did it include cedar banding? Can staff please provide a visual of the original submission? A1: The original plan set included limited use of cedar siding. The ARB requested use of cedar siding at another location on the building; the applicant did not modify the plans with respect to use of cedar siding. The ARB requested more articulation on the wall facing the building at 200 Hamilton; the applicant responded with the use of recessed metal panel at second and third floors. The original, superseded plan set will be presented (clearly indicated as such) on the wall of the Chambers, beside the ARB approved plan set. The original set has also been uploaded to the City’s website at the following location: URL Q2: Do I understand correctly that the project eliminates existing retail at the ground floor in favor of parking? The retail area is indicated to be 2337 sq ft on a 5000 sq ft lot. What is the possibility of below grade parking? A2: Correct. The ground floor retail area is reduced to make way for four enclosed parking spaces on the site via parking lifts. The site is only 5,000 square feet such that it would be infeasible provide a ramp to access underground parking spaces as well as the spaces. Palo Alto Municipal Code 18.52.070 cites a “site area less than 10,000 square feet” as when feasibility of providing on-site parking becomes a challenge and one criteria for eligibility to pay in-lieu parking fees. Variance Q3: Variance question: the findings indicate that this property is one of two that has the 5 foot and 7 foot setbacks. Is this referencing these specific setback dimensions or special setbacks in general in the downtown district as I recall there are other special setbacks downtown. What are the current sidewalk widths? I'm looking for the actual sidewalk dimension rather than the "effective" sidewalk width in each case above. A3: There is a seven foot special setback and a six foot special setback along certain streets in the core of the Downtown, as imposed by the special setback map. A seven foot special setback is applied along the Hamilton Avenue side of the subject property, and a six foot special setback is applied along the Ramona Street side of the project site. The seven foot special setback exists on both sides of Hamilton Avenue, extending from Waverley Street to Alma Street. The six foot special setback only exists at two locations in the core of Downtown; 1) along eastern edge of Bryant Street between Hamilton and Channing Avenues, and 2) along Ramona Street between Hamilton and Forest Avenues. Furthermore, there are only two corners in all of Downtown where both a seven foot and six foot special setback are applied; 1) at the northeastern corner of Hamilton Avenue and Bryant Street (Washington Mutual building), and 2) at the northwestern corner of Hamilton Avenue and Ramona Street (project site). The current sidewalk between the existing building and Ramona Street is six feet wide, which is consistent with the sidewalk adjacent to existing buildings on Ramona Street between Forest and Hamilton Avenues. The current sidewalk width between the existing building and Hamilton Avenue is eight feet, which is consistent with the width of sidewalk adjacent to existing buildings on Hamilton Avenue between Ramona and Emerson Streets. For purposes of determining the setback, the measurement is taken at the property line and not the face of curb. As it is currently situated, the existing building is on the property line on both the Ramona Street and Hamilton Avenue sides of the project. If the special setbacks were applied to the development, the result would be a 15 foot wide sidewalk along Hamilton Avenue and a 12 foot wide sidewalk along Ramona Street, both of which would result in significantly increased sidewalk widths that would be inconsistent with the sidewalks immediately adjacent to the project site. The approved and non-appealed Variance allows the project to provide a sidewalk width of approximately 11 feet along Hamilton Avenue, and 10 feet along Ramona Street, both of which meet or exceed the sidewalk width requirements in the Downtown. The wider sidewalk and more importantly, the shift of the building mass, would improve the pedestrian experience and enhance the opportunity for retail activity along Hamilton Avenue. Also please note that the variance request has not been appealed. Historic Q4. The (9/9/13) staff report on Page 151 speaks to the historic Ramona District. Did staff consider the sphere of influence (area of potential effect) as a tool in determining compatibility and context, which context could also include the Birge Clark two doors away that used to house Blue Chalk, Reposado building that is Potentially eligible for CA Register, etc? Q5. One clarification seeking comment: I believe that the differentiation referenced in the Secretary of Interior's Standards asks for differentiation, but does not require modern buildings, for example, and is within the context of compatibility. An environmental review (as guidance in application of the Sec Stds) would require compatibility with adjacent historic buildings and those within the area of potential effect. Q6. Was the Historic Planner consulted in determining compatibility with the National Register Ramona District and other historic buildings in the immediate area? Staff Answers on Historic Questions Adjacency and Area of Potential Effect The project site is not abutting any historic site. The use of “area of potential effect (APE)” is language found in the California Environmental Quality Act (CEQA) guidelines. Sphere of Influence is not the proper term in this context. The lead agency has discretion to determine the appropriate APE and this will vary project by project. CEQA Guidelines Section 15064.5(b)(1) states, “Substantial adverse change in the significance of an historical resource means physical demolition, destruction, relocation, or alteration of the resource or its immediate surroundings such that the significance of an historical resource would be materially impaired.” The process for determining whether the significance of an historical resource is materially impaired is addressed in the subsequent provisions of the CEQA Guidelines. Specifically, Section 15064.5(b)(2) sets forth criteria for determining when the significance of an historical resource is materially impaired. In addition, Section 15064.5(b)(3) states, “Generally, a project that follows the Secretary of the Interior's Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings or the Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings (1995), Weeks and Grimmer, shall be considered as mitigated to a level of less than a significant impact on the historical resource.” Although it is in close proximity, 240 Hamilton is not within the Ramona National Historic District located across Hamilton; the historic Cardinal Hotel and the University Arts building are within the Ramona Historic District. The project site is also located across from a non-historic site (City Hall), which also provides context. Staff determined demolition and new construction at 240 Hamilton Avenue would not “materially impair the significance” of historic buildings located across Hamilton Avenue, nor those historic resources located farther down Ramona street. Reposado The adjacent Reposado restaurant building, circa 1921, is not a historic building. It was not deemed “historic” on the City’s list of historic resources, though in 1998 it was considered “potentially eligible” and needing further study should an application be submitted for demolition and replacement. A renovation was studied by Historic staff in conjunction with Architectural Review approval issued in 2008 for replacement of the window system below the existing transom with wood painted operable windows and wood entry vestibule, as well as an overhead canopy, exterior lighting, signage, exterior paint, and interior renovation. The City has not altered the status of “potentially eligible for the California Register” as a result of the modifications in 2008. The building owner has not requested a historic inventory designation of the site, and the City will not initiate a change to the historic status for a building without the consent of the owner. The new building at 240 Hamilton will not alter or change the Reposado building. The 240 Hamilton building will be architecturally differentiated from the Reposado building. The south side of Hamilton Street, including Reposado is not currently a historic district nor is it proposed to become a Historic District. The building adjacent to Reposado at 200 Hamilton is a modern-designed building constructed in 2001. Blue Chalk The historic Blue Chalk building (at 630 Ramona) is two buildings away. The demolition of the 240 Hamilton building would not significantly affect 630 Ramona; the new building at 240 Hamilton would be seen on the block face with the other buildings on Ramona. Historic Buildings on Remainder of Block The block within which this project is located extends from Hamilton Avenue to Forest Avenue and Emerson Street to Ramona Street. There are historic buildings within the same block as the building, many of them along Emerson Street and two of them on Ramona Street located farther down toward Forest Avenue, namely 630 Ramona and 668 Ramona (Pacific Art League – more on this property described later). Tool Used to Determine Compatibility The tool used to determine compatibility and context was the Council-adopted Palo Alto Municipal Code (PAMC) Section 18.18.110, Context-Based Design Criteria. Goals of this section are expressed as development that is responsible to its context, compatible with adjacent development and promotes pedestrian oriented design. While PAMC does not define “adjacent” it does define “abutting” as having property or district lines in common. PAMC 18.18.110 defines context and compatibility. Context indicates relationships to adjacent street types, surrounding land uses, and on-site or nearby natural features, and seeks effective transitions to adjacent uses and natural features. Further: 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.” 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 unit of the street is maintained.” Consultation with City’s Historic Planner regarding 240 Hamilton Site The project planner examined the status of the site’s building, which was not listed on our local historic inventory nor considered potentially eligible for listing. The City’s Historic Planner was consulted regarding the historic status. He informed the project planner that, “though the building used to be a Mission Revival structure ca. 1920 that housed the Palo Alto Times newspaper office, it was radically altered into the modern building of today around the 1970s. It has totally lost integrity and is no longer a historic building in any way.” Because the project site was not historic, and was not located within the nationally registered Ramona District, the City’s Historic Planner was not requested to determine compatibility of the new building with the district located across Hamilton Avenue prior to ARB staff reports and hearings. See earlier response. Corner Buildings Q7: Should the Pacific Art Center be included in determining appropriate design for the site? Reason for question: I am looking at the anchor corner buildings in area for guidance. A7: Corner Buildings 1. PAL The Pacific Art League (PAL) building can be compared to the 240 Hamilton site with respect to an alternative “anchor corner treatment”. The PAL site is 5,610 sf in area, similar in parcel size. Like 200 Hamilton, that project does not include residential use, only one land use; the 240 Hamilton Avenue project includes commercial and residential and is therefore allowed greater floor area. The three-story 1926 PAL building was 7,858 sf and no legal on-site parking was provided (again comparable to 240 Hamilton and 200 Hamilton as to lack of existing on- site parking). A 4,940 square foot three-story addition was approved as bonus area (free from parking requirement) for use on site for the Pacific Art League building via HRB and ARB, as the addition was determined to be compliant with Secretary of Interior Standards for that site. Total floor area for Pacific Art League upon completion will be 12,798 square feet and the addition, under construction, results in the appearance of a four story building. The difference on 240 Hamilton is that the bonus area of 5,000 sf is being transferred to the site via the TDR program, and added to the existing 7,000 s.f. of commercial area, allows for 12,000 sf of commercial area, comparable in size. The additional 3,000 square feet is proposed for the residential floor area, which makes the building larger than the PAL building. 2. 200 Hamilton The 200 Hamilton Avenue building (26,638 sf on a 9,375 sf parcel), constructed in 2001, is three stories on a corner lot on the other end of the Hamilton block face. It also extends to a height of approximately 50 feet and 62 feet for the clock tower (via Design Enhancement Exception). It also included use of transferred development rights (TDRs; 7,500 s.f. from two different nearby and adjacent historic sites) to supplement the allowable 19,138 s.f. reach an FAR of 2.8:1), though that building was approved for commercial use only (retail and office) and abuts a listed historic property (where the transferred bonus area was derived). Parking and Floor Area Q7: (Before September 2013 council meeting) I sent in a question seeking resolution of the square footage inconsistencies (5000 vs 7000 existing) and look forward to that response. I received confirmation from staff that the Parking District Assessment is based on 5000 sq ft. I look forward to identification of the additional 2000 sq ft. Can staff please provide a copy of the Building Permit that allows the 2000 sq ft mezzanine as this remains an area of confusion. Was the 2000 sq ft mezzanine built? Does it exist? A7: There is no building permit on record citing the floor area of the building, other than a 1949 record noting 5,000 square feet. We have record of there being a 2,000 sf mezzanine that was confirmed by the City’s Building division in July of 2012. It may have been previously used for storage or incidental office to the primary retail use. The mezzanine may have been vacant and therefore not assessed as floor area for the parking assessment when originally constructed. The mezzanine area measured by the Building staff included the mezzanine area at the “Waze” tenant space plus the mezzanine at “Inhabiture”. There have been other instances where this has also been the case (270 University). A Building Permit was issued for tenant improvements at 240 Hamilton Avenue in October 2005 (copy provided). In September 2012 an AR approval was issued for signage and façade improvements for the current tenant and the mezzanine space was viewable at that time. The zoning table in the July 18, 2013 ARB staff report referred to the 2,000 square feet of mezzanine floor area not previously assessed for parking spaces as being exempt under PAMC section 18.52.070 (a)(3) – this section has been deleted in the Interim Ordinance adopted by Council and now in effect (31 days from second reading November 4, 2013). Q8: Is staff considering bringing to the Council the 200 sq ft parking exception that is indicated a part of this application? A8: This is answered in the staff report prepared post adoption of the Interim ordinance that eliminates the 200 s.f. parking exemption. Q9: What is the breakdown of the sq footage for the building and related parking requirements? The (9/9/13) staff report on page 153 indicates 7000 sq ft (5000 + 2000) + 4327 TDR + 200. This equates to an 11,527 sq ft building. The Zoning compliance table on page 268 refers to 5000 sq ft of TDR plus seismic bonus. For a building in the district to reach a 3:1 ratio (15,000 sq ft) it has to use TDR or seismic or historic bonuses. Please describe how the project qualifies for a 15,000 sq ft project. A9: The project viewed by the ARB had a total of 15,000 s.f. of floor area. This included the 200 s.f. one-time bonus (still included) plus ‘replacement area’ (7,000 s.f. commercial) plus 3,473 residential area plus TDR area (4,327 s.f.). The Applicant proposes to use 5,000 s.f. of TDR parking exemption to reduce the amount of ‘replacement area’ by 673 s.f. City of Palo Alto (ID # 4309) City Council Staff Report Report Type: Action Items Meeting Date: 12/9/2013 City of Palo Alto Page 1 Summary Title: Direction on Maybell Options Title: Council Discussion and Direction to Staff Regarding the 567-595 Maybell Avenue Site From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council direct staff to take no action terminating the loan agreement for the property at 567-595 Maybell, and to closely monitor future changes to the inventory of housing sites identified in the City’s 2007-2014 Housing Element as a result of the defeat of Measure D on November 5, 2013. Executive Summary The subject site, 567-595 Maybell Avenue, was purchased by the Palo Alto Housing Corporation (PAHC), in part with a $5,820,200 loan from the City. With the defeat of Measure D on November 5, 2013, PAHC’s plan for a 60 unit affordable senior development and 12 market rate single family homes will not proceed. The City could choose to do nothing and recoup its investment upon sale of the property by PAHC, or could take steps to terminate the agreement. Upon termination, the City could force a sale of the property or exercise its option to purchase. The Maybell site and the 60 affordable units proposed by PAHC were included in the recently adopted Housing Element to help the City meet its Regional Housing Needs Allocation (RHNA) requirement. While staff believes that the defeat of Measure D does not immediately jeopardize the Housing Element’s certification status, it does severely reduce the City’s already small surplus of prospective units identified in the Housing Element and makes it imperative that the City make good faith efforts to implement other programs and sites in the Housing Element. Specifically, any development on parcels within the Housing Element’s inventory of sites will need to be closely monitored, and if one of those sites develops during 2014 at densities lower than the realistic capacity ascribed to it in the Housing Element, the City will need to identify additional sites to ensure that the City can meet its RHNA requirement. City of Palo Alto Page 2 Background Palo Alto Housing Corporation, a not for profit affordable housing developer, entered into a purchase agreement in June 2012 to purchase 567-595 Maybell Ave for $15,580,000. The 2.46 acre property contains four single-family residential homes and an orchard with non-bearing fruit trees. In September 2012, the City Council conducted a study session to hear a proposal from PAHC to develop a 60 unit multifamily affordable housing project with a market-rate single family home subdivision component. In November 2012, the City approved a $3,220,220 million acquisition loan to PAHC with an additional $2,600,000 loan commitment to the project. The property closed escrow at the end of November 2012 and the $2.6 million loan was finalized in July 2013 for a total City loan amount of $5,820,200. (The funding was derived from affordable housing impact fees and can only be used for that purpose.) See Attachment A (First Amended and Restated Acquisition and Development Loan Agreement and Option to Purchase). In the interim, PAHC submitted a request for a zone change to a Planned Community (PC) zone district to allow the development of 60 units of affordable senior housing and 15 market rate single family units. The PC zone change was requested in that the proposed residential density would have exceeded the maximum allowed in the underlying district, which would allow 34-46 units depending on whether a State density bonus is triggered. The PC application was approved by the City Council in June 2013. A referendum, Measure D, was held to affirm the Council’s decision to approve project. The measure was defeated on November 5, 2013, so the site retains its current R-2 and RM-15 zoning, and the PAHC project cannot proceed. Staff understands that PAHC is currently marketing the property, with the intention to sell. As noted above, under the current zoning, maximum build-out of the parcel could include up to 34-46 residential units. The ultimate number of units allowed would depend on the site layout, size of units and whether sufficient affordable units are included to trigger a density bonus allowed under State law. In structuring the financing for the acquisition of the loan, two other lenders, the Low Income Investment Fund (LIIF) and Local Initiative Support Corporation (LISC), were co-senior lenders, providing an $8 million loan. Of the $8 million loan, $7 million was for the acquisition and the remaining $1 million is used as an interest reserve. The interest reserve was used to pay the interest on the $7 million. The City’s loan was in second position and the County, who is in the most subordinate position, provided a $2,759,780 loan. The property was over-encumbered with the amount of the loans, $16,580,000, exceeding the property purchase price of $15,580,000. The current total loan balance is approximately $16,080,000. Closing costs on the City of Palo Alto Page 3 transaction are estimated to be approximately $1 million. Therefore, the sales price would need to be in the $17 million to $17.5 million price to pay all encumbrances and closing costs. Staff believes that the property value has increased since PAHC acquired the site. For reference, according to Zillow, Palo Alto home values have increased approximately 20% in the past year. Trulia’s reports figures similar to Zillow. Applying the 20% appreciation estimate to the $15.58 million purchase price, the property would be valued at approximately $18.7 million. If the property were to be sold, the LISC and LIIF loans would be repaid first, the City loan would then be repaid and the County loan would be repaid last. Any remaining proceeds from the sale could be used to pay for Palo Alto Housing’s predevelopment costs. An appraisal would be required to get an accurate value on the property. If the property value does not support the full amount of the loans, the County loan, being the most junior in position, would be most at risk not to completely be repaid. However, for the sale to proceed in this situation, the County would need to agree to a short sale and the County could demand that PAHC or some other entity agree to cover all or a portion of the County’s losses. Discussion As noted above, the City agreed to loan PAHC $5,820,200 for the purchase and development of a 60 unit affordable housing project, with a market-rate single family home component. With the defeat of Measure D, the City could do nothing and allow PAHC to sell the property to a market rate developer and repay the City its loan, or the City could terminate the agreement. Under the first option (“do nothing”), the City would wait until PAHC identifies a buyer and negotiates a sale. The City would approve the sale and receive its $5,820,200 at closing; the $5,820,200 would be available for another needed affordable housing development elsewhere in the city in the future. Under the second option (terminate the agreement), the City would provide a notice of termination to PAHC. Concurrently with the termination notice, the City could exercise an option to purchase the property. If the City issued a termination notice but did not exercise an option, the City’s loan would become due and payable on the effective date of the termination notice. This would effectively force PAHC to sell the property and the results would be the same as with the “do nothing” option. If the City exercises its option to purchase the site, it must provide notice to PAHC within 120 days of the date the project was not approved, or March 5, 2014. (March 5, 2014 is 120 days City of Palo Alto Page 4 from the election on November 5, 2013.) Under the option, the City would theoretically have the ability to acquire the property for the amount of the City’s loan, or $5,820,200. However, in acquiring the property, the City would also be responsible for assuming the $8.0 million LISC/LIIF loan and the $2.8 million County loan. This course of action would have significant negative impacts on PAHC, because the non-profit would not recoup its predevelopment expenses. In addition, this course of action would require the City to invest substantial additional funds because both the County loan and the LISC/LIIF loans were conditioned on a development similar to the one rejected by the voters. In addition, if the City proposed to use the property for any purpose other than affordable housing, the City’s $5.8 million loan from the affordable housing fund would need to be backfilled with other funds. The County has recorded a Regulatory Agreement against the property requiring 20 units of extremely low income housing on the property. Thus, any future development would need to adhere to the County Regulatory Agreement requirements, which could only be removed if the County loan was repaid. Similarly, the LISC and LIIF loan agreements require the owner of the Property to pursue approval of a project similar to the Development. Therefore, the City would have to pay off the loans in order to avoid default with the LISC/LIIF loans, or the City could negotiate with LISC/LIIF to revise their project requirements in their loan agreements. In any circumstance, the City would need to pay off the loans by November 29, 2014 to avoid a default. If the City were interested in purchasing the property for development of affordable housing under the existing zoning, it would need to identify over $10 Million in additional funding to purchase the site and pay off the loans. Even with a State density bonus on the site, the maximum number of units could not exceed 46. In the PAHC proposal, the total development cost was $26.3 million for the entire 60 unit development or approximately $438K per unit. Of the $438K per unit cost, $125K was the land cost, and it was estimated that the land cost of the 1.0 acre senior development site was $7.5 million. In a less dense development of 46 units, the per-unit costs would be much higher. For example, in a 46 unit affordable development, the land cost per unit alone would be approximately $318K ($15.6 Million/46 units). With the addition of construction costs, the per-unit cost increases substantially. Also, with PAHC’s project, about $13 Million would have been generated with tax credit equity. In 2013, the average project size that was awarded tax credits was 62 units. Therefore, it is unlikely that a smaller, less dense project requiring much higher subsidies could depend on tax credit equity as a source of funding. The City could also explore the possibility of developing a mixed income project similar to the PAHC proposal, although at existing densities. It appears the City would still face larger subsidies for the affordable units because of the lower density. The sales proceeds from the City of Palo Alto Page 5 market rate development may help decrease some of the affordable housing costs, but again, because of the lower density, the project would not be competitive for tax credit financing. Other items to consider if the City were to purchase the property include the four existing homes on the site and possible relocation costs incurred, as well as carrying costs during pre- development and development. Impact to Housing Element The Maybell project and its then-approved 72 units were included in the 2007-2014 Housing Element. This is a net increase of 38 units above the existing zoning on the site (24 units above the existing zoning with the potential State density bonus for affordable housing). In the Housing Element inventory of sites, the City identified enough sites to accommodate 1,680 units. This was just sufficient to meet the City’s unmet need of 1,646 units. With the defeat of Measure D and the “loss” of the 38 net units from Maybell, it created a small deficit of 4 units. However, the approval of the 48 housing units at 3159 El Camino Real resulted in 17 additional units above the site’s assumed capacity of 31 units. Thus, the City has a surplus -- although smaller than what was approved by HCD – and a very fluid situation, in which one or two future developments can significantly affect the City’s ability to meet its RHNA requirements. This means that the City will need to closely monitor proposed developments on sites included in the Housing Element’s inventory and find alternative sites if any develop with fewer units than originally assumed. This imperative is encapsulated in Housing Element Program 2.2.8, which the State required the City to include in its Housing Element. Timeline The timing of PAHC’s sale of the property is unknown, and if the City were interested in terminating its agreement with PAHC, it must provide notice prior to March 5, 2014. Resource Impact The City has invested signifcant resources in the Maybell site (approx $5.8M) from the Residential Housing Fund (Fund 233) and the Commercial Housing Fund (Fund 234), and is expected to recoup that investment for use in another affordable housing project upon sale of the property. If the Council wishes to terminate its agreement and exercise its option rather than recouping its investment, significant additional resources would be required for the purchase and subsequent development of the site. It is important to remember that the City has significant unfunded infrasructure needs that have been under study for the past several years and limited capital to address those needs. Also, the City really doesn’t have the expertise or time to “go into the development business.” Finally, termination of the agreement and City purchase could have a significant impact on PAHC and their ability to reinvest in other needed afforable housing in the city. City of Palo Alto Page 6 Policy Implications The loss of units at the Maybell site impacts the inventory of sites in the City’s Housing Element and it will be imperative for the City to monitor closely the development on other sites across the city during 2014 and to ensure that the City’s Regional Housing Needs Allocation can still be met. Environmental Review Taking no action regarding the loan agreement is not a “project” requiring CEQA review. If the City were to terminate the agreement and exercise its option to purchase the site, this would constitute a project requiring review. The level of review required (and the potential use of the prior environmental document) would depend on the intended use(s) of the site. Attachments: Attachment A: Amended Loan Agreement (PDF) FIRST AMEND~DANDRESTATED ACQUISITION AND DEVELOP:MENT LOAN AGREEMENT AND OPTION TO PURCHASE 89S\05\1267519.3 llWio13 , by and between THE ·CITY OF PALO ALTO A Chartered City and Munieipal·Corporation and PALO ALTO HOUSING CORPORATION A California Non-Profit PubOe Benefit Corporation For the Real Property Loeated at: 567 .. 595 Maybell Avenue (APN: 137 .. 25-108,137 .. 25 .. 109) Dated ~ \1; 2013 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS AND EXHIBITS 3 Section 1.1 Definitions ........................................••...........................................•.................. 3 Section 1.2 Exhibits ........................................................................... ~ .......... tol •••••••••••••••••••••• 7 ARTICLE 2 LOAN PROVISIONS 7 Section 2.1 Loan .................................... It ••••••••••••••••••••• If ................... f ••••••••••••••••••••••••••••••••••• t 7 Section 2.2 Interest ................................................................... :. .......................................... 8 Section 2.3 Use ofF1lllds ..................................................................................................... 8 Section 2.4 .Securit:y .•••.••••••.•••••...••••••••••..••... ~ .................................................................... .,. ••• 8 Section 2.5 Subordination ...................................................................................................... 9 Section 2.6 Disbursement Requirements -Acquisition Loan .................. ~ ........................ 10 Section 2.7 Subordirtation to Construction Financing .................. ~ ................................... 12 Section 2.8 Subordination to Permanent Financing ........................................................... 14 Section 2.9 Repayment of th.e City Loan ........................................................................... 14 Section 2.10 Non-Recourse ...................................................................................... ~ ........ 17 ARTICLE 3 PREDEVELOPMENT ACTIVITIES 18 Section 3.1 Predevelopment Activities ........................................................................ , ..... 18 Section 3.2 Land Use Approvals and CEQA Review ....................................................... 18 Section 3.3 Tax Credit and Other Finanoing Applications ................................................ 19 Section 3',4 Fin81lcing Platl. ............................................................................................... 19 Section 3.5 Building Permit ............................................................................................... 20 ARTICLE 4 ONGOING OBLIGATIONS 20 Section 4.1 Periodic Reports ........................................ ~ .................................................... 20 Section 4.2 Informa,tion ........................................................................................................ 20 Section 4.3 Records .................................•.....................•........................................• · .........• 20 Section 4.4 Audits ..................•.......•.......... ! •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 21 Section 4.5 Compliance with Laws; Prevailing Wages ..................................................... 21 Section 4.6 Relocation .......................................•....... ' .......................................................• 22 Section 4.7 Hazardous Materials ....................................................................................... 22 Section 4.8 Mainten8Ilce and Damage .............................................................................. 25 Section 4.9 Mechanics Liens, Stop Notices, and Notices of Completion ......................... 25 Section 4.10 Fees atld Taxes .............................................................................................. 26 Section 4.11 Notices ..............••••................ ; ••..................•.. t ................................................. 26 Section 4.12 Non-Discrimination ... i ................................ , •••••••••••••••••• • .............................. 26 Section 4.13 Insurance Requirements ................................................................................ 27 Section 4.14 Transfer .......................................................................................................... 27 Section 4.15 Other Indebtedness and Liens ....................................................................... 28 Section 4.16 Use as Affordable Housing ........................................................................... 28 ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER 895\05\1267519.3 112212013 i 29 TABLE OF CONTENTS (continued) Section 5.1 Representations an.d Warran.ties ..................................................................... 29 Section 5.2 Survival of Representations and Warranties .................................................. 31 ARTICLE 6 TERMINATION, DEFAULT AND REMEDIES 31 'Section 6.1 Termination of Agreetnent ............................................................................. 31 Section 6.2 Events of Default. ........................................................................................... 31 Section:6.3 Remedies .......................................................................................................... 33 Section ~.4 Option to Pl.1l'Cbase, Enter.and Possess .............................................................. 34 Section 6.S RiglJ.t of Contest .............................................................................................. 35 Section 6.6 Remedies Cumulative .................................... ~ ................................................ 35 ARTICLE 7 GENERAL PROVISIONS 35 Section 7.1 Agreement Coordination ................................................................................ 35 Section 7.2 Relationship of Parties ..................................................... ~ ............................... 36 Section 7'.3 No Claims ....................................................................................................... 36 . Section 7.4 AmendInents ................................................................................................... 36 Section 7.5 Entire Understanding of the Parties ................................................................ 36 Section 7.6 htdemnification ............................................................................................... 36 Section 7.7 Non-Liability of CITY and CITY Offioials, Employees and Agents ............. 37 Section 7.8 No Third Party Beneficiaries .......................................................................... 37 Section 7.9 Action by the CITY; Amendments ................................................................. 37 Section 7.10 Waivers .........•..........................• t ••••••••••••••••••••• , ••••••••••••••••••••••••••••••••••••••••••••• 37 Section 7.11 Notices, Demands and Communications ...................................................... 37 Section 7.12 Applicable Lawan.d Ven.ue .......................................................................... 38 . Section 7.13 Parties Bound ................................................................................................ 38 Section 7.14 Attomeys' Fees ............................... ! ............................................................. 39 Section 7.15' Severability' .•.. ~ .............................................................................................. 39 Sec-tj.on 7.16 Force Majeure ...•...............•.......••• , ........... , ............•........•••............................ 