HomeMy WebLinkAboutStaff Report 14096
City of Palo Alto (ID # 14096)
City Council Staff Report
Meeting Date: 4/4/2022
City of Palo Alto Page 1
Title: Approval of Pets in Need's Amended Termination Notice to Extend
Termination Date Six Months for Continued Animal Shelter Operations
From: City Manager
Lead Department: Community Services
Recommendation
Staff recommends that Council approve Pets in Need’s amended termination notice of
the operating agreement for the Palo Alto Animal Shelter for a period of six months,
extending the termination date to May 14, 2023.
Background
Pets in Need (PIN) has been operating the Palo Alto Animal Shelter since January 2019
through an operating Agreement approved by City Council in November 2018. The
Agreement was originally for a five-year term with a total compensation to PIN of $3.4
million. Several capital improvement projects were identified in the Agreement to be
completed by the City including renovation of the medical suite, installation of a
modular building, minor improvements to the existing kennels, and construction of a
new kennel building. The City has completed all projects with the exception of
construction of the new kennel building and has spent $1.8 million to date.
On November 15, 2021, Pets in Need (PIN) provided formal notification to the City that
it would exercise its right to terminate the Agreement without cause in 12 months time
as allowed in Section 19.2 of the Agreement. PIN stated delays in completing the
capital improvement projects as the reason for terminating the Agreement. Since that
time, PIN has experienced a change in its Executive Director leadership and both
parties have been working collaboratively to reset the relationship and to ensure shelter
and veterinary services continue to be available to residents and partner agencies.
Additional background information on the Animal Shelter and Agreement with Pets in
Need can be found in the following reports:
• November 26, 2018, Staff Report ID # 9822: Animal Shelter Operating
Agreement with Pets in Need (PIN)
• February 14, 2022, Staff Report ID # 13952: Provide Direction to Staff on
Negotiations with Pets in Need for Operations and Capital Improvements at the
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City’s Animal Shelter
Discussion
On February 14, 2022, City staff provided an update on the the agreement with Pets in
Need and requested the Council provide direction on negotations with PIN for
operations and capital improvements at the Animal Shelter. At the February 14th
meeting, the Council approved the following motion:
A. That as a condition for continuing good faith negotiations, that Pets in Need
would agree to extend the notice of termination six months beyond the current
date;
B. Proceed with negotiations with Pets in Need for a long-term contract agreement
for animal services in Palo Alto;
C. Evaluate the necessary kennel size for community partners that we serve;
D. Include some form of trap and neuter program;
E. Include a small animal area in the renovation plans;
F. Assure that the contract agrees upon hours of operation and services provided;
G. That the parties agree to pursue a fundraising program to supplement existing
capital commitments for the shelter; and
H. Explore the transition to a new database.
On March 9, 2022 the PIN Board approved the attached amended termination notice
(Attachment A) to extend the termination date by six months to May 15, 2023. Both
the City and PIN have identified areas of concern that need to be addressed and staff
are ready to begin negotiating new agreement terms to successfully move forward with
a long-term partnership. PIN has indicated that construction of a new and redesigned
kennel building as well as a renovated cat/small animal area is a top priority to be able
to move forward with the Agreement. The City will need assurances that the shelter
and medical clinic are open and available to the public during agreed upon times, and
that animal care and welfare is of the highest quality. These areas of concern are
described in the February 14th staff report and are reflected in the Council motion
above.
Timeline
If the Council approves the amended notice, staff and PIN will begin negotiating new
agreement terms immediately.
Resource Impact
In the current Agreement, the City is committed up to $3.4 million in capital
improvements to the Animal Shelter and has spent $1.8 million to date. New agreement
terms that increase the scope of shelter improvements (Staff Report ID # 13952) would
require additional funding. The total amount of additional funding needed is unknown
at this time but are estimated to be an additional $3 - $4 million in capital costs. As
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directed in the February 14, 2022 Council motion, a fundraising plan will be pursued to
support the additional costs.
Stakeholder Engagement
Staff from the Community Services, Public Works, and Police Departments have been
working closely with PIN Interim Executive Director and PIN staff to discuss terms for a
new agreement and to ensure Animal Shelter operations continue.
Environmental Review
This discussion and direction are not a “project” within the meaning of CEQA. Should
any future action involving the Animal Shelter require environmental review or approval
by Council, staff will return at the appropriate time.
Attachments:
• Attachment12.a: Attachment A: Pets in Need Amended Termination Notice
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March 10, 2022
City of Palo Alto, City Manager’s Office
250 Hamilton Avenue
Palo Alto, CA 94301
Attn: Ed Shikada, City Manager
Dear Ed:
Pets in Need (“PIN”) hereby amends its letter to the City of Palo Alto (“City”), dated November 15, 2021
(“termination letter”), attached again here for reference, in which PIN gave City a one-year notice of
termination without cause under the contract between the City and PIN (City contract no. C19174493).
PIN hereby amends the termination letter as follows:
1. PIN extends the notice period by six (6) months so that the termination will now take effect at
11:59 p.m. on May 15, 2023.
2. PIN reiterates that it will perform its obligations under the Agreement through May 15, 2023, and
expects the City to do the same.
This amended termination letter comes after PIN staff and City staff have met and agreed to use the
additional time to negotiate whether the City and PIN will remain under contract past May 15, 2023.
However, nothing in this amended termination letter binds either PIN or the City to any specific process
or outcome regarding whether PIN and the City remain under contract past May 15, 2023. Nothing in this
amended termination letter alters any rights or obligations of the parties under the contract or at law.
SIGNATURE OF ACCEPTANCE BY PETS IN NEED
Pets In Need accepts and agrees to the provisions of this amended termination letter, which was approved
by the PIN Board of Directors on March 9, 2022.
BY:___________________________
Valerie McCarthy
Interim Executive Director
SIGNATURE OF ACCEPTANCE BY THE CITY OF PALO ALTO
The City of Palo Alto accepts and agrees to the provisions of this amended termination letter, which was
approved by the City Council on March _____, 2022.
BY:___________________________
Ed Shikada
City Manager
Attachment:
Pets In Need Letter to City of Palo Alto, dated November 15, 2021
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