HomeMy WebLinkAboutStaff Reoprt 12400
City of Palo Alto (ID # 12400)
City Council Staff Report
Report Type: Informational Report Meeting Date: 8/30/2021
City of Palo Alto Page 1
Summary Title: Sales Tax Digest Summary Calendar 2020 Q4
Title: Sales Tax Digest Summary 4th Quarter Calendar 2020
From: City Manager
Lead Department: Administrative Services
Information
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the
fourth quarter (October to December) of 2020. This report has been modified from prior
versions to incorporate feedback and reporting needs as the City continues to manage through
this pandemic which lengthened the typical report cycle time for this information.
There are two attachments to this report that provide a further level of information:
• City of Palo Alto Sales Tax Digest Summary (Attachment A)
• California Legislative Update March 2021 (Attachment B)
The City’s sales tax cash receipts of $7.3 million for the fourth quarter (October to December
2020) is $2.5 million (25.4 percent) lower than the same quarter of the prior year (see
Attachment A, chart 5). However, this decrease includes late payment anomalies related to a
California sales tax 90-day extension program for small businesses. After adjustments for non-
period related payments, the overall economic quarter over quarter sales activity decreased by
$1.9 million (23.6 percent).
For the year ending in the fourth quarter of 2020, sales tax cash receipts (including pools) for
the City declined 27.3 percent from the prior year. In comparison, statewide receipts declined
7.2 percent, Northern California declined 5.1 percent and Southern California declined 8.6
percent for the same period.
After adjustments for non-period related payments, the overall economic sales tax activity
(local business excluding pools) in Palo Alto decreased by 21.3 percent. Adjusted statewide
receipts declined 17.0 percent, while Northern California declined 13.4 percent and Southern
California declined 19.3 percent for the same period in contrast.
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Many economic factors in 2020 driven by pandemic impacts attributed to the decline in
California sales tax. This reporting period represents the holiday season during the global
COVID-19 pandemic including one of the surges in the spread of the virus. The Economic GDP
fell by 3.5 percent in 2020, the largest decrease in modern history. Spending on services
decreased by 7.3 percent, offset by the increase of 3.9 percent in goods spending. California’s
unemployment rate averaged 10.2 percent in 2020, compared to an unemployment rate
averaging 4.1 percent in 2019.
.
Attachments:
• Attachment9.a: Attachment A: 2020 Q4 Sales Tax Digest Summary (Calendar Year)
• Attachment9.b: Attachment B: Legislative Update, March 2021
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Sales Tax Digest Summary
Collections through March 2020
Sales through December 2020 (2020Q4)
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California Overview
For the year ending in fourth quarter of 2020, cash receipts (including pools) decreased -7.2% statewide,
-5.1% in Northern California and -8.6% in Southern California. However, when we adjust for non-period
related payments, the overall economic sales activity (excluding pools) for the year ending in fourth
quarter of 2020 decreased by -17.0% statewide, -19.3% in Southern California and -13.4% in Northern
California.
City of Palo Alto
For the year ending in fourth quarter of 2020, sales tax cash receipts (including pools) for the city declined
-27.3% from the prior year. However, when adjusted for non-period related payments, the overall
economic sales tax activity (local businesses excluding pools) in Palo Alto for the year ending in fourth
quarter of 2020 decreased by -21.3%.
On a quarterly basis, sales tax cash receipts (including pools) decreased by -25.4% from Quarter 4 2019 to
Quarter 4 2020. However, this decrease includes late payment anomalies related to a state sales tax
extension program. The period’s cash receipts include tax from business activity during the period,
payments for prior periods and other cash adjustments. When adjusted for non-period related payments,
the overall economic quarter over quarter sales tax activity (local businesses excluding pools - Q4 2019 to
Q4 2020) in Palo Alto decreased by -23.6%.
Regional Overview
The first chart on page two shows adjusted economic benchmark year amounts, which means that it
shows a full calendar year from the first quarter of 2020 through fourth quarter of 2020 compared to
first quarter of 2019 through fourth quarter of 2019 (benchmark years are rolling annual comparisons
through the current quarter). The decrease is different between the state and Palo Alto because the
sales tax from businesses in Palo Alto were more impacted than those statewide.
Attachment A
Attachment A - 1
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$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Quarterly Benchmark Year
% of Total / % Change PALO ALTO
California
Statewide S.F. Bay Area Sacramento
Valley
Central
Valley South Coast Inland Empire North Coast Central Coast
General Retail 24.4 / -42.5 26.8 / -16.9 25.6 / -15.9 26.3 / -6.9 33.7 / 7.0 26.1 / -19.1 26.4 / -33.1 28.2 / -2.1 25.4 / -25.4
Food Products 13.2 / -43.7 19.1 / -26.3 18.5 / -32.5 16.0 / -15.2 14.7 / -14.6 20.8 / -24.6 17.8 / -32.5 20.4 / -25 28.9 / -29.6
Transportation 21.5 / -24.0 23.3 / -17.5 20.7 / -20.3 28.0 / -7.2 22.4 / -17.2 23.6 / -13.8 25.3 / -32.0 26.3 / -4.4 24.1 / -9.3
Business to Business 37.8 / -7.7 18.1 / -13.5 22.1 / -7.2 15.1 / -4.9 16.5 / -9.9 17.8 / -13.2 15.0 / -35.3 9.1 / -6.2 10.2 / -14.8
Misc/Other 3.1 / 17.1 12.7 / -3.2 13.0 / -5.8 14.7 / 0.0 12.7 / 1.8 11.7 / 2.1 15.4 / -19.2 16.0 / 8.0 11.4 / 8.1
Total 100.0 / -21.3 100.0 / -17.0 100.0 / -17.7 100.0 / -7.2 100.0 / -6.1 100.0 / -16.1 100.0 / -31.2 100.0 / -7.4 100.0 / -19.5
PALO ALTO
California
Statewide S.F. Bay Area Sacramento
Valley
Central
Valley South Coast Inland Empire North Coast Central Coast
Largest Segment Leasing Restaurants Restaurants Auto Sales -
New
Department
Stores Restaurants Department
Stores Restaurants Restaurants
% of Total / % Change 18.4 / 34.2 12.2 / -34.4 11.5 / -42.2 12.4 / 0.1 12.1 / -2.6 13.7 / -32.8 10.9 / -27.4 13.9 / -34.5 18.2 / -39.0
2nd Largest Segment Auto Sales -
New
Auto Sales -
New Auto Sales - New Department
Stores
Furniture/
Appliance
Auto Sales -
New
Auto Sales -
New
Department
Stores
Auto Sales -
New
% of Total / % Change 18.1 / -22.7 11.4 / -8.7 11.2 / -12.6 11.5 / 3.1 9.7 / 59.0 12.1 / -4.1 10.9 / -22.6 11.4 / -0.2 14.4 / 9.0
3rd Largest Segment Office
Equipment
Department
Stores
Miscellaneous
Retail Restaurants Auto Sales -
New
Department
Stores Restaurants Auto Sales -
New Food Markets
% of Total / % Change 11.9 / -31.5 9.1 / -13.7 9.6 / 9.7 9.9 / -22.8 9.0 / -21.2 8.8 / -12.7 10.6 / -37.3 11.0 / 6.6 8.6 / -7.2
*** Not specified to maintain confidentiality of tax information
ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 4th Quarter 2020
ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 4th Quarter 2020
Regional Overview Chart (Economic)
Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter (Before Adjustments)
Chart 1
Chart 2
Attachment A
Attachment A - 2
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Auto Sales -New
18.1%
Restaurants
11.1%
Leasing
18.4%
Office Equipment
11.9%Furniture/Appliance
4.1%
Department Stores
3.7%
All Other
32.7%
Net Pools & Adjustments
21.6%
Anderson Honda Louis Vuitton Shreve & Co.