39 Section 7.17 Contlict ofhtterest ........................................................... ~ ............................. 39 Section 7.18 Time ofBssence ...................................................... " ................. , ........•..•....... 40 Section 7.19 Title of Parts and Sections; Exhibits ............................................................ .40 Section 7 .20 Mu1tip~e Originals; Counterpart .................................................................... 40 . Section 7.21 Recording of Memo of AgreCUlent .............................................................. 40 Section 7.22 Further Actions ............................................................................................. 40 EXHffiIT A: Legal Description of the Property EXHmIT B: Note EXHIBIT C: Deed of Trust EXHmIT D: Estimated Project Costs and Sources of Funds EXHIBIT E: Schedule of Performance EXHIBIT F: . Assignment of Documents EXHIBIT G: Insurance Requirements 895\05\1267519.3 112212013 ii FIRST AMENDED AND RESTATED ACQUISITION AND DEVELOPMENT LOAN AGREEMENT AND OPTION TO PURCHASE (Maybell Orchard Apartments, 567-595 Maybell Avenue, Palo Alto, California) This First Amended and Restated Acquisition and Development Loan Agreement and Option to Purchase (the "Agreement"), initially ex~ as ~ November 28, 2012 (the "Effective Datetl), as fully amended and restated as of~, 2013, by and between the CITY OF PALO ALTO, a chartered city and a municipal corporation (the "CITY") and PALO ALTO HOUSING CORPORATION, a California non-profit public benefit corporation, with offices at 725 Alma Street, Palo Alto, California 94301 (the tlBORROWER"). RECITALS A. On June 22, 2012, BORROWER entered into a purchase and sale agreement with Maybell Sambuceto Properties, LLC, a California limited liability company, and Sambuceto Partners, a California limited partnership, 'to acquire the property located at 567 .. 595 Maybell Ave., , Palo Alto, California (the "Property") for a purchase price of Fifteen Million Five Hundred Eighty Thousand Dollars ($15,580,000) for the purpose of developing an affordable rental housing project. A legal description of the Property is attached as Exhibit At ' B. BORROWER proposes to construct approximately sixty (60) residential rental units (the IIPr<?jecttt) on a portion of the Property, of.which fifty-nine (59) units would be affordable to low, very low, and extremely low income senior households earriing between thirty percent (30%) and sixty percent (60%) of area median income as determined by the United States Department of Housing and Urban Development. BORROWER further desires to sell a portion of the Property totaling approximately 1.46 acres '(the "Market .. Rate Parcel") to a third party for construction of market-rate housing to reduce the acquisition and development costs related to the Proj ect. ' C. CITY 'has established the Residential In-Lieu Housing Fund (the "In .. Lieu Housing Fund") for the purpose of providing loans to support the development of affordable rental housing. The expenditure of funds for site acquisition to secure a site for possible use as low income housing is an eligible activity under the CITY's adopted Guidelines for use of the Residential In-Lieu Housing Fund. CITY has further established the Stanford University Medical Center Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund (the "SUMC Fund") in part to support the development of affordable housing. There is a severe ,shortage of rental housing affordable to senior residents with extremely low, very low, and low incomes in Palo Alto and nearby areas. D. The CITY made a loan to BORROWER in the amount of Three Million Two Hundred Twenty Thousand Two Hundred Twenty pollars ($3,220,220) (the "Original Loanll) from the In .. Lieu Housing Fund pursuant to that Acquisition and Development Loan Agreement and Option to Purchase by and between the CITY and the BORROWER dated November 28, 2.012 (the "Original Loan Agreement") and a Promissory Note executed by the BORROWER 895\oS\l267519.3 112212013 1 dated November 26,2012 (the "Original Note't), which was secured by a Deed of Trust with Assignment of Rents dated November 16, 2012 (the ItOriginal Deed of Trust"). The purpose of the Original Loan was to assist in the acquisition of the Property. While the BORROWER was able to acquire the Property in a timely fashion, BORROWER was required to borrow from other assets. To further assist in the acquisition of the Property for possible use as affordable housing, BORROWER wishes to borrow an additional Two Million Six Hundred Thousand Dollars ($2,600,000) from the SUMC Fund. BORROWER and the CITY wish to amend and restate the Original Loan Agreement to increase the tota1loan from the CITY to Five Million Eight Hundred Twenty Thousand Two Hundred Twenty Dollars ($5,820,220) (the nCity Loanlt). - E. The portion of the City Loan funded from the SUMC Fund ($2,600,000) must be repaid by January 31, 2015, unless CITY grants an extension of up toone year for repayment. The amount of the City Loan attributable to the SUMC Fund shall decrease as CITY receives additional funds designated for the In-Lieu Housing Fund, as further described in Section 2.1 of this Agreement, Only those portions of the City Loan that remain attributable to the SUMC Fund must be repaid by January 31, 2015 or any extension of that date. F. Concurrently with execution of this Agreement, the BORROWER will execute a First Amended and Restated Promissory Note (the IINote", attached as Exhibit B) evidencing the City Loan, which will be secured by a deed of trust recorded against the Property (the "Deed of Trust," attached as Exhibit C). The City Loan will be further secured by an Assignment of Docwnents as defined below. As a condition to disbursement of the remaining proceeds of the City Loan, the CITY will cancel the Original Note and reconvey the Original Deed of Trust. O. Through this Agreement, the City has made no commitment to approve the Project nor any particular application for Land Use Approvals (as defined below) on the Property, and site .. specific environmental review will be completed when such application is made and plans are developed for the Project. The provision of financing for acquisition of the Property, without commitment to any specific project, is consistent with the Land Use Element of the Comprehensive Plan and with the CITY's affordable housing goals as outlined in the Housing Element of the Comprehensive Plan. A program Envirorunentallrilpact Report on the CITY'S Comprehensive Plan was certified by the Palo Alto City Council on July 20, 1998. The approval of this Agreement is within the scope of that program EIR, and no new environmental document is required~ in that no specific plans for development of the Property have been proposed that would create additional environmental impacts. H. This Agreement amends and restates the Original Loan Agreement in its entirety. BORROWER and CITY desire to enter into this Agreement to establish certain terms and conditions relating to the City Loan. NOW, THEREFORE, in consideration of the mutual covenants and agreements specified herein, and subject to its terms and provisions, the parties to this Agreement hereby agree as follows. 895\05\1261519.3 112212013 2 AGREEMENT The foregoing recitals are hereby incorporated by reference and made part of this Agreement. This Agreement is entered into to assist the BORROWER in the acquisition of the Property and the development of the Project, which consists of multifamily rental housing reserved for occupancy by extremely low, very low, and low income households. This Agreement sets forth the respective duties and responsibilities of CITY and BORROWER regarding the acquisition of the Property and financing for the development of the Project, establishes a schedule of performance by BORROWER, and provides for a termination of this Agreement under certain conditions. ARTICLE! DEFINITIONS AND EXHIBITS Section 1.1 Definitions. The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this. Agreement, unless otherwise provided: . (a) 'tAgreement" is defined in the first paragraph of this Agreement. (b) "Annual Operating Expenses" is defined in Section 2.9 below. (c) "Approved Acquisition Financing" shall mean all of the following loans: (1) Loan from the Local Initiatives Support Corporation ("LISC"), a New York not-for-profit corporation with its principal offices located at 501 Seventh Avenue, 7th Floor, New York, New York 10018, in the approximate amount of Four Million Dollars ($4,000,000) (including an interest reserve not to exceed Five Hundred Thousand Dollars ($500,000)), secured by a shared, first priority deed of trust on the Property (the "LISe Loanlt); (2) Loan from the Low Income Investment Fund ("LIIF"), a California nonprofit public benefit corporation with offices located at 100 Pine Street, Suite 1800, San Francisco, California 94111, in the approximate amount of Four Million Dollars ($4,000,000) (including an interest reserve not to exceed Five Hundred Thousand Dollars ($500,000)), secured by a shared, first priority deed of trust on the Property (the "LIIF Loan"); (3) Loan from the County of Santa Clara in the approximate amount of Two MillioJ;l Seven Hundred Fifty Nine Thousand Seven Hundred Eighty Dollars ($2,759,780) (the "County Loantt). 895\05\1267519.3 1122/2013 3 (d) ItApproved Construction Financing" shall mean the City Loan, the County Loan~ and the following additional financing: (1) Tax Credit Investor Proceeds in the approximate amount of One Million One Hundred Thirty Two Thousand Dollars ($1,132,000); and (2) Construction Loan in the approximate amount of Ten Million One Hundred Sixty One Thousand Dollars ($10,161,000), on tenus reasonably approved by the CITY. (e) "Approved Financing" means the Approved Acquisition Financing, the Approved Construction Financing,and/or the Approved Penuanent Financing. (f) "Approved Pennanent Financingll shall mean the City Loan, the County Loan, and the following additional financing: ' (1) Tax Credit Investor Proceeds in the approximate amount of Eleven Million Three Hundred Eighteen Thousand Dollars ($11,318,000); and (2) Conventional Mortgage in the approximate amount of One Million Two Hundred Twenty Eight Thousand Dollars ($1,228,000), on terms reasonable approved by the CITY. (g) "Assignment of Documents" is defined in Section 2.4. The form of the Assignment of Documents is attached hereto as Exhibit F. (h) "BORROWER" is defined in the first paragraph of this Agreement. (i) IICEQA" means the California Environmental Quality Act, Public Resources Code Section 21000 et seq. G) "CITY" is defined in the fIrst paragraph of this Agreement. (k) "City Council II means the City Council of the CITY. (1) ftCity Loan" is defined in paragraph D of the Recitals. The City Loan is more particularly described in Section 2.1 below. (m) "City Manager" means the City Manager of the CITY or the City Manager's designee. (n) nConstruction Bondt! is defined in Section 2.7 below. (0) "Construction Closing" means the date upon which all financing necessary for the construction of the Project on the Property closes, and any deeds of trust related to such finanCing are recorded against the Property. 895\05\1267519.3 1122/2013 4 (P) lIConstruction Contract" is defined in Section 2.7 below. (q) "Deed of Trust" is defined in Recital F. The form of the Deed of Trust is attached hereto as Exhibit C. (r) "Default" has the meaning set forth in Section 6.2 below. (s) "Default Rate" has the meaning set forth in Section 2.2 below. (t) "DIR" is the California Department of Industrial Relations. (u) "Effective Date" is defmed in the first paragraph of this Agreement. (v) "Financing Plan" has the meaning set forth in Section 3.4 below. (w) "Force Majeure" is defined in Section 7.16 below. (x) ItGeneral Contractor" is defined in Section 2.7 below. (y) "Gross Revenue" is defined in Section 2.9 below. (z) IIHazardous Materials" has the meaning set forth in Section 4.7 below. (aa) "Hazardous Materials Claim" has the meaning set forth in Section 4.7 below. (bb) "Hazardous Materials Law" has the meaning set forth in Section 4.7 below. (cc) "In-Lieu Housing FundI! is defined in Recital C. (dd) "Land Use Approvals" is defmed in Section 3.2 below. (ee) "Loan Documents" means this Agreement, the Note, the Deed of Trust, the Assignment of Documents, the Memo of Agreement, the Regulatory Agreement, and any other document or agreement evidencing the City Loan. (ft) "Market-Rate Parcel" is defined in Recital B. (gg) "Memo of Agreement" means the Memorandum of Acquisition and Development Loan Agreement and Option to Purchase to be recorded against the Property upon acquisition by BORROWER. (bb) ExhibitB. 895\05\1267519.3 LI2212013 "Note" is defined hi Recital F. The form of the Note is attached hereto as 5 (ii) "Notice of Exercise" has the meaning set forth in Section 6.4 below. Gj) "Option to Purchase" is defined in Sections 2.4 and 6.4 below. (kk) tlOriginal Deed of Trusf' is defin~d in Recital D. (11) "Original Loanll is definedin Recital D. (mm) "Original Loan Agreementtl is defined in Recital D. (nn) "Original Note" is defined in Recital D. (00) "Permanent Closing" means the date upon which all financing necessary for the operation of the Project on the Property closes, and any deeds of trust related to such financing are recorded against the Property. (Pp) "Predevelopment Activities" means the activities to be performed by BORROWER during the Term, as further described in Article 3 below. (qq) "Projectll is defined in Recital B. (rr) "Project Budget" is the pro forma acquisition and construction budget for the Project, including sources and uses of funds; as approved by the CITY, and attached as Exhibit D. (ss) "Project Documents" are defined in Section 2.4(b) below. (tt) "Property" is defined in Recital A, and is more particularly described in the attached Exhibit A. (uu) "Regulatory Agreement" means covenants entered into between the CITY and the BORROWER, to be recorded prior to Construction Closing, which requires that the Project, if approved by the CITY, be maintained and operated as housing affordable to extremely low> very low, and low-income households. (vv) "Residual Receipts" are defined in Section 2.9 below. (ww) "Schedule of Performance" is defined in Section 3.1 below, and is more particularly described in Exhibit E. (xx) (yy) (zz) 895\05\1267519.3 1122/2013 "Senior Lenders" are defined in Section 2.5 below. "Senior Loan" is defined in Section 2.5 below. nSUMC Fund" is defined in Recital C. 6 (aaa) "TCACIt means the California Tax Credit Allocation Committee. (bbb) "Term!! is defined in Section 2.9 below. (ccc) "Termination Noticefl is defined in Section 6.1 below. (ddd) "Third Party Buyer" is defined in Section 4.14 below. (eee) "Transfer" has the meaning set forth in Section 4.14 below. Section 1.2 Exhibits. The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference: EXHIBIT A: Legal Description of the Property EXHIBIT B: Note EXHIBIT c: Deed of Trust EXHIBIT D: Estimated Project Costs and Sources of Funds EXHIBIT E: Schedule of Performance EXHIBIT F: Assignment of Documents EXHIBIT G: Insurance Requirements ARTICLE 2 LOAN PROVISIONS Section 2.1 Loan. (a) Subject to satisfaction of the conditions set forth in Section 2.6, the CITY shall loan to the BORROWER the City Loan in the total principal amount of Five Million Eight Hundred Twenty Thousand Two Hundred Twenty Dollars ($5,820,220) for the purposes set forth in Section 2.3 of this Agreement. The obligation to repay the City Loan shall be evidenced by the Note in the form attached hereto as Exhibit B. (b) CITY is funding the principal amount of the City Loan from two sources, not to exceed a total of Five Million Eight Hundred Twenty Thousand Two Hundred Twenty Dollars «$5,820,220). As of the date of execution of this Agreement, Three Million Two Hundred Twenty Thousand Two Hundred Twenty Dollars ($3,220,220) has been disbursed to BORROWER from the In-Lieu Housing Fund to assist in the purchase of the Property. The remaining Two Million Six Hundred Thousand Dollars ($2,600,000) shall be funded from the SUMCFund. ( c) As CITY receives additional funds designated for the In Lieu Housing Fund, CITY will increase the outstanding principal balance of the City Loan attributable to the In Lieu 395\05\1267519.3 1122/2013 7 Housing Fund and will decrease the outstanding principal balance of the City Loan attributable to the SUMC Fund by the same amount, until the entire outstanding principal balance of the City Loan that is attributable to the SUMC Fund is zero, or until the date that the unpaid principal balance attributable to the SUMC Fund must be paid in full pursuant to Section 2.9(b), whichever comes first. CITY shall document changes to the balances attributable to each fund and, upon request, shall provide BORROWER with statements detailing such balances. As an example, if CITY receives $200,000 for the In-Lieu Housing Fund, the outstanding principal balance of the City Loan attributable to the In-Lieu Housing Fund shall be increased by $200,000 (to $3,420,000) and the outstanding principal balance attributable to the SUMC Fund shall be decreased by $200,000 (to $2,400,000).) Section 2.2 Interest. (a) Subject to the provisions of Section 2.2(b) below, the outstanding principal balance of the City Loan will bear simple interest at the rate of three percent (3%) per annum commencing with the date of the Pennanent Closing. (b) In the event of a Default, interest on the City Loan will begin to accrue, as of the date of Default and continue until such time as the City Loan funds are repaid in full or the Default is cured~ at the default rate of the lesser of eight percent (8%) per annum, compounded annually (the "Default "Rate") and the highest rate pennitted by law. Section 2.3 Use of Funds. BORROWER shall use the City Loan to fund the acquisition and development of the Property. BORROWER shall not use the City Loan for any other purpose without the prior written consent of the CITY. Section 2.4 Security. (a) Deed of Trust. The BORROWER shall secure its obligation to repay the City Loan, as evidenced by the Note, by executing the Deed of Trust, and recording it as a Hen against the Property senior in Hen priority to all other deeds of trust recorded against the Property except the LISC Loan and the LIIF Loan. The BORROWER shall also cause or permit the Memo of Agreement to be recorded against the Property. (b) Assignment of Documents. As further consideration and security for the City Loan, the BORROWER hereby assigns to the CITY its rights and obligations with respect to certain agreements, plans, specifications, other documents, and approvals (the "Project Documents"), pursuant to an Assigrunent of Agreements, Plans and Specifications, and Approvals (the "Assignment of Documentsft ), substantially in the form set forth in the attached Exhibit F. The assignments set forth in the Assignment of Documents shall become effective immediately upon the occurrence of a Default (as defined below in Section 6.2) or upon termination as described in Section 6.1. The CITY shall not have any obligation under any contracts or agreements assigned pursuant to the Assignment of Documents until the CITY expressly agrees in writing to be bound by such contracts or agreements. Upon Default or 895\05\1267519.3 112212013 8 termination, the CITY may use any of the foregoing assigned documents pursuant to the Assignment of Documents for 'any purpose for which the BORROWER could have used them for development of the Project, and the BORROWER shall cooperate with the CITY to implement the Assignment of Documents and shall immediately deposit with the CITY for the CITytS use all Project Documents that are the subject of the Assignment of Documents. (c) Option to Purchase. As further consideration and security for the City Loan, BORROWER hereby grants and gives to the CITY a right to purchase all of BORROWER's right, title and interest in and -to the Property upon Default on the terms set forth in Section 6.4 (the "Option to Purchase"). Section 2.5 Subordination. The Deed of Trust, Regulatory Agreement, and/or Memo of Agreement may (which includes the City's Option to Purchase), shall be subordinated to other loans approved by the CITY (in each case, a "Senior Loan"), but only on condition that all of the following conditions are satisfied. The LISe Loan and the LIIF Loan are considered a Senior Loan. (a) Subordination to Construction Financing. The CITY shall subordinate the Deed of Trust, Regulatory Agreement, and/or Memo of Agreement to Senior Loans proposed for Construction Closing if all of the conditions contained in Section 2.7 and in subsection (c) of this Section have been complied with. (b) Subordination to Permanent Financing. The City shall subordinate the Deed of Trust, Regulatory Agreement, andlor Memo of Agreement to Senior Loans proposed for Pennanent Closing if all of the conditions contained in Section 2.8 and in subsection (c) of this Section have been complied with. (c) Conditions Applicable to All Subordination Agreements. In addition to compliance with the requirements of subsection (a) or (b) above, all of the following conditions must be satisfied in all agreements subordinating the CITY's Loan Documents: (1) All of the proceeds of the proposed Senior Loan, less any transaction costs, must be used to provide acquisition, construction, rehabilitation, andlor permanent financing for the Project; (2) The proposed lender (each, a IISenior Lender") must be a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with BORROWER or any of the BORROWER'S affiliates, other than as a depositor or a lender; _ (3) BORROWER must demonstrate to the CITY'S reasonable satisfaction that subordination of the Deed of Trust, Regulatory Agreement, andlor Memo of Agreement is necessary to secure adequate acquisition, construction, rehabilitation andlor permanent financing to ensure the operation of the Project, if approved, as affordable housing, as required by the Loan Documents. To satisfy this requirement, BORROWER must provide to the CITY, in addition to any other infonnation reasonably 895\05\1267519.3 112212013 9 required by the CITY, evidence demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate acquisition, construction, rehabilitation andlor permanent financing to ensure the viability of the Project, and that adequate financing for the Project would not be available without the proposed subordination; (4) The subordination agreement(s) must be structured to minimize the risk that the Deed of Trust, Regulatory Agreement, andlor Memo of Agreement would be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Loan. To satisfy this requirement, the subordination agreement must provide the eITY with adequate rights to cure any defaults by BORROWER, including: (i~ providing the CITY or its successor with copies of any notices of default at the same time and in the same manner as provided to BORROWER; and (ii) providing the CITY with a cure period o(at least forty-five (45) days to cure any default; (5) No subordination may limit the effect of the Deed of Trust, Regulatory Agreement, andlor Memo of Agreement before a 'foreclosure, nor require consent of the holder of the Senior Loan to exercise of any remedies by the CITY under the Loan Documents, except for limited standstill periods of up to ninety (90) days as required by the subordination agreements related to the LIse Loan and the LIIF Loan; (6) The subordination(s) described in this Section 2.5 may be effective only during the original term of the Senior Loan and any extension of its term or refmancing approved in writing by the CITY, except as otherwise provided in the subordination agreements related to the LISe Loan and the LIIF Loan. Upon a determination by the City Attorney that the conditions in this Section have been satisfied, the City Manager or hislher designee will be authorized to execute the approved subordination agreement without the necessity of any further action or approval. Section 2.6 Disbursement Requirements -Acquisition Loan. (a) The CITY has previously disbursed Three Million Two Hundred Twenty Thousand Two Hundred Twenty Dollars ($3,220,220) to BORROWER subject to the following conditions precedent: (1) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement, or under any other agreement between the CITY and the BORROWER; (2) BORROWER will close escrow and complete the acquisition of the Property on or before May 31, 2013. The City Manager may extend the date for close of escrow pursuant to Section 2.9(a); (3) BORROWER has delivered to the CITY copies of all of BORROWER's organizational documents, a certificate of status for the BORROWER dated within thirty (30) days of the Effective Date, and a copy of a corporate authorizing resolution authorizing BORROWER's execution of the Loan Documents; 895\05\1267519.3 112212013 10 (4) BORROWER has furnished the CITY with evidence of the insurance coverage meeting the requirements of Exhibit G (5) BORROWER has executed and delivered to the CITY the Loan Documents and any other instruments and policies required under the Loan Documents, except the Regulatory Agreement; (6) The Memo of Agreement and Deed of Trust have been, or will be concurrently with the acquisition of the Property, recorded against the Property in the Office of the Recorder of the County of Santa Clara in a lien position acceptable to the CITY; , (7) The BORROWER and all Contractors, as defined in the Assignment of Documents, have executed and delivered to the CITY the Assignment of Documents in the form attached as Exhibit F; (8) BORROWER has executed and delivered to the CITY all other documents, instruments, and policies required under the Loan Documents; (9) A title insurer reasonably acceptable to the CITY is unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of insurance insuring the priority of the Memo of Agreement and Deed of Trust in the amount of the City Loan, subject only to such exceptions and exclusions as may be reasonably acceptable to the CITY, and containing such endorsements as the CITY may reasonably require; and (l0) The CITY has received a written draw request with complete documentation of acquisition expenses from the BORROWER, including all closing costs, demonstrating that the undisbursed proceeds of the City Loan, together with other funds or firm commitments for funds that BORROWER has obtained in connection with the Property, are not less than the amount that the CITY determines is necessary to pay for acquisition of the Property. If CITY determines that the entire City Loan is not required to pay reasonable and necessary acquisition costs for the Property, CITY may disburse to BORROWER only those funds required to acquire the Property. (b) The CITY is not obligated to make any disbursement of the remaining Two Million Six Hundred Thousand Dollars ($2,600,000) for the acquisition of the Property or take any other action under the· Loan Documents unless all of the following conditions precedent are satisfied: (1) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement, or under any other agreement between the CITY and the BORROWER; (2) BORROWER has delivered to the CITY copies of all of BORROWER's organizational documents, a certificate of status for the BORROWER dated within thirty (30) days of the Effective Date, and a copy of a corporate authorizing resolution authorizing BORROWER's execution of the Loan Documents; 895\05\ 12675 t 9.3 1122/2013 11 (3) BORROWER has furnished the CITY with evidence of the insurance coverage meeting the requirements of Exhibit G (4) BORROWER has executed and delivered to the CITY the Loan Documents and any other instruments and policies required under the Loan Documents, except the Regulatory Agreement; (5) The Memo of Agreement and Deed of Trust have been, or will be concurrently with the acquisition of the Property, recorded against the Property in the Office of the Recorder of the County of Santa Clara in a lien position acceptable to the CITY, and CITY has received executed subordination agreements as required to ensure that the Deed of Trust remains in the same lien position as the Original Deed of Trust; (6) The BORROWER and all Contractors, as defined in the Assignment of Documents, have executed and delivered to the CITY the Assignment of Documents in the form attached as Exhibit F; (7) BORROWER has executed and delivered to the CITY all other documents, instruments, and policies required under the Loan Documents; (8) A title insurer reasonably acceptable to the CITY is unconditionally and irrevocably. committed to issuing an ALTA Lender's Policy of insurance insuring the priority of the Memo of Agreement and Deed of Trust in the amount of the City Loan, subject only to such exceptions and exclusions as may be reasonably acceptable to the CITY, and containing such endorsements as the CITY may reasonably require; and (9) The CITY has received a written draw request with complete documentation of acquisition expenses from the BORROWER} including all closing costs, demonstrating that the undisbursed proceeds oithe City Loan, together with other funds or firm commitments for funds that BORROWER has obtained in connection with the Property, are not less than the amount that the CITY determines is necessary to pay for acquisition of the Property. If CITY determines that the entire City Loan is not required to pay reasonable and necessary acquisition costs for the Property, CITY may disburse to BORROWER only those funds required to acquire the Property. (c) Following reconveyance of the LISC Loan and the LIIF Loan, if the entire City Loan was not required to pay reasonable and necessary acquisition costs for the Property, BORROWER may submit a written draw request to CITY to disburse the remaining portion of the City Loan for reasonable predevelopment expenses, such as architectural and engineering fees, upon presentation of signed contracts for such services. The City Manager may authorize disbursement of any remaining City Loan funds upon BORROWER's compliance with this subsection (c) and subsections (b)(1) -(3). Section 2.7 895\05\1267519.3 112212013 Subordination to Construction Financing. 12 The City shall not subordinate the Deed of Trust or Memo of Agreement to Senior Loans proposed for Construction Closing unless all of the conditions contained in Section 2.5 and in this Section have been complied with. (a) BORROWER has executed and delivered to the CITY the Regulatory Agreement, and the Regulatory Agreement has been, or will be concurrently with the Construction Closing, recorded against the Property in the Office of the Recorder of the County of Santa Clara in a lien position acceptable to the CITY. (b) BORROWER has submitted to the CITY, and CITY has approved, the Financing Plan as described in Sectio~ 3.4, demonstrating that the BORROWER holds sufficient funds andlor binding commitments for sufficient funds to complete the construction of the Project in accordance with the plans and specifications for the Project and to subsequently operate and maintain the Project. The development budget may provide for a developer's fee or a similar fee or fees based on submittal of the Final Budget to the City. City must approve the Final Budget. (c) BORROWER has submitted to the CITY a fully executed copy of a legally binding contract for construction of the Project (the "Construction Contractlt) which obligates a reputable and financially responsible general contractor (the "General Contractor"), licensed in California and experienced in completing the. type of Project contemplated by this Agreement, to commence and complete the construction of the Project, with a guaranteed maximum fixed price consistent with the Final Construction and Permanent Financing Plan. The Construction Contract shall provide for construction of the Project at a guaranteed maximum fixed price, subject to such reasonable adjustments as are customarily allowed with respect to construction contracts. The Construction Contract shall provide for retention of at least ten (10) percent from each progress payment until the final payment, and the final payment shall not be paid to the General Contractor until the occurrence of (1), (2) or (3), below: (1) The expiration of thirty (30) days if a Unconditional Waiver and Release has been issued by the General Contractor or the expiration of sixty-five (65) days from the date of recording by BORROWE~ as owner, of a Notice of Completion for the Project, which BORROWER agrees to record promptly within the times specified by law for the recording of such Notice; and the settlement and discharge of all liens and charges claimed by persons who supplied either labor or materials for the construction of such Project; or (2) The posting of a bond, acceptable to the CITY in fonn and amount, insuring the Property and any interest therein against loss arising from any mechanics', laborers', materialmens' or other like liens filed against the Property; or (3) BORROWER shall have provided such other assurances as may be acceptable to the CITY protecting the Property and any interest therein against loss arising from any mechanics', laborers', materialmens' or other like liens filed against the Property. 895\05\1261519.3 112212013 13 (d) The Construction Contract shall require the General Contractor to warrant all work and materials for at least one year after issuance of a certificate of occupancy for the Project. (e) The CITY shall have received satisfactory evidence that the insurance required by Exhibit G of this Agreement is in effect. (:t) The CITY shall have received a: Performance Bond and a Labor and Material Payment Bond (in the fonn of AlA form A311 or A312) (the nConstruction Bond"), issued by a surety acceptable to the CITY in the CITY's reasonable discretion, securing the faithful perfonnance by the General Contractor of the completion of the construction of the Project free of all liens and claims, within the time provided in the updated Schedule of Performance. The Construction Bond shall be in an amount equal to one hundred percent (100%) of the Construction Contract, shall name the CITY as a co-obligee, and shall be issued by a company acceptable to the CITY and listed in the current United States Treasury Department circular 570 and otherwise within the underwriting limits specified for that company in such circular. Section 2.8 Subordination to Permanent Financing. The City shall not subordinate the Deed of Trust, Regulatory Agreement, andlor Memo of Agreement to Senior Loans proposed for Permanent Closing unless all of the conditions contained in Section 2.5 and in this Section have been complied with. (a) Construction of the Project has been completed, as evidenced by a certificate of occupancy or equivalent certification provided by the CITY and an architectts or e.ngineerfs certificate of completion. (b) A notice of completion has been timely recorded. (c) Either the lien period has expired and there are no unreleased mechanicst liens or stop notices; or lien releases have been recorded for all contractors, subcontractors and suppliers who provided labor or materials for the Project. Section 2.9 Repayment of the City Loan. (a) Term. The ItTennlt of this Agreement commences as of the Effective Date, and expires, unless sooner terminated in accordance with this Agreement,.on the date that is fifty-five (55) years after the date of the Permanent Closing. (b) Due in Full. BORROWER shall pay to CITY any unpaid principal balance of the City Loan that is attributable to the SUMC Fund (as may be modified pursuant to Section 2.1), together with any accrued interest thereon, no later than January 31, 2015, except that CITY, at its sole discretion, may extend the date for repayment for up to one year (to January 31,2016). BORROWER shall pay all other outstanding principal and accrued interest on the City Loan, in full, on the earliest to occur of (i) any Transfer not authorized by the CITY, (ii) a Default, (iii) on January 31, 2015 or any extension of that date if the Agreement is terminated pursuant to Section 6.1, and (iv) the expiration of the Term. The CITY and the BORROWER shall have the right, 895\05\ 1267519.3 112212013 14 but not the obligation, to extend the period for repayment of the City Loan or to modify the tenns of the City Loan, including the option to forgive the portion of the City Loan attributable to the In-Lieu Housing Fund, if desirable to serve the purposes of this Agreement. (c) Annual Payments. No later than April 30th of each calendar year after Permanent Closing, the BORROWER shall make repayments of any remaining unpaid principal balance of the City Loan for that prior calendar year based on the available amount of Residual Receipts (as defined below in subsection (c)(3). The CITY shall, in its reasonable discretion, share Residual Receipts proportionately with other lenders in proportion to their respective loan amounts to the Project. These payments shall be credited first against accrued interest and then against outstanding principal of the City Loan, and shall be accompanied by the BORROWER's report of Residual Receipts (including an independent auditor's report regarding the auditorts review of Gross Revenue and Annual Operating Expenses). The BORROWER shall provide the CITY with any documentation reasonably requested by the CITY to substantiate the BORROWER's determination of Residual Receipts. The following definitions shall apply for the purposes of this subsection (c): (1) "Annual Operating Expenses," with respect to a particular calendar year during the· Term, means the following costs reasonably and actually incurred for operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property taxes and assessments imposed on the Project; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on permanent loans that are Senior Loans or part of the Approved Financing; property management fees and reimbursements, excluding incentive management fees, not to exceed fees and reimbursements which are standard in the industry; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Project; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Project in the amount required by Senior Lenders, or if there are no Senior Lender requirements, an amount consistent with California Tax Credit Allocation Committee standards; cash deposited into an operating reserve for the Project in an amount required by Senior Lenders or the investor's limited partner, or if there are no Senior Lender or limited partner requirements, an amount consistent with California Tax Credit Allocation Committee standards; extraordinary operating costs specifically approved by the CITY; payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves; deferred BORROWER fees; and other ordinary and reasonable operating expenses approved by the CITY and not listed above. Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses or any amount expended from a reserve account. (2) "GrOSS Revenue," with respect to a particular calendar year during the Term, means all revenue, income, receipts, and other consideration actually received from operation and leasing of the Project. tlGross Revenue" shall·include, but not be 895\05\1267519.3 1122/2013 15 limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements resulting in actual income; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; subject to the rights of Senior Lenders, the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project (or applied toward the cost of recovering such proceeds) and not payable to the Senior Lenders; and condemnation awards for a taking of part or all of the Project for a temporary period. "Gross Revenue" shall also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Project. "Gross Revenue" shall not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (3) "Residual Receipts," with respect to a particular calendar year . during the Term, means the amount by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as defined above). (d) Records Regarding Residual Receipts. In connection with the annual payments required by Section 2.9(c), within one hundred fifty (150) days of the end of the BORROWER's fiscal year, the BORROWER .shall furnish to the CITY an audited statement duly certified by an independent firm of certified public accountants approved by the CITY, setting forth in reasonable detail the computation and amount of Residual Receipts during the preceding calendar year. (1) The BORROWER shall keep and maintain on the Property, or at its principal place of business, or elsewhere with the CITY's written consent, full, complete and appropriate books, records and accounts relating to the Project, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the BORROWER's calculation of Residual Receipts. Books, records and accounts relating to the BORROWER's compliance with the tenns, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement which provide for the calculation of Residual Receipts on a cash basis. All such books, records, and accounts shall be open to and available for inspection by the CITI, its auditors or other CITY authorized representatives at reasonable intervals during nonnal business hours. Copies of all tax returns and other reports that the BORROWER may be required to furnish any governmental agency shall at all· reasonable times be open for inspection by the CITY at the place that the books, records and accounts of the BORROWER are kept. The BORROWER shall preserve records on which any statement of Residual Receipts is based for a period of not' less than five (5) years after such statement is rendered, and for any period during which there is an audit undertaken pursuant to subparagraph (d)(2) below then pending. (2) The receipt by the CITY of any statement pursuant to this subsection (d) or any payment by the BORROWER or acceptance by the CITY of any City Loan repayment for any period shall not bind the CITY as to the correctness of such 895\05\1 267519.3 lf22120l3 16 statement or such payment. Within three (3) years after the receipt of any such statement, the CITY or any designated agent or employee of the CITY at any time shall be entitled to audit the Residual Receipts and all books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of the BORROWER and other places where records are kept. Immediately after the completion of an audit, the CITY shall deliver a copy of the results of such audit to the BORROWER. If it shall be determined as a result" of such al.!dit that there has been a deficiency in a City Loan repayment to the CITY, then such deficiency shall become immediately due and payable with interest at the non-default rate set forth in the Note (unless BORROWER's failure, refusal, or repeated failure to correctly calculate and/or submit the repayment constitutes an event of default, in which case interest shall be paid at the Default Rate), determined as of and accruing from the date that said payment should have been made. (e) Right to Prepay. BORROWER may prepay the City Loan at any time without premiwn or penalty. All prepayments shall be credited first applied to accrued interest and then to outstanding principal. The Deed of Trust shall remain in effect for the entire Term to secure the Regulatory Agreement, when recorded. Section 2.10 Non .. Recourse. Except as provided below, neither BORROWER, nor any partner of BORROWER, has any personal liability for payment of the principal of, and interest on, the City Loan. Following recordation of the Deed of Trust, the sole recourse of the CITY with respect to the principal of, or interest on, the Note will be to the property described in the Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability limits or impairs the enforcement of all the rights and remedies of the CITY against all such security for the Note, or impairs the right of CITY to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation to repay the principal and interest on the Note. Except as hereafter set forth; nothing contained herein is intended to relieve BORROWER of its obligation to indemnify the CITY under Sections 4.5, 4.6,4.7, and 7.6 of this Agreement, or liability for (i) loss or damage of any kind resulting from waste, fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by BORROWER other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property. 895\05\ l2675 19.3 1122/2013 17 ARTICLE 3 PREDEVELOPMENT ACTIVITIES Section 3.1 Predevelopment Activities. (a) This Article 3 sets forth various Predevelopment Activities that BORROWER shall seek diligently and in good faith to perform and achieve. (b) Exhibit E (the ItSchedule of Performancefl) describes the tasks that must be completed and the dates proposed by BORROWER for their completion. The Schedule of Perfonnance may be modified in writing by BORROWER and by the City Manager on behalf of the CITY without formal amendment of this Agreement. However, if the Construction Closing has not occurred by January 31, 2015, subject to Force Majeure,. the CITY may terminate this Agreement pursuant to Section 6.1 below as applicable, and exercise its remedies pursuant to this Agreement. (c) Sections 3.3, 3.4, and 3.5 apply only if CITY grants the Land Use Approvals for the Project as described in Section 3.2. Section 3.2 Land Use Approvals and CEQA Review. (a) Within the time set forth in the Schedule of Performance, BORROWER shall submit to the CITY a complete application for all discretionary land use entitlements required from the CITY to construct the Project and to create the Market-Rate Parcel (the "Land Use Approvals"). (b) BORROWER shall exercise diligent good faith efforts to seek CITY approval of all Land Use Approvals within the time set forth in the Schedule of Performance, in accordance with all applicable legal requirements and procedures. (c) As part of its review of the Land Use Approvals, the CITY shall complete the environmental documents required for the Land Use Approvals. Nothing in this Agreement shall be construed to compel the CITY to approve or make any particular findings with respect to such environmental documents. The BORROWER shall reasonably assist the CITY in its determination by providing information about the Project as requested. (d) Nothing in this Agreement shall obligate the CITY to exercise its discretion regarding the Project in any particular manner. BORROWER acknowledges that execution of this Agreement by the CITY does not constitute approval by the CITY of any Land Use Approvals or any required pennits, applications, or maps, and in no way limits the discretion of the CITY in the permit and approval process. BORROWER acknowledges that approval or. disapproval of the Land Use Approvals following completion of the environmental review process is within the sole discretion of the CITY without limitation by or consideration of the terms' of this Agreement; and that the CITY makes no representation regarding the ability or willingness of the CITY to approve the Land Use Approvals, including the creation of the Market-Rate Parcel, nor any representation regarding the imposition of any mitigation measures 895\05\1267519 J t12212013 18 or other conditions of approval. The parties recognize that the CITY has the sole discretion and right to terminate this Agreement without fault or Default if CITY determines not to approve the Land Use Approvals for the Project. In addition, the BORROWER acknowledges that other local, state or federal agencies may require additional entitlements, including environmental review, and that any approval by the CITY does not bind any other local, state or federal agency. (e) If the CITY approves the Project following completion of the environmental review process and such approval is conditioned upon implementation of specified environmental mitigation measures or other conditions of approval, the BORROWER shall be responsible for implementing such mitigation measureS and conditions as part of the Project. Section 3.3 Tax Credit and Other Financinfl ARPlications. (a) BORROWER shall submit a timely and complete application to TCAC for a preliminary reservation of nine percent (9%) tax credits within the time set forth in the Schedule of Performance. (b) If BORROWER is not successful in obtaining a reservation of tax credits from TCAC in its first application, BORROWER shall submit a second application. (c) BORROWER further agrees to seek construction and permanent funding for the Project from all available and appropriate sources to ensure that the Project will be financially feasible and will provide affordable rental housing for extremely low, very low, and low-income households. Section 3.4 Financing Plan. (a) The preliminary Project Budget is shown in Exhibit D. Within the time set forth in the Schedule of Performance BORROWER shall submit for CITY approval a Final Construction and Permanent Financing Plan (the "Financing Plan") containing the following: (1) An updated development budget showing a "sources and uses" breakdown of the costs of constructing the Project. (2) of the Project. An operating pro forma for the first thirty (30) years of operation (3) Copies of all required funding commitments for construction and permanent financing for the Project; or proposed funding, as applicable. (4) Any other information that is reasonably necessary for the CITY to determine that BORROWER has the financial capability to pay all costs of constructing and operating the Project. (b) . The CITY shall review the Financing Plan to determine if, in the CITY's reasonable judgment~ BORROWER has the financial capability (taking into account all committed funds) to pay all realistically established costs of constructing and operating the 895\05\1267519.3 112212013 19 Project. The CITY shall review the Financing Plan an4 shall either approve or disapprove the Financing Plan in writing within thirty (30) days of receipt. If disapproved, the CITY shall give specific reasons in writing for disapproval and the required revisions to the previously submitted Financing Plan. If the Financing Plan is disapproved, BORROWER shall resubmit, a revised Financing Plan within thirty (30) days of notification of disapproval. The CITY shall either approve or disapprove the submitted revised Financing Plan within thirty (30) days of the date such revised Financing Plan is received by the CITY. (c) BORROWER shall submit any material revision to an approved Financing Plan to the CITY for its review and approval. Any proposed revised Financing Plan shall be considered and approved or disapproved by the CITY in· the same manner and according to the same timeframe set forth in subsection (b) above. Section 3.5 Building Permit. (a) Within the time set forth in the Schedule of Performance BORROWER shall submit a complete application to the CITY for a building permit for the construction of the Project. (b) BORROWER shall exercise diligent good faith efforts to obtain the building permit for the Project within the time set forth in the Schedule of Performance. ARTICLE 4 ONGOING OBLIGATIONS Section 4.1 Periodic Reports. During the performance of the Predevelopment Activities set forth in Article 3, BORROWER shall on the frrst day of each month of the Termt and from time to time as reasonably requested by the CITY, provide the CITY with written progress reports regarding the status of the performance of the Pre development Activities. Section 4.2 Information. BORROWER shall provide any information reasonably requested by the CITY in connection with the ownership of the Property' and performance of the Predevelopment Activities. Section 4.3 Records. BORROWER shall maintain on a current basis complete records, including books of original entry, source documents supporting accounting transactions, service records, a general ledger, canceled checks, time sheets, and related documents and records to assure proper accounting of funds and performance of the terms of this Agreement. BORROWER shall furnish any and all information and reports which may be required by CITY in connection with this 895\05\ l2675 19.3 1!l212013 20 Agreement. BORROWER shall further permit access to its books, r~cords and accounts by the representatives and employees of. CITY during regular business hours, and with reasonable notice, for the purpose of investigation or audit to ascertain compliance with all applicable laws, regulations, rules and orders and for the purpose of evaluating and monitoring BORROWER's compliance with the provisions of this Agreement. All such records shall be retained by BORROWER and made available to CITY upon request for review or audit for a period of at least five (5) years following the expiration or termination of this Agreement. Section 4.4 Audits. BORROWER shall provide CITY, during the term of this Agreement, with copies of audited financial statements of BORROWER, including any management letter comments on the adequacy of internal or operational controls, within one hundred fifty (150) days of the close of each fiscal year of the BORROWER. CITY reserves the right, during the term of this Loan Agreement, to audit the records, including the financial records supporting the aforementioned financial statements, and other records and documents pertaining to the operations of the Project. Section 4.5 Compliance with Laws; Prevailing Wages. (a) BORROWER shall comply with all applicable laws, ordinances, rules and regulations of federal, state, county or munidpal governments or agencies now in force or that may be enacted hereafter, including (without limitation and where applicable) the prevailing wage provisions of Sections 1770 et seq., of the California Labor Code and implementing rules and regulations as set forth below, in owning the Property, performing the Predevelopment Activities, and constructing the Project on the Property. (b) This Agreement has been prepared with the intention that CITY assistance under this Agreement does not require payment of state prevailing wages in connection with construction work that is paid for in whole or in part out of public funds; provided, however, that nothing in this Agreement constitutes a representation or warranty by the CITY regarding the applicability of the provisions of Labor Code Section 1720 et ~., and the hiring of apprentices pursuant to Labor Code Sections 1777.5 et seq., to the City Loan or Approved Financing. To the extent applicable, BORROWER shall pay and shall cause the General Contractor and subcontractors to pay prevailing wages in connection with the construction of the Development, as those wages are determined pursuant to Labor Code Sections 1720 et ~., to employ apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations of the Department of Industrial relations ("DIR"). BORROWER shall and shall cause the consultants and contractors to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and implementing regUlations of the DIR. BORROWER shall cause the contractors to keep and retain such records as are necessary to determine if such prevailing wages have been paid as required pursuant to Labor Code Sections 1720 et ~., and apprentices have been employed are required by Labor Code Sections 1777.5 et seq. Copies of the currently applicable current per diem prevailing wages are available from DIR. (c) BORROWER shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the CITy) the CITY against any claim for damages, compensation, &95\05\1261519.3 112212013 21 fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including BORROWER, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et ~., to employ apprentices pursuant to Labor Code Sections 1777.5 et ~., and implementing regulations of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the Pre development Activities or any other work undertaken or in connection with the Property. The requirements in this subsection (c) shall survive the repayment of the City Loan and the reconveyance of the Deed of Trust. Section 4.6 Relocation. If and to the extent that acquisition and development of the Property will result in the permanent or temporary displacement of persons or businesses entitled to relocation benefits~ then BORROWER shall comply with all applicable local, state, and federal statutes and regulations, (including without limitation the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as. amended, California Government Code Section 7260 et seq., and accompanying regulations) with respect to preparation of a relocation plan, relocation planning, advisory assistance, and payment of monetary benefits. BORROWER shall be solely responsible for payment of any relocation benefits to any displaced persons and any other .obligations associated with complying with such relocation laws. BORROWER shall indemnify, defend and hold harmless, (with counsel reasonably acceptable to the CITY), the CITY and its councilmembers, employees, agents, successors and assigns against any claim for damages, compensation, fines, penalties, relocation payments or other amounts and expenses (including reasonable attorneys' fees) arising out of the failure or alleged failure of any person or entity (including BORROWER, or the CITY) to satisfy relocation obligations related to the acquisition of the Property. This obligation to indemnify shall survive termination of this Agreement. Section 4.7 Hazardous Materials. (a) BORROWER shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any Hazardous Materials Law (defined below), including but not limited to, soil and ground water conditions. BORROWER shall not, and shall not cause or permit the use, generation, manufacture, storage or disposal of on, under, or about the Property or transportation to or from the Property of (i) any substance, material, or waste th~t is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos- containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical, and (U) any waste, substance or material defined as or included in the definition of "hazardous substances," IIhazardous wastes," flhazardous materials," "toxic materials", tltoxic waste", "toxic substances," or words of similar import under any Hazardous Materials Law (collectively referred to hereinafter as "Hazardous Materialsll). BORROWER shall cause any persons who may come onto the Property to comply with the foregoing. Notwithstanding the foregoing, Hazardous Materials shall not ·include substances routinely used in the development and operations of housing in accordance with all applicable laws and regulations. 