Apple Stores Lucile Packard Children's Hospital Space Systems Loral
Audi Palo Alto Macy's Department Store Stanford Outpatient Clinic Pharmacy
Dell Marketing Magnussen's Toyota of Palo Alto Tesla
Enclos Corporation Neiman Marcus Department Store Tesla Lease Trust
Hengehold Trucks Nordstrom Department Store Tiffany & Company
Hermes Richemont Varian Medical Systems
Houzz Shop Shell Service Stations Volvo Cars Palo Alto
HP Computing & Printing
Net Cash Receipts for Benchmark Year 4th Quarter 2020: $25,357,425
* Benchmark year (BMY) is the sum of the current and 3 previous quarters (2020Q4 BMY is sum of 2020 Q4, 2020 Q3, 2020 Q2, 2020 Q1)
TOP 25 SALES/USE TAX CONTRIBUTORS
The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order
and represents the year ended 4th Quarter 2020. The Top 25 Sales/Use Tax contributors generate 63.0%
of Palo Alto’s total sales and use tax revenue.
Chart 3 Attachment A
Attachment A - 3
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$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Benchmark Year 2020Q4 Benchmark Year 2019Q4
Sales Tax from Largest Non-Confidential Sales Tax Segments (Economic)
Chart 4 Attachment A
Attachment A - 4
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Economic Category % 2020Q4 2020Q3 2020Q2 2020Q1 2019Q4 2019Q3 2019Q2 2019Q1 2018Q4 2018Q3 2018Q2
Business To Business 32.3% 1,948,294 2,027,964 1,870,893 2,010,844 2,381,737 1,950,735 1,958,684 2,244,140 1,910,168 1,390,421 1,738,805
Miscellaneous/Other 27.4% 1,650,242 1,321,778 990,334 1,225,410 1,692,985 1,516,049 1,784,443 1,464,631 2,497,498 2,248,618 1,500,660
General Retail 28.3% 1,709,004 1,298,977 657,723 1,449,509 2,573,066 2,415,683 1,993,189 1,887,330 2,559,140 2,103,433 1,784,418
Food Products 12.0% 721,698 647,289 434,446 976,479 1,244,954 1,203,802 1,267,934 1,176,607 1,240,898 1,200,777 1,149,998
Subtotal Economic (Local Business) 82.1% 6,029,238 5,296,007 3,953,397 5,662,242 7,892,743 7,086,269 7,004,251 6,772,708 8,207,703 6,943,250 6,173,881
Net Pools & Adjustments 17.9% 1,311,945 1,227,317 1,872,972 4,307 1,949,165 1,471,130 1,742,411 942,447 1,700,082 2,776,978 1,640,111
Total Cash Receipts 100.0% 7,341,183 6,523,324 5,826,368 5,666,550 9,841,908 8,557,399 8,746,661 7,715,155 9,907,785 9,720,228 7,813,992
Economic Segment % 2020Q4 2020Q3 2020Q2 2020Q1 2019Q4 2019Q3 2019Q2 2019Q1 2018Q4 2018Q3 2018Q2
Miscellaneous/Other 66.6% 4,014,369 3,687,523 3,192,638 3,556,542 4,675,922 4,323,203 4,044,470 4,097,682 4,842,499 4,049,966 3,603,314
Restaurants 10.0% 600,427 543,111 339,414 853,240 1,095,153 1,072,082 1,122,871 1,041,119 1,079,230 1,061,607 1,002,473
Miscellaneous Retail 7.6% 456,914 325,380 107,313 279,945 500,221 384,381 392,196 333,960 544,739 368,526 349,179
Apparel Stores 6.1% 365,837 263,940 72,307 305,736 552,734 469,447 486,790 408,476 599,685 509,814 365,635
Department Stores 5.2% 315,453 186,208 29,823 245,862 552,822 431,508 453,439 356,943 599,796 475,142 405,604
Service Stations 2.1% 127,467 108,840 70,063 146,282 181,063 175,309 185,969 159,032 173,915 179,644 162,352
Food Markets 1.5% 91,881 81,580 76,039 102,026 118,952 104,192 113,153 106,194 124,138 109,282 121,403
Business Services 0.9% 56,890 99,426 65,799 172,609 215,876 126,148 205,363 269,302 243,701 189,269 163,922
Subtotal Economic (Local Business) 82.1% 6,029,238 5,296,007 3,953,397 5,662,242 7,892,743 7,086,269 7,004,251 6,772,708 8,207,703 6,943,250 6,173,881
Net Pools & Adjustments 17.9% 1,311,945 1,227,317 1,872,972 4,307 1,949,165 1,471,130 1,742,411 942,447 1,700,082 2,776,978 1,640,111
Total Cash Receipts 100.0% 7,341,183 6,523,324 5,826,368 5,666,550 9,841,908 8,557,399 8,746,661 7,715,155 9,907,785 9,720,228 7,813,992
Historical Analysis by Calendar Quarter
The chart above shows the categories and segments in quarterly economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding
up the categories/segments with the “Net Pools & Adjustments” amount.