895\05\1267519.3 112212013 22 (b) BORROWER shall immediately notify the CITY in writing if at any time it has any notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against BORROWER or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, health, industrial hygiene, environmental conditions, or the regulation or protection of the environment, and all amendments thereto as of this date and to be added in the future and any successor statute or rule or regulation promulgated thereto ("Hazardous Materials Lawn); (ii) all claims made or threatened by any third party against BORROWER or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) BORROWER's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property It under the provision of California Health and Safety Code, Sections 25220 et~., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) The CITY shall have the right to join and participate in, as a party if it so elects, and be represented by counsel of its own choice in, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims, and to have its reasonable attorneys' fees in connection therewith paid by BORROWER. (d) BORROWER shall indemnify and hold harmless the CITY and its councilmembers, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, fine, penalty, judgment, award, settlement, expense or liability, directly or indirectly arising out of or attributable to: (i) any actual or past or present violation of any Hazardous Materials Law; (ii) any Hazardous Materials Claim; (iii) any actual or past or present use, generation, manufacture, storage, release, threatened release, discharge, disposal, transportation, or presence of Hazardous Materials on, under, or about the Property; (iv) any investigation, cleanup, remediation, removal, or restoration work of site conditions of the Property relating to Hazardous Materials (whether on the Property or any other property); and (v) the breach of any representation of warranty by or covenant of BORROWER in this Section 4.7, and Section 5.1(h). Such indemnity shall include, without limitation: (i) all consequential damages; (ii) the costs of any required or necessary investigation, repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (iii) all reasonable costs and expenses incurred by the CITY in connection with clauses (i) and (ii), including but not limited to reasonable attorneys' fees and consultant fees. This obligation to indemnify shall survive termination of this Agreement and shall not be diminished or affected in any respect as a result of any notice, disclosure, knowledge, if any, to or by the CITY of Hazardous Materials. (e) Without the CITY's prior written consent, which shall not be unreasonably withheld, BORROWER shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any claims made or threatened by any third party against BORROWER, any tenant, or the Property relating to damage, contribution, cost 895\05\1267519.3 112212013 23 recovery compensation, loss or injury resulting from any Hazardous Materials, which remedial action, settlement, consent decree or compromise might, in the CITY's reasonable judgment, impair the value of the CITY's security hereunder; provided, however, that the CITY's prior consent shall not be necessary: (i) in relation to those remedial actions initiated by the sellers of the Property pursuant to SCCo Case No. 06S2W18L03s; and (ii) in the event that the presence of Hazardous Materials. on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the CITY's consent before taking such action, provided that in such event BORROWER shall notify the CITY as soon as practicable of any action so taken. The CITY agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) BORROWER will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) BORROWER establishes to the reasonable satisfaction of the CITY that there is no reasonable alternative to such remedial action which would result in less impairment of the CITY's security hereunder; or (iv) the action has been agreed to by the CITY. (f) BORROWER hereby acknowledges and agrees that (i) this Section is intended as the CITY's written request for information (and BORROWERts response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Property is intended by the Parties to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. (g) In the event that any portion of the Property is determined to be "environmentally impaired II (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3») or to be an Itaffected parcell! (as that teon is defined in California Code of Civil Procedure Section 726.S(e)(1)), then, without otherwise limiting or in any way affecting the CITY's or the trustee's rights and remedies under the Deed of Trust, the CITY may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (i) waive its lien on such environmentally impaired or affected portion of the Property and (ii) exercise (1) the rights and remedies of an unsecured creditor, including reduction of its claim against BORROWER to judgment, and (2) any other rights and remedies permitted by law. For purposes of detennining the CITY right to proceed as an unsecured creditor under CalifomiaCode of Civil Procedure Section 726.5(a), BORROWER shall be deemed to have willfully permitted or acquiesced in a release or threatened release of Hazardous Materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and BORROWER knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses~ including (but not limited to) attorneys' fees~ incurred by the CITY in cormection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the rate specified in the Note until paid, shall 895\05\1267519.3 1122/2013 24 be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the CITY upon its demand made at any time following the conclusion of such action. Section 4.8 Maintenance and Damage. (a) BORROWER shall maintain the Property and the Project in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if BORROWER has not cured such condition within thirty (30) days after receiving a notice from the CITY of such a condition, then in addition to any other rights available to the CITY, the CITY shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property. (b) If any improvement constructed on the Property by BORROWER, now or in the future, is damaged or destroyed, then BORROWER shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with any plans and specifications approved by the CITY. Such work or repair shall be commenced no later than the later of one hundred twenty (120) days, or such longer period approved by the CITY in writing, after the damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and shall be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and~ if such insurance proceeds shall be insufficient for such purpose, then BORROWER shall make up the deficiency. Section 4.9 Mechanics Liens. Stop Notices, and Notices of Completion. (a) If any claim of lien is filed against the Property or a stop notice affecting the City Loan is served on the CITY or any other lender or other third party in connection with the Development, then BORROWER shall, within thirty (30) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the CITY a surety bond in sufficient form and amount, or provide the CITY with other assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or discharged. (b) If BORROWER fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the CITY may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at BORROWER'S expense. Alternately, the CITY may require BORROWER to immediately deposit with the CITY the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is adversely determined against BORROWER. (c) BORROWER shall file a valid notice of cessation or notice of completion upon cessation of construction on the Development and take all other reasonable' steps to forestall the assertion of claims of lien against the Property. BORROWER authorizes the CITY, but without any obligation, to record any notices of completion or cessation of labor, or any other notice that the CITY deems necessary or desirable to protect its interest in the Property. 895\05\1267519.3 lamOI3 25 Section 4.10 Fees and Taxes. BORROWER shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Project to the extent owned by BORROWER, and shall pay such charges prior to delinquency. However, BORROWER shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the CITY, BORROWER deposits with the CITY any funds or other fonns of assurance that the CITY in good faith from time to time detennines appropriate to protect the CITY from the consequences of the contest being unsuccessful. Section 4.11 Notices. BORROWER shall notify the CITY promptly in writing of any and all of the following: (a) Any litigation known to BORROWER affecting BORROWER, or the Property and of any claims or disputes that involve a material risk of litigation; (b) Any written or oral communication BORROWER receives from any governmental, judicial, or legal authority giving notice of any claim or assertion that the Property or Project fails in any respect to comply with any applicable governmental law; (c) Any material adverse change in the physical condition of the Property (including any damage suffered as a result of fire, earthquakes, or floods); (d) Any material adverse change in BORROWER's financial condition, any material adverse change in BORROWER1s operations, or any change in the management of BORROWER; (e) That any of the statements in Section 5.1 (h) regarding Hazardous Materials are no longer accurate; (f) Any Default or event which, with the giving of notice or the passage of time or both, would constitute a Default; and (g) Any other circumstance, event, or occurrence that results in a material adverse change in BORROWER's ability to timely perfonn any of its obligations under any of the Loan Documents. Section 4.12 Non-Discrimination. BORROWER shall not discriminate or segregate in the ownership of the Property, and performance of the Predevelopment Activities, or operation or construction of the Project on the basis of race, color, creed, ancestry, national origin, religion, sex, sexual orientation, marital status, age, disability, medical condition, familial status, source of income or any other arbitrary 895\05\1267519.3 1122/2013 26 basis. BORROWER shall otherwise comply with all applicable local, state, and federal laws concerning discrimination. Section 4.13 Insurance Requirements. BORROWER, at its sole cost and expense, shall obtain and maintain during the term of this Agreement, insurance provided by responsible companies authorized to engage in the offering of insurance services in California in such amounts and against such risks as shall be satisfactory to CITY'S risk manager, including, without limitation, worker's compensation, employer's liability, commercial general liability, comprehensive automobile liability, personal injury and property damage insurance, as appropriate, as set forth in Exhibit G, insuring against all liability of BORROWER and its directors, officers, employees, agents, and representatives arising out of or in connection with the acquisition, construction and development of the Project or BORROWER'S performance or nonperformance under this Agreement. Section 4.14 Transfer. (a) For purposes of this Agreement, "Transfer" is any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Project is transferred and the BORROWER retains title. "Transfer" shall exclude the leasing of any single unit in the Project to . an occupant and the transfer of an easement interest in the Property for utility purposes. The City Manager or his/her designee is authorized to execute assignment and asswnption agreements on behalf of the CITY to implement any approved Transfer. (b) CITY is entering into this Agreement based on the experience, skill, and ability to perform of BORROWER. The BORROWER recognizes that its qualifications and identity are of particular concern to the CITY,in view of: (i) the importance of affordable housing to the general welfare of the community; (ii) the reliance by the CITY upon the unique qualifications and ability of the BORROWER to ensure the quality of the affordability, use, operation, and maintenance of the proposed Project, if approved; (iii) the requirement that the Property be used for affordable housing; and (iv) BORROWER's representation that the Property is not to be acquired or used for speculation, but only for use by the BORROWER for affordable housing. (c) No Transfer not specifically authorized in this Section 4.14 shall be permitted without the prior written consent of the CITY, which the CITY may withhold in its sole discretion. The City Loan shall automatically accelerate and be due in full upon any Transfer made without the prior written consent of the CITY. (d) Sale of Market-Rate Parcel. (1), BORROWER desires to sell the portion of the Property identified as the Market-Rate Parcelto a third party (the "Third Party Buyer") for construction of market-rate housing in order to repay the LIIF Loan and the LISe Loan. 895\05\ 1261519.3 112212013 27 (2) If BORROWER has received all required Land Use Approvals to create the Market-Rate Parcel, as described in Section 3.2 and proposes to sell the Market-Rate Parcel to a Third Party Buyer, BORROWER shall provide written notice to the CITY at least forty-five days (45) days prior to the consummation of any proposed sale of the Market-Rate Parcel to a Third Party Buyer. (~) . If BORROWER has received all required Land Use Approvals to create the Market-Rate Parcel, as described in Section 3.2, CITY hereby approves the sale of the Market-Rate Parcel to a Third Party Buyer provided that: (i) the LISC Loan . and the LIIF Loan shall be paid off and the deeds of trust for those loans reconveyed upon sale of the Market-Rate Parcel; and (ii) any proceeds from the sale of the Market- Rate Parcel remaining after repayment of the LISC and LIFF loans shall either be used for the Project, if the CITY approves the Land Use Approvals for the Project; or for other affordable housing purposes, if the City does not approve the Land Approvals for the Project. On the date of the sale of the Market-Rate Parcel in conformance with this subsection (d), CITY agrees to release the Memo of Agreement and reconvey the Deed of Trust from the Market-Rate Parcel. (4) The provisions of this subsection (d) apply only to sale of a fee title interest in the Market .. Rate Parcel. All other Transfers are subject to the provisions of subsections (a), (b), (c), and (e) of this Section. ( e) The CITY hereby approves the Transfer of this Agreement to a limited partnership, of which BORROWER or BORROWER's wholly controlled affiliate is the general partner. Section 4.15 Other Indebtedness and Liens. Except for the Approved Acquisition Financing, BORROWER shall not incur any indebtedness of any kind or encumber the Property with any liens without the prior written consent of the CITY. Section 4.16 Use as Affordable Housing In consideration for the City Loan to be provided to the BORROWER on below .. market tenns, the BORROWER hereby agrees to apply for the use of the Property as affordable housing and otherwise use its best good faith efforts to comply with the requirements of Article 3 of this Agreement. If the Project is approved, the use, occupancy and rent restrictions in the Regulatory Agreement shall be compatible with the restrictions of other Approved Financing. BORROWER's compliance with this Section 4.16 is of particular importance to CITY and the main purpose of the City Loan. If the Project is approved, the BORROWER shall record against the Property, prior to Construction Closing, the Regulatory Agreement. 895\05\1267519.3 1122/2013 28 ARTICLES REPRESENTATIONS AND WARRANTIES OF BORROWER Section 5.1 Representations and Warranties. As a material inducement to the CITY's entry into this Agreement, BORROWER hereby represents and warrants to the CITY as follows and acknowledges, understands, and agrees that the representations and warranties set forth in this Article 5 are deemed to be continuing during all times when any portion of the City Loan remains outstanding: (a) Organization. BORROWER is duly organized, validly existing, and in good standing under the laws of the State of California and have the power and authority to own their property and carry on their business as now being conducted. (b) Authority of BORROWER. BORROWER has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered,or to be executed and delivered, pursuant to this Agreement, and to perfonn and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of BORROWER, and all actions required under BORROWER's 's organizational documents and applicable governing law for the authorization, execution, delivery and perfonnance of this Agreement and the Loan Document.s and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. (d) Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of enforceable against it in accordance with their respective terms. (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on BORROWER, or any provision of the organizational documents of BORROWER, or will conflict with or constitute a breach of or a default under any agreement to which BORROWER is a party, or will result in the creation or imposition of any lien upon any assets or property of BORROWER, other than liens established pursuant hereto. 895\05\1267519.3 112212013 29 (f) Pending Proceedings. BORROWER is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of BORROWER, threatened against or affecting BORROWER or the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to BORROWER, materially affect BORROWER's ability to repay the City Loan or impair the security to be given to the CITY pursuant hereto. (g) Title to Land. At the time of recordation of the Deed of Trust, BORROWER will have good and marketable fee title to the Property and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than liens for current real property taxes and assessments not yet due and payable, and liens in favor of the CITY or approved in writing by the CITY. (h) Hazardous Materials. To the best of BORROWER's knowledge, except as disclosed in writing by BORROWER to the CITY or in the following reports, prior to the date of this Agreement (Phase I Environmental Site Assessment, dated July 2, 2012; Phase II Environmental Site Assessment, dated July20, 2012); (i) no Hazardous Material has been disposed of, stored on, discharged from, or released to or from, or otherwise now exists in, on, under, or around, the Property, (ii) no aboveground or underground storage tanks are now or have ever been located on or under the Property, (iii) neither the Property, nor BORROWER, is in violation of any Hazardous Materials Law; and (iv) neither the Property, nor BORROWER, is subject to any existing, pending or threatened Hazardous Materials Claims. (i) Financial Statements. The financial statements of BORROWER and other financial data and information furnished by BORROWER to the CITY fairly present the infonnatioJ;l contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of BORROWER from that shown by such financial statements and other data and information. G) Sufficient Funds. BORROWER holds sufficient funds andlor binding commitments for sufficient funds to complete the acquisition of the Property and perform the Predevelopment Activities. (k) Taxes. BORROWER and its subsidiaries have filed all federal and other material tax returns and reports required to be filed, and have paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against BORROWER or any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect upon the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of BORROWER and its' subsidiaries, taken as a whole, which would be expected to result in a material impairment of the ability of BORROWER to perform under any Loan Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against BORROWER of any Loan Document. 