Chart 5 Attachment A
Attachment A - 5
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Quarterly Analysis by Sales Tax Category: Change from 2019Q4 to 2020Q4 (Economic)
Unlike the chart on page one which showed a ‘benchmark year’ through fourth quarter of 2020, the chart above shows a comparison of one quarter only – fourth
quarter of 2020 to fourth quarter of 2019. This chart is for local ‘brick and mortar’ businesses and it excludes county pools and adjustments.
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Campbell -13.1% -31.8% -30.9% 6.9% 11.8%2,232,996 2,604,068 -14.2% Bldg.Matls-Retail Office Equipment Restaurants Service Stations
Cupertino -18.5% -38.1% -57.6% 96.4% -48.5%15,101,519 8,648,808 74.6% Office Equipment Recreation Products Restaurants I.T. Infrastructure
Gilroy -9.4% -15.9% -49.2% -10.3% 12.9%3,522,530 4,471,332 -21.2% Miscellaneous Other Department Stores Auto Sales - New Apparel Stores
Los Altos -16.8% -28.2% -45.3% 32.3% -45.0%484,923 647,781 -25.1% Green Energy Recreation Products Restaurants Service Stations
Los Gatos -30.0% -26.8% -29.3% -26.7% -17.1%1,200,218 1,649,548 -27.2% Recreation Products Bldg.Matls-Retail Restaurants Furniture/Appliance
Milpitas -35.5% -38.7% -13.3% -10.1% -9.5%4,685,337 6,063,946 -22.7% Heavy Industry Bldg.Matls-Retail Apparel Stores Restaurants
Morgan Hill -0.2% -10.6% -16.9% 38.9% 8.9%1,982,374 2,071,269 -4.3% Heavy Industry Energy Sales Service Stations Light Industry
Mountain View -11.2% -21.0% -20.4% -29.8% -4.3%3,848,533 4,768,314 -19.3% Health & Government Auto Sales - New Restaurants Business Services
Palo Alto -33.3% -42.0% -16.3% -18.2% 620.5%6,029,238 7,892,743 -23.6% Leasing Health & Government Office Equipment Restaurants
San Jose 0.7% -28.9% -15.0% -21.5% 7.0%47,312,633 52,811,222 -10.4% Miscellaneous Retail Bldg.Matls-Whsle Restaurants Service Stations
Santa Clara -20.1% -37.5% -11.3% -8.7% -18.4%10,577,130 12,576,406 -15.9% Office Equipment I.T. Infrastructure Restaurants Electronic Equipment
County of Santa Clara -44.9% -31.1% 10.6% -5.7% -17.9%997,047 1,259,493 -20.8% Misc. Vehicle Sales Heavy Industry Miscellaneous Retail Restaurants
Saratoga -23.5% -28.4% -32.3% -53.6% -15.1%191,796 269,386 -28.8% Bldg.Matls-Retail Electronic Equipment Restaurants Service Stations
Sunnyvale -32.9% -33.8% -24.6% 3.0% 12.0%5,283,009 6,416,636 -17.7% Office Equipment Bldg.Matls-Whsle Restaurants Auto Sales - New
Chart 6 Attachment A
Attachment A - 6
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California Avenue % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
FOOD PRODUCTS -26.1% 41,653 56,364 42.3%45.8%
GENERAL RETAIL 38.6% 27,791 20,050 28.2%16.3%
ALL OTHER -37.5% 29,099 46,595 29.5%37.9%
TOTAL -19.9% 98,543 123,009 100.0% 100.0%
El Camino Real and Midtown % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
FOOD PRODUCTS -47.7% 91,870 175,673 17.6%16.1%
GENERAL RETAIL -18.5% 34,224 41,985 6.6%3.8%
ALL OTHER -54.8% 395,152 875,137 75.8%80.1%
TOTAL -52.3% 521,245 1,092,795 100.0% 100.0%
Greater Downtown % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
FOOD PRODUCTS -48.6% 242,646 471,659 50.4%47.5%
GENERAL RETAIL -54.8% 179,419 396,924 37.2%40.0%
BUSINESS TO BUSINESS -62.2% 36,372 96,206 7.5%9.7%
CONSTRUCTION -12.3% 13,265 15,118 2.8%1.5%
MISCELLANEOUS -22.3% 7,296 9,384 1.5%0.9%
TRANSPORTATION -22.3% 2,816 3,623 0.6%0.4%
TOTAL -51.5% 481,815 992,914 100.0% 100.0%
Stanford Shopping Center % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
GENERAL RETAIL -32.7% 999,266 1,484,905 73.0%89.4%
FOOD PRODUCTS -21.9% 121,536 155,564 8.9%9.4%
ALL OTHER 100+% 247,413 21,383 18.1%1.3%
TOTAL -17.7% 1,368,215 1,661,852 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2019Q4 to 2020Q4 (Economic)
Chart 7 Attachment A
Attachment A - 7
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Town And Country Shopping Center % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
GENERAL RETAIL -42.4% 50,178 87,041 46.6%51.4%
ALL OTHER -30.2% 57,547 82,417 53.4%48.6%
TOTAL -36.4% 107,726 169,458 100.0% 100.0%
All Other Geos combined with Balance of Jurisdiction % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
BUSINESS TO BUSINESS -13.9% 1,811,527 2,103,496 32.6%29.3%
GENERAL RETAIL -35.7% 1,515,694 2,355,923 27.3%32.8%
TRANSPORTATION -14.3% 1,416,837 1,652,972 25.5%23.0%
FOOD PRODUCTS -43.6% 588,006 1,041,832 10.6%14.5%
CONSTRUCTION 187.4% 141,867 49,369 2.6%0.7%
MISCELLANEOUS 100+% 83,351 (24,517)1.5%-0.3%
TOTAL -22.6% 5,557,282 7,179,076 100.0% 100.0%
All Geo Area Totals Comparison 20Q4 & 19Q4 % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
Balance of Jurisdiction -5.1% 2,979,739 3,139,048 53.6%43.7%
Stanford Shopping Center -17.7% 1,368,215 1,661,852 24.6%23.1%
El Camino Real and Midtown -52.3% 521,245 1,092,795 9.4%15.2%
Greater Downtown -51.5% 481,815 992,914 8.7%13.8%
Town And Country Shopping Center -36.4% 107,726 169,458 1.9%2.4%
California Avenue -19.9% 98,543 123,009 1.8%1.7%
TOTAL -22.6% 5,557,282 7,179,076 100.0% 100.0%
Palo Alto citywide QE 20Q4 & 19Q4 % CHANGE QoQ 2020Q4 QE 2019Q4 QE 20Q4 % OF TOTAL 19Q4 % OF TOTAL
BUSINESS TO BUSINESS -18.2% 1,948,294 2,381,737 32.3%30.2%
GENERAL RETAIL -33.6% 1,709,004 2,573,066 28.3%32.6%
TRANSPORTATION -16.3% 1,386,237 1,656,345 23.0%21.0%
FOOD PRODUCTS -42.0% 721,698 1,244,954 12.0%15.8%
CONSTRUCTION 174.5% 147,280 53,650 2.4%0.7%
MISCELLANEOUS 100+% 116,726 (17,009)1.9%-0.2%
TOTAL -23.6% 6,029,238 7,892,743 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2019Q4 to 2020Q4 (Economic) Cont.
Attachment A
Attachment A - 8
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FOOD PRODUCTS, -26.1% CHANGE,
$41,653 , 42.3% TOTAL
GENERAL RETAIL, 38.6% CHANGE,
$27,791 , 28.2% TOTAL
ALL OTHER,
-37.5% CHANGE, $29,099 ,
29.5% TOTAL
California Avenue 2020Q4 SALES TAX AMOUNTS
FOOD PRODUCTS, $56,364 ,
45.8%TOTAL
GENERAL RETAIL,
$20,050 , 16.3%TOTAL
ALL OTHER, $46,595 ,
37.9%TOTAL
California Avenue 2019Q4 SALES TAX AMOUNTS
FOOD PRODUCTS,
-47.7%CHANGE, $91,870 ,
17.6%TOTAL
GENERAL RETAIL,
-18.5% CHANGE, $34,224 ,
6.6%TOTAL
ALL OTHER,
-54.8% CHANGE, $395,152 ,
75.8%TOTAL
El Camino Real and Midtown 2020Q4 SALES TAX AMOUNTS
FOOD PRODUCTS,
$175,673 , 16.1%TOTAL
GENERAL RETAIL,
$41,985,
3.8%TOTAL
ALL OTHER, $875,137,
80.1%TOTAL
El Camino Real and Midtown 2019Q4 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts
Chart 8
Attachment A
Attachment A - 9
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FOOD PRODUCTS,
-48.6%CHANGE, $242,646 ,
50.4%TOTAL
GENERAL RETAIL,
-54.8% CHANGE,
$179,419 ,
37.2%TOTAL
BUSINESS TO BUSINESS,
-62.2% CHANGE, $36,372 ,
7.5%TOTAL
CONSTRUCTION, -12.3% CHANGE,
$13,265 , 2.8%TOTAL
MISCELLANEOUS, -22.3% CHANGE,
$7,296 , 1.5%TOTAL
TRANSPORTATION, -22.3% CHANGE,
$2,816 , 0.6%TOTAL
Greater Downtown 2020Q4 SALES TAX AMOUNTS
FOOD PRODUCTS,
$471,659 , 47.5%TOTAL
GENERAL RETAIL,
$396,924 , 40.0%TOTAL
BUSINESS TO BUSINESS,
$96,206 , 9.7%TOTAL
CONSTRUCTION,
$15,118 , 1.5%TOTAL
MISCELLANEOUS,
$9,384 , 0.9%TOTAL TRANSPORTATION,
$3,623 , 0.4%TOTAL
Greater Downtown 2019Q4 SALES TAX AMOUNTS
GENERAL RETAIL, -32.7% CHANGE,
$999,266 , 73.0%TOTAL
FOOD PRODUCTS,
-21.9% CHANGE,
$121,536 , 8.9%TOTAL
ALL OTHER, 100.0+% CHANGE,
$247,413 , 18.1%TOTAL
Stanford Shopping Center 2020Q4SALES TAX AMOUNTS
GENERAL RETAIL, $1,484,905 ,
89.4%TOTAL
FOOD PRODUCTS,
$155,564 , 9.4%TOTAL
ALL OTHER, $21,383 ,
1.3%TOTAL
Stanford Shopping Center 2019Q4 SALES TAX AMOUNTS
City of Palo Alto Geo Areas Pie Charts
Attachment A
Attachment A - 10
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GENERAL RETAIL,
-42.4%CHANGE, $50,178 ,
46.6%TOTAL
ALL OTHER, -30.2% CHANGE,
$57,547 , 53.4%TOTAL
Town And Country Shopping Center 2020Q4 SALES TAX
AMOUNTS
GENERAL RETAIL, $87,041 ,
51.4%TOTAL
ALL OTHER, $82,417 ,
48.6%TOTAL
Town And Country Shopping Center 2019Q4 SALES TAX
AMOUNTS
BUSINESS TO BUSINESS,
-13.9%CHANGE,
$1,811,527 , 34.1%TOTAL
GENERAL RETAIL, -35.7% CHANGE,
$1,515,694 , 28.5%TOTAL
TRANSPORTATION,
-14.3% CHANGE,
$1,416,837 ,
26.7%TOTAL
FOOD PRODUCTS,
-43.6% CHANGE, $588,006 ,
11.1%TOTAL
CONSTRUCTION, 187.4% CHANGE,
$141,867 , 2.7%TOTAL MISCELLANEOUS, 100+% CHANGE,
$83,351 , 1.6%TOTAL
All Other Geos combined with Balance of Jurisdiction 2020Q4
SALES TAX AMOUNTS
BUSINESS TO BUSINESS,
$2,103,496 , 32.6%TOTAL
GENERAL RETAIL,
$2,355,923 , 36.5%TOTAL
TRANSPORTATION,
$1,652,972 ,
25.6%TOTAL
FOOD PRODUCTS, $1,041,832 ,
16.1%TOTAL
CONSTRUCTION,
$49,369 , 0.8%TOTAL MISCELLANEOUS,
$(24,517), -0.4%TOTAL
All Other Geos combined with Balance of Jurisdiction 2019Q4
SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts
Attachment A