895\05\1267519.3 112212013 30 Section 5.2 Survival of Representations and Warranties. All representations and warranties of BORROWER shall survive the making of the City Loan and have been or will be relied on by the CITY notwithstanding any investigation made by the CITY. ARTICLE 6 TERMINATION, DEFAULT AND REMEDIES Section 6.1 Termination of Agreement (a) Failure by the BORROWER to complete the Construction Closing and obtain all Land Use Approvals and building permits required to construct the Project by January 31,2015, subject to Force Majeure, or CITY's determination not to approve the Land Use Approvals required for the Project, including creation of the Market-Rate Parcel, constitutes a basis for the CITY to terminate this Agreement, subject to the conditions set forth in subsection (b) below. At BORROWER's request, CITY may, at its sole discretion, extend the time for performance contained in this paragraph, provided that BORROWER demonstrates to CITY's reasonable satisfaction that BORROWER is likely to obtain financing and Land Use Approvals required to construct the Project within a reasonable period. (b) Upon the happening of the events described in subsection (a), the City may provide written notice to BORROWER of its intent to terminate this Agreement within one hundred twenty (120) days pursuant to this Section 6.1 (the "Tennination Noticelt). At its sole discretion, the Termination Notice may indicate CITY's intent to exercise the Option to Purchase pursuant to Section 6.4 provided that the Notice of Exercise is delivered to BORROWER concurrently with the Termination Notice. Upon the effective date of the Tennination Notice, the outstanding principal balance of the Note shall be due and payable, and the CITY may exercise all rights pursuant to the Assignment of Documents; and this Agreement will terminate and neither party shall have any rights against or liability to the other pursuant to this Agreement except for the provisions that state they survive termination of this Agreement, and the applicable provisions of this Section 6.1, Section 6.4, and Section 6.5. Section 6.2 Events of Default. Upon the occurrence of Default, as defined in this Section, the CITY will give written notice to BORROWER. If the Default continues uncured for forty .. five (45) days after receipt of written notice thereof from the CITY to BORROWER or, if a non-monetary breach cannot be cured within forty-five (45) days, BORROWER diligently undertakes to cUre such breach within forty-five (45) days but such breach remains uncured within ninety (90) days, then CITY may terminate this Agreement and exercise all remedies available at law or equity; provided, however, that if a different period or notice requirement is specified under any other provision of this Article 6, the specific provisions shall control. Each of the following shall constitute a "Defaultfl by BORROWER under this Agreement: 895\05\12675 t 9 .3 112212013 31 (a) Failure to Make Payment. Failure to repay the principal and any interest on the Loan within fifteen (15) days after receipt of written notice from the CITY that such payment is due pursuant to the Loan Documents. (b) Breach of Covenants. Failure of BORROWER to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents. (c) Default Under Other Loans. A default is declared under any other financing for the Project or acquisition of the Property by the lender of such financing, or BORROWER fails to make any payment or perfonn any of its other covenants, agreements, or obligations under any other agreement with respect to financing for the Project. After the expiration of any cure periods, the occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note. (d) Adverse Financial Condition. A material adverse change in BORROWER's financial condition, or an event or condition materially impairing BORROWERts intended use of the Property, or BORROWER's ability to repay the City Loan occurs. (e) Insolvency. A court having jurisdiction shall have made or entered any decree or order (1) adjudging BORROWER to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of BORROWER or seeking any arrangement for BORROWER under the bankruptcy law or any other applicable debtor's relief law or statute or the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of BORROWER in bankruptcy or insolvency or for any of their properties, (4) directing the winding up or liquidation of BORROWER, if any such decree or order described in clauses (1) to (4), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days; or (5) BORROWER shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (1) to (5), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note. (f) Assignment: Attachment. BORROWER shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed . upon shall have been returned or released within ninety (90) days after such event or, if Sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note. (g) Suspension; Dissolution. BORROWER shall have voluntarily suspended its business or the dissolution of BORROWER. (h) Liens on Property and the Project. There shall be filed any claim of lien (other than liens approved in writing by the CITY) against the Project, the Property, or any part thereof, 895\05\1267519.3 If2212013 32 or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the City Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) days without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the CITY. (i) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Project, except that condemnation by the CITY shall cause the City Loan to accelerate but shall not be a Default. G) Unauthorized Transfer. Any Transfer other than as pennitted by Section 4.14. (k) Representation or Warranty Incorrect. Any representation or warranty of BORROWER contained in this Agreement, or in any application, fmancial statement, certificate, or report submitted to the CITY in connection with any of the Loan Documents, proves to have been incorrect in any material and adverse respect when made. (1) Applicability to General Partner. In the event BORROWER is a limited partnership or limited liability· company, the occurrence of any of the events set forth in subsection (f), subsection (g), or subsection (h) in relation to the general partner of BORROWER. Section 6.3 Remedies. The OCCU11'ence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the CITY or automatically where so specified, relieve the CITY of any obligation to make or continue the City Loan and shall give the CITY the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, subject to the terms of the subordiIl:ation agreements related to the LISC Loan and the LIIF Loan, including but not limited to the following: (a) Acceleration of Note. The CITY shall have the right to cause all indebtedness of BORROWER to the CITY under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. BORROWER waives all right to presentment. demand, protest or notice of protest or dishonor. The CITY may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the CITY as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. BORROWER shall be liable to pay the CITY on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred by the CITY in connection with the collection of the City Loan and the . preservation, maintenance, protection, sale, or other disposition of the security given for the City Loan. (b) Assignment of Documents. The CITY may exercise all rights under the Assignment of Documents. 895\05\1267519.3 112212013 33 (c) Specific Performance. The CITY shall have the right to mandamus or other suit, action or proceeding at law or in equity to require BORROWER to perfonn its obligations and covenants under the Loan Documents or to enjoin acts or things which may be unlawful or in violation of the provisions of the Loan Documents. Cd) Right to Cure at BORROWER's Expense. The CITY shall have the right (but not the obligation) to cure any monetary default by BORROWER under a loan other than the City Loan. BORROWER agrees to reimburse the CITY· for any funds advanced by the CITY to cure a monetary default by BORROWER upon demand therefore, together with interest thereon from the date of expenditure until the date of reimbursement at the Default Rate. Section 6.4 Option to Purchase, Enter and Possess. (a) In consideration for the City Loan, BORROWER hereby grants the CITY the additional right at the CITY's option~ to purchase, enter, and take possession of the Property with all improvements thereon (the "Option to Purchase") upon an uncured event of Default of BORROWER or upon termination of this Agreement pursuant to Section 6.1. (b) If the CITY decides to exercise its Option to Purchase the CITY shall provide BORROWER, LISC, and LIIF with written notice of its intent to do so (the "Notice of Exercise") within sixty (60) days of CITY's notice to BORROWER of an uncured event of Default pursuant to Section 6.2 above or concurrently with delivery of a Tennination Notice pursuant to Section 6.1 above. The Notice of Exercise will include a date for closing which is the later to occur of the following: (1) not less than ninety (90) days nor more than one hundred fifty (150) days after the date of the Notice of Exercise in the event of an uncured event of Default; (2) not less than ninety (90) days nor more than one hundred fifty (150) days after the effective date of the Termination Notice; or (3) ten (10) days after BORROWER has done all acts and executed all documents required for close of escrow. (c) Upon the CITY's delivery of the Notice of Exercise, BORROWER and the CITY shall promptly open an escrow account. BORROWER shall execute, acknowledge, and deliver a grant deed in a form acceptable to the CITY transferring the Property to the CITY~ subject only to the title exceptions that (1) existed at the time of BORROWER's acquisition of the Property, or (2) were created with the written consent of CITY or approved in writing by CITY or expressly contemplated or permitted by this Agreement. Closing costs and title insurance shall be paid by CITY and BORROWER pursuant to the custom and practice in the County of Santa Clara at the time of the opening of escrow, or as may be provided otherwise by mutual agreement. BORROWER agrees to do all acts and execute all documents necessary to enable the close of escrow and transfer of the Property to the City_ The BORROWER shall also provide the CITY all documents to which the CITY is entitled pursuant to the Assignment of Documents upon the CITY's exercise of the Option to Purchase. (d) The purchase price of the Property under the Option to Purchase will be all amounts due under the City Loan. The CITY shall deem all outstanding amounts due on the City Loan paid in full upon close of escrow and delivery of all documents to which the CITY is entitled pursuant to the Assignment of Documents. The City acknowledges that it will take title to the 895\05\1267519.3 1122f2013 34 Property subject to the liens of the deeds of trust in favor of the Senior Lenders and the County Loan and the terms and provisions of the documents evidencing the County Loan and the Senior Loans (except for any modification to such Senior Loan documents that require the approval of the City pursuant to the applicable subordination agreement and for which such approval was not obtained). (e) As used in this Section, the term "City Loan" includes any accrued interest as calculated pursuant to Section 2.2. (f) The granting of this Option to Purchase to the CITY shall not impair or limit the CITY's ability to exercise any other rights or remedies granted to the CITY in this Agreement. CITY may enforce this Section 6.4 by specific performance. Section 6.5 Right of Contest. BORROWER shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and in a marmer unprejudicial to the CITY or the rights of the CITY hereunder. Section 6.6 Remedies Cumulative. No right, power, or remedy given to the CITY by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the CITY by the teoos of any such instrument, or by any statute or otherwise against BORROWER and any other person or entity. Neither the failure nor any delay on the part of the CITY to exercise any such rights and remedies shall operate as a waiver thereoft nor shall any single or partial exercise by the CITY of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. ARTICLE 7 GENERAL PROVISIONS Section 7.1 Agreement Coordination (a) CITY's City Manager shall represent CITY for all purposes under this Agreement. CITY's Director of Planning and Community Environment is designated by the City Manager as the project manager, and his or her designee !:)hall supervise the progress and' execution of this Agreement. (b) The Executive Director of BORROWER shall represent BORROWER for all purposes under this Agreement andt as the project director for BORROWER, shall supervise the progress and execution of this Agreement. ' 895\05\1267519.3 112212013 35 (c) Each party may change the party representing it by notice to the other party. Section 7.2 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or understood by any of the parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the CITY and BORROWER or BORROWER's agents, employees or contractors, and BORROWER shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. BORROWER has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the development of the Projectt BORROWER shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. BORROWER agrees to be solely responsible for its own acts and those of its agents and employees. Section 7.3 No Claims. Nothing contained in this Agreement shall create or justify any claim against the CITY, by any person BORROWER may have employed or with whom BORROWER may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the development of 'the Project, and BORROWER shall include similar requirements in any contracts entered into for the development of the Project. Section 7.4 Amendments. Any amendment to this Agreement shall be binding upon the parties, provided such amendment is set forth in a writing signed by the parties. The City Manager is authorized to execute any amendments to this Agreement after approval by the City Council and to confer any consents or approvals that may be provided by the City Manager pursuant to this Agreement. Section 7.5 Entire Understanding of the Parties. This Agreement constitutes the entire understanding and agreement of the Parties with respect to the City Loan. Section 7.6 Indemnification. Except as directly caused by the CITY's proven gross negligence or willful misconduct, BORROWER agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the CITY) the CITY, and its councilmembers, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens directly or indirectly 895\05\1267519.3 1122/2013 36 arising out of or resulting from: (i) the making of the City Loan; (ii) BORROWER's performance or non-performance of its obligations under this Agreement; (iii) any act or omission of BORROWER, any of its agents, employees, licensees, tenants, contractors, subcontractors or material suppliers, or other person or entity with respect to the City Loan or the Property (iv) the acquisition, ownership and maintenance of the Property; (v) the development, marketing, rental and operation of the Project, or (vi) any documents executed by BORROWER in connection with the Project. The provisions of this Section 7.6 shall survive the repayment and cancellation of the Note, the release and reconveyance of the Deed of Trust, and termination of this Agreement. Section 7.7 Non-Liability of CITY and crr-y Officials, Employees and Agents. No member, official, employee or agent of the CITY shall be personally liable to BORROWER, or any successor in interest, in the event of any Default or breach by the CITY, or for any amount which may become due to BORROWER or its successor or on any obligation under the terms of this Agreement. . Section 7.8 No Third Party Beneficiaries. BORROWER lacks any authority or power to pledge the credit of CITY or incur any obligation in the name of CITY. This Agreement shall not be construed or deemed to be an agreement for the benefit of any third party, and no third party shall have any claim or right of action hereunder for any cause whatsoever. Section 7.9 Action by the CITY; Amendments. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, request, extension of time, waiver of condition, termination, or other action by the CITY is required or permitted under this Agreement, such action may be given, made, or taken by the City Manager without further approval by the City Council, and any such action shall be in writing. Section 7.10 Wai vers. Any waiver by the CITY of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the CITY to take action on any breach or Default of BORROWER or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to BORROWER to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the CITY to any act or omission by BORROWER shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the CITY's written consent to future waivers. Section 7.11 Notices. Demands and Communications. All notices, consents, communications or transmittals required by this Loan Agreement 895\05\1267519.3 112212013 37 shall be made, in writing, and shall be communicated by the United States mail, certified, return receipt requested or by express delivery or overnight courier service with a delivery receipt, and shall be deemed given as of the date shown on the delivery receipt as the date of delivery or the date on which delivery was refused, and shall be addressed to the following addresses, or such other address as either party may designate, from time to time, by written notice sent to the other party in like manner: CITY: City of Palo Alto Office of the City Clerk PO Box 10250 Palo Alto, CA 94303 With a copy to: City of Palo Alto Director, Department of Planning & Community Environment POBox 10250 Palo Alto, CA 94303 BORROWER: Palo Alto Housing Corporation 725 Alma Street Palo Alto, CA 94301 Attn: Executive Director Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt for delivery or refusal of delivery. Section 7.12 Awlicable Law and Venue. This Agreement shall be deemed a contract made under the laws of the State of California, and for the purposes hereof shall be governed and construed by and in accordance with the laws of the State of California. In the event that suit is brought by either party, the parties agree that trial of such action shall be vested exclusively in the state court of California in the City of San Jose, County of Santa Clara, or in the United States District Court for the Northern District of California in the City of San Jose. Section 7.13 Parties Bound. Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, legal 895\05\1267519.3 112212013 38 representatives, successors and assigns. Any provision of this Loan Agreement which is characterized as a covenant or a condition shall be deemed both a covenant and a condition. This Agreement is intended to run with the land and shall bind BORROWER and its successors and assigns in the Property and the Project for the entire Tenn, and the benefit hereof shall inure to the benefit of the CITY and its successors and assigns. . Section 7.14 Attorneys' Fees. If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing party will have the right to recover its reasonable attorneys' fees and costs of suit from the other party. Section 7.15 Severability. If any tenn of this Agreement is held by a court of competent jurisdiction to be invalid, void or Wlenforceable, the remainder of the provisions shatl continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. Section 7.16 Force Majeure. In addition to specific provisions of this Agreement, performance by either party shall not be deemed to be in default where delays or defaults are due to to war~ insurrection, strikes, lock- outs or other labor disturbances, one or more acts of a public enemy, war, riot, sabotage, blockade, embargo, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, court order, delays or failures of perfonnance by any governmental authority or utility company (other than the acts or failure to act of the CITY and so long as the party seeking the extension has adequately complied with the applicable processing requirements of such governmental authority or utility company), delays resulting from changes in any applicable laws, rules~ regulations, ordinances or codes, or a change in the interpretation thereof by any governing body with jurisdictio~ or any other cause (other than lack of funds of BORROWER or BORROWER's inability to finance the construction of the Project) beyond the reasonable control or without the fault of the party claiming an extension of time to perform or an inability of performance. An extension of time for any cause will be deemed granted if notice by the party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and the party granting the extension agrees to the extension in writing. In no event shall the CITY be required to agree to cumulative delays in excess of one hundred eighty (180) days. Section 7.17 Conflict of Interest. (a) Except for payment of salaries and administrative costs. no person who is an employee~ agent, consultant, officer or official of BORROWER who exercises or has exercised any functions or responsibilities concerning the activities under this Agreement, or who is in a position to participate in a decision making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from any such activity, or have an interest in any contract~ subcontract, or agreement with respect thereto, or the proceeds 895\05\1267519.3 1122f.1013 39 thereunder, either for him or herself or for those with whom he or she has family or business ties, during his or her tenure or for one year thereafter. (b) BORROWER further covenants that it presently has no interest and shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the services hereunder. BORROWER also covenants that, in the performance of this Agreement, no subcontractor or person having such interest shall be employed by BORROWER. In addition, BORROWER certifies that no one who has or will have any financial interest under this Agreement is an officer or employee of CITY. Section 7.18 Time of Essence. Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement. Section 7.19 Title of Parts and Sections; Exhibits. Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules which may, from time to time, be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and shall be deemed to be part hereOf. Section 7.20 Multiple Originals; Counterpart. This Agreement may be executed in mUltiple originals, each of which is deemed to be an original, and may be signed in counterparts. Section 7.21 Recording of Memo of Agreement. The CITY and BORROWER shall cause the Memo of Agreement to be recorded against the Property in the Official Records of Santa Clara County. Section 7.22 Further Actions. The parties agree that they will take such further actions, and execute such further documents, as may be necessary or appropriate in order to carry out the purposes of this Agreement. /I /I /I II 895\05\1267519.3 1/2212013 40 895\05\1267519.3 1122/2013 41 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Real property in the City of Palo Alto, County of Santa Clara, State of California, described as follows: TRACT ONE: PARCEL ONE: PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED/ "MAYBELL TRAer', WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 19, 1905 IN BOOK K OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A HUB SET AT THE POINT OF INTERSECTION OF THE SOUTHEASTERLY LINE OF MAYBELL AVENUE WITH THE NORTHEASTERLY LINE OF 10, AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP ABOVE REFERRED TO, RUNNING THENCE SOUTH 28° 481 WEST ALONG THE SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE 145.00 FEET TO THE TRUE POINT OF BEGINNING OF THE FOLLOWING DESCRIBED PARCEL OF LAND; THENCE AT RIGHT ANGLES TO SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE/ SOUTH 61° 12r EAST 65.00 FEET; THENCE RUNNING PARALLEL WITH SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE SOUTH 28° 481 WEST 111.00 FEET; THENCE NORTH 61° 12' WEST 65.00 FEET TO A POINT IN SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE; THENCE ALONG SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE NORTH 28° 481 EAST 111.00 FEET TO THE POINT OF BEGINNING. PARCEL lWO: PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE. 19, 1905 IN BOOK "K' OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE 'OF MAYBELL AVENUE, DISTANT THEREON S. 28° 48' W. 84.83 FEET FROM THE POINT OF INTERSECTION THEREOF WITH THE NORTHEASTERLY LINE OF LOT 10, AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP OF MAYBELL TRACT HEREINABOVE REFERRED TO; THENCE PARALLEL WITH SAID NORTHEASTERLY LINE OF LOT 10/ S. 61° 14r 22" E. 895\05\1267519.3 1122/2013 80.74 FEET; THENCE PARALLEL WITH SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE, S. 28° 48' W. 169.66 FEET; THENCE PARALLEL WITH SAID NORTHEASTERLY LINE OF LOT 10, N. 61° 14' 2211 W. 15.74 FEET; THENCE PARALLEL WITH THE SOUTHEASTERLY LINE OF MAYBELL AVENUE N. 28° 48' E. 109.49 FEET; THENCE PARALLEL WITH SAID NORTHEASTERLY TINE OF LOT 10 N. 61° 14' 2211 W. 65 FEET TO THE SOUTHEASTERLY UNE OF MAYBELL AVENUE; THENCE ALONG SAID SOUTHEASTERLY LINE, N. 28° 48' E. 60.17 FEET TO THE POINT OF BEGINNING. TRACT TWO: PARCEL ONE: PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, ·uMAYBELL TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 19, 1905 IN BOOK K OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A HUB SET AT THE POINT OF INTERSECTION OF THE SOUTHEASTERLY LINE OF MAYBELL AVENUE WITH THE NORTHEASTERLY LINE OF LOT 101 AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP ABOVE REFERRED TO; RUNNING THENCE SOUTH 28° 48' WEST ALONG THE SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE 339.32 .FEET TO AN IRON PIPE SET AT THE INTERSECTION THEREOF WITH THE SOUTHWESTERLY LINE OF SAID LOT 10; RUNNING THENCE SOUTH 610 12' EAST ALONG SAID LAST NAMED LINE 96. 14 FEET TO AN IRON PIPE AT THE WESTERNMOST CORNER OF THAT CERTAIN 0.94 ACRE TRACT OF LAND DESCRIBED IN THE DEED FROM MARTHA A. CHRISTESON TO GEO M. ANTHONY, DATED MAR~H 5, 1937 RECORDED MARCH 26, 1937 IN BOOK 814 OF OFFICIAL RECORDS, PAGE 434, SANTA CLARA COUNTY RECORDS; RUNNING THENCE NORTH 280 481 EAST ALONG THE NORTHWESTERLY LINE OF SAID 0.94 ACRE TRACT 99.68 FEET TO AN IRON PIPE AT THE NORTHERN,MOST CORNER THEREOF; RUNNING THENCE SOUTH 57° 27' 3811 EAST ALONG THE NORTHEASTERLY LINE OF THE SAID 0.94 ACRE TRACT 221.17 FEET TO AN IRON PIPE; THENCE LEAVING SAID LAST NAMED LINE AND RUNNING NORTH 28° 48r EAST AND PARALLEL WITH THE SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE 254.14 FEET TO AN IRON PIPE SET ON THE SAID NORTHEASTERLY LINE OF LOT 10; RUNNING THENCE NORTH 61°141 2211 WEST ALONG SAID LAST NAMED LINE 316.84 FEET TO THE POINT OF BEGINNING. CONTAINING APPROXIMATELY 2 ACRES, SURVEYED AND MONUMENTED IN JANUARY 1951 BY GEO S. NOLTE, CIVIL ENGINEER AND LAND SURVEYOR. EXCEPTING THEREFROM THAT CERTAIN PARCEL OF LAND DESCRIBED AS FOLLOWS: 895\05\1267519.3 112212013 PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 19, 1905 IN BOOK K OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A HUB SET AT THE POINT OF INTERSECTION OF THE SOUTHEASTERLY LINE OF MAYBELL AVENUE WITH THE NORTHEASTERLY UNE OF LOT 10, AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP ABOVE REFERRED TO; RUNNING THENCE SOUTH 28° 48' WEST ALONG THE SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE 145.00 FEET TO THE TRUE POINT OF BEGINNING OF THE FOLLOWING DESCRIBED PARCEL OF LAND; THENCE AT RIGHT ANGLES, TO SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE, SOUTH 61° 121 EAST 65.00 FEET; THENCE RUNNING PARALLEL WITH THE SOUTHEASTERLY· LINE OF MAYBELL AVENUE SOUTH 28° 48' WEST 111.00 FEET'; THENCE NORTH 61° 12'. WEST 65.00 FEET TO A POINT IN SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE; THENCE ALONG SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE NORTH 28° 48' EAST 111.00 FEET TO THE TRUE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM: PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUN1Y OF SANTA CLARA, STATE OF CALIFORNIA ON JUNE 19, 1905 IN BOOK K OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE OF MAYBELL AVENUE, DISTANT THEREON S. 28° 48' W. 84.83 FEET FROM THE POINT OF INTERSECTION THEREOF WITH THE NORTHEASTERLY UNE OF LOT 10, AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAp OF MAYBELL TRACT HEREINABOVE REFERRED TO; THENCE PARALLEL WITH SAID NORTHEASTERLY LINE OF LOT la, S. 610 14' 2211 E. 80.74 FEET; THENCE PARALLEL WITH SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE, S. 28° 48' W. 169.66 FEET; THENCE PARALLEL WITH SAID NORTHEASTERLY UNE OF LOT 10, N. 61° 14' 221f W. 15.74 FEET; THENCE PARALLEL WITH THE SOUTHEASTERLY LINE OF MAYBELL AVENUE N. 280 48' E. 109.49 FEET; THENCE PARALLEL WITH SAID NORTHEASTERLY TINE OF LOT 10 N. 61° 14' 2211 W. 65 FEET TO THE SOUTHEASfERLY LINE OF MAYBELL AVENUE; THENCE ALONG SAID SOUTHEASTERLY LINE, N. 28° 4~' E. 60.17 FEEfTO THE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM: PORTION OF LOT 10, MAP OF MAYBELL TRACT, FILED JUNE 19, 1905, BOOK K OF MAPS AT PAGE 88, SANTA CLARA COUNTY RECORDS, DESCRIBED AS FOLLOWS: 895\05\1267519.3 1/2212013 BEGINNING AT THE INTERSECTION OF THE SOUTHEAST LINE OF MAYBELL AVENUE AND THE NORTHEAST LINE OF CLEMO AVENUE, FORMERLY PARK AVENUE; THENCE FROM SAID POINT OF BEGINNING N. 28° 48' E. ALONG SAID LINE OF MAYBELL AVENUE 13.00 FEET; THENCE LEAVING SAID LINE S. 61° 12' E. 10.00 FEET; THENCE 5. 28° 48' W 3.00 FEET; THENCE ON THE ARC OF A TANGENT CURVE TO THE LEFT WITH A RADIUS OF 10 FEET, THROUGH A CENTRAL ANGLE OF 900 , AN ARC DISTANCE OF 15.71 FEET TO SAID NORTHEASTERLY UNE OF CLEMO AVENUE; THENCE ALONG SAID LINE N. 61 0 12' W. 20.00 FEET TO THE POINT OF BEGINNING. PARCEL lWO: BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF LOT 10, DISTANT THEREON N. 61° 12' W, 271.16 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 10 IN THE NORTHWESTERLY LINE OFARASTRADERO ROAD, AS SAID LOT AND ROAD ARE SHOWN UPON THE MAP OF MAYBELL TRACT HEREINAFTER REFERRED TO; THENCE LEAVING SAID SOUTHWESTERLY LINE AND RUNNING N. 28° 48r E., 85.35 FEET, MORE OR LESS, TO A POINT IN THE NORTHEASTERLY LINE OF THAT CERTAIN 0.94 ACRE TRACT DESCRIBED IN THE DEED FROM MARTHA A. CHRISTESON TO GEORGE M. ANTHONY, DATED MARCH 5, 1937 AND RECORDED MARCH 26, 1937 IN BOOK 814 OF OFFICIAL RECORDS PAGE 434, SANTA CLARA COUNTY RECORDS; SAID POINT BEING THE MOST WESTERLY CORNER OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN THE DEED FROM CURTIS DAY, ET UX, TO SCOBLE, INC., A CORPORATION DATED APRIL 29, 1958 AND RECORDED MAY 12, 1958 IN l300K 4072 OF OFFICIAL RECORDS, PAGE liD, SANTA CLARA COUNTY RECORDS; THENCE RUNNING ALONG THE SAID NORTHEASTERLY LINE OF THE 0.94 ACRE PARCEL OF LAND N. 57° 26' W. 221.17 FEET TO THE MOST NORTHERLY ,CORNER OF SAID 0.94 ACRE PARCEL; THENCE RUNNING ALONG THE NORTHWESTERLY LINE OF SAID 0.94 ACRE PARCEL, S. 28° 481 W., 99.68 FEET TO THE MOST WESTERLY CORNER THEREOF; THENCE RUNNING ALONG THE SOUTHWESTERLY LINE OF THE SAID 0.94 ACRE PARCEL, SAID UNE ALSO BEING THE SAID SOUTHWESTERLY LINE OF LOT 10 HEREINABOVE REFERRED TO, S. 61° 121 E" 220.70 FEET TO THE POINT OF BEGINNING, AND BEING A PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL TRACT, MAYFIELD SANTA CLARA CO.n, WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON LIME 19, 1905 IN BOOK UK" OF MAPS, PAGE 88 AND 89. APN: 137-25-108-00 and 137-25-109-00 895\05\1267519.3 1122/2013 EXHIBITB SCHEDULE OF PERFORMANCE This Schedule of Performance summarizes the schedule for various activities under the Acquisition and Development Loan Agreement and Option to Purchase (the "Agreement") to which this exhibit is attached. The description of items in this Schedule of Performance is meant to be descriptive only, and shall not be deemed to modify in any way the provisions of the Agreement to which such items relate. Whenever this Schedule of Performance requires the submission of plans or other documents at a specific time, such plans or other documents, as submitted, shall be complete and adequate for review by the CITY or other applicable governmental entity within the time set forth herein. Prior to the time set forth for each particular submission, BORROWER shall consult with CITY staff informally as necessary concerning such submission in order to assure that such submission will be complete and in a proper form within the time for submission set forth herein. As provided in Section 3.1 of this Agreement, this Schedule of Performance may be modified by agreement of the City Manager on behalf of the CITY and the BORROWER. Action 1. Application -.Land Use Approvals. BORROWER shall submit a complete application for the CITY Land Use Approvals, including CEQA review. 2. Receipt -Land Use Approvals. BORROWER shall obtain the CITY Land Use Approvals. 3. Application Tax Credits. BORROWER shall submit an application to TCAC for a preliminary reservation of 9% tax credits. 4. Application -Building Permit. BORROWER shall apply for a building permit from CITY. 5. Receipt -Tax Credits. BORROWER receives approval for tax credit allocation. 895\05\1267519.3 112212013 Date By January 15,2013. By July 1,2013. July 2013 (if Land Use Approvals are approved) September 15,2013 October 31,2013 Action 6. Receipt -First Building Permit. BORROWER shall obtain the first building permit from City. 7. Submission -Final Construction and Permanent. Financing Plan. BORROWER shall prepare and submit the Construction Financing Plan for CITY approval. 8. Construction Loan Closing. BORROWER shall satisfy all conditions in Section 2.7 and commence construction. 9. Permanent Loan Closing and Complete Rent-Up and Occupancy. 895\05\1267519.3 112212013 Date October 31t 2013 Within 30 days after receipt of tax credit allocation from TCAC. November 31, 2013 to close construction loans. TCAC deadline to start construction April 2014. April 30, 2015. CONTRACTORS TO THE CITY OF PALO ALTO (Cltv), 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 A BEST'S KEV RATING OF ,A-:VII, OR HI.GHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. , AWARD IS CONTINGENT'ON COMPUANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES WORKER'S COMPENSATION AUTOMOBilE STATUTORY d.;1..000 YES lIABILIlY STATUTORY ,000 ~-z,\oa BODILY INJURY $I,ego,ggg. yes COMPREHENSIVE GENERAlllABllITY, "~ ~OOO ~-a:~-'b INCLUDING PERSONAL INJURY, BROAD PROPERTY DAMAGE i6 FORM PROPERTY DAMAGE BLANKET ~'l.-. 00, 000 CONTRAcrUAI, AND FIRE LEGAlllABIUlY BODilY INJURY & PROPERTY DAMAGE COMBINED. .'.888,88' ."999,Q~ BODILY INJURY $1,000,000 $1~OOO,OOO -EACH PERSON $1,000,000 $1JOOO,OOO -EACH OCGURRENCE $11000,000 $1,000,000 YES COMPREHENSIVE AUTOMOBllE'llA81L1lY} INCLUDING, OWNED, HIRED, NON-OWNED PROPERlY DAMAGE $1,000,000 $1,000.000 BODILV INJURV AND PROPERlY DAMAGE, $1,000,000 $1,000,000 COMBINED NO PROfESSIONAL UABIUTY, INCLUDING, ERRORS AND OMISSIONS, MAlPRAcnCE (WHEN APPLICABLE), AND NEGLIGENT J PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITV OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST A~D 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 PROPOSER AND ITS SUBCONSULTANS, IF AN'l, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION; EMPLOYER'S liABILITY AND PROfESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CllV, 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· CANCELLATlONj AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIQING iNSURANCE COVERAGE FOR, CONTRACTOR'S AGREEMENT TO INDE~NIFY CITY -seE, SAMPLE AGREEMENT FOR SERVICES. II. SUBMIT CERTIFICATE(S} OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH V, BELOW. A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER): 8. . NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER: C. POLICY NUMBER(S): D. DEDUCTIBLE AMOUNT{S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL): 0, ~ ~O ODO ~OOO .~O POLICY NUMBER: PHPlt843325 COMMERCIAL GENERAL I ... IABILITY CO 20 181186 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY .. ADDITIONAL INSURED - MORTGAGEE, ASS.IGNEE, OR RECEIVER This endorseme~t modifies Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name of Person or Organization: Ci toy of Palo Alto Designation of Premises: farahasing and Cont~aat Admin. P.O. Box 10250 palo Alto, CA 94303 USA (If no entry appears above. information required to complete this endorsement will be shown in the Declarations as applloable to this endorsement.) 1. WHO IS AN INSURED (Section II) Is amended to incluQ6 as an Insured Ihe person(s) or organlzatlon(s) shown in the Schedule but only with respect to their liability as mortgagee, assignee, or receiver and arising out of the ownership, maintenance, or use of the premises by you and shown In the Schedule. 2. This insurance does not apply to structural alterations, new construction and demolition operations performed by or for that person or organization. CG 20181186 Copyright. Insurance Services Office, Inc.. 1984 SUPPLEMENT TO CERTIFICATE OF I~SURANCt; DATE _10/10/2012 NAME OF INSURED: Palo Alto HoudJlg corporation &ldi~Qrml QllmiRllgC gf QR!ilmtlmutlBfIIl'lrk~ frQm ~_ 1 : Addltlonallnfonnaljon: ~ if SUpp (06104)