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BUSINESS TO BUSINESS,
-18.2%CHANGE,
$1,948,294 , 32.3%TOTAL
GENERAL RETAIL,
-33.6% CHANGE,
$1,709,004 , 28.3%TOTAL
TRANSPORTATION,
-16.3% CHANGE,
$1,386,237 ,
23.0%TOTAL
FOOD PRODUCTS,
-42.0% CHANGE, $721,698 ,
12.0%TOTAL
CONSTRUCTION,
174.5% CHANGE, $147,280 ,
2.4%TOTAL
MISCELLANEOUS, 100+% CHANGE,
$116,726 , 1.9%TOTAL
Palo Alto citywide 2020Q4 SALES TAX AMOUNTS
BUSINESS TO BUSINESS,
$2,381,737 , 30.2%TOTAL
GENERAL RETAIL,
$2,573,066 , 32.6%TOTAL
TRANSPORTATION,
$1,656,345 ,
21.0%TOTAL
FOOD PRODUCTS,
$1,244,954 , 15.8%TOTAL
CONSTRUCTION,
$53,650 , 0.7%TOTAL MISCELLANEOUS, $(17,009),
-0.2%TOTAL
Palo Alto citywide 2019Q4 SALES TAX AMOUNTS
Balance of Jurisdiction,
-5.1%CHANGE, $2,979,739 ,
53.6%TOTAL
Stanford Shopping Center,
-17.7% CHANGE, $1,368,215 ,
24.6%TOTAL
El Camino Real and Midtown,
-52.3% CHANGE, $521,245 ,
9.4%TOTAL
Greater Downtown,
-51.5% CHANGE,
$481,815 , 8.7%TOTAL
Town And Country Shopping Center,
-36.4% CHANGE, $107,726 , 1.9%TOTAL California Avenue, -19.9% CHANGE,
$98,543 , 1.8%TOTAL
All Geo Area Totals 2020Q4 SALES TAX AMOUNTS
Balance of Jurisdiction,
$3,139,048 , 43.7%TOTAL
Stanford Shopping Center,
$1,661,852 , 23.1%TOTAL
El Camino Real and Midtown,
$1,092,795 , 15.2%TOTAL
Greater Downtown,
$992,914 , 13.8%TOTAL
Town And Country Shopping Center,
$169,458 , 2.4%TOTAL California Avenue,
$123,009 , 1.7%TOTAL
All Geo Area Totals 2019Q4 SALES TAX AMOUNTS
City of Palo Alto Geo Area & Citywide Pie Charts
Chart 8
Attachment A
Attachment A - 12
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March 2021
Things are starting to pick up steam in Sacramento and we will be reporting regularly as
legislation and related actions unfolds. Please feel free to contact me with any questions.
Fran Mancia, Vice President of Government Relations Fran.Mancia@AvenuInsights.com
Although the state Capitol remains quiet with only one staffer permitted in the building
per legislator, the legislative session has resumed with its usual rigor. Meetings with
legislators and staff via teleconference continue, newly introduced legislation is being
analyzed, budget hearings began on an expedited timeline. The Department of Finance is
slowly releasing trailer bill language clarifying some of the Administration’s January budget proposal, and the
Legislative Analyst’s staff is busy making recommendations about how the Legislature should respond to it.
February 19 was the bill introduction deadline, and so far, there seems to be a disproportionate number of spot
bills – measures without substantive changes to current law used as placeholders until substantive language is
drafted. In total, 1,564 Assembly bills have been introduced and 815 Senate bills. Policy committee hearings
are slowly ramping up and the Senate waived the requirement that legislation be in print for 30 days prior to be
heard in policy committees, which further expedites hearings.
Revenues
Governor Gavin Newsom announced on TikTok and twitter in February that the State has $10.3 billion in
additional revenues that were not included in the governor’s January budget proposal. The additional funding is
the result of tax revenues exceeding projections by $2.6 billion in December and $7.7 billion in January. The
Department of Finance will include the new revenues in their May Revision, however, in the meantime, the
governor stated that the additional funding will allow the State to direct additional funding to small businesses,
vaccine administration, public schools, and reserves. The Legislature will also consider the new revenues as
they review the governor’s budget and their own priorities.
Early Action Budget Agreement
Governor Newsom signed the negotiated early action agreement on February 23 contained in the following
package of bills.
AB 85 (Committee on Budget) Budget Act of 2020, amends the 2020 Budget Act appropriating approximately
$1.4 billion General Fund and $123 million Proposition 98 funding:
x Golden State Stimulus Grants
o $163,000 for administration costs and $500,000 for automation costs at the Department of Social
Services;
o $243.2 million for grant payments to CalWORKs families; and
o $750 million for grant payments to SSI/SSP and California Assistance Program for Immigrants
beneficiaries.
California Legislative Update – March 2021
Attachment B
Attachment B - 1
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x $242.3 million to disregard pandemic unemployment compensation from being considered as income
for CalWORKs eligibility.
x CalFresh Outreach
o $28.8 million ($11.8 million General Fund) for CalFresh county administration and outreach
costs associated with the temporary federal expansion of eligibility to higher education students;
o $650,000 General Fund to the University of California;
o $1.3 million General Fund to California State University;
o $3.1 million Prop 98 funding California Community Colleges; and
o $1 million General Fund to Chico State’s Center for Healthy Communities.
x $30 million for emergency food assistance at food banks and $5 million for diaper banks.
x $24 million to support the Housing for the Harvest program to help farmworkers quarantine after
exposure to COVID-19.
x $90 million General Fund to the Alcoholic Beverage Control Fund to backfill revenues as a result of fee
waivers for licensees.
x Education
o $5.3 million ($1.9 million General Fund, $3.4 million Prop 98) to extend family fee waivers for
the California State Preschool Program through June 30, 2021;
o $100 million Prop 98 funding to provide low-income community college students with
emergency financial aid;
o $20 million Prop 98 funding to support student retention and enrollment at California
Community Colleges; and
o $1.4 million for the Asian American Studies Center at the University of California Los Angeles
campus.
AB 85 also contains language allowing $23 million allocated in the 2020-21 Budget Act dedicated to counties
for voter education and outreach to be used for a contract awarded by the Secretary of State.
Additionally, the measure amends existing budget control language to allow the Department of Finance to
allocate federal funds provided to the State as a result of federal legislation passed between December 26, 2020
and December 31, 2020 for COVID-19 public health emergency expenses including testing, contact tracing,
food assistance, and vaccinations.
AB 81 (Ting) COVID-19 relief, includes the following provisions:
x Appropriates $5 million General Fund to the Franchise Tax Board to conduct outreach for the Golden
State Stimulus.
x Changes to SB 91 (Chapter 2, Statutes of 2021), the Tenant Relief Act, clarifying that local rent
repayment plans can have repayment schedules through August 31, 2022; instances where courts may
reduce damages awarded for COVID-19 rental debt; that most actions to collect rental debt are stayed
until August 1, 2021; and that landlords that participate in the program receive 80 percent of back rent
due, rather than “up to” 80 percent.
x Clarifies that the State’s participation in Federal-State Unemployment Insurance Extended Benefits
applies to the federal Continued Assistance Act, which continued funding this program until March 14,
2021.
x Includes language to disregard pandemic unemployment compensation from being considered as income
for CalWORKs eligibility.
Attachment B - 2
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AB 82 (Ting) COVID-19 pandemic emergency: contact tracing: childcare, appropriates $1.8 million ($817,000
General Fund) in employee compensation related to an MOU with labor, and $654.3 million in federal funds:
x Child Care: $400.3 million in one-time federal Coronavirus Response and Relief Supplemental Act
funds:
o $244 million for one-time provider pandemic relief stipend of $525 per child enrolled in a
subsidized child care program to all subsidized childcare providers.
o $80 million to expand child care alternative payment voucher access to new essential workers.
o $76 million to extend child care alternative payment vouchers for essential workers.
o $2 million for administration costs for the Department of Education and Department of Social
Services.
o An increase in paid non-operational days for child care providers that accept state vouchers, from
24 to 40 days.
x Child Care Providers United: AB 82 reflects a tentative agreement appropriating $110 million in
Coronavirus Aid, Relief, and Economic Security (CARES) Act funds:
o $80 million for emergency child care allocated to extend and expand emergency child care as
well as address agency over-earnings for school age children now on distance learning and
requiring care during school hours; and
o $30 million to pay providers the cost of lost fees while families are on distance learning.
SB 94 (Skinner) Alcoholic beverage control: barbering and cosmetology: license renewal fees: waiver, exempts
Board of Barbering and Cosmetology licensees from paying license renewal fees and authorizes the Department
of Alcoholic Beverage Control to issue renewal fee waivers to certain licensees. Appropriates $25.6 million
from the General Fund to the Barbering and Contingent Fund to be used to backfill revenues related to the
license renewal fee waivers.
SB 87 (Caballero) California Small Business COVID-19 Relief Grant Program: income tax: gross income:
exclusion: small business grants, appropriates $2.075 billion from the General Fund to the Golden State
Stimulus Emergency Fund and establishes the California Small Business COVID-19 Relief Grant Program.
AB 88 (Committee on Budget) One-time stimulus payment: delinquent accounts: Earned Income Tax Credit:
statements, the Golden State Stimulus trailer bill, provides $3.7 billion in direct relief to millions of low-income
Californians:
x $2.3 billion to provide $600 additional tax rebate for all CalEITC recipients for the 2020 tax year.
x $470 million to provide the $600 tax rebate for all ITIN tax filers up to $75,000 of income.
x $243 million to provide the $600 additional grant for families enrolled in CalWORKs.
x $750 million to provide the $600 additional grant for individuals enrolled in Supplemental Security
Income/State Supplemental Program (SSI/SSP) or Cash Assistance Program for Aged, Blind, and
Disabled Legal Immigrants (CAPI).
Approximately 5.7 million low-income households will benefit from the $600 stimulus payments provided in
AB 88.
Eviction Moratorium and State Rental Assistance Program
Governor Newsom signed SB 89 and SB 91 extending the State’s eviction moratorium, establishing a State
Rental Assistance Program, and appropriating the federal funding needed to implement the State Rental
Assistance Program January 29.
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SB 91 extends, until June 30, 2021, the eviction moratorium established by AB 3088 (Chapter 37, Statutes of
2020). Under SB 91, a renter can avoid eviction until July 1, 2021 by paying 25% of their rent obligation, either
on a month-to-month basis or in one lump sum. Additionally, the legislation establishes a rental assistance
program to be administered by the Department of Housing and Community Development (HCD).
The State Rental Assistance Program assists renters by offering their landlord 80% of their unpaid rental debt
accumulated between April 1, 2020 and March 31, 2021, conditioned on the landlord's agreement that it be
considered payment in full. If a landlord declines to participate in the rental assistance program, an eligible
renter may apply for rental arrears assistance which will be limited to compensation of 25% of the eligible
household's unpaid rental debt between April 1, 2020 and March 31, 2021. Paying a landlord 25% of the rental
debt would prevent eviction until July 1, 2021. The program is funded using federal dollars.
Under the program, HCD will provide $150 million to counties with a population of less than 200,000, allocated
based on proportional share of population from the 2019 federal census data; and the remainder of the state
allocation (after the costs of state administration) will be distributed to eligible localities with a population of
200,000 or greater, based on their proportional share of the population from the 2019 federal census data.
x A municipality with a population greater than 500,000 shall receive their funding as a block grant from
the State to be implemented locally.
x A local government with a population of 499,999 or less, but greater than 200,000 may request an
allocation of block grant funds if they attest and HCD agrees that they have established a program
consistent with the requirements of the legislation.
x Localities with populations below 200,000, or those who opted to not receive their funds as a block
grant from the State, will receive their allocation of funding administered by a statewide program
implementer – a vendor who will manage and distribute emergency rental assistance resources.
COVID-19 Federal Spending
California State Auditor Elaine Howle released a report on the State’s management of federal Coronavirus
Relief Funds (CRF). The report evaluates both the division of funds between municipalities as well as state
oversight of the funding to ensure compliance with the Coronavirus Aid, Relief, and Economic Security
(CARES) Act. We anticipate the report is likely to be the subject of budget discussions in the coming months as
lawmakers vie for limited state funds for their districts. The following are the top-level takeaways from the
report.
x The CARES Act provided $15.3 billion to California for expenses incurred due to the public health
emergency. $5.8 billion of that funding was allocated directly to cities and counties with populations
greater than 500,000.
x $9.5 billion was allocated directly to the State and appropriated as follows:
o $4.5 billion to K-12 Education and Community Colleges for learning loss mitigation;
o $550 million to the Department of Housing and Community Development (HCD) for emergency
housing for homeless individuals and families;
o $1.3 billion to counties to address public health and safety needs due to COVID-19;
o $500 million to cities to address increased homelessness due to COVID-19 economic impacts
and for additional public safety services; and
o $2.7 billion to the State General Fund to reimburse COVID-19-related expenditures.
x Smaller counties received significantly less funding per person than the State’s 16 largest counties. In
making the recommendation for allocations, the Department of Finance stated that it believed there was
a higher spread of COVID-19 in the 16 larger counties due to population density. The State Auditor
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contends that Department of Public Health data doesn’t support that assertion and that the needs of many
small counties were at least the same if not greater than the needs of large counties.
o $650 million went to 42 counties that did not receive federal funds directly, providing them with
$102 per capita.
o $650 million was appropriated to the 16 large counties that had already directly received
funding. The large counties initially received $174 per person from the U.S. Treasury, then that
amount increased to at least $190 per person after they received the additional state allocation.
x The State Auditor believes that a more equitable distribution proposal would have been to allocate $1.1
billion to the 42 smaller counties and the remaining $200 million across all counties on a per-person
basis, which would have resulted in all counties receiving $179 per person. The Department of Finance
pointed out that although they can make recommendations regarding allocations, the Legislature and
governor make the ultimate decisions regarding appropriations.
x In terms of funding oversight, the California Department of Education, the Board of Governors of the
California Community Colleges, and HCD were responsible for overseeing and managing funds directed
to them. The Department of Public Health was charged with ensuring that counties adhered to the public
health directives required to receive funding, and the Governor’s Office of Emergency Services (Cal
OES) was charged with ensuring the same of cities.
x The State Auditor found that Cal OES did not consistently evaluate the 476 cities’ adherence to State
public health orders, reporting that only two cities passed resolutions inconsistent with the State’s health
orders – Atwater and Coalinga.
x Moving forward, the State Auditor recommends the following:
o The Department of Finance should ensure equitable treatment of local governments by proposing
a method to the Legislature to provide equitable funding to counties on a per-person basis or
other basis that treats counties fairly.
o The Department of Finance should continue to implement a monitoring plan already underway to
evaluate whether expenditures comply with the CARES Act, preventing the return of CRF funds
to the federal government.
o A formal process should be utilized to evaluate all cities’ adherence to requirements of the
funding.
LAO Analysis of Homelessness and Housing Proposals
The Legislative Analyst’s Office (LAO) released its analysis of the governor’s homelessness and housing
proposals which are being reviewed and heard by the appropriate budget subcommittees. The LAO’s
overarching message to the Legislature is that a long-term strategy is needed to address homelessness and
housing, and that strategy could better guide programmatic investments as compared to the administration’s
proposed one-time solutions.
Homelessness
The LAO recommends that the Legislature identify goals, solutions that align with those goals, set clear state
and local responsibilities, identify a state governance structure, establish a funding strategy, and develop
rigorous oversight mechanisms to address the State’s homelessness crisis. The governor’s homelessness
proposals focus on the acquisition and rehabilitation of properties using one-time resources, however, ongoing
funding for supportive services and maintenance would need to be provided by local governments.
Project Roomkey/Homekey:Project Roomkey was established to address immediate housing needs during the
pandemic. The State partnered with local governments to lease hotels and motels to provide housing to
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vulnerable individuals experiencing homelessness that were at risk of contracting COVID-19. In total, $112
million was allocated to Project Roomkey, securing 14,000 rooms (70% of which are occupied), and providing
short-term housing for 23,000 people in 42 counties.
The Homekey Program expands on Project Roomkey by providing funding to local public entities to purchase
and rehabilitate property for housing units, including hotels, motels, vacant apartment buildings, and other
buildings. Those buildings are then converted into interim or permanent long-term housing for homeless
individuals. $800 million in one-time funding has already been granted for the Homekey Program through 94
awards to local entities, with the expectation that approximately 6,000 units will be produced. So far under
Homekey, the average statewide cost per housing unit is $124,000 and the average local match is $24,000,
making the average total cost per unit $148,000.
The governor is proposing $750 million General Fund ($250 million proposed for early action) to continue the
Homekey Program. In evaluating this proposal, the LAO suggests that the Legislature consider the following:
x Does the Administration have a list of properties ready for purchase and renovation?
x Would early action allow homeless individuals to move in earlier than they otherwise would?
x The Department of Housing and Community Development (HCD) could be instructed to change evaluation
criteria for applications to align with the Legislature’s priorities.
x Local entities’ capacity to fund new ongoing costs is unclear, and there is no plan for preserving units in the
long-term.
x The expansion of Homekey is proposed without first assessing whether the original allocation proved
successful. How would HCD assess the program and inform the Legislature of needed changes?
x How will the acquisitions of new facilities in the three major homelessness proposals coordinate?
Board and Care Facilities:Adult Residential Facilities and Residential Care Facilities for the Elderly (board
and care facilities) are generally privately owned residential facilities that serve adults and seniors who cannot
live safely on their own. As of 2019, there were more than 12,000 facilities across the State serving more than
190,000 residents. The governor is proposing $250 million General Fund for the acquisition and rehabilitation
of board and care facilities with an emphasis on seniors who are experiencing homelessness or are at risk of
homelessness. The Department of Social Services would administer the program allocating funding directly to
local governments similar to the Homekey Program where the purchase of Residential Care Facilities for the
Elderly is already allowed. In evaluating this proposal, the LAO suggests that the Legislature consider the
following:
x How is this proposal fundamentally different than Homekey?
x Without aggregated data available about why facilities close or what happens to residents when facilities
close, assessing the impact of closures and the effectiveness of the administration’s proposal is difficult.
x How would funding be targeted to prevent closures and increase capacity?
x What role do board and care facilities play in addressing homelessness?
x Who is this proposal intended to serve – Project Roomkey participants or adults and seniors in need of
residential care?
x Will acquisitions be targeted in particular counties or regions?
x Who would own and operate new facilities?
x What level of accountability would be placed on facilities that receive funding?
Behavioral Health:The governor is proposing $750 million General Fund to provide grants to counties for the
acquisition and rehabilitation of properties to expand behavioral health treatment resources. The administration
estimates that the proposal will produce 5,000 beds to treat persons with behavioral health disorders. The LAO
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finds that the expansion of county behavioral health capacity is likely warranted, however asks some questions
regarding details of the proposal:
x How would resources be targeted to address homelessness?
x How would local governments fund ongoing costs not included in the proposal?
x How would the local match requirement impact county participation?
Housing
In concept, the LAO finds that the governor’s housing proposals have the potential to help the State meet
housing production goals. The administration’s housing investments are primarily one-time solutions, focused
on expanding resources for existing housing programs. Also included in the governor’s budget are resources to
boost local compliance with housing production goals.
Infill Infrastructure Grant (IIG) Program:Governor Newsom is proposing $500 million one-time General
Fund ($250 million for early action), for housing-related infrastructure focused on projects with a high
percentage of environmental remediation costs. Additionally, the administration proposes to make it easier for
smaller jurisdictions to qualify for funding and to extend the liquidation date for IIG funding provided in 2019
on a case-by-case basis, from June 30, 2023 to June 30, 2025. The LAO provided the following questions to the
Legislature:
x Does the administration have a list of local entities ready to participate?
x Would early action allow housing development projects to move forward that otherwise would not?
x Does the need to extend the liquidation period indicate locals do not currently have capacity for additional
projects?
x Would additional resources spur housing development in communities most in need of additional housing?
x The governor has also proposed $300 million in one-time General Fund to investigate and remediate
brownfields for the Department of Toxic Substances Control. How would environmental remediation efforts
be coordinated with state entities responsible for oversight of toxic substances?
Tax Credits:In addition to the $100 million annually that the State makes available for housing tax credits, the
governor’s budget proposes $500 million for tax credits to builders of rental housing affordable to low-income
households. Up to $200 million would be available for the development of mixed-income housing projects.
As the State has authorized $1 billion in low-income housing tax credits over the last two fiscal years, the LAO
suggests the Legislature direct the administration to provide an update on the status of the awarded tax credits,
the number of units produced, and information on the statewide distribution of housing anticipated due to the
tax credits.
Housing Law Assistance & Enforcement:The governor’s proposal provides $4.3 million General Fund ($3.8
million ongoing) to expand HCD’s enforcement of state housing laws by assisting local jurisdictions with
housing element compliance. The intent of the proposal is to facilitate affordable housing production through
monitoring, technical assistance, and enforcement of current laws. In addition, the governor proposes $2.2
million General Fund ($1.7 million ongoing) and eight positions for the Department of Fair Employment and
Housing to support compliance with fair housing laws. The LAO recommends the Legislature ask the
administration the following questions regarding this proposal:
x What are HCD’s current practices related to oversight and enforcement of state housing law?
x How would resources supplement current efforts?
x How would HCD prioritize assistance and enforcement resources?
x How would HCD determine when to elevate enforcement action to the State Attorney General’s Office?
x How would HCD keep the Legislature informed of tracking and monitoring compliance?
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City of Palo Alto (ID # 13410)
City Council Staff Report
Report Type: Informational Report Meeting Date: 8/30/2021
City of Palo Alto Page 1
Summary Title: ADU Quarterly Report (Quarter 3 and Quarter 4 2020)
Title: Accessory Dwelling Unit (ADU) Quarterly Report (Quarter 3 and
Quarter 4, Calendar Year 2020)
From: City Manager
Lead Department: Planning and Development Services
Recommendation
This is an informational report and no action is requested.
Executive Summary
The Accessory Dwelling Unit (ADU) Quarterly Report keeps track of the ADU permit applications
received, approved, and finalized yearly by the City, as well as the details of quarterly applications
received. Since 2015, the City has issued a total of 135 permits; 45% of these permits were issued
during 2019. During 2020, Palo Alto received a total of 78 ADU building permit applications, or an
average of over 19 per each quarter. The details of the applications are provided in Attachment A of
the staff report.
Background
In June 2017, the City of Palo Alto amended the Zoning Code (Title 18) to adopt Accessory
Dwelling Unit (ADU) regulations to comply with State adopted requirements. At adoption, the
City Council directed staff to provide quarterly reports on the number of permits filed for the
construction of ADUs. The City Council received the last development report for the first two
quarters of 2020 on August 17, 2020 (Report ID # 11464).
Since June 2017, the City Council has adopted Ordinances 5489 and 5507 to update the City’s
ADU regulations in response to changes in state law and to create additional local policies to
incentivize creation of ADUs.
Discussion
10
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